Professional Documents
Culture Documents
Case(s) :: ALU-TUCP vs. NLRC, 234 SCRA 678
Case(s) :: ALU-TUCP vs. NLRC, 234 SCRA 678
Case(s) :: ALU-TUCP vs. NLRC, 234 SCRA 678
KILUSAN-OLALIA contends that after finding that the 64 workers are regular employees of KIMBERLY, Minister
Sanchez should have remanded the representation case to the med-arbiter instead of declaring UKCEU-PTGWO as
the winner in the certification election and setting aside the med-arbiter's order which allowed the 64 casual
workers to cast their votes.
Respondents argue that since the issues of regularization and representation are closely interrelated and that a
resolution of the former inevitably affects the latter, it was necessary for the former labor minister to take
cognizance of the representation issue; that no timely motion for reconsideration or appeal was made from his
decision of November 13, 1986 which has become final and executory; and that the aforesaid decision was
impliedly accepted by KILUSAN-OLALIA when it demanded from KIMBERLY the issuance of regular appointments
to its affected members in compliance with said decision, hence petitioner employees are now stopped from
questioning the legality thereof.
We uphold the authority of former Minister Sanchez to assume jurisdiction over the issue of the regularization of
the 64 casual workers, which fact is not even disputed by KILUSAN-OLALIA as may be gleaned from its request for
an interim order in the notice of strike case (BLR-NS-5-164-86), asking that the regularization issue be immediately
resolved. Furthermore, even the med-arbiter who ordered the holding of the certification election refused to
resolve the protest on the ground that the issue raised therein correctly pertains to the jurisdiction of the then
labor minister. No opposition was offered by KILUSAN-OLALIA. We hold that the issue of regularization was
properly addressed to the discretion of said former minister.
However, the matter of the controverted pronouncement by former Minister Sanchez, as reaffirmed by
respondent secretary, regarding the winner in the certification election presents a different situation.
It will be recalled that in the certification election, UKCEU-PTGWO came out as the winner, by garnering a majority
of the votes cast therein with the exception of 64 ballots which were subject to challenge. In the protest filed for
the opening and counting of the challenged ballots, KILUSAN-OLALIA raised the main and sole question of
regularization of the 64 casual workers. The med-arbiter refused to act on the protest on the ground that the issue
involved is within the jurisdiction of the then Minister of Labor. KILUSAN-OLALIA then sought an interim order for
an early resolution on the employment status of the casual workers, which was one of the issues included in the
notice of strike filed by KILUSAN-OLALIA in BLR Case No. NS-5-164-86. Consequently, Minister Sanchez rendered
the questioned decision finding that the workers not engaged in janitorial and yard maintenance service are
regular employees but that they became regular only on the date of his decision, that is, on November 13, 1986,
and, therefore, they were not entitled to vote in the certification election. On the basis of the results obtained in
the certification election, Minister Sanchez declared UKCEU-PTGWO as the winner.
The pivotal issue, therefore, is when said workers, not performing janitorial or yard maintenance service,
became regular employees of KIMBERLY.
We find and so hold that the former labor minister gravely abused his discretion in holding that those workers not
engaged in janitorial or yard maintenance service attained the status of regular employees only on November 13,
1986, which thus deprived them of their constitutionally protected right to vote in the certification election and
choose their rightful bargaining representative.
The law thus provides for two. kinds of regular employees, namely: (1) those who are engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those
who have rendered at least one year of service, whether continuous or broken, with respect to the activity in
which they are employed. The individual petitioners herein who have been adjudged to be regular employees fall
under the second category. These are the mechanics, electricians, machinists machine shop helpers, warehouse
helpers, painters, carpenters, pipefitters and masons It is not disputed that these workers have been in the employ
of KIMBERLY for more than one year at the time of the filing of the Petition for certification election by KILUSAN-
OLALIA.
Owing to their length of service with the company, these workers became regular employees, by operation of
law, one year after they were employed by KIMBERLY through RANK. While the actual regularization of these
employees entails the mechanical act of issuing regular appointment papers and compliance with such other
operating procedures as may be adopted by the employer, it is more in keeping with the intent and spirit of the
law to rule that the status of regular employment attaches to the casual worker on the day immediately after
the end of his first year of service. To rule otherwise, and to instead make their regularization dependent on the
happening of some contingency or the fulfillment of certain requirements, is to impose a burden on the
employee which is not sanctioned by law.
That the first stated position is the situation contemplated and sanctioned by law is further enhanced by the
absence of a statutory limitation before regular status can be acquired by a casual employee. The law is explicit. As
long as the employee has rendered at least one year of service, he becomes a regular employee with respect to
the activity in which he is employed. The law does not provide the qualification that the employee must first be
issued a regular appointment or must first be formally declared as such before he can acquire a regular status.
Obviously, where the law does not distinguish, no distinction should be drawn.
The submission that the decision of November 13, 1986 has become final and executory, on the grounds that no
timely appeal has been made therefrom and that KILUSAN-OLALIA has impliedly acceded thereto, is untenable.
Rule 65 of the Rules of Court allows original petitions for certiorari from decisions or orders of public respondents
provided they are filed within a reasonable time. We believe that the period from January 9, 1987, when the
motions for reconsideration separately filed by KILUSAN-OLALIA and KIMBERLY were denied, to March 16, 1987,
when the petition in G.R. No. 77629 was filed, constitutes a reasonable time for availing of such recourse.
We likewise do not subscribe to the claim of respondents that KILUSAN-OLALIA has impliedly accepted the
questioned decision by demanding compliance therewith. In the letter of KILUSAN-OLALIA dated November 24,
1986 24 addressed to the legal counsel of KIMBERLY, it is there expressly and specifically pointed out that KILUSAN-
OLALIA intends to file a motion for reconsideration of the questioned decision but that, in the meantime, it was
demanding the issuance of regular appointments to the casual workers who had been declared to be regular
employees. The filing of said motion for reconsideration of the questioned decision by KILUSAN-OLALIA, which was
later denied, sustains our position on this issue and denies the theory of estoppel postulated by respondents.
On the basis of the foregoing circumstances, and as a consequence of their status as regular employees, those
workers not perforce janitorial and yard maintenance service were performance entitled to the payment of salary
differential, cost of living allowance, 13th month pay, and such other benefits extended to regular employees
under the CBA, from the day immediately following their first year of service in the company. These regular
employees are likewise entitled to vote in the certification election held in July 1, 1986. Consequently, the votes
cast by those employees not performing janitorial and yard maintenance service, which form part of the 64
challenged votes, should be opened, counted and considered for the purpose of determining the certified
bargaining representative.
We do not find it necessary to disturb the finding of then Minister Sanchez holding as legal the service contract
executed between KIMBERLY and RANK, with respect to the workers performing janitorial and yard maintenance
service, which is supported by substantial and convincing evidence. Besides, we take judicial notice of the general
practice adopted in several government and private institutions and industries of hiring a janitorial service on an
independent contractor basis. Furthermore, the occasional directives and suggestions of KIMBERLY are insufficient
to erode primary and continuous control over the employees of the independent contractor. 25 Lastly, the duties
performed by these workers are not independent and integral steps in or aspects of the essential operations of
KIMBERLY which is engaged in the manufacture of consumer paper products and cigarette paper, hence said
workers cannot be considered regular employees.
The reinstatement of Roque Jimenez without backwages involves a question of fact best addressed to the
discretion of respondent secretary whose finding thereon is binding and conclusive upon this Court, absent a
showing that he committed a grave abuse in the exercise thereof.
WHEREFORE, judgment is hereby rendered in G.R. No. 77629:
1. Ordering the med-arbiter in Case No. R04-OD-M-4-15-86 to open and count the 64 challenged votes, and that
the union with the highest number of votes be thereafter declared as the duly elected certified bargaining
representative of the regular employees of KIMBERLY;
2. Ordering KIMBERLY to pay the workers who have been regularized their differential pay with respect to
minimum wage, cost of living allowance, 13th month pay, and benefits provided for under the applicable collective
bargaining agreement from the time they became regular employees.
All other aspects of the decision appealed from, which are not so modified or affected thereby, are hereby
AFFIRMED. The temporary restraining order issued in G.R. No. 77629 is hereby made permanent.
The petition filed in G.R. No. 78791 is hereby DISMISSED.
SO ORDERED.
Melencio-Herrera, Paras, Padilla and Sarmiento, JJ., concur.
5. Contract-Fixed Period
Case(s):
Brent School vs. Zamora, 181 SCRA 702
G.R. No. L-48494 February 5, 1990
BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE, petitioners,
vs.
RONALDO ZAMORA, the Presidential Assistant for Legal Affairs, Office of the President, and DOROTEO R.
ALEGRE, respondents.
Quasha, Asperilla, Ancheta, Peña & Nolasco for petitioners.
Mauricio G. Domogon for respondent Alegre.
NARVASA, J.:
The question presented by the proceedings at bar 1 is whether or not the provisions of the Labor Code, 2 as
amended, 3 have anathematized "fixed period employment" or employment for a term.
The root of the controversy at bar is an employment contract in virtue of which Doroteo R. Alegre was engaged as
athletic director by Brent School, Inc. at a yearly compensation of P20,000.00. 4 The contract fixed a specific term
for its existence, five (5) years, i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976.
Subsequent subsidiary agreements dated March 15, 1973, August 28, 1973, and September 14, 1974 reiterated the
same terms and conditions, including the expiry date, as those contained in the original contract of July 18, 1971. 5
Some three months before the expiration of the stipulated period, or more precisely on April 20,1976, Alegre was
given a copy of the report filed by Brent School with the Department of Labor advising of the termination of his
services effective on July 16, 1976. The stated ground for the termination was "completion of contract, expiration
of the definite period of employment." And a month or so later, on May 26, 1976, Alegre accepted the amount of
P3,177.71, and signed a receipt therefor containing the phrase, "in full payment of services for the period May 16,
to July 17, 1976 as full payment of contract."
However, at the investigation conducted by a Labor Conciliator of said report of termination of his services, Alegre
protested the announced termination of his employment. He argued that although his contract did stipulate that
the same would terminate on July 17, 1976, since his services were necessary and desirable in the usual business
of his employer, and his employment had lasted for five years, he had acquired the status of a regular employee
and could not be removed except for valid cause. 6 The Regional Director considered Brent School's report as an
application for clearance to terminate employment (not a report of termination), and accepting the
recommendation of the Labor Conciliator, refused to give such clearance and instead required the reinstatement
of Alegre, as a "permanent employee," to his former position without loss of seniority rights and with full back
wages. The Director pronounced "the ground relied upon by the respondent (Brent) in terminating the services of
the complainant (Alegre) . . . (as) not sanctioned by P.D. 442," and, quite oddly, as prohibited by Circular No. 8,
series of 1969, of the Bureau of Private Schools. 7
Brent School filed a motion for reconsideration. The Regional Director denied the motion and forwarded the case
to the Secretary of Labor for review. 8 The latter sustained the Regional Director. 9 Brent appealed to the Office of
the President. Again it was rebuffed. That Office dismissed its appeal for lack of merit and affirmed the Labor
Secretary's decision, ruling that Alegre was a permanent employee who could not be dismissed except for just
cause, and expiration of the employment contract was not one of the just causes provided in the Labor Code for
termination of services. 10
The School is now before this Court in a last attempt at vindication. That it will get here.
The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time when the
Labor Code of the Philippines (P.D. 442) had not yet been promulgated. Indeed, the Code did not come into effect
until November 1, 1974, some three years after the perfection of the employment contract, and rights and
obligations thereunder had arisen and been mutually observed and enforced.
At that time, i.e., before the advent of the Labor Code, there was no doubt whatever about the validity of term
employment. It was impliedly but nonetheless clearly recognized by the Termination Pay Law, R.A. 1052, 11 as
amended by R.A. 1787. 12 Basically, this statute provided that—
In cases of employment, without a definite period, in a commercial, industrial, or agricultural
establishment or enterprise, the employer or the employee may terminate at any time the
employment with just cause; or without just cause in the case of an employee by serving written
notice on the employer at least one month in advance, or in the case of an employer, by serving
such notice to the employee at least one month in advance or one-half month for every year of
service of the employee, whichever is longer, a fraction of at least six months being considered as
one whole year.
The employer, upon whom no such notice was served in case of termination of employment
without just cause, may hold the employee liable for damages.
The employee, upon whom no such notice was served in case of termination of employment
without just cause, shall be entitled to compensation from the date of termination of his
employment in an amount equivalent to his salaries or wages corresponding to the required
period of notice.
There was, to repeat, clear albeit implied recognition of the licitness of term employment. RA 1787 also
enumerated what it considered to be just causes for terminating an employment without a definite period, either
by the employer or by the employee without incurring any liability therefor.
Prior, thereto, it was the Code of Commerce which governed employment without a fixed period, and also
implicitly acknowledged the propriety of employment with a fixed period. Its Article 302 provided that —
In cases in which the contract of employment does not have a fixed period, any of the parties
may terminate it, notifying the other thereof one month in advance.
The factor or shop clerk shall have a right, in this case, to the salary corresponding to said month.
The salary for the month directed to be given by the said Article 302 of the Code of Commerce to the
factor or shop clerk, was known as the mesada (from mes, Spanish for "month"). When Article 302
(together with many other provisions of the Code of Commerce) was repealed by the Civil Code of the
Philippines, Republic Act No. 1052 was enacted avowedly for the precise purpose of reinstating the
mesada.
Now, the Civil Code of the Philippines, which was approved on June 18, 1949 and became effective on August
30,1950, itself deals with obligations with a period in section 2, Chapter 3, Title I, Book IV; and with contracts of
labor and for a piece of work, in Sections 2 and 3, Chapter 3, Title VIII, respectively, of Book IV. No prohibition
against term-or fixed-period employment is contained in any of its articles or is otherwise deducible therefrom.
It is plain then that when the employment contract was signed between Brent School and Alegre on July 18, 1971,
it was perfectly legitimate for them to include in it a stipulation fixing the duration thereof Stipulations for a term
were explicitly recognized as valid by this Court, for instance, in Biboso v. Victorias Milling Co., Inc., promulgated on
March 31, 1977, 13 and J. Walter Thompson Co. (Phil.) v. NLRC, promulgated on December 29, 1983. 14 The
Thompson case involved an executive who had been engaged for a fixed period of three (3) years. Biboso involved
teachers in a private school as regards whom, the following pronouncement was made:
What is decisive is that petitioners (teachers) were well aware an the time that their tenure was
for a limited duration. Upon its termination, both parties to the employment relationship were
free to renew it or to let it lapse. (p. 254)
Under American law 15 the principle is the same. "Where a contract specifies the period of its duration, it
terminates on the expiration of such period." 16 "A contract of employment for a definite period terminates by its
own terms at the end of such period." 17
The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor Code
(Presidential Decree No. 442), which went into effect on November 1, 1974. The Code contained explicit
references to fixed period employment, or employment with a fixed or definite period. Nevertheless, obscuration of
the principle of licitness of term employment began to take place at about this time
Article 320, entitled "Probationary and fixed period employment," originally stated that the "termination of
employment of probationary employees and those employed WITH A FIXED PERIOD shall be subject to such
regulations as the Secretary of Labor may prescribe." The asserted objective to was "prevent the circumvention of
the right of the employee to be secured in their employment as provided . . . (in the Code)."
Article 321 prescribed the just causes for which an employer could terminate "an employment without a definite
period."
And Article 319 undertook to define "employment without a fixed period" in the following manner: 18
An employment shall be deemed to be without a definite period for purposes of this Chapter
where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been
fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the duration of the season.
The question immediately provoked by a reading of Article 319 is whether or not a voluntary agreement on a fixed
term or period would be valid where the employee "has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer." The definition seems a non sequitur. From
the premise — that the duties of an employee entail "activities which are usually necessary or desirable in the
usual business or trade of the employer the" — conclusion does not necessarily follow that the employer and
employee should be forbidden to stipulate any period of time for the performance of those activities. There is
nothing essentially contradictory between a definite period of an employment contract and the nature of the
employee's duties set down in that contract as being "usually necessary or desirable in the usual business or
trade of the employer." The concept of the employee's duties as being "usually necessary or desirable in the
usual business or trade of the employer" is not synonymous with or identical to employment with a fixed term.
Logically, the decisive determinant in term employment should not be the activities that the employee is called
upon to perform, but the day certain agreed upon by the parties for the commencement and termination of
their employment relationship, a day certain being understood to be "that which must necessarily come,
although it may not be known when." 19 Seasonal employment, and employment for a particular project are
merely instances employment in which a period, where not expressly set down, necessarily implied.
Of course, the term — period has a definite and settled signification. It means, "Length of existence; duration. A
point of time marking a termination as of a cause or an activity; an end, a limit, a bound; conclusion; termination. A
series of years, months or days in which something is completed. A time of definite length. . . . the period from one
fixed date to another fixed date . . ." 20 It connotes a "space of time which has an influence on an obligation as a
result of a juridical act, and either suspends its demandableness or produces its extinguishment." 21 It should be
apparent that this settled and familiar notion of a period, in the context of a contract of employment, takes no
account at all of the nature of the duties of the employee; it has absolutely no relevance to the character of his
duties as being "usually necessary or desirable to the usual business of the employer," or not.
Subsequently, the foregoing articles regarding employment with "a definite period" and "regular" employment
were amended by Presidential Decree No. 850, effective December 16, 1975.
Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating the reference to
persons "employed with a fixed period," and was renumbered (becoming Article 271). The article 22 now reads:
. . . Probationary employment.—Probationary employment shall not exceed six months from the
date the employee started working, unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an employee who has been engaged in a probationary
basis may be terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the
time of his engagement. An employee who is allowed to work after a probationary period shall
be considered a regular employee.
Also amended by PD 850 was Article 319 (entitled "Employment with a fixed period," supra) by (a) deleting
mention of employment with a fixed or definite period, (b) adding a general exclusion clause declaring irrelevant
written or oral agreements "to the contrary," and (c) making the provision treat exclusively of "regular" and
"casual" employment. As revised, said article, renumbered 270, 23 now reads:
. . . Regular and Casual Employment.—The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be
deemed to be regular where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer except where the
employment has been fixed for a specific project or undertaking the completion or termination
of which has been determined at the time of the engagement of the employee or where the
work or service to be employed is seasonal in nature and the employment is for the duration of
the season.
An employment shall be deemed to he casual if it is not covered by the preceding paragraph:
provided, that, any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such actually exists.
