Probationary Employees
SC, petitioner alleges that uttering
1. PASAMBA v. NLRC
FACTS: On July 3, 2001, Jennifer Fabello
Pasamba (Pasamba) was employed as a
staff nurse by St. Luke’s Medical Center
(SLMC). On October 15, 2001, Dr. Pacita J.
M. Lopez filed a complaint with the Vice
President for Nursing in SLMC against
Pasamba for uttering slanderous remarks
against her. In her complaint, Dr. Lopez
attached a letter written by Hazel S.
Cabales wherein Pasamba made the
following remarks against Dr. Lopez:
“Bakit si Dra. Lopez pa ang napili
mong pedia eh ang tanda-tanda na
nun? xxx Alam mo ba, kahit wala
naming diperensiya yung baby,
ipinpa-isolate niya? Minsan nga
merong baby siyang pasyente
ipinasok ditto, sabi ko, bah himala!
Walang ikinabit sa kanya. Tapos,
kinabukasan…kinabitan din pala!”
SLMC issued a Memorandum to the
petitioner to reply in the complaint.
Petitioner denied making the alleged
statement and that Cabales had merely
concocted the story after petitioner barred
Cabales from staying in the Intermediate
Maternity Care Unit (IMCU) since visitors
were not allowed to do so. SLMC conducted
a hearing and directed petitioner to explain
why action should not be taken against her
for violating Rule IV, Article 2 of SLMC
Code of Discipline on libelous utterances. In
petitioner’s reply, she adopted the same
explanation and demanded a In this case, there is no dispute that SLMC
reinvestigation. On November 7, 2001,
SLMC notified petitioner, thru a Letter, that
she was found guilty of uttering slanderous
and derogatory remarks against Dr. Lopez.
As a consequence, her employment was
terminated.
Petitioner then filed a complaint for illegal
dismissal. The LA dismissed the complaint
finding that petitioner uttered slanderous
remarks. The NLRC affirmed the decision of
the LA. The CA also affirmed the NLRC’s
decision.
On her current petitioned filed before the
slanderous statements is not related to her
work as a nurse, and therefore cannot effect
her dismissal.
ISSUE: WON petitioner is illegally
dismissed
RULING: NO.
Petitioner was not dismissed for serious
misconduct which is among the grounds for
dismissing regular employees. Petitioner
was a probationary employee, not a regular
employee. A probationary employee is one,
who, for a given period of time is being
observed and evaluated to determine
whether or not he is qualified for a
permanent position.
Under Art. 281 of the Labor Code, the law
does not preclude the employer from
terminating the probationary
employment if it finds that the
probationary employee is not qualified
for regular employment in accordance to
reasonable standards made known by
the employer to the employee at the time
of his engagement. The provision which
states that the probationary period shall not
exceed 6 months means that the
probationary employee may be dismissed
for cause at any time before the expiration
of 6 months. On the other hand, if such
worker continues to be employed longer
than 6 months, he or she is considered a
regular employee and ceases to be a
probationary employee.
notified the petitioner of the standards she
needed to comply with for her continued
employment as petitioner and her co-
employees attended an orientation seminar
wherein the standards which employees
were required to meet were discussed.
2. CALS POULTRY SUPPLY CORP v.
ROCO
FACTS: CALS Poultry Corporation is
engaged in the business of selling dressed
chicken and related products managed by
Danilo Yap. In 1984, CALS hired Alfredo
Roco as driver and Alfredo’s sister, Edna,
as a helper at its chicken dressing plant. On
May 6, 1995, Candelaria, another sister of
Alfredo, was also hired as a helper in the
chicken dressing plant on a probationary
basis.
The three filed a complaint for illegal
dismissal.
LA: dismissed the complaints. The LA
found that Alfredo applied for a leave of
absence and such application was granted.
However, he did not report back for work
after the expiration of his leave of absence
showing abandonment of work on his part.
On the other hand, the LA also upheld the
decision of CALS not to continue with
Candelaria’s probationary employment
because she was unsuited for the work for
which her services were engaged. Edna, on
one hand, began absenting herself and
when she was sent a memo requiring her to
report immediately, she did not respond.
NLRC: affirmed the LA
CA: set aside the decision of the NLRC.
The CA found that there was no valid cause
for the termination of Alfredo’s employment
and that he was not afforded to his right of
due process. In the case of Candelaria, the
CA held that she was terminated 4 days
after she ceases to be a probationary
employee and became a regular employee.
In the case of Edna, the CA affirmed the
decision of the NLRC.
ISSUE: WON Candelaria was illegally
dismissed
RULING: No.
There is no dispute that Candelaria was
employed on probationary basis. She was
hired on May 16, 1995 and her services on
November 15, 1995 were terminated due to
poor work performance. She did not
measure to the standards on the dressing of
chicken. For example, she frequently failed
to observe the allowable inches to cut,
which must only be 1.5 inches, in
performing surgical incision of the chicken
butt, thereby making it difficult to remove the
chicken parts without damaging it. The
computation of the CA of the 6-month
probationary period is erroneous.
Candelaria’s services was terminated within
and not beyond the 6-month probationary
period. Citing the case of Cebu Royal v.
Deputy Minister of Labor, the computation
of the 6-month probationary period is
reckoned from the date of appointment
up to the same calendar date of the 6th
month following.
Note: Alfredo Roco and the Management
had a misunderstanding, having said
that, they shall bear their own loss.
3. PHILIPPINE SPRING WATER
RESOURCES v. CA
FACTS: Petitioner is engaged in business
of manufacturing, selling and distributing
bottled mineral water. It hired Juvenstein
Mahilum as Vice-President for Sales and
Marketing for the Bulacan-South Luzon
Area. Mahilum was assigned as the
chairman of the inauguration of PSWRI’s
plant on Bulacan and the company’s
Christmas party. Mahilum called a
committee meeting for the program but the
meeting was postponed because he had to
entertain some visitors who arrived without
prior appointment. Mahilum requested Ms.
Vicky Evangelista to take charge of the
meeting for the planning of the event.
Mahilum learned that Evangelista
postponed the meetings because she
accompanied the daughter of the CEO and
President of the company to Bulacan.
Thereafter, meetings on the program of
activities for the inauguration and Christmas
party were conducted without the presence
of Mahilum. Evangelista took charge and
assumed the lead role until the day of the
event.
On the day of the event, Mahilum’s attention
was called when the company president got
furious because he was not recognized
during the program proper. Upon inquiry
from the emcees, Mahilum learned that they
were not apprised of the president’s
decision to deliver a speech.
Mahilum was required to explain why the
president was not recognized and made to
deliver his speech. At the same time, he
was placed under preventive suspension for
30 days. He submitted a written
explanation. Subsequently an investigation
was conducted. When his suspension
ended, Mahilum reported back for work but
was prevented from entering the workplace
and he received a copy of the memorandum
terminating his services. He executed the
Release, Waiver and Quitclaim in favor of
the company. However, Mahilum filed a
complaint for illegal dismissal.
LA: dismissed the complaint. The LA finds
that Mahilum is estopped due to the
quitclaim he executed.
NLRC: ruled in favor of Mahilum on the
ground that the subject quitclaim did not bar
the institution for illegal dismissal. The
NLRC also found that while Mahilum failed
to discharge his duties as chairman of the
inauguration of the Bulacan plan, the same
was not sufficient to deprive him of his
employment on the ground of loss of
confidence.
CA: revered the decision of the NLRC and
upheld the validity of the executed quitclaim.
In its petition in the SC, PSWRI argued that
Mahilum was not a regular employee at the
time of his dismissal because his
probationary status would end only if he
could satisfactorily perform his duties and
functions as defined in the company’s rules
of discipline.
