Laya v. Veterans National Bank

8/10/2021 SUPREME COURT REPORTS ANNOTATED 850 8/10/2021 SUPREME COURT REPORTS ANNOTATED 850
entertained.” The rule rests on the basic tenet of

immutability of judgments. “At some point, a
decision becomes final and executory and,
consequently, all litigations must come to an
end.” The general rule, however, against second
and subsequent motions for reconsideration
admits of settled exceptions. For one, the
present Internal Rules of the Supreme Court,
particularly Section 3, Rule 15 thereof,
provides: Sec. 3. Second motion for
reconsideration.—The Court shall not
G.R. No. 205813. January 10, 2018.*
entertain a second motion for reconsideration,

and any exception to this rule can only be
ALFREDO F. LAYA, JR., petitioner, vs.
granted in the higher interest of justice by
PHILIPPINE VETERANS BANK and
the Court En Banc upon a vote of at least two-
RICARDO A. BALBIDO, JR., respondents.
thirds of its actual membership. There is
reconsideration “in the higher interest of
Remedial Law; Motion for Reconsideration;
justice” when the assailed decision is not
As a general rule, second and subsequent
only legally erroneous, but is likewise
motions for reconsideration are forbidden.—As a
patently unjust and potentially capable of
general rule, second and subsequent motions for
causing unwarranted and irremediable
reconsideration are forbidden. Nevertheless,
injury or damage to the parties. A second
there are situations in which exceptional
motion for reconsideration can only be
circumstances warrant allowing such motions
entertained before the ruling sought to be
for reconsideration, and for that reason the
reconsidered becomes final by operation of law
Court has recognized several exceptions to the
or by the Court’s declaration.
general rule. We have extensively expounded on
the exceptions in McBurnie v. Ganzon, 707
SCRA 646 (2013), where we observed: At the _______________
outset, the Court emphasizes that second and * EN BANC.

subsequent motions for reconsideration are, as
a general rule, prohibited. Section 2, Rule 52 of
the Rules of Court provides that “[n]o second
motion for reconsideration of a judgment or
316
final resolution by the same party shall be
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316 SUPREME COURT REPORTS 3518. As one of the mechanisms to rehabilitate

ANNOTATED PVB, Congress saw fit to modify PVB’s
Laya, Jr. vs. Philippine Veterans Bank operations, capital structure, articles of
incorporation and bylaws through the
enactment of Republic Act No. 7169. By
Same; Same; The Supreme Court (SC) may restoring PVB as envisioned by Republic Act
entertain second and subsequent motions for No. 3518, and by providing that the creation of
reconsideration when the assailed decision is the PVB would be in accord with the
legally erroneous, patently unjust and Corporation Code, the General Banking Act,
potentially capable of causing unwarranted and and other related laws, Congress undeniably
irremediable injury or damage to the parties.— bestowed upon the PVB the personality of a
The Court may entertain second and private commercial bank through Republic Act
subsequent motions for reconsideration when No. 7169. In that regard, Section 8 of Republic
the assailed decision is legally erroneous, Act No. 7169 directed the Filipino veterans to
patently unjust and potentially capable of raise P750,000,000.00 in total unimpaired
causing unwarranted and irremediable injury capital accounts, prior to PVB’s reopening, but
or damage to the parties. Under these excused the Government from making any new
circumstances, even final and executory capital infusion.
judgments may be set aside because of the
Remedial Law; Civil Procedure; Findings of
existence of compelling reasons.
Fact; There is now no dispute that the Court of
Banks and Banking; Philippine Veterans Appeals (CA) can make a determination whether
Bank; By restoring Philippine Veterans Bank the factual findings by the National Labor
(PVB) as envisioned by Republic Act (RA) No. Relations Commission (NLRC) or the Labor
3518, and by providing that the creation of the Arbiter (LA) were based on the evidence and in
PVB would be in accord with the Corporation accord with pertinent laws and jurisprudence.—
Code, the General Banking Act, and other There is now no dispute that the CA can make a
related laws, Congress undeniably bestowed determination whether the factual findings by
upon the PVB the personality of a private the NLRC or the Labor Arbiter were based on
commercial bank through RA No. 7169.—We the evidence and in accord with pertinent laws
also note that Congress enacted Republic Act and jurisprudence. The
No. 7169, whereby it acknowledged the Filipino
veterans of World War II as the owners of PVB,
but their ownership had not been fully realized
despite the implementation of Republic Act No.
317
VOL. 850, JANUARY 10, 2018 317 lower than those prescribed by law.—The
employers and employees may agree to fix the
Laya, Jr. vs. Philippine Veterans Bank
retirement age for the latter, and to embody
their agreement in either their collective
significance of this clarification is that bargaining agreements (CBAs) or their
whenever the decision of the CA in a labor case employment contracts. Retirement plans
is appealed by petition for review on certiorari, allowing employers to retire employees who
the Court can competently delve into the have not yet reached the compulsory retirement
propriety of the factual review not only by the age of 65 years are not per se repugnant to the
CA but also by the NLRC. Such ability is still in constitutional guaranty of security of tenure,
pursuance to the exercise of our review provided that the retirement benefits are not
jurisdiction over administrative findings of fact lower than those prescribed by law.
that we have discoursed on in several rulings,
Same; Same; Same; The mere mention of
including Aklan Electric Coooperative, Inc. v.
the retirement plan in the letter of appointment
National Labor Relations Commission, 323
did not sufficiently inform the petitioner of the
SCRA 258 (2000), where we have pointed out:
contents or details of the retirement program.—
while administrative findings of fact are
The mere mention of the retirement plan in the
accorded great respect, and even finality when
letter of appointment did not sufficiently inform
supported by substantial evidence,
the petitioner of the contents or details of the
nevertheless, when it can be shown that
retirement program. To construe from the
administrative bodies grossly misappreciated
petitioner’s acceptance of his appointment that
evidence of such nature as to compel a contrary
he had acquiesced to be retired earlier than the
conclusion, this Court had not hesitated to
compulsory age of 65 years would, therefore, not
reverse their factual findings. Factual findings
be warranted. This is because retirement
of administrative agencies are not infallible and
should be the result of the bilateral act of both
will be set aside when they fail the test of
the employer and the employee based on their
arbitrariness.
voluntary agreement that the employee agrees
Labor Law; Termination of Employment; to sever his employment upon reaching a
Retirement; Retirement Plans; Retirement plans
allowing employers to retire employees who have
not yet reached the compulsory retirement age of
sixty-five (65) years are not per se repugnant to
318
the constitutional guaranty of security of tenure,
provided that the retirement benefits are not

318 SUPREME COURT REPORTS pursuant to the retirement provision that he had
ANNOTATED not knowingly and voluntarily agreed to,
Laya, Jr. vs. Philippine Veterans Bank Philippine Veterans Bank (PVB) was guilty of
illegal dismissal as to him.—To stress, company
retirement plans must not only comply with the
certain age. That the petitioner might be standards set by the prevailing labor laws but
well aware of the existence of the retirement must also be accepted by the employees as
program at the time of his engagement did not commensurate to their faithful services to the
suffice. His implied knowledge, regardless of employer within the requisite period. Although
duration, did not equate to the voluntary the employer could be free to impose a
acceptance required by law in granting an early retirement age lower than 65 years for as long
retirement age option to the employee. The law its employees consented, the retirement of the
demanded more than a passive acquiescence on employee whose intent to retire was not clearly
the part of the employee, considering that his established, or whose retirement was
early retirement age option involved conceding involuntary is to be treated as a discharge. With
the constitutional right to security of tenure. the petitioner having been thus dismissed
Same; Same; Same; The pertinent rule on pursuant to the retirement provision that he
retirement plans does not presume consent or had not knowingly and voluntarily agreed to,
acquiescence from the high educational PVB was guilty of illegal dismissal as to him.
attainment or legal knowledge of the employee. Being an illegally dismissed employee, he was
—The Court disagrees with the view tendered entitled to the reliefs provided under Article 279
by Justice Leonen to the effect that the of the Labor Code, to wit: Article 279. Security
petitioner, because of his legal expertise and of tenure.—In cases of regular employment, the
educational attainment, could not now validly employer shall not terminate the services of an
claim that he was not informed of the provisions employee except for a just cause or when
of the retirement program. The pertinent rule authorized by this Title. An employee who is
on retirement plans does not presume consent unjustly dismissed from work shall be entitled
or acquiescence from the high educational to reinstate-
attainment or legal knowledge of the employee.

