757 PHIL. 96
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.
WHEREFORE, judgment is hereby rendered:
(1) DECLARING, in NLRC Certified Case No. V-000001-2000 (NLRC NCR CC No. 000171-99), Pepsi-Cola Products Philippines, Incorporated, not guilty of union busting/unfair labor practice, and dismissing LEPCEU-ALU's Notice of Strike dated July 19, 1999;
(2) DECLARING, in the subsumed NLRC Case No. 7-0301-99, LEPCEU-ALU's strike on July 23, 1999 ILLEGAL for having been conducted without legal authority and without observing the 7-day strike vote notice requirement as provided in Section 2 and Section 7 of Rule XXII, Book V of the Omnibus Rules Implementing Art. 263 (c) and (f) of the Labor Code, but DENYING PEPSI-COLA's supplemental prayer to declare loss of employment status of union leaders and some of its members as identification of officers and members, and the knowing participation of union officers in the illegal strike, or that of the officers and members in illegal acts during the strike, have not been established;
(3) DISMISSING in the subsumed NLRC Injunction Case No. V-000013-99, LEPCEU-ALU's Petition for a Writ of Preliminary Injunction with Prayer for the Issuance of Temporary Restraining Order, because Pepsi Cola had already implemented its Corporate-wide CRP in the exercise of management prerogative. Moreover, LEPCEU-ALU had adequate remedy in law;
(4) DISMISSING, in subsumed case NLRC RAB VIII Cases Nos. 9-0432-99 to 9-0459-99 (Molon, et al. vs. PCPPI) all the complaints for Illegal Dismissal except that of Saunder Santiago T. Remandaban III, for having been validly and finally settled by the parties, and ORDERING PEPSI COLA Products Phils., Inc. to reinstate Saunder Santiago T. Remandaban III to his former position without loss of seniority rights but without backwages;
(5) Nullifying, in NLRC Consolidated Case No. V-000071-01 (RAB VIII cases nos. 3-0246-2000 to 3-0258-2000; Kempis, et al. vs. PCPPI), the Executive Labor Arbiter's Decisions dated December 15, 2000, and DISMISSING the complaints for illegal dismissal, and in its stead DECLARING the retrenchment program of Pepsi Cola Products Phils., Inc. pursuant to its CRP, a valid exercise of management prerogatives; Further, ORDERING Pepsi Cola Products Philippines, Inc. to pay the following complainants their package separation benefits of 1 & ½ months salary for every year of service, plus commutation of all vacation and sick leave credits in the respective amounts hereunder indicated opposite their names:(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.
1. ARTEMIO S. KEMPIS – P167,486.80 2. EXUPERIO C. MOLINA – 168,196.38 3. GILBERTO V. OPINION – 31,799.74 4. PURISIMO M. CABAOBAS – 165,466.09 5. VICENTE P. LAURON – 167,325.86 6. RAMON M. DE PAZ, JR. - 109,652.98 7. ZACARIAS E. CARBO – 160,376.47 8. JULITO C. ABARRACOSO – 161,366.44 9. DOMINGO B. GLORIA – 26,119.26 10. FRANCISCO P. CUMPIO – 165,204.41
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.
IN LIGHT OF ALL THE FOREGOING, the instant petition is GRANTED. The decision of the NLRC dated September 11, 2002 is hereby REVERSED and SET ASIDE and judgment is rendered as follows:Declaring the strike conducted on July 23, 1999 as legal, it falling under the exception of Article 263, Labor Code;Attorney's fees equivalent to 10% of the amount which petitioners may recover pursuant to Article 111 of the Labor Code is also awarded.
Declaring the manner by which the corporate rightsizing program or retrenchment was effected by PEPSI-COLA to be contrary to the prescribed rules and procedure;
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.
No pronouncement as to costs.
THE HONORABLE COURT OF APPEALS, SPECIAL FORMER EIGHTEENTH DIVISION, COMMITTED AN ERROR OF LAW WHEN IT IGNORED THE EARLIER DECISION OF THE TWENTIETH DIVISION ON THE SAME FACTUAL AND LEGAL ISSUES.
THE HONORABLE COURT OF APPEALS, SPECIAL FORMER EIGHTEENTH DIVISION, COMMITTED AN ERROR OF LAW WHEN IT REFUSED TO REVERSE THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION, FOURTH DIVISION, DESPITE PRIVATE RESPONDENT’S FAILURE TO COMPLY WITH THE REQUISITES OF A VALID RETRENCHMENT.
THE HONORABLE COURT OF APPEALS, SPECIAL FORMER EIGHTEENTH DIVISION, COMMITTED AN ERROR OF LAW WHEN IT AFFIRMED THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION, FOURTH DIVISION, DECLARING AS LEGAL THE ILLEGAL DISMISSAL OF PETITIONERS AND DISMISSING THEIR COMPLAINTS FOR ILLEGAL DISMISSAL.
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.
Essentially, the prerogative of an employer to retrench its employees must be exercised only as a last resort, considering that it will lead to the loss of the employees' livelihood. It is justified only when all other less drastic means have been tried and found insufficient or inadequate. Corollary thereto, the employer must prove the requirements for a valid retrenchment by clear and convincing evidence; otherwise, said ground for termination would be susceptible to abuse by scheming employers who might be merely feigning losses or reverses in their business ventures in order to ease out employees. These requirements are:(1) That retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer;In due regard of these requisites, the Court observes that Pepsi had validly implemented its retrenchment program:
(2) That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least one-half (½) month pay for every year of service, whichever is higher;
(4) That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure; and
(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.(1) Records disclose that both the CA and the NLRC had already determined that Pepsi complied with the requirements of substantial loss and due notice to both the DOLE and the workers to be retrenched. The pertinent portion of the CA’s March 31, 2006 Decision reads: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 the present action, the NLRC held that PEPSI-COLA’s financial statements are substantial evidence which carry great credibility and reliability viewed in light of the financial crisis that hit the country which saw multinational corporations closing shops and walking away, or adapting [sic] their own corporate rightsizing program. Since these findings are supported by evidence submitted before the NLRC, we resolve to respect the same. x x x x The notice requirement was also complied with by PEPSI-COLA when it served notice of the corporate rightsizing program to the DOLE and to the fourteen (14) employees who will be affected thereby at least one (1) month prior to the date of retrenchment. (Citations omitted)
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.
