Montero v. Times Transport Co.

,
G.R. No. 190828, March 16, 2015
REYES, J.:
Doctrine: The four-year prescriptive period continues even after the withdrawal of the case as though no action has been filed at all.
Facts: Respondent Times Transportation Co., Inc., (TTCI) employed herein 21 petitioners as bus drivers, conductors, mechanics,
welders, security guards and utility personnel. Sometime in 1995, the rank-and-file employees of TTCI formed a union named as Times
Employees Union (TEU) which was later certified as the sole and exclusive bargaining unit within TTCI. In March 1997, members of
TEU went on strike; but when former Labor Secretary Quisimbing assumed jurisdiction over the labor dispute and certified the same for
compulsory arbitration, a return-to-work Order was issued which ended the strike and enjoined the parties from committing any other
act that may intensify the situation. chanroblesvirtuallawlibrary
Subsequently, TTCI, through its President and Chairman of the board (Respondent Santiago) gradually disposed of its assets because
of unabated increase of the cost of operations and losses for the last two years. TTCI also adopted a company-wide retrenchment
program, thus, 25 buses of TTCI were sold and the Certificates of Public Convenience for the operation of the buses, were transferred
to respondent Mencorp Transport Systems, Inc., (MENCORP) by virtue of a Deed of Sale. Thereafter, several union members received
notices that they were being retrenched.chanroblesvirtuallawlibrary
For a second time, TEU declared a strike against TTCI, but the latter merely reiterated the earlier return-to-work order of the Labor
Secretary. For disregarding the said return-to-work order, 119 workers were terminated for participating in the illegal
strike.roblesvirtuallawlibrary
On December 4, 1997, Santiago served to the Department of Labor and Employment Regional Office I a notice that TTCI would be
closing its operations due to heavy business losses.blesvirtuallawlibrary
Petitioners Estrañero, Pajarillo, Padre, Avila, Avila, Jr., Tupasi, Cuenta, Dulay, Yago, and Aganon (Estrañero et. Al) filed several
complaints against TTCI and MENCORP but they were withdrawn upon motion by the TEU’s counsel.
Four years later, several complaints for unfair labor practice, illegal dismissal with money claims, damages and attorney’s fees were
filed against TTCI, Santiago, MENCORP and its General Manager Mendoza, including the latter’s husband Reynaldo Mendoza
(collectively called the respondents).
In response, TTCI asserted that the petitioners’ cause of action had already been barred by prescription because the complaints were
filed only in June 2002 or after almost five years from the date of their dismissal. MENCORP, on the other hand, raised the defense of
lack of employer-employee relationship since it never engaged the services of the petitioners when TTCI sold to them its buses and the
Certificates of Public Convenience.uallawlibrary
LA: rendered a Decision dismissing the petitioners’ claim for unfair labor practice and money claims on the ground of prescription.
However, regarding the issue of illegal dismissal, only the complaints of Montero, Ravina, Cabello, Genaro, Madera, Gaano, Arsenio
Donato and Estilong were dismissed for having been barred by prescription while petitioners Estrañero et. al were declared illegally
dismissed and were awarded their separation pay and backwages considering that they timely filed complaints in June 2002 and the
eight-month period during which their cases were pending should be excluded from the four-year prescriptive period.
NLRC: appeals have both been denied for non-perfection, particularly for failure of the petitioners to verify their appeal, and for failure
of the respondent to post the required cash or surety bond.
The NLRC observed that the LA had ignored the rule on prescription, and chose to be selective in awarding relief to the 10
complainants by stating in his decision that the period during which the labor cases were pending should be deducted from the period
of prescription.
CA: affirmed NLRC’s ruling and dismissed the appeal.

Issue: WON the petitioners’ complaints for illegal dismissal have already prescribed.

