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ALFREDO F. LAYA v. PHILIPPINE VETERANS BANK

FACTS:

This case involves petitioner Alfredo F. Laya, Jr., who was hired by respondent Philippine Veterans Bank (PVB) as its Chief Legal Counsel. PVB had a Retirement Plan with provisions for normal retirement, early retirement, and late retirement. On June 14, 2007, PVB informed petitioner of his retirement effective July 1, 2007. Petitioner requested for an extension of his tenure for two more years, but his request was denied. He later filed a complaint for illegal dismissal against PVB and its president, contesting his unexpected retirement. The Labor Arbiter dismissed the complaint but ordered PVB to pay him reasonable indemnity. The NLRC affirmed the dismissal of the complaint and deleted the indemnity. The CA upheld the NLRC's ruling, stating that petitioner's acceptance of his appointment signified his conformity to the retirement program, and PVB's implementation of the retirement plan was valid unless proven to be malicious.

The petitioner filed a petition for review with the Supreme Court's First Division, but it was denied. The petitioner then filed a motion for reconsideration, asking for the referral of his petition to the Court En Banc. The SC denied the motion. The petitioner filed a second motion for reconsideration, arguing that PVB was a public instrumentality and should be subject to different laws. The SC's First Division referred the case to the Court En Banc.

PVB challenged the acceptance of the case by the Court En Banc, arguing that it violated the principle of immutability of final judgments and that the issues raised were factual matters. PVB also disputed the petitioner's attack on its corporate existence, asserting that it is not a public or government entity.

The Court allowed the petitioner's second motion for reconsideration, citing exceptional circumstances that warrant such reconsideration. The Court then proceeded to give due course to the petitioner's appeal.

The Court was tasked to determine whether PVB is a private entity or a public instrumentality and whether the petitioner's retirement was valid.

In the case of Vir-Jen Shipping and Marine Services, Inc. v. NLRC, et al., the Court en banc reversed the ruling of the Court's Division on the claim for wages and monetary benefits of the private respondents. The Court emphasized that rules of procedure should be seen as tools to facilitate justice and not to hinder it. The power of the court to suspend or disregard rules of procedure is recognized, even if it alters a decision that has already attained finality. The court may suspend rules of procedure for the sake of achieving a just resolution.

ISSUES:

  1. Whether the Court has the power to disregard or suspend the rules of procedure even if a decision has already attained finality.

  2. Whether the retirement program established by Philippine Veterans Bank (PVB) is valid without the explicit and voluntary consent of the employees.

  3. Whether the Philippine Veterans Bank (PVB) is a government or private entity.

  4. Whether petitioner Alfredo Laya was validly retired at age 60.

  5. Whether the Court of Appeals can review the factual findings or legal conclusions of the NLRC

  6. Whether the petitioner agreed to be bound by the retirement plan of the respondent when he accepted his appointment

  7. Whether the petitioner's implied knowledge of the retirement plan and his continued membership in it were sufficient to establish his voluntary acceptance of the plan.

  8. Whether the petitioner's consent to the retirement plan could be inferred from his signature on the letter of appointment and personnel action forms.

  9. Whether the petitioner was illegally dismissed by the respondent bank.

  10. Whether the petitioner is entitled to backwages, separation pay, and other benefits.

RULING:

  1. The Court has the power to disregard or suspend the rules of procedure, even if a decision has already attained finality, when there are compelling reasons such as matters of life, liberty, honor, or property, the existence of special or compelling circumstances, the merits of the case, the lack of fault or negligence on the part of the party favored by the suspension of the rules, the absence of frivolous and dilatory motives, and the absence of unjust prejudice to the other party.

  2. The retirement program established by PVB is not valid without the explicit and voluntary consent of the employees. The law requires the employees' consent to be express and voluntary in order for them to be bound by a retirement program that provides for a retirement age earlier than 65 years. Therefore, allowing the case to be reviewed on its merits is necessary to ascertain whether the dismissal of the petitioner's case produced results that are patently unjust.

  3. The Supreme Court declared that PVB is a private entity. It was created by Republic Act No. 3518, with the majority of its shares owned by veterans and their heirs. The bank is not owned or controlled by the government, and therefore, does not fall under the Civil Service. The relations of the Bank with its employees should be governed by labor laws.

  4. The Supreme Court found that petitioner Alfredo Laya was not validly retired at age 60. The Court clarified that the authority of the Court of Appeals (CA) is not limited to determining whether the National Labor Relations Commission (NLRC) committed grave abuse of discretion, but can also review the factual findings and legal conclusions of the NLRC.

