THIRD DIVISION
G.R. No. 209468, December 13, 2017
UNITED DOCTORS MEDICAL CENTER, Petitioner, v. CESARIO BERNADAS, REPRESENTED BY LEONILA BERNADAS, Respondent.
D E C I S I O N
LEONEN, J.:
An employee who has already qualified for optional retirement but dies before the option to retire could be exercised is entitled to his or her optional retirement benefits, which may be claimed by the qualified employee's beneficiaries on his or her behalf.
This is a Petition for Review on Certiorari1 assailing the June 21, 2013 Decision2 and the October 4, 2013 Resolution3 of the Court of Appeals in CA-G.R. SP No. 126781, sustaining the National Labor Relations Commission's finding that Cesario Bernadas' (Cesario) beneficiaries were entitled to his optional retirement benefits.
On July 17, 1986, Cesario started working as an orderly in United Doctors Medical Center's housekeeping department. He was eventually promoted as a utility man.4
United Doctors Medical Center and its rank-and-file employees had a collective bargaining agreement (CBA), under which rank-and-file employees were entitled to optional retirement benefits.5 On retirement pay, the CBA provided:
Under the optional retirement policy, an employee who has rendered at least 20 years of service is entitled to optionally retire. The optional retirement pay is equal to a retiree's salary for 11 days per year of service.7ARTICLE XI
RETIREMENT AND SEVERANCE PAY
SECTION 1. RETIREMENT AND SEVERANCE PAY. The CENTER shall grant each employee retirement and severance pay in accordance with law. It shall also continue its present policy on optional retirement.6
WHEREFORE, premises considered, the Decision dated August 31, 2011 is REVERSED AND SET ASIDE. Judgment is hereby rendered finding complainant Cesario M. Bernadas is entitled to optional retirement benefit in the amount of P98,252.55 and ordering respondent United Doctors Medical Center to pay the said amount to the complainant.United Doctors Medical Center's Motion for Reconsideration20 was denied;21 hence, it filed a Petition for Certiorari22 with the Court of Appeals.
SO ORDERED.19
while initially humanitarian in nature, now concomitantly serve to secure loyalty and efficiency on the part of employees, and to increase continuity of service and decrease the labor turnover, by giving to the employees some assurance of security as they approach and reach the age at which earning ability and earnings are materially impaired or at an end.38 (Citation omitted)Thus, the grant of insurance proceeds will not necessarily bar the grant of retirement benefits. These are two (2) separate and distinct benefits that an employer may provide to its employees.
Article 302. [287] Retirement. - Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract.However, these types of retirement plans are not meant to be a replacement to the compulsory retirement scheme under social security laws but must be understood as a retirement plan in addition to that provided by law. Llora Motors, Inc. v. Drilon,51 explained:
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 agreements shall not be less than those provided therein.
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.
