F.

Fixed term employees

Claret School vs. Sinday, G.R. 226358 (2019)

G. Probationary

Robinson’s Galleria et al. v. Ranchez, G.R. No. 177937 (2011)

FACTS: Respondent Ranchez was a probationary employee for 5 months. She was hired as a
cashier by Robinsons sometime within that period. Two weeks after she was hired, she reported
the loss of cash which she had placed in the company locker. She offered to pay for the lost
amount but the Operations Manager of Robinsons had her strip-searched then reported her to
the police even though they found nothing on her person. An information for Qualified Theft was
filed with the 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 respondent by mail a notice of termination and/or
notice of expiration of probationary employment.

Even though she was merely a probationary employee, the lapse of the probationary contract
did not amount to a valid dismissal because there was already an unwarranted constructive
dismissal beforehand.

ISSUE: Whether respondent was illegally terminated from employment by petitioners.

HELD: The petition is unmeritorious.

Probationary employees; termination of employment

There is probationary employment when the employee upon his engagement is made to
undergo a trial period during which the employer determines his fitness to qualify for regular
employment based on reasonable standards made known to him at the time of engagement.

A probationary employee, like a regular employee, enjoys security of tenure. However, in cases
of probationary employment, aside from just or authorized causes of termination, an additional
ground is provided under Article 281 of the Labor Code, i.e., the probationary employee may
also be terminated for failure to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of the engagement. Thus,
the services of an employee who has been engaged on probationary basis may be terminated
for any of the following:

(1) a just or

(2) an authorized cause; and

(3) when he fails to qualify as a regular employee in accordance with reasonable

standards prescribed by the employer.
Article 277(b) of the Labor Code mandates that the employer shall furnish the worker, whose
employment is sought to be terminated, a written notice containing a statement of the causes of
termination, and shall afford 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
regulations pursuant to the guidelines set by the Department of Labor and Employment.

In the instant case, based on the facts on record, petitioners failed to accord respondent
substantive and procedural due process. The haphazard manner in the investigation of the
missing cash, which was left to the determination of the police authorities and the Prosecutor's
Office, left respondent with no choice but to cry foul. Administrative investigation was not
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 reported her to the police as the suspected thief, which resulted in
her languishing in jail for two weeks.

The due process requirements under the Labor Code are mandatory and may not be replaced
with police investigation or court proceedings. An illegally or constructively dismissed employee,
respondent is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is
no longer viable; and (2) back wages. These two reliefs are separate and distinct from each
other and are awarded conjunctively.

In this case, since respondent was a probationary employee at the time she was constructively
dismissed by petitioners, she is entitled to separation pay and back wages. Reinstatement of
respondent is no longer viable considering the circumstances.

Buiser v. Leogardo, G.R. No. L- 63316, (1984)

FACTS: Buiser, Rilloacuna and Intengan were employed by General Telephone Directory Co.
as sales representative.

Buiser et al. entered an “Employment Contract (on Probationary Status)” with GT Directory.

The employment contact states that:

o The company hereby employs the employee as telephone sales representative

on a probationary status for a period of eighteen (18) months.
o During the probationary period of employment, the Employee may be terminated
at the pleasure of the company without the necessity of giving notice of
termination or the payment of termination pay.
o It takes about eighteen (18) months before his worth as a telephone sales
representative can be fully evaluated.

GT Directory prescribed sales quotas to be accomplished by Buiser. Failing to meet their

respective sales quotas, Buiser et al. were dismissed from the service. Thus, Buiser filed a
complaint for illegal dismissal. Hence, this petition.
ISSUE: W/N the 18 months probationary status is allowed.

HELD: YES

General Rule: probationary period of employment is limited to six (6) months.

Exception:

o parties to an employment contract agreed otherwise,

o established by company policy
o required by the nature of work to be performed by the employee.

There is an exercise of managerial prerogatives in requiring a longer period of probationary

employment, especially where the employee must learn a particular kind of work such as
selling, or when the job requires certain qualifications, skills, experience or training.