In fact, the rule provides that the acquiescence

by the employee cannot be lightly inferred from
his acceptance of employment. 319
Same; Same; Same; Illegal Dismissals;

With the petitioner having been thus dismissed VOL. 850, JANUARY 10, 2018 319

CARPIO, J., Concurring Opinion:
ment without loss of seniority rights and
other privileges and to his full backwages,
inclusive of allowances, and to his other benefits Waiver of Rights; View that the well-
or their monetary equivalent computed from the recognized rule is that any waiver of a
time his compensation was withheld from him constitutional right must be clear, categorical,
up to the time of his actual reinstatement. knowing, and intelligent.—The well-recognized
rule is that any waiver of a constitutional
Same; Same; Same; Same; Separation Pay; right must be clear, categorical, knowing,
Considering that the petitioner’s reinstatement and intelligent. Thus, in a long line of cases,
is no longer feasible because of his having this Court has ruled: “The relinquishment of a
meanwhile reached the compulsory retirement constitutional right has to be laid out
age of sixty-five (65) years by June 11, 2012, he convincingly. Such waiver must be clear,
should be granted separation pay.—Considering categorical, knowing, and intelligent.”
that the petitioner’s reinstatement is no longer
feasible because of his having meanwhile Labor Law; Termination of Employment;
reached the compulsory retirement age of 65 Retirement; Retirement Plan; View that while
years by June 11, 2012, he should be granted Philippine Veterans Bank (PVB) has a
separation pay. In this regard, retirement retirement plan making sixty (60) years the
benefits and separation pay are not mutually compulsory retirement age, this specific fact was
exclusive. The basis for computing the not made known to petitioner at the time PVB
separation pay should accord with Section 4, handed him his appointment letter on 1 June
Article III of PVB’s retirement plan. Hence, his 2001.—Under Article 287 of the Labor Code, the
full backwages should be computed from July “compulsory retirement age” is 65 years, “in the
18, 2007 — the date when he was illegally absence of a retirement plan or agreement
dismissed — until his compulsory retirement providing
age of 65 years on June 11, 2012. Such

backwages shall all be subject to legal interest

of 12% per annum from July 18, 2007 until June
30, 2013, and then to legal interest of 6% 320
interest per annum from July 1, 2013 until full
satisfaction, conformably with Nacar v. Gallery
320 SUPREME COURT REPORTS
Frames, 703 SCRA 439 (2013).
ANNOTATED
Laya, Jr. vs. Philippine Veterans Bank be presumed. There must be clear and
convincing evidence of an actual intention to
relinquish the right to constitute a waiver
for retirement benefits of employees.” While
of a constitutional right. There must be proof
Philippine Veterans Bank (PVB) has a
of the following: (a) that the right exists; (b)
retirement plan making 60 years the
that the person involved had knowledge, either
compulsory retirement age, this specific fact
actual or constructive, of the existence of such
was not made known to petitioner at the
right; and, (c) that the said person had an
time PVB handed him his appointment
actual intention to relinquish the right.
letter on 1 June 2001. The appointment letter
The waiver must be made voluntarily,
mentioned in one line a retirement plan but the
knowingly and intelligently. The Court indulges
retirement plan itself was not attached to the
every reasonable presumption against any
appointment letter or given to petitioner.
waiver of fundamental constitutional rights.
Nothing in the appointment letter
There is no showing here that petitioner has an
indicated, expressly or impliedly, that the
actual intention to waive his constitutional
compulsory retirement age was 60 years.
right to security of tenure. Such intention to
Anyone who received and read the
waive a fundamental constitutional right
appointment letter would not have known
cannot be presumed but must be actually
that the compulsory retirement age was 60
shown and established. The bar against any
years. In short, petitioner could not have
implied waiver is very high because this Court
waived knowingly the compulsory retirement
“indulges [in] every reasonable presumption
age of 65 years because this fact was not
against any waiver of fundamental
made known to him at the time of his
constitutional rights.” PVB has failed to
appointment. Any such waiver was not made
surmount that high bar.
knowingly.
Same; Same; Same; View that the fact that
petitioner is a lawyer cannot give rise to the
presumption that he impliedly waived his
321
constitutional right to security of tenure when he
accepted the appointment letter.—The fact that
petitioner is a lawyer cannot give rise to the VOL. 850, JANUARY 10, 2018 321
presumption that he impliedly waived his Laya, Jr. vs. Philippine Veterans Bank
constitutional right to security of tenure when
he accepted the appointment letter. This Court
has ruled: But a waiver by implication cannot
Same; Same; Same; View that even in being assailed.—Petitioner Alfredo F. Laya,
determining whether the appointment of an Jr.’s (Laya) second motion for reconsideration
employee is permanent or probationary, actual should not have been entertained by the Court.
disclosure of the performance standards at the Under Rule 15, Section 3 of the Internal Rules
time of the employment is required and cannot of the Supreme Court, the Court shall not
be presumed.—Even in determining whether entertain a second motion for reconsideration,
the appointment of an employee is permanent except in the higher interest of justice, and
or probationary, actual disclosure of the before the finality of the decision being assailed.
performance standards at the time of the Higher interest of justice will prevail if there is
employment is required and cannot be showing that the “assailed decision is not only
presumed. This Court has explained that a legally erroneous, but is likewise patently
probationary employee shall be deemed a unjust and potentially capable of causing
regular employee where no standards are unwarranted and irremediable injury or
made known to him at the time of his damage to the parties.” For Petitioner Laya’s
engagement, unless the job is self-descriptive, second motion for reconsideration to prosper,
like maid, cook, driver, or messenger. Thus, to there must be showing that the contested
comply with the constitutional mandate that decision is not sound in law, and is also
the “State shall afford full protection to manifestly unfair and has the possibility of
labor,” disclosure to the employee at the time giving irreparable damage to Petitioner Laya.
of appointment is necessary to bind the Furthermore, the second motion for
employee. “Full protection” means implied reconsideration must have been filed before the
waivers in derogation of an employee’s case has attained finality.
constitutional or statutory right cannot be Same; Civil Procedure; Judgments;
presumed. Doctrine of Immutability of Final Judgments;
View that an erroneous decision, by itself, is not
LEONEN, J., Dissenting Opinion:

Remedial Law; Motion for Reconsideration; 322

View that under Rule 15, Section 3 of the
Internal Rules of the Supreme Court (SC), the
Court shall not entertain a second motion for
ANNOTATED
reconsideration, except in the higher interest of
justice, and before the finality of the decision Laya, Jr. vs. Philippine Veterans Bank
enough to set aside defined rules of Same; Same; Appeals; Labor Law; View
procedure. Once a judgment has become final, it that in labor cases, factual findings of labor
becomes immutable and unalterable.— officials are accorded respect and even finality,
Petitioner Laya mainly anchors his request on especially when backed by substantial evidence.
the alleged erroneous decision of the National —In putting at issue the validity of Petitioner
Labor Relations Commission. However, an Laya’s early retirement, the Ponencia ruled on a
erroneous decision, by itself, is not enough to question of fact. This issue involves looking into
set aside defined rules of procedure. Once a the correctness of the findings of fact of the
judgment has become final, it becomes National Labor Relations Commissions, and is
immutable and unalterable. It cannot be beyond the scope of a petition for review on
changed in any way, even if the modification is certiorari under Rule 45 of the Rules of Court.
for the correction of a perceived error, by the In labor cases, factual findings of labor officials
court which promulgated it or by a higher court. are accorded respect and even finality,
Judgments and orders should be final at some especially when backed by substantial evidence.
definite time based on law, as there would be no The Court’s function does not involve
end to litigation. While the losing party has a reevaluating the evidence, particularly when
right to appeal his or her case, the winning the Labor Arbiter, National Labor Relations
party has an attendant right to enjoy the Commission and the Court of Appeals have the
finality of the decision issued in his or her favor, same findings of fact.
through the execution process to satisfy the Pleadings and Practice; View that if the
award given to him or her. constitutional issue is “not raised in the
Same; Same; Courts; View that the courts, pleadings, it cannot be considered at the trial, it
in the exercise of its appellate jurisdiction, can
correct errors of law or errors of fact, or both,
depending on the mode of appeal.—In a Rule 45
Petition, only questions of law are at issue. The
323
Court, in the exercise of its certiorari review, is
limited to correcting errors of jurisdiction or
abuse of discretion which is so grave as to VOL. 850, JANUARY 10, 2018 323
remove the tribunal or court its jurisdiction. Laya, Jr. vs. Philippine Veterans Bank
Meanwhile, the courts, in the exercise of its
appellate jurisdiction, can correct errors of law
or errors of fact, or both, depending on the mode cannot be considered on appeal.”—Any
of appeal. constitutional issue should be raised at the
earliest opportunity, or in pleadings filed before Veterans Bank pursuant to its Retirement Plan
a competent court which can rule on it. If the Rules and Regulations. Under the Retirement
constitutional issue is “not raised in the Plan Rules and Regulations, Respondent
pleadings, it cannot be considered at the trial, Philippine Veterans Bank set the retirement
and, if not considered at the trial, it cannot be age of members of the Plan to sixty (60) years
considered on appeal.” The issue on old, and on a case to case basis and on an
constitutionality was belatedly raised in this annual renewal, a member may extend his or
case. Thus, we assume for this case that her service beyond the imposed retirement age
Philippine Veterans Bank is a private under the Plan, but not beyond sixty-five (65)
institution. As a private institution, it can years old. Petitioner Laya became bound under
impose a separate retirement program as long the Retirement Plan Rules and Regulations
as it is agreed with by the employee. In this when he agreed to the letter of employment
case, the pronouncements of the Labor Arbiter, issued by Respondent Philippine Veterans
the National Labor Relations Commission, and Bank, which indicated that he is entitled to
the Court of Appeals’ pronouncement that Laya particular executive benefits, including
did not consent to be bound by Philippine Membership in the Provident Fund
Veterans Bank’s Retirement Plan is at issue. Program/Retirement Program.
Labor Law; Termination of Employment; Same; Same; Same; View that when there is
Retirement; View that Section 287 of the Labor showing that the other party “is knowledgeable
Code declares the age of sixty-five (65) years old enough to have understood the terms and
as the compulsory age of retirement. However, conditions of the contract, or one whose stature
the employer may impose a lower retirement age, is such that he is
as long as this is indicated in a collective
bargaining agreement, or in any other
applicable contract or plan, and agreed to by the
employee.—Section 287 of the Labor Code 324
declares the age of sixty-five (65) years old as
the compulsory age of retirement. However, the
employer may impose a lower retirement age, 324 SUPREME COURT REPORTS
as long as this is indicated in a collective ANNOTATED
bargaining agreement, or in any other Laya, Jr. vs. Philippine Veterans Bank
applicable contract or plan, and agreed to by the
employee. Petitioner Laya was given notice of
his early retirement by Respondent Philippine

