Atty. Gregorio B. Austral, CPA
Effect of a gap in service on retirement benefits
There are employees who resign from their previous employers to seek a greener pasture in another company. As fate would have it, the previous employer turns out to be better than the new employer. After working shortly with the new employer, the employee later on decides to reapply for a job in his previous employer. When this employee retires, a question is often asked: Should the length of service be reckoned from the very first day he worked at the company or should it be counted only from the time he re-applied at the company up to the date of his retirement?
The Supreme Court decision in Sta. Catalina College and Sister Lorena Oranza vs. NLRC, G.R. No. 144483, November 19, 2003, is instructive on this issue.
In June 1955, Hilaria G. Tercero (Hilaria) was hired as an elementary school teacher at the Sta. Catalina College in San Antonio, Bian, Laguna. In 1970, she applied for and was granted a one year leave of absence without pay on account of the illness of her mother. After the expiration in 1971 of her leave of absence, she had not been heard from by the school. In the meantime, she was employed as a teacher at the San Pedro Parochial School during school year 1980-1981 and at the Liceo de San Pedro, Bian, Laguna during school year 1981-1982. In 1982, she applied anew at Sta. Catalina. On May 31, 1997, Hilaria reached the compulsory retirement age of 65. Sta. Catalina computed her retirement benefits on the basis of fifteen years of service from 1982 to 1997. Her service from 1955 to 1970 was excluded in the computation, since Sta. Catalina asserted that she had, in 1971, abandoned her employment.
The Supreme Court ruled in this wise:
x x x Hilaria cannot be credited for her services in 1955-1970 in the determination of her retirement benefits. For, after her one year leave of absence expired in 1971 without her requesting for extension thereof as in fact she had not been heard from until she resurfaced in 1982 when she reapplied with petitioner school, she abandoned her teaching position as in fact she was employed elsewhere in the interim and effectively relinquished the retirement benefits accumulated during the said period.
For a valid finding of abandonment, two factors must be present: (1) the failure to report for work, or absence without valid or justifiable reason; and (2) a clear intention to sever employer- employee relationship, with the second element as the more determinative factor, being manifested by some overt acts.
To prove abandonment, the employer must show that the employee deliberately and unjustifiably refused to resume his employment without any intention of returning. There must be a concurrence of the intention to abandon and some overt acts from which an employee may be deduced as having no more intention to work. The law, however, does not enumerate what specific overt acts can be considered as strong evidence of the intention to sever the employee-employer relationship.
It is not disputed that the approved one-year leave of absence without pay of Hilaria expired in 1971, without her, it bears repeating, requesting for extension thereof or notifying petitioner school if and when she would resume teaching. Nor is it disputed that she was rehired only in 1982 after filing anew an application, without her proffering any explanation for her more than a decade of absence. Under the circumstances, abandonment of work at petitioner school in 1971 is indubitably manifest.
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As Hilaria was considered a new employee when she rejoined petitioner school upon reapplying in 1982, her retirement benefits should thus be computed only on the basis of her years of service from 1982 to 1997.