G.R. No.
192571 July 23, 2013 After having successfully passed the pre-employment requirements, you are hereby
ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D.
FEIST, MARIA OLIVIA T. YABUTMISA, TERESITA C. BERNARDO, AND ALLAN
G. ALMAZAR, Petitioners,
vs.
PEARLIE ANN F. ALCARAZ, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated December
10,2009 and Resolution3 dated June 9, 2010 of the Court of Appeals (CA) in CA-G.R.
SP No. 101045 which pronounced that the National Labor Relations Commission
(NLRC) did not gravely abuse its discretion when it ruled that respondent Pearlie Ann
F. Alcaraz (Alcaraz) was illegally dismissed from her employment.
The Facts
On June 27, 2004, petitioner Abbott Laboratories, Philippines (Abbott) caused the
publication in a major broadsheet newspaper of its need for a Medical and Regulatory
Affairs Manager (Regulatory Affairs Manager) who would: (a) be responsible for drug
safety surveillance operations, staffing, and budget; (b) lead the development and
implementation of standard operating procedures/policies for drug safety surveillance
and vigilance; and (c) act as the primary interface with internal and external
customers regarding safety operations and queries.4 Alcaraz - who was then a
Regulatory Affairs and Information Manager at Aventis Pasteur Philippines,
Incorporated (another pharmaceutical company like Abbott) – showed interest and
submitted her application on October 4, 2004.5
On December 7, 2004, Abbott formally offered Alcaraz the abovementioned position
which was an item under the company’s Hospira Affiliate Local Surveillance Unit
(ALSU) department.6 In Abbott’s offer sheet.7 it was stated that Alcaraz was to be
employed on a probationary basis.8 Later that day, she accepted the said offer and
received an electronic mail (e-mail) from Abbott’s Recruitment Officer, petitioner
Teresita C. Bernardo (Bernardo), confirming the same. Attached to Bernardo’s e-mail
were Abbott’s organizational chart and a job description of Alcaraz’s work.9
On February 12, 2005, Alcaraz signed an employment contract which stated, inter
alia, that she was to be placed on probation for a period of six (6) months beginning
February 15, 2005 to August 14, 2005. The said contract was also signed by Abbott’s
General Manager, petitioner Edwin Feist (Feist):10
PROBATIONARY EMPLOYMENT
Dear Pearl,
appointed as follows:
Position Title : Regulatory Affairs Manager
Department : Hospira
The terms of your employment are:
Nature of Employment : Probationary
Effectivity : February 15, 2005 to August 14, 2005
Basic Salary : ₱110,000.00/ month
It is understood that you agree to abide by all existing policies, rules and regulations
of the company, as well as those, which may be hereinafter promulgated.
Unless renewed, probationary appointment expires on the date indicated subject to
earlier termination by the Company for any justifiable reason.
If you agree to the terms and conditions of your employment, please signify your
conformity below and return a copy to HRD.
Welcome to Abbott!
Very truly yours,
Sgd.
EDWIN D. FEIST
General Manager
CONFORME:
Sgd.
