G.R. No. 208027 - Philippine Journalists, Inc. vs. De Guzman

Case Summary (G.R. No. 208027)

Factual Background

Respondents were long-time employees of PHILIPPINE JOURNALISTS, INC. (PJI). Erika Marie R. De Guzman commenced employment on May 11, 1994 and ceased employment on November 15, 2008; she served as an Ad Taker/Account Executive and also performed duties as Executive Security to the Chairman, receiving a salary of Php23,000. Edna Quirante began on September 5, 1989 and ceased on March 15, 2009; she was HRD Supervisor and Officer‑in‑Charge with a salary of Php25,522.20. On October 28, 2008 and January 23, 2009, respectively, they notified PJI of their desire to avail themselves of the company’s optional retirement scheme as set forth in the Collective Bargaining Agreement (CBA). PJI failed or refused to process payment of alleged optional retirement benefits, prompting respondents to file a complaint for unfair labor practice and money claims, alleging nonpayment of optional retirement benefits and service incentive leave.

Labor Arbiter Proceedings

The Labor Arbiter dismissed the complaint on April 29, 2010 for lack of merit. The Arbiter found that the CBA excluded certain positions as managerial and therefore outside the bargaining unit. On that ground, the Arbiter concluded that respondents were not rank‑and‑file employees and therefore not entitled to optional retirement benefits under the CBA.

NLRC Decision

The National Labor Relations Commission reversed on December 29, 2011. The NLRC interpreted Article XIV, Sections 2 and 3 of the CBA and concluded that the optional retirement pay was to be computed on the basis of an approved retirement plan provided in Section 2, thereby recognizing the existence of an optional retirement plan. The NLRC nevertheless considered the CBA’s definition of “employee” as limited to those within the bargaining unit, and acknowledged that Annex A listed positions excluded from coverage. The NLRC gave weight to evidence that PJI had, as a matter of company practice, previously granted optional retirement benefits to employees who were managerial or otherwise excluded from the CBA, citing affidavits and specific prior instances. The NLRC found that such practice had been deliberately and consistently applied and that jurisprudence did not require a fixed minimum duration for a company practice to ripen into an enforceable obligation. It set aside the Labor Arbiter’s decision and ordered PJI to pay respondents the optional retirement benefits.

Court of Appeals Decision

The Court of Appeals denied petitioners’ certiorari and affirmed the NLRC in its November 7, 2012 Decision. The CA agreed that the CBA’s optional retirement provision plainly allowed a regular employee with five continuous years to optionally retire and receive pay computed on an approved retirement plan. Although it recognized that respondents’ positions were listed in Annex A as excluded from coverage, the CA applied the doctrine of company practice. It relied on prior jurisprudence to hold that voluntary, deliberate, and consistent grants of benefits over a significant period may become enforceable as company practice even if not contractually mandated. The CA relied on evidence that two managerial employees had been previously granted optional retirement benefits in 2001 and 2003 and concluded that PJI had thereby established a company practice that it could not unilaterally withdraw without violating Art. 100 of the Labor Code. The CA denied petitioners’ motion for reconsideration by Resolution dated July 4, 2013.

Issues Presented

The petition framed the issues as: (1) the distinction between compulsory retirement benefit and optional retirement benefit; and (2) whether optional retirement benefit can be demanded as a mandatory benefit by a regular employee who voluntarily resigns even without an approved optional retirement program approved by management.

Petitioners’ Contentions

Petitioners maintained that optional retirement differs from compulsory retirement and is not demandable as a matter of right because it requires management approval and an approved retirement plan. They argued that management consent is the critical condition because the employer must be financially ready to assume the obligation. Petitioners asserted that PJI was suffering losses, had implemented a retrenchment program, and therefore could not be required to pay optional retirements. They contended that prior instances of optional retirement alleged by respondents involved employees who were covered by an approved program, as attested by certain retirees and longtime employees.

Respondents’ Position and Procedural Posture

Respondents relied on the NLRC finding that PJI had a settled practice of granting optional retirement benefits even to employees excluded from the bargaining unit. Procedurally, respondents failed to file a Comment before the Supreme Court despite directives, and the Court deemed the filing waived and adjudicated the petition on the existing record.

