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479

Cebu Royal Plant v DOLE


153 SCRA 38
Disease
FACTS
Private respondent, Ramon Pilones, was employed by petitioner
Cebu Royal Plant. The public respondent held that Pilones was
already a regular employee and so was entitled to security of tenure.
Pilones was dismissed because he was diagnosed with pulmonary
tubercolosis terminal in the medical exam conducted by the
petitioners physician. Petitioner Cebu Royal Plant claims that his
dismissal was not only in conformity with company policy but also
necessary for the protection of the public health, as he was handling
ingredients in the processing of soft drin!s which were being sold to
the public.
SS!E
"#$ the termination was %ustified
"ELD
$#. &ection ', Rule (, )oo! *(, of the Rules and Regulations
(mplementing the +abor Code reading as follows,
&ec. '. Disease as a ground for dismissal. - "here the
employee suffers from a disease and his continued
employment is prohibited by law or pre%udicial to his health or
to the health of his co.employees, the employer shall not
terminate his employment unless there is a certification by a
competent public health authority that the disease is of such
nature or at such a stage that it cannot be cured within a
period of six /01 months even with proper medical treatment. (f
the disease or ailment can be cured within the period, the
employer shall not terminate the employee but shall as! the
employee to ta!e a leave. The employer shall reinstate such
employee to his former position immediately upon the
restoration of his normal health.
The record does not contain the certification re2uired by the above
rule. The medical certificate offered by the petitioner came from its
own physician, who was not a 3competent public health authority,3
and merely stated the employee4s disease, without more.
The Court granted Pilones bac!wages and reinstatement only upon
certification by a competent public health authority that he is fit to
return to wor!.
48#
San Pe$%o "os&ital v Se'%eta%y o( Labo%
)*3 SCRA 98
E+&loy+ent ,ot Dee+e$ Te%+inate$-Te+&o%a%y Sus&ension o(
O&e%ations
FACTS
Petitioner &an Pedro 5ospital of 6igos and private respondent
Nagkabiusang Mamumuo sa San Pedro Hospital of Digos
National Federation of Labor /$787&7P.$9+1 were negotiating on a
new Collective )argaining 7greement /C)71. The union demands
wage increases and a provision for a union shop.
"hen both parties failed to reach an agreement, members of the
union abandoned their respective department and conducted a
stri!e. 6octors began leaving the hospital and number of patients
dwindled to nothing.
#n :une ;<, ;==;, petitioner hospital filed a $otice of Temporary
&uspension of #peration> that it would temporarily suspend
operations for six /01 months effective :une ;?, ;==;, or up to
6ecember ;?, ;==;.
Private respondent union alleged that petitioner was not in serious
financial condition and that petitioner acted in bad faith and
circumvented the return.to.wor! order when it suspended operations.
&ecretary of +abor $ieves held that suspension of operations was
not for a valid or %ustifiable cause but was actually for the purpose of
defeating the wor!ers4 right to self.organi@ation. )ut because the
hospital had actually cease operations, he decided to grant, by way
of penalty, bac!wages for the wor!ers from :une <;, ;==;, the date
they were refused admittance by petitioner, until 6ecember ;?, ;==;,
the expiration of the temporary suspension of the hospital4s
operation. 5e also en%oined petitioner to enter in a new C)7 with
respondent union.
Petitioner hospital insists that the union members were not entitled to
bac!wages because the temporary cessation of petitioner4s
operation suspended the employer.employee relationship between
the union members and petitioner. They also failed to negotiate on a
new C)7. #n 6ecember ;?, ;==;, petitioner hospital formally
ceased operations.
SS!E
"#$ the secretary gravely abused his discretion when he granted
bac!wages to employee and en%oined petitioner to enter in a new
C)7 with respondent union.
"ELD
$#. 7rticle <'0 of the +abor Code provides, 3The bona fide
suspension of the operation of a business or underta!ing for a period
not exceeding six /01 months . . . shall not terminate employment.3
&ection ;<, Rule ;, )oo! *( of the #mnibus Rules (mplementing the
+abor Code provides that the employer-employee relationship shall
be deemed suspended in case of the suspension of operation
referred to above, it being implicitly assumed that once operations
are resumed, the employer.employee relationship is revived and
restored.
