CENTRAL PHILIPPINES RETREADERS INCORPORATED AND VICTORIA SARMIENTO, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION (SEVENTH DIVISION) AND NESTOR R. PINTOR, RESPONDENTS.
QUIJANO-PADILLA, J.:
The Facts
Petitioner Central Philippines Retreaders Incorporated [CPRI] was formerly known as Central Philippines Bandag Retreaders Incorporated until its change of name upon the approval of the Securities and Exchange Commission on August 28, 2003.[3] CPRI is engaged in the business of retreading services. On the other hand, private respondent Nestor R. Pintor [Pintor] was hired by the company on April 1, 1991 and worked in the company as a bookkeeper and continuously rendered his services for twenty [20] years until his retirement on April 30, 2011.[4] He was 52 years old when he applied for retirement and was receiving a monthly salary of P12,017.06 at that time.[5]
When his retirement was approved by CPRI, a computation made by Sarmiento Management Corporation, which is the firm that controls CPRI, reflected thereon that Pintor was to receive a total amount of P360,511.80 as retirement pay, however, he only received a total amount of P127,768.32[6] which was paid to him on a staggered basis over the span of eleven [11] months or from November 25, 2010 until November 9, 2011.[7]
Because of the disparity, Pintor filed before the Labor Arbiter a complaint for non-payment of full retirement benefits. In his position paper he asserts that he is entitled to retirement pay and gratuity pursuant to company practice. His retirement pay should be computed at 150% as of the latest monthly salary for each year of service and on top of that, as a company practice of CPRI, he was likewise entitled to be given a gratuity at a rate to be determined by CPRI. Moreover, as alluded to and as practiced by CPRI over the years, the said retirement pay and gratuity are supposed to be paid in lump sum or in one occasion only. Considering that he already received the amount of P127,768.32, he is claiming for the balance of P232,743.48, which amount he is entitled to per computation of Sarmiento Management Corporation.[8]
CPRI in its position paper alleged that Pintor was only 52 years old at that time he applied for retirement, as such, he was not entitled to retirement benefits under the Retirement Pay Law, thus, any remuneration given which are not required by law is gratuity. Gratuity is defined as an act of liberality of the giver which the recipient has no right to demand as a matter of right. Given that Pintor’s benefits has no basis in law but rather has basis on the liberality of CPRI, the former has no right to demand from the latter. Moreover, as the bookkeeper of the CPRI, he is privy to the audited financial statements of the corporation showing that it was experiencing financial difficulties.[9]
The Labor Arbiter in its Decision[10] dated September 21, 2012, granted Pintor’s claims and ruled that pursuant to the ruling of the Supreme Court in Nestle Philippines, Inc. v. NLRC [G.R. No. 91231, February 4, 1991], employees have a vested right to a non-contributory retirement plan. It is an existing benefit voluntarily granted to them by their employer so that the latter may not unilaterally withdraw, eliminate or diminish such benefits. Management discretion may not be exercised arbitrarily or capriciously especially with regard [to] the implementation of the retirement plan. Upon acceptance of employment, a contractual relationship was established giving the employee and enforceable vested interest in the retirement fund. The retirement scheme became an integral part of his employment package and the benefits to be derived therefrom constituted a continuing consideration for services rendered as well as an effective inducement for remaining with the firm. Having rendered twenty (20) years of service with the company, the employee has already acquired a vested right to the retirement fund- a right which can only be withheld upon a clear showing of good and compelling reasons.[11]
The dispositive portion of the Labor Arbiter’s Decision, reads:
“WHEREFORE, judgment is hereby rendered declaring that complainants (sic) are (sic) entitled to retirement pay. Respondents are hereby ordered to jointly and solidarily pay complainant, the total amount of PESOS: TWO HUNDRED TWENTY TWO THOUSAND SEVEN HUNDRED FORTY THREE AND 48/100 (P222,743.48).
All other claims are denied for lack of merit.
