Dear PAO,
My older sister sought her retirement benefit from the private company she used to work with for more than 15 years but was declined. The company told her that she should have claimed her retirement benefit when she turned 65 years old. According to my sister, it is absurd for her to do that when she was still employed with them until she turned 69 years old, which was just less than a year ago. What happened was, the company kept extending my sister’s employment even after she turned 65 years old. She accepted each time and reported working diligently. It was only a month before her 69th birthday when she was informed that they will no longer extend her contract. So, that was when she started demanding for her retirement benefit. But the company is resolute about not giving her what she is asking for. Is my sister really not entitled to such a benefit anymore?
Citas
Dear Citas,
Retirement benefit is one of the statutory benefits granted under the Labor Code of the Philippines. To be certain, Article 302 of the said Code, as amended and renumbered, provides that:
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“ART. 302. [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 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.x x x”
Considering that it is a form of labor money claim, the retirement benefit must be legally pursued within the three-year period as stated under Article 306 of the said Code:
“ART. 306. [291] Money claims. – All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred. xxx”
Based on your narration, your sister is already beyond the compulsory retirement age of 65. However, based on your narration, she did not retire upon reaching said age because her private employer kept extending her employment, and it was only a month before she turned 69 years old when she was informed that her employment will be severed. For this reason, she initiated her demand for such benefit only thereafter. Corollary, we believe that your sister may still pursue her claim because her right to such benefit only accrued from the time her employment was actually terminated and there appears to be no neglect or abandonment on her part. We also believe that it is not just for the company to claim that she should have retired upon reaching the age of 65 when they kept extending her employment until a month before she reached the age of 69. In one case, the Supreme Court, through Associate Justice who later became Chief Justice Teresita Leonardo-de Castro, explained the following:
“Bernardo’s right to retirement benefits and the obligation of DLS-AU to pay such benefits are already established under Article 302 [287] of the Labor Code, as amended by Republic Act No. 7641. However, there was a violation of Bernardo’s right only after DLS-AU informed him on November 8, 2003 that the university no longer intended to offer him another contract of employment, and already accepting his separation from service, Bernardo sought his retirement benefits, but was denied by DLSAU. Therefore, the cause of action for Bernardo’s retirement benefits only accrued after the refusal of DLS-AU to pay him the same, clearly expressed in Dr. Bautista’s letter dated February 12, 2004. Hence, Bernardo’s complaint, filed with the NLRC on February 26, 2004, was filed within the three-year prescriptive period provided under Article 291 of the Labor Code.
“Even granting arguendo that Bernardo’s cause of action already accrued when he reached 65 years old, we cannot simply overlook the fact that DLS-AU had repeatedly extended Bernardo’s employment even when he already reached 65 years old. DLS-AU still knowingly offered Bernardo, and Bernardo willingly accepted, contracts of employment to teach for semesters and summers in the succeeding 10 years. Since DLS-AU was still continuously engaging his services even beyond his retirement age, Bernardo deemed himself still employed and deferred his claim for retirement benefits, under the impression that he could avail himself of the same upon the actual termination of his employment. The equitable doctrine of estoppel is thus applicable against DLS-AU. x x x” (De La Salle-Araneta University vs. Juanito C. Bernardo, Feb. 13, 2017, GR 190809)
We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated on.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]
