G.R. No.

192571 July 23, 2013

ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D.FEIST,

MARIA OLIVIA T. YABUTMISA, TERESITA C. BERNARDO, AND ALLAN G.
ALMAZAR Petitioners, vs. PEARLIE ANN F. ALCARAZ, Respondent.

PETITION for review on certiorari of the decision and resolution of the Court of
Appeals which pronounced that the National Labor Relations Commission
(NLRC) did not gravely abuse its discretion when it ruled that respondent Pearlie
Ann F. Alcaraz (Alcaraz) was illegally dismissed from her employment.

Facts :
On June 27, 2004, Abbot Laboratories, Philippines published in major broadsheet that it
is in need of Medical and Regulatory Affairs Manager stating therein the responsibilities
and qualifications of said position.

On December 7, 2004, Abbott formally offered Alcaraz the above mentioned position
which was an item under the company’s Hospira Affiliate Local Surveillance Unit
(ALSU) department.

On February 12, 2005, Alcaraz signed an employment contract which state, inter alia,
that she was to be placed on probation for a period of six (6) months beginning
February 15, 2005 to August 14, 20015.

She underwent pre-employment orientation where she was briefed on her duties and
responsibilities.

On March 3, 2005, Alcaraz received an e-mail from the HR Director explaining the
procedure for evaluating the performance of probationary employees and further
indicated that Abott had only one evaluation system for all of its employees. Alcaraz
was also given copies of Abbot’s Code of Conduct and Probationary Performance
Standards and Evaluation and Performance Excellence Orientation Modules which she
had to apply in line with her task of evaluating the Hospital ALSU staff.

On April 12, 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. This
Alcaraz eventually submitted.

On May 16, 2005, Alcaraz was called to a meeting with her immediate supervisor and
the former HR Director where she was informed that she failed to meet the
regularization standards for the position of Regulatory Affairs Manager. Thereafter she
was asked to tender her resignation, else they be forced to terminate her services.

She filed a case of illegal dismissal against Abott and its officers. LA dismissed her
complaint for lack of merit. NLRC reversed and set aside the LA’s ruling and ordered

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Abbot to reinstate and pay Alcaraz exemplary damages. The CA affirmed the NLRC
decision.

Issues:
1. Whether or not ALcaraz was sufficiently informed of the reasonable standards to
qualify her as a regular employee; and
2. Whether or not Alcaraz was validly terminated from her employment.

Held:
1. Yes, Alcaraz was sufficiently informed of the reasonable standards. Under
Section 6(d) of the Implementing Rules of the Labor code the employer is made
to comply with two (2) requirements when dealing with a probationary employee:
first, the employer must communicate the regularization standards to the
probationary employee; and second, the employer must make such
communication at the time of the probationary employee’s engagement. If the
employer fails to comply with either, the employee is deemed as a regular
and not a probationary employee.

A punctilious examination of the records reveals that Abbot has indeed complied
with the above-stated requirements. This conclusion is largely impelled by the
fact that Abbot clearly conveyed to Alcaraz her duties and responsibilities as
Regulatory Affairs Manger prior to, during the time of her engagement, and the
incipient stages of her employment.

2. A probationary employee, like a regular employee, enjoys security of tenure.

However, in cases of probationary employment, aside from just or
authorized causes of termination, an additional ground is provided under
Article 295 of the Labor Code, i.e., the probationary employee may also be
terminated for failure to qualify as a regular employee in accordance with
the reasonable standards made known by the employer to the employee at
the time of the engagement.

A different procedure is applied when terminating a probationary employee; the

usual two-notice rule does not govern. Section 2, Rule I, Book VI of the
Implementing Rules of the Labor Code states that “if the termination is brought
about by the failure of an employee to meet the standards of the employer in
case of probationary employment, it shall be sufficient that a written notice is
served to the employee, within a reasonable time from the effective date of
termination.”

As the records show, Alcaraz’s dismissal was effected through a letter dated May
19, 2005 which she received on May 23, 2005 and again on May 27, 2005.
Stated therein were the reasons for her termination, i.e., that after proper
evaluation, Abbot determined that she failed to meet the reasonable standards
for her regularization considering her lack of time and people management
decision making skills, which are necessary in the performance of her functions

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 as Regulatory Affairs Manager. Undeniably, this written notice sufficiently meets
the criteria set forth above, thereby legitimizing the cause and manner of
Alcaraz’s dismissal as a probationary employee under the parameters set by the
Labor Code.

However, records show that Abbott’s PPSE procedure mandates, inter alia,
that the job performance of a probationary employee should be formally
reviewed and discussed with the employee at least twice: first on the third
month and second on the fifth month from the date of employment. Abbott is also
required to come up with a Performance Improvement Plan during the third
month review to bridge the gap between the employee’s performance and the
standards set, if any. In addition, a signed copy of the PPSE form should be
submitted to Abbott’s HRD as the same would serve as basis for recommending
the confirmation or termination of the probationary employment, it is apparent
that Abbott failed to follow the said procedure in evaluating Alcaraz

In this light, while there lies due cause to terminate Alcaraz’s probationary
employment for her failure to meet the standards required for her
regularization, and while it must be further pointed out that Abbott had
satisfied its statutory duty to serve a written notice of termination, the fact
that it violated its own company procedure renders the termination of
Alcaraz’s employment procedurally infirm, warranting the payment of
nominal damages

Dissenting Opinion - Brion J.

