Early retirement

Dear Atty. Nico,

I would like to seek your legal advice. I am 50 years of age and I worked as a PE teacher for 11 years at Northstar International Academy. Due to the pandemic, the latter offered its employees an early retirement package on the following conditions: a) one had to be at least 50 years of age; and b) one had worked for at least 10 years. I expressed my intention to avail the said package. However, they declined my request on the ground that I was only employed on a fixed-term basis and not as a regular employee. Am I entitled to avail the said early retirement package?

Tonyo

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Dear Tonyo,

Yes, you may avail the said retirement package. In the case of Santo vs. University of Cebu, the Court defined retirement as “a form of reward for an employee’s loyalty and service to an employer and are earned under existing laws, Collective Bargaining Agreements, 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.”

As to what type of employee may avail of a retirement plan, the Court explained the same in the case of De La Salle Araneta University vs. Bernardo that: “Republic Act 7641 states that ‘any employee may be retired upon reaching the retirement age…’ and ‘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.’ The Implementing Rules provide that Republic Act 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 7641 shall ‘include part-time employees, employees of service and other job contractors and domestic helpers or persons in the personal service of another.’”

Applying the same in your case, your employer is obliged to grant your availment of the early retirement package as you have accepted the said offer and have made known of such acceptance; thus, an agreement between the two of you has already been created. Moreover, retirement is a right, not a privilege, neither is it considered a “dole-out.”

Atty. Nico A. Antonio