Our Ruling

We rule in the affirmative.

When the CA’s findings and conclusions differ from those of the labor tribunals, a Rule 45 review can consider questions of fact; the Court is not bound to address only questions of law.³⁴

Here, the CA’s finding that Cabrido is entitled to retirement pay pursuant to Option A, Section 3, Article V of ISM’s Retirement Plan contrasts with the ruling of the LA and the NLRC. Thus, the Court can rule on the factual issue of the case.

Definition of Retirement

It is imperative to discuss the definition of retirement because the issue revolves around it and its entitlement. In Santo v. University of Cebu,³⁵ the Court defined it as:

a form of reward for an employee’s loyalty and service to an employer and are earned under existing laws, Collective Bargaining Agreements (CBA), employment contracts and company policies. It 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 or length of service, agrees to sever his or her employment with the former.³⁶ (Emphasis supplied, citations omitted)

From the definition, We can derive the elements of retirement: (1) it is a form of reward for an employee’s loyalty and service to an employer; (2) it is earned under existing laws, Collective Bargaining Agreements, employment contracts, and company policies; (3) it is a result of a bilateral act of the parties; (4) it is an agreement, whereby, after reaching a certain age or length of service, the employee severs their employment.

However, We should understand that there is more depth to it than how retirement was defined in our jurisdiction. The United Nations Human Rights Office of the High Commissioner explained that:³⁷

The right to social security is of central importance in guaranteeing human dignity for all persons when they are faced with circumstances that deprive them of their capacity to fully realize their human rights.

The right to social security encompasses the right to access and maintain benefits without discrimination in order to secure protection from:

1. a lack of work-related income caused by sickness, disability, maternity, employment injury, unemployment, old age, or death of a family member;

………..

Social security plays an important role in reducing and alleviating poverty, preventing social exclusion, and promoting social inclusion. (Emphasis supplied)

From here, it can be deduced that the right to social security, which includes the right to secure protection from unemployment, also consists of the right to receive retirement pay.

Articles 22 and 25 of the Universal Declaration of Human Rights (UDHR)³⁸ cover the rights within which retirement is embodied. Thus:

Article 22

Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.

Article 25

1. Everyone has the right to a standard of living adequate for the health and well-being of himself/herself and of his/her family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his/her control. (Emphasis supplied)

Looking at these provisions of the UDHR, retirement no longer remains a reward or a privilege but a right that is indispensable for one’s dignity.

No less than the state policies under Article II of the Constitution provide:

Section 11. The State values the dignity of every human person and guarantees full respect for human rights.

Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

With this definitive backdrop, We now address the contentions raised by ISM.

First, ISM alleges that the CA overlooked that its Retirement Plan covers only full-time regular employees.³⁹

ISM asserts that the CA erroneously concluded that Cabrido is entitled to retirement benefits under the ISM’s retirement plan when such plan covers only regular full-time teachers and Cabrido’s contract was for fixed term. In effect, the CA rewrote the school’s retirement plan.⁴⁰

In De La Salle Araneta University v. Bernardo,⁴¹ the Court ruled that:

Republic Act No. 7641 states that “any employee may be retired upon reaching the retirement age [ . . . ];” and “[i]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 agreement and other agreements.” The Implementing Rules provide that Republic Act No. 7641 applies to “all employees in the private sector, regardless of their position, designation or status and irrespective of the method by which their wages are paid, except to those specifically exempted […]” Secretary Quisumbing’s Labor Advisory further clarifies that the employees covered by Republic Act No. 7641 shall “include part-time employees, employees of service and other job contractors and domestic helpers or persons in the personal service of another.”⁴² (Emphasis supplied)

Thus, the fact that Cabrido’s contract was for a fixed term is immaterial because all employees in the private sector, regardless of their status, are entitled to retirement pay.

Moreover, according to ISM, Cabrido’s greed dragged ISM into a costly and time-consuming litigation and demanded benefits to which he was not entitled under the school’s retirement plan.⁴³

On the contrary, it may be recalled that Cabrido would not have had any notion that he was entitled to a retirement benefit until ISM sent an offer to avail a retirement package. Thus:

Good day,

We regret to inform you that the IATF regulation stating that, “Conduct of curricular and co-curricular activities involving gatherings such as science fairs, showcase of portfolios, trade fairs, school sports, campus journalism, festival of talents, job fairs, and other similar activities will be cancelled” remains in force. It may well be that this ban will last for the entirety of SY 2020-2021.

In view of this, ISM has no choice but to suspend all afternoon activities – both ATAC and AFAC – and furlough all its coaches. This means that your employment status at ISM will follow” the “no work, no pay” arrangement, as permitted by DOLE, unless and until we are allowed by the government to return to regular holding of ATAC and AFAC activities.

