2019 Labor Law Bar Q and A

A.1.
Define, explain or distinguish the following terms:
(a) Just and authorized causes
Suggested answer: A just cause is a fault-based ground for dismissal under Art. 297, LC;
whereas an authorized cause is a non-fault ground for dismissal under Art. 298-299,
LC.
(b) Seasonal and project employees
A seasonal employee is one engaged for the duration of the season for which he has
been engaged; whereas, a project employee is on whose employment is co-terminus
with the specific project or undertaking for which he has been engaged; provided, its
scope or duration was made known to him upon engagement. [Art. 295, LC]
(c) Strikes and lockouts
Strikes are carried out through temporary stoppage of work; whereas, lockouts are carried
out through temporary withholding of work. [Art. 279, LC]
(d) Bona fide occupational qualifications
A bona fide occupational qualification (BFOQ) is an occupational requirement based
on quality or attribute. It is valid if it serves a legitimate business purpose, it is work-
related, and its possession enhances an employee’s productivity at work. [Star Paper
Corp., et al. v. Symbol, et al., GR no. 164774, April 12, 2006]
(e) Grievance machinery
A grievance machinery is a contractual dispute resolution mechanism for all grievable
disputes. It is a mandatory provision of a CBA, without which it cannot be registered.
A.2.
X is a member of the Social Security System (SSS). In 2015, he died without any spouse or
children. Prior to the semester of his death, X had paid 36 monthly contributions. His
mother, M, who had previously been receiving regular support from X, filed a claim for the
latter’s death benefits.
(a) Is M entitled to claim death benefits from the SSS? Explain.
M is entitled to the death benefits. Being the mother of X, who was single and without
issue, she is elevated to the status of sole beneficiary. [Sec. 8(k), RA 8282]
(b) Assuming that X got married to his girlfriend a few days before his death, is M entitled
to claim death benefits from the SSS? Explain.
In view of the marriage of X to his girlfriend, M is deemed restored to her secondary
beneficiary status. Hence, X’s wife will be his primary beneficiary until she remarries;
provided, she was living with him at the time of his death. [Sec. 8(k), RA 828; Yolanda
Signey v. SSS, GR No. 173582, January 28, 2008]
A.3.
A, B, and C were hired as resident-doctors by MM Medical Center, Inc. In the course of their
engagement, A, B, and C maintained specific work schedules as determined by the Medical
Director. The hospital also monitored their work through supervisors who gave them
specific instructions on how they should perform their respective tasks, including diagnosis,
treatment, and management of their patients.
One day, A, B, and C approached the Medical Director and inquired about the non-payment
of their employment benefits. In response, the Medical Director told them that they are not
entitled to any because they are mere “independent contractors” as expressly stipulated in
the contracts which they admittedly signed. As such, no-employer-employee relationship
exists between them and the hospital.
(a) What is the control test in determining the existence of an employer-employee?
Under the Control Test, the person who exercises labor law concept of control, actual
or reserved, is the employer of the person over whom he exercises it. Labor law
concept of control is control over means and methods of performance. [Orozco v. CA,
Philippine Daily Inquirer & Magsanoc, GR 155207, August 13, 2008]
(b) Is the Medical Director’s reliance on the contracts signed by A, B, and C to refute the
existence of an employer-employee relationship correct? If not, are A, B, and C employees
of MM Medical Center, Inc.? Explain.
No, the Medical Director is not correct. Employer-employee relationship is a question
of both law and fact. Law provides its cognitive significance, whereas evidence gives
its out-there representation. Being a matter of law and evidence, it cannot be the
subject of stipulation. A, B, and C, who are not medical specialists, are the employees
of MM Medical Center, Inc. owing to the “means-methods control” exercised by the
latter over them.
A.4.
Mrs. B, the personal cook in the household of X, filed a monetary claim against her
employer, X, for denying her service incentive leave pay. X argued that Mrs. B did not avail
of any service incentive leave at the end of her one (1) year of service and hence, not
entitled to the said monetary claim.
(a) Is the contention of X tenable? Explain.
No, X’s contention is not tenable. As a kasambahay, Mrs. B is entitled to service
incentive leave (RA 10361). As such, she has the prerogative to use it, monetize it after
12 months of service, or commute it until separation from service. If she elects the
second, she has 3 years from demand for payment to avail of the benefit. [Lourdes
Rodriguez v. Park N Ride, GR 222980, March 20, 2017]. Hence, not being a prescribed
claim, its withholding is unlawful.
