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PROBATIONARY EMPLOYMENT employee.

Worse, she was deprived of her only means of


livelihood.
TAMSONS ENTERPRISES, INC.,
NELSON LEE, LILIBETH ONG and For their part, the petitioners asserted that before Sy was
JOHNSON NG, hired, she was apprised that she was being hired as a
probationary employee for six months from September 1,
- versus - 2006 to February 28, 2007, subject to extension as a regular
employee conditioned on her meeting the standards of
COURT OF APPEALS permanent employment set by the company. Her work
and ROSEMARIE L. SY, performance was thereafter monitored and
Respondents. evaluated. On February 1, 2007, she was formally informed
MENDOZA, J.: that her employment would end on February 28,
2007 because she failed to meet the companys standards.
This is a petition for review on certiorari under Rule From then on, Sy started threatening the families of the
45 of the 1997 Rules of Civil Procedure assailing the February petitioners with bodily harm. They pointed out that the
26, 2010 Decision[1] and the July 9, 2010 Resolution[2] of the unpredictable attitude of Sy was one of the reasons for her not
Court of Appeals (CA) in CA-G.R. SP No. 105845 which being considered for regular employment.
reversed the April 29, 2003 Decision[3] of the National Labor
Relations Commission (NLRC) and reinstated the September The foregoing circumstances prompted Sy to file a case for
28, 2007 Decision[4] of the Executive Labor Arbiter, Herminio illegal dismissal with claims for back wages, unpaid salary,
Suelo (ELA), in NLRC NCR Case No. 00-03-0236607, finding service incentive leave, overtime pay, 13th month pay, and
petitioners liable for illegal dismissal and payment of money moral and exemplary damages, and attorneys fees.
claims. After the submission of the parties respective
pleadings, the ELA rendered a decision in favor of Sy, stating
This case stemmed from a complaint for illegal dismissal with that a termination, notwithstanding the probationary status,
money claims filed by respondent Rosemarie L. must be for a just cause. As there was an absence of evidence
Sy (Sy) before the Arbitration Branch, National Capital showing just cause and due process, he found Sys
Region, NLRC, against petitioners Tamsons Enterprises, termination to be arbitrary and illegal. The dispositive portion
Inc. (Tamsons), Nelson Lee (Lee), the company President; of the ELA decision reads:
and Lilibeth Ong (Ong) and Johnson Ng (Ng), her co-
employees. WHEREFORE, premises considered,
judgment is hereby rendered finding
From the records, it appears that on September 1, 2006, Sy respondents [herein petitioners] liable for
was hired by Tamsons as Assistant to the President. Despite illegal dismissal and payment of money
the title, she did not act as such because, per instruction of claims.
Lee, she was directed to act as payroll officer, though she
actually worked as a payroll clerk.[5] Accordingly, respondents [herein petitioners] are
hereby ordered to reinstate complainant
On February 24, 2007,[6] four days before she to her position without loss of seniority
completed her sixth month of working in Tamsons, Ng, the rights and other benefits, and to pay the
Sales Project Manager, called her to a meeting with him and following:
Lee. During the meeting, they informed Sy that her services
would be terminated due to inefficiency. She was asked to 1. Complainants full
sign a letter of resignation and quitclaim. She was told not to backwages, computed
report for work anymore because her services were no longer from the time she was
needed. On her last day of work, Ong humiliated her in front illegally dismissed to the
of her officemates by shouting at her and preventing her from date of her actual
getting her personal things or any other document from the reinstatement, which as
office. of date amounts
to ₱185,380.00;
During her pre-employment interview, Lee had nice
comments about her good work experience and educational 2. Prorated 13th month pay
background. She was assured of a long-term employment in the sum of ₱4,166.00;
with benefits. Throughout her employment, she earnestly
performed her duties, had a perfect attendance record, 3. Salaries for period
worked even during brownouts and typhoons, and would often of February 16-28,
work overtime just to finish her work. 2007 amounting
to ₱13,000.00;
Sy claimed that the remarks of her superiors about
her alleged inefficiency were ill-motivated and made without 4. 10% of the total award as
any basis. She had been rendering services for almost six (6) attorneys fee.
months before she was arbitrarily and summarily
dismissed. Her dismissal was highly suspicious as it took The reinstatement aspect of
place barely four (4) days prior to the completion of her six- this Decision is immediately executory
month probationary period. The petitioners did not show her pursuant to Article 223 of the Labor
any evaluation or appraisal report regarding her alleged Code, as amended. Respondents [herein
inefficient performance. As she was terminated without an petitioners] are therefore directed to
evaluation on her performance, she was deprived of the submit a report of compliance thereof
opportunity to be regularly part of the company and to be before this Office within ten (10) calendar
entitled to the benefits and privileges of a regular days from receipt hereof.

1
2007 is REINSTATED. Consequently,
All other claims are hereby the decision and resolution of the
DISMISSED for lack of merit. National Labor Relations Commission
dated April 29, 2008 and July 30, 2008,
SO ORDERED.[7] respectively, are REVERSED and SET
ASIDE.
Dissatisfied, the petitioners appealed to the NLRC on the
ground that the ELA gravely abused his discretion in finding SO ORDERED.[10]
that Sy was illegally dismissed and in ordering her
reinstatement and payment of backwages. The petitioners sought reconsideration of the said decision.
The CA, however, denied the motion in its Resolution
On appeal, the NLRC reversed the ELAs finding dated July 9, 2010.
that Sy was terminated without just cause and without due Hence, the petitioners interpose the present petition
process and dismissed the case.[8] before this Court anchored on the following

In reversing the decision of the ELA, the NLRC GROUNDS


reasoned out that pursuant to Article 281 of the Labor Code,
there are two general grounds for the services of a (1)
probationary employee to be terminated, just cause or failure THE COURT OF APPEALS ERRED IN
to qualify as a regular employee. In effect, failure to qualify for UPHOLDING THE DECISION OF THE
regular employment is in itself a just cause for termination of LABOR ARBITER AND AWARDING
probationary employment. To the NLRC, the petitioners were BACK WAGES AND OTHER
in compliance with the mandate of the said provision when Sy MONETARY CLAIMS IN FAVOR OF
was notified one month in advance of the expiration of her THE PRIVATE RESPONDENT.
probationary employment due to her non-qualification for
regular employment.

The motion for reconsideration having been denied,


Sy elevated her case to the CA via a petition for certiorari (2)
under Rule 65. She imputed grave abuse of discretion on the THE COURT OF APPEALS ERRED IN
part of NLRC in dismissing her complaint. HOLDING THAT HEREIN PRIVATE
RESPONDENT BECAME A REGULAR
On February 26, 2010, the CA rendered the assailed EMPLOYEE EFFECTIVE DAY ONE OF
decision reversing the NLRC. It explained that at the time Sy HER EMPLOYMENT WITH
was engaged as a probationary employee she was not PETITIONER.
informed of the standards that she should meet to become a
regular employee.Citing the ruling in Clarion Printing House, (3)
Inc v. NLRC,[9] the CA stated that where an employee hired THE COURT OF APPEALS GRAVELY
on probationary basis was not informed of the standards that ERRED IN DISREGARDING THE
would qualify her as a regular employee, she was deemed to PROBATIONARY PERIOD OF
have been hired from day one as a regular employee. As a EMPLOYMENT OF PRIVATE
regular employee, she was entitled to security of tenure and RESPONDENT ENDING
could be dismissed only for a just cause and after due [ON] FEBRUARY 28, 2007.[11]
compliance with procedural due process. The CA added that
the petitioners did not observe due process in dismissing Sy. The core issue to be resolved is whether the
termination of Sy, a probationary employee, was valid or not.
Thus, the CA agreed with the ELAs conclusion that the
termination of Sys services was illegal as there was no The petitioners pray for the reversal of the CA
evidence that a standard of performance had been made decision arguing that Sy was a probationary employee with a
known to her and that she was accorded due process. The limited tenure of six months subject to regularization
pertinent portions of the CA decision, including the dispositive conditioned on her satisfactory performance. They insist that
portion, read: they substantially complied with the requirements of the law
Public respondent NLRC committed having apprised Sy of her status as probationary
grave abuse of discretion in reversing the employee. The standard, though not written, was clear that
findings of the Labor Arbiter and ruling her continued employment would depend on her over-all
that private respondents [herein performance of the assigned tasks, and that the same was
petitioners] have the right to terminate made known to her since day one of her
the services of petitioner [herein employment. According to the petitioners, reasonable
respondent] because they found her unfit standard of employment does not require written evaluation of
for regular employment even if there was Sys function. It is enough that she was informed of her duties
no evidence to show the instances which and that her performance was later rated below satisfactory
made her unfit. Moreover, the NLRC by the Management.
erred when it found that there was a
compliance with procedural due process Citing Alcira v. NLRC[12] and Colegio San Agustin v.
when petitioners [respondents] services NLRC,[13] the petitioners further argue that Sys constitutional
were terminated. protection to security of tenure ended on the last day of her
probationary tenure or on February 28, 2007. It is unfair to
WHEREFORE, the petition is GRANTED. The compel regularization of an employee who was found by the
decision of the Labor Arbiter Management to be unfit for the job. As they were not under
dated September 28, obligation to extend Sys employment, there was no illegal

2
dismissal, but merely an expiration of the probationary with reasonable standards made known to them by the
contract. As such, she was not entitled to any benefits like employer at the time of their engagement.[16] Consistently,
separation pay or backwages. in Mercado v. AMA Computer College-Paranaque City,
Inc.,[17] this Court clearly stressed that:
Sy counters that she was illegally terminated from
Labor, for its part, is given the
service and insists that the petitioners cannot invoke her
protection during the probationary period
failure to qualify as she was not informed of the standards or
of knowing the company standards the
criteria which she should have met for regular
new hires have to meet during the
employment. Moreover, no proof was shown as to her alleged
probationary period, and to be judged on
poor work performance. She was unceremoniously
the basis of these standards, aside from
terminated to prevent her from becoming a regular employee
the usual standards applicable to
and be entitled to the benefits as such.
employees after they achieve permanent
status. Under the terms of the Labor
The Court finds the petition devoid of merit.
Code, these standards should be
made known to the [employees] on
The pertinent law governing the present case is
probationary status at the start of their
Article 281 of the Labor Code which provides as follows:
probationary period, or xxx during
which the probationary standards are to
Art. 281. Probationary
be applied. Of critical importance in
employment. Probationary employment
invoking a failure to meet the
shall not exceed six months from the date
probationary standards, is that
the employee started working, unless it is
the [employer] should show as a
covered by an apprenticeship agreement
matter of due process how these
stipulating a longer period. The services
standards have been applied. This is
of an employee who has been engaged
effectively the second notice in a
in a probationary basis may be
dismissal situation that the law requires
terminated for a just cause or when he
as a due process guarantee supporting
fails to qualify as a regular employee in
the security of tenure provision, and is in
accordance with reasonable standards
furtherance, too, of the basic rule in
made known by the employer to the
employee dismissal that the employer
employee at the time of his
carries the burden of justifying a
engagement. An employee who is
dismissal. These rules ensure
allowed to work after a probationary
compliance with the limited security of
period shall be considered a regular
tenure guarantee the law extends to
employee. (Underscoring supplied)
probationary employees.[18] [Emphases
supplied]

There is probationary employment where the


employee upon his engagement is made to undergo a trial In this case, the justification given by the petitioners
for Sys dismissal was her alleged failure to qualify by the
period during which the employer determines his fitness to
qualify for regular employment based on reasonable companys standard. Other than the general allegation that
standards made known to him at the time of said standards were made known to her at the time of her
employment, however, no evidence, documentary or
engagement.[14] The probationary employment is intended to
afford the employer an opportunity to observe the fitness of a otherwise, was presented to substantiate the same. Neither
probationary employee while at work, and to ascertain was there any performance evaluation presented to prove that
indeed hers was unsatisfactory. Thus, this Court is in full
whether he will become an efficient and productive employee.
While the employer observes the fitness, propriety and accord with the ruling of the CA when it wrote that:
efficiency of a probationer to ascertain whether he is qualified
Private respondents were
for permanent employment, the probationer, on the other
hand, seeks to prove to the employer that he has the remiss in showing that petitioner failed to
qualifications to meet the reasonable standards for permanent qualify as a regular employee. Except for
their allegations that she was apprised of
employment. Thus, the word probationary, as used to
describe the period of employment, implies the purpose of the her status as probationary and that she
term or period, not its length.[15] would be accorded regular status once
she meets their standards, no evidence
was presented of these standards and
that petitioner had been apprised of them
On the basis of the aforequoted provisions and at the time she was hired as a
definition, there is no dispute that Sys employment with probationary employee. Neither was it
Tamsons on September 1, 2006 was probationary in shown that petitioner failed to meet such
character. As a probationary employee, her employment standards.
status was only temporary.Although a probationary or
temporary employee with a limited tenure, she was still Petitioner should have been
entitled to a security of tenure. informed as to the basis of private
respondents decision not to extend her
It is settled that even if probationary employees do regular or permanent employment. This
not enjoy permanent status, they are accorded the case is bereft of any proof like an
constitutional protection of security of tenure. This means they evaluation or assessment report which
may only be terminated for a just cause or when they would support private respondents claim
otherwise fail to qualify as regular employees in accordance that she failed to comply with the

