Case Summary (G.R. No. 252716)
Facts of the Case
The claim originated from a dispute over a withholding tax that Western Union deducted from Riingen’s early retirement benefits. Riingen alleged that she was informed by Western Union’s representatives that her retirement package would be tax-free. Despite this, upon her retirement, Western Union withheld approximately P4,243,191.80 citing tax liability due to its Employees' Retirement Plan not being registered with the Bureau of Internal Revenue (BIR).
Riingen contended that the firm’s failure to register the Plan should not deprive employees of entitled benefits and accused Western Union of misleading its employees regarding the tax-exempt status of retirement benefits. She sought the return of the withheld amount and additional damages.
Ruling of the Labor Arbiter
On February 28, 2017, the Labor Arbiter ruled in favor of Riingen, ordering Western Union to pay her the withheld tax amount, alongside moral and exemplary damages, and legal fees. The Labor Arbiter concluded that Western Union’s failure to register the Employees' Retirement Plan indicated an abuse of rights under the Civil Code, violating Riingen’s rights.
Ruling of the National Labor Relations Commission
The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's ruling on June 29, 2017, although it deleted the awards for moral and exemplary damages, indicating that Western Union did not act in bad faith. The NLRC supported its decision by invoking the principle of promissory estoppel, noting Riingen’s legitimate expectation of receiving tax-free retirement benefits based on Western Union’s prior communications. The NLRC asserted that Western Union's misleading communications warranted accountability.
Ruling of the Court of Appeals
Western Union subsequently sought recourse in the Court of Appeals, resulting in a July 11, 2019 decision that reversed the NLRC's findings, concluding that Riingen could not claim ignorance of tax liabilities due to the explicit terms in the Employee Retirement Plan she had signed. The appellate court held that management’s decision not to register the plan did not violate any laws, disclaiming the applicability of promissory estoppel in this context.
Overview of the Petitions and Arguments
Riingen filed a Petition for Review on Certiorari with the Supreme Court, emphasizing her reliance on Western Union’s communications that had led her to believe her benefits would be tax-free. She highlighted correspondence with senior management confirming her understanding and underscoring that had she been appropriately informed of tax implications, she might have pursued different retirement options.
In its response, Western Union denied any misleading conduct, advocating that the wording in the Employee Retirement Plan was clear on tax withholdings and maintaining that Riingen’s retirement decision was independent of the tax implications.
Issue
The main question posed to the Court concerned whether Western Union was obliged to refund the taxes withheld from Riingen’s retirement pay.
Ruling of the Court
The Supreme Court ruled in favor of Riingen, reinsta
...continue readingCase Syllabus (G.R. No. 252716)
Case Overview
- The case arises from a petition for review on certiorari filed by Patricia Zamora Riingen against Western Union Financial Services (Hong Kong) Limited, Philippines Representative Office.
- The petition challenges the Decision dated July 11, 2019, and the Resolution dated June 9, 2020, of the Court of Appeals, which overturned the decisions of the Labor Arbiter (LA) and the National Labor Relations Commission (NLRC) regarding Riingen's monetary claim for withholding tax deducted from her early retirement benefits.
Facts of the Case
- Patricia Zamora Riingen worked for Western Union and served as the Senior Regional Vice President for South East Asia and Oceania, having joined the company in 2005.
- Riingen expressed her interest in the early retirement package on June 24, 2016, and subsequently formalized her retirement on August 8, 2016.
- Western Union's Manager for Human Relations, Jocelyn Flordeliza, confirmed via email that Riingen's retirement benefits would be tax-free.
- However, on August 24, 2016, Western Union’s Senior Manager for Compensation and Benefits, Laura Manganotti, informed Riingen that her retirement benefits were taxable due to the company's failure to register its Employees' Retirement Plan with the Bureau of Internal Revenue (BIR).
- On her retirement day, Riingen was notified that Western Union withheld PHP 4,243,191.80 from her retirement pay as tax liability.
Claims and Counterclaims
- Riingen contended that despite Western Union's failure to register the Employees' Retirement Plan, she was entitled to the promised tax-free retirement benefits.
- She asserted claims fo