Held: Yes. In the case at bar, October 26, 1997 and November 24, 1997 appear on record to be the dates when the petitioners’
employment were terminated by TTCI. Thus, there is no question about the fact that the petitioners’ complaints for unfair labor practice
and money claims have already prescribed.
Settled is the rule that when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to contest the
legality of one’s dismissal from employment constitutes, in essence, an action predicated upon an injury to the rights of the plaintiff, as
contemplated under Article 1146 of the New Civil Code, which must be brought within four years.
The petitioners contend that the period when they filed a labor case on May 14, 1998 but withdrawn on March 22, 1999 should be
excluded from the computation of the four-year prescriptive period for illegal dismissal cases. However, the Court had already ruled
that the prescriptive period continues even after the withdrawal of the case as though no action has been filed at all. The applicability of
Article 1155 of the Civil Code in labor cases was upheld in the case of Intercontinental Broadcasting Corporation v.
Panganiban where the Court held that “although the commencement of a civil action stops the running of the statute of prescription or
limitations, its dismissal or voluntary abandonment by plaintiff leaves the parties in exactly the same position as though no action had
been commenced at all.”
While the filing of the complaint for illegal dismissal before the LA interrupted the running of the prescriptive period, its
voluntary withdrawal left the petitioners in exactly the same position as though no complaint had been filed at all. The
withdrawal of their complaint effectively erased the tolling of the reglementary period.

THE PHILIPPINE GEOTHERMAL, INC. EMPLOYEES UNION V. UNOCAL PHILIPPINES, INC. (NOW CHEVRON GEOTHERMAL
PHILIPPINES HOLDINGS, INC.)
G.R. No. 190187, September 28, 2016
LEONEN, J.:
DOCTRINE: Merger of a corporation with another does not operate to dismiss the employees of the corporation absorbed by the
surviving corporation. The employment of the absorbed employees subsists. The surviving corporation automatically assumes the
employment contracts of the absorbed corporation, such that the absorbed corporation's employees become part of the manpower
complement of the surviving corporation. Although the absorbed employees are retained as employees of the merged corporation, the
employer retains the right to terminate their employment for a just or authorized cause. Likewise, the employees are not precluded from
severing their employment through resignation or retirement. The freedom to contract and the prohibition against involuntary servitude
is still, thus, preserved in this sense. This is the manner by which the consent of the employees is considered by the law.
Separation benefits are not granted by law in case of voluntary resignation. But it may be granted if such payment was agreed upon
with the employer under the CBA.
FACTS: Philippine Geothermal, Inc. Employees Union is a legitimate labor union that stands as the bargaining agent of the rank-and-
file employees of Unocal Philippines. While Unocal Philippines, formerly known as Philippine Geothermal, Inc., is a foreign corporation
incorporated under the laws of the State of California, USA, licensed to do business in the Philippines for the "exploration and
development of geothermal resources as alternative sources of energy." It is a wholly owned subsidiary of Union Oil Company of
California (Unocal California), which, in turn, is a wholly owned subsidiary of Union Oil Corporation (Unocal Corporation).
Unocal Corporation executed an Merger Agreement with Chevron Texaco Corporation (Chevron) and Blue Merger Sub, Inc. (Blue
Merger). Under the Merger Agreement, Unocal Corporation merged with Blue Merger, and Blue Merger became the surviving
corporation. Chevron then became the parent corporation of the merged corporations and after the merger, Blue Merger, as the
surviving corporation, changed its name to Unocal Corporation. an
Unocal Philippines executed a Collective Bargaining Agreement with the Union. However, on October 20, 2006, the Union wrote
Unocal Philippines asking for the separation benefits provided for under the Collective Bargaining Agreement. However, according to
the Union, the Merger Agreement resulted in the closure and cessation of operations of Unocal Philippines and the implied dismissal of
its employees. Unocal Philippines refused the Union's request and asserted that the employee-members were not terminated and that
the merger did not result in its closure or the cessation of its operations.
Unable to settle their agreement, the Union claimed that Unocal Philippines was guilty of unfair labor practice and filed a Notice of
Strike which it later withdrew.
Then, the parties agreed to submit their dispute for voluntary arbitration before the Department of Labor and Employment, with the
Secretary of Labor and Employment as Voluntary Arbitrator.
SOLE: Union's members were impliedly terminated from employment as a result of the Merger Agreement and awarder separation pay
under the Collective Bargaining Agreement. Pursuant to Section 7, Rule XIX of Department Order No. 40-03, series of 2003, the
Decision shall be final and executory after ten (10) calendar days from receipt hereof and it shall not be subject of a motion for
reconsideration.
CA: reversed the Decision of the Secretary of Labor. It held that Unocal Philippines has a separate and distinct juridical personality
from its parent company, Unocal Corporation, which was the party that entered into the Merger Agreement. The Court of Appeals ruled
that Unocal Philippines remained undissolved and its employees were unaffected by the merger. It ruled that in any case, the Collective
Bargaining Agreement only provided for the payment of separation pay if a reduction in workforce results from redundancy,
retrenchment or installation of labor-saving devices, or closure and cessation of operations, all of which did not occur in this case.
It also pointed out that the Union's members merely wanted to discontinue their employment with Unocal Philippines, but there was
nothing in the Labor Code nor in the parties' Collective Bargaining Agreement that would sanction the payment of separation pay to
those who no longer wanted to work for Unocal Philippines as a result of the merger.