SO ORDERED.”[12]
Discontented, CPRI appealed the adverse decision before the NLRC but the latter affirmed the decision of the Labor Arbiter, the fallo of the NLRC’s decision, reads:
“WHEREFORE, premises considered, respondents’ appeal is DISMISSED. The Labor Arbiter’s decision is AFFIRMED.
SO ORDERED.”[13]
Hence, upon denial[14] of CPRI’s Motion for Reconsideration,[15] it comes to Us via this petition for certiorari with the following assignment of errors, to wit:
“I. THE HONORABLE LABOR ARBITER COMMITTED A SERIOUS ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION IN HOLDING THAT COMPLAINANT IS ENTITLED TO RETIREMENT PAY EQUIVALENT TO 150% OR ONE MONTH AND A HALF FOR EVERY YEAR OF SERVICE NOTWITHSTANDING THE FACT THAT THERE WAS NO COLLECTIVE BARGAINING AGREEMENT OR CONTRACT BETWEEN THE PARTIES; and
II. THE HONORABLE LABOR ARBITER COMMITTED A SERIOUS ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION IN HOLDING THAT RESPONDENT ATTY. MARIA VICTORIA SARMIENTO IS JOINTLY AND SOLIDARILY LIABLE WITH RESPONDENT CPRI NOTWITHSTANDING THE FACT THAT THERE WAS NO FINDING OF BAD FAITH OR MALICE.”[16]
Our Ruling
Petitioner CPRI avers that both the Labor Arbiter and the NLRC erred in granting the monetary award of P222,743.48 as the balance of Pintor’s retirement benefit because as already established there was no company retirement plan and that there was no Collective Bargaining Agreement to that effect. What Pintor received from CPRI is an act of liberality or gratuity from the latter and does not ripen into a right that is properly demandable by Pintor.
The petition is meritorious.
We are aware that the rule is settled that the original and exclusive jurisdiction of this Court to review a decision of respondent NLRC in a petition for certiorari under Rule 65 does not normally include an inquiry into the correctness of its evaluation of the evidence. Errors of judgment, as distinguished from errors of jurisdiction, are not within the province of a special civil action for certiorari, which is merely confined to issues of jurisdiction or grave abuse of discretion.[17] However, by way of exception, in Tan, Jr. v. Matsuura, et al.,[18] the Supreme Court ruled that “grave abuse of discretion refers not merely to palpable errors of jurisdiction; or to violations of the Constitution, the law and jurisprudence. It also refers to cases in which, for various reasons, there has been a gross misapprehension of facts.”
We find that both the Labor Arbiter and the NLRC had misapprehended the factual antecedents of the instant case.
Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former. The age of retirement is primarily determined by the existing agreement between the employer and the employees. However, in the absence of such agreement, the retirement age shall be fixed by law. Under Art. 287 of the Labor Code as amended, the legally mandated age for compulsory retirement is 65 years, while the set minimum age for optional retirement is 60 years. In the absence of any provision on optional retirement in a collective bargaining agreement, other employment contract, or employer’s retirement plan, an employee may optionally retire upon reaching the age of 60 years or more, but not beyond 65 years, provided he has served at least five years in the establishment concerned. That prerogative is exclusively lodged in the employee.[19] While Pintor mentioned a CPRI retirement plan,[20] this allegation is not supported by evidence on record, and since mere allegation is not proof then the allegation of Pintor is therefore not substantiated. The said fact is concurred with by the NLRC when it stated “[w]hile there is indeed no Retirement Plan, it is established that respondent has granted gratuity pay to retired employees. Such practice has ripened into a company policy which cannot be peremptorily and arbitrarily withdrawn.”[21]
