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Republic of the Philippines Bernardo’s e-mail were Abbott’s organizational chart

SUPREME COURT and a job description of Alcaraz’s work.9


Manila
EN BANC On February 12, 2005, Alcaraz signed an employment
contract which stated, inter alia, that she was to be
G.R. No. 192571 July 23, 2013 placed on probation for a period of six (6) months
ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. beginning February 15, 2005 to August 14, 2005. The
TERRIBLE, EDWIN D. FEIST, MARIA OLIVIA T. said contract was also signed by Abbott’s General
YABUTMISA, TERESITA C. BERNARDO, AND ALLAN G. Manager, petitioner Edwin Feist (Feist):10
ALMAZAR, Petitioners,
vs. PROBATIONARY EMPLOYMENT
PEARLIE ANN F. ALCARAZ, Respondent. Dear Pearl,
After having successfully passed the pre-employment
DECISION requirements, you are hereby appointed as follows:
PERLAS-BERNABE, J.: Position Title : Regulatory Affairs Manager
Assailed in this petition for review on certiorari1 are the Department : Hospira
Decision2 dated December 10,2009 and The terms of your employment are:
Resolution3 dated June 9, 2010 of the Court of Appeals Nature of Employment : Probationary
(CA) in CA-G.R. SP No. 101045 which pronounced that Effectivity : February 15, 2005 to August 14, 2005
the National Labor Relations Commission (NLRC) did not Basic Salary : ₱110,000.00/ month
gravely abuse its discretion when it ruled that It is understood that you agree to abide by all existing
respondent Pearlie Ann F. Alcaraz (Alcaraz) was illegally policies, rules and regulations of the company, as well
dismissed from her employment. as those, which may be hereinafter promulgated.
Unless renewed, probationary appointment expires on
The Facts the date indicated subject to earlier termination by the
On June 27, 2004, petitioner Abbott Laboratories, Company for any justifiable reason.
Philippines (Abbott) caused the publication in a major If you agree to the terms and conditions of your
broadsheet newspaper of its need for a Medical and employment, please signify your conformity below and
Regulatory Affairs Manager (Regulatory Affairs return a copy to HRD.
Manager) who would: (a) be responsible for drug safety Welcome to Abbott!
surveillance operations, staffing, and budget; (b) lead Very truly yours,
the development and implementation of standard Sgd.
operating procedures/policies for drug safety EDWIN D. FEIST
surveillance and vigilance; and (c) act as the primary General Manager
interface with internal and external customers CONFORME:
regarding safety operations and queries.4 Alcaraz - who Sgd.
was then a Regulatory Affairs and Information Manager PEARLIE ANN FERRER-ALCARAZ
at Aventis Pasteur Philippines, Incorporated (another
pharmaceutical company like Abbott) – showed interest During Alcaraz’s pre-employment orientation,
and submitted her application on October 4, 2004.5 petitioner Allan G. Almazar (Almazar), Hospira’s Country
Transition Manager, briefed her on her duties and
On December 7, 2004, Abbott formally offered Alcaraz responsibilities as Regulatory Affairs Manager, stating
the abovementioned position which was an item under that: (a) she will handle the staff of Hospira ALSU and
the company’s Hospira Affiliate Local Surveillance Unit will directly report to Almazar on matters regarding
(ALSU) department.6 In Abbott’s offer sheet.7 it was Hopira’s local operations, operational budget, and
stated that Alcaraz was to be employed on a performance evaluation of the Hospira ALSU Staff who
probationary basis.8 Later that day, she accepted the are on probationary status; (b) she must implement
said offer and received an electronic mail (e-mail) from Abbott’s Code of Good Corporate Conduct (Code of
Abbott’s Recruitment Officer, petitioner Teresita C. Conduct), office policies on human resources and
Bernardo (Bernardo), confirming the same. Attached to finance, and ensure that Abbott will hire people who
are fit in the organizational discipline; (c) petitioner
1
Kelly Walsh (Walsh), Manager of the Literature Drug During the course of her employment, Alcaraz noticed
Surveillance Drug Safety of Hospira, will be her that some of the staff had disciplinary problems. Thus,
immediate supervisor; (d) she should always coordinate she would reprimand them for their unprofessional
with Abbott’s human resource officers in the behavior such as non-observance of the dress code,
management and discipline of the staff; (e) Hospira moonlighting, and disrespect of Abbott officers.