  5. The Court of Appeals can review the factual findings or legal conclusions of the NLRC. The previous rule in Jamer v. Alviar stating that only the Supreme Court can review the factual findings or legal conclusions of the NLRC has been overruled. The Court of Appeals, in the exercise of its power, can review the factual findings or legal conclusions of the NLRC.

  6. The petitioner did not agree to be bound by the retirement plan of the respondent when he accepted his appointment. The mere mention of the retirement plan in the petitioner's letter of appointment did not sufficiently inform him of the contents or details of the retirement program. His implied knowledge did not equate to his agreement to be retired earlier than the compulsory age of 65 years.

  7. The Court held that the petitioner's implied knowledge of the retirement plan and his continued membership in it were not sufficient to establish his voluntary acceptance of the plan. The Court emphasized that the acceptance of an early retirement age option must be explicit, voluntary, free, and uncompelled. The law requires more than passive acquiescence from the employee, considering that early retirement age option involves conceding the constitutional right to security of tenure. Mere implied knowledge, regardless of duration, does not equate to the voluntary acceptance required by law.

  8. The Court ruled that the petitioner's consent to the retirement plan could not be inferred from his signature on the letter of appointment and personnel action forms. The Court held that to conclude that the acceptance of the salary increases was also a concurrence to the retirement plan would be tantamount to compelling the employee to agree to the plan. Voluntary and unequivocal acceptance of an early retirement age option in a retirement plan necessitates that the employee's consent specifically refers to the plan itself or that the employee has read and understood the plan when giving their consent.

  9. The Court found that the petitioner was illegally dismissed by the respondent bank since the retirement provision he was subjected to was not knowingly and voluntarily agreed to. The retirement of an employee whose intent to retire was not clearly established or whose retirement was involuntary is considered a discharge.

  10. The Court ruled that the petitioner is entitled to backwages, separation pay, and other benefits. Since reinstatement is no longer feasible due to the petitioner reaching the compulsory retirement age, separation pay should be granted. The basis for computing the separation pay should be in accordance with the retirement plan. The petitioner is also entitled to full backwages computed from the time of his illegal dismissal until his compulsory retirement age, with legal interest.

PRINCIPLES:

  • The Court has the power to suspend or even disregard the rules of procedure when there are compelling reasons, even if a decision has already attained finality.

  • Technicalities should give way to the realities of the situation and substantive rights should prevail over technicalities.

  • The Court may entertain second and subsequent motions for reconsideration when the assailed decision is legally erroneous, patently unjust, and potentially capable of causing unwarranted and irremediable injury or damage to the parties.

  • The retirement program must have the explicit and voluntary consent of the employees to be valid.

  • The Civil Service encompasses all branches, subdivisions, instrumentalities, and agencies of the government, including government-owned or controlled corporations with original charters.

  • The relations of a bank, such as PVB, with its employees should be governed by labor laws if it is not owned or controlled by the government.

  • The Court of Appeals, in its exercise of certiorari jurisdiction, can review both the factual findings and the legal conclusions of the NLRC.

  • The Court of Appeals can review the factual findings or legal conclusions of the NLRC.

  • Retirement should be the result of the voluntary agreement between the employer and employee based on reaching a certain age.

  • Acceptance by employees of an early retirement age option must be explicit, voluntary, free, and uncompelled.

  • The implementation and execution of the early retirement option may be unilateral, but the adoption and institution of the retirement plan containing the option must be voluntarily assented to by the employees or at least by a majority of them through a bargaining representative.

  • Implied knowledge of the retirement plan and continued membership in it does not establish voluntary acceptance by the employee.

  • Consent to the retirement plan cannot be inferred from the employee's signature on documents unrelated to the plan, such as salary increase forms.

  • Voluntary and unequivocal acceptance of an early retirement age option in a retirement plan requires that the employee's consent specifically refers to the plan or that the employee has read and understood the plan when giving their consent.

  • Retirement plans must comply with labor laws and be accepted by employees as commensurate to their faithful services.

  • The retirement of an employee whose intent to retire was not clearly established or whose retirement was involuntary is to be treated as a discharge.

  • Illegally dismissed employees are entitled to reinstatement without loss of seniority rights, full backwages, inclusive of allowances, and other benefits or their monetary equivalent.

  • Retirement benefits and separation pay are not mutually exclusive and can be granted simultaneously. The basis for computing separation pay should accord with the retirement plan.

  • Backwages should be computed from the time of illegal dismissal until the compulsory retirement age, with legal interest.