Almirante: Retirement or dismissal?

IN DECEMBER 1978, respondent Super Manufacturing Inc. (SMI) hired petitioner Guido B. Pulong as a spot welder in its production plant in Quezon City. On Sept. 22, 2014, SMI showed petitioner a document stating that he was compulsorily retired since he had already turned 60 years old.

On Sept. 30, 2014, petitioner filed a complaint for illegal dismissal and money claims against SMI. In defense, SMI alleged that petitioner was compulsorily retired pursuant to the Memorandum of Agreement (MOA) dated Jan. 1, 2013 between it and its workers purportedly represented by safety/liaison officer Eduardo K. Abad, painter II Glenn B. Bionat and rewinder I Julio D. Cruz. The MOA provided among others, a retirement pay in accordance with law, retirement age at 60 years with at least five years of continuous service and optional retirement for 20 years of continuous service.

In reply, petitioner argued that the MOA did not bind him for he was not a signatory therein and the alleged signatories have no authority to represent SMI’s workers.

Whose argument prevails?

Ruling: That of petitioner.

By its express language, the law permits employers and employees to fix the employee’s retirement age. Absent of such an agreement, the law fixes the age for compulsory retirement at 65 years, while the minimum age for optional retirement is set at 60 years. Thus, retirement plans allowing employers to retire employees who have not yet reached the compulsory retirement age of 65 years are not per se repugnant to the constitutional guaranty of security of tenure, provided that the retirement benefits are not lower than those prescribed by law and they have the employee’s consent. It is axiomatic, therefore, that a retirement plan giving the employer the option to retire its employees below the ages provided by law must be assented to by the latter, otherwise, its adhesive imposition will amount to a deprivation of property without due process.

In the recent case of Alfredo Laya Jr. v. Philippine Veterans Bank, G.R. 205813, Jan. 10, 2018, 850 SCRA 315,341-342; citing Cerado v. Uniprom Inc., we emphasized the character of the employee’s consent to the employer’s early retirement policy: it must be explicit, voluntary, free, and uncompelled. Unfortunately, this is not the case here. In fact, petitioner was not at all shown to have voluntarily acquiesced to SMI’s compulsory retirement age of 60.

It is incumbent upon SMI to prove that Abad, Bionat, and Cruz were the duly authorized bargaining representatives of SMI’s workers for purposes of signing the MOA. This, SMI failed to do. For it merely asserts that Abad and Bionat were among the representatives of SMI’s workers in the previous MOAs of SMI and the employees.

Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former. In Cercado v. Uniprom Inc., 647 Phil. 603, 611 (2010), we held that an early retirement plan must be voluntarily assented to by the employees.

All told, an employee who did not expressly agree to an early retirement plan cannot be retired from service before he reaches the age of 65 years. Even implied knowledge, regardless of duration, cannot equate to the voluntary acceptance required by law in granting an early retirement age option. The law demands more than a passive acquiescence on the part of the employee, considering that his early retirement age option involves conceding the constitutional right to security of tenure.

Verily, having terminated petitioner solely on the basis of a provision of a retirement plan which was not freely assented to by him, SMI is guilty of illegal dismissal. It is thus liable to pay petitioner backwages and to reinstate him without loss of seniority and other benefits. (Guido B. Pulong vs. Super Manufacturing Inc., et al., G.R. 247819, Oct. 14, 2019).

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