The Supreme Court has declared a 37-year-old retirement plan of Silliman University in Dumaguete City as invalid and ordered the institution to pay separation pay and backwages, totaling eight years, to an employee it had retired in 1993.

In an eight-page decision penned by Associate Justice Renato Corona and concurred in by Chief Justice Renato Puno and Associate Justices Angelina Sandoval-Gutierrez, Adolfo Azcuna and Cancio Garcia, the Supreme Court First Division affirmed an earlier decision of the National Labor Relations Commission finding Silliman University guilty of illegal dismissal when it retired Alpha Jaculbe after serving the University for 35 years.

Jaculbe's retirement from her job as a nurse at the Silliman University Medical Center was based on the retirement plan of the University which mandates automatic retirement to full-time employees who had served continuously for 35 years or who had reached 65 years of age.

Jaculbe, who was only 57, said the compulsory retirement under the plan was tantamount to a dismissal. She asked to be allowed to work until the age of 60, the minimum age at which she could qualify for Social Security System pension, but this was denied by the University, citing "company policy."

The University said that Jaculbe had voluntarily contributed to the Retirement Plan through monthly salary deductions. The University also said that many others have been retired through this plan and no questions or disagreements had ever been raised until the same was made to apply to Jaculbe.

Jaculbe filed a compliant at the National Labor Relations Commission, where the labor arbiter found the university guilty of illegal dismissal and ordered that Jaculbe be reinstated and paid full backwages.

On appeal, the NLRC reversed the labor arbiter's decision and dismissed the complaint for lack of merit and denied the motion for reconsideration. This was affirmed by the Court of Appeals. But in reversing the Court of Appeals ruling, the Supreme Court said that while the Labor Code permits employers and employees to fix the applicable retirement age at below 60 years, the rules and regulations of the Silliman retirement plan shows that participation therein was not voluntary at all.

The Plan automatically covered all full-time Filipino employees of the University, who could not withdraw from the Plan while they continued to serve the University.

The Court also said that while the Court of Appeals pointed out that the retirement plan had been in effect for more than 30 years, it did not point out that it only came into being in 1970 or 12 years after Jaculbe started working for the University.

"In short, it was not part of the terms of employment to which petitioner agreed when she started working for respondent," the decision said. The Court said there was no agreement, collective or otherwise, to justify the University's imposition of the early retirement age in its retirement plan.

The Court said [Jaculbe] "had no choice but to participate in the plan, given that the only way she could refrain from doing so was to resign or lose her job."

This decision is feared to open the University to claims from other faculty and staff who had been retired since 1970, under this retirement plan.

Jose Riodil Montebon, university legal counsel, said they have yet to receive a copy of the Supreme Court decision. "We will explore our remedies when we receive our copy," he said.*AP

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