ALSU will spin off from Abbott in early 2006 and will be However, Alcaraz’s method of management was
officially incorporated and known as Hospira, considered by Walsh to be "too strict."14 Alcaraz
Philippines. In the interim, Hospira ALSU operations will approached Misa to discuss these concerns and was
still be under Abbott’s management, excluding the told to "lie low" and let Walsh handle the matter. Misa
technical aspects of the operations which is under the even assured her that Abbott’s HRD would support her
control and supervision of Walsh; and (f) the processing in all her management decisions.15
of information and/or raw material data subject of
Hospira ALSU operations will be strictly confined and On April 12, 2005, Alcaraz received an e-mail from Misa
controlled under the computer system and network requesting immediate action on the staff’s performance
being maintained and operated from the United States. evaluation as their probationary periods were about to
For this purpose, all those involved in Hospira ALSU are end. This Alcaraz eventually submitted.16
required to use two identification cards: one, to identify
them as Abbott’s employees and another, to identify On April 20, 2005, Alcaraz had a meeting with petitioner
them as Hospira employees.11 Cecille Terrible (Terrible), Abbott’s former HR Director,
to discuss certain issues regarding staff performance
On March 3, 2005, petitioner Maria Olivia T. Yabut-Misa standards. In the course thereof, Alcaraz accidentally
(Misa), Abbott’s Human Resources (HR) Director, sent saw a printed copy of an e-mail sent by Walsh to some
Alcaraz an e-mail which contained an explanation of the staff members which essentially contained queries
procedure for evaluating the performance of regarding the former’s job performance. Alcaraz asked
probationary employees and further indicated that if Walsh’s action was the normal process of evaluation.
Abbott had only one evaluation system for all of its Terrible said that it was not.17
employees. Alcaraz was also given copies of Abbott’s
Code of Conduct and Probationary Performance On May 16, 2005, Alcaraz was called to a meeting with
Standards and Evaluation (PPSE) and Performance Walsh and Terrible where she was informed that she
Excellence Orientation Modules (Performance Modules) failed to meet the regularization standards for the
which she had to apply in line with her task of position of Regulatory Affairs Manager.18 Thereafter,
evaluating the Hospira ALSU staff.12 Walsh and Terrible requested Alcaraz to tender her
resignation, else they be forced to terminate her
Abbott’s PPSE procedure mandates that the job services. She was also told that, regardless of her
performance of a probationary employee should be choice, she should no longer report for work and was
formally reviewed and discussed with the employee at asked to surrender her office identification cards. She
least twice: first on the third month and second on the requested to be given one week to decide on the same,
fifth month from the date of employment. The but to no avail.19
necessary Performance Improvement Plan should also
be made during the third-month review in case of a gap On May 17, 2005, Alcaraz told her administrative
between the employee’s performance and the assistant, Claude Gonzales (Gonzales), that she would
standards set. These performance standards should be be on leave for that day. However, Gonzales told her
discussed in detail with the employee within the first that Walsh and Terrible already announced to the
two (2) weeks on the job. It was equally required that a whole Hospira ALSU staff that Alcaraz already resigned
signed copy of the PPSE form must be submitted to due to health reasons.20
Abbott’s Human Resources Department (HRD) and shall
serve as documentation of the employee’s performance On May 23, 2005, Walsh, Almazar, and Bernardo
during his/her probationary period. This shall form the personally handed to Alcaraz a letter stating that her
basis for recommending the confirmation or services had been terminated effective May 19,
termination of the probationary employment.13 2005.21 The letter detailed the reasons for Alcaraz’s
termination – particularly, that Alcaraz: (a) did not
2
manage her time effectively; (b) failed to gain the trust evidence to conclude that Abbott’s officers and
of her staff and to build an effective rapport with them; employees acted in bad faith in terminating Alcaraz’s
(c) failed to train her staff effectively; and (d) was not employment.33
able to obtain the knowledge and ability to make sound Displeased with the LA’s ruling, Alcaraz filed an appeal
judgments on case processing and article review which with the National Labor Relations Commission (NLRC).
