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Tabas vs. California Manufacturing Issue: WON principal employer is liable.

Co., Inc. [169 SCRA 497, GR 80680] Held: Yes. The existence of an employer-employee relation
cannot be made the subject of an agreement.
Posted by Pius Morados on November Based on Article 106, “labor-only” contractor is considered
17, 2011 merely as an agent of the employer, and the liability must be
shouldered by either one or shared by both.
(Labor Standards – Both employer and labor only contractor
There is no doubt that in the case at bar, Livi performs
may be liable)
“manpower services”, meaning to say, it contracts out labor in
Facts: Petitioners filed a petition in the NLRC for reinstatement favor of clients. We hold that it is one notwithstanding its
and payment of various benefits against California vehement claims to the contrary, and notwithstanding the
Manufacturing Company. The respondent company then provision of the contract that it is “an independent
denied the existence of an employer-employee relationship contractor.” The nature of one’s business is not determined by
between the company and the petitioners. self-serving appellations one attaches thereto but by the tests
provided by statute and prevailing case law. The bare fact that
Pursuant to a manpower supply agreement, it appears that the
Livi maintains a separate line of business does not extinguish
petitioners prior their involvement with California
the equal fact that it has provided California with workers to
Manufacturing Company were employees of Livi Manpower
pursue the latter’s own business. In this connection, we do not
service, an independent contractor, which assigned them to
agree that the petitioners had been made to perform activities
work as “promotional merchandisers.” The agreement provides
‘which are not directly related to the general business of
manufacturing,” California’s purported “principal operation
California “has no control or supervisions whatsoever over activity.” Livi, as a placement agency, had simply supplied
[Livi’s] workers with respect to how they accomplish their California with the manpower necessary to carry out its
work or perform [Californias] obligation” It was further (California’s) merchandising activities, using its (California’s)
expressly stipulated that the assignment of workers to premises and equipment.
California shall be on a “seasonal and contractual basis”; that
“[c]ost of living allowance and the 10 legal holidays will be
charged directly to [California] at cost “; and that “[p]ayroll for
the preceding [sic] week [shall] be delivered by [Livi] at
[California’s] premises.”
SSS (petitioner) vs. C.A. and Ayalde equipments and carabao as well as having his
own work schedule.
(respondents) o Ayalde never exercised control over the manner
Nature: Petition Tana used performed his work.
o Wanted the case dismissed because Tana was
Facts: never her employee
o Ignacio Tana Sr. had a wife named Margarita Tana o Social Security Commission issued a resolution that
o Ignacio worked for Conchita Ayalde (respondent) as a stated that:
farmhand in 2 sugarcane plantations from 1961- 1979. o Tana was an employee of Conchita Ayalde due
o Ignacio received the minimum wage at that time while to the testimony of the Tana’s co-workers.
social security contributions were deducted from his o Ayalde was liable for payment of damages and
wage.. SSS give Mrs. Tana her accrued pension.
o When he died, his wife found out that Tana was never o C.A. stated otherwise and declaring the decision in
reported for coverage nor his contributions remitted to favour of Ayalde.
the SSS (petitioner).
Issue: whether or not an agricultural laborer who was hired on
o Margarita Tana was deprived of the burial grant “pakyaw” basis can be considered an employee entitled to
and pension. compulsory coverage and corresponding benefits under the
o She wanted: Social Security Law.
o Respondents Ayalde to pay the premium
contributions of her husband Decision:
o SSS to grant Mrs. Tanada her burial grant and o Aylade failed to show complete documents to
pension due to her. strengthen her claim that Tana was not her employee
o SSS stated that Conchita Ayalda were never registered o Margarita Tana’s testimony corroborated by 2 other
to the SSS thus Mr. Tana was never registered as well. witnesses
o Ayalde (respondent) denied allegations that Mr. Tana o Mr. Tana was paid a daily wage which
was her employee Ayalde’s overseer disbursed every 15 days.
o He was only hired intermittently as an o No particular form of evidence is required to prove the
independent contractor and used his own existence of an employer-employee relationship. Any
competent and relevant evidence to prove the Brotherhood Labor Unity Movement of
relationship may be admitted.
o the testimonial evidence of the claimant and her the Phil. v. Zamora
witnesses constitute positive and credible evidence of
the existence of an employer-employee relationship
between Tana and Ayalde. Facts:
o Tana and his family lived inside the plantation of The petitioners are workers who have been employed at the
Ayalde thus the logical explanation is that he was San Miguel Parola Glass Factory as “pahinantes” or
working exclusively for Ayalde throughout the year. “kargadors” for almost seven years. They worked exclusively
o Ayalde exercised control over Tana indirectly, through at the SMC plant, never having been assigned to other
her overseer. companies or departments of San Miguel Corp, even when the
o There is substantial evidence that Tana was paid a daily volume of work was at its minimum. Their work was neither
wage thus he is entitled to compulsory coverage. regular nor continuous, depending on the volume of bottles to
o Ayalde failed to counter these positive assertions. Even be loaded and unloaded, as well as the business activity of the
on the assumption that there were no deductions, the company. However, work exceeded the eight-hour day and
fact remains that Tana was and should have been sometimes, necessitated work on Sundays and holidays. -for
this, they were neither paid overtime nor compensation.
covered under the Social Security Law. The
circumstances of his employment place him outside the Sometime in 1969, the workers organized and affiliated
ambit of the exception provided in Section 8(j) of themselves with Brotherhood Labor Unity Movement
Republic Act No. 1611, as amended by Section 4 of (BLUM). They wanted to be paid to overtime and holiday pay.
R.A. 2658. They pressed the SMC management to hear their grievances.
BLUM filed a notice of strike with the Bureau of Labor
WHEREFORE, in view of all the foregoing, the Decision Relations in connection with the dismissal of some of its
of the Court of Appeals in C.A.-G.R. SP No. 16427 and the members. San Miguel refused to bargain with the union
Resolution dated June 14, 1991 are hereby REVERSED and alleging that the workers are not their employees but the
SET ASIDE. The Resolution of the Social Security employees of an independent labor contracting firm,
Commission in SSC Case No. 8851 is REINSTATED. Guaranteed Labor Contractor.
The workers were then dismissed from their jobs and denied
entrance to the glass factory despite their regularly reporting
for work. A complaint was filed for illegal dismissal and unfair and habituality of the petitioner’s work bolsters the claim of an
labor practices. employee status.
As for the payment of the workers’ wages, the contention that
the independent contractors were paid a lump sum representing
only the salaries the workers where entitled to have no merit.
Whether or not there was employer-employee (ER- The amount paid by San Miguel to the contracting firm is no
EE)relationship between the workers and San Miguel Corp. business expense or capital outlay of the latter. What the
contractor receives is a percentage from the total earnings of all
the workers plus an additional amount from the earnings of
Held: each individual worker.

YES. In determining if there is an existence of the (ER-EE) The power of dismissal by the employer was evident when the
relationship, the four-fold test was used by the Supreme petitioners had already been refused entry to the premises. It is
Court. These are: apparent that the closure of the warehouse was a ploy to get rid
of the petitioners, who were then agitating the company for
· The selection and engagement of the employee reforms and benefits.
· Payment of wages The inter-office memoranda submitted in evidence prove the
· Power of dismissal company’s control over the workers. That San Miguel has the
power to recommend penalties or dismissal is the strongest
· Control Test- the employer’s power to control the indication of the company’s right of control over the workers
employee with respect to the means and methods by which as direct employer.
work is to be accomplished
In the case, the records fail to show that San Miguel entered
into mere oral agreements of employment with the workers.
Considering the length of time that the petitioners have worked
with the company, there is justification to conclude that they
were engaged to perform activities necessary in the usual
business or trade. Despite past shutdowns of the glass plant, the
workers promptly returned to their jobs. The term of the
petitioner’s employment appears indefinite and the continuity
LIRIO v. GENOVIA recording technician whenever a client uses the studio for
recording, editing or any related work.
G.R. No. 169757 November 23, 2011
- Respondent stated that a few days after he started working as
petitioners Cesar C. Lirio, doing business under the a studio manager, petitioner approached him and told him
name and style of CELKOR AD SONICMIX about his project to produce an album for his 15y.o.
daughter, Celine Mei Lirio, a former talent of ABS-CBN Star
respondents Wilmer D. Genovia
Records. Petitioner asked respondent to compose and arrange
songs for Celine and promised that he (Lirio) would draft a
contract to assure respondent of his compensation for such
summary services. As agreed upon, the additional services that
Studio manager + composer. Genovia was terminated because respondent would render included composing and arranging
he did not agree with the small compensation scheme proposed musical scores only, while the technical aspect in producing
by Lirio. The court held that they have an employer-employee the album, such as digital editing, mixing and sound
relationship and that LA & CA is correct – Genovia was engineering would be performed by respondent in his
illegally dismissed. capacity as studio manager for which he was paid on a
monthly basis. Respondent then started making the album.
- Genovia alleged that before the end of Sept 2001, he
facts of the case (sorry super long) reminded petitioner about his compensation as composer and
- July 9, 2002: Respondent Genovia filed a complaint against arranger of the album. Petitioner verbally assured him that he
Petitioner Lirio and/or Celkor Ad Sonicmix Recording Studio would be duly compensated. On Feb 26, 2002 (after the carrier
for illegal dismissal, non-payment of commission and award of single was already aired in over the radio on Feb 22),
moral and exemplary damages. respondent again reminded petitioner about the contract on his
compensation as composer and arranger of the album.
- In his Position Paper, respondent Genovia alleged, among Petitioner told respondent that since he was practically a
others, that on August 15, 2001, he was hired as studio nobody and had proven nothing yet in the music industry,
manager by petitioner Lirio. He was employed to manage and respondent did not deserve a high compensation, and he
operate Celkor and to promote and sell the recording studio's should be thankful that he was given a job to feed his
services to music enthusiasts and other prospective clients. He family (kapal ng mukha!). Petitioner informed respondent that
received a monthly salary of P7k. They also agreed that he was he was entitled only to 20% of the net profit, and not of the
entitled to an additional commission of P100 per hour as gross sales of the album, and that the salaries he received and
would continue to receive as studio manager of Celkor would Sonicmix Recording Studio. He looked for a
be deducted from the said 20% net profit share. composer/arranger who would compose the songs for the said
album – found Genovia. Respondent verbally agreed with petitioner
- Respondent objected and insisted that he be properly to co-produce the album based on the following terms and
compensated. On March 14, 2002, petitioner verbally conditions: (1) petitioner shall provide all the financing, equipment
terminated respondent’s services, and he was instructed not and recording studio; (2) Celine Mei Lirio shall sing all the songs;
to report for work. (3) respondent shall act as composer and arranger of all the lyrics and
the music of the five songs he already composed and the revival
- Respondent asserts that he was illegally dismissed as he was songs; (4) petitioner shall have exclusive right to market the album;
terminated without any valid grounds, and no hearing was (5) petitioner was entitled to 60% of the net profit, while respondent
conducted before he was terminated, in violation of his and Celine Mei Lirio were each entitled to 20% of the net profit; and
constitutional right to due process. Having worked for more (6) respondent shall be entitled to draw advances of P7,000.00 a
than six months, he was already a regular employee. Although month, which shall be deductible from his share of the net profits and
he was a so called “studio manager,” he had no managerial only until such time that the album has been produced. Petitioner
powers, but was merely an ordinary employee. asserted that from the aforesaid terms and conditions, his relationship
with respondent is one of an informal partnership under Article 1767
- Respondent’s evidence consisted of the Payroll dated July 31, of NCC, since they agreed to contribute money, property or industry
2001 to March 15, 2002, which was certified correct by to a common fund with the intention of dividing the profits among
petitioner, and Petty Cash Vouchers evidencing receipt of themselves. Hence, petitioner contended that no employer-employee
payroll payments by respondent from Celkor. relationship existed between him and the respondent, and there was
no illegal dismissal to speak of.
- LA: Genovia is illegally dismissed. NLRC: reversed. CA:
reversed and reinstated LA decision.

