ABBOTT LABORATORIES V ALCARAZ 5.
Abbott’s PPSE Procedure mandates that a probationary employee’s job
23 July 2013 | Perlas-Bernabe, J. | PfRoC | Duties of Directors/Controlling SHs
PETITIONERS: Abbott Laboratories, Philippines, Cecille Terrible, Edwin Feist,
Maria Olivia Yabutmisa, Teresita Bernardo, Allan Almazar
RESPONDENT: Pearlie Ann Alcaraz
SUMMARY: Abbott terminated the services of Alcaraz, its probationary employee.
Alcaraz claimed that she had been illegally dismissed. The SC ruled that her
dismissal was for due cause and complied with the requirements of the LC, but it
was procedurally infirm due to non-compliance with the company’s policies. On the
matter of holding liable for damages the individual petitioners, who were officers of
the corporation, the SC held that they were not personally liable.
DOCTRINE: Personal liability of corporate directors, trustees or officers attaches
only when: (1) they assent to a patently unlawful act of the corporation, or when they
are guilty of bad faith or gross negligence in directing its affairs, or when there is a
conflict of interest resulting in damages to the corporation, its stockholders, or other
persons; (2) they consent to the issuance of watered down stocks or when, having
knowledge of such issuance, do not forthwith file with the corporate secretary their
written objection; (3) they agree to hold themselves personally and solidarily liable
with the corporation; or (4) they are made by specific provision of law personally
answerable for their corporate action.
FACTS:
1. Petitioner Abbott Laboratories, Philippines caused publication in a major
broadsheet of its need for a Medical and Regulatory Affairs Manager. Alcaraz, then a
Regulatory Affairs and Information Manager at Aventis Pasteur Philippines Inc. (a
pharmaceutical company like Abbott) submitted her application thereof.
2. Abott formally offered Alcaraz the position, which was an item under the
company’s Hospira Affiliate Local Surveillance Unit (ALSU) department. In her
offer sheet, it stated that Alcaraz was to be employed on a probationary basis. Later
that day, she accepted the offer and received an e-mail from Abott’s Recruitment
Officer Teresita Bernardo confirming the same, with an attached organizational chart
and job description of Alcaraz’s work.
3. Alcaraz signed an employment contract stating that she was to be placed on
probation for 6 mos beginning 15 Feb 200 – 14 Aug 2005. It was also signed by
Abbott’s General Manager, petitioner Edwin Feist.
4. DUrign Alcraz’s pre-employment orientation, petitioner Allan Almazar, Hspira’s
Country Transition Manager, briefed her on her duties and responsibilities as
Regulatory Affairs Manager. Petitioner Maria Olivia Yabut-Misa, Abbott’s HR
director, e-mailed Alcaraz an explanation of the procedure for evaluating the
performance of probationary employees and further indicated that Abbot had only
one evaluation system for all of its employees. Alcaraz was also given copies of
Abbott’s Code of Conduct and Probationary Performance Standards and Evaluation
(PPSE) and Performance Excellence Orientation Modules which she had to apply in
line with her task of evaluating the Hospira ALSU staff.
performance should be formally reviewed and discussed with the employee at least
twice: (1) 3rd mo and (2) 5th mo from date of employment. The necessary
Performance Improvement Plan should also be made during the 3 rd mo review in
case of a gap between the employee’s performance and the standards. These
performance should be discussed in detail with the employee within the first 2 week
son the job. It was equally required that a signed copy of the PPSE form must be
submitted to Abbott’s HR Dept and shall serve as documentation of the employee’s
performance during his/her probationary period. This would form the basis for
recommending the probationary employment’s confirmation or termination.
6. During her employment, Alcaraz noticed that some of the staff had disciplinary
problems. She would reprimand them for their unprofessional behavior, e.g. non-
observance of dress code, moonlighting, and disrespect of Abbott officers. However,
Walsh considered her method of management too strict. Alcaraz approached Misa to
discuss these concerns and was told to “lie low” and let Walsh handle the matter;
Misa assured her that HRD would support her in all her management decisions.
7. On 12 April 2005, Alcaraz received an e-mail from Misa requesting immediate
action on the staff’s performance evaluation as their probationary periods were about
to end. Alcaraz eventually submitted this. On 20 April 2005, Alcaraz had a meeting
with petitioner Cecille Terrible, Abbott’s former HR Director, to discuss certain
issues regarding staff performance standards. Alcaraz then accidentally saw a printed
e-mail sent by Walsh to some staff members which essentially contained queries
regarding the former’s staff performance. Alcaraz asked if Walsh’s action was the
normal evaluation process, which Terrible answered was not.
8. On 16 May 2005, Alcaraz was called to a meeting with Walsh and Terrible and
told that she failed to meet the regularization standards for her position. They
requested that she resign, else they be forced to terminate her services; and that,
regardless of her choice, she should no longer report for work and was asked to
surrender her office IDs. She requested a week to decide, but to no avai.
9. The next day, Alcaraz told her administrative assistant, Gonzales, that she would
be on leave that day. But he told her that Walsh and Terrible had already announced
to the whole Hospira ASLU staff that Alcaraz had resigned due to health reasons.
