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PLDT Pension Plan Legal Ruling

PLDT adopted an employee pension plan in 1923 that provided pensions to employees who reached age 60 and served for 20 years. In 1945, PLDT's board discontinued the pension plan, denying pensions to some retired employees who did not meet the conditions. The court ruled that the pension plan was an inducement for employees to continue serving indefinitely and became a binding contract once employees continued working after the plan was introduced. Therefore, PLDT could not unilaterally discontinue the plan and deny pensions to employees who met the conditions prior to the discontinuation.

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272 views1 page

PLDT Pension Plan Legal Ruling

PLDT adopted an employee pension plan in 1923 that provided pensions to employees who reached age 60 and served for 20 years. In 1945, PLDT's board discontinued the pension plan, denying pensions to some retired employees who did not meet the conditions. The court ruled that the pension plan was an inducement for employees to continue serving indefinitely and became a binding contract once employees continued working after the plan was introduced. Therefore, PLDT could not unilaterally discontinue the plan and deny pensions to employees who met the conditions prior to the discontinuation.

Uploaded by

Michelle T
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PLDT v Jeturian

Facts:
PLDT adopted in 1923 a Plan for Employees’ Pension.

Condition of pension: If they reach the age of 60 and served for 20years.

In 1945 the BOD adopted a resolution discontinuing the pension plan– some retirees did not
get the pension because they did not satisfythe conditions. PLDT argued that employees cannot
compel them to continueprogram when it was based on expectancy.

Issue:
WON the pre-war employees are entitled to the pension.

Held: Yes. But with the exception of those who died or left before the outbreak of the war. The
pension plan was not a gratuity but an inducement foremployees to continue indefinitely in
service. The plan ripened into abinding contract upon its implied acceptance of the employees.
Acceptance is inferred from their entering the employ of the company andstaying after the plan
was made known. PLDT argues that it can only beheld liable under the conditions expressly set
in the pension plan. But theCourt held that the Company that violated the contract with its
employees,by discontinuing the plan without their consent, is not in the position toinsist upon
the terms of the very contract they have breached

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