GR 181178; (July, 2010) (Digest)
G.R. No. 181178; July 26, 2010
AMELIA R. OBUSAN, Petitioner, vs. PHILIPPINE NATIONAL BANK, Respondent.
FACTS
Petitioner Amelia R. Obusan was hired by respondent Philippine National Bank (PNB) in 1979 when it was still a government-owned and controlled corporation (GOCC). As a GOCC employee, her compulsory retirement age was governed by the Revised Government Service Insurance Act (PD 1146), which was 65 years. PNB was privatized in 1996, and Obusan was deemed retired from government service, receiving her GSIS retirement benefits. She continued her employment with the privatized PNB. Subsequently, the PNB Board approved the PNB Regular Retirement Plan (PNB-RRP), which set the compulsory retirement age at 60 years or after 30 years of service. The plan was registered with the BIR and recognized in a Collective Bargaining Agreement. Upon reaching age 60, Obusan was informed of her compulsory retirement.
Obusan filed a complaint for illegal dismissal and unfair labor practice, arguing she had a vested right to retire at age 65 under the old civil service rules. She contended the PNB-RRP could not be applied to her retroactively. The Labor Arbiter and the NLRC dismissed her complaint, ruling the PNB-RRP was valid. The Court of Appeals affirmed these decisions.
ISSUE
Whether or not the compulsory retirement of Obusan under the PNB-RRP, which set the retirement age at 60, constituted illegal dismissal, considering her claim of a vested right to retire at age 65 under the previous government service rules.
RULING
The Supreme Court denied the petition and upheld Obusan’s compulsory retirement. The legal logic is clear: upon PNB’s privatization, it ceased to be a GOCC and was no longer governed by civil service laws, including PD 1146 which set retirement at age 65. As a private corporation, PNB was governed by the Labor Code, which allows employers to establish a retirement plan for employees. The PNB-RRP, providing for retirement at age 60, was duly established, registered with the BIR, and recognized in a CBA; thus, it is a valid company policy.
The Court ruled that a retirement plan is not a vested right accruing at the time of hiring but is determined by the prevailing plan at the time of retirement. Obusan’s claim of a vested right to retire at 65 was anchored on a law that ceased to apply to PNB after privatization. Her acceptance of GSIS benefits upon PNB’s privatization effectively severed her employment under the government system. Her continued service under the privatized PNB was under a new employment relationship, subject to its new retirement plan. Therefore, her compulsory retirement under the valid PNB-RRP was legal and did not constitute dismissal.