Title I

TERMINATION OF EMPLOYMENT

ARTICLE 278. Coverage. – The provisions of this Title shall apply to all establishments or
undertakings, whether for profit or not.

ARTICLE 279. Security of tenure. – In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by this Title.
An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss
of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement. (As amended by Section 34,
Republic Act No. 6715, March 21, 1989).

ARTICLE 280. Regular and casual employment. – The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or trade of the employer, except where
the employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in nature and the employment is for the
duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:

Provided, That any employee who has rendered at least one year of service, whether such service
is continuous or broken, shall be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such activity exists.

ARTICLE 281. Probationary employment. – Probationary employment shall not exceed six (6)
months from the date the employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.

ARTICLE 282. Termination by employer. – An employer may terminate an employment for

any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representatives; and

(e) Other causes analogous to the foregoing.

ARTICLE 283. Closure of establishment and reduction of personnel. - The employer may also
terminate the employment of any employee due to the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and
Employment at least one (1) month before the intended date thereof. In case of termination due
to the installation of labor-saving devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1)
month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of establishment or undertaking not due
to serious business losses or financial reverses, the separation pay shall be equivalent to one (1)
month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.

ARTICLE 284. Disease as ground for termination. – An employer may terminate the services
of an employee who has been found to be suffering from any disease and whose continued
employment is prohibited by law or is prejudicial to his health as well as to the health of his co-
employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary
or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at
least six (6) months being considered as one (1) whole year.

ARTICLE 285. Termination by employee. – (a) An employee may terminate without just cause
the employee-employer relationship by serving a written notice on the employer at least one (1)
month in advance. The employer upon whom no such notice was served may hold the employee
liable for damages.

(b) An employee may put an end to the relationship without serving any notice on the employer
for any of the following just causes:

1. Serious insult by the employer or his representative on the honor and person of the employee;

2. Inhuman and unbearable treatment accorded the employee by the employer or his
representative;

3. Commission of a crime or offense by the employer or his representative against the person of
the employee or any of the immediate members of his family; and

4. Other causes analogous to any of the foregoing.

ARTICLE 286. When employment not deemed terminated. – The bona-fide suspension of the
operation of a business or undertaking for a period not exceeding six (6) months, or the
fulfillment by the employee of a military or civic duty shall not terminate employment. In all
such cases, the employer shall reinstate the employee to his former position without loss of
seniority rights if he indicates his desire to resume his work not later than one (1) month from the
resumption of operations of his employer or from his relief from the military or civic duty.

Retrenchment Concept

Retrenchment is an economic ground to reduce the number of employees. It is the reduction of

personnel for the purpose of cutting down on costs of operations in terms of salaries and wages
resorted to by an employer because of losses in operation of a business occasioned by lack of
work and considerable reduction in the volume of business. Retrenchment is sometimes also
referred to as downsizing. It is aimed at saving a financially ailing business establishment from
eventually collapsing.

Basic Requisites of Valid Retrenchment

To justify retrenchment, the following requisites must be complied with:

1. The retrenchment must be necessary to prevent business losses; and

2. The business losses sought to be prevented are serious, actual and real.

Meaning of “To Prevent Losses”

The phrase “to prevent losses” means that retrenchment is authorized to be undertaken by the
employer sometime before the losses anticipated are actually sustained or realized. Actual losses
need not set in prior to retrenchment.

Meaning of “Serious, Actual and Real”

In order to be justified, the termination of employment by reason of retrenchment must be due to

business losses or reverses which are serious, actual and real.

Not every loss incurred or expected to be incurred by the employer will justify retrenchment,
since, in the nature of things, the possibility of incurring losses is constantly present, in greater or
lesser degree, in carrying on the business operations.

The following are the general standards to determine whether the business losses sought to be
prevented are serious, actual and real, and sufficient to justify retrenchment of employees:

1. The losses expected should be substantial and not merely de minimis in extent;
2. The losses apprehended must be reasonably imminent;
3. The alleged losses if already realized, and the expected imminent losses sought to be
forestalled, must be proven by sufficient and convincing evidence.
Separation Pay

In case of retrenchment to prevent losses, the separation pay shall be equivalent to one month
pay or at least one-half month pay for every year of service, whichever is higher. A fraction of at
least six months shall be considered one whole year. (Article 283, LC.)

