Law Summary
Retirement Pay in Absence of Retirement Plans
- If no retirement plan or agreement exists, employees aged 60 to 65, with at least 5 years of service, may retire and are entitled to retirement pay.
- Retirement pay is at least one-half month salary per year of service.
- Fractions of at least six months count as one whole year for computation.
Definition of One-Half Month Salary
- One-half month salary means 15 days salary plus:
- One-twelfth of the 13th month pay.
- Cash equivalent of up to 5 days of service incentive leaves, unless otherwise agreed.
Exemptions
- Retail, service, and agricultural establishments employing 10 or fewer workers are exempt from this retirement pay provision.
Penalties for Violation
- Violation of retirement pay provisions is unlawful.
- Penal provisions under Article 288 of the Labor Code apply.
Preservation of Other Benefits
- The Act does not diminish benefits employees are entitled to under existing laws, company policies, or practices.
Effectivity
- The Act takes effect 15 days after complete publication in the Official Gazette or two national newspapers, whichever is earlier.