.R. No. L-63316 July 31, 1984 ILUMINADA VER BUISER, MA. CECILIA RILLOACUA and MA.

MERCEDES P. INTENGAN, petitioners, vs. HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of the Ministry of Labor & Employment, and GENERAL TELEPHONE DIRECTORY, CO., respondents. GUERRERO, J.: This is a petition for certiorari seeking to set aside the Order of the Deputy Minister of Labor and Employment, affirming the Order of the Regional Director, National Capital Region, in Case No. NCR-STF-5-2851-81, which dismissed the petitioners' complainant for alleged illegal dismissal and unpaid commission. 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. 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. Among others, the "Employment Contract (On Probationary Status)" included the following common provisions: l. 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 darung 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. Corollary to this, the 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. The records show that the private respondent terminated the services of petitioners Iluminada Ver Buiser and Cecilia RilloAcuna on May 14, 1981 and petitioner Ma. Mercedes P. Intengan on May 18, 1981 for their failure to meet their sales quotas.

Thus, on May 27, 1981, petitioners filed with the National Capital Region, Ministry of Labor and Employment, a complaint for illegal dismissal with claims for backwages, earned commissions and other benefits, docketed as Case No. NCR-STF-5-2851-81. The Regional Director of said ministry, in an Order dated September 21, 1982, dismissed the complaints of the petitioners, except the claim for allowances which private respondent was ordered to pay. A reconsideration of the Order was sought by the petitioners in a motion filed on September 30, 1982. This motion, however, was treated as an appeal to the Minister of Labor. On appeal, Deputy Minister Vicente Leogardo, Jr. of the Ministry of Labor issued an Order dated January 7, 1983, affirming the Regional Director's Order dated September 21, 1982, wherein it ruled that the petitioners have not attained permanent status since private respondent was justified in requiring a longer period of probation, and that the termination of petitioners' services was valid since the latter failed to meet their sales quotas. Hence, this petition for certiorari on the alleged ground that public respondent committed grave abuse of discretion amounting to lack of jurisdiction. Specifically, petitioners submit that: 1. The Hon. Regional Director and the Hon. Deputy Minister committed grave abuse of discretion amounting to lack of jurisdiction in ruling that the probationary employment of petitioners herein is eighteen (18) months instead of the mandated six (6) months under the Labor Code, and in consequently further ruling that petitioners are not entitled to security of tenure while under said probation for 18 months. 2. The Hon. Regional Director and the Hon. Deputy Minister committed grave abuse of discretion amounting to lack of jurisdiction in ruling that petitioners were dismissed for a just and valid cause. 3. The Hon. Regional Director and the Hon. Deputy Minister committed grave abuse of discretion amounting to lack of jurisdiction in ruling that petitioners are not entitled to the commissions they have earned and accrued during their period of employment. Petitioners contend that under Articles 281-282 of the Labor Code, having served the respondent company continuously for over six (6) months, they have become automatically regular employees notwithstanding an agreement to the contrary. Articles 281-282 read thus: Art. 282. Probationary Employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it iscCovered 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. (As amended by PD 850). Art. 281. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral

agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceeding paragraph. Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. (As amended by PD 850). It is petitioners' submission that probationary employment cannot exceed six (6) months, the only exception being apprenticeship and learnership agreements as provided in the Labor Code; that the Policy Instruction of the Minister of Labor and Employment nor any agreement of the parties could prevail over this mandatory requirement of the law; that this six months prescription of the Labor Code was mandated to give further efficacy to the constitutionally-guaranteed security of tenure of workers; and that the law does not allow any discretion on the part of the Minister of Labor and Employment to extend the probationary period for a longer period except in the aforecited instances. Finally, petitioners maintain that since they are regular employees, they can only be removed or dismissed for any of the just and valid causes enumerated under Article 283 of the Labor Code. We reject petitioners' contentions. They have no basis in law. 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. In the case at bar, it is shown that private respondent Company needs at least eighteen (18) months to determine the character and selling capabilities of the petitioners as sales representatives. The Company is engaged in advertisement and publication in the Yellow Pages of the PLDT Telephone Directories. Publication of solicited ads are only made a year after the sale has been made and only then win the company be able to evaluate the efficiency, conduct, and selling ability of its sales representatives, the evaluation being based on the published ads. Moreover, an eighteen month probationary period is recognized by the Labor Union in the private respondent company, which is Article V of the Collective Bargaining Agreement, ... thus: Probationary Period New employees hired for regular or permanent shall undergo a probationary or trial period of six (6) months, except in the cases of telephone or sales representatives where the probationary period shall be eighteen (I 8) months. And as indicated earlier, 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. We, therefore, hold and rule that the probationary employment of petitioners set to eighteen (18) months is legal and valid and that the Regional Director and the Deputy Minister of Labor and Employment committed no abuse of discretion in ruling accordingly. On the second assignment of error that public respondent committed grave abuse of discretion in ruling that petitioners were dismissed for a just and valid cause, this is not the first time that this issue has been raised before this Court. Earlier, in the case of "Arthur Golez vs. The National Labor Relations Commission and General Telephone Directory Co. "G.R. No. L-64459, July 25, 1983, the petition for certiorari which raised the same issue against the herein private respondent was dismissed by this Court for lack of merit. The practice of a company in laying off workers because they failed to make the work quota has been recognized in this jurisdiction. (Philippine American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634, 639). In the case at bar, the petitioners' failure to meet the sales quota assigned to each of them constitute a just cause of their dismissal, regardless of the permanent or probationary status of their employment. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the alloted reasonable period, or by producing unsatisfactory results. This management prerogative of requiring standards availed of so long as they are exercised in good faith for the advancement of the employer's interest. Petitioners anchor their claim for commission pay on the Collective Bargaining Agreement (CBA) of September 1981, in support of their third assignment of error.

