9. ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D.
FEIST, Same; Same; An employer is deemed to have made known the standards that would qualify a
MARIA OLIVIA T. YABUTMISA, TERESITA C. BERNARDO, AND ALLAN G. ALMAZAR,
petitioners, vs. PEARLIE ANN F. ALCARAZ, respondent.
Remedial Law; Civil Procedure; Forum Shopping; Certification Against Forum Shopping; The
prohibition against forum shopping is different from a violation of the certification requirement under
Section 5, Rule 7 of the Rules of Court.—At the outset, it is noteworthy to mention that the prohibition
against forum shopping is different from a violation of the certification requirement under Section 5, Rule
7 of the Rules of Court. In Sps. Ong v. CA, 384 SCRA 139 (2002), the Court explained that: x x x The
distinction between the prohibition against forum shopping and the certification requirement should by
now be too elementary to be misunderstood. To reiterate, compliance with the certification against forum
shopping is separate from and independent of the avoidance of the act of forum shopping itself. There is a
difference in the treatment between failure to comply with the certification requirement and violation of
the prohibition against forum shopping not only in terms of imposable sanctions but also in the manner of
enforcing them. The former constitutes sufficient cause for the dismissal without prejudice [to the filing]
of the complaint or initiatory pleading upon motion and after hearing, while the latter is a ground for
summary dismissal thereof and for direct contempt.
Same; Same; Same; Forum shopping takes place when a litigant files multiple suits involving the
same parties, either simultaneously or successively, to secure a favorable judgment.—Forum shopping
takes place when a litigant files multiple suits involving the same parties, either simultaneously or
successively, to secure a favorable judgment. It exists where the elements of litis pendentia are present,
namely: (a) identity of parties, or at least such parties who represent the same interests in both actions; (b)
identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the
identity with respect to the two preceding particulars in the two (2) cases is such that any judgment that
may be rendered in the pending case, regardless of which party is successful, would amount to res
judicata in the other case.
Same; Same; Same; Section 5(b), Rule 7 of the Rules of Court requires that a plaintiff who files a
case should provide a complete statement of the present status of any pending case if the latter involves
the same issues as the one that was filed.—Section 5(b), Rule 7 of the Rules of Court requires that a
plaintiff who files a case should provide a complete statement of the present status of any pending case if
the latter involves the same issues as the one that was filed. If there is no such similar pending case,
Section 5(a) of the same rule provides that the plaintiff is obliged to declare under oath that to the best of
his knowledge, no such other action or claim is pending.
Labor Law; Probationary Employees; 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
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. Thus, the services of an employee who has been
engaged on probationary basis may be terminated for any of the following: (a) a just or (b) an authorized
cause; and (c) when he fails to qualify as a regular employee in accordance with reasonable standards
prescribed by the employer.
Same; Same; If the employer fails to inform the probationary employee of the reasonable
standards upon which the regularization would be based on at the time of the engagement, then the said
employee shall be deemed a regular employee.—Section 6(d), Rule I, Book VI of the Implementing Rules
of the Labor Code provides that if the employer fails to inform the probationary employee of the
reasonable standards upon which the regularization would be based on at the time of the engagement, then
the said employee shall be deemed a regular employee, viz.: (d) In all cases of probationary employment,
the employer shall make known to the employee the standards under which he will qualify as a regular
employee at the time of his engagement. Where no standards are made known to the employee at that
time, he shall be deemed a regular employee. In other words, the employer is made to comply with two (2)
requirements when dealing with a probationary employee: first, the employer must communicate the
regularization standards to the probationary employee; and second, the employer must make such
communication at the time of the probationary employee’s engagement. If the employer fails to comply
with either, the employee is deemed as a regular and not a probationary employee.
probationary employee to be a regular employee when it has exerted reasonable efforts to apprise the
employee of what he is expected to do or accomplish during the trial period of probation.—An employer
is deemed to have made known the standards that would qualify a probationary employee to be a regular
employee when it has exerted reasonable efforts to apprise the employee of what he is expected to do or
accomplish during the trial period of probation. This goes without saying that the employee is sufficiently
made aware of his probationary status as well as the length of time of the probation. The exception to the
foregoing is when the job is self-descriptive in nature, for instance, in the case of maids, cooks, drivers, or
messengers. Also, in Aberdeen Court, Inc. v. Agustin, 456 SCRA 32 (2005), it has been held that the rule
on notifying a probationary employee of the standards of regularization should not be used to exculpate an
employee who acts in a manner contrary to basic knowledge and common sense in regard to which there
is no need to spell out a policy or standard to be met. In the same light, an employee’s failure to perform
the duties and responsibilities which have been clearly made known to him constitutes a justifiable basis
for a probationary employee’s nonregularization.
Same; Same; 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.—Verily, basic knowledge and common sense dictate that the adequate
performance of one’s duties is, by and of itself, an inherent and implied standard for a probationary
employee to be regularized; such is a regularization standard which need not be literally spelled out or
mapped into technical indicators in every case. In this regard, it must be observed that the assessment of
adequate duty performance is in the nature of a management prerogative which when reasonably exercised
— as Abbott did in this case — should be respected. This is especially true of a managerial employee like
Alcaraz who was tasked with the vital responsibility of handling the personnel and important matters of
her department.
Same; Same; If the termination is brought about by the failure of an employee to meet the
standards of the employer in case of probationary employment, it shall be sufficient that a written notice is
served the employee, within a reasonable time from the effective date of termination.—A different
procedure is applied when terminating a probationary employee; the usual two-notice rule does not
govern. Section 2, Rule I, Book VI of the Implementing Rules of the Labor Code states that “[i]f the
termination is brought about by the x x x failure of an employee to meet the standards of the employer in
case of probationary employment, it shall be sufficient that a written notice is served the employee, within
a reasonable time from the effective date of termination.”
Same; Company Policy; A company policy partakes of the nature of an implied contract between
the employer and employee.— A company policy partakes of the nature of an implied contract between
the employer and employee. In Parts Depot, Inc. v. Beiswenger, 170 S.W.3d 354 (Ky. 2005), it has been
held that: [E]mployer statements of policy . . . can give rise to contractual rights in employees without
evidence that the parties mutually agreed that the policy statements would create contractual rights in the
employee, and, hence, although the statement of policy is signed by neither party, can be unilaterally
amended by the employer without notice to the employee, and contains no reference to a specific
employee, his job description or compensation, and although no reference was made to the policy
statement in pre-employment interviews and the employee does not learn of its existence until after his
hiring. Toussaint, 292 N.W.2d at 892. The principle is akin to estoppel. Once an employer establishes an
express personnel policy and the employee continues to work while the policy remains in effect, the
policy is deemed an implied contract for so long as it remains in effect. If the employer unilaterally
changes the policy, the terms of the implied contract are also thereby changed.
Same; Termination of Employment; Nominal Damages; Case law has settled that an employer who
terminates an employee for a valid cause but does so through invalid procedure is liable to pay the latter
nominal damages.—Case law has settled that an employer who terminates an employee for a valid cause
but does so through invalid procedure is liable to pay the latter nominal damages. In Agabon v. NLRC
(Agabon), 442 SCRA 573 (2004), the Court pronounced that where the dismissal is for a just cause, the
lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However,
the employer should indemnify the employee for the violation of his statutory rights. Thus, in Agabon, the
employer was ordered to pay the employee nominal damages in the amount of P30,000.00.
Same; Same; If the dismissal is based on a just cause under Article 282 of the Labor Code (now
Article 296) but the employer failed to comply with the notice requirement, the sanction to be imposed
upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to
the employee; if the dismissal is based on an authorized cause under Article 283 (now Article 297) but the
employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal
process was initiated by the employer’s exercise of his management prerogative.—It was explained that if
the dismissal is based on a just cause under Article 282 of the Labor Code (now Article 296) but the
employer failed to comply with the notice requirement, the sanction to be imposed upon him should
be tempered because the dismissal process was, in effect, initiated by an act imputable to the employee; if
the dismissal is based on an authorized cause under Article 283 (now Article 297) but the employer failed
to comply with the notice requirement, the sanction should be stiffer because the dismissal process was
initiated by the employer’s exercise of his management prerogative. Hence, in Jaka, where the employee
was dismissed for an authorized cause of retrenchment — as contradistinguished from the employee
in Agabon who was dismissed for a just cause of neglect of duty — the Court ordered the employer to pay
the employee nominal damages at the higher amount of P50,000.00.
Corporation Law; Liability of Corporate Directors; Requisites to Hold Corporate Directors,
Trustees or Officers Personally Liable for Corporate Acts.—It is hornbook principle that personal liability
of corporate directors, trustees or officers attaches only when: (a) they assent to a patently unlawful act of
the corporation, or when they are guilty of bad faith or gross negligence in directing its affairs, or when
there is a conflict of interest resulting in damages to the corporation, its stockholders or other persons; (b)
they consent to the issuance of watered down stocks or when, having knowledge of such issuance, do not
forthwith file with the corporate secretary their written objection; (c) they agree to hold themselves
personally and solidarily liable with the corporation; or (d) they are made by specific provision of law
personally answerable for their corporate action.688
6 SUPREME COURT REPORTS ANNOTATED
88
Abbott Laboratories, Philippines vs. Alcaraz
Civil Law; Bad Faith; It is a well-settled rule that bad faith cannot be presumed and he who
alleges bad faith has the onus of proving it.—A judicious perusal of the records show that other than her
unfounded assertions on the matter, there is no evidence to support the fact that the individual petitioners
herein, in their capacity as Abbott’s officers and employees, acted in bad faith or were motivated by ill
will in terminating Alcaraz’s services. The fact that Alcaraz was made to resign and not allowed to enter
the workplace does not necessarily indicate bad faith on Abbott’s part since a sufficient ground existed for
the latter to actually proceed with her termination. On the alleged loss of her personal belongings, records
are bereft of any showing that the same could be attributed to Abbott or any of its officers. It is a well-
settled rule that bad faith cannot be presumed and he who alleges bad faith has the onus of proving it. All
told, since Alcaraz failed to prove any malicious act on the part of Abbott or any of its officers, the Court
finds the award of moral or exemplary damages unwarranted.
BRION, J., Dissenting Opinion:
Labor Law; Appeals; View that a labor case finds its way into the judicial system from the
National Labor Relations Commission (NLRC) whose decision is final and executory; When an
administrative ruling (or any ruling for that matter) is already final and unappealable, the only recourse
open under the Rules of Court is through a limited review on jurisdictional grounds under Rule 65.—A
labor case finds its way into the judicial system from the NLRC whose decision is final and executory.
