EN BANC

G.R. No. 192571, July 23, 2013

ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN
D. FEIST, MARIA OLIVIA T. YABUT-MISA, TERESITA C. BERNARDO,
AND ALLAN G. ALMAZAR, Petitioners, v. PEARLIE ANN F. ALCARAZ,
Respondent.

DECISION
PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated
December 10, 2009 and Resolution3 dated June 9, 2010 of the Court of
Appeals (CA) in CA-G.R. SP No. 101045 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.

The Facts

On June 27, 2004, petitioner Abbott Laboratories, Philippines (Abbott) caused

the publication in a major broadsheet newspaper of its need for a Medical and
Regulatory Affairs Manager (Regulatory Affairs Manager) who would: (a) be
responsible for drug safety surveillance operations, staffing, and budget; (b)
lead the development and implementation of standard operating
procedures/policies for drug safety surveillance and vigilance; and (c) act as
the primary interface with internal and external customers regarding safety
operations and queries.4 Alcaraz – who was then a Regulatory Affairs and
Information Manager at Aventis Pasteur Philippines, Incorporated (another
pharmaceutical company like Abbott) – showed interest and submitted her
application on October 4, 2004.5

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.6 In Abbott’s offer sheet,7 it was stated
that Alcaraz was to be employed on a probationary basis.8 Later that day, she
accepted the said offer and received an electronic mail (e-mail) from Abbott’s
Recruitment Officer, petitioner Teresita C. Bernardo (Bernardo), confirming
the same. Attached to Bernardo’s e-mail were Abbott’s organizational chart
and a job description of Alcaraz’s work.9

On February 12, 2005, Alcaraz signed an employment contract which stated,

inter alia, that she was to be placed on probation for a period of six (6)
months beginning February 15, 2005 to August 14, 2005. The said contract
was also signed by Abbott’s General Manager, petitioner Edwin Feist (Feist):10

PROBATIONARY EMPLOYMENT

Dear Pearl,

After having successfully passed the pre-employment requirements, you are

hereby appointed as follows: cralavvon linel awlib rary

Position Title : Regulatory Affairs Manager

Department : Hospira
The terms of your employment are: c ralavvonl inelawl ibra ry

Nature of Employment : Probationary

Effectivity : February 15, 2005 to August 14, 2005
Basic Salary : P110,000.00/ month

It is understood that you agree to abide by all existing policies, rules and
regulations of the company, as well as those, which may be hereinafter
promulgated.

Unless renewed, probationary appointment expires on the date indicated

subject to earlier termination by the Company for any justifiable reason.

If you agree to the terms and conditions of your employment, please signify
your conformity below and return a copy to HRD.

Welcome to Abbott!

Very truly yours,

Sgd.
EDWIN D. FEIST
General Manager

CONFORME:

Sgd.
PEARLIE ANN FERRER-ALCARAZ

During Alcaraz’s pre-employment orientation, petitioner Allan G. Almazar

(Almazar), Hospira’s Country Transition Manager, briefed her on her duties
and responsibilities as Regulatory Affairs Manager, stating that: (a) she will
handle the staff of Hospira ALSU and will directly report to Almazar on
matters regarding Hopira’s local operations, operational budget, and
performance evaluation of the Hospira ALSU Staff who are on probationary
status; (b) she must implement Abbott’s Code of Good Corporate Conduct
(Code of Conduct), office policies on human resources and finance, and
ensure that Abbott will hire people who are fit in the organizational
discipline; (c) petitioner Kelly Walsh (Walsh), Manager of the Literature Drug
Surveillance Drug Safety of Hospira, will be her immediate supervisor; (d) she
should always coordinate with Abbott’s human resource officers in the
management and discipline of the staff; (e) Hospira ALSU will spin off from
Abbott in early 2006 and will be officially incorporated and known as Hospira,
Philippines. In the interim, Hospira ALSU operations will still be under Abbott’s
management, excluding the technical aspects of the operations which is under
the control and supervision of Walsh; and (f) the processing of information
and/or raw material data subject of Hospira ALSU operations will be strictly
confined and controlled under the computer system and network being
maintained and operated from the United States. For this purpose, all those
involved in Hospira ALSU are required to use two identification cards: one, to
identify them as Abbott’s employees and another, to identify them as Hospira
employees.11
On March 3, 2005, petitioner Maria Olivia T. Yabut-Misa (Misa), Abbott’s
Human Resources (HR) Director, sent Alcaraz an e-mail which contained an
explanation of the procedure for evaluating the performance of probationary
employees and further indicated that Abbott 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 (Performance Modules) which
she had to apply in line with her task of evaluating the Hospira ALSU staff.12

