PURISIMO M.
CABA OBAS, 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, vs. PEPSI-COLA PRODUCTS, PHILIPPINES, INC.,
Respondents.z
G.R. No.
176908 November 11, 2015
Facts: Pepsi-Cola Products Philippines, Inc.’s Tanauan Plant in Tanauan, Leyte incurred business losses in the total amount of 29,167,390.00. To avert further losses, PCPPI implemented a company-wide retrenchment program and retrenched 47 employees of its Tanauan Plant.
Petitioners, who are permanent and regular employees of the Tanauan Plant, received their respective letters, informing them of the cessation of their employment. Petitioners then filed their respective complaints for illegal dismissal before the National Labor Relations Commission Regional Arbitration Branch No. VIII in Tacloban City.
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.
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.
The Labor Arbiter ruled that the dismissal of the petitioners was illegal. On appeal of both parties, the Fourth Division of the NLRC reversed the decision of the labor arbiter.
The petitioners’ appeal was dismissed and the CA affirmed the NLRC’s Fourth Division’s decision. However, acting on the petition for certiorari filed by Molon, et al., the CA reversed its own decision and declaring that the retrenchment was contrary to the prescribed rules and procedure and 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.
Issue: Whether or not the dismissal was legal and valid.
Ruling: The petition has no merit.
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.
REQUISITES:
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;
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;
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;
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
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.
In due regard of these requisites, the Court observes that Pepsi had validly implemented its retrenchment program.
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.
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.