Under the Labor Code, six (6) months is the general probationary period, but the probationary
period is the period needed to determine fitness for the job. This period, for lack of a better
measurement is deemed to be the period needed to learn the job.

Moreover, an eighteen month probationary period is recognized by the Labor Union GT

Directory Co, which is Article V of the Collective Bargaining Agreement.

Mercado v. AMA Computer College, G.R. No. 183572, (2010)

Facts: The petitioners were faculty members who started teaching at AMACC. AMACC
implemented new faculty screening guidelines, set forth in its Guidelines on the Implementation
of AMACC Faculty Plantilla. Pursuant to said guidelines, entitlement to salary increase was
determined. The petitioners failed to obtain a passing rating based on the performance
standard, and hence, were not entitled to said increase. This prompted them to file with the
NLRC complaint for underpayment of

wages, inter alia. AMACC countered that Petitioners were under a contracted term and under a
non-tenured appointment and were still within the three-year probationary period for teachers.
Their contracts were not renewed for the following term because they failed to pass the
Performance Appraisal System for Teachers (PAST) while others failed to comply with the other
requirements for regularization, promotion, or increase in salary.

ISSUE: Should the teachers’ probationary status be disregarded simply because the contracts
were fixed term?

HELD: NO. “To be sure, nothing is illegitimate in defining the school-teacher relationship in this
manner. The school, however, cannot forget that its system of fixed-term contract is a system
that operates during the probationary period and for this reason is subject to the terms of Article
281 of the Labor Code. Unless this reconciliation is made, the requirements of this Article on
probationary status would be fully negated as the school may freely choose not to renew
contracts simply because their terms have expired. The inevitable effect of course is to wreck
the scheme that the Constitution and the Labor Code established to balance relationships
between labor and management.”

“Given the clear constitutional and statutory intents, we cannot but conclude that in a situation
where the probationary status overlaps with a fixed-term contract not specifically used for the
fixed term it offers, Article 281 should assume primacy and the fixed-period character of the
contract must give way. This conclusion is immeasurably strengthened by the petitioners and
the AMACCs hardly concealed expectation that the employment on probation could lead to
permanent status, and that the contracts are renewable unless the petitioners fail to pass the
schools standards.”

“If the school were to apply the probationary standards (as in fact it says it did in the present
case), these standards must not only be reasonable but must have also been communicated to
the teachers at the start of the probationary period, or at the very least, at the start of the period
when they were to be applied. These terms, in addition to those expressly provided by the
Labor Code, would serve as the just cause for the termination of the probationary contract. As
explained above, the details of this finding of just cause must be communicated to the affected
teachers as a matter of due process.”

“While we can grant that the standards were duly communicated to the petitioners and could be
applied beginning the 1st trimester of the school year 2000-2001, glaring and very basic gaps in
the school’s evidence still exist. The exact terms of the standards were never introduced as
evidence; neither does the evidence show how these standards were applied to the petitioners.
Without these pieces of evidence effectively, the finding of just cause for the nonrenewal of the
petitioners’ contracts), we have nothing to consider and pass upon as valid or invalid for each of
the petitioners. Inevitably, the non-renewal (or effectively, the termination of employment of
employees on probationary status) lacks the supporting finding of just cause that the law
requires and, hence, is illegal.”

Mariwasa v. Leogardo, G.R. No. 74246 (1989)

FACTS: Joaquin A. Dequila (or Dequilla) was hired on probation by Mariwasa Manufacturing,
Inc. as a general utility worker on January 10, 1979. After 6 months, he was informed that his
work was unsatisfactory and had failed to meet the required standards. To give him another
chance, and with Dequila’s written consent, Mariwasa extended Dequila’s probationary period
for another three months: from July 10 to October 9, 1979. Dequila’s performance, however, did
not improve and Mariwasa terminated his employment at the end of the extended period.

Dequila filed a complaint for illegal dismissal against Mariwasa and its VP for Administration,
Angel T. Dazo, and violation of Presidential Decrees Nos. 928 and 1389.

ISSUE: WON employer and employee may, by agreement, extend the probationary period of
employment beyond the six months prescribed in Art. 282 of the Labor Code?