expected to be more prudent and cautious contract — his contract specified that he would
with respect to his [or her] transactions, such automatically become a member of the
party cannot later on be heard to complain for retirement program upon being hired.—The case
being ignorant or having been forced into merely of Cercado v. Uniprom, Inc., 633 SCRA 281
consenting to the contract.”—The ponencia held (2010), is not applicable to this case. In that
that the Retirement Plan is a contract of case, the Court ruled that the Cercado did not
adhesion, and that the inclusion in the letter of voluntarily agree to the retirement plan and so,
appointment of the provision indicating that was not bound by the early retirement clause.
Petitioner Laya is a member of Respondent Moreover, in that case, the retirement plan was
Philippine Veterans Bank’s retirement program not in existence at the time Cercado was
is not sufficient to show that he was aware of employed in 1978. Also, there was no Collective
the program’s contents. A contract of adhesion Bargaining Agreement, or any other contract,
is a ready-made contract imposed by one party, including one for employment, which indicated
usually a company, and which the other party the compulsory retirement age for employees to
merely signs to signify his or her agreement. It be 60 years old. Instead, the retirement plan
is not invalid per se, as the other party may was codified in 1980, or two years after Cercado
completely reject it, and it will be struck down had already been employed, and without
as void only if there is showing, based on the consultation with the employees. In this case,
circumstances which led to its signing, that the the retirement program had long been in
weaker party had no other choice but to agree to existence and in writing even before Petitioner
it, and that the agreement is inequitable and Laya was employed by the Respondent
basically one-sided. As such, when there is Philippine Veterans Bank. Furthermore, he was
showing that the other party “is knowledgeable informed of the existence of the retirement
enough to have understood the terms and program when he signed his employment
conditions of the contract, or one whose stature contract — his contract specified that he would
is such that he is expected to be more prudent

and cautious with respect to his [or her]

transactions, such party cannot later on be
heard to complain for being ignorant or having 325
been forced into merely consenting to the
contract.”
VOL. 850, JANUARY 10, 2018 325
Same; Same; Same; View that petitioner
was informed of the existence of the retirement
program when he signed his employment
automatically become a member of the shows that he not only was aware of the
retirement program upon being hired. provisions of the retirement program, but that
his retirement was governed by it. It was only
Same; Same; Same; View that as an upon the rejection of his request for extension
employee with legal expertise, whose educational did he allege that he was illegally dismissed. As
attainment and professional experience require an employee with legal expertise, whose
that he be more prudent in the contracts and educational attainment and professional
agreements he enters into, Petitioner Laya experience require that he be more prudent in
cannot simply allege that he was not informed of the contracts and agreements he enters into,
the provisions of the retirement program at the Petitioner Laya cannot simply allege that he
time he was employed.—Petitioner Laya is not a was not informed of the provisions of the
weaker party that can claim ignorance of the retirement program at the time he was
implications of what he is signing or agreeing employed. Part of the work of a lawyer is to
to. As a lawyer, he is considered to be exercise due diligence in the review of
knowledgeable of the legal effects and documents and contracts presented before him.
ramifications of what he is signing or agreeing His membership in the retirement program was
to. This is further emphasized by the position clearly indicated in his employment contract,
he was employed for: as Chief Legal Counsel. which he is presumed to have read and
He was hired based on his legal prowess. In understood. It is his duty, as a lawyer and as
addition, as Chief Legal Counsel with a Vice the Chief Legal Counsel of Respondent
President rank, the information regarding the Philippine Veterans Bank, to be aware of the
retirement of employees was at his disposal; he provisions to which he has bound himself to
cannot claim that the Retirement Plan Rules follow.
and Regulations were belatedly shown to him,
and that its provisions should not apply to him.
In all his years as an employee of Respondent
Philippine Veterans Bank, he did not contest
326
the provisions of the Retirement Plan Rules and
Regulations, despite his knowledge that he was
a member the Bank’s retirement program. It 326 SUPREME COURT REPORTS
must be noted that when he was notified by ANNOTATED
Respondent Philippine Veterans Bank of his
retirement, he requested for an extension of his
service for another two (2) years based on the
Retirement Plan Rules and Regulations. This
PETITION for review on certiorari of a Commission (NLRC) dated June 21, 2010
decision of the Court of Appeals. affirming the dismissal of his complaint for
The facts are stated in the opinion of the illegal dismissal by the Labor Arbiter.
Court.
Juan Orendain P. Buted for _______________
respondents.
Rowena B. Austria-Generoso for
respondent Philippine Veterans Bank. 1 Rollo, pp. 34-48; penned by Associate Justice
Leoncia Real-Dimagiba, and concurred in by Associate
BERSAMIN, J.: Justices Rosmari D. Carandang and Ricardo R.
Rosario.
An employee in the private sector who
did not expressly agree to the terms of an
early retirement plan cannot be separated
from the service before he reaches the age
327
of 65 years. The employer who retires the
employee prematurely is guilty of illegal
dismissal, and is liable to pay his VOL. 850, JANUARY 10, 2018 327
backwages and to reinstate him without Laya, Jr. vs. Philippine Veterans Bank
loss of seniority and other benefits, unless
the employee has meanwhile reached the
Antecedents
mandatory retirement age under the Labor

Code, in which case he is entitled to
The CA summarized the factual
separation pay pursuant to the terms of
antecedents as follows:
the plan, with legal interest on the
backwages and separation pay reckoned On 1 June 2001, petitioner Alfredo F.
from the finality of the decision. Laya, Jr. was hired by respondent
Philippine Veterans Bank as its Chief
The Case Legal Counsel with a rank of Vice
President. Among others, the terms and
The petitioner seeks the review and conditions of his appointment are as
reversal of the adverse decision follows; (sic)
promulgated on August 31, 2012,1 whereby “3. As a Senior Officer of the
the Court of Appeals (CA) upheld the Bank, you are entitled to the
ruling of the National Labor Relations
following executive ben[e]fits:

Car Plan limit of P700,000.00,
without equity on your part; a 328
gasoline subsidy of 300 liters per
month and subject further to The
Car Plan Policy of the Bank.
ANNOTATED
Membership in a professional
organization in relation to your
profession and/or assigned functions
in the Bank. Section 2. Early Retirement.—
A Member may, with the approval
Membership in the Provident
of the Board of Directors, retire
Fund Program/Retirement
early on the first day of any month
Program.
coincident with or following his
Entitlement to any and all other
attainment of age 50 and
basic and fringe benefits enjoyed by
completion of at least 10 years of
the officers; core of the Bank
Credited Service.
relative to Insurance covers,
Section 3. Late Retirement.—A
Healthcare Insurance, vacation and
Member may, with the approval of
sick leaves, among others.”
the Board of Directors, extend his
service beyond his normal
On the other hand, private respondent
retirement date but not beyond age
has its Retirement Plan Rules and
65. Such deferred retirement shall
Regulations which provides among others,
be on a case by case and yearly
as follows:
extension basis.
ARTICLE IV On 14 June, 2007, petitioner was
informed thru letter by the private
RETIREMENT DATES respondent of his retirement effective on 1
July 2007.
Section 1. Normal Retirement. On 21 June 2007 petitioner wrote
—The normal retirement date of a Col. Emmanuel V. De Ocampo, Chairman
Member shall be the first day of the of respondent bank, requesting for an
month coincident with or next extension of his tenure for two (2) more
following his attainment of age 60.
years pursuant to the Bank’s Retirement VOL. 850, JANUARY 10, 2018 329
Plan (Late Retirement).
On 26 June 2008, private respondent
issued a memorandum directing the
petitioner to continue to discharge his denial of the request for the extension of
official duties and functions as chief legal his retirement,5 but PVB certified his
counsel pending his request. However, on retirement from the service as of July 1,
18 July 2007, petitioner was informed 2007 on March 6, 2008.6
thru its president Ricardo A. Balbido, Jr. On December 24, 2008, the petitioner
that his request for an extension of tenure filed his complaint for illegal dismissal
was denied.2 against PVB and Balbido, Jr. in the NLRC
to protest his unexpected retirement.7

