Caltex vs.

Philippine Labor Organization,

GR L-991 May 27, 1959

Facts:

Herein Caltex hired Hipdion del Rosario as employee in their Pandacan Terminal who after two
months was suspended for insubordination. Caltex later on filed with the Industrial Court for
authorization to dismiss del Rosario who was found guilty of the acts complained of by the former.
However, the Court ordered his reinstatement with payment of backwages holding that the permanent
dismissal sought by Caltex as punishment for del Rosario’s acts was too severe. Caltex appealed the
decision contending serious mistake of law and that in compelling them to retain del Rosario, the Court
used its judgment to substitute their power to determine the fitness and qualification of a temporary
employee to be a regular employee.

Issue:

Whether or not the Court could validly substitute their judgment from that of Caltex’s.

Ruling:

No, the Court held although the dismissal of herein del Rosario was proper in view of his willful
disobedience being a justifiable ground for his termination, the power to determine his fitness and
qualification still lie with Caltex. The period of time he had been working for Caltex before his
suspension can be considered as temporary employment. And it is the employer’s prerogative hire and
thereafter classify or categorize an employee according to their corporate hierarchy, should one exist, in
due compliance with the provisions of law.