In De La Salle Araneta University vs. Juanito C. Bernardo, the Supreme Court affirmed that part-time employees are entitled to retirement benefits under Republic Act No. 7641, also known as the New Retirement Law. The Court emphasized that the law’s coverage extends to all employees in the private sector, regardless of their employment status, unless specifically exempted. This decision ensures that part-time workers who meet the age and service requirements receive retirement pay, promoting social justice and protecting vulnerable employees.

Beyond Full-Time: Does Retirement Law Protect Part-Time Lecturers?

Juanito C. Bernardo, a part-time lecturer at De La Salle Araneta University (DLS-AU), sought retirement benefits after teaching for 27 years. Despite his long service, DLS-AU denied his claim, arguing that only full-time permanent faculty were entitled to such benefits based on university policy and the Collective Bargaining Agreement (CBA). Bernardo filed a complaint, leading to a legal battle that questioned whether Republic Act No. 7641, the New Retirement Law, extends protection to part-time employees. The core legal question was whether Bernardo, as a part-time lecturer, was entitled to retirement benefits under the law, despite the university’s internal policies.

The Labor Arbiter initially dismissed Bernardo’s complaint, citing prescription. It was argued that Bernardo should have claimed his retirement benefits upon reaching the compulsory retirement age of 65, not ten years later when he was 75. However, the National Labor Relations Commission (NLRC) reversed this decision, finding that Bernardo’s claim was timely because DLS-AU had extended his employment beyond the standard retirement age. The NLRC emphasized that Republic Act No. 7641 does not exclude part-time employees from enjoying retirement benefits, citing the law’s broad coverage of all private-sector employees, regardless of status.

The Court of Appeals affirmed the NLRC’s decision, reinforcing the principle that labor and social laws should be liberally construed to favor employees. DLS-AU then elevated the case to the Supreme Court, raising two key issues: whether part-time employees are excluded from retirement benefits under Republic Act No. 7641, and whether Bernardo’s claim had prescribed under Article 291 of the Labor Code. The Supreme Court ultimately sided with Bernardo, emphasizing that Republic Act No. 7641’s coverage includes part-time employees unless they fall under specific exemptions.

The Supreme Court began its analysis by addressing Bernardo’s employment status. While acknowledging that Bernardo was a part-time lecturer with a fixed-term contract, the Court clarified that these factors were not relevant to his claim for retirement benefits. Bernardo was not questioning his termination but asserting his right to retirement benefits after the termination of his employment at age 75. This distinction was crucial in understanding the legal basis for Bernardo’s claim.

The Court then delved into the core issue of whether part-time employees are entitled to retirement benefits. The Court emphasized that Republic Act No. 7641 is a curative social legislation designed to provide minimum retirement benefits to employees not covered by collective bargaining agreements or other retirement plans. Article 302 [287] of the Labor Code, as amended by Republic Act No. 7641, states that any employee may be retired upon reaching the retirement age and is entitled to retirement benefits under existing laws and agreements.

To reinforce this point, the Court cited Book VI, Rule II of the Rules Implementing the Labor Code, which describes the broad coverage of Republic Act No. 7641, explicitly including all employees in the private sector, regardless of their position, designation, or status. The only exemptions are employees of the National Government, domestic helpers, and employees of retail, service, and agricultural establishments employing not more than ten employees. The Court noted that Bernardo did not fall under any of these exemptions.

The Court also highlighted a Labor Advisory issued by then Secretary of Labor Leonardo A. Quisumbing, which provided guidelines for the effective implementation of Republic Act No. 7641. This advisory explicitly stated that the law applies to all employees in the private sector, including part-time employees. The Supreme Court gave weight to this contemporaneous interpretation of the law by administrative officials charged with its enforcement.

The Court applied the rule of statutory construction of expressio unius est exclusio alterius, meaning the express mention of one thing implies the exclusion of all others. Since part-time employees were not among those specifically exempted under Republic Act No. 7641, their claim for retirement benefits could not be denied on that basis. The Court stated that the Implementing Rules partake the nature of a statute and are binding as if written in the law itself.

Addressing the issue of prescription, the Court rejected DLS-AU’s argument that Bernardo’s claim had prescribed because he filed it more than three years after reaching the compulsory retirement age of 65. The Court emphasized that a cause of action has three elements: a right in favor of the plaintiff, an obligation on the part of the defendant, and a violation of the plaintiff’s right by the defendant.

In Bernardo’s case, the cause of action accrued only after DLS-AU informed him that his contract would not be renewed and subsequently denied his claim for retirement benefits. The Court found that DLS-AU’s refusal to pay the retirement benefits, as expressed in Dr. Bautista’s letter dated February 12, 2004, triggered the prescriptive period. Therefore, Bernardo’s complaint filed on February 26, 2004, was well within the three-year period provided under Article 291 of the Labor Code.

The Court further invoked the equitable doctrine of estoppel. This doctrine prevents a party from denying a fact that they have previously acted in a way that suggests its truth, especially when another party has relied on that conduct to their detriment. DLS-AU had repeatedly extended Bernardo’s employment even after he reached the compulsory retirement age, leading him to believe that he would be entitled to retirement benefits upon the actual termination of his employment. The Court held that DLS-AU could not now escape its obligation by blaming Bernardo for the delayed claim.

FAQs

What was the key issue in this case?	The primary issue was whether a part-time employee is entitled to retirement benefits under Republic Act No. 7641, despite not being a full-time permanent employee.
What is Republic Act No. 7641?	Republic Act No. 7641, also known as the New Retirement Law, provides for retirement benefits for employees in the private sector, aiming to ensure their financial security after retirement.
Are part-time employees covered by Republic Act No. 7641?	Yes, the Supreme Court affirmed that part-time employees are covered by Republic Act No. 7641 unless they fall under specific exemptions, such as government employees or those in small retail establishments.
What are the requirements to qualify for retirement benefits under this law?	To qualify, an employee must have reached the age of 60 for optional retirement or 65 for compulsory retirement, and must have served at least five years in the establishment.
What does “expressio unius est exclusio alterius” mean?	It’s a rule of statutory construction meaning the express mention of one thing implies the exclusion of all others. In this case, since part-time employees weren’t excluded, they’re included.
When does the cause of action for retirement benefits accrue?	The cause of action accrues when the employer refuses to pay the retirement benefits after the employee’s separation from service. This is when the prescriptive period begins.
What is the doctrine of estoppel?	The doctrine of estoppel prevents a party from denying a fact that they have previously acted in a way that suggests its truth, especially when another party has relied on that conduct.
Why was the doctrine of estoppel applied in this case?	It was applied because DLS-AU continuously extended Bernardo’s employment beyond the compulsory retirement age, leading him to believe he would receive retirement benefits upon termination.
How is retirement pay calculated under Republic Act No. 7641?	Retirement pay is equivalent to at least one-half month salary for every year of service, with a fraction of at least six months being considered as one whole year.

The Supreme Court’s decision in De La Salle Araneta University vs. Juanito C. Bernardo reinforces the broad protective scope of Republic Act No. 7641, ensuring that part-time employees are not unjustly excluded from retirement benefits. This ruling underscores the importance of social justice and equitable treatment in labor relations, providing a safety net for vulnerable employees who contribute significantly to the workforce. For businesses, it is a reminder to review retirement policies to ensure compliance with the law and to avoid potential liabilities.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: De La Salle Araneta University, vs. Juanito C. Bernardo, G.R. No. 190809, February 13, 2017