(n the absence of any other information, the plain and natural
presumption will be that petitioner would resume operations after six
months, and therefore, it follows that a new C)7 will be needed to
govern the employment relations of the parties, the old one having
already expired. Clearly then, under the circumstances, the
respondent &ecretary cannot be faulted nor considered to have
gravely abused his discretion for ordering the parties to enter into a
new C)7.
The Court, however, cannot ignore the supervening event of
permanent closure of the petitioner hospital. )usiness reverses or
losses are recogni@ed by law as a %ust cause for terminating
employment. Thus, despite the absence of grave abuse of discretion
on the part of the respondent &ecretary, this Court cannot impose
upon petitioner the directive to enter into a new C)7 with the union
for the very simple reason that it had already decided to close shop.
The court affirmed the grant of bac!wages from :une <; A 6ecember
;?. )ut set aside the order for the parties to enter into a new
collective agreement for it being moot and academic.
481
De .u/+an v ,LRC
54# SCRA )1
E+&loy+ent ,ot Dee+e$ Te%+inate$-Te+&o%a%y Sus&ension o(
O&e%ations
FACTS
Petitioner 6e Bu@man was employed as a bus conductor by private
respondent Philippine Rabbit )us +ine Company. Petitioner filed an
application for leave of absence alleging that he was experiencing
chronic pain from the gunshot wounds he sustained in :anuary ;='C
when he tried to defend the earnings of the company from
3brigands.3
Respondent company placed petitioner under preventive suspension
for his absence without an approved leave of absence. Petitioner
was directed to report to a certain 8r. T. Cunanan within three /D1
days from receipt of the notice at the companys 8ain #ffice to
explain his side in a formal investigation.
Petitioner tried to tal! to company president $isce and he was told
that he would be allowed to report to wor! the next day. "hen he
reported for wor!, however, he was not given any assignment.
Petitioner filed a complaint against respondents for illegal dismissal,
underpaymentEnonpayment of overtime pay, premium pay for holiday
and rest day and service incentive leave pay, as well as moral and
exemplary damages.
Private respondents /company1 contend that petitioner was validly
dismissed for abandonment of wor!.
The +abor 7rbiter stated that 3FaGn unacted application for leave has
the effect of abandonment if an employee begins to en%oy a leave of
absence even before its approval.3
SS!E
"#$ Petitioner 6e Bu@man was illegally dismissed from
employment
"ELD
HI&. To constitute abandonment, two elements must concur, /;1 the
failure to report for wor! or absence without valid or %ustifiable
reason, and /<1 a clear intention to sever the employer.employee
relationship, with the second element as the more determinative
factor and being manifested by some overt acts. 8ere absence is not
sufficient. The burden of proof is on the employer to show an
une2uivocal intent on the part of the employee to discontinue
employment.
(n this case, the respondent company failed to discharge this burden.
Certain facts dissuade the Court from believing that petitioner
intended to sever his employment relations with respondent
company. $otably, petitioner commenced this suit on 8ay <C, ;==0
or more than six /01 months after respondent company stopped
giving him any wor! assignment.
Jnder 7rticle <'0 of the +abor Code, the bona fide suspension of the
operation of a business or underta!ing for a period not exceeding six
months shall not terminate employment. Conse2uently, when the
bona fide suspension of the operation of a business or underta!ing
exceeds six months, then the employment of the employee shall be
deemed terminated. )y the same to!en and applying said rule by
analogy, if the employee was forced to remain without wor! or
assignment for a period exceeding six months, then he is in effect
constructively dismissed.
Petitioners dismissal by reason of abandonment has not been
convincingly established.
The Court granted the petitioner separation pay> full bac!wages>
unpaid overtime pay, premium pay for holiday and rest day, and
service incentive leave pay> moral and exemplary damages.
