MANILA, Philippines — The Supreme Court (SC) First Division has denied the petition of International School Manila (ISM), affirming that part-time and fixed-term employees are entitled to retirement benefits under the law. In a Decision promulgated on July 29, 2025, and penned by Associate Justice Ramon Paul B. Hernando, the Court ruled that retirement is a “basic human right” indispensable to human dignity, rather than a mere privilege or employer “generosity.”

The ruling favored Ireland Carreon Cabrido, who served as an Afternoon Activity (AFAC) and Athletic Activity (ATAC) coach at ISM for 25 years, from 1995 to 2020. Despite his long tenure, ISM argued that Cabrido was not entitled to the school’s formal retirement plan because he was a fixed-term, part-time employee who did not meet the statutory retirement age of 60.

The dispute began during the COVID-19 pandemic in 2020 when face-to-face classes and sports activities were suspended. On July 23, 2020, ISM sent an email to its coaches offering an “early retirement option” for those at least 50 years old with at least five years of service. Cabrido, then 50, accepted the offer.

However, a conflict arose when ISM computed his retirement pay at approximately PHP 298,000, while Cabrido asserted he was entitled to over PHP 680,000 based on his 25 years of service. ISM refused the re-computation, claiming Cabrido was only receiving “financial assistance” by way of accommodation and was not a “member” of the official retirement plan, which ISM claimed was reserved for full-time regular faculty.

The Labor Arbiter and the National Labor Relations Commission (NLRC) initially sided with the school, dismissing Cabrido’s complaint. However, the Court of Appeals (CA) reversed these rulings, prompting ISM to elevate the case to the Supreme Court.

The Supreme Court rejected ISM’s restrictive interpretation of its retirement plan. Citing Republic Act No. 7641 and established jurisprudence, the Court emphasized that retirement laws apply to “all employees in the private sector, regardless of their position, designation, or status,” including part-time and fixed-term workers.

The Court also applied the principle of estoppel, noting that ISM’s own human resources department specifically used the terms “retirement option” and “retirement package” in its offer to Cabrido. By setting the qualifications at 50 years of age and five years of service, ISM created a new agreement that superseded the general statutory requirement of being 60 years old.

“The conduct and representations of ISM… led [Cabrido] to believe that he is qualified to avail of the offer,” the Court held. “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.”

The SC further invalidated the “Waiver, Release, and Quitclaim” signed by Cabrido. Reaffirming that such documents are generally looked upon with disfavor, the Court noted that Cabrido was left with “no choice” but to accept the offer during a pandemic that had decimated his income.

The ruling characterized the quitclaim as a “contract of adherence” rather than a choice, stating that the pandemic’s negative impact on individual income meant the parties did not stand on equal footing.

In a significant closing statement on social justice, the Court reminded employers that retirement benefits are linked to international human rights standards, including the Universal Declaration of Human Rights (UDHR).

“Retirement no longer remains a reward or a privilege but a right that is indispensable for one’s dignity,” the Court declared. “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.'”

The Supreme Court ordered the case remanded to the Labor Arbiter for the re-computation of Cabrido’s benefits in accordance with the decision.