G.R. No. 126888 - J.V. Angeles Construction Corp. vs. National Labor Relations Commission

Pedro Santos was employed in 1969 by J.V. Angeles Construction Corporation as a carpenter.
In 1973, he was promoted to the position of foreman, a post he held until his retirement in February 1992 at the age of 62.

On October 25, 1993, Pedro Santos filed a complaint before the NLRC (National Capital Region Arbitration Branch), seeking retirement benefits and service incentive leave pay.
The complaint arose after amicable settlement talks failed during the case proceedings, leading the parties to submit their respective written position papers.

On July 25, 1995, Labor Arbiter Ariel Cadiente Santos issued a decision in favor of Pedro Santos, directing the petitioner to pay retirement benefits.
The award included retirement pay equivalent to ½ month pay for every year of service, service incentive leave for the three years preceding the filing, and a portion of the 13th month pay.

On August 14, 1995, petitioner J.V. Angeles Construction Corporation appealed the Labor Arbiter’s ruling with the NLRC.
The key contention was that the retroactive application of Republic Act No. 7641 (Retirement Pay Law) was improper since Santos retired in February 1992—almost a year before the law took effect on January 7, 1993.
The petitioner argued that, in the absence of a collective bargaining agreement or an explicit employer commitment, additional retirement benefits over those provided by existing laws (including those received from the SSS) should not be granted.

On May 31, 1996, the Third Division of the NLRC upheld the Labor Arbiter’s decision by applying the retroactive effect of R.A. 7641, relying on the Oro Enterprises precedent and related case law.
The NLRC maintained that benefits could be computed retroactively as the claim for benefits was filed after the law’s effectivity even though Santos had retired before its enactment.
Dissatisfied with the NLRC ruling, the petitioner elevated the case to the Supreme Court through a petition for certiorari, alleging grave abuse of discretion and excess of jurisdiction by the NLRC.

Whether the NLRC committed grave abuse of discretion and acted in excess of its jurisdiction in giving retroactive application to R.A. 7641 for awarding retirement benefits to Pedro Santos.
Whether the retroactive application of R.A. 7641 is proper when the claimant, Pedro Santos, had already retired and ceased to be an employee before the law took effect.