According to the petitioner, he was Ruling of the Labor Arbiter
made aware of the retirement plan of
respondent Philippine Veterans Bank On August 28, 2009, the Labor Arbiter
(PVB) only after he had long been rendered a decision dismissing the
employed and was shown a photocopy of complaint for illegal dismissal,8 to wit:
the Retirement Plan Rules and
3
Regulations, but PVB’s President Ricardo
WHEREFORE, the charge of illegal
A. Balbido, Jr. had told him then that his
dismissal and money claims raised by the
request for extension of his service would
complainant, together with the
be denied “to avoid precedence.”4 He
counterclaim raised by the respondents
sought the reconsideration of the
are DISMISSED for lack of merit but by
reason of a flaw in the denial of
_______________ complainant’s application for term
2 Id., at pp. 35-37.
extension as discussed above, the
respondent bank is hereby ordered to pay
3 Id., at p. 7.
the complainant the amount of
4 Id., at p. 8.
P200,000.00 by way of reasonable (sic)
indemnity.
Ricardo Balbido, Jr., is hereby dropped
as party-respondent.
329 SO ORDERED.9

respondents is GRANTED. The Decision

After his motion for reconsideration was below is hereby AFFIRMED with
denied,10 the petitioner appealed to the MODIFICATION, deleting the award of
NLRC.11 indemnity to complainant.
SO ORDERED.13
_______________

5 Id. The petitioner assailed the ruling to the
6 Id., at p. 10. CA through certiorari.
7 Id.
8 Id., at p. 37. Ruling of the CA
9 Id., at p. 40.

On August 31, 2012, the CA
10 Id.
promulgated the now assailed decision,14
11 Id.
holding that the petitioner’s acceptance of
his appointment as Chief Legal Officer of
PVB signified his conformity to the
retirement program;15 that he could not
330 have been unaware of the retirement
program which had been in effect since
330 SUPREME COURT REPORTS January 1, 1996;16 that the lowering of the
ANNOTATED retirement age through the retirement
plan was a recognized exception under the
Laya, Jr. vs. Philippine Veterans Bank provisions of Article 287 of the Labor
Code;17 that considering his failure to
Ruling of the NLRC adduce evidence showing that PVB had
acted maliciously in applying the
On June 21, 2010, the NLRC affirmed provisions of the retirement plan to him
the dismissal of the petitioner’s complaint, and in denying his request for the
and deleted the indemnity imposed by the extension of his service, PVB’s
Labor Arbiter,12 viz.: implementation of the retirement plan was
a valid exercise of its management
WHEREFORE, premises considered
prerogative.18
the appeal of the complainant is hereby
DENIED for lack of merit. The appeal of
_______________
12 Id. In its resolution promulgated on August

13 Id., at pp. 42-43. 28, 2013, the Court (First Division) denied
14 Id., at pp. 34-48. the petitioner’s motion for reconsideration,
15 Id., at p. 45. as well as his prayer to refer the case to
16 Id., at pp. 45-46. the Court En Banc.24 The entry of
17 Id., at p. 46. judgment was issued on December 6,
18 Id., at pp. 46-47. 2013.25
The petitioner filed a second motion for
reconsideration on December 18, 2013,26
whereby he expounded on the issues he
was raising in his first motion for
331
reconsideration. He urged that the Court
should find and declare PVB as a public
VOL. 850, JANUARY 10, 2018 331 instrumentality; that the law applicable to
his case was Presidential Decree No. 1146
(GSIS Law), which stipulated the
compulsory retirement age of 65 years;27
The CA denied the petitioner’s motion and that the compulsory retirement age for
for reconsideration on February 8, 2013.19 civil servants could not be “contracted
On April 8, 2013, the Court (First out.”28
Division) denied the petition for review on
certiorari.20 In his motion for
_______________
reconsideration, the petitioner not only
prayed for the reconsideration of the denial 19 Id., at pp. 51-52.
but also sought the referral of his petition 20 Id., at p. 56.
to the Court En Banc,21 arguing that the 21 Id., at pp. 57-66.
CA and the NLRC had erroneously applied 22 Id., at p. 57.
laws and legal principles intended for 23 Id., at pp. 57-58.
corporations in the private sector to a 24 Id., at p. 106.
public instrumentality like PVB;22 and that
25 Id., at p. 126.
to allow the adverse rulings to stand would
26 Id., at pp. 108-124.
be to condone the creation of a private
27 Id., at pp. 110-111.
corporation by Congress other than by a
28 Id., at p. 111.
general law on incorporation.23

law or by the Court’s declaration”;33 and

that the First Division had correctly denied
the petition for review because the issues
332
raised therein were
332 SUPREME COURT REPORTS _______________

ANNOTATED
29 Id., at p. 152.
30 Id., at p. 154A.
31 Id., at p. 233.
On March 25, 2014, the Court En Banc 32 Section 3. Second Motion for Reconsideration.
accepted the referral of this case by the —The Court shall not entertain a second motion for
First Division.29 reconsideration, and any exception to this rule can
On April 22, 2014, the Court En Banc only be granted in the higher interest of justice by the
required PVB and the Office of the Court En Banc upon a vote of at least two-thirds of its
Solicitor General (OSG) to file their actual membership. There is reconsideration “in the
comments on the petitioner’s second higher interest of justice” when the assailed decision
motion for reconsideration.30 is not only legally erroneous, but is likewise patently
The comment of PVB poses several unjust and potentially capable of causing
challenges to the petition. unwarranted and irremediable injury or damage to
In support of its first challenge, PVB the parties. A second motion for reconsideration can
contends that the Court should not have only be entertained before the ruling sought to be
accepted the referral of the case to the reconsidered becomes final by operation of law or by
Banc because the First Division had the Court’s declaration. x x x
already denied with finality the petitioner’s 33 Rollo, pp. 232-233.
first motion for reconsideration, as well as
his motion to refer the case to the Banc;31
that the Court En Banc’s acceptance of the
case was in violation of the principle of
immutability of final judgments as well as 333
of Section 3, Rule 15 of the Internal Rules
of the Supreme Court32 to the effect that a VOL. 850, JANUARY 10, 2018 333
second motion for reconsideration could be
allowed only “before the ruling sought to be Laya, Jr. vs. Philippine Veterans Bank
reconsidered becomes final by operation of
factual matters that this mode of appeal Bank is concerned. As this Honorable
could not review and pass upon.34 Court observed in Philippine Veterans
As its second challenge, PVB demurrs to Bank Employees Union-NUBE v.
the propriety of the petitioner’s attack on Philippine Veterans Bank —
its corporate existence. It submits that he
should not be allowed to pose such attack _______________
for the first time in this appeal;35 that his
argument was also an impermissible 34 Id., at pp. 238-239.
collateral attack on the constitutionality of 35 Id., at p. 242.
Republic Act No. 3518 and Republic Act 36 Id., at p. 243.
No. 7169;36 and that his seeking a 37 Id., at p. 245.
declaration of PVB as a public institution 38 Id., at pp. 247-248.
“partakes the nature of a petition for 39 Id., at pp. 248-249.
declaratory relief which is an action 40 Id., at p. 249.
beyond the original jurisdiction of the 41 Id., at p. 250.
Honorable Court.”37
Nevertheless, PVB maintains that it is
not a public or government entity for
several reasons, namely: (1) the
334
Government does not own a single share in
it;38 (2) the Government has no appointee
or representative in the Board of Directors, 334 SUPREME COURT REPORTS
and is not involved in its management;39 ANNOTATED
and (3) it does not administer government Laya, Jr. vs. Philippine Veterans Bank
funds.40
PVB insists that its creation as a
These stockholdings (of the
private bank with a special charter does
veterans, widows, orphans or
not in any way violate Section 16, Article
compulsory heirs) do not enjoy any
XII of the Constitution,41 explaining:
special immunity over and above
Firstly, the mischief which the shares of stock in any other
constitutional provision seeks to prevent, corporation, which are always
i.e., giving certain individuals, families or subject to the vicissitudes of
groups special privileges denied to other business. Their value may
citizens, will not be present insofar as the appreciate or decline or the stocks
may become worthless altogether. The creation of Veterans Bank

Like any other property, they do not through Republic Act Nos. 3518 and 7169
have a fixed but a fluctuating price. should therefore be taken in conjunction
Certainly, the mere acceptance of and harmonized with Section 16, Article
these shares of stock by the XII of the Constitution. The predilection
petitioners did not create any legal of the said Republic Acts towards the
assurance from the Government that welfare of the veterans, their widows,
their original value would be orphans or compulsory heirs is supported
preserved and that the owners could by no less than a constitutional provision.
not be deprived of such property That Republic Act Nos. 3518 and 7169 do
under any circumstance no matter not fall within the proscription against
how justified. the creation of private corporations is
Secondly, the obvious legislative readily apparent from
intent is “to give meaning and realization
to the constitutional mandate to provide
immediate and adequate care, benefits
and other forms of assistance to war 335
veterans and veterans of military
campaigns, their surviving spouses and
orphans.” Article XVI, Section 7 of the VOL. 850, JANUARY 10, 2018 335
Constitution states: Laya, Jr. vs. Philippine Veterans Bank
Section 7. The State shall provide
immediate and adequate care,
the fact that in both laws, the intendment
benefits and other forms of
of the legislature is that Veterans Bank
assistance to war veterans and
will eventually be operated, managed and
veterans of military campaigns,
exist under the general laws, i.e.,
their surviving spouses and
Corporation Code and General Banking
orphans. Funds shall be provided
Act. The mere circumstance that the
therefor and due consideration shall
charter was granted directly by Congress
be given them in the disposition of
does not signify that only Congress can
agricultural lands of the public
modify or abrogate it by another
domain and, in appropriate cases,
enactment.
in the utilization of natural
Thirdly, the following mandate of
resources.
Section 3 of Republic Act No. 7169 had
been accomplished: Through its comment, the OSG presents

an opinion favorable to the position of the
“The operations and changes in the petitioner, opining upon the authority of
capital structure of the Veterans Boy Scouts of the Philippines v.
Bank, as well as other amendments Commission on Audit43
to its articles of incorporation and
bylaws as prescribed under _______________
Republic Act No. 3518, shall be in
accordance with the Corporation 42 Id., at pp. 251-252.
Code, the General Banking Act, and 43 G.R. No. 177131, June 7, 2011, 651 SCRA 146,
other related laws.” 188.