Petitioners cannot avail of this agreement since their services had been terminated in May, 1981, at a time when the CBA of September, 1981 was not yet in existence. In fine, there is nothing in the records to show any abuse or misuse of power properly vested in the respondent Deputy Minister of Labor and Employment. For certiorari to lie, "there must be capricious, arbitrary and whimsical exercise of power, the very antithesis of the judicial prerogative inaccordance with centuries of both civil and common law traditions." (Panaligan vs. Adolfo, 67 SCRA 176, 180). The "abuse of discretion must be grave and patent, and it must be shown that the discretion was exercised arbitrarily or despotically." (Palma and Ignacio vs. Q. & S., Inc., et al., 17 SCRA 97, 100; Philippine Virginia Tobacco Administration vs. Lucero, 125 SCRA 337, 343). WHEREFORE, the petition is DISMISSED for lack of merit. SO ORDERED. G.R. No. 74004. August 10, 1989 A.M. ORETA & CO., INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and SIXTO GRULLA JR., respondents. Siguion Reyna, Montecillo & Ongsiako for petitioner

On September 18, 1980, respondent Grulla reported back to his Project Manager and presented to the latter a medical certificate declaring the former already fit for work. Since then, he started working again until he received a notice of termination of his employment on October 9, 1980. In December, 1981, respondent Grulla filed a complaint for illegal dismissal, recovery of medical benefits, unpaid wages for the unexpired ten (10) months of his contract and the sum of P1,000.00 as reimbursement of medical expenses against A.M. Oreta and Company, Inc., and Engineering Construction and Industrial Development Co. (ENDECO) with the Philippine Overseas Employment Administration (POEA).lwph1.t The petitioner A.M. Oreta and Company, Inc and ENDECO filed their answer and alleged that the contract of employment entered into between petitioners and Grulla provides, as one of the grounds for termination, violations of the rules and regulations promulgated by the contractor; and that Grulla was dismissed because he has not performed his duties satisfactorally within the probationary period of three months. On August 8, 1985, the POEA rendered a decision (pp. 97-107, Rollo) the dispositive portion of which states, inter alia: In view of the foregoing, this Office finds and so holds that complainants dismissal was illegal and warrants the award of his wages for the unexpired portion of the contract. 2. Anent the complainant's claim for medical expenses, this Office finds the same well-taken. Respondent did not deny either specifically or generally said claim. Hence, it is deemed admitted. Wherefore, judgment is hereby rendered ordering repondents A.M. Oreta and Company, Inc , and its foreign principal Engineering Construction and Industrial Development Company (ENDECO) jointly and severally to pay the complainant within ten (10) days from receipt of this Order the sum of THREE THOUSAND SEVEN HUNDRED U.S. DOLLARS (U.S.$ 3,700.00) or its equivalent at the time of payment representing complainant's salaries for the unexpired portion of his contract for ten (10) months and the sum of ONE THOUSAND PESOS ( P1,00.00 ) representing reimbursement of medical expenses. Respondent is likewise ordered to pay attorney's fees equivalent to ten (10%) percent of total award SO ORDERED. Petitioner appealed from the adverse decision to respondent Commission. On January 17, 1986, respondent Commission dismissed the appeal for lack of merit and affirmed in toto the decision of the POEA. On April 1, 1986, the instant petition was filed on the ground that the respondent Commission commited grave abuse of discretion in affirming the decision of the POEA. A temporary restraining order was issued by this court on April 23, 1986, enjoining the respondents from enforcing the questioned resolution of the respondent Commission.