3
standards in order to become a regular considered for regularization and how the standards had been
employee. applied in her case. As correctly pointed out by Sy, the
dissatisfaction on the part of the petitioners was at best self-
One of the conditions before serving and dubious as they could not present concrete and
an employer can terminate a competent evidence establishing her alleged
probationary employee is dissatisfaction incompetence. Failure on the part of the petitioners to
on the part of the employer which must discharge the burden of proof is indicative that the dismissal
be real and in good faith, not feigned so was not justified.
as to circumvent the contract or the The law is clear that in all cases of probationary
law. In the case at bar, absent any proof employment, the employer shall make known to the employee
showing that the work performance of the standards under which he will qualify as a regular
petitioner was unsatisfactory, We cannot employee at the time of his engagement. Where no standards
conclude that petitioner failed to meet the are made known to the employee at that time, he shall be
standards of performance set by private deemed a regular employee.[24] The standards under which
respondents. This absence of proof, in she would qualify as a regular employee not having been
fact, leads Us to infer that their communicated to her at the start of her probationary period,
dissatisfaction with her work Sy qualified as a regular employee. As held by this Court in
performance was contrived so as not to the very recent case of Hacienda Primera Development
regularize her employment.[19] Corporation v. Villegas,:[25]

For failure of the petitioners to support their claim of In this case, petitioner Hacienda fails to
unsatisfactory performance by Sy, this Court shares the view specify the reasonable standards by
of the CA that Sys employment was unjustly terminated to which respondents alleged poor
prevent her from acquiring a regular status in circumvention performance was evaluated, much less
of the law on security of tenure. As the Court previously to prove that such standards were made
stated, this is a common and convenient practice of known to him at the start of his
unscrupulous employers to circumvent the law on security of employment. Thus, he is deemed to
tenure. Security of tenure, which is a right of paramount value have been hired from day one as a
guaranteed by the Constitution, should not be denied to the regular employee. Due process dictates
workers by such a stratagem. The Court can not permit such that an employee be apprised
a subterfuge, if it is to be true to the law and social justice.[20] beforehand of the condition of his
employment and of the terms of
In its attempt to justify Sys dismissal, the petitioners relied advancement therein. [Emphasis
heavily on the case of Alcira v. NLRC[21] where the Court supplied]
stressed that the constitutional protection ends on the
expiration of the probationary period when the parties are free
to either renew or terminate their contract of employment.
Even on the assumption that Sy indeed failed to
Indeed, the Court recognizes the employers power to meet the standards set by them and made known to the
terminate as an exercise of management prerogative. The former at the time of her engagement, still, the termination
petitioners, however, must be reminded that such right is not was flawed for failure to give the required notice to Sy. Section
without limitations. In this connection, it is well to quote the 2, Rule I, Book VI of the Implementing Rules provides:
ruling of the Court in the case of Dusit Hotel Nikko v.
Gatbonton, [22] where it was written: Section 2. Security of tenure.
(a) In cases of regular employment, the
As Article 281 clearly states, a employer shall not terminate the services
probationary employee can be legally of an employee except for just or
terminated either: (1) for a just cause; or authorized causes as provided by law,
(2) when the employee fails to qualify as and subject to the requirements of due
a regular employee in accordance with process.
the reasonable standards made known to
him by the employer at the start of the (b) The foregoing shall also
employment. Nonetheless, the power of apply in cases of probationary
the employer to terminate an employee employment; Provided however, that in
on probation is not without such cases, termination of employment
limitations. First, this power must be due to failure of the employee to qualify
exercised in accordance with the specific in accordance with the standards of the
requirements of the contract. Second, employer made known to the former at
the dissatisfaction on the part of the the time of engagement may also be a
employer must be real and in good faith, ground for termination of employment.
not feigned so as to circumvent the x
contract or the law; and third, there must x
be no unlawful discrimination in the x
dismissal. In termination cases, the
burden of proving just or valid cause for (d) In all cases of termination
dismissing an employee rests on the of employment, the following standards
employer.[23] [Emphases supplied] of due process shall be substantially
observed:
Here, the petitioners failed to convey to Sy the
standards upon which she should measure up to be

4
x
x
x

If the termination is brought


about by the completion of a contract or
phase thereof, or by failure of an
employee to meet the standards of the
employer in the 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. [Emphasis
and Underscoring supplied]
G.R. No. 192571 July 23, 2013
In this case, the petitioners failed to comply with the
requirement of a written notice. Notably, Sy was merely
verbally informed that her employment would be terminated ABBOTT LABORATORIES, PHILIPPINES, CECILLE A.
on February 28, 2007, as admitted by the TERRIBLE, EDWIN D. FEIST, MARIA OLIVIA T.
petitioners.[26] Considering that the petitioners failed to YABUTMISA, TERESITA C. BERNARDO, AND ALLAN G.
observe due process in dismissing her, the dismissal had no ALMAZAR, Petitioners,
legal sanction. It bears stressing that a workers employment vs.
is property in the constitutional sense.[27] PEARLIE ANN F. ALCARAZ, Respondent.

DECISION

Being a regular employee whose termination was PERLAS-BERNABE, J.:


illegal, Sy is entitled to the twin relief of reinstatement and
backwages granted by the Labor Code. Article 279 provides
that an employee who is unjustly dismissed from work shall Assailed in this petition for review on certiorari1 are the
be entitled to reinstatement without loss of seniority rights and Decision2 dated December 10,2009 and Resolution3 dated
other privileges, to her full backwages, inclusive of June 9, 2010 of the Court of Appeals (CA) in CA-G.R. SP No.
allowances, and to her other benefits or their monetary 101045 which pronounced that the National Labor Relations
equivalent computed from the time her compensation was Commission (NLRC) did not gravely abuse its discretion when
withheld from her up to the time of actual it ruled that respondent Pearlie Ann F. Alcaraz (Alcaraz) was
reinstatement. Likewise, having been compelled to come to illegally dismissed from her employment.
court and to incur expenses to protect her rights and interests,
the award of attorneys fees is in order.[28] The Facts

On June 27, 2004, petitioner Abbott Laboratories, Philippines


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

On December 7, 2004, Abbott formally offered Alcaraz the


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

On February 12, 2005, Alcaraz signed an employment


contract which stated, inter alia, that she was to be placed on

5
probation for a period of six (6) months beginning February Surveillance Drug Safety of Hospira, will be her immediate
15, 2005 to August 14, 2005. The said contract was also supervisor; (d) she should always coordinate with Abbott’s
signed by Abbott’s General Manager, petitioner Edwin Feist human resource officers in the management and discipline of
(Feist):10 the staff; (e) Hospira ALSU will spin off from Abbott in early
2006 and will be officially incorporated and known as Hospira,
Philippines. In the interim, Hospira ALSU operations will still
PROBATIONARY EMPLOYMENT
be under Abbott’s management, excluding the technical
aspects of the operations which is under the control and
Dear Pearl, supervision of Walsh; and (f) the processing of information
and/or raw material data subject of Hospira ALSU operations
will be strictly confined and controlled under the computer
After having successfully passed the pre-employment system and network being maintained and operated from the
requirements, you are hereby appointed as follows: United States. For this purpose, all those involved in Hospira
ALSU are required to use two identification cards: one, to
Position Title : Regulatory Affairs Manager identify them as Abbott’s employees and another, to identify
them as Hospira employees.11
Department : Hospira
On March 3, 2005, petitioner Maria Olivia T. Yabut-Misa
(Misa), Abbott’s Human Resources (HR) Director, sent
The terms of your employment are: Alcaraz an e-mail which contained an explanation of the
procedure for evaluating the performance of probationary
Nature of Employment : Probationary employees and further indicated that Abbott had only one
evaluation system for all of its employees. Alcaraz was also
given copies of Abbott’s Code of Conduct and Probationary
Effectivity : February 15, 2005 to August 14, 2005 Performance Standards and Evaluation (PPSE) and
Performance Excellence Orientation Modules (Performance
Basic Salary : ₱110,000.00/ month Modules) which she had to apply in line with her task of
evaluating the Hospira ALSU staff.12
It is understood that you agree to abide by all existing policies,
rules and regulations of the company, as well as those, which Abbott’s PPSE procedure mandates that the job performance
may be hereinafter promulgated. 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
Unless renewed, probationary appointment expires on the employment. The necessary Performance Improvement Plan
date indicated subject to earlier termination by the Company should also be made during the third-month review in case of
for any justifiable reason. a gap between the employee’s performance and the
standards set. These performance standards should be
If you agree to the terms and conditions of your employment, discussed in detail with the employee within the first two (2)
please signify your conformity below and return a copy to weeks on the job. It was equally required that a signed copy
HRD. of the PPSE form must be submitted to Abbott’s Human
Resources Department (HRD) and shall serve as
documentation of the employee’s performance during his/her
Welcome to Abbott! probationary period. This shall form the basis for
recommending the confirmation or termination of the
Very truly yours, probationary employment.13

Sgd. During the course of her employment, Alcaraz noticed that


EDWIN D. FEIST some of the staff had disciplinary problems. Thus, she would
General Manager reprimand them for their unprofessional behavior such as non-
observance of the dress code, moonlighting, and disrespect
of Abbott officers. However, Alcaraz’s method of management
CONFORME: was considered by Walsh to be "too strict."14 Alcaraz
approached Misa to discuss these concerns and was told to
Sgd. "lie low" and let Walsh handle the matter. Misa even assured
PEARLIE ANN FERRER-ALCARAZ her that Abbott’s HRD would support her in all her
management decisions.15

During Alcaraz’s pre-employment orientation, petitioner Allan


G. Almazar (Almazar), Hospira’s Country Transition Manager, On April 12, 2005, Alcaraz received an e-mail from Misa
briefed her on her duties and responsibilities as Regulatory requesting immediate action on the staff’s performance
Affairs Manager, stating that: (a) she will handle the staff of evaluation as their probationary periods were about to end.
Hospira ALSU and will directly report to Almazar on matters This Alcaraz eventually submitted.16
regarding Hopira’s local operations, operational budget, and
performance evaluation of the Hospira ALSU Staff who are on On April 20, 2005, Alcaraz had a meeting with petitioner
probationary status; (b) she must implement Abbott’s Code of Cecille Terrible (Terrible), Abbott’s former HR Director, to
Good Corporate Conduct (Code of Conduct), office policies discuss certain issues regarding staff performance standards.
on human resources and finance, and ensure that Abbott will In the course thereof, Alcaraz accidentally saw a printed copy
hire people who are fit in the organizational discipline; (c) of an e-mail sent by Walsh to some staff members which
petitioner Kelly Walsh (Walsh), Manager of the Literature Drug

6
essentially contained queries regarding the former’s job considering her admissions that she was briefed by Almazar
performance. Alcaraz asked if Walsh’s action was the normal on her work during her pre-employment orientation
process of evaluation. Terrible said that it was not.17 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
On May 16, 2005, Alcaraz was called to a meeting with Walsh
unable to meet the standards set by Abbott as per her
and Terrible where she was informed that she failed to meet
performance evaluation, the LA ruled that the termination of
the regularization standards for the position of Regulatory
her probationary employment was justified.32 Lastly, the LA
Affairs Manager.18 Thereafter, Walsh and Terrible requested
found that there was no evidence to conclude that Abbott’s
Alcaraz to tender her resignation, else they be forced to
officers and employees acted in bad faith in terminating
terminate her services. She was also told that, regardless of
Alcaraz’s employment.33
her choice, she should no longer report for work and was
asked to surrender her office identification cards. She
requested to be given one week to decide on the same, but to Displeased with the LA’s ruling, Alcaraz filed an appeal with
no avail.19 the National Labor Relations Commission (NLRC).