(b) Assuming that Mrs. B is instead a clerk in X’s company with at least 30 regular
employees, will her monetary claim prosper? Explain.
Being a corporate employee, Mrs. B is a covered employee. Not being one of the less
than 10 regular employees, as her employee has at least 30 regular employees, she is
qualified. Hence, prescription being a non-issue, she is entitled to service incentive
leave.
A.5.
Ms. F, a sales assistant, is one of the eight (8) workers regularly employed by ABC
Convenience Store. She was required to report on December 25 and 30.
Should ABC Convenience Store pay her holiday pay? Explain.
No, ABC Convenience Store, being a retail establishment does not have the duty to
pay holiday pay to Ms. F because she is one of its less than 10 regular employees. As
such, she is disqualified by Art. 94(a), LC.
A.6.
D, one of the sales representatives of OP, Inc., was receiving a basic pay of P50,000.00 a
month, plus a 1% overriding commission on his actual sales transactions. In addition,
beginning 3 months ago, or in August 2019, D was able to receive a monthly gas and
transportation allowance of P5,000.00 despite the lack of any company policy therefor.
In November 2019, D approached his manager and asked for his gas and transportation
allowance for the month. The manager declined his request, saying that the company had
decided to discontinue the aforementioned allowance considering the increased costs of its
overhead expenses. In response, D argued that OP, Inc.’s removal of the gas and
transportation allowance amounted to a violation of the rule on non-diminution of benefits.
Is the argument of D tenable? Explain.
No, D’s argument is not tenable. The Principle of Non-Diminution of Benefits [Art.
100, LC] strictly pertains to pre-promulgation benefits and not to post-promulgation
benefits such as subject allowance [Apex Mining Co. v. NLRC, GR 86200, Feb 25, 1992;
Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, GR 174040,
Sept. 22, 2010]. If what is diminished is s post-promulgation benefit, the rule violated
is the Principle of Grants. At any rate, the subject allowance has not yet ripened to a
demandable right since its enjoyment was for a few months only and the company did
not intend to grant it permanently.
A.7.
W Gas Corp. is engaged in the manufacture and distribution to the general public of various
petroleum products. On January 1, 2010, W Gas Corp. entered into a Service Agreement
with Q Manpower Co., whereby the latter undertook to provide utility workers for the
maintenance of the former’s manufacturing plant. Although the workers were hired by Q
Manpower Co., they used the equipment owner by W Gas Corp. in performing their tasks,
and were likewise subject to constant checking based on W Gas Corp.’s procedures.
On February 1, 2010, Mr. R, one of the utility workers, was dismissed from employment in
line with the termination of the Service Agreement between W Gas Corp. and Q Manpower
Co. Thus, Mr. R filed a complaint for illegal dismissal against W Gas Corp., claiming that Q
Manpower Co. is only a labor-only contractor. In the course of the proceedings, W Gas
Corp. presented no evidence to prove Q Manpower Co.’s contractualization.
(a) Is Q Manpower Co. a labor-only contractor? Explain.
Q Manpower Co., not being substantially capitalized and possessed with investment in
the form of tools, equipment, machineries or work premises, is a labor-only
contractor. Relevantly, its apparent labor-only contractor status is confirmed by the
fact that it does not control the means and methods of performance of the manpower
it supplied. Since both essential element and confirming element are present, it is a
labor-only contractor.
(b) Will Mr. R’s complaint for illegal dismissal against W Gas Corp. prosper? Explain.
Yes, it will prosper. In labor-only contracting, the legal personality of the principal
merges with that of its labor-only contractor who is just its agent. [Coca-Cola Bottlers
Phils., Inc. v. Dela Cruz, et al., GR 184977, Dec. 7, 2009] Hence, pursuant to the
Principle of Merger of Legal Personalities, the former as the real employer can be
proceeded against for illegal dismissal despite the termination of subject contracting
agreement.
A.8.
Ms. T was caught in the act of stealing the company property of her employer. When Ms. T
admitted to the commission of the said act to her manager, the latter advised her to just
tender her resignation; otherwise, she would face an investigation which would likely lead to
the termination of her employment and the filing of criminal charges in court.
Acting on her manager’s advice, Ms. T submitted a letter of resignation. Later on, Ms. T filed
a case for constructive dismissal against her employer. While Ms. T conceded that her
manager spoke to her in a calm and unforceful manner, she claimed that her resignation
was not completely voluntary because she was told that she should not resign, she could be
terminated from work for just cause and worse criminal charges could be filed against her.