The first paragraph is identical to Article 319 except that, as just mentioned, a clause has been added, to
wit: "The provisions of written agreement to the contrary notwithstanding and regardless of the oral
agreements of the parties . . ." The clause would appear to be addressed inter alia to agreements fixing a
definite period for employment. There is withal no clear indication of the intent to deny validity to
employment for a definite period. Indeed, not only is the concept of regular employment not essentially
inconsistent with employment for a fixed term, as above pointed out, Article 272 of the Labor Code, as
amended by said PD 850, still impliedly acknowledged the propriety of term employment: it listed the
"just causes" for which "an employer may terminate employment without a definite period," thus giving
rise to the inference that if the employment be with a definite period, there need be no just cause for
termination thereof if the ground be precisely the expiration of the term agreed upon by the parties for
the duration of such employment.
Still later, however, said Article 272 (formerly Article 321) was further amended by Batas Pambansa Bilang 130, 24
to eliminate altogether reference to employment without a definite period. As lastly amended, the opening lines of
the article (renumbered 283), now pertinently read: "An employer may terminate an employment for any of the
following just causes: . . . " BP 130 thus completed the elimination of every reference in the Labor Code, express or
implied, to employment with a fixed or definite period or term.
It is in the light of the foregoing description of the development of the provisions of the Labor Code bearing on
term or fixed-period employment that the question posed in the opening paragraph of this opinion should now be
addressed. Is it then the legislative intention to outlaw stipulations in employment contracts laying down a definite
period therefor? Are such stipulations in essence contrary to public policy and should not on this account be
accorded legitimacy?
On the one hand, there is the gradual and progressive elimination of references to term or fixed-period
employment in the Labor Code, and the specific statement of the rule 25 that—
. . . Regular and Casual Employment.— The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be
deemed to be regular where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer except where the
employment has been fixed for a specific project or undertaking the completion or termination
of which has been determined at the time of the engagement of the employee or where the
work or service to be employed is seasonal in nature and the employment is for the duration of
the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
provided, that, any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such actually exists.
There is, on the other hand, the Civil Code, which has always recognized, and continues to recognize, the validity
and propriety of contracts and obligations with a fixed or definite period, and imposes no restraints on the
freedom of the parties to fix the duration of a contract, whatever its object, be it specie, goods or services, except
the general admonition against stipulations contrary to law, morals, good customs, public order or public policy. 26
Under the Civil Code, therefore, and as a general proposition, fixed-term employment contracts are not limited, as
they are under the present Labor Code, to those by nature seasonal or for specific projects with pre-determined
dates of completion; they also include those to which the parties by free choice have assigned a specific date of
termination.
Some familiar examples may be cited of employment contracts which may be neither for seasonal work nor for
specific projects, but to which a fixed term is an essential and natural appurtenance: overseas employment
contracts, for one, to which, whatever the nature of the engagement, the concept of regular employment will all
that it implies does not appear ever to have been applied, Article 280 of the Labor Code not withstanding; also
appointments to the positions of dean, assistant dean, college secretary, principal, and other administrative offices
in educational institutions, which are by practice or tradition rotated among the faculty members, and where fixed
terms are a necessity, without which no reasonable rotation would be possible. Similarly, despite the provisions of
Article 280, Policy, Instructions No. 8 of the Minister of Labor 27 implicitly recognize that certain company officials
may be elected for what would amount to fixed periods, at the expiration of which they would have to stand
down, in providing that these officials," . . . may lose their jobs as president, executive vice-president or vice-
president, etc. because the stockholders or the board of directors for one reason or another did not re-elect
them."
There can of course be no quarrel with the proposition that where from the circumstances it is apparent that
periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck
down or disregarded as contrary to public policy, morals, etc. But where no such intent to circumvent the law is
shown, or stated otherwise, where the reason for the law does not exist, e.g., where it is indeed the employee
himself who insists upon a period or where the nature of the engagement is such that, without being seasonal or
for a specific project, a definite date of termination is a sine qua non, would an agreement fixing a period be
essentially evil or illicit, therefore anathema? Would such an agreement come within the scope of Article 280
which admittedly was enacted "to prevent the circumvention of the right of the employee to be secured in . . . (his)
employment?"
As it is evident from even only the three examples already given that Article 280 of the Labor Code, under a narrow
and literal interpretation, not only fails to exhaust the gamut of employment contracts to which the lack of a fixed
period would be an anomaly, but would also appear to restrict, without reasonable distinctions, the right of an
employee to freely stipulate with his employer the duration of his engagement, it logically follows that such a
literal interpretation should be eschewed or avoided. The law must be given a reasonable interpretation, to
preclude absurdity in its application. Outlawing the whole concept of term employment and subverting to boot the
principle of freedom of contract to remedy the evil of employer's using it as a means to prevent their employees
from obtaining security of tenure is like cutting off the nose to spite the face or, more relevantly, curing a headache
by lopping off the head.
It is a salutary principle in statutory construction that there exists a valid presumption that
undesirable consequences were never intended by a legislative measure, and that a construction
of which the statute is fairly susceptible is favored, which will avoid all objecionable mischievous,
undefensible, wrongful, evil and injurious consequences. 28
Nothing is better settled than that courts are not to give words a meaning which would lead to
absurd or unreasonable consequences. That s a principle that does back to In re Allen decided oil
October 27, 1903, where it was held that a literal interpretation is to be rejected if it would be
unjust or lead to absurd results. That is a strong argument against its adoption. The words of
Justice Laurel are particularly apt. Thus: "The fact that the construction placed upon the statute
by the appellants would lead to an absurdity is another argument for rejecting it. . . ." 29
. . . We have, here, then a case where the true intent of the law is clear that calls for the
application of the cardinal rule of statutory construction that such intent of spirit must prevail
over the letter thereof, for whatever is within the spirit of a statute is within the statute, since
adherence to the letter would result in absurdity, injustice and contradictions and would defeat
the plain and vital purpose of the statute. 30
Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article
280 of the Labor Code clearly appears to have been, as already observed, to prevent circumvention of the
employee's right to be secure in his tenure, the clause in said article indiscriminately and completely ruling out all
written or oral agreements conflicting with the concept of regular employment as defined therein should be
construed to refer to the substantive evil that the Code itself has singled out: agreements entered into precisely to
circumvent security of tenure. It should have no application to instances where a fixed period of employment was
agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being
brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the
law would be made to apply to purposes other than those explicitly stated by its framers; it thus becomes pointless
and arbitrary, unjust in its effects and apt to lead to absurd and unintended consequences.
Such interpretation puts the seal on Bibiso 31 upon the effect of the expiry of an agreed period of employment as
still good rule—a rule reaffirmed in the recent case of Escudero vs. Office of the President (G.R. No. 57822, April 26,
1989) where, in the fairly analogous case of a teacher being served by her school a notice of termination following
the expiration of the last of three successive fixed-term employment contracts, the Court held:
Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her employment
was probationary, contractual in nature, and one with a definitive period. At the expiration of the
period stipulated in the contract, her appointment was deemed terminated and the letter
informing her of the non-renewal of her contract is not a condition sine qua non before Reyes
may be deemed to have ceased in the employ of petitioner UST. The notice is a mere reminder
that Reyes' contract of employment was due to expire and that the contract would no longer be
renewed. It is not a letter of termination. The interpretation that the notice is only a reminder is
consistent with the court's finding in Labajo supra. ... 32
Paraphrasing Escudero, respondent Alegre's employment was terminated upon the expiration of his last contract
with Brent School on July 16, 1976 without the necessity of any notice. The advance written advice given the
Department of Labor with copy to said petitioner was a mere reminder of the impending expiration of his contract,
not a letter of termination, nor an application for clearance to terminate which needed the approval of the
Department of Labor to make the termination of his services effective. In any case, such clearance should properly
have been given, not denied.
WHEREFORE, the public respondent's Decision complained of is REVERSED and SET ASIDE. Respondent Alegre's
contract of employment with Brent School having lawfully terminated with and by reason of the expiration of the
agreed term of period thereof, he is declared not entitled to reinstatement and the other relief awarded and
confirmed on appeal in the proceedings below. No pronouncement as to costs.
SO ORDERED.
Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortés, Griño-Aquino, Medialdea
and Regalado, JJ., concur.
Fernan, C.J., took no part.
Separate Opinions
SARMIENTO, J., concurring and dissenting:
I am agreed that the Labor Code has not foresaken "term employments", held valid in Biboso V. Victorias Milling
Company, Inc. (No. L-44360, March 31, 1977, 76 SCRA 250). That notwithstanding, I can not liken employment
contracts to ordinary civil contracts in which the relationship is established by stipulations agreed upon. Under the
very Civil Code:
Art. 1700. The relations between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts are subject to the special laws on labor
unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours
of labor and similar subjects.
xxx xxx xxx
Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor
of the safety and decent living for the laborer.
The courts (or labor officials) should nevertheless be vigilant as to whether or not the termination of the
employment contract is done by reason of expiration of the period or to cheat the employee out of office. The
latter amounts to circumvention of the law.
Seasonal Employees
Case(s):
Manila Hotel vs. CIR, 165 SCRA 562
G.R. No. L-18873 September 30, 1963
MANILA HOTEL COMPANY, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, ET AL., respondents.
Government Corporate Counsel Simeon M. Gopengco and Trial Attorney Jose S. Gomez for petitioner.
Gregorio E. Fajardo and Jesus Jaramillo for respondent Union.
Mariano B. Tuason for respondent Court.
BAUTISTA ANGELO, J.:
The Pines Hotel Employees Association filed on February 24, 1960 before the Court of Industrial Relations a
petition praying, among other things, that its employees who were working at the Pines Hotel be paid additional
compensation for overtime service rendered due to the exigencies of the business, as well as additional
compensation for Sunday, legal holiday and nighttime work.
The Manila Hotel filed its answer denying the material averments of the petition and alleging, among others,
that if overtime service was rendered the same was not authorized but was rendered voluntarily, for the
employees were interested in the "tips" offered by the patrons of the hotel.
Presiding Judge Jose S. Bautista, to whom the petition was assigned, after trial, rendered judgment stating
that the employees were entitled to the additional compensation demanded, including that for overtime work,
because an employee who renders overtime service is entitled to compensation even if he rendered it without
prior authority. A motion for reconsideration was filed on the ground that the order was contrary to law and the
evidence, but the same was denied by the industrial court en banc.1awphîl.nèt
In compliance with the order of the court, the Examining Division of the Court of Industrial Relations
submitted a report in which it stated that the amount due the employees as additional compensation for overtime
and night services rendered from January to December 31, 1958 was P32,950.69. The management filed its
objection to the report on the ground that it included 22 names of employees who were not employees of the
Pines Hotel at the time the petition was filed so that insofar as said employees are concerned the petition merely
involves a money claim which comes under the jurisdiction of the regular courts. The trial judge, however,
overruled this objection holding that, while the 22 employees were actually not in the service at the time of the
filing of the petition, they were however subsequently employed even during the pendency of the incident, and so
their claim comes within the jurisdiction of the Court of Industrial Relations. Hence, the present petition for review.
There is no merit in this appeal it appearing that while it is true that the 22 employees whose claim is
objected to were not actually in the service at the time the instant petition was filed, they were however,
subsequently reemployed even while the present incident was pending consideration by the trial court. Moreover,
it appears that the questioned employees were never separated from the service. Their status is that of regular
seasonal employees who are called to work from time to time, mostly during summer season. The nature of
their relationship with the hotel is such that during off season they are temporarily laid off but during summer
season they are re-employed, or when their services may be needed. They are not strictly speaking separated
from the service but are merely considered as on leave of absence without pay until they are re-employed. Their
employment relationship is never severed but only suspended. As such, these employees can be considered as
in the regular employment of the hotel.
WHEREFORE, the order appealed from is affirmed. No costs.
Bengzon, C.J., Padilla, Labrador, Concepcion, Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.
Reyes, J.B.L., J., took no part.
Hacienda Bino is a 236-hectare sugar plantation located at Barangay Orong, Kabankalan City, Negros Occidental,
and represented in this case by Hortencia L. Starke, owner and operator of the said hacienda.
The 76 individual respondents were part of the workforce of Hacienda Bino consisting of 220 workers, performing
various works, such as cultivation, planting of cane points, fertilization, watering, weeding, harvesting, and loading
of harvested sugarcanes to cargo trucks.[2]
On July 18, 1996, during the off-milling season, petitioner Starke issued an Order or Notice which stated, thus:
To all Hacienda Employees:
Please bear in mind that all those who signed in favor of CARP are expressing their desire to get out of
employment on their own volition.
Wherefore, beginning today, July 18, only those who did not sign for CARP will be given employment by Hda. Bino.
(Sgd.)
Hortencia Starke[3]
The respondents regarded such notice as a termination of their employment. As a consequence, they filed a
complaint for illegal dismissal, wage differentials, 13th month pay, holiday pay and premium pay for holiday, service
incentive leave pay, and moral and exemplary damages with the NLRC, Regional Arbitration Branch No. VI, Bacolod
City, on September 17, 1996.[4]
In their Joint Sworn Statement, the respondents as complainants alleged inter alia that they are regular and
permanent workers of the hacienda and that they were dismissed without just and lawful cause. They further
alleged that they were dismissed because they applied as beneficiaries under the Comprehensive Agrarian Reform
Program (CARP) over the land owned by petitioner Starke.[5]
For her part, petitioner Starke recounted that the company’s Board of Directors petitioned the Sangguniang Bayan
of Kabankalan for authority to re-classify, from agricultural to industrial, commercial and residential, the whole of
Hacienda Bino, except the portion earmarked for the CARP. She asserted that half of the workers supported the re-
classification but the others, which included the herein respondents, opted to become beneficiaries of the land
under the CARP. Petitioner Starke alleged that in July 1996, there was little work in the plantation as it was off-
season; and so, on account of the seasonal nature of the work, she issued the order giving preference to those
who supported the re-classification. She pointed out that when the milling season began in October 1996, the
work was plentiful again and she issued notices to all workers, including the respondents, informing them of the
availability of work. However, the respondents refused to report back to work. With respect to the respondents’
money claims, petitioner Starke submitted payrolls evidencing payment thereof.
On October 6, 1997, Labor Arbiter Ray Allan T. Drilon rendered a Decision,[6] finding that petitioner Starke’s notice
dated July 18, 1996 was tantamount to a termination of the respondents’ services, and holding that the petitioner
company was guilty of illegal dismissal. The dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of the complainants illegal
and ordering respondent Hortencia L. Starke, Inc. represented by Hortencia L. Starke, as President, to:
1. Reinstate the complainants to their former position without loss of seniority rights immediately
upon receipt of this decision;
2. PAY the backwages and wage differentials of the complainants, to wit:
…
in the total amount of Four Hundred Ninety-Five Thousand Eight Hundred Fifty-Two and 72/100
(P495,852.72) Pesos; and
3. TO PAY the complainants attorney's fee in the amount of Forty-Nine Thousand Five Hundred
Eighty-Five and 27/100 (P49,585.27) Pesos.
Respondents are further directed to deposit to this Office the total judgment award of FIVE HUNDRED FORTY-FIVE
THOUSAND AND FOUR HUNDRED THIRTY-SEVEN AND 99/100 (P545,437.99) PESOS within ten (10) days from
receipt of this decision.
SO ORDERED.[7]
Both the petitioners and the respondents appealed the case to the NLRC. On July 24, 1998, the NLRC affirmed with
modification the decision of the Labor Arbiter. The dispositive part of its decision reads:
WHEREFORE, premises considered, the Decision of the Labor Arbiter is AFFIRMED WITH MODIFICATIONS.
Respondent is further ordered to pay the complainants listed in the Holiday Pay Payroll the amounts due them.
SO ORDERED.[8]
A motion for reconsideration of the said decision was denied by the NLRC.[9] Dissatisfied, the respondents
appealed the case to the CA where the following issues were raised:
A. THE HONORABLE COMMISSION GRAVELY ABUSED ITS DISCRETION AND POWER BY VIOLATING THE DOCTRINE
OF “STARE DECISIS” LAID DOWN BY THE SUPREME COURT AND THE APPLICABLE LAWS AS TO THE STATUS OF THE
SUGAR WORKERS.
B. THE HONORABLE COMMISSION COMMITTED SERIOUS ERRORS BY ADMITTING THE MOTION TO DISMISS
AND/OR ANSWER TO PETITIONERS’ APPEAL MEMORANDUM DATED MARCH 26, 1998 FILED BY COUNSEL FOR THE
HEREIN RESPONDENTS INSPITE OF THE FACT THAT IT WAS FILED WAY BEYOND THE REGLEMENTARY PERIOD.
C. THE HONORABLE COMMISSION COMMITTED GRAVE ERROR IN GIVING CREDENCE TO THE SWEEPING
ALLEGATIONS OF THE COMPLAINANTS AS TO THE AWARD OF BACKWAGES AND HOLIDAY PAY WITHOUT ANY
BASIS.[10]
On July 31, 2001, the CA rendered a Decision,[11] the dispositive portion of which reads:
WHEREFORE, the decision of the National Labor Relations Commission is hereby MODIFIED by deleting the award
for holiday pay and premium pay for holidays. The rest of the Decision is hereby AFFIRMED.
SO ORDERED.[12]
The CA ruled that the concept of stare decisis is not relevant to the present case. It held that the ruling in Mercado,
Sr. v. NLRC[13] does not operate to abandon the settled doctrine that sugar workers are considered regular and
permanent farm workers of a sugar plantation owner, considering that there are facts peculiar in that case which
are not present in the case at bar. In the Mercado case, the farm laborers worked only for a definite period for a
farm owner since the area of the land was comparatively small, after which they offer their services to other farm
owners. In this case, the area of the hacienda, which is 236 hectares, simply does not allow for the respondents to
work for a definite period only.
The CA also held that the petitioners’ reliance on Bacolod-Murcia Milling Co. Inc. v. NLRC[14] was misplaced, as it
in fact, bolstered the respondents' posture that they are regular employees. In that case, the Court held that a
sugar worker may be considered as in regular employment even during those years when he is merely a seasonal
worker where the issues concern the determination of an employer-employee relationship and security of tenure.