were necessary for the proper performance of her
duties.22 On May 27, 2005, Alcaraz received another The NLRC Ruling
copy of the said termination letter via registered mail.23 On September 15, 2006, the NLRC rendered a
Alcaraz felt that she was unjustly terminated from her Decision,34 annulling and setting aside the LA’s ruling,
employment and thus, filed a complaint for illegal the dispositive portion of which reads:
dismissal and damages against Abbott and its officers, WHEREFORE, the Decision of the Labor Arbiter dated 31
namely, Misa, Bernardo, Almazar, Walsh, Terrible, and March 2006 [sic] is hereby reversed, annulled and set
Feist.24 She claimed that she should have already been aside and judgment is hereby rendered:
considered as a regular and not a probationary 1. Finding respondents Abbot [sic] and individual
employee given Abbott’s failure to inform her of the respondents to have committed illegal dismissal;
reasonable standards for her regularization upon her 2. Respondents are ordered to immediately reinstate
engagement as required under Article 29525 of the Labor complainant to her former position without loss of
Code. In this relation, she contended that while her seniority rights immediately upon receipt hereof;
employment contract stated that she was to be 3. To jointly and severally pay complainant backwages
engaged on a probationary status, the same did not computed from 16 May 2005 until finality of this
indicate the standards on which her regularization decision. As of the date hereof the backwages is
would be based.26 She further averred that the computed at
individual petitioners maliciously connived to illegally a. Backwages for 15 PhP
dismiss her when: (a) they threatened her with months - 1,650,000.00
termination; (b) she was ordered not to enter company
premises even if she was still an employee thereof; and b. 13th month pay - 110,000.00
(c) they publicly announced that she already resigned in
order to humiliate her.27 PhP
TOTAL
1,760,000.00
On the contrary, petitioners maintained that Alcaraz 4. Respondents are ordered to pay complainant moral
was validly terminated from her probationary damages of ₱50,000.00 and exemplary damages of
employment given her failure to satisfy the prescribed ₱50,000.00.
standards for her regularization which were made 5. Respondents are also ordered to pay attorney’s fees
known to her at the time of her engagement.28 of 10% of the total award.
6. All other claims are dismissed for lack of merit.
The LA Ruling SO ORDERED.35
In a Decision dated March 30, 2006,29 the LA dismissed
Alcaraz’s complaint for lack of merit. The NLRC reversed the findings of the LA and ruled that
there was no evidence showing that Alcaraz had been
The LA rejected Alcaraz’s argument that she was not apprised of her probationary status and the
informed of the reasonable standards to qualify as a requirements which she should have complied with in
regular employee considering her admissions that she order to be a regular employee.36 It held that Alcaraz’s
was briefed by Almazar on her work during her pre- receipt of her job description and Abbott’s Code of
employment orientation meeting30 and that she Conduct and Performance Modules was not equivalent
received copies of Abbott’s Code of Conduct and to her being actually informed of the performance
Performance Modules which were used for evaluating standards upon which she should have been evaluated
all types of Abbott employees.31 As Alcaraz was unable on.37 It further observed that Abbott did not comply
to meet the standards set by Abbott as per her with its own standard operating procedure in evaluating
performance evaluation, the LA ruled that the probationary employees.38 The NLRC was also not
termination of her probationary employment was convinced that Alcaraz was terminated for a valid cause
justified.32 Lastly, the LA found that there was no
3
given that petitioners’ allegation of Alcaraz’s "poor While the petitioners’ motion for reconsideration of the
performance" remained unsubstantiated.39 CA’s May 18, 2010 Resolution was pending, Alcaraz
again moved for the issuance of a writ of execution
Petitioners filed a motion for reconsideration which was before the LA. On June 7, 2010, petitioners received the
denied by the NLRC in a Resolution dated July 31, LA’s order granting Alcaraz’s motion for execution
2007.40 which they in turn appealed to the NLRC – through a
Memorandum of Appeal dated June 16, 2010 (June 16,
Aggrieved, petitioners filed with the CA a Petition for 2010 Memorandum of Appeal ) – on the ground that
Certiorari with Prayer for Issuance of a Temporary the implementation of the LA’s order would render its
Restraining Order and/or Writ of Preliminary Injunction, motion for reconsideration moot and academic.50
docketed as CA G.R. SP No. 101045 (First CA Petition),
alleging grave abuse of discretion on the part of NLRC Meanwhile, petitioners’ motion for reconsideration of
when it ruled that Alcaraz was illegally dismissed.41 the CA’s May 18, 2010 Resolution in the Second CA
Petition was denied via a Resolution dated October 4,
Pending resolution of the First CA Petition, Alcaraz 2010.51 This attained finality on January 10, 2011 for
moved for the execution of the NLRC’s Decision before petitioners’ failure to timely appeal the same.52 Hence,
the LA, which petitioners strongly opposed. The LA as it stands, only the issues in the First CA petition are
denied the said motion in an Order dated July 8, 2008 left to be resolved.
