G.R. No. 144476 - Ong Yong vs. Tiu

Perez commenced employment with Comparts Industries, Inc. (CII) on 16 July 1988 and secured regular status on 01 September 1988.
Rising through the ranks through several promotions, Perez eventually held the position of Marketing Manager, which she occupied from 1998 until her resignation on 10 January 2009.

CII maintained a Retirement Plan for its managerial employees (the “Retirement Plan”) which took effect on 01 June 1999 and was amended on 25 January 2001. The plan contained provisions for optional or early retirement benefits.
Perez, having rendered sufficient years of service, manifested her intention to avail herself of the optional retirement program on multiple occasions:

In November 2007, she first indicated her desire to retire optionally.
In January 2008, during a vacation in the United States, she again applied for optional retirement in order to take advantage of a job opportunity in the country.
In April 2008, after her initial denials, she requested reconsideration of her application and also sought inclusion in CII’s retrenchment plan, which was also declined.
In December 2008, she reapplied for optional retirement to be effective on 10 January 2009, concurrently claiming the associated benefits under the plan.

Its Retirement Plan grants it the option to approve or disallow any application for optional retirement.
The company was experiencing a financial crisis, which limited its ability to provide such benefits.
There was a lack of corresponding policy or rule in some instances, particularly for voluntary resignations.

Initially, the NLRC Regional Arbitration Branch No. VII ruled in favor of Perez, awarding her a total of Php422,195.84 for her optional retirement benefits plus ten percent (10%) attorney’s fees.
CII subsequently appealed the decision before the NLRC, challenging the award on several grounds that included:

The fact that several managerial employees who received optional retirement benefits did so before the effectivity of the Retirement Plan.
The requirement that optional retirement applications must be approved by the company, as stated in the plan.
The absence of an established company practice mandating such benefits.

The NLRC reversed the initial ruling, a decision later affirmed by the Court of Appeals.
Perez then elevated the matter through a petition for certiorari under Rule 45 of the Rules of Court, contending that the denial of her claims was tainted by grave abuse of discretion.

Perez asserted that, having rendered more than twenty (20) years of service, she was qualified for the optional retirement benefits either:

Under the Retirement Plan for managerial employees, or
Through the Collective Bargaining Agreement (CBA) applicable to rank-and-file employees.

She further contended that in addition to these benefits, she was eligible for separation pay under the retrenchment provisions due to the company’s financial crisis.
Evidence submitted included multiple emails to CII and affidavits from other managerial employees who had, in isolated instances, been granted similar benefits.

CII maintained that the Retirement Plan is a contractual arrangement where the grant of optional retirement benefits is subject to the company’s (employer’s) discretion and consent.
The company emphasized its right, especially given the prevailing financial crisis and declining profitability, to withhold such benefits in order to sustain its operations.
Evidence of the company’s financial difficulties was presented, showing a marked downturn in gross profit and net profit over the relevant period, justifying the denial of further benefits.

Whether Perez, by voluntarily resigning from her employment, is entitled to separation pay or any form of optional retirement benefits under the Retirement Plan or the CBA.
Whether the completion of the minimum number of years of service confers a vested right to optional retirement benefits despite the condition requiring the company’s consent for such benefits to be granted.
Whether the isolated instances of prior grant of benefits to other employees establish an enforceable and consistent company practice that would compel CII to award similar benefits to Perez.
The proper interpretation of contractual provisions under the Retirement Plan, particularly the phrase “with the consent of the Company,” in determining the entitlement to optional retirement benefits.