ISSUE: (1) WON the Merger Agreement executed by Unocal Corporation, Blue Merger, and Chevron resulted in the termination of the
employment of petitioner's members; (2) WONpetitioner's members are entitled to separation benefits.

HELD: (1) NO. A merger is a consolidation of two or more corporations, which results in one or more corporations being absorbed into
one surviving corporation. The separate existence of the absorbed corporation ceases, and the surviving corporation "retains its identity
and takes over the rights, privileges, franchises, properties, claims, liabilities and obligations of the absorbed corporations."
If respondent is a subsidiary of Unocal California, which, in turn, is a subsidiary of Unocal Corporation, then the merger of Unocal
Corporation with Blue Merger and Chevron does not affect respondent or any of its employees. Respondent has a separate and
distinct personality from its parent corporation. Nonetheless, if respondent is indeed a party to the merger, the merger still does not
result in the dismissal of its employees.
Although Sec. 80 of the corporation code does not explicitly state the merger's effect on the employees of the absorbed
corporation, Bank of the Philippine Islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank has ruled that
the surviving corporation automatically assumes the employment contracts of the absorbed corporation, such that the absorbed
corporation's employees become part of the manpower complement of the surviving corporation.
Section 80 of the Corporation Code provides that the surviving corporation shall possess all the rights, privileges, properties, and
receivables due of the absorbed corporation. Moreover, all interests of, belonging to, or due to the absorbed corporation "shall be taken
and deemed to be transferred to and vested in such surviving or consolidated corporation without further act or deed." The surviving
corporation likewise acquires all the liabilities and obligations of the absorbed corporation as if it had itself incurred these liabilities or
obligations. This acquisition of all assets, interests, and liabilities of the absorbed corporation necessarily includes the rights and
obligations of the absorbed corporation under its employment contracts. Consequently, the surviving corporation becomes bound by
the employment contracts entered into by the absorbed corporation. These employment contracts are not terminated. They subsist
unless their termination is allowed by law.
The merger of two corporations does not authorize the surviving corporation to terminate the employees of the absorbed corporation in
the absence of just or authorized causes as provided in Articles 282 and 283 of the Labor Code. Once an employee becomes
permanent, he is protected by the security of tenure clause in the Constitution, and he can be terminated only for just or authorized
causes as provided by law.
(2) No petitioners are not entitled to the separation benefits it claims from respondent.
Separation benefits are not granted to petitioner by law in case of voluntary resignation, or by any contract it entered into with
respondent.
Under the CBA, Merger is not one of the circumstances where the employees may claim separation pay. The only instances where
separation pay may be awarded to petitioner are: (a) reduction in workforce as a result of redundancy; (b) retrenchment or installation
of labor-saving devices; or (c) closure and cessation of operations.

- Redundancy: exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements
of the enterprise. A position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a
number of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service
activity previously manufactured or undertaken by the enterprise.
Retrenchment: the reduction of personnel to save on costs on salaries and wages due to a considerable decline in the volume of
business.chanrobleslaw
Cessation and closure of business: the stopping of business operations of the employer whether on the employer's prerogative or
on account of severe business losses.obleslaw

