Facts:

The case involves Lourdes A. Cercado (petitioner) and UNIPROM, Inc. (respondent). Cercado began her employment with UNIPROM on December 15, 1978, as a ticket seller at Fiesta Carnival in Quezon City. Over the years, she was promoted to cashier and later to clerk typist. On April 1, 1980, UNIPROM established an Employees' Non-Contributory Retirement Plan, allowing employees with at least twenty years of service to retire at their option or at the company's discretion. In compliance with Republic Act No. 7641, UNIPROM amended this retirement plan on January 1, 2001, reserving the right to retire qualified employees.

In December 2000, UNIPROM initiated a company-wide early retirement program, offering Cercado, who was then 47 years old with 22 years of service, an early retirement package of P171,982.90, which she declined. Subsequently, UNIPROM decided to retire her effective February 15, 2001, issuing a check for P100,811.70 as her retirement benefits, which she ref...

Facts:

Petitioner Lourdes A. Cercado began her employment with respondent UNIPROM, Inc. on December 15, 1978, as a ticket seller at Fiesta Carnival, Araneta Center, Quezon City. She was later promoted to cashier and then to clerk typist.

Retirement Plan Implementation
On April 1, 1980, UNIPROM instituted an Employees' Non-Contributory Retirement Plan, allowing any participant with 20 years of service to retire at their option or the company's. On January 1, 2001, the plan was amended to comply with Republic Act No. 7641, reserving UNIPROM’s option to retire qualified employees.

Early Retirement Offer and Rejection
In December 2000, UNIPROM implemented a company-wide early retirement program for 41 employees, including Cercado, who was 47 years old with 22 years of service. She was offered a retirement package of ₱171,982.90 but rejected it.

Compulsory Retirement and Legal Action
UNIPROM exercised its option under the retirement plan and retired Cercado effective February 15, 2001, issuing a check for ₱100,811.70 as her retirement benefits, which she refused to accept. Cercado filed a complaint for illegal dismissal, alleging the absence of a bona fide retirement plan and lack of consent.

Labor Arbiter and NLRC Rulings
The Labor Arbiter ruled in Cercado’s favor, declaring her dismissal illegal and ordering her reinstatement with full backwages. The National Labor Relations Commission (NLRC) affirmed this decision, noting no evidence of Cercado's consent to the retirement plan.

Court of Appeals Decision
The Court of Appeals reversed the lower rulings, declaring Cercado’s retirement valid under UNIPROM’s retirement plan, consistent with Article 287 of the Labor Code.

Issue:

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Ruling:

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Ratio:

1. Retirement as a Bilateral Act: Retirement requires mutual agreement between the employer and employee. An employer cannot unilaterally impose a retirement plan without the employee’s consent.
2. Voluntary Consent: Consent to an early retirement plan must be explicit, voluntary, and freely given. Implied knowledge or passive acquiescence is insufficient.
3. Invalid Retirement Plan: UNIPROM’s plan was implemented without Cercado’s consent, making her retirement invalid.
4. Illegal Dismissal: Terminating an employee based on a non-consensual retirement plan constitutes illegal dismissal, entitling the employee to reinstatement, backwages, or separation pay if reinstatement is impossible.