RETIREMENT BENEFITS AND SEPARATION PAY

IN order to maintain the viability of its operations in the midst of economic reversals, petitioner Goodyear Philippines, Inc., implemented cost-saving measures which included the streamlining of its workforce. On September 19, 2011, respondent Marina L. Angus received a letter from petitioner’s Human Resources Director that her position as secretary to the Manager of Quality & Control Technology has been declared redundant. After some hitches, Angus finally accepted on January 17, 2002, a check in the amount of P1,958,927.89 purportedly inclusive of all termination benefits computed at 47 days’ pay per year of service. She likewise executed a Release and Quitclaim in favor of the petitioner. On February 5, 2002, she filed with the Labor Arbiter a complaint for illegal dismissal with claims for separation pay, damages, and attorney’s fees against petitioners. She claimed that the separation pay to which she is entitled by law is entirely different from the retirement benefits that she received. Does her complaint prosper?

Ruling: Yes.

In Aquino v. National Labor Relations Commission, G.R. No. 87653, February 11, 1992, 206 SCRA 118, 123-125 citing Batangas Laguna Tayabas Bus Company v. Court of Appeals, 163 Phil. 494 (1976) and University of the East v. Hon. Minister of Labor, 236 Phil. 724(1987), the Court held that an employee is entitled to recover both separation pay and retirement benefits in the absence of a specific prohibition in the Retirement Plan or CBA. Concomitantly, the Court ruled that an employee’s right to receive separation pay in addition to retirement benefits depends upon the provisions of the company’s Retirement Plan and/or CBA.

Here, petitioners allege that there is a provision in the last CBA against the recovery of both retirement benefits and separation pay. To support their claim, petitioners submitted a copy of what appears to be a portion of the company CBA entitled “Retirement Plan, Life Insurance, Physical Disability Pay and Resignation Pay.” Section 1, Article XI thereof provides that the availment of retirement benefits precludes entitlement to any separation pay. The same, however, can hardly be considered as substantial evidence because it does not appear to be an integral part of Goodyear’s CBA. Even assuming that it is, it would still not suffice as there is no showing if the CBA under which the said provision is found was the one in force at the time material to this case. On the other hand, Angus presented the parties’ 2001-2004 CBA and upon examination of the same, the Court agrees with her that it does not contain any restriction on the availment of benefits under the company’s Retirement Plan and of separation pay. Indeed, the Labor Arbiter and the NLRC erred in ignoring this material piece of evidence which is decisive of the issue presented before them. The CA, thus, committed no error in reversing the Decisions of the labor tribunals when it ruled in favor of Angus’ entitlement to both retirement benefits and separation pay.

Moreover, the Court agrees with the CA that the amount Angus received from petitioners represented only her retirement pay and not separation pay. A cursory reading of petitioners’ September 18, 2001 letter notifying Angus of her termination from employment shows that they granted her early retirement benefits pegged at 47 days’ pay per year of service. This rate was arrived at after petitioners considered respondent’s length of service with the company, as well as her age which qualified her for early retirement. In fact, petitioners were even explicit in stating in the said letter that the amount she was to receive would come from the company’s Pension Fund, which, as correctly asserted by Angus, was created to cover retirement benefit payment of employees. In addition, the document showing a detailed account of Angus’ termination benefits speaks for itself as the same is entitled “Summary of Retirement Pay and other Company Benefits.” In view therefore of the clear showing that what petitioners decided to grant Angus was her early retirement benefits, they cannot now be permitted to deny having paid such benefit. (Del Castillo, J.; SC Second Division; Goodyear Philippines, Inc. and Remegio M. Ramos vs. Marina L. Angus, G.R. No. 185449, November 12, 2014).