None of these instances are present here. The terms do not provide that a merger is one of the instances where petitioner may claim
separation benefits for its members. Neither can these circumstances be interpreted as to contemplate a merger with another
corporation. In any case, if title parties intended that petitioner ought to be granted separation pay in case of a merger, it should have
been explicitly provided for in the contract. Absent this express intention, petitioner cannot claim separation pay.
On the contention that petitioner must be awarded the separation pay in the interest of social justice, this Court has held that this award
is granted only under the following exceptional cases: (1) the dismissal of the employee was not for serious misconduct; and (2) it did
not reflect on the moral character of the employee.
In this case, there is no dismissal of the employees on account of the merger. Petitioner does not deny that respondent actually
continued its normal course of operations after the merger, and that its members, as employees, resumed their work with their tenure,
salaries, wages, and other benefits intact. Petitioner was even able to execute with respondent, after the merger, the Collective
Bargaining Agreement from which it anchors its claims.
Given these circumstances, petitioner is not entitled to separation pay. Although the policy of the state is to rule in favor of labor in light
of the social justice provisions under the Constitution, this Court cannot unduly trample upon the rights of management, which are
likewise entitled to respect in the interest of fair play.

MAUREEN P. PEREZ v. COMPARTS INDUSTRIES INC.,

GR No. 197557, Oct 05, 2016
PEREZ, J.
DOCTRINE: Availment of the optional retirement benefits is subject to the exclusive prerogative and sole option of the employer.
FACTS: Petitioner was employed with respondent CII and became a regular employee on 01 September 1988. After years of working
and after several promotions, she was eventually appointed as Marketing Manager. She held this position from 1998 up to 10 January
2009, the date when she resigned from her work.
CII has a retirement program for its managerial employees or officers covered by Retireplan Plan which took effect on 01 June 1999
and was amended on 25 January 2001. Included therein are provisions relating to optional or early retirement and optional retirement
benefits.
Prior to her resignation, Perez filed 2 applications to avail of the optional retirement but they were denied by CII saying that, under the
Retirement Plan, it has the option to grant or deny her application for optional retirement and considering that it is experiencing financial
crisis, it has no choice but to disallow her intention. Then, Perez was informed that CII could only give her Php100,000.00 as gratuity
for her twenty years of service as this was the only amount it could afford but sherefused the offer.
On 08 January 2001, Perez received a letter which contained the, acceptance of her resignation effective 10 January 2009. The letter
likewise contained CIFs denial of her claim for optional retirement benefits or separation pay for the following reasons: 1) it has no
policy or rules on optional retirement benefits; 2) it has been so affected by the global crisis and has been suffering financial losses; 3)
there is no provision in the Labor Code which grants separation pay to voluntarily resigning employees; and 4) it cannot invoke the
provisions of the CBA on optional retirement benefits because the CBA is for rank-and-file employees.
Perez filed a Complaint for discrimination, moral damages and attorney's fees against CII praying for separation pay in the form of
optional retirement benefits, either under the Retirement Plan for CII officers or under the CBA for rank-and-file employees.
NLRC-RAB: granted the petition and ruled that Perez is entitled to optional retirement benefits under the CII Retirement Plan having
rendered service to CII for mdre than twenty (20) years and that 7 CII managerial/middle management employees have received
separation pay and/or benefits either pursuant to optional retirement or retrenchment.
NLRC: reversed and set aside the ruling of the NLRC-RAB. Nonetheless, the NLRC ordered CII to pay Perez the amount of
P100,000.00 as gratuity, CII having previously offered such in consideration for past services.
CA: dismissed the petition and sustained the rulings of the NLRC

Perez maintains that she is entitled to separation pay: (1) primarily through the optional retirement program under the Retirement Plan
having rendered more than twenty (20) years of service to CII, (2) through a similar optional retirement program under the CBA which
has been likewise extended to other managerial/middle management employees in several instances, or (3) a retrenchment program
undertaken by CII because of the global financial crisis.

ISSUE: WON petitioner is entitled to retirement benefits?