Finality simply means that the NLRC ruling is no longer appealable; the legal intent is to confine
adjudication of labor cases to labor tribunals with the expertise in these cases and thereby bring the
resolution of the case to a close at the soonest possible time. When an administrative ruling (or any ruling
for that matter) is already final and unappealable, the only recourse open under the Rules of Court is
through a limited review on jurisdictional grounds under Rule 65. This has been the mode of review
followed since the Labor Code took effect in November 1974; labor cases were directly brought to this
Court but only on jurisdictional grounds under Rule 65.
Same; Same; View that under Section 65 of the Rules of Court, the sole ground or issue allowed is
jurisdictional — the presence or absence of grave abuse of discretion on the part of the National Labor
Relations Commission (NLRC) in ruling on the case; whereas, a Rule 45 review the Supreme Court simply
determines whether the legal correctness of the Court of Appeal’s finding that the NLRC ruling of illegal
dismissal had basis in fact and in law.—Under the Rule 65 review by the CA, Montoya reiterates that the
sole ground or issue allowed is jurisdictional – the presence or absence of grave abuse of discretion on
the part of the NLRC in ruling on the case. To state the obvious, this kind of review would have made it
easier for the CA to handle the case; in the absence of a grave abuse of discretion, it can dismiss labor
cases for lack of grave abuse of discretion as we do in this Court. From the CA, further recourse is through
a Rule 45 review by this Court on questions of law in accordance with prevailing rulings. The office of a
petition for review on certiorari is not to examine and settle factual questions already ruled upon below.
In this review, the Court simply determines whether the legal correctness of the CA’s finding that the
NLRC ruling of illegal dismissal had basis in fact and in law.
Same; Probationary Employees; View that while the respondent might have been hired as a
probationary employee, the petitioner’s evidence did not establish the employers’ compliance with the
probationary employment requirements under Article 281 of the Labor Code (as amended) and Section
6(d) of the Implementing Rules of Book VI, Rule I of the Labor Code (as amended). Thus, the respondent
should be considered a regular employee and the case should be reviewed on this basis.—While the
respondent might have been hired as a probationary employee, the petitioners’ evidence did not establish
the employers’ compliance with the probationary employment requirements under Article 281 of the
Labor Code (as amended) and Section 6(d) of the Implementing Rules of Book VI, Rule I of the Labor
Code (as amended). Thus, the respondent should be considered a regular employee and the case should be
reviewed on this basis. Article 281 of the Labor Code, as amended, provides: ART. 281. Probationary
employment.—Probationary employment shall not exceed six (6) months from the date the employee
started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a probationary basis may be terminated for a just cause
or 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. An employee who is allowed to work
after a probationary period shall be considered a regular employee. [italics supplied; emphasis ours]
Further, Section 6(d) of the Implementing Rules of Book VI, Rule I of the Labor Code, as amended,
states: Sec. 6. Probationary employment.—There is probationary employment where the employee, upon
his engagement, is made 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. [emphasis supplied]
Same; Same; View that a valid probationary employment requires the concurrence of two
requirements; Failing in one or both, the employee, even if initially hired as a probationary employee,
should be viewed and considered a regular employee.—A valid probationary employment requires the
concurrence of two requirements. First, the employer shall make known the reasonable
standard (performance standard) whose compliance will render the employee qualified to be a regular
employee. Second, the employer shall inform the employee of the applicable performance standard at
the time of his/her engagement. Failing in one or both, the employee, even if initially hired as a
probationary employee, should be viewed and considered a regular employee. The ponencia apparently
fully agrees with the above statement of the applicable law as it substantially recites the same
requirements, including the consequence that upon failure to comply with these same requirements, “the
employee is deemed as a regular and not a probationary employee.” It continues, however, with
a twist that effectively negates what it has stated and admitted about the need to communicate the
regularization standards to the employee.
Same; Termination of Employment; View that to justify the dismissal of an employee, the employer
carries the burden of proving that the dismissal was for a just cause and with the observance of due
process prior to dismissal.—To justify the dismissal of an employee, the employer carries the burden of
proving that the dismissal was for a just cause and with the observance of due process prior to dismissal.
The employer has to discharge this burden by clear, accurate, consistent and convincing evidence; in case
of doubt, the presumption in the employee’s favor under Article 4 of the Labor Code should apply.691
Same; Same; View that a probationary employee does not have lesser rights than a regular
employee under the Labor Code in terms of the just cause for the termination of an employment.—An
important legal point that should not be lost in considering this case is that a probationary employee
does not have lesser rights than a regular employee under the Labor Code in terms of the just cause
for the termination of an employment. While the strict application of Article 282 of the Labor Code
may be relaxed because the employee is still under probation (so that analogous probationary status rules
may apply), the same essential just cause for dismissal must be present and must be proven. In other
words, probationary employment does not mean that the employee is under an “employment at
will” situation as that phrase is understood in American jurisprudence. To reiterate, the fact that the
respondent was still in her probationary period of employment did not lessen the burden of proof that the
law imposed on the petitioners to prove the just cause for her dismissal. Probationary employees are
protected by the security of tenure provision of the Constitution and they cannot be removed from their
position except only for cause.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals. regarding Hopira’s local operations, operational budget, and performance evaluation of the Hospira ALSU
The facts are stated in the opinion of the Court. Staff who are on probationary status; (b) she must implement Abbott’s Code of Good Corporate Conduct
Laguesma, Magsalin, Consulta & Gastardo for petitioner. (Code of Conduct), office policies on human resources and finance, and ensure that Abbott will hire
Jimenez, Baroque and Salazar for respondent. people who are fit in the organizational discipline; (c) petitioner Kelly Walsh (Walsh), Manager of the
PERLAS-BERNABE, J.: Literature Drug Surveillance Drug Safety of Hospira, will be her immediate supervisor; (d) she should
Assailed in this petition for review on certiorari1 are the Decision2 dated December 10, 2009 and always coordinate with Abbott’s human resource officers in the management and discipline of the staff;
Resolution3 dated June 9, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 101045 which (e) Hospira ALSU will spin off from Abbott in early 2006 and will be officially incorporated and known
pronounced that the National Labor Relations Commission (NLRC) did not gravely abuse its discretion as Hospira, Philippines. In the interim, Hospira ALSU operations will still be under Abbott’s
when it ruled that respondent Pearlie Ann F. Alcaraz (Alcaraz) was illegally dismissed from her management, excluding the technical aspects of the operations which is under the control and supervision
employment. of Walsh; and (f) the processing of information and/or raw material data subject of Hospira ALSU
The Facts operations will be strictly confined and controlled under the computer system and network being
On June 27, 2004, petitioner Abbott Laboratories, Philippines (Abbott) caused the publication in a maintained and operated from the United States. For this purpose, all those involved in Hospira ALSU are
major broadsheet newspaper of its need for a Medical and Regulatory Affairs Manager (Regulatory required to use two identification cards: one, to identify them as Abbott’s employees and another, to
Affairs Manager) who would: (a) be responsible for drug safety surveillance operations, staffing, and identify them as Hospira employees.11
budget; (b) lead the development and implementation of standard operating procedures/policies for drug On March 3, 2005, petitioner Maria Olivia T. Yabut-Misa (Misa), Abbott’s Human Resources (HR)
safety surveillance and vigilance; and (c) act as the primary interface with internal and external customers Director, sent Alcaraz an e-mail which contained an explanation of the procedure for evaluating the
regarding safety operations and queries.4 Alcaraz — who was then a Regulatory Affairs and Information performance of probationary employees and further indicated that Abbott had only one evaluation system
Manager at Aventis Pasteur Philippines, Incorporated (another pharmaceutical company like Abbott) — for all of its employees. Alcaraz was also given copies of Abbott’s Code of Conduct and Probationary
showed interest and submitted her application on October 4, 2004. 5 Performance Standards and Evaluation (PPSE) and Performance Excellence Orientation Modules
On December 7, 2004, Abbott formally offered Alcaraz the abovementioned position which was an (Performance Modules) which she had to apply in line with her task of evaluating the Hospira ALSU
item under the company’s Hospira Affiliate Local Surveillance Unit (ALSU) department. 6 In Abbott’s staff.12
offer sheet,7 it was stated that Alcaraz was to be employed on a probationary basis. 8 Later that day, she Abbott’s PPSE procedure mandates that the job performance of a probationary employee should be
accepted the said offer and received an electronic mail (e-mail) from Abbott’s Recruitment Officer, formally reviewed and discussed with the employee at least twice: first on the third month and second on
petitioner Teresita C. Bernardo (Bernardo), confirming the same. Attached to Bernardo’s e-mail were the fifth month from the date of employment. The necessary Performance Improvement Plan should also
Abbott’s organizational chart and a job description of Alcaraz’s work. 9 be made during the third-month review in case of a gap between the employee’s performance and the
On February 12, 2005, Alcaraz signed an employment contract which stated, inter alia, that she was standards set. These performance standards should be discussed in detail with the employee within the
to be placed on probation for a period of six (6) months beginning February 15, 2005 to August 14, 2005. first two (2) weeks on the job. It was equally required that a signed copy of the PPSE form must be
The said contract was also signed by Abbott’s General Manager, petitioner Edwin Feist (Feist): 10 submitted to Abbott’s Human Resources Department (HRD) and shall serve as documentation of the
PROBATIONARY EMPLOYMENT employee’s performance during his/her probationary period.