PEARLIE ANN FERRER-ALCARAZ
During Alcaraz’s pre-employment orientation, petitioner Allan G. Almazar (Almazar),
Hospira’s Country Transition Manager, briefed her on her duties and responsibilities
as Regulatory Affairs Manager, stating that: (a) she will handle the staff of Hospira
ALSU and will directly report to Almazar on matters regarding Hopira’s local
operations, operational budget, and performance evaluation of the Hospira ALSU
Staff who are on probationary status; (b) she must implement Abbott’s Code of Good
Corporate Conduct (Code of Conduct), office policies on human resources and
finance, and ensure that Abbott will hire people who are fit in the organizational
discipline; (c) petitioner Kelly Walsh (Walsh), Manager of the Literature Drug
Surveillance Drug Safety of Hospira, will be her immediate supervisor; (d) she should
always coordinate with Abbott’s human resource officers in the management and
discipline of the staff; (e) Hospira ALSU will spin off from Abbott in early 2006 and will
be officially incorporated and known as Hospira, Philippines. In the interim, Hospira
ALSU operations will still be under Abbott’s management, excluding the technical
aspects of the operations which is under the control and supervision of Walsh; and (f)
the processing of information and/or raw material data subject of Hospira ALSU
operations will be strictly confined and controlled under the computer system and
network being maintained and operated from the United States. For this purpose, all
those involved in Hospira ALSU are required to use two identification cards: one, to
identify them as Abbott’s employees and another, to identify them as Hospira
employees.11
On March 3, 2005, petitioner Maria Olivia T. Yabut-Misa (Misa), Abbott’s Human
Resources (HR) Director, sent Alcaraz an e-mail which contained an explanation of
the procedure for evaluating the performance of probationary employees and further
indicated that Abbott had only one evaluation system for all of its employees. Alcaraz
was also given copies of Abbott’s Code of Conduct and Probationary Performance
Standards and Evaluation (PPSE) and Performance Excellence Orientation Modules
(Performance Modules) which she had to apply in line with her task of evaluating the
Hospira ALSU staff.12
Abbott’s PPSE procedure mandates that the job performance of a probationary
employee should be formally reviewed and discussed with the employee at least
twice: first on the third month and second on the fifth month from the date of
employment. The necessary Performance Improvement Plan should also be made
during the third-month review in case of a gap between the employee’s performance
and the standards set. These performance standards should be discussed in detail
with the employee within the first two (2) weeks on the job. It was equally required
that a signed copy of the PPSE form must be submitted to Abbott’s Human
Resources Department (HRD) and shall serve as documentation of the employee’s
performance during his/her probationary period. This shall form the basis for
recommending the confirmation or termination of the probationary employment.13
During the course of her employment, Alcaraz noticed that some of the staff had
disciplinary problems. Thus, she would reprimand them for their unprofessional
behavior such as non-observance of the dress code, moonlighting, and disrespect of
Abbott officers. However, Alcaraz’s method of management was considered by Walsh
to be "too strict."14 Alcaraz approached Misa to discuss these concerns and was told
to "lie low" and let Walsh handle the matter. Misa even assured her that Abbott’s HRD
would support her in all her management decisions.15
On April 12, 2005, Alcaraz received an e-mail from Misa requesting immediate action
on the staff’s performance evaluation as their probationary periods were about to end.
This Alcaraz eventually submitted.16
On April 20, 2005, Alcaraz had a meeting with petitioner Cecille Terrible (Terrible),
Abbott’s former HR Director, to discuss certain issues regarding staff performance
standards. In the course thereof, Alcaraz accidentally saw a printed copy of an e-mail
sent by Walsh to some staff members which essentially contained queries regarding
the former’s job performance. Alcaraz asked if Walsh’s action was the normal process
of evaluation. Terrible said that it was not.17
On May 16, 2005, Alcaraz was called to a meeting with Walsh and Terrible where she
was informed that she failed to meet the regularization standards for the position of
Regulatory Affairs Manager.18 Thereafter, Walsh and Terrible requested Alcaraz to
tender her resignation, else they be forced to terminate her services. She was also
told that, regardless of her choice, she should no longer report for work and was
asked to surrender her office identification cards. She requested to be given one
week to decide on the same, but to no avail.19
On May 17, 2005, Alcaraz told her administrative assistant, Claude Gonzales
(Gonzales), that she would be on leave for that day. However, Gonzales told her that
Walsh and Terrible already announced to the whole Hospira ALSU staff that Alcaraz
already resigned due to health reasons.20
On May 23, 2005, Walsh, Almazar, and Bernardo personally handed to Alcaraz a
letter stating that her services had been terminated effective May 19, 2005.21 The
letter detailed the reasons for Alcaraz’s termination – particularly, that Alcaraz: (a) did
not manage her time effectively; (b) failed to gain the trust of her staff and to build an
effective rapport with them; (c) failed to train her staff effectively; and (d) was not able
to obtain the knowledge and ability to make sound judgments on case processing and
article review which were necessary for the proper performance of her duties.22 On
May 27, 2005, Alcaraz received another copy of the said termination letter via
registered mail.23
Alcaraz felt that she was unjustly terminated from her employment and thus, filed a
complaint for illegal dismissal and damages against Abbott and its officers, namely,
Misa, Bernardo, Almazar, Walsh, Terrible, and Feist.24 She claimed that she should
have already been considered as a regular and not a probationary employee given
Abbott’s failure to inform her of the reasonable standards for her regularization upon
her engagement as required under Article 29525 of the Labor Code. In this relation,
she contended that while her employment contract stated that she was to be engaged
on a probationary status, the same did not indicate the standards on which her
regularization would be based.26 She further averred that the individual petitioners
maliciously connived to illegally dismiss her when: (a) they threatened her with
termination; (b) she was ordered not to enter company premises even if she was still
an employee thereof; and (c) they publicly announced that she already resigned in
order to humiliate her.27
On the contrary, petitioners maintained that Alcaraz was validly terminated from her
probationary employment given her failure to satisfy the prescribed standards for her
regularization which were made known to her at the time of her engagement.28
The LA Ruling
In a Decision dated March 30, 2006,29 the LA dismissed Alcaraz’s complaint for lack
of merit.