HELD: NO. Termination of employment by the employee, does not entitle the employee to separation pay. Separation pay is that
amount which an employee receives at the time of his severance from employment, designed to provide the employee with the
wherewithal (resources) during the period that he is looking for another employment and is recoverable only in instances enumerated
under Articles 283 and 284 of the Labor Code or in illegal dismissal cases when reinstatement is not feasible.
Under Art. 287 (now, Art. 302) the age of retirement is primarily determined by the existing agreement or employment
contract. In the absence of such agreement, the retirement age shall be fixed by law. Under the aforecited law, the mandated
compulsory retirement age is set at 65 years, while the minimum age for optional retirement is set at 60 years
A Retirement Plan in a company partakes the nature of a contract, with the employer and the employee as the contracting parties. It
creates a contractual obligation in which the promise to pay retirement benefits is made in, consideration of the continued faithful
service of the employee for the requisite period. Being a contract, the employer and employee may establish such stipulations, clauses,
terms and conditions as they may deem convenient.
Observably, as stipulated in the Retirement Plan, it is not enough that an employee of CII who wants to optionally retire meets the
conditions for optional retirement. CII has to give its consent for the optional retirement to operate. In this case, Perez's application for
optional retirement was denied several times as CII still needs her services. Perez's unilateral act of retiring without the consent of CII
does not bind the latter with the provisions of the Retirement Plan. Therefore, CII is not liable to give Perez the optional retirement
benefits provided therein.
Neither is the payment of separation pay be considered as company practice as there is no element of consistency or pattern in the
employees granted optional retirement benefits by CII in the years prior to the effectivity of the Retirement Plan. In addition, CII did not
voluntarily grant the benefits and only did so upon application and request of the employee. Moreover, the grant of optional retirement
benefits to other managerial/middle management employees in the instances stated in the affidavits of former employees-members
was undertaken before the effectivity of the Retirement Plan in 1999. Therefore, no company practice can be gleaned from a single
managerial employee availing of optional retirement benefits under the CBA after effectivity of the Retirement Plan for CII Officers.
Nor can she be entitle to separation pay due to retrenchment since she voluntarily retired. The option to undertake the retrenchment is
the employer's prerogative to serve the interest of the establishment. It is not for the benefit of an employee who has opted to sever the
employment relations.
3 basic requirements are: (a) proof that the retrenchment is necessary to prevent losses or impending losses; (b) service of written
notices to the employees and to the Department of Labor and Employment at least one (1) month prior to the intended date of
retrenchment; and (c) payment of separation pay equivalent to one (1) month pay, or at least one-half (1/2) month pay for every year of
service, whichever is,higher. 14 In addition, jurisprudence has set the standards for losses which may justify retrenchment, thus:
(1) the losses inquired are substantial and not de minimis; (2) the losses are actual or reasonably imminent; (3) the retrenchment is
reasonably necessary and is likely to be effective in preventing the expected losses; and (4) the alleged losses, if already incurred, or
the expected imminent losses sought to be forestalled, are proven by sufficient and convincing evidence.
Under Article 283 of the Labor Code, retrenchment requires financial losses, otherwise, it becomes illegal. Taking into consideration the
financial losses and dire situation of s CII over the past two years, it was indeed a valid, responsible, arid reasonable exercise of its
management prerogative to deny Perez's optional retirement benefits request but still offered her a substantial amount in the form of
gratis that was almost equivalent to the entire balance that remained in the retirement fund.

