WHAT IF AN EMPLOYEE CONSENTS TO RETIRE AT AN EARLIER AGE?

To be valid, retirement at an earlier age must be voluntarily consented to by the employee.

In Jaculbe v. Silliman University, the Supreme Court ruled that in order for retirement at an earlier age to be valid, it must be shown that the employee’s participation in the plan is voluntary. An employer is free to impose a retirement age of less than 65 for as long as it has the employees’ consent. Stated conversely, employees are free to accept the employer’s offer to lower the retirement age if they feel they can get a better deal with the retirement plan presented by the employer.

Following Jaculbe, the retirement of petitioner in the 2010 case of Lourdes Cercado v. Uniprom, Inc. at the age of 47, after having served respondent company for 22 years, pursuant to its Employees’ Non-Contributory Retirement Plan, which provides that employees who have rendered at least 20 years of service may be retired at the option of the company, was declared illegal because it was not shown that she has given her consent thereto. Not even an iota of voluntary acquiescence to respondent’s early retirement age option is attributable to petitioner. The assailed retirement plan was not embodied in a CBA or in any employment contract or agreement assented to by petitioner and her co-employees. On the contrary, it was unilaterally and compulsorily imposed on them.
Earlier Retirement Age as Illegal Dismissal

Retiring at an earlier age will amount to illegal dismissal if employee did not consent thereto.

In the same cases of Jaculbe and Lourdes Cercado, having terminated the employee solely on the basis of a provision of a retirement plan which was not freely assented to by the employee, the employer was held guilty of illegal dismissal.

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