On May 17, 2005, Alcaraz told her administrative assistant, The NLRC Ruling
Claude Gonzales (Gonzales), that she would be on leave for
that day. However, Gonzales told her that Walsh and Terrible
On September 15, 2006, the NLRC rendered a
already announced to the whole Hospira ALSU staff that
Decision,34 annulling and setting aside the LA’s ruling, the
Alcaraz already resigned due to health reasons.20
dispositive portion of which reads:

On May 23, 2005, Walsh, Almazar, and Bernardo personally


WHEREFORE, the Decision of the Labor Arbiter dated 31
handed to Alcaraz a letter stating that her services had been
March 2006 [sic] is hereby reversed, annulled and set aside
terminated effective May 19, 2005.21 The letter detailed the
and judgment is hereby rendered:
reasons for Alcaraz’s termination – particularly, that Alcaraz:
(a) did not manage her time effectively; (b) failed to gain the
trust of her staff and to build an effective rapport with them; (c) 1. Finding respondents Abbot [sic] and individual
failed to train her staff effectively; and (d) was not able to respondents to have committed illegal dismissal;
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, 2. Respondents are ordered to immediately
Alcaraz received another copy of the said termination letter reinstate complainant to her former position without
via registered mail.23 loss of seniority rights immediately upon receipt
hereof;

Alcaraz felt that she was unjustly terminated from her


employment and thus, filed a complaint for illegal dismissal 3. To jointly and severally pay complainant
backwages computed from 16 May 2005 until
and damages against Abbott and its officers, namely, Misa,
Bernardo, Almazar, Walsh, Terrible, and Feist.24 She claimed finality of this decision. As of the date hereof the
that she should have already been considered as a regular backwages is computed at
and not a probationary employee given Abbott’s failure to
inform her of the reasonable standards for her regularization
upon her engagement as required under Article 29525 of the a. Backwages for PhP
Labor Code. In this relation, she contended that while her 15 months - 1,650,000.00
employment contract stated that she was to be engaged on a
probationary status, the same did not indicate the standards b. 13th month pay - 110,000.00
on which her regularization would be based.26 She further
averred that the individual petitioners maliciously connived to PhP
TOTAL
illegally dismiss her when: (a) they threatened her with 1,760,000.00
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 4. Respondents are ordered to pay complainant
humiliate her.27 moral damages of ₱50,000.00 and exemplary
damages of ₱50,000.00.

On the contrary, petitioners maintained that Alcaraz was


validly terminated from her probationary employment given 5. Respondents are also ordered to pay attorney’s
her failure to satisfy the prescribed standards for her fees of 10% of the total award.
regularization which were made known to her at the time of
her engagement.28 6. All other claims are dismissed for lack of merit.

The LA Ruling SO ORDERED.35

In a Decision dated March 30, 2006,29 the LA dismissed The NLRC reversed the findings of the LA and ruled that there
Alcaraz’s complaint for lack of merit. was no evidence showing that Alcaraz had been apprised of
her probationary status and the requirements which she
The LA rejected Alcaraz’s argument that she was not informed should have complied with in order to be a regular
of the reasonable standards to qualify as a regular employee employee.36 It held that Alcaraz’s receipt of her job description

7
and Abbott’s Code of Conduct and Performance Modules was Meanwhile, petitioners’ motion for reconsideration of the CA’s
not equivalent to her being actually informed of the May 18, 2010 Resolution in the Second CA Petition was
performance standards upon which she should have been denied via a Resolution dated October 4, 2010.51 This
evaluated on.37 It further observed that Abbott did not comply attained finality on January 10, 2011 for petitioners’ failure to
with its own standard operating procedure in evaluating timely appeal the same.52 Hence, as it stands, only the issues
probationary employees.38 The NLRC was also not convinced in the First CA petition are left to be resolved.
that Alcaraz was terminated for a valid cause given that
petitioners’ allegation of Alcaraz’s "poor performance"
Incidentally, in her Comment dated November 15, 2010,
remained unsubstantiated.39
Alcaraz also alleges that petitioners were guilty of forum
shopping when they filed the Second CA Petition pending the
Petitioners filed a motion for reconsideration which was resolution of their motion for reconsideration of the CA’s
denied by the NLRC in a Resolution dated July 31, 2007.40 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,
Aggrieved, petitioners filed with the CA a Petition for Certiorari
Rule 7 of the Rules of Court when they failed to disclose in the
with Prayer for Issuance of a Temporary Restraining Order
instant petition the filing of the June 16, 2010 Memorandum of
and/or Writ of Preliminary Injunction, docketed as CA G.R. SP
Appeal filed before the NLRC.54
No. 101045 (First CA Petition), alleging grave abuse of
discretion on the part of NLRC when it ruled that Alcaraz was
illegally dismissed.41 The Issues Before the Court

Pending resolution of the First CA Petition, Alcaraz moved for The following issues have been raised for the Court’s
the execution of the NLRC’s Decision before the LA, which resolution: (a) whether or not petitioners are guilty of forum
petitioners strongly opposed. The LA denied the said motion shopping and have violated the certification requirement
in an Order dated July 8, 2008 which was, however, under Section 5, Rule 7 of the Rules of Court; (b) whether or
eventually reversed on appeal by the NLRC.42 Due to the not Alcaraz was sufficiently informed of the reasonable
foregoing, petitioners filed another Petition for Certiorari with standards to qualify her as a regular employee; (c) whether or
the CA, docketed as CA G.R. SP No. 111318 (Second CA not Alcaraz was validly terminated from her employment; and
Petition), assailing the propriety of the execution of the NLRC (d) whether or not the individual petitioners herein are liable.
decision.43
The Court’s Ruling
The CA Ruling
A. Forum Shopping and
With regard to the First CA Petition, the CA, in a Violation of Section 5, Rule 7
Decision44 dated December 10, 2009, affirmed the ruling of of the Rules of Court.
the NLRC and held that the latter did not commit any grave
abuse of discretion in finding that Alcaraz was illegally
At the outset, it is noteworthy to mention that the prohibition
dismissed.
against forum shopping is different from a violation of the
certification requirement under Section 5, Rule 7 of the Rules
It observed that Alcaraz was not apprised at the start of her of Court. In Sps. Ong v. CA,55 the Court explained that:
employment of the reasonable standards under which she
could qualify as a regular employee.45 This was based on its
x x x The distinction between the prohibition against forum
examination of the employment contract which showed that
shopping and the certification requirement should by now be
the same did not contain any standard of performance or any
too elementary to be misunderstood. To reiterate, compliance
stipulation that Alcaraz shall undergo a performance
with the certification against forum shopping is separate from
evaluation before she could qualify as a regular employee.46 It
and independent of the avoidance of the act of forum
also found that Abbott was unable to prove that there was any
shopping itself. There is a difference in the treatment between
reasonable ground to terminate Alcaraz’s
failure to comply with the certification requirement and
employment.47 Abbott moved for the reconsideration of the
violation of the prohibition against forum shopping not only in
aforementioned ruling which was, however, denied by the CA
terms of imposable sanctions but also in the manner of
in a Resolution48 dated June 9, 2010.
enforcing them. The former constitutes sufficient cause for the
dismissal without prejudice to the filing of the complaint or
The CA likewise denied the Second CA Petition in a initiatory pleading upon motion and after hearing, while the
Resolution dated May 18, 2010 (May 18, 2010 Resolution) latter is a ground for summary dismissal thereof and for direct
and ruled that the NLRC was correct in upholding the contempt. x x x. 56
execution of the NLRC Decision.49 Thus, petitioners filed a
motion for reconsideration.
As to the first, forum shopping takes place when a litigant files
multiple suits involving the same parties, either
While the petitioners’ motion for reconsideration of the CA’s simultaneously or successively, to secure a favorable
May 18, 2010 Resolution was pending, Alcaraz again moved judgment. It exists where the elements of litis pendentia are
for the issuance of a writ of execution before the LA. On June present, namely: (a) identity of parties, or at least such parties
7, 2010, petitioners received the LA’s order granting Alcaraz’s who represent the same interests in both actions; (b) identity
motion for execution which they in turn appealed to the NLRC of rights asserted and relief prayed for, the relief being
– through a Memorandum of Appeal dated June 16, 2010 founded on the same facts; and (c) the identity with respect to
(June 16, 2010 Memorandum of Appeal ) – on the ground that the two preceding particulars in the two (2) cases is such that
the implementation of the LA’s order would render its motion any judgment that may be rendered in the pending case,
for reconsideration moot and academic.50

8
regardless of which party is successful, would amount to res accordance with reasonable standards prescribed by the
judicata in the other case.57 employer.60

In this case, records show that, except for the element of Corollary thereto, Section 6(d), Rule I, Book VI of the
identity of parties, the elements of forum shopping do not Implementing Rules of the Labor Code provides that if the
exist. Evidently, the First CA Petition was instituted to question employer fails to inform the probationary employee of the
the ruling of the NLRC that Alcaraz was illegally dismissed. reasonable standards upon which the regularization would be
On the other hand, the Second CA Petition pertains to the based on at the time of the engagement, then the said
propriety of the enforcement of the judgment award pending employee shall be deemed a regular employee, viz.:
the resolution of the First CA Petition and the finality of the
decision in the labor dispute between Alcaraz and the
(d) In all cases of probationary employment, the employer
petitioners. Based on the foregoing, a judgment in the Second
shall make known to the employee the standards under which
CA Petition will not constitute res judicata insofar as the First
he will qualify as a regular employee at the time of his
CA Petition is concerned. Thus, considering that the two
engagement. Where no standards are made known to the
petitions clearly cover different subject matters and causes of
employee at that time, he shall be deemed a regular
action, there exists no forum shopping.
employee.

As to the second, Alcaraz further imputes that the petitioners


In other words, the employer is made to comply with two (2)
violated the certification requirement under Section 5, Rule 7
requirements when dealing with a probationary employee:
of the Rules of Court58 by not disclosing the fact that it filed the
first, the employer must communicate the regularization
June 16, 2010 Memorandum of Appeal before the NLRC in
standards to the probationary employee; and second, the
the instant petition.
employer must make such communication at the time of the
probationary employee’s engagement. If the employer fails to
In this regard, Section 5(b), Rule 7 of the Rules of Court comply with either, the employee is deemed as a regular and
requires that a plaintiff who files a case should provide a not a probationary employee.
complete statement of the present status of any pending case
if the latter involves the same issues as the one that was filed.
Keeping with these rules, an employer is deemed to have
If there is no such similar pending case, Section 5(a) of the
made known the standards that would qualify a probationary
same rule provides that the plaintiff is obliged to declare under
employee to be a regular employee when it has exerted
oath that to the best of his knowledge, no such other action or
reasonable efforts to apprise the employee of what he is
claim is pending.
expected to do or accomplish during the trial period of
probation. This goes without saying that the employee is
Records show that the issues raised in the instant petition and sufficiently made aware of his probationary status as well as
those in the June 16, 2010 Memorandum of Appeal filed with the length of time of the probation.
the NLRC likewise cover different subject matters and causes
of action. In this case, the validity of Alcaraz’s dismissal is at
The exception to the foregoing is when the job is self-
issue whereas in the said Memorandum of Appeal, the
descriptive in nature, for instance, in the case of maids, cooks,
propriety of the issuance of a writ of execution was in question.
drivers, or messengers.61 Also, in Aberdeen Court, Inc. v.
Agustin,62 it has been held that the rule on notifying a
Thus, given the dissimilar issues, petitioners did not have to probationary employee of the standards of regularization
disclose in the present petition the filing of their June 16, 2010 should not be used to exculpate an employee who acts in a
Memorandum of Appeal with the NLRC. In any event, manner contrary to basic knowledge and common sense in
considering that the issue on the propriety of the issuance of regard to which there is no need to spell out a policy or
a writ of execution had been resolved in the Second CA standard to be met. In the same light, an employee’s failure to
Petition – which in fact had already attained finality – the perform the duties and responsibilities which have been
matter of disclosing the June 16, 2010 Memorandum of clearly made known to him constitutes a justifiable basis for a
Appeal is now moot and academic. probationary employee’s non-regularization.

Having settled the foregoing procedural matter, the Court now In this case, petitioners contend that Alcaraz was terminated
proceeds to resolve the substantive issues. 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
B. Probationary employment;
never apprised her of these standards and thus, maintains
grounds for termination.
that she is a regular and not a mere probationary employee.

