SECOND DIVISION

[G.R. No. 121962. April 30, 1999]

ESPERANZA C. ESCORPIZO, and UNIVERSITY OF BAGUIO

FACULTY EDUCATION WORKERS UNION,petitioners,
vs. UNIVERSITY OF BAGUIO and VIRGILIO C.
BAUTISTA
and
NATIONAL
LABOR
RELATIONS
COMMISSION, respondents.
DECISION
QUISUMBING, J.:
This special civil action for certiorari seeks to annul the
Resolution[1] of NLRC promulgated on May 31, 1995 in NLRC Case
No. RAB - CAR - 07-0217-92 which dismissed petitioners appeal
and affirmed the decision of the Labor Arbiter.
Petitioner Esperanza Escorpizo was initially hired by
respondent university on June 13, 1989 as a high school classroom
teacher. Under the rules of the respondent university, appointment
to teach during the first two years at the university is probationary
in nature. During the probation period, the teacher is observed and
evaluated to determine his competency. Attainment of a
permanent status by a faculty member is conditioned upon
compliance with certain requirements, such as passing the
professional board examination for teachers (PBET).
On March 18, 1991, respondent university informed Escorpizo
that her employment was being terminated at the end of the
school semester in view of her failure to pass the PBET. But before
the start of the school year 1991-1992, Escorpizo reapplied and
pleaded that she be given another chance. She told the
respondent school that she had just taken the PBET and hoped to
pass it.
As Escorpizos appeal was favorably considered, she was
allowed to teach during the school year 1991-1992. However, her
continued employment was conditioned on her passing the
PBET. Unfortunately, Escorpizo failed again. Undaunted, Escorpizo

took the examination a third time in November 1991. At the end

of the school year 1991-1992, respondent university evaluated the
teachers performance to determine who would be in the list for the
next school year. Escorpizo, not having passed the PBET yet, was
not included.
Much later, on June 8, 1992, the results of the PBET were
released
and
this
time
Escorpizo
passed
said
examination. Nevertheless, on June 15, 1992, respondent
university no longer renewed Escorpizos contract of employment
on the ground that she failed to qualify as a regular teacher. This
prompted Escorpizo to file on July 16, 1992 a complaint for illegal
dismissal, payment of backwages and reinstatement against
private respondents.
On June 22, 1993, the labor arbiter ruled that respondent
university had a permissible reason in not renewing the
employment contract of Escorpizo.[2] Nevertheless, the labor
official ordered the reinstatement of Escorpizo and disposed of the
case as follows:
WHEREFORE, evidence and law considered, the respondents are
hereby directed to cause the immediate reinstatement of the
complainant but without backwages, and to extend to her regular
status.
All other claims are hereby dismissed for lack of merit.
SO ORDERED.[3]
Dissatisfied with the decision there being no award of
backwages, Escorpizo appealed to the National Labor Relations
Commission (NLRC). But in its assailed Resolution[4] dated May 31,
1995, the NLRC dismissed said appeal and affirmed the labor
arbiters decision.
Instead of filing the required motion for reconsideration,
petitioners filed this instant petition[5] imputing grave abuse of
discretion on the part of public respondent in affirming the decision
of the labor arbiter.
This precipitate filing of petition for certiorari under Rule 65
without first moving for reconsideration of the assailed resolution
warrants the outright dismissal of this case. As we consistently
held in numerous cases,[6] a motion for reconsideration is

indispensable for it affords the NLRC an opportunity to rectify

errors or mistakes it might have committed before resort to the
courts can be had.
It is settled that certiorari will lie only if there is no appeal or
any other plain, speedy and adequate remedy in the ordinary
course of law against acts of public respondents. In the case at
bar, the plain and adequate remedy expressly provided by law was
a motion for reconsideration of the impugned resolution, based on
palpable or patent errors, to be made under oath and filed within
ten (10) days from receipt of the questioned resolution of the
NLRC,[7] a procedure which is jurisdictional. Hence, original action
of certiorari, as in this case, will not prosper. Further, it should be
stressed that without a motion for reconsideration seasonably filed
within the ten-day reglementary period, the questioned order,
resolution or decision of NLRC, becomes final and executory after
ten (10) calendar days from receipt thereof. Consequently, the
merits of the case can no longer be reviewed to determine if the
public respondent had committed any grave abuse of discretion. [8]
Besides, petitioners did not comply with the rule on
certification against forum shopping. As pointed out by the private
respondents, the certification in the present petition was executed
by the counsel of petitioners,[9] which is not correct. The
certification of non-forum shopping must be by the plaintiff or any
of the principal party and not the attorney.[10] This procedural lapse
on the part of petitioners is also a cause for the dismissal of this
action.
To be sure, even if the aforesaid procedural and technical
infirmities were to be set aside, we find no cogent reason to depart
from the decision of public respondent as hereunder
elucidated. Definitely, no grave abuse of discretion could be
imputed to the public respondent in affirming the decision of the
labor arbiter.
Petitioners contend that Escorpizo had attained the status of a
regular employee having rendered very satisfactory performance
as probationary teacher for two years, consistent with the
collective bargaining agreement between the respondent university
and petitioner union of which Escorpizo is a member. They argue
that the prerequisite prescribed by respondent university that
teachers pass the PBET to attain regular employment has no legal
basis because it is not stipulated in the collective bargaining
agreement.

This contention, in our view, is bereft of merit.

A probationary employee is one who, for a given period of
time, is being observed and evaluated to determine whether or not
he is qualified for permanent employment. A probationary
appointment affords the employer an opportunity to observe the
skill, competence and attitude of a probationer. The word
probationary, as used to describe the period of employment,
implies the purpose of the term or period. While the employer
observes the fitness, propriety and efficiency of a probationer to
ascertain whether he is qualified for permanent employment, the
probationer at the same time, seeks to prove to the employer that
he has the qualifications to meet the reasonable standards for
permanent employment.[11]
There is no dispute that Escorpizo was a probationary
employee from the time she was employed on June 13, 1989 and
until the end of the school semester in March 1991 or for two
academic years. Thereafter, on her plea, she was again allowed to
teach for school year 1991-1992. She knew that her status then
was not that of a regular employee. For, she was also aware that
her attainment of a regular employment is conditioned upon
compliance with the requisites attached to her position, pursuant to
the rules prescribed by respondent university, to wit:
PROBATIONARY STATUS
An appointment to teach during the first two years at the
University is probationary in nature. xxx.
During the period of probation (four semesters, excluding summer
terms), the teacher is observed and evaluated formally by a
committee composed of: (1) the most ranking/senior member of
the faculty in his discipline/field of specialization, (2) his
department head or college dean, (3) the Personnel Director and
(4) the Vice President for Academic Affairs, including his students
to determine his competency and fitness to be elevated to
permanent status.
xxx

xxx

xxx

Permanent status is granted to the faculty member of the high

school or elementary school who has satisfactorily complied with
the requirements of the probationary period, has at least a

bachelors degree in education, and has passed the Professional

Teacher Board Examination or an equivalent Civil Service
Examination.[12]
Under the aforecited rule, the following conditions must concur
in order that a probationary teacher may be extended a regular
appointment; (1) the faculty member must satisfactorily complete
the probationary period of four semesters or two years, within
which his performance shall be observed and evaluated for the
purpose of determining his competency and fitness to be extended
permanent status; and (2) the faculty member must pass the PBET
or an equivalent civil service examination.
Admittedly, while Escorpizo met the first requirement, she did
not fulfill the second. She had failed the PBET twice at the time
her probationary period ended. That she did not qualify to become
a permanent employee is further evidenced by the fact that before
her employment contract expired, she was informed that her
services would be terminated by the end of the school year in
March 1991. When she was given, upon her plea, a teaching load
in the next succeeding school year, it was already beyond the twoyear probationary period. The most that could be conceded in this
situation is that her continued employment was deemed an
extension, ex-gratia, of her probationary period, affording her
another chance to pass the requisite licensure test for
teachers.[13] Petitioners did not even deny that Escorpizo was
rehired on a temporary basis on condition that she has to pass the
PBET in order to become a permanent employee. Under no
circumstance could continued employment alone beyond the twoyear period bestow on her the status of a regular employee. It was
only after fulfilling the cited second requirement when, on the third
try, she passed the PBET that she qualified for regular and
permanent employment.
Petitioners reliance on the collective bargaining agreement
(CBA) alone is not tenable. Indeed, provisions of a CBA must be
respected since its terms and conditions constitute the law between
the contracting parties. Those who are entitled to its benefits can
invoke its provisions. And in the event that an obligation therein
imposed is not fulfilled, the aggrieved party has the right to go to
court for redress.[14]To buttress their position, petitioners cite the
following provision of the CBA between respondent university and
petitioner union:

SECTION 3. Probationary academic employees. A probationary

academic employee is one hired by the Administration on trial or
probation for the purpose of occupying, if found fit and qualified, a
permanent or regular position in the University. Before such
probationary employee becomes regular or permanent, he shall
undergo for two (2) years, which period however, may be reduced
by the Administration at the latters discretion.[15]
Clearly, the abovequoted provision does not mention that
passing the PBET is a prerequisite for attaining permanent status
as a teacher. Nevertheless, the aforecited CBA provision must be
read in conjunction with statutory and administrative regulations
governing faculty qualifications. It is settled that an existing law
enters into and forms part of a valid contract without the need for
the parties expressly making reference to it.[16] Further, while
contracting parties may establish such stipulations, clauses, terms
and conditions as they may see fit, such right to contract is subject
to limitation that the agreement must not be contrary to law or
public policy.[17]
In this connection, DECS Order No. 38, series of 1990, a
regulation implementing Presidential Decree No. 1006[18] or the
Decree Professionalizing Teaching stipulates that no person shall be
allowed to engage in teaching and/or act as a teacher unless he
has registered as professional teacher with the National Board for
Teachers. To be eligible as professional teacher, one must have
passed the board examination for teachers or the examinations
given by the Civil Service Commission or jointly by the Department
of Education, Culture & Sports and the Civil Service
Commission. The Order also provides that effective January 1,
1992, no teacher in the private schools shall be allowed to teach
unless he or she is a registered professional teacher. Significantly,
school officials are enjoined by the said administrative order to
ensure that all persons engaged in teaching in the public or private
elementary or secondary schools are registered professional
teachers.
Undoubtedly, the requirement of passing the PBET before one
could become a regular employee as prescribed by respondent
university is legally in order. Being a prerequisite imposed by law,
such requirement could not have been waived by respondent
university, as herein insisted by petitioners. In the same vein,
petitioners proposition that upon completion of two-year
probationary period with a very satisfactory performance,
Escorpizo automatically becomes permanent is not correct. For as

earlier stressed, Escorpizo could only qualify to become permanent

employee upon fulfilling the reasonable standards for permanent
employment which include passing the board examination for
teachers.
This is by no means to assert that probationary teachers do
not enjoy security of tenure. They enjoy security of tenure in the
sense that during their probationary employment they cannot be
dismissed except for cause. However, upon expiration of their
contract of employment, probationary academic personnel cannot
claim security of tenure and compel their employers to renew their
employment contracts.[19] In fact, the services of an employee
hired on probationary basis may be terminated 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 that would hinder the
employer from extending a regular or 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,
the law does not preclude the employer from terminating the
probationary employment on justifiable ground. [20]

[1]

Penned by Commissioner Ireneo B. Bernardo, and concurred in

by Presiding Commissioner Lourdes C. Javier and Commissioner
Joaquin A. Tanodra.
[2]

Labor Arbiter Decision quoted in NLRC Resolution, Rollo p. 30.

