Change in Ownership of the Majority of the Voting Equity of the Bank. - When the ownership of the majority of the issued common voting shares passes to private investors, the stockholders shall cause the adoption and registration with the Securities and Exchange Commission of the appropriate Articles of Incorporation and revised by-laws within three (3) months from such transfer of ownership. Upon the issuance of the certificate of incorporation under the provisions of the Corporation Code, this Charter shall cease to have force and effect, and shall be deemed repealed. Any special privileges granted to the Bank such as the authority to act as official government depository, or restrictions imposed upon the Bank, shall be withdrawn, and the Bank shall thereafter be considered a privately organized bank subject to the laws and regulations generally applicable to private banks. The bank shall likewise cease to be a government owned or controlled corporation subject to the coverage of service-wide agencies such as the Commission on Audit and the Civil Service Commission. (Emphasis supplied.)
Normal Retirement. The normal retirement date of a Member shall be the day he attains sixty (60) years of age, regardless of length of service or has rendered thirty (30) years of service, regardless of age, whichever of the said conditions comes first. A Member who has reached the normal retirement date shall have to compulsor[il]y retire and shall be entitled to receive the retirement benefits under the Plan.6
Complainant posits that she has a vested right to be retired at 65 years since this was the retirement age at the time she was hired. However, there is neither jurisprudence nor law which supports this contention. Undisputed is the fact that, when complainant was hired, PNB was still a government owned and controlled corporation. Accordingly, the Revised Government Service Insurance Act [RGSI] of 1977 (Presidential Decree No. 1146), which established that the compulsory retirement age for government employees to be 65 years governs the employment of PNB employees. The PNB then did not have any participation in establishing the compulsory retirement age but the RGSI Act which is the law itself. But the same may apply only as long as PNB remains a government owned and controlled corporation. From the time PNB ceased to be such, it cannot be said that [the] RGSI Act of 1977 still applies. Thus negating the claim of complainant to retire at age 65 under the said law.
When PNB ceased to be a government owned or controlled corporation, the law now applicable to the Bank is the Labor Code which allows PNB to establish its own retirement plan. As such, PNB is empowered to formulate its Regular Retirement Plan provided it is within the bounds of the Labor Code. We find no cogent reason to invalidate the Regular Retirement Plan as it is in accord with the law.
Indeed, this Office cannot see how complainant can assert that her right to be retired at the age of 65 years has been "vested" at the time of her hiring when, in fact, such right can only be vested at the time of her retirement. Necessarily, complainant can only avail a retirement plan that is in effect at the time of her retirement. In this case, the retirement plan she insists on applying is no longer existent and instead it was replaced by the PNB Regular Retirement Plan which, by its terms, complies with the pertinent provisions of the Labor Code on retirement plans.14
Movant invokes the ruling of the Supreme Court in Razon, Jr. v. NLRC (185 SCRA 44), where the Supreme Court held:"We believe that upon acceptance of employment, a contractual relationship was established giving private respondent an enforceable vested interest in the retirement fund. Verily, the retirement scheme became an integral part of his employment package and the benefits to be derived therefrom constituted as it were a continuing consideration for services rendered, as well as an effective inducement for remaining with the firm."It is clear that the contractual relationship established between the employer and employee upon the latter's acceptance of employment was an enforceable vested interest in the retirement fund. The Supreme Court did not hold that the private respondent has a vested right to his retirement age. x x x.
x x x A vested right or a vested interest may be held to mean some right or interest in property that has become fixed or established, and is no longer open to doubt or controversy. Retirement age is not a property. It cannot be also fixed or permanent. Laws, contracts, and collective bargaining agreements may amend or alter the retirement age of an employee. Complainant may have had a vested right to the retirement funds under the old retirement plan of the bank, but as held in Razon, this right could be withheld upon a clear showing of good and compelling reasons. The privatization of PNB and the consequent severance of its employees from government service is the reason why complainant lost her right to the government retirement plan. These are causes which are persuasive and compelling.17
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 Pantranco North Express, Inc. v. NLRC, to which both the CA and respondent refer, the imposition of a retirement age below the compulsory age of 65 was deemed acceptable because this was part of the CBA between the employer and the employees. The consent of the employees, as represented by their bargaining unit, to be retired even before the statutory retirement age of 65 was laid out clearly in black and white and was therefore in accord with Article 287.
In this case, neither the CA nor the respondent cited any agreement, collective or otherwise, to justify the latter's imposition of the early retirement age in its retirement plan, opting instead to harp on petitioner's alleged "voluntary" contributions to the plan, which was simply untrue. 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.
x x x x
As already stated, an employer is free to impose a retirement age less than 65 for as long as it has the employee's consent. Stated conversely, employees are free to accept the employer's offer to lower the retirement age if they feel they can get a better deal with the retirement plan presented by the employer. Thus, 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.20
ART. 287. 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 agreement and other agreements shall not be less than those provided herein.
