G.R. No. 118743 October 12, 1998
ERNESTO E. MARTINEZ, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, GMCR, INC. (Formerly GLOBE MACKAY CABLE & RADIO CORP.), and MARK ANTHONY JAVIER, respondents.

FACTS

Petitioner Ernesto E. Martinez was employed by respondent GMCR, Inc. on June 10, 1977, as assistant credit and collection manager, and was later promoted to credit and collection manager. At the start of his employment, the company stated that employees ineligible for the bargaining unit would receive benefits at least equivalent to those in the collective bargaining agreement (CBA). Petitioner received annual merit-based salary increases, which were retroactively applied. However, he did not receive a salary increase for the period before his retirement, while two of his subordinates did. Due to a severe pulmonary defect diagnosed by the company physician, petitioner went on sick leave from March 1 to July 15, 1992. On April 10, 1992, he applied for optional retirement under the CBA, effective July 16, 1992. Due to financial need, he agreed to change his retirement date to April 30, 1992, upon the company’s request, in exchange for advance payments. He received checks totaling P351,375.00 for salary advances and retirement benefits. Dissatisfied, he filed a complaint seeking payment of actual, moral, and exemplary damages, and attorney’s fees. The Labor Arbiter ruled in his favor, but the NLRC modified the decision, reducing certain awards and setting aside others. Petitioner filed this petition for certiorari.

ISSUE

The primary issues are: (1) Whether petitioner, a managerial employee, can claim retirement benefits under the CBA; (2) Whether the effective date of his retirement was validly changed to April 30, 1992; and (3) Whether he is entitled to the claimed monetary awards, including merit increase, unpaid salaries, fringe benefits, and damages.

RULING

The Supreme Court affirmed the NLRC decision with modification. On the first issue, the Court held that while managerial employees are generally ineligible to join a labor union or claim CBA benefits due to potential conflict of interest, an employer may voluntarily grant them equivalent or higher benefits. Here, respondent company’s promise to extend such benefits to petitioner constituted an “applicable employment contract” under Article 287 of the Labor Code, entitling him to retirement benefits. On the second issue, the Court upheld the change in retirement date to April 30, 1992, finding it a valid condition for the advance payment, consented to by petitioner without vitiation of consent. On the third issue, the Court awarded a merit increase of P31,623.75 (based on 18% increase over 7.5 months), modifying the NLRC’s computation. It denied claims for unpaid salaries, fringe benefits, rehiring salaries, moral damages (for lack of proof), and attorney’s fees (for absence of bad faith).