48)
Sentinel Se'u%ity v ,LRC
)95 SCRA 1)3
Te+&o%a%y 0O(( Detail1 o% 0Floatin2 Status1
FACTS
The complainants were employees of &entinel &ecurity 7gency
/&&71 and were assigned as guards at the premises of Philippine
7merican +ife (nsurance /P7+(1. P7+( as!ed for the replacement of
all the security guards in certain offices including the complainants.
Complainants reported to &&7 but instead of being reassigned to
other clients, they were told that they were replaced because they
are already old.
The decision of the Court declared that complainants were illegally
dismissed by the agency and was ordered to pay bac! wages.
SS!E
/;1 "#$ respondents employees were illegally dismissed. /<1 "#$
Petitioner.Client is liable for bac! wages.
"ELD
/;1 HI&. There was no suspension of operation, business or
underta!ing, bona fide or not, that would have %ustified placing the
complainants off.detail and ma!ing them wait for a period of six
months. The only logical conclusion from the foregoing discussion is
that the 7gency illegally dismissed the complainants.
/<1 $#. The Court held that Client /P7+(1 was not responsible for the
illegal dismissal of the complainants. Thus, it should not be held
liable for bac! wages. 5owever, the court did not absolve P7+(
which, as an indirect employer, is solidarily liable with Petitioner
7gency for complainants unpaid service incentive leave.
483
,a+a3u v 4a%'o&&e%
57# SCRA *37
Sto&&a2e o( O&e%ations by .ove%n+ent
FACTS
6epartment of Invironment and $atural Resources /DEN1 ordered
the indefinite suspension of 87RC#PPIR4s operations for causing
damage to the environment of the Province of 8arindu2ue by spilling
the company4s mine waste or tailings from an old underground
impounding area into the )oac River, in violation of its Invironmental
Compliance Certificate /E!!1. &ubse2uently, 6I$R &ecretary
ordered the cancellation of 87RC#PPIRs ICC.
$7T(#$7+ 8($I& and 7++(I6 "#RKIR& J$(#$ /$787"J1,
petitioner, claimed that due to the indefinite suspension of
87RC#PPIR4s operations, its members were not paid the wages
due them and separation pay. Prior to the case arising from the
suspension of operations, there is already a pending case between
the same parties of an illegal stri!e. Three /D1 employees in the
present case did not participate in the illegal stri!e case to which 0;?
$787"J members were parties.
The Court of 7ppeals, in deciding the illegal stri!e case, decided in
favour of the company and denied the separation pay award.
The $+RC, on the other hand, decided on the suspension of
operation case granting the employees separation pay.
The respondent company claim that C7 had already confirmed the
dismissal of the 0;? $787"J members and had already decided
on the grant of the separation pay.
SS!E
"#$ the employees are to be granted their separation pay.
"ELD
Regarding the 0;? $787"J members who participated in the illegal
stri!e case, the Court held that $+RC cannot reverse the decision of
a higher tribunal in a case with the same claim already decided. The
Court dismissed the petition with respect to the 0;? $787"J
members for they are no longer employees at the time
87RC#PPIR suspended its operations.
Regarding the D non.participating employees, the Court granted
them separation pay.
7s of the day the companys ICC was cancelled, the temporary
suspension of operations became permanent so that 87RC#PPIR
did not have to wait for the end of the six.month suspension of
operations before the services of the three employees were deemed
terminated. (n +abor Code terms, the cancellation of the ICC
amounted to a company closure governed by 7rticle <'D of the +abor
Code . the provision that governs the relationship of employers and
employees in closure situations. Pursuant to 7rticle <'D of the +abor
Code, 87RC#PPIR is ordered to pay the D non.participating
employees their separation pay.
484
P%es5 De'%ee ,o5 183 4ay *6 1973
Ful(ill+ent o( 4ilita%y Duty o% Civil Duty
PRO7D,. FOR T"E A,,!AL RE.STRATO, OF
RESER7STS OF T"E AR4ED FORCES OF T"E P"LPP,ES8
.RA,T,. SEC!RT9 OF TE,!RE TO RESER7STS
E4PLO9ED , PR7ATE FR4S :"LE !,DER.O,.