which was, however, eventually reversed on appeal by
the NLRC.42 Due to the foregoing, petitioners filed Incidentally, in her Comment dated November 15, 2010,
another Petition for Certiorari with the CA, docketed as Alcaraz also alleges that petitioners were guilty of
CA G.R. SP No. 111318 (Second CA Petition), assailing forum shopping when they filed the Second CA Petition
the propriety of the execution of the NLRC decision.43 pending the resolution of their motion for
reconsideration of the CA’s December 10, 2009 Decision
The CA Ruling i.e., the decision in the First CA Petition.53 She also
With regard to the First CA Petition, the CA, in a contends that petitioners have not complied with the
Decision44 dated December 10, 2009, affirmed the ruling certification requirement under Section 5, Rule 7 of the
of the NLRC and held that the latter did not commit any Rules of Court when they failed to disclose in the instant
grave abuse of discretion in finding that Alcaraz was petition the filing of the June 16, 2010 Memorandum of
illegally dismissed. Appeal filed before the NLRC.54

It observed that Alcaraz was not apprised at the start of The Issues Before the Court
her employment of the reasonable standards under The following issues have been raised for the Court’s
which she could qualify as a regular employee.45 This resolution: (a) whether or not petitioners are guilty of
was based on its examination of the employment forum shopping and have violated the certification
contract which showed that the same did not contain requirement under Section 5, Rule 7 of the Rules of
any standard of performance or any stipulation that Court; (b) whether or not Alcaraz was sufficiently
Alcaraz shall undergo a performance evaluation before informed of the reasonable standards to qualify her as a
she could qualify as a regular employee.46 It also found regular employee; (c) whether or not Alcaraz was validly
that Abbott was unable to prove that there was any terminated from her employment; and (d) whether or
reasonable ground to terminate Alcaraz’s not the individual petitioners herein are liable.
employment. Abbott moved for the reconsideration of
47

the aforementioned ruling which was, however, denied The Court’s Ruling
by the CA in a Resolution48 dated June 9, 2010. A. Forum Shopping and
Violation of Section 5, Rule 7 of the Rules of Court.
The CA likewise denied the Second CA Petition in a At the outset, it is noteworthy to mention that the
Resolution dated May 18, 2010 (May 18, 2010 prohibition against forum shopping is different from a
Resolution) and ruled that the NLRC was correct in violation of the certification requirement under Section
upholding the execution of the NLRC Decision.49 Thus, 5, Rule 7 of the Rules of Court. In Sps. Ong v. CA,55 the
petitioners filed a motion for reconsideration. Court explained that:

4
x x x The distinction between the prohibition against In this regard, Section 5(b), Rule 7 of the Rules of Court
forum shopping and the certification requirement requires that a plaintiff who files a case should provide
should by now be too elementary to be misunderstood. a complete statement of the present status of any
To reiterate, compliance with the certification against pending case if the latter involves the same issues as
forum shopping is separate from and independent of the one that was filed. If there is no such similar
the avoidance of the act of forum shopping itself. There pending case, Section 5(a) of the same rule provides
is a difference in the treatment between failure to that the plaintiff is obliged to declare under oath that to
comply with the certification requirement and violation the best of his knowledge, no such other action or claim
of the prohibition against forum shopping not only in is pending.
terms of imposable sanctions but also in the manner of
enforcing them. The former constitutes sufficient cause Records show that the issues raised in the instant
for the dismissal without prejudice to the filing of the petition and those in the June 16, 2010 Memorandum
complaint or initiatory pleading upon motion and after of Appeal filed with the NLRC likewise cover different
hearing, while the latter is a ground for summary subject matters and causes of action. In this case, the
dismissal thereof and for direct contempt. x x x. 56 validity of Alcaraz’s dismissal is at issue whereas in the
said Memorandum of Appeal, the propriety of the
As to the first, forum shopping takes place when a issuance of a writ of execution was in question.