(a) What is the difference between resignation and constructive dismissal?
A resignation is voluntary self-termination when personal reasons cannot be sacrificed
in favor of the exigency of the employer’s business [Gan v. Galderma Philippines, Inc.,
et al., GR 177167, Jan. 17, 2013]. In contrast, a constructive dismissal is a quitting
because the employer makes continued employment impossible, unreasonable or
unlikely [Phil. Japan Active Carbon Corp. v. NLRC, GR 83239, March 8, 1989]
(b) Will Ms. T’s claim for constructive dismissal prosper? Explain.
No, Ms. T’s claims will not prosper. She was not placed in a situation that left her no
option except to self-terminate. Instead, she was just given a graceful exit. A graceful
exit is within the prerogative of an employer to give instead of binding an employee
to his fault, or filing an action for redress against him. [Central Azucarera de Bais, Inc.,
et al. v. Janet T. Siason, GR 215555, July 29, 2015]
A.9.
After due proceedings, the LA declared Mr. K to have been illegally dismissed by his former
employer, ABC, Inc. As a consequence, the LA directed ABC, Inc. to pay Mr. K separation pay
in lieu of reinstatement as well as his full back wages.
While ABC, Inc. accepted the finding of illegal dismissal, it nevertheless filed a motion for
reconsideration, claiming that the LA erred in awarding both separation pay and full back
wages, and instead, should have ordered Mr. K’s reinstatement to his former position
without loss of seniority rights and other privileges, but without payment of back wages. In
this regard, ABC, Inc. pointed out that the LA’s ruling did not contain any finding of strained
relations or that reinstatement was no longer feasible. In any case, it appears that no
evidence was presented on this score.
(a) Is ABC, Inc.’s contention to delete the separation pay, and instead, order reinstatement
without back wages correct? Explain.
As to separation pay, the LA’s decision fails to state that there is a bar to
reinstatement; hence, he should have ordered reinstatement; hence, he should have
ordered reinstatement pursuant to the general rule prescribed by Art. 294 of the
Labor Code. Since the alternative relief of separation pay is an exception, it must be
justified with a reinstatement bar. As to back wages, however, it cannot be deleted
because it is a logical consequence of a finding of illegal dismissal [ICT Marketing
Services, Inc. v. Mariphil Sales, GR 202090, Sept. 9, 2015]. Hence, absent any reason
for limiting or withholding it, it should be awarded as it was awarded by the LA.
(b) Assuming that on appeal, the NLRC upholds the decision of the LA, where, how, and
within what timeframe should ABC, Inc. assail the NLRC ruling?
After the denial of the appellant’s motion for reconsideration, the NLRC’s decision
and order of denial can be assailed under Rule 65 of the Rules of Court through the
filing a petition for certiorari within 60 days from receipt of said denial order.
Correction of error of jurisdiction, resulting in the nullification of the assailed
dispositions, should be sought based on the NLRC’s grave abuse of its appellate
power amounting to lack of or excess of jurisdiction.
A.10.
For purposes of prescription, within what periods from the time the cause of action accrued
should the following cases be filed:
(a) Money claims arising from employer-employee relations – within 3 years from date
they become a legal possibility or can be judicially brought [Art. 306, LC; Art. 1150,
NCC; Anabe v. Asian Construction, GR 183233, Dec. 23, 2009]
(b) Illegal dismissal – within 4 years from complete severance of employer-employee
relationship or date of salary/positional downgrade [Art. 1146, NCC; Orchard Golf &
Country Club v. Francisco, GR 178125, March 18, 2013]
(c) Unfair labor practice – not later than 1 year from date of commission [Art. 305, LC].
As to its criminal aspect, it shall be prosecuted within 3 years from date of finality of
the ULP judgment [Art. 305, LC[
(d) Offenses under the Labor Code – within 3 years from date of commission [Art. 305,
LC]
(e) Illegal recruitment – within 5 years if simple illegal recruitment, and within 20 years
if economic sabotage [Sec. 7, Rule IV, RA 10022]
B.11.
