Moral vs. MPMC

G.R. No. 226240, 6 March 2019

Facts of the case:

Petitioner was hired as probationary employee with her designation being that of a Leasing Assistant. Six months after her employment, she was informed of her dismissal and was advised to no longer report for work. Upon inquiring the reason for her dismissal, respondent coldly ignored her query and thereafter, no longer contacted her. She contended that respondent failed to provide any notice or justifiable cause as to why her employment was being severed.

According to respondent, in line with the provisions of their Employment Agreement, petitioner was subjected to the respondent's evaluation procedure on the fifth month of her employment. Petitioner was requested to report to the head office for the purpose of discussing her poor evaluation scores. Unfortunately, petitioner disregarded the same.

The Labor Arbiter rendered a decision in favor of petitioner stating that the latter was illegally dismissed. The NLRC upheld the view of the Labor Arbiter that respondent failed to defend its argument that it did not dismiss petitioner. The CA granted the petition and annulled and set aside the decision of the NLRC. However, for failure to observe procedural due process, the petitioner is hereby directed to pay nominal damages to private respondent in the amount of Php 30,000.00.

Issue:

1. Whether or not petitioner, as probationary employee was illegally dismissed by respondent.

2. Whether or not respondent is liable for nominal damages.

Ruling of the Court:

1. The Court ruled that petitioner was not illegally dismissed from her employment as probationary employee. There is no question that petitioner was hired by respondent as a probationary employee of respondent based on the employment agreement the parties executed. Petitioner was well-aware that her regularization would depend on her ability and capacity to fulfill the requirements of her position and that her failure to perform such would give respondent a valid cause to terminate her probationary employment.

Petitioner was well-aware that her regularization would depend on her ability and capacity to fulfill the requirements of her position and that her failure to perform such would give respondent a valid cause to terminate her probationary employment.

The records reveal that petitioner failed to comply with the regularization standards of respondent made known to her at the time of her engagement. Petitioner's performance evaluation was substandard, as evinced by her dismal scores in a series of aptitude tests she took before the end of her six-month probationary period. In the Employee's Performance Summary which is part of her Performance Appraisal Report, petitioner's scores for her quantitative and qualitative performance and results under the developmental assessment portion fell under the rating norm for below average.

Based on the above-mentioned test results, respondent was only exercising its statutory hiring prerogative when it refused to hire petitioner on a permanent basis, upon the expiration of her six-month probationary period. It is a well-established principle that an employer has the right or is at liberty to choose who will be hired and who will be denied employment. Accordingly, it is within the exercise of the right to select one's employees that an employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before the former is hired on a permanent basis. As long as the employer has made known to the employee the regularization standards at the time of the employee's engagement, the refusal of the former to regularize the latter, by reason of the latter's failure to comply with the regularization standards, is within the ambit of the law.

2. Respondent is liable for nominal damages. While respondent had the right to terminate petitioner's employment, and not to accord her the status of a regular employee, the manner by which petitioner's dismissal was carried out was not in accordance with the standards set forth under the law.

With respect to the termination of a probationary employee, a different procedure is applied – the usual two-notice rule does not govern. Thus, Section 2, Rule I, Book VI, as amended by Department Order No. 147-15, of the Omnibus Rules Implementing the Labor Code governs the procedure for the termination of a probationary employee, to wit:

Section 2. Security of Tenure. —

x x x x

If the termination is brought about by the x x x 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.

A perusal of the records reveals that petitioner's dismissal was effected through a series of text messages from her immediate supervisor, instead of the above-mentioned mandated procedure. As correctly pointed out by the Court of Appeals, the Notice of AWOL issued by respondent was nothing more than an afterthought, considering it was furnished to petitioner on 7 January 2014 or five days after she was informed of her dismissal. Hence, in view of the procedural infirmity attending the termination of petitioner, respondent is liable to pay nominal damages.

With respect to the proper amount of damages to be awarded in the instant case, the Court notes that petitioner's dismissal proceeded from her failure to comply with the standards required for her regularization. Hence, it is indisputable that the dismissal process was, in effect, initiated by an act imputable to the employee, akin to dismissals due to just causes under Article 297 of the Labor Code. Therefore, the Court deems it appropriate to fix the amount of nominal damages in the sum of P30,000.00, consistent with its ruling in Agabon v. National Labor Relations Commission.