Article 287 of the Labor Code also recognizes that employers and employees may, by a collective bargaining or other agreement, set up [a] retirement plan in addition to that established by the Social Security law, 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 Social Security law. Such is the thrust of the second paragraph of Article 287 which directs that the employee shall be entitled to receive retirement benefits earned "under existing laws and any collective bargaining or other agreement."52Unlike the fixed retirement ages in social security laws, Article 302 [287] of the Labor Code allows employers and employees to mutually establish an early retirement age option. The rationale for optional retirement is explained in Pantranco North Express v. National Labor Relations Commission:53
In almost all countries today, early retirement, i.e., before age 60, is considered a reward for services rendered since it enables an employee to reap the fruits of his labor - particularly retirement benefits, whether lump-sum or otherwise at an earlier age, when said employee, in presumably better physical and mental condition, can enjoy them better and longer. As a matter of fact, one of the advantages of early retirement is that the corresponding retirement benefits, usually consisting of a substantial cash windfall, can early on be put to productive and profitable uses by way of income-generating investments, thereby affording a more significant measure of financial security and independence for the retiree who, up till then, had to contend with life's vicissitudes within the parameters of his fortnightly or weekly wages. Thus we are now seeing many CBAs with such early retirement provisions.54Optional retirement may even be done at the option of the employer55 for as long as the option was mutually agreed upon by the employer and the employee. Thus:
Acceptance by the employees of an early retirement age option must be explicit, voluntary, free, and uncompelled. While an employer may unilaterally retire an employee earlier than the legally permissible ages under the Labor Code, this prerogative must be exercised pursuant to a mutually instituted early retirement plan. In other words, only the implementation and execution of the option may be unilateral, but not the adoption and institution of the retirement plan containing such option. For the option to be valid, the retirement plan containing it must be voluntarily assented to by the employees or .at least by a majority of them through a bargaining representative.56
The terms and conditions of a CBA "constitute the law between the parties."58 However, this CBA does not provide for the terms and conditions of the "present policy on optional retirement." Leonila merely alleged before the Labor Arbiter that petitioner "grants an employee a retirement or separation equivalent to eleven (11) days per year of service after serving for at least twenty (20) years,"59 which was not disputed by petitioner. Therefore, doubt arises as to what petitioner's optional retirement package actually entails.ARTICLE XI
RETIREMENT AND SEVERANCE PAY
SECTION 1. RETIREMENT AND SEVERANCE PAY. The CENTER shall grant each employee retirement and severance pay in accordance with law. It shall also continue its present policy on optional retirement.57
| Very truly yours, |
(SGD) | |
WILFREDO V. LAPITAN | |
Division Clerk of Court |
Endnotes:
1Rollo, pp. 3-27.
2 Id. at 29-35. The Decision was penned by Associate Justice Amelita G. Tolentino and concurred in by Associate Justices Ramon R. Garcia and Danton Q. Bueser of the Fourth Division, Court of Appeals, Manila.
3 Id. at 37-38. The Resolution was penned by Associate Justice Amelita G. Tolentino and concurred in by Associate Justices Ramon R. Garcia and Danton Q. Bueser of the Fourth Division, Court of Appeals, Manila.
4 Id. at 30.
5 Id.
6 Id. at 39.
7 Id. at 115-116. NLRC Decision.
8 Id. at 30.
9 Id. at 88.
10 Id. at 30.
11 Id. at 265-266.
12 Id. at 30.
13 Id. at 88-96. The Decision, docketed as NLRC NCR CASE NO. 01-01538-11, was penned by Labor Arbiter Jenneth B. Napiza.
14 Id. at 95-96.
15 Id. at 97-103.
16 Id. at 113-118. The Decision was penned by Presiding Commissioner Joseph Gerard E. Mabilog and concurred in by Commissioners Isabel G. Panganiban-Ortiguerra and Nieves E. Vivar-De Castro of the Sixth Division, National Labor Relations Commission, Quezon City.
17 Id. at 116.
18 Id.
19 Id. at 117.
20 Id. at 119-131.
21 Id. at 132-134.
22 Id. at 135-160.
23 Id. at 29-35.
24 Id. at 33.
25 Id. at 33-34.
26 Id. at 306-324.
27 Id. at 37-38.
28 Id. at 3-27. Comment was filed on March 3, 2015 (rollo, pp. 336-342) while Reply was filed on May 28, 2014 (rollo, pp. 358-368).
29 Id. at 9-10.
30 Id. at 17-18.
31 Id. at 20-23.
32 Id. at 339.
33 Id. at 338.
34 Id.
35 Id.
36Cercado v. Uniprom, Inc., 647 Phil. 603, 608-609 (2010) [Per J. Nachura, Second Division] citing Magdadaro v. Philippine National Bank, 610 Phil. 608 (2009) [Per J. Carpio, First Division]; Universal Robina Sugar Milling Corporation (URSUMCO) v. Caballeda, 583 Phil. 118 (2008) [Per J. Nachura, Third Division]; Cainta Catholic School v. Cainta Catholic School Employees Union (CCSEU), 523 Phil. 134 (2006) [Per J. Tinga, Third Division]; Ariola v. Philex Mining Corporation, 503 Phil. 765, 783 (2005) [Per J. Carpio, First Division]; and Pantranco North Express, Inc. v. NLRC, 328 Phil. 470, 482 (1996) [Per J. Panganiban, Third Division].
