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Abott v.

Alcaraz, 23 July 2013 regularization standards to the probationary


employee; and second, the employer must
B. Probationary employment; make such communication at the time of the
grounds for termination. probationary employee’s engagement. If the
employer fails to comply with either, the
A probationary employee, like a regular employee is deemed as a regular and not a
employee, enjoys security of tenure. probationary employee.
However, in cases of probationary
employment, aside from just or authorized Keeping with these rules, an employer is
causes of termination, an additional ground is deemed to have made known the standards
provided under Article 295 of the Labor that would qualify a probationary employee
Code, i.e., the probationary employee may to be a regular employee when it has exerted
also be terminated for failure to qualify as a reasonable efforts to apprise the employee of
regular employee in accordance with the what he is expected to do or accomplish
reasonable standards made known by the during the trial period of probation. This goes
employer to the employee at the time of the without saying that the employee is
engagement.59 Thus, the services of an sufficiently made aware of his probationary
employee who has been engaged on status as well as the length of time of the
probationary basis may be terminated for any probation.
of the following: (a) a just or (b) an
authorized cause; and (c) when he fails to The exception to the foregoing is when the
qualify as a regular employee in accordance job is self-descriptive in nature, for instance,
with reasonable standards prescribed by the in the case of maids, cooks, drivers, or
employer.60 messengers.61 Also, in Aberdeen Court, Inc.
v. Agustin,62 it has been held that the rule on
Corollary thereto, Section 6(d), Rule I, Book notifying a probationary employee of the
VI of the Implementing Rules of the Labor standards of regularization should not be used
Code provides that if the employer fails to to exculpate an employee who acts in a
inform the probationary employee of the manner contrary to basic knowledge and
reasonable standards upon which the common sense in regard to which there is no
regularization would be based on at the time need to spell out a policy or standard to be
of the engagement, then the said employee met. In the same light, an employee’s failure
shall be deemed a regular employee, viz.: to perform the duties and responsibilities
which have been clearly made known to him
(d) In all cases of probationary employment, constitutes a justifiable basis for a
the employer shall make known to the probationary employee’s non-regularization.
employee the standards under which he will
qualify as a regular employee at the time of In this case, petitioners contend that Alcaraz
his engagement. Where no standards are was terminated because she failed to qualify
made known to the employee at that time, he as a regular employee according to Abbott’s
shall be deemed a regular employee. standards which were made known to her at
the time of her engagement. Contrarily,
In other words, the employer is made to Alcaraz claims that Abbott never apprised her
comply with two (2) requirements when of these standards and thus, maintains that
dealing with a probationary employee: first, she is a regular and not a mere probationary
the employer must communicate the employee.
The Court finds petitioners’ assertions to be organizational structure and her job
well-taken. description through e-mail;

