528 Phil. 603
CORONA, J.:
Complainant is entitled to retirement pay. This entitlement was not denied by respondents. xxx The computation of this benefits shall cover the entire period of his employment from January 1979 up to July 16, 1997 based on his latest monthly salary of P5,383.15 per the payroll sheet submitted by respondents. While respondents claim that respondent corporation was merely registered with the DOTC on November 13, 1985, they did not deny however that complainant was an employee of the then Enriquez Security and Investigation Agency, and that complainant's services with the said security agency up to the present respondent corporation was uninterrupted. The obligation of the new company involves not only to absorb the workers of the dissolved company, but also to include the length of service earned by the absorbed employee with their former employer as well. To rule otherwise would be manifestly less than fair, certainly less than just and equitable.On appeal, the NLRC set aside the labor arbiter's award of one-month salary for every year of service for being excessive. It ruled that under RA 7641, respondent Cabotaje was entitled to retirement pay equivalent only to one-half month salary for every year of service. Thus:xxx xxx xxx
WHEREFORE, judgment is hereby rendered ordering respondents to pay complainant the grand total amount of P228,581.00 representing his retirement benefits and other money claims.
SO ORDERED.[3]
WHEREFORE, the assailed decision is hereby set aside and a new one entered ordering respondents to pay complainant the amount of P76,710.60 representing his retirement benefits.On March 15, 2000, the NLRC denied petitioner's motion for reconsideration.[5]
SO ORDERED.[4]
We find no merit in the petition.
- [w]hether or not the Retirement [Pay] Law has retroactive effect.
- [w]hether the whole 5 days service incentive leave or just a portion thereof equivalent to 1/12 should be included in the ½ month salary for purposes of computing the retirement pay.
- [w]hether or not the length of service of a retired employee in a dissolved company (his former employer) should be included in his length of service with his last employer for purposes of computing the retirement pay.[10]
In reckoning the length of service, the period of employment with the same employer before the effectivity date of the law on January 7, 1993 should be included.Thus, in Rufina Patis Factory v. Lucas, Sr.,[11] we held:
RA 7641 is undoubtedly a social legislation. The law has been enacted as a labor protection measure and as a curative statute that - absent a retirement plan devised by, an agreement with, or a voluntary grant from, an employer - can respond, in part at least, to the financial well-being of workers during their twilight years soon following their life of labor. There should be little doubt about the fact that the law can apply to labor contracts still existing at the time the statute has taken effect, and that its benefits can be reckoned not only from the date of the law's enactment but retroactively to the time said employment contracts have started. (emphasis ours)Second. Petitioner's insistence that only 1/12 of the service incentive leave (SIL) should be included in the computation of the retirement benefit has no basis. Section 1, RA 7641 provides:
x x x 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 leave. x x x
Section 5.2, Rule II of the Implementing Rules of Book VI of the Labor Code further clarifies what comprises the "1/2 month salary" due a retiring employee:The foregoing rules are clear that the whole 5 days of SIL are included in the computation of a retiring employees' pay.
5.2 Components of One-half (1/2) Month Salary. - For the purpose of determining the minimum retirement pay due an employee under this Rule, the term "one-half month salary" shall include all the following:
(a) Fifteen (15) days salary of the employee based on his latest salary rate. x x x;
(b) The cash equivalent of not more than five (5) days of service incentive leave;
(c) One-twelfth of the 13th month pay due an employee;
(d) All other benefits that the employer and employee may agree upon that should be included in the computation of the employee's retirement pay.