DE LA SALLE ARANETA UNIVERSITY, PETITIONER, VS. JUANITO C. BERNARDO, RESPONDENT

G.R. No. 190809, February 13, 2017
LEONARDO-DE CASTRO, J.:
DOCTRINE: Retirement benefits, where not mandated by law, may be granted by agreement of the employees and their employer or
as a voluntary act on the part of the employer. The general coverage of Republic Act No. 7641 is broad enough to encompass all
private sector employees, and part-time (fixed term) employees are not among those specifically exempted from the law.
FACTS: Respondent Bernardo filed a complaint against DLS-AU and its owner/manager, Dr. Bautista, for the payment of retirement
benefits. He alleged that he started working as a part-time professional lecturer at DLS-AU on June 1, 1974 for an hourly rate of
P20.00. Bernardo taught for two semesters and the summer for the school year 1974-1975. Bernardo then took a leave of absence
from June 1, 1975 to October 31, 1977 when he was assigned by the Philippine Government to work in Papua New Guinea. When
Bernardo came back in 1977, he resumed teaching at DLS-AU until October 12, 2003, the end of the first semester for school year
2003-2004. Bernardo's teaching contract was renewed at the start of every semester and summer. However, on November 8, 2003,
DLS-AU informed Bernardo through a telephone call that he could not teach at the school anymore as the school was implementing the
retirement age limit for its faculty members. As he was already 75 years old, Bernardo had no choice but to retire. At the time of his
retirement, Bernardo was being paid P246.50 per hour.
DOLE advised Respondent Bernardo that he was entitled to receive benefits under Republic Act No. 7641, otherwise known as the
"New Retirement Law," and its Implementing Rules and Regulations. Yet, Dr. Bautista, informed him that as mandated by the DLS-
AU's policy and CBA, only full-time permanent faculty of DLS-AU for at least five years immediately preceeding the termination of their
employment could avail themselves of the post-employment benefits. And that as part-time faculty member, Bernardo did not acquire
permanent employment under the Manual of Regulations for Private Schools, in relation to the Labor Code, regardless of his length of
service.
Bernardo a complaint for non-payment of retirement benefits and damages.
LA: dismissed complaint on the ground of prescription for he filed his claim 10 years after his cause of action accrued which is beyond
the 3 year prescription period.
NLRC: reversed the Labor Arbiter's ruling and found that Bernardo timely filed his complaint for retirement benefits. The NLRC pointed
out Bernardo's cause of action for payment of his retirement benefits accrued only on November 8, 2003, when he was informed by
DLS-AU that his contract would no longer be renewed and he was deemed separated from employment. The principle of estoppel was
also applicable against DLS-AU and Dr. Bautista who could not validly claim prescription when they were the ones who permitted
Bernardo to work beyond retirement age. As to Bernardo's entitlement to retirement benefits, Republic Act No. 7641 explicitly provides
as within its coverage "all employees in the private sector, regardless of their position, designation, or status, and irrespective of the
method by which their wages are paid" (Section 1, Rules Implementing the New Retirement Law) (Underlined for emphasis). The only
exceptions are employees covered by the Civil Service Law; domestic helpers and persons in the personal service of another; and
employees in retail, service and agricultural establishments or operations regularly employing not more than ten employees and
respondent does not fall under any of the exceptions.
CA: affirming in toto the NLRC judgment.

ISSUE: WON respondent is entitled to retirement benefits?

HELD: YES. In the present case, DLS-AU denied Bernardo's claim for retirement benefits because only full-time permanent faculty of
DLS-AU are entitled to said benefits pursuant to university policy and the CBA. Since Bernardo has not been granted retirement
benefits under any agreement with or by voluntary act of DLS-AU, however he can claim retirement benefits by mandate of law under
RA 7641.
Republic Act No. 7641 is a curative social legislation. It precisely intends to give the minimum retirement benefits to employees not
entitled to the same under collective bargaining and other agreements. It also applies to establishments with existing collective
bargaining or other agreements or voluntary retirement plans whose benefits are less than those prescribed in said law.
Article 302 [287] of the Labor Code, as amended by Republic Act No. 7641, reads: Retirement. - Any employee may be
retired upon reaching the retirement age established in the collective bargaining agreement or other applicable
employment contract.
In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing
 laws and any collective bargaining agreement and other agreements: Provided however, That an employee's retirement
benefits under any collective bargaining and other agreement shall not be less than those provided herein.
In the absence of retirement plan or agreement providing for retirement benefits of employees in the establishment, an
employee upon reaching the age of sixty (60) years or more, but not beyond sixty five (65) years which is hereby declared the
compulsory retirement age, who has served at least five (5) years in said establishment, may retire and shall be entitled to
retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months
being considered as one whole year.
Unless the parties provide for broader inclusions, the term one-half month salary shall mean fifteen (15) days plus one twelfth
(1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.
xxxx
Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers
are exempted from the coverage of this provision.
Violation of this provision is hereby declared unlawful and subject to the penal provisions provided under Article 288 of this
Code.
The general coverage of Republic Act No. 7641 is broad enough to encompass all private sector employees, and part-time employees
are not among those specifically exempted from the law. The provisions of Republic Act No. 7641 and its Implementing Rules are plain,
direct, unambiguous, and need no further elucidation.
For the availment of the retirement benefits under Article 302 [287] of the Labor Code, as amended by Republic Act No. 7641, the
following requisites must concur: (1) the employee has reached the age of 60 years for optional retirement or 65 years for compulsory
retirement; (2) the employee has served at least five years in the establishment; and (3) there is no retirement plan or other applicable
agreement providing for retirement benefits of employees in the establishment.
Bernardo - being 75 years old at the time of his retirement, having served DLS-AU for a total of 27 years, and not being covered by the
grant of retirement benefits in the CBA - is unquestionably qualified to avail himself of retirement benefits under said statutory
provision, i.e., equivalent to one-half month salary for every year of service, a fraction of at least six months being considered as one
whole year.
Furthermore, Bernardo's employment was extended beyond the compulsory retirement age thus, the cause of action for his retirement
benefits accrued only upon the termination of his extended employment with DLSAU. The principle of estoppel applies.
Inaction or silence may under some circumstances amount to a misrepresentation, so as to raise an equitable estoppel. When the
silence is of such a character and under such circumstances that it would become a fraud on the other party to permit the party who
has kept silent to deny what his silence has induced the other to believe and act on, it will operate as an estoppel. This doctrine rests
on the principle that if one maintains silence, when in conscience he ought to speak, equity will debar him from speaking when in
conscience he ought to remain silent.
DLS-AU, in this case, not only kept its silence that Bernardo had already reached the compulsory retirement age of 65 years old, but
even continuously offered him contracts of employment for the next 10 years. It should not be allowed to escape its obligation to pay
Bernardo's retirement benefits by putting entirely the blame for the deferred claim on Bernardo's shoulders.