Further, the CA held that the respondents’ appeal to the NLRC was not perfected since they failed to accompany
their notice of appeal with a memorandum of appeal, or to timely file a memorandum of appeal. Thus, as to them,
the decision of the Labor Arbiter became final and executory. The NLRC, therefore, gravely abused its discretion
when it modified the decision of the Labor Arbiter and awarded to the respondents holiday pay and premium for
holiday pay. Finally, the CA affirmed the award of backwages, finding no circumstance that would warrant a
reversal of the findings of the Labor Arbiter and NLRC on this point. [15]
On September 24, 2001, the CA denied the motion for reconsideration filed by the petitioners due to their failure
to indicate the date of the receipt of the decision to determine the timeliness of the motion.[16]
Petitioner Starke contends that the established doctrine that seasonal employees are regular employees had been
overturned and abandoned by Mercado, Sr. v. NLRC.[18] She stresses that in that case, the Court held that
petitioners therein who were sugar workers, are seasonal employees and their employment legally ends upon
completion of the project or the season. Petitioner Starke argues that the CA violated the doctrine of stare decisis
in not applying the said ruling. She asserts that the respondents, who are also sugar workers, are seasonal
employees; hence, their employment can be terminated at the end of the season and such termination cannot be
considered an illegal dismissal. Petitioner Starke maintains that the determination of whether the workers are
regular or seasonal employees is not dependent on the number of hectares operated upon by them, or the
number of workers, or the capitalization involved, but rather, in the nature of the work. She asserts that the
respondents also made their services available to the neighboring haciendas. To buttress her contention that the
respondents are seasonal employees, petitioner Starke cites Rep. Act 6982, An Act Strengthening the Social
Amelioration Program in the Sugar Industry, Providing the Mechanics for its Implementation, and for other
Purposes, which recognizes the seasonal nature of the work in the sugar industry.[19]
Petitioner Starke also takes exception to the denial of her motion for reconsideration due to failure to state the
date of the receipt of the decision. She asserts that a denial of a motion for reconsideration due to such cause is
merely directory and not mandatory on the part of the CA. Considering that the amount involved in this case and
the fact that the motion was filed within the reglementary period, the CA should have considered the motion for
reconsideration despite such procedural lapse.[20]
On the other hand, the respondents aver that the petitioners erroneously invoke the doctrine of stare decisis since
the factual backdrop of this case and the Mercado case is not similar. The respondents posit that the Mercado
case ruled on the status of employment of farm laborers who work only for a definite period of time for a farm
owner, after which they offer their services to other farm owners. Contrarily, the respondents contend that they
do not work for a definite period but throughout the whole year, and do not make their services available to other
farm owners. Moreover, the land involved in the Mercado case is comparatively smaller than the sugar land
involved in this case. The respondents insist that the vastness of the land involved in this case requires the workers
to work on a year-round basis, and not on an “on-and-off” basis like the farm workers in the Mercado case.
Finally, the respondents maintain that the requirement that the date of receipt of the decision should be indicated
in the motion for reconsideration is mandatory and jurisdictional and, if not complied with, the court must deny
the motion outright.[21]
On the substantial issue of whether the respondents are regular or seasonal employees, the petitioners contend
that the CA violated the doctrine of stare decisis by not applying the ruling in the Mercado case that sugar workers
are seasonal employees. We hold otherwise. Under the doctrine of stare decisis, when a court has laid down a
principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future
cases in which the facts are substantially the same.[22] Where the facts are essentially different, however, stare
decisis does not apply, for a perfectly sound principle as applied to one set of facts might be entirely inappropriate
when a factual variance is introduced.[23]
The CA correctly found that the facts involved in this case are different from the Mercado case; therefore, the
ruling in that case cannot be applied to the case at bar, thus:
We do not find the concept of stare decisis relevant in the case at bench. For although in the Mercado case, the
Supreme Court held the petitioners who were sugar workers not to be regular but seasonal workers, nevertheless,
the same does not operate to abandon the settled doctrine of the High Court that sugar workers are considered
regular and permanent farm workers of a sugar plantation owner, the reason being that there are facts present
that are peculiar to the Mercado case. The disparity in facts between the Mercado case and the instant case is best
exemplified by the fact that the former decision ruled on the status of employment of farm laborers, who, as found
by the labor arbiter, work only for a definite period for a farm worker, after which they offer their services to other
farm owners, considering the area in question being comparatively small, comprising of seventeen and a half (17½)
hectares of land, such that the planting of rice and sugar cane thereon could not possibly entail a whole year
operation. The herein case presents a different factual condition as the enormity of the size of the sugar
hacienda of petitioner, with an area of two hundred thirty-six (236) hectares, simply do not allow for private
respondents to render work only for a definite period.
Indeed, in a number of cases, the Court has recognized the peculiar facts attendant in the Mercado case. In
Abasolo v. NLRC,[24] and earlier, in Philippine Tobacco Flue-Curing & Redrying Corporation v. NLRC,[25] the Court
made the following observations:
… In Mercado, although respondent constantly availed herself of the petitioners’ services from year to year, it was
clear from the facts therein that they were not in her regular employ. Petitioners therein performed different
phases of agricultural work in a given year. However, during that period, they were free to work for other farm
owners, and in fact they did. In other words, they worked for respondent, but were nevertheless free to contract
their services with other farm owners. The Court was thus emphatic when it ruled that petitioners were mere
project employees, who could be hired by other farm owners….[26]
Recently, the Court reiterated the same observations in Hacienda Fatima v. National Federation of Sugarcane
Workers-Food and General Trade[27] and added that the petitioners in the Mercado case were “not hired regularly
and repeatedly for the same phase/s of agricultural work, but on and off for any single phase thereof.”
In this case, there is no evidence on record that the same particulars are present. The petitioners did not present
any evidence that the respondents were required to perform certain phases of agricultural work for a definite
period of time. Although the petitioners assert that the respondents made their services available to the
neighboring haciendas, the records do not, however, support such assertion.
The primary standard for determining regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual trade or business of the employer.[28] There is no
doubt that the respondents were performing work necessary and desirable in the usual trade or business of an
employer. Hence, they can properly be classified as regular employees.
For respondents to be excluded from those classified as regular employees, it is not enough that they perform
work or services that are seasonal in nature. They must have been employed only for the duration of one
season.[29] While the records sufficiently show that the respondents’ work in the hacienda was seasonal in
nature, there was, however, no proof that they were hired for the duration of one season only. In fact, the
payrolls,[30] submitted in evidence by the petitioners, show that they availed the services of the respondents
since 1991. Absent any proof to the contrary, the general rule of regular employment should, therefore, stand.
It bears stressing that the employer has the burden of proving the lawfulness of his employee’s dismissal. [31]
On the procedural issue, petitioner Starke avers that the CA should not have denied outright her motion for
reconsideration, considering its timely filing and the huge amount involved. This contention is already moot.
Petitioner Starke has already aired in this petition the arguments in her motion for reconsideration of the CA
decision, which have been adequately addressed by this Court. Assuming arguendo that the CA indeed failed to
consider the motion for reconsideration, petitioner Starke was not left without any other recourse.[32]
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decision of the Court of Appeals, dated July 31,
2001, and its Resolution dated September 24, 2001 are hereby AFFIRMED.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.
This petition assails the Decision2 of the Court of Appeals dated 14 March 2005 in CA-G.R. SP No. 81140 entitled,
"Poseidon Fishing/Terry De Jesus v. National Labor Relations Commission and Jimmy S. Estoquia" which affirmed
that of the National Labor Relations Commission (NLRC). The NLRC had affirmed with modification the Decision
dated 5 December 2000 of Labor Arbiter Melquiades Sol D. Del Rosario in NLRC-NCR Case No. 00-07-03625-00,
declaring private respondent to have been illegally dismissed and entitled to backwages and separation pay.
As thoroughly told by the Court of Appeals and the Labor Arbiter, the particulars are beyond dispute:
Petitioner Poseidon Fishing is a fishing company engaged in the deep-sea fishing industry. Its various vessels catch
fish in the outlying islands of the Philippines, which are traded and sold at the Navotas Fish Port. One of its boat
crew was private respondent Jimmy S. Estoquia.3 Petitioner Terry de Jesus is the manager of petitioner company.
Private respondent was employed by Poseidon Fishing in January 1988 as Chief Mate. After five years, he was
promoted to Boat Captain. In 1999, petitioners, without reason, demoted respondent from Boat Captain to Radio
Operator of petitioner Poseidon.4 As a Radio Operator, he monitored the daily activities in their office and
recorded in the duty logbook the names of the callers and time of their calls. 5
On 3 July 2000, private respondent failed to record a 7:25 a.m. call in one of the logbooks. However, he was able to
record the same in the other logbook. Consequently, when he reviewed the two logbooks, he noticed that he was
not able to record the said call in one of the logbooks so he immediately recorded the 7:25 a.m. call after the 7:30
a.m. entry.6
Around 9:00 o’clock in the morning of 4 July 2000, petitioner Terry de Jesus detected the error in the entry in the
logbook. Subsequently, she asked private respondent to prepare an incident report to explain the reason for the
said oversight.7
At around 2:00 o’clock in the afternoon of that same day, petitioner Poseidon’s secretary, namely Nenita Laderas,
summoned private respondent to get his separation pay amounting to Fifty-Five Thousand Pesos (P55,000.00).
However, he refused to accept the amount as he believed that he did nothing illegal to warrant his immediate
discharge from work.8
Rising to the occasion, private respondent filed a complaint for illegal dismissal on 11 July 2000 with the Labor
Arbiter, alleging nonpayment of wages with prayer for back wages, damages, attorney’s fees, and other monetary
benefits.
In private respondent’s position paper, he averred that petitioner Poseidon employed him as a Chief Mate
sometime in January 1988. He claimed that he was promoted to the position of Boat Captain five years after.
However, in 1999, he was demoted from Boat Captain to Radio Operator without any reason and shortly, he was
terminated without just cause and without due process of law.
Conversely, petitioners Poseidon and Terry de Jesus strongly asserted that private respondent was a contractual or
a casual employee whose services could be terminated at the end of the contract even without a just or authorized
cause in view of Article 280 of the Labor Code, which provides:
Art. 280. Regular and Casual Employment. – The provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the employment is for the duration of the
season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any
employee who has rendered at least one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed and his employment shall
continue while such actually exists. (Emphasis supplied.)
Petitioners further posited that when the private respondent was engaged, it was made clear to him that he was
being employed only on a "por viaje" or per trip basis and that his employment would be terminated at the end of
the trip for which he was being hired. As such, the private respondent could not be entitled to separation pay and
other monetary claims.
On 5 December 2000, following the termination of the hearing of the case, the Labor Arbiter decided in favor of
private respondent. The Labor Arbiter held that even if the private respondent was a casual employee, he became
a regular employee after a period of one year and, thereafter, had attained tenurial security which could only be
lost due to a legal cause after observing due process. The dispositive portion of the Decision reads:
CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered finding complainant to have been illegally
dismissed and so must immediately be reinstated to his former position as radio operator and paid by
respondent[s] in solidum his backwages which as of December 3, 2000 had already accumulated in the sum of
P35,880.00 plus his unpaid one (1) week salary in the sum of P1,794.00.
Respondents are further ordered to pay attorney’s fees in a sum equivalent to 10% of the awarded claims. 9
Consequently, the petitioners filed their Memorandum of Appeal with the NLRC for the reversal of the aforesaid
decision. On 24 September 2002, the NLRC affirmed the decision of the Labor Arbiter with the modification, inter
alia, that: (a) the private respondent would be paid his separation pay equivalent to one-half of his monthly pay for
every year of service that he has rendered in lieu of reinstatement; and (b) an amount equivalent to six months
salary should be deducted from his full backwages because it was his negligence in the performance of his work
that brought about his termination. It held:
Petitioners moved for the reconsideration of the NLRC decision, but were denied in a Resolution dated 29 August
2003.
Petitioners filed a Petition for Certiorari with the Court of Appeals, imputing grave abuse of discretion, but the
Court of Appeals found none. The following is the fallo of the decision:
WHEREFORE, the foregoing premises considered, the instant petition is hereby DENIED. 11
In a last attempt at vindication, petitioners filed the present petition for review with the following assignment of
errors:
I.
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENT WAS A REGULAR
EMPLOYEE WHEN IN TRUTH HE WAS A CONTRACTUAL/PROJECT/SEASONAL EMPLOYEE.
II.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RESPONDENT WAS ILLEGALLY
DISMISSED FROM EMPLOYMENT.
III.
THE HONORABLE COURT OF APPEALS ERRED IN NOT CONSIDERING THE RESPONDENT A SEASONAL
EMPLOYEE AND APPLYING THE RULING IN RJL MARTINEZ FISHING CORPORATION vs. NLRC THAT "the
activity of fishing is a continuous process and could hardly be considered as seasonal in nature."
IV.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RESPONDENT IS ENTITLED TO
BACKWAGES, SEPARATION PAY, ATTORNEY’S FEES AND OTHER MONETARY BENEFITS.
V.
THE HONORABLE COURT OF APPEALS ERRED IN NOT RESOLVING THE PRAYER FOR THE ISsuance of
preliminary injunction and/or temporary restraining order. 12
The fundamental issue entails the determination of the nature of the contractual relationship between petitioners
and private respondent, i.e., was private respondent a regular employee at the time his employment was
terminated on 04 July 2000?
Asserting their right to terminate the contract with private respondent per the "Kasunduan" with him, petitioners
pointed to the provision thereof stating that he was being employed only on a ‘’por viaje’’ basis and that his
employment would be terminated at the end of the trip for which he was being hired, to wit:
NA, kami ay sumasang-ayon na MAGLINGKOD at GUMAWA ng mga gawaing magmula sa pag-alis ng lantsa sa
pondohan sa Navotas patungo sa palakayahan; pabalik sa pondohan ng lantsa sa Navotas hanggang sa paghango
ng mga kargang isda.13
Petitioners lament that fixed-term employment contracts are recognized as valid under the law notwithstanding
the provision of Article 280 of the Labor Code. Petitioners theorize that the Civil Code has always recognized the
validity of contracts with a fixed and definite period, and imposes no restraints on the freedom of the parties to fix
the duration of the contract, whatever its object, be it species, goods or services, except the general admonition
against stipulations contrary to law, morals, good customs, public order and public policy. Quoting Brent School
Inc. v. Zamora,14 petitioners are hamstrung on their reasoning that under the Civil Code, fixed-term employment
contracts are not limited, as they are under the present Labor Code, to those that by their nature are seasonal or
for specific projects with pre-determined dates of completion as they also include those to which the parties by
free choice have assigned a specific date of termination. Hence, persons may enter into such contracts as long as
they are capacitated to act, petitioners bemoan.
Petitioners’ construal of Brent School, Inc. v. Zamora, has certainly gone astray. The subject of scrutiny in the Brent
case was the employment contract inked between the school and one engaged as its Athletic Director. The
contract fixed a specific term of five years from the date of execution of the agreement. This Court upheld the
validity of the contract between therein petitioner and private respondent, fixing the latter’s period of
employment. This Court laid down the following criteria for judging the validity of such fixed-term contracts, to
wit:
Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article
280 of the Labor Code clearly appears to have been, as already observed, to prevent circumvention of the
employee’s right to be secure in his tenure, the clause in said article indiscriminately and completely ruling out all
written or oral agreements conflicting with the concept of regular employment as defined therein should be
construed to refer to the substantive evil that the Code itself has singled out: agreements entered into precisely to
circumvent security of tenure. It should have no application to instances where a fixed period of employment was
agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being
brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the
law would be made to apply to purposes other than those explicitly stated by its framers; it thus becomes pointless
and arbitrary, unjust in its effects and apt to lead to absurd and unintended consequences. 15 (Emphasis supplied.)
Brent cited some familiar examples of employment contracts which may neither be for seasonal work nor for
specific projects, but to which a fixed term is an essential and natural appurtenance, i.e., overseas employment
contracts, appointments to the positions of dean, assistant dean, college secretary, principal, and other
administrative offices in educational institutions, which are by practice or tradition rotated among the faculty
members, and where fixed terms are a necessity without which no reasonable rotation would be possible. 16 Thus,
in Brent, the acid test in considering fixed-term contracts as valid is: if from the circumstances it is apparent that
periods have been imposed to preclude acquisition of tenurial security by the employee, they should be
disregarded for being contrary to public policy.
On the same tack as Brent, the Court in Pakistan International Airlines Corporation v. Ople,17 ruled in this wise:
It is apparent from Brent School that the critical consideration is the presence or absence of a substantial indication
that the period specified in an employment agreement was designed to circumvent the security of tenure of
regular employees which is provided for in Articles 280 and 281 of the Labor Code. This indication must ordinarily
rest upon some aspect of the agreement other than the mere specification of a fixed term of the employment
agreement, or upon evidence aliunde of the intent to evade.
Consistent with the pronouncements in these two earlier cases, the Court, in Cielo v. National Labor Relations
Commission,18 did not hesitate to nullify employment contracts stipulating a fixed term after finding that "the
purpose behind these individual contracts was to evade the application of the labor laws."
In the case under consideration, the agreement has such an objective - to frustrate the security of tenure of private
respondent- and fittingly, must be nullified. In this case, petitioners’ intent to evade the application of Article 280
of the Labor Code is unmistakable. In a span of 12 years, private respondent worked for petitioner company first as
a Chief Mate, then Boat Captain, and later as Radio Operator. His job was directly related to the deep-sea fishing
business of petitioner Poseidon. His work was, therefore, necessary and important to the business of his employer.
Such being the scenario involved, private respondent is considered a regular employee of petitioner under Article
280 of the Labor Code, the law in point, which provides:
Art. 280. Regular and Casual Employment. – The provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the employment is for the duration of the
season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any
employee who has rendered at least one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed and his employment shall
continue while such actually exists. (Emphasis supplied.)
Moreover, unlike in the Brent case where the period of the contract was fixed and clearly stated, note that in the
case at bar, the terms of employment of private respondent as provided in the Kasunduan was not only vague, it
also failed to provide an actual or specific date or period for the contract. As adroitly observed by the Labor
Arbiter:
There is nothing in the contract that says complainant, who happened to be the captain of said vessel, is a casual,
seasonal or a project worker. The date July 1 to 31, 1998 under the heading "Pagdating" had been placed there
merely to indicate the possible date of arrival of the vessel and is not an indication of the status of employment of
the crew of the vessel.
Actually, the exception under Article 280 of the Labor Code in which the respondents have taken refuge to justify
its position does not apply in the instant case. The proviso, "Except where the employment has been fixed for a
specific project or undertaking the completion or determination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season." (Article 280 Labor Code), is inapplicable because the very contract
adduced by respondents is unclear and uncertain. The kasunduan does not specify the duration that complainant
had been hired x x x.19 (Emphasis supplied.)
