Can Company Lower Age of Retirement of Employees?

Yes, provided it is found in the existing employment agreement or contract between the employer and employee.

The retirement age is primarily determined by the existing agreement or employment contract.  Absent such an agreement, the retirement age under Article 287 of the Labor Code will apply.  Article 287 mentions the age of at least 60 years but not over 65 years old as the retirement age of employees when there is no retirement plan or contract provision on the matter.

In fact, in a recent case decided by the Supreme Court, it ruled that:

Retirement plans allowing employers to retire employees who have not yet reached the compulsory retirement age of 65 years are not per se repugnant to the constitutional guaranty of security of tenure. By its express language, the Labor Code permits employers and employees to fix the applicable retirement age at 60 years or below, provided that the employees’ retirement benefits under any CBA and other agreements shall not be less than those provided by law.

Case of: Amelia R. Obusan vs. Philippine National Bank, G.R. No. 181178, July 26, 2010.

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  2. Are Dismissed Employees Entitled to Separation Pay?
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