Defense (just in case itanong ni Ma’am – pero baseless ‘to kasi

wala namang evidence): Lirio stated in his Position Paper that Issue/s
respondent was not hired as studio manager, composer,
WON CA erred in reversing and setting aside the decision of the
technician or as an employee in any other capacity of Celkor. NLRC, and reinstating the decision of the Labor Arbiter with
Respondent could not have been hired as a studio manager, modification. NO.
since the recording studio has no personnel except petitioner.
He decided to produce an album for his daughter and
established a recording studio, which he named Celkor Ad
ratio would help and teach respondent how to use the studio
equipment. In such case, petitioner certainly had the power to
In petitions for review, only errors of law are generally reviewed
check on the progress and work of respondent.
by this Court. This rule, however, is not ironclad. Where the issue is
On the other hand, petitioner failed to prove that his
shrouded by a conflict of factual perceptions by the lower court or
relationship with respondent was one of partnership. Such
the lower administrative body, in this case, the NLRC, this Court is
claim was not supported by any written agreement. The Court
constrained to review the factual findings of the Court of Appeals.
notes that in the payroll dated July 31, 2001 to March 15, 2002,
Before a case for illegal dismissal can prosper, it must first there were deductions from the wages of respondent for his
be established that an employer-employee relationship existed absence from work, which negates petitioner’s claim that the
between petitioner and respondent. The elements to wages paid were advances for respondent’s work in the
determine the existence of an employment relationship are: partnership.
(a) the selection and engagement of the employee; (b) the It is a well-settled doctrine, that if doubts exist between the
payment of wages; (c) the power of dismissal; and (d) the evidence presented by the employer and the employee, the
employer’s power to control the employee’s conduct. The scales of justice must be tilted in favor of the latter. (Nicario v
most important element is the employer’s control of the NLRC)
employee’s conduct, not only as to the result of the work to Court agrees with the CA that the evidence presented by
be done, but also as to the means and methods to the parties showed that an employer-employee relationship
accomplish it. existed between petitioner and respondent. Petitioner failed to
It is settled that no particular form of evidence is required comply with legal requirements (valid cause for termination +
to prove the existence of an employer-employee relationship. due process); hence, the CA correctly affirmed the LA’s
Any competent and relevant evidence to prove the relationship finding that respondent was illegally dismissed, and entitled to
may be admitted. the payment of backwages, and separation pay in lieu of
The evidence presented by Genovia (payroll + petty cash reinstatement.
vouchers) showed that petitioner hired respondent as an
employee and he was paid monthly wages of P7,000. Petitioner
wielded the power to dismiss as respondent stated that he was
verbally dismissed by petitioner, and respondent, thereafter,
filed an action for illegal dismissal against petitioner. The
power of control refers merely to the existence of the power. It
is not essential for the employer to actually supervise the
performance of duties of the employee, as it is sufficient that
the former has a right to wield the power. Nevertheless,
petitioner stated in his Position Paper that it was agreed that he
Issue(s) (1). Is there E2e relationship between parties?
ZANOTTE SHOES/Leonardo Lorenzo (2). Can the private respondents avail of separation pay?
vs. NLRC, et. al G.R. No. 100665 Held (1). Yes. The Court did not disturb the findings of the Labor
February 13, 1995 By Richard Troy A. Arbiter and the NLRC on the existence of E2e relationship with
finality absent substantial evidence against the contrary findings.
Colmenares USA College of Law Start: The work of private respondents is clearly related to, and in the
6/27/14 10:00:37 PM Finish: 6/27/14 pursuit of, the principal business activity of petitioners. The indicia
used is in establishing E2e relationship are as follows: (1) the
11:01:57 PM selection and engagement of the employee; (2) the payment of
Nature of the Case A petition for certiorari against the order of wages; (3) the power of dismissal; and (4) the employers power to
NLRC sustaining the award of separation pay to respondents. control the employee with respect to the result of the work to be
done and to the means and methods by which the work to be done
Facts Private respondents filed a complaint on illegal dismissal and and accomplished. Key to this issue is the existence of control, and
monetary claims plus damages and attorneys fees against Zanotte not its actual exercise.
Shoes. They allege: (1) that they work at least 12 hours daily, (2). No. As sustained by NLRC, the Labor Arbiter concluded
including Sundays and holidays when needed; (2) paid on a piece- there was neither dismissal nor abandonment and noted that
work basis; (3) their request to be made members of SSS angered instead of being ordered back to work, private respondents wanted
petitioner Lorenzo; and (4) that when they demanded for a higher to be given separation pay. The conciliation stage shows that
rate, they were denied entry to work premises. Petitioners counter: Zanotte Shoes offered reinstatement, and thus there is no dismissal
(1) that their business operation is seasonal (coinciding with the to speak of. The private respondents are out of job for reasons not
opening of classes and during Christmas holidays); (2) when heavy attributable to the parties. NLRC, on its part, noted that the Labor
job-orders would come; and (3) that private respondents are Arbiter saw that fear on the part of complainants to enter into a
engaged contractually and paid based on their agreements. The trap being laid before them for indeed, it is peculiar for an employer
labor arbiter rendered judgment, awarding separation pay to the who wants to get rid of its employees, to insist on reinstatement
private respondents. The same was sustained by NLRC, thereby rather than a separation pay scheme which the law allows them so
denying petitioner’s appeal and motion for reconsideration. Thus, they may be able to better manage their business. This is but mere
this petition. Solicitor General (SG) agreed with the existence of speculation. The Zanotte shoes has offered to accept back the
employer-employee (E2e) relationship between parties but held workers and yet the workers refused to accept such offer. Thus,
strong reservations on the award of separation pay because: (1) they cannot be entitled to a separation pay.
there was neither dismissal [of employer]; (2) nor abandonment [of
the workers]. NLRC submitted its own comment.
Insular Life Assurance Co. Ltd. vs. terminate also his engagement under the first contract and to stop
payment of his commissions.
NLRC and Melecio Basiao
G.R. No. 88484 November 15, 1989 Basiao filed with the Ministry of Labor a complaint against
Narvasa, J. Insular. Without contesting the termination of the first contract,
the complaint sought to recover commissions allegedly unpaid
thereunder, plus attorney's fees. Insular disputed the Ministry's
jurisdiction over Basiao's claim, asserting that he was not the
Facts: Melecio Basiao and Insular Life Assurance Co. Ltd.
Company's employee, but an independent contractor.
(Insular) entered into a contract authorizing Basiao to solicit
applications for insurance policies and annuities within the
Philippines. Basiao will receive commissions in consideration
The Labor Arbiter ruled in favor of Basiao. Said decision was
thereof. The rules in Insular’s Rate Book & its Agent Manual
affirmed on appeal by the NLRC. NLRC contended that the
as well as its circulars and those which may from time to time
contract’s provisions do not constitute the decisive determinant
be promulgated by the company were made part of said contract.
of the nature of Basiao’s engagement. The critical feature
The contract likewise contained provisions governing the
distinguishing the status of an employee from that of an
relations of the party. Among others it provided that “the Agent
independent contractor is control, that is, whether or not the
shall be free to exercise his own judgment as to time, place and
party who engages the services of another has the power to
means of soliciting insurance. Nothing herein contained shall
control the latter's conduct in rendering such services. The
therefore be construed to create the relationship of employee
provisions of Basiao's contract obliging him to "... observe and
and employer between the Agent and the Company.”
conform to all rules and regulations which the Company may
from time to time prescribe ...," as well as to the fact that the
company prescribed the qualifications of applicants for
Four years later, Insular & Basiao entered into another contract,
insurance, processed their applications and determined the
an Agency Manager's Contract. To implement his end of it,
amounts of insurance cover to be issued as indicative of the
Basiao organized an agency (M. Basiao and Associates) while
control, which made Basiao, in legal contemplation, an
concurrently fulfilling his commitments under the first contract.
employee of the company.
Insular terminated the Agency Manager's Contract after seven
years. After vainly seeking reconsideration, Basiao sued Insular
in a civil action and this, he claimed, prompted Insular to
Issue: Is Basiao to be considered an employee of Insular?
insured, subject insurance applications to processing and
approval by the company, and also reserve to the company the
Held: NO. While “control” is a valid test of the character of a
determination of the premiums to be paid and the schedules of
contract or agreement to render service, not every form of
payment. None of these really invades the agent's contractual
control that the hiring party reserves to himself over the conduct
prerogative to adopt his own selling methods or to sell insurance
of the party hired in relation to the services rendered may be
at his own time and convenience, hence cannot justifiably be
accorded the effect of establishing an employer-employee
said to establish an employer-employee relationship between
relationship between them in the legal or technical sense of the
him and the company.