Furthermore, as petitioners themselves admitted in their petition before this Court, private respondent was
repeatedly hired as part of the boat’s crew and he acted in various capacities onboard the vessel. In Integrated
Contractor and Plumbing Works, Inc. v. National Labor Relations Commission, 20 we held that the test to determine
whether employment is regular or not is the reasonable connection between the particular activity performed by
the employee in relation to the usual business or trade of the employer. And, if the employee has been performing
the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the
repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of
that activity to the business. 21
In Bustamante v. National Labor Relations Commission, 22 the Court expounded on what are regular employees
under Article 280 of the Labor Code, viz:
It is undisputed that petitioners were illegally dismissed from employment. Article 280 of the Labor Code, states:
ART. 280. Regular and Casual Employment. - The provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the employment is for the duration of the
season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, that, any
employee who has rendered at least one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed and his employment shall
continue while such activity exists.
This provision draws a line between regular and casual employment, a distinction however often abused by
employers. The provision enumerates two (2) kinds of employees, the regular employees and the casual
employees. The regular employees consist of the following:
1) those engaged to perform activities which are usually necessary or desirable in the usual business or
trade of the employer; and
2) those who have rendered at least one year of service whether such service is continuous or broken. 23
Ostensibly, in the case at bar, at different times, private respondent occupied the position of Chief Mate, Boat
Captain, and Radio Operator. In petitioners’ interpretation, however, this act of hiring and re-hiring actually
highlight private respondent’s contractual status saying that for every engagement, a fresh contract was entered
into by the parties at the outset as the conditions of employment changed when the private respondent filled in a
different position. But to this Court, the act of hiring and re-hiring in various capacities is a mere gambit employed
by petitioner to thwart the tenurial protection of private respondent. Such pattern of re-hiring and the recurring
need for his services are testament to the necessity and indispensability of such services to petitioners’ business or
trade.24
Petitioners would brush off private respondent’s length of service by stating that he had worked for the company
merely for several years25 and that in those times, his services were not exclusive to petitioners. On the other hand,
to prove his claim that he had continuously worked for petitioners from 1988 to 2000, private respondent
submitted a copy of his payroll26 from 30 May 1988 to October 1988 and a copy of his SSS Employees
Contributions27 as of the year 2000. These documents were submitted by private respondent in order to
benchmark his claim of 12 years of service. Petitioners, however, failed to submit the pertinent employee files,
payrolls, records, remittances and other similar documents which would show that private respondent’s work was
not continuous and for less than 12 years. Inasmuch as these documents are not in private respondent’s
possession but in the custody and absolute control of petitioners, their failure to refute private respondent’s
evidence or even categorically deny private respondent’s allegations lead us to no other conclusion than that
private respondent was hired in 1988 and had been continuously in its employ since then. Indeed, petitioners’
failure to submit the necessary documents, which as employers are in their possession, gives rise to the
presumption that their presentation is prejudicial to its cause. 28
To recapitulate, it was after 12 long years of having private respondent under its wings when petitioners, possibly
sensing a brewing brush with the law as far as private respondent’s employment is concerned, finally found a
loophole to kick private respondent out when the latter failed to properly record a 7:25 a.m. call. Capitalizing on
this faux pas, petitioner summarily dismissed private respondent. On this note, we disagree with the finding of the
NLRC that private respondent was negligent on account of his failure to properly record a call in the log book. A
review of the records would ineluctably show that there is no basis to deduct six months’ worth of salary from the
total separation pay that private respondent is entitled to. We note further that the NLRC’s finding clashes with
that of the Labor Arbiter which found no such negligence and that such inadvertence on the part of private
respondent, at best, constitutes simple negligence punishable only with admonition or suspension for a day or
two.
As the records bear out, private respondent himself seasonably realized his oversight and in no time recorded the
7:25 a.m. call after the 7:30 a.m. call. Gross negligence under Article 282 of the Labor Code, 29 as amended,
connotes want of care in the performance of one’s duties, while habitual neglect implies repeated failure to
perform one’s duties for a period of time, depending upon the circumstances. 30 Here, it is not disputed that private
respondent corrected straight away the recording of the call and petitioners failed to prove the damage or injury
that such inadvertence caused the company. We find, as the Labor Arbiter 31 had found, that there is no sufficient
evidence on record to prove private respondent’s negligence, gross or simple for that matter, in the performance
of his duties to warrant a reduction of six months salary from private respondent’s separation pay. Moreover,
respondent missed to properly record, not two or three calls, but just a single call. It was also a first infraction on
the part of private respondent, not to mention that the gaffe, if at all, proved to be innocuous. Thus, we find such
slip to be within tolerable range. After all, is it not a rule 32 that in carrying out and interpreting the provisions of the
Labor Code and its implementing regulations, the workingman's welfare should be primordial?
Petitioners next assert that deep-sea fishing is a seasonal industry because catching of fish could only be
undertaken for a limited duration or seasonal within a given year. Thus, according to petitioners, private
respondent was a seasonal or project employee.
We are not won over.
As correctly pointed out by the Court of Appeals, the "activity of catching fish is a continuous process and could
hardly be considered as seasonal in nature."33 In Philex Mining Corp. v. National Labor Relations Commission, 34 we
defined project employees as those workers hired (1) for a specific project or undertaking, and (2) the completion
or termination of such project has been determined at the time of the engagement of the employee. The principal
test for determining whether particular employees are "project employees" as distinguished from "regular
employees," is whether or not the "project employees" were assigned to carry out a "specific project or
undertaking," the duration and scope of which were specified at the time the employees were engaged for that
project. In this case, petitioners have not shown that private respondent was informed that he will be assigned to a
"specific project or undertaking." As earlier noted, neither has it been established that he was informed of the
duration and scope of such project or undertaking at the time of their engagement.
More to the point, in Maraguinot, Jr. v. National Labor Relations Commission,35 we ruled that once a project or
work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for
the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business
or trade of the employer, then the employee must be deemed a regular employee.
In fine, inasmuch as private respondent’s functions as described above are no doubt "usually necessary or
desirable in the usual business or trade" of petitioner fishing company and he was hired continuously for 12 years
for the same nature of tasks, we are constrained to say that he belongs to the ilk of regular employee. Being one,
private respondent’s dismissal without valid cause was illegal. And, where illegal dismissal is proven, the worker is
entitled to back wages and other similar benefits without deductions or conditions. 36
Indeed, it behooves this Court to be ever vigilant in checking the unscrupulous efforts of some of our
entrepreneurs, primarily aimed at maximizing their return on investments at the expense of the lowly
workingman.37
WHEREFORE, the present petition is hereby DENIED. The Decision of the Court of Appeals dated 14 March 2005 in
CA-G.R. SP No. 81140 is hereby AFFIRMED WITH MODIFICATION by deleting the reduction of an amount equivalent
to six months of pay from private respondent’s separation pay. The case is remanded to the Labor Arbiter for
further proceedings solely for the purpose of determining the monetary liabilities of petitioners in accordance with
the decision. The Labor Arbiter is ORDERED to submit his compliance thereon within thirty (30) days from notice of
this decision, with copies furnished to the parties. Costs against petitioners.
SO ORDERED.
VII. PROBATIONARY EMPLOYEES – Arts. 281, 61 Labor Code, Rule I, Sec. 6, Omnibus Rules
A. Definition
Case(s):
International Catholic Migration Commission vs. NLRC, 169 SCRA 508
G.R. No. 72222 January 30, 1989
INTERNATIONAL CATHOLIC MIGRATION COMMISSION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and BERNADETTE GALANG, respondents.
FERNAN, C.J.:
The issue to be resolved in the instant case is whether or not an employee who was terminated during the
probationary period of her employment is entitled to her salary for the unexpired portion of her six-month
probationary employment.
The facts of the case are undisputed.
Petitioner International Catholic Migration Commission (ICMC), a non-profit organization dedicated to refugee
service at the Philippine Refugee Processing Center in Morong, Bataan engaged the services of private respondent
Bernadette Galang on January 24, 1983 as a probationary cultural orientation teacher with a monthly salary of
P2,000.00.
Three (3) months thereafter, or on April 22, 1983, private respondent was informed, orally and in writing, that her
services were being terminated for her failure to meet the prescribed standards of petitioner as reflected in the
performance evaluation of her supervisors during the teacher evaluation program she underwent along with other
newly-hired personnel.
Despite her termination, records show that private respondent did not leave the ICMC refugee camp at Morong,
Bataan, but instead stayed thereat for a few days before leaving for Manila, during which time, she was observed
by petitioner to be allegedly acting strangely.
On July 24, 1983, private respondent returned to Morong, Bataan on board the service bus of petitioner to
accomplish the clearance requirements. In the evening of that same day, she was found at the Freedom Park of
Morong wet and shivering from the rain and acting bizarrely. She was then taken to petitioner's hospital where she
was given the necessary medical attention.
Two (2) days later, or on July 26, 1983, she was taken to her residence in Manila aboard petitioner's service bus.
Thru a letter, her father expressed appreciation to petitioner for taking care of her daughter. On that same day, her
father received, on her behalf, the proportionate amount of her 13th month pay and the equivalent of her two
week pay.
On August 22, 1983, private respondent filed a complaint 1 for illegal dismissal, unfair labor practice and unpaid
wages against petitioner with the then Ministry of Labor and Employment, praying for reinstatement with
backwages, exemplary and moral damages.
On October 8, 1983, after the parties submitted their respective position papers and other pleadings, Labor Arbiter
Pelagio A. Carpio rendered his decision dismissing the complaint for illegal dismissal as well as the complaint for
moral and exemplary damages but ordering the petitioner to pay private respondent the sum of P6,000.00 as
payment for the last three (3) months of the agreed employment period pursuant to her verbal contract of
employment. 2
Both parties appealed the decision to the National Labor Relations Commission. In her appeal, private respondent
contended that her dismissal was illegal considering that it was effected without valid cause. On the other hand,
petitioner countered that private respondent who was employed for a probationary period of three (3) months
could not rightfully be awarded P6,000.00 because her services were terminated for failure to qualify as a regular
employee in accordance with the reasonable standards prescribed by her employer.
On August 22, 1985, the NLRC, by a majority vote of Commissioners Guillermo C. Medina and Gabriel M.
Gatchalian, sustained the decision of the Labor Arbiter and thus dismissed both appeals for lack of merit.
Commissioner Miguel Varela, on the other hand, dissented and voted for the reversal of the Labor Arbiter's
decision for lack of legal basis considering that the termination of services of complainant, now private
respondent, was effected during her probationary period on valid grounds made known to her. 3
Dissatisfied, petitioner filed the instant petition.
Petitioner maintains that private respondent is not entitled to the award of salary for the unexpired three-month
portion of the probationary period since her services were terminated during such period when she failed to
qualify as a regular employee in accordance with the reasonable standards prescribed by petitioner; that having
been terminated on valid grounds during her probationary period, or specifically on April 24, 1983, petitioner is not
liable to private respondent for services not rendered during the unexpired three-month period, otherwise, unjust
enrichment of her part would result; that under Article 282 (now Article 281) of the Labor Code, if the employer
finds that the probationary employees does not meet the standards of employment set for the position, the
probationary employee may be terminated at any time within the six-month period, without need of exhausting
raid entire six-month term. 4
The Solicitor General, on the other hand, contends that a probationary employment for six (6) months, as in the
case of herein private respondent, is an employment for a definite period of time and, as such, the employer is
duty-bound to allow the probationary employee to work until the termination of the probationary employment
before her re- employment could be refused; that when petitioner disrupted the probationary employment of
private respondent, without giving her the opportunity to improve her method of instruction within the said
period, it held itself liable to pay her salary for the unexpired portion of such employment by way of damages
pursuant to the general provisions of civil law that he who in any manner contravenes the terms of his obligation
without any valid cause shall be liable for damages; 5 that, as held in Madrigal v. Ogilvie, et al, 6 the damages so
awarded are equivalent to her salary for the unexpired portion of her employment for a fixed period. 7
We find for petitioner.
There is justifiable basis for the reversal of public respondent's award of salary for the unexpired three-month
portion of private respondent's six-month probationary employment in the light of its express finding that there
was no illegal dismissal. There is no dispute that private respondent was terminated during her probationary
period of employment for failure to qualify as a regular member of petitioner's teaching staff in accordance with its
reasonable standards. Records show that private respondent was found by petitioner to be deficient in classroom
management, teacher-student relationship and teaching techniques. 8 Failure to qualify as a regular employee in
accordance with the reasonable standards of the employer is a just cause for terminating a probationary employee
specifically recognized under Article 282 (now Article 281) of the Labor Code which provides thus:
ART. 281. Probationary employment. — Probationary employment shall not exceed six months
from the date the employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employer who has been engaged in a
probationary basis may be terminated for a just cause or when he fails to qualify as a regular
employer in accordance with reasonable standard made known by the employer to the employer
at the time of his engagement. An employee who is allowed to work after a probationary period
shall be considered a regular employee. (Emphasis supplied.)
It must be noted that notwithstanding the finding of legality of the termination of private respondent, public
respondent justified the award of salary for the unexpired portion of the probationary employment on the ground
that a probationary employment for six (6) months is an employment for a "definite period" which requires the
employer to exhaust the entire probationary period to give the employee the opportunity to meet the required
standards.
The legal basis of public respondent is erroneous. A probationary employee, as understood under Article 282 (now
Article 281) of the Labor Code, is one who is on trial by an employer during which the employer determines
whether or not he is qualified for permanent employment. A probationary appointment is made to afford the
employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he will
become a proper and efficient employee. 9 The word "probationary", as used to describe the period of
employment, implies the purpose of the term or period, but not its length. 10
Being in the nature of a "trial period" 11 the essence of a probationary period of employment fundamentally lies in
the purpose or objective sought to be attained by both the employer and the employee during said period. The
length of time is immaterial in determining the correlative rights of both in dealing with each other during said
period. While the employer, as stated earlier, observes the fitness, propriety and efficiency of a probationer to
ascertain whether he is qualified for permanent employment, the probationer, on the other, seeks to prove to the
employer, that he has the qualifications to meet the reasonable standards for permanent employment.
It is well settled that the employer has the right or is at liberty to choose who will be hired and who will be denied
employment. In that sense, it is within the exercise of the right to select his employees that the employer may set
or fix a probationary period within which the latter may test and observe the conduct of the former before hiring
him permanently. The equality of right that exists between the employer and the employee as to the nature of the
probationary employment was aptly emphasized by this Court in Grand Motor Parts Corporation v. Minister of
Labor, et al., 130 SCRA 436 (1984), citing the 1939 case of Pampanga Bus. Co., Inc. v. Pambusco Employees Union,
Inc. 68 Phil. 541, thus:
The right of a laborer to sell his labor to such persons as he may choose is, in its essence, the
same as the right of an employer to purchase labor from any person whom it chooses. The
employer and the employee have thus an equality of right guaranteed by the Constitution. If the
employer can compel the employee to work against the latter's will, this is servitude. If the
employee can compel the employer to give him work against the employer's will, this is
oppression.
As the law now stands, Article 281 of the Labor Code gives ample authority to the employer to terminate a
probationary employee for a just cause or when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of his engagement. There is
nothing under Article 281 of the Labor Code that would preclude the employer from extending a regular or a
permanent appointment to an employee once the employer finds that the employee is qualified for regular
employment even before the expiration of the probationary period. Conversely, if the purpose sought by the
employer is neither attained nor attainable within the said period, Article 281 of the Labor Code does not likewise
preclude the employer from terminating the probationary employment on justifiable causes as in the instant case.
We find unmeritorious, therefore, public respondents argument that the security of tenure of probationary
employees within the period of their probation, as in the case of herein private respondent, justified the award of
salary for the unexpired portion of her probationary employment. The termination of private respondent
predicated on a just cause negates the application in this case of the pronouncement in the case of Biboso v.
Victories Milling Co., Inc., 12 on the right of security of tenure of probationary employees.
Upon inquiry by the then Ministry of Labor and Employment as a consequence of the illegal dismissal case filed by
private respondent before it, docketed as Case No. NLRC NCR-8-3786-83, it was found that there was no illegal
dismissal involved in the case, hence, the circumvention of the rights of the probationary employees sought to be
regulated as pointed out in Biboso v. Victorias Milling Co., Inc., 13 is wanting.
There was no showing, as borne out by the records, that there was circumvention of the rights of private
respondent when she was informed of her termination. Her dismissal does not appear to us as arbitrary, fanciful or
whimsical. Private respondent was duly notified, orally and in writing, that her services as cultural orientation
teacher were terminated for failure to meet the prescribed standards of petitioner as reflected in the performance
evaluation conducted by her supervisors during the teacher evaluating program. The dissatisfaction of petitioner
over the performance of private respondent in this regard is a legitimate exercise of its prerogative to select whom
to hire or refuse employment for the success of its program or undertaking. More importantly, private respondent
failed to show that there was unlawful discrimination in the dismissal.
It was thus a grave abuse of discretion on the part of public respondent to order petitioner to pay private
respondent her salary for the unexpired three-month portion of her six-month probationary employment when
she was validly terminated during her probationary employment. To sanction such action would not only be unjust,
but oppressive on the part of the employer as emphasized in Pampanga Bus Co., Inc., v. Pambusco Employer
Union, Inc. 14
WHEREFORE, in view of the foregoing, the petition is GRANTED. The Resolution of the National Labor Relations
Commission dated August 22, 1985, is hereby REVERSED and SET ASIDE insofar as it ordered petitioner to pay
private respondent her P6,000.00 salary for the unexpired portion of her six-month probationary employment. No
cost.
SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.
B. Purpose
Case(s):
Philemploy Services and Resources, Inc. vs. Rodriguez, 486 SCRA 302
G.R. No. 152616 March 31, 2006
PHILEMPLOY SERVICES AND RESOURCES, INC., Petitioner,
vs.
ANITA RODRIGUEZ, Respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 to annul the Decision2 dated 15 March 2002 of the Court of Appeals in CA-G.R. SP No.
54386. The Court of Appeals reversed the 11 June 1998 Decision 3 and the 3 February 1999 Resolution4 of the
National Labor Relations Commission ("NLRC") in NLRC NCR Case No. ADJ(L)-95-01-0306. The Court of Appeals
reinstated the 26 December 1996 Decision of Labor Arbiter Manuel R. Caday.
The Facts
The facts, as summarized by the Labor Arbiter and adopted in toto by the Court of Appeals and the NLRC, are as
follows:
In March 1994, complainant Anita Rodriguez applied with respondent Philempl[o]y Services and Resources, Inc. at
36 Main Ave. cor. 8th Ave., Cubao, Quezon City for deployment abroad as a factory worker.
After her interview, complainant secured the necessary documentation for her travel, such as passport, medical
certificate, NBI clearance, among others, to which she expended the sum of P2,000.00.
In December 1994, she set out from Cotabato to Manila to report to the office of respondent after she had
received a telegram (Annex "A") requiring her to report.
