Case Digest: Pepsi-Cola v. Molon
G.R. No. 175002 : February 18, 2013
PEPSI-COLA PRODUCTS PHILIPPINES, INC., Petitioner, v. 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, and SAUNDER SANTIAGO REMANDABAN III, Respondents.
PERLAS-BERNABE, J.:
FACTS:
In 1999, Pepsi-Cola (Pepsi) plant in Sto. Nio, Tanauan, Leyte (Tanauan Plant), adopted a company-wide retrenchment program denominated as Corporate Rightsizing Program. To commence with its program, it sent a notice of retrenchment to the DOLE as well as individual notices to the affected employees informing them of their termination from work. Subsequently, on July 13, 1999, Pepsi notified the DOLE of the initial batch of forty-seven (47) workers to be retrenched. Among these employees are herein respondents who were members of the Leyte Pepsi-Cola Employees Union-Associated Labor Union (LEPCEU-ALU), a legitimate labor organization composed of rank-and-file employees in Pepsi's Tanauan Plant.
On July 19, 1999, LEPCEU-ALU filed a Notice of Strike before the NCMB due to Pepsi alleged acts of union busting/ULP. It claimed that Pepsi adoption of the retrenchment program was designed solely to bust their union so that come freedom period, Pepsi company union, the Leyte Pepsi-Cola Employees Union-Union deObreros de Filipinas #49 (LEPCEU-UOEF#49) which was also the incumbent bargaining union at that time would garner the majority vote to retain its exclusive bargaining status. Hence, on July 23, 1999, LEPCEU-ALU went on strike.
On July 27, 1999, Pepsi filed before the NLRC a petition to declare the strike illegal with a prayer for the loss of employment status of union leaders and some union members.On even date, then DOLE SecretaryBienvenido A. Laguesma certified the labor dispute to the NLRC for compulsory arbitration.A return-to-work order was also issued.
Eventually, Pepsi and LEPCEU-ALU agreed to settle their labor dispute arising from the company retrenchment program and thus, executed an agreement for such. Pursuant thereto, respondents signed individual release and quitclaim forms in September 1999 stating that Pepsi would be released and discharged from any action arising from their employment. Notwithstanding the foregoing, respondents still filed separate complaints for illegal dismissal with the NLRC.
The NLRC, on September 11, 2002, rendered a decision in favor of Pepsi. Therein, Pepsi was absolved of the charge of union busting/ULP for having been conducted without legal authority; the July 23, 1999 strike was declared illegal since LEPCEU-ALU was not the certified bargaining agent of the company and failure to comply with the seven-day notice requirement.
The case was eventually elevated to the CA. On March 31, 2006, the CA issued a Decision which reversed and set aside the NLRC ruling.
ISSUES:
1. Whether or not respondents retrenchment was valid.
2. Whether or not Pepsi was guilty of union busting and ULP?
HELD: Court of Appeal decision was reversed.
Validity of Retrenchment
Retrenchment is defined as the termination of employment initiated by the employer through no fault of the employee and without prejudice to the latter, resorted by management during periods of business recession, industrial depression or seasonal fluctuations or during lulls over shortage of materials. It is a reduction in manpower, a measure utilized by an employer to minimize business losses incurred in the operation of its business.Retrenchment is one of the authorized causes to validly terminate an employment under the Labor Code.
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.
The Court observes that Pepsi had validly implemented its retrenchment program. Substantial evidence which carry great credibility and reliability showed that Pepsi has complied with the notice requirement when it served notice of the corporate rightsizing program to the DOLE and the employees affected at least one (1) month prior to the date of retrenchment. Records also show that the respondents had already been paid the requisite separation pay as evidenced by the September 1999 quitclaims signed by them.
Contrary to the CA 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., LEPCEUUOEF#49) were likewise among those retrenched.
Also, as aptly pointed out by the NLRC, Pepsi Corporate Rightsizing Program was a company-wide program which had already been implemented in its other plants. Consequently, given the general applicability of its retrenchment program, Pepsi could not have intended to decimate LEPCEUALU membership, much less impinge upon its right to self-organization, when it employed the same.
Lastly, the allegation that the retrenchment program was a mere subterfuge to dismiss the respondents considering Pepsi 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.
Union Busting and ULP
Under Article 276(c) of the Labor Code, there is union busting when the existence of the union is threatened by the employer act of dismissing the former officers who have been duly elected in accordance with its constitution and by-laws.
On the other hand, the term unfair labor practice refers to that gamut of offenses defined in the Labor Code which, at their core, violates the constitutional right of workers and employees to self-organization, with the sole exception of Article 257(f) (previously Article 248[f]).
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. Actually, 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 cooperation during the NCMB-supervised conciliation conferences can also be gleaned from the records. Furthermore, the fact that Pepsi rightsizing program was implemented on a company-wide basis dilutes respondents claim that Pepsi retrenchment scheme was calculated to stymie its union activities, much less diminish its constituency. Therefore, absent any perceived threat to LEPCEU-ALU existence or a violation of respondent's right to self-organization as demonstrated by the foregoing actuations epsi cannot be said to have committed union busting or ULP in this case.
