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Doctrine: One half month salary is equivalent to
22.5 days. It includes 15 days salary based on
latest salary rate + 1/12 of the 13th month pay +
cash equivalent of not more than 5 days of SIL +
all other benefits the employer and employee may
agree upon.
ISSUE: WON the whole 5 days SIL or just a portion
thereof equivalent to 1/12 should be included in
the month salary for purposes of computing
retirement pay
HELD: RA 7641 and Its IRR clearly state that the
whole 5 days of SIL incentive are included in the
computation of month salary for purposes of
computing retirement pay.
RA 7641 Unless the parties provide for broader
inclusions, the term month salary shall mean 15
days plus 1/12 of the 13th month pay and the
cash equivalent of not more than 5 days of SIL.
SEC. 5.2 Rule II of IRR Book VI of the Labor Code
further clarifies what comprises the month
salary due a retiring employee.
a. 15 days salary of the employee based on
his salary rate.
b. the cash equivalent of not more than 5
days of SIL.
c. 1/12 of the 13th month pay due an
employee
7. VOLUNTARY RETIREMENT
-ROBERTO ARIOLA ET. AL V. PHILEX MINING
Doctrine: If the intent to retire is not clearly
established or if retirement is involuntary, it is to
be treated discharge.
ISSUE: Was there voluntary retirement?
HELD: NO, There was retrenchment, not
retirement
Philex, to submit other documents proving
petitioners claimed retirement, such as their
applications for retirement under Philexs early
voluntary retirement program and their clearance
slips, undermines it claim. The submission of
these documents, which should indicate the
reason for petitioners separation from service,
would have put to rest any doubt on the cause of
such separation.
The vouchersin question do not suffice to
prove petitioners retirement from Philex.
Retirement results from voluntary agreement
between the employer and employee where the
latter, after reaching a certain age, agrees to
sever his employment with the former. In the
present case, the intent to retire is not clearly
established or if the retirement is involuntary, it is
to be treated as a discharge.
8. FORFEITURE OF BENEFITS
-INTEL TECHNOLOGY PHILIPPINES INC V.
NLRC ND JEREMIAS CABILES
Doctrine: Resignation is the formal
relinquishment of an office, the overt act of which
is coupled with an intent to renounce. This intent
could be inferred from the acts of the employee
before and after the alleged resignation.
ISSUE: WON Cabiles resigned from Intel
Philippines
HELD: Cabiles resigned from Intel Philippines. The
communication between Cabiles and Intel
Philippines manifested two of his main concerns:
a. clearance procedures
b. the probability of getting his retirement pay
despite the non completion of the required
10 years of employment service. Beyond
these concerns, however was his
acceptance of the fact that he would be
ending his relationship with Intel Phil. as his
employer. The words he used- local hire,
close, clearance- denote nothing but his firm
resolves to voluntarily disassociate himself
from Intel Phil. and take on new
responsibilities with Intel HK.
SY V. METROPOLITAN BANK & TRUST
COMPANY
Sec. 6, Book 6 Rule 2 Sec. 1 IRR of RA 7641exemption from tax- The retirement pay provided
in the Act may be exempted from tax if the
requirements set by the BIR under Sec. 2 b item 1
of Revenue Regulation No. 12-86 dated Aug 1,
1986 are met.
Pensions, retirement and separation payconstitute compensation subject to withholding,
except the following
1. Retirement benefits received by officials and
employees of private firms under a
reasonable private benefit plan maintained
by the employer, if the following
requirements are met:
a. the benefit plan must be approved by the
BIR
b. the retiring official or employee must
have been in the service of the same
employer for at least 10 years and is not
less than fifty years of age at the time of
retirement; and
c. the retiring official or employee shall not
have previously availed of the privilege
under the retirement benefit plan of the
same or another employer.
-IBC V. NOEMI AMORILLA
Doctrine: For retirement benefits to be
exempt from withholding tax, the