EMPLOYERS cannot compel workers to retire before the mandatory retirement age of 65 without their clear and voluntary consent, the Supreme Court (SC) said, ruling that early retirement may constitute illegal dismissal.
“The employee must freely and expressly agree to it, without pressure or coercion, because accepting optional retirement means giving up the right to security of tenure,” the SC Office of the Spokesperson said in a statement on Tuesday, citing a ruling written by Associate Justice Ramon Paul L. Hernando.
The ruling partly granted a petition filed by Rodolfo Ondevilla against Colegio de San Juan de Letran (CSJL) in Laguna, which had treated him as retired when he turned 60.
Under the Labor Code, retirement follows the terms of an existing retirement agreement or plan. Absent such an arrangement, compulsory retirement is at age 65, while optional retirement may begin at age 60.
The SC said optional retirement must stem from a mutual agreement because it involves waiving a worker’s right to security of tenure.
Mr. Ondevilla joined CSJL as comptroller in 2004 and later became assistant vice-president for finance. Following a reorganization in 2018, he was reassigned as comptroller, a move he challenged as a demotion.
CSJL deemed his appointment expired on Aug. 29, 2019, when he turned 60, prompting him to file an illegal dismissal complaint.
The Court of Appeals earlier ruled that Mr. Ondevilla was illegally dismissed but said he had agreed to retire through a July 2020 letter.
The SC disagreed, saying CSJL had not offered a retirement plan and that the letter was merely a response to the school’s demand that he repay a cash advance.
“In this case, the court found that Ondevilla’s early retirement was not the result of a mutual agreement between him and CSJL,” the SC said.
The tribunal ordered the payment of back wages, separation pay and retirement benefits covering his service from 2004 to Aug. 29, 2024, with the amount to be computed. — Erika Mae P. Sinaking