26 GTE Directories Corp. v. Sanchez AUTHOR: Miguel M.

Consing
[G.R. No. 76219; May 27, 1991] NOTES:
TOPIC: Company Policy The sales people were selling ad-space.
PONENTE: Narvasa, J. There are a lot of facts and issues in this case so I focused on the
ones relevant to company policy.
FACTS:
 GTE is a foreign corporation engaged in the business of publishing the PLDT telephone directories for Metro Manila
and several provinces.

 Old practice for conducting sales:

o Sales Reps. (SRs) were given work assignments in specific territories through a draw method.
o The SRs assigned to these territories had to meet a quota.
o A territory was not fully released to the salesperson for handling at one time, but assigned in in partial releases of
account.
o Increments were given by the Grid System; divisions within each territory usually number I – V. Each grid had a
closing date.

 Upon realizing the need to be more competitive, GTE launched a new aggressive sales strategy.
o Like in the old policy, SRs have to meet their quotas, and in cases of cancelled revenue accounts or advertisements
they had to re-establish contact and renew the same within a fixed period.
o However, under the new policy, If the cancelled revenue accounts were not renewed within the assigned period,
these accounts were declared, for a set period, OPEN TERRITORY to all SRs including the one who reported the
cancellation. if not renewed during the open territory period, these cancelled accounts were deemed no longer
"open territory," and they could be referred for handling to contractual salespersons and/or outside agencies.

 The new policy did not sit well with the Union. It demanded that it be given 15 days "to raise questions or objections to or to
seek reconsideration of the sales and administrative practices issued by the Company.” GTE granted this request, the Union
then sent its proposals for revisions, corrections, and deletions in the policy that GTE issued.

 GTE formulated a new set of Sales Administrative Practices which required SRs to submit individual reports reflecting target
revenues as of deadlines (The initial amount that was required as of the first deadline was Php30k, it was reduced to 20K).
This was forwarded to the SRs.

 However, none of the SRs submitted the required reports. Instead, the union wrote the company stating that only 1 SR met
the 20k quota on the deadline, and furthermore the schedule [for the deadlines] was not drawn up as a result of an
agreement of all concerned.

 The Union filed on behalf of the SRs a notice of strike grounded on alleged unfair labor practices of GTE consisting of:
o Refusal to bargain on unjust sales policies particularly on the failure to meet the 75% of the average sales
production for two consecutive years;
o Open territory of accounts;
o Illegal suspension of Brian Pineda, a union officer; and
o Non-payment of eight days' suspension pay increase.

 GTE addressed the concerned SRs 6 times individual reports or memoranda reflecting target revenues. After giving them
their final warning, the concerned employees still failed to submit their report, thus they were terminated.
ISSUE(S):
Do the Union’s objections to Company regulations and policies suspend their enforcement and excuse the employees’ refusal to
comply?

HELD/RATIO:
No. In this case, it must thus be conceded that its adoption of a new "Sales Evaluation and Production Policy" was within its
management prerogative to regulate, according to its own discretion and judgment, all aspects of employment, including the
manner, procedure and processes by which particular work activities should be done.

Deliberate disregard or disobedience of rules, defiance of management authority cannot be countenanced. Until and unless the rules
or orders are declared to be illegal or improper by competent authority, the employees ignore or disobey them at their peril. The
Court fails to see how the existence of objections made by the union justify the studied disregard, or willful disobedience by the sales
representatives of direct orders of their superior officers to submit reports.
CASE LAW/ DOCTRINE:
The formal challenge brought by employee of the reasonableness or the motives of a company’s policy is not an excuse for the
employee not to obey said policy.