[3]

Id., at p. 26.

[4]

Id., at pp. 26-33.

[5]

Id., at pp. 3-33.

[6]

Manila Midtown Hotels & Land Corp. vs. NLRC, 288 SCRA 259,
264 (1998); ABS-CBN Employees Union vs. NLRC, 276 SCRA 123,
128 (1997); Building Care Corporation vs. NLRC, 268 SCRA 666,
674 (1997); Gonpu Services Corporation vs. NLRC, 266 SCRA 657,
660 (1997); Interorient Maritime Enterprises Inc. vs. NLRC, 261
SCRA 757, 764 (1996)
[7]

Rule VII, Section 14. The New Rules of Procedure of the

National Labor Relations Commission.
[8]

Manila Midtown Hotels & Land Corporation vs. NLRC, 288 SCRA
259, 264-265 (1998).

In the instant case, Escorpizo was entitled to security of tenure

during the period of her probation but such protection ended the
moment her employment contract expired at the close of school
year 1991-1992 and she was not extended a new appointment. No
vested right to a permanent appointment had as yet accrued in
Escorpizos favor since she had not yet complied, during her
probation, with the prerequisites necessary for the acquisition of
permanent status.[21] Consequently, as respondent university was
not under obligation to renew Escorpizos contract of employment,
her separation cannot be said to have been without justifiable
cause. Legally
speaking,
Escorpizo
was
not
illegally
dismissed. Her contract merely expired.

[9]

WHEREFORE, the instant petition is hereby DISMISSED, and

the assailed RESOLUTION of public respondent is hereby
AFFIRMED. Costs against petitioners.

[13]

SO ORDERED.
Bellosillo, (Chairman), Puno, Mendoza, and Buena, JJ., concur.

Private respondents Comment, Rollo, p. 50; Petition, Supra,

note 2.
[10]

O.M. Herrera, Comments on the 1997 Rules of Civil Procedure

As Amended 91 (1997); Supreme Court Revised Circular No. 2891; Supreme Court Administrative Circular No. 04-94.
[11]

International Catholic Migration Commission vs. NLRC, 169

SCRA 607, 613-614 (1989).
[12]

University Memorandum Circular No. 1, series of 1988,

published in UB Faculty and Staff Manual, 1988 edition, pp. 49-56,
cited in Private Respondents Comment;Rollo, pp. 51-52.
Mariwasa Manufacturing Inc. vs. Leogardo, Jr., 169 SCRA 465,
470 (1989).
[14]
[15]

Roche (Philippines) vs. NLRC, 178 SCRA 386, 395 (1989).

Article II, Section 3 of the CBA of University of Baguio and

University of Baguio Faculty Education Workers Union, quoted in
the Petition; Rollo, p. 9.

[16]

Lakas Manggagawang Makabayan vs. Abiera, 36 SCRA 436,

442 (1970).
[17]

PAL Employees Savings and Loan Association Inc. vs. NLRC,

260 SCRA 758, 774 (1996); New Civil Code, Article 1306.
[18]

The law in force at the time when the cause of action

accrued. Now, the applicable statute is RA 7836 or the Philippine
Teachers Professionalization Act of 1994, approved on December
15, 1994.
[19]

U.P. Sarmiento, Manual of Regulations for Private Schools

Annotated 465 (1995).
[20]

Supra, note 11.

[21]

Escudero vs. Office of the President of the Philippines, 172

SCRA 783, 792 (1989).
SYNOPSIS
Petitioner Escorpizo worked as a high school classroom
teacher for two academic years in the respondent university.
Under the rules of the university, appointment to teach during the
first two years at the university is probationary in nature and
attainment of a permanent status is conditioned upon the
fulfillment of the reasonable standards for permanent employment,
which include passing the Professional Board Examination for
Teachers (PBET). Petitioner failed the PBET twice at the time of
her probationary passed the PBET.
However, respondent
university no longer renewed her contract. Thus, petitioners filed a
complaint against respondent university for illegal dismissal,
payment of backwages and reinstatement. The Labor Arbiter ruled
that respondent university had a permissible reason in not
renewing the employment contract of petitioner. Nevertheless, the
Labor Arbiter ordered the reinstatement of petitioner but without
backwages, and to extend to her regular status. Petitioner
appealed to NLRC for award of backwages. However, the NLRC
dismissed said appeal. Instead of filing the required motion for
reconsideration, petitioners filed the instant petition imputing grave
abuse of discretion on the part of the NLRC. The instant petition
also did not comply with the rule on certification against forum
shopping.
Petitioners contended that upon completion of the two-year
probationary period with a very satisfactory performance,
petitioner Escorpizo automatically becomes a permanent.

Moreover, petitioners argued that the prerequisite prescribed by

respondent university has no legal basis because it is not stipulated
in the Collective Bargaining Agreement.
The precipitate filing of petition for certiorari under Rule 65
without first moving for reconsideration of the assailed resolution
warrants the outright dismissal of this case. However, even if the
aforesaid procedural and technical infirmities were to be set aside,
the Court found no cogent reason to depart from the decision of
the NLRC. No vested right to a permanent appointment had yet
accrued in petitioner Escorpizos favor since she had yet complied
during her probation with the prerequisites necessary for the
acquisition of permanent status. Consequently, as respondent
university was under no obligation to renew said petitioners
contract of employment, her separation can not be said to have
been without justifiable cause. Her contract merely expired.
Moreover, the CBAs provision on probationary academic
employees must be read in conjunction with statutory and
administrative regulations governing faculty qualifications. Under
DECS Order No. 38, series of 1990, no person shall be allowed to
engage in teaching in the public or private elementary or
secondary schools unless he or she has passed the board
examination for teachers. Being a prerequisite imposed by law,
such requirement could not have been waived by respondent
university. Thus, the Supreme court affirmed the resolution of the
NLRC.
SYLLABUS
1.

REMEDIAL LAW; CERTIORARI; APPEAL FROM THE

NATIONAL LABOR RELATIONS COMMISSION TO THE
SUPREME
COURT;
FILING
OF
MOTION
FOR
RECONSIDERATION IS INDISPENSABLE BEFORE FILING
THEREOF.
-- This
precipitate
filing
of
petition
for certiorari under Rule 65 without first moving for
reconsideration of the assailed resolution warrants the outright
dismissal of this case. As we consistently held in numerous
cases, a motion for reconsideration is indispensable for it
affords the NLRC an opportunity to rectify errors or mistakes it
might have committed before resort to the courts can be had.
It is settled that certiorari will lie only if there is no appeal or
any other plain, speedy and adequate remedy in the ordinary
course of law against acts of public respondents. In the case
at bar, the plain and adequate remedy expressly provided by
law was a motion for reconsideration of the impugned

resolution, based on palpable or patent errors, to be made

under oath and filed within ten (10) days from receipt of the
questioned resolution of the NLRC, a procedure which is
jurisdictional. Hence, original action of certiorari, as in this
case, will not prosper. Further, it should be stressed that
without a motion for reconsideration seasonably filed within
the ten-day reglementary period, the questioned order,
resolution or decision of NLRC, becomes final and executory
after ten (10) calendar days from receipt thereof.
Consequently, the merits of the case can no longer be
reviewed to determine if the public respondent had committed
any grave abuse of discretion.
2. ID.; CIVIL PROCEDURE; ACTIONS; CERTIFICATION OF
NON-FORUM SHOPPING MUST BE EXECUTED BY
PRINCIPAL PARTY AND NOT THE ATTORNEY. -Petitioners did not comply with the rule on certification against
forum shopping. As pointed out by the private respondents,
the certification in the present petition was executed by the
counsel of petitioners, which is not correct. The certification of
non-forum shopping must be by the plaintiff or any of the
principal party and not the attorney. This procedural lapse on
the part of petitioners is also a cause for the dismissal of this
action.
3. LABOR AND SOCIAL LEGISLATION; LABOR STANDARDS;
EMPLOYMENT; PROBATIONARY EMPLOYEE; DEFINED;
PROBATIONER MUST BE PROVE THAT HE IS QUALIFIED
FOR
PERMANENT
EMPLOYMENT. -A
probationary
employee is one who, for a given period of time, is being
observed and evaluated to determine whether or not he is
qualified for permanent employment. A probationary
appointment affords the employer an opportunity to observe
the skill, competence and attitude of a probationer. The word
probationary, as used to describe the period of employment,
implies the purpose of the term or period. While the employer
observes the fitness, propriety and efficiency of a probationer
to ascertain whether he is qualified for permanent
employment, the probationer at the same time, seeks to prove
to the employer that he has the qualifications to meet the
reasonable standards for permanent employment.
4. ID.; ID.; ID.; PETITIONER MUST PASS THE PBET TO
QUALIFY FOR REGULAR EMPLOYMENT. -- Admittedly,
while Escorpizo met the first requirement, she did not fulfill the

second. She had failed the PBET twice at the time her
probationary period ended. That she did not qualify to become
a permanent employee is further evidenced by the fact that
before her employment contract expired, she was informed
that her services would be terminated by the end of the school
year in March 1991. When she was given, upon her plea, a
teaching load in the next succeeding school year, it was
already beyond the two-year probationary period. The most
that could be conceded in this situation is that her continued
employment was deemed an extension, ex-gratia, of her
probationary period, affording her another chance to pass the
requisite licensure test for teachers. Petitioners did not even
deny that Escorpizo was rehired on a temporary basis on
condition that she has to pass the PBET in order to become a
permanent employee. Under no circumstance could continued
employment alone beyond the two-year period bestow on her
the status of a regular employee. It was only after fulfilling
the cited second requirement when, on the third try, she
passed the PBET that she qualified for regular and permanent
employment.
5. ID.; ID.; ID.; COLLECTIVE BARGAINING AGREEMENT'S
PROVISION MUST BE READ IN CONJUNCTION WITH
STATUTORY
AND
ADMINISTRATIVE
REGULATIONS
GOVERNING FACULTY QUALIFICATIONS. -- Petitioners
reliance on the collective bargaining agreement (CBA) alone is
not tenable. Indeed, provisions of a CBA must be respected
since its terms and conditions constitute the law between the
contracting parties. Those who are entitled to its benefits can
invoke its provisions. And in the event that an obligation
therein imposed is not fulfilled, the aggrieved party has the
right to go to court for redress. To buttress their position,
petitioners cite the following provision of the CBA between
respondent university and petitioner union. Clearly, the
abovequoted provision does not mention that passing the PBET
is a prerequisite for attaining permanent status as a teacher.
Nevertheless, the aforecited CBA provision must be read in
conjunction with statutory and administrative regulations
governing faculty qualifications. It is settled that an existing
law enters into and forms part of a valid contract without the
need for the parties expressly making reference to it. Further,
while contracting parties may establish such stipulations,
clauses, terms and conditions as they may see fit, such right to
contract is subject to limitation that the agreement must not

