G.R. No.

190809

DE LA SALLE ARANETA UNIVERSITY, Petitioner

Facts:

Respondent Bernardo has been a part-time professional lecturer at DLS-AU for 27 years. He taught for two
semesters and the summer of each school year. On Novermber 8, 2003, DLS-AU informed Bernardo through a
telephone call that he could not teach at the school anymore as the school was implementing the retirement
age limit for its faculty members. As he was already 75 years old, Bernardo had no choice but to retire. At the
time of his retirement, Bernardo was being paid ₱246.50 per hour. Bernardo immediately sought advice from
the Department of Labor and Employment (DOLE) regarding his entitlement to retirement benefits after 27
years of employment. In letters dated January 20, 2004  and February 3, 2004,  the DOLE, through its Public
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Assistance Center and Legal Service Office, opined that Bernardo was entitled to receive benefits under
Republic Act No. 7641, otherwise known as the "New Retirement Law," and its Implementing Rules and
Regulations.

Yet, Dr. Oscar Bautista (Dr. Bautista). the owner/manager of DLS-AU, in a letter  dated February 12, 2004,
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stated that Bernardo was not entitled to any kind of separation pay or benefits. Dr. Bautista explained to
Bernardo that as mandated by the DLS-AU's policy and Collective Bargaining Agreement (CBA), only full-time
permanent faculty of DLS-AU for at least five years immediately preceeding the termination of their
employment could avail themselves of the post-employment benefits. As part-time faculty member, Bernardo
did not acquire permanent employment under the Manual of Regulations for Private Schools, in relation to the
Labor Code, regardless of his length of service.

Aggrieved by the repeated denials of his claim for retirement benefits, Bernardo filed before the NLRC, National
Capital Region, a complaint for non-payment of retirement benefits and damages against DLS-AU and Dr.
Bautista.

DLS-AU and Dr. Bautista contended that Bernardo, as a part-time employee, was not entitled to retirement
benefits pursuant to any retirement plan, CBA, or employment contract. Neither was DLS-AU mandated by law
to pay Bernardo retirement benefits. The compulsory retirement age under Article 302 [287] of the Labor Code,
as amended, is 65 years old. When the employee reaches said age, his/her employment is deemed
terminated. The matter of extension of the employee's service is addressed to the sound discretion of the
employer; it is a privilege only the employer can grant. In this case, Bernardo was effectively separated from
the service upon reaching the age of 65 years old. DLS-AU merely granted Bernardo the privilege to teach by
engaging his services for several more years after reaching the compulsory retirement age. Assuming
arguendo that Bernardo was entitled to retirement benefits, he should have claimed the same upon reaching
the age of 65 years old. Under Article 291 of the Labor Code, as amended, all money claims arising from
employer-employee relations shall be filed within three years from the time the cause of action accrues.

On December 13, 2004, the Labor Arbiter rendered its Decision dismissing Bernardo's complaint on the ground
of prescription.

Bernardo appealed the foregoing Labor Arbiter's Decision to the NLRC, arguing that since he continuously
worked for DLS-AU and Dr. Bautista until October 12, 2003, he was considered retired and the cause of action
for his retirement benefits accrued only on said date.

The NLRC, in its Decision dated June 30, 2008, reversed the Labor Arbiter's ruling and found that Bernardo
timely filed his complaint for retirement benefits. DLS-AU filed before the Court of Appeals a Petition
for Certiorari  and Prohibition. The CA, affirmed in toto the NLRC judgment.

Hence, DLS-AU lodged the present petition before the Court.

Ruling

The Court ruled in the affirmative.

That Bernardo was a part-time employee and his employment was for a fixed period are immaterial in this
case. Bernardo is not alleging illegal dismissal nor claiming separation pay. Bernardo is asserting his right to
retirement benefits given the termination of his employment with DLS-AU when he was already 75 years old.

As a part-time employee with fixed-term employment, Bernardo is entitled to retirement benefits.

The Court declared in Aquino v. National Labor Relations Commission  that retirement benefits are intended to
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help the employee enjoy the remaining years of his life, lessening the burden of worrying for his financial
support, and are a form of reward for his loyalty and service to the employer. Retirement benefits, where not
mandated by law, may be granted by agreement of the employees and their employer or as a voluntary act on
the part of the employer.