ISSUE: WON Mahilum was illegally
dismissed
RULING: YES.
Contrary to the claims of the petitioners,
Mahilum was correctly considered by the
NLRC and CA as a regular employee. A
probationary employee, like a regular
employee, enjoys security of tenure. In
cases of probationary employment,
probationary employees may only be
terminated for any of the following: (1)
just or (2) an authorized cause and (3)
when he fails to qualify as a regular
employee.
In this case, it is clear that the primary
cause of Mahilum’s dismissal from his
employment was borne out of his alleged
lapses as chairman for the inauguration of
the Bulacan plant company’s Christmas
party. Under the circumstances, the
petitioners may not be permitted to
belatedly harp on its choice not to extend
his alleged probationary status to regular
employment as a ground for his dismissal.
Besides having been allowed to work
after the lapse of the probationary
period, Mahilum became a regular
employee.
Further, his designation as the chairman of
the whole affair did not form part of his duty
as a supervisor. Mahilum was engaged to
supervises the sales and marketing aspects
of the PSWRI’s Bulacan Plant. Simply, put
the petitioners were not able to prove that
Mahilum was unfit to continue working for
the company.
4. MITSUBISHI MOTORS PHILIPPINES
CORP. (MMPC) vs. CPLU and PARAS
Facts:
In 19 March 1976, Petitioner Mitsubishi
Motors hired the respondent Nelson Paras
as a shuttle bus driver but he resigned in
June 16, 1982. He was then rehired as
welder fabricator at the Mitsubishi Motors
from October 3, 1994 to October 31, 1994.
On October 29, 1994, his contract was
renewed from November 1, 1994 up to
March 3, 1995.
Sometime in May of 1996, Paras was re-
hired on a probationary basis as a
manufacturing trainee at the Plant
Engineering Maintenance Department. He
and the new and re-hired employees were
given an orientation on May 15, 1996. Paras
started to work on May 27, 1996.
When was evaluated by his immediate
supervisor, he received average rating and
informed that he would be regularized.
However the Department and Division
Managers reviewed the evaluation of Paras.
They unanimously agreed that the
performance of Paras was unsatisfactory
and was not considered for regularization.
On 26 November 1996, Paras received a
Notice of Termination dated November 25,
1996.
Utilizing the grievance machinery in the
collective bargaining agreement, the
Chrysler Philippines Labor Union (CLPU),
which is the legitimate labor organization,
demanded the settlement of the dispute
which arose from the termination of Paras.
The parties failed to settle a solution in the
voluntary arbitration. CLPU contends that
Paras was dismissed 3 days after the
expiration of the 6 months probationary
period. Thus, he was already a regular
employee when he was terminated and can
only be terminated upon just and authorized
causes.
Voluntary Arbitrator: dismissal of Paras
was due to his inability to pass the
probationary standards of MMPC. also
agreed that the termination was within the
probationary period.
CA: ruled in favor of CLPU and Paras. The
notice of termination was served November
26 or on the 183rd day of Paras. He was
already a regular employee.
Petitioner’s arguments in the SC:
 From May 27 - Nov 26 = 180
days. When Paras was terminated,
he was still a probationary employee
citing Art. 13 of the New Civil Code.
 His reinstatement is moot and
academic because of the
retrenchment program in February
1998. Paras would have been
included in the first batch of
employees terminated based on first
in policy.
Issue: Whether or not Paras was already a
regular employee when he was terminated.
Ruiling:
YES. Under Article 281 of the Labor
Code, the employer must inform the
employee of the standards for which his
employment may be considered for
regularization. Such probationary period,
unless covered by an apprenticeship
agreement, shall not exceed six (6)
months from the date the employee
started working. The employees services
may be terminated for just cause or for
his failure to qualify as a regular
employee based on reasonable
standards made known to him. Applying
Article 13 of the Civil Code,the probationary
period of six (6) months consists of one
hundred eighty (180) days.This is in
conformity with paragraph one, Article 13 of
the Civil Code, which provides that the
months which are not designated by their
names shall be understood as consisting of
thirty (30) days each. The number of
months in the probationary period, six (6),
should then be multiplied by the number of
days within a month, thirty (30); hence, the
period of one hundred eighty (180) days.
As clearly provided for in the last paragraph
of Article 13, in computing a period, the first
day shall be excluded and the last day
included. Thus, the one hundred eighty
(180) days commenced on May 27, 1996,
and ended on November 23, 1996. The
termination letter dated November 25, 1996
was served on respondent Paras only at
3:00 a.m. of November 26, 1996. He was,
by then, already a regular employee of the
petitioner under Article 281 of the Labor
Code.
Furthermore, there was also no showing
that respondent Paras was informed of the
basis of the volte force of the management
group tasked to review his performance
rating. Considering the that Paras was not
dismissed for just or authorized cause, his
dismissal was illegal.
5. ILLUMINADA VER BUISER vs.
LEOGARDO
Facts:
On 26 May 1980, petitioners were employed
by private respondent General Telephone
Directory Company as sales representative
under an “Employment Contract (on
Probationary Status).” Under the contract, it
was provided that the probationary period
would be 18 months. In 14 May 1982,
petitioners were dismissed for their inability
to reach the prescribed sales quota. Thus,
petitioners filed an action for illegal
dismissal in the Ministry of Labor and
Employment.
Regional Director: dismissed the
complaint.
Deputy Minister: affirmed. Petitioners have
not attained the regular status since private
respondents was justified in requiring a
longer period of probation.
Issue: Whether or not the the petitioners
have acquired a regular status.
Ruiling:
NO. The petitioner’s contention that they
have already served more than 6 months
thus they acquired automatically regular
status is not tenable.
Generally, the probationary period of
employment is limited to six (6) months.
The exception to this general rule is when
the parties to an employment contract may
agree otherwise, such as when the same is
established by company policy or when the
same is required by the nature of work to be
performed by the employee. In the latter
case, there is recognition of the exercise of
managerial prerogatives in requiring a
longer period of probationary employment,
such as in the present case where the
probationary period was set for eighteen
(18) months, i.e. from May, 1980 to
October, 1981 inclusive, especially where
the employee must learn a particular kind of
work such as selling, or when the job
requires certain qualifications, skills,
experience or training.
In the case at bar, it is shown that private
respondent Company needs at least
eighteen (18) months to determine the
character and selling capabilities of the
petitioners as sales representatives.
Moreover, an eighteen month probationary
period is recognized by the Labor Union in
the private respondent company, which is
Article V of the Collective Bargaining
Agreement. This stipulation is not contrary
to law, morals and public policy.
6. Mariwasa vs Leogarda, Jr.
Facts:
Private respondent Joaquin A. Dequila was
hired on probation by petitioner Mariwasa
Manufacturing, Inc. as a general utility
worker on January 10, 1979. Upon the
expiration of the probationary period of six
months, Dequila was informed by his
employer that his work had proved
unsatisfactory and had failed to meet the
required standards. To give him a chance to
improve his performance and qualify for
regular employment, instead of dispensing
with his service then and there, with his
written consent Mariwasa extended his
probation period for another three months
from July 10 to October 9, 1979. His
performance, however, did not improve and
on that account Mariwasa terminated his
employment at the end of the extended
period. Dequila filed a complaint for illegal
dismissal and violation of Presidential
Decrees Nos. 928 and 1389. His complaint
was dismissed after hearing by Director
Francisco L. Estrella, Director of the Ministry
of Labor National Capital Region. On appeal
to the Office of the Minister, however, said
disposition was reversed. Petitioner sought
this Court to review Hon. Leogardo's
(Deputy Minister) decision on certiorari and
prohibition, urging its reversal for having
been rendered with grave abuse of
discretion and/or without or in excess of
jurisdiction.
