ISSUE:

CALTEX INC. VS. PHILIPPINE LABOR ORGANIZATION

(G.R. No. L-9915 May 27, 1959) 5
May the petitioner dismiss the private respondent on account of insubordination and
whether the former has validly exercised the said management prerogative?

RULING:
The Court answered in the affirmative. The power of control and the right to hire are
enunciated in this case. Petitioner has the right to place private respondent under temporary or
trial basis, considering the period of time that said laborer had been working for petitioner. It
is so to determine his fitness and competency. The acts of insubordination for which private
respondent was found guilty consist of disorderly conduct and willful disobedience, committed
in a very short period of two months. Willful disobedience is a justifiable ground for an
employee's discharge. Thus, petitioner can dismiss the private respondent. The power of
control and the right to hire are enunciated in this case.

RENE M. GOMEZ I BLOCK 2A LAW ON LABOR RELATIONS S/Y 2017-2018

 SAN MIGUEL BREWERY SALES FORCE UNION VS. OPLE AND SAN MIGUEL
CORP.
(G.R. No. L-53515 February 8, 1989)
6
ISSUE:
Was the introduction of Complementary Distribution System (CDS) a valid exercise of
management prerogative and it does not contravenes Section 1, Article IV of the collective
bargaining agreement that reduce the take-home pay of the salesmen and their truck helpers for
the company would be unfairly competing with them?

RULING:
Yes. Every business enterprise may adopt or devise means designed towards its goal of
increasing its profits. So long as a company's management prerogatives are exercised in good
faith for the advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid agreements, they
will be upheld. San Miguel Corporation's offer to compensate the members of its sales force
who will be adversely affected by the implementation of the CDS by paying them a so-called
"back adjustment commission" to make up for the commissions they might lose as a result of
the CDS proves the company's good faith and lack of intention to bust their union.

RENE M. GOMEZ I BLOCK 2A LAW ON LABOR RELATIONS S/Y 2017-2018

 HERITAGE HOTEL MANILA VS. NATIONAL UNION WORKERS
(G.R. No. 178296, January 12, 2011) 7
ISSUE:

Is non-compliance with submission of the annual financial report is a valid ground for
cancellation of a unions registration?

RULING:

No. The law provides that failure to comply with the reportorial requirements provided
by law shall not be a ground for cancellation of union registration but shall subject the erring
officers or members to suspension, expulsion from membership, or any appropriate penalty.
Moreover, submission of the required documents is the duty of the officers of the union. It
would be unreasonable for this Office to order the cancellation of the union and penalize the
entire union membership on the basis of the negligence of its officers.
ILO Convention No. 87, which we have ratified in 1953, provides that workers and
employers organizations shall not be liable to be dissolved or suspended by administrative
authority. The ILO has expressed the opinion that the cancellation of union registration by the
registrar of labor unions, tantamount to dissolution of the organization by administrative
authority when such measure would give rise to the loss of legal personality of the union or
loss of advantages necessary for it to carry out its activities, which is true in our jurisdiction.
Although the ILO has allowed such measure to be taken, provided that judicial safeguards are
in place, i.e., the right to appeal to a judicial body, it has nonetheless reminded its members
that dissolution of a union, and cancellation of registration for that matter, involve serious
consequences for occupational representation. It has, therefore, deemed it preferable if such
actions were to be taken only as a last resort and after exhausting other possibilities with less
serious effects on the organization.
The aforesaid amendments and the ILOs opinion on this matter serve to fortify our
ruling in this case. It is undisputed that appellee failed to submit its annual financial reports and
list of individual members in accordance with Article 239 of the Labor Code. However, the
existence of this ground should not necessarily lead to the cancellation of union registration.
Article 239 recognizes the regulatory authority of the State to exact compliance with reporting
requirements. Yet there is more at stake in this case than merely monitoring union activities
and requiring periodic documentation thereof.
The more substantive considerations involve the constitutionally guaranteed freedom
of association and right of workers to self-organization. Also involved is the public policy to
promote free trade unionism and collective bargaining as instruments of industrial peace and
democracy. An overly stringent interpretation of the statute governing cancellation of union
registration without regard to surrounding circumstances cannot be allowed. Otherwise, it
would lead to an unconstitutional application of the statute and emasculation of public policy
objectives. Worse, it can render nugatory the protection to labor and social justice clauses that
pervades the Constitution and the Labor Code.

RENE M. GOMEZ I BLOCK 2A LAW ON LABOR RELATIONS S/Y 2017-2018