Abbott Laboratories
(b) she must implement Abbott’s Code of Good Corporate
Phil. et.al. v. Pearlie
Ann F. Alcaraz [G.R.
No. 192571, July
23, 2013]
Subject: Labor Law – Probationary employees
– Standards to qualify as a regular employee
Decision (Perlas-Bernarbe, J.)
Dissent (Brion, J.)
FACTS:
On June 27, 2004, Abbott Laboratories, Philippines (Abbott)
caused the publication in a major broadsheet newspaper of
its need for a Medical and 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.
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.
On December 7, 2004, Abbott formally offered Alcaraz the
above-mentioned position which was an item under the
company’s Hospira Affiliate Local Surveillance Unit
(ALSU) department.
In Abbott’s offer sheet, it was stated that Alcaraz was to
be employed on a probationary basis.
Later that day, she accepted the said offer and received an
electronic mail (e-mail) from Abbott’s Recruitment Officer,
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.
On February 12, 2005, Alcaraz signed an employment
contract which stated that she was to be placed on
probation for a period of six (6) months beginning
February 15, 2005 to August 14, 2005.
During Alcaraz’s pre-employment orientation, Allan G.
Almazar, Hospira’s Country Transition Manager, briefed
her on her duties and responsibilities as Regulatory
Affairs Manager:
(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;
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) Kelly 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; 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.
On March 3, 2005, Maria Olivia T. Yabut-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.
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.
On April 20, 2005, Alcaraz had a meeting with Cecille
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.
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.
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.
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.
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. 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.
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. She claimed that she should have already been
considered as a regular and not a probationary employee
given Abbott’s failure to inform her of the reasonable
standards for her regularization upon her engagement as
required under Article 295 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. 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.
Abbott 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.
The Labor Arbiter ruled in Abbott’s favor. The NLRC
reversed, upholding Alcaraz’s allegations. The CA affirmed
the NLRC decision.
ISSUES:
1) WON Alcaraz was sufficiently informed of the
reasonable standards to qualify her as a regular
employee
MAJORITY: YES. 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 (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 of probation.This goes without saying that the employee is
as part of her orientation; 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-
(g) Alcaraz received copies of Abbott’s Code of Conduct and
descriptive in nature, for instance, in the case of maids,
Performance Modules from Misa who explained to her the
cooks, drivers, or messengers. Also in Aberdeen Court, Inc
procedure for evaluating the performance of probationary
v. Agustin, it has been held that the rule on notifying a
employees; she was further notified that Abbott had only one
probationary employee of the standards of
evaluation system for all of its employees; and
regularization should not be used to exculpate an
employee in a manner contrary to basic knowledge and
(h) Moreover, Alcaraz had previously worked for another common sense in regard to which there is no need to spell
pharmaceutical company and had admitted to have an out a policy or standard to be met. In the same light, an
“extensive training and background” to acquire the employee’s failure to perform the duties and
necessary skills for her job. responsibilities which have been clearly made known to
him constitutes a justifiable basis for a probationary
employee’s non-regularization.
Considering the totality of the above-stated circumstances,
DISSENT (Brion, J.): Based on these premises, the
Alcaraz was well-aware that her regularization would
ponencia then deftly argues that because the duties and
depend on her ability and capacity to fulfill the requirements
responsibilities of the position have been explained
of her position as Regulatory Affairs Manager and that her
to Alcaraz, an experienced human resource specialist, she
failure to perform such would give Abbott a valid cause to
should have known what was expected for her to attain
terminate her probationary employment. Verily, basic
regular status. The ponencia’s reasoning, however, is badly
knowledge and common sense dictate that the adequate
flawed.
performance of one’s duties is, by and of itself, an
1st. The ponencia impliedly admits that no performance
inherent and implied standard for a probationary
standards were expressly given but argues that because
employee to be regularized; such is a regularization
Alcaraz had been informed of her duties and responsibilities
standard which need not be literally spelled out or
(a fact that was and is not disputed), she should be deemed
mapped into technical indicators in every case.
to know what was expected of her for purposes of
DISSENT (Brion, J.): NO. The Offer Sheet was designed
regularization. This is a major flaw that the ponencia
to inform Alcaraz of the compensation and benefits
satisfies only via an assumption. The ponencia apparently
package offered to her by Abbott and can in no way be
forgets that knowledge of duties and responsibilities is
read as a statement of the applicable probationary
different from the measure of how these duties and
employment standard. It was communicated even prior to
responsibilities should be delivered. They are separate
engagement when the parties were negotiating, not at the
elements and the latter element is missing in the present
point of engagement as the law requires.
case.
The pre-employment orientation on Alcaraz’s duty to
2nd. The ponencia glosses over the communication aspect.
implement Abbott’s Code of Conduct, office policies and
Not only must there be express performance standards; there
training program likewise cannot be characterized as
must be effective communication. If no standards were
performance standards; they simply related to activities
provided, what would be communicated?
aimed at acquainting and training Alcaraz on her duties
