Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=84199:59633&catid=1594&Itemid=566
Timestamp: 2019-04-24 23:52:27+00:00

Document:
G.R. No. 176908, March 25, 2015 - 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, Petitioners, v. PEPSI-COLA PRODUCTS, PHILIPPINES, INC., Respondents.
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, Petitioners, v. PEPSI-COLA PRODUCTS, PHILIPPINES, INC., Respondents.
This is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Court of Appeals (CA) Decision1 dated July 31, 2006, and its Resolution2 dated February 21, 2007 in CA-G.R. S.P. No. 81712. The assailed decision denied the petition for certiorari filed by petitioners 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, seeking a partial nullification of the Decision3 dated September 11, 2002 of the National Labor Relations Commission (NLRC) in NLRC Certified Case No. V-000001-2000.4 The NLRC dismissed petitioners' complaints for illegal dismissal and declared the retrenchment program of respondent Pepsi-Cola Products Philippines, Inc. as a valid exercise of management prerogative.
Respondent Pepsi-Cola Products Philippines, Inc. (PCPPI) is a domestic corporation engaged in the manufacturing, bottling and distribution of soft drink products, which operates plants all over the country, one of which is the Tanauan Plant in Tanauan, Leyte.
In 1999, PCPPI’s Tanauan Plant allegedly incurred business losses in the total amount of Twenty-Nine Million One Hundred Sixty-Seven Thousand and Three Hundred Ninety (P29,167,390.00) Pesos. To avert further losses, PCPPI implemented a company-wide retrenchment program denominated as Corporate-wide Rightsizing Program (CRP) from 1999 to 2000, and retrenched forty-seven (47) employees of its Tanauan Plant on July 31, 1999.
In their Consolidated Position Paper,6 petitioners alleged that PCPPI was not facing serious financial losses because after their termination, it regularized four (4) employees and hired replacements for the forty-seven (47) previously dismissed employees. They also alleged that PCPPI's CRP was just designed to prevent their union, Leyte Pepsi-Cola Employees Union-Associated Labor Union (LEPCEU-ALU), from becoming the certified bargaining agent of PCPPI's rank-and-file employees.
In its Position Paper,7 PCPPI countered that petitioners were dismissed pursuant to its CRP to save the company from total bankruptcy and collapse; thus, it sent notices of termination to them and to the Department of Labor and Employment. In support of its argument that its CRP is a valid exercise of management prerogative, PCPPI submitted audited financial statements showing that it suffered financial reverses in 1998 in the total amount of SEVEN HUNDRED MILLION (P700,000,000.00) PESOS, TWENTY- SEVEN MILLION (P27,000,000.00) PESOS of which was allegedly incurred in the Tanauan Plant in 1999.
WHEREFORE, premises duly considered, judgment is hereby rendered finding the dismissal of the ten (10) complainants herein illegal. Consequently, respondent Pepsi-Cola Products Phils., Inc. (PCPPI) is ordered to reinstate them to their former positions without loss of seniority rights and to pay them full backwages and other benefits reckoned from February 16, 2000 until they are actually reinstated, which as of date amounted to NINE HUNDRED FORTY-SEVEN THOUSAND FIVE HUNDRED FIFTY-EIGHT PESOS AND THIRTY-TWO CENTAVOS (P947,558.32) inclusive of the 10% attorney's fees.
Other claims are dismissed for lack of merit.
PCPPI appealed from the Decision of the Labor Arbiter to the Fourth Division of the NLRC of Tacloban City. Meanwhile, the NLRC consolidated all other cases involving PCPPI and its dismissed employees.
(6) DECLARING, in NLRC Injunction Case No. V-000003-2001, Pepsi-Cola's Petition for Injunction and Application for immediate issuance of Temporary Restraining Order, moot and academic, and DISMISSING the same; Further, DECLARING moot and academic all incidents to the case of Kempis, et al. vs. PCPPI (NLRC Case No. V-000071-2000 relating to the execution or implementation of the nullified Decision dated December 15, 2000, and likewise, nullifying them.
All other claims and petitions are dismissed for want of merit.