A probationary employee, like a regular employee, enjoys


The Court finds petitioners’ assertions to be well-taken.
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 A punctilious examination of the records reveals that Abbott
of the Labor Code, i.e., the probationary employee may also had indeed complied with the above-stated requirements.
be terminated for failure to qualify as a regular employee in This conclusion is largely impelled by the fact that Abbott
accordance with the reasonable standards made known by clearly conveyed to Alcaraz her duties and responsibilities as
the employer to the employee at the time of the Regulatory Affairs Manager prior to, during the time of her
engagement.59 Thus, the services of an employee who has engagement, and the incipient stages of her employment. On
been engaged on probationary basis may be terminated for this score, the Court finds it apt to detail not only the incidents
any of the following: (a) a just or (b) an authorized cause; and which point out to the efforts made by Abbott but also those
(c) when he fails to qualify as a regular employee in circumstances which would show that Alcaraz was well-

9
apprised of her employer’s expectations that would, in turn, especially true of a managerial employee like Alcaraz who
determine her regularization: was tasked with the vital responsibility of handling the
personnel and important matters of her department.
(a) On June 27, 2004, Abbott caused the
publication in a major broadsheet newspaper of its In fine, the Court rules that Alcaraz’s status as a probationary
need for a Regulatory Affairs Manager, indicating employee and her consequent dismissal must stand.
therein the job description for as well as the duties Consequently, in holding that Alcaraz was illegally dismissed
and responsibilities attendant to the aforesaid due to her status as a regular and not a probationary
position; this prompted Alcaraz to submit her employee, the Court finds that the NLRC committed a grave
application to Abbott on October 4, 2004; abuse of discretion.

(b) In Abbott’s December 7, 2004 offer sheet, it was To elucidate, records show that the NLRC based its decision
stated that Alcaraz was to be employed on a on the premise that Alcaraz’s receipt of her job description and
probationary status; 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
(c) On February 12, 2005, Alcaraz signed an
on.64 It, however, overlooked the legal implication of the other
employment contract which specifically stated, inter
attendant circumstances as detailed herein which should have
alia, that she was to be placed on probation for a
warranted a contrary finding that Alcaraz was indeed a
period of six (6) months beginning February 15,
probationary and not a regular employee – more particularly
2005 to August 14, 2005;
the fact that she was well-aware of her duties and
responsibilities and that her failure to adequately perform the
(d) On the day Alcaraz accepted Abbott’s same would lead to her non-regularization and eventually, her
employment offer, Bernardo sent her copies of termination.
Abbott’s organizational structure and her job
description through e-mail;
Accordingly, by affirming the NLRC’s pronouncement which is
tainted with grave abuse of discretion, the CA committed a
(e) Alcaraz was made to undergo a pre- reversible error which, perforce, necessitates the reversal of
employment orientation where Almazar informed its decision.
her that she had to implement Abbott’s Code of
Conduct and office policies on human resources
C. Probationary employment;
and finance and that she would be reporting directly
termination procedure.
to Walsh;

A different procedure is applied when terminating a


(f) Alcaraz was also required to undergo a training
probationary employee; the usual two-notice rule does not
program as part of her orientation;
govern.65 Section 2, Rule I, Book VI of the Implementing Rules
of the Labor Code states that "if the termination is brought
(g) Alcaraz received copies of Abbott’s Code of about by the x x x failure of an employee to meet the standards
Conduct and Performance Modules from Misa who of the employer in case of probationary employment, it shall
explained to her the procedure for evaluating the be sufficient that a written notice is served the employee,
performance of probationary employees; she was within a reasonable time from the effective date of
further notified that Abbott had only one evaluation termination."
system for all of its employees; and
As the records show, Alcaraz's dismissal was effected through
(h) Moreover, Alcaraz had previously worked for a letter dated May 19, 2005 which she received on May 23,
another pharmaceutical company and had admitted 2005 and again on May 27, 2005. Stated therein were the
to have an "extensive training and background" to reasons for her termination, i.e., that after proper evaluation,
acquire the necessary skills for her job.63 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
Considering the totality of the above-stated circumstances, it are necessary in the performance of her functions as
cannot, therefore, be doubted that Alcaraz was well-aware
Regulatory Affairs Manager.66 Undeniably, this written notice
that her regularization would depend on her ability and sufficiently meets the criteria set forth above, thereby
capacity to fulfill the requirements of her position as legitimizing the cause and manner of Alcaraz’s dismissal as a
Regulatory Affairs Manager and that her failure to perform
probationary employee under the parameters set by the Labor
such would give Abbott a valid cause to terminate her Code.67
probationary employment.

D. Employer’s violation of
Verily, basic knowledge and common sense dictate that the company policy and
adequate performance of one’s duties is, by and of itself, an procedure.
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 Nonetheless, despite the existence of a sufficient ground to
in every case. In this regard, it must be observed that the terminate Alcaraz’s employment and Abbott’s compliance
assessment of adequate duty performance is in the nature of with the Labor Code termination procedure, it is readily
a management prerogative which when reasonably exercised apparent that Abbott breached its contractual obligation to
– as Abbott did in this case – should be respected. This is

10
Alcaraz when it failed to abide by its own procedure in pointed out that Abbott had satisfied its statutory duty to serve
evaluating the performance of a probationary employee. 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
Veritably, a company policy partakes of the nature of an
nominal damages. A further exposition is apropos.
implied contract between the employer and employee. In
Parts Depot, Inc. v. Beiswenger,68 it has been held that:
Case law has settled that an employer who terminates an
employee for a valid cause but does so through invalid
Employer statements of policy . . . can give rise to contractual
procedure is liable to pay the latter nominal damages.
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 In Agabon v. NLRC (Agabon),71 the Court pronounced that
policy is signed by neither party, can be unilaterally amended where the dismissal is for a just cause, the lack of statutory
by the employer without notice to the employee, and contains due process should not nullify the dismissal, or render it
no reference to a specific employee, his job description or illegal, or ineffectual. However, the employer should indemnify
compensation, and although no reference was made to the the employee for the violation of his statutory rights.72 Thus, in
policy statement in pre-employment interviews and the Agabon, the employer was ordered to pay the employee
employee does not learn of its existence until after his hiring. nominal damages in the amount of ₱30,000.00.73
Toussaint, 292 N.W .2d at 892. The principle is akin to
estoppel. Once an employer establishes an express
Proceeding from the same ratio, the Court modified Agabon
personnel policy and the employee continues to work while
in the case of Jaka Food Processing Corporation v. Pacot
the policy remains in effect, the policy is deemed an implied
(Jaka)74 where it created a distinction between procedurally
contract for so long as it remains in effect. If the employer
defective dismissals due to a just cause, on one hand, and
unilaterally changes the policy, the terms of the implied
those due to an authorized cause, on the other.
contract are also thereby changed.1âwphi1 (Emphasis and
underscoring supplied.)
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
Hence, given such nature, company personnel policies create
employer failed to comply with the notice requirement, the
an obligation on the part of both the employee and the
sanction to be imposed upon him should be tempered
employer to abide by the same.
because the dismissal process was, in effect, initiated by an
act imputable to the employee; if the dismissal is based on an
Records show that Abbott’s PPSE procedure mandates, inter authorized cause under Article 283 (now Article 297) but the
alia, that the job performance of a probationary employee employer failed to comply with the notice requirement, the
should be formally reviewed and discussed with the employee sanction should be stiffer because the dismissal process was
at least twice: first on the third month and second on the fifth initiated by the employer’s exercise of his management
month from the date of employment. Abbott is also required to prerogative.75 Hence, in Jaka, where the employee was
come up with a Performance Improvement Plan during the dismissed for an authorized cause of retrenchment 76 – as
third month review to bridge the gap between the employee’s contradistinguished from the employee in Agabon who was
performance and the standards set, if any.69 In addition, a dismissed for a just cause of neglect of duty77 – the Court
signed copy of the PPSE form should be submitted to Abbott’s ordered the employer to pay the employee nominal damages
HRD as the same would serve as basis for recommending the at the higher amount of ₱50,000.00.
confirmation or termination of the probationary employment.70
Evidently, the sanctions imposed in both Agabon and Jaka
In this case, it is apparent that Abbott failed to follow the proceed from the necessity to deter employers from future
above-stated procedure in evaluating Alcaraz. For one, there violations of the statutory due process rights of
lies a hiatus of evidence that a signed copy of Alcaraz’s PPSE employees.78 In similar regard, the Court deems it proper to
form was submitted to the HRD. It was not even shown that a apply the same principle to the case at bar for the reason that
PPSE form was completed to formally assess her an employer’s contractual breach of its own company
performance. Neither was the performance evaluation procedure – albeit not statutory in source – has the parallel
discussed with her during the third and fifth months of her effect of violating the laborer’s rights. Suffice it to state, the
employment. Nor did Abbott come up with the necessary contract is the law between the parties and thus, breaches of
Performance Improvement Plan to properly gauge Alcaraz’s the same impel recompense to vindicate a right that has been
performance with the set company standards. 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
While it is Abbott’s management prerogative to promulgate its
contractual breach is warranted in accordance with Article
own company rules and even subsequently amend them, this
2221 of the Civil Code.79
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 Anent the proper amount of damages to be awarded, the
contrary interpretation would entail a disharmonious Court observes that Alcaraz’s dismissal proceeded from her
relationship in the work place for the laborer should never be failure to comply with the standards required for her
mired by the uncertainty of flimsy rules in which the latter’s regularization. As such, it is undeniable that the dismissal
labor rights and duties would, to some extent, depend. 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
In this light, while there lies due cause to terminate Alcaraz’s
appropriate to fix the amount of nominal damages at the
probationary employment for her failure to meet the standards
amount of ₱30,000.00, consistent with its rulings in both
required for her regularization, and while it must be further
Agabon and Jaka.

11
E. Liability of individual
petitioners as corporate
officers.

It is hornbook principle that personal liability of corporate G.R. No. 192571 April 22, 2014
directors, trustees or officers attaches only when: (a) they
assent to a patently unlawful act of the corporation, or when ABBOTT LABORATORIES, PHILIPPINES, CECILLE A.
they are guilty of bad faith or gross negligence in directing its TERRIBLE, EDWIN D. FEIST, MARIA OLIVIA T. YABUT-
affairs, or when there is a conflict of interest resulting in MISA, TERESITA C. BERNARDO, AND ALLAN G.
damages to the corporation, its stockholders or other persons; ALMAZAR, Petitioners,
(b) they consent to the issuance of watered down stocks or vs.
when, having knowledge of such issuance, do not forthwith PEARLIE ANN F. ALCARAZ, Respondent.
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 RESOLUTION
law personally answerable for their corporate action.80
PERLAS-BERNABE, J.:
In this case, Alcaraz alleges that the individual petitioners
acted in bad faith with regard to the supposed crude manner For resolution is respondent Pearlie Ann Alcaraz's (Alcaraz)
by which her probationary employment was terminated and Motion for Reconsideration dated August 23, 2013 of the
thus, should be held liable together with Abbott. In the same
Court's Decision dated July 23, 2013 (Decision).1
vein, she further attributes the loss of some of her remaining
belongings to them.81
At the outset, there appears to be no substantial argument in
the said motion sufficient for the Court to depart from the
Alcaraz’s contention fails to persuade. pronouncements made in the initial ruling. But if only to
address Akaraz's novel assertions, and to so placate any
A judicious perusal of the records show that other than her doubt or misconception in the resolution of this case, the Court
unfounded assertions on the matter, there is no evidence to proceeds to shed light on the matters indicated below.
support the fact that the individual petitioners herein, in their
capacity as Abbott’s officers and employees, acted in bad faith
A. Manner of review.
or were motivated by ill will in terminating

Alcaraz contends that the Court should not have conducted a


Alcaraz’s services. The fact that Alcaraz was made to resign
re-weighing of evidence since a petition for review on
and not allowed to enter the workplace does not necessarily certiorari under Rule 45 of the Rules of Court (Rules) is limited
indicate bad faith on Abbott’s part since a sufficient ground
to the review of questions of law. She submits that since what
existed for the latter to actually proceed with her termination.
was under review was a ruling of the Court of Appeals (CA)
On the alleged loss of her personal belongings, records are rendered via a petition for certiorari under Rule 65 of the
bereft of any showing that the same could be attributed to
Rules, the Court should only determine whether or not the CA
Abbott or any of its officers. It is a well-settled rule that bad properly determined that the National Labor Relations
faith cannot be presumed and he who alleges bad faith has Commission (NLRC) committed a grave abuse of discretion.
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 The assertion does not justify the reconsideration of the
unwarranted. assailed Decision.