Issue:
Whether or not employer and employee
may by agreement extend the probationary
period of employment beyond the six
months prescribed in Art. 282 of the Labor
Code
Held:
Yes. The Court held that such an extension
may lawfully be covenanted,
notwithstanding the seemingly restrictive
language of the cited provision. Generally,
the probationary period of employment
is limited to six (6) months. The
exception to this general rule is when the
parties to an employment contract may
agree otherwise, such as when the same
is established by company policy or
when the same is required by the nature
of work to be performed by the
employee. For aught that appears of
record, the extension of Dequila's probation
was ex gratia, an act of liberality on the part
of his employer affording him a second
chance to make good after having initially
failed to prove his worth as an employee.
Such an act cannot now unjustly be turned
against said employer's account to compel it
to keep on its payroll one who could not
perform according to its work standards.
The law, surely, was never meant to
produce such an inequitable result. By
voluntarily agreeing to an extension of the
probationary period, Dequila in effect
waived any benefit attaching to the
completion of said period if he still failed to
make the grade during the period of
extension. The Court finds nothing in the
law which by any fair interpretation prohibits
such a waiver. And no public policy
protecting the employee and the security of
his tenure is served by prescribing voluntary
agreements which, by reasonably extending
the period of probation, actually improve
and further a probationary employee's
prospects of demonstrating his fitness for
regular employment.
7. Dusit Hotel vs Gatbonton
Facts:
On November 21, 1998, respondent Renato
M. Gatbonton was hired as Chief Steward in
petitioner Dusit Hotel Nikkos Food and
Beverage Department. He signed a three-
month probationary employment contract
until February 21, 1999. At the start of his
employment, the standards by which he
would be assessed to qualify for regular
employment were explained to him.
The hotel alleged that at the end of the
probation period, Ingo Rauber, Director of
its Food and Beverage Department,
observed that Gatbonton failed to meet the
qualification standards for Chief Steward,
and Rauber recommended a two-month
extension of Gatbontons probationary
period, or until April 22, 1999. At the end of
the 4thmonth, on March 24, 1999, Rauber
informed Gatbonton that the latter had poor
ratings on staff supervision, productivity,
quantity of work, and overall efficiency and
did not qualify as Chief Steward. Gatbonton
requested another month or until April 22,
1999 to improve his performance, to which
Rauber agreed but allegedly refused to sign
the Performance Evaluation Form. Neither
did he sign the Memorandum on the
extension.
On March 31, 1999, a notice[6] of
termination of probationary employment
effective April 9, 1999, on the above alleged
grounds was served on Gatbonton. On April
12, 1999, he filed a complaint for illegal
dismissal and non-payment of wages. The
Labor Arbiter found that at the time of the
respondents termination, he was already a
regular employee. National Labor Relations
Commission (NLRC) which reversed the
Labor Arbiters decision and declared the
respondents dismissal legal.
Issue:
Whether or not respondent was a regular
employee at the time of his dismissal?
Held:
Yes. Here, the petitioner did not present
proof that the respondent was evaluated
from November 21, 1998 to February 21,
1999, nor that his probationary employment
was validly extended. The petitioner alleged
that at the end of the respondents three-
month probationary employment, Rauber
recommended that the period be extended
for two months since respondent Gatbonton
was not yet ready for regular employment.
The petitioner presented a Personnel Action
Form containing the recommendation. We
observed, however, that this document was
prepared on March 31, 1999, the end of the
4th month of the respondents employment.
In fact, the recommended action was
termination of probationary employment
effective April 9, 1999, and not extension of
probation period. Upon appeal to the NLRC,
the petitioner presented another Personnel
Action Form prepared on March 2, 1999,
showing that the respondents probationary
employment was extended for two months
effective February 23, 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
respondents evaluation. Without the
evaluation, the action form had no basis.
Second, the action form spoke of an
attached memo which the petitioner
identified as Raubers Memorandum,
recommending the extension of the
respondents probation period for two
months. Again, the supposed Memorandum
was not presented. Third, the action form
did not bear the respondents signature.
In the absence of any evaluation or valid
extension, we cannot conclude that
respondent failed to meet the standards
of performance set by the hotel for a
chief steward. At the expiration of the
three-month period, Gatbonton had
become a regular employee. 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. Since respondent was not
dismissed for a just or authorized cause, his
dismissal was illegal.
8. Cebu Marine vs NLRC
Facts:
Cebu Marine Beach Resort (herein
petitioner company), a single proprietorship
owned by Victor Dualan, commenced its
operations sometime in January, 1990 with
the recruitment of its employees, including
Ric Rodrigo Rodriguez, Manulita Villegas
and Lorna G. Igot, respondents. Inasmuch
as the beach resort was intended to cater
principally to Japanese tourists,
respondents had to undergo a special
training in Japanese customs, traditions,
discipline as well as hotel and resort
services. This special training was
supervised by Tsuyoshi Sasaki, also a
petitioner. During a seminar conducted on
May 24, 1990, petitioner Sasaki suddenly
scolded respondents and hurled brooms,
floor maps, iron trays, fire hoses and other
things at them. In protest, respondents
staged a walk-out and gathered in front of
the resort. Immediately, petitioner Sasaki
reacted by shouting at them to go home and
never to report back to work. Heeding his
directive, respondents left the premises.
Eventually, they filed with the Regional
Arbitration Branch at Cebu City a complaint
for illegal dismissal and other monetary
claims against petitioners. On May 28,
1990, petitioner company, through its acting
general manager, Ofelia Pelaez, also a
petitioner, sent letters to respondents
requiring them to explain why they should
not be terminated from employment on the
grounds of abandonment of work and failure
to qualify with the standards for
probationary employees.
In due course, the Labor Arbiter rendered a
Decision dismissing respondents complaint
but directing them to immediately report dismissal cannot by logic be said to have
back to work. On appeal, the National Labor abandoned his work.
Relations Commission (NLRC), reversed
At the time they were dismissed, they
the Labor Arbiters Decision, declaring that
were still in a trial period or probationary
the respondents were dismissed illegally
period. Being in the nature of a trial
and ordering their reinstatement with
period, the essence of a probationary
payment of full backwages. Petitioners filed
period of employment fundamentally lies
with this Court a petition for certiorari,
in the purpose or objective sought to be
prohibition and injunction with prayer for the
attained by both the employer and the
issuance of a temporary restraining order.
employee during said period. While the
The court referred the petition to the Court
employer observes the fitness, propriety
of Appeals for its appropriate action and
and efficiency of a probationer to
disposition. The Court of Appeals rendered
ascertain whether he is qualified for
its Decision affirming the Decision and
permanent employment, the probationer,
Resolution of the NLRC with modification
on the other hand, seeks to prove to the
regarding the computation of backwages
employer that he has the qualifications
and separation pay. From the said Decision,
to meet the reasonable standards for
petitioners filed a motion for
permanent employment which obviously
reconsideration, but was denied. Hence,
were made known to him. To reiterate, in
this petition for review on certiorari.
the case at bar, far from allowing the
Issue: respondents to prove that they possessed
the qualifications to meet the reasonable
Whether or not respondents were illegally
standards for their permanent employment,
dismissed from employment by petitioner
petitioners peremptorily dismissed them
company
from the service.
