GR L 6846; (July, 1955) (Digest)
G.R. No. L-6846 July 20, 1955
Gregorio Araneta Employees Union, etc., et al., petitioners, vs. Arsenio C. Roldan, et al., respondents.
FACTS
The Agricultural Division of Gregorio Araneta, Inc., established in 1947, faced overcapitalization, with its investment growing from P200,000 to about P3,000,000 by 1953. To address this, the Board of Directors decided on a retrenchment policy after failing to secure fresh outside capital from Heacock and Company. This policy involved reducing merchandise imports, cutting credits, and decreasing business volume, necessitating a personnel reduction. Consequently, 17 employees were laid off. Their selection was made by a technical person and approved by the Board, and they were given one month’s separation pay, except Nicolas Gonzalez who refused his. The reorganization and retrenchment were adopted by unanimous Board resolution before the petitioner Gregorio Araneta Employees Union was organized. In the Court of Industrial Relations, Associate Judge Jose S. Bautista found the layoffs justified due to the business reduction but believed Gonzalez should not have been separated as his work was shifted to another employee, Augusto Achacoso. Both parties moved for reconsideration. The court en banc, in a resolution dated March 31, 1953, modified Judge Bautista’s decision, holding that Gonzalez’s layoff was also legal. Judge Bautista dissented on this point.
ISSUE
Whether the Court of Industrial Relations committed a reversible error in upholding the legality of the layoff of the 17 employees, including Nicolas Gonzalez, due to the company’s retrenchment policy.
RULING
The Supreme Court denied the petition for certiorari, affirming the resolution of the Court of Industrial Relations en banc. The Court found no reason to disturb the decision, holding that the layoff of the 17 employees was a legitimate result of the retrenchment policy adopted to reduce overcapitalization and minimize expenses following a considerable reduction in business volume. Critically, the retrenchment policy was adopted before the petitioner union was organized; therefore, it was not directed against the union or its members for union or labor activities and did not constitute an unfair labor practice. The petition was denied without costs.