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Santos v. Pepsi Cola

1) Three employees of Pepsi Cola Products Phils., Inc. filed a complaint for illegal dismissal after their positions as Complimentary Distribution Specialists were declared redundant and abolished. 2) Pepsi maintained that terminating positions due to redundancy was a valid exercise of management prerogative. However, the employees argued that the new positions of Account Development Managers had substantially the same duties as their old roles. 3) The court ultimately ruled that Pepsi's redundancy program was undertaken in good faith, as the job descriptions showed the old and new positions were different. Pepsi was found to have legitimately restructured and streamlined its distribution system for efficiency reasons.

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218 views1 page

Santos v. Pepsi Cola

1) Three employees of Pepsi Cola Products Phils., Inc. filed a complaint for illegal dismissal after their positions as Complimentary Distribution Specialists were declared redundant and abolished. 2) Pepsi maintained that terminating positions due to redundancy was a valid exercise of management prerogative. However, the employees argued that the new positions of Account Development Managers had substantially the same duties as their old roles. 3) The court ultimately ruled that Pepsi's redundancy program was undertaken in good faith, as the job descriptions showed the old and new positions were different. Pepsi was found to have legitimately restructured and streamlined its distribution system for efficiency reasons.

Uploaded by

Mariah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ISMAEL SANTOS vs.

COURT OF APPEALS, PEPSI COLA


July 5, 2001
Procedure and Consequences of Termination

Facts: Petitioners Ismael V. Santos and Alfredo G. Arce were employed by Pepsi Cola
Products Phils., Inc. as Complimentary Distribution Specialists (CDS), while Hilario M.
Pastrana was employed as Route Manager. In a letter dated 26 December 1994, PEPSI
informed them that their positions were declared redundant and abolished, hence, they
were terminated. Petitioners left their respective positions, accepted their separation
pays and executed the corresponding releases and quitclaims.

However, before the end of the year, petitioners learned that PEPSI created new
positions called Account Development Managers (ADM) with substantially the same
duties and responsibilities as the CDS. Consequently, they filed a complaint with the
Labor Arbiter for illegal dismissal. On the other hand, PEPSI maintained that termination
due to redundancy was a management prerogative, the wisdom and soundness of
which were beyond the discretionary review of the courts.

As a result, the Labor Arbiter dismissed the complaint for lack of merit. On appeal, the
National Labor Relations Commission (NLRC) affirmed the ruling of the Labor Arbiter.
Thus, the petitioners filed a special civil action for certiorari with the Court of Appeals.
The Court of Appeals dismissed the petition outright for failure to comply with a number
of requirements mandated by Sec. 3, Rule 46, in relation to Sec. 1, Rule 65, of the 1997
Rules of Civil Procedure. Hence, this petition.

Issue: Whether or not the termination due to redundancy done by PEPSI is valid.

Ruling: YES. Redundancy exists when the service capability of the work force is in
excess of what is reasonably needed to meet the demands of the enterprise. A
redundant position is one rendered superfluous by a number of factors, such as
overhiring of workers, decreased volume of business, dropping of a particular product
line previously manufactured by the company or phasing out of a service previously
undertaken by the business.

There was no doubt that the findings of the NLRC were supported by substantial
evidence. The job descriptions submitted by PEPSI were replete with information and
was an adequate basis to compare and contrast the two (2) positions. Therefore, the
two (2) positions being different, it follows that the redundancy program instituted by
PEPSI was undertaken in good faith. Petitioners have not established that the title
Account Development Manager was created in order to maliciously terminate their
employment. Nor have they shown that PEPSI had any ill motive against them. It was,
therefore, apparent that the restructuring and streamlining of PEPSI's distribution and
sales system were an honest effort to make the company more efficient.

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