However, the School is offering an early retirement option for those (1) at least 50 years of age; and (2) have worked for the school for at least 5 years as of Jan 31, 2021. Pursuant to the Philippine Labor Code, the computation for retirement pay is ½ month for every year of service. “The basis for this calculation will be your pay for school year 2019-2020.

If you do meet the qualifications above and are interested in availing of this option, please feel free to reach out to me by sending me an email no later than November 30th 2020 and we can then provide you with a computation.

We will keep this situation under constant review and keep you informed of any changes.

Please do not hesitate to email me should you have any questions.

Michelle Mapua
HR Director⁴⁴ (Emphasis supplied)

When he conveyed his acceptance of the offer,⁴⁵ it becomes a new “agreement” that will be the basis for the grant of the retirement pay that superseded any other previously agreed retirement plans.

Article 302 [287] of the Labor Code, as amended by Republic Act No. 7641, reads:

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. (Emphasis supplied)

The Court further held that:⁴⁶

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 agreement 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 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 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.⁴⁷ (Emphasis supplied)

Hence, ISM’s reproof against and its imputation of greed on Cabrido is not acceptable, given that the qualifications for retirement were crafted by ISM and the offer to retire was likewise initiated by ISM. Cabrido did not actively ask for it but only agreed to avail of it after it was offered to him as it was doubtful that he could still regain his employment considering the pandemic.

Besides, ISM’s responsible officers used the words “retirement option” and “retirement package.” Thus, the CA was correct in pointing out that ISM cannot renege on its obligation to provide Cabrido with his retirement pay under its retirement plan under the pretense that it only gave its employees financial aid, under the claim that Cabrido, being only 50 years old, is not entitled to retirement pay under the Labor Code, which requires that the employee be at least 60 years old.⁴⁸ This assertion would have only remained meritorious had it not made a new offer to Cabrido.

In Riingen v. Western Union Financial Services,⁴⁹ the Court applied estoppel in a case involving a monetary claim for withholding tax deducted from the early retirement benefit. Thus:

According to Article 1431 of the Civil Code provides that “through estoppel, an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.” There are three kinds of estoppels, to wit: (1) estoppel in pais; (2) estoppel by deed; and (3) estoppel by laches. Under estoppel in pais, a person is considered in estoppel if his conduct, representations, admissions, or silence when he ought to speak out, whether intentionally or through culpable negligence, “causes another to believe certain facts to exist and such other rightfully relies and acts on such belief, as a consequence of which he would be prejudiced if the former is permitted to deny the existence of such facts.”⁵⁰ (Emphasis in the original, citation omitted)

The conduct and representations of ISM and its responsible officers before, during, and after Cabrido’s acceptance of the offer led him to believe that he is qualified to avail of the offer, and that the benefit he would receive was a retirement pay that should be computed according to the applicable laws, as specifically mentioned in ISM’s letter.

Next, there is no merit in ISM’s assertion that the quitclaim executed by Cabrido in favor of ISM is valid. Thus, he is already precluded from pursuing his claims in the instant case.⁵¹

The Court repeatedly held that quitclaims are looked upon with disfavor and are commonly frowned upon as contrary to public policy and ineffective to bar claims. The reason for this rule is that the employer and the employee do not stand on the same footing, such that quitclaims usually take the form of contracts of adherence, not of choice.⁵²

In this case, ISM left Cabrido with no choice but to accept the terms of its offer. Its message was clear that if Cabrido does not accept the offer, there is no guarantee that he can still be employed. The CA was correct in noting that considering the factual milieu of the incidents when the offer for retirement was made, the pandemic caused a negative impact on an individual’s income.⁵³ The quitclaim should not stop Cabrido from pursuing his claim for retirement pay.

To Our minds, the premise of the quitclaim is the offer and acceptance of ISM’s computed retirement benefit. ISM cannot call it retirement pay to release itself from further responsibility and simultaneously deny its nature as retirement pay when the computation is being challenged and questioned.

ISM’s representations belie its claim that its offer is a financial assistance to qualified employees who wish to resign.

Finally, the issue of the grant of retirement benefit is not an issue of generosity and greed. As previously discussed, it is a basic human right to social security indispensable to uphold and protect the dignity of every person and critical for alleviating the lives of the marginalized. Thus, employers should be reminded to take the issue of retirement with careful consideration. Retirement is a right and not a privilege; neither is it considered a “dole out”.

FOR THESE REASONS, the Petition for Review on Certiorari is DENIED. The February 29, 2024 Decision of the Court of Appeals in CA-G.R. SP No. 180309 is AFFIRMED. Ireland Carreon Cabrido is ENTITLED to RETIREMENT PAY.

The case is REMANDED to the Labor Arbiter for re-computation of the amounts due to Cabrido in conformity with this Decision.

SO ORDERED.