A punctilious examination of the records (e) Alcaraz was made to undergo a


reveals that Abbott had indeed complied with pre-employment orientation where
the above-stated requirements. This Almazar informed her that she had to
conclusion is largely impelled by the fact that implement Abbott’s Code of Conduct
Abbott clearly conveyed to Alcaraz her duties and office policies on human
and responsibilities as Regulatory Affairs resources and finance and that she
Manager prior to, during the time of her would be reporting directly to Walsh;
engagement, and the incipient stages of her
employment. On this score, the Court finds it (f) Alcaraz was also required to
apt to detail not only the incidents which undergo a training program as part of
point out to the efforts made by Abbott but her orientation;
also those circumstances which would show
that Alcaraz was well-apprised of her (g) Alcaraz received copies of
employer’s expectations that would, in turn, Abbott’s Code of Conduct and
determine her regularization: Performance Modules from Misa who
explained to her the procedure for
(a) On June 27, 2004, Abbott caused evaluating the performance of
the publication in a major broadsheet probationary employees; she was
newspaper of its need for a further notified that Abbott had only
Regulatory Affairs Manager, one evaluation system for all of its
indicating therein the job description employees; and
for as well as the duties and
responsibilities attendant to the (h) Moreover, Alcaraz had previously
aforesaid position; this prompted worked for another pharmaceutical
Alcaraz to submit her application to company and had admitted to have an
Abbott on October 4, 2004; "extensive training and background"
to acquire the necessary skills for her
(b) In Abbott’s December 7, 2004 job.63
offer sheet, it was stated that Alcaraz
was to be employed on a probationary Considering the totality of the above-stated
status; circumstances, it cannot, therefore, be
doubted that Alcaraz was well-aware that her
(c) On February 12, 2005, Alcaraz regularization would depend on her ability
signed an employment contract which and capacity to fulfill the requirements of her
specifically stated, inter alia, that she position as Regulatory Affairs Manager and
was to be placed on probation for a that her failure to perform such would give
period of six (6) months beginning Abbott a valid cause to terminate her
February 15, 2005 to August 14, probationary employment.
2005;
Verily, basic knowledge and common sense
(d) On the day Alcaraz accepted dictate that the adequate performance of
Abbott’s employment offer, Bernardo one’s duties is, by and of itself, an inherent
sent her copies of Abbott’s and implied standard for a probationary
employee to be regularized; such is a reversible error which, perforce, necessitates
regularization standard which need not be the reversal of its decision.
literally spelled out or mapped into technical
indicators in every case. In this regard, it must C. Probationary employment;
be observed that the assessment of adequate termination procedure.
duty performance is in the nature of a
management prerogative which when A different procedure is applied when
reasonably exercised – as Abbott did in this terminating a probationary employee; the
case – should be respected. This is especially usual two-notice rule does not
true of a managerial employee like Alcaraz govern.65 Section 2, Rule I, Book VI of the
who was tasked with the vital responsibility Implementing Rules of the Labor Code states
of handling the personnel and important that "if the termination is brought about by
matters of her department. the x x x failure of an employee to meet the
standards of the employer in case of
In fine, the Court rules that Alcaraz’s status probationary employment, it shall be
as a probationary employee and her sufficient that a written notice is served the
consequent dismissal must stand. employee, within a reasonable time from the
Consequently, in holding that Alcaraz was effective date of termination."
illegally dismissed due to her status as a
regular and not a probationary employee, the As the records show, Alcaraz's dismissal was
Court finds that the NLRC committed a grave effected through a letter dated May 19, 2005
abuse of discretion. which she received on May 23, 2005 and
again on May 27, 2005. Stated therein were
To elucidate, records show that the NLRC the reasons for her termination, i.e., that after
based its decision on the premise that proper evaluation, Abbott determined that
Alcaraz’s receipt of her job description and she failed to meet the reasonable standards
Abbott’s Code of Conduct and Performance for her regularization considering her lack of
Modules was not equivalent to being actually time and people management and decision-
informed of the performance standards upon making skills, which are necessary in the
which she should have been evaluated performance of her functions as Regulatory
on.64 It, however, overlooked the legal Affairs Manager.66 Undeniably, this written
implication of the other attendant notice sufficiently meets the criteria set forth
circumstances as detailed herein which above, thereby legitimizing the cause and
should have warranted a contrary finding that manner of Alcaraz’s dismissal as a
Alcaraz was indeed a probationary and not a probationary employee under the parameters
regular employee – more particularly the fact set by the Labor Code.67
that she was well-aware of her duties and
responsibilities and that her failure to D. Employer’s violation of
adequately perform the same would lead to company policy and
her non-regularization and eventually, her procedure.
termination.
Nonetheless, despite the existence of a
Accordingly, by affirming the NLRC’s sufficient ground to terminate Alcaraz’s
pronouncement which is tainted with grave employment and Abbott’s compliance with
abuse of discretion, the CA committed a the Labor Code termination procedure, it is
readily apparent that Abbott breached its
contractual obligation to Alcaraz when it month and second on the fifth month from the
failed to abide by its own procedure in date of employment. Abbott is also required
evaluating the performance of a probationary to come up with a Performance Improvement
employee. Plan during the third month review to bridge
the gap between the employee’s performance
Veritably, a company policy partakes of the and the standards set, if any.69 In addition, a
nature of an implied contract between the signed copy of the PPSE form should be
employer and employee. In Parts Depot, Inc. submitted to Abbott’s HRD as the same
v. Beiswenger,68 it has been held that: would serve as basis for recommending the
confirmation or termination of the
Employer statements of policy . . . can give probationary employment.70
rise to contractual rights in employees
without evidence that the parties mutually In this case, it is apparent that Abbott failed
agreed that the policy statements would to follow the above-stated procedure in
create contractual rights in the employee, evaluating Alcaraz. For one, there lies a
and, hence, although the statement of policy hiatus of evidence that a signed copy of
is signed by neither party, can be unilaterally Alcaraz’s PPSE form was submitted to the
amended by the employer without notice to HRD. It was not even shown that a PPSE
the employee, and contains no reference to a form was completed to formally assess her
specific employee, his job description or performance. Neither was the performance
compensation, and although no reference was evaluation discussed with her during the third
made to the policy statement in pre- and fifth months of her employment. Nor did
employment interviews and the employee Abbott come up with the necessary
does not learn of its existence until after his Performance Improvement Plan to properly
hiring. Toussaint, 292 N.W .2d at 892. The gauge Alcaraz’s performance with the set
principle is akin to estoppel. Once an company standards.
employer establishes an express personnel
policy and the employee continues to work While it is Abbott’s management prerogative
while the policy remains in effect, the policy to promulgate its own company rules and
is deemed an implied contract for so long as even subsequently amend them, this right
it remains in effect. If the employer equally demands that when it does create its
unilaterally changes the policy, the terms of own policies and thereafter notify its
the implied contract are also thereby employee of the same, it accords upon itself
changed.1âwphi1 (Emphasis and the obligation to faithfully implement them.
underscoring supplied.) Indeed, a contrary interpretation would entail
a disharmonious relationship in the work
Hence, given such nature, company place for the laborer should never be mired
personnel policies create an obligation on the by the uncertainty of flimsy rules in which the
part of both the employee and the employer latter’s labor rights and duties would, to some
to abide by the same. extent, depend.

