Title
Banco De Oro Unibank, Inc. vs. Sagaysay
Case
G.R. No. 214961
Decision Date
Sep 16, 2015
Employee challenged mandatory retirement at 60 under BDO’s policy; Supreme Court upheld retirement plan’s validity and enforceability of quitclaim, dismissing claims of illegal dismissal.
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Case Digest (G.R. No. 214961)

Facts:

Employment Background

  • Respondent Guillermo Sagaysay was hired by Banco De Oro Unibank, Inc. (BDO) on May 16, 2006, as a Senior Accounting Assistant 5 in its San Jose, Nueva Ecija branch. This hiring followed a merger between BDO and United Overseas Bank (UOB), with BDO as the surviving entity. Sagaysay had previously worked at UOB from 2004 to 2006 and at Metropolitan Bank and Trust Co. (Metrobank) from 1976 to 2004.

Retirement Policy

  • BDO’s retirement plan, implemented on July 1, 1994, mandated a normal retirement age of 60. Section 1, Article V of the plan stated that the normal retirement date for each member would be the first day of the month coinciding with or following their 60th birthday.
  • On January 8, 2010, BDO informed Sagaysay that he would be retired effective September 1, 2010, a few days after his 60th birthday.

Requests for Extension

  • On July 27, 2010, Sagaysay requested an extension of his service, citing financial obligations such as an outstanding loan and children in college. BDO denied this request.
  • On August 19, 2010, Sagaysay appealed for an 8.5-month extension to complete five years of service, which would entitle him to 50% of his basic pay for each year of service. BDO again denied his request and retired him on September 1, 2010.

Quitclaim and Complaint

  • Sagaysay signed a Release, Waiver, and Quitclaim on October 22, 2010, receiving P98,376.14 in consideration. The quitclaim released BDO from any claims related to his employment.
  • On January 10, 2011, Sagaysay filed a complaint for illegal dismissal, seeking reinstatement, backwages, and damages, claiming he was forced to retire at 60 instead of 65.

Issue:

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Ruling:

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Ratio:

  1. Retirement Plan Binding: A retirement plan adopted before an employee’s hiring is binding if the employee accepts employment with knowledge of the plan. Sagaysay was aware of BDO’s retirement policy, as evidenced by his requests for an extension and his acknowledgment of the retirement program in his communications with BDO.
  2. Quitclaim Enforceable: A quitclaim is valid if executed voluntarily, with full understanding, and for reasonable consideration. Sagaysay, a veteran banker, knowingly signed the quitclaim, and there was no evidence of coercion or undue influence.
  3. Management Prerogative: Employers have the discretion to deny requests for extension of service beyond the mandatory retirement age. BDO’s denial of Sagaysay’s request was within its management prerogative.

Conclusion:

The Supreme Court upheld BDO’s retirement plan and the validity of the quitclaim, emphasizing that Sagaysay had consented to the retirement policy by accepting employment and that the quitclaim was executed voluntarily and for valid consideration.


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