G.R. No. 214961 September 16, 2015
BANCO DE ORO UNIBANK, INC., Petitioner, vs. GUILLERMO C. SAGAYSAY, Respondent

FACTS

Respondent Guillermo Sagaysay was hired by petitioner Banco De Oro Unibank, Inc. (BDO) on May 16, 2006, as a Senior Accounting Assistant 5, following a merger with United Overseas Bank. Prior to this, he had worked for Metropolitan Bank and Trust Co. for 28 years and for United Overseas Bank for 2 years. On January 8, 2010, BDO informed Sagaysay that pursuant to its retirement plan, which set the normal retirement age at 60, he would be retired effective September 1, 2010, shortly after his 60th birthday. The retirement plan had been in effect since July 1, 1994. Sagaysay requested an extension of his service, first citing financial obligations and later specifically asking for an extension until May 16, 2011, to complete five years of service with BDO and become eligible for a higher retirement benefit. BDO denied both requests and retired him on September 1, 2010. Sagaysay subsequently signed a Release, Waiver and Quitclaim on October 22, 2010, in consideration of ₱98,376.14. On January 10, 2011, he filed a complaint for illegal dismissal. The Labor Arbiter ruled in favor of Sagaysay, declaring the dismissal illegal, ordering reinstatement with backwages and awarding damages. The National Labor Relations Commission (NLRC) reversed the Labor Arbiter, dismissing the complaint. The Court of Appeals then reversed the NLRC and reinstated the Labor Arbiter’s decision, albeit deleting the moral and exemplary damages.

ISSUE

1. Whether the retirement plan setting the mandatory retirement age at 60 is valid and binding on the respondent.
2. Whether the Release, Waiver and Quitclaim executed by the respondent is valid.

RULING

The Supreme Court GRANTED the petition, REVERSED and SET ASIDE the decision of the Court of Appeals, and REINSTATED the decision of the NLRC.
1. On the Validity of the Retirement Plan: The Court ruled that the retirement plan was valid and binding. Article 287 of the Labor Code allows parties to set the retirement age earlier than 65, provided it is part of a retirement plan or agreement. The BDO retirement plan, effective since June 1, 1994, clearly set the normal retirement age at 60. When Sagaysay accepted employment with BDO in 2006, the plan was already in force and deemed written into his contract of employment. His subsequent requests for extension to qualify for the plan’s benefits constituted acknowledgment and acceptance of the plan. The plan was not unilaterally imposed, as it was a pre-existing condition of employment. The Court distinguished the cited case of Cercado v. UNIPROM Inc., as in that case the plan was implemented after the employee’s hiring.
2. On the Validity of the Quitclaim: The Court found the quitclaim valid. Sagaysay, a veteran banker with extensive experience, voluntarily signed the document after receiving a considerable sum. His subsequent act of filing a complaint did not automatically invalidate the quitclaim, as the law requires that waivers be voluntary and made with full understanding. There was no evidence of fraud or deceit, and his financial need did not constitute vitiated consent. The quitclaim constituted a valid release of claims.