be contrary to law or public policy. In this connection, DECS

Order No. 38, series of 1990, a regulation implementing
Presidential Decree No. 100618 or the Decree Professionalizing
Teaching stipulates that no person shall be allowed to engage
in teaching and/or act as a teacher unless he has registered as
professional teacher with the National Board for Teachers. To
be eligible as professional teacher, one must have passed the
board examination for teachers or the examinations given by
the Civil Service Commission or jointly by the Department of
Education, Culture Sports and the Civil Service Commission.
The Order also provides that effective January 1, 1992, no
teacher in the private schools shall be allowed to teach unless
he or she is a registered professional teacher. Significantly,
school officials are enjoined by the said administrative order to
ensure that all persons engaged in teaching in the public or
private elementary or secondary schools are registered
professional teachers.
6. ID.; ID.; ID.; REQUIREMENT OF PASSING THE PBET TO
QUALIFY FOR REGULAR EMPLOYMENT CANNOT BE
WAIVED BY RESPONDENT UNIVERSITY.-- Undoubtedly,
the requirement of passing the PBET before one could become
a regular employee as prescribed by respondent university is
legally in order. Being a prerequisite imposed by law, such
requirement could not have been waived by respondent
university, as herein insisted by petitioners. In the same vein,
petitioners proposition that upon completion of two-year
probationary period with a very satisfactory performance,
Escorpizo automatically becomes permanent is not correct.
For as earlier stressed, Escorpizo could only qualify to become
permanent employee upon fulfilling the reasonable standards
for permanent employment which include passing the board
examination for teachers.
7. ID.; ID.; ID.; PROBATIONARY TEACHERS CANNOT CLAIM
SECURITY OF TENURE UPON EXPIRATION OF THEIR
CONTRACT OF EMPLOYMENT. -- This is by no means to
assert that probationary teachers do not enjoy security of
tenure. They enjoy security of tenure in the sense that during
their probationary employment they cannot be dismissed
except for cause. However, upon expiration of their contract
of employment, probationary academic personnel cannot claim
security of tenure and compel their employers to renew their
employment contracts. In fact, the services of an employee
hired on probationary basis may be terminated 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 that would
hinder the employer from extending a regular or 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, the law does not preclude the
employer from terminating the probationary employment on
justifiable ground.
8. ID.; LABOR RELATIONS; TERMINATION OF EMPLOYMENT;
PETITIONER WAS NOT ILLEGALLY DISMISSED IN CASE
AT BAR. -- In the instant case, Escorpizo was entitled to
security of tenure during the period of her probation but such
protection ended the moment her employment contract
expired at the close of school year 1991-1992 and she was not
extended a new appointment. No vested right to a permanent
appointment had as yet accrued in Escorpizos favor since she
had not yet complied, during her probation, with the
prerequisites necessary for the acquisition of permanent
status. Consequently, as respondent university was not under
obligation to renew Escorpizos contract of employment, her
separation cannot be said to have been without justifiable
cause.
Legally speaking, Escorpizo was not illegally
dismissed. Her contract merely expired.
APPEARANCES OF THE COUNSEL
Rudolfo A. Lockey for petitioners.
The Solicitor General for public respondent.
Cabato Law Office for private respondents.

THIRD DIVISION
[G.R. No. 107320. January 19, 2000]
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[1] 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 petitioners 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
decision[2] disposing as follows:

Guanio

handed

down

the

"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 complainants 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."[3]
Petitioner presented a motion for reconsideration [4]of the aforesaid
decision but to no avail. The same was denied by the respondent
NLRC for lack of merit.[5]
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 RESPONDENTS 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
RESPONDENTS BACK WAGES (sic) AND FOR ITS
(sic) REINSTATEMENT."
For resolution can be simplified into the following issues, to wit:
1. Whether private respondents 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 respondents 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,[6] in relation
to Section 3, Rule I of the Rules of the NLRC,[7] 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 respondents
resignation letter (Annex "D"[8]) which appears to have been
written and submitted at the instance of petitioner. Its form is of
the companys and its wordings are more of a waiver and
quitclaim. Moreover, the supposed resignation was not
acknowledged before a notary public. Petitioners failure to deny
that Sugarland is its sister company and that petitioner absorbed
Sugarlands security contract and security personnel assumes
overriding significance over the resignation theorized upon,
evincing petitioners 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,[9] 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"[10]
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
NLRCs assessment, to wit:
"Complainants 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 complainants hiring or even
after the commission of complainants 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
pressure - Average
the summary on page thereof,
interpretation of such rating, states:

by

1st
Offense........Warning
2nd Offense.......- 30 days suspension
without
pay
3rd Offense........- Dismissal
SECTION
IX
- CHALLENGING
A
SECURITY/LADY GUARD AND SUPERIORS

way

of

It would not be farfetched for us therefore to surmise

that the evaluators mind was already preconditioned
towards
buttressing
respondents
intent
of
terminating complainants employment, considering
that the same, to reiterate, was issued on the very
day of the dismissal, in question."
So also, private respondents 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.,[11] governing
discipline, suspension and separation from the service of security
guards, provides:

POSTED

Any Security/Lady guard who challenges, assaults,

provokes
and
insults
an
officially
posted
Security/Lady guard shall be punished:
1st Offense - One
suspension
2nd Offense - Dismissal"

under

Under pressure, he needs emotional

support.

"SECTION VIII - SLEEPING ON POST

Any Security/Lady guard who is found sleeping while

on post shall be punished as follows:

(1)

month

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. 00-0201038-89, AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Melo,
(Chairman),
Vitug,
JJ., concur.2/3/00 9:20 AM

Panganiban, and Gonzaga-Reyes,

[1]

Penned by Presiding Commissioner Edna Bonto-Perez and

concurred by Commissioners Domingo H. Zapanta and Rustico L.
Diokno.
[2]
Rollo, pp. 27- 31.
[3]
Ibid., pp. 33-49.
[4]
Ibid., pp. 53-55.
[5]
See Resolution dated June 25, 1992, Rollo, p. 50.
[6]
Section 1, Rule 9, Rules of Court: "Allegations not specifically
denied deemed admitted. -- Material averment in the complaint,
other than those as to the amount of damage, shall be deemed
admitted when not specifically denied. Allegations of usury are
deemed admitted if not denied specifically and under oath."
[7]
Section 3, Rule I, Revised Rules of the NLRC: "Suppletory
application of Rules of Court and jurisprudence. -- In the absence
of any applicable provision in these Rules, and in order to
effectuate the objectives of the Labor Code, the pertinent
provisions of the Revised Rules of Court of the Philippines and
prevailing jurisprudence may, in the interest of expeditious labor
justice and whenever practicable and convenient, be applied by
analogy or in a suppletory character and effect."
[8]
Rollo, p. 51.
[9]
"Notwithstanding your probationary appointment, the Agency
reserves the right to terminate your services for just cause even
before the expiration of the term, as provided by law, or if your
services are not satisfactory. Six (6) month after the effectivity of
your probationary appointment, you shall report to this office
without fail. Your overall performance will be analyzed and we will
decide whether we will extend your services or not."
[10]
See NLRC Decision, Rollo, p. 41.
[11]
Rollo, pp. 58-61.

THIRD DIVISION

[G.R. No. 145417. December 11, 2003]

FLORENCIO M. DE LA CRUZ, JR., petitioner, vs. NATIONAL

LABOR
RELATIONS
COMMISSION
(4th Division)
SHEMBERG MARKETING CORPORATION and ERNESTO
U. DACAY, JR., respondents.
DECISION
CORONA, J.:
Before us is a petition for review on certiorari seeking to set
aside the decision[1] of the Court of Appeals dated July 11, 2000,
affirming with modification the two resolutions of the National
Labor Relations Commission (NLRC) dated July 9, 1999 [2] and
November 19, 1999,[3]which awarded to petitioner Florencio de la
Cruz, Jr., the amount of P23,900 representing his unpaid wages
and indemnity.
The facts follow.
On May 27, 1996, petitioner Florencio M. de la Cruz, Jr. was
hired by private respondent Shemberg Marketing Corporation
(Shemberg) as senior sales manager with a monthly salary
of P40,500. Shemberg was engaged in the business of
manufacturing, trading, distributing and importing various
consumer products. The position of senior sales manager was then
newly created in line with Shembergs objective of product
positioning in the consumer market. Its duties included, among
others, the supervision and control of the sales force of the
company. The senior sales manager was also vested with some
discretion to decide on matters within the scope of his functions,
including the appointment of district sales representatives and the
reshuffling of salesmen to achieve sales targets.
However, on September 14, 1996, Shembergs human
resource department manager, Ms. Lilybeth Y. Llanto, summoned
petitioner and informed him of the managements decision to
terminate his services. Petitioner asked Llanto for the reason but

the latter merely informed him that it had something to do with the
drop in the companys sales. Petitioner then requested a meeting
with Shembergs vice president, Ernesto U. Dacay, Jr., but was told
that the decision of the management was final. His request to be
furnished a 30-day written notice was also denied by the
management. Hence, petitioner filed a complaint for illegal
dismissal, non-payment of salary, backwages, 13th month pay and
damages against Shemberg, Ernesto Dacay, Jr. and Lilybeth
Llanto.
Respondents answered that petitioners dismissal was
premised on the following: (1) his poor performance as evidenced
by the steady and substantial drop in company sales since his
assumption as senior sales manager; (2) the dissatisfaction of his
subordinates over his management style and dealings with the
companys distributors which resulted in the low morale of
Shembergs sales force, as evidenced by the joint affidavit[4] of two
of his subordinates, Ruel O. Salgado and Joel D. Sol; (3) his
unauthorized use of company cellular phone for overseas personal
calls[5] and (4) the unauthorized reimbursement of the plane
tickets of his wife and child.[6] In short, petitioner was terminated
for his failure to meet the required company standards and for loss
of trust and confidence.
In a decision dated August 25, 1997, labor arbiter Ernesto F.
Carreon ruled that petitioner Florencio de la Cruz was illegally
dismissed and granted his claim for separation pay, backwages and
unpaid wages:
WHEREFORE, premises considered, judgment is hereby rendered
ordering the respondent Shemberg Marketing Corp. to pay the
complainant Florencio de la Cruz the following:
1.

Separation pay

P40,500.00

2.

Backwages

379,350.00

3.

Unpaid wages
TOTAL

18,900.00
P438,750.00

The other claims and the cases against respondents Ernesto Dacay,
Jr. and Lilybeth Llanto are dismissed for lack of merit.

So ordered.
On appeal by respondents, the NLRC dismissed the appeal in a
decision dated May 13, 1998.[7]
Respondents moved for reconsideration, presenting additional
evidence to support its claim: (1) an affidavit executed on July 11,
1998[8]by
Ms.
Lily
Joy
M.
Sembrano,
Shembergs vice president for operations; (2) petitioners letter
of appointment dated July 8, 1996 as senior sales manager; [9] (3)
petitioners job description;[10] (4) memorandum dated July 30,
1996 addressed to petitioner, sternly warning him about the huge
drop in company sales[11] and (5) an undated memorandum
requiring petitioner to explain why he was claiming reimbursement
for his wifes and childs plane tickets.[12]
Petitioner opposed the motion for reconsideration and
questioned the authenticity of the additional evidence submitted
by the respondents.[13]
On July 9, 1999, the NLRC partially granted the motion for
reconsideration and modified its previous resolution:
WHEREFORE, premises considered, the Motion for Reconsideration
filed by the respondents-appellants is PARTIALLY GRANTED. The
decision of this Commission promulgated on 13 May 1998 is
ABANDONED. The decision of Labor Arbiter Ernesto F. Carreon
dated 25 August 1997 is MODIFIED and a new one is entered, to
wit:
Ordering respondent Shemberg Marketing Corporation to pay
complainant Florencio dela Cruz, Jr., the amount of Twenty Three
Thousand Nine Hundred Pesos (P23,900.00), broken down as
follows:
Unpaid Wages
Indemnity

P18,900.00
5,000.00

TOTAL

P23,900.00

So ordered.