Held:
Yes. It is settled that while probationary
9.1 Abbot vs Alcaraz (2013)
employees do not enjoy permanent status,
they are entitled to the constitutional Facts:
protection of security of tenure. Their
employment may only be terminated for Petitioner Abbott Laboratories, Philippines
(Abbott) caused the publication in a major
just cause or when they fail to qualify as
broadsheet newspaper of its need for a
regular employees in accordance with
Medical and Regulatory Affairs Manager.
reasonable standards made known to
them by their employer at the time of Alcaraz - who was then a Regulatory Affairs
engagement, and after due process. and Information Manager at Aventis Pasteur
Philippines, Incorporated (another
Here, petitioners terminated respondents
pharmaceutical company like Abbott)
probationary employment on the grounds of
showed interest and submitted her
abandonment and failure to qualify for the
application. In Abbotts offer sheet, it was
positions for which they were employed.
stated that Alcaraz was to be employed
However, it is undisputed that Mr. Sasaki
on a probationary basis. Later that day,
made an utterance to the effect that private
she accepted the said offer and received an
respondents should go home and never
electronic mail (e-mail) from Abbotts
come back to work for the company again.
Recruitment Officer, petitioner Teresita C.
Such utterance is tantamount to a dismissal.
Bernardo (Bernardo), confirming the same.
It is a settled doctrine that the filing of a
Attached to Bernardos e-mail were Abbotts
complaint for illegal dismissal is inconsistent
organizational chart and a job description of
with the charge of abandonment, for an
Alcarazs work.
employee who takes steps to protest his
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." 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.
Alcaraz was called to a meeting with Walsh
and Terrible, Abbotts former HR Director,
where she was informed that she failed to
meet the regularization standards for the
position of Regulatory Affairs Manager.
Walsh, Almazar, and Bernardo personally
handed to Alcaraz a letter stating that her
services had been terminated effective May
19, 2005. The letter detailed the reasons for
Alcarazs termination. 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. She claimed that she should have
already been considered as a regular
and not a probationary employee given
Abbotts failure to inform her of the
reasonable standards for her
regularization upon her engagement as
required under Article 295 of the Labor
Code.
LA dismissed Alcaraz’s complaint for lack of
merit. The LA rejected Alcarazs argument
that she was not informed of the reasonable
standards to qualify as a regular employee.
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. On appeal, CA affirmed the
NLRC decision. Hence, this petition.
Issue:
Whether or not Alcaraz was illegally
dismissed
Held:
Yes. 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
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 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 employers expectations that would, in
turn, determine her regularization.
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. In Abbotts December 7,
2004 offer sheet, it was stated that Alcaraz
was to be employed on a probationary
status. On the day Alcaraz accepted
Abbotts employment offer, Bernardo sent
her copies of Abbotts organizational
structure and her job description through e-
mail. Alcaraz was made to undergo a pre-
employment orientation where Almazar
informed her that she had to implement
Abbotts Code of Conduct and office policies
on human resources and finance and that
she would be reporting directly to Walsh.
Alcaraz received copies of Abbotts 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.
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.
An employer who terminates an
employee for a valid cause but does so
through invalid procedure is liable to pay
the latter nominal damages.
Despite the existence of a sufficient
ground to terminate Alcarazs
employment and Abbotts 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.
Records show that Abbotts 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
employees performance and the standards
set, if any. In addition, a signed copy of the
PPSE form should be submitted to Abbotts
HRD as the same would serve as basis for
recommending the confirmation or
termination of the probationary employment.
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 Alcarazs 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 Alcarazs performance
with the set company standards.
In this light, while there lies due cause to
terminate Alcarazs 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 Alcarazs employment
procedurally infirm, warranting the
payment of nominal damages.
9.2 Abbot vs Alcaraz (2014)
Facts and Contentions:
At the outset, there appears to be no
substantial argument in the said motion
sufficient for the Court to depart from the
pronouncements made in the initial ruling
(2013 case). But if only to address Alcaraz's
novel assertions, and to so placate any
doubt or misconception in the resolution of
this case, the Court proceeds to shed light
on the matters indicated below.
Alcaraz contends that the Court should not
have conducted a re-weighing of evidence
since a petition for review on certiorari
under Rule 45 of the Rules of Court (Rules)
is limited to the review of questions of law.
She submits that since what was under
review was a ruling of the Court of Appeals
(CA) rendered via a petition for certiorari
under Rule 65 of the Rules, the Court
should only determine whether or not the
CA properly determined that the National
Labor Relations Commission (NLRC)
committed a grave abuse of discretion.
Regarding standards for regularization,
Alcaraz posits that, contrary to the
Court’s Decision, one’s job description
cannot by and of itself be treated as a
standard for regularization as a standard
denotes a measure of quantity or quality.
Court’s ruling:
A. Manner of review
A careful perusal of the questioned Decision
will reveal that the Court actually resolved
the controversy under the above-stated
framework of analysis (check Alcaraz’s
contention). Essentially, the Court found the
CA to have committed an error in holding
that no grave abuse of discretion can be
ascribed to the NLRC since the latter
arbitrarily disregarded the legal implication
of the attendant circumstances in this case
which should have simply resulted in the
finding that Alcaraz was apprised of the
performance standards for her
regularization and hence, was properly a
probationary employee. As the Court
observed, 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. As detailed
in the Decision, Alcaraz was well-apprised
of her duties and responsibilities as well as
the probationary status of her employment
B. Standards for regularization;
conceptual underpinnings
First off, the Court must correct Alcaraz’s
mistaken notion: it is not the probationary
employee’s job description but the adequate
performance of his duties and
responsibilities which constitutes the
inherent and implied standard for
regularization. To echo the fundamental
point of the Decision, if the probationary
employee had been fully apprised by his
employer of these duties and
responsibilities, then basic knowledge
and common sense dictate that he must
adequately perform the same, else he
fails to pass the probationary trial and
may therefore be subject to termination.
10. MYLENE CARVAJAL vs. LUZON
DEVELOPMENT BANK AND/OR OSCAR
Z. RAMIREZ
Facts: Petitioner Mylene Carvajal was
employed as a trainee-teller by respondent
Luzon Development Bank on October 28,
2003 under a six-month probationary
employment contract, with a monthly
salary of P5,175.00. On December 10,
2003, the Respondent Bank sent petitioner
a Memorandum directing her to explain in
writing why she should not be subjected to
disciplinary action for "chronic tardiness" on
November 3, 5, 6, 14, 18, 20, 21 and 28
2003 or for a total of eight (8) times.
Petitioner apologized in writing and
explained that she was in the process of
making adjustments regarding her work and
house chores. She was thus reprimanded in
writing and reminded of her status as a
probationary employee. Still, on January 6,
2004, a second Memorandum was sent to
petitioner directing her to explain why she
should not be suspended for "chronic
tardiness" on 13 occasions or on December
2, 3, 4, 5, 8, 10, 11, 12, 15, 16, 18, 22, and
23 2003. On 7 January 2004, petitioner
submitted her written explanation and
manifested her acceptance of the
consequences of her actions. On 12
January 2004, petitioner was informed,
through a Memorandum, of her suspension
for three (3) working days without pay
effective January 21, 2004. Finally, in a
Memorandum dated 22 January 2004,
petitioner’s suspension was lifted but in the
same breath, her employment was
terminated effective 23 January 2004.
Petitioner then filed a case for illegal
dismissal against respondent bank.
Issue: Whether or not Petitioner was a
regular employee and was illegally
dismissed
Ruling: No. Petitioner was a probationary
employee and was validly dismissed.
Petitioner maintained that she became a
regular employee by virtue of Book VI, Rule
1, Section 6(d) of the Implementing Rules of
the Labor Code which states:
(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.
However, the Court ruled that at the time
of her engagement and as mandated by
law, petitioner was informed in writing of
the standards necessary to qualify her
as a regular employee because of the
provision in her appointment letter which
states that: “Possible extension of this
contract will depend on the job
requirements of the Bank and your
overall performance. Performance review
will be conducted before possible
renewal can take effect.”