RULING:  YES, agreements stipulating longer probationary periods may constitute lawful

exceptions to the statutory prescription limiting such periods to six months.

The SC in its decision in Buiser vs. Leogardo, Jr. (1984) said that “Generally, the probationary
period of employment is limited to six (6) months. The exception to this general rule is when the
parties to an employment contract may agree otherwise, such as when the same is established
by company policy or when the same is required by the nature of work to be performed by the
employee. In the latter case, there is recognition of the exercise of managerial prerogatives in
requiring a longer period of probationary employment, such as in the present case where the
probationary period was set for eighteen (18) months, i.e. from May, 1980 to October, 1981
inclusive, especially where the employee must learn a particular kind of work such as selling, or
when the job requires certain qualifications, skills experience or training.”

In this case, the extension given to Dequila could not have been pre-arranged to avoid the legal
consequences of a probationary period satisfactorily completed.  In fact, it was ex gratia, an act
of liberality on the part of his employer affording him a second chance to make good after
having initially failed to prove his worth as an employee. Such an act cannot now unjustly be
turned against said employer’s account to compel it to keep on its payroll one who could not
perform according to its work standards.

By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any
benefit attaching to the completion of said period if he still failed to make the grade during the
period of extension. By reasonably extending the period of probation, the questioned agreement
actually improved the probationary employee’s prospects of demonstrating his fitness for regular
employment.

Abbott Laboratories Phil. et al. v. Alcaraz, G.R. No. 192571 (2013)

FACTS: On June 27, 2004, Abbott Laboratories, Philippines published in major broadsheet that
it is in need of Medical and Regulatory Affairs Manager stating therein the responsibilities and
qualifications of said position. Abbott formally offered Alcaraz the abovementioned position
which was an item under the company’s Hospira Affiliate Local Surveillance Unit (ALSU)
department. On February 12, 2005, Alcaraz signed an employment contract which stated, inter
alia, that she was to be placed on probation for a period of six (6) months beginning February
15, 2005 to August 14, 2005.

She underwent pre-employment orientation where she was briefed on her duties and
responsibilities. Alcaraz received an e-mail from the HR Director explaining the procedure for
evaluating the performance of probationary employees and further indicated that Abbott had
only one evaluation system for all of its employees. Alcaraz was also given copies of Abbott’s
Code of Conduct and Probationary Performance Standards and Evaluation and Performance
Excellence Orientation Modules which she had to apply in line with her task of evaluating the
Hospira ALSU staff.

On April 12, 2005, Alcaraz received an e-mail from Misa requesting immediate action on the
staff’s performance evaluation as their probationary periods were about to end. This Alcaraz
eventually submitted. On May 16, 2005, Alcaraz was called to a meeting with her immediate
supervisor and the former HR Director where she was informed that she failed to meet the
regularization standards for the position of Regulatory Affairs Manager. Thereafter she was
asked to tender her resignation, else they be forced to terminate her services.
She filed a case of illegal dismissal against Abott and its officers.

ISSUE(S):

(1) Whether or not Alcaraz was sufficiently informed of the reasonable standards to qualify
her as a regular employee; and
(2) Whether or not Alcaraz was validly terminated from her employment.

HELD:

(1) Yes, Alcaraz was sufficiently informed of the reasonable standards. The employer is
made to comply with two (2) requirements when dealing with a probationary employee:
first, the employer must communicate the regularization standards to the probationary
employee; and second, the employer must make such communication at the time of the
probationary employee’s engagement. If the employer fails to comply with either, the
employee is deemed as a regular and not a probationary employee.

A punctilious (detailed) examination of the records reveals that Abbott had indeed complied
with the above-stated requirements. This conclusion is largely impelled by the fact that Abbott
clearly conveyed to Alcaraz her duties and responsibilities as Regulatory Affairs Manager prior
to, during the time of her engagement, and the incipient stages of her employment.