Dear Pearl, This shall form the basis for recommending the confirmation or termination of the probationary
After having successfully passed the pre-employment requirements, you are hereby appointed as employment.13
follows: During the course of her employment, Alcaraz noticed that some of the staff had disciplinary
Position Title : Regulatory Affairs problems. Thus, she would reprimand them for their unprofessional behavior such as non-observance of
Manager the dress code, moonlighting, and disrespect of Abbott officers. However, Alcaraz’s method of
Department : Hospira management was considered by Walsh to be “too strict.”14 Alcaraz approached Misa to discuss these
The terms of your employment are: concerns and was told to “lie low” and let Walsh handle the matter. Misa even assured her that Abbott’s
Nature of Employment : Probationary HRD would support her in all her management decisions.15
Effectivity : February 15, 2005 to On April 12, 2005, Alcaraz received an e-mail from Misa requesting immediate action on the staff’s
August 14, 2005 performance evaluation as their probationary periods were about to end. This Alcaraz eventually
Basic Salary : P110,000.00/ month submitted.16
It is understood that you agree to abide by all existing policies, rules and regulations of the On April 20, 2005, Alcaraz had a meeting with petitioner Cecille Terrible (Terrible), Abbott’s former
company, as well as those, which may be hereinafter promulgated. HR Director, to discuss certain issues regarding staff performance standards. In the course thereof,
Unless renewed, probationary appointment expires on the date indicated subject to earlier Alcaraz accidentally saw a printed copy of an e-mail sent by Walsh to some staff members which
termination by the Company for any justifiable reason. essentially contained queries regarding the former’s job performance. Alcaraz asked if Walsh’s action was
If you agree to the terms and conditions of your employment, please signify your conformity the normal process of evaluation. Terrible said that it was not.17
below and return a copy to HRD. On May 16, 2005, Alcaraz was called to a meeting with Walsh and Terrible where she was informed
Welcome to Abbott! that she failed to meet the regularization standards for the position of Regulatory Affairs
Very truly yours, Manager.18 Thereafter, Walsh and Terrible requested Alcaraz to tender her resignation, else they be forced
Sgd. to terminate her services. She was also told that, regardless of her choice, she should no longer report for
EDWIN D. FEIST work and was asked to surrender her office identification cards. She requested to be given one week to
General Manager decide on the same, but to no avail.19
CONFORME: On May 17, 2005, Alcaraz told her administrative assistant, Claude Gonzales (Gonzales), that she
Sgd. would be on leave for that day. However, Gonzales told her that Walsh and Terrible already announced to
PEARLIE ANN FERRER- the whole Hospira ALSU staff that Alcaraz already resigned due to health reasons.20
ALCARAZ On May 23, 2005, Walsh, Almazar, and Bernardo personally handed to Alcaraz a letter stating that
During Alcaraz’s pre-employment orientation, petitioner Allan G. Almazar (Almazar), Hospira’s her services had been terminated effective May 19, 2005.21 The letter detailed the reasons for Alcaraz’s
Country Transition Manager, briefed her on her duties and responsibilities as Regulatory Affairs Manager, termination — particularly, that Alcaraz: (a) did not manage her time effectively; (b) failed to gain the
stating that: (a) she will handle the staff of Hospira ALSU and will directly report to Almazar on matters trust of her staff and to build an effective rapport with them; (c) failed to train her staff effectively; and (d)
was not able to obtain the knowledge and ability to make sound judgments on case processing and article
review which were necessary for the proper performance of her duties.22 On May 27, 2005, Alcaraz
received another copy of the said termination letter via registered mail.23
Alcaraz felt that she was unjustly terminated from her employment and thus, filed a complaint for
illegal dismissal and damages against Abbott and its officers, namely, Misa, Bernardo, Almazar, Walsh,
Terrible, and Feist.24 She claimed that she should have already been considered as a regular and not a
probationary employee given Abbott’s failure to inform her of the reasonable standards for her
regularization upon her engagement as required under Article 295 25 of the Labor Code. In this relation, she
contended that while her employment contract stated that she was to be engaged on a probationary status,
the same did not indicate the standards on which her regularization would be based.26 She further averred
that the individual petitioners maliciously connived to illegally dismiss her when: (a) they threatened her
with termination; (b) she was ordered not to enter company premises even if she was still an employee
thereof; and (c) they publicly announced that she already resigned in order to humiliate her. 27
On the contrary, petitioners maintained that Alcaraz was validly terminated from her probationary
employment given her failure to satisfy the prescribed standards for her regularization which were made
known to her at the time of her engagement.28
The LA Ruling
In a Decision dated March 30, 2006,29 the LA dismissed Alcaraz’s complaint for lack of merit.
The LA rejected Alcaraz’s argument that she was not informed of the reasonable standards to qualify
as a regular employee considering her admissions that she was briefed by Almazar on her work during her
preemployment orientation meeting30 and that she received copies of Abbott’s Code of Conduct and
Performance Modules which were used for evaluating all types of Abbott employees. 31 As Alcaraz was
unable to meet the standards set by Abbott as per her performance evaluation, the LA ruled that the
termination of her probationary employment was justified.32 Lastly, the LA found that there was no
evidence to conclude that Abbott’s officers and employees acted in bad faith in terminating Alcaraz’s
employment.33
Displeased with the LA’s ruling, Alcaraz filed an appeal with the National Labor Relations
Commission (NLRC).
The NLRC Ruling
On September 15, 2006, the NLRC rendered a Decision, 34 annulling and setting aside the LA’s
ruling, the dispositive portion of which reads:
WHEREFORE, the Decision of the Labor Arbiter dated 31 March 2006 [sic] is hereby
reversed, annulled and set aside and judgment is hereby rendered:
1. Finding respondents Abbot [sic] and individual respondents to have committed illegal
dismissal;
2. Respondents are ordered to immediately reinstate complainant to her former position
without loss of seniority rights immediately upon receipt hereof;
3. To jointly and severally pay complainant backwages computed from 16 May 2005 until
finality of this decision. As of the date hereof the backwages is computed at
a. Backwages for 15 months - PhP 1,650,000.00
b. 13th month pay - 110,000.00
TOTAL PhP 1,760,000.00
4. Respondents are ordered to pay complainant moral damages of P50,000.00 and
exemplary damages of P50,000.00.
5. Respondents are also ordered to pay attorney’s fees of 10% of the total award.
6. All other claims are dismissed for lack of merit.
SO ORDERED.35
The NLRC reversed the findings of the LA and ruled that there was no evidence showing that
Alcaraz had been apprised of her probationary status and the requirements which she should have
complied with in order to be a regular employee.36 It held that Alcaraz’s receipt of her job description and
Abbott’s Code of Conduct and Performance Modules was not equivalent to her being actually informed of
the performance standards upon which she should have been evaluated on.37 It further observed that
Abbott did not comply with its own standard operating procedure in evaluating probationary
employees.38 The NLRC was also not convinced that Alcaraz was terminated for a valid cause given that
petitioners’ allegation of Alcaraz’s “poor performance” remained unsubstantiated.39
Petitioners filed a motion for reconsideration which was denied by the NLRC in a Resolution dated
July 31, 2007.40
Aggrieved, petitioners filed with the CA a Petition for Certiorari with Prayer for Issuance of a
Temporary Restraining Order and/or Writ of Preliminary Injunction, docketed as CA G.R. SP No.
101045 (First CA Petition), alleging grave abuse of discretion on the part of NLRC when it ruled that
Alcaraz was illegally dismissed.41
Pending resolution of the First CA Petition, Alcaraz moved for the execution of the NLRC’s Decision
before the LA, which petitioners strongly opposed. The LA denied the said motion in an Order dated July
8, 2008 which was, however, eventually reversed on appeal by the NLRC. 42Due to the foregoing,
petitioners filed another Petition for Certiorari with the CA, docketed as CA G.R. SP No.
111318 (Second CA Petition), assailing the propriety of the execution of the NLRC decision.43
The CA Ruling
With regard to the First CA Petition, the CA, in a Decision 44 dated December 10, 2009, affirmed the
ruling of the NLRC and held that the latter did not commit any grave abuse of discretion in finding that
Alcaraz was illegally dismissed.
It observed that Alcaraz was not apprised at the start of her employment of the reasonable standards
under which she could qualify as a regular employee. 45 This was based on its examination of the
employment contract which showed that the same did not contain any standard of performance or any
stipulation that Alcaraz shall undergo a performance evaluation before she could qualify as a regular
employee.46 It also found that Abbott was unable to prove that there was any reasonable ground to
terminate Alcaraz’s employment.47Abbott moved for the reconsideration of the aforementioned ruling
which was, however, denied by the CA in a Resolution48 dated June 9, 2010.
The CA likewise denied the Second CA Petition in a Resolution dated May 18, 2010 (May 18, 2010
Resolution) and ruled that the NLRC was correct in upholding the execution of the NLRC
Decision.49 Thus, petitioners filed a motion for reconsideration.
While the petitioners’ motion for reconsideration of the CA’s May 18, 2010 Resolution was pending,
Alcaraz again moved for the issuance of a writ of execution before the LA. On June 7, 2010, petitioners
received the LA’s order granting Alcaraz’s motion for execution which they in turn appealed to the NLRC
— through a Memorandum of Appeal dated June 16, 2010 (June 16, 2010 Memorandum of Appeal) — on
the ground that the implementation of the LA’s order would render its motion for reconsideration moot
and academic.50
Meanwhile, petitioners’ motion for reconsideration of the CA’s May 18, 2010 Resolution in the
Second CA Petition was denied via a Resolution dated October 4, 2010.51 This attained finality on January
10, 2011 for petitioners’ failure to timely appeal the same.52 Hence, as it stands, only the issues in the First
CA petition are left to be resolved.
Incidentally, in her Comment dated November 15, 2010, Alcaraz also alleges that petitioners were
guilty of forum shopping when they filed the Second CA Petition pending the resolution of their motion
for reconsideration of the CA’s December 10, 2009 Decision i.e., the decision in the First CA
Petition.53 She also contends that petitioners have not complied with the certification requirement under
Section 5, Rule 7 of the Rules of Court when they failed to disclose in the instant petition the filing of the
June 16, 2010 Memorandum of Appeal filed before the NLRC. 54
The Issues Before the Court
The following issues have been raised for the Court’s resolution: (a) whether or not petitioners are
guilty of forum shopping and have violated the certification requirement under Section 5, Rule 7 of the
Rules of Court; (b) whether or not Alcaraz was sufficiently informed of the reasonable standards to
qualify her as a regular employee; (c) whether or not Alcaraz was validly terminated from her
employment; and (d) whether or not the individual petitioners herein are liable.
The Court’s Ruling
A. Forum Shopping and Violation
of Section 5, Rule 7 of the Rules
of Court.
At the outset, it is noteworthy to mention that the prohibition against forum shopping is different
from a violation of the certification requirement under Section 5, Rule 7 of the Rules of Court. In Sps. Ong
v. CA,55 the Court explained that:
The distinction between the prohibition against forum shopping and the certification requirement
should by now be too elementary to be misunderstood. To reiterate, compliance with the
certification against forum
shopping is separate from and independent of the avoidance of the act of forum shopping itself.
There is a difference in the treatment between failure to comply with the certification
requirement and violation of the prohibition against forum shopping not only in terms of
 imposable sanctions but also in the manner of enforcing them. The former constitutes sufficient
cause for the dismissal without prejudice [to the filing] of the complaint or initiatory pleading
upon motion and after hearing, while the latter is a ground for summary dismissal thereof and for
direct contempt.
