JACULBE vs SILIMAN UNIVERSITY

FACTS: Alpha C. Jaculbe is employed in Siliman Universitys Medical Center as a nurse since 1958. In 1992, Jaculbe was informed of her mandatory retirement as per the unversitys retirement plan formulated sometime in 1970 that its employees will be automatically retired upon reaching the age of 65 or after 35 years of uninterrupted service to the university. Her retirement is due a year after the notice. Jaculbe filed with the NLRC a Complaint for Termination of Service with Preliminary Injunction or Restraining Order. The Labor Arbiter found the University guilty of illegal dismissal and ordered it to reinstate Jaculbe and to pay the latter full backwages. The university appealed from the decision of the Labor Arbiter to the NLRC. The NLRC reversed the decision of the LA for lack of merit. Later, the CA also affirmed the decision of the NLRC. ISSUE: Whether or not the compulsory retirement imposed by the university through its retirement plan for its employees is against the security of tenure clause in the 1987 Constitution, and is thereby, in the form of an illegal dismissal. HELD: Yes. Anent the provisions of the Labor Code, it is not per se illegal for employers to retire its employees below the age of 65 if it is pursuant to a collective bargaining agreement or other applicable retirement contracts between the employer and the employee. RATIO: The retirement plan came into being in 1970 or 12 years after petitioner started working for university. In short, it was not part of the terms of employment to which petitioner agreed when she started working for the University. 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. The truth was that petitioner had no choice but to participate in the plan, given that the only way she could refrain from doing so was to resign or lose her job. It is axiomatic that employer and employee do not stand on equal footing, a situation which often

causes an employee to act out of need instead of any genuine acquiescence to the employer. This was clearly just such an instance. an employer is free to impose a retirement age less than 65 for as long as it has the employees consent having terminated petitioner solely on the basis of a provision of a retirement plan which was not freely assented to by her, respondent was guilty of illegal dismissal.