3rd. The ponencia badly contradicts itself in claiming that
and not for the purpose of informing her of the
actual communication of specific standards might not be
performance standards applicable to her. What stands out
necessary “when the job is self-descriptive in nature, for
is that they do not pertain specifically to Alcaraz and the
instance, in the case of maids, cooks, drivers, or
required performance standard applicable for her
messengers.” Alcaraz, in the first place, was never a maid,
qualification for regular employment; they related to the
cook, driver or a messenger and cannot be placed under
staff Alcaraz managed and supervised. Additionally, these
this classification; she was hired and employed as a human
were all relayed prior to or after Alcaraz was engaged by
resources manager, in short, a managerial employee. Plain
Abbott.
and common sense reasoning by one who ever had been in
An important distinction to remember at this point is
an employment situation dictates that the job of a manager
that Alcaraz’s knowledge of the duties that her work
cannot be self-explanatory, in the way the ponencia
entailed, and her knowledge of the employer’s
implied; the complexity of a managerial job must necessarily
performance standard, are two distinct matters
require that the level of performance to be delivered must be
separately requiring the presentation of independent
specified and cannot simply be assumed based on the
proof.
communication of the manager’s duties and
MAJORITY: Keeping with [the Omnibus Rules
responsibilities.
Implementing the Labor Code], an employer is deemed to
4th. The ponencia also forgets that what these
have made known the standards that would qualify a
“performance standards” or measures cannot simply be
probationary employee to be a regular employee when it
assumed because they are critically important in this
has exerted reasonable efforts to apprise the employee of
case, or for that matter, in any case involving jobs whose
what he is expected to do to accomplish during the trial
duties and responsibilities are not simple or self-
descriptive. If Alcaraz had been evaluated or assessed in the
manner that the company’s internal rules require, these
standards would have been the basis for her performance or
lack of it. Last but not the least, Alcaraz’s services were
terminated on the basis of the performance standards that, by
law, the employer set or prescribed at the time of the
employee’s engagement. If none had been prescribed in
the first place, under what basis could the employee then
be assessed for purposes of termination or
regularization?
2) WON Alcaraz was validly terminated from her
employment
MAJORITY: NO. 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.
The Court modified Agabon v. NLRC in the case of Jaka
Food Processing Corporation v. Pacot 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.
If the dismissal is based on a just cause under Article 296
of the Labor Code 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 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.
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 causesunder Article 296 of the
Labor Code. Therefore, the Court deems it appropriate to fix
the amount of nominal damages at the amount of
P30,000.00, consistent with its rulings in
both Agabon and Jaka.
DISSENT (Brion, J.): YES. Alcaraz was dismissed as she
“failed to qualify as regular employee in accordance with the
prescribed standards set by the Company.” Even granting for
the sake of argument that Abbott had apprised Alcaraz of an
applicable performance standard, the evidence failed to
show that Alcaraz did not meet this standard in a manner
and to the extent equivalent to the “just cause” that the
law requires.
In defense of Abbott’s failure to observe the two-notice
requirement, the ponencia argues that a different procedure
applies when terminating a probationary employee; the usual
two-notice requirement does not govern, citing for this
purpose Section 2, Rule I, Book VI of the Implementing
Rules of the Labor Code. The ponencia, however, forgets
that the single notice rule applies only if the employee is
validly on probationary basis; it does not apply where the
employee is deemed a regular employee for the
company’s failure to provide and to communicate a
prescribed performance standard applicable to the
probationary employee.
3) WON the individual petitioners herein are liable
MAJORITY: NO. 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.
DISSENT (Brion, J.): YES. The NLRC exhaustively
discussed Abbott’s bad faith, as demonstrated by the actions
of the individual petitioners:
First, Alcaraz was pressured to resign:
(1) she was threatened with termination, which will surely
damage her reputation in the pharmaceutical industry;
(2) she was asked to evacuate her Commission and ordered
not to enter the Company’s premises even if she was still an
Abbott employee; and
(3) Terrible and Walsh made a public announcement to the
staff that Alcaraz already resigned even if in reality she did
not.
The CA also described in detail the abrupt and oppressive
manner in which Alcaraz’s employment was dismissed by
Abbott:
On May 23, 2005, Alcaraz still reported for work since
Abbott had not yet handed the termination notice to
her. However, the security guard did not allow her to enter
the Hospira ALSU office pursuant to Walsh[’s]
instruction. She requested Walsh that she be allowed to
enter the company premises to retrieve her last remaining
things in her office which are mostly her personal
belongings. She was allowed to enter. However, she was
surprised to see her drawers already unlocked and, when
she opened the same, she discovered that her small brown
envelope x x x, white pouch containing the duplicate keys,
and the staff’s final evaluation sheets were
missing.Alcaraz informed Bernardo about the incident. The
latter responded by saying she was no longer an employee
of the company since May 19, 2005.
Alcaraz reported the matter to the Pasig Police Station and
asked for help regarding the theft of her properties.
The Pasig Police incident report stated as follows:
x x x x When confronted by the suspect, in the presence of
one SOCO officer and staff, named Christian Perez, Kelly
Walsh allegedly admitted that she was the one who opened
the drawer and got the green folders containing the staff
evaluations. The Reportee was told by Kelly Walsh that her
Rolex wristwatch will be returned to her provided that she
will immediately vacate her office.

On the same date, Alcaraz’s termination letter dated May

19, 2005 was handed to her by Walsh, Almazar and
Bernardo.

RESULT: CA reversed. In favor of Abbott.