461 Phil. 720
CARPIO MORALES, J.:
The parties having failed to agree on how the retirement benefits should be computed, Hilaria filed a complaint[8] before the NLRC Regional Arbitration, Branch No. IV against petitioner school and/or petitioner Sr. Loreta Oranza for non-payment of retirement benefits. The complaint was docketed as NLRC Case No. RAB-IV-3-9860.
Retirement Benefits = ½ month salary for every year of service One-half month salary =(15 days x latest salary per day) + (5 days leave x latest salary per day) + (1/12 of 13th month pay) =P4,512.30 + P1,504.10 + P547.33 = P6,563.73 Retirement Pay = number of years in service x one-half month salary = 15 years x P6,580.43 = P98,455.95
WHEREFORE, premises considered, judgment is hereby rendered ordering the respondents to pay the complainant the amount of P18,185.26 only as the differential of her retirement benefits.On appeal, the NLRC, by Decision of April 27, 1999, set aside the Labor Arbiter's decision and disposed as follows:
SO ORDERED.[9]
WHEREFORE, on account of the foregoing, the judgment a quo is SET ASIDE.Not satisfied with the NLRC decision, petitioners brought the case on certiorari[11] to the CA which, by the assailed decision, dismissed it, holding that petitioners failed to prove that Hilaria had abandoned her position in 1970, as petitioner school even gave her a Plaque of Appreciation for thirty years of service "precisely because of her thirty year continuous service," and that petitioner school never sent notice to her dismissing her, hence, the employer-employee relationship was not severed and, therefore, her services for petitioner school during the period from 1955-1970 should be credited in the computation of her retirement benefits. Held the CA:
Respondent-appellee is hereby ordered to pay the total amount of P85,287.72 computed as follows: P3,935.89 (total computation of the retirement components) MULTIPLIED by 29 (number of years in service) EQUALS P114,140.81 (total retirement package) LESS P28,287.72 (representing respondent-appellee's contribution with the PERAA proven to have already been received by complainant-appellant). However, the gratuity pay earlier already given shall not be deducted from the retirement package.
SO ORDERED. [10]
x x x [D]espite the absence of the Private Respondent for a period of eleven (11) years or so from 1970 to 1982 and her employment with the Liceo de San Pedro and San Pedro Parochial School, her employer-employee juridical relationship, with the Petitioner School, had not been severed, namely: (a) the Petitioner School never sent any notice to the Private Respondent dismissing her from her employment on account of her unexplained and prolonged absence as required by Section 2, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code (Reno Foods, Inc. versus NLRC, et al., 249 SCRA 386); (b) the Private Respondent did not receive any amount, from the Petitioner School, by way of separation pay, indemnity pay, and her share of her retirement contributions for the period from 1955 when she commenced her employment with the Petitioner School until her leave of absence in 1970; (c) the Petitioner School gave the Private Respondent a "Plaque of Appreciation" for her thirty (30) year continuous service to the Petitioner School on the occasion of the 51st Commencement Exercise of her Petitioner School on March 22, 1997; (d) she was given a gratuity of P12,000.00 on account of her exemplary services to the Petitioner School until the time when she reached the compulsory retirement age of 65 years.[12] (Underscoring supplied)With respect to the gratuity pay awarded to Hilaria, the CA upheld the NLRC ruling that it should not be deducted from the retirement benefits due her.
THE PUBLIC RESPONDENT CA ERRED IN AWARDING THE RETIREMENT BENEFITS DIFFERENTIAL OF [HILARIA] COMPUTED BASED ON HER 29 YEARS OF SERVICE WHEN SHE MERELY RENDERED 15 CONTINUOUS YEARS OF SERVICE PRIOR TO HER RETIREMENT. THE COURT OF APPEALS COMPLETELY IGNORED THE RULING OF THIS HONORABLE COURT IN CARANDANG V. DULAY, 188 SCRA 793 [1990] THAT SEPARATION PAY SHOULD BE BASED ON THE NUMBER OF CONTINUOUS YEARS OF SERVICE OF THE EMPLOYEE BEFORE THE DATE OF HIS SEPARATION FROM EMPLOYMENT.[15]Petitioners argue that when Hilaria did not report upon the expiration in 1971 of her one year leave of absence without pay nor request for an extension thereof, she actually voluntarily resigned from or abandoned her employment,[16] thus effectively forfeiting all the benefits she had earned for services rendered from 1955 to 1970, hence, she ceased to be an employee of the school. Prescinding from this ratiocination, petitioners conclude that the period from 1955 to 1970 cannot be included in the determination of her retirement benefits, for when she was rehired in 1982, she was a new employee.
