The Retirement Pay Law, or Republic Act No. 7641, was enacted to provide a financial cushion for employees in the private sector upon reaching the twilight of their working lives. While the law is often discussed in the context of permanent or "regular" staff, its protective umbrella extends significantly to non-regular employees, including casual, project, and seasonal workers.

Under Philippine jurisprudence and Department of Labor and Employment (DOLE) guidelines, the "right to retire" is not a privilege reserved solely for those with security of tenure, but a benefit earned through years of service to an employer.

1. The Core Eligibility Criteria

For a non-regular employee to be entitled to retirement pay under RA 7641, three primary conditions must be met:

Absence of a Retirement Plan: The law applies in the absence of a retirement plan or agreement between the employer and the employee. If a plan exists but provides benefits lower than those mandated by law, the employer must pay the difference.
Age Requirement: The employee must have reached the age of sixty (60) years (optional retirement) or sixty-five (65) years (compulsory retirement).
Years of Service: The employee must have served the establishment for at least five (5) years.

2. Applicability to Non-Regular Employees

The Supreme Court and the DOLE Handbook on Workers' Statutory Monetary Benefits explicitly state that RA 7641 covers all employees in the private sector, regardless of their method of compensation or the nature of their employment.

Casual and Project Employees

For casual and project-based employees, the "five-year service" requirement does not necessitate five years of continuous daily work. Instead, it refers to the cumulative length of service.

If a project employee is rehired for various projects over several years, the total duration of these engagements is tallied.
Once the aggregate service reaches five years, the employee is eligible, provided the age requirement is met.

Seasonal Employees

Seasonal workers (common in agriculture or manufacturing) are eligible if they have worked for at least five "seasons." For the purpose of retirement, the law considers a "year of service" to be at least six months of work within a calendar year, unless the nature of the industry dictates a shorter period.

Part-Time Employees

Part-time workers are entitled to retirement pay on a pro-rata basis. Their "one-half month salary" (the basis for the computation) is determined based on their average earnings and the proportion of time worked.

3. The Formula for Retirement Pay

The minimum retirement pay is defined as one-half (1/2) month salary for every year of service. A fraction of at least six (6) months is considered as one whole year.

In the eyes of the law, "one-half month salary" is not merely 50% of the monthly wage. It includes the following components:

15 days salary based on the latest salary rate.
5 days of Service Incentive Leave (SIL), if not yet paid or used.
1/12 of the 13th-month pay.

Consequently, the "one-half month" actually totals approximately 22.5 days of salary per year of service.

4. Notable Exemptions

While the law is broad, certain employers and employees are excluded from the mandate of RA 7641:

Retail, Service, and Agricultural establishments regularly employing not more than ten (10) employees.
Domestic helpers (Kasambahays) and persons in the personal service of another (covered by the Kasambahay Law).
Government employees (covered by the GSIS).

5. Critical Jurisprudential Principles

Liberal Construction: The Supreme Court often rules in favor of the employee in retirement cases. If there is doubt in the interpretation of the law or the employment contract, it is resolved in favor of labor.
Total Years of Service: For non-regular employees, the "years of service" begins from the first day of the first engagement and ends upon retirement, deducting periods when the employee was not under contract, but keeping the "cumulative" total as the benchmark.
Double Recovery: An employee cannot claim retirement pay under RA 7641 and simultaneously claim a full retirement package from a private company plan if the latter is already superior to the law's requirements.

In summary, the status of "non-regular" employment does not strip a worker of their dignity in retirement. As long as the five-year cumulative service and the requisite age are achieved, the employer is legally bound to provide the retirement benefits prescribed by RA 7641.