WHEREFORE, the petition is GRANTED. The Decision dated A careful perusal of the questioned Decision will reveal that
December 10, 2009 and Resolution dated June 9, 2010 of the the Court actually resolved the controversy under the above-
Court of Appeals in CA-G.R. SP No. 101045 are hereby stated framework of analysis. Essentially, the Court found the
REVERSED and SET ASIDE. Accordingly, the Decision dated CA to have committed an error in holding that no grave abuse
March 30, 2006 of the Labor Arbiter is REINSTATED with the of discretion can be ascribed to the NLRC since the latter
MODIFICATION that petitioner Abbott Laboratories, arbitrarily disregarded the legal implication of the attendant
Philippines be ORDERED to pay respondent Pearlie Ann F. circumstances in this case which should have simply resulted
Alcaraz nominal damages in the amount of ₱30,000.00 on in the finding that Alcaraz was apprised of the performance
account of its breach of its own company procedure. standards for her regularization and hence, was properly a
probationary employee. As the Court observed, an
employee’s failure to perform the duties and responsibilities
SO ORDERED.
which have been clearly made known to him constitutes a
justifiable basis for a probationary employee’s non-
regularization. As detailed in the Decision, Alcaraz was well-
apprised of her duties and responsibilities as well as the
probationary status of her employment:

(a) On June 27, 2004, [Abbott Laboratories,


Philippines (Abbott)] caused the publication in a
major broadsheet newspaper of its need for a
Regulatory Affairs Manager, indicating therein the

12
job description for as well as the duties and same would lead to her non-regularization and eventually, her
responsibilities attendant to the aforesaid position; termination.3
this prompted Alcaraz to submit her application to
Abbott on October 4, 2004;
Consequently, since the CA found that the NLRC did not
commit grave abuse of discretion and denied the certiorari
(b) In Abbott’s December 7, 2004 offer sheet, it was petition before it, the reversal of its ruling was thus in order.
stated that Alcaraz was to be employed on a
probationary status;
At this juncture, it bears exposition that while NLRC decisions
are, by their nature, final and executory4 and, hence, not
(c) On February 12, 2005, Alcaraz signed an subject to appellate review,5 the Court is not precluded from
employment contract which specifically stated, inter considering other questions of law aside from the CA’s finding
alia, that she was to be placed on probation for a on the NLRC’s grave abuse of discretion. While the focal point
period of six (6) months beginning February 15, of analysis revolves on this issue, the Court may deal with
2005 to August 14, 2005; ancillary issues – such as, in this case, the question of how a
probationary employee is deemed to have been informed of
the standards of his regularization – if only to determine if the
(d) On the day Alcaraz accepted Abbott’s
concepts and principles of labor law were correctly applied or
employment offer, Bernardo sent her copies of
misapplied by the NLRC in its decision. In other words, the
Abbott’s organizational structure and her job
Court’s analysis of the NLRC’s interpretation of the
description through e-mail;
environmental principles and concepts of labor law is not
completely prohibited in – as it is complementary to – a Rule
(e) Alcaraz was made to undergo a pre- 45 review of labor cases.
employment orientation where [Allan G. Almazar]
informed her that she had to implement Abbott’s
Finally, if only to put to rest Alcaraz’s misgivings on the
Code of Conduct and office policies on human
manner in which this case was reviewed, it bears pointing out
resources and finance and that she would be
that no "factual appellate review" was conducted by the Court
reporting directly to [Kelly Walsh];
in the Decision. Rather, the Court proceeded to interpret the
relevant rules on probationary employment as applied to
(f) Alcaraz was also required to undergo a training settled factual findings. Besides, even on the assumption that
program as part of her orientation; a scrutiny of facts was undertaken, the Court is not altogether
barred from conducting the same. This was explained in the
case of Career Philippines Shipmanagement, Inc. v.
(g) Alcaraz received copies of Abbott’s Code of Serna6 wherein the Court held as follows:
Conduct and Performance Modules from [Maria
Olivia T. Yabut-Misa] who explained to her the
procedure for evaluating the performance of Accordingly, we do not re-examine conflicting evidence, re-
probationary employees; she was further notified evaluate the credibility of witnesses, or substitute the findings
that Abbott had only one evaluation system for all of fact of the NLRC, an administrative body that has expertise
of its employees; and in its specialized field. Nor do we substitute our "own judgment
for that of the tribunal in determining where the weight of
evidence lies or what evidence is credible." The factual
(h) Moreover, Alcaraz had previously worked for findings of the NLRC, when affirmed by the CA, are generally
another pharmaceutical company and had admitted conclusive on this Court.
to have an "extensive training and background" to
acquire the necessary skills for her job.2
Nevertheless, there are exceptional cases where we, in the
exercise of our discretionary appellate jurisdiction may be
Considering the foregoing incidents which were readily
urged to look into factual issues raised in a Rule 45 petition.
observable from the records, the Court reached the For instance, when the petitioner persuasively alleges that
conclusion that the NLRC committed grave abuse of there is insufficient or insubstantial evidence on record to
discretion, viz.:
support the factual findings of the tribunal or court a quo, as
Section 5, Rule 133 of the Rules of Court states in express
[I]n holding that Alcaraz was illegally dismissed due to her terms that in cases filed before administrative or quasi-
status as a regular and not a probationary employee, the judicial bodies, a fact may be deemed established only if
Court finds that the NLRC committed a grave abuse of supported by substantial evidence.7(Emphasis supplied)
discretion.
B. Standards for regularization;
To elucidate, records show that the NLRC based its decision conceptual underpinnings.
on the premise that Alcaraz’s receipt of her job description and
Abbott’s Code of Conduct and Performance Modules was not
Alcaraz posits that, contrary to the Court’s Decision, one’s job
equivalent to being actually informed of the performance description cannot by and of itself be treated as a standard for
standards upon which she should have been evaluated on. It, regularization as a standard denotes a measure of quantity or
however, overlooked the legal implication of the other
quality. By way of example, Alcaraz cites the case of a
attendant circumstances as detailed herein which should have probationary salesperson and asks how does such employee
warranted a contrary finding that Alcaraz was indeed a achieve regular status if he does not know how much he
probationary and not a regular employee – more particularly
needs to sell to reach the same.
the fact that she was well-aware of her duties and
responsibilities and that her failure to adequately perform the
The argument is untenable.

13
First off, the Court must correct Alcaraz’s mistaken notion: it tools should not be treated as a prerequisite for every case of
is not the probationary employee’s job description but the probationary engagement. In fact, even if a system of such
adequate performance of his duties and responsibilities kind is employed and the procedures for its implementation
which constitutes the inherent and implied standard for are not followed, once an employer determines that the
regularization. To echo the fundamental point of the Decision, probationary employee fails to meet the standards required
if the probationary employee had been fully apprised by his for his regularization, the former is not precluded from
employer of these duties and responsibilities, then basic dismissing the latter. The rule is that when a valid cause for
knowledge and common sense dictate that he must termination exists, the procedural infirmity attending the
adequately perform the same, else he fails to pass the termination only warrants the payment of nominal damages.
probationary trial and may therefore be subject to This was the principle laid down in the landmark cases of
termination.8 Agabon v. NLRC9 (Agabon) and Jaka Food Processing
Corporation v. Pacot10 (Jaka). In the assailed Decision, the
Court actually extended the application of the Agabon and
The determination of "adequate performance" is not, in
Jaka rulings to breaches of company procedure,
all cases, measurable by quantitative specification, such
notwithstanding the employer’s compliance with the statutory
as that of a sales quota in Alcaraz’s example. It is also
requirements under the Labor Code.11 Hence, although
hinged on the qualitative assessment of the employee’s work;
Abbott did not comply with its own termination procedure, its
by its nature, this largely rests on the reasonable exercise of
non-compliance thereof would not detract from the finding that
the employer’s management prerogative. While in some
there subsists a valid cause to terminate Alcaraz’s
instances the standards used in measuring the quality of work
employment. Abbott, however, was penalized for its
may be conveyed – such as workers who construct tangible
contractual breach and thereby ordered to pay nominal
products which follow particular metrics, not all standards of
damages.
quality measurement may be reducible to hard figures or are
readily articulable in specific pre-engagement descriptions. A
good example would be the case of probationary employees As a final point, Alcaraz cannot take refuge in Aliling v.
whose tasks involve the application of discretion and intellect, Feliciano12 (Aliling) since the same is not squarely applicable
such as – to name a few – lawyers, artists, and journalists. In to the case at bar. The employee in Aliling, a sales executive,
these kinds of occupation, the best that the employer can do was belatedly informed of his quota requirement. Thus,
at the time of engagement is to inform the probationary considering the nature of his position, the fact that he was not
employee of his duties and responsibilities and to orient him informed of his sales quota at the time of his engagement
on how to properly proceed with the same. The employer changed the complexion of his employment. Contrarily, the
cannot bear out in exacting detail at the beginning of the nature of Alcaraz's duties and responsibilities as Regulatory
engagement what he deems as "quality work" especially since Affairs Manager negates the application of the foregoing.
the probationary employee has yet to submit the required Records show that Alcaraz was terminated because she (a)
output. In the ultimate analysis, the communication of did not manage her time effectively; (b) failed to gain the trust
performance standards should be perceived within the context of her staff and to build an effective rapport with them; (c)
of the nature of the probationary employee’s duties and failed to train her staff effectively; and (d) was not able to
responsibilities. 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.13 Due to the nature and
The same logic applies to a probationary managerial
variety of these managerial functions, the best that Abbott
employee who is tasked to supervise a particular department,
could have done, at the time of Alcaraz's engagement, was to
as Alcaraz in this case.1âwphi1 It is hardly possible for the
inform her of her duties and responsibilities, the adequate
employer, at the time of the employee’s engagement, to map
performance of which, to repeat, is an inherent and implied
into technical indicators, or convey in precise detail the quality
standard for regularization; this is unlike the circumstance in
standards by which the latter should effectively manage the
Aliling where a quantitative regularization standard, in the
department. Factors which gauge the ability of the managerial
term of a sales quota, was readily articulable to the employee
employee to either deal with his subordinates (e.g., how to
at the outset. Hence, since the reasonableness of Alcaraz's
spur their performance, or command respect and obedience
assessment clearly appears from the records, her termination
from them), or to organize office policies, are hardly
was justified. Bear in mind that the quantum of proof which the
conveyable at the outset of the engagement since the
employer must discharge is only substantial evidence which,
employee has yet to be immersed into the work itself. Given
as defined in case law, means that amount of relevant
that a managerial role essentially connotes an exercise of
evidence as a reasonable mind might accept as adequate to
discretion, the quality of effective management can only be
support a conclusion, even if other minds, equally reasonable,
determined through subsequent assessment. While at the
might conceivably opine otherwise.14 To the Court's mind, this
time of engagement, reason dictates that the employer can
threshold of evidence Abbott amply overcame in this case.
only inform the probationary managerial employee of his
duties and responsibilities as such and provide the allowable
parameters for the same. Verily, as stated in the Decision, the All told, the Court hereby denies the instant motion for
adequate performance of such duties and responsibilities is, reconsideration and thereby upholds the Decision in the main
by and of itself, an implied standard of regularization. case.

In this relation, it bears mentioning that the performance WHEREFORE, the motion for reconsideration dated August
standard contemplated by law should not, in all cases, be 23, 2013 of the Court's Decision dated July 23, 2013 in this
contained in a specialized system of feedbacks or evaluation. case is hereby DENIED.
The Court takes judicial notice of the fact that not all
employers, such as simple businesses or small-scale
SO ORDERED.
enterprises, have a sophisticated form of human resource
management, so much so that the adoption of technical
indicators as utilized through "comment cards" or "appraisal"

14
appointments to full-time faculty members who did not yet
have the required postgraduate degrees provided that the
latter comply with such requirement within their probationary
G.R. No. 193897 January 23, 2013
period. The CBA granted UE, however, the option to replace
these appointees during their probationary period if a qualified
UNIVERSITY OF THE EAST, DEAN ELEANOR JAVIER, teacher becomes available at the end of the semester.8
RONNIE GILLEGO and DR. JOSE C.
BENEDICTO,Petitioners,
Pursuant to the new CBA, UE extended probationary
vs.
appointments to respondents Bueno and Pepanio. Two years
ANALIZA F. PEPANIO and MARITI D.
later in October 2003, the Dean of the UE College of Arts and
BUENO, Respondents.
Sciences, petitioner Eleanor Javier, sent notices 9 to
probationary faculty members, reminding them of the
DECISION expiration of the probationary status of those lacking in
postgraduate qualification by the end of the first semester of
the School Year 2003-2004. Pepanio replied that she was
ABAD, J.:
enrolled at the Polytechnic University of the Philippines
Graduate School. Bueno, on the other hand, replied that she
This case is about the employment status of college teachers was not interested in acquiring tenure as she was returning to
with no postgraduate degrees who have been repeatedly her province.
extended semester-to-semester appointments as such.
In any event, Dean Javier subsequently issued a
The Facts and the Case memorandum, stating that she would recommend the
extension of the probationary appointees for two more
semesters for those who want it based on the wishes of the
In 1992, the Department of Education, Culture and Sports University President. Respondent Pepanio requested a three-
(DECS) issued the Revised Manual of Regulations for Private semester extension but Dean Javier denied this request and
Schools,1 Article IX, Section 44, paragraph 1 (a), of which directed Pepanio to ask for just a two-semester extension.
requires college faculty members to have a master's degree The records do not show if Bueno submitted a request for
as a minimum educational qualification for acquiring regular extension. At any rate, the school eventually wrote
status.2 respondents, extending their probationary period but neither
Pepanio nor Bueno reported for work.
In 1994 petitioner University of the East (UE) and the UE
Faculty Association executed a five-year Collective Bueno later wrote UE, demanding that it consider her a
Bargaining Agreement (CBA) with effect up to 1999 which regular employee based on her six-and-a-half-year service on
provided, among others, that UE shall extend only semester- a full-load basis, given that UE hired her in 1997 when what
to-semester appointments to college faculty staffs who did not was in force was still the 1994 CBA. Pepanio made the same
possess the minimum qualifications. Those with such demand, citing her three-and-a-half years of service on a full-
qualifications shall be given probationary appointments and load basis.10 When UE did not heed their demands,
their performance on a full-time or full-load basis shall be respondents filed cases of illegal dismissal against the school
reviewed for four semesters.3 before the Labor Arbiter ’s (LA) office.