Supreme Court’s Ruling

The Supreme Court denied the Petition and affirmed the CA and NLRC in toto. The Court upheld the NLRC’s factual findings and its application of the company practice doctrine. The Court ordered that the judgment award in favor of respondents earn interest at 12% per annum from the filing of the complaint up to June 30, 2013, and thereafter 6% per annum until full satisfaction. The Court dismissed petitioners’ claim of business reverses, noting prior findings in Philippine Journalists, Inc. v. National Labor Relations Commission that PJI was not suffering financial reverses and had engaged in conduct inconsistent with claimed losses. The Court found further indicia of bad faith in PJI’s conduct and in a 2005 “Memorandum of Understanding” whose statement of financial reverses was inconsistent with the record.

Legal Basis and Reasoning

The Court emphasized deference to the NLRC’s and CA’s factual findings and applied the established test for company practice: the grant must be voluntary, deliberate, regular, and continuous over a significant period such that the employer intended to continue it despite

Case Syllabus (G.R. No. 208027)

Parties and Posture

Philippine Journalists, Inc., with Roland De Jesus, Fe Siscar, Eugenia Abania, Sarah Buan, Francis Rivadel o, and Michael Mosqueda as petitioners, filed a Petition for Review on Certiorari from the denial by the Court of Appeals of their petition for certiorari seeking to set aside the NLRC decision favoring the respondents.
Erika Marie R. De Guzman and Edna Quirante are the respondents who claimed entitlement to optional retirement benefits under the company Collective Bargaining Agreement (CBA) and whose claims were upheld by the NLRC and affirmed by the Court of Appeals.
The petition sought reversal of the CA Decision dated November 7, 2012 and its July 4, 2013 Resolution denying reconsideration and prayed for reinstatement of the Labor Arbiter’s April 29, 2010 dismissal.

Key Facts

Erika Marie R. De Guzman worked for PJI from May 11, 1994 to November 15, 2008 as an Ad Taker/Account Executive and also served as Executive Security to the Chairman.
Edna Quirante worked for PJI from September 5, 1989 to March 15, 2009 and served as HR Supervisor and Officer-in-Charge of the department.
Both respondents tendered letters on October 28, 2008 and January 23, 2009 respectively, invoking the CBA provision on optional retirement after five continuous years of service.
Petitioners refused to process payment of the claimed optional retirement benefits, prompting respondents to file complaints for unfair labor practice and money claims with the Labor Arbiter.
Two prior non–rank-and-file employees, Nepthalie E. Hernandez and Atty. Julie Interior-Madeja, were shown to have previously received optional retirement benefits from PJI.

Procedural History

The Labor Arbiter dismissed respondents’ complaint for lack of merit on April 29, 2010.
Respondents appealed to the NLRC-Fifth Division, which reversed and ordered payment of optional retirement benefits on December 29, 2011.
Petitioners sought certiorari relief before the Court of Appeals, which denied the petition on November 7, 2012 and denied reconsideration on July 4, 2013.
Petitioners filed the instant Petition for Review on Certiorari to the Supreme Court, which resolved to proceed to judgment after respondents waived filing a comment.

Issues Presented

Whether there is a distinction between compulsory retirement and optional retirement benefits under the law and the CBA.
Whether optional retirement benefits may be demanded as a matter of right by a regular employee who voluntarily resigns absent an approved retirement program authorized by management.

Petitioners' Arguments

Petitioners contended that optional retirement is not demandable as of right and requires management approval and an approved retirement plan before benefits become payable.
Petitioners maintained that respondents were managerial or excluded employees under Annex A of the CBA and thus not covered by the CBA’s mandatory benefits for rank-and-file employees.
Petitioners asserted that PJI was suffering financial losses and had implemented a retrenchment program in 2005, which they argued justified denial of optional retirement payments.
Petitioners argued that past optional retirement grants to certain employees were covered by an existing approved retirement program and thus were not evidence of a general company practice.

Respondents' Position

Respondents relied on the CBA provision allowing a regular employee with five continuous years to optionally retire and to receive pay computed on the approved retirement plan.
Respondents asserted that PJI had, b