Facts:

The case at hand involves a petition by Purisimo M. Cabaobas, Exuperio C. Molina, Gilberto V. Opinion, Vicente R. Lauron, Ramon M. De Paz, Jr., Zacarias E. Carbo, Julito G. Abarracoso, Domingo B. Gloria, and Francisco P. Cumpio (collectively referred to as petitioners) against Pepsi-Cola Products Philippines, Inc. (PCPPI) as the respondent. The Supreme Court rendered a resolution on November 11, 2015, which addressed the petitioners' Motion for Reconsideration of a previous decision dated March 25, 2015. The issue centered on the validity of the retrenchment program employed by PCPPI, which resulted in the termination of the petitioners’ employment. The petitioners argued that PCPPI failed to comply with necessary legal requirements for a valid retrenchment, notably the third, fourth, and fifth requisites, which involve financial losses, good faith of the employer, and fair criteria in selection for termination. The case had previously been heard by both the National Labor R

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Facts:

Background of the Case

• The case involves petitioners who filed a motion for reconsideration and a motion to refer the case to the Court En Banc regarding their termination under Pepsi-Cola Products Philippines, Inc.’s (PCPI) retrenchment program.
• The central dispute is the validity of PCPI’s retrenchment program and the consequent legality of the employees’ termination.
• Petitioners contend that the factual circumstances in the present case differ from those in the earlier decision in Pepsi-Cola Products Philippines, Inc. v. Molon.

Factual Circumstances and Allegations

• The petitioners argue that unlike the Molon case—where both the Court of Appeals (CA) and the National Labor Relations Commission (NLRC) determined that PCPI complied with retrenchment requisites—they were terminated under conditions where:
• Four (4) employees were regularized a few days after their notices of termination were served.
• Replacements for the 47 dismissed employees were hired, which they argue indicates non-compliance with the valid retrenchment program requirements.
• Petitioners claim that PCPI failed to prove its compliance with the third, fourth, and fifth requisites of a valid retrenchment program:
• The requirement on the payment of separation pay.
• The employer’s observance of its prerogative in good faith for the advancement of its interest rather than to undermine employees’ security of tenure.
• The use of fair and reasonable criteria in ascertaining who would be dismissed versus who would be retained.

Procedural History and Prior Determinations

• In the earlier case of Pepsi-Cola Products Philippines, Inc. v. Molon:
• Both the CA and the NLRC had determined that PCPI complied with the requisite conditions for a valid retrenchment, including proof of substantial loss, due notice to both the Department of Labor and Employment (DOLE) and the workers, and the payment of separation pay as evidenced by documented quitclaims.
• The factual setting in Molon involved the first batch of employees retrenched on July 31, 1999.
• In contrast, petitioners in the present case belong to the second batch, retrenched on February 15, 2000, raising questions about whether the same retrenchment program can be uniformly applied.

Additional Context on Replacement and Outsourcing

• The petitioners raised issues regarding the hiring of replacements and additional workers through service contractors or agencies:
• Specific instances include allegations of regular employees being replaced by workers from agencies such as Helpmate Janitorial Services, Double "N" General Services, and Nestor Ortiga General Services.
• The Court clarified that the so-called “replacements” were not deemed actual substitutes for the regular employees since contractors’ employees are not considered part of the regular workforce.
• The underlying rationale of the retrenchment program (rightsizing to achieve operational efficiency and productivity) was emphasized, illustrating that engaging contractors did not expand the size of PCPI’s regular workforce.

Arguments Presented in the Motion for Reconsideration

• Petitioners stressed that the circumstances of their termination differed from those in Molon, thus contesting the applicability of the stare decisis principle.
• They argued that PCPI’s failure to address issues on the regularization of four employees and the hiring of replacements indicated non-compliance with the valid retrenchment program requisites.
• The petitioners also contended that PCPI had not met the legal requirements concerning the employer’s prerogative and fair criteria in selecting which employees to dismiss.

Issue:

Whether or not the factual differences, namely the regularization of four employees and the hiring of replacements, create a deviation from the retrenchment program validated in Molon.

• Determining if these actions imply non-compliance with the legal requisites for a valid retrenchment program.

The applicability of the principle of stare decisis in this case when the factual circumstances appear to diverge from the prior Molon case.

• Considering whether the issues raised by petitioners are sufficiently distinct to merit a reconsideration or referral to the Court En Banc.

Whether PCPI complied with all the requisites of a valid retrenchment program, including:

• The notification to affected employees and the Department of Labor and Employment.
• The payment or guarantee of payment of separation benefits as required by law.
• Exercising its prerogative in good faith and using fair and reasonable criteria in deciding who should be retrenched.

• The propriety of raising issues for the first time on appeal, specifically regarding the alleged failure of PCPI to comply with the fourth and fifth requisites of a valid retrenchment program.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)