2019 Bar Questions

A.1.
Define, explain or distinguish the following terms:

(a) Just and authorized causes

Suggested answer: A just cause is a fault-based ground for dismissal under Art. 297, LC; whereas an authorized
cause is a non-fault ground for dismissal under Art. 298-299, LC.

(b) Seasonal and project employees

A seasonal employee is one engaged for the duration of the season for which he has been engaged; whereas,
a project employee is on whose employment is co-terminus with the specific project or undertaking for which
he has been engaged; provided, its scope or duration was made known to him upon engagement. [Art. 295, LC]

(c) Strikes and lockouts

Strikes are carried out through temporary stoppage of work; whereas, lockouts are carried out through
temporary withholding of work. [Art. 279, LC]

(d) Bona fide occupational qualifications

A bona fide occupational qualification (BFOQ) is an occupational requirement based on quality or attribute.
It is valid if it serves a legitimate business purpose, it is work-related, and its possession enhances an employee’s
productivity at work. [Star Paper Corp., et al. v. Symbol, et al., GR no. 164774, April 12, 2006]

(e) Grievance machinery

A grievance machinery is a contractual dispute resolution mechanism for all grievable disputes. It is a
mandatory provision of a CBA, without which it cannot be registered.

A.2.
X is a member of the Social Security System (SSS). In 2015, he died without any spouse or children. Prior to the
semester of his death, X had paid 36 monthly contributions. His mother, M, who had previously been receiving
regular support from X, filed a claim for the latter’s death benefits.

(a) Is M entitled to claim death benefits from the SSS? Explain.

M is entitled to the death benefits. Being the mother of X, who was single and without issue, she is elevated to
the status of sole beneficiary. [Sec. 8(k), RA 8282]

(b) Assuming that X got married to his girlfriend a few days before his death, is M entitled to claim death benefits
from the SSS? Explain.

In view of the marriage of X to his girlfriend, M is deemed restored to her secondary beneficiary status. Hence,
X’s wife will be his primary beneficiary until she remarries; provided, she was living with him at the time of his
death. [Sec. 8(k), RA 828; Yolanda Signey v. SSS, GR No. 173582, January 28, 2008]

A.3.
A, B, and C were hired as resident-doctors by MM Medical Center, Inc. In the course of their engagement, A,
B, and C maintained specific work schedules as determined by the Medical Director. The hospital also monitored
their work through supervisors who gave them specific instructions on how they should perform their respective
tasks, including diagnosis, treatment, and management of their patients.

One day, A, B, and C approached the Medical Director and inquired about the non-payment of their employment
benefits. In response, the Medical Director told them that they are not entitled to any because they are mere
“independent contractors” as expressly stipulated in the contracts which they admittedly signed. As such, no-
employer-employee relationship exists between them and the hospital.

(a) What is the control test in determining the existence of an employer-employee?

Under the Control Test, the person who exercises labor law concept of control, actual or reserved, is the
employer of the person over whom he exercises it. Labor law concept of control is control over means and
methods of performance. [Orozco v. CA, Philippine Daily Inquirer & Magsanoc, GR 155207, August 13, 2008]

(b) Is the Medical Director’s reliance on the contracts signed by A, B, and C to refute the existence of an
employer-employee relationship correct? If not, are A, B, and C employees of MM Medical Center, Inc.? Explain.

No, the Medical Director is not correct. Employer-employee relationship is a question of both law and fact. Law
provides its cognitive significance, whereas evidence gives its out-there representation. Being a matter of law and
evidence, it cannot be the subject of stipulation. A, B, and C, who are not medical specialists, are the employees
of MM Medical Center, Inc. owing to the “means-methods control” exercised by the latter over them.

A.4.
Mrs. B, the personal cook in the household of X, filed a monetary claim against her employer, X, for denying
her service incentive leave pay. X argued that Mrs. B did not avail of any service incentive leave at the end of
her one (1) year of service and hence, not entitled to the said monetary claim.

(a) Is the contention of X tenable? Explain.

No, X’s contention is not tenable. As a kasambahay, Mrs. B is entitled to service incentive leave (RA 10361). As
such, she has the prerogative to use it, monetize it after 12 months of service, or commute it until separation
from service. If she elects the second, she has 3 years from demand for payment to avail of the benefit. [Lourdes
Rodriguez v. Park N Ride, GR 222980, March 20, 2017]. Hence, not being a prescribed claim, its withholding is
unlawful.