The LA rejected Alcaraz’s argument that she was not informed of the reasonable
standards to qualify as a regular employee considering her admissions that she was
briefed by Almazar on her work during her pre-employment orientation meeting30 and
that she received copies of Abbott’s Code of Conduct and Performance Modules
which were used for evaluating all types of Abbott employees.31 As Alcaraz was
unable to meet the standards set by Abbott as per her performance evaluation, the
LA ruled that the termination of her probationary employment was justified.32 Lastly,
the LA found that there was no evidence to conclude that Abbott’s officers and
employees acted in bad faith in terminating Alcaraz’s employment.33
Displeased with the LA’s ruling, Alcaraz filed an appeal with the National Labor
Relations Commission (NLRC).
The NLRC Ruling
On September 15, 2006, the NLRC rendered a Decision,34 annulling and setting
aside the LA’s ruling, the dispositive portion of which reads:
WHEREFORE, the Decision of the Labor Arbiter dated 31 March 2006 [sic] is hereby
reversed, annulled and set aside and judgment is hereby rendered:
1. Finding respondents Abbot [sic] and individual respondents to have committed
illegal dismissal;
2. Respondents are ordered to immediately reinstate complainant to her former
position without loss of seniority rights immediately upon receipt hereof;
3. To jointly and severally pay complainant backwages computed from 16 May 2005
until finality of this decision. As of the date hereof the backwages is computed at
a. Backwages for 15 months - PhP 1,650,000.00
b. 13th month pay - 110,000.00
TOTAL PhP 1,760,000.00
4. Respondents are ordered to pay complainant moral damages of ₱50,000.00 and
exemplary damages of ₱50,000.00.
5. Respondents are also ordered to pay attorney’s fees of 10% of the total award.
6. All other claims are dismissed for lack of merit.
SO ORDERED.35
The NLRC reversed the findings of the LA and ruled that there was no evidence
showing that Alcaraz had been apprised of her probationary status and the
requirements which she should have complied with in order to be a regular
employee.36 It held that Alcaraz’s receipt of her job description and Abbott’s Code of
Conduct and Performance Modules was not equivalent to her being actually informed
of the performance standards upon which she should have been evaluated on.37 It
further observed that Abbott did not comply with its own standard operating procedure
in evaluating probationary employees.38 The NLRC was also not convinced that
Alcaraz was terminated for a valid cause given that petitioners’ allegation of Alcaraz’s
"poor performance" remained unsubstantiated.39
Petitioners filed a motion for reconsideration which was denied by the NLRC in a
Resolution dated July 31, 2007.40
Aggrieved, petitioners filed with the CA a Petition for Certiorari with Prayer for
Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction,
docketed as CA G.R. SP No. 101045 (First CA Petition), alleging grave abuse of
discretion on the part of NLRC when it ruled that Alcaraz was illegally dismissed.41
Pending resolution of the First CA Petition, Alcaraz moved for the execution of the
NLRC’s Decision before the LA, which petitioners strongly opposed. The LA denied
the said motion in an Order dated July 8, 2008 which was, however, eventually
reversed on appeal by the NLRC.42 Due to the foregoing, petitioners filed another
Petition for Certiorari with the CA, docketed as CA G.R. SP No. 111318 (Second CA
Petition), assailing the propriety of the execution of the NLRC decision.43
The CA Ruling
With regard to the First CA Petition, the CA, in a Decision44 dated December 10,
2009, affirmed the ruling of the NLRC and held that the latter did not commit any
grave abuse of discretion in finding that Alcaraz was illegally dismissed.