Good notes on this case:

Probationary employee

- A probationary employee is one who is placed on trial by an employer, during which the latter determines whether or not the former is qualified for permanent employment. By virtue of a probationary employment, an employer is given an opportunity to observe the fitness and competency of a probationary employee while at work. During the probationary period of employment, an employer has the right or is at liberty to decide who will be hired and who will be denied employment.

- The essence of a probationary period of employment lies primordially in the purpose or objective of both the employer and the employee during such period. While the employer observes the fitness, propriety, and efficiency of a probationary employee, in order to ascertain whether or not such person is qualified for regularization, the latter seeks to prove to the former that he or she has the qualifications and proficiency to meet the reasonable standards for permanent employment.

- As a general rule, probationary employment cannot exceed six months. Otherwise, the employee concerned shall be regarded as a regular employee. Moreover, it is indispensable in probationary employment that the employer informs the employee of the reasonable standards that will be used as basis for his or her regularization at the time of his or her engagement. In the event that the employer fails to comply with the aforementioned, then the employee is considered a regular employee.

- A probationary employee enjoys security of tenure, although it is not on the same plane as that of a permanent employee. Other than being terminated for a just or authorized cause, a probationary employee may also be dismissed due to his or her failure to qualify in accordance with the standards of the employer made known to him or her at the time of his or her engagement. Hence, the services of a probationary employee may be terminated for any of the following: (1) a just cause; (2) an authorized cause; and (3) when he or she fails to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer.

- In connection with the above-mentioned, Section 6(d), Rule I, Book VI, as amended by Department Order No. 147-15, of the Omnibus Rules Implementing the Labor Code of the Philippines (Labor Code) provides the following:

x x x x

(d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee.

- In other words, the employer is mandated to comply with two requirements when dealing with a probationary employee, viz: (1) the employer must communicate the regularization standards to the probationary employee; and (2) the employer must make such communication at the time of the probationary employee's engagement. If the employer fails to abide by any of the aforementioned obligations, the employee is deemed as a regular, and not a probationary employee. An employer is deemed to have made known the regularization standards when it has exerted reasonable efforts to apprise the employee of what he or she is expected to do or accomplish during the trial period of probation. The exception to the foregoing is when the job is self-descriptive in nature, such as in the case of maids, cooks, drivers, and messengers.

Two-notice rule in termination

- The aforesaid two-notice rule is that which is found under Article 292(b) of the Labor Code, as amended by Section 33 of Republic Act No. 10151, viz:

Article 292. Miscellaneous Provisions. —

x x x x

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 (now, Article 298) of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the cause for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. x x x.

- The aforementioned procedure is also found in Section 2, Rule I, Book VI, as amended by Department Order No. 147-15, of the Omnibus Rules Implementing the Labor Code which states:

Section 2. Security of Tenure. —

x x x x

In all cases of termination of employment, the following standards of due process shall be substantially observed:

For termination of employment based on just causes as defined in Article 288 (now, Article 297) of the Labor Code:

(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side.

(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires, is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him.

(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

x x x x

Agabon Doctrine

- Termination of employment with just cause but with procedural infirmity shall not render the dismissal ineffective. However, the employer shall be liable for nominal damages in the amount of Php 30,000.00.

- In the case of Agabon v. National Labor Relations Commission, the Court pronounced that, where the dismissal is for a just cause, the lack of statutory due process should not nullify the dismissal, or render it illegal or ineffectual. Nevertheless, the employer should indemnify the employee for the violation of his statutory rights. The violation of the employee's right to statutory due process by the employer warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. The payment of nominal damages would serve to deter employers from future violations of the statutory due process rights of employees. It likewise provides a vindication or recognition of the fundamental right to due process accorded to employees under the Labor Code and its Omnibus Implementing Rules.

Rules of Court

- It is a well-established rule that the Court is not a trier of facts. The function of the Court in a petition for review on certiorari under Rule 45 of the Rules of Court is limited to questions of law. However, this rule admits of exceptions, to wit: (1) the conclusion is grounded on speculations, surmises or conjectures; (2) the inference is manifestly mistaken, absurd or impossible; (3) there is grave abuse of discretion; (4) the judgment is based on misapprehension of facts; (5) the findings of fact are conflicting; (6) there is no citation of specific evidence on which the factual findings are based; (7) the findings of absence of facts are contradicted by the presence of evidence on record; (8) the findings of the Court of Appeals are contrary to those of the trial court; (9) the Court of Appeals manifestly overlooked certain relevant and undisputed facts that, if properly considered, would justify a different conclusion; (10) the findings of the Court of Appeals are beyond the issues of the case; and (11) such findings are contrary to the admissions of both parties.