PHIL FEDERATION V NLRC Examining the contract of employment executed between the parties:

GR NO 121071  It shows employment was for a fixed period

 However, the succeeding provisions thereof contradicted the same when it provided
FACTS: that respondent shall be under probationary status ending 6 months after
 September 1982, private respondent Victoria Abril was employed by petitioner
Philippine Federation of Credit Cooperatives, Inc. (PFCCI) as office secretary and Petitioner manifested that respondents employment for a period of one year, from January until
cashier designate for 4 months December 1991, having been fixed for a specified period, could not have converted her
 Shortly after resuming her position as office secretary, subsequently went on leave until employment status to one of regular employment.
she gave birth  Insisted that respondent was employed to perform work related to a project funded by
the World Council of Credit Unions (WOCCU) and hence, her status is that of a project
Upon her return she discovered that a certain Vangie Santos had been permanently appointed to employee
her former position.
 She, nevertheless, accepted the position of Regional Field Officer and shall be Where a contract of employment, being a contract of adhesion, is ambiguous, any ambiguity
probationary for 6 months therein should be construed strictly against the party who prepared it.
 PFCCI presented another contract for a period of one year after which period her  PFCCI cannot be allowed to construe otherwise what appears to be clear from the
employment was terminated wordings of the contract.
 The interpretation which the respondent company seeks to wiggle out is wholly
She filed a complaint for illegal dismissal unacceptable, as it would result in a violation of petitioners right to security of tenure

LA, dismissed ordered PFCCI to reimburse her the amount of P2,500.00 which had been
deducted from her salary.
NLRC, reversed PFCCI was ordered to reinstate complainant to her position last held, which is
that of a Regional Field Officer, or to an equivalent position if such is no longer feasible, with full
backwages
Abril has become regular employee entitled to security of tenure.
Regardless of the designation petitioner may have conferred upon respondents employment
status, it is, however, uncontroverted that the latter, having completed the probationary period and
allowed to work thereafter, became a regular employee

ISSUE: WON Abril is a casual or contractual employee

HELD:

Article 281 of the Labor Code, as amended, allows the employer to secure the services of an
employee on a probationary basis which allows him to terminate the latter for just cause or upon
failure to qualify in accordance with reasonable standards set forth by the employer at the time of
his engagement.

Probationary employee is one who is on trial by an employer during which the employer
determines whether or not he is qualified for permanent employment

Probationary employment is made to afford the employer an opportunity to observe the fitness
of a probationer while at work, and to ascertain whether he will become a proper and efficient
employee.

 Probationary employees, notwithstanding their limited tenure, are also entitled to

security of tenure.

Respondent had allegedly abandoned her secretarial position for eight (8) months, she applied for
the position of Regional Field Officer
 Which appointment had been fixed for a specific project or undertaking the completion
or termination of which had been determined at the time of the engagement of said
private respondent and therefore considered as a casual or contractual employment
under Article 280

(a) Regular employees or those whose work is necessary or desirable to the usual
business of the employer
(b) Project employees or those whose employment has been fixed for a specific project
or undertaking
(c) Casual employees or those who are neither regular nor project employees.
 PANTOJA V SCA HYGIENE PRODUCTS CORP
GR NO 163554
FACTS:
SCA engaged in the manufacture, sale and distribution of industrial paper and tissue products
 Employed Pantoja as utility man on March 15, 1987. He was assigned at paper mill no 4.
o This section manufactures industrial paper products , as a back tender in
charge of the proper operation of the sections machineries
 In a notice of transfer SCA informed Pantoja of its reorganization plan and offered him
a position at Paper Mill No. 5 under the same terms and conditions of employment in
anticipation of permanent shutdown of mill no. 4
 This is in line with the company’s decision streamline and phase out the company’s
industrial paper manufacturing operations due to financial difficulties
Petitioner rejected the said transfer.
 A notice of termination effective May 1999 was sent to Partoja as his position was
declared redundant at Mill No. 4
 He then received his separation pay equivalent to two months’ pay for every year of
service amounting to 356K and executed a quitclaim in favor of the company
April 1999, SCA informed DOLE of its reorganization and partial closure through an Establishment
Termination report, including the names of 31 terminated employees.
Petitioner then filed a complaint for illegal dismissal.
 He averred that the alleged redundancy never occurred as there was no permanent
shutdown of Paper Mill No. 4 due to its continuous operation since his termination.
 Through a testimony of a co-worker Agtang, he confirmed that several contractual
workers was hired to operate Mill No. 4
 He likewise presented evidence documents pertaining to the actual and continuous
operation of Paper Mill No. 4
In SCA’s defense
 They argued that petitioner has voluntarily separated himself from service by opting to
avail of the separation benefits of the company instead of accepting
reassignment/transfer
LA, dismissed the complaint for lack of merit
 Inasmuch as petitioner rejected the position offered to him, opted to receive separation
pay and executed a release and quitclaim releasing the company from any claim or
demand in connection with his employment
NLRC, reversed LA decision
 Gave credence to petitioners evidence of Paper Mill No. 4s continuous operation
 Consequently opined that the feigned shutdown of operations renders respondents
redundancy program legally infirm.
 Quitclaim was not valid having been executed through fraud and misrepresentation of
SCA
CA, reversed NLRC decision
 There was no illegal dismissal as the act of petitioner in rejecting the transfer and
accepting the separation pay constitutes a valid basis for the separation from
employment
Petitioner contends that respondents streamlining of operations which resulted in the reduction of
personnel was a mere scheme to get rid of regular employees
ISSUE: WON Pantoja was illegally dismissed
HELD:
NO.
SCA’s right of management prerogative was exercised in good faith.
 They were able to present evidence of the low volume of sales and orders for the
production of industrial paper in 1999
o Which inevitably resulted to the company’s decision to streamline its
operations.
Exercising its management prerogative and sound business judgment, respondent decided to cut
down on operational costs by shutting down one of its paper mill.
 The abolishment of Paper Mill No. 4 was undoubtedly a business judgment arrived at in
the face of the low demand for the production of industrial paper at the time.
Hence despite apparent reason to implement retrenchment, SCA did not outrightly dismiss the
workers affected by the closure of Paper Mill No. 4
 Gave them an option to be transferred to posts of equal rank and pay.
Court found this to be an indication of good faith on the part of SCA.
 They exhausted other possible measures other than retrenchment
 Giving the workers an option to be transferred without any diminution in rank and pay
specifically belie petitioners allegation that the alleged streamlining scheme was
implemented as a ploy to ease out employees
As to the continuous operation of paper mill 4:
 No evidence was presented to prove such allegation
 What the records reveal is that Paper Mill No. 4 resumed its operation in 2000 due to a
more favorable business climate.
o The said resumption does not make the streamlining/reorganization plan
illegal
Petitioners voluntary separation from employment renders his claim of illegal dismissal
unfounded and baseless.
 Partoja was offered a transfer but refused. He preferred to be separated by executing a
release and quitclaim in which he received 356K
 He freely and voluntarily consented to the execution of the release and quitclaim.
 Having done so apart from the fact that the consideration for the quitclaim is credible
and reasonable, the waiver represents a valid and binding undertaking