Pepsi Cola Distributors of the Philippines, Inc. v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Tertuliano P. Yute, a maintenance electrician, was employed by Pepsi Cola Bottling Company of the Philippines and later absorbed as a regular employee by Pepsi Cola Distributors of the Philippines, Inc. (PCD) in 1981. PCD terminated Yute's employment on December 15, 1988, citing abandonment of work and/or absence without leave. Yute subsequently filed a complaint for illegal dismissal, damages, and attorney's fees against PCD. Procedural History: The Labor Arbiter ruled in favor of Yute, declaring his dismissal illegal and ordering reinstatement with full backwages. PCD appealed this decision to the National Labor Relations Commission (NLRC). While the appeal was pending, PCD reinstated Yute to the payroll but later stopped his salary on July 25, 1989, claiming it had sold its business interests to Pepsi Cola Products Philippines, Inc. (PCPPI). The NLRC, after initially affirming the Labor Arbiter's decision due to a late appeal filing, reconsidered and modified the decision on April 24, 1991, ordering both PCD and PCPPI to reinstate Yute with full backwages or provide separation pay if reinstatement was impossible. This resolution became final and executory on May 20, 1991. The Petition: PCD filed the instant petition for certiorari with the Supreme Court, arguing that the NLRC Resolution of April 24, 1991, was issued with grave abuse of discretion. PCD contended that its right to due process was violated regarding the second dismissal (cessation of payroll) as no formal complaint or hearing was conducted, and that PCPPI, a separate entity, should not be held liable. PCD also claimed its previous counsel failed to inform them of the resolution, leading to the lapse of the period for filing a motion for reconsideration. The Supreme Court issued a temporary restraining order and later a supersedeas bond was posted.
Issue(s)
Whether the dismissal of Tertuliano P. Yute on December 15, 1988, was legal and with due process. Whether the penalty of dismissal was too harsh and disproportionate under the circumstances. Whether the subsequent cessation of Yute's salary on July 25, 1989, constituted a second illegal dismissal, and whether Pepsi Cola Products Philippines, Inc. (PCPPI) can be held liable for the acts of its predecessor, Pepsi Cola Distributors of the Philippines, Inc. (PCD). Whether the NLRC committed grave abuse of discretion in its resolution regarding reinstatement and backwages. Whether the NLRC correctly ruled on the award of backwages and attorney's fees.
Ruling
The Supreme Court affirmed the Resolution of the National Labor Relations Commission dated April 24, 1991. The temporary restraining order issued on January 20, 1992, was lifted. Costs were against the petitioner.
Ratio Decidendi
On the legality and due process of the first dismissal: The Court found that private respondent Yute was accorded due process before his dismissal on December 15, 1988. He was twice notified of hearings, but he refused to sign the notices and attend. The Court reiterated that due process requires an opportunity to be heard, which Yute was given but chose not to avail himself of. The Court cited Stronghold Insurance Co., Inc. v. Court of Appeals to emphasize that the failure to avail oneself of the chance to be heard does not disparage the opportunity or deprive the person of the right to due process. Furthermore, the requirement of due process is satisfied when parties are given the opportunity to submit position papers, which was done in this case. On the harshness of the penalty: Despite finding no violation of due process, the Court held that the penalty of dismissal was too harsh and disproportionate for the infraction. The absences from November 22, 1988, to December 15, 1988, were found to be excusable. Yute had suffered a stomach ache, was advised by the company physician to rest for 25 days, and had informed his immediate supervisor and presented a medical certificate. The Court noted that Yute's prior reprimands in 1979-1980 were during his employment with PCD's predecessor and were obliterated by his absorption as a regular employee by PCD. The Court agreed with the Labor Arbiter and NLRC that Yute should have been given a warning or suspension, not outright dismissal, for the minor procedural infraction of not officially informing management of his sick leave, especially since he had initially filed a vacation leave and presented a medical certificate on December 9, 1988. On the second dismissal and successor liability: The Court found PCD's act of removing Yute from the payroll on July 25, 1989, constituting a second dismissal, to be an attempt to evade liability and shield PCPPI. The Court rejected the argument that the second dismissal presented a separate issue. Citing Pepsi Cola Bottling Co. v. NLRC, the Court held that the purchasing corporation (PCPPI) cannot escape liability for the illegal acts of its predecessor (PCD) without presenting evidence that it is free from such liabilities. The Court emphasized that business operations continued, and there was no evidence showing PCPPI was free from PCD's incurred liabilities. On the NLRC's grave abuse of discretion: The Court found no grave abuse of discretion on the part of the NLRC. The NLRC correctly ordered both PCD and PCPPI to reinstate Yute with backwages from July 25, 1989, or separation pay if reinstatement was impossible, and attorney's fees. The Court acknowledged that given the strained relationship and the consistent refusal to reinstate, separation pay might be a more appropriate alternative to reinstatement. On the award of backwages and attorney's fees: The Court concurred with the NLRC's ruling that Yute was not entitled to backwages from December 15, 1988, to May 21, 1989, due to his procedural fault in the sick leave. However, he was entitled to backwages from July 25, 1989, to actual reinstatement. The award of attorney's fees equivalent to 10% of the monetary award was also sustained.
Main Doctrine
The dismissal of an employee for absence without leave, while potentially justifiable, may be deemed too harsh and disproportionate if the absence was due to illness and the employee had substantially complied with procedural requirements, such as informing the supervisor and presenting a medical certificate. Furthermore, a purchasing corporation that takes over the business operations of a predecessor is not automatically absolved from the liabilities incurred by the predecessor, especially if no evidence is presented to show that the new entity is free from such liabilities.