G.R. No. 120802 June 17, 1997
JOSE T. CAPILI, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, and UNIVERSITY OF MINDANAO, respondents.

FACTS

Petitioner Jose T. Capili, Jr. was employed by private respondent University of Mindanao (UM) as a college instructor in November 1982. On 2 July 1993, UM informed him that under the law and its retirement program, he would be eligible for retirement upon reaching age 60 on 18 August 1993. Petitioner responded on 5 August 1993, citing Section 4, Rule II, Book VI of the Rules Implementing the Labor Code, stating he was not opting to retire and would continue to serve until the compulsory retirement age of 65. UM replied on 10 August 1993, insisting that under the university’s retirement plan, it could retire him, arguing that the employee’s option under the cited rule applies only in the absence of a retirement plan. Petitioner filed a complaint for illegal dismissal (constructive dismissal) before the NLRC Regional Arbitration Branch, seeking reinstatement, back wages, and other benefits. He noted that at least four other faculty members had been allowed to teach beyond age 60. UM invoked its retirement plan and Article 287 of the Labor Code. Petitioner contended he was not a member of the retirement plan and that Policy Instruction No. 25 was abrogated by Republic Act No. 7641, giving him the option to retire at age 60. The Labor Arbiter dismissed the complaint, ruling UM had a retirement plan fixing age 60 for normal retirement, applicable to all employees. Petitioner appealed. UM moved to dismiss the appeal as filed out of time. UM later filed a manifestation stating petitioner received his retirement pay and benefits on 6 October 1994, rendering the appeal moot. Petitioner filed a counter-manifestation, alleging “partial acceptance” of benefits due to long denial. The NLRC initially dismissed the appeal for being filed out of time but later reconsidered and decided on the merits. The NLRC found that while the law fixed age 65 as compulsory retirement, the issue became moot as petitioner accepted and received his full retirement benefits, thereby estopping him from pursuing his claims. Petitioner’s motion for reconsideration was denied.

ISSUE

1. Whether an instructor of a private educational institution may be compelled to retire at the age of sixty years.
2. Whether his subsequent acceptance of retirement benefits would estop him from pursuing his complaint questioning the validity of his forced retirement.

RULING

1. On the first issue, the Court ruled that the petitioner could not be compelled to retire at age 60. The University of Mindanao’s retirement plan, by its explicit terms, applied only to members who chose to contribute to the fund. The petitioner was not a member, as he did not contribute. Therefore, the plan did not cover him. In the absence of a retirement plan or agreement applicable to the petitioner, Article 287 of the Labor Code, as amended by R.A. No. 7641, and its implementing rules govern. Under these rules, specifically Section 4, Rule II, Book VI, retirement at age 60 is optional for the employee, and compulsory retirement is set at age 65. Since no applicable retirement plan covered the petitioner, he had the option to retire at age 60 but could not be forced to do so by the employer; compulsory retirement would be at age 65.
2. On the second issue, the Court ruled that the petitioner’s acceptance of retirement benefits did not estop him from questioning the validity of his forced retirement. Estoppel requires a clear, voluntary, and intentional act of renunciation of a known right. The petitioner’s acceptance of the benefits was not a voluntary act of renunciation but a necessary consequence of his forced retirement, which he consistently protested. He accepted the benefits because they were due to him as a consequence of the termination of his employment, which he contested as illegal. His act of receiving the benefits, after being deprived of them since his forced retirement, did not constitute a waiver of his right to challenge the legality of his dismissal. Therefore, the NLRC committed grave abuse of discretion in dismissing the appeal on the ground of estoppel. The case was remanded to the NLRC for determination of the legality of the petitioner’s dismissal and appropriate remedies.