[14]

Petitioner filed a motion for reconsideration of the above

resolution but the same was denied by the NLRC on November 19,
1999.[15]
Petitioner elevated the case to the Court of Appeals on a
petition for certiorari but it was dismissed for lack of merit.[16] His
subsequent motion for reconsideration was likewise denied
on September 8, 2000.[17]
Hence, this petition.
Petitioner raises the following assignments of error:[18]
I
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN
IT REFUSED TO AWARD BACKWAGES NOTWITHSTANDING ITS
FACTUAL FINDING THAT RESPONDENTS FAILED TO COMPLY WITH
THE TWO-NOTICE REQUIREMENT, CONTRARY TO THE NEW
DOCTRINE IN SERRANO VS. NLRC AND ISETANN DEPT. STORE,
G.R. NO. 117040, 27 JANUARY 2000 WHEREBY THE HONORABLE
SUPREME COURT EN BANC RULED THAT AN EMPLOYEE WHO WAS
NOT GIVEN NOTICE MUST BE PAID BACKWAGES FROM HIS
TERMINATION UNTIL IT IS FINALLY DETERMINED THAT IT WAS
FOR A JUST CAUSE.
II
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT RULED THAT THE SUBMISSION BY
PETITIONER OF PLANE TICKETS FOR REFUND CONSTITUTED
UNAUTHORIZED USE OF COMPANY FUNDS, DESPITE ABSENCE OF
EVIDENCE ON A SPECIFIC PROHIBITION REGARDING SUCH
REQUEST,
AND
CONSIDERING
THAT
THE
SAME
WAS
RESPONDENTS AFTERTHOUGHT FOR NOT BEING RAISED IN THE
ORIGINAL POSITION PAPER BEFORE THE LABOR ARBITER.
III
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT FAILED TO AWARD DAMAGES AS WELL AS
ATTORNEYS FEES.
The petition is without merit.

Petitioner insists that the Court of Appeals committed grave

abuse of discretion in ruling that the submission of his familys
plane tickets for reimbursement was tantamount to fraud and
deceit which justified the employers loss of trust and confidence in
him. He contends that private respondents attempt to impute
fraud and deceit to him was a mere afterthought, considering that
it was only raised by private respondents for the first time on
appeal and not in the original position papers submitted to the
labor arbiter.
Petitioner was holding a managerial position in which he was
tasked to perform key functions in accordance with an exacting
work ethic. His position required the full trust and confidence of
his employer. While petitioner could exercise some discretion, this
obviously did not cover acts for his own personal benefit. As found
by the court a quo, he committed a transgression that
betrayed the trust and confidence of his employer reimbursing
his familys personal travel expenses out of company funds.
Petitioner failed to present any persuasive evidence or argument to
prove otherwise. His act amounted to fraud or deceit which led to
the loss of trust and confidence of his employer.
We reiterate the well-established rule that findings of fact of
the Court of Appeals are conclusive on the parties and are not
generally reviewable by this Court when supported by substantial
evidence.[19] The rationale is that this Court, not being a trier of
facts, relies in good part on the assessment and evaluation of
evidence by the lower courts. We thus subscribe to the following
findings of the Court of Appeals in affirming the NLRC decision, that
petitioners dismissal was for a just cause:
With respect to the unauthorized use of company funds, there
appears to be substantial evidence to show that petitioner indeed is
guilty of the same but only with respect to the reimbursement of
plane ticket fares.
Although the cellular phone bill statement with the alleged
unauthorized overseas calls were reflected was submitted in
evidence, it does not prove that petitioner was the one who made
those calls. Petitioner claimed that the said mobile unit was not at
all times used by him. This was not controverted by respondents.
Furthermore, there was no evidence presented to prove that the
recipient of the overseas call was not at all connected with the
company as the calls could actually be official business calls. Mere

presentation of a cellular phone bill statement would not suffice to

charge petitioner with unauthorized use of company phone
especially in the light of the memorandum sent by the cellular
phone company warning its subscribers of illegal activities
perpetuated by unauthorized individuals posing as their employees.
But this cannot be true insofar as the prosecution of the plane
tickets of petitioners family is concerned. Respondents insist that
petitioner submitted these tickets and reimbursed the cost of the
same from the respondent corporation without authority or
permission from management. On the other hand, petitioner
merely denied having reimbursed the costs of the tickets or of
using company funds to buy them. We find that petitioners denial
cannot prevail over the actual presentation of the plane ticket in
the name of petitioner and his family and terminal fee stubs
bearing three (3) different serial numbers but similarly dated. The
possession by respondent corporation of the plane tickets of
petitioners wife and child clearly shows that the same were
submitted to management for reimbursement along with the other
transportation expenses of petitioner. Otherwise, there is no way
respondent corporation could have gotten hold of the
same. Petitioner opted not to explain why these plane tickets were
in the possession of respondent corporation. His denials without
accompanying proof coupled with his silence on this matter cannot
but be taken against him.
We reject petitioners contention that the matter of
reimbursement of the plane tickets of his family was a mere
afterthought, not having been raised by respondent in the original
position papers before the labor arbiter. The NLRC acted correctly
since technical rules of evidence are not binding in labor
cases. Article 221 of the Labor Code provides:
In any proceeding before the Commission or any of the Labor
Arbiters, the rules of evidence prevailing in courts of law or equity
shall not be controlling and it is the spirit and intention of this Code
that the Commission and its members and the Labor Arbiter shall
use every and all reasonable means to ascertain the facts in each
case speedily and objectively and without regard to technicalities of
law or procedure, all in the interest of due process. xxx
Thus, in Bristol Laboratories Employees Association vs.
NLRC,[20] this Court upheld the NLRC when it considered additional

documentary evidence submitted by the parties on appeal to prove

breach of trust and loss of confidence as basis for the dismissal of
the petitioner therein. Likewise, in Lopez vs. NLRC,[21] we held
that, under Article 221 of the Labor Code, the NLRC could validly
admit certain documents proving the re-employment of the private
respondent
although
they
were
presented
only
on
appeal. Technicalities should not be permitted to stand in the way
of equitably and completely resolving the rights and obligations of
the parties.[22]
Petitioner was hired by respondent Shemberg Marketing
Corporation on May 27, 1996 and was terminated on September
14, 1996. Article 281 of the Labor Code provides:
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.
Petitioner vigorously contends that he was not a probationary
employee since Shemberg failed to disclose to him the reasonable
standards for qualifying as a regular employee.
This Court notes, however, the evidence on record clearly
showing that petitioner was well informed of the standards to be
met before he could qualify as a regular employee. This was
stated in his appointment paper:
To

Florencio dela Cruz

From

HRD

Re

Appointment

Date

July 8, 1996

We are happy to inform you that you have been hired as Senior
Sales Manager VISMIN effective May 27, 1996. As a matter of

company policy your performance shall be periodically evaluated in

accordance with performance standards set by the company.
You will be reporting directly to the President and shall maintain
coordinating relationship with the AVPs for TRADING, F & B
Division, CUPCO & SHALDAN and their respective Plant Managers.
LILIBETH Y. LLANTO
HRD Manager
Noted by:
ERNESTO U. DACAY, JR.
President
Attached to his appointment paper was the job description of
sales manager which read:
JOB DESCRIPTION
Senior Sales Manager
Visayas Mindanao Areas
Shemberg Marketing Corporation
General Functions:
Responsible in (sic) organizing, planning, establishing, and
implementing sales policies and procedures for the purpose of
attaining sales targets.
Specific Functions:
1.

Responsible in (sic) the proper marketing, sales and

distribution of products in the assigned area.

2.

Handles the monitoring of sales and sees to it that

the monthly sales targets are attained.

3.

Submits monthly report of sales and collection

showing comparison against the budgeted sales
targets for evaluation purposes.

4.

Does such other functions as may be directed by

the President from time to time.

5.

Performance subject to evaluation and trial period

for six (6) months or more. (Italics supplied)

A probationary employee is one who, for a given period of

time, is under observation and evaluation to determine whether or
not he is qualified for permanent employment. During the
probationary period, the employer is given the opportunity to
observe the skill, competence and attitude of the employee while
the latter seeks to prove to the employer that he has the
qualifications to meet the reasonable standards for permanent
employment. The length of time is immaterial in determining the
correlative rights of both the employer and the employee in dealing
with each other during said period. [23]
There is no dispute that petitioner, as a probationary
employee, enjoyed only temporary employment status. In general
terms, this meant that he was terminable anytime, permanent
employment not having been attained in the meantime. The
employer could well decide he no longer needed the probationary
employees services or his performance fell short of expectations,
etc. As long as the termination was made before the expiration of
the six-month probationary period, the employer was well within
his rights to sever the employer-employee relationship. A contrary
interpretation would defect the clear meaning of the term
probationary. In this case, respondent Shemberg had good
reason to terminate petitioners employment and that was his
dishonesty.
WHEREFORE, the instant petition is hereby DISMISSED for
lack of merit and the decision dated July 11, 2000 of the Court of
Appeals is hereby AFFIRMED.
SO ORDERED.
Vitug, (Chairman),
JJ., concur.

[1]

Sandoval-Gutierrez, and Carpio-Morales,

Penned by Associate Justice Martin S. Villarama, Jr. and

concurred in by Associate Justices Salome A. Montoya and

Romeo J. Callejo, Sr. (now Associate Justice of the Supreme

Court) in CA-G.R. SP No. 57293; Rollo, pp. 27-37.
[2]

Penned by Commissioner Amorito V. Caete and concurred in by

Presiding Commissioner Irenea E. Ceniza and Commissioner
Bernabe S. Batuhan; Original Records, pp. 220-229.

[19]

Such factual findings shall not be disturbed, unless: (1) the

conclusion is a finding grounded entirely on speculation,
surmise and conjecture; (2) the inference made is
manifestly mistaken; (3) there is grave abuse of discretion;
(4) the judgment is based on a misapprehension of facts;
(5) the findings of fact are conflicting; (6) the Court of
Appeals went beyond the issues of the case and its findings
are contrary to the admissions of both appellant and
appellees; (7) the findings of fact of the Court of Appeals
are contrary to those of the trial court; (8) said findings of
fact are conclusions without citation of specific evidence on
which they are based; (9) the facts set forth in the petition
as well as in the petitioners main and reply briefs are not
disputed by the respondents; and (10) the findings of fact
of the Court of Appeals are premised on the supposed
absence of evidence and contradicted by the evidence on
record. Martinez vs. CA, 358 SCRA 38, 49-50 (2001).

[20]

187 SCRA 118, 121 [1990].

[21]

245 SCRA 644, 649 [1995].

[22]

Philippine-Singapore Ports Corporation vs. NLRC, 218 SCRA 77

[1993].

[23]

Escorpizo vs. University of Baguio, 306 SCRA 497, 507 [1999].

THIRD DIVISION

[G.R. No. 121071. December 11, 1998]

PHIL.

FEDERATION OF CREDIT COOPERATIVES, INC.

