[G.R. No. 161654 May 5, 2006]
DUSIT HOTEL NIKKO, Petitioner, vs. RENATO M. GATBONTON, Respondent.


On November 21, 1998, respondent Renato M. Gatbonton was hired as Chief Steward in
petitioner Dusit Hotel Nikko’s Food and Beverage Department. He signed a three-month
probationary employment contract until February 21, 1999, with a monthly salary of
P25,000. At the start of his employment, the standards by which he would be assessed
to qualify for regular employment were explained to him.

The hotel alleged that at the end of the probation period, Ingo Rauber, Director of its
Food and Beverage Department, observed that Gatbonton failed to meet the
qualification standards for Chief Steward, and Rauber recommended a two-month
extension of Gatbonton’s probationary period, or until April 22, 1999. At the end of the
4th month, on March 24, 1999, Rauber informed Gatbonton that the latter had poor
ratings on staff supervision, productivity, quantity of work, and overall efficiency and did
not qualify as Chief Steward. Gatbonton requested another month or until April 22,
1999 to improve his performance, to which Rauber agreed but allegedly refused to sign
the Performance Evaluation Form. Neither did he sign the Memorandum on the

On March 31, 1999, a notice of termination of probationary employment effective April
9, 1999, on the above alleged grounds was served on Gatbonton. On April 12, 1999, he
filed a complaint for illegal dismissal and non-payment of wages, with prayers for
reinstatement, full backwages, and damages, including attorney’s fees.

Whether or not respondent was a regular employee at the time of his dismissal.


The SC held that as Article 281 clearly states, a probationary employee can be legally
terminated either: (1) for a just cause; or (2) when the employee fails to qualify as a
regular employee in accordance with the reasonable standards made known to him by
the employer at the start of the employment. Nonetheless, the power of the employer
to terminate an employee on probation is not without limitations. First, this power must
be exercised in accordance with the specific requirements of the contract. Second, the
dissatisfaction on the part of the employer must be real and in good faith, not feigned
so as to circumvent the contract or the law; and third, there must be no unlawful
discrimination in the dismissal. In termination cases, the burden of proving just or valid
cause for dismissing an employee rests on the employer.

Here, the petitioner did not present proof that the respondent was evaluated from
November 21, 1998 to February 21, 1999, nor that his probationary employment was
validly extended. The petitioner alleged that at the end of the respondent’s three-month
probationary employment, Rauber recommended that the period be extended for two
months since respondent Gatbonton was not yet ready for regular employment. The
petitioner presented a Personnel Action Form containing the recommendation. We

The Personnel Action Form dated March 2. 1995. Mitsubishi Philippines re-hired him as a welder-fabricator at a tooling shop from November 1. Upon his return. Gatbonton had become a regular employee. we cannot conclude that respondent failed to meet the standards of performance set by the hotel for a chief steward. At the expiration of the three-month period. his dismissal was illegal. Second. Since respondent was not dismissed for a just or authorized cause. the action form did not contain the results of the respondent’s evaluation. 1994 to March 3. and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. 1999.observed. It is an elementary rule in the law on labor relations that a probationary employee engaged to work beyond the probationary period of six months. 1982 because he went to Saudi Arabia and worked there as a diesel mechanic and heavy machine operator from 1982 to 1993. contained the following remarks: “subject to undergo extension of probation for two (2) months as per attached memo. we find this document inconclusive. Again. Mitsubishi Motors vs Chrysler Philippines Labor Union G. the action form did not bear the respondent’s signature. In the absence of any evaluation or valid extension. 1999. and other privileges as well as to full backwages. Third. First. Upon appeal to the NLRC. recommending the extension of the respondent’s probation period for two months. shall be considered a regular employee. Petition is denied. inclusive of allowances. 1999. In fact. 1999. the supposed Memorandum was not presented. Any circumvention of this provision would put to naught the State’s avowed protection for labor. the action form spoke of an attached memo which the petitioner identified as Rauber’s Memorandum. or for any length of time set forth by the employer (in this case.R. Without the evaluation. the action form had no basis. the recommended action was termination of probationary employment effective April 9. No. 148738 June 29.” Yet. however. This is clear in the last sentence of Article 281. 2004 Petitioner: Mitsubishi Motors Philippines Corporation Respondents: Chrysler Philippines Labor Union and Nelson Paras FACTS: Private respondent Nelson Paras first worked with Mitsubishi Philippines as a shuttle bus driver on March 19. three months). He resigned on June 16. the petitioner presented another Personnel Action Form prepared on March 2. . and he is entitled to reinstatement without loss of seniority rights. showing that the respondent’s probationary employment was extended for two months effective February 23. the end of the 4th month of the respondent’s employment. and not extension of probation period. 1999. that this document was prepared on March 31. as provided under Article 281 of the Labor Code. 1976.