Briefly discuss the powers and responsibilities of the following in the scheme of the Labor
Code:
(a) Secretary of Labor – Ordinary Powers: Visitorial and enforcement [Art. 128, LC];
appellate, review of compliance orders issued under Art. 128, LC; and review of CA
orders per Art. 272, LC; rule-making [Art. 5, LC]; and control and supervision [The
Heritage Hotel Manila v. NUWHRAIN-HHMSC, GR 178296, Jan. 12, 2011]
Extraordinary Powers: Assumption power under Art. 278(g); and suspension power
under Art. 292(b), LC.
(b) Bureau of Labor Relations
(c) Voluntary Arbitrators
B.12.
Due to serious business reverses, ABC Co. decided to terminate the services of several
officers receiving “fat” compensation packages. One of these officers was Mr. X, its Vice-
President for External Affairs and a member of the Board of Directors. Aggrieved, Mr. X filed
a complaint for illegal dismissal before the NLRC – Regional Arbitration Branch.
ABC Co. moved for the dismissal of the case on the ground of lack of jurisdiction, asserting
that since Mr. X occupied the position of Vice-President for External Affairs which is listed in
the by-laws of the corporation, the case should have been tiled before the RTC.
The LA denied ABC Co.’s motion and proceeded to rule that Mr. X was illegally dismissed.
Hence, he was reinstated in ABC Co.’s payroll pending its appeal to the NLRC.
(a) Did the LA err in denying ABC Co.’s motion to dismiss on the ground of lack of
jurisdiction? Explain.
The LA did not err. Even if the office occupied by Mr. X may have been listed in the
corporate by-laws as a corporate office, it should have been shown that he was
appointed to it by the Board of Directors. Absent evidence, Mr. X was a corporate
employee; hence, the tenurial issue he brought to the LA was not an intra-corporate
issue. [Cosare v. Broadcom Asia, Inc., et al, GR 2011298, Feb 5, 2014]. Moreover, mere
membership in the governing board does not make one a corporate officer. Unless
elected as President, Secretary or Treasurer, a member of the board would not qualify
as a corporate officer. [Sec. 24, Revised Corporation Code]
(b) Assuming that jurisdiction is not at issue and that the NLRC reverses the LA’s ruling of
illegal dismissal with finality, may ABC Co. claim reimbursement for the amounts it paid to
Mr. X during the time that he was on payroll reinstatement pending appeal? Explain.
ABC Co. cannot claim reimbursement because Mr. X had nothing to do with the
reinstatement because Mr. X had nothing to do with the reinstatement given him. On
the contrary, the company exercised its exclusive right to determine which type of
reinstatement to hive him. Had it informed him of the possibility of a reimbursement,
he would not have chosen to be driven to perjury at the end of the day through a
reimbursement by compulsion. In this case, the Principle of Unjust Enrichment has no
application; hence, he can keep the salaries he received. [Garcia, et al. v. PAL, GR
164856, Jan. 20, 2009]
B.13.
Mr. A signed a 1-year contract with XYZ Recruitment Co. for deployment as wielding
supervisor for DEF, Inc. located in Dubai. The employment contract, which the POEA
approved, stipulated a salary of USD 600.00 a month.
Mr. A had only been in his job in Dubai for 6 months when DEF, Inc. announced that it was
suffering from severe financial losses and thus intended to retrench some of its workers,
among them Mr. A. DEF, Inc. hinted, however, that employees who would accept a lower
salary could be retained.
Together with some other Filipino workers, Mr. A agreed to a reduced salary of USD 400.00
a month and thus, continued with his employment.
(a) Was the reduction of Mr. A’s salary valid? Explain.
No, the reduction is not valid. There is a contractual breach. Applying lex ex contractu
or lex loci celebrationis, Philippine law controls; hence, the substantial character of the
alleged financial losses must have been proven with financial statements duly certified
by an independent external auditor. Mere announcement of losses would not suffice.
The threat of retrenchment was just a scheme to conveniently effect the illegal
substitution of the POEA-approved employment contracts.
(b) Assuming that the reduction was invalid, may Mr. A hold XYZ Recruitment Co. liable for
underpayment of wages? Explain.
Yes, Mr. A may hold XYZ Recruitment Co. liable for the payment of his wages under
the rule that a recruiter is solidarily liable for breaches of the terms and conditions of
the POEA-approved employment contract [Sec. 1(f), Rule II, Book II, POEA Rules and
Regulations; Datuman v. First Cosmopolitan Manpower and Promotion Services, Inc.,
GR 156029, Nov. 14, 2008]
B.14
Upon a review of the wage rate and structure pertaining to its regular rank and file
employees, K Corporation found it necessary to increase its hiring rates for employees
belonging to the different job classification levels to make their salary rates more
competitive in the labor market.