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: first on the third month and second on the fifth
month from the date of employment. The necessary Performance
Improvement Plan should also be made during the third-month review in case
of a gap between the employee’s performance and the standards set. These
performance standards should be discussed in detail with the employee within
the first two (2) weeks on the job. It was equally required that a signed copy
of the PPSE form must be submitted to Abbott’s Human Resources
Department (HRD) and shall serve as documentation of the employee’s
performance during his/her probationary period. This shall form the basis for
recommending the confirmation or termination of the probationary
employment.13

During the course of her employment, Alcaraz noticed that some of the staff
had disciplinary problems. Thus, she would reprimand them for their
unprofessional behavior such as non-observance of the dress code,
moonlighting, and disrespect of Abbott officers. However, Alcaraz’s method of
management was considered by Walsh to be “too strict.”14 Alcaraz
approached Misa to discuss these concerns and was told to “lie low” and let
Walsh handle the matter. Misa even assured her that Abbott’s HRD would
support her in all her management decisions.15

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.16

On April 20, 2005, Alcaraz had a meeting with petitioner Cecille Terrible
(Terrible), Abbott’s former HR Director, to discuss certain issues regarding
staff performance standards. In the course thereof, Alcaraz accidentally saw a
printed copy of an e-mail sent by Walsh to some staff members which
essentially contained queries regarding the former’s job performance. Alcaraz
asked if Walsh’s action was the normal process of evaluation. Terrible said
that it was not.17

On May 16, 2005, Alcaraz was called to a meeting with Walsh and Terrible
where she was informed that she failed to meet the regularization standards
for the position of Regulatory Affairs Manager.18 Thereafter, Walsh and
Terrible requested Alcaraz to tender her resignation, else they be forced to
terminate her services. She was also told that, regardless of her choice, she
should no longer report for work and was asked to surrender her office
identification cards. She requested to be given one week to decide on the
same, but to no avail.19
On May 17, 2005, Alcaraz told her administrative assistant, Claude Gonzales
(Gonzales), that she would be on leave for that day. However, Gonzales told
her that Walsh and Terrible already announced to the whole Hospira ALSU
staff that Alcaraz already resigned due to health reasons.20

On May 23, 2005, Walsh, Almazar, and Bernardo personally handed to Alcaraz
a letter stating that her services had been terminated effective May 19,
2005.21 The letter detailed the reasons for Alcaraz’s termination –
particularly, that Alcaraz: (a) did not manage her time effectively; (b) failed
to gain the trust of her staff and to build an effective rapport with them; (c)
failed to train her staff effectively; and (d) was not able 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.22 On May 27, 2005, Alcaraz received another copy of the said
termination letter via registered mail.23

Alcaraz felt that she was unjustly terminated from her employment and thus,
filed a complaint for illegal dismissal and damages against Abbott and its
officers, namely, Misa, Bernardo, Almazar, Walsh, Terrible, and Feist.24 She
claimed that she should have already been considered as a regular and not a
probationary employee given Abbott’s failure to inform her of the reasonable
standards for her regularization upon her engagement as required under
Article 29525 of the Labor Code. In this relation, she contended that while her
employment contract stated that she was to be engaged on a probationary
status, the same did not indicate the standards on which her regularization
would be based.26 She further averred that the individual petitioners
maliciously connived to illegally dismiss her when: (a) they threatened her
with termination; (b) she was ordered not to enter company premises even if
she was still an employee thereof; and (c) they publicly announced that she
already resigned in order to humiliate her.27

On the contrary, petitioners maintained that Alcaraz was validly terminated

from her probationary employment given her failure to satisfy the prescribed
standards for her regularization which were made known to her at the time of
her engagement.28

The LA Ruling

In a Decision dated March 30, 2006,29 the LA dismissed Alcaraz’s complaint

for lack of merit.