they unanimously agreed that the performance was unsatisfactory. this time as a probationary manufacturing trainee at the Plant Engineering Maintenance Department. as part of the MMPC’s company policies. Velando. that he received an average performance rating but it is a rate which would still qualify him to be regularized. Article 13 of the Civil Code providing that the months which are not designated by their names shall be understood as consisting of thirty (30) days each. started reporting for work on May 27. 1996 and afterwhich. Victoria and Dante Ong reviewed the performance evaluation made on Paras. . Respondent Paras was employed on a probationary basis and was apprised of the standards upon which his regularization would be based during the orientation. the Division Managers namely A. Paras was re-hired again. Paras received a Notice of Termination on November 26. This case. unless specified in the apprenticeship agreement. H. Lopez. ISSUE: Whether or not respondent Paras’ termination was legal or not. His first day to report for work was on May 27. Applying Article 13 of the Civil Code. HELD: The Court holds that a company employer may indeed hire an employee on a probationary basis in order to determine his fitness to perform work. The Court stresses the existence of the statements under Article 281 of the Labor Code which specifies that the employer must inform the employee of the standards they were to meet in order to be granted regularization and that such probationary period shall not exceed six (6) months from the date the employee started working. As a consequence. Lacambacal. with respect to the company’s rules and guidelines.T. the probationary period of six (6) months consists of one hundred eighty (180) days. 1996. Upon this evaluation.C. This letter’s intent is to formally relieve him off of his services and position effective the date since he failed to meet the company’s standards. The Court conforms with paragraph one. As per the company's policy. He had an orientation on May 15. Despite the recommendations of the supervisors. Lacambacal and Wilfredo J. 1996. Paras was not considered for regularization. The supervisors rating Paras’ performance were Lito R. respondent Paras was informed by his supervisor. Paras garnered an average rating. 1996. Paras was evaluated by his immediate supervisors after six months of working. 1996 which was dated November 25. Later.On May 1996. the probationary period was from three (3) months to a maximum of six (6) months. But as part of the company protocols.

The termination letter dated November 25.535. the first day shall be excluded and the last day included. INNODATA VS QUEJADA-LOPEZ 2006 October 12 By: Zendy Garcia-Budhi Facts: Innodata Philippines. to maintain its business and do the job orders of its clients. Natividad and Jocelyn Quejada to have been illegally dismissed by Innodata Philippines Incorporated and Innodata Processing Corporation and ordering reinstatement to their former position without loss of seniority rights. Innodata appealed to NLRC which reversed and set aside the Labor Arbiter’s decision declaring that the contract was for a fixed term and therefore.. Estrella G.56 for the two of them. Inc. They [worked] from March 4. 1998. of November 26. the one hundred eighty (180) days commenced on May 27. An MR was filed but was denied. They believed that their job was necessary and desirable to the usual business of the company which is data processing/conversion and that their employment is regular pursuant to Article 280 of the Labor Code. is engaged in the encoding/data conversion business. The disputed contract reads. Since the period expired. 1996. It said that the fixed-term contract prepared by petitioner was a crude attempt to circumvent respondents’ right to security of tenure. It employs encoders. 1997. as follows: .they filed a complaint for illegal dismissal and for damages as well as for attorney’s fees against Innodata Phils. having a fixed period of one (1) year. Inc. quality/quantity staff. Innodata contended that their employment contracts expired. Natividad and Jocelyn L. he was actually already a regular employee of the petitioner under Article 281 of the Labor Code. 1996 was served on respondent Paras only at 3:00 a. the dismissal at the end of their one year term agreed upon was valid. The Court held that by that time. 1996. The CA ruled that respondents were regular employees in accordance with Section 280 of the Labor Code.m. until their separation on March 3. or to a substantially equivalent position. it is said that in computing a period.the Labor Code pertains to 180 days. backwages computed from the time they were illegally dismissed on March 3. formatters. 1996. Quinto rendered a judgment in favor of complainants holding complainants Estella G. and further ordered to pay them attorney’s fees in the amount equivalent to 10% of their respective awards.28 EACH.. 1998 up to the date of this decision in the amount of P112. Also. and ended on November 23. indexers. Thus. as clearly provided for in the last paragraph of Article 13. Incorporated.070. Quejada were employed as formatters by Innodata Philippines. programmers. their employment was likewise terminated applying the ruling in the Brent School case. or in the total amount of P225. and to pay them jointly and severally. and others. His position as a regularized employee is thus secured until further notice. Labor Arbiter Donato G.