(PECCI)
and
FR.
BENEDICTO
JAYOMA, petitioners, vs.NATIONAL
LABOR
RELATIONS
COMMISSION
(First
Division)
and
VICTORIA ABRIL, respondents.
DECISION

ROMERO, J.:
It is an elementary rule in the law on labor relations that a
probationary employee who is engaged to work beyond the
probationary period of six months, as provided under Art. 281 of
the Labor Code, as amended, or for any length of time set forth by
the employer, shall be considered a regular employee.
Sometime in September 1982, private respondent Victoria
Abril was employed by petitioner Philippine Federation of Credit
Cooperatives, Inc. (PFCCI), a corporation engaged in organizing
services to credit and cooperative entities, as Junior Auditor/Field
Examiner and thereafter held positions in different capacities, to
wit: as office secretary in 1985 and as cashier-designate for four
(4) months ending in April 1988. Respondent, shortly after
resuming her position as office secretary, subsequently went on
leave until she gave birth to a baby girl. Upon her return
sometime in November 1989, however, she discovered that a
certain Vangie Santos had been permanently appointed to her
former position. She, nevertheless, accepted the position of
Regional Field Officer as evidenced by a contract which stipulated,
among other things, that respondents employment status shall be
probationary for a period of six (6) months. Said period having
elapsed, respondent was allowed to work until PFCCI presented to
her another employment contract for a period of one year
commencing on January 2, 1991 until December 31, 1991, after
which period, her employment was terminated.

In a complaint for illegal dismissal filed by respondent against

PFCCI on April 1, 1992, Labor Arbiter Cornelio L. Linsangan
rendered a decision on March 10, 1993 dismissing the same for
lack of merit but ordered PFCCI to reimburse her the amount
of P2,500.00 which had been deducted from her salary.
On appeal, however, the said decision was reversed by the
National Labor Relations Commission (NLRC), the dispositive
portion of which reads:
WHEREFORE, the appealed decision is hereby set aside. The
respondents are hereby directed to reinstate complainant to her
position last held, which is that of a Regional Field Officer, or to an
equivalent position if such is no longer feasible, with full backwages
computed from January 1, 1992 until she is actually reinstated.
SO ORDERED.
We find no merit in the petition.
Article 281 of the Labor Code, as amended, allows the
employer to secure the services of an employee on a probationary
basis which allows him to terminate the latter for just cause or
upon failure to qualify in accordance with reasonable standards set
forth by the employer at the time of his engagement. As defined in
the case of International Catholic Migration v. NLRC,[1] a
probationary employee 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 employment 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.
Probationary employees, notwithstanding their limited tenure,
are also entitled to security of tenure. Thus, except for just cause
as provided by law,[2]or under the employment contract, a
probationary employee cannot be terminated.[3]
In the instant case, petitioner refutes the findings of the NLRC
arguing that, after respondent had allegedly abandoned her
secretarial position for eight (8) months, she applied for the
position of Regional Field Officer for Region IV, which appointment,
as petitioner would aptly put it, had been fixed for a specific
project or undertaking the completion or termination of which had
been determined at the time of the engagement of said private

respondent and therefore considered as a casual or contractual

employment under Article 280 of the Labor Code.[4]
The contention that respondent could either be classified as a
casual or contractual employee is utterly misplaced; thus, it is
imperative for the Court to elucidate on the kinds of employment
recognized in this jurisdiction. The pertinent provision of the Labor
Code, as amended, 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 of law comprehends three kinds of employees:
(a) regular employees or those whose work is necessary or
desirable to the usual business of the employer; (b) project
employees or those whose 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; and (c) casual employees or those who are neither regular
nor project employees. With regard to contractual employees, the
Court in the leading case of Brent School, Inc. v. Zamora, [5] laid
down the guidelines before a contract of employment may be held
as valid, to wit: stipulations in employment contracts providing for
term employment or fixed period employment are valid when the
period were agreed upon knowingly and voluntarily by the parties
without 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.
Having expounded on the various types of employees, the
Court is constrained to review the contract of employment entered
into between the party-litigants. The said contract reads:
That the employer hires the employee on contractual basis to the
position of Regional Field Officer of Region 4 under
PFCCI/WOCCU/Aid Project No. 8175 and to do the function as
stipulated in the job description assigned to him (her): on
probationary status effective February 17/90 for a period not to
exceed six (6) months from said effectivity, subject to renewal of
this contract should the employees performance be satisfactory.
While the initial statements of the contract show that
respondents employment was for a fixed period, the succeeding
provisions thereof contradicted the same when it provided that
respondent shall be under probationary status commencing on
February 17, 1990 and ending six (6) months thereafter. Petitioner
manifested that respondents employment for a period of one year,
from January until December 1991, having been fixed for a
specified period, could not have converted her employment status
to one of regular employment. Conversely, it likewise insisted that
respondent was employed to perform work related to a project
funded by the World Council of Credit Unions (WOCCU) and hence,
her status is that of a project employee. The Court is, thus,
confronted with a situation under which the terms of the contract
are so ambiguous as to preclude a precise application of the
pertinent labor laws.
Amidst the muddled assertions by petitioner, we adhere to the
pronouncement stated in the recent case of Villanueva v.
NLRC,[6] where the Court ruled that where a contract of
employment, being a contract of adhesion, is ambiguous, any
ambiguity therein should be construed strictly against the party
who prepared it. Furthermore, It added:
We cannot allow the respondent company to construe otherwise
what appears to be clear from the wordings of the contract. The
interpretation which the respondent company seeks to wiggle out

is wholly unacceptable, as it would result in a violation of

petitioners right to security of tenure guaranteed in Section 3 of
Article XIII of the Constitution and in Articles 279 and 281 of the
Labor Code.

(d)
Commission of a crime or offense by the
employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and

After a careful scrutiny of the subject contract, we arrive at the

conclusion that there was no grave abuse of discretion on the part
of the NLRC and, thus, affirm the finding that respondent has
become a regular employee entitled to security of tenure
guaranteed under the Constitution and labor laws.

[3]

Agoy v. NLRC, 252 SCRA 588 (1996).

[4]

Petition, Rollo, pp. 15-16.

[5]

181 SCRA 702 (1990).

[6]

G.R. No. 127448, September 10, 1998.

Regardless of the designation petitioner may have conferred

upon
respondents
employment
status,
it
is,
however,
uncontroverted that the latter, having completed the probationary
period and allowed to work thereafter, became a regular employee
who may be dismissed only for just or authorized causes under
Articles 282, 283 and 284 of the Labor Code, as
amended. Therefore, the dismissal, premised on the alleged
expiration of the contract, is illegal and entitles respondent to the
reliefs prayed for.

(e)

Other causes analogous to the foregoing.

WHEREFORE, in view of the foregoing, the petition is hereby

DISMISSED and the decision of the National Labor Relations
Commission dated November 28, 1994 is AFFIRMED. No costs.
SO ORDERED.
Kapunan, Purisima, and Pardo JJ., concur

[1]

169 SCRA 606 (1989).

[2]

ART. 282. Termination by employer. - An employer may

terminate an employment for any of the following causes:
(a)
Serious misconduct or willful disobedience
by the employee of the lawful orders of his employer or
representative in connection with his work;
(b)
of his duties;

Gross and habitual neglect by the employee

(c)
Fraud or willful breach by the employee of
the trust reposed in him by his employer or duly authorized
representative;

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION
G.R. No. 74246 January 26, 1989
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 oncertiorari 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 prearranged 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, Grio-Aquino and Medialdea, JJ., concur.

Footnotes
1 Rollo, pp. 5, 11, 23.
2 Case No. NCR-STF 10-6282-79.
3 Rollo, pp. 14-15.
4 Id., pp. 11-12.
5 Id., p. 13.
6 Id., pp. 2-10.
7 131 SCRA, 151, 156 (July 31, 1984).
8 Rollo, pp. 46-53.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

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.
Valentin A. Zozobrado for petitioner.
Silvino G. Maceren, Jr. for private respondents.
Office of the Solicitor General for public respondent.

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
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

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
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.
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
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

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 likewise denied. 11

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.

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.

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.

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

We find this petition devoid of merit; the writ prayed for cannot be
granted.

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
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.

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
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
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 thatThe 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 selforganization, collective bargaining, security of
tenure, and just and human conditions of work. 18
2. With these in mind, We approach the next issue for resolution,
that is, whether herein private respondents were validly dismissed.
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.

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
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
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.
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.

We agree with the Regional Director

s. 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

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.

On this particular issue, it is perhaps timely to consider well settled

principles involving decisions of administrative agencies. Findings

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.

11 Ibid., 58; Annex I.

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.

15 Powell vs. Alabama, 297 U.S. 45, 77 L. ed. 158.

SO ORDERED.

21 National Federation of Labor Union, et al. vs.

Ople, et al., 143 SCRA 124 (1986).

Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ.,

concur.

22 Section 1, Rule XIV, Book V, Implementing

Regulations of the Labor Code.

12 Petition, 8-14; Rollo, 16-22.

13 Rollo, 68-78.
14 Lopez vs. Director of Lands, 47 Phil. 23, 32
(1924).
16 Sampang vs. Inciong, et al., 137 SCRA 56
(1985); Remerco Garments Manufacturing vs.
Minister of Labor and Employment, et al., 135 SCRA
167 (1985); De Leon vs. Commission on Elections, et
al., 129 SCRA 117 (1984).
17 Section 8, Article II.
18 Article 3, Chapter I, P.D. 442.
19 Comment, 7; Rollo, 74.
20 Dangan vs. National Labor Relations Commission,
et al., 127 SCRA 706 (1984).

23 Attachment C to Annex B, Petition; Rollo, 36.

Footnotes
1 Annex E, Petition; Rollo, 45.
2 Annex G, Ibid.; Rollo, 54.
SECOND DIVISION

3 Annex C, Ibid.; Rollo, 38.

4 Attachment A to Annex B, Ibid.; Rollo 33.
5 Petition, 1; Rollo 9.

[G.R. No. 119512. July 13, 1998]

6 Comment of Public Respondent, Rollo, 69.

7 Rollo, 17-22.
8 Rollo, 37-38.
9 Ibid., 45; Annex E.
10 Ibid., 54; Annex G.

ST.