After the implementation of the new hiring salary, Union X, the exclusive bargaining agent
of the rank and file employees, demanded a similar salary adjustment for the old
employees. It argued that the increase in hiring rates resulted in wage distortion since it
erased the wage gap between the new and old employees. In other words, new employees
would enjoy almost the same salary rates as K Corporation’s old employees.
(a) What is wage distortion?
A wage distortion is the elimination or serious contraction of the wage gap advantage
enjoyed by one wage group over another of same wage region; provided, such
elimination or compression is caused by a wage law, or wage order [Art. 124, LC]; CBA
recognition [Metro Transit Organization, Inc. v. NLRC, et al., GR 116008, July 11,
1995]; or merger [Manila Mandarin Employees Union v. NLRC, et al., GR 108556, Nov.
19, 1996]; but not a promotion [NFL v. NLRC, GR 103586, July 21, 1994]
(b) Did a wage distortion arise under the circumstances which legally obligated K
Corporation to rectify the wages of its old employees? Explain.
No. Since the cause of the alleged elimination is not one of the recognized causes, as
it was an adjustment of the hiring rate for new hires joining other wage groups, the
elimination of the wage gap is not a wage distortion. It is rather clear that the
increased rate would only be given to new hires and not to all the members of the
wage group/s they would be joining. Hence, the company has nothing to adjust or
rectify.
B.15.
On December 1, 2018, GHI Co., an organized establishment, and Union J, the exclusive
bargaining agent therein executed a 5-year CBA which, after ratification, was registered with
the Bureau of Labor Relations.
(a) When can the union ask, at the earliest, for the renegotiation of all terms of the CBA,
except its representation aspect? Explain.
Except for the representation aspect of the CBA, the other provisions can be
renegotiated not later than 3 years from date of the CBA’s effectivity. [Art. 265, LC]
(b) When is the earliest time that another union can file for a petition for certification
election? Explain.
Another union can file a petition for certification election during the freedom period
of the CBA which is its last 60 days. [Art. 265, LC]
B.16.
W Ship Management, Inc. hired Seafarer G as bosun in its vessel under the terms of the
2010 POEA-Standard Employment Contract.
On his 6th month on board, Seafarer G fell ill while working. In particular, he complained of
stomach pain, general weakness, and fresh blood in his stool. When his illness persisted, he
was medically repatriated on January 15, 2018. On the same day, Seafarer G submitted
himself to a post-employment medical examination, wherein he was referred to further
treatment. As of September 30, 2018, Seafarer G has yet to be issued any fit-to-work
certification by the company-designated physician, much less a final and definitive
assessment of his actual condition. Since Seafarer G still felt unwell, he sought an opinion
from a doctor of his choice who later issued an independent assessment stating that he was
totally and permanently disabled due to his illness sustained during work.
Seafarer G then proceeded to file a claim for total and permanent disability compensation.
The company asserts that the claim should be dismissed due to prematurity since Seafarer G
failed to first settle the matter through the third-doctor conflict resolution procedure as
provided under the 2010 POEA-SEC.
(a) What is the third-doctor conflict resolution procedure under the 2010 POEA-SEC.
In the event of conflicting medical assessments, the parties are required to select a
third physician whose finding shall be final and binding on them. Under Sec. 20(B) of
the 2010 POEA-SEC, the selection is consensual; however, jurisprudence has made it
mandatory. [Philippine Hammonia Ship Agency, Inc. v. Eulogio Dumadag, GR 194362,
June 26, 2013]
(b) Will Seafarer G’s claim for total and permanent disability benefits prosper despite his
failure to first settle the matter through the third-doctor conflict resolution procedure?
Explain.
Yes, it will prosper. The Third Physician Rule has no application when the company-
designated physician exceeds the 120-day treatment period without making a final,
categorical and definitive assessment. Here, he allowed 209 days to elapse without
issuing a fit-to-work assessment or a disability grade. [Apines v. Elburg
Shipmanagement Phil., Inc. GR 202114, Nov. 9, 2016]
(c) Assuming that Seafarer G failed to submit himself to a post-employment medical
examination within 3 working days from his return, what is the consequence thereof to his
claim? Explain.
Non-compliance with the 3-day reporting requirement results in the forfeiture of G’s
entitlement to disability compensation. [Sec. 20(B), POEA-SEC]
B.17.