Hence. and the EMPLOYEE hereby accepts such appointment as FORMATTER effective March 04. provisions of applicable statutes are deemed written into the contract.“TERM/DURATION 1. 1998 without need of notice or demand. 1997 to March 03. the continuity of work cannot be ascertained. a period of one (1) year. Innodata’s contract of employment failed to comply with the standards set by law and by this Court. Innodata claims that it was constrained by the nature of its business to enter into fixed-term employment contracts with employees assigned to job orders. in case of doubt. ISSUE: whether the alleged fixed-term employment contracts are valid. the EMPLOYER is hereby granted the right to pre-terminate this Contract within the first three (3) months of its duration upon failure of the EMPLOYEE to meet and pass the qualifications and standards set by the EMPLOYER and made known to the EMPLOYEE prior to execution hereof. In effect. For this reason. Thus.” Moreover. the “parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. HELD: No.4 is a probationary period. the terms of a contract should be construed in favor of labor. Failure of the EMPLOYER to exercise its right hereunder shall be without prejudice to the automatic termination of the EMPLOYEE’s employment upon the expiration of this Contract or cancellation thereof for other causes provided herein and by law. “ A contract of employment is impressed with public interest. The EMPLOYER hereby employs. paragraph 7. Thus. engages and hires the EMPLOYEE.4 provides for a three-month period during which petitioner has the right to pre-terminate the employment for the “failure of the employees to meet and pass the qualifications and standards set by the employer and made known to the employee prior to” their employment. this petition. Aside from the fixed one-year term set in paragraph 1. Hence. 1998.” . xxxxxxxxx 7.1 This Contract shall automatically terminate on March 03.” The contract provided two periods. It relies on the availability of job orders or undertakings from its clients. the paragraph 7.4 The EMPLOYEE acknowledges that the EMPLOYER entered into this Contract upon his express representation that he/she is qualified and possesses the skills necessary and desirable for the position indicated herein. xxxxxxxxx “TERMINATION 7.

When he reviewed the two logbooks. That same day. holding that Estoquia became a regular employee after a year and had attained tenurial security. such contracts are subject to the special laws on labor unions. closed shop.m. strikes and lockouts. working conditions. As Radio Operator. The next morning de Jesus detected the entry error in the logbook. collective bargaining. Poseidon Fishing vs. he monitored daily activities in their office and recorded in the duty logbook the names of the callers and time of their calls. it was made clear to him that he was being employed only on a “por viaje” (per trip) basis and that his employment would be terminated at the end of the trip for which he was being hired per the “Kasunduan” with him. LA decided in favor of Estoquia. They are so impressed with public interest that labor contracts must yield to the common good. The relations between capital and labor are not merely contractual. She asked Estoquia to prepare an incident report to explain the reason for the said oversight. he was able to record the same in the other logbook. However. On July 3. In 1999 Estoquia was demoted without reason to Radio Operator.m. One of its boat crew was private respondent Estoquia. 1700. hours of labor and similar subjects.” And Section 280 of the Labor Code. De Jesus is the manager of Poseidon Fishing. Petitioners also asserted that deep-sea fishing is a seasonal industry as catching of fish could only be undertaken for a limited duration or seasonal within a given year and thus Estoquia was a seasonal or project employee.RATIO: The applicable laws are Article 1700 of the Civil Code which declares: “Art. NLRC modified the decision. After five years. Estoquia refused to accept it as he believed he did nothing illegal to warrant his immediate discharge. Estoquia was employed by Poseidon in Jan 1988 as Chief Mate. Estoquia filed a complaint for illegal dismissal with the LA. he noticed that he wasn’t able to record the said call in one of the logbooks so he immediately recorded it after the 7:30 a. Therefore. 2000 Estoquia failed to record a 7:25 a. DISPOSITIVE: Petition is DENIED. deducting from Estoquia’s . Poseidon’s secretary summoned Estoquia to get his separation pay. call in one of the logbooks. wages. he was promoted to Boat Captain. and the assailed Decision and Resolution are AFFIRMED. NLRC Facts: Poseidon Fishing is a company engaged in the deep-sea fishing industry. Costs against petitioner. when he was engaged. It ordered Poseidon to reinstate him and pay full back wages. entry. Poseidonand de Jesus asserted that Estoquia was a contractual or casual employee.

