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G.R. No. L-53515 – 170 SCRA 25 – Labor Law – Management Prerogative – Return of Investments
In 1979, San Miguel Corporation implemented its “Complementary Distribution System” (CDS) whereby wholesalers can directly get beer products from any SMC office. The scheme was approved by then Secretary of Labor Blas Ople. The San Miguel Brewery Sales Force Union (SMBSFU) assailed this program because it violates the Collective Bargaining Agreement particularly the established scheme whereby route salesmen have been given specific territories to sell beer products. The CDS scheme would then lower the take home pay of the route salesmen and in effect an attack to union members. SMBSFU filed a petition for review on the order of Sec. Ople approving the scheme.
ISSUE: Whether or not the CDS is a violation of the CBA.
HELD: No. The SC ruled that the CDS is an exercise of management prerogative whereby the management can implement schemes to optimize their profit. Further, the CDS provides for a compensation clause as well for salesmen. 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.