Hence, Basiao was not an employee of Insular, but a

A line should be drawn between (1) rules that merely serve as
commission agent, an independent contractor whose claim for
guidelines towards the achievement of the mutually desired
unpaid commissions should have been litigated in an ordinary
result without dictating the means or methods to be employed in
civil action. The appealed resolution of the NLRC was set
attaining it, and (2) rules that control or fix the methodology and
aside, and Basiao’s complaint was dismissed
bind or restrict the party hired to the use of such means. The first,
which aim only to promote the result, create no employer-
employee relationship unlike the second, which address both the
result and the means used to achieve it. The distinction acquires
particular relevance in the case of an enterprise affected with
public interest, as is the business of insurance, and is on that
account subject to regulation by the State with respect, not only
to the relations between insurer and insured but also to the
internal affairs of the insurance company. Rules and regulations
governing the conduct of the business are provided for in the
Insurance Code and enforced by the Insurance Commissioner. It
is, therefore, usual and expected for an insurance company to
promulgate a set of rules to guide its commission agents in
selling its policies that they may not run afoul of the law and
what it requires or prohibits. Of such a character are the rules
which prescribe the qualifications of persons who may be
Sevilla vs CA
On June 17,1963, appellant Lina Sevilla refiled her case against
G..R. No. L-41182-3 the herein appellees and after the issues were joined, the
April 16, 1988 reinstated counterclaim of Segundina Noguera and the new
complaint of appellant Lina Sevilla were jointly heard
following which the court ordered both cases dismiss for lack
Employer-Employee Relationship
of merit.
In her appeal, Lina Sevilla claims that a joint bussiness venture
was entered into by and between her and appellee TWS with
The petitioners invoke the provisions on human relations of the
offices at the Ermita branch office and that she was not an
Civil Code in this appeal by certiorari.
employee of the TWS to the end that her relationship with
TWS was one of a joint business venture appellant made
Mrs. Segundina Noguera, party of the first part; the Tourist
World Service, Inc., represented by Mr. Eliseo Canilao as party
of the second part, and hereinafter referred to as appellants, the
Tourist World Service, Inc. leased the premises belonging to
the party of the first part at Mabini St., Manila for the former-s
Whether or not the padlocking of the premises by the Tourist
use as a branch office. In the said contract the party of the third
World Service, Inc. without the knowledge and consent of the
part held herself solidarily liable with the party of the part for
appellant Lina Sevilla entitled the latter to the relief of damages
the prompt payment of the monthly rental agreed on. When the
prayed for and whether or not the evidence for the said
branch office was opened, the same was run by the herein
appellant supports the contention that the appellee Tourist
appellant Una 0. Sevilla payable to Tourist World Service Inc.
World Service, Inc. unilaterally and without the consent of the
by any airline for any fare brought in on the efforts of Mrs.
appellant disconnected the telephone lines of the Ermita branch
Lina Sevilla, 4% was to go to Lina Sevilla and 3% was to be
office of the appellee Tourist World Service, Inc.?
withheld by the Tourist World Service, Inc.
On November 24, 1961 the Tourist World Service, Inc. appears
to have been informed that Lina Sevilla was connected with a
The trial court held for the private respondent on the premise
rival firm, the Philippine Travel Bureau, and, since the branch
that the private respondent, Tourist World Service, Inc., being
office was anyhow losing, the Tourist World Service
the true lessee, it was within its prerogative to terminate the
considered closing down its office.
lease and padlock the premises. It likewise found the petitioner, OROZCO vs CA (2008)
Lina Sevilla, to be a mere employee of said Tourist World
Service, Inc. and as such, she was bound by the acts of her Wilhelmina Orozco was hired as a writer by the Philippine
employer. The respondent Court of Appeal rendered an Daily Inquirer (PDI) in 1990. She was the columnist of
affirmance. “Feminist Reflections” under the Lifestyle section of the
publication. She writes on a weekly basis and on a per article
In this jurisdiction, there has been no uniform test to determine basis (P250-300/article).
the evidence of an employer-employee relation. In general, we
In 1991, Magsanoc as the editor-in-chief sought to improve the
have relied on the so-called right of control test, "where the
Lifestyle section of the paper. She said there were too many
person for whom the services are performed reserves a right to
Lifestyle writers and that it was time to reduce the number of
control not only the end to be achieved but also the means to be
writers. Orozco’s column was eventually dropped.
used in reaching such end." Subsequently, however, we have
considered, in addition to the standard of right-of control, the Orozco filed for a case for Illegal Dismissal against PDI and
existing economic conditions prevailing between the parties, Magsanoc. Orozco won in the Labor Arbiter. The LA ruled that
like the inclusion of the employee in the payrolls, in there exists an employer-employee relationship between PDI
determining the existence of an employer-employee and Orozco hence Orozco is entitled to receive backwages,
relationship. reinstatement, and 13th month pay.
PDI appealed to the National Labor Relations Commission.
the Decision promulgated on January 23, 1975 as well as the
The NLRC denied the appeal because of the failure of PDI to
Resolution issued on July 31, 1975, by the respondent Court of
post a surety bond as required by Article 223 of the Labor
Appeals is hereby REVERSED and SET ASIDE. The private
Code. The Court of Appeals reversed the NLRC.
respondent, Tourist World Service, Inc., and Eliseo Canilao,
are ORDERED jointly and severally to indemnify the ISSUE: Whether or not there exists an employer-employee
petitioner, Lina Sevilla, the sum of 25,00.00 as and for moral relationship between PDI and Orozco. Whether or not PDI’s
damages, the sum of P10,000.00, as and for exemplary appeal will prosper.
damages, and the sum of P5,000.00, as and for nominal and/or
HELD: Under Article 223 of the Labor Code:
temperate damages.
ART. 223. Appeal. – Decisions, awards or orders of the Labor
Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar
days from receipt of such decisions, awards, or orders.
In case of a judgment involving a monetary award, an appeal
by the employer may be perfected only upon the posting of a
cash or surety bond issued by a reputable bonding company BERNARD A. TENAZAS v. R.
duly accredited by the Commission in the amount equivalent to VILLEGAS TAXI TRANSPORT, GR
the monetary award in the judgment appealed from.
No. 192998, 2014-04-02
The requirement that the employer post a cash or surety bond
to perfect its/his appeal is apparently intended to assure the Facts:
workers that if they prevail in the case, they will receive the
money judgment in their favor upon the dismissal of the
employer’s appeal. It was intended to discourage employers Bernard A. Tenazas (Tenazas) and Jaime M. Francisco
from using an appeal to delay, or even evade, their obligation (Francisco) filed a complaint for illegal dismissal against R.
to satisfy their employees’ just and lawful claims. Villegas Taxi Transport and/or Romualdo Villegas (Romualdo)
and Andy Villegas (Andy) (respondents).
But in this case, this principle is relaxed by the Supreme Court
considering the fact that the Labor Arbiter, in ruling that the Tenazas alleged that on
Orozco is entitled to backwages, did not provide any 2007, the taxi unit assigned to him was sideswiped by another
computation. vehicle, causing a dent on the left fender near the driver seat.
The case is then remanded to the Labor Arbiter for the Upon reporting the incident to the company, he was scolded by
computation. This necessarily pended the resolution of the respondents... and was told to leave the garage for he is already
other issue of whether or not there exists an employer- fired. He was even threatened with physical harm should he
employee relationship between PDI and Orozco. ever be seen in the company's premises again. Despite the...
warning, Tenazas reported for work on the following day but
was told that he can no longer drive any of the company's units
as he is already fired.
Francisco, on the other hand, averred that his dismissal was
brought about by the company's unfounded suspicion that he
was organizing a labor union. He was instantaneously
terminated, without the benefit of procedural due process
Endraca, for his part, alleged that his dismissal was instigated existence of employer-employee relationship and whether there
by an occasion when he fell short of the required boundary for was an illegal dismissal.
his taxi unit.
He related that before he was dismissed, he brought his taxi
unit to an auto shop for an urgent repair. He was charged the... The petition lacks merit.
amount of no substantial evidence was presented to support the
conclusion that Francisco was an employee of the respondents
700.00 for the repair services and the replacement parts. As a
and accordingly modified the NLRC decision.
result, he was not able to meet his boundary for the day.
respondents admitted that Tenazas and Endraca were with the respondents' denial of... employer-employee
employees of the company, the former being a regular driver relationship, it behooved Francisco to present substantial
and the latter a spare driver. The respondents, however, denied evidence to prove that he is an employee before any question
that Francisco was an employee of the company or that he was on the legality of his supposed dismissal becomes appropriate
able to drive one... of the company's units at any point in time. for discussion. Francisco, however, did not offer evidence to...
substantiate his claim of employment with the
the Labor Arbiter (LA)... dismissed for lack of merit. respondents. Short of the required quantum of proof, the CA
correctly ruled that the NLRC's finding of illegal dismissal and
petitioners appealed the decision of the LA to the NLRC. the monetary awards which necessarily follow such ruling
the NLRC... rendered a Decision,... reversing the appealed lacked factual and legal basis and must... therefore be deleted.
decision of the LA... respondents filed a motion for It is an oft-repeated rule that in labor cases, as in other
reconsideration but the NLRC denied the same... respondents administrative and quasi-judicial proceedings, "the quantum of
filed a petition for certiorari with the CA. proof necessary is substantial evidence, or such amount of
the award of Jaime Francisco's claims is DELETED. The relevant evidence which a reasonable mind might accept as
separation pay granted in favor of Bernard Tenazas and Isidro adequate to justify a... conclusion."
Endraca is, likewise, DELETED and their reinstatement is "[T]he burden of proof rests upon the party who asserts the
ordered instead. affirmative of an issue."
petitioners filed a motion for reconsideration but the same was Corollarily, as Francisco was claiming to be an employee of the
denied by the CA respondents, it is incumbent upon him to proffer... evidence to
Undeterred, the petitioners filed the instant petition for review prove the existence of said relationship.
on certiorari Francisco failed to present any proof substantial enough to
Issues: establish his relationship with the respondents. He failed to
present documentary evidence like attendance logbook, CASE DIGEST: BITOY JAVIER
payroll, SSS record or any personnel file that could somehow
depict his... status as an employee. Anent his claim that he was (DANILO P. JAVIER), Petitioner, v.
not issued with employment records, he could have, at least,
produced his social security records which state his FLY ACE CORPORATION and
contributions, name and address of his employer, as his co- FLORDELYN CASTILLO,
petitioner Tenazas did. He could have also... presented
testimonial evidence showing the respondents' exercise of Respondents.
control over the means and methods by which he undertakes
his work. This is imperative in light of the respondents' denial
of his employment and the claim of another taxi operator, FACTS: Javier an employee of Fly Ace performing various
Emmanuel Villegas work for the latter filed a complaint before the NLRC for
underpayment of salaries and other labor standard benefits.
(Emmanuel), that he was his employer. He alleged that he reported for work from Monday to Saturday
The utter lack of evidence is fatal to Francisco's case especially from 7:00 oclock in the morning to 5:00 oclock in the
in cases like his present predicament when the law has been afternoon; that during his employment, he was not issued an
very lenient in not requiring any particular form of evidence or identification card and pay slips by the company; that he
manner of proving the... presence of employer-employee reported for work but he was no longer allowed to enter the
relationship. company premises by the security guard upon the instruction of
Here, Francisco simply relied on his allegation that he was an Ruben Ong (Mr. Ong), his superior; that after several minutes
employee of the company without any other evidence of begging to the guard to allow him to enter, he saw Ong
supporting his claim. Unfortunately for him, a mere allegation whom he approached and asked why he was being barred from
in the position paper is not tantamount to evidence. entering the premises; that Ong replied by saying, Tanungin
mo anak mo;that he discovered that Ong had been courting his
Bereft of... any evidence, the CA correctly ruled that Francisco
daughter Annalyn after the two met at a fiesta celebration in
could not be considered an employee of the respondents.
Malabon City; that Annalyn tried to talk to Ong and convince
A bare claim... of strained relations by reason of termination is him to spare her father from trouble but he refused to accede;
insufficient to warrant the granting of separation that thereafter, Javier was terminated from his employment
pay. Likewise, the filing of the complaint by the petitioners without notice; and that he was neither given the opportunity to
does not necessarily translate to strained relations between the refute the cause/s of his dismissal from work.
For its part p, Fly Ace denied the existence of employer-
employee relationship between them and Javier as the latter The CA ruled thatJaviers failure to present salary vouchers,
was only called roughly 5 to 6 times only in a month whenever payslips, or other pieces of evidence to bolster his contention,
the vehicle of its contracted hauler, Milmar Hauling Services, pointed to the inescapable conclusion that he was not an
was not available. Labor Arbiter dismissed the complaint ruling employee of Fly Ace. Further, it found that Javiers work was
that respondent Fly Ace is not engaged in trucking business but not necessary and desirable to the business or trade of the
in the importation and sales of groceries. Since there is a company, as it was only when there were scheduled deliveries,
regular hauler to deliver its products, we give credence to which a regular hauling service could not deliver, that Fly Ace
Respondents claim that complainant was contracted on pakiao would contract the services of Javier as an extra helper. Lastly,
basis. the CA declared that the facts alleged by Javier did not pass the
control test.
On appeal, NLRC reversed the decisin of the LA. It was of the
view that a pakyaw-basis arrangement did not preclude the He contracted work outside the company premises; he was not
existence of employer-employee relationship. Payment by required to observe definite hours of work; he was not required
result x x x is a method of compensation and does not define to report daily; and he was free to accept other work elsewhere
the essence of the relation. It is a mere method of computing as there was no exclusivity of his contracted service to the
compensation, not a basis for determining the existence or company, the same being co-terminous with the trip only.
absence of an employer-employee relationship. The NLRC Since no substantial evidence was presented to establish an
further averred that it did not follow that a worker was a job employer-employee relationship, the case for illegal dismissal
contractor and not an employee, just because the work he was could not prosper. Hence, this appeal.
doing was not directly related to the employers trade or
business or the work may be considered as extra helper as in ISSUE:
this case; and that the relationship of an employer and an
employee was determined by law and the same would prevail Does an employer-employee relationship exist between
whatever the parties may call it. Finding Javier to be a regular Javier and Fly Ace, thereby holding the latter guilty of
employee, the NLRC ruled that he was entitled to a security of illegal dismissal?
tenure. For failing to present proof of a valid cause for his
HELD: As the records bear out, the LA and the CA found
termination, Fly Ace was found to be liable for illegal dismissal
Javiers claim of employment with Fly Ace as wanting and
of Javier who was likewise entitled to backwages and deficient. The Court is constrained to agree. Labor officials are
separation pay in lieu of reinstatement. However, on appeal, enjoined to use reasonable means to ascertain the facts speedily
CA reversed the ruling of NLRC and objectively with little regard to technicalities or formalities
but nowhere in the rules are they provided a license to
completely discount evidence, or the lack of it. The quantum of and engagement of the employee; (2) the payment of wages;
proof required, however, must still be satisfied. Hence, when (3) the power of dismissal; and (4) the power to control the
confronted with conflicting versions on factual matters, it is for employees conduct. Of these elements, the most important
them in the exercise of discretion to determine which party criterion is whether the employer controls or has reserved the
deserves credence on the basis of evidence received, subject right to control the employee not only as to the result of the
only to the requirement that their decision must be supported work but also as to the means and methods by which the result
by substantial evidence.Accordingly, the petitioner needs to is to be accomplished.DENIED
show by substantial evidence that he was indeed an employee
of the company against which he claims illegal dismissal.

In sum, the rule of thumb remains: the onus probandi falls on

petitioner to establish or substantiate such claim by the
requisite quantum of evidence. Whoever claims entitlement to
the benefits provided by law should establish his or her right
thereto x x x. Sadly, Javier failed to adduce substantial
evidence as basis for the grant of relief.

By way of evidence on this point, all that Javier presented were

his self-serving statements purportedly showing his activities as
an employee of Fly Ace. Clearly, Javier failed to pass the
substantiality requirement to support his claim. Hence, the
Court sees no reason to depart from the findings of the CA.

While Javier remains firm in his position that as an employed

stevedore of Fly Ace, he was made to work in the company
premises during weekdays arranging and cleaning grocery
items for delivery to clients, no other proof was submitted to
fortify his claim. The lone affidavit executed by one Bengie
Valenzuela was unsuccessful in strengthening Javiers cause.

The Court is of the considerable view that on Javier lies the

burden to pass the well-settled tests to determine the existence
of an employer-employee relationship, viz: (1) the selection
Quezon City Regional Trial Court. She was detained for
2 weeks for failure to immediately post bail. Weeks
later, respondent Ranchez filed a complaint for illegal
dismissal and damages. A year later, Robinsons sent to
CASE DIGEST: ROBINSONS respondent by mail a notice of termination and/or notice
GALLERIA & MANUEL V. of expiration of probationary employment.
RANCHEZ The Labor Arbiter dismissed the complaint for illegal
G.R. No. 177937, January 19, 2011 dismissal, alleging that at the time of filing respondent
Ranchez had not yet been terminated. She was merely
ROBINSONS GALLERIA/ROBINSONS investigated. However, the NLRC reversed this ruling,
SUPERMARKET CORPORATION and/or JESS stating that Ranchez was illegally dismissed and that
MANUEL, petitioners, vs. IRENE R. RANCHEZ, Robinson's should reinstate her. It held that Ranchez
respondents. was deprived of due process when she was strip-
searched and sent to jail for two weeks because such
NACHURA, J.: amounted to constructive dismissal, making it
impossible for the respondent to continue under the
FACTS: employment. Even though she was merely a
probationary employee, the lapse of the probationary
Respondent Ranchez was a probationary employee for 5 contract did not amount to a valid dismissal because
months. She was hired as a cashier by Robinsons there was already an unwarranted constructive dismissal
sometime within that period. Two weeks after she was beforehand.
hired, she reported the loss of cash which she had placed
in the company locker. She offered to pay for the lost The NLRC denied Robinson's motion for
amount but the Operations Manager of Robinsons had reconsideration. The CA affirmed the decision of the
her strip-searched then reported her to the police even NLRC.
though they found nothing on her person. An
information for Qualified Theft was filed with the ISSUE: Whether respondent was illegally terminated
from employment by petitioners. (1) a just or
(2) an authorized cause; and
HELD: The petition is unmeritorious.
(3) when he fails to qualify as a regular employee in
LABOR LAW: Probationary employees; accordance with reasonable standards prescribed by the
termination of employment employer.

