G.R. No. L-54244. January 27, 1992.
SAN MIGUEL CORPORATION, petitioner, vs. ERNESTO JAVATE, JR., and THE DEPARTMENT OF LABOR, respondents.

FACTS

Private respondent Ernesto Javate, Jr., a casual employee of San Miguel Corporation, was injured in an accident on June 21, 1974. After 56 days of sick leave, his attending physician certified him fit to return to work on August 17, 1974. Due to a typhoon, he could not report that day and, with his supervisor’s assistance, applied for vacation leave. This application and a subsequent one were disapproved for failing the company rule requiring a six-day prior filing. Consequently, these absences were charged against his sick leave credits.
On September 1, 1974, before his applied vacation leave ended, petitioner San Miguel Corporation “compulsorily retired” Javate. The company invoked its Health, Welfare and Retirement Plan, which allowed compulsory retirement if a permanent worker exhausted all sick leave benefits and was certified by the company physician as unfit for work. Javate filed a complaint for illegal dismissal, which the Labor Arbiter decided in his favor, ordering reinstatement with one year back wages. The NLRC and the Secretary of Labor affirmed this decision.

ISSUE

Whether the compulsory retirement of Ernesto Javate, Jr., by San Miguel Corporation was valid under the company’s Retirement Plan and labor laws.

RULING

No, the compulsory retirement was invalid and constituted illegal dismissal. The Supreme Court upheld the findings of the labor tribunals. For compulsory retirement under the specific plan provision to be valid, two conditions must concur: (1) exhaustion of all sick leave benefits, and (2) a certification from the company physician of the employee’s incapacity to work. The Court found the second condition utterly lacking. Javate was certified fit by his attending physician, and there was no certification whatsoever from a company physician declaring him unfit. Therefore, the mandatory prerequisite for compulsory retirement was not met.
The company’s act was a dismissal disguised as retirement. Since it was a dismissal, the requirement for a prior clearance from the Department of Labor was applicable, which the company failed to secure. The Court also rejected the argument that Javate was estopped by accepting retirement benefits, citing jurisprudence that acceptance does not bar a challenge to dismissal’s legality, especially when the employee is forced into such a position. The petition was dismissed for lack of merit.