As to the first, forum shopping takes place when a litigant files multiple suits involving the same
parties, either simultaneously or successively, to secure a favorable judgment. It exists where the elements
of litis pendentiaare present, namely: (a) identity of parties, or at least such parties who represent the same
interests in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on
the same facts; and (c) the identity with respect to the two preceding particulars in the two (2) cases is
such that any judgment that may be rendered in the pending case, regardless of which party is successful,
would amount to res judicata in the other case.57
In this case, records show that, except for the element of identity of parties, the elements of forum
shopping do not exist. Evidently, the First CA Petition was instituted to question the ruling of the NLRC
that Alcaraz was illegally dismissed. On the other hand, the Second CA Petition pertains to the propriety
of the enforcement of the judgment award pending the resolution of the First CA Petition and the finality
of the decision in the labor dispute between Alcaraz and the petitioners. Based on the foregoing, a
judgment in the Second CA Petition will not constitute res judicata insofar as the First CA Petition is
concerned. Thus, considering that the two petitions clearly cover different subject matters and causes of
action, there exists no forum shopping.
As to the second, Alcaraz further imputes that the petitioners violated the certification requirement
under Section 5, Rule 7 of the Rules of Court58 by not disclosing the fact that it filed the June 16, 2010
Memorandum of Appeal before the NLRC in the instant petition.
In this regard, Section 5(b), Rule 7 of the Rules of Court requires that a plaintiff who files a case
should provide a complete statement of the present status of any pending case if the latter involves the
same issues as the one that was filed. If there is no such similar pending case, Section 5(a) of the same rule
provides that the plaintiff is obliged to declare under oath that to the best of his knowledge, no such other
action or claim is pending.
Records show that the issues raised in the instant petition and those in the June 16, 2010
Memorandum of Appeal filed with the NLRC likewise cover different subject matters and causes of
action. In this case, the validity of Alcaraz’s dismissal is at issue whereas in the said Memorandum of
Appeal, the propriety of the issuance of a writ of execution was in question. Thus, given the dissimilar
issues, petitioners did not have to disclose in the present petition the filing of their June 16, 2010
Memorandum of Appeal with the NLRC. In any event, considering that the issue on the propriety of the
issuance of a writ of execution had been resolved in the Second CA Petition — which in fact had already
attained finality — the matter of disclosing the June 16, 2010 Memorandum of Appeal is now moot and
academic.
Having settled the foregoing procedural matter, the Court now proceeds to resolve the substantive
issues.
B. Probationary employment;
grounds for termination.
A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of
probationary employment, aside from just or authorized causes of termination, an additional ground is
provided under Article 295 of the Labor Code, i.e., the probationary employee may also be terminated for
failure to qualify as a regular employee in accordance with the reasonable standards made known by the
employer to the employee at the time of the engagement.59 Thus, the services of an employee who has
been engaged on probationary basis may be terminated for any of the following: (a) a just or (b) an
authorized cause; and (c) when he fails to qualify as a regular employee in accordance with reasonable
standards prescribed by the employer. 60
Corollary thereto, Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor Code
provides that if the employer fails to inform the probationary employee of the reasonable standards upon
which the regularization would be based on at the time of the engagement, then the said employee shall be
deemed a regular employee, viz.:
(d) In all cases of probationary employment, the employer shall make known to the employee
the standards under which he will qualify as a regular employee at the time of his engagement.
Where no standards are made known to the employee at that time, he shall be deemed a regular
employee.
In other words, the employer is made to comply with two (2) requirements when dealing with a
probationary employee: first, the employer must communicate the regularization standards to the
probationary employee; and second, the employer must make such communication at the time of the
probationary employee’s engagement. If the employer fails to comply with either, the employee is deemed
as a regular and not a probationary employee.
Keeping with these rules, an employer is deemed to have made known the standards that would
qualify a probationary employee to be a regular employee when it has exerted reasonable efforts to apprise
the employee of what he is expected to do or accomplish during the trial period of probation. This goes
without saying that the employee is sufficiently made aware of his probationary status as well as the
length of time of the probation.
The exception to the foregoing is when the job is self-descriptive in nature, for instance, in the case of
maids, cooks, drivers, or messengers.61 Also, in Aberdeen Court, Inc. v. Agustin,62 it has been held that the
rule on notifying a probationary employee of the standards of regularization should not be used to
exculpate an employee who acts in a manner contrary to basic knowledge and common sense in regard to
which there is no need to spell out a policy or standard to be met. In the same light, an employee’s failure
to perform the duties and responsibilities which have been clearly made known to him constitutes a
justifiable basis for a probationary employee’s nonregularization.
In this case, petitioners contend that Alcaraz was terminated because she failed to qualify as a regular
employee according to Abbott’s standards which were made known to her at the time of her engagement.
Contrarily, Alcaraz claims that Abbott never apprised her of these standards and thus, maintains that she is
a regular and not a mere probationary employee.
The Court finds petitioners’ assertions to be well-taken.
A punctilious examination of the records reveals that Abbott had indeed complied with the above-
stated requirements. This conclusion is largely impelled by the fact that Abbott clearly conveyed to
Alcaraz her duties and responsibilities as Regulatory Affairs Manager prior to, during the time of her
engagement, and the incipient stages of her employment. On this score, the Court finds it apt to detail not
only the incidents which point out to the efforts made by Abbott but also those circumstances which
would show that Alcaraz was well-apprised of her employer’s expectations that would, in turn, determine
her regularization:
(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 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. 63
Considering the totality of the above-stated circumstances, it cannot, therefore, be doubted that
Alcaraz was well-aware that her regularization would depend on her ability and capacity to fulfill the
requirements of her position as Regulatory Affairs Manager and that her failure to perform such would
give Abbott a valid cause to terminate her probationary employment.
Verily, basic knowledge and common sense dictate that the adequate performance of one’s duties is,
by and of itself, an inherent and implied standard for a probationary employee to be regularized; such is a
regularization standard which need not be literally spelled out or mapped into technical indicators in every
case. In this regard, it must be observed that the assessment of adequate duty performance is in the nature
of a management prerogative which when reasonably exercised — as Abbott did in this case — should be
respected. This is especially true of a managerial employee like Alcaraz who was tasked with the vital
responsibility of handling the personnel and important matters of her department.
 In fine, the Court rules that Alcaraz’s status as a probationary employee and her consequent dismissal
must stand. Consequently, in holding that Alcaraz was illegally dismissed due to her status as a regular
and not a probationary employee, the Court finds that the NLRC committed a grave abuse of discretion.
To elucidate, records show that the NLRC based its decision on the premise that Alcaraz’s receipt of
her job description and Abbott’s Code of Conduct and Performance Modules was not equivalent to being
actually informed of the performance standards upon which she should have been evaluated on. 64 It,
however, overlooked the legal implication of the other attendant circumstances as detailed herein which
should have warranted a contrary finding that Alcaraz was indeed a probationary and not a regular
employee — more particularly the fact that she was well-aware of her duties and responsibilities and that
her failure to adequately perform the same would lead to her non-regularization and eventually, her
termination.
Accordingly, by affirming the NLRC’s pronouncement which is tainted with grave abuse of
discretion, the CA committed a reversible error which, perforce, necessitates the reversal of its decision.
C. Probationary employment;
termination procedure.
A different procedure is applied when terminating a probationary employee; the usual two-notice rule
does not govern.65
Section 2, Rule I, Book VI of the Implementing Rules of the Labor Code states that “[i]f the termination is
brought about by the failure of an employee to meet the standards of the employer in case of probationary
employment, it shall be sufficient that a written notice is served the employee, within a reasonable time
from the effective date of termination.”
As the records show, Alcaraz’s dismissal was effected through a letter dated May 19, 2005 which she
received on May 23, 2005 and again on May 27, 2005. Stated therein were the reasons for her termination,
i.e., that after proper evaluation, Abbott determined that she failed to meet the reasonable standards for her
regularization considering her lack of time and people management and decision-making skills, which are
necessary in the performance of her functions as Regulatory Affairs Manager.66 Undeniably, this written
notice sufficiently meets the criteria set forth above, thereby legitimizing the cause and manner of
Alcaraz’s dismissal as a probationary employee under the parameters set by the Labor Code. 67
D. Employer’s violation of company
policy and procedure.
Nonetheless, despite the existence of a sufficient ground to terminate Alcaraz’s employment and
Abbott’s compliance with the Labor Code termination procedure, it is readily apparent that Abbott
breached its contractual obligation to Alcaraz when it failed to abide by its own procedure in evaluating
the performance of a probationary employee.
Veritably, a company policy partakes of the nature of an implied contract between the employer and
employee. In Parts Depot, Inc. v. Beiswenger,68 it has been held that:
[E]mployer statements of policy . . . can give rise to contractual rights in employees without
evidence that the parties mutually agreed that the policy statements would create contractual
rights in the employee, and, hence, although the statement of policy is signed by neither party,
can be unilaterally amended by the employer without notice to the employee, and contains no
reference to a specific employee, his job description or compensation, and although no reference
was made to the policy statement in pre-employment interviews and the employee does not learn
of its existence until after his hiring. Toussaint, 292 N.W.2d at 892. The principle is akin to
estoppel. Once an employer establishes an express personnel policy and the employee
continues to work while the policy remains in effect, the policy is deemed an implied
contract for so long as it remains in effect. If the employer unilaterally changes the policy,
the terms of the implied contract are also thereby changed. (Emphasis and underscoring
supplied.)
Hence, given such nature, company personnel policies create an obligation on the part of both the
employee and the employer to abide by the same.
Records show that Abbott’s PPSE procedure mandates, inter alia, that the job performance of a
probationary employee should be formally reviewed and discussed with the employee at least twice: first
on the third month and second on the fifth month from the date of employment. Abbott is also required to
come up with a Performance Improvement Plan during the third month review to bridge the gap between
the employee’s performance and the standards set, if any. 69 In addition, a signed copy of the PPSE form
should be submitted to Abbott’s HRD as the same would serve as basis for recommending the
confirmation or termination of the probationary employment.70
In this case, it is apparent that Abbott failed to follow the above-stated procedure in evaluating
Alcaraz. For one, there lies a hiatus of evidence that a signed copy of Alcaraz’s PPSE form was submitted
to the HRD. It was not even shown that a PPSE form was completed to formally assess her performance.
Neither was the performance evaluation discussed with her during the third and fifth months of her
employment. Nor did Abbott come up with the necessary Performance Improvement Plan to properly
gauge Alcaraz’s performance with the set company standards.
While it is Abbott’s management prerogative to promulgate its own company rules and even
subsequently amend them, this right equally demands that when it does create its own policies and
thereafter notify its employee of the same, it accords upon itself the obligation to faithfully implement
them. Indeed, a contrary interpretation would entail a disharmonious relationship in the work place for the
laborer should never be mired by the uncertainty of flimsy rules in which the latter’s labor rights and
duties would, to some extent, depend.