WHEREFORE, premises considered, the petition filed in this case is hereby DENIED and the decision dated September 11, 2002, and the resolution dated September 15, 2003, promulgated by the National Labor Relations Commission, Fourth Division in NLRC Certified Case No. V-000001-2000 (NCR CC. No. 000171-99) are hereby AFFIRMED.
On February 21, 2007, the CA 18th Division issued a Resolution14 denying petitioners' motion for reconsideration.
Declaring that petitioners were illegally terminated. Their reinstatement to their former positions or its equivalent is hereby ordered, without loss of seniority rights and privileges and PEPSI-COLA is also ordered the payment of their backwages from the time of their illegal dismissal up to the date of their actual reinstatement. If reinstatement is not feasible because of strained relations or abolition of their respective positions, the payment of separation pay equivalent to 1 month salary for every year of service, a fraction of at least 6 months shall be considered a whole year. The monetary considerations received by some of the employees shall be deducted from the total amount they ought to receive from the company.
Attorney's fees equivalent to 10% of the amount which petitioners may recover pursuant to Article 111 of the Labor Code is also awarded.
The three issues raised by petitioners boil down to the legality of their dismissal pursuant to PCPPI's retrenchment program.
WHEREFORE, the petition is GRANTED. The assailed March 31, 2006 Decision and September 18, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 82354 are hereby REVERSED and SET ASIDE. Accordingly, the September 11, 2002 Decision of the National Labor Relations Commission is hereby REINSTATED insofar as (1) it dismissed subsumed cases NLRC-RAB VIII Case Nos. 9-0432-99 to 9-0458-99 and; (2) ordered the reinstatement of respondent Saunder Santiago Remandaban III without loss of seniority rights but without backwages in NLRC-RAB VIII Case No. 9-0459-99.
(5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.
It is axiomatic that absent any clear showing of abuse, arbitrariness or capriciousness, the findings of fact by the NLRC, especially when affirmed by the CA – as in this case – are binding and conclusive upon the Court. Thus, given that there lies no discretionary abuse with respect to the foregoing findings, the Court sees no reason to deviate from the same.
(2) Records also show that the respondents had already been paid the requisite separation pay as evidenced by the September 1999 quitclaims signed by them. Effectively, the said quitclaims serve inter alia the purpose of acknowledging receipt of their respective separation pays. Appositely, respondents never questioned that separation pay arising from their retrenchment was indeed paid by Pepsi to them. As such, the foregoing fact is now deemed conclusive.
(3) Contrary to the CA’s observation that Pepsi had singled out members of the LEPCEU-ALU in implementing its retrenchment program, records reveal that the members of the company union (i.e., LEPCEU-UOEF#49) were likewise among those retrenched.
Also, as aptly pointed out by the NLRC, Pepsi’s Corporate Rightsizing Program was a company-wide program which had already been implemented in its other plants in Bacolod, Iloilo, Davao, General Santos and Zamboanga. Consequently, given the general applicability of its retrenchment program, Pepsi could not have intended to decimate LEPCEU-ALU’s membership, much less impinge upon its right to self-organization, when it employed the same.
In fact, it is apropos to mention that Pepsi and its employees entered into a collective bargaining agreement on October 17, 1995 which contained a union shop clause requiring membership in LEPCEU-UOEF#49, the incumbent bargaining union, as a condition for continued employment. In this regard, Pepsi had all the reasons to assume that all employees in the bargaining unit were all members of LEPCEU-UOEF#49; otherwise, the latter would have already lost their employment. In other words, Pepsi need not implement a retrenchment program just to get rid of LEPCEU-ALU members considering that the union shop clause already gave it ample justification to terminate them. It is then hardly believable that union affiliations were even considered by Pepsi in the selection of the employees to be retrenched.
Lastly, the allegation that the retrenchment program was a mere subterfuge to dismiss the respondents considering Pepsi’s subsequent hiring of replacement workers cannot be given credence for lack of sufficient evidence to support the same.
Verily, the foregoing incidents clearly negate the claim that the retrenchment was undertaken by Pepsi in bad faith.
(5) On the final requirement of fair and reasonable criteria for determining who would or would not be dismissed, records indicate that Pepsi did proceed to implement its rightsizing program based on fair and reasonable criteria recommended by the company supervisors.