The LA rejected Alcaraz’s argument that she was not informed of the
reasonable standards to qualify as a regular employee considering her
admissions that she was briefed by Almazar on her work during her pre-
employment orientation meeting30 and that she received copies of Abbott’s
Code of Conduct and Performance Modules which were used for evaluating all
types of Abbott employees.31 As Alcaraz was unable to meet the standards
set by Abbott as per her performance evaluation, the LA ruled that the
termination of her probationary employment was justified.32 Lastly, the LA
found that there was no evidence to conclude that Abbott’s officers and
employees acted in bad faith in terminating Alcaraz’s employment.33
Displeased with the LA’s ruling, Alcaraz filed an appeal with the National Labor
Relations Commission (NLRC).

The NLRC Ruling

On September 15, 2006, the NLRC rendered a Decision,34 annulling and

setting aside the LA’s ruling, the dispositive portion of which reads: cralavvonli nelawlib ra ry

WHEREFORE, the Decision of the Labor Arbiter dated 31 March 2006 [sic] is
hereby reversed, annulled and set aside and judgment is hereby rendered: cralavvonlinelaw lib rary

1. Finding respondents Abbot [sic] and individual respondents to have

committed illegal dismissal; cha nrob lesvi rtua lawlib rary

2. Respondents are ordered to immediately reinstate complainant to her

former position without loss of seniority rights immediately upon receipt
hereof;chanroblesvi rtua lawlib rary

3. To jointly and severally pay complainant backwages computed from 16 May

2005 until finality of this decision. As of the date hereof the backwages is
computed at

a. Backwages for 15 months - PhP 1,650,000.00

b. 13th month pay - 110,000.00
TOTAL PhP 1,760,000.00

4. Respondents are ordered to pay complainant moral damages of P50,000.00

and exemplary damages of P50,000.00.

5. Respondents are also ordered to pay attorney’s fees of 10% of the total
award.

6. All other claims are dismissed for lack of merit.

SO ORDERED. 35

The NLRC reversed the findings of the LA and ruled that there was no
evidence showing that Alcaraz had been apprised of her probationary status
and the requirements which she should have complied with in order to be a
regular employee.36 It held that Alcaraz’s receipt of her job description and
Abbott’s Code of Conduct and Performance Modules was not equivalent to her
being actually informed of the performance standards upon which she should
have been evaluated on.37 It further observed that Abbott did not comply
with its own standard operating procedure in evaluating probationary
employees.38 The NLRC was also not convinced that Alcaraz was terminated
for a valid cause given that petitioners’ allegation of Alcaraz’s “poor
performance” remained unsubstantiated.39

Petitioners filed a motion for reconsideration which was denied by the NLRC in
a Resolution dated July 31, 2007.40

Aggrieved, petitioners filed with the CA a Petition for Certiorari with Prayer for
Issuance of a Temporary Restraining Order and/or Writ of Preliminary
Injunction, docketed as CA G.R. SP No. 101045 (First CA Petition), alleging
grave abuse of discretion on the part of NLRC when it ruled that Alcaraz was
illegally dismissed.41

Pending resolution of the First CA Petition, Alcaraz moved for the execution of
the NLRC’s Decision before the LA, which petitioners strongly opposed. The LA
denied the said motion in an Order dated July 8, 2008 which was, however,
eventually reversed on appeal by the NLRC.42 Due to the foregoing,
petitioners filed another Petition for Certiorari with the CA, docketed as CA
G.R. SP No. 111318 (Second CA Petition), assailing the propriety of the
execution of the NLRC decision.43

The CA Ruling

With regard to the First CA Petition, the CA, in a Decision44 dated December
10, 2009, affirmed the ruling of the NLRC and held that the latter did not
commit any grave abuse of discretion in finding that Alcaraz was illegally
dismissed.