MICHAEL
ACADEMY
and
SISTER
PATRICIA
AGUILAR, petitioners, vs. THE NATIONAL LABOR
RELATIONS
COMMISSION,
HERMIE
BOLOSIO,
EDERLINDA REBADULLA, FERLIZA GOLO, IMELDA

ALERIA, BERNARDITA OSERRAOS, CEFERINA DACLAG

and JOSEPHINE DELORINO, respondents.
DECISION
PUNO, J.:
Petitioners seek to annul and set aside the Decision [1] of the
public respondent National Labor Relations Commission, Fourth
Division,
Cebu
City,
affirming
with
modification
the
Decision,[2] dated August 26, 1993, of Labor Arbiter Gabino A.
Velasquez, Jr. and granting monetary awards to private
respondents in the total amount of three hundred twenty thousand
two hundred seventy five pesos and forty two centavos
(P320,275.42).
Petitioner St. Michael Academy is an educational institution
located in Catarman, Northern Samar. Petitioner Sister Patricia
Aguilar is its principal. Private respondents, Hermie G.
Bolosio,[3] Josephine A. Delorino, Ceferina Daclag, Imelda P.
Aleria, Bernardita S. Oserraos, Ferliza B. Golo and Ederlinda M.
Rebadulla, are former teachers of petitioner school.
The instant case started when a complaint for payment of
terminal pay was filed by Bolosio and Delorino against the
petitioners on July 9, 1992.[4] This was docketed as RAB Case No.
8-0311-92. On August 3, 1992, Bolosio and Delorino filed a new
complaint for separation pay. The case was raffled off to Labor
Arbiter Gabino A. Velasquez, Jr.[5] On August 21, 1992, petitioners
submitted their position paper[6] where they disputed the right of
the complainants to separation pay on the ground that they were
not illegally dismissed. They presented the resignation letters[7] of
Bolosio and Delorino to prove that they voluntarily resigned on
June 15, 1992 and April 4, 1992, respectively.
In September 1992, Bolosio and Delorino filed their unverified
position paper[8] where they were joined by seven (7) former
teachers of petitioner school, namely: Gallano, Daclag, Aleria,
Oserraos, Rebadulla, Tan and Golo. No complaints have been filed
previously by these teachers. Their unverified position paper
alleged new claims for wage differentials, vacation and sick leave
benefits, separation pay and all other benefits to which
complainants are entitled under the Labor Code. To justify their
claim for separation pay, the seven teachers alleged that they were

forced to resign following their rally against petitioner school for

not releasing their share in the tuition fee increase.
On November 4, 1992, petitioners objected to the joining of
the seven teachers in the unverified position paper and the
inclusion of monetary claims not alleged in the original
complaints. They requested for time to file a reply which was
granted. The teachers were also allowed to submit a rejoinder.[9]
On November 5, 1992, Oserraos, Daclag, Aleria, Golo and
Rebadulla filed their individual complaints[10] against petitioner
school. Their complaints were docketed as RAB Case Nos. 110657-92 to 11-0661-92.
On November 13, 1992, petitioners submitted their
reply.[11] They raised as issue the illegality of including in the
unverified position paper new parties and new claims. They also
submitted the voluntary resignation letters[12] of the teachers to
belie their alleged intimidation and harassment. Petitioners then
received from the office of the Labor Arbiter copies of the individual
complaints. No rejoinder was filed by the teachers to petitioners
reply.
On March 5, 1993, petitioners received an Order, dated
February 4, 1993, from Labor Arbiter Velasquez informing the
parties that the case was already submitted for decision pursuant
to Section 5, Rule V of the NLRC Rules. On March 8, 1993,
petitioners received the sworn statements/affidavits[13] of Bolosio,
Delorino, Daclag, Oserraos, Aleria, Rebadulla and Golo which
specified their monetary claims. Some of the money claims
dated back to 1981. On March 31, 1993, petitioners filed a reply
to the complainants specified claims by way of an
affidavit[14] executed by Sister Escolastica Batungbakal, treasurer
of petitioner school. To negate their monetary liability, petitioners
submitted the following: (1) payroll sheets[15] signed by each
complainant showing the payment of their vacation pay and
monthly salary over and above the wage prescribed by law; (2)
copies of Notice of Inspection Results[16] issued by DOLE
Inspector Romeo Claveria for the year 1991 and by DOLE Inspector
Abraham Matillado for the year 1992 showing petitioner schools
compliance with the mandated minimum wage for employees; (3)
payroll sheets[17] showing compliance with Wage Order VIII-02;
and (4) provisions of the School Manual [18] on vacation and sick
leave. They also invoked the prescription of some of complainants
monetary claims.

Labor Arbiter Velasquez decided the case in favor of the

complainants. He awarded Delorino the amount of P41,040.75
consisting of salary differentials for the school years 1983 to 1992
(inclusive of vacation leave pay), 13th month pay for three (3)
school years and service incentive leave pay for three (3) years,
but ruled out her claim for separation pay due to her resignation;
awarded Bolosio the amount ofP53,799.23 consisting of salary
differentials for the school years 1987 to 1992 (inclusive of
vacation leave pay), 13th month pay for two (2) school years,
separation pay for five (5) years, backwages and moral and
exemplary damages; awarded Rebadulla the amount ofP25,815.76
consisting of salary differentials for the school years 1988 to 1991
(inclusive of vacation leave pay), 13th month pay for three (3)
years and service incentive leave pay for three (3) years, but found
her resignation valid; awarded Golo the amount of P22,353.34
consisting of salary differentials for the school years 1990 to 1992
(inclusive of vacation leave pay), 13 th month pay for two (2) years
and service incentive leave pay for three (3) years, but found her
resignation valid; awarded Aleria the amount of P24,866.04
consisting of salary differentials for the school years 1988 to 1992
(inclusive of vacation leave pay), but found her resignation valid;
awarded Oserraos the amount of P54,000.25 consisting of salary
differentials for the school years 1987 to 1992 (inclusive of
vacation leave pay), separation pay for five (5) years, backwages
and moral and exemplary damages for her involuntary resignation;
and awarded Daclag the amount ofP116,924.67 consisting of salary
differentials from 1984 to 1992 (inclusive of vacation leave pay),
13th month pay for eight (8) years, service incentive leave pay for
eleven (11) years, separation pay for eleven (11) years,
backwages and moral and exemplary damages for her involuntary
resignation.[19]
The Arbiter rejected petitioners claim that complainants
violated the rules of procedure by presenting new claims in their
position paper citing Section 6, Rule VII (sic) of the NLRC Rules
and Article 221 of the Labor Code. He likewise held that technical
rules of procedure [and] of evidence are not binding in labor
proceedings. He also rejected petitioners defense that some
monetary claims of complainants have been barred by
prescription. He declared that considerations of substantial justice
demand that the claims be decided regardless of the three-year
prescriptive period.[20] He awarded separation pay to some of the
complainants after finding that their resignations were
involuntary.[21]

Petitioners appealed to the public respondent NLRC. Except

for deleting the award of damages and service incentive leave pay
and denying some monetary claims due to prescription, public
respondent affirmed the decision of the Labor Arbiter, viz.:
x x x
After a review of the facts and the evidence vis-a-vis the appeal,
We find no jurisdiction to disturb the findings and conclusion of the
Labor Arbiter, the same being substantially supported by the
evidence record.
As to the appellants pretension that the clarificatory questions
allegedly posed by the arbiter on the appellees were not made in
the presence of the appellants thereby effectively violating
appellants right to due process, We find that after the Labor
Arbiter issued his Order of February 4, 1993 (sic) that the case was
deemed submitted for decision, the parties submitted additional
pleadings and/or evidence, and consequently the labor Arbiter had
to evaluate them.
Anent the monetary awards for unpaid labor standards, We find
no abuse of discretion on the part of the Labor Arbiter in granting
them. We believe that complainants claim for terminal pay
necessarily involves all that they are entitled to. What the law
grants to the employees cannot be defeated by a mere defense of
technicality, and We find relevance on the Supreme Courts view of
substantial justice on the point. It is not only legal but also
moral. However, while we affirm the grant of the aforecited
monetary benefits, we see the need to revise the computation in
the light of the respondents claims, which we sustain, that some of
the claims had already prescribed. Accordingly, the complainants
are hereby granted the following:
x x x
SUMMARY
1.
2.
3.
4.
5.

Herme Bolosino
Ederlinda Rebadulla
Ferliza Golo
Imelda Aleria
Bernardita Oserraos

=
=
=
=
=

P 87,892.74
11,455.92
18,350.56
11,664.22
83,942.52

6. Ceferina Daclag
7. Josephine Delorino

=
=

100,822.72
6,146.74
P320,275.42

Granting without admitting the propriety of the award of

backwages, the NLRC committed grave abuse of discretion in
failing to apply the rule laid down in Ferrer v. NLRC (224 SCRA
410).

x x x[22]

VII

Petitioners now assail before this Court the decision of the

respondent Commission for having been made with grave abuse of
discretion, viz.:

The NLRC gravely abused its discretion when it disregarded

prescribed rules of procedure repeatedly violated by
private respondents.

I
The NLRC gravely abused its discretion in finding that private
respondents Delorino, Bolosino, Daclag, Rebadulla, and Golo
were not paid their 13th month pay.
II
The NLRC gravely abused its discretion when it awarded
vacation leave pay to the private respondents.
III
The NLRC gravely abused its discretion in finding and
concluding that private respondents were underpaid applicable
wage orders.
IV
The NLRC gravely abused its discretion and seriously erred in
finding that petitioners forced private respondents Bolosino,
Daclag and Oserraos to resign from the service.
V
The NLRC gravely abused its discretion in awarding separation
pay and backwages to private respondents Bolosino, Daclag
and Oserraos.
VI

We affirm with modification.[23]

Errors I, II and III pertain to the monetary awards granted by
the public respondent and will be discussed under the issue of
whether or not private respondents are entitled to the payment of
salary differentials, 13th month pay, vacation leave pay and service
incentive leave pay. Errors IV, V and VI revolve on the issue of
whether or not private respondents Bolosio, Daclag and Oserraos
were illegally dismissed by being forced to resign. Error VII raises
the issue of whether or not private respondents failure to follow
the rules of procedure in labor cases violated petitioners right to
due process.
I
Public respondent NLRC modified the Labor Arbiters monetary
awards to respondents by applying the three-year prescriptive
period on several money claims and deleting the award of service
incentive leave pay as well as moral and exemplary damages. Not
satisfied, petitioners maintain that public respondent NLRC gravely
abused its discretion when it affirmed the Labor Arbiters award of
13th month pay and unpaid vacation leave pay to the private
respondents despite the latters failure to specifically pray for them
in their pleadings. Petitioners contend that a prayer for such other
benefits provided by the Labor Code should be limited to those
benefits which follow as a matter of course based on the
allegations of the parties and the evidence presented. They urge
that it should clearly appear that a party is entitled to the benefit
but, through inadvertence or ignorance, failed to specifically
include it in the prayer.
We hold that the respondent Commission did not gravely
abuse its discretion in granting 13th month pay differential to the
private respondents. We have granted statutory benefits to

employees although they have failed to pray for them in their

complaint.[24] Technical rules of pleading are not enforced strictly in
labor cases especially where they will defeat the substantive rights
of employees. We find no reason to depart from this ruling
demanded
by
broad
consideration
of
substantial
justice. Nevertheless, we take exception to the complete award of
13th month pay to each private respondent as there appears a clear
mistake in the computation. The payroll sheets show the
13thmonth pay actually paid by petitioner school to the private
respondents. For the second half of 1989, private respondents did
not receive their proportionate 13th month pay; for the year 1990,
they received only one-half; for 1991, they were paid an
incomplete amount; for 1992, they also received one-half of the
13th month pay plus one-month subsidy.
It appears that public respondent computed the 13 th month
pay differential by multiplying the daily wage rate by the number of
days each private respondents worked in petitioner school. This is
incorrect. According to No. 4 (a) of the Revised Guidelines on the
Implementation of the 13th Month Law (Presidential Decree 851)
dated November 16, 1987, the 13th month pay of an individual is
(not less than) one-twelfth (1/12) of the total basic salary earned
by an employee within a calendar year. Moreover, in No. 6
thereof, it is provided that an employee who has resigned or whose
services were terminated at any time before the time for payment
of the 13th month pay is entitled to this monetary benefit in
proportion to the length of time he worked during the year,
reckoned from the time he started working during the calendar
year up to the time of his resignation or termination from the
service.[25]
Following these guidelines, the proportionate 13 th month pay of
private respondents Bolosio, Delorino, Oserraos, Rebadulla, Aleria
and Daclag for the second half of 1989 should be computed by
multiplying their basic monthly wage at that time by 7/12. For the
year 1990, private respondents, except Golo, should be given the
remaining half of the 13th month pay. For the year 1991, private
respondents,
except
Rebadulla,
should
be
given
the
differential. For 1992, no differential is due to private respondents
since petitioner school paid all of them an amount over and above
their proportionate 13th month pay.
Petitioners contend that the public respondent erred when it
granted vacation leave pay as the same is given only to permanent
employees in accordance with Section 2 of the School

