G.R. No. 119080 - Singa Ship Management Philippines, Inc. vs. National Labor Relations Commission

Patricia Zamora Riingen, former Senior Regional Vice President for South East Asia and Oceania, was employed by Western Union Financial Services (Hong Kong) Limited, Philippines Representative Office.
Riingen joined Western Union as Marketing Director in 2005 and retired on August 31, 2016.

On June 24, 2016, Riingen expressed her interest in the early retirement package under the Employees’ Retirement Plan by sending an email to Jocelyn Flordeliza, Manager for Human Relations.
The Employees’ Retirement Plan allowed retirement at age 50 with ten years or more of service.
On August 5, 2016, Flordeliza forwarded a computation of Riingen’s retirement benefits, prepared by Laura Manganotti, Senior Manager for Compensation and Benefits, which confirmed that the benefits were tax-free.

Riingen formalized her intention to retire through an email dated August 8, 2016.
On August 11, 2016, Flordeliza sent a revised computation reiterating that, since Riingen was not more than 50, her lump sum retirement benefit was non-taxable.
Despite these representations, on August 24, 2016, Manganotti contradicted previous communications by informing Riingen that her retirement benefits were not tax-free.

On the day of her retirement, an external auditor of Western Union notified Riingen of the failure to register the Employees’ Retirement Plan with the Bureau of Internal Revenue (BIR).
In an email dated September 1, 2016, Tim Cinalli, Western Union’s Vice President for Global Benefits, Payroll, and Mobility, explained that the retirement plan was never registered due to time-consuming and complicated registration processes.
Consequently, Western Union withheld the amount of ₱4,243,191.80 from Riingen’s retirement pay as tax liability.

Riingen asserted that the employees had an entitlement to a tax-free retirement package as promised by Western Union.
She alleged that Western Union’s failure to register the plan did not exempt the company from providing the benefits as represented.
Riingen claimed that this failure misled her and the employees, amounting to bad faith.
Besides the refund of the withheld tax amount, Riingen sought moral damages, exemplary damages, and attorney’s fees.

Western Union argued that the retirement benefit was subject to withholding tax under the National Internal Revenue Code and did not meet the requirements for tax exemption under Revenue Regulations No. 1-68, as amended.
The company maintained that it was under no legal obligation to register the Employees’ Retirement Plan with the BIR.

The Labor Arbiter (LA) rendered a decision on February 28, 2017, awarding the tax amount along with moral damages, exemplary damages, legal interest, and attorney’s fees based on the doctrine of abuse of rights.
The National Labor Relations Commission (NLRC) affirmed the LA’s decision on June 29, 2017, but removed the awards for moral and exemplary damages.
Western Union then elevated the case, and the Court of Appeals (CA) reversed the NLRC and LA rulings in its decision dated July 11, 2019.
Riingen filed her Petition for Review on Certiorari challenging the CA’s reversal.

Whether Western Union should refund Riingen the amount of taxes withheld from her early retirement benefit.

Whether Riingen’s reliance on representations made by high-ranking officers of Western Union constituted a basis for a claim under the doctrine of promissory estoppel.
Whether the failure of Western Union to register its Employees’ Retirement Plan with the BIR justified the tax exemption representations made to its employees.
Whether Western Union’s management prerogative in not registering the plan should preclude it from being held liable for the alleged misleading representations.