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Retirement Benefits vs. Separation Pay

Marina Angus was employed by Goodyear Philippines for 35 years until she was retrenched due to economic difficulties faced by the company. When her position was declared redundant, Goodyear granted her early retirement benefits according to company practice but denied her claim for additional separation pay. The Court ruled that retirement benefits and separation pay are not mutually exclusive and that under the Labor Code, Angus was entitled to receive both as retirement benefits reward employee loyalty while separation pay aids workers during their job search after termination. As such, the Court found in favor of Angus and awarded her both the retirement benefits already received as well as separation pay.

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331 views1 page

Retirement Benefits vs. Separation Pay

Marina Angus was employed by Goodyear Philippines for 35 years until she was retrenched due to economic difficulties faced by the company. When her position was declared redundant, Goodyear granted her early retirement benefits according to company practice but denied her claim for additional separation pay. The Court ruled that retirement benefits and separation pay are not mutually exclusive and that under the Labor Code, Angus was entitled to receive both as retirement benefits reward employee loyalty while separation pay aids workers during their job search after termination. As such, the Court found in favor of Angus and awarded her both the retirement benefits already received as well as separation pay.

Uploaded by

PreciousGan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Goodyear Phils., Inc. v.

Angus
12 November 2014 | Del Castillo, J. |
Retirement > Collection of both retirement benefits and separation pay (Two are mutually exclusive)
Digested by: Precious Gan

PETITIONERS: Goodyear Philippines, Inc.; Remegio M. Ramos


RESPONDENT: Marina L. Angus

SUMMARY: When Goodyear experienced economic reversals, it resorted to the retrenchment of certain employees in order to
continue its operations. One such employee is Marina, and she was granted an early retirement benefit, as per company practice.
However, she claimed entitled to separation pay in addition to the retirement benefits already received.

DOCTRINE: Retirement benefits and separation pay are not mutually exclusive. Retirement benefits are a form of reward for an
employees loyalty and service to an employer, whereas separation pay is that amount which an employee receives at the time of his
severance from employment, designed to provide the employee with the wherewithal during the period that he is looking for another
employment

FACTS: instances enumerated under Articles 283 and 284 of the Labor
1. 19 November 1966: Marina was employed by Goodyear on Code or in illegal dismissal cases when reinstatement is not
November 19, 1966 as the secretary to the Manager of feasible. In the case at bar, Article 283 clearly entitles Angus to
Quality and Technology. separation pay apart from the retirement benefits she received
from petitioners.
2. Goodyear experienced economic reversals. To continue its
operations, it resorted to retrenchment.

3. 18 September 2001: Marina received a letter from Remegio


Ramos, HR Director, stating that management considered
her position redundant and no longer necessary and is to be
abolished on the same day, with her services to be
terminated after a month. Per company practice, the
company only granted her an early retirement benefit.

4. Marina claims that she is entitled to separation pay in


addition to retirement benefits.

5. Goodyear points to a provision in their CBA stating that


the availment of retirement benefits therein shall exclude
entitlement to any separation pay, termination pay,
redundancy pay, retrenchment pay, or any other severance
pay.

6. The parties finally agreed that an employee shall be entitled


to the higher of either benefit. However, Marina later
contested this.

ISSUE: WON Marina is entitled to both retirement benefits and


separation pay.

RATIO:
Labor Law; Retirement Benefits; Separation Pay; Retirement
benefits and separation pay are not mutually [Link] is
worthy to mention at this point that retirement benefits and
separation pay are not mutually exclusive. Retirement benefits
are a form of reward for an employees loyalty and service to
an employer and are earned under existing laws, CBAs,
employment contracts and company policies. On the other hand,
separation pay is that amount which an employee receives at the
time of his severance from employment, designed to provide
the employee with the wherewithal during the period that he is
looking for another employment and is recoverable only in

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