In view of the Court's ruling in Pepsi-Cola Products Philippines, Inc. v. Molon,20 PCPPI contends that the petition for review on certiorari should be denied and the CA decision should be affirmed under the principle of stare decisis.
The Court sustains PCPPI's contention.
The principle of stare decisis et non quieta movere (to adhere to precedents and not to unsettle things which are established) is well entrenched in Article 8 of the New Civil Code which states that judicial decisions applying or interpreting the laws or the Constitution shall form part of the legal system of the Philippines.
The Court rules in the affirmative.
However, abandonment of the ruling in Pepsi-Cola Products Philippines, Inc. v. Molon31 on the same issue of the validity of PCPPI's retrenchment program must be based only on strong and compelling reasons. After a careful review of the records, the Court finds no such reasons were shown to obtain in this case.
Even upon evaluation of petitioners' arguments on its supposed merits, the Court still finds no reason to disturb the CA ruling that affirmed the NLRC. In their petition for review on certiorari, petitioners argue that PCPPI failed to prove that it was suffering from financial losses, and that its financial statements were perplexing. In support of their argument, they cite the observation of the Labor Arbiter that the alleged losses amounting to P1.2 billion in PCPPI's audited financial statements included those of two subsidiaries that were not yet in commercial operation, interest payments on short-term and long-term debts, and the adverse effect of the peso devaluation.32 They also cite the Dissenting Opinion of Commissioner Edgardo M. Enerlan that the Majority decision ignored the previous financial statement and relied on the new document presented by PCPPI during the appeal stage, and that the accountant admitted that the financial statement as of and for the year ended June 30, 2000 and 1999 are still incomplete.33 They also insist that PCPPI failed to explain its acts of regularizing four (4) employees and hiring sixty-three (63) replacements and additional workers.
The accompanying statement of assets, liabilities and home office account of Tanauan Operations of Pepsi-Cola Products Philippines, Inc. ('company') as of June 30, 1999 and the related statement of income for the year then ended, are integral parts of the financial statements of the company taken as a whole. In 1999, the Company's Tanauan Operations incurred a net loss of P29,167,390 as reported in such plant's financial statement (ANNEX I) which forms part of the audited consolidated financial statements as of and for the year ended June 30, 1999, to which we have rendered our opinion dated October 28, 1999, attached hereto as ANNEX II.
On the other hand, the accompanying financial statements as of and for the year ended June 30, 2000 of the company's Tanauan Plant operations, which reported a net loss P22,327,175 (ANNEX III) are included in the financial statements of the company taken as a whole as also hereto attached (as ANNEX IV). The financial statements were accordingly derived from the Company's accounting records, with certain adjustments and are subject to any additional adjustments as may be disclosed upon the completion of an audit of the financial statements of the company taken as a whole, which is currently in progress. Since the audit of the company's financial statements as of and for the year ended June 2000 has not yet been completed, we are unable to express and we do not express our opinion on the statement of assets, liabilities and home office account of Tanauan operations of the company as of June 30, 2000 and the related statement if income for the year then ended.
The statements of assets, liabilities and home office account and the related statements of income of the company's Tanauan Operations are not intended to be a complete presentation of the company's financial statement as of end for the year ended June 30, 2000 and 1999.
The letter of SGV & Co. was accompanied by a consolidat[ed] statement of Income and Deficit (supplementary schedule) showing a net loss of P29,167,000. in the company's Tanauan Operations as of June 30, 1999, and P22,328,000 as of June 2000. This illustrates that the income statements and the balance sheets pertaining to the Tanauan Plant Operations as prepared by Rodante F. Ramos were audited by SGV & Co. This situation would have been avoided had the persistent requests for ample opportunity to present evidence made by the respondent were not persistently denied by the Executive Labor Arbiter.
There is likewise no merit in Commissioner Enerlan's dissenting opinion that the majority decision ignored the previous financial statement and relied on the new document presented by PCPPI during the appeal stage. Such act of the majority is sanctioned by no less than Article 221 of the Labor Code, as amended, and Section 10, Rule VII of the 2011 NLRC Rules of Procedure which provide that in any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of the Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process.