Pursuant hereto, the Bank had
registered with the Securities and
Exchange Commission under its 336
certificate of incorporation/registration
number 24681. It has its articles of
incorporation and bylaws separate and 336 SUPREME COURT REPORTS
distinct from the provisions of Republic ANNOTATED
Act Nos. 3518 and 7169. The manner by Laya, Jr. vs. Philippine Veterans Bank
which the Bank’s Board of Directors is to
be organized and the Officers to be elected and Article 44 of the Civil Code44 that PVB
or appointed are stated in the bylaws. The is a public corporation created in the public
latest Definitive Information Sheet of the interest, and a government
Bank indicates that as of April 30, 2014, instrumentality with juridical
the total number of shareholders of record personality;45 hence, the law governing the
(common and preferred) is 383,852. There petitioner’s compulsory retirement age was
had been 25,303,869 common shares and Republic Act No. 8291, and the compulsory
3,611,556 preferred shares issued, none of retirement age for him should be 65
which belong to the government. It is thus years.46
operating under and by virtue of the
Corporation Code and the General
Banking Act.42 Issues

The following procedural and a juridical personality, separate and distinct from
substantive issues are to be considered and that of each shareholder, partner or member. (35a)
resolved, namely: (1) whether or not the 45 Rollo, p. 276.
Court could accept the petitioner’s second 46 Id., at pp. 290-293.
motion for reconsideration; (2) whether
PVB is a private entity or a public
instrumentality; and (3) whether the
petitioner was validly retired by PVB at 337
age 60.

Ruling of the Court VOL. 850, JANUARY 10, 2018 337
In light of pertinent laws and relevant
jurisprudence, the Court has ascertained,
1.
after going over the parties’ arguments and
The Court En Banc properly accepted

the records of the case, that the
the petitioner’s second motion for
reconsideration of the Court’s resolutions

reconsideration.
promulgated on April 8, 2013 and August

28, 2013, and the lifting of the entry of
As a general rule, second and
judgment made herein are in order; and
subsequent motions for reconsideration are
that the appeal by the petitioner should be
forbidden.47 Nevertheless, there are
given due course.
situations in which exceptional
circumstances warrant allowing such
_______________ motions for reconsideration, and for that
reason the Court has recognized several
44 Article 44. The following are juridical
exceptions to the general rule. We have
persons:
extensively expounded on the exceptions in
(1) The State and its political subdivisions;
McBurnie v. Ganzon,48 where we observed:
(2) Other corporations, institutions and entities
for public interest or purpose, created by law; their At the outset, the Court emphasizes
personality begins as soon as they have been that second and subsequent motions for
constituted according to law; reconsideration are, as a general rule,
(3) Corporations, partnerships and associations prohibited. Section 2, Rule 52 of the Rules
for private interest or purpose to which the law grants of Court provides that “[n]o second motion

for reconsideration of a judgment or final 338

resolution by the same party shall be
entertained.” The rule rests on the basic
tenet of immutability of judgments. “At
ANNOTATED
some point, a decision becomes final and
executory and, consequently, all Laya, Jr. vs. Philippine Veterans Bank
litigations must come to an end.”
The general rule, however, against tice” when the assailed decision
second and subsequent motions for is not only legally erroneous,
reconsideration admits of settled but is likewise patently unjust
exceptions. For one, the present Internal and potentially capable of
Rules of the Supreme Court, particularly causing unwarranted and
Section 3, Rule 15 thereof, provides: irremediable injury or damage
Sec. 3. Second motion for to the parties. A second motion for
reconsideration.—The Court shall reconsideration can only be
not entertain a second motion for entertained before the ruling sought
reconsideration, and any to be reconsidered becomes final by
exception to this rule can only operation of law or by the Court’s
be granted in the higher declaration.
interest of justice by the Court xxxx
En Banc upon a vote of at least two- In a line of cases, the Court has
thirds of its actual membership. then entertained and granted second
There is reconsideration “in the motions for reconsideration “in the
higher interest of jus- higher interest of substantial
justice,” as allowed under the Internal
_______________ Rules when the assailed decision is
“legally erroneous,” “patently unjust” and
“potentially capable of causing
47 Section 2, Rule 52 of the Rules of Court. unwarranted and irremediable injury or
48 G.R. Nos. 178034, 178117 & 186984-85, damage to the parties.” In Tirazona v.
October 17, 2013, 707 SCRA 646 (Resolution). Philippine EDS Techno-Service, Inc.
(PET, Inc.), we also explained that a

second motion for reconsideration may be

allowed in instances of “extraordinarily

persuasive reasons and only after an Laya, Jr. vs. Philippine Veterans Bank
express leave shall have been obtained.”
In Apo Fruits Corporation v. Land Bank for “the power of this Court to
of the Philippines, we allowed a second suspend its own rules or to except a
motion for reconsideration as the issue particular case from its operations
involved therein was a matter of public whenever the purposes of justice
interest, as it pertained to the proper require it, cannot be questioned.” In
application of a basic constitutionally De Guzman v. Sandiganbayan, the Court,
guaranteed right in the government’s thus, explained:
implementation of its agrarian reform [T]he rules of procedure should
program. In San Miguel Corporation v. be viewed as mere tools designed to
NLRC, the Court set aside the decisions facilitate the attainment of justice.
of the LA and the NLRC that favored Their strict and rigid application,
claimant-security guards upon the Court’s which would result in technicalities
review of San Miguel Corporation’s that tend to frustrate rather than
second motion for reconsideration. In Vir- promote substantial justice, must
Jen Shipping and Marine Services, Inc. v. always be avoided. Even the Rules
NLRC, et al., the Court En Banc reversed of Court envision this liberality.
on a third motion for reconsideration the This power to suspend or even
ruling of the Court’s Division on therein disregard the rules can be so
private respondents’ claim for wages and pervasive and encompassing so as
monetary benefits. to alter even that which this Court
It is also recognized that in some itself has already declared to be
instances, the prudent action final, as we are now compelled to do
towards a just resolution of a case is in this case x x x.
for the Court to suspend rules of x x x x
procedure, The Rules of Court was conceived
and promulgated to set forth

guidelines in the dispensation of

justice but not to bind and chain the
339 hand that dispenses it, for
otherwise, courts will be mere
slaves to or robots of technical
VOL. 850, JANUARY 10, 2018 339 rules, shorn of judicial discretion.