Ms. A is a volleyball coach with 5 years of experience in her field. Before the start of the
volleyball season of 2015, she was hired for the sole purpose of overseeing the training and
coaching of the University’s volleyball team. During her hiring, the Vice-President for Sports
expressed to Ms. A the University’s expectation that she would bring the University a
championship at the end of the year.
In her first volleyball season, the University placed 9 th out of the 10 participating teams. Soon
after the end of the season, the Vice-President for Sports informed Ms. A that she was a
mere probationary employee and hence, she need not come back for the next season
because of the poor performance of the team.
In any case, the Vice-President for Sports claimed that Ms. A was a fixed-term employee
whose contract had ended at the close of the year.
(a) Is Ms. A a probationary, fixed-term, or regular employee? Explain your reasons as to why
she is or she is not such kind of an employee for each of the types of employment given.
Ms. A is a regular employee. She cannot be considered a fixed-term employee in the
absence of a fixed-term employment contract, nor a probationary employee because
it was not expressly communicated to her upon her engagement that her tenure was
for 6 months unless she survived pre-disclosed standards for regularization. When an
employee is hired without being apprised of such standards, he is deemed a regular
employee regardless of the employer’s intent to hire him as a probationary employee.
[Abbott Laboratories v. Alcaraz, GR 192571, July 23, 2013]
(b) Assuming that Ms. A was dismissed by the University for serious misconduct but was
never given a notice to explain, what is the consequence of a procedurally infirm dismissal
from service under our Labor law and jurisprudence? Explain.
The violation of Mr. A’s right to statutory due process requires the assessment of the
University with nominal damages. The amount is P30,000.00 because a dismissal for
failure to qualify is akin to a dismissal for a just cause. [Abbott Laboratories v. Alcaraz,
GR 192571, July 23, 2013]
B.18.
When resolving a case of unfair labor practice filed by a union, what should the critical point
of analysis to determine if an act constitutes ULP?
The nature of a ULP is that it is a violation of workers’ right to self-organization. [Art.
258, LC; Culili v. Eastern Telecommunications Phils., GR 165381, Feb. 9, 2011] An act,
however unfair it may be, is not a ULP unless listed as such under Art. 259 & 260, LC.
Therefore, the critical point of analysis in a ULP case filed by a union is whether the
act complained of is expressly listed as ULP under Art. 259, LC.
B.19.
Because of dwindling sales and the consequent limitation of production, rumors were rife
that XYZ, Inc. would reduce its employee force. The next day, the employees of XYZ, Inc.
received a notice that the company will have a winding down period of 10 days, after which
there will be a 6-month suspension of operations to allow the company to address its
precarious financial position.
On the 4th month of suspension of its operations XYZ, Inc. posted announcement that it will
resume its operations in 60 days but at the same time announced that instead of closing
down due to financial losses, it will retrench 50% of the work force.
(a) Is the announcement that there would be retrenchment affecting 50% of the work force
sufficient compliance with the legal requirements for retrenchment? Explain.
No. The 30-day notice requirement is a written notice that must be served on both the
DOLE and the affected employees. [Art. 298, LC] Hence, the posted announcement is a
violation of the prescribed pre-termination procedure.
(b) Assuming that XYZ, Inc., instead of retrenchment, extended the suspension of its
operations from 6 months to 8 months, would the same be legally permissible? If not, what
are the consequences?
Temporary suspension of business operations under Art. 301 of the LC should not
exceed 6 months; otherwise, the suspension would ripen to constructive dismissal
after the period expires. In such case, the company would be ordered to reinstate and
pay back wages.
B.20.
Discuss the differences between compulsory and voluntary/optional retirement as well as
the minimum benefits provided under the Labor Code for retiring employees of private
establishments.
A voluntary/optional retirement is a termination of employment based on a bilateral
agreement to terminate employment at an agreed age regardless of years in service,
or after a certain number of years in service regardless of age. It is a matter of
contract. In contrast, a compulsory retirement is a termination of employment by
operation of law. It is a matter of statute.
Under Art. 302 of the LC, retiring employees shall be paid retirement benefits
computed as follows: (22.5 days x Daily Rate) x Length of Service. The 22.5 days
consist of 15 days representing half-month salary, 5 days as service incentive leave,
and 2.5 days representing 1/12 of 13 th month pay. The full 22.5 days shall be used if
the retiree is entitled to both service incentive leave and 13 th  month pay. Meantime,
the 15 days must always be used.