GRAND MOTOR PARTS CORPORATION vs MINISTER OF LABOR

FACTSRespondent Balicena was the Branch Manager of the petitioner company’s Iloilo Branch. Prior to his employment in Grand Motor, he was the Finance Officer of Warner, Barnes, & Co., when allegedly Mr. Alfredo Cisneros (acting branch manager) induced him to apply for the position of Branch Manager, as their company (petitioner) was looking for a CPA. He applied for the job and was accepted. He started working for the petitioner company on April 1 but resigned from his position in 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 Statement, Comparative Projections & Actual Sales Report;

the Comparative Performance Report dated 7/8/1980 on the operation of the Iloilo Branch for the month of June and May, 1980, the Cash Sales of the Iloilo Branch went down to P91,318.41 for June, 1980, as compared with the sales for the month of May, 1980 in the sum of P174,697.77;

Belicena in violation of company policy and without clearance from the head office in Cebu, extended personal accounts in favor of 15 persons which as of November, 1980 produced delinquent accounts amounting to P18,435.80; and

Belicena claimed lack of knowledge of the vehicular accident caused by a subordinate and failed to provide prompt administrative disciplinary action against the erring employee.

They claimed that Balicena is only a probationary employee, which would be observed by the company for 4-6 months and that Balicena knew that there is a possibility that he would not get the job.

Balicena on the other hand alleged that he is a regular employee, although he was not able to present any contract establishing his status as a regular employee; that the mishap involving the company's vehicle which was used without his permission and knowledge could not be blamed upon him; that the alleged reports which he failed to send were not reminded to him, verbally or in writing; that his sales for the period April to August, 1980 is higher compared to that for the same period in 1979; and that the alleged accounts remaining unpaid as of 11/6/1980 would have been collected in full if he were still the Manager, among other things.

Regional Director and Minister of Labor ruled in favor of Balicena, ordering his reinstatement, payment of his backwages, and other privileges.

ISSUEWhether or not private respondent's employment as Branch Manager was temporary or probationary, and not regular and permanent

RULINGAt the outset, Balicena was a probationary employee:

There was no written proof of Balicena’s appointment or employment as regular and permanent Branch Manager. There was the fact that he assumed his work as of April 1 but resigned from his previous company only on April 28, meaning that if he was really appointed as regular and permanent then he would have resigned immediately from his old company. But since he was not yet sure of his status in the petitioner corporation, he resigned late.

The Court cannot sustain Balicena’s claim, the absence of a written contract due to the fact that contracts were given only to those who will pass the probationary period and the rank-and-file employee, not to those managerial ones, are contrary to usual business practice especially in multi-million enterprises as the petitioner corporation. Considering the magnitude of its sales and operation, petitioner corporation must have taken the necessary precautions to test the qualifications, ability and performance of its Branch Manager, but he did not. The conclusion is inevitable that his hiring was temporary.

Balicena had never been hired as manager, and the petitioner company and Balicena’s former company are engaged in different kinds of business so it was necessary for Balicena to undergo a period of probation to test his qualifications, skills and experience since managing is a new experience for him.

The employer has the right or is at liberty to choose as to who will be hired and who will be declined. It is within the exercise of this right to select his employees that the employer may set or fix probationary period within which the latter may test and observed the conduct of the former before hiring him permanently. "The right of the 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 Constitution.

DISPOSITION: Order of the Deputy Minister of Labor is REVERSED and SET ASIDE. No costs. PETITION GRANTED.

ORIENT EXPRESS PLACEMENT PHILIPPINES vs NLRC

FACTSANTONIO F. FLORES was hired as crane operator by ORIENT EXPRESS PLACEMENT PHILIPPINES for 1 year, subject to a 3-month probationary period. However, after 1 month and 5 days in Saudi Arabia, Flores was repatriated to the Philippines. Consequently, he filed a complaint with the POEA for having been terminated from work for no valid reason. ORIENT EXPRESS and NADRICO countered that Flores was terminated for poor job performance.

On 7/14/1992, POEA rendered a decision in favor of complainant. It was observed that neither ORIENT EXPRESS nor NADRICO pointed out the reasonable standards of work required of Flores by which his incompetency was adjudged; much less did they specify how the latter failed to live up to such reasonable standards. Hence, his dismissal was unwarranted.

On appeal, NLRC affirmed the POEA decision. In addition, it ruled that the designation of Flores as floorman instead of crane operator for which he was hired violated his employment contract. The NLRC concluded that since Flores never worked as crane operator, his foreign employer could not have observed and assessed his performance as such and then come up with a performance evaluation sheet, especially considering his consistent claim that he was made to work as floorman instead. Subsequent motion for reconsideration filed by ORIENT EXPRESS and NADRICO was denied. Hence, this petition.

