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15 Nestle Philippines, Inc. v. Puedan, JR.
15 Nestle Philippines, Inc. v. Puedan, JR.
Have any questions? (02) 579-9170 Unit G03 Makati Executive Tower 2, Dela Rosa St., Makati City
Atty. Elvin B.
Villanueva is a
litigation lawyer
Nestle Philippines, Inc. vs. Benny A. Puedan, Jr., et al.
specializing in labor
G.R. No. 220617, January 30, 2017
laws. He graduated
Facts: from Arellano
University School of
Puedan, et al alleged that on various dates, ODSI and NPI hired them to sell various Law with honors. He
NPI products in the assigned covered area. was a recipient of
the Supreme Court
After some time, Puedan, et al demanded that they be considered regular
award for his essay
employees of NPI, but they were directed to sign contracts of employment with
on the Role of the
ODSI instead. When Puedan, et al refused to comply with such directives, NPI and
Rule of Law in
ODSI terminated them from their position. Thus, they were constrained to file the
National
complaint, claiming that: (a) ODSI is a labor-only contractor and, thus, they should Development.
be deemed regular employees of NPI; and (b) there was no just or authorized cause
for their dismissal. Ocho de Septiembre, Inc. Learn More
For its part, ODSI averred that it is a company engaged in the business of buying,
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selling, distributing, and marketing of goods and commodities of every kind and it Contact us
enters into all kinds of contracts for the acquisition thereof. ODSI admitted that on
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To deliver
various dates, it hired Puedan, et al aslegal services andMonday
its employees assigned- Friday:
them to execute Unit G03 Makati
the Distributorship Agreementthatitwill provide
entered withthe best
NPI. 8:30am - 5:30pm Executive Tower 2, Dela
solution for clients and Rosa St.,Atty. Elvin's
Makati City
However, the business relationship between
better results for NPI and ODSI
society. turned -sour
Saturday when the
Sunday: Books
former’s sales department badgered the latter regarding the sales targets.
Closed (02) 579-9170
Corporation
Eventually, NPI downsized its marketing and promotional support from ODSI which (02) 831-5881
Law
[email protected]
resulted to business reverses and in the latter’s filing of a petition for corporate
rehabilitation and, subsequently, the closure of its Nestle unit due to the Criminal Law
termination of the Distributorship Agreement and the failure of rehabilitation. [email protected]
Events
Under the foregoing circumstances, ODSI argued that Puedan, et al were not
dismissed but merely put in floating status. Forms and
Templates
On the other hand, NPI did not file any position paper or appear in the scheduled
conferences. Labor Law
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LA Ruling: Privacy - Terms
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The Labor Arbiter (LA) dismissed the complaint for lack of merit, but nevertheless, Rules of
ordered, inter alia, ODSI and NPI to pay Puedan, et al nominal damages plus Procedure
attorney’s fees.
Tax Law
The LA found that: (a) Puedan, et al were unable to prove that they were NPI
employees; and (b) Puedan, et al were not illegally dismissed as ODSI had indeed TRAIN Law
closed down its operations due to business losses. As to the issue on the failure to
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give Puedan, et al a thirty (30)-day notice prior to such closure, the LA concluded
that all the impleaded Puedan, et al therein (i.e., including NPI) should be held
liable for the payment of nominal damages plus attorney’s fees.
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SC Ruling:
The observance of fairness in the conduct of any investigation is at the very heart
of procedural due process. The essence of due process is to be heard, and, as
applied to administrative proceedings, this means a fair and reasonable
opportunity to explain one’s side, or an opportunity to seek a reconsideration of
the action or ruling complained of. Administrative due process cannot be fully
equated with due process in its strict judicial sense, for in the former a formal or
trial-type hearing is not always necessary, and technical rules of procedure are not
strictly applied.
In this case, NPI was furnished via courier of a copy of the amended complaint filed
by the Puedan, et al against it as shown by LBC Receipt. It is also apparent that NPI
was also furnished with the Puedan, et al’ Position Paper, Reply, and Rejoinder.
Verily, NPI was indeed accorded due process, but as the LA mentioned, the former
chose not to file any position paper or appear in the scheduled conferences.
Assuming arguendo that NPI was somehow deprived of due process by either of
the labor tribunals, such defect was cured by: (a) NPI’ s filing of its motion for
reconsideration before the NLRC; (b) the NLRC’s subsequent issuance of its
Resolution wherein the tribunal considered all of NPI’s arguments as contained in
its motion; and (c) NPI’s subsequent elevation of the case to the CA.
Evidently, the foregoing shows that NPI was not denied due process of law as it was
afforded the fair and reasonable opportunity to explain its side.
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In Steelcase, Inc. vs. Design International Selections, Inc., the Court held that the
imposition of minimum standards concerning sales, marketing, finance and
operations are nothing more than an exercise of sound business practice to
increase sales and maximize profits.
Verily, it was only reasonable for NPI -it being a local arm of one of the largest
manufacturers of foods and grocery products worldwide -to require its distributors,
such as ODSI, to meet various conditions for the grant and continuation of a
distributorship agreement for as long as these conditions do not control the means
and methods on how ODSI does its distributorship business, as shown in this case.
This is to ensure the integrity and quality of the products which will ultimately fall
into the hands of the end consumer. Thus, the foregoing circumstances show that
ODSI was not a labor-only contractor of NPI; hence, the latter cannot be deemed
the true employer of Puedan, et al.
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