Temporary Retrenchment or Lay-Off

Article 283 of the Labor Code of the Philippines speaks only of permanent retrenchment or lay-
off. There is no specific provision in the Labor Code that governs temporary retrenchment,
particularly the requisites for its implementation and maximum duration.

To remedy this situation, the Court has applied by analogy Art. 286 to set a specific period that
employees may remain temporarily laid, or, sometimes referred to as in floating status. Article
286 provides:

Article 286. When employment not deemed terminated. The bonafide suspension of the operation
of a business or undertaking for a period not exceeding six months, or the fulfillment by the
employee of a military or civic duty shall not terminate employment. In all such cases, the
employer shall reinstate the employee to his former position without loss of seniority rights if he
indicates his desire to resume his work not later than one month from the resumption of
operations of his employer or from his relief from the military or civic duty.

Applying the above provision in the case of temporary retrenchment, an employee who has been
temporarily laid-off should be recalled or otherwise permanently retrenched after the lapse of six
months. Failing this would be tantamount to illegal dismissal.
 Title II

RETIREMENT FROM THE SERVICE

ART. 287. Retirement. - Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment contract.

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:
Provided, however, That an employee’s retirement benefits under any collective bargaining and
other agreements shall not be less than those provided therein.

In the absence of a retirement plan or agreement providing for retirement benefits of employees
in the establishment, an employee upon reaching the age of sixty (60) years or more, but not
beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has
served at least five (5) years in the said establishment, may retire and shall be entitled to
retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered as one whole year.

Unless the parties provide for broader inclusions, the term ‘one-half (1/2) month salary’ shall
mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of
not more than five (5) days of service incentive leaves.

Retail, service and agricultural establishments or operations employing not more than ten (10)
employees or workers are exempted from the coverage of this provision.

Violation of this provision is hereby declared unlawful and subject to the penal provisions under
Article 288 of this Code.

ART. 288. Penalties. - Except as otherwise provided in this Code, or unless the acts complained
of hinge on a question of interpretation or implementation of ambiguous provisions of an
existing collective bargaining agreement, any violation of the provisions of this Code declared to
be unlawful or penal in nature shall be punished with a fine of not less than One Thousand Pesos
(P1,000.00) nor more than Ten Thousand Pesos (P10,000.00) or imprisonment of not less than
three months nor more than three years, or both such fine and imprisonment at the discretion of
the court.

In addition to such penalty, any alien found guilty shall be summarily deported upon completion
of service of sentence.

Any provision of law to the contrary notwithstanding, any criminal offense punished in this
Code, shall be under the concurrent jurisdiction of the Municipal or City Courts and the Courts
of First Instance. (As amended by Section 3, Batas Pambansa Bilang 70).
Employee Retirement Benefits in the Philippines

"The retirement benefit plan is a life annuity."

Book VI of the Labor Code of the Philippines, under the heading Post Employment covers the
employee's retirement and benefits and social insurance. The section covers the support and
funds an employee benefits for retirement from the Government under the stipulation of the
Philippine law, either through pensions or savings.

The term 'employee' represents an individual who is legally employed under the Philippine law,
or any person compulsorily covered by the SSS under Republic Act 1161 or any person
compulsorily covered by the GSIS under the Commonwealth Act 186.

The term 'retirement plan' (or superannuation) refers to a pension (benefits in retirement) granted
when an employee retires from work upon reaching the retirement age established in the
collective bargaining agreement or other applicable employment contract.

Characteristically, the retirement benefit plan is a life annuity, a financial contract wherein the
life insurance company GSIS or SSS makes a series of payments to the annuitant in the future in
exchange for a series of regular immediate payments, prior to the onset of the annuity.

