Philippine Supreme Court bars employers from forcing retirement before 65

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Supreme Court bars forced retirement before 65

Highlights

Philippine Supreme Court rules employers cannot force retirement before age 65 without employees' clear, voluntary consent, clarifying Labor Code provisions.
The court partially grants Rodolfo Ondevilla's petition against Colegio de San Juan de Letran, finding no mutual agreement on his retirement at age 60.
The tribunal orders payment of back wages, separation pay, and retirement benefits for Ondevilla's service from 2004 to Aug. 29, 2024, with amount pending computation.

Ruling clarifies retirement consent rules

As reported by BusinessWorld, citing the Supreme Court Office of the Spokesperson, the tribunal says employers cannot compel employees to retire before the mandatory age of 65 without their clear and voluntary consent. In a statement on Tuesday, the office cites a ruling written by Associate Justice Ramon Paul L. Hernando that says accepting optional retirement means waiving the right to security of tenure, so the employee must expressly agree without pressure or coercion.

Under the Labor Code, retirement follows the terms of an existing retirement agreement or plan. If there is no such arrangement, compulsory retirement applies at 65, while optional retirement may start at age 60 only through mutual agreement, the court says.

The ruling partly grants a petition filed by Rodolfo Ondevilla against Colegio de San Juan de Letran in Laguna, which had treated him as retired when he turned 60. The Supreme Court says his early retirement is not the result of a mutual agreement between him and the school.

Implications for employers and labor disputes

Ondevilla joined the school as comptroller in 2004 and later became assistant vice-president for finance. After a 2018 reorganization, he was reassigned as comptroller, a move he challenged as a demotion.

Colegio de San Juan de Letran deemed his appointment expired on Aug. 29, 2019, when he turned 60, leading him to file an illegal dismissal complaint. Although the Court of Appeals earlier says he was illegally dismissed, it also says he had agreed to retire through a July 2020 letter.

The Supreme Court disagrees, saying the school did not offer a retirement plan and that the letter only responded to a demand that he repay a cash advance. The tribunal orders the payment of back wages, separation pay and retirement benefits covering his service from 2004 to Aug. 29, 2024, with the amount still to be computed.

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