Ms. Brenda Castro, an official of respondent, demanded from complainant the sum of P60,000.00 as placement
fee. Since she could not afford such amount, they agreed that she would have to pay initially the amount of
P30,000.00 as downpayment and the balance of P30,000.00, plus 7% interest every month thereafter through
salary deductions.
After she had pledged her motorcycle and a necklace, she paid Ms. Castro the amount of P30,000.00 plus 10%
interest on December 29, 1994, but she was not issued any receipt.
Thereafter, she executed a contract of employment as a domestic helper of one Chao Hung Ching of Taipei, Taiwan
with a monthly salary of NT$14,010, plus free food and accommodation for a period of one (1) year. (Annexes "A"
and "B")
On January 11, 1995, she again reported to the office of respondent where another sum of P900.00 for Medicare
was required on complainant. After she had pledged her College ring, she paid respondent said amount.
On January 13, 1995, she was deployed by respondent to the latter’s principal arriving in Taiwan later that day.
(Annex "D")
As such domestic helper, she worked from 5:00 a.m. until 10:00 p.m. Among her chores were to carwash the
vehicle of her master, cook the meals, housecleaning and babysitting.
For her desire to improve her lot, as well as those she left behind, she weathered all the hardships and loneliness
working abroad.
In the morning of January 24, 1995, she wrote her family in the Philippines of her difficulties as a DH in Taiwan and
of her desire to return home after her one-year contract. She requested the wife of [her] master to mail said letter.
Later that evening, she had a talk with her master where she was told that she is sending her home on account of
certain problems. Complainant pleaded that she continue her employment, confronted as she was with the debts
she had to pay.
On January 25, 1995, complainant was accompanied to the airport by a certain Ms. Go to whom she inquired why
she was being repatriated to the Philippines. All that Ms. Go answered was that there was some kind of a problem.
While at the airport, Ms. Go forced complainant to sign an Affidavit where it stated, among others, that her leaving
as a DH was voluntary and that she would assume all the obligations for her travel back to the Philippines. Since
complainant did not want to sign said Affidavit, Ms. Go took complainant to the Office of the Foreign Affairs where,
through an immigration police, complainant’s passport and plane ticket were given to her. Two policemen
accompanied complainant board the plane bound for the Philippines.
From January 13 to 24, 1995 or a period of twelve (12) days, complainant was only paid the sum of NT$1,931.00.
In resisting complainant’s allegations, respondent, in its Position Paper with an accompanying Affidavit of Bayani
Fontanilla, Jr. and annexes, asserted the following material averments, to wit:
Complainant was hired and deployed for Taiwan as a domestic helper for a one-year contract with principal Chao
Hung Ching in Taiwan with a monthly salary of NT$14,010.00. Among other stipulations of the contract, it was
agreed that she would undergo a forty (40) days probationary period before she becomes a regular domestic
helper.
In the course of her recruitment, complainant was personally interviewed through telephone calls by her principal
and apprised of the terms and conditions of her employment as a domestic helper in Taiwan.
Complainant was charged of her placement fees as allowed by law and by the POEA rules and regulations.
On January 13, 1995, complainant departed for Taiwan. It was only on January 15, 1995 when she actually
performed her work as a domestic helper after she had undergone an orientation.
During the first ten (10) days of her probationary period, complainant was observed to be inattentive and
incompetent to perform her duties and responsibilities. She could not cook and do simple things as washing
clothes. It was the principal’s mother-in-law who did most of the household chores, like babysitting of the child.
Worse, complainant was already complaining of the cold weather. However, the principal was nonetheless
optimistic that complainant would improve her chores, but to no avail as complainant kept insisting that she be
allowed to go home on account of her incapability to perform her job. The complainant even told her foreign
employer that "she had hired a housemaid in their house for more than ten years to do the task."
After the first ten (10) days’ work with the principal employer, complainant returned to the Philippines. 5
On 26 December 1996, the Labor Arbiter rendered his decision with the following dispositive portion:
WHEREFORE, premises considered, judgment is hereby rendered ordering respondents jointly and severally to pay
complainant the sum of P10,900.00 representing the excess placement fee paid by her; the amount of
NT$161,115.00 or its peso equivalent in the amount of P155,411.15 representing her unearned wages
corresponding to the unexpired portion of her contract; NT$3,492.22 or its peso equivalent in the amount of
P3,368.59 representing salary differentials; and ten percent (10%) of the total monetary award due complainant as
attorney’s fees.
SO ORDERED.6
Philemploy Services and Resources, Inc. ("petitioner") and Chao Hung Ching appealed to the NLRC. The NLRC
rendered its decision on 11 June 1998. The pertinent parts of the decision read as follows:
Right from the time complainant was accepted as an applicant for the position of Caretaker/Domestic helper, she
has already a second thought about said position. Her reason is that it is not the position she applied for. (see No. 7
of complainant’s Sinumpaang Salaysay, page 30, record). This statement is not found in the Arbiter’s translation
into English of such Sinumpaang Salaysay which was adopted by complainant as part of her position paper, and
upon which the Labor Arbiter’s a quo factual antecedents have been derived.
Indeed, such omitted material facts coming from complainant herself, is pregnant of bold manifestation that in fact
she had difficulty in adjusting herself to the nature of her accepted position different from what was intended. It
reinforces thus, respondents’ observation that complainant misrepresented herself to her foreign employer that
she knows the household chores.
Yet, despite all of these misgivings shown by complainant, her foreign employer was willing to give her time to
organize and learn herself the duties and responsibilities attendant to the position of house helper. But the same
becomes naught when she insisted to be repatriated before the end of the one-year contract.
Normally, this Commission does not disturb the factual finding of the Labor Arbiter a quo when supported by
substantial evidence. (Union of Filipino Workers vs. NLRC, G.R. No. 98111, April 7, 1993).
But in this case, We find it more prudent to deviate from said decisional rule to avoid injustice.
We sympathize with the misfortune of complainant, but factual as well as corroborative circumstances speak
loudly against the charge of dismissal. Complainant preferred to go back home earlier than expected. As such, she
should not be allowed to utilize this forum as a convenient avenue to enforce a claim which is devoid of factual or
legal basis.7
The dispositive portion of the decision of the NLRC reads:
WHEREFORE, in view thereof, the appealed decision is hereby modified deleting the award of P155,411.15
representing unearned wages corresponding to the unexpired portion of the contract, there being no illegal
dismissal that took place.
In all other respects, the decision is affirmed.
SO ORDERED.8
Anita Rodriguez ("Anita") filed a motion for reconsideration on 3 September 1998. 9
On 15 September 1998, Anita filed before the NLRC a Manifestation 10 asserting, inter alia, that —
While it is conceded that respondents had filed their appeal within the period permitted by law yet, it is submitted
that the said appeal should not have been entertained on the very simple ground that the surety bond it submitted
to perfect their appeal is a "FAKE" and "FORGERIES" as certified to by no less than NORMA A. VILLANO, Assistant
Vice President of the Eastern Assurance & Surety Corporation in her letter dated September 11 and 14, 1998
regarding the surety bonds Nos. G(16)54276 B-2772 in the amount of P118,779.69 and G(16)54194/B-2691 in the
amount of P50,000.00, respectively.11
Anita asserted that since petitioner failed to comply with the requirements for perfecting an appeal, no appeal was
perfected from the decision of the Labor Arbiter and petitioner’s appeal should have been "outrightly dismissed." 12
The NLRC denied Anita’s motion for reconsideration in its assailed 3 February 1999 Resolution. 13
On 17 August 1999, Anita filed a petition for certiorari 14 before the Court of Appeals assailing the decision and
resolution of the NLRC. On 23 August 1999, the Court of Appeals issued the following resolution:
Before We act on the instant petition for certiorari, the petitioner is directed to inform this Court in writing, within
five (5) days from receipt hereof, the date when C. S. Cruz and Associates, her counsel, received a copy of the
Resolution dated February 3, 1999 in the case before the National Labor Relations Commission.
SO ORDERED.15
On 17 April 2000, Anita’s new counsel, Emerson C. Tumanon ("Atty. Tumanon"), filed with the Court of Appeals his
Entry of Appearance and Compliance.16 Atty. Tumanon asserted that Anita engaged his services as counsel in the
present case in view of the death of Anita’s former counsel, Ciriaco S. Cruz ("Atty. Cruz"), on 26 June 1999. Atty.
Tumanon stated that upon verification with the records of the NLRC, he found out that Atty. Cruz never received a
copy of the assailed 3 February 1999 Resolution.
The Ruling of the Court of Appeals
On 15 March 2002, the Court of Appeals rendered judgment as follows:
WHEREFORE, premises considered, the decision of the NLRC dated June 11, 1998, as well as its Resolution of
February 3, 1999 is hereby REVERSED and SET ASIDE. In lieu thereof, the decision of the Labor Arbiter dated
December 26, 1996 is hereby REINSTATED.
SO ORDERED.17
The Court of Appeals ruled that, contrary to the view of the NLRC, the fact that Anita "had a second thought about
her position as a caretaker or domestic helper as it was not the position she applied for, was not pregnant of bold
manifestation that in fact she had difficulty in adjusting herself to the nature of her accepted position." The Court
of Appeals stated that neither would Anita’s "second thoughts" bolster petitioner’s allegation that Anita
"misrepresented to her foreign employer that she knows the house chores."
The Court of Appeals held that petitioner’s allegation that Anita did not know her job was incredible. The Court of
Appeals stated that the nature of the work given to Anita "such as car-washing the vehicle of her master, cooking
the meals, housecleaning and babysitting, was too simple and menial for an ordinary person of average
intelligence to easily learn, especially so for Anita, who is a registered midwife and a family woman." The Court of
Appeals ruled that even granting that Anita did not know her job, petitioner, who had the duty to evaluate her
qualification, should have rejected her application outright.
The Court of Appeals also ruled that if there is doubt on the credibility of the evidence presented by the parties,
the doubt should be resolved in Anita’s favor. The Court of Appeals stated that it is a settled rule that in case of
doubt, the scales of justice must be tilted in favor of the employee.
On petitioner’s claim that the petition for certiorari was filed out of time, the Court of Appeals ruled that the
provisions of law pertinent to the issue were Sections 9 and 10, Rule 13 of the 1997 Rules of Civil Procedure.
The Court of Appeals held that petitioner failed to prove that Anita’s counsel received the first notice of service of
the 3 February 1999 resolution of the NLRC. The Court of Appeals stated that except for petitioner’s allegation that
Anita’s counsel received the first, second, and third notices, and the presentation of the certified true copy of the
second notice, there is no sufficient proof that Anita’s counsel received the first notice.
The Court of Appeals also stated that petitioner should have presented the postmaster’s certification on the
sending of the first notice, which should include the data not only on whether the corresponding notice was issued
or sent but also on how, when and to whom delivery of the notice was made. The Court of Appeals held that with
petitioner’s failure to adduce the required conclusive proof that the postmaster sent the first notice to Anita’s
counsel, the conclusion was ineluctable that Anita’s counsel did not receive the first notice. The Court of Appeals
held that there was no way in this case to determine the reckoning date of the period for the filing of the petition
for certiorari.
Hence, petitioner filed the present petition.
The Issues
In assailing the decision of the Court of Appeals, petitioner contends that:
1. The Petition for Certiorari filed by respondent before the Court of Appeals docketed as CA-G.R. No. Sp-
54386 was out of time, hence, the Court of Appeals had no jurisdiction to entertain the same; and
2. The factual findings of the Court of Appeals are contrary to those of the National Labor Relations
Commission in NLRC Case No. Adj. (L) 95-01-0306.18
The Ruling of the Court
We find merit in the petition.
Petitioner has raised a factual issue, i.e., whether Anita was illegally dismissed, which is not proper in a petition for
review. We have consistently ruled that it is not the function of this Court to assess and evaluate the facts and the
evidence again, our jurisdiction being generally limited to reviewing errors of law that might have been committed
by the trial court or administrative agency.19 Nevertheless, since the factual findings of the Court of Appeals and
the Labor Arbiter are at variance with those of the NLRC, we resolve to review the records and the evidence
presented by the parties.20
This Court generally accords respect to the factual findings of the NLRC. However, the rule is equally settled that
this Court will not uphold erroneous conclusions of the NLRC if the NLRC’s findings of fact on which its conclusions
are based are not supported by substantial evidence.21 Substantial evidence, which is the quantum of evidence
required to establish a fact in cases before administrative or quasi-judicial bodies, is that level of relevant evidence
which a reasonable mind might accept as adequate to justify a conclusion. 22 Factual findings of administrative
agencies will be set aside if found arbitrary. 23
Petitioner assails the appellate court’s finding that it was incredible for Anita not to know her job because the
nature of work of a domestic helper was easy. Petitioner asserts that the Court of Appeals "completely overlooked
that it was not a matter of learning the job, but it was more on the psychological preparedness of Anita to do
menial job, which way back home were being done by her own househelpers." Petitioner asserts that it did not say
that Anita did not know her job as even petitioner’s evaluation of Anita’s qualifications was outstanding. Petitioner
stresses that Anita’s repatriation was of her own accord.
On the other hand, Anita asserts that all that petitioner has presented were mere self-serving allegations, such as
(1) she was not doing her job as domestic helper; (2) she did not know how to wash clothes; (3) she had broken
several glasswares of her foreign employer; and (4) when her foreign employer called her attention, she allegedly
answered that she used to have her own househelper at home to do the housekeeping chores for her. Anita
asserts that petitioner has not adduced any substantial evidence to support its allegations.
Anita also asserts that she did not have second thoughts about accepting the job of domestic helper because she
knew how to do the job of a domestic helper.
We note that in its Position Paper filed before the Labor Arbiter, petitioner pointed out that they had agreed in
their employment contract that Anita’s placement was subject to a 40-day probationary period. 24 Anita is deemed
to have admitted the existence of this stipulation in the employment contract as she never disputed petitioner’s
assertion in all the pleadings that she submitted to the NLRC, the Court of Appeals, and this Court. Hence, even if it
were true that Anita’s foreign employer terminated her services after 10 days of her employment, there could
be no illegal dismissal as the termination was effected during the agreed probationary period.
The law in point is Section 6, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, thus —
Probationary employment. There is probationary employment where the employee, upon his engagement, is made
to undergo a trial period during which the employer determines his fitness to qualify for regular employment,
based on reasonable standards made known to him at the time of engagement.
Probationary employment shall be governed by the following rules:
xxxx
(c) The services of any employee who has been engaged on probationary basis may be terminated only for a just or
authorized cause, when he fails to qualify as a regular employee in accordance with reasonable standards
prescribed by the employer.
(d) In all cases of probationary employment, the employer shall make known to the employee the standards under
which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to
the employee at that time, he shall be deemed a regular employee.
Indeed, an employer, in the exercise of its management prerogative, may hire an employee on a probationary
basis in order to determine his fitness to perform his work. The employee’s services may be terminated for a just
cause or for his failure to qualify as a regular employee based on reasonable standards made known to him at the
time of his engagement.25
Anita was employed as a domestic helper on a probationary basis. Her foreign employer interviewed her through
telephone calls and apprised her of the terms and conditions of her employment as househelper. Upon her arrival
at her employer’s house in Taiwan, her employer apprised her again of her duties as househelper. 26
The findings of fact of the Labor Arbiter which the NLRC and the Court Appeals adopted reveal that Anita’s foreign
employer was dissatisfied with her performance.
The law in protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer.
While the Constitution is committed to the policy of social justice and the protection of the working class, it should
not be supposed that every labor dispute would automatically be decided in favor of labor. 27
However, although Anita’s employment was terminated because she failed to meet the standards of her foreign
employer, still it is necessary and obligatory to afford Anita her basic right to notice. Section 2, Rule 1, Book VI of
the Omnibus Rules Implementing the Labor Code provides:
Security of tenure. (a) In cases of regular employment, the employer shall not terminate the services of an
employee except for just or authorized causes as provided by law, and subject to the requirements of due
process.
(b) The foregoing shall also apply in cases of probationary employment; provided, however, that in such cases,
termination of employment due to failure of the employee to qualify in accordance with the standards of the
employer made known to the former at the time of engagement may also be a ground for termination of
employment.
xxxx
(d) In all cases of termination of employment, the following standards of due process shall be substantially
observed:
xxxx
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 supplied)
Records disclose that Anita was repatriated to the Philippines on 25 January 1995. On the night before her
departure, her employer’s wife merely told her that she was sending her home "on account of some problem."
When Anita asked Ms. Go, who accompanied her to the airport the following day, why she was being repatriated,
Ms. Go merely answered that "there was some kind of a problem." 28
The information given to Anita cannot be considered as equivalent to the written notice required by law to be
served on the employee. The notice should inform the employee of the ground or grounds for his termination and
that his dismissal is being sought.
The absence of notice in the present case makes Anita’s termination defective for which petitioner must be
sanctioned for its non-compliance with the requirements of or for failure to observe due process. Not being a mere
technicality but part of procedural due process, to which every employee is entitled to ensure that the employer’s
prerogative to dismiss is not exercised arbitrarily, this requisite notice must be complied with strictly. 29
Hence, it was incumbent upon Anita’s foreign employer to comply with this requirement. This, her employer failed
to do, entitling Anita to nominal damages30 of P30,000 in accordance with recent jurisprudence,31 to vindicate or
recognize her right to procedural due process which was violated by her employer.
In Agabon v. National Labor Relations Commission,32 this Court held:
Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify
the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the
violation of his statutory rights, as ruled in Reta v. National Labor Relations Commission. The indemnity to be
imposed should be stiffer to discourage the abhorrent practice of "dismiss now, pay later," which we sought to
deter in the Serrano ruling. The sanction should be in the nature of indemnification or penalty and should depend
on the facts of each case, taking into special consideration the gravity of the due process violation of the employer.
Under the Civil Code, nominal damages is adjudicated in order that a right of the plaintiff, which has been violated
or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.
As enunciated by this Court in Viernes v. National Labor Relations Commission, an employer is liable to pay
indemnity in the form of nominal damages to an employee who has been dismissed if, in effecting such dismissal,
the employer fails to comply with the requirements of due process. The Court, after considering the circumstances
therein, fixed the indemnity at P2,590.50, which was equivalent to the employee’s one month salary. This
indemnity is intended not to penalize the employer but to vindicate or recognize the employee’s right to statutory
due process which was violated by the employer.
The violation of the petitioners’ right to statutory due process by the private respondent warrants the payment of
indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of
the court, taking into account the relevant circumstances. Considering the prevailing circumstances in the case at
bar, we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers
from future violations of the statutory due process rights of employees. At the very least, it provides a vindication
or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules.