and later as Radio Operator. His job was directly related to the deep-sea fishing business of Poseidon. EROME D. v. Issue: Whether or not Estoquia was a seasonal or project employee Held: NO. However.R.back wages as it was his negligence in the performance of his work that brought about his termination. ESCASINAS and EVAN RIGOR SINGCO vs. the duration and scope of which were specified at the time the employee was engaged for that project. Maraguinot Jr. PEPITO GR No. His work was necessary and important to the business of his employer. necessary and indispensable to the usual business or trade of the employer. Petitioners have not shown that Estoquia was informed that he will be assigned to a specific project or undertaking. where illegal dismissal is proven. The test to determine whether one is a “project employee” is W/N the said employee was assigned to carry out a specific project or undertaking. 178827 March 24. private respondent’s dismissal without valid cause was illegal. Petitioners’ intent to evade the application of Art 280 is unmistakable. if circumstances show that periods have been imposed to preclude acquisition of tenurial security by the employee. we are constrained to say that he belongs to the ilk of regular employee. the worker is entitled to back wages and other similar benefits without deductions or conditions. the “Kasunduan” has such an objective: to frustrate the security of tenure of Estoquia. the Court ruled that fixed- term employment contracts are recognized as valid under the law despite Art 280 of the LC. JESSICA J. intermittently) re-hired by the same employer for the same tasks or nature of tasks. the employee must be deemed a regular employee. v. And. In Brent School Inc. and (2) these tasks are vital. Being one. Estoquia worked forPoseidon first as a Chief Mate. In the case at bar. the fixed-term contract should be disregarded for being contrary to public policy. SHANGRI-LA’S MACTAN ISLAND RESORT and DR. CA dismissed the petition for certiorari. In a span of 12 years. then Boat Captain. Inasmuch as Estoquia’s functions are no doubt “usually necessary or desirable in the usual business or trade” of Poseidon and he was hired continuously for 12 years for the same nature of tasks. National Labor Relations Commission established that once a project or work pool employee has been (1) continuously (vs. 2009 . Neither has it been established that he was informed of the duration and scope of such project or undertaking at the time of their engagement. Zamora 181 SCRA 702.

he cannot be automatically deemed a regular employee. 280 of the Labor Code states that if a worker performs work usually necessary or desirable in the business of an employer. and that respondent doctor is a legitimate individual contractor who has the power to hire. underpayment of wages. the Article provides: . as amended. that the services of nurses is not germane nor indispensable to its operations. Escasinas and Evan Rigor Singco (petitioners) were engaged in 1999 and 1996. Whether or not there exists an employer-employee relationship between Shangri- la and petitioners. and that the Memorandum of Agreement between the respondent and the respondent doctor amply shows that respondent doctor was in fact engaged by Shangri-la on retainer basis. the NLRC declared that no employer-employee relationship existed between Shangri-la and petitioners. Art. It ruled that contrary to the finding of the LA. The Labor Arbiter (LA) declared petitioners to be regular employees of Shangri-la. contrary to petitioners’ postulation. does not make it mandatory for a covered establishment to employ health personnel. that Article 157 of the Labor Code. Shangri-la claimed. non-payment of holiday pay. 157 does not require the engagement of full-time nurses as regular employees of a company employing not less than 50 workers. ISSUES: 1. and thus ordered Shangri-la to grant them the wages and benefits due them as regular employees from the time their services were engaged. In late 2002. petitioners could not be regarded as regular employees of Shangri-la. Thus. under which she could hire her own nurses and other clinic personnel. night shift differential and 13th month pay differential against respondents. respectively. concluding that all aspects of employment of petitioners being under the supervision and control of respondent doctor and since Shangri-la is not principally engaged in the business of providing medical or healthcare services. HELD: The Court holds that. Upon appeal. Pepito (respondent doctor) to work in her clinic at respondent Shangri-la’s Mactan Island Resort (Shangri-la) in Cebu of which she was a retained physician. however. Whether or not Article 157 of the Labor Code make it mandatory for covered establishment to employ health personnel.FACTS: Registered nurses Jeromie D. Jessica Joyce R. that petitioners were not its employees but of respondent doctor. The Court of Appeals (CA) affirmed the NLRC decision. claiming that they are regular employees of Shangri-la. fire and supervise the work of nurses under her. even if Art. petitioners filed with the National Labor Relations Commission (NLRC) a complaint for regularization. and 2. by Dr. noting that the petitioners usually perform work which is necessary and desirable to Shangri-la’s business.