In this light, while there lies due cause to terminate Alcaraz’s probationary employment for her
failure to meet the standards required for her regularization, and while it must be further pointed out that
Abbott had satisfied its statutory duty to serve a written notice of termination, the fact that it violated its
own company procedure renders the termination of Alcaraz’s employment procedurally infirm, warranting
the payment of nominal damages. A further exposition is apropos.
Case law has settled that an employer who terminates an employee for a valid cause but does so
through invalid procedure is liable to pay the latter nominal damages.
In Agabon v. NLRC (Agabon),71 the Court pronounced that where the dismissal is for a just cause, the
lack of statutory
due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer
should indemnify the employee for the violation of his statutory rights.72 Thus, in Agabon, the employer
was ordered to pay the employee nominal damages in the amount of P30,000.00.73
Proceeding from the same ratio, the Court modified Agabon in the case of Jaka Food Processing
Corporation v. Pacot (Jaka)74 where it created a distinction between procedurally defective dismissals due
to a just cause, on one hand, and those due to an authorized cause, on the other.
It was explained that if the dismissal is based on a just cause under Article 282 of the Labor Code
(now Article 296) but the employer failed to comply with the notice requirement, the sanction to be
imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act
imputable to the employee; if the dismissal is based on an authorized cause under Article 283 (now Article
297) but the employer failed to comply with the notice requirement, the sanction should be stifferbecause
the dismissal process was initiated by the employer’s exercise of his management prerogative. 75Hence, in
Jaka, where the employee was dismissed for an authorized cause of retrenchment 76 — as
contradistinguished from the employee in Agabon who was dismissed for a just cause of neglect of
duty77 — the Court ordered the employer to pay the employee nominal damages at the higher amount of
P50,000.00.
Evidently, the sanctions imposed in both Agabon and Jaka proceed from the necessity to deter
employers from future violations of the statutory due process rights of employees.78 In similar regard, the
Court deems it proper to apply the same principle to the case at bar for the reason that an employer’s
contractual breach of its own company procedure — albeit not statutory in source — has the parallel effect
of violating the laborer’s rights. Suffice it to state, the contract is the law between the parties and thus,
breaches of the same impel recompense to vindicate a right that has been violated. Consequently, while
the Court is wont to uphold the dismissal of Alcaraz because a valid cause exists, the payment of nominal
damages on account of Abbott’s contractual breach is warranted in accordance with Article 2221 of the
Civil Code.79
Anent the proper amount of damages to be awarded, the Court observes that Alcaraz’s dismissal
proceeded from her failure to comply with the standards required for her regularization. As such, it is
undeniable that the dismissal process was, in effect, initiated by an act imputable to the employee, akin to
dismissals due to just causes under Article 296 of the Labor Code. Therefore, the Court deems it
appropriate to fix the amount of nominal damages at the amount of P30,000.00, consistent with its rulings
in both Agabon and Jaka.
E. Liability of individual peti-
tioners as corporate officers.
It is hornbook principle that personal liability of corporate directors, trustees or officers attaches only
when: (a) they assent to a patently unlawful act of the corporation, or when they are guilty of bad faith or
gross negligence in directing its affairs, or when there is a conflict of interest resulting in damages to the
corporation, its stockholders or other persons; (b) they consent to the issuance of watered down stocks or
when, having knowledge of such issuance, do not forthwith file with the corporate secretary their written
objection; (c) they agree to hold themselves personally and solidarily liable with the corporation; or (d)
they are made by specific provision of law personally answerable for their corporate action.80
In this case, Alcaraz alleges that the individual petitioners acted in bad faith with regard to the
supposed crude manner by which her probationary employment was terminated and thus, should be held
liable together with Abbott. In the same vein, she further attributes the loss of some of her remaining
belongings to them.81
Alcaraz’s contention fails to persuade.
A judicious perusal of the records show that other than her unfounded assertions on the matter, there
is no evidence to support the fact that the individual petitioners herein, in their capacity as Abbott’s
officers and employees, acted in bad faith or were motivated by ill will in terminating Alcaraz’s services.
The fact that Alcaraz was made to resign and not allowed to enter the workplace does not necessarily
indicate bad faith on Abbott’s part since a sufficient ground existed for the latter to actually proceed with
her termination. On the alleged loss of her personal belongings, records are bereft of any showing that the
same could be attributed to Abbott or any of its officers. It is a well-settled rule that bad faith cannot be
presumed and he who alleges bad faith has the onus of proving it. All told, since Alcaraz failed to prove
any malicious act on the part of Abbott or any of its officers, the Court finds the award of moral or
exemplary damages unwarranted.
WHEREFORE, the petition is GRANTED. The Decision dated December 10, 2009 and Resolution
dated June 9, 2010 of the Court of Appeals in CA-G.R. SP No. 101045 are hereby REVERSED and SET
ASIDE. Accordingly, the Decision dated March 30, 2006 of the Labor Arbiter is REINSTATED with
the MODIFICATION that petitioner Abbott Laboratories, Philippines be ORDERED to pay respondent
Pearlie Ann F. Alcaraz nominal damages in the amount of P30,000.00 on account of its breach of its own
company procedure.
SO ORDERED.
Sereno (CJ.), Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Del Castillo, Abad,
Villarama, Jr., Perez and Reyes, JJ., concur.
Brion, J., See Dissent.
Mendoza, J., But concurs with J. Brion in his views on the procedural aspect.
Leonen, J., I join J. Brion in his dissent.
DISSENTING OPINION
BRION, J.:
The Case
The case in caption was a Second Division illegal dismissal case that the Court en banc accepted for
decision pursuant to Section 3, Rule 2 of the Internal Rules of the Supreme Court.
A. The Issues Posed
The case posed two issues to the Court for resolution. The first is the manner of review that the Court
should undertake. This is an issue that underlies all the Court’s decision making in light of the various
modes of review and essentials that the Rules of Court require. The second and core issue relates to the
merits of the legality or illegality of the dismissal: whether the Labor Code requirements governing the
dismissal of a probationary employee had been complied with, considered from the prism of the mode of
review and the nature of the decision under review.
B. The Factual Highlights
To briefly summarize the highlights of the case, Abbott Laboratories, Phils. (petitioner), Cecille A.
Terrible, Edwin D. Feist, Maria Olivia T. Yabut-Misa, Teresita C. Bernardo, and Allan G. Almazar
(individual petitioners) are the employer and its senior officials who dismissed respondent Pearlie Ann F.
Alcaraz from employment within three (3) months from her engagement. The respondent complained
against the petitioners on the ground that she had been illegally dismissed: (1) she was not informed of the
standards that would govern her as a probationary employee, as required by the law (the Labor Code) and
its implementing rules; (2) the petitioners even violated the company’s own internal rules on the manner
of dismissing probationary employees; (3) substantively, her dismissal was without the required just cause
as required by the law and the rules; and (4) her dismissal was done oppressively and in bad faith.
C. The Rulings Below
The Labor Arbiter ruled that the dismissal had been valid but the National Labor Relations
Commission(NLRC) reversed the Labor Arbiter; found the dismissal illegal; and damages and attorney’s
fees because of the manner the dismissal was effected. The Court of Appeals(CA) found no grave abuse
of discretion and accordingly denied the Rule 65 petition that the petitioner Abbott brought.
D. The Current Court Rulings
The Ponencia. In the present Rule 45 petition for review on certiorari before this Court, the
ponencia undertook a weighing of the evidence in light of her own view of how the evidence should be
interpreted, and came out with her own ruling for the grant of the petition.
This Dissent. I vote to dismiss the petition before us as I agree with the decision of the CA that
the NLRC did not commit any grave abuse of discretion in concluding that respondent had been
illegally dismissed from employment.
Discussion of the Issues
I. The Procedural Issue
A. The Preliminary Issue: Manner of Review
A labor case finds its way into the judicial system from the NLRC whose decision is final and
executory. Finality simply means that the NLRC ruling is no longer appealable; the legal intent is to
confine adjudication of labor cases to labor tribunals with the expertise in these cases and thereby bring
the resolution of the case to a close at the soonest possible time.
When an administrative ruling (or any ruling for that matter) is already final and unappealable, the
only recourse open under the Rules of Court is through a limited review on jurisdictional grounds under
Rule 65. This has been the mode of review followed since the Labor Code took effect in November 1974;
labor cases were directly brought to this Court but only on jurisdictional grounds under Rule 65. 1
In 1998, the Court — in lieu of directly acting on labor cases under Rule 65 of the Rules of Court —
opted to change the procedure of review through its ruling in St. Martin Funeral Homes, Inc. vs.
National Labor Relations Commission,2 taking into account the judicial hierarchy of courts and the
growing number of labor cases elevated to the Supreme Court under Rule 65. The Court resolved that the
proper recourse from the NLRC’s final and executory ruling is to assail the ruling before the CA under
Rule 65. Thus, the unappealable character of the NLRC ruling (as declared by substantive law) did not
change; only the process of review changed in terms of the court (from the Supreme Court to the Court of
Appeals) to which the labor case can initially be brought.
From the CA ruling, a dissatisfied party has the option to file an appeal with the Supreme
Court through a petition for review on certiorari under Rule 45 of the Rules of Court. This mode of appeal
limits the review to questions of law.
B. Standard of Review of a Labor Case under Rule 45 of the Rules of Court
Montoya v. Transmed3the CourtMontoya
In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast with
the review for jurisdictional error that we undertake under Rule 65. Furthermore, Rule 45 limits
us to the review of questions of law raised against the assailed CA decision. In ruling for legal
correctness, we have to view the CA decision in the same context that the petition
for certiorari it ruled upon was presented to it; we have to examine the CA decision from the
prism of whether it correctly determined the presence or absence of grave abuse of
discretion in the NLRC decision before it, not on the basis of whether the NLRC decision
on the merits of the case was correct. In other words, we have to be keenly aware that the CA
undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it.
This is the approach that should be basic in a Rule 45 review of a CA ruling in a labor case. In
question form, the question to ask is: Did the CA correctly determine whether the NLRC
committed grave abuse of discretion in ruling on the case? 4 [emphases and italics supplied;
citations omitted]
Thus, under the Rule 65 review by the CA, Montoya reiterates that the sole ground or issue allowed
is jurisdictional — the presence or absence of grave abuse of discretion on the part of the NLRC in ruling
on the case. To state the obvious, this kind of review would have made it easier for the CA to handle the
case; in the absence of a grave abuse of discretion, it can dismiss labor cases for lack of grave abuse of
discretion as we do in this Court.