It observed that Alcaraz was not apprised at the start of her employment of
the reasonable standards under which she could qualify as a regular
employee.45 This was based on its examination of the employment contract
which showed that the same did not contain any standard of performance or
any stipulation that Alcaraz shall undergo a performance evaluation before
she could qualify as a regular employee.46 It also found that Abbott was
unable to prove that there was any reasonable ground to terminate Alcaraz’s
employment.47 Abbott moved for the reconsideration of the aforementioned
ruling which was, however, denied by the CA in a Resolution48 dated June 9,
2010.

The CA likewise denied the Second CA Petition in a Resolution dated May 18,
2010 (May 18, 2010 Resolution) and ruled that the NLRC was correct in
upholding the execution of the NLRC Decision.49 Thus, petitioners filed a
motion for reconsideration.

While the petitioners’ motion for reconsideration of the CA’s May 18, 2010
Resolution was pending, Alcaraz again moved for the issuance of a writ of
execution before the LA. On June 7, 2010, petitioners received the LA’s order
granting Alcaraz’s motion for execution which they in turn appealed to the
NLRC – through a Memorandum of Appeal dated June 16, 2010 (June 16,
2010 Memorandum of Appeal ) – on the ground that the implementation of
the LA’s order would render its motion for reconsideration moot and
academic.50

Meanwhile, petitioners’ motion for reconsideration of the CA’s May 18, 2010
Resolution in the Second CA Petition was denied via a Resolution dated
October 4, 2010.51 This attained finality on January 10, 2011 for petitioners’
failure to timely appeal the same.52 Hence, as it stands, only the issues in the
First CA petition are left to be resolved.

Incidentally, in her Comment dated November 15, 2010, Alcaraz also alleges
that petitioners were guilty of forum shopping when they filed the Second CA
Petition pending the resolution of their motion for reconsideration of the CA’s
December 10, 2009 Decision i.e., the decision in the First CA Petition.53 She
also contends that petitioners have not complied with the certification
requirement under Section 5, Rule 7 of the Rules of Court when they failed to
disclose in the instant petition the filing of the June 16, 2010 Memorandum of
Appeal filed before the NLRC.54

The Issues Before the Court

The following issues have been raised for the Court’s resolution: (a) whether
or not petitioners are guilty of forum shopping and have violated the
certification requirement under Section 5, Rule 7 of the Rules of Court; (b)
whether or not Alcaraz was sufficiently informed of the reasonable standards
to qualify her as a regular employee; (c) whether or not Alcaraz was validly
terminated from her employment; and (d) whether or not the individual
petitioners herein are liable.

The Court’s Ruling

A. Forum Shopping and Violation of Section 5,

Rule 7 of the Rules of Court.

At the outset, it is noteworthy to mention that the prohibition against forum

shopping is different from a violation of the certification requirement under
Section 5, Rule 7 of the Rules of Court. In Sps. Ong v. CA,55 the Court
explained that: cralavvo nli nelawlib rary

x x x The distinction between the prohibition against forum shopping and the
certification requirement should by now be too elementary to be
misunderstood. To reiterate, compliance with the certification against forum
shopping is separate from and independent of the avoidance of the act of
forum shopping itself. There is a difference in the treatment between failure
to comply with the certification requirement and violation of the prohibition
against forum shopping not only in terms of imposable sanctions but also in
the manner of enforcing them. The former constitutes sufficient cause for the
dismissal without prejudice [to the filing] of the complaint or initiatory
pleading upon motion and after hearing, while the latter is a ground for
summary dismissal thereof and for direct contempt. x x x. 56

