IN Ondevilla v. Colegio de San Juan de Letran (Letran Laguna), published by the Supreme Court on Oct. 27, 2026, the court ruled that an employer cannot allow an employee's contract to expire, thereby effectively retiring him before the compulsory retirement age of 65, without his express and voluntary consent.
The case involved the petitioner who joined Letran Laguna as a comptroller in 2004 and later advanced to assistant vice president for finance. His tenure included several contract renewals until he was reassigned as controller in 2018. In 2019, upon reaching age 60, Letran declared his appointment expired. The petitioner filed a complaint for illegal dismissal with the National Labor Relations Commission, which ruled in his favor.
However, the Court of Appeals reversed the NLRC decision, holding that the petitioner agreed to retire effective July 31, 2020, based on a letter he sent requesting that his retirement be deferred to the end of the school year. The petitioner contested this interpretation, maintaining he did not consent to the retirement enforced by Letran.
Ultimately, the Supreme Court sided with the petitioner, reinforcing the principle that retirement benefits are not mere privileges but essential rewards for an employee's loyalty and years of dedicated service. Under Article 302 of the Labor Code, the retirement age is determined by existing agreements, employment contracts, or company policies; where none exists, the compulsory retirement age is 65, with the option to retire at 60.
In this case, the premature retirement imposed on the petitioner lacked mutual agreement or a valid company policy. The Supreme Court emphasized that Letran failed to present any retirement plan to the petitioner.
The Court concluded that the forced retirement constituted illegal dismissal and warranted payment of the petitioner’s full back wages and separation pay.
To be clear, while this recent case clearly established that the optional retirement age of 60 cannot be arbitrarily enforced on an employee and that the compulsory retirement age is 65, this applies only in the absence of any agreement, employment contract, or company policy to the contrary. As the Supreme Court reiterated in this case, the Labor Code provides that an employee may be retired upon reaching the retirement age set under a valid collective bargaining agreement or any employment contract, subject to compliance with payment of the minimum retirement benefits as provided by the Labor Code and its implementing rules.
