Banco de Oro Unibank v. Sagaysay
REITERATIONFacts
The Antecedents: Respondent Guillermo C. Sagaysay (Sagaysay) was hired by petitioner Banco De Oro Unibank, Inc. (BDO) as Senior Accounting Assistant 5 on May 16, 2006. BDO informed Sagaysay via letter dated January 8, 2010, that he would be retired effective September 1, 2010, pursuant to the bank's retirement policy mandating a retirement age of 60. Sagaysay requested an extension of his services, citing an outstanding loan and his children's college education, and later appealed for an extension until May 16, 2011, to complete five years of service for enhanced retirement benefits. BDO denied both requests and retired him on September 1, 2010. Sagaysay signed a Release, Waiver and Quitclaim (quitclaim) dated October 22, 2010, for ₱98,376.14, releasing BDO from any claims related to his employment. Procedural History: Sagaysay filed a complaint for illegal dismissal with the Labor Arbiter (LA), claiming he was forced into optional retirement contrary to Article 287 of the Labor Code. The LA ruled in favor of Sagaysay, finding him illegally dismissed and ordering reinstatement, backwages, moral and exemplary damages, and attorney's fees. The National Labor Relations Commission (NLRC) reversed the LA's decision, holding that Sagaysay assented to the retirement plan when he accepted employment, as it was already in effect since 1994 and he was a veteran banker. The Court of Appeals (CA) reinstated the LA's decision, ruling that the retirement plan was not a result of mutual agreement and that Sagaysay's acquiescence was not voluntary, rendering the quitclaim invalid. BDO filed the present petition for review on certiorari. The Petition: BDO seeks to reverse the CA's decision, arguing that the retirement plan is valid and binding, that Sagaysay was aware of it and assented to it, and that the quitclaim he executed is valid.
Issue(s)
Whether the retirement plan is valid and effective, and consequently, the mandatory retirement age of 60 years old is binding. Whether the execution of a release, waiver, and quitclaim by the respondent is valid.
Ruling
The petition is GRANTED. The March 31, 2014 Decision and the October 8, 2014 Resolution of the Court of Appeals are REVERSED and SET ASIDE, and the February 29, 2012 Decision and the June 25, 2012 Resolution of the National Labor Relations Commission are REINSTATED.
Ratio Decidendi
On the validity and effectiveness of the retirement plan and the mandatory retirement age of 60 years old: The Court held that the retirement plan established on July 1, 1994, which mandated a normal or compulsory retirement age of 60, was valid and binding on Sagaysay. Sagaysay was employed on May 16, 2006, which was twelve years after the adoption of the retirement plan. By accepting employment with BDO, Sagaysay was deemed to have assented to all existing rules, regulations, and policies of the bank, including the retirement plan. The Court noted that Sagaysay, a seasoned banker with 34 years of experience, had every opportunity to question the plan if it was not beneficial to him but remained silent for four years. Furthermore, his emails requesting an extension implicitly acknowledged the existence and implementation of the BDO Retirement Program for those reaching the age of sixty. The Court distinguished this case from Cercado v. UNIPROM Inc., where the retirement plan was adopted after the employee's hiring and was not voluntarily assented to by the employee. On the validity of the release, waiver, and quitclaim: The Court found the quitclaim executed by Sagaysay to be valid. Sagaysay received ₱98,376.14 as consideration, which was based on a liquidation data sheet for rank and file employees, and was justified as he had not completed five years of service required for full retirement benefits. Given Sagaysay's extensive experience as a banker, he could not claim to be naive or unaware of the implications of signing the quitclaim. There was no evidence of undue influence exerted by BDO. Therefore, the quitclaim was recognized as a valid and binding undertaking, consistent with jurisprudence that upholds quitclaims executed voluntarily, with full understanding, and for a credible and reasonable consideration.
Main Doctrine
An employer may validly implement a retirement plan with a compulsory retirement age lower than the statutory age of 65, provided that the plan was established prior to the employee's hiring and the employee, by accepting employment, is deemed to have assented to the existing rules and policies of the bank, including the retirement plan. A quitclaim executed by a seasoned employee with full understanding of its contents and for a reasonable consideration is considered valid.