As to the first, forum shopping takes place when a litigant files multiple suits
involving the same parties, either simultaneously or successively, to secure a
favorable judgment. It exists where the elements of litis pendentia are
present, namely: (a) identity of parties, or at least such parties who represent
the same interests in both actions; (b) identity of rights asserted and relief
prayed for, the relief being founded on the same facts; and (c) the identity
with respect to the two preceding particulars in the two (2) cases is such that
any judgment that may be rendered in the pending case, regardless of which
party is successful, would amount to res judicata in the other case.57

In this case, records show that, except for the element of identity of parties,
the elements of forum shopping do not exist. Evidently, the First CA Petition
was instituted to question the ruling of the NLRC that Alcaraz was illegally
dismissed. On the other hand, the Second CA Petition pertains to the
propriety of the enforcement of the judgment award pending the resolution of
the First CA Petition and the finality of the decision in the labor dispute
between Alcaraz and the petitioners. Based on the foregoing, a judgment in
the Second CA Petition will not constitute res judicata insofar as the First CA
Petition is concerned. Thus, considering that the two petitions clearly cover
different subject matters and causes of action, there exists no forum
shopping.

As to the second, Alcaraz further imputes that the petitioners violated the
certification requirement under Section 5, Rule 7 of the Rules of Court58 by
not disclosing the fact that it filed the June 16, 2010 Memorandum of Appeal
before the NLRC in the instant petition.

In this regard, Section 5(b), Rule 7 of the Rules of Court requires that a
plaintiff who files a case should provide a complete statement of the present
status of any pending case if the latter involves the same issues as the one
that was filed. If there is no such similar pending case, Section 5(a) of the
same rule provides that the plaintiff is obliged to declare under oath that to
the best of his knowledge, no such other action or claim is pending.

Records show that the issues raised in the instant petition and those in the
June 16, 2010 Memorandum of Appeal filed with the NLRC likewise cover
different subject matters and causes of action. In this case, the validity of
Alcaraz’s dismissal is at issue whereas in the said Memorandum of Appeal, the
propriety of the issuance of a writ of execution was in question. Thus, given
the dissimilar issues, petitioners did not have to disclose in the present
petition the filing of their June 16, 2010 Memorandum of Appeal with the
NLRC. In any event, considering that the issue on the propriety of the
issuance of a writ of execution had been resolved in the Second CA Petition –
which in fact had already attained finality – the matter of disclosing the June
16, 2010 Memorandum of Appeal is now moot and academic.

Having settled the foregoing procedural matter, the Court now proceeds to
resolve the substantive issues.

B. Probationary employment;
chanrob lesvirtualawlibra ry

grounds for termination.

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.59 Thus, the services of an employee who has been engaged on
probationary basis may be terminated for any of the following: (a) a just or
(b) an authorized cause; and (c) when he fails to qualify as a regular
employee in accordance with reasonable standards prescribed by the
employer.60

Corollary thereto, Section 6(d), Rule I, Book VI of the Implementing Rules of

the Labor Code provides that if the employer fails to inform the probationary
employee of the reasonable standards upon which the regularization would be
based on at the time of the engagement, then the said employee shall be
deemed a regular employee, viz.: cra lavvonli nelawli bra ry

(d) In all cases of probationary employment, the employer shall make known
to the employee the standards under which he will qualify as a regular
employee at the time of his engagement. Where no standards are made
known to the employee at that time, he shall be deemed a regular employee.

In other words, 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.

Keeping with these rules, an employer is deemed to have made known the
standards that would qualify a probationary employee to be a regular
employee when it has exerted reasonable efforts to apprise the employee of
what he is expected to do or accomplish during the trial period of probation.
This goes without saying that the employee is sufficiently made aware of his
probationary status as well as the length of time of the probation.