That is precisely why courts in already declared final. The Court then
rendering real justice have always recalled in Navarro an entry of judgment
been, as they in fact ought to be, after it had determined the validity and
conscientiously guided by the norm constitutionality of Republic Act No. 9355,
that when on the balance, explaining that:
technicalities take a backseat Verily, the Court had, on several
against substantive rights, and not occasions, sanctioned the recall of
the other way around. Truly then, entries of judgment in light of
technicalities, in the appropriate attendant extraordinary
language of Justice Makalintal, circumstances. The power to
“should give way to the realities of suspend or even disregard rules of
the situation.” x x x. procedure can be so pervasive and
compelling as to alter even that
Consistent with the foregoing which this Court itself had already
precepts, the Court has then reconsidered declared final. In this case, the
even decisions that have attained finality, compelling concern is not only to
finding it more appropriate to lift entries afford the movant-intervenors the
of judgments already made in these cases. right to be heard since they would
In Navarro v. Executive Secretary, we be adversely affected by the
reiterated the pronouncement in judgment in this case despite not
being original parties thereto, but
also to arrive at the correct
interpretation of the provisions of
340
the [Local Government Code (LGC)]
with respect to the creation of local
government units. x x x
340 SUPREME COURT REPORTS In Muñoz v. CA, the Court resolved to
ANNOTATED recall an entry of judgment to prevent a
Laya, Jr. vs. Philippine Veterans Bank miscarriage of justice. This justification
was likewise applied in Tan Tiac Chiang
v. Hon. Cosico, wherein the Court held
De Guzman that the power to suspend or
that:
even disregard rules of procedure can be
The recall of entries of
so pervasive and compelling as to alter
judgments, albeit rare, is not a
even that which this Court itself has
novelty. In Muñoz v. CA, where the
case was elevated to this Court and frivolous and dilatory, and (f) the other
a first and second motion for party will not be unjustly prejudiced
reconsideration had been denied thereby. (Citations omitted; underscoring
with finality, the Court, in the supplied)49
interest of substantial justice,
recalled the Entry of Judgment as
well as the letter of transmittal of In short, the Court may entertain
the records to the Court of Appeals. second and subsequent motions for
In Barnes v. Judge Padilla, we reconsideration when the assailed decision
ruled: is legally erroneous, patently unjust and
[A] final and executory judgment potentially capable of causing unwarranted
can no longer be attacked by any of and irremediable injury or damage to the
the parties or be parties. Under these circumstances, even
final and executory judgments may be set
aside because of the existence of
compelling reasons.
It is notable that the retirement
341
program in question herein was
established solely by PVB as the employer.
VOL. 850, JANUARY 10, 2018 341 Although PVB could validly impose a
retirement age lower than 65 years for as
long as it did so with the employees’
consent,50 the consent must be explicit,
modified, directly or indirectly, even by voluntary, free, and uncompelled.51 In
the highest court of the land. dismissing the petition for review on
However, this Court has relaxed this certiorari, the Court’s First Division
rule in order to serve substantial justice inadvertently overlooked that the law
considering (a) matters of life, liberty, required the employees’ consent to be
honor or property, (b) the existence of express and voluntary in order for them to
special or compelling circumstances, (c) be bound by the retirement program
the merits of the case, (d) a cause not providing for a retirement age earlier than
entirely attributable to the fault or the age of 65
negligence of the party favored by the
suspension of the rules, (e) a lack of any
_______________
showing that the review sought is merely
49 Id., at pp. 664-668. Veterans Bank

50 Jaculbe v. Silliman University, G.R. No. as a private, not a government, entity.
156934, March 16, 2007, 518 SCRA 445, 452.
51 Cercado v. Uniprom, Inc., G.R. No. 188154, In Philippine Veterans Bank Employees
October 13, 2010, 633 SCRA 281, 290. Union-NUBE v. The Philippine Veterans
Bank,52 we pertinently pronounced:

Coming now to the ownership of the
Bank, we find it is not a government
342 bank, as claimed by the petitioners. The
fact is that under Section 3(b) of its
342 SUPREME COURT REPORTS charter, while 51% of the capital stock of
ANNOTATED the Bank was initially fully subscribed by
the Republic of the Philippines for and in
behalf of the veterans, their widows,
orphans or compulsory heirs, the
years. Hence, the Court deems it proper to corresponding shares of stock were to be
render a fair adjudication on the merits of turned over within 5 years from the
the appeal upon the petitioner’s second organization by the Bank to the said
motion for reconsideration. Furthermore, beneficiaries who would thereafter have
allowing this case to be reviewed on its the right to vote such common shares.
merits furnishes the Court with the The balance of about 49% was to be
opportunity to reexamine the case in order divided into preferred shares which would
to ascertain whether or not the dismissal be opened for subscription by any
produced results patently unjust to the recognized veteran, widow, orphans or
petitioner. These reasons do justify compulsory heirs of said veteran at the
treating this case as an exception to the rate of one preferred share per veteran,
general rule on immutability of judgments. on the condition that in case of failure of
any particular veteran to subscribe for
2. any preferred share of stock so offered to
The pronouncement
of the Court in him within thirty (30) days from the date
Philippine Veterans Bank Employees
of receipt of notice, said share of stock
Union-NUBE v. The Philippine shall be
Veterans Bank is still doctrinal
on the status of the Philippine
_______________
52 G.R. Nos. 67125 & 82337, August 24, 1990, 189 authorized to do business and
SCRA 14. operate as a commercial bank as of
the date of approval of this Act.

This point is important because
343 the Constitution provides in its
Article IX-B, Section 2(1) that “the
Civil Service embraces all branches,
VOL. 850, JANUARY 10, 2018 343 subdivisions, instrumentalities, and
Laya, Jr. vs. Philippine Veterans Bank agencies of the Government,
including government-owned or -
available for subscription to other controlled corporations with original
veterans in accordance with such rules or charters.” As the Bank is not owned
regulations as may be promulgated by the or controlled by the Government
Board of Directors. Moreover, under Sec. although it does have an original
6(a), the affairs of the Bank are managed charter in the form of R.A. No. 3518,
by a board of directors composed of eleven it clearly does not fall under the Civil
members, three of whom are ex officio Service and should be regarded as an
members, with the other eight being ordinary commercial corporation.
elected annually by the stockholders in Section 28 of the said law so
the manner prescribed by the Corporation provides. The consequence is that the
Law. Significantly, Sec. 28 also provides relations of the Bank with its
as follows: employees should be governed by the
Sec. 28. Articles of labor laws, under which in fact they
Incorporation.—This Act, upon its have already been paid some of their
approval, shall be deemed and claims.53 (Bold underscoring supplied for
accepted to all legal intents and emphasis)
purposes as the statutory articles of

incorporation or Charter of the
Anent whether PVB was a government
Philippine Veterans Bank; and
or a private entity, therefore, we declare
that, notwithstanding the
that it is the latter. The foregoing juris-
provisions of any existing law to the
contrary, said Bank shall be
_______________
deemed registered and duly

53 Id., at pp. 29-30. Act No. 7169 directed the Filipino veterans
to raise P750,000,000.00 in total
unimpaired capital accounts, prior to
PVB’s reopening, but excused the
344 Government from making any new capital
infusion, viz.:
344 SUPREME COURT REPORTS Section 8. Transitory Provisions.—

ANNOTATED Without requiring new capital infusion
either from the Government or from
outside investigators, the Filipino
veterans of
prudential pronouncement remains to be
good law, and should be doctrinal and
_______________
controlling.
We also note that Congress enacted
Republic Act No. 7169,54 whereby it 54 An Act to Rehabilitate the Philippine Veterans
acknowledged the Filipino veterans of Bank Created Under Republic Act No. 3518,
World War II as the owners of PVB, but Providing the Mechanisms Therefor, and for Other
their ownership had not been fully realized Purposes.
despite the implementation of Republic Act 55 An Act Creating the Philippine Veterans Bank,
No. 3518.55 As one of the mechanisms to and for Other Purposes.
rehabilitate PVB, Congress saw fit to 56 Section 3 of R.A. No. 7169 states:
modify PVB’s operations, capital structure, Section 3. Operations and Changes in the Capital
articles of incorporation and bylaws Structure of the Veterans Bank and other
through the enactment of Republic Act No. Amendments.—The operations and changes in the
7169.56 By restoring PVB as envisioned by capital structure of the Veterans Bank, as well as
Republic Act No. 3518,57 and by providing other amendments to its articles of incorporation and
that the creation of the PVB would be in bylaws as prescribed under Republic Act No. 3518,
accord with the Corporation Code, the shall be in accordance with the Corporation Code, the
General Banking Act, and other related General Banking Act, and other related laws.
laws, Congress undeniably bestowed upon 57 Sec. 4, id.
the PVB the personality of a private
commercial bank through Republic Act No.
7169. In that regard, Section 8 of Republic
345 that the petitioner was not validly retired

at age 60.
Before going further, we clarify that the
VOL. 850, JANUARY 10, 2018 345
CA, in the exercise of its certiorari
Laya, Jr. vs. Philippine Veterans Bank jurisdiction, is limited to determining
whether or not the NLRC committed grave
World War II who are real owners- abuse of discretion amounting to lack or
stockholders of the Veterans Bank shall excess of jurisdiction. The remedy is the
cause the said bank to have at least Seven special civil action for certiorari under Rule
hundred fifty million pesos 65 of the Rules of Court brought in the CA,
(P750,000,000.00) in total unimpaired and once the CA decides the case the party
capital accounts prior to reopening thereby aggrieved may appeal the decision
pursuant to this Act as a commercial of the CA by petition for review on
bank. certiorari under Rule 45 of the Rules of
It is hereby provided that the Board of Court.
Trustees of the Veterans of World War II However, rigidly limiting the authority
(BTVWW II) created under Republic Act of the CA to the determination of grave
No. 3518 is hereby designated as trustee abuse of discretion amounting to lack or
of all issued but undelivered shares of excess of jurisdiction on the part of the
stock. NLRC does not fully conform with
prevailing case law, particularly St. Martin

With the Government having no more
_______________
stake in PVB, there is no justification for
the insistence of the petitioner that PVB 58 Rollo, p. 27.
“is a public corporation masquerading as a
private corporation.”58

3. 346
Petitioner Alfredo
Laya was
not validly retired at age 60.