It observed that Alcaraz was not apprised at the start of her employment of the
reasonable standards under which she could qualify as a regular employee.45 This
was based on its examination of the employment contract which showed that the
same did not contain any standard of performance or any stipulation that Alcaraz
shall undergo a performance evaluation before she could qualify as a regular
employee.46 It also found that Abbott was unable to prove that there was any
reasonable ground to terminate Alcaraz’s employment.47 Abbott moved for the
reconsideration of the aforementioned ruling which was, however, denied by the CA
in a Resolution48 dated June 9, 2010.
The CA likewise denied the Second CA Petition in a Resolution dated May 18, 2010
(May 18, 2010 Resolution) and ruled that the NLRC was correct in upholding the
execution of the NLRC Decision.49 Thus, petitioners filed a motion for
reconsideration.
While the petitioners’ motion for reconsideration of the CA’s May 18, 2010 Resolution
was pending, Alcaraz again moved for the issuance of a writ of execution before the
LA. On June 7, 2010, petitioners received the LA’s order granting Alcaraz’s motion for
execution which they in turn appealed to the NLRC – through a Memorandum of
Appeal dated June 16, 2010 (June 16, 2010 Memorandum of Appeal ) – on the
ground that the implementation of the LA’s order would render its motion for
reconsideration moot and academic.50
Meanwhile, petitioners’ motion for reconsideration of the CA’s May 18, 2010
Resolution in the Second CA Petition was denied via a Resolution dated October 4,
2010.51 This attained finality on January 10, 2011 for petitioners’ failure to timely
appeal the same.52 Hence, as it stands, only the issues in the First CA petition are
left to be resolved.
Incidentally, in her Comment dated November 15, 2010, Alcaraz also alleges that
petitioners were guilty of forum shopping when they filed the Second CA Petition
pending the resolution of their motion for reconsideration of the CA’s December 10,
2009 Decision i.e., the decision in the First CA Petition.53 She also contends that
petitioners have not complied with the certification requirement under Section 5, Rule
7 of the Rules of Court when they failed to disclose in the instant petition the filing of
the June 16, 2010 Memorandum of Appeal filed before the NLRC.54
The Issues Before the Court
The following issues have been raised for the Court’s resolution: (a) whether or not
petitioners are guilty of forum shopping and have violated the certification requirement
under Section 5, Rule 7 of the Rules of Court; (b) whether or not Alcaraz was
sufficiently informed of the reasonable standards to qualify her as a regular employee;
(c) whether or not Alcaraz was validly terminated from her employment; and (d)
whether or not the individual petitioners herein are liable.
The Court’s Ruling
A. Forum Shopping and
Violation of Section 5, Rule 7
of the Rules of Court.
At the outset, it is noteworthy to mention that the prohibition against forum shopping is
different from a violation of the certification requirement under Section 5, Rule 7 of the
Rules of Court. In Sps. Ong v. CA,55 the Court explained that:
x x x The distinction between the prohibition against forum shopping and the
certification requirement should by now be too elementary to be misunderstood. To
reiterate, compliance with the certification against forum shopping is separate from
and independent of the avoidance of the act of forum shopping itself. There is a
difference in the treatment between failure to comply with the certification requirement
and violation of the prohibition against forum shopping not only in terms of imposable
sanctions but also in the manner of enforcing them. The former constitutes sufficient
cause for the dismissal without prejudice to the filing of the complaint or initiatory
pleading upon motion and after hearing, while the latter is a ground for summary
dismissal thereof and for direct contempt. x x x. 56
As to the first, forum shopping takes place when a litigant files multiple suits involving
the same parties, either simultaneously or successively, to secure a favorable
judgment. It exists where the elements of litis pendentia are present, namely: (a)
identity of parties, or at least such parties who represent the same interests in both
actions; (b) identity of rights asserted and relief prayed for, the relief being founded on
the same facts; and (c) the identity with respect to the two preceding particulars in the
two (2) cases is such that any judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata in the other
case.57
In this case, records show that, except for the element of identity of parties, the
elements of forum shopping do not exist. Evidently, the First CA Petition was
instituted to question the ruling of the NLRC that Alcaraz was illegally dismissed. On
the other hand, the Second CA Petition pertains to the propriety of the enforcement of
the judgment award pending the resolution of the First CA Petition and the finality of
the decision in the labor dispute between Alcaraz and the petitioners. Based on the
foregoing, a judgment in the Second CA Petition will not constitute res judicata insofar
as the First CA Petition is concerned. Thus, considering that the two petitions clearly
cover different subject matters and causes of action, there exists no forum shopping.