Records show that Abbott’s PPSE procedure In this light, while there lies due cause to
mandates, inter alia, that the job performance terminate Alcaraz’s probationary
of a probationary employee should be employment for her failure to meet the
formally reviewed and discussed with the standards required for her regularization, and
employee at least twice: first on the third while it must be further pointed out that
Abbott had satisfied its statutory duty to serve employer’s exercise of his management
a written notice of termination, the fact that it prerogative.75 Hence, in Jaka, where the
violated its own company procedure renders employee was dismissed for an authorized
the termination of Alcaraz’s employment cause of retrenchment76 – as
procedurally infirm, warranting the payment contradistinguished from the employee in
of nominal damages. A further exposition is Agabon who was dismissed for a just cause
apropos. of neglect of duty77 – the Court ordered the
employer to pay the employee nominal
Case law has settled that an employer who damages at the higher amount of ₱50,000.00.
terminates an employee for a valid cause but
does so through invalid procedure is liable to Evidently, the sanctions imposed in both
pay the latter nominal damages. Agabon and Jaka proceed from the necessity
to deter employers from future violations of
In Agabon v. NLRC (Agabon),71 the Court the statutory due process rights of
pronounced that where the dismissal is for a employees.78 In similar regard, the Court
just cause, the lack of statutory due process deems it proper to apply the same principle to
should not nullify the dismissal, or render it the case at bar for the reason that an
illegal, or ineffectual. However, the employer employer’s contractual breach of its own
should indemnify the employee for the company procedure – albeit not statutory in
violation of his statutory rights.72 Thus, in source – has the parallel effect of violating
Agabon, the employer was ordered to pay the the laborer’s rights. Suffice it to state, the
employee nominal damages in the amount of contract is the law between the parties and
₱30,000.00.73 thus, breaches of the same impel recompense
to vindicate a right that has been violated.
Proceeding from the same ratio, the Court Consequently, while the Court is wont to
modified Agabon in the case of Jaka Food uphold the dismissal of Alcaraz because a
Processing Corporation v. Pacot valid cause exists, the payment of nominal
74
(Jaka) where it created a distinction damages on account of Abbott’s contractual
between procedurally defective dismissals breach is warranted in accordance with
due to a just cause, on one hand, and those Article 2221 of the Civil Code.79
due to an authorized cause, on the other.
Anent the proper amount of damages to be
It was explained that if the dismissal is based awarded, the Court observes that Alcaraz’s
on a just cause under Article 282 of the Labor dismissal proceeded from her failure to
Code (now Article 296) but the employer comply with the standards required for her
failed to comply with the notice requirement, regularization. As such, it is undeniable that
the sanction to be imposed upon him should the dismissal process was, in effect, initiated
be tempered because the dismissal process by an act imputable to the employee, akin to
was, in effect, initiated by an act imputable to dismissals due to just causes under Article
the employee; if the dismissal is based on an 296 of the Labor Code. Therefore, the Court
authorized cause under Article 283 (now deems it appropriate to fix the amount of
Article 297) but the employer failed to nominal damages at the amount of
comply with the notice requirement, the ₱30,000.00, consistent with its rulings in both
sanction should be stiffer because the Agabon and Jaka.
dismissal process was initiated by the