While it is no longer necessary to resolve the other issues presented in this petition, still we opt to discuss them
one by one.
Petitioner asserts that Anita filed her petition for certiorari before the Court of Appeals out of time. According to
petitioner, on the envelope containing the assailed 3 February 1999 Resolution are annotations consisting of: (a)
Atty. Ciriaco S. Cruz, C. S. Cruz & Associates, Counsel for Complainant, 1801 Int. J. P. Laurel St., San Miguel, Manila;
(b) First Notice; (c) Second Notice; (d) Third Notice; and (e) Return to Sender Unclaimed. Petitioner asserts that
these annotations reveal how, when, and to whom delivery of the mail was made.
Petitioner contends that since only the date of the second notice of the postmaster – 23 February 1999 – is
readable, it can be deduced from this that Atty. Cruz constructively received the 3 February 1999 Resolution on 28
February 1999 or five days from 23 February 1999.
Petitioner also argues that it is not necessary to present the postmaster’s certification. Petitioner maintains that
the annotations on the mail envelope "can stand on equal footing with and have similar evidentiary value as a
postmaster’s certification."
Petitioner stresses that since Anita’s counsel filed the petition for certiorari with the Court of Appeals only on 17
August 1999 or more than 60 days from 28 February 1999, the Resolution "has already assumed finality and the
Court of Appeals has no jurisdiction over that petition."
These arguments are erroneous. Section 9, Rule 13 of the 1997 Rules of Civil Procedure provides:
Service of judgments, final orders or resolutions. — Judgments, final orders or resolutions shall be served either
personally or by registered mail. x x x
Section 10 of the same Rule provides:
Completeness of service. — Personal service is complete upon actual delivery. Service by ordinary mail is complete
upon the expiration of ten (10) days after mailing, unless the court otherwise provides. Service by registered mail is
complete upon actual receipt by the addressee, or after five (5) days from the date he received the first notice of
the postmaster, whichever date is earlier.
The rule on service by registered mail contemplates two situations: (1) actual service the completeness of which is
determined upon receipt by the addressee of the registered mail and (2) constructive service the completeness of
which is determined upon expiration of five days from the date the addressee received the first notice of the
postmaster.
In the present case, there is no proof of actual receipt of the notice of the registered mail by Anita’s counsel.
Petitioner merely relied on the envelope which bore the notations "Return to Sender Unclaimed," "Second Notice
2-23," and "Third Notice"33 tending to indicate that the registered mail was returned to sender because it was
unclaimed despite the notices sent by the postmaster to the addressee. Petitioner should not have relied on these
notations to support the presumption of constructive service.34 The envelope does not constitute sufficient proof
that a first notice was sent by the postmaster, much less, that there was completeness of service. 35
A party who relies on constructive service or who contends that his adversary has received a copy of a final order
or judgment upon the expiration of five days from the date the addressee received the first notice sent by the
postmaster must prove that the first notice was actually received by the addressee. 36
For completeness of constructive service, there must be conclusive proof that Anita’s former counsel had actually
received the notice.37 Such proof requires a certified or sworn copy of the notice given by the postmaster to the
addressee. Thus, Section 13 of Rule 13 provides:
Proof of service. – x x x If service is made by registered mail, proof shall be made by such affidavit and the registry
receipt issued by the mailing office. The registry return card shall be filed immediately upon its receipt by the
sender, or in lieu thereof of the unclaimed letter together with the certified or sworn copy of the notice given by
the postmaster to the addressee. (Emphasis supplied)
There must be compliance with Section 13 of Rule 13 on proof of service by registered mail. As the Court ruled in
Dela Cruz v. Dela Cruz:38
In the present case there is no proof of the actual receipt of the notice of the registered mail by counsel for the
defendants, Atty. Belen. The trial court merely relied on the notations on the wrapper or envelope of the returned
order of September 21, 1965 consisting of "R & S", "unclaimed" and the stamped box with the wordings "2nd
notice" and "last notice" tending to indicate that the registered mail was returned to sender because it was
unclaimed inspite of the notices sent by the postmaster to the addressee therein. The trial court, on the basis of
said notations, assumed that the first notice of the postmaster must have been received by defendants on or
before November 3, 1965, the date when the order in the envelope was returned to the Urdaneta Post Office. This
finding of the court a quo is untenable.
In Barrameda vs. Castillo, this Court held:
Therefore, to obviate injustice, it is incumbent upon a party, who relies on constructive service or who contends
that his adversary was served with a copy of a final order or judgment upon the expiration of five days from the
first notice of registered mail sent by the postmaster to prove that the first notice was sent and delivered to the
addressee. A certification from the postmaster would be the best evidence of that fact (Grafil vs. Feliciano, L-
27156, June 30, 1967, 20 SCRA 616). The mailman’s testimony may also be adduced to prove that fact, as was done
in Aldecoa vs. Hon. Arellano and Siguenza, 113 Phil. 75, 78.
The postmaster’s certification as to the sending of the first notice ‘should include the data not only as to whether
or not the corresponding notices were issued or sent but also as to how, when and to whom the delivery thereof
was made.’ (Hernandez vs. Navarro, L-28296, November 24, 1972, 48 SCRA 44, 64, per Barredo, J.).
As stressed by Justice Barredo in a recent case, ‘there must be clear proof of compliance with the postal
regulations governing the sending and receipt of the notice referred to in’ section 8 of Rule 13 (Vecino vs. Court of
Appeals, L-38612, March 29, 1977). The mere exhibition in court of the envelope containing the unclaimed mail is
not sufficient proof that a first notice was sent.
Note that in a certain case a first notice was sent but it was received by the addressee’s eleven-year old child who
did not deliver it to the addressee himself. It was held that to apply the presumption in that case and to insist on
constructive service would work an injustice rather than promote justice (Cabuang vs. Hon. Bello, 105 Phil. 1135,
1138).
In the instant case, there is no evidence that the first notice was sent to Barrameda’s lawyer and that it was
delivered to him or should have been received by him. The envelope containing the unclaimed mail was presented
in court. The face of the envelope contains the notation ‘Returned to sender. Reason: Unclaimed’. Above the
stamp, on the back of the envelope, with the legend ‘City of San Pablo, Philippines, Jan. 29, 1966’, are written the
dates, ‘2-3-66 and 2-9-66’. Written also on the back of the envelope are the following: ‘R to S, notified 3/3/66’.
Relying on those notations on the envelope, the trial court literally and rigidly applied the presumption as to
constructive service. It did not require appellee Castillo to present the postmaster’s certification that a first notice
was sent to Barrameda’s lawyer and that the notice was received by the latter.
Under those circumstances, the trial court’s order dismissing Barrameda’s appeal is fraught with injustice.
(Emphasis supplied)
Here, there is no postmaster’s certification that the registered mail was unclaimed by Atty. Cruz, Anita’s former
counsel, and thus returned to sender after the first notice was sent to and actually received by him on a specified
date. Absent such notice, the disputable presumption of completeness of service does not arise and by implication,
petitioner could not presume actual receipt by Atty. Cruz. 39
Under Section 4 of Rule 65 of the 1997 Rules of Civil Procedure, the special civil action for certiorari should be
instituted within a period of 60 days from notice of the judgment, order, or resolution sought to be assailed. 40 As
there is no conclusive proof of service of the resolution dated 3 February 1999 denying Anita’s motion for
reconsideration of the NLRC decision, the resolution cannot be deemed to have become final and executory. There
is no way in the instant case to determine the reckoning date of the period provided by law for the filing of the
special civil action for certiorari. Hence, the Court of Appeals did not lose jurisdiction over Anita’s petition for
certiorari filed before it.
That Anita herself received a copy of the assailed resolution is of no moment. Section 5(a), Rule III of The New
Rules of Procedure of the NLRC provides:
xxxx
For the purpose of computing the period of appeal, the same shall be counted from receipt of such decisions,
awards or orders by the counsel/representative of record.
Moreover, jurisprudence teaches that when a party is represented by counsel, notice should be made upon the
counsel of record at his given address to which notices of all kinds emanating from the court should be sent in the
absence of a proper and adequate notice to the court of a change of address. 41
The service of the court’s order upon any person other than the counsel of record is not legally effective and
binding upon the party. Neither may it start the corresponding reglementary period for the subsequent procedural
steps that may be taken by the attorney. This is because it is the lawyer who is supposed to know the next
procedural steps or what ought to be done in law for the protection of the rights of the client, and not the latter. 42
The sending of the copy of the assailed resolution to Anita was not even necessary.
WHEREFORE, we GRANT the petition and SET ASIDE the decision of the Court of Appeals. However, petitioner
Philemploy Services and Resources, Inc. shall pay respondent Anita Rodriguez P30,000 as nominal damages. No
pronouncement as to costs.
SO ORDERED.
Mitsubishi Motors Corp. vs. Chrysler Phils. Labor Union, 433 SCRA 206
D. Duration/Exception
Case(s):
Holiday Inn Manila vs. NLRC, 226 SCRA 417
G.R. No. 109114 September 14, 1993
HOLIDAY INN MANILA and/or HUBERT LINER and BABY DISQUITADO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (Second Division) and ELENA HONASAN, respondents.
Inocentes, De Leon, Leogardo, Atienza, Manaye & Azucena Law Office for petitioners.
Florante M. Yambot for private respondent.
CRUZ, J.:
The employer has absolute discretion in hiring his employees in accordance with his standards of competence and
probity. This is his prerogative. Once hired, however, the employees are entitled to the protection of the law even
during the probation period and more so after they have become members of the regular force. The employer
does not have the same freedom in the hiring of his employees as in their dismissal.
Elena Honasan applied for employment with the Holiday Inn and was on April 15, 1991, accepted for "on-the-job
training" as a telephone operator for a period of three weeks. 1 For her services, she received food and
transportation allowance. 2 On May 13, 1992, after completing her training, she was employed on a "probationary
basis" for a period of six months ending November 12,
1991. 3
Her employment contract stipulated that the Hotel could terminate her probationary employment at any time
prior to the expiration of the six-month period in the event of her failure (a) to learn or progress in her job; (b) to
faithfully observe and comply with the hotel rules and the instructions and orders of her superiors; or (c) to
perform her duties according to hotel standards.
On November 8, 1991, four days before the expiration of the stipulated deadline, Holiday Inn notified her of her
dismissal, on the ground that her performance had not come up to the standards of the Hotel. 4
Through counsel, Honasan filed a complaint for illegal dismissal, claiming that she was already a regular employee
at the time of her separation and so was entitled to full security of tenure. 5 The complaint was dismissed on April
22, 1992 by the Labor Arbiter, 6 who held that her separation was justified under Article 281 of the Labor Code
providing as follows:
Probationary employment shall not exceed six (6) months from the date the employee started
working, unless it is covered by an apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a probationary basis may be terminated for a
just cause or when he fails to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of his engagement. An
employee who is allowed to work after a probationary period shall be considered a regular
employee.
On appeal, this decision was reversed by the NLRC, which held that Honasan had become a regular employee and
so could not be dismissed as a probationer. 7 In its own decision dated November 27, 1992, the NLRC ordered the
petitioners to reinstate Honasan "to her former position without loss of seniority rights and other privileges with
backwages without deduction and qualification." Reconsideration was denied in a resolution dated January 26,
1993. 8
The petitioners now fault the NLRC for having entertained Honasan's appeal although it was filed out of time and
for holding that Honasan was already a regular employee at the time of her dismissal, which was made 4 days days
before the expiration of the probation period.
The petition has no merit.
On the timeliness of the appeal, it is well-settled that all notices which a party is entitled to receive must be
coursed through his counsel of record. Consequently, the running of the reglementary period is reckoned from the
date of receipt of the judgment by the counsel of the appellant. 9 Notice to the appellant himself is not sufficient
notice. 10 Honasan's counsel received the decision of the Labor Arbiter on May 18, 1992. 11 Before that, however,
the appeal had already been filed by Honasan herself, on May 8, 1992. 12 The petitioners claim that she filed it on
the thirteenth but this is irrelevant. Even if the latter date was accepted, the appeal was nevertheless still filed on
time, in fact even before the start of the reglementary period.
On the issue of illegal dismissal, we find that Honasan was placed by the petitioner on probation twice, first during
her on-the-job training for three weeks, and next during another period of six months, ostensibly in accordance
with Article 281. Her probation clearly exceeded the period of six months prescribed by this article.
Probation is the period during which the employer may determine if the employee is qualified for possible
inclusion in the regular force. In the case at bar, the period was for three weeks, during Honasan's on-the-job
training. When her services were continued after this training, the petitioners in effect recognized that she had
passed probation and was qualified to be a regular employee.
Honasan was certainly under observation during her three-week on-the-job training. If her services proved
unsatisfactory then, she could have been dropped as early as during that period. But she was not. On the contrary,
her services were continued, presumably because they were acceptable, although she was formally placed this
time on probation.
Even if it be supposed that the probation did not end with the three-week period of on-the-job training, there is
still no reason why that period should not be included in the stipulated six-month period of probation. Honasan
was accepted for on-the-job training on April 15, 1991. Assuming that her probation could be extended beyond
that date, it nevertheless could continue only up to October 15, 1991, after the end of six months from the earlier
date. Under this more lenient approach, she had become a regular employee of Holiday Inn and acquired full
security of tenure as of October 15, 1991.
The consequence is that she could no longer be summarily separated on the ground invoked by the petitioners. As
a regular employee, she had acquired the protection of Article 279 of the Labor Code stating as follows:
Art. 279. Security of Tenure — In cases of regular employment, the employer shall not terminate
the services of an employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
The grounds for the removal of a regular employee are enumerated in Articles 282, 283 and 284 of the Labor Code.
The procedure for such removal is prescribed in Rule XIV, Book V of the Omnibus Rules Implementing the Labor
Code. These rules were not observed in the case at bar as Honasan was simply told that her services were being
terminated because they were found to be unsatisfactory. No administrative investigation of any kind was
undertaken to justify this ground. She was not even accorded prior notice, let alone a chance to be heard.
We find in the Hotel's system of double probation a transparent scheme to circumvent the plain mandate of the
law and make it easier for it to dismiss its employees even after they shall have already passed probation. The
petitioners had ample time to summarily terminate Honasan's services during her period of probation if they were
deemed unsatisfactory. Not having done so, they may dismiss her now only upon proof of any of the legal grounds
for the separation of regular employees, to be established according to the prescribed procedure.
The policy of the Constitution is to give the utmost protection to the working class when subjected to such
maneuvers as the one attempted by the petitioners. This Court is fully committed to that policy and has always
been quick to rise in defense of the rights of labor, as in this case.
WHEREFORE, the petition is DISMISSED, with costs against petitioners. It is so ordered.
Griño-Aquino, Davide, Jr., Bellosillo and Quiason, JJ., concur.
E. Criteria Regularization
Case(s):
Alcira vs. NLRC, 431 SCRA 508
RADIN C. ALCIRA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, MIDDLEBY PHILIPPINES
CORPORATION/FRANK THOMAS, XAVIER G. PEÑA and TRIFONA F. MAMARADLO, respondents.
DECISION
CORONA, J.:
Before us on appeal is the decision of the Court of Appeals dated June 22, 2001 affirming the decision of the
National Labor Relations Commission dated March 23, 1999 which, in turn, affirmed the decision of labor arbiter
Pedro Ramos dated May 19, 1998 dismissing petitioner Radin Alcira’s complaint for illegal dismissal with prayer for
reinstatement, backwages, moral damages, exemplary damages and attorney’s fees.
The facts follow.
Respondent Middleby Philippines Corporation (Middleby) hired petitioner as engineering support services
supervisor on a probationary basis for six months. Apparently unhappy with petitioner’s performance, respondent
Middleby terminated petitioner’s services. The bone of contention centered on whether the termination occurred
before or after the six-month probationary period of employment.
The parties, presenting their respective copies of Alcira’s appointment paper, claimed conflicting starting dates of
employment: May 20, 1996 according to petitioner and May 27, 1996 according to respondent. Both documents
indicated petitioner’s employment status as “probationary (6 mos.)” and a remark that “after five months
(petitioner’s) performance shall be evaluated and any adjustment in salary shall depend on (his) work
performance.”
Petitioner asserts that, on November 20, 1996, in the presence of his co-workers and subordinates, a senior officer
of respondent Middleby in bad faith withheld his time card and did not allow him to work. Considering this as a
dismissal “after the lapse of his probationary employment,” petitioner filed on November 21, 1996 a complaint in
the National Labor Relations Commission (NLRC) against respondent Middleby contending that he had already
become a regular employee as of the date he was illegally dismissed. Included as respondents in the complaint
were the following officers of respondent Middleby: Frank Thomas (General Manager), Xavier Peña (Human
Resources Manager) and Trifona Mamaradlo (Engineering Manager).
In their defense, respondents claim that, during petitioner’s probationary employment, he showed poor
performance in his assigned tasks, incurred ten absences, was late several times and violated company rules on the
wearing of uniform. Since he failed to meet company standards, petitioner’s application to become a regular
employee was disapproved and his employment was terminated.
On May 19, 1998, the labor arbiter dismissed the complaint on the ground that: (1) respondents were able to
prove that petitioner was apprised of the standards for becoming a regular employee; (2) respondent Mamaradlo’s
affidavit showed that petitioner “did not perform well in his assigned work and his attitude was below par
compared to the company’s standard required of him” and (3) petitioner’s dismissal on November 20, 1996 was
before his “regularization,” considering that, counting from May 20, 1996, the six-month probationary period
ended on November 20, 1996.
On March 23, 1999, the NLRC affirmed the decision of the labor arbiter.
On June 22, 2001, the Court of Appeals affirmed the judgment of the NLRC. According to the appellate court:
Even assuming, arguendo, that petitioner was not informed of the reasonable standards required of him by
Middleby, the same is not crucial because there is no termination to speak of but rather expiration of contract.
Petitioner loses sight of the fact that his employment was probationary, contractual in nature, and one with a
definite period. At the expiration of the period stipulated in the contract, his appointment was deemed terminated
and a notice or termination letter informing him of the non-renewal of his contract was not necessary.
While probationary employees enjoy security of tenure such that they cannot be removed except for just cause as
provided by law, such protection extends only during the period of probation. Once that period expired, the
constitutional protection could no longer be invoked. Legally speaking, petitioner was not illegally dismissed. His
contract merely expired.
Hence, this petition for review based on the following assignment of errors:
I
THE COURT OF APPEALS GRAVELY ERRED, BLATANTLY DISREGARDED THE LAW AND ESTABLISHED JURISPRUDENCE,
IN UPHOLDING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION.
