What's the difference between "fired" and "retired"?

The question of whether or not the former executive secretary was kicked out, sacked, or fired, on the one hand, or was allowed to resign, to retire, was retrenched, declared redundant or simply allowed to go his own way, on the other hand, is still the subject of many discussions and arguments in many coffee shops by pundits and commentators.

Let us just leave that issue aside and focus on the Philippine Labor Laws. This writer has been invited to speak before 500 or more lawyers, members of the Integrated Bar of the Philippines, who are attending the Joint Convention of the Western and Eastern Visayan Chapters in Waterfront Hotel this coming weekend.

One of my topics is termination of employment which includes firing for just causes, under Article 297 of the Labor Code, and separating employees based on authorized causes, under Article 298. Just causes include serious misconduct, insubordination, fraud, breach of trust, crimes, and other analogous grounds. Authorized causes include installation of labor-saving devices, redundancy, retrenchment, and closures.

Retirement is governed by Article 302 of the Labor Code, both optional and compulsory. When a private sector employee reaches the age of 60 and has served the employer for at least five years, he may opt to retire and shall receive a retirement pay of one-half month for every year of service, except if there is a company practice or a contract granting higher benefits to retiring employees.

The code was amended to accept the decision by the Supreme Court, in the case of Capitol Wireless vs. Confesor holding that retirement pay of one-half month pay is equal to 22.5 days for every year of service. Take note that separation pay is only 15 days for retrenchment and closure of bankrupt companies.

Retirement becomes compulsory at age 65 for most employees, but only 60 for underground miners. Employees of small companies with not more than 10 employees have no retirement benefits under the law. When the law talks of optional retirement, it means that the option belongs to the employee and not to the employer. In the case of Alfredo Laya vs. Philippine Veterans Bank, Justice Lucas Bersamin (now executive secretary) writing for the Supreme Court, held that when an employer compels an employee to retire before reaching the age of 65, that management act is tantamount to illegal dismissal.

The bank was ordered by the Supreme Court to pay millions in backwages to cover his salaries from the day of illegal dismissal to actual payment of both backwages and retirement pay. Ordinarily, illegally-dismissed employees are entitled to reinstatement or to be put back into his former position without loss of seniority rights, with no demotion nor diminution of pay. But if reinstatement is no longer feasible because the employee has reached retirement age, he should be paid separation pay of one month’s pay per year of service, or retirement pay, whichever is higher. Attorney's fees equal to 10% and legal interests of 6% are also to be added.

Being fired means being deprived of separation pay and retirement pay. Being retired means they are entitled to hefty pay and being retrenched or declared redundant means allowed to go with separation pay. When an employee voluntarily resigns, the employer does not have any obligation to pay separation pay. When employees are forced to resign, that is another form of illegal dismissal.