There is probationary employment when the employee

Article 277(b) of the Labor Code mandates that the
upon his engagement is made to undergo a trial period
employer shall furnish the worker, whose employment
during which the employer determines his fitness to
is sought to be terminated, a written notice containing a
qualify for regular employment based on reasonable
statement of the causes of termination, and shall afford
standards made known to him at the time of
the latter ample opportunity to be heard and to defend
himself with the assistance of a representative if he so
desires, in accordance with company rules and
A probationary employee, like a regular employee,
regulations pursuant to the guidelines set by the
enjoys security of tenure.However, in cases of
Department of Labor and Employment.
probationary employment, aside from just or authorized
causes of termination, an additional ground is provided
In the instant case, based on the facts on record,
under Article 281 of the Labor Code,i.e., the
petitioners failed to accord respondent substantive and
probationary employee may also be terminated for
procedural due process.The haphazard manner in the
failure to qualify as a regular employee in accordance
investigation of the missing cash, which was left to the
with reasonable standards made known by the employer
determination of the police authorities and the
to the employee at the time of the engagement.Thus, the
Prosecutor's Office, left respondent with no choice but
services of an employee who has been engaged on
to cry foul.Administrative investigation was not
probationary basis may be terminated for any of the
conducted by petitioner Supermarket.On the same day
that the missing money was reported by respondent to
her immediate superior, the company already pre-judged
her guilt without proper investigation, and instantly San Miguel Corporation vs del Rosario
reported her to the police as the suspected thief, which
resulted in her languishing in jail for two weeks.
Case Digest
San Miguel Corporation vs. Caroline
The due process requirements under the Labor Code are del Rosario
mandatory and may not be replaced with police
investigation or court proceedings. An illegally or G.R. No. 168194
constructively dismissed employee, respondent is
entitled to: (1) either reinstatement, if viable, or December 13, 2005
separation pay, if reinstatement is no longer viable; and
(2) backwages. These two reliefs are separate and
distinct from each other and are awarded conjunctively. Facts: On April 17, 2000, respondent was employed by
petitioner as key account specialist. On March 9, 2001,
petitioner informed respondent that her probationary
In this case, since respondent was a probationary employment will be severed at the close of the business hours of
employee at the time she was constructively dismissed March 12, 2001. On March 13, 2001, respondent was refused
by petitioners, she is entitled to separation pay and entry to petitioner's premises. On June 24, 2002, respondent filed
backwages. Reinstatement of respondent is no longer a complaint against petitioner for illegal dismissal and
viable considering the circumstances. underpayment/non-payment of monetary benefits. Respondent
alleged that petitioner feigned an excess in manpower because
DENIED after her dismissal, it hired new recruits and re-employed two of
her batch mates. On the other hand, petitioner claimed that
respondent was a probationary employee whose services were
terminated as a result of the excess manpower that could no
longer be accommodated by the company.

The Labor Arbiter declared respondent a regular employee

because her employment exceeded six months and holding that
she was illegally dismissed as there was no authorized cause to
terminate her employment. On appeal to NLRC, it modified the employment, her services still had to be terminated because
previous decision. there are no more regular positions in the company.
Undoubtedly, petitioner is invoking a redundancy which
allegedly resulted in the termination not only of the trainees,
Issue: Whether or not the respondent was an employee and was probationers but also of some of its regular employees.
illegally terminated. If so, is she entitled to monetary benefits?

Redundancy, for purposes of the Labor Code, exists where the

Ruling: In termination cases, the burden of proving the services of an employee are in excess of what is reasonably
circumstances that would justify the employee's dismissal rests demanded by the actual requirements of the enterprise.
with the employer. The best proof that petitioner should have Succinctly put, a position is redundant where it is superfluous,
presented to prove the probationary status of respondent is her and superfluity of a position or positions may be the outcome of
employment contract. None, having been presented, the a number of factors, such as overhiring of workers, decreased
continuous employment of respondent as an account specialist volume of business, or dropping of a particular product line or
for almost 11 months, from April 17, 2000 to March 12, 2001, service activity previously manufactured or undertaken by the
means that she was a regular employee and not a temporary enterprise. The criteria in implementing a redundancy are: (a)
reliever or a probationary employee. And while it is true that by less preferred status, e.g. temporary employee; (b) efficiency;
way of exception, the period of probationary employment may and (c) seniority. What further militated against the alleged
exceed six months when the parties so agree, such as when the redundancy advanced by petitioner is their failure to refute
same is established by company policy, or when it is required by respondent's assertion that after her dismissal, it hired new
the nature of the work, none of these exceptional circumstance recruits and re-employed two of her batch mates. The Court
were proven in the present case. Thus, respondent whose finds that petitioner was not able to discharge the burden of
employment exceeded six months is undoubtedly a regular proving that the dismissal of respondent was valid.
employee of petitioner.

Considering that respondent was illegally dismissed, she is

Her termination from employment must be for a just or entitled not only to reinstatement but also to payment of full back
authorized cause, otherwise, her dismissal would be illegal. wages, computed from the time her compensation was actually
Petitioner tried to justify the dismissal of respondent under the withheld from her on March 13, 2001, up to her actual
authorized cause of redundancy. It thus argued in the alternative reinstatement. She is likewise entitled to other benefits, i.e.,
that even assuming that respondent qualified for regular service incentive leave pay and 13th month pay computed from
such date also up to her actual reinstatement. Respondent is not G.R. No. 183572 MERCADO vs AMA
entitled to holiday pay because the records reveal that she is a
monthly paid regular employee. Under Section 2, Rule IV, Book COMPUTER COLLEGE-
III of the Omnibus Rules Implementing the Labor Code, PARAÑAQUE CITY, INC.
employees who are uniformly paid by the month, irrespective of
the number of working days therein, shall be presumed to be Facts: The petitioners were faculty members who started
paid for all the days in the month whether worked or not. teaching at AMACC on May 25, 1998. The petitioners
executed individual Teacher’s Contracts for each of the
trimesters that they were engaged to teach, with the following
common stipulation: 1. POSITION. The TEACHER has agreed
to accept a non-tenured appointment to work in the College of
xxx effective xxx to xxx or for the duration of the last term that
the TEACHER is given a teaching load based on the
assignment duly approved by the DEAN/SAVP-COO.
For the school year 2000-2001, AMACC implemented new
faculty screening guidelines, set forth in its Guidelines on the
Implementation of AMACC Faculty Plantilla. Under the new
screening guidelines, teachers were to be hired or maintained
based on extensive teaching experience, capability, potential,
high academic qualifications and research background.
On September 7, 2000, the petitioners individually received a
memorandum from AMACC, through, informing them that
with the expiration of their contract to teach, their contract
would no longer be renewed.
The Labor Arbiter Ruling declared that the petitioners had
been illegally dismissed. On appeal, the NLRC in a Resolution
dated July 18, 2005 denied AMACC’s appeal for lack of merit
and affirmed in toto the LA’s ruling. The NLRC, however,
observed that the applicable law is Section 92 of the Manual of
Regulations for Private Schools (which mandates a interests between labor and management that the Code has
probationary period of nine consecutive trimesters of institutionalized pursuant to the underlying intent of the
satisfactory service for academic personnel in the tertiary level Constitution.
where collegiate courses are offered on a trimester basis), not
Labor, for its part, is given the protection during the
Article 281 of the Labor Code (which prescribes a probationary
probationary period of knowing the company standards the
period of six months) as the LA ruled.
new hires have to meet during the probationary period, and to
The CA Ruling the CA granted AMACC’s petition for be judged on the basis of these standards, aside from the usual
certiorari and dismissed the petitioners’ complaint for illegal standards applicable to employees after they achieve permanent
dismissal. status. Under the terms of the Labor Code, these standards
should be made known to the teachers on probationary status at
Issue: WON the CA correctly found that the NLRC committed
the start of their probationary period, or at the very least under
grave abuse of discretion in ruling that the petitioners were
the circumstances of the present case, at the start of the
illegally dismissed.
semester or the trimester during which the probationary
Ruling: The use of employment for fixed periods during the standards are to be applied. Of critical importance in invoking a
teachers’ probationary period is likewise an accepted practice failure to meet the probationary standards, is that the school
in the teaching profession. should show – as a matter of due process – how these
standards have been applied.
AMACC’s right to academic freedom is particularly important
in the present case, because of the new screening guidelines for The school, however, cannot forget that its system of fixed-
AMACC faculty put in place for the school year 2000-2001. term contract is a system that operates during the probationary
We agree with the CA that AMACC has the inherent right to period and for this reason is subject to the terms of Article 281
establish high standards of competency and efficiency for its of the Labor Code. Unless this reconciliation is made, the
faculty members in order to achieve and maintain academic requirements of this Article on probationary status would be
excellence. The school’s prerogative to provide standards for fully negated as the school may freely choose not to renew
its teachers and to determine whether or not these standards contracts simply because their terms have expired. The
have been met is in accordance with academic freedom that inevitable effect of course is to wreck the scheme that the
gives the educational institution the right to choose who should Constitution and the Labor Code established to balance
teach. relationships between labor and management.

The provision on employment on probationary status under the Given the clear constitutional and statutory intents, we cannot
Labor Code is a primary example of the fine balancing of but conclude that in a situation where the probationary status
overlaps with a fixed-term contract not specifically used for the CASE DIGEST: Abbott Laboratories
fixed term it offers, Article 281 should assume primacy and the
fixed-period character of the contract must give way. This Phil. v. Pearlie Ann F. Alcaraz
conclusion is immeasurably strengthened by the petitioners’ [G.R. No. 192571, July 23, 2013]
and the AMACC’s hardly concealed expectation that the Subject: Labor Law – Probationary employees – Standards to
employment on probation could lead to permanent status, and qualify as a regular employee
that the contracts are renewable unless the petitioners fail to Decision (Perlas-Bernarbe, J.)
pass the school’s standards. Dissent (Brion, J.)
While we can grant that the standards were duly communicated On June 27, 2004, Abbott Laboratories, Philippines (Abbott)
to the petitioners and could be applied beginning the 1 st caused the publication in a major broadsheet newspaper of its
trimester of the school year 2000-2001, glaring and very basic need for a Medical and Regulatory Affairs Manager who would:
gaps in the school’s evidence still exist. The exact terms of the (a) be responsible for drug safety surveillance operations,
standards were never introduced as evidence; neither does the staffing, and budget; (b) lead the development and
evidence show how these standards were applied to the implementation of standard operating procedures/policies for
petitioners. Without these pieces of evidence (effectively, the drug safety surveillance and vigilance; and (c) act as the primary
finding of just cause for the non-renewal of the petitioners’ interface with internal and external customers regarding safety
contracts), we have nothing to consider and pass upon as valid operations and queries.
or invalid for each of the petitioners. Alcaraz – who was then a Regulatory Affairs and Information
Manager at Aventis Pasteur Philippines, Incorporated (another
In this light, the CA decision should be reversed. 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)

