Pulong v. Super Manufacturing
REITERATIONFacts
The Antecedents: Petitioner Guido B. Pulong was employed by respondent Super Manufacturing Inc. (SMI) starting in December 1978, and was re-employed as a Senior Die Setter on August 1, 1998. On September 22, 2014, SMI denied him entry to its premises, presenting him with retirement papers stating he had reached the compulsory retirement age of sixty (60). Pulong refused to sign, wishing to work until age sixty-five (65), but SMI prevented his return to work. Respondents contended that Pulong was compulsorily retired pursuant to a January 1, 2013 Memorandum of Agreement (MOA) between SMI and its workers, which stipulated a retirement age of 60 with at least five years of continuous service. Procedural History: Pulong filed a complaint for illegal dismissal. The Labor Arbiter initially ruled in his favor, finding him illegally dismissed as SMI failed to prove the MOA was executed with the consultation and authorization of its workers. The National Labor Relations Commission (NLRC) initially affirmed this ruling. However, upon motion for reconsideration, the NLRC reversed its decision, finding that Pulong and his co-workers' acceptance of benefits under the MOA estopped them from assailing its validity. The NLRC ordered SMI to pay Pulong's retirement benefits. Pulong sought reconsideration, which was denied with modification, increasing his retirement pay. Aggrieved, Pulong filed a petition for certiorari with the Court of Appeals, which affirmed the NLRC's decision, upholding the compulsory retirement under the MOA. The Petition: Petitioner Pulong seeks to nullify the Court of Appeals' decision and resolution, maintaining he was illegally dismissed as he did not consent to the MOA's compulsory retirement provision at age sixty (60). He argues that the benefits he received were mere gratuities and not an indication of assent to the MOA. Respondents counter that Pulong's enjoyment of the benefits under the MOA binds him and precludes him from assailing its validity. The petition argues that SMI failed to prove that the signatories of the MOA were authorized representatives of the workers and that any waiver of the constitutional right to security of tenure must be clear, categorical, knowing, and intelligent, which was not demonstrated here.
Issue(s)
Whether the Court of Appeals erred in upholding petitioner's compulsory retirement at the age of sixty (60) years under the MOA dated January 1, 2013. Whether petitioner is estopped from assailing the validity of the MOA.
Ruling
The petition is GRANTED. The Decision dated July 13, 2018 and Resolution dated March 6, 2019 of the Court of Appeals are REVERSED and SET ASIDE. The Decision of the Labor Arbiter dated June 10, 2015 is REINSTATED with MODIFICATION. Respondent Super Manufacturing, Inc. is ORDERED to PAY petitioner Guido B. Pulong backwages, separation pay, retirement benefits, and attorney's fees, with legal interest. Engr. Eduardo Dy and Ermilo Pico are dropped as party-respondents.
Ratio Decidendi
On the issue of compulsory retirement under the MOA: The Court held that Article 287 of the Labor Code, as amended by RA 7641, allows employers and employees to fix the retirement age. However, in the absence of such an agreement, the compulsory retirement age is sixty-five (65) years, and the minimum optional retirement age is sixty (60) years. Retirement plans allowing earlier retirement must be assented to by the employee, and this consent must be explicit, voluntary, free, and uncompelled. In this case, SMI failed to prove that the signatories Abad, Bionat, and Cruz were duly authorized by the workers to sign the MOA. Therefore, the MOA did not bind petitioner, and its provisions on compulsory retirement at age sixty (60) were not applicable to him. The Court emphasized that retirement is a bilateral act, requiring voluntary agreement, and an early retirement plan must be voluntarily assented to by the employees or their bargaining representative. On the issue of estoppel: The Court disagreed with the respondents' argument that petitioner's receipt of benefits under the MOA estopped him from questioning its validity. The benefits received (uniforms, Christmas gifts, leave monetization, health card) were considered usual gratuities granted as a matter of company practice, and their acceptance did not equate to assent to the retirement plan. The Court reiterated that acquiescence to an early retirement plan cannot be inferred from acceptance of employment benefits; the acceptance must be unequivocal and specifically refer to the retirement plan. The waiver of a constitutional right, such as security of tenure, must be clear, categorical, knowing, and intelligent, which was not demonstrated here. Therefore, petitioner was not estopped from assailing the validity of the MOA.
Main Doctrine
An employee who did not expressly agree to an early retirement plan cannot be retired from service before reaching the age of sixty-five (65) years. Acceptance of benefits does not equate to assent to the retirement plan unless the acceptance is unequivocal and specifically refers to the retirement plan.