UNITED DOCTORS MEDICAL CENTER vs. CESARIO BERNADAS

FACTS: Under the optional retirement policy, an employee who has rendered at least 20 years of service is entitled to optionally retire optional retirement pay is equal to a retiree's salary for 11 days per year of service died from a "freak accident"

ISSUE: Whether or not Leonila Bernadas as her husband's representative, may claim his optional retirement benefits.

However, to resolve this issue, this Court must first resolve the issue of whether or not Cesario Bernadas is entitled to receive his optional retirement benefits despite his untimely death.

HELD: An employee who has already qualified for optional retirement but dies before the option to retire could be exercised is entitled to his or her optional retirement benefits, which may be claimed by the qualified employee's beneficiaries on his or her behalf.

At the outset, retirement benefits must be differentiated from insurance proceeds. One is in the concept of an indemnity while the other is conditioned on age and length of service. "A 'contract of insurance' is an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event

Thus, the grant of insurance proceeds will not necessarily bar the grant of retirement benefits. These are two (2) separate and distinct benefits that an employer may provide to its employees.

Three (3) types of retirement plans.

The first is compulsory and contributory.

The second and third types of retirement plans are voluntary.

The second type of retirement plan is by agreement between the employer and the employee, usually embodied in the CBA between them. "The third type is one that is voluntarily given by the employer, expressly as in an announced company policy or impliedly as in a failure to contest the employee's claim for retirement benefits.

The issue in this case concerns the second type of retirement plan

It is settled that doubts must be resolved in favor of labor.

However, retirement encompasses even the concept of death. This Court has considered death as a form of disability retirement as "there is no more permanent or total physical disability than death." Compulsory retirement and death both involve events beyond the employee's control.