A valid probationary employment requires the concurrence of two requirements. First,
the employer shall make known the reasonable standard (performance standard) whose
compliance will render the employee qualified to be a regular employee. Second, the
employer shall inform the employee of the applicable performance standard at the time
of his/her engagement. Failing in one or both, the employee, even if initially hired as a
probationary employee, should be viewed and considered a regular employee.

To justify the dismissal of an employee, the employer carries the burden of proving that
the dismissal was for a just cause and with the observance of due process prior to
dismissal. The employer has to discharge this burden by clear, accurate, consistent and
convincing evidence; in case of doubt, the presumption in the employee’s favor
under Article 4 of the Labor Code should apply.

The fact that the respondent was still in her probationary period of employment did not
lessen the burden of proof that the law imposed on the petitioners to prove the just
cause for her dismissal. Probationary employees are protected by the security of tenure
provision of the Constitution and they cannot be removed from their position except only
for cause.

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Issue No.1
Whether or not ALcaraz was sufficiently informed of the reasonable standards to
qualify her as a regular employee

Abbott’s pre-employment orientation and other documentary evidence cannot

amount to performance standards

The pre-employment orientation the petitioners conducted for Alcaraz and the office
policies communicated to her cannot be equated with the performance standards
required by law. The pre-employment orientation pertains to Alcaraz’s duty to implement
Abbott’s Code of Conduct and office policies as they relate to the staff she has to
manage and supervise. The other pieces of documentary evidence Abbott presented —
Code of Conduct, PPSE and Performance Excellence Orientation Modules — were
likewise in line with its purpose of acquainting and assisting Alcaraz in her duty in
supervising and evaluating the employees assigned to her department.

The respondent’s knowledge of the duties that her work entailed, and her knowledge of
the employer’s performance standard, are two distinct matters separately requiring the
presentation of independent proof.

It was admitted in the ruling that no performance standards were expressly given but
because the respondent had been informed of her duties and responsibilities (a fact that
was and is not disputed), she should be deemed to know what was expected of her for
purposes of regularization

As the NLRC and the CA found however, there is no evidence on record to show what
these standards really were and that they were duly communicated. Much less was
there evidence that Alcaraz was actually evaluated on the basis of the required duly
communicated standards.

If none had been prescribed in the first place, under what basis could the employee
then be assessed for purposes of termination or regularization?

The requirement of independent proof is found under Article 281 of the Labor Code, as
amended, and its implementing rule that deem an employee to be regular if he/she was
not informed of the performance standard for regularization. Independent proof is
likewise necessary as the law provides an additional ground for terminating a
probationary employment, i.e., when the employee “fails to qualify as a regular
employee in accordance with the reasonable standards made known by the employer.

Since the validity of Alcaraz’s dismissal hinges on whether Abbott complied with the
twin requirements under Article 281 of the Labor Code, then proof of its compliance with
these requirements must be substantiated by the evidence — and not merely assumed
from or impelled by something that, in the first place, the NLRC and the CA did not find
existing.

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Issue No. 2
Whether or not Alcaraz was validly terminated from her employment

Complementing the requirement for the existence of performance standards is the

required communication of the performance standard to the respondent. Again, nothing
in the records shows that the petitioner ever communicated any performance standard
to the respondent
In this case, as it is apparent that Abbott failed to follow the above-stated procedure in
evaluating Alcaraz. It was not even shown that a PPSE form was completed to formally
assess her performance. Neither was the performance evaluation discussed with her
during the third and fifth months of her employment. Nor did Abbott come up with the
necessary Performance Improvement Plan to properly gauge Alcaraz performance with
the set company standards.

On the other hand, the NLRC and the CA concluded that a different performance
standard and evaluation process was applied to the respondent in light of the
circumstances of the case, gleaned from the evidence submitted.

Since the respondent, as the incident suggests, was bound by a different set of
standards and procedures, and since no evidence of record existed showing what these
standards were or that the required procedures were observed, the petitioners’ theory
that the respondent was informed of, and was evaluated pursuant to, the performance
standards applicable to her position, is effectively negated. This leads to the conclusion
that the respondent, from the beginning, had been a regular employee as a result of the
failure of Abbott’s HR processes. A much simpler view, related this time to the manner
of her termination, is that the respondent was simply differently treated.
Additionally, the petitioner failed to comply with the procedural due process of the Labor
Code when it terminated the respondent’s employment. The two-written notice
requirement under Section 2, Rule XXIII, Book V of the Omnibus Rules Implementing
the Labor Code, as amended, was never observed
The first notice is complied with when the employee is properly apprised of the charges
brought against him/her so that he/she can properly prepare for his/her defense. The
second notice is complied with when the employee is informed of the employer’s
intention to terminate the employment.
From the records, the respondent received only one notice and was not given ample
opportunity to be heard before her employment was terminated. The single notice rule
applies only if the employee is validly on probationary basis; it does not apply where the
employee is deemed a regular employee for the company’s failure to provide and to
communicate a prescribed performance standard applicable to the probationary
employee.

The above analysis shows that the respondent had been illegally dismissed from her
employment. The petitioner failed to show that her dismissal was for a valid cause. The

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petitioner also failed to respect the respondent’s procedural due process rights under
the law.