CA okays SMC compensation deal

The Court of Appeals (CA) has approved a compromise agreement entered into by San Miguel Corp. (SMC) with its 30 managers and supervisors who resigned in 2002 after they were demoted.

Under the compromise agreement, SMC will pay more than P12 million to its 30 managers and supervisors as compensation.

The compensation is part of the compromise agreement entered into by SMC and its subsidiaries, San Miguel Foods Inc. (SMFI) and San Miguel Purefoods Corp., and the employees last May 26 in exchange for the dropping of any complaint against the company.

In a 22-page decision penned by Presiding Justice Ruben Reyes, the CA’s first division said the compromise agreement is not contrary to law, morals, good customs, public order and public policy.

The decision was concurred by Associate Justices Juan Eniquez Jr. and Vicente Veloso.

"Finding the foregoing compromise agreement as not contrary to law, morals, good customs, public order and public policy, the same is hereby approved.

"Wherefore, judgment is rendered in accordance with the foregoing compromise agreement. Parties are enjoined to faithfully abide by its terms and conditions," the CA said.

The case stemmed from SMC’s acquisition of Purefoods Corp. and integrated its business with SMFI to enhance competitiveness in the poultry, seeds and flour businesses.

As part of the arrangement, SMFI absorbed all Purefoods’ employees, including the petitioners led by Ronald Mascariñas, senior vice president and head of Purefoods’ Luzon Poultry Division.

The petitioners were re-assigned by SMFI to other available positions due to pre-existing organizational hierarchy.

The SMC managers and supervisors said they were illegally demoted by San Miguel as most supervisory employees were downgraded to occupy rank and file positions, while managers were relegated to managing reduced areas of concern. — Jose Rodel Clapano