G.R. No. 247819 , October 14, 2019
Guido B. Pulong, Petitioner, vs. Super Manufacturing Inc., Engr. Eduardo Dy and Ermilo Pico, Respondents.

FACTS

Petitioner Guido B. Pulong was hired by respondent Super Manufacturing Inc. (SMI) in December 1978. After receiving separation pay due to a plant transfer in May 1998, he was re-employed on August 1, 1998, as a Senior Die Setter. On September 22, 2014, he was denied entry into SMI’s plant. SMI’s Personnel Manager showed him a document stating he was compulsorily retired as he had turned 60 years old. Petitioner refused to sign the retirement papers, wanting to work until 65, but was prevented from returning to work. He filed a complaint for illegal dismissal.
Respondents countered that petitioner was validly retired pursuant to a Memorandum of Agreement (MOA) dated January 1, 2013, between SMI and its workers, which set the retirement age at 60 years with at least 5 years of continuous service. The MOA was signed by three workers: Eduardo K. Abad, Glenn B. Bionat, and Julio D. Cruz. Petitioner argued the MOA did not bind him as he was not a signatory and the signatories had no authority to represent SMI’s workers, submitting an affidavit from thirteen workers supporting this claim. Respondents asserted petitioner was estopped from challenging the MOA as he had availed of benefits under it, such as uniform, Christmas gift, monetized leave credits, and a health card.
The Labor Arbiter ruled in favor of petitioner, declaring illegal dismissal, ordering reinstatement and payment of backwages. The NLRC initially affirmed but, upon reconsideration, reversed itself, dismissing the complaint and ordering payment of retirement benefits instead, finding petitioner and co-workers estopped by their acceptance of MOA benefits. The Court of Appeals affirmed the NLRC.

ISSUE

Did the Court of Appeals err in upholding petitioner’s compulsory retirement at the age of sixty (60) years under the MOA dated January 1, 2013?

RULING

Yes. The Supreme Court granted the petition, ruling that petitioner was illegally dismissed.
The Court held that under Article 287 of the Labor Code, as amended, employers and employees may fix the retirement age by agreement. Absent such an agreement, the compulsory retirement age is 65, and the minimum for optional retirement is 60. A retirement plan allowing an employer to retire employees below 65 is not per se invalid, provided the benefits are not lower than those prescribed by law and the employee consents. Consent must be explicit, voluntary, free, and uncompelled.
The Court found that SMI failed to prove that the signatories to the MOA (Abad, Bionat, and Cruz) were duly authorized bargaining representatives of the workers. Merely showing that some signatories had signed previous MOAs on different periods was insufficient to establish their authority for the 2013 MOA. No evidence was presented that these individuals were appointed or elected by their co-workers to represent them. Therefore, the MOA was not a valid covenant binding petitioner.
The Court also rejected the application of estoppel. Petitioner’s receipt of benefits (uniform, Christmas gift, etc.) did not constitute voluntary acquiescence to the early retirement provision, as these were minor benefits that could be perceived as gratuities and did not involve a direct trade-off for the waiver of the right to security of tenure. The acceptance was not shown to be with knowledge of the retirement clause.
Consequently, with no valid retirement agreement, the applicable compulsory retirement age was 65. Petitioner’s forced retirement at 60, without his consent, constituted illegal dismissal. The Court ordered SMI to pay petitioner full backwages and separation pay in lieu of reinstatement, as well as attorney’s fees.