G.R. No. 100686 - Pepsi Cola Distributors of the Philippines, Inc. vs. National Labor Relations Commission

Tertuliano P. Yute began his tenure with Pepsi Cola Bottling Company of the Philippines (PCBCP) in Butuan City as a contractual maintenance electrician around 1979.
In 1981, following the takeover of PCBCP’s manufacturing operations by Pepsi Cola Distributors of the Philippines, Inc. (PCD), Yute was absorbed as a regular employee.

On December 15, 1988, petitioner PCD terminated Yute’s employment on the grounds of alleged abandonment of work and/or absence without leave.
Yute initiated legal proceedings on January 3, 1989 by filing a complaint before the Sub-Regional Arbitration Branch No. X of the NLRC in Butuan City, seeking relief for illegal dismissal, along with claims for moral and exemplary damages and attorney’s fees.

On May 22, 1989, Labor Arbiter Amado M. Solamo rendered a decision declaring Yute’s dismissal illegal.
The Labor Arbiter ordered PCD to reinstate Yute without loss of seniority rights and to pay full backwages from the time of dismissal until reinstatement, in addition to 10% of the monetary award as attorney’s fees; other claims such as moral damages were dismissed.

PCD appealed the Labor Arbiter’s decision to the NLRC (Fifth Division), Cagayan de Oro City.
Despite the appeal, PCD reinstated Yute on May 22, 1989; however, on July 25, 1989, PCD ceased salary payments, attributing the stoppage to the sale of its business interest to Pepsi Cola Products Philippines, Inc. (PCPPI).
Various motions were filed thereafter, including a writ of execution by Yute and other affected employees, as well as a motion by PCPPI contesting its party status and liability in the case.

After a motion for reconsideration by PCD concerning the timeliness and merits of its appeal, the NLRC issued a resolution on April 24, 1991.
The resolution modified the Labor Arbiter’s decision by ordering both PCD and PCPPI to reinstate Yute without loss of seniority, or, if reinstatement was not feasible, to pay separation pay based on one month’s salary for each year of service, along with full backwages from July 25, 1989 until his actual reinstatement and 10% of the monetary award as attorney’s fees.
This NLRC resolution became final and executory on May 20, 1991, and the entry of judgment was recorded on June 10, 1991.

Petitioner PCD raised the contention that the NLRC’s resolution was issued with grave abuse of discretion, arguing that its previous counsel’s failure to inform them had caused due process violations, particularly as no hearing was conducted regarding the second dismissal.
PCD further contended that PCPPI, being a separate and distinct corporate entity, should not be held liable for acts committed by its predecessor.
On January 14, 1992, following the lapse of procedural deadlines, PCD sought relief through a writ of preliminary injunction and/or temporary restraining order, prompting this Court to issue a temporary restraining order on January 20, 1992.
Later, on March 14, 1992, PCD submitted a Supersedeas Bond in the amount of P73,926.00 to secure its appeal.

Whether PCD’s act of dismissing Yute a second time—by removing his name from the payroll after reinstatement—is a justifiable and separate issue from the first dismissal.

Whether Yute was afforded the necessary due process in both his initial termination on December 15, 1988 and the subsequent dismissal on July 25, 1989.
Whether the absence of a formal hearing or opportunity for PCD to present evidence regarding the second dismissal constituted a violation of due process.

Whether Pepsi Cola Products Philippines, Inc. (PCPPI) can be held liable for the acts of its predecessor, PCD, particularly in relation to the illegal dismissal and the subsequent reinstatement order.
Whether the separate legal personality of PCPPI exempts it from liability under the circumstances.

Whether the ordered remedy of reinstatement with backwages (or, alternatively, separation pay) is appropriate given the supervening facts and the strained employer-employee relationship.
Whether the monetary award for attorney’s fees as stipulated (10% of the monetary award) is justified.