November 16, 2022 @ 11:47 AM 3 weeks ago

“RETIREMENT laws should be liberally construed and administered in favor of the persons intended to be benefited and all doubts as to the intent of the law should be resolved in favor of the retiree to achieve its humanitarian purposes.” (UDMC vs. Bernadas, December 13, 2017)

UNDOUBTEDLY, given the enormous stress and pressure of working full-time (not to mention the exhausting daily commuter traffic to workplaces), some (if not everyone) must be yearning for and looking forward to their retirement-and retirement benefits.


Jurisprudence states that retirement is the result of “a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age, agrees and/or consents to sever his or her employment with the former.” (Pulong v. Super Manufacturing, Inc., October 14, 2019)

Art. 302 (formerly 287) of the Labor Code of the Philippines, as amended by Republic Act No. 7641 (RA 7641), otherwise known as the “New Retirement Pay Law”, governs the retirement of employees in the private sector.

Art. 302 of the Labor Code explicitly provides that “[A]ny employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employee’s retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein.”

The same provision further states that “In the absence of a retirement plan or agreement plan providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.”

It should be noted that RA 7641 shall apply to all employees in the private sector, regardless of their position, designation or status and irrespective of the method by which their wages are paid. They shall include part-time employees, employees of service and other job contractors and domestic helpers or persons in the personal service of another. (Labor Advisory on Retirement Pay Law dated October 24, 1996)

RA 7641, however, does not cover employees of retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers and employees of the National Government and its political subdivisions, including Government-owned and/or -controlled corporations, if they are covered by the Civil Service Law and its regulations.

(May karugtong)