REPUBLIC ACT NO. 7641

AN ACT AMENDING ARTICLE 287 OF PRESIDENTIAL DECREE NO. 442, AS

AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, BY
PROVIDING FOR RETIREMENT PAY TO QUALIFIED PRIVATE SECTOR EMPLOYEES
IN THE ABSENCE OF ANY RETIREMENT PLAN IN THE ESTABLISHMENT

SECTION 1. Article 287 of Presidential Decree No. 442, as amended, otherwise known as the
Labor Code of the Philippines, is hereby amended to read as follows:

“Art. 287. Retirement. — Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment contract.

“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: provided, however, that an employee’s retirement benefits under any collective
bargaining and other agreements shall not be less than those provided herein.

“In the absence of a retirement plan or agreement providing for retirement benefits of employees
in the establishment, an employee upon reaching the age of sixty (60) years or more, but not
beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has
served at least five (5) years in the said establishment, may retire and shall be entitled to
retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered as one whole year.
“Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall
mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of
not more than five (5) days of service incentive leaves.

“Retail, service and agricultural establishments or operations employing not more than (10)
employees or workers are exempted from the coverage of this provision.

“Violation of this provision is hereby declared unlawful and subject to the penal provisions
provided under Article 288 of this Code.”

SECTION 2. Nothing in this Act shall deprive any employee of benefits to which he may be
entitled under existing laws or company policies or practices.

SECTION 3. This Act shall take effect fifteen (15) days after its complete publication in the
Official Gazette or in at least two (2) national newspapers of general circulation, whichever
comes earlier.
REPUBLIC ACT NO. 6683
AN ACT PROVIDING BENEFITS FOR EARLY RETIREMENT AND VOLUNTARY
SEPARATION FROM THE GOVERNMENT SERVICE, AS WELL AS INVOLUNTARY
SEPARATION OF CIVIL SERVICE OFFICERS AND EMPLOYEES PURSUANT TO
VARIOUS EXECUTIVE ORDERS AUTHORIZING GOVERNMENT
REORGANIZATION AFTER THE RATIFICATION OF THE 1987 CONSTITUTION
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES.

Section 1. Declaration of Policy. — It is hereby declared the policy of the State to promote
economy, efficiency and effectiveness in government operations, particularly in the delivery of
essential public services.For this purpose, the State shall endeavor to streamline government
functions and to maintain necessary positions through an appropriate retirement and voluntary
separation scheme.

Sec. 2. Coverage. — This Act shall cover all appointive officials and employees of the National
Government, including government-owned or controlled corporations with original charters, as
well as the personnel of all local government units. The benefits authorized under this Act shall
apply to all regular, temporary, casual and emergency employees, regardless of age, who have
rendered at least a total of two (2) consecutive years of government service as of the date of
separation. Uniformed personnel of the Armed Forces of the Philippines including those of the
PC-INP are excluded from the coverage of this Act.

Sec. 3. Early Retirement and Voluntary Separation Benefits. — All appointive government
officials and employees included in the coverage hereof who voluntarily elect in writing to be
retired or separated from the service and whose retirement has been approved under the
provisions of this Act shall be paid retirement or separation benefits equivalent to one and one-
fourth (1 1/4) month basic salary for every year of their respective government services or the
nearest equivalent fraction thereof favorable to them on the basis of the highest salary which they
respectively received in the course of their employment in the government: Provided, That in no
case shall the benefit to be paid to any appointive official or employee be less than Ten thousand
pesos (P10,000): Provided, further, That any appointive official or employee who has previously
been found guilty in an administrative proceeding and whose rank or salary has been reduced
shall be paid on the basis of his last salary.

Sec. 4. Additional Benefits. — In addition to the benefits herein authorized, covered appointive
officials and employees who retire or voluntarily elect to be separated from the service under this
Act shall be entitled to the return of GSIS personal contributions pertaining to retirement only
and the payment of the corresponding share of the government with interest earned pursuant to
existing rules and regulations of the Government Service Insurance System. They shall likewise
be entitled to the commutation of unused vacation and sick leaves in accordance with existing
rules and regulations: Provided, however, That should the government agency concerned lack the
necessary funds for this, the same shall come from the appropriation to fund this Act: Provided,
further, That those who retire after rendering government service for thirty-one (31) years or
more and avail themselves of the incentive benefits provided under this Act shall be entitled to
an additional ten percent (10%) of the amount corresponding to what they will receive from the
thirty-first year onward.