II
THE COURT OF APPEALS GRAVELY ERRED AND BLATANTLY DISREGARDED THE LAW IN HOLDING THAT
PROBATIONARY EMPLOYMENT IS EMPLOYMENT FOR A DEFINITE PERIOD.
III
THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT AN EMPLOYER CAN BE PRESUMED TO HAVE
COMPLIED WITH ITS DUTY TO INFORM THE PROBATIONARY EMPLOYEE OF THE STANDARDS TO MAKE HIM A
REGULAR EMPLOYEE.
IV
THE COURT OF APPEALS GRAVELY ERRED AND FAILED TO AFFORD PROTECTION TO LABOR IN NOT APPLYING TO
THE INSTANT CASE THE DOCTRINE LAID DOWN BY THIS HONORABLE COURT IN SERRANO VS. NLRC, ET. AL., G.R.
NO. 117040, JANUARY 27, 2000.
Central to the matter at hand is Article 281 of the Labor Code which provides that:
ART. 281. PROBATIONARY EMPLOYMENT. Probationary employment shall not exceed six (6) months from the date
the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a probationary basis may be terminated for a just cause or
when he fails to qualify as a regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.
The first issue we must resolve is whether petitioner was allowed to work beyond his probationary period and was
therefore already a regular employee at the time of his alleged dismissal. We rule in the negative.
Petitioner claims that under the terms of his contract, his probationary employment was only for five months as
indicated by the remark “Please be informed that after five months, your performance shall be evaluated and any
adjustment in salary shall depend on your work performance.” The argument lacks merit. As correctly held by the
labor arbiter, the appointment contract also stated in another part thereof that petitioner’s employment status
was “probationary (6 mos.).” The five-month period referred to the evaluation of his work.
Petitioner insists that he already attained the status of a regular employee when he was dismissed on November
20, 1996 because, having started work on May 20, 1996, the six-month probationary period ended on November
16, 1996. According to petitioner’s computation, since Article 13 of the Civil Code provides that one month is
composed of thirty days, six months total one hundred eighty days. As the appointment provided that petitioner’s
status was “probationary (6 mos.)” without any specific date of termination, the 180 th day fell on November 16,
1996. Thus, when he was dismissed on November 20, 1996, he was already a regular employee.
Petitioner’s contention is incorrect. In CALS Poultry Supply Corporation, et. al. vs. Roco, et. al., this Court dealt with
the same issue of whether an employment contract from May 16, 1995 to November 15, 1995 was within or
outside the six-month probationary period. We ruled that November 15, 1995 was still within the six-month
probationary period. We reiterate our ruling in CALS Poultry Supply:
(O)ur computation of the 6-month probationary period is reckoned from the date of appointment up to the same
calendar date of the 6th month following.(italics supplied)
In short, since the number of days in each particular month was irrelevant, petitioner was still a probationary
employee when respondent Middleby opted not to “regularize” him on November 20, 1996.
The second issue is whether respondent Middleby informed petitioner of the standards for “regularization” at the
start of his employment.
Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code (Department Order No. 10, Series of
1997) provides that:
xxx xxx xxx
(d) In all cases of probationary employment, the employer shall make known to the employee the standards under
which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to
the employee at that time, he shall be deemed a regular employee.
xxx xxx xxx
We hold that respondent Middleby substantially notified petitioner of the standards to qualify as a regular
employee when it apprised him, at the start of his employment, that it would evaluate his supervisory skills after
five months. In Orient Express Placement Philippines vs. National Labor Relations Commission, we ruled that an
employer failed to inform an employee of the reasonable standards for becoming a regular employee:
Neither private respondent's Agency-Worker Agreement with ORIENT EXPRESS nor his Employment Contract with
NADRICO ever mentioned that he must first take and pass a Crane Operator's License Examination in Saudi Arabia
before he would be allowed to even touch a crane. Neither did he know that he would be assigned as floorman
pending release of the results of the examination or in the event that he failed; more importantly, that he would
be subjected to a performance evaluation by his superior one (1) month after his hiring to determine whether the
company was amenable to continuing with his employment. Hence, respondent Flores could not be faulted for
precisely harboring the impression that he was hired as crane operator for a definite period of one (1) year to
commence upon his arrival at the work-site and to terminate at the end of one (1) year. No other condition was
laid out except that he was to be on probation for three (3) months.(emphasis supplied)
Conversely, an employer is deemed to substantially comply with the rule on notification of standards if he apprises
the employee that he will be subjected to a performance evaluation on a particular date after his hiring. We agree
with the labor arbiter when he ruled that:
In the instant case, petitioner cannot successfully say that he was never informed by private respondent of the
standards that he must satisfy in order to be converted into regular status. This rans (sic) counter to the agreement
between the parties that after five months of service the petitioner’s performance would be evaluated. It is only
but natural that the evaluation should be made vis-à-vis the performance standards for the job. Private respondent
Trifona Mamaradlo speaks of such standard in her affidavit referring to the fact that petitioner did not perform
well in his assigned work and his attitude was below par compared to the company’s standard required of him.
The third issue for resolution is whether petitioner was illegally dismissed when respondent Middleby opted not to
renew his contract on the last day of his probationary employment.
It is settled that even if probationary employees do not enjoy permanent status, they are accorded the
constitutional protection of security of tenure. This means they may only be terminated for just cause or when
they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to them
by the employer at the time of their engagement.
But we have also ruled in Manlimos, et. al. vs. National Labor Relations Commission that this constitutional
protection ends on the expiration of the probationary period. On that date, the parties are free to either renew or
terminate their contract of employment. Manlimos concluded that “(t)his development has rendered moot the
question of whether there was a just cause for the dismissal of the petitioners xxx.” In the case at bar, respondent
Middleby exercised its option not to renew the contract when it informed petitioner on the last day of his
probationary employment that it did not intend to grant him a regular status.
Although we can regard petitioner’s severance from work as dismissal, the same cannot be deemed illegal. As
found by the labor arbiter, the NLRC and the Court of Appeals, petitioner (1) incurred ten absences (2) was tardy
several times (3) failed to wear the proper uniform many times and (4) showed inferior supervisory skills.
Petitioner failed to satisfactorily refute these substantiated allegations. Taking all this in its entirety, respondent
Middleby was clearly justified to end its employment relationship with petitioner.
WHEREFORE, the petition is hereby DENIED.
No costs.
SO ORDERED.
Vitug, J., (Chairman), Sandoval-Gutierrez, and Carpio Morales, JJ., concur.
F. Extension of Contract
Case(s):
Mariwasa Manufacturing, Inc. vs. Leogardo, 169 SCRA 465
MARIWASA MANUFACTURING, INC., and ANGEL T. DAZO, petitioners,
vs.
HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of Ministry of Labor and Employment
judgment, and JOAQUIN A. DEQUILA, respondents.
Cruz, Agabin, Atienza & Alday for petitioners.
The Solicitor General of public respondent.
Norberto M. Alensuela, Sr. for private respondent.
NARVASA, J.:
There is no dispute about the facts in this case, and the only question for the Court is whether or not, Article 282 of
the Labor Code notwithstanding, probationary employment may validly be extended beyond the prescribed six-
month period by agreement of the employer and the employee.
Private respondent Joaquin A. Dequila (or Dequilla) was hired on probation by petitioner Mariwasa Manufacturing,
Inc. (hereafter, Mariwasa only) as a general utility worker on January 10, 1979. Upon the expiration of the
probationary period of six months, Dequila was informed by his employer that his work had proved unsatisfactory
and had failed to meet the required standards. To give him a chance to improve his performance and qualify for
regular employment, instead of dispensing with his service then and there, with his written consent Mariwasa
extended his probation period for another three months from July 10 to October 9, 1979. His performance,
however, did not improve and on that account Mariwasa terminated his employment at the end of the extended
period. 1
Dequila thereupon filed with the Ministry of Labor against Mariwasa and its Vice-President for Administration,
Angel T. Dazo, a complaint for illegal dismissal and violation of Presidential Decrees Nos. 928 and 1389. 2 His
complaint was dismissed after hearing by Director Francisco L. Estrella, Director of the Ministry's National Capital
Region, who ruled that the termination of Dequila's employment was in the circumstances justified and rejected
his money claims for insufficiency of evidence. 3 On appeal to the Office of the Minister, however, said disposition
was reversed. Respondent Deputy Minister Vicente Leogardo, Jr. held that Dequila was already a regular employee
at the time of his dismissal, therefore, could not have been lawfully dismissed for failure to meet company
standards as a probationary worker. He was ordered reinstated to his former position without loss of seniority and
with full back wages from the date of his dismissal until actually reinstated. 4 This last order appears later to have
been amended so as to direct payment of Dequila's back wages from the date of his dismissal to December 20,
1982 only. 5
Mariwasa and Dazo, now petitioners, thereafter be sought this Court to review Hon. Leogardo's decision on
certiorari and prohibition, urging its reversal for having been rendered with grave abuse of discretion and/or
without or in excess of jurisdiction. 6
The petition, as well as the parties' comments subsequently submitted all underscore the fact that the threshold
issue here is, as first above stated, the legal one of whether employer and employee may by agreement extend the
probationary period of employment beyond the six months prescribed in Art. 282 of the Labor Code, which
provides that:
Art. 282. Probationary Employment. — Probationary employment shall not exceed six (6) months
from the date the employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work after
probationary period shall be considered a regular employee.'
The Court agrees with the Solicitor General, who takes the same position as the petitioners, that such an extension
may lawfully be covenanted, notwithstanding the seemingly restrictive language of the cited provision. Buiser vs.
Leogardo, Jr . 7 recognized agreements stipulating longer probationary periods as constituting lawful exceptions to
the statutory prescription limiting such periods to six months, when it upheld as valid an employment contract
between an employer and two of its employees that provided for an eigthteen-month probation period. This Court
there held:
'It is petitioners' submission that probationary employment cannot exceed six (6) months, the
only exception being apprenticeship and learnership agreements as provided in the Labor Code;
that the Policy Instruction of the Minister of Labor and Employment nor any agreement of the
parties could prevail over this mandatory requirement of the law; that this six months
prescription of the Labor Code was mandated to give further efficacy to the constitutionally-
guaranteed security of tenure of workers; and that the law does not allow any discretion on the
part of the Minister of Labor and Employment to extend the probationary period for a longer
period except in the aforecited instances. Finally, petitioners maintain that since they are regular
employees, they can only be removed or dismissed for any of the just and valid causes
enumerated under Article 283. of the Labor Code.
We reject petitioners' contentions. They have no basis in law.
Generally, the probationary period of employment is limited to six (6) months. The exception to
this general rule is when the parties to an employment contract may agree otherwise, such as
when the same is established by company policy or when the same is required by the nature of
work to be performed by the employee. In the latter case, there is recognition of the exercise of
managerial prerogatives in requiring a longer period of probationary employment, such as in the
present case where the probationary period was set for eighteen (18) months, i.e. from May,
1980 to October, 1981 inclusive, especially where the employee must learn a particular kind of
work such as selling, or when the job requires certain qualifications, skills experience or training.
xxx
We therefore, hold and rule that the probationary employment of petitioners set to eighteen
(18) months is legal and valid and that the Regional Director and the Deputy Minister of Labor
and Employment committed no abuse of discretion in ruling accordingly.
The single difference between Buiser and the present case: that in the former involved an eighteen-month
probationary period stipulated in the original contract of employment, whereas the latter refers to an extension
agreed upon at or prior to the expiration of the statutory six-month period, is hardly such as to warrant or even
suggest a different ruling here. In both cases the parties' agreements in fact resulted in extensions of the period
prescribed by law. That in this case the inability of the probationer to make the grade became apparent only at or
about the end of the six-month period, hence an extension could not have been pre-arranged as was done in
Buiser assumes no adverse significance, given the lack, as pointed out by the Solicitor General, of any indication
that the extension to which Dequila gave his agreement was a mere stratagem of petitioners to avoid the legal
consequences of a probationary period satisfactorily completed.
For aught that appears of record, the extension of Dequila's probation was ex gratia, an act of liberality on the part
of his employer affording him a second chance to make good after having initially failed to prove his worth as an
employee. Such an act cannot now unjustly be turned against said employer's account to compel it to keep on its
payroll one who could not perform according to its work standards. The law, surely, was never meant to produce
such an inequitable result.
By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any benefit attaching
to the completion of said period if he still failed to make the grade during the period of extension. The Court finds
nothing in the law which by any fair interpretation prohibits such a waiver. And no public policy protecting the
employee and the security of his tenure is served by prescribing voluntary agreements which, by reasonably
extending the period of probation, actually improve and further a probationary employee's prospects of
demonstrating his fitness for regular employment.
Having reached the foregoing conclusions, the Court finds it unnecessary to consider and pass upon the additional
issue raised in the Supplemental Petition 8 that the back wages adjudged in favor of private respondent Dequila
were erroneously computed.
WHEREFORE, the petition is granted. The orders of the public respondent complained of are reversed and set
aside. Private respondent's complaint against petitioners for illegal dismissal and violation of Presidential Decrees
928 and 1389 is dismissed for lack of merit, without pronouncement as to costs.
SO ORDERED.
Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.
G. Absorbed Employees
Case(s):
Cebu Stevedoring Co., Inc. vs. Regional Director, 168 SCRA 315
G.R. No. L-54285 December 8, 1988
CEBU STEVEDORING CO., INC., Petitioner, vs. THE HONORABLE REGIONAL DIRECTOR/MINISTER OF LABOR,
ARSENIO GELIG and MARIA LUZ QUIJANO, Respondents.
REGALADO, J.:
This is a petition for review on certiorari of the order, dated May 2, 1978, of the Regional Director of Labor
Regional Office No. 7 in Cebu City, in an action for reinstatement with backwages, which order was affirmed on
appeal by the then Ministry of Labor 1 and, subsequently, by the Office of the President, 2 and the dispositive
portion whereof reads as follows:
WHEREFORE, the respondent, Cebu Stevedoring Co., Inc., is hereby ordered to reinstate Arsenio
Gelig and Maria Luz Quijano to their former positions within ten days from receipt to (sic) this
order without loss of seniority rights and with full backwages from October 18, 1977 until the
actual date of reinstatement. 3 chanrobles virtual law library
Private respondents Arsenio Gelig and Maria Luz Quijano were former employees of the Cebu Customs Arrastre
Service (hereinafter referred to as CCAS). On May 2, 1977, pursuant to Customs Administrative Order No. 21-77 of
the Hon. Pio de Roda, Acting Commissioner of Customs and concurrently Acting Secretary of Finance, the CCAS was
abolished "for the reason that the objectives for which it was created had already been attained". 4 As a
consequence of such abolition, all the employees of CCAS, including herein respondents, were given their
termination and/or separation pay by the Bureau of Customs, Cebu City, computed up to April 30, 1977. 5
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Thereafter, on May 1, 1977, all the employees of CCAS including herein private respondents, were absorbed by
petitioner Cebu Stevedoring Co. Inc. (CSCI for brevity), with the same positions that they held in the CCAS.
Eventually, however, on October 17, 1977, private respondents were dismissed by petitioner 6 without prior
clearance, allegedly for redundancy and other alleged ground hereinafter discussed . 7 chanrobles virtual law library
A complaint for reinstatement with backwages was filed by private respondents before Regional Office No. 7 of the
Ministry of Labor, which thereafter rendered the order containing the above-quoted portion under the following
rationale:
It is to be noted that the complainants were employed by the Cebu Customs Arrastre Service
long time ago whose functions were carried over when they were absorbed by the herein
respondent. In other words, there is no need to employ them as probationary considering that
they are already well trained in their respective functions. They were not absorbed for a definite
period but instead for an indefinite period.chanroblesvirtuallawlibrary chanrobles virtual law
library
A probationary period of employment means that an employee is hired for training for a certain
period in order to determine whether they qualify (sic) for the position or not. In this case, the
complainants cannot be mistakenly considered as probationary viewed on the theory that they
have been holding the same positions for a quite a long time at the Cebu Customs Arrastre
Service before they were absorbed by the Cebu Stevedoring Co. Inc. with the same positions. 8
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On appeal, the Minister of Labor affirmed the decision of the Labor Regional Director, stating that:
... complainants who were employed by Cebu Arrastre Service upon being absorbed by
respondent for the same function and work need not undergo another probationary test in the
same line of work where they have gained a latitude of expertise. 9 chanrobles virtual law library
Petitioner thereafter elevated the case to the Office of the President which, through Presidential Executive
Assistant Jacobo C. Clave, issued a resolution dismissing the appeal for the reason that "there is no law expressly
recognizing the parties' right to appeal to this Office in cases of this nature and considering that it does not show
any exceptionally meritorious cause for the exercise in this case of the constitutional power of review (control) of
the President/Prime Minister as implemented by Executive Order No. 19, series of 1966, as amended, Section 1 of
which pertinently provides that 'an appeal to the Office of the President ... is not a matter of right in the absence of
statutory provision to that effect '" and further noting that the "case does not involve national interest." 10 A
motion for reconsideration of the resolution was like-wise denied. 11 chanrobles virtual law library
Petitioner's submissions in the present recourse may be synthesized into the following propositions: (1) There is a
brazen disregard of the constitutional precept of "due process of law" prejudicing petitioner's rights; (2) As casuals,
respondents Gelig and Quijano can be terminated within the 6-month period without need of clearance from the
Ministry of Labor and neither is the employer obligated to pay them termination pay; (3) Redundancy is one of the
grounds under the Labor Code justifying termination of employees; and (4) Retrenchment is another justifying
circumstance for terminating the services of an employee.chanroblesvirtuallawlibrary chanrobles virtual law library
1. Petitioner contends that it was denied procedural due process because no hearing was conducted before the
Labor Regional Director and neither did private respondents Gelig and Quijano file their position papers as
provided in the Labor Code; that upon the abolition of the CCAS, all its employees were given separation pay, and
thus, when the employees, including herein private respondents, were absorbed by petitioner when it took over
the arrastre operations on May 3, 1977, they were all employed as casuals; that when the company terminated the
services of private respondents, together with 52 others, on October 18, 1977 they had served CSCI for barely 5-
1/2 months and were still on probation, hence no clearance was required for their termination; that since the
positions occupied by herein private respondents with the former CCAS are Identical with the positions already
filled up and with the same functions being discharged in the main office of CSCI, private respondents may be
terminated for redundancy; and that financial losses incurred by petitioner likewise justify the retrenchment of its
employees. 12 chanrobles virtual law library
Public respondent, in its Comment, 13 points out that although private respondents failed to submit their position
paper, they substantiated their complaint in a hearing before the labor arbiter on April 5, 1978; that although
petitioner, through an error in the subpoena but also with its contributory fault, was deprived of the opportunity
to appear at the scheduled hearing of April 5, 1978, it does not mean an outright denial of due process considering
that petitioner availed of the remedy of appeal to the Ministry of Labor and the Office of the President; that the
dismissal of private respondents is without just cause; and that the present petition raises mainly questions of
fact.chanroblesvirtuallawlibrary chanrobles virtual law library
We find this petition devoid of merit; the writ prayed for cannot be granted.chanroblesvirtuallawlibrary chanrobles
virtual law library
Petitioner's proposition that the lack of hearing before the Labor Regional Director and private respondents' failure
to file their respective position papers constitute a denial of due process, deserves meagre
consideration.chanroblesvirtuallawlibrary chanrobles virtual law library
We agree that no rule is better established, under the due process clause of the Constitution, than that which
requires notice and the opportunity to be heard before any person can be lawfully deprived of his rights. 14 The
right to be heard, as a preliminary step essential to the rendition of an enforceable judgment, constitutes a basic
element of the constitutional requirement of due process of law. 15 chanrobles virtual law library
However, while in this case petitioner was not afforded an opportunity to be heard by oral argument on its
position paper due to its absence at the scheduled hearing, as already explained, it is likewise true that it was
required to, as in fact it actually did, submit a position paper which, together with the evidence presented during
the hearing, became the basis of the questioned order of the Regional Director. From this order, to repeat,
petitioner appealed to the Labor Minister, and then to the Office of the President. It is, therefore, apparent that
petitioner was not denied adequate remedies from the alleged procedural infirmities imputed to the rendition of
the Regional Director's order. The entire record of the case was reviewed and duly considered on appeal to the
Labor Minister, which appellate proceeding remedied any inadequacy in the procedural due process with which
the trial proceedings are being faulted.chanroblesvirtuallawlibrary chanrobles virtual law library
Thus, We have consistently adhered to the decisional rule that appellate review is curative in character on the
issue of an alleged denial of due process for lack of a hearing in the case. 16 chanrobles virtual law library
This Court has never lost sight of the fact that one of the most important and significant State policies, enshrined in
the present Constitution as it was in its two predecessors, is the promotion of social justice in all phases of national
development, specifically the protection of the rights of workers and the promotion of their welfare. 17 chanrobles
virtual law library
It was in the light of this concern in the fundamental law and the jurisprudence thereon that the Labor Code was
enacted, with a specific declaration of its basic policy that-
The State shall afford protection to labor, promote full employment, ensure equal work
opportunities regardless of sex, race or creed, and regulate the relations between workers and
employers. The State shall assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and human conditions of work. 18 chanrobles virtual law library
2. With these in mind, We approach the next issue for resolution, that is, whether herein private respondents were
validly dismissed.chanroblesvirtuallawlibrary chanrobles virtual law library
Petitioner submits that private respondents were merely casuals and could, therefore, be terminated even without
prior clearance from the then Ministry of Labor and without entitlement to separation pay. This contention is not
well-taken.chanroblesvirtuallawlibrary chanrobles virtual law library
We agree with the Regional Director that private respondents could not be considered probationary employees
because they were already well-trained in their respective functions. This conclusion is further bolstered by the
factual findings of the Labor Minister that said order of the Director was supported by substantial evidence. As
stressed by the Solicitor General, while private respondents were still with the CCAS they were already clerks.