REFRES"ER TRA,,.6 4O;L<ATO, OR ASSE4;L9 TESTS
OR A,,!AL ACT7E D!T9 TRA,,. , F!LFLL4E,T OF
T"ER 4LTAR9 O;L.ATO,S8 A,D FOR OT"ER P!RPOSES
"5IRI7&, to provide for a more effective reserve training and
defense build.up program, it is further necessary to grant security of
tenure for reservists employed in private firms and establishment
during periods of absence while fulfilling their military obligations to
the Republic, sub%ect to certain conditions.
$#", T5IRI9#RI, (, 9IR6($7$6 I. 87RC#&, President of the
Philippines, by virtue of the powers vested in me by the Constitution
as Commander.in.Chief of all the 7rmed 9orces of the Philippines,
and pursuant to Proclamation $o. ;L';, dated &eptember <;, ;=M<,
continued in Proclamation $o. ;;LC, dated :anuary ;M, ;=MD, and
Beneral #rder $o. ;, dated &eptember <<, ;=M<, as amended, do
hereby order and decree that henceforth,
/f1 7ny employee of any private commercial, industrial, or agricultural
firm, with an annual gross volume of business of not less than two
hundred and fifty thousand pesos and with a personnel force of at
least twenty employees, who is called to undergo refresher training,
or a mobili@ation or assembly test, or annual active duty training in
the 7rmed 9orces of the Philippines, shall not loss his position or
suffer any loss of pay due to his absence in the fulfillment of his
military obligation, Provided, That said firm shall be entitled to claim
the salaries paid to such employee during such training period as a
deductible item in its income tax return
485
Llo%a v D%ilon
179 SCRA 175
RA 7*41 Reti%e+ent Pay La3 De' 96 199)
FACTS
Primitivo *. 7lviar was a truc! driver of petitioner. 7t the time he
stopped wor!ing, he was 0? years of age. 5e filed a complaint and
was as!ing for his retirement benefits.
Petitioners opposed the complaint and alleged that all of the
employment benefits claimed by private respondent 7lviar had
already been fully paid. #n the matter of retirement benefits, it was
contended that 8r. 7lviar had not been dismissed by +lora 8otors, it
was complainant who abandoned his wor! since the last wee! of
7pril ;='? and never reported since then. $either had 8r. 7lviar
been retired for the simple reason that respondent corporation does
not have any retirement plan or any collective bargaining agreement
with the employees for no union exists within the company because
the employees, drivers included, received more than the standard
benefits for their labor.
+abor 7rbiter granted 7lviar a total of P;0, ;0C.'M money claims
including the P=,='?.'L retirement benefits.
SS!E
"#$ 7lviar is legally entitled to receive retirement benefits from
petitioners.
"ELD
$#. #ur +abor Code has only one article that deals with the sub%ect
of 3retirement from the service.3 7rticle <'M of the Code reads as
follows,
7rticle <'M. etirement. - 7ny employee may be retired
upon reaching the retirement age established in the
!olle"ti#e $argaining %greement or other appli"able
employment "ontra"t&
(n 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 or other
agreement.
7rticle <'M above shows that entitlement to retirement benefits may
accrue either /a1 under existing laws or /b1 under a collective
bargaining agreement or other employment contract. (t is at once
apparent that 7rticle <'M does not itself purport to impose any
obligation upon employers to set up a retirement s"heme for their
employees o#er and abo#e that already established under e'isting
la(s&
7rticle <'M recogni@es that existing laws already provide for a
scheme by which retirement benefits may be earned or accrue in
favor of employees, as part of a broader social security system that
provides for retirement benefits. (t is not disputed that 7lviar already
received his retirement benefits as provided in the &ocial &ecurity
7ct.
7rticle <'M of the +abor Code also recogni@es that employers and
employees may, by a collective bargaining or other agreement, set
up a retirement plan in addition to that established by the So"ial
Se"urity la() but prescribes at the same time that such consensual
additional retirement plan cannot be substituted for or reduce the
retirement benefits available under the compulsory scheme
established by the &ocial &ecurity law. 7s been reiterated by
petitioners, there is no collective bargaining between them and
employees nor was there an agreement about retirement benefits.
