DUSIT HOTEL NIKKO, petitioner, vs. RENATO M.

GATBONTON, respondent
GR.No. 161654 | May 5, 2006
Justice Leonardo Quisimbing
(Labor Standards- Probationary period of Employment)

Doctrine:
The power of the employer to terminate an employee on probation must be exercised (1) in accordance with the
requirements of the contract, (2) the dissatisfaction on the part of the employer must be real and in good faith, not
feigned so as to circumvent the contract or the law; and, (3) there must be o unlawful discrimination in the dismissal.

Facts: Respondent Gatbonton was hired as Chief Steward in the petitioner’s food and beverage (F and
B) department. At the end of the probation period, F and B director observed that Gatbonton failed to
meet the qualification standards for the position, and recommended a two-month extension of his
probationary period.

At the end of the fourth month, respondent still had poor ratings. He requested another month in
probation which the director agreed but refused to sign the memorandum on the extension.

Gatbonton later received a notice of termination of probationary employment. He filed a complaint for
illegal dismissal which the Labor Arbiter disposed for lack of evidence, stating that at the time of the
respondent’s termination, he was already a regular employee.

NLRC reversed the decision declaring that respondent was legally dismissed based on the Personnel
Action Form which showed that the respondent’s probationary employment was extended.

CA further reinstated the decision of the Labor Arbiter, hence the petition.

Issue: Whether or not respondent was still a probationary employee at the time of his dismissal. (No)

Ruling: No. a probationary employee can be legally terminated either: (1) for a just cause; or (2) when
the employee fails to qualify as a regular employee in accordance with the reasonable standards made
known to him by the employer at the start of the employment.

Here, the petitioner did not present proof that the respondent was evaluated from November 21, 1998
to February 21, 1999.

The Personnel Action Form dated March 2, 1999, contained the following remarks: "subject to
undergo extension of probation for two (2) months as per attached memo." Yet, we find this document
inconclusive. First, the action form did not contain the results of the respondent’s evaluation. Without
the evaluation, the action form had no basis. Second, the action form spoke of an attached memo
which the petitioner identified as Rauber’s Memorandum, recommending the extension of the
respondent’s probation period for two months. Again, the supposed Memorandum was not presented.
Third, the action form did not bear the respondent’s signature.
It is an elementary rule in the law on labor relations that a probationary employee engaged to work
beyond the probationary period of six months, as provided under Article 281 of the Labor Code, or for
any length of time set forth by the employer (in this case, three months), shall be considered a regular
employee.

Dispositive portion: WHEREFORE, the instant petition for review is DENIED. The Decision of the
Court of Appeals in CA-G.R. SP No. 73296, which reversed the Resolution dated September 24, 2001
of the National Labor Relations Commission, is AFFIRMED WITH the MODIFICATION that the
order for payment of unpaid salaries is DELETED.