Case Digest (G.R. No. 176908)
Facts:
The case involves 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") as the petitioners against Pepsi-Cola Products Philippines, Inc. (referred to as "respondent"). The events leading to this case began in 1999 when the respondent, a domestic corporation engaged in the manufacturing, bottling, and distribution of soft drink products, reported significant financial losses amounting to P29,167,390.00 at its Tanauan Plant in Leyte. To mitigate these losses, the respondent implemented a Corporate-wide Rightsizing Program (CRP) that resulted in the retrenchment of 47 employees on July 31, 1999. Following this, on January 15, 2000, the petitioners received termination letters effective February 15, 2000, also due to the CRP.
In response, the petitioners filed complaints for illegal...
Case Digest (G.R. No. 176908)
Facts:
Background of the Case
This is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Court of Appeals (CA) Decision dated July 31, 2006, and its Resolution dated February 21, 2007, in CA-G.R. S.P. No. 81712. The CA affirmed the National Labor Relations Commission (NLRC) Decision dated September 11, 2002, which dismissed the complaints for illegal dismissal filed by petitioners against respondent Pepsi-Cola Products Philippines, Inc. (PCPPI). The NLRC declared PCPPI's retrenchment program as a valid exercise of management prerogative.
Petitioners and Respondent
Petitioners are permanent and regular employees of PCPPI's Tanauan Plant in Leyte. Respondent PCPPI is a domestic corporation engaged in the manufacturing, bottling, and distribution of soft drink products.
Implementation of the Retrenchment Program
In 1999, PCPPI’s Tanauan Plant allegedly incurred business losses amounting to ₱29,167,390.00. To mitigate further losses, PCPPI implemented a company-wide retrenchment program, the Corporate-wide Rightsizing Program (CRP), from 1999 to 2000. On July 31, 1999, PCPPI retrenched 47 employees from the Tanauan Plant. On January 15, 2000, petitioners received termination letters, effective February 15, 2000, as part of the CRP.
Complaints Filed by Petitioners
Petitioners filed complaints for illegal dismissal before the NLRC Regional Arbitration Branch No. VIII in Tacloban City. They alleged that PCPPI was not facing serious financial losses, citing the regularization of four employees and the hiring of replacements for previously dismissed employees. They also claimed that the CRP was designed to prevent their union, Leyte Pepsi-Cola Employees Union-Associated Labor Union (LEPCEU-ALU), from becoming the certified bargaining agent.
PCPPI’s Defense
PCPPI countered that the CRP was necessary to save the company from bankruptcy. It submitted audited financial statements showing a ₱700,000,000.00 loss in 1998, including ₱27,000,000.00 incurred at the Tanauan Plant in 1999. PCPPI argued that it complied with the legal requirements for a valid retrenchment, including serving notices of termination to the Department of Labor and Employment (DOLE) and providing separation pay.
Labor Arbiter and NLRC Decisions
The Labor Arbiter found the dismissal illegal and ordered the reinstatement of petitioners with backwages. On appeal, the NLRC reversed the decision, declaring the retrenchment program valid and dismissing the complaints for illegal dismissal. The CA affirmed the NLRC’s decision.
Related Cases
In a related case, Pepsi-Cola Products Philippines, Inc. v. Molon, the Supreme Court upheld the validity of PCPPI’s retrenchment program, ruling that it was a valid exercise of management prerogative and that PCPPI had complied with the legal requirements for retrenchment.
Issue:
The main issue is whether the dismissal of petitioners pursuant to PCPPI’s retrenchment program was legal. Specifically:
- Whether the CA erred in affirming the NLRC’s decision despite PCPPI’s alleged failure to comply with the requisites of a valid retrenchment.
- Whether PCPPI’s retrenchment program was a subterfuge to prevent petitioners’ union from becoming the certified bargaining agent.
- Whether the CA erred in ignoring an earlier decision of the Twentieth Division of the CA on the same factual and legal issues.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
The Supreme Court upheld the legality of PCPPI’s retrenchment program, ruling that it was a valid exercise of management prerogative and that PCPPI had complied with the legal requirements for retrenchment. The Court also rejected claims of union-busting and applied the principle of stare decisis, affirming the CA’s decision.