R&E Transport, Inc. v. Honorio Enriquez vs.

Avelina Latag
G.R. No. 155214 | February 13, 2004
FACTS:
Pedro Latag was a regular employee of La Mallorca Taxi since
March 1, 1961. When La Mallorca ceased from business operations,
Latag transferred to R & E Transport, Inc. He was receiving an
average daily salary of five hundred pesos (P500.00) as a taxi driver.
Latag got sick in January 1995 and was forced to apply for partial
disability with the SSS, which was granted. When he recovered, he
reported for work in September 1998 but was no longer allowed to
continue working on account of his old age. Latag thus asked Felix
Fabros, the administrative officer of [petitioners], for his retirement
pay pursuant to Republic Act 7641 but he was ignored.
Thus, on December 21, 1998, Latagfiled a case for payment of
his retirement pay before the NLRC. Latag however died on April 30,
1999. Subsequently, his wife, Avelina Latag, substituted him. On
January 10, 2000, the Labor Arbiter rendered a decision in favor of
Latag.

ISSUE: WON Latag is entitled to retirement benefits despite

quitclaim. (YES)
RULING:
Latag is entitled to retirement benefits despite of waiver of
quitclaims. There is no dispute fact that late Pedro Latag is entitled
to retirement benefits. Rather, the bone of contention is number of
years that he should be credited with in computing those benefits.
Findings of NLRC that Pedro must be credited only with his service
to R & E Transport because the evidence shows that the
aforementioned companies are two different entities, which SC
supports.
As to Quitclaim and Waiver signed by Latag, CA committed no
error when it ruled that the document was invalid and could not bar
her from demanding the benefits legally due her husband. This is
not said that all quitclaims are invalid per se. Courts are wary of
schemes that frustrate workers' rights & benefits and look with
disfavor upon quitclaims and waivers that bargain these away.
Undisputably, Pedro M. Latag was credited with 14 years of
service with R & E Transport, Inc. Article 287 of the Labor Code, as
amended by Republic Act No. 7641, provides:
Retirement. — In the absence of a 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.
The rules implementing the New Retirement Law similarly
provide the above-mentioned formula for computing the one-half
month salary. Since Pedro was paid according to the "boundary"
system, he is not entitled to the 13th month and the service
incentive pay; hence, his retirement pay should be computed on the
sole basis of his salary. It is accepted that taxi drivers do not receive
fixed wages but retain only those sums in excess of the "boundary"
or fee they pay to the owners or operators of their vehicles. Thus,
basis for computing their benefits should be the average daily
income. In this case, the CA found that Pedro was earning an
average of five hundred pesos (P500) per day. We thus compute his
retirement pay as follows: P500 x 15 days x 14 years of service
equals P105,000.