The exception to the foregoing is when the job is self-descriptive in nature, for
instance, in the case of maids, cooks, drivers, or messengers.61 Also, in
Aberdeen Court, Inc. v. Agustin,62 it has been held that the rule on notifying a
probationary employee of the standards of regularization should not be used
to exculpate an employee who acts in a manner contrary to basic knowledge
and common sense in regard to which there is no need to spell out a policy or
standard to be met. In the same light, an employee’s failure to perform the
duties and responsibilities which have been clearly made known to him
constitutes a justifiable basis for a probationary employee’s non-
regularization.

In this case, petitioners contend that Alcaraz was terminated because she
failed to qualify as a regular employee according to Abbott’s standards which
were made known to her at the time of her engagement. Contrarily, Alcaraz
claims that Abbott never apprised her of these standards and thus, maintains
that she is a regular and not a mere probationary employee.

The Court finds petitioners’ assertions to be well-taken.

A punctilious examination of the records reveals that Abbott had indeed

complied with the above-stated requirements. This conclusion is largely
impelled by the fact that Abbott clearly conveyed to Alcaraz her duties and
responsibilities as Regulatory Affairs Manager prior to, during the time of her
engagement, and the incipient stages of her employment. On this score, the
Court finds it apt to detail not only the incidents which point out to the efforts
made by Abbott but also those circumstances which would show that Alcaraz
was well-apprised of her employer’s expectations that would, in turn,
determine her regularization: cralavvon linelaw lib rary

(a) On June 27, 2004, Abbott caused the publication in a major broadsheet
newspaper of its need for a Regulatory Affairs Manager, indicating therein the
job description for as well as the duties and responsibilities attendant to the
aforesaid position; this prompted Alcaraz to submit her application to Abbott
on October 4, 2004; chan roble svirtualaw libra ry
(b) In Abbott’s December 7, 2004 offer sheet, it was stated that Alcaraz was
to be employed on a probationary status; chan roblesv irt uala wlibra ry

(c) On February 12, 2005, Alcaraz signed an employment contract which

specifically stated, inter alia, that she was to be placed on probation for a
period of six (6) months beginning February 15, 2005 to August 14, 2005; c hanro blesvi rt ualawlib ra ry

(d) On the day Alcaraz accepted Abbott’s employment offer, Bernardo sent
her copies of Abbott’s organizational structure and her job description through
e-mail;chan roble svirtualawl ibra ry

(e) Alcaraz was made to undergo a pre-employment orientation where

Almazar informed her that she had to implement Abbott’s Code of Conduct
and office policies on human resources and finance and that she would be
reporting directly to Walsh; chan roble svirtualawl ibra ry

(f) Alcaraz was also required to undergo a training program as part of her
orientation; chan roble svirtualawl ibra ry

(g) Alcaraz received copies of Abbott’s Code of Conduct and Performance

Modules from Misa who explained to her the procedure for evaluating the
performance of probationary employees; she was further notified that Abbott
had only one evaluation system for all of its employees; and

(h) Moreover, 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.63

Considering the totality of the above-stated circumstances, it cannot,

therefore, be doubted that Alcaraz was well-aware that her regularization
would depend on her ability and capacity to fulfill the requirements of her
position as Regulatory Affairs Manager and that her failure to perform such
would give Abbott a valid cause to terminate her probationary employment.

Verily, basic knowledge and common sense dictate that the adequate
performance of one’s duties is, by and of itself, an inherent and implied
standard for a probationary employee to be regularized; such is a
regularization standard which need not be literally spelled out or mapped into
technical indicators in every case. In this regard, it must be observed that the
assessment of adequate duty performance is in the nature of a management
prerogative which when reasonably exercised – as Abbott did in this case –
should be respected. This is especially true of a managerial employee like
Alcaraz who was tasked with the vital responsibility of handling the personnel
and important matters of her department.

In fine, the Court rules that Alcaraz’s status as a probationary employee and
her consequent dismissal must stand. Consequently, in holding that Alcaraz
was illegally dismissed due to her status as a regular and not a probationary
employee, the Court finds that the NLRC committed a grave abuse of
discretion.