and an emergency clinic which means that it should provide or make available such medical and allied services to its employees. not employ. 157 cannot be construed as referring to the type of employment of the person engaged to provide the services. So De Vera teaches:x x For. nothing is there in the law which says that medical practitioners so engaged be actually hired as employees. adding that the law. and(c) The services of a full-time physician. even without being hired as an employee. which employs more than 200 workers. This set-up is precisely true in the case of an independent contractorship as well as in an agency agreement. As held in Philippine Global Communications vs. 157. Emergency medical and dental services. The Secretary of Labor shall provide by appropriate regulations the services that shall be required where the number of employees does not exceed fifty (50) and shall determine by appropriate order hazardous workplaces for purposes of this Article. subject to such regulations as the Secretary of Labor may prescribe to insure immediate availability of medical and dental treatment and attendance in case of emergency. a part-time physician and dentist.(b) The services of a full-time registered nurse. only requires the employer “to retain”. and an infirmary or emergency hospital with one bed capacity for every one hundred (100) employees when the number of employees exceeds three hundred (300). no employer shall engage the services of a physician or dentist who cannot stay in the premises of the establishment for at least two (2) hours. no matter how necessary for the latter’s business. a part-time physician who needed to stay in the premises of the non-hazardous workplace for two (2) hours. is mandated to “furnish” its employees with the services of a full-time registered nurse.ART. we take it that any agreement may provide that one party shall render services for and in behalf of another. – It shall be the duty of every employer to furnish his employees in any locality with free medical and dental attendance and facilities consisting of: (a) The services of a full-time registered nurse when the number of employees exceeds fifty (50) but not more than two hundred (200) except when the employer does not maintain hazardous workplaces. De Vera: x x x while it is true that the provision requires employers to engage the services of medical practitioners in certain establishments depending on the number of their employees. Where the undertaking is nonhazardous in nature. the physician and dentist may be engaged on retained basis.The term “full-time” in Art. and not less than eight (8) hours in the case of those employed on full-time basis. Shangri-la. in which case the services of a graduate first-aider shall be provided for the protection of the workers. not necessarily to hire or employ a service provider. as written. In cases of hazardous workplaces. Indeed. when the number of employees exceeds two hundred (200) but not more than three hundred (300). and an emergency clinic. 280 in order to vest employer-employee relationship on the employer and the person so engaged. Under the foregoing provision. for Article 157 must not be read alongside Art. a part-time physician and dentist. in the case of those engaged on part-time basis. dentist and full-time registered nurse as well as a dental clinic. Article 280 of the Labor . where no registered nurse is available.

157. tools. x x x The phrase “services of a full-time registered nurse” should thus be taken to refer to the kind of services that the nurse will render in the company’s premises and to its employees. materials and labor. Besides. appliances.Code. respondent doctor is the one who underwrites the following: salaries. not the manner of his engagement. the term and duration of the relationship. is not the yardstick for determining the existence of an employment relationship. the duty to supply the premises. As to payment of wages.. the maintenance of a clinic and provision of medical services to its employees is required under Art.e. That Shangri-la provides the clinic premises and medical supplies for use of its employees and guests does not necessarily prove that respondent doctor lacks substantial capital and investment. existence of an employer. regular and casual. . and the mode. pay their SSS premium as well as their wages if they were not indeed her employees. quoted by the appellate court. It is thus presumed that said document. With respect to the supervision and control of the nurses and clinic staff. governs how they perform their respective tasks and responsibilities. the control and supervision of the work to another. the control of the premises.employee relationship is established by the presence of the following determinants: (1) the selection and engagement of the workers. it is not disputed that a document. “Clinic Policies and Employee Manual” claimed to have been prepared by respondent doctor exists. i.00 monthly retainer fee and 70% share of the service charges from Shangri-la’s guests who avail of the clinic services. sourced from her P60. Against the above-listed determinants. and (4) the power to control the worker’s conduct. (3) the payment of wages by whatever means. As it is. the Court holds that respondent doctor is a legitimate independent contractor.000. On the other hand. and not the employee manual being followed by Shangri-la’s regular workers. the skill required. SSS contributions and other benefits of the staff. to which petitioners gave their conformity and in which they acknowledged their co-terminus employment status. firing and payment of the contractor’s workers. the employer’s power with respect to the hiring. the right to assign the performance of a specified piece of work. The existence of an independent and permissible contractor relationship is generally established by considering the following determinants: whether the contractor is carrying on an independent business. group life. It is unlikely that respondent doctor would report petitioners as workers. the nature and extent of the work. the provision merely distinguishes between two (2) kinds of employees. manner and terms of payment. (2) power of dismissal. as well as value added taxes and withholding taxes. with the latter assuming primacy in the overall consideration. group personal accident insurance and life/death insurance for the staff with minimum benefit payable at 12 times the employee’s last drawn salary. which are not directly related to Shangri-la’s principal business – operation of hotels and restaurants.

as Shangri-la does not control how the work should be performed by petitioners. .In fine. it is not petitioners’ employer.