Llora Motors, Inc. vs. Drilon G.R. No. 82895. November 7, 1989.

Labor Relations; Labor Arbiters; Due Process; A formal or trial type hearing is not at all times essential to due process; Requirements satisfied where parties are afforded fair and reasonable opportunity to explain their side; Case at bar.—With respect to the first issue, petitioners allege that failure by the Labor Arbiter to conduct a formal hearing, prior to rendition of judgment, resulted in violation of their constitutional right to due process. We do not agree. This Court has held in the past that a formal or trial-type hearing is not at all times and in all instances essential to due process, the requirements of which are satisfied where parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. Such opportunity had not here been withheld from petitioners. The record shows that in response to private respondent Alviar’s complaint below and before the Labor Arbiter rendered his decision of 27 January 1987, petitioners submitted on 21 January 1986 a Position Paper, complete with annexes, where they had set out and argued the factual as well as the legal bases of their position. Petitioners do not claim that their submissions there were ignored or disregarded altogether by the Labor Arbiter. The record moreover shows that petitioners were given additional opportunity to argue their case on appeal before public respondent NLRC, in a Memorandum and Motion for Reconsideration, which pleadings were likewise considered by that labor agency in the course of resolving the case. All told, the due process argument put forward by petitioners must fail.

Same; Same; Retirement benefits; When retirement benefits may accrue; Compulsory and contributory character on the part of both the employer and the employee.—Examination of Article 287 above shows that entitlement to retirement benefits may accrue either (a) under existing laws or (b) under a collective bargaining agreement or other employment contract. It is at once apparent that Article 287 does not itself purport to impose any obligation upon employers to set up a retirement scheme for their employees over and above that already established under existing laws. In other words, Article 287 recognizes that existing laws already provide for a scheme by which retirement benefits may be earned or accrued in favor of employees, as part of a broader social security system that provides not only for retirement benefits but also death and funeral benefits, permanent disability benefits, sickness benefits and maternity leave benefits. As is common place knowledge, the Social Security Act provides for retirement benefits which essentially consist of the right to receive a monthly pension for the rest of the covered employee’s life provided that: (1) such employee had paid at least one hundred twenty (120) monthly contributions prior to retirement; and (2) has reached the age of sixty (60) years (if his salary is less than P300.00 a month) or 65 years. The retirement scheme here established is compulsory and contributory in character on the part of both the employer and the employee, backed up by criminal sanctions and administered by a large and elaborate bureaucracy.

Same; Same; Same; Termination Pay; Conditions in order that payments under a retirement plan may be credited against the termination pay.—What needs to be stressed, however, is that Section 14 of Implementing Rule I, like Article 287 of the Labor Code, does not purport to require “termination pay” to be paid to an employee who may want to retire but for whom no additional retirement plan had been set up by prior agreement with the employer. Thus, Section 14 itself speaks of an employee “who is

retired pursuant to a bona-fide retirement plan or in accordance with the applicable individual or collective agreement or established employer policy.” What Section 14 of Implementing Rule I may be seen to be saying is that where termination pay is otherwise payable to an employee under an applicable provision of the Labor Code, and an additional or consensual retirement plan exists, then payments under such retirement plan may be credited against the termination pay that is due, subject, however, to certain conditions. These conditions are: (a) that payments under the additional retirement plan cannot have the effect of reducing the amount of termination pay due and payable to less than one-half (1/2) month’s salary for every year of service; and (b) the employee cannot be made to contribute to the termination pay that he is entitled to receive under some provision of the Labor Code; in other words, the employee is entitled to the full amount of his termination pay plus at least the return of his own contributions to the additional retirement plan.

Same; Same; Same; Same; No consensual basis for the required payment of additional retirement benefits; Reasons; Case at bar.—Clearly, there was in the instant case no consensual basis for the required payment of additional retirement benefits. The Labor Arbiter and the NLRC had not declared private respondent Alviar to have been illegally dismissed by petitioners. Neither was there any pretense on the part of private respondent Alviar that labor-saving devices had been installed, or that redundancy or retrenchment or cessation of operations had occurred in Llora Motors or that he was afflicted by some disabling disease, or that, being entitled to reinstatement, he could not be reinstated to his old position. Under these circumstances, the portion of the Labor Arbiter’s award which required petitioners to pay an amount equivalent to a half month’s pay for every year of service of Mr. Alviar cannot be justified either as (additional) retirement benefits or as termination pay and hence constituted an act without or in excess of jurisdiction.

Manuel L. Quezon University vs. National Labor Relations Commission G.R. No. 141673. October 17, 2001

Labor Law; Retirement; Republic Act No. 7641 intends to give the minimum retirement benefits to employees not entitled thereto under collective bargaining and other agreement.—We affirm the decision of the Court of Appeals. The law, Republic Act No. 7641, intends to give the minimum retirement benefits to employees not entitled thereto under collective bargaining and other agreements. Its coverage applies to establishments with existing collective bargaining or other agreements or voluntary retirement plans whose benefits are less than those prescribed under the proviso in question.

