Mandatory Retirement

I have been working with a private multinational company for 18 years already. We do not have a CBA or any contract that we signed. Originally, the company was owned by a Chinese family as an exclusive distributor of an international electronics brand. But around 1997, the Chinese owner sold all his shares to the Japanese principal.

One of the policies of the Japanese principals was a Mandatory Retirement policy for employees who have reached 50 years or have served 15 years whichever comes first. Is this policy legal considering we did not sign any contract agreeing to this and that, as far as I know by law the retirement age is 60?

This afternoon, I was informed that I am due for retirement and the company is offering 94% of my current salary per year of service. Considering I still have 4 little kids studying, I am not yet prepared to retire and I don't think the amount I will receive will last long. And also, since I am already 46 years old I will have difficulty finding a new job.

I did not sign yet their offer saying I will think about it first.

Your advise will be greatly appreciated.

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 agreement 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.

I would argue that at best, this policy can be only a voluntary retirement especially because you did not agree to it.

on the other hand,94% is better than the 50% mandated by law. do the math first and add the factor of how willing you are to deal with the friction and fighting this out with the company.

attyLLL wrote:

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 agreement 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.

I would argue that at best, this policy can be only a voluntary retirement especially because you did not agree to it.

on the other hand,94% is better than the 50% mandated by law. do the math first and add the factor of how willing you are to deal with the friction and fighting this out with the company.

Thank you for the reply.

I am aware that 94% is already better than that mandated by law of 50%. However, considering how little my salary is, this will not be enough to sustain my current financial obligations. I would rather continue working until I reach the compulsory retirement age and get the 50% mandated by law 20 years from now. At least I still have a monthly salary and all the benefits of being employed.

My next questions are: what will happen if I don't agree with the company's offer? What would be their next step? What are my options? Do I have a choice?

I have indicated to the company that I will only accept the retirement if it is at least 200%. Is this a reasonable demand?

Thank you again for the advice.

I cannot predict what your company will do next. they may insist to retire you mandatorily based on their policy.

if they force you to retire, take note that receiving the package may preclude you from winning any case you may file after. they will surely ask you to execute a waiver and quitclaim.