Case Digest: Banco Filipino v. Lazaro

G.R. Nos. 185346 and 185442 : June 27, 2012

BANCO FILIPINO SAVINGS AND MORTGAGE BANK, Petitioner, v. MIGUELITO M. LAZARO, Respondent.

MIGUELITO M. LAZARO, Petitioner, v. BANCO FILIPINO SAVINGS AND MORTGAGE BANK, ET AL., Respondent.

SERENO,J.:

FACTS:


On 1 February 1968, Lazaro started working for Banco Filipino as a probationary employee. Rising from the ranks, he was promoted to the position of assistant manager, which he held until the bank was closed by the Central Bank of the Philippines on 25 January 1985. Notwithstanding the cessation of the regular operations of the bank, Lazaro was reemployed on16 April 1992 as a member of a task forceassigned to collect its delinquent accounts.

After this Court adjudged that the banks closure was illegal,Banco Filipino eventually reopened in June 1992. Lazaro continued to work for the bank until he retired from his last post as assistant vice-president on1 December 1995. Thereafter, he was paid retirement benefits for 20 years and 7 months of service pegged at his latest gross salary rate of ₱38,000 per month.

Lazaro, however, demanded a higher amount. Specifically, he asserted that since his employment lasted from 1 February 1968 until 1 December 1995, he should be credited with 27 years and 10 months of service. Additionally, he claimed that the base amount of his retirement pay should be increased from ₱38,000 to ₱50,000 to reflect the salary increase given by the bank to its senior officers in December 1995.

Aside from demanding his retirement pay differential, Lazaro also required Banco Filipino to pay the 10% attorneys fees it received while foreclosing delinquent accounts. Furthermore, he sought the payment of his 10% profit share from 1984 to 1995.

Banco Filipino refused the additional demands of Lazaro. As a result, he filed a Complaint for underpayment of retirement benefits, as well as nonpayment of attorneys fees and profit shares before the Labor Arbiter (LA).

In its defense, Banco Filipino emphasized that Lazaro was entitled only to 20 years and 7months of service, for he could not include in his employment the period of 7 years within which the bank was ordered closed.

Banco Filipino also denied the contention of Lazaro that the basis of his retirement pay should be increased from ₱38,000 to ₱50,000. According to the bank, Lazaro was not covered by the salary increase granted in December 1995, since he had resigned as early as 1 December 1995.

Ultimately, the LA gave credence to the banks defenses and, hence, denied all of Lazaros demands. On appeal, the National Labor Relations Commission (NLRC) affirmed the LAs Decision.

After receiving the adverse judgment, Lazaro pursued the action before the CA. The appellate court modified the LAs Decision and held that Lazaro was entitled to retirement pay differential. Filipino and Lazaro separately moved for reconsideration, both of which the appellate court denied. In the instant Petitions, the parties question the CAs dispositions of Lazaros monetary claims.

ISSUES:

I. Whether the CA gravely erred in granting retirement pay differentials to Lazaro;

II. Whether the CA committed grievous error in dismissing Lazaros claims for attorneys fees and profit shares; and

III. Whether the CA committed grievous error in not addressing Lazaros claims for a one-day salary differential and damages consisting of moral and exemplary damages, attorneys fees and expenses of suit.

HELD:

LABOR LAW

In essence, Banco Filipino maintains that the seven-year period when it was under liquidation should not be credited in computing Lazaros retirement pay because, during that period, the bank was considered closed. It cites, as further basis, G.R. No. 165367 pertaining toBanco Filipino Staff Association v. Banco Filipino Savings and Mortgage Bankto support the exclusion of the liquidation period.

This contention is without merit, for it inaccurately portrays the status of a bank under liquidation. InPhilippine Veterans Bank v. NLRC,this Court explained that banks under liquidation retain their legal personality. In fact, even if they are prohibited from conducting regular banking business, it is necessary that debts owed to them be collected.Lazaro performed the duty of foreclosing debts in favor of Banco Filipino. It cannot rightfully disclaim Lazaros work that benefitted it. Consequently, we find no grievous error committed by the CA in crediting the years covered by the liquidation period as part of Lazaros retirement pay.

With respect toBanco Filipino Staff Association v. Banco Filipino Savings and Mortgage Bank, which Banco Filipino cites in order toprove that this Court had earlier excluded the seven-year period of closure from the length of service of the banks employees, the CA read the case correctly; i.e. that this Court did not categorically exclude the seven-year period of closure from the length of service of Banco Filipino employees. Thus, the bank cannot use our pronouncement in the said case to defeat Lazaros claim for retirement pay differential.

Notably, Lazaro remains unsatisfied with the award of retirement pay differential. He seeks these further adjustments: (1) the basis for the computation of his retirement pay should be increased from ₱38,000 to ₱50,000; and (2) the retirement pay differential should include 8 years, and not just 7 years and 7 months of his service.

With respect to the claim that the base for computing the retirement pay should be ₱50,000 and not ₱38,000, the courtsa quo found that since the applicable Rules of the Banco Filipino Retirement Fund state that the computation shall be for each completed month of service,Lazaro who did not complete his services for December 1995 cannot claim the salary increase granted, when he has already left Banco Filipino, and credit it to his retirement pay. Conversely, Lazaro argues that the Rules of the Banco Filipino Retirement Fund do not explicitly state that the computation shall be for each completed month of service.

Referring to the Rules of the Banco Filipino Retirement Fund, this Court observes that they refer to the final salary of the employee as basis for computing the latters retirement pay.

As established by the LA, the NLRC and the CA, the final salary of Lazaro was ₱38,000, and not ₱50,000.This consistent factual determination can no longer be retried. It is aphoristic that a reexamination of factual findings cannot be done through a petition for review on certiorari under Rule 45 of the Rules of Court, because this Court reviews only questions of law.

With regard to the second adjustment Lazaro prays for, we note that he assiduously went through the whole process of appeal to seek a rounding off of his 27 years and 10 months of work to 28 years and consequently obtain a higher retirement pay. Considering the banks grant of 20 years and 7 months of retirement pay, plus the CAs award of a 7-year retirement pay differential,in effect, only 5 months worth of prorated retirement pay remains unsettled.At this juncture, this Court reminds everyone that while access to the courts is guaranteed, there must be limits thereto.

We rule that the CA committed no reversible error when it did not round off Lazaros length of service. To begin with, his plea for rounding off his length of service is mistakenly based on Article 287 of the Labor Code, which provides:

Art. 287. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract.

In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, that an employee's retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein.

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 the 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 (1/2) 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.

Lazaro cannot anchor his claim on the said provision, because governing in this case is the Rules of the Banco Filipino Retirement Fund. Indeed, as found in the Implementing Rules of the Retirement Pay Lawand in jurisprudence, only in the absence of an applicable retirement agreement shall Article 287 of the Labor Code apply. There is aprovisohowever, that an employee's retirement benefits under any agreement shall not be less than those provided in the said article.

It cannot be gainsaid that the Rules of the Banco Filipino Retirement Fund provide for benefits lower than those in the Labor Code. In fact, the bank offers a retirement pay equivalent to oneandone-half month salary for every year of service, a rate over and above the one-half month salary threshold provided by the law.

Therefore, considering that Lazaro is bound by the terms of the Rules of the Banco Filipino Retirement Fund, it follows that he cannot claim his27 years and 10 months of work to be rounded off to 28 years in order to obtain a higher retirement pay.

CA DECISION AFFIRMED.

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