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 maintained and operated from the United States. For this
job description of Alcaraz’s work. purpose, all those involved in Hospira ALSU are required to use
On February 12, 2005, Alcaraz signed an employment contract two identification cards: one, to identify them as Abbott’s
which stated that she was to be placed on probation for a period employees and another, to identify them as Hospira employees.
of six (6) months beginning February 15, 2005 to August 14,
2005. On March 3, 2005, Maria Olivia T. Yabut-Misa, Abbott’s
During Alcaraz’s pre-employment orientation, Allan G. Human Resources (HR) Director, sent Alcaraz an e-mail which
Almazar, Hospira’s Country Transition Manager, briefed her on contained an explanation of the procedure for evaluating the
her duties and responsibilities as Regulatory Affairs Manager: performance of probationary employees and further indicated
(a) she will handle the staff of Hospira ALSU and will directly that Abbott had only one evaluation system for all of its
report to Almazar on matters regarding Hopira’s local employees. Alcaraz was also given copies of Abbott’s Code of
operations, operational budget, and performance evaluation of Conduct and Probationary Performance Standards and
the Hospira ALSU Staff who are on probationary status; Evaluation (PPSE) and Performance Excellence Orientation
Modules (Performance Modules) which she had to apply in line
(b) she must implement Abbott’s Code of Good Corporate with her task of evaluating the Hospira ALSU staff.
Conduct (Code of Conduct), office policies on human resources Abbott’s PPSE procedure mandates that the job performance of
and finance, and ensure that Abbott will hire people who are fit a probationary employee should be formally reviewed and
in the organizational discipline; discussed with the employee at least twice: first on the third
month and second on the fifth month from the date of
(c) Kelly Walsh, Manager of the Literature Drug Surveillance employment. The necessary Performance Improvement Plan
Drug Safety of Hospira, will be her immediate supervisor; 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
(d) she should always coordinate with Abbott’s human resource with the employee within the first two (2) weeks on the job. It
officers in the management and discipline of the staff; was equally required that a signed copy of the PPSE form must
be submitted to Abbott’s Human Resources Department (HRD)
(e) Hospira ALSU will spin off from Abbott in early 2006 and and shall serve as documentation of the employee’s performance
will be officially incorporated and known as Hospira, during his/her probationary period. This shall form the basis for
Philippines; and recommending the confirmation or termination of the
probationary employment.
(f) the processing of information and/or raw material data On April 20, 2005, Alcaraz had a meeting with Cecille Terrible,
subject of Hospira ALSU operations will be strictly confined and Abbott’s former HR Director, to discuss certain issues regarding
controlled under the computer system and network being staff performance standards. In the course thereof, Alcaraz
accidentally saw a printed copy of an e-mail sent by Walsh to Alcaraz felt that she was unjustly terminated from her
some staff members which essentially contained queries employment and thus, filed a complaint for illegal dismissal and
regarding the former’s job performance. Alcaraz asked if damages against Abbott and its officers, namely, Misa,
Walsh’s action was the normal process of evaluation. Terrible Bernardo, Almazar, Walsh, Terrible, and Feist. She claimed
said that it was not. that she should have already been considered as a regular and
On May 16, 2005, Alcaraz was called to a meeting with Walsh not a probationary employee given Abbott’s failure to inform
and Terrible where she was informed that she failed to meet the her of the reasonable standards for her regularization upon her
regularization standards for the position of Regulatory Affairs engagement as required under Article 295 of the Labor Code. In
Manager. Thereafter, Walsh and Terrible requested Alcaraz to this relation, she contended that while her employment contract
tender her resignation, else they be forced to terminate her stated that she was to be engaged on a probationary status, the
services. She was also told that, regardless of her choice, she same did not indicate the standards on which her regularization
should no longer report for work and was asked to surrender her would be based. She further averred that the individual
office identification cards. She requested to be given one week petitioners maliciously connived to illegally dismiss her when:
to decide on the same, but to no avail. (a) they threatened her with termination;
On May 17, 2005, Alcaraz told her administrative assistant,
Claude Gonzales (Gonzales), that she would be on leave for that (b) she was ordered not to enter company premises even if she
day. However, Gonzales told her that Walsh and Terrible was still an employee thereof; and
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 (c) they publicly announced that she already resigned in order
handed to Alcaraz a letter stating that her services had been to humiliate her.
terminated effective May 19, 2005. The letter detailed the
reasons for Alcaraz’s termination – particularly, that Alcaraz: Abbott maintained that Alcaraz was validly terminated from her
(a) did not manage her time effectively; probationary employment given her failure to satisfy the
prescribed standards for her regularization which were made
(b) failed to gain the trust of her staff and to build an effective known to her at the time of her engagement.
rapport with them;
The Labor Arbiter ruled in Abbott’s favor. The NLRC reversed,
(c) failed to train her staff effectively; and upholding Alcaraz’s allegations. The CA affirmed the NLRC
(d) was not able to obtain the knowledge and ability to make
sound judgments on case processing and article review which ISSUES:
were necessary for the proper performance of her duties.
1) WON Alcaraz was sufficiently informed of the reasonable Code of Conduct and office policies on human resources and
standards to qualify her as a regular employee finance and that she would be reporting directly to Walsh;
MAJORITY: YES. Abbott clearly conveyed to Alcaraz her
duties and responsibilities as Regulatory Affairs Manager prior (f) Alcaraz was also required to undergo a training program as
to, during the time of her engagement, and the incipient stages part of her orientation;
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 (g) Alcaraz received copies of Abbott’s Code of Conduct and
that Alcaraz was well-apprised of her employer’s expectations Performance Modules from Misa who explained to her the
that would, in turn, determine her regularization: procedure for evaluating the performance of probationary
(a) On June 27, 2004, Abbott caused the publication in a major employees; she was further notified that Abbott had only one
broadsheet newspaper of its need for a Regulatory Affairs evaluation system for all of its employees; and
Manager, indicating therein the job description for as well as
the duties and responsibilities attendant to the aforesaid (h) Moreover, Alcaraz had previously worked for another
position; this prompted Alcaraz to submit her application to pharmaceutical company and had admitted to have an
Abbott on October 4, 2004; “extensive training and background” to acquire the necessary
skills for her job.
(b) In Abbott’s December 7, 2004 offer sheet, it was stated that
Alcaraz was to be employed on a probationary status; Considering the totality of the above-stated circumstances,
Alcaraz was well-aware that her regularization would depend on
(c) On February 12, 2005, Alcaraz signed an employment her ability and capacity to fulfill the requirements of her position
contract which specifically stated, inter alia, that she was to be as Regulatory Affairs Manager and that her failure to perform
placed on probation for a period of six (6) months beginning such would give Abbott a valid cause to terminate her
February 15, 2005 to August 14, 2005; 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
(d) On the day Alcaraz accepted Abbott’s employment offer, probationary employee to be regularized; such is a regularization
Bernardo sent her (d) On the day Alcaraz accepted Abbott’s standard which need not be literally spelled out or mapped into
employment offer, Bernardo sent her copies of Abbott’s technical indicators in every case.
organizational structure and her job description through e-mail; DISSENT (Brion, J.): NO. The Offer Sheet was designed to
inform Alcaraz of the compensation and benefits package
(e) Alcaraz was made to undergo a pre-employment orientation offered to her by Abbott and can in no way be read as a statement
where Almazar informed her that she had to implement Abbott’s of the applicable probationary employment standard. It was
communicated even prior to engagement when the parties were sense in regard to which there is no need to spell out a policy or
negotiating, not at the point of engagement as the law requires. standard to be met. In the same light, an employee’s failure to
The pre-employment orientation on Alcaraz’s duty to perform the duties and responsibilities which have been clearly
implement Abbott’s Code of Conduct, office policies and made known to him constitutes a justifiable basis for a
training program likewise cannot be characterized as probationary employee’s non-regularization.
performance standards; they simply related to activities aimed at DISSENT (Brion, J.): Based on these premises, the ponencia
acquainting and training Alcaraz on her duties and not for the then deftly argues that because the duties and responsibilities of
purpose of informing her of the performance standards the position have been explained to Alcaraz, an experienced
applicable to her. What stands out is that they do not pertain human resource specialist, she should have known what was
specifically to Alcaraz and the required performance standard expected for her to attain regular status. The ponencia’s
applicable for her qualification for regular employment; they reasoning, however, is badly flawed.
related to the staff Alcaraz managed and supervised. 1st. The ponencia impliedly admits that no performance
Additionally, these were all relayed prior to or after Alcaraz was standards were expressly given but argues that because
engaged by Abbott. Alcaraz had been informed of her duties and responsibilities (a
An important distinction to remember at this point is fact that was and is not disputed), she should be deemed to know
that Alcaraz’s knowledge of the duties that her work entailed, what was expected of her for purposes of regularization. This is
and her knowledge of the employer’s performance standard, are a major flaw that the ponencia satisfies only via an assumption.
two distinct matters separately requiring the presentation of The ponencia apparently forgets that knowledge of duties and
independent proof. responsibilities is different from the measure of how these duties
MAJORITY: Keeping with [the Omnibus Rules Implementing and responsibilities should be delivered. They are separate
the Labor Code], an employer is deemed to have made known elements and the latter element is missing in the present case.
the standards that would qualify a probationary employee to be 2nd. The ponencia glosses over the communication aspect. Not
a regular employee when it has exerted reasonable efforts to only must there be express performance standards; there must be
apprise the employee of what he is expected to do to accomplish effective communication. If no standards were provided, what
during the trial of probation.This goes without saying that the would be communicated?
employee is sufficiently made aware of his probationary status 3rd. The ponencia badly contradicts itself in claiming that actual
as well as the length of time of the probation. communication of specific standards might not be necessary
The exception to the foregoing is when the job is self-descriptive “when the job is self-descriptive in nature, for instance, in the
in nature, for instance, in the case of maids, cooks, drivers, or case of maids, cooks, drivers, or messengers.” Alcaraz, in the
messengers. Also in Aberdeen Court, Inc v. Agustin, it has been first place, was never a maid, cook, driver or a messenger and
held that the rule on notifying a probationary employee of the cannot be placed under this classification; she was hired and
standards of regularization should not be used to exculpate an employed as a human resources manager, in short, a managerial
employee in a manner contrary to basic knowledge and common employee. Plain and common sense reasoning by one who ever
had been in an employment situation dictates that the job of a If the dismissal is based on a just cause under Article 296 of the
manager cannot be self-explanatory, in the way the ponencia Labor Code but the employer failed to comply with the notice
implied; the complexity of a managerial job must necessarily requirement, the sanction to be imposed upon him should be
require that the level of performance to be delivered must be tempered because the dismissal process was, in effect, initiated
specified and cannot simply be assumed based on the by an act imputable to the employee
communication of the manager’s duties and responsibilities. If the dismissal is based on an authorized cause under Article
4th. The ponencia also forgets that what these “performance 297 but the employer failed to comply with the notice
standards” or measures cannot simply be assumed because they requirement, the sanction should be stiffer because the dismissal
are critically important in this case, or for that matter, in any case process was initiated by the employer’s exercise of his
involving jobs whose duties and responsibilities are not simple management prerogative.
or self-descriptive. If Alcaraz had been evaluated or assessed in Alcaraz’s dismissal proceeded from her failure to comply with
the manner that the company’s internal rules require, these the standards required for her regularization. As such, it is
standards would have been the basis for her performance or lack undeniable that the dismissal process was, in effect, initiated by
of it. Last but not the least, Alcaraz’s services were terminated an act imputable to the employee, akin to dismissals due to just
on the basis of the performance standards that, by law, the causesunder Article 296 of the Labor Code. Therefore, the Court
employer set or prescribed at the time of the employee’s deems it appropriate to fix the amount of nominal damages at
engagement. If none had been prescribed in the first place, under the amount of P30,000.00, consistent with its rulings in
what basis could the employee then be assessed for purposes of both Agabon and Jaka.
termination or regularization? DISSENT (Brion, J.): YES. Alcaraz was dismissed as she
2) WON Alcaraz was validly terminated from her employment “failed to qualify as regular employee in accordance with the
MAJORITY: NO. Abbott failed to follow the above-stated prescribed standards set by the Company.” Even granting for the
procedure in evaluating Alcaraz. For one, there lies a hiatus of sake of argument that Abbott had apprised Alcaraz of an
evidence that a signed copy of Alcaraz’s PPSE form was applicable performance standard, the evidence failed to show
submitted to the HRD. It was not even shown that a PPSE form that Alcaraz did not meet this standard in a manner and to the
was completed to formally assess her performance. Neither was extent equivalent to the “just cause” that the law requires.
the performance evaluation discussed with her during the third In defense of Abbott’s failure to observe the two-notice
and fifth months of her employment. Nor did Abbott come up requirement, the ponencia argues that a different procedure
with the necessary Performance Improvement Plan to properly applies when terminating a probationary employee; the usual
gauge Alcaraz’s performance with the set company standards. two-notice requirement does not govern, citing for this purpose
The Court modified Agabon v. NLRC in the case of Jaka Food Section 2, Rule I, Book VI of the Implementing Rules of the
Processing Corporation v. Pacot where it created a distinction Labor Code. The ponencia, however, forgets that the single
between procedurally defective dismissals due to a just cause, notice rule applies only if the employee is validly on
on one hand, and those due to an authorized cause, on the other. probationary basis; it does not apply where the employee is
deemed a regular employee for the company’s failure to provide The CA also described in detail the abrupt and oppressive
and to communicate a prescribed performance standard manner in which Alcaraz’s employment was dismissed by
applicable to the probationary employee. Abbott:
3) WON the individual petitioners herein are liable
MAJORITY: NO. Other than her unfounded assertions on the On May 23, 2005, Alcaraz still reported for work since Abbott
matter, there is no evidence to support the fact that the individual had not yet handed the termination notice to her. However, the
petitioners herein, in their capacity as Abbott’s officers and security guard did not allow her to enter the Hospira ALSU
employees, acted in bad faith or were motivated by ill will in office pursuant to Walsh[’s] instruction. She requested Walsh
terminating Alcaraz’s services. The fact that Alcaraz was made that she be allowed to enter the company premises to retrieve
to resign and not allowed to enter the workplace does not her last remaining things in her office which are mostly her
necessarily indicate bad faith on Abbott’s part since a sufficient personal belongings. She was allowed to enter. However, she
ground existed for the latter to actually proceed with her was surprised to see her drawers already unlocked and, when
termination. On the alleged loss of her personal belongings, she opened the same, she discovered that her small brown
records are bereft of any showing that the same could be envelope x x x, white pouch containing the duplicate keys, and
attributed to Abbott or any of its officers. the staff’s final evaluation sheets were missing.Alcaraz informed
DISSENT (Brion, J.): YES. The NLRC exhaustively discussed Bernardo about the incident. The latter responded by saying she
Abbott’s bad faith, as demonstrated by the actions of the was no longer an employee of the company since May 19, 2005.
individual petitioners: Alcaraz reported the matter to the Pasig Police Station and
First, Alcaraz was pressured to resign: asked for help regarding the theft of her properties. The Pasig
Police incident report stated as follows:
(1) she was threatened with termination, which will surely x x x x When confronted by the suspect, in the presence of one
damage her reputation in the pharmaceutical industry; SOCO officer and staff, named Christian Perez, Kelly Walsh
allegedly admitted that she was the one who opened the drawer
(2) she was asked to evacuate her Commission and ordered not and got the green folders containing the staff evaluations. The
to enter the Company’s premises even if she was still an Abbott Reportee was told by Kelly Walsh that her Rolex wristwatch will
employee; and be returned to her provided that she will immediately vacate her
(3) Terrible and Walsh made a public announcement to the staff
that Alcaraz already resigned even if in reality she did not. 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.

ALCIRA vs NLRC Case Digest Middleby in bad faith withheld his time card and did not allow
him to work. Considering this as a dismissal "after the lapse of
[G.R. No. 149859. June 9, 2004] his probationary employment," petitioner filed on November 21,
1996 a complaint in the National Labor Relations Commission
(NLRC) against respondent Middleby contending that he had
already become a regular employee as of the date he was
illegally dismissed.
and TRIFONA F. MAMARADLO, respondents.

In their defense, respondents claim that, during petitioner's

FACTS: Respondent Middleby Philippines Corporation hired
probationary employment, he showed poor performance in his
petitioner as engineering support services supervisor on a
assigned tasks, incurred ten absences, was late several times and
probationary basis for six months. Apparently unhappy with
violated company rules on the wearing of uniform. Since he
petitioner's performance, respondent Middleby terminated
failed to meet company standards, petitioner's application to
petitioner's services. The bone of contention centered on
become a regular employee was disapproved and his
whether the termination occurred before or after the six-month
employment was terminated.
probationary period of employment.

