G.R. No. 110861 November 14, 1994
ORO ENTERPRISES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and LORETO L. CECILIO, respondents.

FACTS

Private respondent Loreto L. Cecilio was first employed by petitioner Oro Enterprises, Inc. in August 1949. After 41 years of continuous service, she manifested her intention to retire by filing a “Claim for Retirement Pay” on September 3, 1990, stating that her SSS retirement pay of P500.00 a month was insufficient for her subsistence. On September 15, 1990, petitioner informed her it was not financially able to grant additional retirement benefits beyond SSS, but offered her a house and lot in Bulacan under a proposed company plan for retiring employees. This offer and plan did not materialize. On September 26, 1990, private respondent filed a complaint with the Labor Arbiter. Petitioner argued it had no CBA, agreement, or established policy for retirement benefits beyond the SSS, citing the Llora Motors case. The Labor Arbiter decided in favor of private respondent, awarding retirement benefits equivalent to half-month pay per year of service. Both parties appealed to the NLRC. During the pendency of the appeal, Republic Act No. 7641 (amending Article 287 of the Labor Code) took effect on January 7, 1993, providing for retirement pay in the absence of a retirement plan or agreement. On March 22, 1993, the NLRC applied R.A. No. 7641 and directed petitioner to pay private respondent retirement pay of P61,500.00, but denied the award of attorney’s fees. Petitioner’s motion for reconsideration was denied.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in applying Republic Act No. 7641 retroactively to award retirement benefits to private respondent who retired on September 15, 1990, before the law’s effectivity on January 7, 1993.

RULING

No, the NLRC did not commit grave abuse of discretion. The petition for certiorari was dismissed and the NLRC decision was affirmed. At the time of private respondent’s retirement, Article 287 of the Labor Code and its Implementing Rules did not require the payment of retirement benefits in the absence of a CBA, agreement, or established employer policy, as held in Llora Motors, Inc. vs. Drilon. The proposed company plan was never formalized or implemented. However, the NLRC found that private respondent’s claim for retirement pay was filed on January 7, 1993, the date R.A. No. 7641 took effect, and considering she retired only on September 15, 1990, her monetary claim was filed within the three-year prescriptive period. Given these findings, which are accorded due respect, the NLRC’s conclusion that the claim falls within the ambit of R.A. No. 7641 did not constitute a capricious, whimsical, or arbitrary exercise of judgment equivalent to lack of jurisdiction.