Respondent Gelig had been a clerk for CCAS for more than ten (10) years, while respondent Quijano had slightly
less than ten (10) years of service. They were, therefore, not novices in their jobs but experienced workers. 19
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On this particular issue, it is perhaps timely to consider well settled principles involving decisions of administrative
agencies. Findings of quasi-judicial agencies which have acquired expertise because their jurisdiction is confined to
specific matters are generally accorded not only respect but, at times, even finality where such findings are
supported by substantial evidence, 20 and judicial review by Us is limited to issues of jurisdiction or grave abuse of
discretion. 21 chanrobles virtual law library
As regular employees, therefore, private respondents may not be dismissed and petitioner cannot terminate their
services except for a just or authorized cause provided by law and with scrupulous observance of due process
requirements. 22 chanrobles virtual law library
3. It is true that Article 283 of the Labor Code provides that an "employer may also terminate the employment of
any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the
closing or cessation of operation of the establishment or undertaking." However, the records fail to establish
clearly and convincingly that the positions occupied by private respondents are Identical with those presently
existing in petitioner's office.chanroblesvirtuallawlibrary chanrobles virtual law library
Furthermore, petitioner kept private respondents in its employ for almost six months without raising this issue. It
does not mention which positions are allegedly duplicated by the positions held by private respondents. It does not
even explain why the private respondents should be the ones to be terminated, without regard to the comparative
lengths of service, qualifications and performance of all employees concerned.chanroblesvirtuallawlibrary
chanrobles virtual law library
4. Petitioner's submission that it is suffering financial losses is untenable since it appears that it absorbed and
employed for almost six months, without any intimation of supposed financial distress, the majority of the former
employees of CCAS. It never advised private respondents of a company retrenchment program; the first time this
supposed program was mentioned was when petitioner was trying to justify the dismissal of the private
respondents before the labor arbiter. In a futile attempt to extricate itself from liability, petitioner presented a so-
called Statement of Operations, 23 which, however, remains an uncorroborated and self-serving piece of
evidence.chanroblesvirtuallawlibrary chanrobles virtual law library
The constitutional duty of the State to protect the right of laborers to security of tenure demands that an employer
may be permitted to terminate the services of an employee only under conditions allowed by and with due process
of law. Under the circumstances obtaining in this case, the irresistible conclusion is that the termination of private
respondents' services was unjust and illegal, as to justify their reinstatement and entitlement to backwages for
three years.chanroblesvirtuallawlibrary chanrobles virtual law library
WHEREFORE, this petition is hereby DISMISSED and petitioner is ordered to reinstate private respondents to their
former positions at the time of their dismissal, or if such reinstatement is not possible, to substantially equivalent
positions, without loss of seniority rights and other privileges appertaining thereto; and to pay private respondents
three (3) years backwards, from October 18, 1977 without qualification or deduction. In the event that
reinstatement is not possible due to the supervenience of events which prevent the same, petitioner is ordered to
further pay private respondents, more as a vindication of a right and less as indemnification of a loss, separation
pay equivalent to one (1) month's salary based on their monthly salaries as of October 17,
1977.chanroblesvirtuallawlibrary chanrobles virtual law library
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.
H. Double Probation
Case(s):
A Prime Security Services, Inc. vs. NLRC, 322 SCRA 283
A’ PRIME SECURITY SERVICES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (SECOND
DIVISION), HON. ARBITER VALENTIN GUANIO, and OTHELLO MORENO, respondents.
DECISION
PURISIMA, J.:
This special civil action for certiorari seeks to annul the decision of the Second Division of the National Labor
Relations Commission ("NLRC"), dated April 20, 1992, which affirmed with modification the decision of Labor
Arbiter Valentin C. Guanio in NLRC-NCR Case No. 00-02-01038-89.
The facts that matter are as follows:
On February 23, 1989, private respondent Othello C. Moreno filed a complaint with the Department of Labor and
Employment, Arbitration Branch, National Capital Region, against the petitioner, A’ Prime Security Agency, Inc., for
illegal dismissal, illegal deduction and underpayment of wages. Docketed as NLRC-NCR Case No. 00-02-01038-89,
the complaint was assigned to Labor Arbiter Valentin C. Guanio ("LA Guanio").
The complaint alleged, among others, that complainant (private respondent herein) had been working as a security
guard for a year with the Sugarland Security Services, Inc., a sister company of petitioner; that he was rehired as a
security guard on January 30, 1988 by the petitioner and assigned to the same post at the U.S. Embassy Building
along Roxas Boulevard, Manila; that he was among those absorbed by the petitioner when it took over the security
contracts of its sister company, Sugarland Security Services, Inc., with the U.S. Embassy; that he was forced by
petitioner to sign new probationary contracts of employment for six (6) months; that on August 1, 1988, his
employment was terminated; that during his employment, the amount of P20.00 per month was deducted from
his salary allegedly for withholding tax, although no withholding tax receipt was given to him, and the salary he
was receiving was only P2,187.00 a month, which was way below the P2,410.17 stipulated in the PADPAO
memorandum of agreement.
Petitioner, for its part, alleged that the private respondent was hired on January 30, 1988, on a probationary basis,
and he signed an authority to deduct from his salary any reimbursement for any loss or damage caused to
properties of the client; that he was given a copy of petitioner’s rules and regulations which provide that sleeping
on post is punishable by warning, suspension and dismissal and he was caught sleeping on post on March 17, 1988,
for which he was sent a memorandum giving him a last warning; that on March 25, 1988, he figured in a quarrel
with another security guard, which resulted in a near shootout; that at the end of his probationary employment,
he was given a psychological test and on the basis of the foregoing, petitioner told him that his probationary
employment had come to an end as he did not pass the company standard and therefore, he could not be hired as
a regular employee.
On November 28, 1989, LA Guanio handed down the decision disposing as follows:
"WHEREFORE, in view of the foregoing, judgment is hereby rendered ordering the respondent to
reinstate the complainant to his former position and accord to him the status of a regular
employee. The respondent is further ordered to pay the complainant his backwages from the
time he was unlawfully dismissed until he is finally reinstated; and to refund to the complainant
the deduction it had made from his salary in the amount of P20.00 per month.
The claim of the complainant for underpayment of wages is dismissed for lack of merit.
SO ORDERED."
Petitioner appealed to the National Labor Relations Commission which affirmed the decision of LA Guanio with a
slight modification, holding thus:
"WHEREFORE, premises considered, the appealed decision is hereby, Modified as aforediscussed.
The order for the refund of the deductions made by respondent from complainant’s salaries in
the amount of P20.00 per month is hereby, Vacated and Set Aside.
Moreover, the backwages due complainant should in no case exceed the period of three (3)
years.
In all other respects, the decision appealed from, stands."
Petitioner presented a motion for reconsiderationof the aforesaid decision but to no avail. The same was denied by
the respondent NLRC for lack of merit.
Undaunted, petitioner found its way to this Court via the present petition, contending that:
"I
BASIC PUBLIC RESPONDENTS HAVE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION AND/OR IN EXCESS OF JURISDICTION WHEN THEY UNDULY PRONOUNCED
PRIVATE RESPONDENT’S EMPLOYMENT WITH THE PETITIONER AS A CONTINUANCE OF ITS (sic)
PREVIOUS EMPLOYMENT WITH ITS (sic) OLD EMPLOYER, THE SUGARLAND SECURITY SERVICES,
INC., WITHOUT ANY SHRED OF EVIDENCE LINKING THE TWO COMPANIES, EMPLOYERS WHICH
ARE DISTINCT AND DIFFERENT PERSONALITIES, AS PROVEN BY THE RECORDS OF THE CASE,
RESULTING IN SERIOUS PREJUDICE OF THE PETITIONER WHICH, LIKE LABOR, ALSO DESERVES
PROTECTION OF THE LAW.
II
BOTH PUBLIC RESPONDENT (sic) HAVE COMMITTED GRAVE ABUSE OF DISCRETION WHEN THEY
CHARGED AND FOUND PETITIONER GUILTY OF ILLEGAL DISMISSAL AND THUS FAILED TO
CONSIDER THAT THE TERMINATION OF THE PROBATIONARY CONTRACT BY THE PETITIONER IS A
LEGITIMATE EXERCISE OF DISCRETION IN ANTICIPATION OF WHAT IT PERCEIVED OF AN
EMPLOYEE, IN THE PERSON OF THE PRIVATE RESPONDENT, WHICH (sic) WILL NOT MAKE A GOOD
- (sic) ASSET OF THE COMPANY AND INSTEAD IS A LIABILITY AS IT POSSES (sic) DANGERS NOT
ONLY ON THE PETITIONER BUT ON ITS VERY CLIENT, THE U.S. EMBASSY, WITH WHOM PRIVATE
RESPONDENT IS DIRECTLY SERVING WITH (sic), DUE TO ITS (sic) INEFFICIENCY, ENEPTNESS (sic)
AND MORE THAN (sic) BELOW BAR PERFORMANCE BY (sic) THE PRIVATE RESPONDENT DURING
ITS (sic) SIX MONTH PROBATIONARY PERIOD;
III
THE PUBLIC RESPONDENTS COMMITTED GRAVE ABUSE OF DISCRETION WHEN THEY ORDERED
PETITIONER FOR THE PAYMENT OF (sic) PRIVATE RESPONDENT’S BACK WAGES (sic) AND FOR ITS
(sic) REINSTATEMENT."
For resolution can be simplified into the following issues, to wit:
1. Whether private respondent’s employment with A’ Prime Security Services, Inc. was just a
continuation of his employment with Sugarland Security Services, Inc.;
2. Whether private respondent is a regular or probationary employee of petitioner; and
3. Whether private respondent’s dismissal is illegal.
After a careful study, the Court finds the imputation of grave abuse of discretion on the part of the respondents,
NLRC and "LA Guanio", barren of any sustainable basis.
Anent the first issue, records show that the allegations of the private respondent that Sugarland Security Services,
Inc. ("Sugarland") is a sister company of A’ Prime Security Services, Inc. ("A’ Prime") and that the latter absorbed
the security contracts and security guards of Sugarland with the U.S. Embassy were neither denied nor
controverted by the petitioner before the Labor Arbiter. Under Section 1, Rule 9 of the Rules of Court, in relation to
Section 3, Rule I of the Rules of the NLRC, material averments in the Complaint are deemed admitted when not
specifically denied.
In the petition under scrutiny, it is contended belatedly that A’ Prime and Sugarland are two separate and distinct
juridical entities. However, aside from such a bare allegation, petitioner presented no supporting evidence and the
Court cannot, of course, act thereupon without any legal basis.
The Court cannot uphold and give weight to private respondent’s resignation letter (Annex "D") which appears to
have been written and submitted at the instance of petitioner. Its form is of the company’s and its wordings are
more of a waiver and quitclaim. Moreover, the supposed resignation was not acknowledged before a notary
public. Petitioner’s failure to deny that Sugarland is its sister company and that petitioner absorbed Sugarland’s
security contract and security personnel assumes overriding significance over the resignation theorized upon,
evincing petitioner’s design to ignore or violate labor laws through the use of the veil of corporate personality. The
Court cannot sanction the practice of some companies which, shortly after a worker has become a regular
employee, effects the transfer of the same employee to another entity whose owners are the same, or identical, in
order to deprive subject employee of the benefits and protection he is entitled to under the law.
On the issue as to whether the private respondent is a probationary or regular employee, the Court holds that the
latter became a regular employee upon completion of his six-month period of probation. Private respondent
started working on January 30, 1988 and completed the said period of probation on July 27, 1988. Thus, at the
time private respondent was dismissed on August 1, 1988, he was already a regular employee with a security of
tenure. He could only be dismissed for a just and authorized cause.
There is no basis for subjecting private respondent to a new probationary or temporary employment on January
30, 1988, considering that he was already a regular employee when he was absorbed by A’ Prime from Sugarland,
its sister company.
On the issue of whether the dismissal of private respondent was unjust and illegal, the Court rules in the
affirmative. Subject letter of August 1, 1988 for the dismissal of private respondent from his employment stated:
"x x x
Dear Mr. Moreno,
You were hired by this agency as security guard on a six -month probationary appointment on 30
January 1988.
Much as we would like to retain you, it is unfortunate that you were not able to live up with the
standard expected of you as a security guard.
In line with this and pursuant to paragraph 6 of said Probationary Appointment, which you have
signed on 30 January 1988, we are constrained to terminate your services with us for cause
effective this date.
We hope you understand our position on this regard.
Very truly
yours,........................
(SGD.) REYNALDO M.
ARDINA
President"
The dismissal of private respondent was presumably based on the results of his behavioral and neuropsychological
tests and on his violation of a company rule on sleeping on post. With respect to the behavioral and
neuropsychological tests, the Court agrees with NLRC’s assessment, to wit:
"Complainant’s result of his behavioral research and neuropsychological test to our mind, is of no
moment, considering that the said test appeared to have been conveniently contrived to be
conducted, and the result produced on the very day of his dismissal, in question. Were
respondent-appellant really sincere in its motive of fully screening its employees before they
could be regularized it should have done so, prior to complainant’s hiring or even after the
commission of complainant’s infractions of the company rules adverted to by appellant way back
in March 1988, when complainant was only about two (2) months on probation. But that is not
the case herein.
Moreover, We have observed a discrepancy in the results of the test for while in the first page of
the Evaluation Report, in question, complainant was ruled as:
‘Steadiness and Endurance under pressure - Average’
the summary on page thereof, by way of interpretation of such rating, states:
‘Under pressure, he needs emotional support.’
It would not be farfetched for us therefore to surmise that the evaluator’s mind was already
preconditioned towards buttressing respondent’s intent of terminating complainant’s
employment, considering that the same, to reiterate, was issued on the very day of the dismissal,
in question."
So also, private respondent’s alleged violations of sleeping on post, and quarrelling with a co-worker, may not be
proper grounds for dismissal, as the same were first infractions. Circular No. I dated March 16, 1983 of A’ Prime
Security Services, Inc., governing discipline, suspension and separation from the service of security guards,
provides:
"SECTION VIII - SLEEPING ON POST
Any Security/Lady guard who is found sleeping while on post shall be punished as follows:
1st Offense........- Warning
2nd Offense.......- 30 days suspension without pay
3rd Offense........- Dismissal
SECTION IX - CHALLENGING A POSTED SECURITY/LADY GUARD AND SUPERIORS
Any Security/Lady guard who challenges, assaults, provokes and insults an officially posted
Security/Lady guard shall be punished:
1st Offense - One (1) month suspension
2nd Offense - Dismissal"
As the infractions of Sections VIII and IX of Circular No. 1 by private respondent were first offenses, they were not
punishable by dismissal. They were not valid grounds for terminating the employment of private respondent.
What is more, as found by the NLRC, the private respondent was not given a chance to contest his dismissal. He
was deprived of an opportunity to be heard.
Premises studiedly viewed in correct perspective, the Court is of the irresistible finding and conclusion that the
dismissal of private respondent, a regular employee, was sans any just, legal and valid basis.
WHEREFORE, the petition is DISMISSED; and the Decision, dated April 20, 1992, and Resolution, dated June 25,
1992, of the National Labor Relations Commission in NLRC NCR Case No. 00-02-01038-89, AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Gonzaga-Reyes, JJ., concur.2/3/00 9:20 AM