Sec. 5. Exclusiveness of Benefits. — An appointive official or employee who retires or elects to

be separated from the service under this Act shall not be eligible for optional retirement with
gratuity under Republic Act Nos. 1616 and 4968 or with pension under Commonwealth Act. No.
186, as amended by Republic Act No. 660, or under Presidential Decree No. 1146, as amended,
or vice-versa.

Sec. 6. Abolition of Positions. — The positions vacated through the early retirement or
separation of its incumbent shall be abolished unless the head of the office or agency, with the
approval of the President in the case of the Executive Department, the Chief Justice in the case of
the Judiciary, the Senate President or the Speaker of the House of Representatives in the case of
Congress, the Chairman in the case of the Constitutional Commissions, certifies within the
period of sixty (60) days from the time of approval or acceptance of the application for
retirement or separation that the exigencies of the service require its retention.

Sec. 7. Discretion of Agency Heads in Acceptance of Application for Early Retirement and
Voluntary Separation. — No appointive official or employee shall be separated or retired under
this Act unless his application for early retirement or voluntary separation shall have been
accepted by the head of the government office or agency or by the chief executive officer of the
government-owned or controlled corporation concerned as the case may be.

For purposes of this Act, "head of government office or agency" refers to the Secretary in the
case of bureaus, divisions and other offices under a department; governor or mayor, as the case
may be, in the case of local government units; the Chief of Justice in the case of the employees
of the Judiciary; the Senate President or the Speaker of the House of Representatives, as the case
may be, in the case of employees of the Legislature; the Chairman in the case of the
Constitutional Commissions; and in the case of other offices not within the authority of those
previously mentioned, their overall superior.

The application for early retirement or voluntary separation shall be accepted unless the services
of the applicant shall be deemed necessary. The application of those with pending administrative
cases punishable by dismissal or removal shall be held in abeyance until the final disposition of
such cases without prejudice to their receiving benefits under this law in case of acquittal.

The applications of those with criminal cases of grave nature committed in relation to their office
shall be held in abeyance.

Sec. 8. Restriction on the Employment and Replacement of Retired or Separated Personnel. —

Appointive officials and employees who are retired or separated under this Act shall not be
eligible for appointment to, or employment in any branch, division, instrumentality or agency of
the government, including government-owned or controlled corporations with original charters
whether on a permanent, temporary, casual or emergency status within a period of five (5) years
after separation unless they refund the benefits they received: Provided, however, That those
reemployed in the government shall be treated as new entrants insofar as GSIS coverage is
concerned.

Positions vacated but retained shall be filled by personnel chosen from among the most
deserving employees in the agency concerned or from any other agency.

Sec. 9. Period of Applicability and Effectivity of the Incentive Benefits. — Applications for
early retirement and voluntary separation benefits hereunder shall be entertained only if filed
within a period of two (2) months from the issuance of the rules and regulations for the
implementation of this Act pursuant to Section 13 hereof. The oldest employees who are the
most senior in the service will be given priority in the payment of benefits.

Sec. 10. Funding. — For national government employees, the sum of Three billion pesos, or so
much thereof as may be necessary, is hereby authorized to be appropriated out of any funds in
the National Treasury not otherwise appropriated for payment of early retirement and separation
incentive benefits authorized in this Act.

For employees of government-owned or controlled corporations, the benefits herein granted shall
be paid from the internal funds of the respective corporations. In no case shall the benefits paid
to employees of government-owned or controlled corporations be less than the benefits granted
by their existing corporate programs, if any.

For employees of local government units, the benefits shall be paid from available funds of each
local government unit.

Government-owned or controlled corporations and local government units which may not be
able to adequately fund the incentive benefits under this Act may avail themselves of the Three
billion peso fund appropriation for this purpose but only to the extent of twenty-five percent
(25%) of the requirements on the condition that their plantilla and staffing pattern shall, for a
period of one (1) year from the effectivity of this Act, be subject to approval of the Department
of Budget and Management: Provided, That in the case of government-owned or controlled
corporations, said twenty-five percent (25%) may be deducted by the Department of Budget and
Management from whatever budgetary allocation and assistance they may get from the National
Government in the future.

