VOLUNTARY RETIREMENT VS. INVOLUNTARY RETIREMENT

Robina Farms Cebu/Universal Robina Corporation Vs. Elizabeth Villa
G.R. No. 175869. April 18, 2016

Facts:

Villa averred that she was employed by petitioner Robina Farms as sales clerk since August 1981; that in the later part of 2001, the petitioner had enticed her to avail herself of the company’s special retirement program; that on March 2, 2002, she had received a memorandum requiring her to explain her failure to issue invoices for unhatched eggs; that she had explained that the invoices were not delivered on time because the delivery receipts were delayed and overlooked; that despite her explanation, she had been suspended for 10 days; that upon reporting back to work, she had been advised to cease working because her application for retirement had already been approved; that she had been subsequently informed that her application had been disapproved, and had then been advised to tender her resignation with a request for financial assistance; that she had manifested her intention to return to work but the petitioner had confiscated her gate pass; and that she had since then been prevented from entering the company premises and had been replaced by another employee.

Petitioner alleged that she had applied for retirement under the special privilege program offered to its employees in Bulacan and Antipolo who had served for at least 10 years. During the administrative hearing, Villa was found to have violated the company rule on the timely issuance of the invoices that had resulted in delay in the payment of buyers considering that the payment had depended upon the receipt of the invoices; that she had been suspended from her employment as a consequence; that after serving the suspension, she had returned to work and had followed up her application for retirement with Lucina de Guzman, who had then informed her that the management did not approve the benefits equivalent to 86% of her salary rate applied for, but only ½ month for every year of service; and that disappointed with the outcome, she had then brought her complaint against the petitioners.

LA Ruling:

The LA ruled that Villa was not dismissed from employment. The LA held that her application, insofar as the benefits are concerned, was not approved which means that while her application for retirement was considered, management was willing to give her retirement benefits equivalent only to half-month pay for every year of service and not 86% of her salary for every year of service as mentioned in her application. Mrs. De Guzman suggested that if she wanted to pursue her supposed retirement despite thereof, she should submit a resignation letter and include therein a request for financial assistance. We do not find anything illegal or violative in the suggestion made by Mrs. De Guzman. There was no compulsion since the choice was left entirely to the complainant whether to pursue it or not. The LA ordered reinstatement without backwages but also payment of service incentive leave to Villa.

Both parties appealed to the NLRC

NLRC Ruling:

The NLRC dismissed the appeal of petitioner but granted that of Villa. The NLRC held the petitioner liable for the illegal dismissal of Villa, observing that because Villa’s retirement application had been subject to the approval of the management, her act of applying therefor did not indicate her voluntary intention to sever her employment relationship but only her opting to retire by virtue of her having qualified under the plan; that upon informing her about the denial of her application, the petitioner had advised her to tender her resignation and to request for financial assistance; that although she had signified her intention to return to work, the petitioner had prevented her from doing so by confiscating her gate pass and informing her that she had already bee n replaced by another employee; and that the petitioner neither disputed her allegations thereon, nor adduced evidence to controvert the same.

After the denial of its motion for reconsideration, the petitioner filed a petition for certiorari in the CA.

CA Ruling:

The CA dismissed the petition. Other than dismissal due to procedural defect (unsigned pleading due to lack proof of authority to sign verification), the CA upheld the finding of the NLRC that the petitioner had illegally dismissed Villa. It deemed the advice by Ngochua and de Guzman for Villa to resign and to  request instead for financial assistance was a strong and unequivocal indication of the petitioner’s desire to sever the employer-employee relationship with Villa. The CA denied the MR. Thus, the petition.

Issue/s:

1. Whether or not application for retirement amounted to intention to sever employment relationship
2. Whether or not there was dismissal and if so, if it was illegal
3. Whether or not the DTR showing more than 8 hours of stay in office premises can be sufficient basis to claim overtime pay

SC Ruling:

The SC did not find merit in the appeal.

Villa’s application for early retirement did not manifest her intention to sever the employer-employee relationship. Although she applied for early retirement, she did so upon the belief that she would receive a higher benefit based on the petitioner’s offer. As such, her consent to be retired could not be fairly deemed to have been knowingly and freely given.

Retirement is the result of a bilateral act of both the employer and the employee based on  their voluntary agreement that upon reaching a certain age, the employee agrees to sever his employment. The difficulty in the case of Villa arises from determining whether the retirement was voluntary or involuntary. The line between the two is thin but it is one that the Court has drawn. On one hand, voluntary retirement cuts the employment ties leaving no residual employer liability; on the other, involuntary retirement amounts to a discharge, rendering the employer liable for termination without cause. The employee’s intent is decisive. In determining such intent, the relevant parameters to consider are the fairness of the process governing the retirement decision, the payment of stipulated benefits, and the absence of badges of intimidation or coercion.

In Jaculbe vs. Silliman University, [A]n employer is free to impose a retirement age less than 65 for as long as it has the employees’ consent. Stated conversely, employees are free to accept the employer’s offer to lower the retirement age if they feel they can get a better deal with the retirement plan presented by the employer. Thus, having terminated petitioner solely on the basis of a provision of a retirement plan which was not freely assented to by her, respondent was guilty of illegal dismissal. The dismissal of Villa is illegal.

The DTRs did not substantially prove the actual performance of overtime work. The petitioner correctly points out that any employee could render overtime work only when there was a prior authorization therefor by the management. Without the prior authorization, therefore, Villa could not validly claim having performed work beyond the normal hours of work. Moreover, Section 4( c ), Rule I, Book III of the Omnibus Rules Implementing the Labor Code.