Petitioner knew, at the time of her
engagement, that she must comply with the
standards set forth by respondent and
perform satisfactorily in order to attain
regular status. She was apprised of her
functions and duties as a trainee-teller.
Respondent released to petitioner its
evaluation of her performance and the
petitioner was found wanting.
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 281 of the Labor Code, i.e., the
probationary employee may also be
terminated for failure to qualify as a
regular employee in accordance with
reasonable standards made known by
the employer to the employee at the time
of the engagement. Thus, the services of
an employee who has been engaged on
probationary basis may be terminated
for any of the following: (1) a just or (2)
an authorized cause and (3) when he
fails to qualify as a regular employee in
accordance with reasonable standards
prescribed by the employer.
It is evident that the primary cause of
respondent’s dismissal from her
probationary employment was her "chronic
tardiness." At the very start of her
employment, petitioner already exhibited
poor working habits. Even during her first
month on the job, she already incurred eight
(8) tardiness. In a Memorandum dated 11
December 2003, petitioner was warned that
her tardiness might affect her opportunity to
become a permanent or regular employee.
And petitioner did not provide a satisfactory
explanation for the cause of her tardiness.
Punctuality is a reasonable standard
imposed on every employee, whether in
government or private sector. As a matter of
fact, habitual tardiness is a serious offense
that may very well constitute gross or
habitual neglect of duty, a just cause to
dismiss a regular employee. More
importantly, satisfactory performance is and
should be one of the basic standards for
regularization. Naturally, before an
employer hires an employee, the former can
require the employee, upon his
engagement, to undergo a trial period
during which the employer determines his
fitness to qualify for regular employment
based on reasonable standards made
known to him at the time of engagement.
11. PHILIPPINE DAILY INQUIRER, INC.,
vs.
LEON M. MAGTIBAY, JR. and
PHILIPPINE DAILY INQUIRER
EMPLOYEES UNION (PDIEU)
On February 7, 1995, PDI hired Magtibay,
on contractual basis, to assist, for a period
of five months from February 17, 1995, the
regular phone operator. Before the
expiration of Magtibay’s contractual
employment, he and PDI agreed to a
fifteen-day contract extension, or from July
17, 1995 up to July 31, 1995, under the
same conditions as the existing contract.
After the expiration of Magtibay’s
contractual employment, as extended, PDI
announced the creation and availability of a
new position for a second telephone
operator who would undergo probationary
employment. Apparently, it was PDI’s policy
to accord regular employees preference for
new vacancies in the company. Thus, a PDI
employee and member of respondent PDI
Employees Union (PDIEU) filed an
application for the new position. However,
she later withdrew her application, paving
the way for outsiders or non-PDI
employees, like Magtibay in this case, to
apply.
After the usual interview for the second
telephone operator slot, PDI chose to hire
Magtibay on a probationary basis for a
period of six (6) months. The signing of a
written contract of employment followed.
On March 13, 1996, or a week before the
end the agreed 6-month probationary
period, PDI officer Benita del Rosario
handed Magtibay his termination paper,
grounded on his alleged failure to meet
company standards. Aggrieved, Magtibay
immediately filed a complaint for illegal
dismissal and damages before the Labor
Arbiter.
Issue: Whether or not respondent Magtibay
was illegally dismissed
Ruling: No. Magtibay was validly
dismissed.
Within the limited legal six-month
probationary period, probationary
employees are still entitled to security of
tenure. It is expressly provided in the
afore-quoted Article 281 that a
probationary employee may be
terminated only on two grounds: (a) for
just cause, or (b) when he fails to qualify
as a regular employee in accordance
with reasonable standards made known
by the employer to the employee at the
time of his engagement.
PDI invokes the second ground under the
premises. In claiming that it had adequately
apprised Magtibay of the reasonable
standards against which his performance
will be gauged for purposes of permanent
employment, PDI cited the one-on-one
seminar between Magtibay and its
Personnel Assistant, Ms. Rachel Isip-Cuzio.
PDI also pointed to Magtibay’s direct
superior, Benita del Rosario, who diligently
briefed him about his responsibilities in PDI.
These factual assertions were never denied
nor controverted by Magtibay. Neither did
he belie the existence of a specific rule
prohibiting unauthorized persons from
entering the telephone operator’s booth and
that he violated that prohibition.
It is on record that Magtibay committed
obstinate infractions of company rules and
regulations, which in turn constitute
sufficient manifestations of his inadequacy
to meet reasonable employment norms. The
suggestion that Magtibay ought to have
been made to understand during his briefing
and orientation that he is expected to obey
and comply with company rules and
regulations strains credulity for acceptance.
It is likewise immaterial that his termination
was only made known to him only a week
before his 6-month probationary
employment ended.
Unlike under the first ground for the valid
termination of probationary employment
which is for just cause, the second ground
does not require notice and hearing. Due
process of law for this second ground
consists of making the reasonable
standards expected of the employee during
his probationary period known to him at the
time of his probationary employment. By the
very nature of a probationary employment,
the employee knows from the very start that
he will be under close observation and his
performance of his assigned duties and
functions would be under continuous
scrutiny by his superiors. It is in apprising
him of the standards against which his
performance shall be continuously
assessed where due process regarding
the second ground lies, and not in notice
and hearing as in the case of the first
ground.
Note: The Labor Arbiter premised his
holding on the validity of the previous
contractual employment of Magtibay as an
independent contract.
12. TAMSONS ENTERPRISES, INC.,
NELSON LEE, LILIBETH ONG and
JOHNSON NG vs. COURT OF APPEALS
and ROSEMARIE L. SY
Facts: On February 24, 2007, four days
before private respondent completed her
sixth month of working in Tamsons, Ng, the
Sales Project Manager, called her to a
meeting with him and Petitioner Lee. During
the meeting, they informed Sy that her
services would be terminated due to
inefficiency. She was asked to sign a letter
of resignation and quitclaim. She was told
not to report for work anymore because her
services were no longer needed. On her last
day of work, Ong humiliated her in front of
her officemates by shouting at her and
preventing her from getting her personal
things or any other document from the
office.
During her pre-employment interview, Lee
had nice comments about her good work
experience and educational
background. She was assured of a long-
term employment with benefits. Throughout
her employment, she earnestly performed
her duties, had a perfect attendance record,
worked even during brownouts and
typhoons, and would often work overtime
just to finish her work.
Sy claimed that the remarks of her superiors
about her alleged inefficiency were ill-
motivated and made without any basis. She
had been rendering services for almost six
(6) months before she was arbitrarily and
summarily dismissed. Her dismissal was
highly suspicious as it took place barely four
(4) days prior to the completion of her six-
month probationary period. The petitioners
did not show her any evaluation or appraisal
report regarding her alleged inefficient
performance. As she was terminated
without an evaluation on her performance,
she was deprived of the opportunity to be
regularly part of the company and to be
entitled to the benefits and privileges of a
regular employee. Worse, she was deprived
of her only means of livelihood. She then
filed a complaint for illegal dismissal against
petitioners.
Issue: Whether the termination of private
respondent Sy, a probationary employee,
was valid or not
Ruling: No, the termination was not
valid.
There is no dispute that Sy’s employment
with Tamsons on September 1, 2006 was
probationary in character. As a
probationary employee, her employment
status was only temporary. Although a
probationary or temporary employee
with a limited tenure, she was still
entitled to a security of tenure.
It is settled that even if probationary
employees do not enjoy permanent status,
they are accorded the constitutional
protection of security of tenure. This means
they may only be terminated for a just cause
or when they otherwise fail to qualify as
regular employees in accordance with
reasonable standards made known to them
by the employer at the time of their
engagement.