The above provisions notwithstanding, all savings accruing from the abolition of positions
pursuant hereto shall be earmarked and used exclusively for the payment of the benefits under
this Act.

Sec. 11. Retroactive Charges. — Officials and employees who were previously separated from
the government service not for cause but as a result of the reorganization pursuant to various
executive orders authorizing government reorganization issued after the ratification of the 1987
Constitution shall be deemed covered and entitled to avail of the incentive benefits under this
Act.
Sec. 12. Penalties. — Any government official who compels an employee under any guise
whatsoever to retire or be separated from government service by virtue of this Act or otherwise
violates provisions hereof shall, upon conviction, be punished by a fine not exceeding One
thousand pesos (P1,000), or by imprisonment not exceeding six (6) months or both such fine and
imprisonment in the discretion of the court.

Sec. 13. Implementing Rules and Regulations. — The implementing rules and regulations shall
be issued within fifteen (15) days from the date of effectivity of this Act by the Department of
Budget and Management, in consultation with the Civil Service Commission: Provided, That any
provision of law to the contrary notwithstanding, the only documents or supporting papers to be
submitted by appointive officials and employees who wish to avail themselves of the benefits
under this Act are the following:

(a) A duly approved application under oath for early retirement or voluntary separation in
accordance with this Act, including a statement of the number of years of service in the
government and the rate of the highest salary received.
(b) Money and property clearance from the agency concerned where proper pursuant to
Section 7 hereof; and

(c) A simplified statement of assets and liabilities, net worth, and financial and business
interests in the case of regular employees: Provided, further, that the processing and actual
payment of benefits to the appointive officials and employees concerned shall be completed
within fifteen (15) days from the date of submission of all the foregoing documents.

Sec. 14. Compliance and Reporting. — Six (6) months from the effectivity of this Act, the
Department of Budget and Management and the Civil Service Commission shall, on the basis of
the reports of the various heads of government offices and agencies, render a report to Congress
on the number of government employees affected, the type or nature of positions involved, the
total amount spent and an evaluation thereof.

Sec. 15. Repealing Clause. — All laws, rules and regulations or parts thereof, inconsistent with
the provisions of this Act are hereby repealed or modified accordingly.
Sec. 16. Separability Clause. — If any part, section or provision of this Act shall be held invalid
or unconstitutional, no other part section or provision thereof shall be affected thereby.

Sec. 17. Effectivity. — This Act shall take effect upon publication in two (2) newspapers of
general circulation.
ALABANG COUNTRY CLUB INC., ET AL. VS. NATIONAL LABOR RELATIONS
COMMISSION, ET AL.

G.R. No. 157611. August 9, 2005

Facts: Petitioner Alabang Country Club Inc. (ACCI), is a stock, non-profit corporation that
operates and maintains a country club and various sports and recreational facilities for the
exclusive use of its members. Sometime in 1993, Francisco Ferrer, then President of ACCI,
requested its Internal Auditor, to conduct a study on the profitability of ACCI’s Food and
Beverage Department (F & B Department). Consequently, report showed that from 1989 to
1993, F & B Department had been incurring substantial losses. Realizing that it was no longer
profitable for ACCI to maintain its own F & B Department, the management decided to cease
from operating the department and to open the same to a contractor, such as a concessionaire,
which would be willing to operate its own food and beverage business within the club. Thus,
ACCI sent its F & B Department employee’s individual letters informing them that their services
were being terminated and that they would be paid separation pay. The Union in turn, with the
authority of individual respondents, filed a complaint for illegal dismissal.

Issue: Whether or not the club’s right to terminate its employees for an authorized cause,
particularly to secure its continued viability and existence is valid.

Held: When petitioner decided to cease operating its F & B Department and open the same to a
concessionaire, it did not reduce the number of personnel assigned thereat. It terminated the
employment of all personnel assigned at the department.