Same; Same; Statutory Construction; Republic Act No. 7641 is a curative social legislation, and by their nature, curative statutes may be given retroactive effect, unless it will impair vested rights.— Republic Act No. 7641 is a curative social legislation. By their nature, curative statutes may be given retroactive effect, unless it will impair vested rights. Republic Act No. 7641 has retroactive effect to include in its coverage the employees’ services to an employer rendered prior to its effectivity. It applies to employees in the employ of employers at the time the law took effect and who are eligible to benefits under that statute.

Philippine Airlines, Inc. vs. Airline Pilots Association of the Phils.G.R. No. 143686. January 15, 2002.

Labor Law; Retirement; Pilots; Based on the peculiar circumstance that PAL pilots are in, retiring after twenty years of service or after flying 20,000 hours, and who would still be in the prime of their lives—a special scheme of retirement different from that contemplated in the Labor Code was provided for by the parties; Article 287 of the Labor Code could not have contemplated the situation of the PAL pilots—it was intended for those who have no more plans of employment after retirement, and are thus in need of financial assistance and reward for the years that they have rendered service.—A pilot who retires after twenty years of service or after flying 20,000 hours would still be in the prime of his life and at the peak of his career, compared to one who retires at the age of 60 years old. Based on this peculiar circumstance that PAL pilots are in, the parties provided for a special scheme of retirement different from that contemplated in the Labor Code. Conversely, the provisions of Article 287 of the Labor Code could not have contemplated the situation of PAL’s pilots. Rather, it was intended for those who have no more plans of employment after retirement, and are thus in need of financial assistance and reward for the years that they have rendered service.

Same; Same; Same; Assumption of Jurisdiction; Due Process; The option of an employer to retire its employees is recognized as valid, and the requirement imposed by the Secretary of Labor to consult the pilots prior to their retirement defeats the exercise by management of its option to retire the said employees; Due process only requires that notice be given to the pilot of the airline’s decision to retire him.—On the issue of whether petitioner should consult the pilot concerned before exercising its option to retire pilots, we rule that this added requirement, in effect, amended the terms of Article VII, Section 2 of the 1976 PAL-ALPAP Retirement Plan. The option of an employer to retire its employees is recognized as valid. x x x Surely, the requirement to consult the pilots prior to their retirement defeats the exercise by management of its option to retire the said employees. It gives the pilot concerned an undue prerogative to assail the decision of management. Due process only requires that notice be given to the pilot of petitioner’s decision to retire him. Hence, the Secretary of Labor overstepped the boundaries of reason and fairness when he imposed on petitioner the additional requirement of consulting each pilot prior to retiring him.

Same; Same; Same; Same; Same; Where the Secretary of Labor and Employment resolves a question which is outside of the issues raised, he deprives the parties of an opportunity to be heard on such point.—When the Secretary of Labor and Employment imposed the added requirement that petitioner should consult its pilots prior to retirement, he resolved a question which was outside of the issues raised, thereby depriving petitioner an opportunity to be heard on this point.

Razon, Jr. vs. National Labor Relations Commission G.R. No. 80502. May 7, 1990.

Labor Law; Retirement; Management discretion may not be exercised arbitrarily or capriciously especially with regards to the implementation of the retirement plan.—It must be stressed that the

words “upon the discretion of management” are not synonymous with absolute or unlimited discretion. In other words, management discretion may not be exercised arbitrarily or capriciously especially with regards to the implementation of the retirement plan. We believe that upon acceptance of employment, a contractual relationship was established giving private respondent an enforceable vested interest in the retirement fund. Verily, the retirement scheme became an integral part of his employment package and the benefits to be derived therefrom constituted as it were a continuing consideration for services rendered, as well as an effective inducement for remaining with the firm.

Same; Same; Same; Private respondent has already acquired a vested right to the retirement fund.—Having rendered twenty years of service with Metroport Services, Inc., it can be said that private respondent has already acquired a vested right to the retirement fund, a right which can only be withheld upon a clear showing of good and compelling reasons.

Same; Same; Same; Fact that private respondent sought employment elsewhere should not hinder him from claiming his retirement benefits.—The fact that private respondent sought employment elsewhere should not hinder him from claiming his retirement benefits. It is an inexorable fact that at 65 years, he reached the mandatory age for retirement and, therefore, qualified to retire. We have here an ironic situation where instead of enjoying the fruits of his retirement, private respondent was forced to seek reemployment for his survival. Surely, private respondent does not deserve such a pathetic end to his long and faithful service with petitioners.