RETIREMENT PLAN SHOULD BE EXPRESSLY CONSENTED TO BY NEW EMPLOYEE TO BE BINDINGAtty Elvin
Retirement plan cannot be presumed to be known to new employees most especially if it lowers the retirement age than that provided in the Labor Code.
For instance, the compulsory retirement age under Art. 302 of the Labor Code, as amended, is 65 years old. The law permits the parties to lower this age upon mutual agreement.
Under the provision, the employers and employees may agree to fix the retirement age for the latter, and to embody their agreement in either their collective bargaining agreements (CBAs) or their employment contracts. Retirement plans allowing employers to retire employees who have not yet reached the compulsory retirement age of 65 years are not per se repugnant to the constitutional guaranty of security of tenure, provided that the retirement benefits are not lower than those prescribed by law.
If the company lowers the compulsory retirement age to 60 from 65 and that the employee may be allowed to extend beyond 60 on a yearly extension. A new employee who came in for example 10 years after such retirement program is retired at 60 but insists to retire at 65 arguing that he was not covered by the retirement program which was approved a decade before his employment.
But the company retired him anyway stating that his signing of the employment documents signified his conformity to the terms of such retirement policy.
The employee can be considered illegally dismissed for being forced to retire. This situation is similar to the case of Laya vs. Court of Appeals (G.R. No. 205813, January 10, 2018).
During his engagement Atty. Alfredo Laya signed the Personnel Action Form which states that “Employee hereby expressly acknowledges receipt of and undertakes to abide by the provisions of his/her Job Description, Company Code of Conduct and such other policies, guidelines, rules and regulations the company may prescribe.”
According to the Supreme Court, the personnel action forms relate to the increase in employee’s salary at various periodic intervals. To conclude that acceptance of the salary increases was also, simultaneously, a concurrence to the retirement plan would be tantamount to compelling her to agree to the latter.
Moreover, voluntary and equivocal acceptance by an employee of an early retirement age option in a retirement plan necessarily connotes that her consent specifically refers to the plan or that she has at least read the same when she affixed her conformity thereto.
How about the argument that if one is a lawyer he is presumed to know the retirement law and that his signing of the personnel action form clearly indicates his conformity to the lowering of retirement age?
According to the SC, the pertinent rule on retirement plans does not presume consent or acquiescence from the high educational attainment or legal knowledge of the employee. In fact, the rule provides that the acquiescence by the employee cannot be lightly inferred from his acceptance of employment.
How to Avoid Illegal Dismissal Through Forced Retirement: Read Guide to Valid Dismissal of Employees 2nd Edition