There being no contractual or statutory basis on the payment of
retirement by the petitioners to private respondent 7lviar, the
decision of the +abor 7rbiter regarding the retirement is set aside.
48*
Aba=uin v Atien/a
19# SCRA 4*#
RA 7*41 Reti%e+ent Pay La3 De' 96 199)
FACTS
Petitioner security agency employed private respondent 7ntonio ).
:ose as a security guard. 7lmost twenty.five /<?1 years later, :ose
voluntarily resigned in view of his failing health and his desire to
withdraw his cash deposits with petitioner. 5e was then sixty.one
/0;1 years old. The petitioner company, relying on the absence of
any management policy or agreement between them regarding
retirement or termination benefits, paid :ose only his cash deposits.
9eeling aggrieved, :ose filed a complaint against petitioner for
separation pay.
+abor 7rbiter dismissed :ose4s complaint on the ground that an
employee4s en%oyment of retirement benefits or separation pay under
7rticle <'' of the +abor Code and &ections ;D and ;C /a1, Rule (,
)oo! *( of the Rules and Regulations (mplementing the +abor Code
is sub%ect to the existence of a retirement plan, individual or
collective agreement or established management policy.
$+RC set aside +abor 7rbiters decision and held that :ose be paid
his retirement or termination pay e2uivalent to N month salary for
every year of service
SS!E
"#$ :ose is entitled to retirement or termination pay.
"ELD
Hes, he is entitled to termination pay but not retirement pay.
The legal provisions involved in this petition provide as follows,
7rt, <''. > etirement. - 7ny employee may be retired upon
reaching the retirement age established in the collective
bargaining agreement or other applicable employment
contract.
(n 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 or other
agreement. /+abor Code1
&ec. ;C. etirement benefits& 7n employee who is retired
pursuant to a bona.fide retirement plan or in accordance with
the applicable individual or collective agreement or
established employer policy shall be entitled to all the
retirement benefits provided therein or to termination pay
e2uivalent at least to one.half month salary for every year of
service, whichever is higher, a fraction of at least six /01
months being considered as one whole year.
There being no individual or collective agreement between the
parties or established employer4s policy regarding retirement
benefits, petitioner4s resistance to private respondent4s claim
therefore is legally defensible.
)e that as it may, the Court is not prepared to altogether set aside
the award of termination pay, considering that there exists another
legal basis. The Court applied 7rticle <'?, which considers disease
as a ground for termination, in %ustifying the grant for termination pay.
The Court also reiterated the distinction made in the +lora case
between retirement benefits and termination pay, Termination pay or
separation pay is re2uired to be paid by an employer in particular
situations (dentified by the +abor Code itself or by (mplementing Rule
(. Termination pay where properly due and payable under some
applicable provision of the +abor Code or under &ection C /b1 of
(mplementing Rule (, must be paid whether or not an additional
retirement plan has been set up under an agreement with the
employer or under an 3established employer policy.3
The Court dismissed the petition and granted the monetary award.
The monetary award in favor of private respondent 7ntonio ). :ose
is understood to be in the concept of termination pay, rather than
retirement benefits.
487
Es'o "ale S?oe Co+&any v ,LRC
193 SCRA *78
RA 7*41 Reti%e+ent Pay La3 De' 96 199)
FACTS
Private respondent Casimira Pedrosa was employed by petitioner
Isco 5ale &hoe Company as a shoebox ma!er, then as a heel pad
attacher. 5aving reached 0?, Pedrosa applied for retirement with the
&ocial &ecurity Commission and received retirement benefits
therefrom. 5owever, Pedrosa continued wor!ing for petitioner until
years after when petitioner excluded her from the regular wor!
schedule.
Private respondent filed a complaint and as!ed for the payment of
retirement benefits or separation pay.