Let Us squarely tackle this issue of replacements in the cases of the complainants in this case. We bear in mind that replacements refer to the regular workers subjected to retrenchment, occupying regular positions in the company structure. Artemio Kempis, a filer mechanic with a salary of P9,366.00 was replaced by Rogelio Castil. Rogelio Castil was hired through an agency named Helpmate Janitorial Services. Castil’s employer is Helpmate Janitorial Services. How can a janitorial service employee perform function of a filer mechanic? How much does Pepsi Cola pay Helpmate Janitorial Services for the contract of service? These questions immediately come to mind. Being not a regular employee of Pepsi Cola, he is not a replacement of Kempis. The idea of rightsizing is to reduce the number of workers and related functions and trim down, streamline, or simplify the structure of the organization to the level of utmost efficiency and productivity in order to realize profit and survive. After the CRP shall have been implemented, the desired size of the corporation is attained. Engaging the services of service contractors does not expand the size of the corporate structure. In this sense, the retrenched workers were not replaced.
WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated July 31, 2006, and its Resolution dated February 21, 2007 in CA-G.R. SP No. 81712, are AFFIRMED.
Velasco, Jr., (Chairperson), Villarama, Jr., Reyes, and Jardeleza, JJ., concur.
1 Penned by Associate Justice Romeo F. Barza, with Associate Justices Arsenio J. Magpale and Vicente L. Yap, concurring, rollo, pp. 33-41.
2 Penned by Associate Justice Romeo F. Barza, with Associate Justices Arsenio J. Magpale and Agustin S. Dizon, concurring, id. at 43-44.
3 Penned by Presiding Commissioner Irenea E. Ceniza, with Commissioner Oscar S. Uy, concurring and Commissioner Edgardo M. Enerlan, dissenting, id. at 186-229.
4 NLRC Certified Case No. V-000001-2000 (NCR CC No. 000171-99), NCMB-RBVIII-NS-07-10-99 and NCMB-RBVIII-NS-07-14-99. Subsumed Cases: (1) RAB Case No. VIII-7-0301-99 (For: Illegal Strike Under Article 217 of the Labor Code); (2) NLRC Injunction Case No. V-000013-99; (3) RAB Case No. VIII-9-0432-99 to 9-0560-99; and (4) RAB Case No. VIII-9-0459-99; Consolidated Cases:(1) RAB Case No. VIII-03-0246-2000 to 03-0259-2000; and (2) NLRC Injunction Case No. V-000003-2001.
5 Anecito Molon, Augusto Tecson, Jonathan Villones, Bienvenido Lagartos, Jaime Cadion, Eduardo Troyo, Rodulfo Mendigo, Aurelio Moralita, Estanislao Martinez, Reynaldo Vasquez, Orlando Guantero, Eutropio Mercado, Francisco Gabon, Rolando Arandia, Reynaldo Talbo, Antonio Devaras, Honorato Abarca, Salvador Maquilan, Reynaldo Anduyan, Vicente Cinco, Felix Rapiz, Roberto Cataros, Romeo Dorotan, Rodolfo Arrope, Danilo Casilan, Alfredo B. Estrera and Saunder Santiago Remandaban III.
11Id. at 219-220. (Emphasis added).
18 G.R. No. 175002, February 18, 2013, 691 SCRA 113.
21 535 Phil. 540 (2006).
23 G.R. No. 191475. December 11, 2013, 712 SCRA 489.
27Social Security Commission v. Rizal Poultry and Livestock Association, Inc., G.R. No. 167050, June 1, 2011.
30Supra note 21, at 504, citing Abaria v. National Labor Relations Commission, G.R. No. 154113, December 7, 2011, 661 SCRA 686, 713.
34Manila Polo Club Employees' Union (MPCEU) FUR-TUCP v. Manila Polo Club, Inc. G.R. No. 172846. July 24, 2013.
37San Miguel Corporation v. National Labor Relations Commission, G.R. Nos. 146121-22, April 16, 2008; Community Rural Bank of San Isidro (N.E.), Inc. v. Paez, G.R. No. 158707, November 27, 2006.
(k) When the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.
43 Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 176985, April 1, 2013.

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