The justification given by the petitioners for
Sys dismissal was her alleged failure to
qualify by the company’s standard. Other
than the general allegation that said
standards were made known to her at the
time of her employment, however, no
evidence, documentary or otherwise, was
presented to substantiate the same. Neither
was there any performance evaluation
presented to prove that indeed hers was
unsatisfactory.
For failure of the petitioners to support their
claim of unsatisfactory performance by Sy,
this Court views that Sy’s employment was
unjustly terminated to prevent her from
acquiring a regular status in circumvention
of the law on security of tenure.
Here, the petitioners failed to convey to
Sy the standards upon which she should
measure up to be considered for
regularization and how the standards
had been applied in her case. As
correctly pointed out by Sy, the
dissatisfaction on the part of the
petitioners was at best self-serving and
dubious as they could not present
concrete and competent evidence
establishing her alleged
incompetence. Failure on the part of the
petitioners to discharge the burden of
proof is indicative that the dismissal was
not justified.
13. GALLARDO U. LUCERO vs. HON.
COURT OF APPEALS and PHILIPPINE
NATIONAL BANK
Facts: On 18 January 1995, petitioner
Gallardo U. Lucero started working on a
contractual basis with private respondent
Philippine National Bank (PNB). He was
hired by Excellent Manpower Services, a
manning agency, which then supplied the
manpower requirements of the PNB. On 06
December 1995, the PNB extended Lucero
an original and permanent appointment as
Liaison Officer 1, with Salary Grade II, at the
bank’s cash division.
On 23 May 1996, Lourdes V. Ledesma,
Vice-President of the Human Resources
Department (HRD) of the PNB, issued a
memorandum to Linda U. Gaerlan, then
Vice-President of the Cash Division,
informing the latter that the management
approved the termination of services of
Lucero due to the "unsatisfactory"
performance rating obtained by him during
the probationary period of his employment.
Acting on the memorandum, Gaerlan wrote
to the HRD requesting that Lucero’s name
be dropped from the official roll of PNB
employees effective at the close of business
hours of 31 May 1996. Meanwhile, on 24
May 1996, Lucero was served his
termination papers.
He then filed a complaint to the Civil Service
Commission for illegal termination.
However, the CSC explained that, at the
time he filed his complaint on 07 June 1996,
the PNB had already been privatized and
that it was no longer covered by the CSC
rules.
On 04 September 1996, Lucero filed a
complaint for illegal dismissal against the
PNB before the Labor Arbiter. On 28
September 1998, the Labor Arbiter
dismissed the complaint for lack of
jurisdiction. The Labor Arbiter declared that
Lucero was still a government employee
when he was dismissed on 24 May 1996,
the PNB having been privatized only on 27
May 1996.
Issue: Whether or not the termination was
valid
Ruling: Yes, the termination was valid.
The Court of Appeals, reiterating the
findings of the NLRC, held that at the time
of the services of petitioner were dispensed
with on 31 May 1996, his employment with
the PNB was still under probationary status,
i.e., that he was still on trial during which
time his qualification for his career
employment would be determined. The
performance by Gallardo was found
inadequate by the PNB that entitled it to
drop him from the service. Whether, indeed,
that performance was satisfactory or
unsatisfactory, was a factual question best
addressed for final determination by the
Court of Appeals, the findings on which,
when supported by substantial evidence,
would be binding on this Court. The
appellate court said:
"Applying the foregoing standards,
we hold that PNB validly exercised
its prerogative to terminate Lucero’s
probationary employment for
unsatisfactory performance. Before
expiration of his probationary
employment, Lucero was informed
of his termination. And it is
noteworthy that his immediate
superiors were one in saying that his
attitude and work performance left
much to be desired.” xxx ‘for several
times, Mr. Lucero was called upon at
the Office of the Vice President to
explain his poor performance and
misconduct reported by his assigned
supervisors;’ that Lucero ‘was
absorbed by the Bank after he
promised to the Vice-President that
he will do good and improve his
performance;’ that Lucero ‘ignored
the counseling and oral reprimands
by his supervisors;’ and that he
‘received a written complaint from a
lady employee of this department on
Mr. Lucero’s untoward behaviour
which has affected her work
performance.’ xxx In the instant
case, Lucero proved himself
unworthy of permanent employment.
Consequently, PNB cannot be
faulted for terminating his services."
It would be difficult to sustain the stand
taken by petitioner that the Court of Appeals
erred in ignoring his subsequent high
performance rating. The high rating of "very
satisfactory" obtained by petitioner after his
reinstatement, in compliance with the order
of the NLRC, was not controlling, the point
in question being his performance during
the probationary period of the employment.
14. MCARTHUR MALICDEM v. MARULAS
INDUSTRIAL CORPORATION
Facts: A complaint for illegal dismissal,
separation pay, money claims, moral and
exemplary damages, and attorney's fees
was filed by petitioners Malicdem and
Flores against respondents Marulas
Industrial Corporation (Marulas) and Mike
Mancilla (Mancilla), who were engaged in
the business of manufacturing sacks
intended for local and export markets.
Malicdem and Flores were first hired by
Marulas as extruder operators in 2006, as
shown by their employment contracts. They
were responsible for the bagging of filament
yarn, the quality of pp yarn package and the
cleanliness of the work place area. Their
employment contracts were for a period of
one (1) year. Every year thereafter, they
would sign a Resignation/Quitclaim in favor
of Marulas a day after their contracts ended,
and then sign another contract for one (1)
year. Until one day, on December 16, 2010,
Flores was told not to report for work
anymore after being asked to sign a paper
by Marulas' HR Head to the effect that he
acknowledged the completion of his
contractual status. On February 1, 2011,
Malicdem was also terminated after signing
a similar document. Thus, both claimed to
have been illegally dismissed.
Marulas countered that their contracts
showed that they were fixed-term
employees for a specific undertaking which
was to work on a particular order of a
customer for a specific period. Their
severance from employment was due to the
expiration of their contracts.
Issue: Whether or not petitioners were
illegally dismissed.
Ruling: Yes. The petitioners have
convincingly shown that they should be
considered regular employees. A reading of
the 2008 employment
contracts,denominated as "Project
Employment Agreement," reveals that there
was a stipulated probationary period of six
(6) months from its commencement. It was
provided therein that in the event that they
would be able to comply with the company’s
standards and criteria within such period,
they shall be reclassified as project
employees with respect to the remaining
period of the effectivity of the contract.
Under Article 281 of the Labor Code,
however, "an employee who is allowed to
work after a probationary period shall be
considered a regular employee." When an
employer renews a contract of employment
after the lapse of the six-month probationary
period, the employee thereby becomes a
regular employee. No employer is allowed
to determine indefinitely the fitness of its
employees.1 While length of time is not the
controlling test for project employment, it is
vital in determining if the employee was
hired for a specific undertaking or tasked to
perform functions vital, necessary and
indispensable to the usual business of trade
of the employer. Thus, in the earlier case of
Maraguinot, Jr. v. NLRC, it was ruled that a
project or work pool employee, who has
been: (1) continuously, as opposed to
intermittently, rehired by the same employer
for the same tasks or nature of tasks; and
(2) those tasks are vital, necessary and
indispensable to the usual business or trade
of the employer, must be deemed a regular
employee.
The respondents cannot use the alleged
expiration of the employment contracts of
the petitioners as a shield of their illegal
acts. The project employment contracts that
the petitioners were made to sign every
year since the start of their employment
were only a stratagem to violate their
security of tenure in the company.
15. Innodata Phils. v. Jocelyn Quejada-
Lopez
Facts: Innodata Philippines, Inc., is
engaged in the encoding/data conversion
business. It employs encoders, indexers,
formatters, programmers, quality/quantity
staff, and others, to maintain its business
and do the job orders of its clients.
