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71-Padillo v. Rural Bank

1. The petitioner resigned from his job as a bank bookkeeper due to poor health from hypertension, including a mild stroke. 2. The Labor Arbiter ordered the bank to pay the petitioner ₱100,000 as financial assistance from his retirement plan, but denied any retirement benefits since he resigned before retirement age. 3. The NLRC reversed and awarded the petitioner additional separation pay, treating his resignation as termination due to disease under the Labor Code. 4. The Court of Appeals reinstated the Labor Arbiter's ruling, finding the petitioner initiated his own resignation rather than being terminated, so he was not entitled to retirement benefits or separation pay for termination due to disease.

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62 views2 pages

71-Padillo v. Rural Bank

1. The petitioner resigned from his job as a bank bookkeeper due to poor health from hypertension, including a mild stroke. 2. The Labor Arbiter ordered the bank to pay the petitioner ₱100,000 as financial assistance from his retirement plan, but denied any retirement benefits since he resigned before retirement age. 3. The NLRC reversed and awarded the petitioner additional separation pay, treating his resignation as termination due to disease under the Labor Code. 4. The Court of Appeals reinstated the Labor Arbiter's ruling, finding the petitioner initiated his own resignation rather than being terminated, so he was not entitled to retirement benefits or separation pay for termination due to disease.

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Grezyl Amores
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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package.

Despite several follow-ups, his request


PADILO v. RURAL BANK remained unheeded.
GR No. 199338
Padillo was separated from employment due to
IN RELATION TO TOPIC: OTHER CAUSES OF his poor and failing health as reflected in a
SEVERANCE OF EMPLOYMENT RELATION Certification dated December 4, 2007 issued by
the Bank. Not having received his claimed
Article 297 of the Labor Code contemplates a retirement benefits, Padillo filed on September
situation where the employer, and not the 23, 2008 with the NLRC Regional Arbitration
employee, initiates the termination of Branch No. XI of Davao City a complaint for the
employment on the ground of the latter's recovery of unpaid retirement benefits
disease or sickness.
LA RULING:
A plain reading of the [Article 297 of the Labor LA issued a Decision dismissing Padillo's
Code] clearly presupposes that it is the complaint but directed the Bank to pay him the
employer who terminates the services of the amount of P100,000.00 as financial assistance,
employee found to be suffering from any treated as an advance from the amounts
disease and whose continued employment is receivable under the Philam Life Plan. It found
prohibited by law or is prejudicial to his health Padillo disqualified to receive any benefits
as well as to the health of his coemployees. It under Article 300 (formerly, Article 287) of the
does not contemplate a situation where it is the Labor Code of the Philippines as he was (55)
employee who severs his or her employment years old when he resigned, while the law
ties specifically provides for an optional retirement
age of (60) and compulsory retirement age of
(65).

FACTS: NLRC RULING:


Petitioner, the late Eleazar Padillo (Padillo), was NLRC reversed and set aside the LA's ruling and
employed by respondent Rural Bank of ordered respondents to pay Padillo the amount
Nabunturan, Inc. (Bank) as its SA Bookkeeper. of P164,903.70 as separation pay, on top of the
Due to liquidity problems which arose P100,000.00 Philam Life Plan benefit.
sometime in 2003, the Bank took out
retirement/insurance plans with Philippine NLRC applied the Labor Code provision on
American Life and General Insurance Company termination on the ground of disease —
(Philam Life) for all its employees in anticipation particularly, Article 297 thereof (formerly,
of its possible closure and the concomitant Article 323) — holding that while Padillo did
severance of its personnel. resign, he did so only because of his poor health
condition.
Padillo suffered a mild stroke due to
hypertension which consequently impaired his CA RULING:
ability to effectively pursue his work. In CA granted respondents' petition for certiorari
particular, he was diagnosed with Hypertension and rendered a decision setting aside the
S/P CVA (Cerebrovascular Accident) with short NLRC's December 29, 2009 and March 31, 2010
term memory loss, the nature of which had Resolutions.
been classified as a total disability. On
September 10, 2007, he wrote a letter CA held that Padillo could not, absent any
addressed to respondent Oropeza expressing agreement with the Bank, receive any
his intention to avail of an early retirement retirement benefits pursuant to Article 300 of
the Labor Code considering that he was only more, but not beyond sixty-five (65) years which
(55) years old when he retired. is hereby declared the compulsory retirement
age, who has served at least five (5) years in the
Citing the case of Villaruel v. Yeo Han Guan said establishment, may retire and shall be
(Villaruel), it pronounced that separation pay on entitled to retirement pay equivalent to at least
the ground of disease under Article 297 of the one-half (1/2) month salary for every year of
Labor Code should not be given to Padillo service, a fraction of at least six (6) months
because he was the one who initiated the being considered as one whole year.
severance of his employment and that even
before September 10, 2007, he already stopped the petition is PARTLY GRANTED.
working due to his poor and failing health.

ISSUE:
1. W/N The termination on the ground of
disease can be initiated by the employee
2. W/N Early retirement can be availed in the
absence of a retirement plan or agreement
providing for retirement benefits of employees
in the establishment.

COURT’S RULING:
1. NO. The Labor Code provision on termination
on the ground of disease under Article 297 does
not apply in this case, considering that it was
the petitioner and not the Bank who severed
the employment relations.

A plain reading of the [Article 297 of the Labor


Code] clearly presupposes that it is the
employer who terminates the services of the
employee found to be suffering from any
disease and whose continued employment is
prohibited by law or is prejudicial to his health
as well as to the health of his coemployees. It
does not contemplate a situation where it is the
employee who severs his or her employment
ties.

2. NO. Art. 300. Retirement. — Any employee


may be retired upon reaching the retirement
age established in the collective bargaining
agreement or other applicable employment
contract.

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

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