(2) A probationary employee, like a regular employee, enjoys security of tenure. However, in
cases of probationary employment, aside from just or authorized causes of termination,
an additional ground is provided under Article 295 of the Labor Code, i.e., the
probationary employee may also be terminated for failure to qualify as a regular
employee in accordance with the reasonable standards made known by the employer to
the employee at the time of the engagement.

A different procedure is applied when terminating a probationary employee; the usual two-
notice rule does not govern. Section 2, Rule I, Book VI of the Implementing Rules of the Labor
Code states that "if the termination is brought about by the failure of an employee to meet the
standards of the employer in case of probationary employment, it shall be sufficient that a
written notice is served the employee, within a reasonable time from the effective date of
termination."

As the records show, Alcaraz's dismissal was effected through a letter dated May 19, 2005
which she received on May 23, 2005 and again on May 27, 2005. Stated therein were the
reasons for her termination, i.e., that after proper evaluation, Abbott determined that she failed
to meet the reasonable standards for her regularization considering her lack of time and people
management and decision-making skills, which are necessary in the performance of her
functions as Regulatory Affairs Manager. Undeniably, this written notice sufficiently meets the
criteria set forth above, thereby legitimizing the cause and manner of Alcaraz’s dismissal as a
probationary employee under the parameters set by the Labor Code.

Prime Security Services, Inc. v. NLRC, G.R. No. 107023, (2000)

FACTS: Othello C. Moreno (Respondent) worked as a security guard for a year with Sugarland
Security Services, Inc. (sister company of A Prime Security).On January 30, 1988 – Moreno
was rehired as a security guard by A’ Prime Security Services, Inc. (Petitioner).He was assigned
to the US Embassy, which was the same post as when he was under Sugarland Here, he was
forced to sign new probationary contracts for 6 months

On August 1, 1998 – his employment under A Prime was terminated. Moreno filed a complaint
before the DOLE against A Prime for illegal dismissal, illegal deduction, and underpayment of
wages. PRIME terminated Moreno’s employment / did not make him a regular employee
because:

- he was caught sleeping while on duty

- he quarreled with another security guard, which almost led to a shootout
- he did not pass the company standard in the psychological test he was given

Hence, the present petition.

ISSUE:
(1) WON Moreno’s employment with A Prime is a continuation of his employment with
Sugarland, its sister company
(2) WON Moreno is a probationary employee or a regular employee

HELD:
1. YES. records show that the allegations of the Moreno that Sugarland is a sister
company of A' Prime, and that the latter absorbed the security contracts and security
guards of Sugarland with the U.S. Embassy were neither denied nor controverted by
the A Prime before the LA. Under Sec. 1, Rule 9 of the Rules of Court, in relation to
Sec. 3, Rule 1 of the Rules of the NLRC, material averments in the Complaint are
deemed admitted when not specifically denied.

In the petition under scrutiny, it is contended belatedly that A' Prime and Sugarland are
two separate and distinct juridical entities. However, aside from such a bare allegation, A Prime
presented no supporting evidence and the Court cannot, of course, act thereupon without any
legal basis. So, A Prime and Sugarland will be considered as one juridical entity in this case.

In relation to that, the Court cannot sanction the practice of some companies which,
shortly after a worker has become a regular employee, effects the transfer of the same
employee to another entity whose owners are the same, or identical, in order to deprive subject
employee of the benefits and protection he is entitled to under the law.

2. The Court holds that Moreno became a regular employee upon completion of his six-
month period of probation. Moreno started working on January 30, 1988 and completed
the said period of probation on July 27, 1988. Thus, at the time Moreno was dismissed
on August 1, 1988, he was already a regular employee with a security of tenure. He
could only be dismissed for a just and authorized cause.