Manual. They further allege that they have paid the vacation leave
pay of the deserving complainants.
Petitioners position is well-taken. The payment of vacation
and sick leave is governed by the policy of the employer or the
agreement between the employer and employee. In the instant
case, Section 2 of the School Manual[26] of petitioner school relates
to private respondents entitlement to vacation and/or sick leave
benefits. It provides:
SECTION 2
CLASSIFICATION OF LEAVES
Permanent or regular faculty members are entitled to five (5) days
sick leave, five (5) days emergency leave and one (1) month
summer vacation leave with pay during the calendar year. These
leaves are not commutative nor cumulative. Part-time members
are not entitled to the privilege under this paragraph.
Clearly, probationary teachers are not entitled to the leaves
specified in Section 2 of the School Manual. The probationary
period for private school teachers is three years as provided in the
Manual of Regulations for Private Schools.[27] Thus, private
respondents Golo and Rebadulla are not entitled to vacation leave
pay since they were probationary teachers until they resigned on
April 6, 1992 and May 28, 1991, respectively. Private respondent
Aleria is not also entitled to vacation leave pay for the years 1990
and 1991 as she was still on probation then. In 1992, she received
full vacation leave pay as shown in the payroll sheets. Private
respondents Bolosio and Oseraos were still probationary teachers
in 1990. They were paid full vacation leave pay for 1991 and
1992. Private respondent Daclag was paid full vacation leave pay
for 1990, 1991 and 1992. Lastly, private respondent Delorino was
paid full vacation leave pay for 1990 and 1992. Her 1991 vacation
leave pay was below the minimum wage. She is entitled to the
payment of its differential.
Petitioners also assail the award of salary differential on the
ground that they have fully paid the salaries of private
respondents. They cite the certification issued by the Department
of Labor and Employment (DOLE) that there was no underpayment
of wages in petitioner school and the payroll sheets indicating that

private respondents received salaries more than what was then

mandated by law.
We find partial merit on the contention of the petitioners. The
wage order pertinent to this case is Wage Order No. RB VIII-01 of
the Regional Tripartite Wages and Productivity Board of Region VIII
which took effect on December 9, 1990. Section 2 of the Wage
Order and Section 6 of its implementing rules provide that with
respect to private educational institutions, the share of the covered
workers and employees in the increase in the tuition fees for
school year 1990 shall be credited as compliance with the wage
increase prescribed therein. The payroll sheets show that the
private respondents received subsidy on a monthly basis or in a
lump sum amount since January 1990 (except for the months of
April and May 1991 with respect to private respondent Delorino) up
to the time they resigned. Accordingly, the subsidy given by
petitioner school to the private respondents starting January 1990
should be credited as compliance with the wage increase
prescribed by Wage Order No. VIII-01. No salary differential is
therefore due to private respondents from January 1990 up to the
time of their resignation except for the month of May 1991 with
respect to private respondent Delorino.
With respect to the period from July 1989 to December 1989,
we cannot credit the alleged subsidy given by petitioner school to
the private respondents to cover the difference between the
minimum wage rate and their basic salary. The payroll sheets do
not clearly show that private respondents received subsidy since it
was neither incorporated in their gross pay nor paid them in a lump
sum amount. Needless to state, as the basic monthly salary
received by private respondents for the said period fell short of the
minimum monthly wage at that time, they are entitled to salary
differentials.
Under Articles 291 of the Labor Code, money claims arising
from an employer-employee relationship must be filed within three
(3) years from the time the cause of action accrued. Thus, salary
differential can only be recovered from July 1989 with respect to
private respondents Bolosio and Delorino, and from November
1989 with respect to private respondents Rebadulla, Oserraos,
Daclag and Aleria, that is, three (3) years before they filed their
individual complaints on July 9, 1992 and November 5, 1992,
respectively.[28] But as aforestated, petitioner school complied with
the minimum wage requirement starting January 1990, hence, no
salary differential can be recovered from that instant up to the time

of their resignation. Thus, Bolosio can recover salary differential

from July 1989 to December 1989; Delorino is entitled to salary
differential from July 1989 to December 1989 and May 1991; and
Rebadulla, Oserraos, Daclag and Aleria can recover salary
differential from November 1989 to December 1989. As for Golo,
it appears that she was fully compensated for her services.
II
We now determine whether or not private respondents
Bolosio, Daclag and Oserraos were forced to resign from
petitioner school, hence, illegally dismissed.
Public respondent NLRC upheld the Labor Arbiters ruling that
private respondents were illegally dismissed by simply stating that
the conclusion of the latter is substantially supported by the
evidence on record. Petitioners aver that the evidence
overwhelmingly prove otherwise. They presented the individual
resignation letters of private respondents. In contrast, the records
reveal that private respondents presented no competent evidence
to prove that they were compelled to resign after they staged a sitdown strike.
It is apt to examine the resignation letters of private
respondents. The full text of private respondent Daclags
resignation letter reads:
Catarman, N. Samar
April 4, 1992
Rev. Sister Patricia. O.P.
Directress/Principal
St. Michael Academy
Catarman, N. Samar
Dear Sister:
Leaving in (sic) this institution seemed so hard for me to
do. But with my plan to under go check-up, I made (sic) my
decision to resign.
For the last 10 years of service in this school, I have gained
various things that challenged me to grow and developed (sic) into
a more effective, more competent of knowledge, facts as well as
fiction (sic).

I wish to express my heartfelt thanks and appreciation to

the administration, specially the Dominican sisters, for giving
me the opportunity to be a member of this Catholic school; the
faculty and staff who in one way helped and guided me of (sic) my
incapabilities.
Please consider my resignation as secondary teacher-adviser of
this school effective this day, April 4, 1992.
Sincerely yours,
(Sgd.) Ms.

June 15, 1992

The Principal
St. Michael Academy
Catarman, Northern Samar
Dear Sister,
I have the honor to inform your good office that I am resigning as
a classroom teacher effective today (June 15, 1992).

Ceferina Daclag
St Catherine Adviser[29] (emphasis supplied)
BOLOSIO

Private respondent Oserraos resignation letter states:

Very truly yours,

(Sgd.) MR. HERME G.

Copy furnished:
Catarman, N.
Samar
June 29, 1992
Dear Sister:
I wish to tender my resignation as English teacher in your school
for personal reason.
I appreciate very much being with you in the past years
and still hope that I can be with you again in some other
instances.
I hope that this letter be given (sic) due consideration and
approval.
Thank you very much.
Very truly yours,
(Sgd.) BERNARDITA S. OSERRAOS
Teacher[30] (emphasis supplied)
As for private respondent Bolosio, his resignation letter is simply
worded in this wise:

Labor
DECS
Office of the Mo. General
School File[31]
The resignation letter of respondent Daclag clearly stated her
reason for resigning, that is, to undergo check-up. In addition, her
letter as well as that of private respondent Oserraos contained
words of gratitude and appreciation to the petitioners. Such kind
expressions can hardly come from teachers forced to resign. As for
the letter of private respondent Bolosio, the fact that no reason
was stated for his resignation is no reason to conclude that he was
threatened by petitioners. Indeed, Bolosio did not present any
competent evidence to prove that he was forced by the petitioners
to resign. Neither did the other private respondents prove that
force or threat was applied on them to resign from petitioner
school. For intimidation to vitiate consent, the following requisites
must be present: (1) that the intimidation caused the consent to
be given; (2) that the threatened act be unjust or unlawful; (3)
that the threat be real or serious, there being evident disproportion
between the evil and the resistance which all men can offer,
leading to the choice of doing the act which is forced on the person
to do as the lesser evil; and (4) that it produces a well- grounded
fear from the fact that the person from whom it comes has the
necessary means or ability to inflict the threatened injury to his
person or property.[32] Bare allegations of threat or force do not

constitute substantial evidence to support a finding of forced

resignation. In fine, from the evidence on record, we are not
convinced that private respondents Bolosio Oserraos and Daclag
were forced to resign. Accordingly, we hold that they are not
entitled to the award of separation pay and backwages.
III
Lastly, petitioners contend that private respondents violated
procedural rules when they submitted ahead of their individual
complaints and unverified position paper containing monetary
claims which were not previously included in their complaint. The
Solicitor General, in refutation, avers that technically should not be
allowed to stand in the way of equitably and completely resolving
the rights and obligations of the parties. He asseverates that
petitioners have not clearly shown that they were deprived of due
process of law.
Article 221 of the Labor Code provides that in any proceeding
before the NLRC or any of the Labor Arbiters, the rules of evidence
prevailing in courts of law or equity shall not be controlling and it is
the spirit and intention of the Labor Code that the NLRC and the
Labor Arbiters shall use every and all reasonable means to
ascertain the facts in each case speedily and objectively and
without regard to technicalities of law or procedure.
While the procedure adopted by the private respondents failed
to comply strictly with Rule III (Pleadings) and Rule V (Proceedings
Before Labor Arbiters) of the New Rules of Procedure of the NLRC,
we are constrained to heed the underlying policy of the Labor Code
relaxing the application of technical rules of procedure in labor
cases to help secure and not defeat justice.[33] To be sure,
petitioners cannot maintain that they were denied due
process. The essence of due process in administrative proceedings
is simply an opportunity to explain ones side or an opportunity to
seek a reconsideration of action or ruling complained of. [34] In labor
cases, submission of position papers and memoranda fulfills the
requirements of due process.[35] The records of the instant case
show that after private respondents Bolosio and Delorino filed
their complaint, petitioner school submitted its position paper
together with the annexes to refute the charges. In the position
paper of Bolosio and Delorino, however, the other private
respondents
appeared
as
complaints
and
alleged
new
grievances. Petitioners were able to manifest their objection to the
entry of new complainants and the inclusion of additional monetary
claims not demanded in the original complaint of Bolosio and

