MANILA HOTEL CORPORATION VS NLRC

GR NO. L-53453
JANUARY 22, 1986

FACTS:

Renato Cruz was employed as gardener by Manila Hotel on “probation status” effective
September 22, 1976 with a monthly salary of P400 payable semi-monthly for a period of 6 months and
subject to submitting all necessary work permits and clearances such as medical and security. Cruz’s job
performance and efficiency upon the expiration of his probation shall be reviewed and appraised.

On March 1977, a day before the expiration of Cruz’s probationary period, his position was
abolished allegedly due to economic reverses or business recession and to salvage the enterprise from
imminent danger of collapse together with the 3 other gardeners, Arcis, Manila and Reyes. Ironically, he
later found out that Arci and Manila were promoted as Stewards and Reyes was retained as sole
gardener.

Claiming that his dismissal was illegal and constitutes unfair labor practice, Cruz filed a
complaint. Labor Arbiter rendered a decision to reinstate the complainant without loss of seniority
rights and other privileges and to reclassify him as a regular or permanent employee.

ISSUE:

Whether or not the employer can validly terminate employees whose appointment are under
Probationary Status.

RULING:

No. Although, this is by no means to assert that the security of tenure protection of the
Constitution does not apply to probationary employees. The Labor code has wisely provided for such
cases. Specifically, the power of an employer to terminate a probationary employment contract is
subject to various limitations.

The records failed to reveal any standard or criteria adopted by the petitioner in making the
promotion and selection in question thus leading to conclusion that Crus was arbitrarily terminated or
dismissed.

Since there was no valid termination, private respondent is entitled to reinstate the complainant
without loss of seniority rights and other privileges and to reclassify him as a regular or permanent
employee.