Padillo Vs Rural Bank of Nabunturan

Eleazar S. Padillo, Vs. Rural Bank Of Nabunturan, Inc. And Mark S.
Oropeza, 2013
Facts:
 Petitioner, the late Eleazar Padillo (Padillo), was an employee of respondent Rural Bank of
Nabunturan, Inc. (Bank) as its SA Bookkeeper. Due to liquidity problems in 2003, the Bank took
out retirement/insurance plans with Philippine American Life and General Insurance Company
(Philam Life) for all its employees in anticipation of its possible closure and the concomitant
severance of its personnel. Respondent Mark Oropeza is the president and major stockholder of
the bank.
 Padillo suffered a mild stroke due to hypertension which consequently impaired his ability to
effectively pursue his work. He wrote a letter addressed to Oropeza expressing his intention to
avail of an early retirement package. Despite several follow-ups, his request remained
unheeded. Not having received his claimed retirement benefits, Padillo filed with the NLRC a
complaint for the recovery of unpaid retirement benefits.
 The Labor Arbiter dismissed Padillos complaint on the ground that the latter did not qualify to
receive any benefits under Article 300 of the Labor Code as he was only fifty-five (55) years old
when he resigned, while the law specifically provides for an optional retirement age of sixty (60)
and compulsory retirement age of sixty-five (65).
 Padillo elevated the matter to the NLRC. The NLRC reversed the Labor Arbiters ruling. Aggrieved,
Oropeza and the Bank filed a petition for certiorari with the CA. The CA reversed the NLRCs
ruling but with modification. It directed the respondents to pay Padillo the amount of
P50,000.00 as financial assistance exclusive of the P100,000.00 Philam Life Plan benefit.
 Displeased with the CAs ruling, Padillo (now substituted by his legal heirs due to his death) filed
the instant petition before the Supreme Court.
Issue:
 Is Padillo entitled to claim for separation and retirement benefits under the Labor Code? NO.
Ruling:
 At the outset, it must be maintained that the Labor Code provision on termination on the
ground of disease under Article 297 does not apply in this case, considering that it was Padillo
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 co-employees. It
does not contemplate a situation where it is the employee who severs his or her employment
ties.
 What remains applicable, however, is the Labor Code provision on retirement. In the absence of
any applicable agreement, an employee must (1) retire when he is at least sixty (60) years of age
and (2) serve at least (5) years in the company to entitle him/her to a retirement benefit of at
least one-half (1/2) month salary for every year of service, with a fraction of at least six (6)
months being considered as one whole year. Notably, these age and tenure requirements are
cumulative and non- compliance with one negates the employees entitlement to the retirement
benefits under Article 300 of the Labor Code altogether.
 In this case, it is undisputed that there exists no retirement plan, collective bargaining
agreement or any other equivalent contract between the parties which set out the terms and
condition for the retirement of employees, with the sole exception of the Philam Life Plan which
premiums had already been paid by the Bank.
 Unfortunately, while Padillo was able to comply with the five (5) year tenure requirement as he
served for twenty-nine (29) years he, however, fell short with respect to the sixty (60) year age
requirement given that he was only fifty-five (55) years old when he retired. Therefore, without
prejudice to the proceeds due under the Philam Life Plan, petitioners claim for retirement
benefits must be denied.
 Nevertheless, the Court concurs with the CA that financial assistance should be awarded but at
an increased amount. With a veritable understanding that the award of financial assistance is
usually the final refuge of the laborer, considering as well the supervening length of time which
had sadly overtaken the point of Padillos death an employee who had devoted twenty-nine (29)
years of dedicated service to the Bank the Court, in light of the dictates of social justice, holds
that the CAs financial assistance award should be increased from P50,000.00 to P75,000.00, still
exclusive of the P100,000.00 benefit receivable by the petitioners under the Philam Life Plan
which remains undisputed.
 Finally, the Court finds no bad faith on the part of the Bank and Oropeza as they were within
their right, absent any proof of its abuse, to ignore Padillos misplaced claim for retirement
benefits. Oropezas and the Banks obstinate refusal to accede to Padillos request is precisely
justified by the fact that here lies no basis under any applicable agreement or law which accords
the latter the right to demand any retirement benefits from the Bank. While the Court mindfully
notes that damages may be recoverable due to an abuse of right under Article 21 in conjunction
with Article 19 of the Civil Code the following elements must, however, obtain: ( 1) there is a
legal right or duty; (2) exercised in bad faith; and (3) for the sole intent of prejudicing or injuring
another. Records reveal that none of these elements exists in the case at bar and thus, no
damages on account of abuse of right may he recovered.

Padillo Vs Rural Bank of Nabunturan

Uploaded by

Copyright:

Available Formats

Padillo Vs Rural Bank of Nabunturan

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Padillo Vs Rural Bank of Nabunturan

Uploaded by

Copyright:

Available Formats

Eleazar S. Padillo, Vs. Rural Bank Of Nabunturan, Inc. And Mark S.

You might also like