• Early retirement


    Persida Acosta

    Dear PAO,
    I used to work as a factory supervisor for a local manufacturing company for 25 years, since I started back in 1992. When I reached the age of 60 last July 2017, my boss told me that I would be “retired” by the company, and that I will effectively be jobless the following month. They told me that I will be receiving a nice and hefty retirement package, since this is a part of the company’s early retirement program which I have supposedly acceded to when I decided to join the company. All along I thought that I will work until the age of 65 as I have known that the mandatory retirement age is 65 under Philippine labor laws.

    I left the company somewhat feeling disturbed, because I did not want to retire yet this early in my life. In fact, ever since the day I left the company, I have been doing nothing, and it is driving me crazy being stuck at home. I came across your articles in the newspaper, so I decided to ask for legal advice on my predicament. Can my company really impose a mandatory early retirement on me? Thank you!

    Dear Johnny,
    Based on the facts you have narrated, it appears that your involuntary early retirement was invalid, and that you were illegally dismissed by the company when you were forced to retire and accept the early retirement package/benefits. It must be emphasized at the outset that our Labor Code provides that the compulsory age for retirement is pegged at 65 years of age, to wit:

    “Article 287. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract.

    x x x

    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 x.” [Emphasis and underscoring supplied.]

    It is evident from the foregoing provision of law that in the absence of a retirement plan or agreement providing
    for retirement benefits of employees in an establishment, the compulsory retirement age is 65 years old, and that an employee only has the option of retiring at the age of 60 years which cannot be compelled by the employer. In your situation; however, you mentioned that your company supposedly had an early retirement program on which they based your forced retirement at the age of 60. This cannot hold water especially if you did not expressly agree or acquiesce to such an early retirement program as such early retirement should be made through a voluntary and bilateral agreement between the employer and the employee.

    In the case of Alfredo F. Laya, Jr. vs. Court of Appeals, et al. (G.R. No. 205813, 10 January 2018), penned by Honorable Associate Justice Lucas Bersamin, the Honorable Supreme Court had the opportunity to rule on the invalidity of such forced retirement in this wise, viz:

    “Under the provision, the employers and employees may agree to fix the retirement age for the latter, and to embody their agreement in either their collective bargaining agreements (CBAs) or their employment contracts.
    Retirement plans allowing employers to retire employees who have not yet reached the compulsory retirement age of 65 years are not per se repugnant to the constitutional guaranty of security of tenure, provided that the retirement benefits are not lower than those prescribed by law.

    x xx x

    Obviously, the mere mention of the retirement plan in the letter of appointment did not sufficiently inform the petitioner of the contents or details of the retirement program. To construe from the petitioner’s acceptance of his appointment that he had acquiesced to be retired earlier than the compulsory age of 65 years would, therefore, not be warranted. This is because retirement should be the result of the bilateral act of both the employer and the employee based on their voluntary agreement that the employee agrees to sever his employment upon reaching a certain age.” [Emphasis supplied.]

    Following the said laws and jurisprudence, it is thus clear that your forced retirement was not valid and did not conform to the requirements set by law. Thus, you may seek relief against your employer by questioning the validity of the said retirement and thereby allowing you to work again or at the very least be compensated for the lost opportunity to work.

    We find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. Thus, the opinion may vary when the facts are changed or further elaborated. We hope that we were able to enlighten you on the matter.

    Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net


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