ISSUEWON the dismissal of FLORES is valid

RULINGUnder Art. 281 of the Labor Code, the services of an employee hired on a probationary basis may be terminated 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. However, the Court cannot sustain his dismissal on this ground because petitioner failed to specify the reasonable standards by which private respondent's alleged poor performance was evaluated, much less to prove that such standards were made known to him at the time of his recruitment in Manila. Both private respondent's Agency-Worker Agreement with ORIENT EXPRESS and NADRICO never mentioned that:

He must first take and pass a Crane Operators' License Examination in Saudi Arabia before he would be allowed to even touch a crane

He would be assigned as floorman pending release of the results of the examination or in the event that he failed;

He would be subjected to a performance evaluation by his superior 1 month after his hiring to determine whether the company was amenable to continuing with his employment.

Hence, respondent Flores could not be faulted for precisely harboring the impression that he was hired as crane operator for a definite period of 1 year to commence upon his arrival at the work-site and to terminate at the end of 1 year. No other condition was laid out except that he was to be on probation for 3 months. No standard whatsoever by which such probationary period could be hurdled was specified and made known to him.

Due process dictates that an employee be apprised beforehand of the condition of his employment and of the terms of advancement therein. Precisely, implicit in Art. 281 of the Code is the requirement that reasonable standards be previously made known by the employer to the probationary employee at the time of his engagement, such an essential requirement was not met by petitioner, even assuming that Flores' alleged unsatisfactory performance was true. Besides, unsatisfactory performance is not one of the just causes for dismissal under the Labor Code.

DISPOSITION: The assailed Decision and Resolution of NLRC are AFFIRMED. Costs against petitioner Orient Express Placement Philippines.

BUISER V. LEOGARDO 131 SCRA 151 (1984)

FACTS: Petitioners were employed by the private respondent GENERAL TELEPHONE DIRECTORY COMPANY as sales representatives and charged with the duty of soliciting advertisements for inclusion in a telephone directory.

1. The records show that petitioners Iluminada Ver Buiser and Ma. Mercedes P. Intengan entered into an "Employment Contract (on Probationary Status)" on May 26, 1980 with private respondent, a corporation engaged in the business of publication and circulation of the directory of the Philippine Long Distance Telephone Company. Petitioner Ma. Cecilia Rillo-Acuna entered into the same employment contract on June 11, 1980 with the private respondent.

2. Among others, the "Employment Contract (On Probationary Status)" included the following common provisions:

The company hereby employs the employee as telephone representative on a probationary status for a period of eighteen (18) months, i.e. from May 1980 to October 1981, inclusive. It is understood that daring 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. The Employee recognizes the fact that the nature of the telephone sales representative's job is such that the company would be able to determine his true character, conduct and selling capabilities only after the publication of the directory, and that it takes about eighteen (18) months before his worth as a telephone saw representative can be fully evaluated inasmuch as the advertisement solicited by him for a particular year are published in the directory only the following year.

3. Private respondent prescribed sales quotas to be accomplished or met by the petitioners. Failing to meet their respective sales quotas, the petitioners were dismissed from the service by the private respondent.

4. Petitioners, then, filed a complaint for illegal dismissal and claims for back wages, earned commissions and other benefits

5. Regional director of MOLE dismissed the complaints of petitioners except for the claim for allowances.

6. Deputy minister Leogardy of MOLE affirmed the decision of the regional director citing that the petitioners have not attained permanent status since private respondent was justified in requiring a longer period of probation. Leogardo likewise ruled that the termination was valid

ISSUE: WON the petitioners are probationary employees

HELD: 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.

Policy Instruction No. 11 of the Minister of Labor and Employment has clarified any and all doubts on the period of probationary employment. It states as follows:

Probationary Employment has been the subject of misunderstanding in some quarter. Some people believe six (6) months is the probationary period in all cases. On the other hand employs who have already served the probationary period are sometimes required to serve again on probation.

Under the Labor Code, six (6) months is the general probationary period ' but the probationary period is actually 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.

The purpose of this policy is to protect the worker at the same time enable the employer to make a meaningful employee selection. This purpose should be kept in mind in enforcing this provision of the Code. This issuance shall take effect immediately.

The very contracts of employment signed and acquiesced to by the petitioners specifically indicate that "the company hereby employs the employee as telephone sales representative on a probationary status for a period of eighteen (18) months, i.e. from May 1980 to October 1981, inclusive. This stipulation is not contrary to law, morals and public policy.