SEC. 1. In cases of employment, without a definite period, in a commercial, industrial, or agricultural establishment or enterprise, the employer or the employee may terminate at any time the employment with just cause; or without just cause in the case of an employee by serving written notice on the employer at least one month in advance, or in the case of an employer, by serving such notice to the employee at least one month in advance or one-half month for every year of service of the employee, whichever is longer, a fraction of at least six months being considered as one whole year.Above-stated law should thus apply in the case at bar, so Mapua Institute of Technology v. Manalo[24] instructs:
The employer, upon whom no such notice was served in case of termination of employment without just cause may hold the employee liable for damages.
The employee, upon whom no such notice was served in case of termination of employment without just cause shall be entitled to compensation from the date of termination of his employment in an amount equivalent to his salaries or wages corresponding to the required period of notice.
x x x (Emphasis and underscoring supplied)
Without declaring that a private college or university like the Mapua Institute of Technology is a commercial, industrial, or agricultural establishment, we believe that there being no special law governing the dismissal or separation of professors from colleges and universities, the provisions of Republic Act No. 1052, as amended by Republic Act No. 1787, should be made to apply. Authority for such a course of action is 78 Corpus Juris Secundum 617, which says:Abandonment of work being a just cause for terminating the services of Hilaria, petitioner school was under no obligation to serve a written notice to her.
"Contracts between private schools and teachers or other instructors are governed, in general, by the rules applicable to other contracts of employment." (Underscoring supplied)
Private respondent's re-employment as a new employee x x x would mean a demotion in rank and privileges, retirement benefits, for example, as his entire previous eighteen (18) years of service with petitioner, would simply be considered as non-existent.This Court is not unmindful of Hilaria's rendition of a total of thirty years of teaching in petitioner school and should be accorded ample support in her twilight years. Petitioner school in fact acknowledges her dedicated service to its students. She can, however, only be awarded with what she is rightfully entitled to under the law. So Sosito v. Aguinaldo Development Corporation dictates:[26]
While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its own rights which, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privilege in life, this Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded us to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.As for the ruling of the CA affirming that of the NLRC that the P12,000.00 gratuity pay earlier awarded to Hilaria should not be deducted from the retirement benefits due her, the same is in order. Gratuity pay is separate and distinct from retirement benefits. It is paid purely out of generosity. So Republic Planters Bank v. NLRC[27] holds:
Gratuity pay x x x is paid to the beneficiary for the past services or favor rendered purely out of the generosity of the giver or grantor. Gratuity, therefore, is not intended to pay a worker for actual services rendered or for actual performance. It is a money benefit or bounty given to the worker, the purpose of which is to reward employees who have rendered satisfactory service to the company. (Underscoring supplied)Retirement benefits, on the other hand, are intended to help the employee enjoy the remaining years of his life, releasing him from the burden of worrying for his financial support, and are a form of reward for his loyalty to the employer. [28]
Article 287 of the Labor Code, as amended by Republic Act 7641 or the New Retirement Law, provides:Likewise, Section 3.3, Rule II of the Rules Implementing R.A. 7641 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.
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.x x x (Emphasis Supplied)
3.3 Where both the employer and the employee contribute to a retirement fund in accordance with an individual or collective agreement or other applicable employment contract, the employer's total contribution thereto shall not be less than the total retirement benefits to which the employee would have been entitled had there been no such retirement fund. In case the employer's contribution is less than the retirement benefits provided under this Rule, the employer shall pay the difference.Hence, Hilaria is entitled to receive P98,706.45 computed as follows:
One-half month salary | = | (15 days x latest salary per day) + (5 days leave x latest salary per day) + (1/12 of 13 th month pay) | |
= | P4,512.30 + P1,504.10 + P547.33 | ||
| | = | P6,563.73 |
| | | |
| Retirement Pay | = | number of years in service x one-half month salary |
| | = | 15 years x P6,580.43 |
| | = | P98,455.95 |