As a rule, the compulsory age of retirement is 65 while optional retirement starts at 60. Employers, however, are allowed to enter into agreements for early retirement below these age limits but they must be able to show, if questioned later, that their retirement plans or agreements were voluntarily accepted by the employees.
Without proof of voluntary consent, a retirement made on the basis of this early retirement plan may be considered invalid as a “deprivation of property without due process of law.”
This was the Supreme Court’s decision in a case where a company retired its former clerk-typist at the age of 47 on the basis of a non-contributory retirement plan which gave the company the option to retire employees who have rendered at least 20 years of service.
After finding that the retirement plan was not embodied in a CBA or in any employment contract or agreement freely consented by the employee, the Supreme Court ruled that the early retirement was invalid and constituted illegal dismissal. (Cercado vs. UNIPROM, Inc. GR No. 188154, Oct. 13, 2010)