DENIED
PEPSI-COLA PRODUCTS PHILIPPINES, INC., Petitioner, v. 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, and SAUNDER SANTIAGO REMANDABAN III, Respondents.
PERLAS-BERNABE, J.:
FACTS:
In 1999, Pepsi-Cola (Pepsi) plant in Sto. Nio, Tanauan, Leyte (Tanauan Plant), adopted a company-wide retrenchment program denominated as Corporate Rightsizing Program. To commence with its program, it sent a notice of retrenchment to the DOLE as well as individual notices to the affected employees informing them of their termination from work. Subsequently, on July 13, 1999, Pepsi notified the DOLE of the initial batch of forty-seven (47) workers to be retrenched. Among these employees are herein respondents who were members of the Leyte Pepsi-Cola Employees Union-Associated Labor Union (LEPCEU-ALU), a legitimate labor organization composed of rank-and-file employees in Pepsi's Tanauan Plant.
On July 19, 1999, LEPCEU-ALU filed a Notice of Strike before the NCMB due to Pepsi alleged acts of union busting/ULP. It claimed that Pepsi adoption of the retrenchment program was designed solely to bust their union so that come freedom period, Pepsi company union, the Leyte Pepsi-Cola Employees Union-Union deObreros de Filipinas #49 (LEPCEU-UOEF#49) which was also the incumbent bargaining union at that time would garner the majority vote to retain its exclusive bargaining status. Hence, on July 23, 1999, LEPCEU-ALU went on strike.
On July 27, 1999, Pepsi filed before the NLRC a petition to declare the strike illegal with a prayer for the loss of employment status of union leaders and some union members.On even date, then DOLE SecretaryBienvenido A. Laguesma certified the labor dispute to the NLRC for compulsory arbitration.A return-to-work order was also issued.
Eventually, Pepsi and LEPCEU-ALU agreed to settle their labor dispute arising from the company retrenchment program and thus, executed an agreement for such. Pursuant thereto, respondents signed individual release and quitclaim forms in September 1999 stating that Pepsi would be released and discharged from any action arising from their employment. Notwithstanding the foregoing, respondents still filed separate complaints for illegal dismissal with the NLRC.
The NLRC, on September 11, 2002, rendered a decision in favor of Pepsi. Therein, Pepsi was absolved of the charge of union busting/ULP for having been conducted without legal authority; the July 23, 1999 strike was declared illegal since LEPCEU-ALU was not the certified bargaining agent of the company and failure to comply with the seven-day notice requirement.
The case was eventually elevated to the CA. On March 31, 2006, the CA issued a Decision which reversed and set aside the NLRC ruling.
ISSUES:
1. Whether or not respondents retrenchment was valid.
2. Whether or not Pepsi was guilty of union busting and ULP?
HELD: Court of Appeal decision was reversed.
Validity of Retrenchment
Retrenchment is defined as the termination of employment initiated by the employer through no fault of the employee and without prejudice to the latter, resorted by management during periods of business recession, industrial depression or seasonal fluctuations or during lulls over shortage of materials. It is a reduction in manpower, a measure utilized by an employer to minimize business losses incurred in the operation of its business.Retrenchment is one of the authorized causes to validly terminate an employment under the Labor Code.
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.
The Court observes that Pepsi had validly implemented its retrenchment program. Substantial evidence which carry great credibility and reliability showed that Pepsi has complied with the notice requirement when it served notice of the corporate rightsizing program to the DOLE and the employees affected at least one (1) month prior to the date of retrenchment. Records also show that the respondents had already been paid the requisite separation pay as evidenced by the September 1999 quitclaims signed by them.
Contrary to the CA 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., LEPCEUUOEF#49) were likewise among those retrenched.
Also, as aptly pointed out by the NLRC, Pepsi Corporate Rightsizing Program was a company-wide program which had already been implemented in its other plants. Consequently, given the general applicability of its retrenchment program, Pepsi could not have intended to decimate LEPCEUALU membership, much less impinge upon its right to self-organization, when it employed the same.
Lastly, the allegation that the retrenchment program was a mere subterfuge to dismiss the respondents considering Pepsi 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.
Union Busting and ULP
Under Article 276(c) of the Labor Code, there is union busting when the existence of the union is threatened by the employer act of dismissing the former officers who have been duly elected in accordance with its constitution and by-laws.
On the other hand, the term unfair labor practice refers to that gamut of offenses defined in the Labor Code which, at their core, violates the constitutional right of workers and employees to self-organization, with the sole exception of Article 257(f) (previously Article 248[f]).
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. Actually, 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 cooperation during the NCMB-supervised conciliation conferences can also be gleaned from the records. Furthermore, the fact that Pepsi rightsizing program was implemented on a company-wide basis dilutes respondents claim that Pepsi retrenchment scheme was calculated to stymie its union activities, much less diminish its constituency. Therefore, absent any perceived threat to LEPCEU-ALU existence or a violation of respondent's right to self-organization as demonstrated by the foregoing actuations epsi cannot be said to have committed union busting or ULP in this case.
DENIED
