G.R. No. 157658 - Philippine National Railways vs. Court of Appeals

The case originated from a Petition for Review on Certiorari filed by Philippine Journalists Inc. (PJI) and associated petitioners seeking reversal of the Court of Appeals’ decisions that dismissed earlier petitions.
The petition sought to reinstate the Labor Arbiter’s decision wherein respondents had applied for optional retirement benefits pursuant to their length of service and a corresponding Collective Bargaining Agreement (CBA).

Employed by PJI from May 11, 1994, to November 15, 2008.
Held the position of Ad Taker/Account Executive with a base salary of Php23,000.00 plus commission.
Also functioned as the Executive Security for the Chairman, thus blurring the lines as a rank-and-file employee.

Employed from September 5, 1989, until her cessation on March 15, 2009.
Served as the HRD Supervisor and, at one time, acted as Officer-in-Charge of the department.

Both respondents submitted separate letters (dated October 28, 2008, and January 23, 2009) to availing the company’s optional retirement plan as provided in the CBA.
The CBA contains provisions stipulating that a regular employee who has continuously rendered five years of service may optionally retire if an approved retirement plan is in place.
Specific exclusions were noted in the CBA by enumerating certain managerial positions, which included those held by respondents, as per Annex A; however, despite such exclusions, PJI had a history of granting the benefit.

Respondents, finding that PJI failed to process the retirement benefits, filed a complaint for unfair labor practices, non-payment of optional retirement benefits, and other money claims.
The Labor Arbiter initially dismissed the complaint on the ground that the respondents were not part of the bargaining unit (being classified as managerial or equivalent positions).
The NLRC later reversed this dismissal, ruling in favor of respondents by emphasizing that:

The existence of an approved optional retirement plan was unambiguously provided in the CBA.
The benefit had, in practice, been extended even to those excluded by the CBA’s classification.

Subsequent petitions before the CA and motions for reconsideration by petitioners were likewise addressed, with the CA affirming the NLRC’s decision based on established company practice and the non-diminution provision of Article 100 of the Labor Code.

A clear distinction exists between compulsory retirement benefits (a right under the Labor Code) and optional retirement benefits (which require management approval).
Respondents were not entitled to the optional retirement benefits because such benefits required an express, approved retirement plan and were not a matter of right.
PJI was experiencing business losses at the time of the requests, justifying a retrenchment program and the denial of extra benefits.

They acted in good faith based on an established company practice where similar benefits had been availed by other employees.
The consistent granting of these benefits, even to managerial employees, had effectively created an expectation (or implied contractual obligation) that such benefits were due irrespective of strict CBA coverage.
There was no sufficient evidence to support the claim of financial distress as a justification for denying the benefits.

Whether respondents, despite being classified outside the rank-and-file according to the CBA (as managerial or executive staff), may still claim the optional retirement benefit based on established company practice.
Whether a distinction between compulsory retirement benefits and optional retirement benefits is dispositive of the right to receive such benefits.
Whether the lack of an expressly approved retirement plan at the time, combined with a retrenchment claim by PJI due to alleged business losses, justifies the denial of the benefits otherwise regularly granted.
Whether the practice of voluntarily granting retirement benefits, even to those excluded by contract or CBA provision, constitutes an enforceable company policy that cannot be unilaterally withdrawn.