Holiday Inn Manila vs NLRC

Facts:Elena Honasan applied for employment with the Holiday Inn and was on April 15, 1991, accepted for "on-the-job training" as a telephone operator for a period of three weeks. 1

For her services, she received food and transportation allowance. 2 On May 13, 1992, after completing her training, she was employed on a "probationary basis" for a period of six months ending November 12, 1991. 3

Her employment contract stipulated that the Hotel could terminate her probationary employment at any time prior to the expiration of the six-month period in the event of her failure (a) to learn or progress in her job; (b) to faithfully observe and comply with the hotel rules and the instructions and orders of her superiors; or (c) to perform her duties according to hotel standards.

On November 8, 1991, four days before the expiration of the stipulated deadline, Holiday Inn notified her of her dismissal, on the ground that her performance had not come up to the standards of the Hotel. 4

Honasan filed a complaint for illegal dismissal, claiming that she was already a regular employee at the time of her separation and so was entitled to full security of tenure.

Issue: Honasan was already a regular employee at the time of her dismissal, which was made 4 days days before the expiration of the probation period.

Held: We find in the Hotel's system of double probation a transparent scheme to circumvent the plain mandate of the law and make it easier for it to dismiss its employees even after they shall have already passed probation. The petitioners had ample time to summarily terminate Honasan's services during her period of probation if they were deemed unsatisfactory.

The employer has absolute discretion in hiring his employees in accordance with his standards of competence and probity. This is his prerogative. Once hired, however, the employees are entitled to the protection of the law even during the probation period and more so after they have become members of the regular force. The employer does not have the same freedom in the hiring of his employees as in their dismissal.

Honasan was placed by the petitioner on probation twice, first during her on-the-job training for three weeks, and next during another period of six months, ostensibly in accordance with Article 281. Her probation clearly exceeded the period of six months prescribed by this article.

Probation is the period during which the employer may determine if the employee is qualified for possible inclusion in the regular force. In the case at bar, the period was for three weeks, during Honasan's on-the-job training. When her services were continued after this training, the petitioners in effect recognized that she had passed probation and was qualified to be a regular employee.

Honasan was certainly under observation during her three-week on-the-job training. If her services proved unsatisfactory then, she could have been dropped as early as during that period. But she was not. On the contrary, her services were continued, presumably because they were acceptable, although she was formally placed this time on probation.

Even if it be supposed that the probation did not end with the three-week period of on-the-job training, there is still no reason why that period should not be included in the stipulated six-month period of probation. Honasan was accepted for on-the-job training on April 15, 1991. Assuming that her probation could be extended beyond that date, it nevertheless could continue only up to October 15, 1991, after the end of six months from the earlier date. Under this more lenient approach, she had become a regular employee of Holiday Inn and acquired full security of tenure as of October 15, 1991.

The consequence is that she could no longer be summarily separated on the ground invoked by the petitioners. As a regular employee, she had acquired the protection of Article 279 of the Labor Code

BERNARDO V NLRC (FAR EAST BANK AND TRUST COMPANY)

FACTS:- 43 Complainants are deaf-mutes who were hired by respondent Far East Bank and Trust Co. as Money Sorters and Counters through an "Employment Contract for Handicapped Workers".

- FAR EAST disclaimed that BERNARDO ET AL were regular employees AND that they were hired temporarily under a special employment arrangement due to "pakiusap".

- NLRC affirmed ruling of the labor arbiter that BERNARDO ET AL could not be deemed regular employees under Art. 280 of the Labor Code.

ISSUES:WON NLRC is guilty of grave abuse of discretion in holding that 1. money sorters and counters working in a bank are not regular employees2. employment contracts signed and renewed by the petitioners, which provide for a period of 6 months, were valid

HELD:1. YES. Only the employees, who worked for more than 6 months and whose contracts were renewed are deemed regular. Hence, their dismissal from employment was illegal.

Reasoning- According to FAR EAST, the employment contracts were prepared in accordance with A80 LC, which provides Art. 80. Employment agreement.

— Any employer who employs handicapped workers shall enter into an employment agreement with them, which agreement shall include:(c) The duration of employment period; and

- FAR EAST entered into contract with a total of 56 handicapped workers and renewed the contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily, the renewal of the contracts of the handicapped workers and the hiring of others lead to the conclusion that their tasks were beneficial and necessary to the bank . More important, these facts show that they were qualified to perform the responsibilities of their positions. In other words, their disability did not render them unqualified or unfit for the tasks assigned to them.

- Magna Carta for Disabled Persons mandates that a qualified disabled employee should be given the same terms and conditions of employment as a qualified able-bodied person .

- Since the Magna Carta accords them the rights of qualified able-bodied persons, they are thus covered by Article 280 of the Labor Code

- The task of counting and sorting bills is necessary and desirable to the business of respondent bank. With the exception of sixteen of them, BERNARDO ET AL performedthese tasks for more than six months.