Meantime, on February 7, 1996 several concerned For its defense, UE countered that it never regarded
government agencies issued DECS-CHED-TESDA-DOLE respondents as regular employees since they did not hold the
Joint Order 14 which reiterated the policy embodied in the required master’s degree that government rules required as
Manual of Regulations that "teaching or academic personnel minimum educational qualification for their kind of work.
who do not meet the minimum academic qualifications shall
not acquire tenure or regular status." In consonance with this,
the UE President issued a University Policy stating that, On March 10, 2005 the LA held that Bueno and Pepanio were
beginning the School Year 1996-1997, it would hire those who regular employees, given that they taught at UE for at least
have no postgraduate units or master’s degree for its college four semesters under the old CBA.11 The new CBA, said the
teaching staffs, in the absence of qualified applicants, only on LA, could not deprive them of the employment benefits they
a semester-to-semester basis. already enjoyed. Since UE enjoined Pepanio from attending
her classes and since it did not give Bueno any teaching load,
they were dismissed without just cause. The LA directed UE
UE hired respondent Mariti D. Bueno in 19975 and respondent to reinstate respondents with backwages.12 Dissatisfied, UE
Analiza F. Pepanio in 2000,6 both on a semester-to-semester appealed to the National Labor Relations Commission
basis to teach in its college. They could not qualify for (NLRC).
probationary or regular status because they lacked
postgraduate degrees. Bueno enrolled in six postgraduate
subjects at the Philippine Normal University’s graduate school Bueno and Pepanio questioned the timeliness of the appeal
but there is no evidence that she finished her course. Pepanio to the NLRC. They pointed to the postmaster’s certification
earned 27 units in her graduate studies at the Gregorio that its office received the mail containing the LA’s Decision
Araneta University Foundation but these could no longer be on March 17, 2005 and "informed the Office of Atty. Mison
credited to her because she failed to continue with her studies right away but they only got the letter on April 4, 2005." Bueno
within five years. and Pepanio claim that the 10-day period for appeal should
be counted from March 22, 2005, five days after the
postmaster’s first notice to Atty. Mison to claim his mail.
In 2001 UE and the UE Faculty Association entered into a new
CBA7 that would have the school extend probationary full-time

15
On September 27, 2006 the NLRC Third Division set aside the For completeness of service by registered mail, the reckoning
LA Decision.1âwphi1 It rejected the technical objection and period starts either (a) from the date of actual receipt of the
ruled that the four-semester probationary period provided mail by the addressee or (b) after five days from the date he
under the old CBA did not automatically confer permanent received the first notice from the postmaster.14There must be
status to Bueno and Pepanio. They still had to meet the a conclusive proof, however, that the registry notice was
standards for permanent employment provided under the received by or at least served on the addressee before the
Manual of Regulations and the Joint Order mentioned above. five-day period begins to run.15
The non-renewal of their contract was based on their failure
to obtain the required postgraduate degrees and cannot,
Here, the records fail to show that Atty. Mison in fact received
therefore, be regarded as illegal.
the alleged registry notice from the post office on March 22,
2005 that required him to claim his mail. Respondents have
On petition for certiorari, the Court of Appeals (CA) rendered not presented a copy of the receipt evidencing that notice. The
a Decision13 on July 9, 2010, reinstating the LA’s Decision by Court has no choice but to consider the registry return receipt
reason of technicality. It held that the 10-day period for appeal bearing the date April 4, 2005 which showed the date of Atty.
already lapsed when UE filed it on April 14, 2005 since the Mison’s receipt of a copy of the LA Decision a conclusive proof
reckoning period should be counted five days from March 17, of service on that date. Reckoned from April 4, UE filed its
when the postmaster gave notice to UE’s legal counsel to appeal to the NLRC on time.
claim his mail or from March 22, 2005. This prompted UE to
file the present petition.
Two. Respondents alleged that UE failed to attach to its
petition a Secretary’s Certificate evidencing the resolution
from its Board of Trustees, authorizing a representative or
agent to sign the verification and certification of non-forum
shopping.

As a general rule, the Board of Directors or Board of Trustees


of a corporation must authorize the person who signs the
verification and certification against non-forum shopping of its
Respondents point out, however, that the petition should be petition. But the Court has held16 that such authorization is not
denied since it failed to enclose a certification from the UE necessary when it is self-evident that the signatory is in a
Board of Trustees, authorizing petitioner Dean Javier to sign position to verify the truthfulness and correctness of the
the verification and certification of non-forum shopping. allegations in the petition. Here the verification and
certification were signed by petitioner Dean Javier who, based
on the given facts of the case, was "in a position to verify the
The Issues truthfulness and correctness of the allegations in the
petition."17
The following issues are presented for the Court’s resolution:
Three. Respondents argue that UE hired them in 1997 and
1. Whether or not UE filed a timely appeal to the 2000, when what was in force was the 1994 CBA between UE
NLRC from the Decision of the LA; and the faculty union. Since that CBA did not yet require a
master’s degree for acquiring a regular status and since
respondents had already complied with the three
2. Whether or not UE’s petition before this Court requirements of the CBA, namely, (a) that they served full-
can be given due course given its failure to enclose time; (b) that they rendered three consecutive years of
a certification from the UE Board of Trustees’ service; and (c) that their services were satisfactory, 18 they
empowering petitioner Dean Javier to execute the should be regarded as having attained permanent or regular
verification and certification of non-forum shopping; status.
and

But the policy requiring postgraduate degrees of college


3. Whether or not UE illegally dismissed Bueno and teachers was provided in the Manual of Regulations as early
Pepanio. as 1992. Indeed, recognizing this, the 1994 CBA provided
even then that UE was to extend only semester-to-semester
The Court’s Rulings appointments to college faculty staffs, like respondents, who
did not possess the minimum qualifications for their positions.
One. Respondents Bueno and Pepanio contend that UE filed
its appeal to the NLRC beyond the required 10-day period. Besides, as the Court held in Escorpizo v. University of
They point out that the postmaster gave notice to Atty. Mison Baguio,19 a school CBA must be read in conjunction with
on March 17, 2005 to claim his mail that contained the LA statutory and administrative regulations governing faculty
Decision. He was deemed in receipt of that decision five days qualifications. Such regulations form part of a valid CBA
after the notice or on March 22, 2005. UE had 10 days from without need for the parties to make express reference to it.
the latter date or until April 1, 2005 within which to file its While the contracting parties may establish such stipulations,
appeal from that decision. UE contends, on the other hand, clauses, terms and conditions, as they may see fit, the right to
that the period of appeal should be counted from April 4, 2005, contract is still subject to the limitation that the agreement
the date appearing on the registry return receipt of the mail must not be contrary to law or public policy.
addressed to its counsel.
The State through Batas Pambansa Bilang 232 (The
Education Act of 1982) delegated the administration of the

16
education system and the supervision and regulation of
educational institutions to the Ministry of Education, Culture
and Sports (now Department of Education). Accordingly, in
promulgating the Manual of Regulations, DECS was
exercising its power of regulation over educational institutions,
which includes prescribing the minimum academic
qualifications for teaching personnel.20

In 1994 the legislature transferred the power to prescribe such


qualifications to the Commission on Higher Education
(CHED). CHED’s charter authorized it to set minimum
standards for programs and institutions of higher
learning.21 The Manual of Regulations continued to apply to
colleges and universities and suppletorily the Joint Order until
2010 when CHED issued a Revised Manual of Regulations
which specifically applies only to institutions involved in
tertiary education.

The requirement of a masteral degree for tertiary education


teachers is not unreasonable. The operation of educational
institutions involves public interest. The government has a
right to ensure that only qualified persons, in possession of
sufficient academic knowledge and teaching skills, are
allowed to teach in such institutions. Government regulation
in this field of human activity is desirable for protecting, not
only the students, but the public as well from ill-prepared
teachers, who are lacking in the required scientific or technical
knowledge. They may be required to take an examination22or
to possess postgraduate degrees as prerequisite to
employment.

Respondents were each given only semester-to-semester


appointments from the be0ginning of their employment with
UE precisely because they lacked the required master's
degree. It was only when UE and the faculty union signed their
2001 CBA that the school extended petitioners a conditional
probationary status subject to their obtaining a master's
degree within their probationary period. It is clear, therefore,
that the parties intended to subject respondents' permanent
status appointments to the standards set by the law and the
university.

Here, UE gave respondents Bueno and Pepanio more than


ample opportunities to acquire the postgraduate degree
required of them. But they did not take advantage of such
opportunities. Justice, fairness, and due process demand that
an employer should not be penalized for situations where it
had little or no participation or control.23

WHEREFORE, the Court GRANTS the petition and


REVERSES the Decision of the Court of Appeals in CA-G.R.
SP 98872 dated July 9, 2010 and REINSTATES the Decision
of the National Labor Relations Commission dated September
27, 2006 as well as its Resolutions dated December 29, 2006
and February 27, 2007 that dismissed the complaints of
respondents Analiza F. Pepanio and Mariti D. Bueno.

SO ORDERED.

17
the school year 2003-2004. She again mentioned in her letter
that she was a candidate for a master’s degree in English
Studies; that the schedule of her oral defense may actually
materialize anytime within the first academic semester of
2003; and that she intended to fully earn her degree that year.
She also furnished the school with a Certification from UP,
G.R. No. 188914 December 11, 2013 stating that she had already finished her coursework in her
master’s studies. Furthermore, she indicated that it was her
long-term goal to apply for a return to full-time faculty status
JOCELYN HERRERA-MANAOIS, Petitioner, by then and for SSC to consider the aforesaid matters.6
vs.
ST. SCHOLASTICA'S COLLEGE, Respondent.
Manaois eventually received a letter from the Dean of College
and Chairperson of the Promotions and Permanency Board
DECISION officially informing her of the board’s decision not to renew her
contract. The letter provides as follows:7
SERENO, CJ.:
The Permanency Board reviewed your case and after a
The present case concerns the academic qualifications thorough deliberation, the members decided not to renew your
required in attaining the status of a permanent full-time faculty contract for school year 2003-2004.
member in the tertiary level of a private educational institution.
Petitioner Jocelyn Herrera-Manaois (Manaois) assails the With due consideration to your services, the institution had
judgments1 of the Court of Appeals (CA), which reversed the granted your request for a three-year extension to finish your
Resolution2 of the National Labor Relations Commission master’s degree. However, you failed to comply with the terms
(NLRC) and ruled that respondent St. Scholastica's College which you yourself had requested. In addition, your
(SSC) was not guilty of illegal dismissal. SSC did not extend specialization cannot be maximized at SSC due to the
to Manaois the position of permanent full-time faculty member college’s curriculum changes and streamlining.
with the rank of instructor because she failed to acquire a
master's degree and because her specialization could no
longer be maximized by the institution due to the changes in It is with your best interest in mind and deep regret on our part
its curriculum and streamlining. that we have to let you go. A new environment may be able to
provide you more avenues and opportunities where you can
utilize your graduate studies in Creative Writing to the fullest.
THE FACTS

