GR 197003; (February, 2013) (Digest)
G.R. No. 197003 ; February 11, 2013
NERIE C. SERRANO, Petitioner, vs. AMBASSADOR HOTEL, INC. and YOLANDA CHAN, Respondents.
FACTS
Petitioner Nerie C. Serrano was a long-time employee of respondent Ambassador Hotel, Inc. (AHI), having been hired in 1969 and eventually becoming head of the accounting department. An intra-corporate dispute in 1998 led to her dismissal by a new Board of Directors, but this was contested by the former president. The legal conflict culminated in respondent Yolanda Chan assuming the AHI presidency in April 2001. Chan issued a memo directing Serrano to prepare a turnover of accounts and ceased giving her regular job assignments. Alleging she was constructively dismissed, Serrano filed for retirement effective July 31, 2001.
Serrano filed a complaint for nonpayment of salaries, 13th month pay, and retirement benefits. The Labor Arbiter ruled in her favor, awarding monetary claims including retirement pay. The NLRC modified this decision by deleting the retirement pay award, crediting respondents’ claim that Serrano had already received retirement benefits from the Social Security System (SSS). The Court of Appeals initially reinstated the Labor Arbiter’s full award in a related petition, but in the petition subject to this review, a different CA Division affirmed the NLRC’s deletion of the retirement pay.
ISSUE
Whether an employee who has received retirement benefits from the SSS is still entitled to claim retirement pay under Article 287 of the Labor Code from her employer.
RULING
Yes. The Supreme Court granted the petition and reinstated the award of retirement pay. The legal logic is grounded on the distinct nature and purpose of the two retirement benefit schemes. Retirement benefits under the SSS are a form of social insurance, mandated by law and funded by compulsory contributions from the employee and employer. Their purpose is to provide a safety net for members in their old age, disability, or death.
In contrast, retirement pay under Article 287 of the Labor Code is a labor standard benefit, a reward for an employee’s long and faithful service to a specific employer. It is an employer liability, payable by the company itself upon the employee’s retirement, provided the conditions in a collective bargaining agreement, company policy, or the Labor Code are met. The Court emphasized that these two benefits arise from different sources and laws, serve separate purposes, and are not mutually exclusive. Receipt of one does not bar entitlement to the other. Therefore, the NLRC and the CA erred in deducting the SSS benefits from Serrano’s rightful claim for retirement pay from her employer, AHI. The employer’s liability under the Labor Code remains intact and separate from the state-administered SSS benefits.