In the absence of a 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 the 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 (1/2) 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.
- For service rendered after privatization, a Member, regardless whether or not he received GSIS Retirement Gratuity Benefits, shall be entitled to one hundred twelve (112%) percent of his "Latest Monthly Plan Salary"22 for every year of service rendered, a fraction of at least six (6) months being considered as one (1) whole year.
The vesting multiple of one hundred twelve (112%) percent that is applied to the "Latest Monthly Plan Salary" is derived as the sum of fifteen (15) days of the "Latest Daily Plan Salary" plus five (5) days of the service incentive leave (based on Latest Daily Plan Salary) plus one-twelfth (1/12) of the "Latest Monthly Plan Salary." The Daily Plan Salary used is computed as "Latest Monthly Plan Salary" multiplied by thirteen (13) months and divided by two hundred fifty-one (251) days.23
- A Member who failed to qualify to receive GSIS Retirement Gratuity Benefits shall be entitled to one Month Basic Salary (as of May 26, 1996) for every year of service rendered before privatization.24
Section 1. Membership. Membership in the Plan shall be automatic for all full-time regular and permanent officers and employees of the Bank as of the effectivity date of the Plan. For employees hired after the effectivity of this Plan, their membership shall be effective on "Date Entered Bank."27
1 Rollo, pp. 8-20.
2 Penned by Associate Justice Sixto C. Marella, Jr., with Associate Justices Amelita G. Tolentino and Lucenito N. Tagle, concurring; id. at 21-30.
3 Id. at 31-32
4 Id. at 87.
5 Id. at 56-68.
6 Id. at 61.
7 Id. at. 101-105.
8 Id. at 106-108.
9 Article XVI of the CBA reads: "The retirement benefits of the employees shall be in accordance with the existing non-contributory Retirement Plan of the Bank," as cited in PNB's Memorandum; id. at 133.
10 Id. at 109.
11 Id. at 110.
12 Id. at 111-112.
13 Id. at 33-43.
14 Id. at 38-39.
15 Id. at 44-46.
16 Id. at 47-48.
17 Citations omitted.
18 Rollo, pp. 71-74.
19 G.R. No. 156934, March 16, 2007, 518 SCRA 445.
20 Id. at 451-452. (Citations omitted.)
21 Oxales v. United Laboratories, Inc., G.R. No. 152991, July 21, 2008, 559 SCRA 26.
22 Article II, Sec. 1(h) of the PNB-RRP states î º
h. "Latest Monthly Plan Salary" shall mean the latest gross monthly salary paid to a Member excluding Rice/Sugar/Meal Allowances, Teller's/Fieldman's Allowances or allowances of a similar nature, Clothing/Travel allowances, Temporary Detail Allowances, overtime pay, night premium, discretionary funds and/or special allowances (if any) that were granted on case-to-case basis, anniversary/quarterly/year-end bonuses, and/or profit-sharing payments and other fluctuating emoluments/monetary benefits which are not considered as part of or integrated into the regular salary of the Member. (Rollo, p. 58.)
23 Article VIII, Sec. 1(a)(3) of the PNB-RRP; id. at 63.
25 Jaculbe v. Silliman University, supra note 19.
26 See Universal Robina Sugar Milling Corporation (URSUMCO) v. Caballeda, G.R. No. 156644, July 28, 2008, 560 SCRA 115; Oxales v. United Laboratories, Inc., supra note 21; Jaculbe v. Silliman University, supra note 19; Philippine Airlines, Inc. v. Airline Pilots Association of the Philippines, 424 Phil. 356 (2002); Capili v. National Labor Relations Commission, 273 Phil. 576 (1997); Pantranco North Express, Inc. v. NLRC, 328 Phil. 470 (1996).
27 Article IV, Sec. 1 of the PNB-RRP; rollo, p. 60.
28 Philippine Airlines, Inc. v. Airline Pilots Association of the Philippines, supra note 26.
29 Article V, Sec. 1 of the PNB-RRP states î º
Sec. 1. The Retirement Fund. The funding of the Plan and the payment of the benefits hereunder shall be provided for through the medium of a retirement fund held by a Trustee under and pursuant to a Trust Agreement. The contributions of the Bank to the fund so created, together with any income, gains or profits, less distributions, expenses, charges or losses, shall constitute the Fund. (Emphasis supplied; rollo p. 60.)