Notwithstanding the rejection of the ANNOTATED
petitioner’s insistence that PVB was a Laya, Jr. vs. Philippine Veterans Bank
public corporation, we find and declare
Funeral Home v. NLRC,59 where we firmly were based on the evidence and in accord
observed that because of the “growing with pertinent laws and jurisprudence.
number of labor cases being elevated to The significance of this clarification is
this Court which, not being a trier of fact, that whenever the decision of the CA in a
has at times been constrained to remand labor case is appealed by petition for
the case to the NLRC for resolution of review on certiorari, the Court can
unclear or ambiguous factual findings”60 competently delve into the propriety of the
the CA could more properly address factual review not only by the CA but also
petitions for certiorari brought against the by the NLRC. Such ability is still in
NLRC. Conformably with such observation pursuance to the exercise of our review
made in St. Martin Funeral Homes, we jurisdiction over administrative findings of
have then later on clarified that the CA, in fact that we have discoursed on in several
its exercise of its certiorari jurisdiction, can rulings, including Ak-
review the factual findings or even the
legal conclusions of the NLRC,61 viz.: _______________
In St. Martin Funeral Home[s] v. NLRC,

it was held that the special civil action of 59 G.R. No. 130866, September 16, 1998, 295
certiorari is the mode of judicial review of SCRA 494.
the decisions of the NLRC either by this 60 Id., at p. 509.
Court and the Court of Appeals, although 61 Agustilo v. Court of Appeals, G.R. No. 142875,
the latter court is the appropriate forum September 7, 2001, 364 SCRA 740.
for seeking the relief desired “in strict 62 Id., at p. 747.
observance of the doctrine on the
hierarchy of courts” and that, in the
exercise of its power, the Court of Appeals
can review the factual findings or the
347
legal conclusions of the NLRC. The
contrary rule in Jamer was thus
overruled.62 VOL. 850, JANUARY 10, 2018 347

There is now no dispute that the CA can
make a determination whether the factual lan Electric Coooperative, Inc. v. National
findings by the NLRC or the Labor Arbiter Labor Relations Commission,63 where we
have pointed out: the membership in the Provident Fund

Program/Retirement Program. Worthy to
While administrative findings of fact are note that when petitioner accepted his
accorded great respect, and even finality appointment as Chief Legal Officer, he
when supported by substantial evidence, likewise signified his conformity with the
nevertheless, when it can be shown that provisions of the Retirement Program
administrative bodies grossly considering that the same has already
misappreciated evidence of such nature as been in existence and effective since 1
to compel a contrary conclusion, this January 1996, i.e., prior to his
Court had not hesitated to reverse their appointment. As such, this Court is not
factual findings. Factual findings of convinced that petitioner was not aware
administrative agencies are not infallible of the private respondent’s retirement
and will be set aside when they fail the program.65
test of arbitrariness.64
_______________
The review of the findings of the CA 63 G.R. No. 121439, January 25, 2000, 323 SCRA
becomes more compelling herein, inasmuch 258.
as it appears that the CA did not 64 Id., at p. 270.
appreciate the fact that the retirement
65 Rollo, pp. 45-46.
plan was not the sole prerogative of the
employer, and that the petitioner was
automatically made a member of the plan.
Upon reviewing the resolution by the
NLRC, the CA simply concluded that the 348
petitioner’s acceptance of the employment
offer had carried with it his acquiescence, 348 SUPREME COURT REPORTS
which implied his knowledge of the plan, ANNOTATED
thus:
This Court finds petitioner’s argument
to be misplaced. It must be stressed that The retirement of employees in the
when petitioner was appointed as Chief private sector is governed by Article 287 of
Legal Officer on 01 June 2001 among the the Labor Code:66
terms and conditions of his employment is

Art. 287. Retirement.—Any allowing employers to retire employees

employee may be retired upon who have not yet reached the compulsory
reaching the retirement age retirement age of 65 years are not per se
established in the collective repugnant to the constitutional guaranty of
bargaining agreement or other security of tenure, provided that the
applicable employment contract. retirement benefits are not lower than
In case of retirement, the employee those prescribed by law.67
shall be entitled to receive such
retirement benefits as he may have _______________
earned under existing laws and any
collective bargaining agreement and other 66 Now Article 302, pursuant to Republic Act No.
agreements: Provided, however, That an 10151 (See DOLE Department Advisory No. 01, Series
employee’s retirement benefits under any of 2015).
collective bargaining and other 67 Obusan v. Philippine National Bank, G.R. No.
agreements shall not be less than those 181178, July 26, 2010, 625 SCRA 542, 553.
provided therein.
In the absence of a retirement plan
or agreement providing for
retirement benefits of employees in 349
the establishment, an employee upon
reaching the age of sixty (60) years or
more, but not beyond sixty-five (65) VOL. 850, JANUARY 10, 2018 349
years which is hereby declared the Laya, Jr. vs. Philippine Veterans Bank
compulsory retirement age, who has
served at least five (5) years in the said
The CA concluded that the petitioner
establishment, may retire and shall be
had agreed to be bound by the retirement
entitled to retirement pay. x x x x
plan of PVB when he accepted the letter of
appointment as its Chief Legal Counsel.
Under the provision, the employers and We disagree with the conclusion. We
employees may agree to fix the retirement declare that based on the clear
age for the latter, and to embody their circumstances herein the CA erred in so
agreement in either their collective concluding.
bargaining agreements (CBAs) or their The petitioner’s letter of appointment
employment contracts. Retirement plans pertinently stated:
3. As a Senior Officer of the Bank, sever his employment upon reaching a
you are entitled to the following executive certain age.69
benefits:
_______________
Car Plan limit of P700,000.00, without
equity on your part; a gasoline subsidy of 68 Rollo, p. 35.
300 liters per month and subject further 69 Robina Farms Cebu v. Villa, G.R. No. 175869,
to The Car Plan Policy of the Bank. April 18, 2016, 789 SCRA 471; Paz v. Northern
Membership in a professional Tobacco Redrying Co., Inc., G.R. No. 199554,
organization in relation to your profession February 18, 2015, 751 SCRA 99, 114.
and/or assigned functions in the Bank.
Membership in the Provident
Fund Program/Retirement Program.
Entitlement to any and all other basic 350
and fringe benefits enjoyed by the officers;
core of the Bank relative to Insurance
covers, Healthcare Insurance, vacation 350 SUPREME COURT REPORTS
and sick leaves, among others.68 ANNOTATED

Obviously, the mere mention of the That the petitioner might be well aware
retirement plan in the letter of of the existence of the retirement program
appointment did not sufficiently inform the at the time of his engagement did not
petitioner of the contents or details of the suffice. His implied knowledge, regardless
retirement program. To construe from the of duration, did not equate to the voluntary
petitioner’s acceptance of his appointment acceptance required by law in granting an
that he had acquiesced to be retired earlier early retirement age option to the
than the compulsory age of 65 years would, employee. The law demanded more than a
therefore, not be warranted. This is passive acquiescence on the part of the
because retirement should be the result of employee, considering that his early
the bilateral act of both the employer and retirement age option involved conceding
the employee based on their voluntary the constitutional right to security of
agreement that the employee agrees to tenure.70

In Cercado v. Uniprom, Inc.,71 we have from her signature on the personnel action
underscored the character of the forms
employee’s consent in agreeing to the early
retirement policy of the employer, viz.: _______________
Acceptance by the employees of an 70 Supra note 51 at p. 289.

early retirement age option must be 71 Id.
explicit, voluntary, free, and 72 Id., at p. 290.
uncompelled. While an employer may
unilaterally retire an employee earlier
than the legally permissible ages under
the Labor Code, this prerogative must be
351
exercised pursuant to a mutually
instituted early retirement plan. In other
words, only the implementation and VOL. 850, JANUARY 10, 2018 351
execution of the option may be unilateral,
but not the adoption and institution of the
retirement plan containing such option.
For the option to be valid, the retirement accepting the terms of her job description,
plan containing it must be voluntarily and compliance with the company policies,
assented to by the employees or at least rules and regulations, to wit:
by a majority of them through a
We also cannot subscribe to
bargaining representative.72 (Bold
respondent’s submission that
emphasis supplied)
petitioner’s consent to the retirement
plan may be inferred from her
Furthermore, the petitioner’s signature in the personnel action
membership in the retirement plan could forms containing the phrase:
not be justifiably attributed to his signing “Employee hereby expressly
of the letter of appointment that only listed acknowledges receipt of and
the minimum benefits provided to PVB’s undertakes to abide by the provisions
employees. Indeed, in Cercado, we have of his/her Job Description, Company
declared that the employee’s consent to the Code of Conduct and such other
retirement plan that came into being two policies, guidelines, rules and
years after the hiring could not be inferred
regulations the company may Section 2. Eligibility after

prescribe.” Effective Date.—Any person who
It should be noted that the becomes an Employee after Janu-
personnel action forms relate to the
increase in petitioner’s salary at _______________
various periodic intervals. To
conclude that her acceptance of the 73 Id., at pp. 290-291.
salary increases was also,
simultaneously, a concurrence to the
retirement plan would be
tantamount to compelling her to 352
agree to the latter. Moreover,
voluntary and equivocal acceptance
by an employee of an early 352 SUPREME COURT REPORTS
retirement age option in a retirement ANNOTATED
plan necessarily connotes that her Laya, Jr. vs. Philippine Veterans Bank
consent specifically refers to the plan
or that she has at least read the same ary 1, 1996 shall automatically
when she affixed her conformity become a Member of the Plan on the
thereto.73 date he becomes a regular permanent
Employee, provided he is less than 55

years old as of such date.
A perusal of PVB’s retirement plan
Section 3.
shows that under its Article III all the
Continuation/Termination of
regular employees of PVB were
Membership.—Membership in the Plan
automatically admitted into membership,
shall be concurrent with employment
thus:
with the Bank, and shall cease
ARTICLE III automatically upon termination of the
MEMBERSHIP IN THE
PLAN Member’s service with the Bank for any
reason whatsoever.74 (Bold underscoring
Section 1. Eligibility at Effective supplied for emphasis)
Date.—Any Employee of the Bank as of