Manaois sought clarification and reconsideration of the


SSC, situated in the City of Manila, is a private educational decision of SSC to terminate her services. SSC denied her
institution offering elementary, secondary, and tertiary request in a letter dated 11 July 2003. Consequently, she filed
education. Manaois graduated from SSC in October 1992 with a complaint for illegal dismissal, payment of 13th month pay,
a degree in Bachelor of Arts in English. In 1994, she returned damages, and attorney’s fees against SSC.
to her alma mater as a part-time English teacher. After taking
a leave of absence for one year, she was again rehired by
SSC for the same position. Four years into the service, she SSC explained that upon consideration of the written
was later on recommended by her Department Chairperson application of Manaois, the Dean of Arts and Sciences wrote
to become a full-time faculty member of the English the following notation at the bottom of her letter of application
Department. – "APPROVED: on the basis that she finishes her MA." 8 The
college clarified that the application for full-time faculty status
of Manaois was accepted with the specific qualification that
Manaois thus applied for a position as full-time instructor for she would submit the necessary papers pertaining to her
school year 2000-2001. She mentioned in her application master’s degree. It stressed that permanency may only be
letter3 that she had been taking the course Master of Arts in extended to full-time faculty members if they had fulfilled the
English Studies, Major in Creative Writing, at the University of criteria provided in the SSC Faculty Manual. According to
the Philippines, Diliman (UP); that she was completing her SSC, the Chair of the English Department did not endorse the
master’s thesis; and that her oral defense was scheduled for application for permanency of Manaois, since the latter had
June 2000. In a reply letter4 dated 17 April 2000, the Dean of not finished her master’s degree within the three-year
Arts and Sciences informed her of the SSC Administrative probationary period. SSC then refuted the supposed
Council’s approval of her application. She was then advised performance ratings of Manaois and instead pointed out that
to maintain the good performance that she had shown for the she had merely received an average rating from her students.
past years and to submit the necessary papers pertaining to Finally, it asserted that her specialization was the subject of
her master’s degree. Accordingly, SSC hired her as a writing and not English Literature, which was the subject area
probationary fulltime faculty member with the assigned rank that they needed a faculty member for.
of instructor for the school year 2000-2001.5 Her probationary
employment continued for a total of three consecutive years.
Throughout her service as a probationary full-time faculty THE LABOR ARBITER RULING
member with no derogatory record, she was given above-
satisfactory ratings by both the Department Chairperson and On 16 July 2004, the labor arbiter rendered a Decision9 finding
the Dean of Arts and Sciences. the dismissal of petitioner to be illegal. In addressing the
issues, he first noted the two reasons given by SSC for not
Because of the forthcoming completion of her third year of renewing the contract of Manaois: (1) the failure of petitioner
probationary employment, Manaois wrote the Dean of Arts to finish her master’s degree within the three-year
and Sciences requesting an extension of her teaching load for probationary period; and (2) SSC’s inability to maximize

18
petitioner’s specialization due to curriculum changes and THE NLRC RULING
streamlining.
On 27 July 2007, the National Labor Relations Commission
With respect to the first reason, the labor arbiter reiterated that (NLRC) issued a Resolution10 upholding the labor arbiter’s
the alleged handwritten notation on Manaois’s employment Decision. The NLRC reiterated the labor arbiter’s finding that
application showing that the approval thereof was premised the failure of petitioner to finish her master’s degree within the
on her completion of a master’s degree had not been three-year probationary period was not a valid ground for the
disclosed or made known to her at the start of her termination of employment, as the condition was not made
engagement. In fact, she was not given a copy of the approval known to her at the time of engagement. Furthermore, it
until it was attached to the position paper of SSC. The labor reasoned that an average rating was not one of the just
arbiter agreed with Manaois that the only credible evidence causes for dismissal under the Labor Code. Consequently, it
that a precondition had been set for the acceptance of her affirmed the Decision of the labor arbiter in toto.
employment application was SSC’s letter expressly stating
that she must (a) maintain a good performance and (b) submit
THE CA RULING
the necessary papers pertaining to her master’s degree.
Regarding these preconditions, the labor arbiter noted that the
allegation concerning the mere average performance rating of On 27 February 2009, the CA issued the presently assailed
Manaois given by the students was neither made known to Decision reversing the NLRC judgment on the ground of grave
her nor duly substantiated with documentary proof. Even so, abuse of discretion and thus dismissing the complaint of
the labor arbiter articulated that at the very least, the Manaois. According to the appellate court, it was compelled
performance of Manaois during her three-year probationary to conduct its independent evaluation of the facts of the case,
employment was satisfactory, as admitted by SSC itself, since the factual findings of the labor arbiter and the NLRC
thereby satisfying the first condition mentioned in the letter. were contrary to the evidence on record.
The labor arbiter then considered the Certification issued by
UP as sufficient evidence of Manaois’s compliance with the
First, the CA ruled that various pieces of evidence showed
second condition set by SSC.
that Manaois had been, at the time of engagement, aware and
knowledgeable that possession of a master’s degree was a
Next, the labor arbiter noted that under the SSC Faculty criterion for permanency as a full-time faculty member at SSC.
Manual, the minimum requirements for the rank of instructor, As early as April 2000, which was the period during which
for which petitioner had been hired under the employment Manaois applied to become a full-time faculty member, she
contract, was a bachelor’s degree with at least 25% units of had already sent a letter indicating that she was completing
master’s studies completed. He then found that the her master’s degree, and that the oral defense of her thesis
requirement for a master’s degree actually pertained to the was scheduled for June 2000. According to the appellate
rank of assistant professor, a position that had not been court, this fact reasonably implied that she was fully aware of
applied for by Manaois. Thus, he ruled that failure to finish a the necessity of a master’s degree in order for her to attain
master’s degree could not be used either as a ground for permanent status at SSC. Furthermore, it noted that Manaois
dismissing petitioner or as basis for refusing to extend to her submitted, together with her application letter, a Certification
a permanent teaching status. from UP stating that she had already finished her course work
for her master’s degree. It then deduced that this submission
was proof that she had endeavored to substantially comply
Anent respondent’s argument citing the Manual of
with one of the requirements for permanency.
Regulations for Private Schools, the labor arbiter ruled that the
provisions therein were inapplicable insofar as the
employment status of petitioner was concerned. He explained The CA then juxtaposed her letter with the reply of SSC’s
that the manual merely referred to the requirements for tertiary Dean of Arts and Sciences, who said that petitioner must
schools to be accredited and not to the employment submit the necessary papers pertaining to the latter’s master’s
conditions of the academic personnel. Thus, he pronounced degree, as represented in her application letter. It treated this
that Sections 44(c) and 45 of the manual, which required reply as indubitable proof of SSC’s appraisal of the
tertiary schools to hire teachers who were holders of master’s requirement to obtain a master’s degree. Consequently, the
degrees, could not be used as basis for dismissing Manaois. appellate court reasoned that the disclosure of the notation on
petitioner’s application latter was already inconsequential,
since one of the topics of the exchange of correspondences
The labor arbiter then focused on the second reason of SSC
between the parties in April 2000 was the submission of
as a reflection of the true motive behind the dismissal of
petitioner’s papers for her master’s degree. This directive
Manaois. According to the labor arbiter, the clear import of the
proffered no other interpretation than that the completion of a
statement "your specialization cannot be maximized at SSC
master’s degree had been a precondition for the conferment
due to the college’s curriculum changes and streamlining" was
of Manaois’s permanent employment status.
that SSC had already decided to terminate her services,
regardless of the completion of her master’s degree. The labor
arbiter consequently ruled that this reason was not a valid The CA also noted that the employment contract of petitioner
cause for dismissing a probationary employee, reiterating that incorporated the conditions set in the SSC Faculty Manual.
probationers may only be terminated either (a) for a just The manual explicitly stated that the criteria for permanency
cause, or (b) for failure to qualify as a regular employee in included the completion of a master’s degree. According to
accordance with reasonable standards made known at the the CA, the labor arbiter gravely erred when he solely relied
time of engagement. Ultimately, the labor arbiter pronounced on the minimum requirements provided for the rank of
that Manaois had attained permanent status and that SSC’s instructor. It stressed that the criteria cited for the rank of
nonrenewal of her contract must be deemed as a dismissal instructor referred to the basis on which full-time and part-time
without just cause. faculty members were ranked, and not to the requirements to
be fulfilled in order to become a permanent faculty member.
Instead, the appellate court agreed with SSC that what

19
happened in this case was merely the expiration of an B. After having read and understood in full the
employment contract and the nonrenewal thereof. It pointed contents of the COLLEGE UNIT’s current
out that, in spite of the requests of Manaois for the extension FACULTY MANUAL, the FACULTY MEMBER
of her employment in order for her to finish her master’s agrees to faithfully perform all the duties and
degree, she failed to do so. In fact, she informed SSC that responsibilities attendant to her position as
there was still no fixed schedule for her oral defense. PROBATIONARY FULL-TIME FACULTY
MEMBER and comply with all the rules,
regulations and employment conditions of the
Thus, in the light of the foregoing pieces of evidence, the CA
SCHOOL, as provided in said FACULTY
ruled that the labor arbiter and the NLRC committed grave
MANUAL including any amendment/s pertinent
abuse of discretion in ruling that petitioner had not been made
to her position as may be hereinafter
aware of the reasonable standards of employment at the time
incorporated therein.
of her engagement. Based on her own acts, Manaois knew of
the necessity of obtaining a master’s degree in order to attain
permanent employment status. SSC was thus well within its xxxx
rights not to renew her employment contract for her failure to
qualify as a permanent full-time faculty member.
IV. EFFECTIVITY
Consequently, her complaint was dismissed.

A. The SCHOOL has the right to terminate the


THE ISSUE
FACULTY MEMBER’S services for just cause
such as, among others, failure to comply with any
Whether the completion of a master’s degree is required in of the provisions of the FACULTY MANUAL
order for a tertiary level educator to earn the status of pertinent to her status as FULL-TIME
permanency in a private educational institution. PROBATIONARY FACULTY MEMBER.
(Emphases supplied)
OUR RULING
The SSC Faculty Manual in turn provides for the
following conditions in order for a faculty member to
Probationary employment refers to the trial stage or period
acquire permanent employment status:15
during which the employer examines the competency and
qualifications of job applicants, and determines whether they
are qualified to be extended permanent employment B. PERMANENCY
status.11 Such an arrangement affords an employer the
opportunity – before the full force of the guarantee of security
1. Prior to the end of the probationary period, the
of tenure comes into play – to fully scrutinize and observe the
faculty member formally applies for permanency to
fitness and worth of probationers while on the job and to
her/his Department Chair/Coordinator. The
determine whether they would become proper and efficient
Department Chair/Coordinator, in consultation with
employees.12 It also gives the probationers the chance to
the faculty member, reviews the applicant’s over-all
prove to the employer that they possess the necessary
performance. If the records show that the criteria for
qualities and qualifications to meet reasonable standards for
permanency are met, the applicant is
permanent employment.13 Article 281 of the Labor Code, as
recommended for permanency to the Promotions
amended, provides as follows:
and Permanency Board by the Department
Chair/Coordinator. In certain instances (i.e., when
Art. 281. Probationary employment. Probationary the Department Chair/Coordinator does not give a
employment shall not exceed six (6) months from the date the recommendation for permanency), the Academic
employee started working, unless it is covered by an Dean can exercise her prerogative to recommend
apprenticeship agreement stipulating a longer period. The the applicant.
services of an employee who has been engaged on a
probationary basis may be terminated for a just cause
xxxx
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 CRITERIA FOR PERMANENCY
engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.
1. The faculty member must have completed at
(Emphases supplied)
least a master’s degree.

We agree with the CA in setting aside the NLRC Decision and


in ruling that the requirement to obtain a master’s degree was 2. The faculty member must manifest behavior
made known to Manaois. The contract she signed clearly reflective of the school’s mission-vision and goals.
incorporates the rules, regulations, and employment
conditions contained in the SSC Faculty Manual, viz:14 3. The faculty member must have consistently
received above average rating for teaching
performance as evaluated by the Academic Dean,
I. EMPLOYMENT
Department Chair/Coordinator and the students.