"Estrella G. Natividad and Jocelyn L.
Quejada were employed as formatters by
Innodata Philippines, Inc. They [worked]
from March 4, 1997, until their separation on
March 3, 1998.
They then filed a complaint for illegal
dismissal. On the other hand, [petitioner]
contends that [respondents’] employment
contracts expired, for [these were] only for a
fixed period of one (1) year. [Petitioner]
company further invoked the Brent School
case by saying that since the period
expired, [respondents’] employment was
likewise terminated.
Issue: Whether or not the fixed-term
contract was valid.
Ruling: No. When the circumstances of a
case show that the periods were imposed to
block the acquisition of security of tenure,
fixed-term employment contracts should be
struck down for being contrary to law,
morals, good customs, public order or public
policy.
Aside from the fixed one-year term set in
paragraph 1, paragraph 7.4 provides for a
three-month period during which petitioner
has the right to pre-terminate the
employment for the "failure of the
employees to meet and pass the
qualifications and standards set by the
employer and made known to the employee
prior to" their employment. Thus, although
couched in ambiguous language, paragraph
7.4 refers in reality to a probationary period.
Clearly, to avoid regularization, petitioner
has again sought to resort alternatively to
probationary employment and employment
for a fixed term.
The language of the contract in dispute is
truly a double-bladed scheme to block the
acquisition of the employee of tenurial
security. Thereunder, [the employer] has
two options. It can terminate the employee
by reason of expiration of contract, or it may
use ‘failure to meet work standards’ as the
ground for the employee’s dismissal. In
either case, the tenor of the contract
jeopardizes the right of the worker to
security of tenure guaranteed by the
Constitution.
16. OKS Designtech v. Mary Jayne
Caccam
Facts: Petitioner OKS DesignTech, Inc.
(petitioner) hired respondent as an
accountant under a Contract of Employment
for a Fixed Period from January 21, 2008 to
June 21, 2008. Thereafter, the contract was
renewed for the period June 22, 2008 to
June 21, 2009. However, the Management
informed her of the expiration of her
contract on June 21, 2009.
Caccam then filed a complaint for illegal
dismissal. Respondent claimed that she
was a regular employee, arguing that the
nature of her work was necessary and
desirable in the usual business of petitioner,
and that she was merely imposed a fixed-
term employment with an understanding
that her contract would just be renewed
upon its expiration. Hence, in view of her
regular status, and petitioner's failure to
afford her the opportunity to be heard before
terminating her employment, she asserted
that she was illegally dismissed.
Petitioner averred that the complaint was
used only in retaliation to the criminal
complaint for Qualified Theft and
Falsification of Private Documents that was
filed against respondent after having
discovered several unauthorized
withdrawals amounting to P500,000.00 from
its bank in violation of the trust and
confidence reposed in her. They added that
the June 6, 2009 letter was not actually a
termination letter but a mere notice of the
expiration of her employment contract.
Issue: Whether or not Caccam was illegally
dismissed.
Ruling: No. An examination of the contracts
entered into by respondent reveals that her
employment was clearly limited to a fixed
period and did not go beyond such period.
She, however, asserted that she is deemed
a regular employee in view of the nature of
her employment as an accountant, an
activity that is necessary and desirable in
the usual business or trade of the company.
This notwithstanding, case law dictates that
even if an employee is engaged to
perform activities that are necessary or
desirable in the usual trade or business
of the employer, the same does not
preclude the fixing of employment for a
definite period.
The crucial factor to it all is that there is no
showing that the subject contracts were
used as subterfuge to deny respondent of
her security of tenure. Contrary to the
findings of the CA, there was no ambiguity
in the said contracts when it stipulated that
the employee may be terminated if he "fails
to meet the reasonable standards made
known to him." While such provision would
commonly appear in a probationary contract
pursuant to Article 295[46] of the Labor Code,
its inclusion in the fixed-period contracts in
this case never gave rise to an implied
probationary employment status, for which
she was to be evaluated by the company
under certain regularization standards
during a specified trial period, simply
because respondent was never employed
on a probationary basis. On the contrary,
records fully support the NLRC's finding that
respondent's employment was hinged on a
stipulated term.
The fixed-term character of employment
essentially refers to the period agreed upon
between the employer and the employee;
employment exists only for the duration of
the term and ends on its own when the term
expires. In a sense, employment on
probationary status also refers to a period
because of the technical meaning
"probation" carries in Philippine labor law - a
maximum period of six months, or in the
academe, a period of three years for those
engaged in teaching jobs. Their similarity
ends there, however, because of the
overriding meaning that being "on
probation" connotes, i.e., a process of
testing and observing the character or
abilities of a person who is new to a role or
job.
Understood in the above sense, the
essentially protective character of
probationary status for management can
readily be appreciated. But this same
protective character gives rise to the
countervailing but equally protective rule
that the probationary period can only last for
a specific maximum period and under
reasonable, well-laid and properly
communicated standards. Otherwise stated,
within the period of the probation, any
employer move based on the probationary
standards and affecting the continuity of the
employment must strictly conform to the
probationary rules.
17. ROBINSONS GALLERIA/ROBINSONS
SUPERMARKET CORPORATION and/or
JESS MANUEL vs. IRENE R. RANCHEZ
Facts: Respondent was a probationary
employee of petitioner Robinsons
Galleria/Robinsons Supermarket
Corporation (petitioner Supermarket) for a
period of five months, or from October 15,
1997 until March 14, 1998. She underwent
six weeks of training as a cashier before
she was hired as such on October 15, 1997.
Two weeks after she was hired, or on
October 30, 1997, respondent reported to
her supervisor the loss of cash amounting to
P20,299 which she had placed inside the
company locker. Petitioner Jess Manuel
(petitioner Manuel), the Operations
Manager of petitioner Supermarket, ordered
that respondent be strip-searched by the
company guards. However, the search on
her and her personal belongings yielded
nothing.
Respondent acknowledged her
responsibility and requested that she be
allowed to settle and pay the lost amount.
However, petitioner Manuel did not heed
her request and instead reported the matter
to the police. Petitioner Manuel likewise
requested the Quezon City Prosecutors
Office for an inquest.
An information for Qualified Theft was then
filed with the Quezon City Regional Trial
Court. Respondent was constrained to
spend two weeks in jail for failure to
immediately post bail. On November 25,
1997, respondent filed a complaint for illegal
dismissal and damages. On March 12,
1998, petitioners sent to respondent by mail
a notice of termination and/or notice of
expiration of probationary employment
dated March 9, 1998.
Issue: Whether respondent was illegally
terminated from employment by petitioners.
Ruling: Yes, respondent was illegally
terminated.
Article 277(b) of the Labor Code mandates
that subject to the constitutional right of
workers to security of tenure and their right
to be protected against dismissal, except
for just and authorized cause and
without prejudice to the requirement of
notice under Article 283 of the same
Code, the employer shall furnish the
worker, whose employment is sought to be
terminated, a written notice containing a
statement of the causes of termination, and
shall afford the latter ample opportunity to
be heard and to defend himself with the
assistance of a representative if he so
desires, in accordance with company rules
and regulations pursuant to the guidelines
set by the Department of Labor and
Employment.
In the instant case, based on the facts on
record, petitioners failed to accord
respondent substantive and procedural due
process. The haphazard manner in the
investigation of the missing cash, which was
left to the determination of the police
authorities and the Prosecutor’s Office left
respondent with no choice but to cry
foul. Administrative investigation was not
conducted by petitioner Supermarket. On
the same day that the missing money was
reported by respondent to her immediate
superior, the company already pre-judged
her guilt without proper investigation, and
instantly reported her to the police as the
suspected thief, which resulted in her
languishing in jail for two weeks.
