SC rules employees cannot be forced to retire before age 65
For many employees, working beyond the age of 60 is a preferred choice. Reinforcing this right, the Supreme Court has ruled that early retirement cannot be mandated without the voluntary consent of the employee.
In a decision by Associate Justice Ramon Paul Hernando, the SC’s First Division found that Colegio de San Juan de Letran in Laguna had illegally dismissed former finance executive Rodolfo Ondevilla by treating his appointment as expired when he turned 60 in August 2019.
Ondevilla joined CSJL as Comptroller in 2004 and later became Assistant Vice President for Finance. His appointment was renewed several times.
In 2018, however, Ondevilla was "demoted" as a Controller after the school underwent a management reorganization. Nevertheless, he continued working at the same salary and benefits.
In August 2019, when he turned 60, he was reminded that his appointment would conclude at the end of the month and was requested to begin turning over his functions to the Vice President for Finance. Ondevilla subsequently filed a complaint for illegal dismissal.
The Labor Arbiter and the National Labor Relations Commission ruled in his favor, as did the Court of Appeals and the SC.
"Under the Labor Code, the retirement age is set by an existing agreement or employment contract. If neither exists, the law sets the compulsory retirement age at 65 and the minimum age for optional retirement at 60," the high court stated.
According to the SC, an optional retirement plan must be based on a voluntary agreement between the employer and the employee.
"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," they explained.
In Ondevilla's case, his early retirement was not made through a mutual agreement between him and CSJL. The institution also failed to offer a retirement plan that Ondevilla could freely accept or reject and made no indication that they were willing to discuss his retirement.
Since Ondevilla showed no intention of opting for retirement before reaching the age of 65, the court deemed his retirement as involuntary and constituted in illegal dismissal.
The SC ordered CSJL to pay him retirement benefits covering his employment from June 16, 2004, until August 29, 2024, when he reached the mandatory retirement age of 65. He is also entitled to full backwages and separation pay.