ERNESTO GALANG & MA. OLGA JASMIN CHAN v. BOIE TAKEDA CHEMICALS
[GR No. 183934, Jul 20, 2016 ]
JARDELEZA, J.:
DOCTRINE: For the payment of higher retirement pay to be considered as a regular company practice, the employee must prove by
substantial evidence that the giving of the benefit is done over a long period of time, and that it has been made consistently and
deliberately.
FACTS: Respondent pharmaceutical company BTCI hired petitioners Galang and Chan in August 28, 1975 and July 20, 1983,
respectively. Through the years, petitioners rose from the ranks and were promoted to Regional Sales Managers in 2000. Petitioners
held these positions until their separation from BTCI on May 1, 2004.
As Regional Sales Managers, they belong to the sales department of BTCI and reported to the National Sales Director. In 2002, when
the National Sales Director position became vacant, petitioners assumed and shared with the general manager the functions and
responsibilities of this higher position, and reported directly to the General Manager. In 2003, petitioners applied for promotion as
National Sales Director but the new General Manager Nomura hired an outsider from Novartis Company as Marketing Director, while
the position of National Sales Director remained vacant.
Instead in 2004, Villanueva (another employee) was promoted as the National Sales Director which caused ill-feelings on petitioners'
part as they believed that Villanueva did not apply for the position; has only three years of experience in sales; and was reportedly
responsible for losses in the marketing department. After Villanueva's promotion, petitioners claimed that Nomura threatened to dismiss
them from office if they failed to perform well under the newly appointed National Sales Director. This prompted petitioners to inquire if
they could avail of early retirement package due to health reasons. Specifically, they requested Nomura if they could avail of the early
retirement package of 150% plus 120% of monthly salary for every year of service tax free, and lull ownership of service vehicle tax
free.They claimed that this is the same retirement package given to previous retirees namely, former Regional Sales Director Jose
Sarmiento, Jr. (Sarmiento), and former National Sales Director Melchor Barretto. Nomura, however, insisted that such retirement
package does not exist and Sarmiento's case was exceptional since he was just a few years shy from the normal retirement age.
On April 28, 2004, petitioners intimated their intention to retire in a joint written letter of resignation, thereafter, petitioners received their
retirement package and other monetary pay from BTCI. Chan received two checks in the total amount of P2,187,236.64. Upon
petitioners' retirement, the positions of Regional Sales Manager were abolished, and a new position of Operations Manager was
created. Petitioners filed the complaint for constructive dismissal and money claims before the NLRC Regional Arbitration Branch.[30]
LA: were constructively dismissed as they were forced to retire because Villanueva's appointment constituted an abuse of exercise of
management prerogative; and that subsequent events, such as the abolition of the positions of Regional Sales Managers and the
creation of the position of the Operations Manager show that petitioners' easing out from service were orchestrated. It also found that
petitioners were discriminated as to their retirement package. LA ordered BTCI to pay petitioners backwages, salary differentials, moral
and exemplary damages plus atty’s fees.
NLRC: reversed and set aside the LA Decision, and dismissed the complaint ruling that petitioners failed to prove that they were
constructively dismissed.
CA: affirmed NLRC decision.