Delorino. Thereafter, petitioners were also able to file a Reply to

their position paper followed by the Affidavit of Sister Escolastica,
complete with supporting documents. In all these pleadings,
petitioners had the opportunity to present their arguments and
counter-arguments
to
oppose
private
respondents
claims. Evidently, petitioners cannot claim they were not allowed
to ventilate their defense.
Petitioners stance with respect to the lack of verification of
private
respondents
position
paper
deserves
scant
consideration. The defect is a formal, rather than a substantial one
and which further loses significance in light of the exhaustive
proceedings undertaken by public respondent to resolve the
parties dispute on the merits.
In its last endeavor to prove denial of due process, petitioners
call our attention to the Labor Arbiters statement in his decision
that On clarificatory questions conducted by this office, it was
ascertained from complainants that the threats that led them to
resign were stepped up to reality as follows: since the strike was
illegal, they will be dismissed for cause and no benefits whatsoever
will be received by them. On top of that, they will suffer calvary in
looking for future job opportunities because their dismissal will be
the ultimate stigma of their future dreams.[36] They argue that no
questions to that effect were propounded by the Labor Arbiter, or if
ever there were, such were not made in their presence. This,
according to them, effectively violated their right to due process.
The argument need not detain us. We have already ruled that
the evidence proved that private respondents were not compelled
to resign by the petitioners.
IN VIEW WHEREOF, the Decision of the National Labor
Relations Commission under review is MODIFIED as follows:
1. the award of separation pay and backwages to private
respondents Hermie G. Bolosio, Bernardita S. Oserraos
and Ceferina U. Daclag is deleted;
2. private respondent Hermie G. Bolosio is awarded the
following:
a. salary differential from July 1989 to December 1989 in
the amount of P2,059.02;[37] and

b. proportionate 13th month pay for June to December

1989 in the amount of P1,133.52;[38] the remaining
half of the 13th month pay for the year 1990 in the
amount of P1,263.60;[39] and the 13th month pay
differential for the year 1991 in the amount
of P702.15;[40]
3. private respondent Josephine A. Delorino is awarded the
following:
a. salary differential from July 1989 to December 1989 in
the amount of P874.92[41] and for May 1991 in the
amount of P680.75;[42]
b. proportionate 13th month pay for June to December
1989 in the amount of P1,133.52;[43] the remaining half
of the 13th month pay for the year 1990 in the amount
of P1,336.50;[44] and the 13th month pay differential for
the year 1991 in the amount of P254.84;[45] and
c. vacation leave pay differential for April 1991 in the
amount of P680.75;[46]
4. private respondent Bernardita S. Oserraos is awarded the
following:
a. salary differential from November 1989 to December
1989 in the amount of P291.64;[47] and
b. proportionate 13th month pay for June to December
1989 in the amount of P1,133.52;[48] the remaining half
of the 13th month pay for the year 1990 in the amount
of P1,486.30;[49] and the 13th month pay differential for
the year 1991 in the amount of P853.28;[50]
5. private respondent Ederlinda M. Rebadulla is awarded the
following:
a. salary differential from November 1989 to December
1989 in the amount of P991.68;[51] and

b. proportionate 13th month pay for June to December

1989 in the amount of P1,133.52;[52] and the
remaining half of the 13th month pay for the year 1990
in the amount of P1,231.45;[53]
6. private respondent Imelda P. Aleria is awarded the following:
a. salary differential from November 1989 to December
1989 in the amount of P886.34;[54] and
b. proportionate 13th month pay for June to December
1989 in the amount of P1,133.52;[55] the remaining
half of the 13th month pay for the year 1990 in the
amount of P1,320.85;[56] and the 13th month pay
differential for the year 1991 in the amount
of P1,55.89;[57]
7. private respondent Ceferina U. Daclag is awarded the following:
a. salary differential from November 1989 to December
1989 in the amount of P291.64;[58] and
b. proportionate 13th month pay for June to December
1989 in the amount of P1,133.52;[59] the remaining
half of the 13th month pay for the year 1990 in the
amount of P1,271.90;[60] and the 13th month pay
differential for the year 1991 in the amount
of P551.19;[61] and
8. private respondent Ferliza Golos monetary award is deleted
since she was fully compensated for her services, except for the
13th month pay differential for the year 1991 in the amount
of P448.94.[62]
All other aspects of the assailed Decision are AFFIRMED. No
costs.
SO ORDERED.
Regalado,
JJ., concur.

(Chairman),

Melo,

Mendoza, and Martinez,

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
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.

Footnotes
1 Records, P. 1.
2 Records, p. 93.
3 Rollo, pp. 9-12.
4 Rollo, pp. 43-45.
5 Article 1170 of the Civil Code.
6 104 Phil. 749.
7 Rollo, pp. 29-36.
8 Annexes 'A", "A- 1 to A-5"; 'B', Records, pp. 2127.
9 34 Words and Phrases 113, citing 53 P.S. s9370,
9377; McCartney v. Johnston, 191 A. 121, 124, 326
Pa. 442. '
10 Id., at 115, citing People v. Kearney, 58 N.E. 14,
15, 164 N.Y.64.
11 Id., at 114, citing Application of Williams, 150
N.Y.S. 2d 420, 423, 1 Misc. 2d 804.
12 76 SCRA 250 (1977).
13 Supra.
14 Supra.

FIRST DIVISION

[G.R. No. 113713. June 11, 1997]

ORIENT
EXPRESS
PLACEMENT
PHILIPPINES, petitioner, vs. NATIONAL
LABOR
RELATIONS COMMISSION, PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION and ANTONIO F.
FLORES, respondents.
DECISION
BELLOSILLO, J.:

ANTONIO F. FLORES was hired as crane operator with a

monthly salary of US$500.00 (SR1,400) for one (1) year, subject
to a 3-month probationary period, by Orient Express Placement
Philippines (ORIENT EXPRESS) in behalf of its foreign principal
Nadrico Saudi Limited (NADRICO).
However, after only one
(1) month and five (5) days in Saudi Arabia, Flores was
repatriated to the Philippines. Consequently, he filed a complaint
with the Philippine Overseas Employment Administration
(POEA) for
having
been
terminated from
work
for
no
valid reason.[1] ORIENT EXPRESS and NADRICO countered that
Flores was terminated for poor job performance as shown in
his Performance Evaluation Sheet dated 4 May 1991[2] and for
his uncooperative work attitude.[3]
On 14 July 1992 the POEA rendered a decision in favor of
complainant holding that when the ground invoked for the
dismissal of an employee was incompetency or poor job
performance it must be shown that the reasonable standards of
work prescribed by the employer were made known to the
employee and that the latter failed to conform to such
standards. In the
case
of
respondent
Flores,
it
was
observed that neither ORIENT EXPRESS nor NADRICO pointed
out the reasonable standards of work required of Flores by which
his
incompetency
was
adjudged; much
less
did
they
specify how the latter failed to live up to such reasonable
standards. Hence,
his
dismissal
was
unwarranted. As
a
consequence, ORIENT EXPRESS and NADRICO were ordered
jointly and severally to pay respondent Antonio F. Flores the sum
of US$5,416.66 or its peso equivalent representing salaries for the
unexpired portion of the contract.[4]
The National Labor
Relations Commission (NLRC)
affirmed the POEA decision on appeal. In addition, it ruled that
the designation of Flores as floorman instead of crane operator for
which he was hired violated his employment contract. The NLRC
concluded that since Flores never worked as crane operator, his
foreign employer could not have observed and assessed his
performance as such and then come up with a performance
evaluation sheet, especially considering his consistent claim that
he was made to work as floorman instead.[5]A motion for
reconsideration filed by ORIENT EXPRESS and NADRICO was
subsequently denied.[6]
ORIENT EXPRESS alone instituted this petition. It imputes
grave abuse of discretion against the NLRC in concluding that

respondent Flores was never assigned as crane operator and for

ruling that poor job performance and uncooperative work attitude
did not justify his dismissal.
With respect
to
the
factual
issue,
we
agree with
petitioner that the POEA and the NLRC overlooked the fact that
private respondent admitted that he was able to work as crane
operator as clearly and indubitably shown in his Affidavit of 1
August 1991.[7] Erroneous conclusions of the NLRC cannot be
upheld by this Court.[8] However, we disagree with petitioner's
conclusion that private respondent was validly dismissed for poor
job performance and uncooperative work attitude. Hence, we
deny the petition.
Under Art. 281 of the Labor Code, the services of
an employee hired on
a probationary basis may be
terminated 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. However, the Court cannot sustain his dismissal on
this ground because petitioner failed to specify the reasonable
standards by which private respondent's alleged poor performance
was evaluated, much less to prove that such standards were made
known to him at the time of his recruitment in Manila. Neither
private respondent's Agency-Worker Agreement[9] with ORIENT
EXPRESS nor his Employment Contract[10] with NADRICO ever
mentioned that he must first take and pass a Crane Operators'
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 worksite 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.
As aforesaid, no standard whatsoever by which such
probationary period could be hurdled was specified and made
known to him. Due process dictates that an employee be apprised
beforehand of the condition of his employment and of the terms of

advancement therein. Precisely, implicit in Art. 281 of the

Code is the requirement
that
reasonable standards
be
previously
made
known by
the
employer
to the probationary employee at the time of his engage
ment, as correctly suggested by the POEA. Obviously, such an
essential requirement was not met by petitioner, even assuming
that
Flores' alleged
unsatisfactory
performance
was
true. Besides,
unsatisfactory performance is not one of the
just causes for dismissal under the Labor Code.[11]

WHEREFORE, the assailed Decision and Resolution of the

National Labor Relations Commission of 29 December 1992 and 26
April
1993, respectively, declaring
that private
respondent
Antonio F. Flores was illegally dismissed and awarding to him
Five Thousand Four Hundred Sixteen Dollars and Sixty-Six Cents
(US$5,416.66) or its peso equivalent representing salaries for the
unexpired
portion
of
his
overseas
employment
contract, are AFFIRMED. Costs against petitioner Orient Express
Placement Philippines.

Petitioner also cites private respondent's alleged uncooperative

work attitude as another compelling ground for his termination. It
contends that private respondent was only willing to do his specific
job and refused to help out as floorman when asked to do so.
When it is purely a matter of "helping out" co-employees in
urgent need of help, uncooperative work attitude may be worth
discussing
as possible
ground
for some kind of disciplinary action against the
employee. However, such a discussion would be essentially
academic in the case at bench where private respondent was not
asked merely to help out. As borne out by private respondents
allegations, which were not disputed by petitioner, from the
moment of his arrival at the work-site in Saudi Arabia he was
immediately assigned as floorman and not as crane operator,
which was his job specification, on the flimsy excuse that a
floorman, not a crane operator, was more needed at the worksite. It was only because private respondent was bold enough
to resist and insist on his proper designation that his foreign
supervisors grudgingly relented. However in obvious retaliation to
such perceived uncooperative work attitude, private respondent
was assigned to work at unholy hours or the so-called graveyard
shift, i.e., from twelve oclock
midnight to
twelve
oclock
noon. He was not familiarized with nor given helpful instructions
in the operation of relatively modern cranes. Instead, after
subjecting him to a supposed performance evaluation wherein his
performance and work attitude were allegedly found wanting,
private respondent was again designated as floorman, albeit with
the salary of a crane operator. A few days later he was
dismissed and repatriated to the Philippines. Obviously, this Court
cannot accept as a justifiable ground for his termination his alleged
uncooperative work attitude. On the contrary, we are constrained
to sustain the POEA and the NLRC in their unanimous conclusion
that private respondent was indeed dismissed illegally.

SO ORDERED.
Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.
Padilla, (Chairman), J., on leave.

[1]

POEA Case No. (L) - 91-05-571; Records, pp. 17-18.

[2]

Annex "1," Answer to Complaint; Records, p. 37.

[3]

Id., pp. 32-33.

[4] Id., pp. 61-66.

[5]

Rollo, pp. 25-31.

[6]

Id., p. 23.

[7]

See Note 1, pp. 28-29.

[8]

Chong Guan Trading v. National Labor Relations Commission, G.

R. No. 81471, 26 April 1989, 172 SCRA 831.

[9]

Records, p. 48.

[10]

Id., pp. 9-10.

[11]

A. M. Oreta & Co., Inc. v. National Labor Relations Commission,

G. R. No. 74004, 10 August 1989, 176 SCRA 218, 227.