litigant files multiple suits involving the same parties,
either simultaneously or successively, to secure a Thus, given the dissimilar issues, petitioners did not
favorable judgment. It exists where the elements of litis have to disclose in the present petition the filing of their
pendentia are present, namely: (a) identity of parties, or June 16, 2010 Memorandum of Appeal with the NLRC.
at least such parties who represent the same interests In any event, considering that the issue on the propriety
in both actions; (b) identity of rights asserted and relief of the issuance of a writ of execution had been resolved
prayed for, the relief being founded on the same facts; in the Second CA Petition – which in fact had already
and (c) the identity with respect to the two preceding attained finality – the matter of disclosing the June 16,
particulars in the two (2) cases is such that any 2010 Memorandum of Appeal is now moot and
judgment that may be rendered in the pending case, academic.
regardless of which party is successful, would amount
to res judicata in the other case.57 Having settled the foregoing procedural matter, the
Court now proceeds to resolve the substantive issues.
In this case, records show that, except for the element
of identity of parties, the elements of forum shopping B. Probationary employment;
do not exist. Evidently, the First CA Petition was grounds for termination.
instituted to question the ruling of the NLRC that A probationary employee, like a regular employee,
Alcaraz was illegally dismissed. On the other hand, the enjoys security of tenure. However, in cases of
Second CA Petition pertains to the propriety of the probationary employment, aside from just or
enforcement of the judgment award pending the authorized causes of termination, an additional ground
resolution of the First CA Petition and the finality of the is provided under Article 295 of the Labor Code, i.e., the
decision in the labor dispute between Alcaraz and the probationary employee may also be terminated for
petitioners. Based on the foregoing, a judgment in the failure to qualify as a regular employee in accordance
Second CA Petition will not constitute res judicata with the reasonable standards made known by the
insofar as the First CA Petition is concerned. Thus, employer to the employee at the time of the
considering that the two petitions clearly cover engagement.59 Thus, the services of an employee who
different subject matters and causes of action, there has been engaged on probationary basis may be
exists no forum shopping. terminated for any of the following: (a) a just or (b) an
authorized cause; and (c) when he fails to qualify as a
As to the second, Alcaraz further imputes that the regular employee in accordance with reasonable
petitioners violated the certification requirement under standards prescribed by the employer.60
Section 5, Rule 7 of the Rules of Court58 by not disclosing
the fact that it filed the June 16, 2010 Memorandum of Corollary thereto, Section 6(d), Rule I, Book VI of the
Appeal before the NLRC in the instant petition. Implementing Rules of the Labor Code provides that if
5
the employer fails to inform the probationary employee her of these standards and thus, maintains that she is a
of the reasonable standards upon which the regular and not a mere probationary employee.
regularization would be based on at the time of the The Court finds petitioners’ assertions to be well-taken.
engagement, then the said employee shall be deemed a A punctilious examination of the records reveals that
regular employee, viz.: Abbott had indeed complied with the above-stated
(d) In all cases of probationary employment, the requirements. This conclusion is largely impelled by the
employer shall make known to the employee the fact that Abbott clearly conveyed to Alcaraz her duties
standards under which he will qualify as a regular and responsibilities as Regulatory Affairs Manager prior
employee at the time of his engagement. Where no to, during the time of her engagement, and the
standards are made known to the employee at that incipient stages of her employment. On this score, the
time, he shall be deemed a regular employee. Court finds it apt to detail not only the incidents which
point out to the efforts made by Abbott but also those
In other words, the employer is made to comply with circumstances which would show that Alcaraz was well-
two (2) requirements when dealing with a probationary apprised of her employer’s expectations that would, in
employee: first, the employer must communicate the turn, determine her regularization:
regularization standards to the probationary employee; (a) On June 27, 2004, Abbott caused the publication in a
and second, the employer must make such major broadsheet newspaper of its need for a
communication at the time of the probationary Regulatory Affairs Manager, indicating therein the job
employee’s engagement. If the employer fails to comply description for as well as the duties and responsibilities
with either, the employee is deemed as a regular and attendant to the aforesaid position; this prompted
not a probationary employee. Alcaraz to submit her application to Abbott on October
4, 2004;
Keeping with these rules, an employer is deemed to (b) In Abbott’s December 7, 2004 offer sheet, it was