A. x x x x
4. The faculty member must have manifested more
than satisfactory fulfillment of duties and

20
responsibilities as evidenced by official records qualifications and requirements of the
especially in the areas of: x x x said rank. (Emphases supplied)

5. The faculty member must manifest awareness of As correctly pointed out by the CA, the aforecited minimum
and adherence to the school’s code of ethics for requirements provided for the rank of instructor merely refer
faculty. to how instructors are ranked, and not to the academic
qualifications required to attain permanency. It must be noted
that the section in the SSC Faculty Manual on the ranking of
6. The faculty member must be in good physical
instructors cover those who are still on probationary
health and manifest positive well being. (Emphasis
employment and those who have already attained
supplied)
permanency. It would therefore be erroneous to simply read
the section on the ranking of instructors – without taking into
Viewed next to the statements and actions of Manaois – i.e., consideration the previously quoted section on permanency –
the references to obtaining a master’s degree in her in order to determine the academic qualifications for the
application letter, in the subsequent correspondences position of permanent full-time faculty member with the rank
between her and SSC, and in the letter seeking the extension of instructor. Thus, to properly arrive at the criteria, the
of a teaching load for the school year 2003-2004; and her sections on both the permanency and the ranking of an
submission of certifications from UP and from her thesis instructor, as provided in the SSC Manual, must be read in
adviser – we find that there is indeed substantial evidence conjunction with each another.
proving that she knew about the necessary academic
qualifications to obtain the status of permanency.
At this juncture, we reiterate the rule that mere completion of
the three-year probation, even with an above-average
We also agree with the CA that the labor arbiter and the NLRC performance, does not guarantee that the employee will
gravely misinterpreted the section in the SSC Faculty Manual, automatically acquire a permanent employment status. 17 It is
which purportedly provided for a lower academic requirement settled jurisprudence18 that the probationer can only qualify
for full-time faculty members with the rank of instructor, upon fulfillment of the reasonable standards set for permanent
regardless of whether they have attained permanency or are employment as a member of the teaching personnel. In line
still on probation. The labor arbiter refers to the following with academic freedom and constitutional autonomy, an
section in the SSC Manual:16 institution of higher learning has the discretion and prerogative
to impose standards on its teachers and determine whether
these have been met. Upon conclusion of the probation
B. ACCORDING TO RANK
period, the college or university, being the employer, has the
sole prerogative to make a decision on whether or not to re-
Only full-time and half-time faculty members are hire the probationer. The probationer cannot automatically
ranked. Subsidiary faculty members follow a separate assert the acquisition of security of tenure and force the
ranking system. Based on academic preparation, fulfillment of employer to renew the employment contract. In the case at
duties and responsibilities, performance, research, output bar, Manaois failed to comply with the stated academic
and/or community service, a full-time or half-time faculty qualifications required for the position of a permanent full-time
member may be appointed to any of the following ranks: faculty member.

1. INSTRUCTOR Notwithstanding the existence of the SSC Faculty Manual,


Manaois still cannot legally acquire a permanent status of
employment. Private educational institutions must still
There are 4 probationary ranks and 8 permanent ranks supplementarily refer19 to the prevailing standards,
qualifications, and conditions set by the appropriate
a. Minimum Requirements government agencies (presently the Department of
Education, the Commission on Higher Education, and the
Technical Education and Skills Development Authority). This
1. A bachelor’s degree with at least 25% masteral limitation on the right of private schools, colleges, and
units completed universities to select and determine the employment status of
their academic personnel has been imposed by the state in
2. At least 2 years of teaching experience or its view of the public interest nature of educational institutions, so
equivalent as to ensure the quality and competency of our schools and
educators.
(i.e., 1 year supervisory or professional experience)
The applicable guidebook20 at the time petitioner was
engaged as a probationary full-time instructor for the school
b. Promotion within the Rank year 2000 to 2003 is the 1992 Manual of Regulations for
Private Schools (1992 Manual).21 It provides the following
1. A minimum of 1 year in the present conditions of a probationary employment:
level for promotion to Instructor 2, 3, 4,
and 5; a minimum of 2 years for Section 89. Conditions of Employment. Every private school
promotion to Instructor 6, 7 and 8. shall promote the improvement of the economic, social and
professional status of all its personnel.
2. An Instructor at any level may be
promoted to the rank of Assistant In recognition of their special employment status and
Professor upon fulfillment of all the their special role in the advancement of knowledge, the

21
employment of teaching and non-teaching academic policies, rules and standards of the Department and
personnel shall be governed by such rules as may from the school;
time to time be promulgated, in coordination with one
another, by the Department of Education, Culture and
c. Whose total working day of not more than eight
Sports and the Department of Labor and Employment.
hours a day is devoted to the school;

Conditions of employment of non-academic non-teaching


d. Who have no other remunerative occupation
school personnel, including compensation, hours of work,
elsewhere requiring regular hours of work that will
security of tenure and labor relations, shall be governed by the
conflict with the working hours in the school; and
appropriate labor laws and regulations.

e. Who are not teaching full-time in any other


Section 92. Probationary Period. Subject in all instances to
educational institution.
compliance with Department and school requirements,
the probationary period for academic personnel shall not be
more than three (3) consecutive years of satisfactory All teaching personnel who do not meet the foregoing
service for those in the elementary and secondary levels, six qualifications are considered part-time.
(6) consecutive regular semesters of satisfactory service
for those in the tertiary level, and nine (9) consecutive
trimesters of satisfactory service for those in the tertiary level xxxx
where collegiate courses are offered on the trimester basis.
Section 47. Faculty Classification and Ranking. At the tertiary
Section 93. Regular or Permanent Status. Those who have level, the academic teaching positions shall be classified
in accordance with academic qualifications, training and
served the probationary period shall be made regular or
permanent. Fulltime teachers who have satisfactorily scholarship preferably into academic ranks of Professor,
completed their probationary period shall be considered Associate Professor, Assistant Professor, and Instructor,
regular or permanent. (Emphases supplied) without prejudice to a more simplified or expanded system of
faculty ranking, at the option of the school.

Considering that petitioner ultimately sought for the position of


Any academic teaching personnel who does not fall under any
a permanent full-time instructor, we must further look into the
following provisions under the 1992 Manual, which set out the of the classes or ranks indicated in the preceding paragraph
minimum requirements for such status: shall be classified preferably as professorial lecturer, guest
lecturer, or any other similar academic designation on the
basis of his qualifications. (Emphases supplied)
Section 44. Minimum Faculty Qualifications. The minimum
qualifications for faculty for the different grades and levels of
instruction duly supported by appropriate credentials on Thus, pursuant to the 1992 Manual, private educational
file in the school shall be as follows: institutions in the tertiary level may extend "full-time faculty"
status only to those who possess, inter alia, a master’s degree
in the field of study that will be taught. This minimum
xxxx requirement is neither subject to the prerogative of the school
nor to the agreement between the parties. For all intents and
purposes, this qualification must be deemed impliedly written
c. Tertiary
in the employment contracts between private educational
institutions and prospective faculty members. The issue of
(1) For undergraduate courses, other than vocational: whether probationers were informed of this academic
requirement before they were engaged as probationary
employees is thus no longer material, as those who are
(a) Holder of a master’s degree, to teach largely in his
seeking to be educators are presumed to know these
major field; or, for professional courses, holder of the
mandated qualifications. Thus, all those who fail to meet the
appropriate professional license required for at least a
criteria under the 1992 Manual cannot legally attain the status
bachelor's degree. Any deviation from this requirement will be
of permanent full-time faculty members, even if they have
subject to regulation by the Department.
completed three years of satisfactory service.

Section 45. Full-time and Part-time Faculty. As a general rule,


In the light of the failure of Manaois to satisfy the academic
all private schools shall employ full-time academic
requirements for the position, she may only be considered as
personnel consistent with the levels of instruction.
a part-time instructor pursuant to Section 45 of the 1992
Manual. In turn, as we have enunciated in a line of cases, 22 a
Full-time academic personnel are those meeting all the part-time member of the academic personnel cannot acquire
following requirements: permanence of employment and security of tenure under the
Manual of Regulations in relation to the Labor Code. We thus
quote the ruling of this Court in Lacuesta, viz:23
a. Who possess at least the minimum academic
qualifications prescribed by the
Department under this Manual for all academic Section 93 of the 1992 Manual of Regulations for Private
personnel; Schools provides that full-time teachers who have
satisfactorily completed their probationary period shall be
considered regular or permanent. Moreover, for those
b. Who are paid monthly or hourly, based on the
teaching in the tertiary level, the probationary period shall not
regular teaching loads as provided for in the be more than six consecutive regular semesters of

22
satisfactory service. The requisites to acquire permanent
employment, or security of tenure, are (1) the teacher is a full-
time teacher; (2) the teacher must have rendered three
consecutive years of service; and (3) such service must have
been satisfactory.

As previously held, a part-time teacher cannot acquire


permanent status.1âwphi1 Only when one has served as a
full-time teacher can he acquire permanent or regular status.
The petitioner was a part-time lecturer before she was
appointed as a full-time instructor on probation. As a parttime
lecturer, her employment as such had ended when her
contract expired. Thus, the three semesters she served as
part-time lecturer could not be credited to her in computing the
number of years she has served to qualify her for permanent
status.

Petitioner posits that after completing the three-year [full-time


instructor on] probation with an above-average performance,
she already acquired permanent status. On this point, we are
unable to agree with petitioner.

Completing the probation period does not automatically


qualify her to become a permanent employee of the university.
Petitioner could only qualify to become a permanent
employee upon fulfilling the reasonable standards for
permanent employment as faculty member. Consistent with
academic freedom and constitutional autonomy, an institution
of higher learning has the prerogative to provide standards for
its teachers and determine whether these standards have
been met. At the end of the probation period, the decision to
re-hire an employee on probation, belongs to the university as
the employer alone. (Emphases supplied)

For the foregoing reasons, we rule that there is no legal


obligation on the part of SSC to reappoint Manaois after the
lapse of her temporary appointn:ient. We thus affirm in
toto the findings of fact of the CA and rule that SSC is not
guilty of illegal dismissal.

WHEREFORE, the petition is DENIED for lack of merit.


Accordingly, the Court of Appeals Decision dated 27 February
2009 and the Resolution dated 22 July 2009 in CA-G.R. SP.
No. 101382 are hereby AFFIRMED.

SO ORDERED.

23
If termination is for cause, it may be done at anytime during
the probation.
Carvajal vs Luzon Development Bank
FACTS:
Carvajal was employed as a trainee-teller by Luzon
Development Bank (Bank) under a six-month probationary
employment contract. Ramirez is the President and CEO of
the Bank. A month into her employment, she was send a
Memorandum directing her to explain in writing why she
should not be subjected to disciplinary action for her eight
tardiness on November 2003. A second Memorandum was
sent to her on January for her again chronic tardiness on
December 2003. She submitted her written explanations for
both events and manifested her acceptance of the
consequences of her actions. She was terminated for three
days effective 21 January 2004. However, on 22 January, her
termination was lifted but at the same time, her services were
terminated. In the respondents’ position paper to the LA, they
explained that the reasons for her absence are chronic
tardiness, absenteeism and failure to perform satisfactorily as
a probationary employee.

LA Decision: The petitioner was illegally dismissed because


she was not afforded the notice in writing informing her of what
the Bank would like to bring out to her for the latter to answer
in writing.

NLRC Decision: NLRC affirmed the decision of the LA.


CA Decision: The CA found that the petitioner was not entitled
to backwages because she was rightfully dismissed for failure
to meet the employment standards.

ISSUE:
Whether the petitioner can be considered a regular employee
at the time of her dismissal.

HELD:
No. Carvajal’s appointment letter reads that “Possible
extension of this contract will depend on the job requirements
of the Bank and your overall performance. Performance
review will be conducted before possible renewal can take
effect.” Therefore, petitioner knew, at the time of her
engagement, that she must comply with the standards set
forth by respondent and perform satisfactorily in order to attain
regular status. Even the NLRC upheld the petitoner’s
probationary status, stating that reinstatement is not
synonymous to regularization.

Although probationary employees also enjoy security of


tenure, he may still be terminated because of just and
authorized causes of termination and the additional ground
under Article 281 of the Labor Code, i.e. the probationary
employee may also be terminated for failure to qualify as a
regular employee in accordance to the reasonable standards
set by the employer. Punctuality is a reasonable standard
imposed on every employee, whether in government or
private sector. This, together with absenteeism,
underperformance and mistake in clearing a check are
infractions that cannot be tantamount to satisfactory
standards.

In addition to the abovementioned, it has been previously held


in PDI vs. Magtibay, Jr., that the second requirement under
Article 281 does not require notice and hearing. Due process
of law for this second ground consists of making the
reasonable standards expected of the employee during his
probationary period known to him at the time of his
engagement. By the very nature of probationary employment,
the employee knows from the very start that he will be under
close observation and continuous scrutiny by his supervisors.

24

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