ISSUE: Whether or not petitioner attained regular employment

The parties, presenting their respective copies of Alcira's
in the private respondent’s company.
appointment paper, claimed conflicting starting dates of
employment: May 20, 1996 according to petitioner and May 27,
1996 according to respondent. Both documents indicated
HELD: The SC ruled that under the terms of his contract,
petitioner's employment status as "probationary (6 mos.)" and a
petitioner’s probationary employment was only for five months
remark that "after five months (petitioner's) performance shall
as indicated by the remark "Please be informed that after five
be evaluated and any adjustment in salary shall depend on (his)
months, your performance shall be evaluated and any adjustment
work performance."
in salary shall depend on your work performance." The
argument lacks merit. As correctly held by the labor arbiter, the
appointment contract also stated in another part thereof that
Petitioner asserts that, on November 20, 1996, in the presence of
petitioner's employment status was "probationary (6 mos.)." The
his co-workers and subordinates, a senior officer of respondent
five-month period referred to the evaluation of his work.
Bernardo vs NLRC
Petitioner insists that he already attained the status of a regular
employee when he was dismissed on November 20, 1996 GR 122917 07/03/99
because, having started work on May 20, 1996, the six-month
probationary period ended on November 16, 1996. According to
petitioner's computation, since Article 13 of the Civil Code
provides that one month is composed of thirty days, six months
total one hundred eighty days. As the appointment provided that Petitioners numbering 43 are deaf–mutes who were hired on
petitioner's status was "probationary (6 mos.)" without any various periods from 1988 to 1993 by respondent Far East
specific date of termination, the 180th day fell on November 16, Bank and Trust Co. as Money Sorters and Counters through a
uniformly worded agreement called ‘Employment Contract for
1996. Thus, when he was dismissed on November 20, 1996, he
Handicapped Workers. Subsequently, they are dismissed.
was already a regular employee.
Petitioners maintain that they should be considered regular
employees, because their task as money sorters and counters
was necessary and desirable to the business of respondent
Petitioner's contention is incorrect. In CALS Poultry Supply bank. They further allege that their contracts served merely to
Corporation, et al. vs. Roco, et al., this Court dealt with the same preclude the application of Article 280 and to bar them from
issue of whether an employment contract from May 16, 1995 to becoming regular employees.
November 15, 1995 was within or outside the six-month Private respondent, on the other hand, submits that petitioners
probationary period. We ruled that November 15, 1995 was still were hired only as “special workers and should not in any way
within the six-month probationary period. We reiterate our be considered as part of the regular complement of the
ruling in CALS Poultry Supply: Bank.”[12] Rather, they were “special” workers under Article
80 of the Labor Code.
Issue: WON petitioners have become regular employees.
Our computation of the 6-month probationary period is reckoned
from the date of appointment up to the same calendar date of the
6th month following. In short, since the number of days in each The uniform employment contracts of the petitioners stipulated
that they shall be trained for a period of one month, after which
particular month was irrelevant, petitioner was still a
the employer shall determine whether or not they should be
probationary employee when respondent Middleby opted not to
allowed to finish the 6-month term of the
"regularize" him on November 20, 1996. contract. Furthermore, the employer may terminate the
Petition is denied. contract at any time for a just and reasonable cause. Unless
renewed in writing by the employer, the contract shall necessary or desirable in the usual business or trade of the
automatically expire at the end of the term. employer, x x x”
Respondent bank entered into the aforesaid contract with a total “The primary standard, therefore, of determining regular
of 56 handicapped workers and renewed the contracts of 37 of employment is the reasonable connection between the
them. In fact, two of them worked from 1988 to 1993. Verily, particular activity performed by the employee in relation to the
the renewal of the contracts of the handicapped workers and usual trade or business of the employer. The test is whether the
the hiring of others lead to the conclusion that their tasks were former is usually necessary or desirable in the usual business or
beneficial and necessary to the bank. More important, these trade of the employer. The connection can be determined by
facts show that they were qualified to perform the considering the nature of the work performed and its relation to
responsibilities of their positions. In other words, their the scheme of the particular business or trade in its
disability did not render them unqualified or unfit for the tasks entirety. Also if the employee has been performing the job for
assigned to them. at least one year, even if the performance is not continuous and
In this light, the Magna Carta for Disabled Persons mandates merely intermittent, the law deems repeated and continuing
that a qualified disabled employee should be given the same need for its performance as sufficient evidence of the necessity
terms and conditions of employment as a qualified able-bodied if not indispensability of that activity to the business. Hence,
person. Section 5 of the Magna Carta provides: the employment is considered regular, but only with respect to
“Section 5. Equal Opportunity for Employment.—No disabled such activity, and while such activity exists.”
person shall be denied access to opportunities for suitable Respondent bank entered into the aforesaid contract with a total
employment. A qualified disabled employee shall be subject to of 56 handicapped workers and renewed the contracts of 37 of
the same terms and conditions of employment and the same them. In fact, two of them worked from 1988 to 1993. Verily,
compensation, privileges, benefits, fringe benefits, incentives the renewal of the contracts of the handicapped workers and
or allowances as a qualified able bodied person.” the hiring of others lead to the conclusion that their tasks were
The fact that the employees were qualified disabled persons beneficial and necessary to the bank. More important, these
necessarily removes the employment contracts from the ambit facts show that they were qualified to perform the
of Article 80. Since the Magna Carta accords them the rights responsibilities of their positions. In other words, their
of qualified able-bodied persons, they are thus covered by disability did not render them unqualified or unfit for the tasks
Article 280 of the Labor Code, which provides: assigned to them.
“ART. 280. Regular and Casual Employment. — The Without a doubt, the task of counting and sorting bills is
provisions of written agreement to the contrary notwithstanding necessary and desirable to the business of respondent
and regardless of the oral agreement of the parties, an bank. With the exception of sixteen of them, petitioners
employment shall be deemed to be regular where the employee performed these tasks for more than six months.
has been engaged to perform activities which are usually Petition granted
A Prime Security Services, Inc. v. belatedly contended that they were distinct juridical entities,
NLRC [G.R. 107320, January 10, 2000] but such fact lacks any legal basis. The Court
Wednesday, January 21, 2009 Posted by Coffeeholic Writes cannot sanction the practice of companies that affects the
Labels: Case Digests, Labor Law transfer of its employees to another entity whose owners are

FACTS: PR had been working for a year as a security guard the same, in order to deprive subject employees of the

with the Sugarland Security Services, Inc., a sister company of benefits he is entitled to under the law.

petitioner. He was hired on January 1, 1988 as he was among

those absorbed by petitioner when it took over the security
contract of its sister company, Sugarland, with the U.S.
2. Yes. PR became a regular employee upon competition of his
Embassy. He was forced by the petitioner to sign a
six-month period of probation. He started working
new probationary contract for 6 mos; and on August 1, 1998, his
on January 30, 1988; and the end of the period
employment was terminated. Labor Arbiter for the petitioner.
of probation was on July 27, 1988. When he was dismissed
ISSUES: on August 1, he was already a regular employee with

1. Whether PR’s employment with A’ Prime Securities was just security tenure. PR’s alleged violations of sleeping on post

a continuation of his employment with Sugarland. and quarrelling with a worker were first infractions and do
not amount to valid grounds for terminating employment.
2. Whether PR is a regular employee and
thereby illegally dismissed.


1. Yes. The allegations of respondent that Sugarland and A’

Prime were sister companies were never denied nor
controverted by petitioner before the Labor Arbiter. It
CEBU STEVEDORING vs. Gelig and Quijano filed a complaint for reinstatement with
Regional Office of Ministry of Labor:
Cebu Stevedoring Co., Inc. vs. The Honorable Regional
Gelig and Quijano were employed by CCAS and their
Director/Minister of Labor Arsenio Gelig and Maria Luz
functions were carried over when they were absorbed by CSCI.
There was no need to employ them as probationary because
December 8, 1988 they were already well-trained in their functions. A
probationary period of employment means that an employee is
Regalado, J.
hired for training for a certain period in order to determine
whether they qualify for the position or not. Here, Gelig and
Quijano cannot be considered probationary.
Minister of Labor affirmed. CSCI elevated the case to the
Arsenio Gelig and Maria Luz Quijano were former employees Office of the President which, through Presidential Executive
of the Cebu Customs Arrastre Service (CCAS). Assistant Jacobo Clave, issued a resolution dismissing the
May 2, 1977 – Pursuant to Customs Administrative Order No. appeal as there was no law expressly recognizing the parties’
21-77 of Acting Commissioner of Customs and Acting right to appeal to the Office of the Pres and there was no
Secretary of Finance, the CCAS was abolished “for the reason exceptionally meritorious cause for the exercise of the
that the objectives for which it was created had already been constitutional power of review of the President/Prime Minister.
attained.” As a consequence, all the employees of CCAS, CSCI’s position:
including Gelig and Quijano, were given their termination
and/or separation pay by the Bureau of Customs, Cebu City, 1. Upon abolition of CCAS, all its employees were given
computed up to April 30, 1977. separation pay. Thus, when the employees were
absorbed by CSCI when it took over the arrastre
May 3, 1977 – all the employees of CCAS, including Gelig and operations, they were all employed as casuals.
Quijano, were absorbed by Cebu Stevedoring Co., Inc. (CSCI), 2. As casuals, Gelig and Quijano can be terminated within
with the same positions that they held in CCAS. the 6-month period without need of clearance from
Ministry of Labor and neither is the employer obligated
October 17, 1977 – Gelig and Quijano were dismissed by CSCI to pay them termination pay. Gelig and Quijano were
without prior clearance, allegedly for redundancy. terminated on October 18, 1977 or within 5 ½ months
from employment.
3. The positions occupied by Gelig and Quijano with 1. Records failed to establish that the positions occupied
CCAS were identical with the positions already filled by Gelig and Quijano with CCAS are identical with
up and with the same functions being discharged in the those presently existing in CSCI’s office.
main office of CSCI. Thus, they may be terminated for 2. CSCI kept them in its employ for almost 6 months
redundancy and financial losses incurred by CSCI without raising issue of redundancy.
justify the retrenchment of employees. 3. CSCI’s submission that it is suffering financial losses is
untenable since it absorbed and employed for almost 6
months, without any intimation of supposed financial
ISSUE: Whether the termination of Gelig and Quijano (and 52 distress, the majority of the former employees of
others) was valid (NO) CCAS. It never advised Gelig and Quijano of a
REASONING company retrenchment program. The first time this
supposed program was mentioned was when CSCI was
Gelig and Quijano could not be considered probationary trying to justify the dismissal of Gelig and Quijano
employees because they were already well-trained in their before the labor arbiter.
respective functions. Gelig had been a clerk for CCAS for more
than 10 years, while Quijano had slightly less than 10 years of The constitutional duty of the State to protect the right of
service. laborers to security of tenure demands than an employer may
Findings of quasi-judicial agencies (pertaining to Ministry of be permitted to terminate the services of an employee only
Labor here) which have acquired expertise because their under conditions allowed by and with due process of law.
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. DISPOSITIVE

