G.R. No. 150180 October 17, 2008
FLAVIO S. SUAREZ, JR., ET AL., petitioners, vs. NATIONAL STEEL CORPORATION, respondent.

FACTS

Respondent National Steel Corporation, due to substantial financial losses, implemented an organizational streamlining program in 1994, resulting in the retrenchment of 700 employees, including petitioners. Individual termination notices were sent on July 18, 1994, effective August 18, 1994, with a separation package consisting of separation pay (two months’ salary per year of service), leave balance credits, 13th month pay, and uniform plus rice subsidy differential. Petitioners received these benefits and executed notarized releases and quitclaims. A new Collective Bargaining Agreement (CBA) was signed on October 27, 1994, retroactive to July 1, 1994, under which retrenched employees received salary differentials and executed another set of quitclaims. Approximately two and a half years later, in February 1997, petitioners demanded payment of retirement benefits under the CBA, claiming qualification for optional retirement after at least ten years of service. Respondent rejected the claim. The Labor Arbiter dismissed petitioners’ complaint for lack of merit, but the NLRC reversed this decision. The Court of Appeals, upon respondent’s petition for certiorari, set aside the NLRC resolution, ruling that petitioners were no longer entitled to retirement benefits after receiving separation pay and were precluded by their quitclaims.

ISSUE

Whether petitioners, who were retrenched employees and had already received separation pay, are still entitled to claim retirement benefits under the CBA and the company’s retirement plan.

RULING

No. The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The retirement plan of respondent National Steel Corporation explicitly stated in Article X, Section E: “No retirement benefits are payable in instances of resignations or terminations for cause.” Retrenchment is an authorized cause for termination under Article 283 of the Labor Code, constituting a termination for cause. Therefore, petitioners, having been terminated for an authorized cause (retrenchment), are expressly disqualified from receiving retirement benefits under the plain terms of the retirement plan. The Court distinguished the cited jurisprudence (Aquino v. NLRC, University of the East v. Minister of Labor, Batangas Laguna Tayabas Bus Co. v. Court of Appeals) as inapplicable because, unlike in those cases, the retirement plan here contained a specific prohibition against payment of retirement benefits for terminations for cause. Furthermore, the quitclaims executed by petitioners were deemed valid, as they were executed voluntarily, for a reasonable consideration, and the petitioners were not in a state of duress or necessity. The parol evidence rule bars the introduction of extrinsic evidence, such as an affidavit from union officers, to vary the terms of the written retirement plan and CBA, which were clear and unambiguous.