10. On 23 May 2005, Walsh, Almazar and Bernardo personally handed Alcaraz a
letter stating that her services had been terminated effective 19 May 2005, detailing
the reasons for her termination, particularly that she: (1) did not manage her time
effectively; (2) failed to gain her staff’s trust and build an effective rapport with
them; (3) failed to train her staff effectively; and (4) was unable to obtain the
knowledge and ability to make sound judgments on case processing and article
review which were necessary for the proper performance of her duties. Alcaraz
received another copy of the letter via registered mail.
11. Alcaraz filed an illegal dismissal complaint with prayer for damages, claiming
she should already have been considered a regular, not a probationary employee,
given Abbott’s failure to inform her of the reasonable standards for her regularization
upon her engagement as required under Art 295, LC; and that while her employment
contract stated that she was to be engaged on a probationary status, it did not indicate
the standards on which her regularization was to be based.
12. The LA dismissed her complaint. NLRC reversed. The CA affirmed the NLRC.
ISSUE: WoN Alcaraz was illegally dismissed – NO, but PROCEDURALLY
INFIRM
WoN individual petitioners should be held liable with the corporation – NO
HELD: Petition granted. CA reversed and set aside. LA decision reinstated with
modification.
RATIO:
1. Alcaraz’s status as a probationary employee and her consequent dismissal must
stand. Circumstances show that she was well-apprised of her employer’s
expectations that would determine her regularization, i.e. (1) publication of the job
description, duties and responsibilities of her position; (2) offer sheet indicating that
employment was on probationary status; (3) employment contract specifying
probationary status; (4) e-mail of organizational structure and job description; (5)
pre-employment orientation informing her that she had to implement Abbott’s Code
of Conduct and office policies on HR and finance, and that she would be reporting
directly to Walsh; (6) training program; (7) Code of Conduct and Performance
Modules, and further notification that Abbott had only one evaluation system for all
its employees; and (8) Alcaraz had previously worked for another pharmaceutical
company and had admitted to have an “extensive training and background to acquire
the necessary skills for her job.
2. Basic knowledge and common sense dictate that adequate performance of one’s
duties is by and of itself an inherent and implied standard for a probationary
employee to be regularized. This does not need to be literally spelled out.
3. The usual 2-notice rule does not apply in terminating a probationary employee.
For probationary employees, it is sufficient that a written notice is served the
employee, within a reasonable time from the effective date of termination. The
records show that Alcaraz’s dismissal was effected through a letter on 19 May 2005,
received on the 23rd and again on the 27th, stating therein the reasons for her
termination. This sufficiently meets the criteria.
4. But despite the existence of sufficient ground to terminate Alcaraz’s employment
and Abbott’s compliance with the LC termination procedure, it is apparent that
Abbott breached its contractual obligation to Alcaraz when it failed to abide by its
own procedure in evaluating the performance of a probationary employee.
5. A company policy partakes of the nature of an implied contract between the
employer and the employee. The principle is akin to estoppel. Once an employer
establishes an express personnel policy and the employee continues to work while
the policy remains in effect, the policy is deemed an implied contract for so long as it
remains in effect. If the employer unilaterally changes the policy, the terms of the
implied contract are also thereby changed. Given such nature, company personnel
policies create an obligation on the part of both the employee and the employer to
abide by the same.
6. Abbott’s PPSE procedure mandates that the job performance of a probationary
employee should be formally reviewed and discussed with the employee at least
twice. Abbott is also required to come up with a Performance Improvement Plan
during the 3rd month review to bridge the gap between the employee’s performance
and the standards, if any. A signed copy of the PPSE form should be submitted to
Abbott’s HRD as the same would serve as the basis for recommending the
confirmation or termination of the probationary employment. Here, Abbott failed to
follow the procedure. There was no evidence that a signed copy of Alcaraz’s PPSE
form was submitted to HRD, nor even that a PPSE form was completed. Her
performance evaluation was not discussed with her during her 3 rd and 5th mos. Nor
did Abbott come up with the necessary Performance Improvement plan.
7. Thus, while there is due cause to terminate Alcaraz’s probationary employment for
failure to meet the standards required for regularization, and Abbott satisfied its
statutory duty to serve a written notice of termination, the fact that it violated its own
company procedure renders the termination of her employment procedurally infirm,
warranting payment of nominal damages in the amount of P30k.
8. It is hornbook principle that personal liability of corporate directors, trustees or
officers attaches only when: (1) they assent to a patently unlawful act of the
corporation, or when they are guilty of bad faith or gross negligence in directing its
affairs, or when there is a conflict of interest resulting in damages to the corporation,
its stockholders, or other persons; (2) they consent to the issuance of watered down
stocks or when, having knowledge of such issuance, do not forthwith file with the
corporate secretary their written objection; (3) they agree to hold themselves
personally and solidarily liable with the corporation; or (4) they are made by specific
provision of law personally answerable for their corporate action.
9. Alcaraz alleged that the individual petitioners acted in bad faith with regard to the
crude manner by which her probationary employment was terminated and thus,
should be held liable together with Abbott; she also attributed loss of some personal
belongings to them. The SC was not persuaded. The records show no evidence to
support the contention that individual petitioners acted in bad faith or were motivated
by ill will in terminating Alcaraz’s services.
10. The fact that Alcaraz was made to resign and not allowed to enter the workplace
does not necessarily indicate bad faith on Abbott’s part since a sufficient ground
existed for them to proceed with her termination. On the alleged loss of her personal
belongings, there was no showing that the same could be attributed to Abott or any
of its officers.