37 INS. CODE, sec. 2(1).
38Brion v. South Philippine Union Mission, 366 Phil. 967, 974 (1999) [Per J. Romero, Third Division].
39See Gerlach v. Reuters Limited, Phils., 489 Phil. 501 (2005) [Per J. Sandoval-Gutierrez, Third Division].
40 Social Security Law (1997).
41 The Government Service Insurance System Act (1997).
42See Rep. Act. No. 8282, sec. 9 and Rep. Act No. 8291, sec. 5 on the mandatory contributions to the Social Security System and the Government Service Insurance System.
43In Re Mrs. Pacita A. Gruba, 721 Phil. 330, 330 (2013) [Per J. Leonen, En Banc].
44GSIS v. Montesclaros, 478 Phil. 573, 584 (2004) [Per J. Carpio, En Banc].
45 Id.
46See Rep. Act. No. 8282, sec. 13 on death benefits and Rep. Act No. 8291, sec. 20 on survivorship benefits.
47Gerlach v. Reuters Limited, Phils., 489 Phil. 501, 513 (2005) [Per J. Sandoval-Gutierrez, Third Division] citing Llora Motors, Inc. vs. Drilon, 258-A Phil. 749 (1989) [Per J. Feliciano, Third Division].
48 Id. citing Allied Investigation Bureau, Inc. vs. Ople, 180 Phil. 221 (1979) [Per acting C.J. Fernando, Second Division].
49 Article 287 of the Labor Code has since been renumbered to Article 302 in view of Rep. Act No. 10151.
50 Article 287 was amended by Republic Act No. 7641 (1992).
51 258-A Phil. 749 (1989) [Per J. Feliciano, Third Division].
52 Id. at 758.
53 328 Phil. 470 (1996) [Per J. Panganiban, Third Division].
54 Id. at 483.
55See Progressive Development Corporation v. National Labor Relations Commission, 398 Phil. 433 (2000) [Per J. Bellosillo, Second Division].
56Cercado v. Uniprom, Inc., 647 Phil. 603, 612 (2010) [Per J. Nachura, Second Division].
57Rollo, p. 39.
58Roche (Philippines) v. National Labor Relations Commission, 258-A Phil. 160, 171 (1989) [Per J. Gancayco, First Division].
59Rollo, p. 95.
60See LABOR CODE, sec. 4.
61In re Monthly Pension of Justices and Judges, 268 Phil. 312, 317 (1990) [Per J. Regalado, En Banc] citing Bautista vs. Auditor General, etc., 104 Phil. 428 (1958) [Per J. Padilla, En Banc].
62See In Re Mrs. Pacita A. Gruba, 721 Phil. 330, 341 (2013) [Per J. Leonen, En Banc].
63Re: Resolution granting automatic permanent total disability benefits to heirs of Judges and Justices who die in actual service, 486 Phil. 148, 156 (2004) [Per J. Garcia, En Banc].
64See In Re Mrs. Pacita A. Gruba, 721 Phil. 330 (2013) [Per J. Leonen, En Banc].
65Rollo, p. 17.
66GSIS v. Montesclaros, 478 Phil. 573, 584 (2004) [Per J. Carpio, En Banc].
67See Rep. Act. No. 8282, sec. 13 on death benefits and Rep. Act No. 8291, sec. 20 on survivorship benefits.
68See rollo, p. 32, on the presentation of respondent's certificate of marriage.