Petitioner argued that it has neither separate retirement nor private
benefit plan and all its employees, including the private respondent,
are reported to the &&& for coverage> that private respondent had
effectively retired from the petitioner in ;='< when she received
retirement benefits from the &&&.
SS!E
"#$ private respondent Casimira Pedrosa be granted retirement
benfits.
"ELD
HI&. 7rt <'M states,
7rt. <'M. etirement. AA any employee may be retired upon
reaching the retirement age established in the collective
bargaining agreement or other applicable employment
contract.
(n 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 or other
agreement. /&ection <'M, +abor Code, as amended1
5owever, since private respondent had wor!ed with the petitioner for
such a long time, "e deem it %ust and e2uitable to grant her
separation pay as she is retiring from the service of the petitioner ten
/;L1 years beyond the statutory age of sixty 0L1.
(n computing the separation or retirement benefits of complainants,
we have to consider the period when the country was at war with
:apan and also the occupation years which started in 6ecember,
;=C; up to ;=C?. The separation benefits, therefore, have to be
based on forty.five /C?1 years instead of forty.nine years as claimed
and computed on the basis of the minimum wage rate in ;='0 at
PDM.LL a day when complainant was separated from wor!. 7nd
being a daily paid employee, the computation has to be computed at
;D days per year of service, as follows,
PDM.LL x ;DEdays O PC';.LLEmo.
PC';.LL x C? years O P<;,0C?.LL
488
O@ales v !nite$ Labo%ato%ies
559 SCRA )*
Reti%e+ent Plan
FACTS
J$(+7) established the Jnited Retirement Plan /JRP1. The plan is a
comprehensive retirement program aimed at providing for retirement,
resignation, disability, and death benefits of its members. 7n
employee of J$(+7) becomes a member of the JRP upon his
regulari@ation in the company. The JRP mandates the compulsory
retirement of any member.employee who reaches the age of 0L.
7s retirement benefits, the employee receives /;1 from Trust 9und 7
a lump sum of ;N months pay per year of service 3based on the
members last or terminal basic monthly salary,3
?
and /<1 whatever
the employee has contributed to Trust 9und ), together with the
income minus any losses incurred. The JRP excludes commissions,
overtime, bonuses, or extra compensations in the computation of the
basic salary for purposes of retirement.
Petitioner #xales was the 6irector of 8anufacturing &ervices Broup
when he retired from Jnilab after more than <? years of service. 5e
received a total amount of P<,;MD,<DL.D= as retirement benefits.
#xales claimed that he shouldve received more than a million more
for his retirement benefits. 5e insisted that his bonuses, allowances,
and ;D
th
month pay should have been factored in the computation of
his retirement benefits.
J$(+7) disagreeing, reminded #xales about the provision of the
JRP excluding any commissions, overtime, bonuses or extra
compensations in the computation of the basic salary of the retiring
employee.
SS!E
"#$ petitioners bonuses, allowances and ;D
th
month pay should be
included in the computation of retirement benefits.
"ELD
$#. The clear language of the JRP should be respected.
A %eti%e+ent &lan in a company parta!es the nature of a contract,
with the employer and the employee as the contracting parties. (t
creates a contractual obligation in which the promise to pay
retirement benefits is made in consideration of the continued faithful
service of the employee for the re2uisite period.
The Court ruled that #xales is not entitled to the additional retirement
benefits he is as!ing. The JRP is very clear, 3basic monthly salary3
for purposes of computing the retirement pay is 3the basic monthly
salary, or if dailyF,G means the basic rate of pay converted to basic
monthly salary of the employee e@'lu$in2 any commissions,
overtime, bonuses, or extra compensations.3
R.7. $o. M0C; also does not apply to this case because the JRP
grants to the retiring employee more than what the law gives. Jnder
the JRP, the employee receives a lump sum of ;N pay per year of
service, compared to the minimum N month salary for every year of
service set forth by R.7. $o. M0C;.