From the CA, further recourse is through a Rule 45 review by this Court on questions of law in
accordance with prevailing rulings. The office of a petition for review on certiorari is not to examine and
settle factual questions already ruled upon below. In this review, the Court simply determines whether
the legal correctness of the CA’s finding that the NLRC ruling of illegal dismissal had basis in fact and
in law.
This manner of review is effectively a supervisory review by the courts that bears two significant
characteristics: first, it respects the mandate of the law that the decision below is final and is not for the
courts to review on appeal for its legal and factual merits; and second, review by the courts (particularly
by the Supreme Court) in the exercise of their supervisory certiorari jurisdiction is mandated no less than
by the Constitution and is intended to ensure that the deciding entity stayed within the due bounds of its
authority or jurisdiction.5
Specifically, in reviewing a CA labor ruling under Rule 45 of the Rules of Court, the Court’s review
is limited to:
(1) Ascertaining the correctness of the CA’s decision in finding the presence or absence of a
grave abuse of discretion. This is done by examining, on the basis of the parties’ presentations, whether
the CA correctly determined that at the NLRC level, all the adduced pieces of evidence were considered;
no evidence which should not have been considered was considered; and the evidence presented supports
the NLRC findings; and
(2) Deciding any other jurisdictional error that attended the CA’s interpretation or application of
the law.
In this kind of limited review, the Court avoids reviewing a labor case by re-weighing the evidence or
re-evaluating its sufficiency; the task of weighing or evaluation, as a rule, lies within the NLRC’s
jurisdiction as an administrative appellate body.
If the NLRC ruling has basis in the evidence and the applicable law and jurisprudence, then no grave
abuse of discretion exists and the CA should so declare and, accordingly, dismiss the petition. If grave
abuse of discretion exists, then the CA must grant the petition and nullify the NLRC ruling, entering at the
same time the ruling that is justified under the evidence and the governing law, rules and jurisprudence. In
our Rule 45 review, this Court must denythe petition if it finds that the CA correctly acted.
In the context of the present case, the CA found no grave abuse of discretion committed by the
NLRC; hence, the CA dismissed the Rule 65 petition before it. In our own ruling on the Rule 45
petition before us, we should evaluate the petition in this light, not in the manner that the ponencia did
in concluding for the grant of the petition and ruling in favor of the petitioners.
By so doing, the ponencia undertook a factual appellate review that laid the whole case open for the
detailed examination of every piece of evidence adduced in the case and for the evaluation of the
correctness of the application of the law to the evidence found. This is a review that a Rule 45 petition
does not allow.
II. The Substantive Issues
A. The Respondent’s Status of Employment
II.A.1. Standards to determine probationary
employment
While the respondent might have been hired as a probationary employee, the petitioners’ evidence
did not establish the employers’ compliance with the probationary employment requirements under
Article 281 of the Labor Code (as amended) and Section 6(d) of the Implementing Rules of Book VI,
Rule I of the Labor Code (as amended). Thus, the respondent should be considered a regular employee
and the case should be reviewed on this basis.
Article 281 of the Labor Code, as amended, provides:
ART. 281. Probationary employment.—Probationary employment shall not exceed six
(6) months from the date the employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or 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. An employee who is allowed to work after a
probationary period shall be considered a regular employee. [italics supplied; emphasis ours]
Further, Section 6(d) of the Implementing Rules of Book VI, Rule I of the Labor Code, as amended,
states:
Sec. 6. Probationary employment.—There is probationary employment where the
employee, upon his engagement, is made 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. [emphasis supplied]
Probationary employment shall be governed by the following rules:
xxxx
(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. [emphases ours; italics supplied]
To sum up these provisions, a valid probationary employment requires the concurrence of two
requirements. First, the employer shall make known the reasonable standard (performance standard)
whose compliance will render the employee qualified to be a regular employee. Second, the employer
shall inform the employee of the applicable performance standard at the time of his/her
engagement. Failing in one or both, the employee, even if initially hired as a probationary employee,
should be viewed and considered a regular employee.
The ponencia apparently fully agrees with the above statement of the applicable law as it
substantially recites the same requirements, including the consequence that upon failure to comply with
these same requirements, “the employee is deemed as a regular and not a probationary employee.”6 It
continues, however, with a twist that effectively negates what it has stated and admitted about the need to
communicate the regularization standards to the employee, thus:
Keeping with these rules, an employees 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.
Based on these premises, the ponencia then deftly argues that because the duties and responsibilities
of the position have been explained to the respondent, 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 law and the rules require that there performance standards communicated at the time of
engagement to the probationary employee. The performance standards to be met are the
employer’s specific expectations of how the probationary employee should perform.
The ponencia impliedly admits that no performance standards were expressly given but argues that
because the respondent had been informed of her duties and responsibilities (a fact that was and is not
disputed), she should be deemed to know what was expected of her for purposes of regularization.
This is a major flaw that the ponencia satisfies only viaan 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 (except in specific instances defined in the implementing rules, discussed below);
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.” The respondent, 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 managerial employee 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 the respondent 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, the respondent’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?
 From these preliminary take-off points in the ponencia’s premises, it can already be discerned
that something is badly amiss and skewed in its appreciation and review of the rulings of the NLRC
and the CA. It is an appreciation that goes beyond what a determination of grave abuse of
discretion requires. It is an evaluation of the adduced evidence based on externalities beyond the
face value of the presented evidence.
In this case, the ponencia simply disregarded the plain import of the evidence or the lack of it,
and ventured into the realm of assumptions to justify its desired conclusions. In the mathematical
realm of problem solving, it appears to have started from the conclusion and solved the problem
backwards so that the conclusion would fit into its stretched reading of the evidence.
II.A.2. The respondent should be deemed a ground for terminating a probationary employment, i.e., when the employee “fails to qualify as a regular
regular employee
In the context of this case, an initial determination of how the respondent’s employment started and
of her legal status at that point is the best starting point in determining the validity of her dismissal.
The respondent was indisputably initially hired as a probationary employee. This is not a contested
point. The established facts and the applicable law, however, dictate otherwise from the perspective of law
as the petitioners failed to show compliance with the two requirementsof Article 281 of the Labor Code
(as amended) and of Section 6(d) of the Implementing Rules of Book VI, Rule I of the Labor Code (as
amended).
This was what the NLRC found, leading the CA to conclude that no grave abuse of discretion
intervened in the NLRC’s ruling because its findings were supported by the evidence on record and
by the correctly-chosen applicable law. In stark contrast, the ponencia’s reading, although based on the
same legal premises, was based on shaky assumptions, not on the hard evidence that the tribunals below
appreciated.
II.A.2(a). No specific employment standard on
record.
As the NLRC found (and as confirmed by the CA), no term or provision exists in the respondent’s
Employment Contract relating to the performance standard that the respondent was expected to observe.
The Employment Contract, duly presented as evidence, only proved the terms and conditions of the
respondent’s employment as therein indicated, i.e., the position title, the assigned department, the status of
employment, and the period of employment. Beyond these, the Employment Contract did not say anything
more. To be sure, nothing more can be extracted from this piece of evidence except the facts stated and the
inferences by implication from the expressly disclosed information. Significantly, none of these can be
characterized or inferred by implication as performance standards.
The best evidence of what the ponencia did when it saw matters otherwise, is its own statement: its
basis is not what the submitted evidence state but on what she was “largely impelled” to recognize. To
quote the ponencia’s own words:
A punctilious examination of the records reveals that Abbott had indeed complied with the above
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 states of her employment. On this score, the Court finds it
apt to detail not only of 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:” [emphasis supplied]
The petitioner’s other pieces of evidence that the ponencia cited and used to support its conclusion do
not and cannot, however, satisfy the requirement for performance standards that must be communicated at
the time of engagement.
Specifically, these were the Offer Sheet dated December 7, 2004, and the pre-employment
orientationon the respondent’s duty to implement the petitioner’s Code of Conduct, office policies and
training program.
The Offer Sheet was designed to inform the respondent of the compensation and benefits package
offered to her by the petitioner and can in no way be read as a statement of the applicable probationary
employment standard.8 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 the respondent’s duty to implement the petitioner’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 the respondent 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 the respondent and the required performance standard applicable for
her qualification for regular employment; they related to the staff the respondent managed and
supervised. Additionally, these were all relayed prior to or after the respondent was engaged by the
petitioner.
An important distinction to remember at this point is that the respondent’s knowledge of the duties
that her work entailed, and her knowledge of the employer’s performance standard, are two distinct
matters separately requiring the presentation of independent proof.
The requirement of independent proof is found under Article 281 of the Labor Code, as amended, and
its implementing rule that deem an employee to be regular if he/she was not informed of the performance
standard for regularization. Independent proof is likewise necessary as the law provides an additional
employee in accordance with the reasonable standards made known by the employer[.]”9
The performance standard contemplated in law may be proven by evidence of how the employee’s
performance was intended to be or was, in fact, measured by the employer. The performance standard may
be in the form of a clear set of the employer’s expectations, or by a system of feedbacks (e.g., comment
cards) and document evaluation or performance evaluation and appraisals conducted by the employer.
These were the pieces of evidence that the NLRC, as confirmed by the CA, did not see in the
evidence or in the petitioners’ presented case. The ponencia, unfortunately, glossed over these gaps and
omissions in the petitioners’ case and chose to believe, even without evidentiary basis that—
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. [emphasis
supplied]
From this strained and stretched reading that magically saw the required prescribed performance standards
that — by the factual findings of the NLRC and the CA — never existed, the ponencia went on to
conclude:
Verily, basic knowledge and common sense dictate that the adequate performance of one’s duties
is, by and of itself, an inherent and implied standard for a probationary employee to be
regularized; such is a regularization standard which need not be literally spelled out or mapped
into technical indicators in every case. In this
regard, it must be observed that the assessment of adequate duty performance is in the nature of a
management prerogative which when reasonably exercised — as Abbott did in this case —
should be respected. This is especially true of a managerial employee like Alcaraz who was
tasked with the vital responsibility of handling personnel and important matters of her
department.
This conclusion, of course, simply extends the magic by using “basic knowledge and common sense” to
dictate the existence of “inherent and implied standards” of a probationary employee, and even offers a
view of “management prerogative” that is unusual in the given facts of this case. This approach eloquently
exemplifies what I mentioned above as the “solving backwards” approach that the ponencia used.
II.A.2(b). No specific performance standard
communicated to the respondent.
Complementing the requirement for the existence of performance standards is the required
communication of the performance standard to the respondent. Again, nothing in the records shows that
the petitioner ever communicated any performance standard to the respondent.