- As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious practice of making permanent casuals of our lowly employees by the simple expedient of extending to them probationary appointments, ad infinitum ."

The contract signed by petitioners is akin to a probationary employment, during which the bank determined the employees' fitness for the job. When the bank renewed the contract after the lapse of the six-month probationary period, the employees thereby became regular employees. No employer is allowed to determine indefinitely the fitness of its employees.

- As regular employees, the 27 petitioners are entitled to security of tenure; that is, their services may be terminated only for a just or authorized cause. Therefore, when FAR EAST failed to show such cause, they are deemed illegally dismissed and entitled to back wages and reinstatement without loss of seniority rights and other privileges. Considering that the job of money sorting is no longer available because it has beenassigned back to the tellers to whom it originally belonged, petitioners are hereby awarded separation pay in lieu of reinstatement.

INTERNATIONAL CATHOLIC MIGRATION COMMISSION vs NLRC(Definition of Probation)

FACTSPetitioner ICMC is a non-profit organization dedicated to refugee service at the Philippine Refugee Processing Center in Morong, Bataan. It engaged the services of private respondent Bernadette Galang on 1/24/1983 as a probationary cultural orientation teacher. After 3 months, she was informed orally and in writing that her services were being terminated because she failed in the performance evaluation of her supervisors during the teacher evaluation program.

On 8/22/1983, Galang filed a complaint for illegal dismissal, unfair labor practice and unpaid wages against petitioner with the then Ministry of Labor and Employment, praying for reinstatement with backwages, exemplary and moral damages.

On 10/8/1983, Labor Arbiter dismissed the complaint for illegal dismissal as well as the complaint for moral and exemplary damages but ordering the ICMC to pay Galang the sum of P6,000.00 as payment for the last 3 months of the agreed employment period pursuant to her verbal contract of employment.

Both parties appealed the decision to the NLRC. On 8/22/1985, the NLRC, by a majority vote of Commissioners Guillermo C. Medina and Gabriel M. Gatchalian, sustained the decision of the Labor Arbiter and dismissed both appeals for lack of merit. Dissatisfied, petitioner filed the instant petition.

ISSUEWhether or not an employee who was terminated during the probationary period of her employment is entitled to her salary for the unexpired portion of her six-month probationary employment

RULINGNO. Galang was terminated during her probationary period of employment for failure to qualify as a regular member of petitioner’s teaching staff in accordance with its reasonable standards. Galang was found by petitioner to be deficient in classroom management, teacher-student relationship and teaching techniques. Failure to qualify as a regular employee in accordance with the reasonable standards of the employer is a just cause for terminating a probationary employee specifically recognized under Article 282 (now Article 281) of the Labor Code.

The labor arbiter’s decision is erroneous. The award of salary for the unexpired portion of the probationary employment on the ground that a probationary employment for 6 months is an employment for a "definite period" which requires the employer to exhaust the entire probationary period to give the employee the opportunity to meet the required standards.

A 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. A probationary appointment 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. The word “probationary,” as used to describe the period of employment, implies the purpose of the term or period, but not its length.

Being in the nature of a “trial period” the essence of a probationary period of employment fundamentally lies in the purpose or objective sought to be attained by both the employer and the employee during said period. The length of time is immaterial in determining the correlative rights of both in dealing with each other during said period.

It is within the exercise of the right to select his employees that the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently. As the law now stands, Article 281 of the Labor Code gives ample authority to the employer to terminate a probationary employee 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. Nothing would preclude the employer from extending a regular or a permanent appointment to an employee once the employer finds that the employee is qualified for regular employment even before the expiration of the probationary period.

There was no showing, as borne out by the records, that there was circumvention of the rights of Galang when she was informed of her termination. Her dismissal does not appear to us as arbitrary, fanciful or whimsical. She was duly notified, orally and in writing, that her services were terminated for failure to meet the prescribed standards of petitioner as reflected in the performance evaluation conducted by her supervisors during the teacher evaluating program. The dissatisfaction of petitioner over the performance of private respondent in this regard is a legitimate exercise of its prerogative to select whom to hire or refuse employment for the success of its program or undertaking.

The lower court abused its discretion when it ordered ICMC to Galang her salary for the unexpired three-month portion of her six-month probationary employment when she was validly terminated during her probationary employment. To sanction such action would not only be unjust, but oppressive on the part of the employer.

DISPOSITION: The petition is GRANTED. The Resolution of the NLRC is REVERSED and SET ASIDE insofar as it ordered petitioner to pay private respondent her P6,000.00 salary for the unexpired portion of her six-month probationary employment. No cost.