Given that it was established that there was no collective bargaining agreement and that CPRI had no retirement plan, Article 287 of the Labor Code shall apply. At the time Pintor applied for retirement which was subsequently granted, he was only 52 years old, therefore, he is not considered as optionally retired under Article 287 of the Labor Code so that he is not entitled to the retirement benefits mandated under the said article. Pursuant to the 2011 Rules of Procedure of the National Labor Relations Commission, particularly Section 3, thereof which reads:
“SECTION 3. SUPPLETORY APPLICATION OF THE RULES OF COURT. – In the absence of any applicable provision in these Rules, and in order to effectuate the objectives of the Labor Code, the pertinent provisions of the Rules of Court of the Philippines may, in the interest of expeditious dispensation of labor justice and whenever practicable and convenient, be applied by analogy or in a suppletory character and effect. ”[22]
Thus, as a basic rule in evidence, the burden of proof is on the part of the party who makes the allegations – ei incumbit probatio, qui dicit, non qui negat. If he claims a right granted by law, he must prove his claim by competent evidence, relying on the strength of his own evidence and not upon the weakness of that of his opponent.[23] While it is axiomatic that retirement laws are liberally construed in favor of the persons intended to be benefited, however, such interpretation cannot be made in this case in light of the clear lack of consensual and statutory basis of the grant of retirement benefits to Pintor.[24]
Considering that Pintor was not entitled to retirement benefits, all the more that he is likewise not entitled to the gratuity granted to the retired employees of CPRI, but the latter in its benevolence taking into consideration Pintor’s 20 years in service had given him an amount of P127,768.32. Said amount falls under the definition of gratuity. Gratuity is defined as a pay that is separate and distinct from retirement benefits. It is paid purely out of generosity. It is paid to the beneficiary for the past services or favor rendered purely out of the generosity of the giver or grantor. Gratuity, therefore, is not intended to pay a worker for actual services rendered or for actual performance. It is a money benefit or bounty given to the worker, the purpose of which is to reward employees who have rendered satisfactory service to the company.[25]
In view of the foregoing, since it was established that Pintor is not considered as retired under Article 287 of the Labor Code, then he is likewise not entitled to the retirement benefits mandated under the said article. Moreover since he is not considered retired then he is likewise not entitled to the gratuity benefit given to CPRI’s retiring employees. Thus, Pintor’s complaint has no basis in law and jurisprudence. Consequently, there is no need to discuss the second assignment of error raised by petitioner CPRI.
WHEREFORE, in view of the foregoing, the Decision dated February 28, 2013 of the National Labor Relations Commission [NLRC], 7th Division, Cebu City in NLRC Case No. VAC-12-000725-2012 is hereby VACATED and SET ASIDE. The instant complaint is hereby DISMISSED.
SO ORDERED.
Hernando, J., Chairperson, and Azcarraga-Jacob, JJ., concur.
[1] Rollo, pp. 33-38, penned by the Honorable Commissioner Julie C. Rendoque
[2] Rollo, pp. 59-66, penned by the Honorable Labor Arbiter Milagros B. Bunagan-Cabatingan
[3] Rollo, p. 41
[4] Rollo, p. 43
[5] Rollo, p. 49
[6] Rollo, p. 43
[7] Rollo, p. 50
[8] Rollo, p. 44
[9] Rollo, p. 52
[10] Rollo, pp. 59-66
[11] Rollo, pp. 64-65
[12] Rollo, pp. 65-66
[13] Rollo, p. 38
[14] Rollo, pp. 39-40
[15] Rollo, pp. 67-78
[16] Rollo, p. 11
[17] Cocomangas Hotel Beach Resort, et al. v. Visca, et al., G.R. No. 167045, August 29, 2008
[18] G.R. No. 179003, January 9, 2013
[19] Universal Robina Sugar Milling Corporation (URSUMCO), et al. v. Caballeda, et al., G.R. No. 156644, July 28, 2008
[20] Rollo, p. 44
[21] Rollo, p. 37
[22] Ando v. Campo, et al., G.R. No. 184007, February 16, 2011
[23] Rufina Patis Factory, et al. v. Alusitain, G.R. No. 146202, July 14, 2004
[24] Lopez v. National Steel Corporation, G.R. No. 149674, February 16, 2004
[25] Sta. Catalina College, et al. v. NLRC, et al., G.R. No. 144483, November 19, 2003