have made known the standards that would qualify a stated that Alcaraz was to be employed on a
probationary employee to be a regular employee when probationary status;
it has exerted reasonable efforts to apprise the (c) On February 12, 2005, Alcaraz signed an
employee of what he is expected to do or accomplish employment contract which specifically stated, inter
during the trial period of probation. This goes without alia, that she was to be placed on probation for a period
saying that the employee is sufficiently made aware of of six (6) months beginning February 15, 2005 to August
his probationary status as well as the length of time of 14, 2005;
the probation. (d) On the day Alcaraz accepted Abbott’s employment
offer, Bernardo sent her copies of Abbott’s
The exception to the foregoing is when the job is self- organizational structure and her job description through
descriptive in nature, for instance, in the case of maids, e-mail;
cooks, drivers, or messengers.61 Also, in Aberdeen (e) Alcaraz was made to undergo a pre-employment
Court, Inc. v. Agustin,62 it has been held that the rule on orientation where Almazar informed her that she had to
notifying a probationary employee of the standards of implement Abbott’s Code of Conduct and office policies
regularization should not be used to exculpate an on human resources and finance and that she would be
employee who acts in a manner contrary to basic reporting directly to Walsh;
knowledge and common sense in regard to which there (f) Alcaraz was also required to undergo a training
is no need to spell out a policy or standard to be met. In program as part of her orientation;
the same light, an employee’s failure to perform the (g) Alcaraz received copies of Abbott’s Code of Conduct
duties and responsibilities which have been clearly and Performance Modules from Misa who explained to
made known to him constitutes a justifiable basis for a her the procedure for evaluating the performance of
probationary employee’s non-regularization. probationary employees; she was further notified that
Abbott had only one evaluation system for all of its
In this case, petitioners contend that Alcaraz was employees; and
terminated because she failed to qualify as a regular (h) Moreover, Alcaraz had previously worked for
employee according to Abbott’s standards which were another pharmaceutical company and had admitted to
made known to her at the time of her engagement. have an "extensive training and background" to acquire
Contrarily, Alcaraz claims that Abbott never apprised the necessary skills for her job.63
6
Considering the totality of the above-stated C. Probationary employment;
circumstances, it cannot, therefore, be doubted that termination procedure.
Alcaraz was well-aware that her regularization would A different procedure is applied when terminating a
depend on her ability and capacity to fulfill the probationary employee; the usual two-notice rule does
requirements of her position as Regulatory Affairs not govern.65 Section 2, Rule I, Book VI of the
Manager and that her failure to perform such would Implementing Rules of the Labor Code states that "if the
give Abbott a valid cause to terminate her probationary termination is brought about by the x x x failure of an
employment. employee to meet the standards of the employer in
case of probationary employment, it shall be sufficient
Verily, basic knowledge and common sense dictate that that a written notice is served the employee, within a
the adequate performance of one’s duties is, by and of reasonable time from the effective date of
itself, an inherent and implied standard for a termination."
probationary employee to be regularized; such is a
regularization standard which need not be literally As the records show, Alcaraz's dismissal was effected
spelled out or mapped into technical indicators in every through a letter dated May 19, 2005 which she received
case. In this regard, it must be observed that the on May 23, 2005 and again on May 27, 2005. Stated
assessment of adequate duty performance is in the therein were the reasons for her termination, i.e., that
nature of a management prerogative which when after proper evaluation, Abbott determined that she
reasonably exercised – as Abbott did in this case – failed to meet the reasonable standards for her
should be respected. This is especially true of a regularization considering her lack of time and people
managerial employee like Alcaraz who was tasked with management and decision-making skills, which are
the vital responsibility of handling the personnel and necessary in the performance of her functions as
important matters of her department. Regulatory Affairs Manager.66 Undeniably, this written
notice sufficiently meets the criteria set forth above,
In fine, the Court rules that Alcaraz’s status as a thereby legitimizing the cause and manner of Alcaraz’s
probationary employee and her consequent dismissal dismissal as a probationary employee under the
must stand. Consequently, in holding that Alcaraz was parameters set by the Labor Code.67
illegally dismissed due to her status as a regular and not
a probationary employee, the Court finds that the NLRC D. Employer’s violation of company policy and
committed a grave abuse of discretion. procedure.
