337 Phil. 659
BELLOSILLO, J.:
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 Allied, private respondent had been an employee of petitioner since 1953. In 1976, having reached the age of sixty (60) years, he submitted to petitioner an application for retirement benefits which was subsequently approved although there was then no collective bargaining agreement or employer policy establishing an additional retirement plan for its employees. Controversy arose with respect to the method of computing the amount of retirement benefits. Instead of basing the amount upon private respondent's actual period of employment (from 1953 up to 1976), petitioner computed such amount starting with the date of the effectivity of the Labor Code (1 November 1974) up to 1976. The Labor Arbiter, the NLRC and the then Minister of Labor were one in the view that the computation should be on the basis of the length of service. This Court sustained the computation of public respondents since it found the comment of the Solicitor General in support thereof persuasive -
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 or other agreement (underscoring supplied).
x x x x in the computation thereof, public respondents acted judiciously in reckoning the retirement pay from the time private respondent started working with petitioner since respondent employee's application for retirement benefits and the company's approval of the same make express mention of Sections 13 and 14, Rule 1, Book VI of the Implementing Rules and Regulations of the Labor Code as the basis for retirement pay. Section 14 (a) of said rule provides that 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 shall be entitled to all the retirement benefits provided therein or to termination pay equivalent to at least one-half month salary for every year of service, whichever is higher, a fraction of at least six (6) months being considered as one whole year x x x x This position taken by public respondents squares with the principle that social legislation should be interpreted in favor of workers in the light of the Constitutional mandate that the State shall afford protection to labor.Quite differently, in Llora Motors, we set aside the grant of retirement benefits because of the absence of a collective bargaining agreement or other contractual basis or any established employer policy that contemplated said grant. Private respondent invoked Allied but we found the reliance thereon misplaced because -
x x x x while Allied had no collective bargaining agreement or similar employment contract establishing a plan under which employees could retire, its approval of (private respondent's) application, although unilateral and possibly ad hoc, supplied the necessary consensual basis. In the instant case, (petitioner) consistently resisted the demand for separation pay or retirement benefits by private respondent x x x xAs between Llora which is invoked by petitioners and Allied which is invoked by the Solicitor General, we could have applied the former because of similarity in factual milieu except that we have to take into account the amendment of Art. 287 by R.A. 7641 on 7 January 1993 or during the pendency of the proceedings before the NLRC. As amended, Art. 287 now pertinently provides-
Art. 287. Retirement. - Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract.Under the amendment, respondent Federico appears to be entitled to retirement pay. But can he avail himself of this provision considering that it took effect subsequent to his filing of the complaint? This brings to mind the principle reiterated in Allied that police power legislation intended to promote public welfare applies to existing contracts and can therefore be given retroactive effect. Actually, the case at bench no longer presents a novel issue. We have ruled in Oro Enterprises, Inc. v. NLRC[6] that R.A. 7641 can indeed be applied retroactively. Private respondent in that case, after working continuously with the company for forty-one (41) years, manifested her intention to retire from work by filing with petitioner a claim for retirement pay which was however denied. The Labor Arbiter granted her claim. During the pendency of the appeal, R.A. 7641 took effect and on that basis the NLRC affirmed the subject decision with modification. We sustained the NLRC on its rationalization that -
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 x x x x (underscoring on amendment supplied).
R.A. 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 x x x x (underscoring supplied).The labor contract between private respondent and petitioner therein was still existing at the time of the effectivity of R.A. 7641 because the NLRC was still tasked with determining, among other things, the issue of whether private respondent has in fact been effectively retired.