Petitioner’s failure to prove that the closure of its F & B Department was due to substantial
losses notwithstanding, the Court finds that individual respondents were dismissed on the ground
of closure or cessation of an undertaking not due to serious business losses or financial reverses,
which is allowed under Article 283 of the Labor Code. The closure of operation of an
establishment or undertaking not due to serious business losses or financial reverses includes
both the complete cessation of operations and the cessation of only part of a company’s
activities.
AGABON VS. NATIONAL LABOR RELATIONS COMMISSION

G.R. No. 158693. November 17, 2004

Facts:

Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and
installing ornamental and construction materials. It employed petitioner Virgilio Agabon and
Jenny Agabon as gypsum board and cornice installers on January 2, 1992 until February 23,
1999 when they were dismissed for abandonment of work. Petitioners then filed a complaint for
illegal dismissal. The Labor Arbiter rendered a decision declaring the dismissal illegal. On
appeal, the NLRC reversed the decision because it found that the petitioners had abandoned their
work and were not entitled to backwages and separation pay. The Court of Appeals in turn ruled
that the dismissal of the petitioners was not illegal because they had abandoned their
employment.

Issue: Whether or not petitioners were illegally dismissed.

Held:

The dismissal should be upheld because it was established that the petitioners abandoned their
jobs to work for another company. Private respondent, however, did not follow the notice
requirements and instead argued that sending notices to the last known addresses would have
been useless because they did not reside there anymore. Unfortunately for the private respondent,
this is not a valid excuse because the law mandates the twin notice requirements to the
employee’s last known address. Thus, it should be held liable for non-compliance with the
procedural requirements of due process.

When the dismissal is for a just cause, the lack of statutory due process should not nullify the
dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the
employee for the violation of his statutory rights.
UNIVERSAL ROBINA SUGAR MILLING CORPORATION

(URSUMCO) V CABALLEDA 156644, JULY 28, 2008, NACHURA,J.

Facts:

Agripino Caballeda was a welder for URSUMCO from March

1989 until June 23, 1997 with a salary of P124 per day while Alejandro Cadalin was a crane
operator from 1976 to June 15, 1997, with a salary of P209.30 per day.

John Gokongwei Jr., President of URSUMCO, issued a memorandum establishing the age of
compulsory retirement at 60. Subsequently, RA 7641 set the compulsory retirement age, in the
absence of a retirement plan or agreement, at 65 and that an employee may retire upon reaching
60.

The National Labor Federation, the labor union of the workers of URSUMCO, of which
Alejandro Cadalin was a member, entered into a CBA with URSUMCO. Article XV of said
CBA particularly provided that the retirement benefits of the members of the collective
bargaining unit shall be in accordance with law.

Agripino and Alejandro subsequently reached the age of 60 and were allegedly forced to retire.
They accepted their separation pays and applied for retirement benefits with the SSS. Alejandro
also executed a quitclaim in favor of URSUMCO.

They subsequently filed Complaints for illegal dismissal with the Labor Arbiter of Dumaguete
City. URSUMCO claimed that Agripino and Alejandro voluntarily retired, that the
Memorandum was no longer in effect when they did so, and that RA 7641 cannot be given
retroactive effect since there was an existing CBA that covered the retirement benefits of the
employees.

It further alleged that Agripino was merely a seasonal or project worker and not a casual worker
since the sugar milling business is seasonal in nature. Thus, he was not actually forced to retire.
The termination of his employment was essentially based on the fact that the period in his
contract had expired.

Issues:

WoN RA 7641 has retroactive effect: Yes. The issue of the retroactive effect of RA 7641 has
long been settled. It is a curative statute.

WoN Agripino is a seasonal or project employee: No. He is a regular employee.

WoN the Agripino and Alejandro voluntarily retired: No. The law generally looks with disfavor
on quitclaims and releases of employees who have been inveigled or pressured into signing them
by unscrupulous employers seeking to evade their responsibilities.

Whether or not Agripino was a seasonal/project employee or a regular employee is a question of

fact. Time and again, we have held that the Court is not a trier of facts.

HELD: In this case, it is noteworthy that the LA, the NLRC and the CA are one in ruling that
Agripino was not a casual employee, much less a seasonal or project employee. In their findings,
Agripino was considered a regular employee of URSUMCO. Consequently, such uniform
finding of the LA, the NLRC, and the CA binds this Court.