(b) Assuming that Mrs. B is instead a clerk in X’s company with at least 30 regular employees, will her monetary
claim prosper? Explain.

Being a corporate employee, Mrs. B is a covered employee. Not being one of the less than 10 regular employees,
as her employee has at least 30 regular employees, she is qualified. Hence, prescription being a non-issue, she is
entitled to service incentive leave.

A.5.
Ms. F, a sales assistant, is one of the eight (8) workers regularly employed by ABC Convenience Store. She was
required to report on December 25 and 30.

Should ABC Convenience Store pay her holiday pay? Explain.

No, ABC Convenience Store, being a retail establishment does not have the duty to pay holiday pay to Ms. F
because she is one of its less than 10 regular employees. As such, she is disqualified by Art. 94(a), LC.

A.6.
D, one of the sales representatives of OP, Inc., was receiving a basic pay of P50,000.00 a month, plus a 1%
overriding commission on his actual sales transactions. In addition, beginning 3 months ago, or in August 2019,
D was able to receive a monthly gas and transportation allowance of P5,000.00 despite the lack of any company
policy therefor.

In November 2019, D approached his manager and asked for his gas and transportation allowance for the
month. The manager declined his request, saying that the company had decided to discontinue the
aforementioned allowance considering the increased costs of its overhead expenses. In response, D argued that
OP, Inc.’s removal of the gas and transportation allowance amounted to a violation of the rule on non-
diminution of benefits.

Is the argument of D tenable? Explain.

No, D’s argument is not tenable. The Principle of Non-Diminution of Benefits [Art. 100, LC] strictly pertains
to pre-promulgation benefits and not to post-promulgation benefits such as subject allowance [Apex Mining Co.
v. NLRC, GR 86200, Feb 25, 1992; Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao,
GR 174040, Sept. 22, 2010]. If what is diminished is s post-promulgation benefit, the rule violated is the Principle
of Grants. At any rate, the subject allowance has not yet ripened to a demandable right since its enjoyment was
for a few months only and the company did not intend to grant it permanently.

A.7.
W Gas Corp. is engaged in the manufacture and distribution to the general public of various petroleum products.
On January 1, 2010, W Gas Corp. entered into a Service Agreement with Q Manpower Co., whereby the latter
undertook to provide utility workers for the maintenance of the former’s manufacturing plant. Although the
workers were hired by Q Manpower Co., they used the equipment owner by W Gas Corp. in performing their
tasks, and were likewise subject to constant checking based on W Gas Corp.’s procedures.

On February 1, 2010, Mr. R, one of the utility workers, was dismissed from employment in line with the
termination of the Service Agreement between W Gas Corp. and Q Manpower Co. Thus, Mr. R filed a complaint
for illegal dismissal against W Gas Corp., claiming that Q Manpower Co. is only a labor-only contractor. In the
course of the proceedings, W Gas Corp. presented no evidence to prove Q Manpower Co.’s contractualization.

(a) Is Q Manpower Co. a labor-only contractor? Explain.

Q Manpower Co., not being substantially capitalized and possessed with investment in the form of tools,
equipment, machineries or work premises, is a labor-only contractor. Relevantly, its apparent labor-only
contractor status is confirmed by the fact that it does not control the means and methods of performance of the
manpower it supplied. Since both essential element and confirming element are present, it is a labor-only
contractor.

(b) Will Mr. R’s complaint for illegal dismissal against W Gas Corp. prosper? Explain.

Yes, it will prosper. In labor-only contracting, the legal personality of the principal merges with that of its labor-
only contractor who is just its agent. [Coca-Cola Bottlers Phils., Inc. v. Dela Cruz, et al., GR 184977, Dec. 7,
2009] Hence, pursuant to the Principle of Merger of Legal Personalities, the former as the real employer can be
proceeded against for illegal dismissal despite the termination of subject contracting agreement.

A.8.
Ms. T was caught in the act of stealing the company property of her employer. When Ms. T admitted to the
commission of the said act to her manager, the latter advised her to just tender her resignation; otherwise, she
would face an investigation which would likely lead to the termination of her employment and the filing of
criminal charges in court.

Acting on her manager’s advice, Ms. T submitted a letter of resignation. Later on, Ms. T filed a case for
constructive dismissal against her employer. While Ms. T conceded that her manager spoke to her in a calm and
unforceful manner, she claimed that her resignation was not completely voluntary because she was told that she
should not resign, she could be terminated from work for just cause and worse criminal charges could be filed
against her.

