Employees cannot be forced to retire early without consent, Supreme Court says

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The Supreme Court (SC) has ruled that employees cannot be retired before the compulsory retirement age of 65 without their clear and voluntary consent.

In a 22-page decision, the SC’s First Division affirmed that under the Labor Code, an employee may opt to retire upon reaching 60 years old, but compulsory retirement remains set at 65.

“The Labor Code permits employers and employees to fix the applicable retirement age at below 60 years. Absent such an agreement, the retirement age shall be that fixed by law, and the above-cited law mandates that the compulsory retirement age is 65 years, while the minimum age for optional retirement is set at 60 years,” the SC said.

According to court records, petitioner Rodolfo C. Ondevilla was illegally dismissed by his employer, Colegio de San Juan de Letran - Laguna, when his appointment was treated as expired after he turned 60 years old.

The Labor Arbiter and the National Labor Relations Commission both ruled in Ondevilla’s favor, and the Court of Appeals (CA) likewise affirmed that he was illegally dismissed.

While the CA noted that Ondevilla had agreed to retire effective July 31, 2020, based on a letter sent to his employer, the high court affirmed his illegal dismissal because the school had denied his preferred retirement terms.

The SC emphasized that an optional retirement plan must be grounded on a mutual and voluntary agreement, with the employee freely and expressly consenting without pressure or coercion, as accepting optional retirement entails waiving the right to security of tenure.

“Considering that CSJL denied Ondevilla's preference to retire on July 31, 2020, he is deemed to have been illegally dismissed from employment,” the court said.

The Colegio de San Juan de Letran - Laguna was then ordered to pay Ondevilla full backwages from August 29, 2019 until August 29, 2024. He was also declared entitled to separation pay instead of reinstatement.

Furthermore, the SC awarded him retirement benefits covering his period of employment from June 16, 2004, until August 29, 2024, when he reached the mandatory retirement age of 65.

“The total monetary award shall earn legal interest at the rate of 6% per annum from August 29, 2019 until fully paid,” the decision read.

The decision was penned by Associate Justice Ramon Paul L. Hernando and promulgated in June 2026 and posted on social media on October 27, 2026. — BAP, GMA News