It is true that Article 283 of the Labor Code provides that an Termination of Gelig and Quijano was unjust and illegal. CSCI
“employer may also terminate the employment of any is ordered to reinstate Gelig and Quijano to their fromer
employee due to the installation of labor-serving devices, positions at the time of dismissal, or if such reinstatement is not
redundancy, retrenchment to prevent losses or the closing or possible, to substantially equivalent positions, without loss of
cessation of operation of the establishment or undertaking.” seniority rights and other privileges appertaining thereto and to
pay them 3 years backwards, from Octber 18, 1977 without
BUT: qualification or deduction. If reinstatement is not possible due
to supervenience of events which prevent the same, CSCI is
ordered to pay them, more as a vindication of a right and less
as indemnification of a loss, separation pay equivalent to 1 Aklan College vs. Guarino [G.R. No.
month’s salary based on their monthly salaries as of October
17, 1977.. 152949, August 14, 2007]
Facts: Guarino was first hired as an instructor. Then he was
appointed as Acting Dean (for 17 years) of the Commerce and
Secretarial Department and later as Acting Personnel Director,
in addition to his duties as acting dean. His appointment as
Acting Personnel Director was in a temporary basis and until it
is revoked by the President or Rector of the College.
A year after he went on leave for one year. Then he wrote to
the Rector about his intention of reassuming his positions. The
School rejected saying that he is not qualified for the position
and has already been filled up by a regular incumbent. Guarino
served as acting dean for 17 years.
Issue: Did Guarino attain security of tenure as Acting Dean
and as Acting Personnel Director?
No, he did not.
Acting appointment is merely temporary, one cannot insist
on it. An acting appointment is merely temporary, or one
which is good until another appointment is made to take its
place. And if another person is appointed, the temporary
appointee should step out and cannot even dispute the validity
of his successor’s appointment. The undisturbed unanimity of
cases is that one who holds a temporary appointment has no
fixed tenure of office; his employment can be terminated
anytime at the pleasure of the appointing power without need
to show that it is for cause.
Permanent appointment can only be issued to one who he could not be deemed as separated from the service because
meets the qualification. A permanent appointment can be his employment as instructor remains
issued only to a person who meets all the requirements for the
position to which he is being appointed; a person who does not
have the requisite qualifications for the position cannot be
appointed to it in the first place or, only as an exception to the
rule, may be appointed to it merely in an acting capacity in the
absence of persons who are qualified.
The applicable law is DECS Manual, not the Labor Code. It
is settled that questions respecting a private school teacher’s
entitlement to security of tenure are governed by the Manual of
Regulations for Private Schools and not the Labor Code. Under
DECS Manual of Regulations for Private Schools, the
acquisition of a Master’s degree has been made a requirement
before a person can be appointed as Dean of an undergraduate
program. Guarino does not have a Master’s Degree.
Notice of dismissal from an acting capacity is not required
There is no need of a notice to the acting appointee or any form
of hearing. Such procedural requirements apply where the
officer is removable only for cause. This Court reiterates the
rule that a bona fide appointment in an acting capacity is
essentially temporary and revocable in character and the holder
of such appointment may be removed anytime even without
hearing or cause.
Separation pay is due only when there is actual
termination/separation While Guarino was no longer allowed
to return to his positions as Acting Dean and Acting Personnel
Director he was, nonetheless, retained as an instructor. Hence,
G.R. No. 82918 March 11, 1991 probationary employment of professors, instructors and
teachers shall be subject to standards established by the
LA SALETTE OF SANTIAGO, INC., Department of Education and Culture. Said standards are
petitioner, embodied in paragraph 75 of the Manual of Regulations for
Private Schools. Unlike teachers (assistant instructors,
vs. assistant, professors, associate professors, full professors) who
NATIONAL LABOR RELATIONS aspire for and expect to acquired permanency, or security of
tenure, in their employment, as faculty members, teachers who
COMMISSION and CLARITA are appointed as department heads or administrative officials
JAVIER, respondents. (e.g., college or department secretaries principals, directors,
assistant deans, deans) do not normally, and should not expect
Facts: Private respondent has been assigned to different to, acquire a second status of permanency, or an additional or
administrative and teaching positions of the petitioner’s school second security of tenure as such officer. The acquisition of
system, a private school system, where private respondent was such an additional tenure, to repeat, is not consistent with
initially employed for three years as high school principal. In normal practice, constitutes the exception rather than the rule,
1984 to 1986 private respondent was again assigned as the high and may take place only where categorically and explicitly
school principal of the petitioner. After her term as high school provided by law or agreement of the parties. Therefore, private
principal she received a letter from the petitioner instructing respondent did not acquire permanency or tenure in the
her to report to La Sallete College and stating the person as her position of high school principal of the educational system of
replacement as high school principal. Private respondent wrote La Sallete of Santiago Inc.
a letter to the petitioner complaining of her sudden removal as
high school principal but did not received any reply so she filed
a complaint before the Labor Arbiter for illegal dismissal. The
Labor Arbiter decided in her favor and the CA affirmed the
decision of the Labor Arbiter.
Issue: Whether or not private respondent had acquired
permanency, or tenure in the position of high school principal
of the educational system of La Salette of Santiago Inc.?
Held: The Court held, according to Policy Instructions No. 11
issued by the Department of Labor and Employment, the
JOCELYN HERRERA-MANAOIS v. with academic freedom and constitutional autonomy, an
institution of higher learning has the discretion and prerogative
ST. SCHOLASTICA’S COLLEGE to impose standards on its teachers and determine whether
these standards have been met.
December 11, 2013 | Serreno, C. J. | Probationary Employment
Digester: Bea, Alexis
 Petitioner Jocelyn Herrera-Manaois (Josie?) graduated from
SUMMARY: Josie Herrera Manaois taught in St. Scholastica
St. Scholastica’s College (SSC) with a degree of BA
College (SSC) as an English teacher (part-time). She was English
recommended to become a full-time faculty member. In her  (1994) She returned to her alma mater as a part-time
application, she mentioned that she was taking her masters in English teacher
UP and that her oral defense was scheduled for June 2000. This  After taking a leave of absence for more than one year, she
was approved and SSC hired her as a probationary full time was again rehired by SSC for the same position
employee. She failed to acquire her MA degree on time and she  Four years after, she was recommended by her Department
requested for an extension. SSC denied and subsequently opted Chairperson to become a full-time faculty member of the
not to rehire her. LA and NLRC ruled for Josie stating that she English Department
was not informed of the requirement to finish her MA degree  She applied for a position as full time instructor for the
and that the minimum requirement is finishing 25% of her MA school year of 2000-2001
studies only. CA reversed saying that the requirement cited by o She mentioned in her application letter than she had
LA is for ranking purposes and not a qualification for been taking her MA in English Studies, Major in
permanency. SC affirmed the ruling of the LA and also cited a Creative Writing at UP Diliman and that she was
CHED Memorandum requiring tertiary level educators to be completing her master’s thesis
o She stated that her oral defense was scheduled for
MA degree holders.
June 2000
 The Dean of Arts and Sciences informed her of the
approval of her application and was advised to submit the
DOCTRINE: Mere completion of the three-year probation necessary papers pertaining to her master’s degree
does not guarantee that the employee will acquire permanent  SSC hired her as a probationary full-time faculty member
employment status. The probationer can only qualify upon with no derogatory record, she was given above-
fulfillment of the reasonable standards set for permanent satisfactory ratings by both the Department Chairperson
employment as a member of the teaching personnel. In line and the Dean f Arts and Sciences
 Because of forthcoming completion of her third year o Permanency is extended to full-time faculty
probationary employment, Josie requested for an extension members only if they had fulfilled the criteria
of her teaching load for SY 2003-04 provided in the SSC Faculty Manual
o She mentioned once again that she was a candidate o SSC also refuted the performance ratings of Josie
for a master’s degree and that the schedule of her and pointed out that she had merely received an
oral defense may actually materialize anytime average rating from her students
within the first academic semester of 2003 o Josie specialized in the subject of writing and not
o She furnished a certification from UP that she had English Literature, which was the subject area they
finished her coursework in her studies needed a faculty member for.
o She indicated that it was her long-term goal to apply  LA: Ruled in favor of Josie
for a return to full-time faculty status by then and o With respect to the reason that Josie failed to finish
asked SSC to consider the above-mentioned matters her MA within the 3 year period, the notation on the
 Josie eventually received a letter from the Dean of College employment application showing that her
and Chairperson of the Promotions and Permanency Board employment was premised on her completion of an
officially informing her of the board’s decision not to MA degree was not made known to her at the start
renew her contract stating that: of her engagement
o She failed to comply with the terms she herself o She only received when it was attached to the
requested in granting her a three-year extension position paper of SSC
o That her specialization cannot be maximized at SSC o LAonly credible evidence that a precondition had
due to the college’s curriculum changes and been set for the acceptance of her employment
streamlining application was SSC’s letter expressly requiring (1)
 Josie sought for reconsideration which SSC denied good performance and (2) submission of papers
 Josie then filed a case for illegal dismissal, payment of 13th pertaining to her MA degree
month pay, damages, and attorney’s fees against SSC o The allegation that she was rated only an average
 SSC explained that upon consideration of the written performance is not substantiated with documentary
application of Josie, the Dean wrote the following notation proof
at the bottom of her letter of application: “APPROVED: on  In any case, SSC already admitted that her
the basis that she finishes her MA” probationary employment was satisfactory
 The college clarified that for full-time faculty status of (first condition: OK)
Josie was accepted that she would submit the necessary o The certification of UP is also sufficient evidence
papers pertaining to her MA degree for the second condition
o Also noted the faculty manual that the minimum  CA deduced from her submission of the UP
requirements were a bachelor’s degree with at least certification was that she had endeavored to
25% of MA studies completed substantially comply with one of the
 MA requirement pertained to the rank of requirements of permanency
Assistant Professor (not the one applied for  She was required to submit necessary papers
by Josie) which CA treated as proof of SSC’s
 Thus, failure to finish MA degree not a appraisal
ground  Disclosure of notation was already
o The reason that “your specialization cannot be inconsequential
maximized…” is also not a valid cause for o Second, the employment contract of Josie
dismissing a probationary employee, reiterating that incorporated the conditions set in the SSC Faculty
probationers may only be terminated either for: Manual
 Just cause  Manual explicitly stated that the criteria for
 Failure to qualify as a regular employee in permanency included an MA degree
accordance with reasonable standards made  LA erred when it solely relied on the
known at the time of engagement minimum requirements provided for the
o Josie had attained permanent status and SSC’s non- rank of instructor and that it cited for the
renewal is deemed to be as a dismissal without just rank of instructor referred to the basis on
cause which full-time and part-time members were
 NLRC: Affirmed ranked, and not to the requirements to be
 CA: reversed NLRC’s judgment and dismissed Josie’s fulfilled
complaint and that the decision of LA and NLRC were  Agreed with SSC that what happened was
contrary to the evidence on record merely the expiration of an employment
o First, various pieces of evidence show that Josie had contract and non-renewal thereof
been aware that possession of an MA degree was a o Third, in spite of the requests of Josie for the
criteria extension of her employment in order to finish her
 As early as April 2000, when she applied, MA degree, she failed to do so.
she had already sent a letter indicating she  She even informed SSC that there was still
was completing an MA degree no fixed schedule for her oral defense
 This implies that she was fully aware of the RULING: Decision of Court of Appeals is AFFIRMED.
necessity of an MA degree in order for her Petition DENIED.
to attain permanent status at SSC
Whether or not the completion of a master’s degree is DOES NOT guarantee that the employee will
required for a tertiary level educator to earn the status of automatically acquire a permanent employment status
permanency in a private educational institution—YES.  It is settled jurisprudence that probationer can only qualify
upon fulfillment of the reasonable standards set for the
 Probationary employment refers to the trial stage or period permanent employment as a member of the teaching
during which the employer examines the competency and personal
qualifications of job applicants, and determines whether  This is in line with academic freedom and constitutional
they are qualified to be extended permanent employment autonomy—an institution of higher learning has the
status discretion and prerogative to impose standards on its
 This arrangement allows the employer an opportunity to teachers and determine whether these have been met.
fully scrutinize and observe the fitness and worth of o The university has the sole prerogative to make a
probationers while on the job to determine whether they decision on whether or not to rehire probationer
would become proper and efficient employees—before the o Probationer cannot automatically assert acquisition
guarantee of security of tenure comes into play of security of tenure and force employer to renew
 Citing Article 281 of the Labor Code, the Court agrees with the employment contract
the CA in ruling that the requirement to obtain a master’s  Josie failed to comply with the stated academic
degree was made known to Josie qualifications and even if we were to disregard the SSC
 The contract she signed clearly and expressly contained the Faculty Manual, she still cannot legally acquire the status
conditions in the SSC Faculty Manual, most pertinent of of permanency
which is that the faculty member must have completed at o Private educational institutions must still
least a master’s degree supplementarily refer to the prevailing standards,
 CA correctly pointed out that the “requirement” cited by qualifications set by the appropriate government
the LA merely refer to how instructors are ranked and not agencies (DepEd/CHED)
to the academic qualifications required to attain o Sec. 44. of the CHED Manual states that the
permanency minimum qualification for faculty for tertiary
o This ranking covers those who are still on education (undergrad courses other than vocational)
probationary employment and those who have “…Holder of a master’s degree, to teach largely in
already obtained permanency his major field…”
o In order to properly arrive at the criteria, sections on o Sec. 45 states that “all teaching personnel who do
both permanency and ranking must be read in not meet the foregoing qualifications are considered
conjunction with each other part time.”
 Court reiterates that mere completion of the three-year  This minimum requirement is not subject to the prerogative
probation, even with an above-average performance of the school or the agreement of the parties
o IT IS DEEMED TO BE IMPLIEDLY WRITTEN Colegio del Santisimo Rosario and Sr.
issue of whether probationers were informed of the Zenaida S. Mofada, OP v. Emmanuel
academic requirement is immaterial Rojo
o Under the 2002 Manual, Josie cannot attain the
status of permanent full-time faculty members, even
if they completed 3 years of satisfactory service
 Colegio del Santisimo Rosario (CSR) hired Emmanuel
 Citing Lacuesta v. Ateneo de Manila: Moreover, for those
Rojo as a high school teacher on probationary basis for
teaching in the tertiary level, the probationary period shall
the school years 1992-1993, 1993-1994 and 1994-1995.
not be more than 6-consecutive regular semesters of
 On April 5, 1995, CSR, through Sr. Zenaida S. Mofada,
satisfactory service. The requisites to acquire permanent
OP, decided not to renew Rojo’s services.
employment, or security of tenure are:
o The teacher is a full-time teacher  Rojo filed a complaint for illegal dismissal.
o Teacher must have rendered 3 consecutive years of o Since he had served three consecutive school
service years which is the maximum number of terms
o Such service must have been satisfactory allowed for probationary employment, he
should be extended permanent employment.
 ONLY when one has served as a full time teacher can he
o Paragraph 75 of the 1970 Manual of Regulations
acquire permanent or regular status. As previously held,
for Private Schools (1970 Manual), says that
a part time teacher cannot acquire permanent status…as a
“full- time teachers who have rendered three (3)
part-time lecturer, her employment ended when her
consecutive years of satisfactory services shall
contract expired cannot be credited to her in computing the
be considered permanent.”
number of years she has served to qualify her permanent
status  CSR’s position:
o Application to this case? Josie completing her o Rojo knew that his Teacher’s Contract for
probation period is not an automatic qualification. school year 1994-1995 with CSR would expire
She could only qualify upon fulfilling the on March 31, 1995.
reasonable standards for permanent o Thus, he was not dismissed but his probationary
employment set by the employer. contract merely expired and was not renewed.
Whether or not there was a valid contract of sale—NO. o The “three years” mentioned in paragraph 75 of
the 1970 Manual refer to “36 months,” not three
 It school years. Since Rojo served for only three
school years of 10 months each or 30 months,
then he had not yet served the “three years” or
36 months mentioned in paragraph 75 of the the period when they were to be applied. These
1970 Manual. terms, in addition to those expressly provided by the
 LA ruled in favour of Rojo. Labor Code, would serve as the just cause for the
o “Three school years” means three years of 10 termination of the probationary contract.
months, not 12 months. Since Rojo had already  The specific details of this finding of just cause must be
served for three consecutive school years, he communicated to the affected teachers as a matter of
already attained regular employment status. due process. Corollarily, should the teachers not have
Thus, the non-renewal of his contract constitutes been apprised of such reasonable standards at the time
illegal dismissal. specified above, they shall be deemed regular
o LA found CSR and Mofada guilty of bad faith. employees.
 NLRC affirmed.
o After serving three school years, Rojo attained  What is glaringly absent from CSR’s evidence are the
the status of regular employment because CSR reasonable standards that respondent was expected to
did not make known to respondent the meet that could have served as proper guidelines for
reasonable standards he should meet. purposes of evaluating his performance.
 CA affirmed.  Nowhere in the Teacher’s Contract could such
o Rojo attained the status of regular employee standards be found. Neither was it mentioned that the
after three years. same were ever conveyed to Rojo.
o He was also the Prefect of Discipline, a task  Even assuming that respondent failed to meet the
entailing much responsibility. standards set forth by CSR and made known to the
o It was not shown that CSR set performance former at the time he was engaged as a teacher on
standards for Rojo’s employment. probationary status, still, the termination was flawed for
failure to give the required notice to respondent.
Issue: WoN Rojo was illegally dismissed  While Mofada mentioned the existence of alleged
 YES performance evaluations, the Court is in a quandary as
 For teachers on probationary employment, in which to what could have been the basis of such evaluation, as
case a fixed term contract is not specifically used for no evidence were adduced to show the reasonable
the fixed term it offers, it is incumbent upon the school standards by which Rojo’s performance was assessed.
to have not only set reasonable standards to be  Absent any showing of unsatisfactory performance on
followed by said teachers in determining qualification the part of Rojo, it can be presumed that his
for regular employment, the same must have also been performance was satisfactory.
communicated to the teachers at the start of the
probationary period, or at the very least, at the start of
o While he was still more than a year into his CRUZ vs. NLRC [G.R. No. 116384.
probationary employment, he was already
designated Prefect of Discipline. February 7, 2000]
o In such capacity, he was able to uncover the
existence of a drug syndicate within the school CRUZ VS. NLRC
and lessen the incidence of drug use therein. February 7, 2000
o Yet despite respondent’s substantial
contribution to the school, CSR chose to FACTS:
disregard the same and instead terminated his The private respondent Norkis Distributors Inc., is a domestic
services; while most of those who were involved corporation. It is engaged in the business of selling motorcycles
in drug activities within the school were and household appliances. It was operating in Mandaue City,
punished with a slap on the wrist as they were Cebu; it had its branch in Valencia, Bukidnon where the
merely made to write letters promising that the petitioner Cruz was employed. On October 14, 1990, while
incident will not happen again.
petitioners and her co-employees were busy working, petitioner
 No resignation letter presented, contrary to CSR’s
collapsed and was brought to the hospital. From then on, she
allegation that Rojo resigned.
was not able to report for work. On December 28, 1990, she
sent a letter to respondent Norkis to verify her status of
employment but as an answer, she received a termination letter
dated November 2, 1990 citing health reasons for the dismissal.
On March 18, 1991, they filed a complaint for illegal dismissal
against the private respondent praying for payment of
separation pay and other money claims before the NLRC
Branch of Cayagan de Oro City. The Labor Arbitration Branch
ruled in favor of the petitioner. From the said decision, both
parties appealed to the NLRC where the decision was reversed
and set aside.