(a) What is the difference between resignation and constructive dismissal?

A resignation is voluntary self-termination when personal reasons cannot be sacrificed in favor of the exigency
of the employer’s business [Gan v. Galderma Philippines, Inc., et al., GR 177167, Jan. 17, 2013]. In contrast, a
constructive dismissal is a quitting because the employer makes continued employment impossible, unreasonable
or unlikely [Phil. Japan Active Carbon Corp. v. NLRC, GR 83239, March 8, 1989]
(b) Will Ms. T’s claim for constructive dismissal prosper? Explain.

No, Ms. T’s claims will not prosper. She was not placed in a situation that left her no option except to self-
terminate. Instead, she was just given a graceful exit. A graceful exit is within the prerogative of an employer to
give instead of binding an employee to his fault, or filing an action for redress against him. [Central Azucarera
de Bais, Inc., et al. v. Janet T. Siason, GR 215555, July 29, 2015]

A.9.
After due proceedings, the LA declared Mr. K to have been illegally dismissed by his former employer, ABC,
Inc. As a consequence, the LA directed ABC, Inc. to pay Mr. K separation pay in lieu of reinstatement as well
as his full back wages.

While ABC, Inc. accepted the finding of illegal dismissal, it nevertheless filed a motion for reconsideration,
claiming that the LA erred in awarding both separation pay and full back wages, and instead, should have ordered
Mr. K’s reinstatement to his former position without loss of seniority rights and other privileges, but without
payment of back wages. In this regard, ABC, Inc. pointed out that the LA’s ruling did not contain any finding
of strained relations or that reinstatement was no longer feasible. In any case, it appears that no evidence was
presented on this score.

(a) Is ABC, Inc.’s contention to delete the separation pay, and instead, order reinstatement without back wages
correct? Explain.

As to separation pay, the LA’s decision fails to state that there is a bar to reinstatement; hence, he should have
ordered reinstatement; hence, he should have ordered reinstatement pursuant to the general rule prescribed by
Art. 294 of the Labor Code. Since the alternative relief of separation pay is an exception, it must be justified with
a reinstatement bar. As to back wages, however, it cannot be deleted because it is a logical consequence of a
finding of illegal dismissal [ICT Marketing Services, Inc. v. Mariphil Sales, GR 202090, Sept. 9, 2015]. Hence,
absent any reason for limiting or withholding it, it should be awarded as it was awarded by the LA.

(b) Assuming that on appeal, the NLRC upholds the decision of the LA, where, how, and within what timeframe
should ABC, Inc. assail the NLRC ruling?

After the denial of the appellant’s motion for reconsideration, the NLRC’s decision and order of denial can be
assailed under Rule 65 of the Rules of Court through the filing a petition for certiorari within 60 days from
receipt of said denial order. Correction of error of jurisdiction, resulting in the nullification of the assailed
dispositions, should be sought based on the NLRC’s grave abuse of its appellate power amounting to lack of or
excess of jurisdiction.

A.10.
For purposes of prescription, within what periods from the time the cause of action accrued should the following
cases be filed:

(a) Money claims arising from employer-employee relations – within 3 years from date they become a legal
possibility or can be judicially brought [Art. 306, LC; Art. 1150, NCC; Anabe v. Asian Construction, GR 183233,
Dec. 23, 2009]
(b) Illegal dismissal – within 4 years from complete severance of employer-employee relationship or date of
salary/positional downgrade [Art. 1146, NCC; Orchard Golf & Country Club v. Francisco, GR 178125, March
18, 2013]
(c) Unfair labor practice – not later than 1 year from date of commission [Art. 305, LC]. As to its criminal aspect,
it shall be prosecuted within 3 years from date of finality of the ULP judgment [Art. 305, LC[
(d) Offenses under the Labor Code – within 3 years from date of commission [Art. 305, LC]
(e) Illegal recruitment – within 5 years if simple illegal recruitment, and within 20 years if economic sabotage
[Sec. 7, Rule IV, RA 10022]
 B.11.
Briefly discuss the powers and responsibilities of the following in the scheme of the Labor Code:

(a) Secretary of Labor – Ordinary Powers: Visitorial and enforcement [Art. 128, LC]; appellate, review of
compliance orders issued under Art. 128, LC; and review of CA orders per Art. 272, LC; rule-making [Art. 5,
LC]; and control and supervision [The Heritage Hotel Manila v. NUWHRAIN-HHMSC, GR 178296, Jan. 12,
2011]
Extraordinary Powers: Assumption power under Art. 278(g); and suspension power under Art. 292(b), LC.

