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    271.pepsi Cola Distributors v. NLRC

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    Sha Santos
    This case discusses the effects of a merger on employees. The respondent, Yute, worked for Pepsi Cola Bottling Company and was absorbed by petitioner Pepsi Cola Distributors when it took over operations. Yute was later terminated and filed a complaint. While the case was pending, he was reinstated but then Pepsi Cola Distributors stopped paying his salary after selling its business to Pepsi Cola Products Philippines. The NLRC ruled that both Pepsi Cola Distributors and Pepsi Cola Products Philippines must reinstate or pay separation pay to Yute. The Supreme Court affirmed, finding no grave abuse of discretion, and that the second dismissal was an attempt to evade liability.

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    271.pepsi Cola Distributors v. NLRC

    Uploaded by

    Sha Santos
    106 views1 page
    This case discusses the effects of a merger on employees. The respondent, Yute, worked for Pepsi Cola Bottling Company and was absorbed by petitioner Pepsi Cola Distributors when it took over operations. Yute was later terminated and filed a complaint. While the case was pending, he was reinstated but then Pepsi Cola Distributors stopped paying his salary after selling its business to Pepsi Cola Products Philippines. The NLRC ruled that both Pepsi Cola Distributors and Pepsi Cola Products Philippines must reinstate or pay separation pay to Yute. The Supreme Court affirmed, finding no grave abuse of discretion, and that the second dismissal was an attempt to evade liability.

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    271.Pepsi Cola Distributors v. NLRC

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    This case discusses the effects of a merger on employees. The respondent, Yute, worked for Pepsi Cola Bottling Company and was absorbed by petitioner Pepsi Cola Distributors when it took over operations. Yute was later terminated and filed a complaint. While the case was pending, he was reinstated but then Pepsi Cola Distributors stopped paying his salary after selling its business to Pepsi Cola Products Philippines. The NLRC ruled that both Pepsi Cola Distributors and Pepsi Cola Products Philippines must reinstate or pay separation pay to Yute. The Supreme Court affirmed, finding no grave abuse of discretion, and that the second dismissal was an attempt to evade liability.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    106 views1 page

    271.pepsi Cola Distributors v. NLRC

    Uploaded by

    Sha Santos
    This case discusses the effects of a merger on employees. The respondent, Yute, worked for Pepsi Cola Bottling Company and was absorbed by petitioner Pepsi Cola Distributors when it took over operations. Yute was later terminated and filed a complaint. While the case was pending, he was reinstated but then Pepsi Cola Distributors stopped paying his salary after selling its business to Pepsi Cola Products Philippines. The NLRC ruled that both Pepsi Cola Distributors and Pepsi Cola Products Philippines must reinstate or pay separation pay to Yute. The Supreme Court affirmed, finding no grave abuse of discretion, and that the second dismissal was an attempt to evade liability.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    University of the Philippines College of Law | Corporation Law | D2021

    Topic Merger and Consolidation - Effects on Employees

    Case Name Pepsi Cola Distributors v. NLRC

    Case No. & Date G.R. No. 100686 August 15, 1995

    Ponente ROMERO, J.:

    Petitioners PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC.,

    Respondents NATIONAL LABOR RELATIONS COMMISSION, 5th Division, Cagayan de Oro City, HON. AMADO M. SOLAMO,
    Labor Arbiter, Sub-Regional Arbitration Branch No. 10, Butuan City, and TERTULIANO P. YUTE

    Summary Yute started working with Pepsi Cola Bottling Company of the Philippines (PCBCP) as a contractual
    maintenance electrician sometime in 1979 and when petitioner, Pepsi Cola Distributors of the Philippines,
    Inc. (PCD) took over the bottling company's manufacturing operations in 1981, he was absorbed as a regular
    employee. Thereafter, PCD terminated Yute’s employment on the grounds of alleged abandonment of work
    and/or absence without leave. Yute filed a complaint for illegal dismissal against PCD. Pending its appeal to
    the NLRC, PCD reinstated Yute pursuant to the LA’s order. However, 33 days after he was included in the
    payroll, PCD stopped payment of Yute's salary on the ground that it allegedly sold its business interest to
    Pepsi Cola Products Philippines, Inc. (PCPPI for short). In resolving the case on the merits, NLRC modified the
    decision of the LA, ordering both PCD and PCPPI to reinstate Yute or pay for his separation pay. PCD
    maintains that its right to due process of law was violated considering that there was no formal complaint as
    regards the second dismissal and no hearing was ever conducted to enable PCD to present evidence.
    Moreover, the second dismissal of Yute was due to its closure as a result of business losses. PCPPI cannot also
    be liable since it is a corporation separate and distinct from PCDPI, and is not a party to this case.

    SC ruled that there was no grave abuse of discretion on the part of NLRC when it held both PCD and PCPPI
    liable to Yute. The contention that the second dismissal of Yute presents an issue separate and distinct from
    the issue of the earlier dismissal is nothing but an attempt of PCD to evade liability for illegally dismissing Yute
    and to shield the purchasing corporation, PCPPI, from the said liability.

    Doctrine/s The issue of whether or not (PCPPI) is liable for the illegal acts of its predecessor-in-interest PCD , as in the
    instant case, has already been settled in the case of Pepsi Cola Bottling Co. v. NLRC. In said case, the PCPPI
    claimed that it is a corporation separate and distinct from PBC or PCD, hence, it is not the proper party to
    which the writ of execution of the decision in an illegal dismissal case filed against its predecessor-in-interest,
    PBC, should be served; and that reinstatement is no longer possible since PCD closed down its business on
    July 24, 1989 and the new franchise holder, PCPPI, is a new entity. SC ruled:

    PCD may have ceased business operations and PCPPI may be a new company but it does not
    necessarily follow that no one may now be held liable for illegal acts committed by the earlier
    firm. The complaint was filed when PCD was still in existence. Pepsi-Cola never stopped doing
    business in the Philippines. The same soft drinks products sold in 1988 when the complaint was
    initiated continue to be sold now. The sale of products, purchases of materials, payment of
    obligations, and other business acts did not stop at the time PCD bowed out and PCPPI came into
    being. There is no evidence presented showing that PCPPI, as the new entity or purchasing company
    is free from any liabilities incurred by the former corporation.

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