The ponencia, in building up a case contrary to what the NLRC and the CA found, cites the evidence
the petitioners point to — the respondent’s receipt of copies of the petitioner’s Code of Conduct,
Probationary Performance Standards and Evaluation, and Performance Excellence Orientation Modules.
The NLRC and the CA, looking at the same pieces of evidence, saw these in a different light as they did
not only examine the documents themselves but went to the extent of examining and appreciating the
circumstances surrounding the respondent’s receipt of these documents.
The evidence on record suggests, as the respondent directly testified to, that the cited documents were
not given to her for the purpose of complying with the petitioner’s obligation to inform her of the
performance standards applicable to her. The documents were, in fact, given by the petitioner to assist her
in monitoring the employees assigned to her department, i.e., as the documents she must rely on in
conducting the performance evaluations of the staff assigned to her department. In short, the respondent
received the documents because they were necessary in the discharge of her functions.
From the point of law, compliance with the first requirement is not also satisfied by the petitioner’s
assertion that the respondent knew that only one performance standard applied to all employees. Notably,
the law requires proof that the employer specifically made known to her the performance standards
applicable to her to enable her to qualify for regular employment. The required communication must be
an effective one if the law were to be given meaningful substance, not a mere perfunctory
transmission of information.
Faced with these opposing claims, the CA apparently weighed matters in the respondent’s (and
effectively in the NLRC’s) favor. In this situation of possible equipoise, the CA did not rule incorrectly
from the point of law when it acted as it did.
Two factors tilt the balance in favor of the legal correctness of the CA’s ruling. The first is that the
respondent’s position (found by the NLRC to be meritorious) was not without any basis in fact and in
law. The second is from the latter perspective; Article 4 of the Labor Code and established jurisprudence
hold that any doubt in a labor situation must be resolved in the employee’s favor.
Thus, again, the ponencia’s case and its conclusion must fail.
II.A.2(c). Performance standards and the
internal procedures for their
evaluation were not applied to the
respondent.
I can only agree with one aspect of the ponencia — its admission that Abbott’s internal procedures
were not applied to the respondent. I cannot dispute and I fully agree with the following passages of
the ponencia:
Records show that Abbott’s PPSE procedure mandates, inter alia, that the job performance
of a probationary employee should be formally reviewed and discussed with the employee at
least twice: first on the third month and second on the fifth month from the date of employment.
Abbott is also required to come up with a Performance Improvement Plan during the third month
review to bridge the gap between the employee’s performance and the standards set, if any. In
addition, a signed copy of the PPSE form should be submitted to Abbott’s HRD as the same
would serve as basis for recommending the confirmation or termination of the probationary
employment.
In this case, as it is apparent that Abbott failed to follow the above-stated procedure in
evaluating Alcaraz. For one, there lies a hiatus of evidence that a signed copy of Alcaraz 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 performance with the set company
standards.
While it is Abbott’s management prerogative to promulgate its own company rules and even
subsequently amend them, this right equally demands that when it does create its own policies
and thereafter notify its employees of the same, it accords upon itself the obligation to faithfully
implement them. Indeed, a contrary interpretation would entail a disharmonious relationship in
the work place for the laborer should never be mired by the uncertainty of flimsy rules in which
the latter’s labor rights and duties would, to some extent, depend.10
Internal processes, however, cannot be dissociated from the substance that the processes seek to
achieve. This is the essence of due process. There is the requirement for the observance of proper
procedures, hand in hand with the substance of what the law seeks – to level the playing field between the
all-powerful employer and the vulnerable employee who lies at the mercy of the employer if he or she can
be dismissed on the basis of the latter’s whim. This attempt at leveling is the reason for the requirements
for duly disclosed performance standards and their communication to the probationary employee at the
very beginning of the relationship. Reason, experience and common sense dictate that the substance of the
law carry more weight than the process component so that any violation of the substantive portion is a
transgression that mere obeisance to the process or the recognition of the failure of process, cannot cure.
From this perspective, the laudable quotation above loses its luster.
Lusterless or otherwise, the ponencia’s admission of Abbott’s procedural inadequacies is not without
significance in terms of the present case as a whole. Notably, the above quotation expressly and impliedly
admits that no effort at all was ever made for the conduct of an assessment or evaluation of the
respondent’s performance; in fact, no performance evaluation forms appear to have been submitted by the
company. The dearth of evidence on this point (described by the ponencia as a “hiatus of evidence”) is
completely consistent with what the ponencia explicitly and impliedly admits from the very
beginning: there was no evidence of any performance standard furnished the respondent so that the
ponencia could only deduce the existence of performance standards from its assumptions and stretched
rationalizations; much less was there any communica-
tion of performance standards qua performance standards, as this is a matter that was also assumed.
I draw attention, too, to another unusual feature of this case indicating, not only the omissions that the
ponencia already cited, but the implication as well that the respondent had been singled out for special
treatment by the petitioner officers. At the very least, this incident indicates that the petitioner did not
apply the same standards and processes to the respondent’s work. The petitioner’s prescribed procedure
was narrated in an earlier version of the ponencia in this wise:
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 x x x 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.11 (emphasis ours)
This allegation by the respondent in this regard in her pleadings was impliedly admitted by the
petitioner when it failed to offer any refutation. Interestingly, the above allegation was included in the
narration of facts of the Labor Arbiter, the NLRC, the CA and an earlier version of the ponencia,
although they arrived at two (2) different conclusions.
The respondent’s unrefuted allegation was not considered at all in the conclusions of the Labor
Arbiter and of the ponencia.12 On the other hand, the NLRC and the CA concluded that a different
performance standard and evaluation process
was applied to the respondent in light of the circumstances of the case, gleaned from the evidence
submitted.13
In my view, the NLRC and the CA were not without basis in making their conclusion as the incident,
taken together with the facts supported by the available evidence, is vital in appreciating the nature of the
respondent’s employment.
Since the respondent, as the incident suggests, was bound by a different set of standards and
procedures, and since no evidence of record existed showing what these standards were or that the
required procedures were observed, the petitioners’ theory that the respondent was informed of, and was
evaluated pursuant to, the performance standards applicable to her position, is effectively negated. This
leads to the conclusion that the respondent, from the beginning, had been a regular employee as a
result of the failure of Abbott’s HR processes. A much simpler view, related this time to the manner of
her termination, is that the respondent was simply differently treated.
B. “Just Cause” for Dismissal Must Exist
To justify the dismissal of an employee, the employer carries the burden of proving that the dismissal
was for a just cause and with the observance of due process prior to dismissal. 14 The employer has to
discharge this burden by clear, accurate, consistent and convincing evidence; 15 in case of doubt, the
presumption in the employee’s favor under Article 4 of the Labor Code should apply.
II.B.1. The petitioner had no valid cause to
dismiss the respondent’s employment
The respondent was dismissed as she “failed to qualify as regular employee in accordance with the
prescribed standards set by the Company.”16 Even granting for the sake of argument that the petitioner had
apprised the respondent of an applicable performance standard, the evidence failed to show that the
respondent did not meet this standard in a manner and to the extent equivalent to the “just cause” that the
law requires.
II.B.1(a). Just cause requirement for
employees, whether
probationary or regular.
An important legal point that should not be lost in considering this case is that a probationary
employee does not have lesser rights than a regular employee under the Labor Code in terms of the
just cause for the termination of an employment. While the strict application of Article 282 of the
Labor Code may be relaxed because the employee is still under probation (so that analogous probationary
status rules may apply), the same essential just cause for dismissal must be present and must be proven. In
other words, probationary employment does not mean that the employee is under an “employment at will”
situation as that phrase is understood in American jurisprudence. To reiterate, the fact that the respondent
was still in her probationary period of employment did not lessen the burden of proof that the law imposed
on the petitioners to prove the just cause for her dismissal. 17Probationary employees are protected by the
security of tenure provision of the Constitution and they cannot be removed from their position except
only for cause.18
II.B.1(b). The evidentiary status of the
just cause for dismissal
In the present case, the evidence did not show the just cause that Article 282 of the Labor Code
requires. No evidence on record showed the commission by the respondent of any of the following acts or
omissions:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer
or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representatives; and
(e) Other causes analogous to the foregoing.
On the contrary, the records disclose that the respondent performed her duties under the guidance of
the petitioner’s management and worked in line with the tasks assigned to her.19 The petitioner’s
allegation of the respondent’s “poor performance” could not have been substantiated considering the lack
of any clear performance standard in evaluating the respondent’s work.
II.B.2. The petitioner violated its own
procedural requirements in the
performance evaluation
A first instance when the discussion related to “process” was with respect to the communication of
performance standards. This topic also relates to process, but this time on the matter of the procedure to
be taken in performance evaluation: the petitioner failed to observe its own procedural requirements in
evaluating the respondent’s probationary employment.
The petitioner’s prescribed procedure gives probationary employees two (2) opportunities to meet
and qualify for regularization. As mentioned before, the reviews were aimed at informing the employees
of their work performance based on the petitioner’s standard and on how they can improve it to qualify for
regularization. For reasons not disclosed in the records, the prescribed procedure was not followed by the
petitioner in the respondent’s case. She was immediately terminated from employment without having
been evaluated and without undergoing the evaluation process under the petitioner’s prescribed procedure.
While the petitioner’s failure to observe its own procedures is not disputed in the ponencia, the
implication of Abbott’s failure cannot simply be glossed over. Abbott’s non-compliance should be viewed
from the point of fairness or lack of it, that attended the respondent’s dismissal. This circumstance should
be considered together with the other circumstances of the case, if only because the petitioner’s basic
unfairness rendered doubtful the real cause in the termination of her employment.
In other words, any deviation from the prescribed procedures must be sufficiently explained to
remove doubts on the genuineness of the cause of dismissal. In this case, not only did the petitioner fail to
observe its own prescribed procedure; more importantly, it also failed to provide an explanation on why
the prescribed procedure was not followed in the respondent’s case.
Significantly, the NLRC appreciated all these in this case and this appreciation was duly noted
and evaluated by the CA. As there was in fact basis in fact and in law in the NLRC’s findings on this
aspect of the case,
again the CA correctly found no grave abuse of discretion in the NLRC’s actions.
II.B.3. Violation of the Labor Code’s
procedural requirements
Additionally, the petitioner failed to comply with the procedural due process of the Labor Code
when it terminated the respondent’s employment. The two-written notice requirement under Section 2,
Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, as amended, was never
observed. To quote this provision:
Section 2. Standards of due process; requirements of notice.—In all cases of termination of
employment, the following standards of due process shall be substantially observed:
I. For termination of employment based on just causes as defined in Article 282 of the Code:
(a) A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to explain
his side;
(b) A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; and
(c) A written notice of termination served on the employee indicating that upon due
consideration of all the circumstance[s], grounds have been established to justify his
termination.