(b) Bureau of Labor Relations

(c) Voluntary Arbitrators

B.12.
Due to serious business reverses, ABC Co. decided to terminate the services of several officers receiving “fat”
compensation packages. One of these officers was Mr. X, its Vice-President for External Affairs and a member
of the Board of Directors. Aggrieved, Mr. X filed a complaint for illegal dismissal before the NLRC – Regional
Arbitration Branch.

ABC Co. moved for the dismissal of the case on the ground of lack of jurisdiction, asserting that since Mr. X
occupied the position of Vice-President for External Affairs which is listed in the by-laws of the corporation,
the case should have been tiled before the RTC.

The LA denied ABC Co.’s motion and proceeded to rule that Mr. X was illegally dismissed. Hence, he was
reinstated in ABC Co.’s payroll pending its appeal to the NLRC.

(a) Did the LA err in denying ABC Co.’s motion to dismiss on the ground of lack of jurisdiction? Explain.

The LA did not err. Even if the office occupied by Mr. X may have been listed in the corporate by-laws as a
corporate office, it should have been shown that he was appointed to it by the Board of Directors. Absent
evidence, Mr. X was a corporate employee; hence, the tenurial issue he brought to the LA was not an intra-
corporate issue. [Cosare v. Broadcom Asia, Inc., et al, GR 2011298, Feb 5, 2014]. Moreover, mere membership
in the governing board does not make one a corporate officer. Unless elected as President, Secretary or
Treasurer, a member of the board would not qualify as a corporate officer. [Sec. 24, Revised Corporation Code]

(b) Assuming that jurisdiction is not at issue and that the NLRC reverses the LA’s ruling of illegal dismissal with
finality, may ABC Co. claim reimbursement for the amounts it paid to Mr. X during the time that he was on
payroll reinstatement pending appeal? Explain.

ABC Co. cannot claim reimbursement because Mr. X had nothing to do with the reinstatement because Mr. X
had nothing to do with the reinstatement given him. On the contrary, the company exercised its exclusive right
to determine which type of reinstatement to hive him. Had it informed him of the possibility of a reimbursement,
he would not have chosen to be driven to perjury at the end of the day through a reimbursement by compulsion.
In this case, the Principle of Unjust Enrichment has no application; hence, he can keep the salaries he received.
[Garcia, et al. v. PAL, GR 164856, Jan. 20, 2009]

B.13.

Mr. A signed a 1-year contract with XYZ Recruitment Co. for deployment as wielding supervisor for DEF, Inc.
located in Dubai. The employment contract, which the POEA approved, stipulated a salary of USD 600.00 a
month.

Mr. A had only been in his job in Dubai for 6 months when DEF, Inc. announced that it was suffering from
severe financial losses and thus intended to retrench some of its workers, among them Mr. A. DEF, Inc. hinted,
however, that employees who would accept a lower salary could be retained.

Together with some other Filipino workers, Mr. A agreed to a reduced salary of USD 400.00 a month and thus,
continued with his employment.
(a) Was the reduction of Mr. A’s salary valid? Explain.

No, the reduction is not valid. There is a contractual breach. Applying lex ex contractu or lex loci celebrationis,
Philippine law controls; hence, the substantial character of the alleged financial losses must have been proven
with financial statements duly certified by an independent external auditor. Mere announcement of losses would
not suffice. The threat of retrenchment was just a scheme to conveniently effect the illegal substitution of the
POEA-approved employment contracts.

(b) Assuming that the reduction was invalid, may Mr. A hold XYZ Recruitment Co. liable for underpayment of
wages? Explain.

Yes, Mr. A may hold XYZ Recruitment Co. liable for the payment of his wages under the rule that a recruiter is
solidarily liable for breaches of the terms and conditions of the POEA-approved employment contract [Sec. 1(f),
Rule II, Book II, POEA Rules and Regulations; Datuman v. First Cosmopolitan Manpower and Promotion
Services, Inc., GR 156029, Nov. 14, 2008]

B.14

Upon a review of the wage rate and structure pertaining to its regular rank and file employees, K Corporation
found it necessary to increase its hiring rates for employees belonging to the different job classification levels to
make their salary rates more competitive in the labor market.

