Catotocan vs. Lourdes School, April 26, 2017

Facts:
Petitioner Catotocan started her employment in Lourdes School of Quezon City (LSQC) in 1971 as a music teacher. By the school year 200- 2006, she had already served for 35 years. LSQC has a retirement plan providing for retirement at 60yrs old or separation pay depending on the number of years of service. In relation to its retirement policy, LSQC issued Administrative Order No. 2003-004. The said order provides that “An employee may apply for retirement or be retired by the school when he/she reaches the age of sixty (60) years or when he/she completes thirty (30) years of service, whichever comes first.” Petitioner and other co-employees assailed the said order.
They argued that they do not deserve to be retiredand be rehired when they are, in fact, very much capable of doing their duties and responsibilities. LSQC retired Petitioner sometime in June 2006 after completing 35 years of service. Full retirement benefits were given to her computed based on the latest salary multiplied by the total years of service. Under the school's retirement policy, 60% of her retirement benefit was paid in lump sum by the trustee bank, and the balance was to be paid in equal monthly pensions over the next three (3) years. 60% of that amount, or Five Hundred Seventy -One Thousand Seven Hundred and One Philippine Pesos (Php571,701.00) was credited to her savings account, which she opened in accordance with the school's retirement policy.
Petitioner was told that if she desires, she may signify in writing her intent to continue serving the school on a contractual basis. She responded by submitting a "Letter of Intent" on February 14, 2006. Petitioner was rehired for two school years as a guidance counselor. When she re -applied for the third time, LSQC no longer considered her application. Petitioner filed a complaint for illegal dismissal. Both LA and NLRC dismissed Catotocan’s complaint. Likewise, the CA dismissed the petition.

Issue:
Whether or not the receipt of Catotocan of her retirement benefits will not stop her from pursuing an illegal dismissal complaint against LSQC.

​Held:
SC denied the petition. LSQC’s retirement plan is not per se repugnant to the constitutional guaranty of security of tenure. By its express language, the Labor Code permits employers and employees to fix the applicable retirement age at 60 years or below, provided that the employees' retirement benefits under any CBA and other agreements shall not be less than those provided therein. Catotocan's subsequent actions after her "retirement" are actually tantamount to her consent to LSQC's retirement policy of retiring her from service upon serving the school for at least thirty (30) continuous years. (1) after being notified that she was being retired from service by LSQC, she opened a savings account with BDO, the trustee bank; (2) she accepted all the proceeds of her retirement package: the lump sum and all the monthly payments credited to her account until June 2009; and (3) upon acceptance of the retirement benefits, there was no notation that she is accepting the retirement benefits under protest or without prejudice to the filing of an illegal dismissal case. Moreover, petitioner’s correspondence with the respondent following her "retirement” shows her voluntary assent to the latter’s retirement policy. Said letter stipulates that “re -hiring was exclusive only for those employees who have availed of the retirement benefits or who have been retired by the school but who has not yet reached 65 years of age
 
Thus, since petitioner has availed of this contractual employment which is exclusively offered only to LSQC's qualified retirees for three (3) consecutive years following her retirement, she can no longer dispute that she has indeed legitimately retired from employment, and was not illegally dismissed. Furthermore, petitioner’s availment of the re - hiring program of LSQC for qualified retirees for 3 consecutive years is a supervening event that would reveal that she has already voluntarily and freely signified her consent to the retirement policy despite her initial opposition to it.