The due process requirements under the
Labor Code are mandatory and may not
be supplanted by police investigation or
court proceedings. The criminal aspect of
the case is considered independent of the
administrative aspect. Thus, employers
should not rely solely on the findings of the
Prosecutor’s Office. They are mandated to
conduct their own separate investigation,
and to accord the employee every
opportunity to defend himself. Furthermore,
respondent was not represented by counsel
when she was strip-searched inside the
company premises or during the police
investigation, and in the preliminary
investigation before the Prosecutor’s Office.
18. UNIVERSIDAD DE STA. ISABEL V.
SAMBAJON JR.
FACTS: Universidad de Sta. Isabel
(Petitioner) is a non-stock, non-profit
religious educational institution. It hired
SAMBAJON, JR. as a full-time college
faculty member on probationary status
as evidenced by an Appointment
Contract dated November 1, 2002,
effective November 1, 2002 up to March
30, 2003. After the aforesaid contract
expired, petitioner continued to give
teaching loads to respondent who remained
a full-time faculty member of the
Department of Religious Education for the
two semesters of school-year (SY) 2003-
2004 and two semesters of SY 2004-2005.
After respondent completed his course in
Master of Arts in Education he submitted
the corresponding Special Order from
CHED and his credentials to the Human
Resources Department of petitioner for the
purpose of salary adjustment/increase.
Subsequently, respondent’s salary was
increased, as reflected in his pay slips
starting Oct. 1-15, 2004. He was likewise re-
ranked from Assistant Professor to
Associate Professor. He stated in a letter
addressed to the President of petitioner that
his salary increase should be made
effective as of June 2003 and demanded
the payment of his salary differential. The
school administration thru Sr. Purita
Gatongay, D.C., replied by explaining its
policy on re-ranking of faculty members
stating that the teachers in the Universidad
are not re-ranked during their probationary
period and that re-ranking is done every two
years. It was also stated in the reply that
he cannot be re-ranked for he is still a
probationary teacher.
In his letter dated January 12, 2005, he
pointed out the case of another faculty
member, also on probationary status,
whose salary was supposedly adjusted by
petitioner at the start of school year (June)
after he/she had completed his/her master’s
degree in March. Respondent thus pleaded
for the release of his salary differential, or at
the very least, that petitioner give him
categorical answers to his questions.
Apparently, to resolve the issue, a dialogue
was held between respondent and Sr.
Evidente. As to the outcome of this
conversation, the parties gave conflicting
accounts.
On February 26, 2005, respondent received
his letter of termination. On April 14, 2005,
respondent filed a complaint for illegal
dismissal against the petitioner.
LA: No just authorized cause in the
termination
NRLC: affirmed; held that respondent had
acquired a permanent status; the first
contract executed by the parties provides
that he was hired on a probationary status
effective November 1, 2002 to March 30,
2003. While his employment continued
beyond the above-mentioned period and
lasted for a total of five (5) consecutive
semesters, it appears that the only other
contract he signed is the one for the second
semester of SY 2003-2004. There is no
showing that the complainant signed a
contract for the first and second semesters
of SY 2004-2005. Under the circumstances,
it must be concluded that the complainant
has acquired permanent status. The last
paragraph of Article 281 of the Labor Code
provides that "an employee who is allowed
to work after a probationary period shall be
considered a regular employee."
CA: sustained the conclusion of the NLRC
ISSUES:
WON respondents is a probationary
employee - YES
WON illegally dismissed - YES
RULING:
Re: Probationary Employment Period
YES. The probationary employment of
teachers in private schools is not governed
purely by the Labor Code. The Labor Code
is supplemented with respect to the period
of probation by special rules found in the
Manual of Regulations for Private Schools.
Section 93 of the 1992 Manual of
Regulations for Private Schools provides
that full-time teachers who have
satisfactorily completed their probationary
period shall be considered regular or
permanent.
The CA ruled that it is worthy to
emphasize that other than the period
provided under Article 281 of the Labor
Code, the portion “… an employee who
is allowed to work after a probationary
period shall be considered a regular
employee” still applies.
According to CA, on record, there were 5
appointment contracts of respondent. Only
the first and third contracts were signed by
respondents. The third contract, unlike the
previous contracts, does not indicate the
nature of the appointment as probationary
employment. This implies that respondent
was already a permanent employee. The
Court disagrees with this. In the third
appointment contract dated February 26,
2004, it was explicitly provided that
unless renewed in writing respondent’s
appointment automatically expires at the
end of the stipulated period of
employment, the CA erred in concluding
that simply because the word
"probationary" no longer appears below
the designation, respondent had already
become a permanent employee.
As to the Certificate of Employment issued
by Sr. Real on January 31, 2005, it simply
stated that respondent "was a full-time
faculty member in the Religious Education
Department of this same institution" and that
he holds the rank of Associate Professor.
There was no description or qualification of
respondent’s employment as regular or
permanent.
In this case, petitioner applied the maximum
three-year probationary period –
equivalent to six consecutive semesters –
provided in the Manual of Regulations. This
can be gleaned from the letter dated March
24, 2004 of Sr. Grace Namocancat, D.C.
addressed to respondent, informing the
latter of the result of evaluation of his
performance for SY 2003-2004 and stating
that November 2004 marks his second year
of full-time teaching, which means he had
one more year to become a permanent
employee. The circumstance that
respondent’s services were hired on
semester basis did not negate the
applicable probationary period, which is
three school years or six consecutive
semesters.
RE: Probationary Status and Fixed-term
Employment
The existence of the term-to-term contracts
covering the petitioners’ employment is not
disputed, nor is it disputed that they were on
probationary status. This case, however,
brings to the fore the essential question of
which, between the two factors affecting
employment, should prevail given AMACC’s
position that the teachers’ contracts expired
and it had the right not to renew them.
Under the given facts where the school year
is divided into trimesters, the school
apparently utilizes its fixed-term
contracts as a convenient arrangement
dictated by the trimestral system and not
because the workplace parties really
intended to limit the period of their
relationship to any fixed term and to
finish this relationship at the end of that
term. If we pierce the veil, so to speak, of
the parties’ so-called fixed-term employment
contracts, what undeniably comes out at the
core is a fixed-term contract conveniently
used by the school to define and regulate its
relations with its teachers during their
probationary period.
To be sure, nothing is illegitimate in
defining the school-teacher relationship
in this manner. The school, however,
cannot forget that its system of fixed-
term contract is a system that operates
during the probationary period and for
this reason is subject to the terms of
Article 281 of the Labor Code. Unless this
reconciliation is made, the requirements of
this Article on probationary status would be
fully negated as the school may freely
choose not to renew contracts simply
because their terms have expired.
Given the clear constitutional and statutory
intents, we cannot but conclude that in a
situation where the probationary status
overlaps with a fixed-term contract not
specifically used for the fixed term it offers,
Article 281 should assume primacy and the
fixed-period character of the contract must
give way.
RE: Illegal Dismissal
Illegally Dismissed. Notwithstanding the
limited engagement of probationary
employees, they are entitled to
constitutional protection of security of tenure
during and before the end of the
probationary period. 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.
No just or authorized cause was given by
petitioner. Prior to this, respondent had
consistently achieved above average rating
based on evaluation by petitioner’s officials
and students. He had also been promoted
to the rank of Associate Professor after
finishing his master’s degree course on his
third semester of teaching. Clearly,
respondent’s termination after five
semesters of satisfactory service was
illegal.
Respondent therefore is entitled to continue
his three-year probationary period, such that
from March 31, 2005, his probationary
employment is deemed renewed for the
following semester (1st semester of SY
2005-2006) period.