ISSUE: WON petitioners were constructively dismissed?

WON petitioners are entitled to a higher retirement package?
HELD: (1) NO. Petitioners voluntarily retired from the service,thus were not constructively dismissed.
Constructive dismissal ("dismissal in disguise") exists where there is cessation of work because continued employment is rendered
impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. In some cases, while no
demotion in rank or diminution in pay may be attendant, constructive dismissal may still exist when continued employment has become
so unbearable because of acts of clear discrimination, insensibility or disdain by the employer, that the employee has no choice but to
resign. Under these two definitions, what is essentially kicking is the voluntariness in the employee's separation from employment.
In this case, petitioners were neither demoted nor did they receive a diminution in pay and benefits. Petitioners also failed to show that
employment is rendered impossible, unreasonable or unlikely.
Petitioners admitted that they have previously intended to retire and were actually the ones who requested to avail of an early
retirement. Moreover, the circumstances which petitioners claim to have forced them into early retirement are not of such character that
rendered their continued employment with BTCI as impossible.
Our labor laws respect the employer's inherent right to control and manage effectively its enterprise and do not normally allow
interference with the employer's judgment in the conduct of his business. Management has exclusive prerogatives to determine the
qualifications and fitness of workers for hiring and firing, promotion or reassignment. It is only in instances of unlawful discrimination,
limitations imposed by law and collective bargaining agreement can this prerogative of management be reviewed.
The promotion of employees to managerial or executive positions rests upon the discretion of management. The employer's exercise of
management prerogatives, with or without reason, does not per se constitute unjust discrimination, unless there is a showing of grave
abuse of discretion. In this case, there is none. Petitioners did not present any evidence showing BTCI's adopted rules and policies
laying out the standards of promotion of an employee to National Sales Director. They did not present the qualification standards
(which BTCI did not allegedly follow) needed for the position.
The other acts of discrimination complained of by petitioners refer to post-employment matters, or those that transpired after their
retirement. These include payment of alleged "lesser" retirement package, and the abolition of the positions of Regional Sales
Manager. These events transpired only after they voluntary availed of the early retirement while the circumstances contemplated in
constructive dismissal cases are clear acts of discrimination, insensibility or disdain which necessarily precedes the apparent
"voluntary" separation from work. If they happened after the fact of separation, it could not be said to have contributed to employee's
decision to involuntary resign, or in this case, retire.
(2) Petitioners were not discriminated against in terms of their retirement package.
The entitlement of employees to retirement benefits must specifically be granted under existing laws, a collective bargaining agreement
or employment contract, or an established employer policy. Based on both parties' evidence, petitioners are not covered by any
agreement and there is also no dispute that petitioners received more than what is mandated by Article 287 of the Labor Code.
Petitioners, however, claim that they should have received a larger pay because BTCI has given more than what they received to
previous retirees. They claim that they were discriminated against because BTCI did not give them the package of 150% of monthly
salary for every year of service on top of the normal retirement package.
To be considered as a regular company practice, the employee must prove by substantial evidence that the giving of the benefit
is done over a long period of time, and that it has been made consistently and deliberately.
Jurisprudence has not laid down any hard-and-fast rule as to the length of time that company practice should have been exercised in
order to constitute voluntary employer practice. The common denominator in previously decided cases appears to be the regularity and
deliberateness of the grant of benefits over a significant period of time. It requires an indubitable showing that the employer agreed
to continue giving the benefit knowing fully well that the employees are not covered by any provision of the law or agreement
requiring payment thereof. In sum, the benefit must be characterized by regularity, voluntary and deliberate intent of the employer to
grant the benefit over a considerable period of time.
To prove that their claim on the additional grant of 150% of salary, petitioners presented evidence showing that 4 other retired
employees received significantly larger retirement benefits. However, the cases of Ducay, Arada, and Rafael cannot be used as
precedents to prove this specific company practice because these employees were not shown to be similarly situated in terms of rank,
nor are the applicable retirement packages corresponding to their ranks alike. Also, these employees, including Sarmiento, all retired in
the same year of 2001, or only within a one-year period. Definitely, a year cannot be considered long enough to constitute the grant of
retirement benefits to these employees as company practice. Moreover, the affidavit presented states that the retirement package
given to such was not in accordance with standard of merit or company practice.