489
PAL v ALPAP
373 SCRA 3#)
Reti%e+ent Plan
FACTS
The case stemmed from the unilateral act of petitioner to retire airline
pilot Captain 7lbino Collantes under &ection <, 7rticle *((, of the
;=0M P7+.7+P7P Retirement Plan. Contending, inter alia, that the
retirement of Captain Collantes constituted illegal dismissal and
union busting, 7+P7P filed a $otice of &tri!e with the 6epartment of
+abor and Imployment /6#+I1. Pursuant of 7rticle <0D /g1 of the
+abor Code, the &ecretary of the 6#+I /hereafter referred to as
&ecretary1 assumed %urisdiction over the labor dispute.
The retirement plan between P7+ and 7+P7P stated two types of
retirement, /;1 $ormal Retirement A after <L years of service or
<L,LLL hours as pilot for P7+, a retired employee shall receive
P;LL,LLL lumpsum or legally entitled benefits whichever is higher /<1
+ate Retirement A any member who remains in the service after his
normal retirement date may retire either at his option or at the option
of the Company and when so retired he shall be entitled either to a
lump sum payment of P?,LLL.LL for each completed year of service
rendered as a pilot, or to such termination pay benefits to which he
may be entitled under existing laws, whichever is the greater
amount.
7rticle <'M provides that employees, may retire and shall be entitled
to retirement pay e2uivalent to at least one.half /;E<1 month salary
for every year of service, a fraction of at least six /01 months being
considered as one whole year.
SS!E
"hether the C)7 or 7rt. <'M of the +abor Code should be the basis
for computation of retirement pay in this case.
"ELD
C)7. 7n employees retirement benefits under any collective
bargaining agreement shall not be less than those provided in the
+abor Code.
Jnder the C)7, an employee upon retirement gets an amount
e2uivalent to <CLP of his gross monthly income for every year of
service he rendered to petitioner. This is in addition to the amount of
not less than P;LL,LLL.LL that he shall receive under the ;=0M
Retirement Plan.
The benefits from C)7 is clearly higher than those he would receive
under 7rticle <'M of the Civil Code.
49#
Easte%n S?i&&in2 v Se$an
48* SCRA 5*5
O&tion
FACTS
Petitioners hired on a per.voyage basis private respondent 6ioscoro
&edan as Drd marine engineer and oiler in one of the vessels owned
by petitioners. 5is last voyage was on :uly <M, ;==M on board the
vessel M*+ Eastern ,ni#erse. 5e said he was disembar!ing because
he was going to ta!e the board examinations for marine engineers.
Two months later, on &eptember <M, ;==M, &edan sent a letter to
petitioners applying for optional retirement, citing as reason the
death of his only daughter, hence the retirement benefits he would
receive would ease his financial burden. 5owever, petitioners
deferred action on his application for optional retirement since his
services on board ship were still needed.
SS!E
"#$ private respondent &edan may exercise the option to retire.
"ELD
$#. The age of retirement is primarily determined by the existing
agreement between the employer and the employees. 5owever, in
the absence of such agreement, the retirement age shall be fixed by
law. Jnder 7rt <'M of the +abor Code, the legally mandated age for
compulsory retirement is 0? years, while the set minimum age for
optional retirement is 0L years.
(n the instant case, there is an agreement between petitioner
shipping company and its employees. The agreement states,
C. #ptional Retirement,
(t will be the exclusive prerogative and sole option of this
company to retire any covered employee who shall have
rendered at least fifteen /;?1 years of credited service for
land based employees and D,0?L days actually on board
vessel for shipboard personnel.
Clearly, the eligibility age for optional retirement is set at 0L years.
5owever, employees of herein petitioners who are under the age of
0L years, but have rendered at least D0?L days /;L years1 on board
ship or fifteen /;?1 years of service for land.based employees may
also avail of optional retirement, sub%ect to the exclusive prerogative
and sole option of petitioner company.
Records show that private respondent was only C' years old when
he applied for optional retirement. Thus he cannot claim optional
retirement benefits as a matter of right. 5is application for optional
retirement was sub%ect to the exclusive prerogative and sole option
of the shipping company pursuant to the above cited agreement
between the wor!ers and the company.