Supreme Court has ordered International School Manila (ISM) to pay retirement benefits to its former athletic activity coach, stressing that retirement is a right grounded in human dignity and not a mere “dole out” from employers.
In a decision dated 29 July 2025, the High Court’s First Division denied ISM’s petition challenging a Court of Appeals ruling that upheld the grant of retirement pay to Ireland Cabrido under the school’s retirement plan.
The Supreme Court directed the labor arbiter to recompute the amounts due to Cabrido.
ISM argued that its retirement plan applied only to full-time employees and not to Cabrido, whom it classified as a fixed-term employee. The school maintained that Cabrido was already given financial assistance and was not entitled to retirement pay under the Labor Code since he had not reached the age of 60 and had signed a quitclaim in favor of the school.
The case stemmed from Cabrido’s complaint questioning ISM’s computation of his pay after he accepted the school’s offer of an early retirement package during the pandemic.
Cabrido argued that his retirement benefits should have been based on his 25 years of service, asserting that he should be considered a regular employee. ISM countered that Cabrido had been repeatedly rehired on a fixed-term basis.
In the ruling penned by Associate Justice Ramon Paul Hernando, the Court said that all private-sector employees are entitled to retirement benefits regardless of employment status.
The justice said the fixed-term nature of Cabrido’s contract was immaterial, emphasizing that “all employees in the private sector, regardless of their status, are entitled to retirement pay.”
The Court rejected ISM’s claim that Cabrido demanded benefits to which he was not entitled, noting that he would not have sought retirement pay had the school not offered it in writing.
When Cabrido accepted the offer, the Court said it became a new agreement that superseded previous arrangements and served as the basis for computing his retirement benefits.
The Supreme Court also dismissed ISM’s imputation of greed on Cabrido, saying the qualifications for retirement were crafted by the school and that the retirement option was initiated by ISM itself.
It noted that ISM officials explicitly used the terms “retirement option” and “retirement package,” leading Cabrido to reasonably believe he qualified for retirement pay under applicable laws.
The Court further ruled that Cabrido’s quitclaim did not bar him from claiming retirement benefits, reiterating that quitclaims are generally frowned upon because employers and employees do not stand on equal footing.
The Supreme Court emphasized that retirement pay is a legal obligation and a matter of human dignity.
It added that the grant of retirement benefits “is not an issue of generosity and greed,” describing it as a basic human right to social security that is indispensable in protecting dignity and alleviating hardship.
“Retirement is a right and not a privilege; neither is it considered a ‘dole out,’” the Court said.