Whether or not the dismissal of petitioner is legal.

Under Section 8, Rule 1 Book VI of the Rules and Regulations
Implementing the Labor Code, for a disease to be a valid Manila Hotel Corporation vs National
ground for the dismissal of the employee, the continued
employment of such employee is prohibited by law or Labor Relations Commission
prejudicial to his health or to the health of his co-employees In May 1988, Marcelo Santos was an overseas worker in
and there must be a certification by a competent public health Oman. In June 1988, he was recruited by Palace Hotel in
authority that the disease is of such nature or at such a stage Beijing, China. Due to higher pay and benefits, Santos
that it cannot be cured within a period of six months even with agreed to the hotel’s job offer and so he started working there
proper medical treatment. in November 1988. The employment contract between him
There is merit in petitioner’s submission that the award of and Palace Hotel was however without the intervention of the
Philippine Overseas Employment Administration (POEA). In
moral and exemplary damages in her favor is warranted by her
August 1989, Palace Hotel notified Santos that he will be laid
unjustified dismissal. Award of moral and exemplary damages off due to business reverses. In September 1989, he was
for an illegally dismissed employee is proper where the officially terminated.
employee had been harassed and arbitrarily terminated by the
In February 1990, Santos filed a complaint for illegal
dismissal against Manila Hotel Corporation (MHC) and
The Court has consistently accorded the working class a right Manila Hotel International, Ltd. (MHIL). The Palace Hotel was
to recover damages for unjust dismissals tainted with bad faith, impleaded but no summons were served upon it. MHC is a
where the motive of the employer in dismissing the employee government owned and controlled corporation. It owns 50%
is far from noble. The petition is granted. of MHIL, a foreign corporation (Hong Kong). MHIL manages
the affair of the Palace Hotel. The labor arbiter who handled
the case ruled in favor of Santos. The National Labor
Relations Commission (NLRC) affirmed the labor arbiter.
ISSUE: Whether or not the NLRC has jurisdiction over the
HELD: No. The NLRC is a very inconvenient forum for the
following reasons:

1. The only link that the Philippines has in this case is the fact
that Santos is a Filipino;
2. However, the Palace Hotel and MHIL are foreign
corporations – MHC cannot be held liable because it merely
owns 50% of MHIL, it has no direct business in the affairs of
the Palace Hotel. The veil of corporate fiction can’t be pierced
because it was not shown that MHC is directly managing the
affairs of MHIL. Hence, they are separate entities.
3. Santos’ contract with the Palace Hotel was not entered into WILLIAM M. SORIANO G.R. No.
in the Philippines;
4. Santos’ contract was entered into without the intervention of 182072, 19 June 2013
the POEA (had POEA intervened, NLRC still does not have FACTS:
jurisdiction because it will be the POEA which will hear the
case); Soriano was hired by petitioner on probationary basis as legal
5. MHIL and the Palace Hotel are not doing business in the assistant of the company. On a certain day, 8 days prior to the
Philippines; their agents/officers are not residents of the completion of his six months probationary period, the
Philippines; Department head informed him that he was being terminated
from employment due to the company’s cost-cutting measures.
Due to the foregoing, the NLRC cannot possibly determine
all the relevant facts pertaining to the case. It is not He allegedly asked for a thirty-day notice but his termination
competent to determine the facts because the acts was ordered to be effective immediately. Thus, he was left with
complained of happened outside our jurisdiction. It cannot no choice but to leave the company. Petitioner, however, denied
determine which law is applicable. And in case a judgment is the allegations of respondent and claimed instead that prior to
rendered, it cannot be enforced against the Palace Hotel (in his employment, respondent was informed of the standards
the first place, it was not served any summons). required for regularization. Univac also said that Soriano
The Supreme Court emphasized that under the rule of forum abandoned his work due to his plan of reviewing for the bar.
non conveniens, a Philippine court or agency may assume
jurisdiction over the case if it chooses to do so provided: ISSUE:
Whether or not a probationary employee’s dismissal is with a
(1) that the Philippine court is one to which the parties may valid ground considering he was not informed of the standards
conveniently resort to;
required for regularization.
(2) that the Philippine court is in a position to make an
intelligent decision as to the law and the facts; and RULING:
No. It is primordial that at the start of the probationary period,
(3) that the Philippine court has or is likely to have power to
enforce its decision. the standards for regularization be made known to the
probationary employee. In this case, as held by the CA,
None of the above conditions are apparent in the case at bar. petitioner failed to presentadequate evidence to substantiate its
claim that respondent was apprised of said standards. It is
evident from the LA and NLRC decisions that they merely
relied on surmises and presumptions in concluding that
respondent should have known the standards considering his GRAND MOTOR PARTS
educational background as a law graduate. Equally important is
the requirement that in order to invoke “failure to meet the CORPORATION vs MINISTER OF
probationary standards” as a justification for dismissal, the LABOR
employer must show how these standards have been applied to
the subject employee. In this case, aside from its bare allegation, FACTS
it was not shown that a performance evaluation was conducted
Respondent Balicena was the Branch Manager of the petitioner
to prove that his performance was indeed unsatisfactory.
company’s Iloilo
Indeed, the power of the employer to terminate a probationary
employee is subject to three limitations, namely: (1) it must be Branch. Prior to his employment in Grand Motor, he was the
exercised in accordance with the specific requirements of the Finance Officer of Warner,
contract; (2) the dissatisfaction on the part of the employer must
be real and in good faith, not feignedso as to circumvent the Barnes, & Co., when allegedly Mr. Alfredo Cisneros
contract or the law; and (3) there must be no unlawful (acting branch manager) induced
discrimination in the dismissal. In this case, not only did him to apply for the position of Branch Manager, as their
petitioner fail to show that respondent was apprised of the company (petitioner) was
standards for regularization but it was likewise not shown how
these standards had been applied in his case.
Pursuant to well-settled doctrine, petitioner’s failure to specify looking for a CPA. He applied for the job and was accepted. He
the reasonable standards by which respondent’s alleged poor started working for the
performance was evaluated as well as to prove that such
standards were made known to him at the start of his petitioner company on April 1 but resigned from his position in
employment, makes respondent a regular employee. Warner, Barnes, & Co.
only on April 28.
However, he was terminated only after working for the company
for only 4 months
because of infractions alleged by the petitioner, such as:
He failed to submit promptly the monthly Income and Loss
Comparative Projections & Actual Sales Report; Balicena on the other hand alleged that he is a regular employee,
although he was not
the Comparative Performance Report dated 7/8/1980 on the
operation of the able to present any contract establishing his status as a regular
employee; that the
Iloilo Branch for the month of June and May, 1980, the Cash
Sales of the Iloilo mishap involving the company's vehicle which was used
without his permission and
Branch went down to P91,318.41 for June, 1980, as compared
with the sales for knowledge could not be blamed upon him; that the alleged
reports which he failed to
the month of May, 1980 in the sum of P174,697.77;
send were not reminded to him, verbally or in writing; that his
Belicena in violation of company policy and without
sales for the period April
clearance from the head
to August, 1980 is higher compared to that for the same period
office in Cebu, extended personal accounts in favor of 15
in 1979; and that the
persons which as of
alleged accounts remaining unpaid as of 11/6/1980 would have
November, 1980 produced delinquent accounts amounting to
been collected in full if
P18,435.80; and
he were still the Manager, among other things.
Belicena claimed lack of knowledge of the vehicular accident
caused by a Regional Director and Minister of Labor ruled in favor of
Balicena, ordering his
subordinate and failed to provide prompt administrative
disciplinary action reinstatement, payment of his backwages, and other privileges.
against the erring employee. ISSUE
They claimed that Balicena is only a probationary employee, Whether or not private respondent's employment as
which would be observed Branch Manager was temporary or
by the company for 4-6 months and that Balicena knew that probationary, and not regular and permanent
there is a possibility that he
would not get the job.
At the outset, Balicena was a probationary employee: operation, petitioner corporation must have taken the necessary
precautions to
There was no written proof of Balicena’s appointment or
employment as regular test the qualifications, ability and performance of its Branch
Manager, but he did
and permanent Branch Manager. There was the fact that he
assumed his work not. The conclusion is inevitable that his hiring was temporary.
as of April 1 but resigned from his previous company only on Balicena had never been hired as manager, and the petitioner
April 28, meaning company and
that if he was really appointed as regular and permanent then he Balicena’s former company are engaged in different kinds of
would business so it was
necessary for Balicena to undergo a period of probation to test
have resigned immediately from his old company. But since he
was not yet qualifications, skills and experience since managing is a new
sure of his status in the petitioner corporation, he resigned late.
for him.
The Court cannot sustain Balicena’s claim, the absence of a
written contract due The employer has the right or is at liberty to choose as to who
will be hired and
to the fact that contracts were given only to those who will pass
the probationary who will be declined. It is within the exercise of this right to
select his employees that
period and the rank-and-file employee, not to those managerial
ones, are the employer may set or fix probationary period within which
the latter may test and
contrary to usual business practice especially in multi-million
enterprises observed the conduct of the former before hiring him
permanently. "The right of the
as the petitioner corporation. Considering the magnitude of its
sales and 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 purchased labor from any person
whom it chooses. The
employer and the employee have thus an equality of rights
guaranteed by the
DISPOSITION: Order of the Deputy Minister of Labor is