Court of Appeals affirms dismissal of over 200 Coke employees

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MANILA, Philippines–The Court of Appeals upheld the ruling of the National Labor Relations Commission (NLRC) that Coca-Cola Bottlers Philippines dismissal of over 200 of its employees is legal.

In a decision penned by Associate Justice Myra Garcia-Fernandez, the appeals court’s 8th Division said the bottling company is not guilty with unfair labor practices.

In fact, the appeals court said the bottling company’s dismissal of its employees followed the requirements under Article 283 of the Labor Code.

The employees were given notices of termination on May 29, 2009 or more than 30 days prior to their separation from service on June 30, 2009. But the employees were no longer required to report for work beginning May 30 to give them a chance to look for another job. Records showed they were paid their salaries up to June 30, 2009.

The case stemmed after Coca-Cola dismissed from services 276 employees who were part of its Sales Force Union because they have decided to contract out work to a third party as part of its new route-to-market strategy.

The union members said the dismissal has no prior notice to the Department of Labor and Employment (DOLE). They added that the dismissal became effective May 30 and their bargaining agents and other union members were not given the opportunity to be heard.

Aside from giving notice the notice to employees and the DOLE, the company argued that affected employees were given 175 percent separation pay per year of service for those who worked below 15 years and 200 percent separation pay for those who worked 15 years above. Other benefits received are commutation of earned vacation and sick leaves, proportionate 13th month pay, HMO coverage for 5 years (until June 30, 2014) or until 65 years of age (whichever comes first), commission buy-out premium and livelihood program.

Coca-Cola said it decided to let go some of its employees after negative figures appeared on its 2007 operating income. It reviewed its route-to-market strategy and decided to come up with a new scheme that is more efficient with less cost. As a result, 610 of its employees nationwide were affected, of these were the 278 union members.

The company said even the union members availed of the offer and executed deeds of receipt, release, waiver and quit claim.

The appeals court said an employer cannot simply declare that it has become overmanned and dismiss the employees, there are requisites that should be met–the good faith of the employer in abolishing the position and fair and reasonable criteria in determining what positions are redundant.

“In the case at bar, private respondents’ (Coca-Cola) decision to adopt the ‘new route-to-market execution strategy’ was made in good faith and impelled by purely legitimate business considerations,” the appeals court said.

The appeals court added that there was no proof that the employees who signed the quit claim was forced by their employer.

“While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor.”

“Management also has its own rights, which as such, are entitled to respect and enforcement in the interest of simple fair play,” the appeals court said.

The decision is concurred in by Associate Justices Fernanda Lampas-Peralta and Francisco Acosta.

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