Nonetheless, despite the existence of a sufficient
To elucidate, records show that the NLRC based its ground to terminate Alcaraz’s employment and
decision on the premise that Alcaraz’s receipt of her job Abbott’s compliance with the Labor Code termination
description and Abbott’s Code of Conduct and procedure, it is readily apparent that Abbott breached
Performance Modules was not equivalent to being its contractual obligation to Alcaraz when it failed to
actually informed of the performance standards upon abide by its own procedure in evaluating the
which she should have been evaluated on.64 It, however, performance of a probationary employee.
overlooked the legal implication of the other attendant
circumstances as detailed herein which should have Veritably, a company policy partakes of the nature of an
warranted a contrary finding that Alcaraz was indeed a implied contract between the employer and employee.
probationary and not a regular employee – more In Parts Depot, Inc. v. Beiswenger,68 it has been held
particularly the fact that she was well-aware of her that:
duties and responsibilities and that her failure to Employer statements of policy . . . can give rise to
adequately perform the same would lead to her non- contractual rights in employees without evidence that
regularization and eventually, her termination. the parties mutually agreed that the policy statements
Accordingly, by affirming the NLRC’s pronouncement would create contractual rights in the employee, and,
which is tainted with grave abuse of discretion, the CA hence, although the statement of policy is signed by
committed a reversible error which, perforce, neither party, can be unilaterally amended by the
necessitates the reversal of its decision. employer without notice to the employee, and contains
no reference to a specific employee, his job description
or compensation, and although no reference was made
7
to the policy statement in pre-employment interviews which the latter’s labor rights and duties would, to
and the employee does not learn of its existence until some extent, depend.
after his hiring. Toussaint, 292 N.W .2d at 892. The In this light, while there lies due cause to terminate
principle is akin to estoppel. Once an employer Alcaraz’s probationary employment for her failure to
establishes an express personnel policy and the meet the standards required for her regularization, and
employee continues to work while the policy remains in while it must be further pointed out that Abbott had
effect, the policy is deemed an implied contract for so satisfied its statutory duty to serve a written notice of
long as it remains in effect. If the employer unilaterally termination, the fact that it violated its own company
changes the policy, the terms of the implied contract procedure renders the termination of Alcaraz’s
are also thereby changed. (Emphasis and underscoring
1âwphi1 employment procedurally infirm, warranting the
supplied.) payment of nominal damages. A further exposition is
apropos.
Hence, given such nature, company personnel policies
create an obligation on the part of both the employee Case law has settled that an employer who terminates
and the employer to abide by the same. an employee for a valid cause but does so through
invalid procedure is liable to pay the latter nominal
Records show that Abbott’s PPSE procedure mandates, damages.
inter alia, that the job performance of a probationary
employee should be formally reviewed and discussed In Agabon v. NLRC (Agabon),71 the Court pronounced
with the employee at least twice: first on the third that where the dismissal is for a just cause, the lack of
month and second on the fifth month from the date of statutory due process should not nullify the dismissal,
employment. Abbott is also required to come up with a or render it illegal, or ineffectual. However, the
Performance Improvement Plan during the third month employer should indemnify the employee for the
review to bridge the gap between the employee’s violation of his statutory rights.72 Thus, in Agabon, the
performance and the standards set, if any.69 In addition, employer was ordered to pay the employee nominal
a signed copy of the PPSE form should be submitted to damages in the amount of ₱30,000.00.73
Abbott’s HRD as the same would serve as basis for
recommending the confirmation or termination of the Proceeding from the same ratio, the Court modified
probationary employment.70 Agabon in the case of Jaka Food Processing Corporation
v. Pacot (Jaka)74 where it created a distinction between
In this case, it is apparent that Abbott failed to follow procedurally defective dismissals due to a just cause, on
the above-stated procedure in evaluating Alcaraz. For one hand, and those due to an authorized cause, on the
one, there lies a hiatus of evidence that a signed copy of other.
