CASE DIGEST: Abbott Laboratories Phil. et.al. v.

Pearlie Ann
F. Alcaraz [G.R. No. 192571, July 23, 2013]

Subject: Labor Law – Probationary employees

– Standards to qualify as a regular employee
Decision (Perlas-Bernarbe, J.)
Dissent (Brion, J.)
FACTS:
On June 27, 2004, Abbott Laboratories, Philippines (Abbott)
caused the publication in a major broadsheet newspaper of its
need for a Medical and 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.
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.
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.
In Abbott’s offer sheet, it was stated that Alcaraz was to
be employed on a probationary basis.
Later that day, she accepted the said offer and received an
electronic mail (e-mail) from Abbott’s Recruitment Officer,
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.
On February 12, 2005, Alcaraz signed an employment
contract which stated that she was to be placed on
probation for a period of six (6) months beginning
February 15, 2005 to August 14, 2005.
During Alcaraz’s pre-employment orientation, Allan G.
Almazar, Hospira’s Country Transition Manager, briefed her
on her duties and responsibilities as Regulatory Affairs
Manager:
(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) Kelly 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; 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.
On March 3, 2005, Maria Olivia T. Yabut-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.
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.
On April 20, 2005, Alcaraz had a meeting with Cecille
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.
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. 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.
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.
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. 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.
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 Abbott’s failure to
inform her of the reasonable standards for her
regularization upon her engagement as required under
Article 295 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. 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.
Abbott 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.
The Labor Arbiter ruled in Abbott’s favor. The NLRC
reversed, upholding Alcaraz’s allegations. The CA affirmed
the NLRC decision.
ISSUES:
1) WON Alcaraz was sufficiently informed of the
reasonable standards to qualify her as a regular employee
MAJORITY: YES. 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:
(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;
(b) In Abbott’s December 7, 2004 offer sheet, it was stated
that Alcaraz was to be employed on a probationary status;
(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;
(d) On the day Alcaraz accepted Abbott’s employment offer,
Bernardo sent her (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;
(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;
(f) Alcaraz was also required to undergo a training program as
part of her orientation;
(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.
Considering the totality of the above-stated circumstances,
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.
DISSENT (Brion, J.): NO. The Offer Sheet was designed
to inform Alcaraz of the compensation and benefits
package offered to her by Abbott and can in no way be
read as a statement of the applicable probationary
employment standard. It was communicated even prior to
engagement when the parties were negotiating, not at the point
of engagement as the law requires.
The pre-employment orientation on Alcaraz’s duty to
implement Abbott’s Code of Conduct, office policies and
training program likewise cannot be characterized as
performance standards; they simply related to activities
aimed at acquainting and training Alcaraz on her duties
and not for the purpose of informing her of the
performance standards applicable to her. What stands out
is that they do not pertain specifically to Alcaraz and the
required performance standard applicable for her
qualification for regular employment; they related to the
staff Alcaraz managed and supervised. Additionally, these
were all relayed prior to or after Alcaraz was engaged by
Abbott.
An important distinction to remember at this point is that
Alcaraz’s knowledge of the duties that her work entailed,
and her knowledge of the employer’s performance
standard, are two distinct matters separately requiring the
presentation of independent proof.
MAJORITY: Keeping with [the Omnibus Rules
Implementing the Labor Code], 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 to accomplish during the trial 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. Also in Aberdeen Court, Inc
v. Agustin, 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 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.
DISSENT (Brion, J.): Based on these premises, the ponencia
then deftly argues that because the duties and
responsibilities of the position have been explained
to Alcaraz, an experienced human resource specialist, she
should have known what was expected for her to attain
regular status. The ponencia’s reasoning, however, is badly
flawed.
1st. The ponencia impliedly admits that no performance
standards were expressly given but argues that because
Alcaraz had been informed of her duties and responsibilities
(a fact that was and is not disputed), she should be deemed to
know what was expected of her for purposes of regularization.
This is a major flaw that the ponencia satisfies only via an
assumption. The ponencia apparently forgets that
knowledge of duties and responsibilities is different from the
measure of how these duties and responsibilities should be
delivered. They are separate elements and the latter element