There is no basis for subjecting Moreno to a new probationary or temporary employment

on January 30, 1988, considering that he was already a regular employee when he was
absorbed by A' Prime from Sugarland, its sister company.
De la Cruz, Jr. v. NLRC, G.R. No. 145417 (2003)

Univac Development, Inc. v. Soriano, G.R. No. 182072 (2013)

Herrera-Manaois v. St. Scholastica’s College, G.R. No. 18891 (2013)

FACTS: SSC, situated in the City of Manila, is a private educational institution offering
elementary, secondary, and tertiary education. Manaois applied for a position as full–time
instructor for school year 2000–2001. She mentioned in her application letter that she had been
taking the course Master of Arts in English Studies, Major in Creative Writing, at the University
of the Philippines, Diliman (UP); that she was completing her master’s thesis; and that her oral
defense was scheduled for June 2000. Her application was approved, and her probationary
employment continued for a total of three consecutive years. Upon completion of her third year
of probationary employment, she received a letter from the Dean of College and Chairperson of
the Promotions and Permanency Board officially informing her of the board’s decision not to
renew her contract because of her failure to finish her master’s degree.

ISSUE: Whether the completion of a master’s degree is required in order for a tertiary level
educator to earn the status of permanency in a private educational institution?

HELD: Yes. Art. 281.of the Labor Code provides, “Probationary employment shall not exceed
six (6) months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a just cause or when he fails to
qualify as a regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of his engagement. An employee who is allowed to work
after a probationary period shall be considered a regular employee.”

At this juncture, we reiterate the rule that mere completion of the three–year probation, even
with an above–average performance, does not guarantee that the employee will automatically
acquire a permanent employment status. It is settled jurisprudence that the probationer can only
qualify upon fulfillment of the reasonable standards set for permanent employment as a member
of the teaching personnel. In line with academic freedom and constitutional autonomy, an
institution of higher learning has the discretion and prerogative to impose standards on its
teachers and determine whether these have been met. Upon conclusion of the probation period,
the college or university, being the employer, has the sole prerogative to make a decision on
whether or not to re–hire the probationer. The probationer cannot automatically assert the
acquisition of security of tenure and force the employer to renew the employment contract. In
the case at bar, Manaois failed to comply with the stated academic qualifications
(Holder of a master’s degree, to teach largely in his major field) required for the position of a
permanent full–time faculty member.

Colegio del Santisimo Rosario v. Rojo, G.R. No. 170388 (2013)

FACTS: Colegio del Santisimo Rosario (CSR) hired respondent as a high school teacher on
probationary basis for the school years 1992-1993, 1993-1994 and 1994-1995. On April 5,
1995, CSR, through Mofada, decided not to renew respondent’s services. Thus, on July 13,
1995, respondent filed a Complaint for illegal dismissal. He alleged that since he had served
three consecutive school years which is the maximum number of terms allowed for probationary
employment, he should be extended permanent employment. Citing paragraph 75 of the 1970
Manual of Regulations for Private Schools (1970 Manual), respondent asserted that “full- time
teachers who have rendered three (3) consecutive years of satisfactory services shall be
considered permanent.”

On the other hand, petitioners argued that respondent knew that his Teacher’s Contract for
school year 1994-1995 with CSR would expire on March 31,1995. Accordingly, respondent was
not dismissed but his probationary contract merely expired and was not renewed. Petitioners
also claimed that the “three years” mentioned in paragraph 75 of the 1970 Manual refer to “36
months,” not three school years. And since respondent 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 1970 Manual.

ISSUE: Whether or not Rojo has acquired permanent status

HELD: Yes. The common practice is for the employer and the teacher to enter into a contract,
effective for one school year. At the end of the school year, the employer has the option not to
renew the contract, particularly considering the teacher’s performance.

If the contract is not renewed, the employment relationship terminates. If the contract is
renewed, usually for another school year, the probationary employment continues. Again, at the
end of that period, the parties may opt to renew or not to renew the contract. If renewed, this
second renewal of the contract for another school year would then be the last year – since it
would be the third school year – of probationary employment.

At the end of this third year, the employer may now decide whether to extend a permanent
appointment to the employee, primarily on the basis of the employee having met the reasonable
standards of competence and efficiency set by the employer. For the entire duration of this
three-year period, the teacher remains under probation.

Upon the expiration of his contract of employment, being simply on probation, he cannot
automatically claim security of tenure and compel the employer to renew his employment
contract. It is when the yearly contract is renewed for the third time that Section 93 of the
manual becomes operative, and the teacher then is entitled to regular or permanent
employment status.