In the present case, DLS-AU, through Dr. Bautista, denied Bernardo's claim for retirement benefits because
only full-time permanent faculty of DLS-AU are entitled to said benefits pursuant to university policy and the
CBA. Since Bernardo has not been granted retirement benefits under any agreement with or by voluntary act of
DLS-AU, the next question then is, can Bernardo claim retirement benefits by mandate of any law?

We answer in the affirmative.

Republic Act No. 7641 is a curative social legislation. It precisely intends to give the minimum retirement
benefits to employees not entitled to the same under collective bargaining and other agreements. It also
applies to establishments with existing collective bargaining or other agreements or voluntary retirement plans
whose benefits are less than those prescribed in said law. 21

RA 7641 or the Retirement Pay Law shall apply to all employees in the private sector, regardless of their
position, designation or status and irrespective of the method by which their wages are paid. They shall
include part-time employees, employees of service and other job contractors and domestic helpers or
persons in the personal service of another.

The law does not cover employees of retail, service and agricultural establishments or operations employing
not more than [ten] (10) employees or workers and employees of the National Government and its political
subdivisions, including Government-owned and/or controlled corporations, if they are covered by the Civil
Service Law and its regulations.

In ruling that Bernardo, as part-time employee, is entitled to retirement benefits, we do no less and no more
than apply Republic Act No. 7641 and its Implementing Rules issued by the DOLE under the authority given to
it by the Congress.

For the availment of the retirement benefits under Article 302 [287] of the Labor Code, as amended by Republic
Act No. 7641, the following requisites must concur: (1) the employee has reached the age of 60 years for
optional retirement or 65 years for compulsory retirement; (2) the employee has served at least five years in the
establishment; and (3) there is no retirement plan or other applicable agreement providing for retirement
benefits of employees in the establishment. Bernardo - being 75 years old at the time of his retirement, having
served DLS-AU for a total of 27 years, and not being covered by the grant of retirement benefits in the CBA - is
unquestionably qualified to avail himself of retirement benefits under said statutory provision, i.e., equivalent to
one-half month salary for every year of service, a fraction of at least six months being considered as one whole
year.25
Bernardo's employment was extended beyond the compulsory retirement age and the cause of action
for his retirement benefits accrued only upon the termination of his extended employment with DLS-
AU.

Article 306 [291] of the Labor Code mandates:

Art. 306 [291]. Money claims. - All money claims arising from employer-employee relations accruing during the
effectivity of this Code shall be filed within three years from the time the cause of action accrued; otherwise
they shall be forever barred.

Bernardo's right to retirement benefits and the obligation of DLS-AU to pay such benefits are already
established under Article 302 [287] of the Labor Code, as amended by Republic Act No. 7641. However, there
was a violation of Bernardo's right only after DLS-AU informed him on November 8, 2003 that the university no
longer intended to offer him another contract of employment, and already accepting his separation from
service, Bernardo sought his retirement benefits, but was denied by DLSAU. Therefore, the cause of action for
Bernardo's retirement benefits only accrued after the refusal of DLS-AU to pay him the same, clearly expressed
in Dr. Bautista's letter dated February 12, 2004. Hence, Bernardo's complaint, filed with the NLRC on February
26, 2004, was filed within the three-year prescriptive period provided under Article 291 of the Labor Code.

Even granting arguendo that Bernardo's cause of action already accrued when he reached 65 years old, we
cannot simply overlook the fact that DLS-AU had repeatedly extended Bernardo's employment even when he
already reached 65 years old. DLS-AU still knowingly offered Bernardo, and Bernardo willingly accepted,
contracts of employment to teach for semesters and summers in the succeeding 10 years. Since DLS-AU was
still continuously engaging his services even beyond his retirement age, Bernardo deemed himself still
employed and deferred his claim for retirement benefits, under the impression that he could avail himself of the
same upon the actual termination of his employment. The equitable doctrine of estoppel is thus applicable
against DLS-AU.

DLS-AU, in this case, not only kept its silence that Bernardo had already reached the compulsory retirement
age of 65 years old, but even continuously offered him contracts of employment for the next 10 years. It should
not be allowed to escape its obligation to pay Bernardo's retirement benefits by putting entirely the blame for
the deferred claim on Bernardo's shoulders.