As to the second, Alcaraz further imputes that the petitioners violated the certification
requirement under Section 5, Rule 7 of the Rules of Court58 by not disclosing the fact
that it filed the June 16, 2010 Memorandum of Appeal before the NLRC in the instant
petition.
In this regard, Section 5(b), Rule 7 of the Rules of Court requires that a plaintiff who
files a case should provide a complete statement of the present status of any pending
case if the latter involves the same issues as the one that was filed. If there is no such
similar pending case, Section 5(a) of the same rule provides that the plaintiff is
obliged to declare under oath that to the best of his knowledge, no such other action
or claim is pending.
Records show that the issues raised in the instant petition and those in the June 16,
2010 Memorandum of Appeal filed with the NLRC likewise cover different subject
matters and causes of action. In this case, the validity of Alcaraz’s dismissal is at
issue whereas in the said Memorandum of Appeal, the propriety of the issuance of a
writ of execution was in question.
Thus, given the dissimilar issues, petitioners did not have to disclose in the present
petition the filing of their June 16, 2010 Memorandum of Appeal with the NLRC. In
any event, considering that the issue on the propriety of the issuance of a writ of
execution had been resolved in the Second CA Petition – which in fact had already
attained finality – the matter of disclosing the June 16, 2010 Memorandum of Appeal
is now moot and academic.
Having settled the foregoing procedural matter, the Court now proceeds to resolve
the substantive issues.
B. Probationary employment;
grounds for termination.
A probationary employee, like a regular employee, enjoys security of tenure.
However, in cases of probationary employment, aside from just or authorized causes
of termination, an additional ground is provided under Article 295 of the Labor Code,
i.e., the probationary employee may also be terminated for failure to qualify as a
regular employee in accordance with the reasonable standards made known by the
employer to the employee at the time of the engagement.59 Thus, the services of an
employee who has been engaged on probationary basis may be terminated for any of
the following: (a) a just or (b) an authorized cause; and (c) when he fails to qualify as
a regular employee in accordance with reasonable standards prescribed by the
employer.60
Corollary thereto, Section 6(d), Rule I, Book VI of the Implementing Rules of the
Labor Code provides that if the employer fails to inform the probationary employee of
the reasonable standards upon which the regularization would be based on at the
time of the engagement, then the said employee shall be deemed a regular
employee, viz.:
(d) In all cases of probationary employment, the employer shall make known to the
employee the standards under which he will qualify as a regular employee at the time
of his engagement. Where no standards are made known to the employee at that
time, he shall be deemed a regular employee.
In other words, the employer is made to comply with two (2) requirements when
dealing with a probationary employee: first, the employer must communicate the
regularization standards to the probationary employee; and second, the employer
must make such communication at the time of the probationary employee’s
engagement. If the employer fails to comply with either, the employee is deemed as a
regular and not a probationary employee.
Keeping with these rules, an employer is deemed to have made known the standards
that would qualify a probationary employee to be a regular employee when it has
exerted reasonable efforts to apprise the employee of what he is expected to do or
accomplish during the trial period of probation. This goes without saying that the
employee is sufficiently made aware of his probationary status as well as the length of
time of the probation.
The exception to the foregoing is when the job is self-descriptive in nature, for
instance, in the case of maids, cooks, drivers, or messengers.61 Also, in Aberdeen
Court, Inc. v. Agustin,62 it has been held that the rule on notifying a probationary
employee of the standards of regularization should not be used to exculpate an
employee who acts in a manner contrary to basic knowledge and common sense in
regard to which there is no need to spell out a policy or standard to be met. In the
same light, an employee’s failure to perform the duties and responsibilities which
have been clearly made known to him constitutes a justifiable basis for a probationary
employee’s non-regularization.
In this case, petitioners contend that Alcaraz was terminated because she failed to
qualify as a regular employee according to Abbott’s standards which were made
known to her at the time of her engagement. Contrarily, Alcaraz claims that Abbott
never apprised her of these standards and thus, maintains that she is a regular and
not a mere probationary employee.
The Court finds petitioners’ assertions to be well-taken.
