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Araneta Union vs. Roldan: Retrenchment Case

The Gregorio Araneta Employees Union filed a petition for certiorari challenging the resolution of the Court of Industrial Relations regarding the company's policy of retrenchment. The company adopted a retrenchment policy laying off 17 employees due to overcapitalization and reduced business. The retrenchment policy was adopted before the union was organized and was not aimed at the union. The Supreme Court denied the petition, finding no unfair labor practice as the layoffs were a result of legitimate business needs rather than an attempt to target the union.

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Justin Luis Jalandoni
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188 views3 pages

Araneta Union vs. Roldan: Retrenchment Case

The Gregorio Araneta Employees Union filed a petition for certiorari challenging the resolution of the Court of Industrial Relations regarding the company's policy of retrenchment. The company adopted a retrenchment policy laying off 17 employees due to overcapitalization and reduced business. The retrenchment policy was adopted before the union was organized and was not aimed at the union. The Supreme Court denied the petition, finding no unfair labor practice as the layoffs were a result of legitimate business needs rather than an attempt to target the union.

Uploaded by

Justin Luis Jalandoni
Copyright
© © All Rights Reserved
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GREGORIO ARANETA EMPLOYEES UNION VS.

ROLDAN
G.R. NO. L-6846
JULY 20, 1955

FACTS
A petition for certiorari to review the Resolution of the Court of Industrial
Relations dated March 31, 1953.

The Agricultural Division of the Gregorio Araneta, Inc., was established in 1947
with a capital of P200,000. The total investment in that Division in 1953 was
about P3,000,000. To reduce this overcapitalization, the Board of Directors felt
that it was necessary either to invite fresh capital from outside or to adopt a
retrenchment policy. When Heacock and Company refused the invitation
to invest in the enterprise, the Board took the alternative of retrenchment.
The Board decided not to import as much merchandise as usual. It also reduced
credits. All these plans required a reduction in the volume of business
necessitating likewise a reduction of personnel and caused the laying off of 17
employees. The selection of those to be laid off was made by a technical man and
approved by the Board. These employees were given one month separation pay,
except Nicolas Gonzalez who refused to receive it.

The reorganization of the Agricultural Division was adopted by unanimous


resolution of the Board of Directors as a consequence of the retrenchment policy.
This was adopted even before the petitioner, "Gregorio Araneta Employees'
Union", was organized and; consequently, it was never directed against the
union. Judge Bautista adds: ". . . Considering this fact, and taking into account all
the circumstances of this case, especially the actual reduction of business of said
Division, the court fails to find sufficient justification for altering the action of the
Board of Directors regarding those employees, who received their severance
pay". Judge Bautista, however, believed that Gonzales should not have been
separated because his work was shifted to another employee by the name of
Augusto Achacoso, who was thus overburdened.

Both parties filed their respective motions for reconsideration with the court en
banc. The latter modified the decision of Associate Judge Bautista in its
resolution of March 31, 1953, prepared by the Presiding Judge Arsenio C. Roldan
and concurred in by Associate Judges Modesto Castillo and Juan L. Lantin. The
modification consists only in holding that the laying off of Gonzalez was also
legal. Judge Bautista dissented with regard to the separation of Gonzalez, giving
the same reasons he gave in his original opinion.

ISSUE:
Whether or not the company engaged in unfair labor practice by adopting a
policy of retrenchment aimed at the Union or any of its members.

HELD:
We find no reason for disturbing the decision of the Court of Industrial
Relations, en banc. The laying off of the 17 employees was due to the
retrenchment policy which the Company had to adopt in order to reduce the
overcapitalization and minimize expenses. The volume of business was
considerably reduced.

It should be noted that the retrenchment policy was adopted before even the
organization of the petitioning union. It was not, therefore, aimed at the Union or
any of its members for union or labor activities. It was not an unfair labor
practice.
In view of the foregoing, the petition is denied, without pronouncement as to
costs. It is so ordered.

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