R&E Transport vs. Latag

Taxi Operator (D) vs. Taxi Driver (P)
GR 155214, February 13, 2004	[T]

Summary: A taxi driver initially worked for the taxi operator, La Mallorca Taxi. It closed down and a new entity, R&E Transport, was started by the previous owners. Then, the taxi driver worked in this new company and retired. He filed a complaint with the NLRC. However, before the NLRC ruling, his widow accepted only a part of the retirement pay and signed a quitclaim.

Rule of Law: Article 287 of the Labor Code provides that "In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee x x x may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service."

Facts: Pedro Latag (P) was a regular employee of La Mallorca Taxi since 1961. When La Mallorca closed down, Latag (P) transferred to R&E Transport (P). As a taxi driver, Latag (P) received an average daily salary of five hundred pesos.

Latag (P) got sick in 1995 and was forced to apply for partial disability with the SSS, which was granted. When he recovered, he reported for work in 1998 but was no longer allowed to continue working due to old age.

Latag (P) thus asked R&E Transport (D) for his retirement pay pursuant to Republic Act 7641, but he was ignored. Thus, Latag filed a case for payment of his retirement pay before the NLRC.

The labor arbiter credited Latag (P) with 37 years of service for La Mallorca and R&E Transport (D). This was reversed by the NLRC and credited Latag (P) with only 14 years of service at R&E Transport (D). However, before the NLRC decision, Latag's (P) widow accepted a part of the retirement pay and signed a quitclaim or waiver.

Later on appeal, the appellate court upheld the finding of the labor arbiter.

Issues: Is a taxi driver entitled to retirement pay despite of the quitclaim?

Ruling: Yes. Latag (P) was credited with 14 years of service with R&E Transport (D) pursuant Article 287 of the Labor Code, as amended by Republic Act No. 7641, provides:

Article 287. Retirement. - x x x In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee x x x 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-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.

As to the Quitclaim and Waiver signed by Latag's (P) widow, the appellate court committed no error when it ruled that the document was invalid and could not bar Latag (P) from demanding the benefits legally due.

A quitclaim is ineffective in barring recovery of the full measure of a worker’s rights, and the acceptance of benefits therefrom does not amount to estoppel.