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.
Moreover, it must be underscored that Pepsi’s management exerted conscious efforts to incorporate employee participation during the implementation of its retrenchment program. Records indicate that Pepsi had initiated sit-downs with its employees to review the criteria on which the selection of who to be retrenched would be based. This is evidenced by the report of NCMB Region VIII Director Juanito Geonzon which states that “Pepsi’s] [m]anagement conceded on the proposal to review the criteria and to sit down for more positive steps to resolve the issue.”
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.
Therefore, as all the requisites for a valid retrenchment are extant, the Court finds Pepsi’s rightsizing program and the consequent dismissal of respondents in accord with law.
The doctrine of stare decisis embodies the legal maxim that a principle or rule of law which has been established by the decision of a court of controlling jurisdiction will be followed in other cases involving a similar situation. It is founded on the necessity for securing certainty and stability in the law and does not require identity of or privity of parties. This is unmistakable from the wordings of Article 8 of the Civil Code. It is even said that such decisions “assume the same authority as the statute itself and, until authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteria which must control the actuations not only of those called upon to decide thereby but also of those in duty bound to enforce obedience thereto.” Abandonment thereof must be based only on strong and compelling reasons, otherwise, the becoming virtue of predictability which is expected from this Court would be immeasurably affected and the public’s confidence in the stability of the solemn pronouncements diminished.
Under the doctrine of stare decisis, when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same, even though the parties may be different. Where the facts are essentially different, however, stare decisis does not apply, for a perfectly sound principle as applied to one set of facts might be entirely inappropriate when a factual variant is introduced.
The doctrine though is not cast in stone for upon a showing that circumstances attendant in a particular case override the great benefits derived by our judicial system from the doctrine of stare decisis, the Court is justified in setting it aside. For the Court, as the highest court of the land, may be guided but is not controlled by precedent. Thus, the Court, especially with a new membership, is not obliged to follow blindly a particular decision that it determines, after re-examination, to call for a rectification.
More pertinent would have been SGV & Co.'s report to the stockholder. It says: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.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.
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.
At least the Income Statements and the Balance Sheets regularly prepared and submitted by AVR-Asst. Controller Rodante Ramos to SGV & Co. for audit are substantial evidence which carry great credibility and responsibility viewed in the light of the financial crisis that hit the country which saw multinational corporations closing shops and walking away, or adapting their own corporate rightsizing programs.
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.
The same is true in the case of Exuperio C. Molina who was allegedly replaced by Eddie Piamonte, an employee of, again, Helpmate Janitorial Services; of Gilberto V. Opinion who was allegedly replaced by Norlito Ulahay, an employee of Nestor Ortiga General Services; of Purisimo M. Cabasbas who was allegedly replaced by Christopher Albadrigo, an employee of Helpmate Janitorial Services; of Vicente R. Lauron who was allegedly replaced by Wendylen Bron, an employee of Doublt “N” General Services; of Ramon M. de Paz, who was disabled, and replaced by Alex Dieta, an employee of Nestor Ortiga General Services; and of Zacarias E. Carbo who was allegedly replaced by an employee of Double “N” General Services. x x x
The issue of union busting has been debunked by Us in the Certified Notice of Strike Case No. V-000001-2000. We said in that case that Pepsi Cola, in the selection of workers to be retrenched, did not take into consideration union affiliation because the unit was supposed to be composed of all members of good standing of LEPCEU-UOEF#49 there being a “UNION SHOP” provision in the existing CBA. In the conciliation conference, PEPSI COLA expressed its willingness to sit down with unions and review the criteria. When this was suggested by the conciliator, the idea was then and there rejected by the unions, giving the impression that the real conflict was inter-union. There being no cooperation from the unions, PEPSI COLA went on with the first batch of retrenchment involving 47 workers. It bears stressing that all 47 workers signed individual release and quitclaims and settled their complaints with respondent Pepsi Cola, apparently with the assistance of LEPCEU-ALU. It is awkward for LEPCEU-ALU to argue that a serious corporate-wide rightsizing program cannot be implemented in PEPSI-COLA Tanauan Plant because a nascent unrecognized union would probably be busted. Even the Executive Labor Arbiter did not take this issue up in his Decision. The issue does not merit consideration.
Mindful of their nature, the Court finds it difficult to attribute any act of union busting or ULP on the part of Pepsi considering that it retrenched its employees in good faith. As earlier discussed, Pepsi tried to sit-down with its employees to arrive at mutually beneficial criteria which would have been adopted for their intended retrenchment. In the same vein, Pepsi’s cooperation during the NCMB-supervised conciliation conferences can also be gleaned from the records. Furthermore, the fact that Pepsi’s rightsizing program was implemented on a company-wide basis dilutes respondents’ claim that Pepsi’s retrenchment scheme was calculated to stymie its union activities, much less diminish its constituency. Therefore, absent any perceived threat to LEPCEU-ALU’s existence or a violation of respondents’ right to self-organization–as demonstrated by the foregoing actuations–Pepsi cannot be said to have committed union busting or ULP in this case.