After reading “Are Part-Time Workers in the Private Sector Entitled to Retirement Benefits?”, read also “May a foreign state make a request for assistance in the investigation or prosecution of a money laundering offense?”
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Any employee may be retired upon reaching the retirement age.
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The Retirement Pay Law 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.
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They shall include part-time employees, employees of service and other job contractors and domestic helpers or persons in the personal service of another.
Retirement benefits are intended to help the employee enjoy the remaining years of his life, lessening the burden of worrying for his financial support, and are a form of reward for his loyalty and service to the employer. (Conrado Aquino et.al. v. National Labor Relations Commission, G.R. No. 87653, 11 February 1992)
The law says:
The entitlement of part-timers to retirement benefits has three legal bases:
- Article 302 of the Civil Code,
- Book IV, Rule II of the Rules Implementing the Labor Code, and
- Labor Advisory dated October 24, 1996, entitled “Guidelines for the Effective Implementation of Republic Act No. 7641” issued by the Secretary of Labor.
Article 302 [287] of the Labor Code, as amended by Republic Act No. 7641 or the New Retirement Law, reads:
Art. 302 [287]. Retirement. –Any 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 agreement shall not be less than those provided herein.
In the absence of retirement plan or agreement 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 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.
Unless the parties provide for broader inclusions, the term one-half month salary shall mean fifteen (15) days plus one twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.
xxx (Emphasis and underscoring supplied.)
Book VI, Rule II of the Rules Implementing the Labor Code clearly describes the coverage of Republic Act No. 7641 and specifically identifies the exemptions from the same, to wit:
“Sec. 1. General Statement on Coverage. – This Rule 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, except to those specifically exempted under Section 2 hereof. As used herein, the term “Act” shall refer to Republic Act No. 7641, which took effect on January 7, 1993.”
A Labor Advisory dated October 24, 1996, provided for the Guidelines for the Effective Implementation of Republic Act No. 7641, The Retirement Pay Law, addressed to all employers in the private sector. It provides in part:
- COVERAGE
RA 7641 or the Retirement Pay Law 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.
The law 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.”
As stated in the 2016 Handbook on Workers Statutory Monetary Benefits, part-time workers are entitled to retirement pay under Article 302 of the Labor Code after satisfying these conditions for optional retirement:
- “That there is no retirement plan between the employer and the employee, and
- That the employee should have reached the age of 60 years, and should have rendered at least five (5) years of service with the employer.”
Part-time employees, even those with non-permanent status such as those under fixed-term employment contracts, are covered by the Retirement Law under Article 302 of the Labor Code, as amended by R.A. No. 7641, or the New Retirement Law. The employee
- must have reached sixty (60) years of age (for optional retirement) or sixty-five (65) years (for compulsory retirement), and
- has served at least five (5) years in the employer establishment.
Jurisprudence says:
In the case of De La Salle Araneta University v. Juanito Bernardo (G.R. No. 190809, 13 February 2017), the Supreme Court has categorially ruled that part-time employees are entitled to retirement benefits under the law. Thus:
“Republic Act No. 7641 is a curative social legislation. It precisely intends to give the minimum retirement benefits to employees not entitled to the same under collective bargaining and other agreements. It also applies to establishments with existing collective bargaining or other agreements or voluntary retirement plans whose benefits are less than those prescribed in said law.”
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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