Case Summary (G.R. No. 185346)
Applicable Law
This case will be analyzed under the provisions of the 1987 Philippine Constitution and relevant labor laws, particularly the Labor Code and the Rules of the Banco Filipino Retirement Fund.
Summary of Facts
Lazaro was employed by Banco Filipino starting February 1, 1968, gaining various promotions until the Central Bank closed the bank on January 25, 1985. He was reemployed in April 1992 as part of a task force that handled the collection of delinquent accounts after a court determined that the bank's closure was illegal. Lazaro retired from his position as assistant vice-president on December 1, 1995, after 20 years and 7 months of service according to Banco Filipino. He contested that his service record should reflect 27 years and 10 months, asserting that his retirement pay should be calculated on an updated salary rate of ₱50,000 instead of ₱38,000, along with claims for attorney's fees and profit-sharing.
Banco Filipino's Position
Banco Filipino contended that Lazaro's service should only count for 20 years and 7 months due to the suspension of operations during the liquidation period. It argued that the increases in salary and attorney's fees were unfounded because Lazaro’s retirement occurred before the relevant increases took effect. Furthermore, Banco Filipino asserted that the distribution of profit shares required Monetary Board approval, which was not obtained.
Labor Arbiter’s Decision
The Labor Arbiter ruled in favor of Banco Filipino, denying Lazaro's claims. The decision was based on Lazaro's employment length exclusion during the liquidation period and the bank's arguments regarding the lack of contractual or legal basis for the attorney's fees and profit-sharing claims.
National Labor Relations Commission’s (NLRC) Appeal
Upon appeal, the NLRC affirmed the Labor Arbiter's decision. Lazaro sought redress from the CA, which partially modified the decision, granting him retirement pay differential for the period during which he continued to work despite the liquidation while denying the other monetary claims.
Court of Appeals’ Ruling
The CA reasoned that, despite the liquidation, Banco Filipino could not dismiss the work performed by Lazaro during that period, warranting the inclusion of those years in calculating his retirement benefits. However, the CA upheld the denial of the claims for attorney’s fees and additional retirement pay based on the claimed salary increase, confirming the findings from lower courts regarding profit shares that asserted Lazaro had already received these payments.
Petitions for Review
Banco Filipino appealed against the retirement pay differential awarded to Lazaro while Lazaro cross-appealed for a higher basis for his retirement pay and additional claims including for damages and fees. Banco Filipino claimed that the case cited did not support Lazaro’s claims and maintained that the liquidation period should not count as service for retirement purposes.
Supreme Court's Analysis on Retirement Pay Differentials
The Supreme Court rejected Banco Filipino's argument that the liquidation period should be disregarded in computing Lazaro's retirement pay. The ruling clarified that the bank retained its legal personality during liquidation to collect debts and that Lazaro's efforts in this regard were legitimate work for which he deserved retroactive compensation.
Resolution on Salary Base and Rounding
Lazaro's insistence on adopting the salary increase was dismissed because he ceased employment before the increase was effective. The court emphasized the confirmed finding that his final salary was ₱38,000, insisting that the calculation adhered strictly to the retirement fund rules. As for the rounding off his service duration, this was deemed inappropriate as the applicable retirement agreements did not support such a method.
Findings on Attorney’s Fees and Profit Shares
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Background of the Case
- This case involves two consolidated Petitions for Review under Rule 45: (1) Banco Filipino Savings and Mortgage Bank (G.R. No. 185346) and (2) Miguelito M. Lazaro (G.R. No. 185442).
- Both petitions challenge the Court of Appeals (CA) Decision dated January 23, 2008, and Resolution dated November 12, 2008, in CA-G.R. SP No. 93145.
- The CA ruled against Lazaro concerning his monetary claims for salary differential, attorney's fees, and profit sharing but awarded him retirement differential pay for seven years during the bank's liquidation.
Factual Background
- Lazaro began his employment with Banco Filipino on February 1, 1968, as a probationary employee and was promoted to assistant manager until the bank's closure by the Central Bank on January 25, 1985.
- He was reemployed on April 16, 1992, to collect delinquent accounts after the Supreme Court ruled the bank's closure illegal.
- Lazaro retired on December 1, 1995, after 20 years and 7 months of service, receiving retirement benefits based on a last salary of P38,000.
- He claimed that his service should total 27 years and 10 months, and demanded a higher retirement pay calculation based on a salary of P50,000, in addition to attorney's fees and profit shares.
Legal Proceedings
- Lazaro filed a complaint for underpayment of retirement benefits, nonpayment of attorney's fees, and profit shares with the Labor Arbiter (LA).
- Banco Filipino contended that Lazaro's service should only account for 20 years and