After the implementation of the new hiring salary, Union X, the exclusive bargaining agent of the rank and file
employees, demanded a similar salary adjustment for the old employees. It argued that the increase in hiring
rates resulted in wage distortion since it erased the wage gap between the new and old employees. In other
words, new employees would enjoy almost the same salary rates as K Corporation’s old employees.

(a) What is wage distortion?

A wage distortion is the elimination or serious contraction of the wage gap advantage enjoyed by one wage group
over another of same wage region; provided, such elimination or compression is caused by a wage law, or wage
order [Art. 124, LC]; CBA recognition [Metro Transit Organization, Inc. v. NLRC, et al., GR 116008, July 11,
1995]; or merger [Manila Mandarin Employees Union v. NLRC, et al., GR 108556, Nov. 19, 1996]; but not a
promotion [NFL v. NLRC, GR 103586, July 21, 1994]

(b) Did a wage distortion arise under the circumstances which legally obligated K Corporation to rectify the
wages of its old employees? Explain.

No. Since the cause of the alleged elimination is not one of the recognized causes, as it was an adjustment of the
hiring rate for new hires joining other wage groups, the elimination of the wage gap is not a wage distortion. It
is rather clear that the increased rate would only be given to new hires and not to all the members of the wage
group/s they would be joining. Hence, the company has nothing to adjust or rectify.

B.15.
On December 1, 2018, GHI Co., an organized establishment, and Union J, the exclusive bargaining agent therein
executed a 5-year CBA which, after ratification, was registered with the Bureau of Labor Relations.

(a) When can the union ask, at the earliest, for the renegotiation of all terms of the CBA, except its representation
aspect? Explain.

Except for the representation aspect of the CBA, the other provisions can be renegotiated not later than 3 years
from date of the CBA’s effectivity. [Art. 265, LC]

(b) When is the earliest time that another union can file for a petition for certification election? Explain.
Another union can file a petition for certification election during the freedom period of the CBA which is its
last 60 days. [Art. 265, LC]

B.16.

W Ship Management, Inc. hired Seafarer G as bosun in its vessel under the terms of the 2010 POEA-Standard
Employment Contract.

On his 6th month on board, Seafarer G fell ill while working. In particular, he complained of stomach pain,
general weakness, and fresh blood in his stool. When his illness persisted, he was medically repatriated on January
15, 2018. On the same day, Seafarer G submitted himself to a post-employment medical examination, wherein
he was referred to further treatment. As of September 30, 2018, Seafarer G has yet to be issued any fit-to-work
certification by the company-designated physician, much less a final and definitive assessment of his actual
condition. Since Seafarer G still felt unwell, he sought an opinion from a doctor of his choice who later issued
an independent assessment stating that he was totally and permanently disabled due to his illness sustained during
work.

Seafarer G then proceeded to file a claim for total and permanent disability compensation. The company asserts
that the claim should be dismissed due to prematurity since Seafarer G failed to first settle the matter through
the third-doctor conflict resolution procedure as provided under the 2010 POEA-SEC.

(a) What is the third-doctor conflict resolution procedure under the 2010 POEA-SEC.

In the event of conflicting medical assessments, the parties are required to select a third physician whose finding
shall be final and binding on them. Under Sec. 20(B) of the 2010 POEA-SEC, the selection is consensual;
however, jurisprudence has made it mandatory. [Philippine Hammonia Ship Agency, Inc. v. Eulogio Dumadag,
GR 194362, June 26, 2013]

(b) Will Seafarer G’s claim for total and permanent disability benefits prosper despite his failure to first settle
the matter through the third-doctor conflict resolution procedure? Explain.

Yes, it will prosper. The Third Physician Rule has no application when the company-designated physician
exceeds the 120-day treatment period without making a final, categorical and definitive assessment. Here, he
allowed 209 days to elapse without issuing a fit-to-work assessment or a disability grade. [Apines v. Elburg
Shipmanagement Phil., Inc. GR 202114, Nov. 9, 2016]

(c) Assuming that Seafarer G failed to submit himself to a post-employment medical examination within 3
working days from his return, what is the consequence thereof to his claim? Explain.