A punctilious examination of the records reveals that Abbott had indeed complied with
the above-stated requirements. This conclusion is largely impelled by the fact that
Abbott clearly conveyed to Alcaraz her duties and responsibilities as Regulatory
Affairs Manager prior to, during the time of her engagement, and the incipient stages
of her employment. On this score, the Court finds it apt to detail not only the incidents
which point out to the efforts made by Abbott but also those circumstances which
would show that Alcaraz was well-apprised of her employer’s expectations that would,
in turn, determine her regularization:
(a) On June 27, 2004, Abbott caused the publication in a major broadsheet
newspaper of its need for a Regulatory Affairs Manager, indicating therein the job
description for as well as the duties and responsibilities attendant to the aforesaid
position; this prompted Alcaraz to submit her application to Abbott on October 4,
2004;
(b) In Abbott’s December 7, 2004 offer sheet, it was stated that Alcaraz was to be
employed on a probationary status;
(c) On February 12, 2005, Alcaraz signed an employment contract which specifically
stated, inter alia, that she was to be placed on probation for a period of six (6) months
beginning February 15, 2005 to August 14, 2005;
(d) On the day Alcaraz accepted Abbott’s employment offer, Bernardo sent her copies
of Abbott’s organizational structure and her job description through e-mail;
(e) Alcaraz was made to undergo a pre-employment orientation where Almazar
informed her that she had to implement Abbott’s Code of Conduct and office policies
on human resources and finance and that she would be reporting directly to Walsh;
(f) Alcaraz was also required to undergo a training program as part of her orientation;
(g) Alcaraz received copies of Abbott’s Code of Conduct and Performance Modules
from Misa who explained to her the procedure for evaluating the performance of
probationary employees; she was further notified that Abbott had only one evaluation
system for all of its employees; and
(h) Moreover, Alcaraz had previously worked for another pharmaceutical company
and had admitted to have an "extensive training and background" to acquire the
necessary skills for her job.63

Considering the totality of the above-stated circumstances, it cannot, therefore, be
doubted that Alcaraz was well-aware that her regularization would depend on her
ability and capacity to fulfill the requirements of her position as Regulatory Affairs
Manager and that her failure to perform such would give Abbott a valid cause to
terminate her probationary employment.
Verily, basic knowledge and common sense dictate that the adequate performance of
one’s duties is, by and of itself, an inherent and implied standard for a probationary
employee to be regularized; such is a regularization standard which need not be
literally spelled out or mapped into technical indicators in every case. In this regard, it
must be observed that the assessment of adequate duty performance is in the nature
of a management prerogative which when reasonably exercised – as Abbott did in
this case – should be respected. This is especially true of a managerial employee like
Alcaraz who was tasked with the vital responsibility of handling the personnel and
important matters of her department.
In fine, the Court rules that Alcaraz’s status as a probationary employee and her
consequent dismissal must stand. Consequently, in holding that Alcaraz was illegally
dismissed due to her status as a regular and not a probationary employee, the Court
finds that the NLRC committed a grave abuse of discretion.
To elucidate, records show that the NLRC based its decision on the premise that
Alcaraz’s receipt of her job description and Abbott’s Code of Conduct and
Performance Modules was not equivalent to being actually informed of the
performance standards upon which she should have been evaluated on.64 It,
however, overlooked the legal implication of the other attendant circumstances as
detailed herein which should have warranted a contrary finding that Alcaraz was
indeed a probationary and not a regular employee – more particularly the fact that
she was well-aware of her duties and responsibilities and that her failure to
adequately perform the same would lead to her non-regularization and eventually, her
termination.
Accordingly, by affirming the NLRC’s pronouncement which is tainted with grave
abuse of discretion, the CA committed a reversible error which, perforce, necessitates
the reversal of its decision.
C. Probationary employment;
termination procedure.
A different procedure is applied when terminating a probationary employee; the usual
two-notice rule does not govern.65 Section 2, Rule I, Book VI of the Implementing
Rules of the Labor Code states that "if the termination is brought about by the x x x
failure of an employee to meet the standards of the employer in case of probationary
employment, it shall be sufficient that a written notice is served the employee, within a
reasonable time from the effective date of termination."
