Case Summary (G.R. No. 173333)
Petitioner’s Claims
Upon applying for his retirement benefits, Serrano was asked to sign a Quitclaim, which he did while noting “U.P.” (under protest) concerning the amount of ₱75,277.45 he received, asserting it was incorrectly computed. Serrano contended that based on Republic Act No. 7641, his retirement compensation should reflect a rate of 22.5 days per year of service, including the cash equivalent of a 5-day service incentive leave (SIL) and a pro-rated share of the 13th month pay.
Respondent's Defense
The respondents argued that the Quitclaim signed by Serrano barred any further claims for retirement pay and maintained that their computation was accurate. They asserted that Serrano was not entitled to the 5-day SIL or the 1/12 of the 13th month pay because he was paid on a commission basis.
Labor Arbiter's Ruling
In a decision dated February 15, 2007, the Labor Arbiter ruled in favor of Serrano, awarding him ₱116,135.45 as a retirement pay differential and 10% of the total award as attorney’s fees. The Arbiter reasoned that the retirement pay should include the cash equivalent of the 5-day SIL and the pro-rated 13th month pay as stipulated under R.A. 7641, which expanded the definition of “one-half month salary” to include additional benefits.
NLRC's Reversal
On appeal to the National Labor Relations Commission (NLRC), the Labor Arbiter’s decision was reversed on April 23, 2008, and Serrano's complaint was dismissed, although the NLRC awarded a minimal retirement differential of ₱2,365.35. The NLRC based its decision on precedent from R & E Transport, Inc. v. Latag, stating that because Serrano was paid on a commission basis, he was not entitled to the 13th month pay and SIL benefits.
Court of Appeals Decision
The Court of Appeals upheld the NLRC's ruling in a decision dated February 11, 2009, affirming that it was supported by substantial evidence. Serrano's subsequent motion for reconsideration was denied.
Supreme Court's Decision
Serrano filed a petition for review on certiorari with the Supreme Court, which found the petition meritorious. The Supreme Court emphasized that under R.A. 7641, employees are entitled to retirement pay benefits—including the cash equivalent of the 5-day SIL and the 1/12 of the 13th month pay—regardless of whether they are compensated o
...continue readingCase Syllabus (G.R. No. 173333)
Case Overview
- Petitioner: Rodolfo J. Serrano, a bus conductor employed by Severino Santos Transit.
- Respondents: Severino Santos Transit and Severino Santos, owner and operator of the bus company.
- Date of Decision: August 09, 2010.
- Labor Dispute: Involves the computation of retirement pay following optional retirement after 14 years of service.
Employment Background
- Rodolfo J. Serrano was hired on September 28, 1992, as a bus conductor.
- After 14 years of service, he applied for optional retirement on July 14, 2006.
Retirement Application and Quitclaim
- Upon applying for retirement, Serrano was required by the company to sign a Quitclaim before receiving his retirement pay.
- Serrano wrote "U.P." (under protest) on the Quitclaim, indicating his disagreement with the computed amount of P75,277.45, which was based on 15 days of pay per year of service.
Grounds for Complaint
- Serrano filed a complaint before the Labor Arbiter, asserting that the computation of his retirement pay was incorrect.
- He argued that under Republic Act No. 7641 (Retirement Pay Law), he should receive retirement pay based on 22.5 days per year of service, which includes:
- Cash equivalent of 5-day service incentive leave (SIL).
- One-twelfth of the 13th month pay.
Respondents' Position
- Severino Santos Transit contended that the Quitclaim barred Serrano's claim for additional retirement pay.
- They maintained that Serrano was not entitled to the 5-day SIL and pro-rated 13th month pay