Non-compliance with the 3-day reporting requirement results in the forfeiture of G’s entitlement to disability
compensation. [Sec. 20(B), POEA-SEC]

B.17.
Ms. A is a volleyball coach with 5 years of experience in her field. Before the start of the volleyball season of
2015, she was hired for the sole purpose of overseeing the training and coaching of the University’s volleyball
team. During her hiring, the Vice-President for Sports expressed to Ms. A the University’s expectation that she
would bring the University a championship at the end of the year.

In her first volleyball season, the University placed 9th out of the 10 participating teams. Soon after the end of
the season, the Vice-President for Sports informed Ms. A that she was a mere probationary employee and hence,
she need not come back for the next season because of the poor performance of the team.

In any case, the Vice-President for Sports claimed that Ms. A was a fixed-term employee whose contract had
ended at the close of the year.

(a) Is Ms. A a probationary, fixed-term, or regular employee? Explain your reasons as to why she is or she is not
such kind of an employee for each of the types of employment given.
Ms. A is a regular employee. She cannot be considered a fixed-term employee in the absence of a fixed-term
employment contract, nor a probationary employee because it was not expressly communicated to her upon her
engagement that her tenure was for 6 months unless she survived pre-disclosed standards for regularization.
When an employee is hired without being apprised of such standards, he is deemed a regular employee regardless
of the employer’s intent to hire him as a probationary employee. [Abbott Laboratories v. Alcaraz, GR 192571,
July 23, 2013]

(b) Assuming that Ms. A was dismissed by the University for serious misconduct but was never given a notice
to explain, what is the consequence of a procedurally infirm dismissal from service under our Labor law and
jurisprudence? Explain.

The violation of Mr. A’s right to statutory due process requires the assessment of the University with nominal
damages. The amount is P30,000.00 because a dismissal for failure to qualify is akin to a dismissal for a just
cause. [Abbott Laboratories v. Alcaraz, GR 192571, July 23, 2013]

B.18.
When resolving a case of unfair labor practice filed by a union, what should the critical point of analysis to
determine if an act constitutes ULP?

The nature of a ULP is that it is a violation of workers’ right to self-organization. [Art. 258, LC; Culili v. Eastern
Telecommunications Phils., GR 165381, Feb. 9, 2011] An act, however unfair it may be, is not a ULP unless
listed as such under Art. 259 & 260, LC. Therefore, the critical point of analysis in a ULP case filed by a union
is whether the act complained of is expressly listed as ULP under Art. 259, LC.

B.19.
Because of dwindling sales and the consequent limitation of production, rumors were rife that XYZ, Inc. would
reduce its employee force. The next day, the employees of XYZ, Inc. received a notice that the company will
have a winding down period of 10 days, after which there will be a 6-month suspension of operations to allow
the company to address its precarious financial position.

On the 4th month of suspension of its operations XYZ, Inc. posted announcement that it will resume its
operations in 60 days but at the same time announced that instead of closing down due to financial losses, it will
retrench 50% of the work force.

(a) Is the announcement that there would be retrenchment affecting 50% of the work force sufficient
compliance with the legal requirements for retrenchment? Explain.

No. The 30-day notice requirement is a written notice that must be served on both the DOLE and the affected
employees. [Art. 298, LC] Hence, the posted announcement is a violation of the prescribed pre-termination
procedure.

(b) Assuming that XYZ, Inc., instead of retrenchment, extended the suspension of its operations from 6 months
to 8 months, would the same be legally permissible? If not, what are the consequences?

Temporary suspension of business operations under Art. 301 of the LC should not exceed 6 months; otherwise,
the suspension would ripen to constructive dismissal after the period expires. In such case, the company would
be ordered to reinstate and pay back wages.

B.20.
Discuss the differences between compulsory and voluntary/optional retirement as well as the minimum benefits
provided under the Labor Code for retiring employees of private establishments.

A voluntary/optional retirement is a termination of employment based on a bilateral agreement to terminate

employment at an agreed age regardless of years in service, or after a certain number of years in service regardless
of age. It is a matter of contract. In contrast, a compulsory retirement is a termination of employment by
operation of law. It is a matter of statute.
Under Art. 302 of the LC, retiring employees shall be paid retirement benefits computed as follows: (22.5 days
x Daily Rate) x Length of Service. The 22.5 days consist of 15 days representing half-month salary, 5 days as
service incentive leave, and 2.5 days representing 1/12 of 13th month pay. The full 22.5 days shall be used if the
retiree is entitled to both service incentive leave and 13th month pay. Meantime, the 15 days must always be
used.