As the records show, Alcaraz's dismissal was effected through a letter dated May 19,
2005 which she received on May 23, 2005 and again on May 27, 2005. Stated therein
were the reasons for her termination, i.e., that after proper evaluation, Abbott
determined that she failed to meet the reasonable standards for her regularization
considering her lack of time and people management and decision-making skills,
which are necessary in the performance of her functions as Regulatory Affairs
Manager.66 Undeniably, this written notice sufficiently meets the criteria set forth
above, thereby legitimizing the cause and manner of Alcaraz’s dismissal as a
probationary employee under the parameters set by the Labor Code.67
D. Employer’s violation of
company policy and
procedure.
Nonetheless, despite the existence of a sufficient ground to terminate Alcaraz’s
employment and Abbott’s compliance with the Labor Code termination procedure, it is
readily apparent that Abbott breached its contractual obligation to Alcaraz when it
failed to abide by its own procedure in evaluating the performance of a probationary
employee.
Veritably, a company policy partakes of the nature of an implied contract between the
employer and employee. In Parts Depot, Inc. v. Beiswenger,68 it has been held that:
Employer statements of policy . . . can give rise to contractual rights in employees
without evidence that the parties mutually agreed that the policy statements would
create contractual rights in the employee, and, hence, although the statement of
policy is signed by neither party, can be unilaterally amended by the employer without
notice to the employee, and contains no reference to a specific employee, his job
description or compensation, and although no reference was made to the policy
statement in pre-employment interviews and the employee does not learn of its
existence until after his hiring. Toussaint, 292 N.W .2d at 892. The principle is akin to
estoppel. Once an employer establishes an express personnel policy and the
employee continues to work while the policy remains in effect, the policy is deemed
an implied contract for so long as it remains in effect. If the employer unilaterally
changes the policy, the terms of the implied contract are also thereby
changed.1âwphi1 (Emphasis and underscoring supplied.)
Hence, given such nature, company personnel policies create an obligation on the
part of both the employee and the employer to abide by the same.
Records show that Abbott’s PPSE procedure mandates, inter alia, that the job
performance of a probationary employee should be formally reviewed and discussed
with the employee at least twice: first on the third month and second on the fifth
month from the date of employment. Abbott is also required to come up with a
Performance Improvement Plan during the third month review to bridge the gap
between the employee’s performance and the standards set, if any.69 In addition, a
signed copy of the PPSE form should be submitted to Abbott’s HRD as the same
would serve as basis for recommending the confirmation or termination of the
probationary employment.70
In this case, it is apparent that Abbott failed to follow the above-stated procedure in
evaluating Alcaraz. For one, there lies a hiatus of evidence that a signed copy of
Alcaraz’s PPSE form was submitted to the HRD. It was not even shown that a PPSE
form was completed to formally assess her performance. Neither was the
performance evaluation discussed with her during the third and fifth months of her
employment. Nor did Abbott come up with the necessary Performance Improvement
Plan to properly gauge Alcaraz’s performance with the set company standards.
While it is Abbott’s management prerogative to promulgate its own company rules
and even subsequently amend them, this right equally demands that when it does
create its own policies and thereafter notify its employee of the same, it accords upon
itself the obligation to faithfully implement them. Indeed, a contrary interpretation
would entail a disharmonious relationship in the work place for the laborer should
never be mired by the uncertainty of flimsy rules in which the latter’s labor rights and
duties would, to some extent, depend.
In this light, while there lies due cause to terminate Alcaraz’s probationary
employment for her failure to meet the standards required for her regularization, and
while it must be further pointed out that Abbott had satisfied its statutory duty to serve
a written notice of termination, the fact that it violated its own company procedure
renders the termination of Alcaraz’s employment procedurally infirm, warranting the
payment of nominal damages. A further exposition is apropos.
Case law has settled that an employer who terminates an employee for a valid cause
but does so through invalid procedure is liable to pay the latter nominal damages.
In Agabon v. NLRC (Agabon),71 the Court pronounced that where the dismissal is for
a just cause, the lack of statutory due process should not nullify the dismissal, or
render it illegal, or ineffectual. However, the employer should indemnify the employee
for the violation of his statutory rights.72 Thus, in Agabon, the employer was ordered
to pay the employee nominal damages in the amount of ₱30,000.00.73
Proceeding from the same ratio, the Court modified Agabon in the case of Jaka Food
Processing Corporation v. Pacot (Jaka)74 where it created a distinction between
procedurally defective dismissals due to a just cause, on one hand, and those due to
an authorized cause, on the other.