is missing in the present case.
2nd. The ponencia glosses over the communication aspect.
Not only must there be express performance standards; there
must be effective communication. If no standards were
provided, what would be communicated?
3rd. The ponencia badly contradicts itself in claiming that
actual communication of specific standards might not be
necessary “when the job is self-descriptive in nature, for
instance, in the case of maids, cooks, drivers, or messengers.”
Alcaraz, in the first place, was never a maid, cook, driver
or a messenger and cannot be placed under this
classification; she was hired and employed as a human
resources manager, in short, a managerial employee. Plain and
common sense reasoning by one who ever had been in an
employment situation dictates that the job of a manager
cannot be self-explanatory, in the way the ponencia implied;
the complexity of a managerial job must necessarily require
that the level of performance to be delivered must be specified
and cannot simply be assumed based on the
communication of the manager’s duties and
responsibilities.
4th. The ponencia also forgets that what these “performance
standards” or measures cannot simply be assumed
because they are critically important in this case, or for
that matter, in any case involving jobs whose duties and
responsibilities are not simple or self-descriptive. If
Alcaraz had been evaluated or assessed in the manner that the
company’s internal rules require, these standards would have
been the basis for her performance or lack of it. Last but not
the least, Alcaraz’s services were terminated on the basis of
the performance standards that, by law, the employer set or
prescribed at the time of the employee’s engagement. If none
had been prescribed in the first place, under what basis
could the employee then be assessed for purposes of
termination or regularization?
2) WON Alcaraz was validly terminated from her
employment
MAJORITY: NO. 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.
The Court modified Agabon v. NLRC in the case of Jaka Food
Processing Corporation v. Pacot 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.
If the dismissal is based on a just cause under Article 296 of
the Labor Code 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
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.
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.
DISSENT (Brion, J.): YES. Alcaraz was dismissed as she
“failed to qualify as regular employee in accordance with the
prescribed standards set by the Company.” Even granting for
the sake of argument that Abbott had apprised Alcaraz of an
applicable performance standard, the evidence failed to show
that Alcaraz did not meet this standard in a manner and
to the extent equivalent to the “just cause” that the law
requires.
In defense of Abbott’s failure to observe the two-notice
requirement, the ponencia argues that a different procedure
applies when terminating a probationary employee; the usual
two-notice requirement does not govern, citing for this
purpose Section 2, Rule I, Book VI of the Implementing Rules
of the Labor Code. The ponencia, however, forgets that the
single notice rule applies only if the employee is validly on
probationary basis; it does not apply where the employee
is deemed a regular employee for the company’s failure to
provide and to communicate a prescribed performance
standard applicable to the probationary employee.
3) WON the individual petitioners herein are liable
MAJORITY: NO. 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.
DISSENT (Brion, J.): YES. The NLRC exhaustively
discussed Abbott’s bad faith, as demonstrated by the actions
of the individual petitioners:
First, Alcaraz was pressured to resign:
(1) she was threatened with termination, which will surely
damage her reputation in the pharmaceutical industry;
(2) she was asked to evacuate her Commission and ordered
not to enter the Company’s premises even if she was still an
Abbott employee; and
(3) Terrible and Walsh made a public announcement to the
staff that Alcaraz already resigned even if in reality she did
not.
The CA also described in detail the abrupt and oppressive
manner in which Alcaraz’s employment was dismissed by
Abbott:
On May 23, 2005, Alcaraz still reported for work since Abbott
had not yet handed the termination notice to her. However,
the security guard did not allow her to enter the Hospira
ALSU office pursuant to Walsh[’s] instruction. She
requested Walsh that she be allowed to enter the company
premises to retrieve her last remaining things in her office
which are mostly her personal belongings. She was allowed to
enter. However, she was surprised to see her drawers
already unlocked and, when she opened the same, she
discovered that her small brown envelope x x x, white
pouch containing the duplicate keys, and the staff’s final
evaluation sheets were missing.Alcaraz informed Bernardo
about the incident. The latter responded by saying she was
no longer an employee of the company since May 19, 2005.
Alcaraz reported the matter to the Pasig Police Station and
asked for help regarding the theft of her properties. The Pasig
Police incident report stated as follows:
x x x x When confronted by the suspect, in the presence of one
SOCO officer and staff, named Christian Perez, Kelly Walsh
allegedly admitted that she was the one who opened the
drawer and got the green folders containing the staff
evaluations. The Reportee was told by Kelly Walsh that her
Rolex wristwatch will be returned to her provided that she will
immediately vacate her office.
On the same date, Alcaraz’s termination letter dated May 19,
2005 was handed to her by Walsh, Almazar and Bernardo.
RESULT: CA reversed. In favor of Abbott.
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