Alcaraz’s PPSE form was submitted to the HRD. It was
not even shown that a PPSE form was completed to It was explained that if the dismissal is based on a just
formally assess her performance. Neither was the cause under Article 282 of the Labor Code (now Article
performance evaluation discussed with her during the 296) but the employer failed to comply with the notice
third and fifth months of her employment. Nor did requirement, the sanction to be imposed upon him
Abbott come up with the necessary Performance should be tempered because the dismissal process was,
Improvement Plan to properly gauge Alcaraz’s in effect, initiated by an act imputable to the employee;
performance with the set company standards. if the dismissal is based on an authorized cause under
While it is Abbott’s management prerogative to Article 283 (now Article 297) but the employer failed to
promulgate its own company rules and even comply with the notice requirement, the sanction
subsequently amend them, this right equally demands should be stiffer because the dismissal process was
that when it does create its own policies and thereafter initiated by the employer’s exercise of his management
notify its employee of the same, it accords upon itself prerogative.75 Hence, in Jaka, where the employee was
the obligation to faithfully implement them. Indeed, a dismissed for an authorized cause of retrenchment76 –
contrary interpretation would entail a disharmonious as contradistinguished from the employee in Agabon
relationship in the work place for the laborer should who was dismissed for a just cause of neglect of duty77 –
never be mired by the uncertainty of flimsy rules in the Court ordered the employer to pay the employee
nominal damages at the higher amount of ₱50,000.00.
8
Evidently, the sanctions imposed in both Agabon and further attributes the loss of some of her remaining
Jaka proceed from the necessity to deter employers belongings to them.81
from future violations of the statutory due process Alcaraz’s contention fails to persuade.
rights of employees.78 In similar regard, the Court deems A judicious perusal of the records show that other than
it proper to apply the same principle to the case at bar her unfounded assertions on the matter, there is no
for the reason that an employer’s contractual breach of evidence to support the fact that the individual
its own company procedure – albeit not statutory in petitioners herein, in their capacity as Abbott’s officers
source – has the parallel effect of violating the laborer’s and employees, acted in bad faith or were motivated by
rights. Suffice it to state, the contract is the law ill will in terminating
between the parties and thus, breaches of the same
impel recompense to vindicate a right that has been Alcaraz’s services. The fact that Alcaraz was made to
violated. Consequently, while the Court is wont to resign and not allowed to enter the workplace does not
uphold the dismissal of Alcaraz because a valid cause necessarily indicate bad faith on Abbott’s part since a
exists, the payment of nominal damages on account of sufficient ground existed for the latter to actually
Abbott’s contractual breach is warranted in accordance proceed with her termination. On the alleged loss of her
with Article 2221 of the Civil Code.79 personal belongings, records are bereft of any showing
that the same could be attributed to Abbott or any of its
Anent the proper amount of damages to be awarded, officers. It is a well-settled rule that bad faith cannot be
the Court observes that Alcaraz’s dismissal proceeded presumed and he who alleges bad faith has the onus of
from her failure to comply with the standards required proving it. All told, since Alcaraz failed to prove any
for her regularization. As such, it is undeniable that the malicious act on the part of Abbott or any of its officers,
dismissal process was, in effect, initiated by an act the Court finds the award of moral or exemplary
imputable to the employee, akin to dismissals due to damages unwarranted.
just causes under Article 296 of the Labor Code.
Therefore, the Court deems it appropriate to fix the WHEREFORE, the petition is GRANTED. The Decision
amount of nominal damages at the amount of dated December 10, 2009 and Resolution dated June 9,
₱30,000.00, consistent with its rulings in both Agabon 2010 of the Court of Appeals in CA-G.R. SP No. 101045
and Jaka. are hereby REVERSED and SET ASIDE. Accordingly, the
Decision dated March 30, 2006 of the Labor Arbiter is
E. Liability of individual petitioners as corporate REINSTATED with the MODIFICATION that petitioner
officers. Abbott Laboratories, Philippines be ORDERED to pay
It is hornbook principle that personal liability of respondent Pearlie Ann F. Alcaraz nominal damages in
corporate directors, trustees or officers attaches only the amount of ₱30,000.00 on account of its breach of
when: (a) they assent to a patently unlawful act of the its own company procedure.
corporation, or when they are guilty of bad faith or SO ORDERED.
gross negligence in directing its affairs, or when there is ESTELA M. PERLAS-BERNABE
a conflict of interest resulting in damages to the Associate Justice
corporation, its stockholders or other persons; (b) they
consent to the issuance of watered down stocks or
when, having knowledge of such issuance, do not
forthwith file with the corporate secretary their written
objection; (c) they agree to hold themselves personally
and solidarily liable with the corporation; or (d) they are
made by specific provision of law personally answerable
for their corporate action.80

In this case, Alcaraz alleges that the individual


petitioners acted in bad faith with regard to the
supposed crude manner by which her probationary
employment was terminated and thus, should be held
liable together with Abbott. In the same vein, she
9