It was explained that if the dismissal is based on a just cause under Article 282 of the
Labor Code (now Article 296) but the employer failed to comply with the notice
requirement, the sanction to be imposed upon him should be tempered because the
dismissal process was, in effect, initiated by an act imputable to the employee; if the
dismissal is based on an authorized cause under Article 283 (now Article 297) but the
employer failed to comply with the notice requirement, the sanction should be stiffer
because the dismissal process was initiated by the employer’s exercise of his
management prerogative.75 Hence, in Jaka, where the employee was dismissed for
an authorized cause of retrenchment76 – as contradistinguished from the employee
in Agabon who was dismissed for a just cause of neglect of duty77 – the Court
ordered the employer to pay the employee nominal damages at the higher amount of
₱50,000.00.
Evidently, the sanctions imposed in both Agabon and Jaka proceed from the
necessity to deter employers from future violations of the statutory due process rights
of employees.78 In similar regard, the Court deems it proper to apply the same
principle to the case at bar for the reason that an employer’s contractual breach of its
own company procedure – albeit not statutory in source – has the parallel effect of
violating the laborer’s rights. Suffice it to state, the contract is the law between the
parties and thus, breaches of the same impel recompense to vindicate a right that has
been violated. Consequently, while the Court is wont to uphold the dismissal of
Alcaraz because a valid cause exists, the payment of nominal damages on account of
Abbott’s contractual breach is warranted in accordance with Article 2221 of the Civil
Code.79
Anent the proper amount of damages to be awarded, the Court observes that
Alcaraz’s dismissal proceeded from her failure to comply with the standards required
for her regularization. As such, it is undeniable that the dismissal process was, in
effect, initiated by an act imputable to the employee, akin to dismissals due to just
causes under Article 296 of the Labor Code. Therefore, the Court deems it
appropriate to fix the amount of nominal damages at the amount of ₱30,000.00,
consistent with its rulings in both Agabon and Jaka.
E. Liability of individual
petitioners as corporate
officers.
It is hornbook principle that personal liability of corporate directors, trustees or officers
attaches only when: (a) they assent to a patently unlawful act of the corporation, or
when they are guilty of bad faith or gross negligence in directing its affairs, or when
there is a conflict of interest resulting in damages to the corporation, its stockholders
or other persons; (b) they consent to the issuance of watered down stocks or when,
having knowledge of such issuance, do not forthwith file with the corporate secretary
their written objection; (c) they agree to hold themselves personally and solidarily
liable with the corporation; or (d) they are made by specific provision of law personally
answerable for their corporate action.80
In this case, Alcaraz alleges that the individual petitioners acted in bad faith with
regard to the supposed crude manner by which her probationary employment was
terminated and thus, should be held liable together with Abbott. In the same vein, she
further attributes the loss of some of her remaining belongings to them.81
Alcaraz’s contention fails to persuade.
A judicious perusal of the records show that other than her unfounded assertions on
the matter, there is no evidence to support the fact that the individual petitioners
herein, in their capacity as Abbott’s officers and employees, acted in bad faith or were
motivated by ill will in terminating

Alcaraz’s services. The fact that Alcaraz was made to resign and not allowed to enter
the workplace does not necessarily indicate bad faith on Abbott’s part since a
sufficient ground existed for the latter to actually proceed with her termination. On the
alleged loss of her personal belongings, records are bereft of any showing that the
same could be attributed to Abbott or any of its officers. It is a well-settled rule that
bad faith cannot be presumed and he who alleges bad faith has the onus of proving it.
All told, since Alcaraz failed to prove any malicious act on the part of Abbott or any of
its officers, the Court finds the award of moral or exemplary damages unwarranted.

WHEREFORE, the petition is GRANTED. The Decision dated December 10, 2009
and Resolution dated June 9, 2010 of the Court of Appeals in CA-G.R. SP No.
101045 are hereby REVERSED and SET ASIDE. Accordingly, the Decision dated
March 30, 2006 of the Labor Arbiter is REINSTATED with the MODIFICATION that
petitioner Abbott Laboratories, Philippines be ORDERED to pay respondent Pearlie
Ann F. Alcaraz nominal damages in the amount of ₱30,000.00 on account of its
breach of its own company procedure.

SO ORDERED.