MANILA – The Supreme Court (SC) has ruled that employees cannot be retired before the compulsory retirement age of 65 without their clear and voluntary consent.
In a decision written by Associate Justice Ramon Paul L. Hernando and released on Tuesday, the SC’s First Division partly granted the petition of Rodolfo C. Ondevilla and found Colegio de San Juan de Letran in Laguna (CSJL) guilty of illegal dismissal.
Ondevilla joined CSJL as comptroller in 2004 and later became assistant vice president for finance. His appointment was renewed several times.
In 2018, CSJL underwent a management reorganization, and Ondevilla was reassigned as controller. Although he objected to the reassignment, claiming it was a demotion, he continued working at the same salary and benefits.
On Aug. 29, 2019, when Ondevilla turned 60, CSJL considered his appointment expired. Ondevilla then filed a complaint for illegal dismissal.
The labor arbiter and the National Labor Relations Commission ruled in his favor.
The Court of Appeals (CA) also found that CSJL illegally dismissed Ondevilla. However, it ruled that he had agreed to retire effective July 31, 2020, based on a letter he sent to CSJL.
Ondevilla challenged this finding before the SC, insisting that he never agreed to retire before turning 65.
The SC agreed with Ondevilla.
Under the Labor Code, the retirement age is set by an existing agreement or employment contract. If neither exists, the law sets the compulsory retirement age at 65 and the minimum age for optional retirement at 60.
The SC emphasized that an optional retirement plan must be based on a voluntary agreement between the employer and the employee. The employee must freely and expressly agree to it, without pressure or coercion, because accepting optional retirement means giving up the right to security of tenure.
In this case, the Court found that Ondevilla’s early retirement did not result from a mutual agreement between him and CSJL.
The SC noted that CSJL never made any offer or proposal for a retirement plan that Ondevilla could freely accept or reject. There was also no indication that CSJL was willing to discuss his retirement.
The SC said Ondevilla’s letter to CSJL was not a clear notice that he was choosing early retirement. Instead, it was a response to the school’s demand that he repay the cash advance he had received from CSJL.
The SC added that Ondevilla’s objections to being retired early, as well as his filing of an illegal dismissal complaint, showed that he had no intention of opting for retirement before reaching the age of 65.
Because his retirement was involuntary, the SC treated it as an illegal dismissal.
Ondevilla was therefore entitled to full backwages and separation pay instead of reinstatement.
The SC also awarded him retirement benefits covering his employment from June 16, 2004, until August 29, 2024, when he reached the mandatory retirement age of 65. The Court directed the arbitration branch to compute the total amount due to him.