In case of termination, the foregoing notices shall be served on the employee’s last known
address. [emphasis supplied]
The first notice is complied with when the employee is properly apprised of the charges brought
against him/her so that he/she can properly prepare for his/her defense. 20The second notice is complied
with when the employee is informed of the employer’s intention to terminate the employment. 21 A formal
“trial-type” hearing, although preferred, is not absolutely necessary to satisfy the employee’s right to be
heard. In Perez v. Philippine Telegraph and Telephone Company,22 the Court laid down the following
guiding principles in connection with the hearing requirement in dismissal cases:
a) “ample opportunity to be heard” means any meaningful opportunity (verbal or written) given to
the employee to answer the charges against him and submit evidence in support of his defense,
whether in a hearing, conference or some other fair, just and reasonable way.
b) a formal hearing or conference becomes mandatory only when requested by the employee in
writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when
similar circumstances justify it.
c) the “ample opportunity to be heard” standard in the Labor Code prevails over the “hearing or
conference” requirement in the implementing rules and regulations.
From the records, the respondent received only one notice and was not given ample opportunity to
be heard before her employment was terminated. The respondent was not served a first written notice
indicating: (1) the grounds for terminating her employment; and (2) a directive giving her the opportunity
to submit a written explanation within a reasonable period. Neither was the respondent given the ample
opportunity to be heard as required by law. There was only compliance with the second notice
requirement through the petitioner’s letter dated May 19, 2005 which was already a written notice of
termination of employment.23
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. The ponencia itself admits that in such a case, the employee would then be a
regular employee. Since the petitioner utterly failed to support by evidence its compliance with the legal
requirements on performance standards, the two-notice requirement for regular employees must perforce
fully apply.
C. The Consequences of the Respondent’s
Illegal Dismissal
The above analysis shows that the respondent had been illegally dismissed from her employment.
The petitioner failed to show that her dismissal was for a valid cause. The petitioner also failed to respect
the respondent’s procedural due process rights under the law.
As a consequence, the NLRC and the CA, thereafter, correctly ordered the respondent’s reinstatement
and the payment of the monetary awards of backwages, moral damages, exemplary damages and
attorney’s fees. The CA and the NLRC also correctly held that the individual petitioners (i.e., the
corporate officers of the petitioner) should be solidarily liable with the petitioner for the respondent’s
monetary awards.
II.C.1. The recoverable reliefs
Article 279 of the Labor Code, as amended, provides the following awards to an illegally dismissed
employee:
Art. 279. Security of tenure.—In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by this Title.
An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss
of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to
 his other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
“By jurisprudence derived from [the above] provision, separation pay may be awarded to an illegally
dismissed employee in lieu of reinstatement.”24 Under Section 4(b), Rule I of the Rules Implementing
Book VI of the Labor Code, separation pay is awarded, in lieu of reinstatement, to an illegally dismissed
employee when reinstatement is no longer possible, i.e., when the dismissed employee’s position is no
longer available, or the continued relationship between the employer and the employee would no longer
be viable due to the strained relations between them, or when the dismissed employee opts not to be
reinstated, or when the payment of sepa-
ration benefits would be for the best interest of the parties involved.
“Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The
two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible
because of strained relations between the employee and the employer, separation pay is granted. In effect,
an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if
reinstatement is no longer viable, and backwages.”25
II.C.2. Other awards as a consequence of the
damages suffered
In addition to these basic awards, an illegally dismissed employee may also be awarded moral and
exemplary damages and attorney’s fees. Jurisprudence holds that moral and exemplary damages are
awarded when the illegal dismissal is attended by bad faith.26 The Court has also ruled that corporate
officers are solidarily liable with the employer company for the employees’ termination of employment
done with malice or bad faith.27
A review of the facts of the case shows ample evidence supporting the petitioner’s bad faith, as
shown by the manner in which the respondent’s employment was terminated. The NLRC, in its decision,
exhaustively discussed the petitioner’s bad faith, as demonstrated by the actions of the individual
petitioners:
The records show that complainant-appellant’s dismissal was effected by individual
respondents-appellees in a capricious and high-handed manner, anti-social and oppressive,
fraudulent and in bad faith, and contrary to morals, good customs and public policy. Bad faith
and fraud are shown in the acts committed by respondents-appellees before, during and after
complainant-appellant’s dismissal in addition to the manner by which she was dismissed. First,
complainant-appellant 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) individual respondents Ms. Terrible and Ms. Walsh made a public
announcement to the staff that complainant-appellant already resigned even if in reality she did
not. All of which caused complainant-appellant much humiliation, serious anxiety and
besmirched reputation.28
The CA also described in detail the abrupt and oppressive manner in which the respondent’s
employment was dismissed by the petitioner:
On May 23, 2005, the private respondent still reported for work since petitioner 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 Ms. Walsh[‘s] instruction. She requested Ms. 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. The private respondent informed Ms. Bernardo about the
incident. The latter responded by saying she was no longer an employee of the company since
May 19, 2005.
The private respondent 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:
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, the private respondent’s termination letter dated May 19, 2005 was
handed to her by Ms. Walsh, Mr. Almazar and Ms. Bernardo. On May 27, 2005, the private
respondent received another copy of the said termination notice via registered mail. 29
These explanations for the actions taken show that the NLRC’s recognition of the bad faith was
not without basis and was in fact supplemented by the CA in the appellate court’s own confirmatory
explanation.
D. Application of the Rule 45 Standard of Review
Under the evidentiary situation that prevailed in this case as described above in some detail, an
expression of wonder cannot be helped, particularly on how the ponenciacould conclude that the CA
committed a reversible error when it found no grave abuse of discretion in the NLRC’s actions on the
case. In contrast with the findings of the Labor Arbiter, the findings and conclusions of the NLRC, as
affirmed on a Rule 65 review by the CA, were based on the law and jurisprudence as properly applied to
the established set of facts and evidence.
First, while the respondent, from the petitioner’s standpoint, was hired as a probationary employee,
she was deemed a regular employee pursuant to the clear provisions of Article 281 of the Labor Code, as
amended and Section 6(d) of the Implementing Rules of Book VI, Rule I of the Labor Code, as amended.
The evidence adduced failed to show that the petitioner ever apprised the respondent at the time of her
engagement of the standards she must meet to qualify for regular employment.
Second, the respondent’s termination from employment had no basis in fact and in law. Since the
records failed to support the petitioner’s allegation that the respondent’s alleged poor performance and
tardiness were proven by evidence and, in fact, fell within the enumeration in Article 281 and Article 282
of the Labor Code, reason dictates that the present petition be denied.
At the risk of repetition, the adduced evidence, in the first place, did not prove that the respondent’s
work failed to comply with the petitioner’s performance standard as no proof of the performance standard
applied to the respondent’s work was actually presented. The respondent’s employment was also
terminated without undergoing any performance evaluation.
The evidence adduced did not also prove any act of omission under Article 282 of the Labor Code
committed by the respondent. No evidence was presented on the respondent’s actual work so as to
determine whether her acts/omissions constituted a just cause for termination, such as serious misconduct
or gross or habitual neglect of duty or any other analogous cause to the just causes mentioned in the law.
As the records show, neither was there compliance with the respondent’s own internal procedures nor
with the law’s procedural due process. The respondent was not served the two-notice required by law
before her employment was terminated by the petitioner.
Third, the NLRC’s monetary awards, as affirmed by the CA, were appropriate consequences of the
respondent’s illegal dismissal from employment. The payment of the respondent’s backwages and the
order of reinstatement were consistent with the provisions of Article 279 of the Labor Code. Jurisprudence
also provides the award of moral and exemplary damages, as well as attorney’s fees, when bad faith is
proven in the termination of employment.
In this case, the bad faith exhibited by the individual petitioners was clearly established in the
records. The individual petitioners’ bad faith was demonstrated by the evidence of how they unfairly
effected the termination of the respondent’s employment.
The narration of facts of the Labor Arbiter, the NLRC and the CA shows, among others, that: (1) the
individual petitioners did not follow the petitioner’s prescribed procedure performance evaluation as, in
fact, the respondent’s work was not evaluated; (2) the individual petitioners, through their concerted
actions, ganged up on the respondent in forcing her to resign from employment; (3) the individual
petitioners pressured the respondent to resign by announcing her resignation to the office staff, thereby
subjecting her to unwarranted humiliation; and (4) they blackmailed the respondent by withholding her
personal possessions until she resigned from employment.
Bad faith can also be inferred from the lack of fairness and underhandedness employed by the
individual petitioners on how they informed the respondent of the termination of her employment. The
records disclose that the respondent was lured into a meeting on the pretext that her work performance
was to be evaluated; she was caught off-guard when she was informed that her employment had been
terminated. Aside from the abrupt notification, bad faith can also be deduced from the fact that the
termination was made immediately effective; the respondent was immediately banned from the
petitioner’s premises after she was informed that her employment had been terminated.
To my mind, the NLRC correctly ruled that the individual petitioners were solidarily liable, together
with the petitioner, to pay the monetary awards. The cited circumstances constitute sufficient evidence of
their bad faith in terminating the respondent’s employment. Verily, corporate officers are solidarily liable
with the corporation to pay monetary awards in illegal dismissal cases when their bad faith is established
in the termination of the employment.
III. Conclusion
I close this Dissent with the note that the constitutional protection of security of tenure is a right
enjoyed by every employee. Employment, regardless of the employment status, may only be terminated
for cause and within the procedure prescribed by law and jurisprudence. A review of the records shows
that no reversible error was committed by the CA in finding the NLRC free from any taint of grave abuse
of discretion in ruling on the respondent’s illegal dismissal. This conclusion is what the Court should
reflect in its Decision if it is to discharge in good faith its duty to adjudicate.
Petition granted, judgment and resolution reversed and set aside.
Notes.—A person whose right to remain in peaceful possession of his property is violated by another
person’s fraudulent registration of such property in her name is entitled to nominal damages under Article
2221 of the Civil Code. (Reyes vs. Montemayor, 598 SCRA 61 [2009])
The filing of a certificate of non-forum shopping is mandatory so much so that non-compliance could
only be tolerated by special circumstances and compelling reasons; This Court has held that when there
are several petitioners, all of them
must execute and sign the certification against forum shopping; otherwise, those who did not sign will be
dropped as parties to the case. (Pigcaulan vs. Security and Credit Investigation, Inc., 663 SCRA 1 [2012])