To elucidate, records show that the NLRC based its decision on the premise
that Alcaraz’s receipt of her job description and Abbott’s Code of Conduct and
Performance Modules was not equivalent to being actually informed of the
performance standards upon which she should have been evaluated on.64 It,
however, overlooked the legal implication of the other attendant
circumstances as detailed herein which should have warranted a contrary
finding that Alcaraz was indeed a probationary and not a regular employee –
more particularly the fact that she was well-aware of her duties and
responsibilities and that her failure to adequately perform the same would
lead to her non-regularization and eventually, her termination.

Accordingly, by affirming the NLRC’s pronouncement which is tainted with

grave abuse of discretion, the CA committed a reversible error which,
perforce, necessitates the reversal of its decision.

C. Probationary employment; termination procedure.

A different procedure is applied when terminating a probationary employee;

the usual two-notice rule does not govern.65 Section 2, Rule I, Book VI of the
Implementing Rules of the Labor Code states that “[i]f the termination is
brought about by the x x x 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 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, Abbott determined that she failed to meet the reasonable
standards for her regularization considering her lack of time and people
management and decision-making skills, which are necessary in the
performance of her functions as Regulatory Affairs Manager.66 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.67

D. Employer’s violation of company

policy and procedure.

Nonetheless, despite the existence of a sufficient ground to terminate

Alcaraz’s employment and Abbott’s compliance with the Labor Code
termination procedure, it is readily 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.

Veritably, a company policy partakes of the nature of an implied contract

between the employer and employee. In Parts Depot, Inc. v. Beiswenger,68 it
has been held that: c ralavvonl inelawl ibra ry

[E]mployer statements of policy . . . can give rise to contractual rights in

employees without evidence that the parties mutually agreed that the policy
statements would create contractual rights in the employee, and, hence,
although the statement of policy is signed by neither party, can be unilaterally
amended by the employer without notice to the employee, and contains no
reference to a specific employee, his job description or compensation, and
although no reference was made to the policy statement in pre-employment
interviews and the employee does not learn of its existence until after his
hiring. Toussaint, 292 N.W .2d at 892. 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. (Emphasis and
underscoring supplied.)

Hence, given such nature, company personnel policies create an obligation on

the part of both the employee and the employer to abide by the same.

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.69 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.70

In this case, it is apparent that Abbott failed to follow the above-stated

procedure in evaluating Alcaraz. For one, there lies a hiatus of evidence that
a signed copy of Alcaraz’s PPSE form was submitted to the HRD. 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’s performance with the set company standards.

While it is Abbott’s management prerogative to promulgate its own company

rules and even subsequently amend them, this right equally demands that
when it does create its own policies and thereafter notify its employee of the
same, it accords upon itself the obligation to faithfully implement them.
Indeed, a contrary interpretation would entail a disharmonious relationship in
the work place for the laborer should never be mired by the uncertainty of
flimsy rules in which the latter’s labor rights and duties would, to some
extent, depend.

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. A further exposition is apropos.

Case law has settled that an employer who terminates an employee for a
valid cause but does so through invalid procedure is liable to pay the latter
nominal damages.
In Agabon v. NLRC (Agabon),71 the Court pronounced that where the
dismissal is for a just cause, the lack of statutory due process should not
nullify the dismissal, or render it illegal, or ineffectual. However, the employer
should indemnify the employee for the violation of his statutory rights.72
Thus, in Agabon, the employer was ordered to pay the employee nominal
damages in the amount of P30,000.00.73

Proceeding from the same ratio, the Court modified Agabon in the case of
Jaka Food Processing Corporation v. Pacot (Jaka)74 where it created a
distinction between procedurally defective dismissals due to a just cause, on
one hand, and those due to an authorized cause, on the other.