January 1, 1996 shall automatically be a
Member of the Plan as of such date.
Having thus automatically become a 78 CA Rollo, p. 129.

member of the retirement plan through his 79 Capili v. National Labor Relations Commission,
acceptance of employment as Chief Legal G.R. No. 120802, June 17, 1997, 273 SCRA 576, 588.
Officer of PVB,75 the petitioner could not
withdraw from the plan except upon his
termination from employment.
It is also notable that the retirement 353
plan had been in existence since January
1, 1996,76 or more than five years prior to
the petitioner’s employment by PVB. The VOL. 850, JANUARY 10, 2018 353
plan was established solely by the PVB,77 Laya, Jr. vs. Philippine Veterans Bank
and approved by its president.78 As such,
the plan was in the nature of a contract of
sion, to consider him to have voluntarily
adhesion,79 in respect to which the
and freely given his consent to the terms
petitioner was reduced to mere submission
thereof as to warrant his being
by accepting his employment, and
compulsorily retired at the age of 60 years
automatically became a member of the
is factually unwarranted.
plan. With the plan being a contract of
In view of the foregoing, the Court
adhe-
disagrees with the view tendered by
Justice Leonen to the effect that the
_______________ petitioner, because of his legal expertise
and educational attainment, could not now
74 CA Rollo, p. 122.
validly claim that he was not informed of
75 The appointment letter pertinently reads:
the provisions of the retirement program.
Dear Atty. Laya,
The pertinent rule on retirement plans
This is to inform your appointment as Chief
does not presume consent or acquiescence
Legal Officer with a rank of Vice President effective 1
from the high educational attainment or
June 2001 under the following terms and conditions:
legal knowledge of the employee. In fact,
1. Your appointment is on a regular
the rule provides that the acquiescence by
status x x x.
the employee cannot be lightly inferred
x x x x
from his acceptance of employment.
(Id., at p. 160; bold emphasis supplied)
Moreover, it was incumbent upon PVB
76 Section 3, Article I.
to prove that the petitioner had been fully
77 Section 1, Article I.
apprised of the terms of the retirement
program at the time of his acceptance of 354

the offer of employment. PVB did not
discharge its burden, for the petitioner’s
appointment letter apparently enumerated
ANNOTATED
only the minimum benefits that he would
enjoy during his employment by PVB, and Laya, Jr. vs. Philippine Veterans Bank
contained no indication of PVB having
given him a copy of the program itself in the retirement of the employee whose
order to fully apprise him of the contents intent to retire was not clearly established,
and details thereof. Nonetheless, even or whose retirement was involuntary is to
assuming that he subsequently obtained be treated as a discharge.82
information about the program in the With the petitioner having been thus
course of his employment, he still could not dismissed pursuant to the retirement
opt to simply withdraw from the program provision that he had not knowingly and
due to his membership therein being voluntarily agreed to, PVB was guilty of
automatic for the regular employees of illegal dismissal as to him. Being an
PVB. illegally dismissed employee, he was
To stress, company retirement plans entitled to the reliefs provided under
must not only comply with the standards Article 27983 of the Labor Code, to wit:
set by the prevailing labor laws but must
also be accepted by the employees as Article 279. Security of tenure.—In
commensurate to their faithful services to cases of regular employment, the
the employer within the requisite period.80 employer shall not terminate the services
Although the employer could be free to of an employee except for a just cause or
impose a retirement age lower than 65 when authorized by this Title. An
years for as long its employees consented,81 employee who is unjustly dismissed from
work shall be entitled to reinstatement
without loss of seniority rights and other
_______________
privileges and to his full backwages,
80 Supra note 67. inclusive of allowances, and to his other
81 Supra note 50. benefits or their monetary equivalent
computed from the time his compensation
was withheld from him up to the time of
his actual reinstatement.


Considering that the petitioner’s
reinstatement is no longer feasible because Article III of PVB’s retirement plan. Hence,
of his having meanwhile reached the his full backwages should be computed
compulsory retirement age of 65 years by from July 18, 2007 — the date when he
June 11, 2012, he should be granted was illegally dismissed — until his
separation pay. In this regard, retirement compulsory retirement age of 65 years on
benefits and separation pay are not June 11, 2012. Such backwages shall all be
mutually exclusive.84 The basis for subject to legal interest of 12% per annum
computing the separation pay should from July 18, 2007 until June 30, 2013,
accord with Section 4,85 and then to legal interest of 6% interest per
annum from July 1, 2013 until full
_______________ satisfaction, conformably with Nacar v.
Gallery Frames.86
82 Paz v. Northern Tobacco Redrying Co., Inc.,
WHEREFORE, the Court GRANTS
supra note 69 at p. 115. the petition for review on certiorari;
83 Now Article 294 pursuant to Republic Act No. REVERSES and SETS ASIDE the
10151 (See DOLE Department Advisory No. 01, Series decision promulgated by the Court of
of 2015). Appeals on August 31, 2012; FINDS and
84 Goodyear Philippines, Inc. v. Angus, G.R. No. DECLARES respondent PHILIPPINE
185449, November 12, 2014, 740 SCRA 24, 38-39. VETERANS BANK guilty of illegally
85 Section 4. Involuntary Separation Benefit.— dismissing the petitioner; and ORDERS
Any Member who is involuntarily separated from respondent PHILIPPINE VETERANS
service by the Bank for any cause not due to his own BANK to pay to the petitioner, as follows:
fault, misconduct, negligence, or fraud, shall be (a) backwages computed from July 18,
entitled to receive a separation benefit computed in 2007, the time of his illegal dismissal, until
accor- his compulsory age of retirement, plus
legal interest of 12% per annum from July
18, 2007 until June 30, 2013, and legal
interest of 6% per annum from July 1, 2013
355 until full satisfaction; (b) separation pay
computed at the rate of 100% of the final
monthly salary received by the petitioner
VOL. 850, JANUARY 10, 2018 355

8/10/2021 SUPREME COURT REPORTS ANNOTATED 850
pursuant to Section 4, Article V of the PVB

Retirement Plan; and (c) the costs of suit.
The Court DIRECTS that any amount
that the petitioner received from
respondent PHILIPPINE VETERANS
BANK by virtue of his illegal retirement
shall be deducted from the amounts hereby
awarded to him.
The Court DIRECTS the National
Labor Relations Commission to facilitate
the computation and payment of the total
monetary benefits and awards due to the
petitioner in accordance with this decision.
SO ORDERED.
_______________
dance with the retirement benefit formula described

in Section 1 of this Article or the applicable
termination benefit under existing laws whichever is
greater. (CA Rollo, p. 124)
86 G.R. No. 189871, August 13, 2013, 703 SCRA
439, 458-459.

356

ANNOTATED
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8/10/2021 SUPREME COURT REPORTS ANNOTATED 850 8/10/2021 SUPREME COURT REPORTS ANNOTATED 850

entertained.” The rule rests on the basic tenet of

outset, the Court emphasizes that second and * EN BANC.

316 SUPREME COURT REPORTS 3518. As one of the mechanisms to rehabilitate

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Same; Same; Same; Illegal Dismissals;

Laya, Jr. vs. Philippine Veterans Bank

LEONEN, J., Dissenting Opinion:

Remedial Law; Motion for Reconsideration; 322

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following executive ben[e]fits:

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respondents is GRANTED. The Decision

12 Id. In its resolution promulgated on August

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law or by the Court’s declaration”;33 and

332 SUPREME COURT REPORTS _______________

may become worthless altogether. The creation of Veterans Bank

been accomplished: Through its comment, the OSG presents

The Court En Banc properly accepted

reconsideration of the Court’s resolutions

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for reconsideration of a judgment or final 338

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49 Id., at pp. 664-668. Veterans Bank

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344 SUPREME COURT REPORTS Section 8. Transitory Provisions.—

345 that the petitioner was not validly retired

346 SUPREME COURT REPORTS

In St. Martin Funeral Home[s] v. NLRC,

Laya, Jr. vs. Philippine Veterans Bank

have pointed out: the membership in the Provident Fund

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Art. 287. Retirement.—Any allowing employers to retire employees

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Acceptance by the employees of an 70 Supra note 51 at p. 289.

regulations the company may Section 2. Eligibility after

Having thus automatically become a 78 CA Rollo, p. 129.

program at the time of his acceptance of 354

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Laya, Jr. vs. Philippine Veterans Bank

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pursuant to Section 4, Article V of the PVB

dance with the retirement benefit formula described

356 SUPREME COURT REPORTS

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