It was explained that if the dismissal is based on a just cause under Article
282 of the Labor Code (now Article 296) but the employer failed to comply
with the notice requirement, the sanction to be imposed upon him should be
tempered because the dismissal process was, in effect, initiated by an act
imputable to the employee; if the dismissal is based on an authorized cause
under Article 283 (now Article 297) but the employer failed to comply with the
notice requirement, the sanction should be stiffer because the dismissal
process was initiated by the employer’s exercise of his management
prerogative.75 Hence, in Jaka, where the employee was dismissed for an
authorized cause of retrenchment76 – as contradistinguished from the
employee in Agabon who was dismissed for a just cause of neglect of duty77 –
the Court ordered the employer to pay the employee nominal damages at the
higher amount of P50,000.00.

Evidently, the sanctions imposed in both Agabon and Jaka proceed from the
necessity to deter employers from future violations of the statutory due
process rights of employees.78 In similar regard, the Court deems it proper to
apply the same principle to the case at bar for the reason that an employer’s
contractual breach of its own company procedure – albeit not statutory in
source – has the parallel effect of violating the laborer’s rights. Suffice it to
state, the contract is the law between the parties and thus, breaches of the
same impel recompense to vindicate a right that has been violated.
Consequently, while the Court is wont to uphold the dismissal of Alcaraz
because a valid cause exists, the payment of nominal damages on account of
Abbott’s contractual breach is warranted in accordance with Article 2221 of
the Civil Code.79

Anent the proper amount of damages to be awarded, the Court observes that
Alcaraz’s dismissal proceeded from her failure to comply with the standards
required for her regularization. As such, it is undeniable that the dismissal
process was, in effect, initiated by an act imputable to the employee, akin to
dismissals due to just causes under Article 296 of the Labor Code. Therefore,
the Court deems it appropriate to fix the amount of nominal damages at the
amount of P30,000.00, consistent with its rulings in both Agabon and Jaka.

E. Liability of individual petitioners

as corporate officers.

It is hornbook principle that personal liability of corporate directors, trustees

or officers attaches only when: (a) 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; (b) 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; (c) they agree to hold themselves personally and solidarily liable
with the corporation; or (d) they are made by specific provision of law
personally answerable for their corporate action.80

In this case, Alcaraz alleges that the individual petitioners acted in bad faith
with regard to the supposed crude manner by which her probationary
employment was terminated and thus, should be held liable together with
Abbott. In the same vein, she further attributes the loss of some of her
remaining belongings to them.81

Alcaraz’s contention fails to persuade.

A judicious perusal of the records show that other than her unfounded
assertions on the matter, there is no evidence to support the fact that the
individual petitioners herein, in their capacity as Abbott’s officers and
employees, acted in bad faith or were motivated by ill will in terminating
Alcaraz’s services. 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 the latter to actually proceed with her
termination. On the alleged loss of her personal belongings, records are bereft
of any showing that the same could be attributed to Abbott or any of its
officers. It is a well-settled rule that bad faith cannot be presumed and he
who alleges bad faith has the onus of proving it. All told, since Alcaraz failed
to prove any malicious act on the part of Abbott or any of its officers, the
Court finds the award of moral or exemplary damages unwarranted.

WHEREFORE, the petition is GRANTED. The Decision dated December 10,

2009 and Resolution dated June 9, 2010 of the Court of Appeals in CA-G.R. SP
No. 101045 are hereby REVERSED and SET ASIDE. Accordingly, the Decision
dated March 30, 2006 of the Labor Arbiter is REINSTATED with the
MODIFICATION that petitioner Abbott Laboratories, Philippines be ORDERED
to pay respondent Pearlie Ann F. Alcaraz nominal damages in the amount of
P30,000.00 on account of its breach of its own company procedure.

SO ORDERED.

Sereno, C.J., Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Del
Castillo, Abad, Villarama, Jr., Perez, and Reyes, JJ., concur.
Brion, J., see dissent.
Mendoza, J., but concur with J. Brion in his views on the procedural aspect.
Leonen, I join J. Brion in his dissent.