MEDIALDEA, J.: This is a petition for certiorari under Rule 65 of the Rules of Court seeking annulment of the resolution of the respondents National Labor Relations Commission dated January 17, 1986 (p. 24, rollo) in BES Case no. 8-1371 entitled , "SIXTO GRULLA, JR., Complainant, versus A.M. ORETA & COMPANY INC. and/or ENGINEERING CONSTRUCTION & INDUSTRIAL DEVELOPMENT CO. (ENDECO), Respondents", affirming the decision of the Philippine Overseas Employment Administration (POEA) awarding to private respondents herein Sixto Grulla the salaries corresponding to the unexpired portion of his employment contract. The antecedent facts are as follows: Private respondent Grulla was engaged by Engineering Construction and Industrial Development Company (ENDECO) through A.M. Oreta and Co., Inc., as a carpenter in its projects in Jeddah, Saudi Arabia. The contract of employment, which was entered into June 11, 1980 was for a period of twelve (12) months. Respondent Grulla left the Philippines for Jeddah, Saudi Arabia on August 5, 1980. On August 15, 1980, Grulla met an accident which fractured his lumbar vertebra while working at the jobsite. He was rushed to the New Jeddah Clinic and was confined there for twelve (12) days. On August 27, 1980, Grulla was discharged from the hospital and was told that he could resume his normal duties after undergoing physical therapy for two weeks.

The issue to be resolved in the instant case are whether or not the employment of respondent Grulla was illegaly terminated by the petitioner; and whether or not the respondent Grulla is entitled to salaries corresponding to the unexpired portion of his employment contract. Petitioner contends that the respondent Grulla was validly dismissed because the latter was still a probationary employee; and that his dismissal was justified on the basis of his unsatisfactory performance of his job during the probationary period. This contention has no merit. Article 280 (formerly Article 281) of the Labor Code, as amended, provides: Article 280. Regular and Casual Employment The provisions of written agreement to the contrary not withstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desireable in the usual business or trade of employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employment or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, that any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. It may be well to cite at this point Policy Instructions No. 12 of the then Minister of Labor (Now Secretary of Labor and Employment) which provides: PD 850 has defined the concept of regular and casual employment. What determines regularity or casualness is not employment contract, written or otherwise, but the nature of the job. If the job is usually necessary or desireable to the main business of the employer, the employment is regular. . . Petitioner admitted that respondent Grulla was employed in the company as carpenter for a period of twelve (12) months before he was dismissed on October 9, 1980. A perusal of the employment contract reveals that although the period of employment of respondent Grulla is twelve (12) months, the contract is renewable subject to future agreements of the parties. It is clear from the employment contract that the respondent Grulla was hired by the company as a regular employee and not just mere probationary employee. On the matter of probationary employment, the law in point is Article 281 (formerly 282) of the Labor Code which provides in part: Art. 281 Probationary Employment . . .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 engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. (Italics supplied) The law is clear to the effect that in all cases involving employees engaged on probationary period basis, the employer shall make known to the employee at the time he is hired, the standards by which he will qualify as a regular employee. Nowhere in the employment contract executed between petitioner company and respondent Grulla is there a stipulation that the latter shall undergo a probationary period for three months before he can qualify as a regular employee. There is also no evidence on record showing that the respondent Grulla has been appraised of his probationary status and the requirements which he should comply in order to be a regular employee. In the absence of this requisites, there is justification in concluding that respondent Grulla was a regular employee at the time he was dismissed by petitioner. As such, he is entitled to security of tenure during his period of employment and his services cannot be terminated except for just and authorized causes enumerated under the Labor Code and under the employment contract. Granting, in gratia argumenti, that respondent is a probationary employee, he cannot, likewise, be removed except for cause during the period of probation. Although a probationary or temporary employee has limited tenure, he still enjoys security of tenure. During his tenure of employment or before his contract expires, he cannot be removed except for cause as provided by law (Euro-Linea Phils., Inc. v. NLRC, No. L-75782, December 1, 1987, 156 SCRA 78; Manila Hotel Corporation v. NLRC, No. L-53453, January 22, 1986, 141 SCRA 169).lwph1.t Article 282 of the Labor Code sets forth the following just causes for which an employer may terminate an employment, namely: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) other cause analogous to the foregoing The alleged ground of unsatisfactory performance relied upon by petitioner for dismissing respondent Grulla is not one of the just causes for dismissal provided in the Labor Code. Neither is it included among the grounds for termination of employment under Article VII of the contract of employment executed by petitioner company and respondent Grulla (p. 18, Rollo). Moreover, petitioner has failed to show proof of the particular acts or omissions constituting the unsatisfactory performance of Grulla of his duties, which was allegedly due to his poor physical state after the accident. Contrary to petitioner's claims, records show that the medical certificate issued by the hospital where respondent Grulla was confined as a result of the accident, clearly and positively stated that Grulla was

already physically fit for work after he was released from the hospital (p. 102, Rollo).lwph1.t Anent the respondent Commission's finding of lack of due process in the dismissal of Grulla, the petitioner claims that notice and hearing are important only if the employee is not aware of the problems affecting his employment; that the same is not true in the instant case where respondent Grulla knew all along that he could no longer effectively perform his job due to his physical condition. We find that this contention has no legal basis. The twin requirements of notice and hearing constitute essential elements of due process in cases of employee dismissal: the requirement of notice is intended to inform the employee concerned of the employer's intent to dismiss and the reason for the proposed dismissal, while the requirement of hearing affords the employee an opportunity to answer his employer's charges against him and accordingly to defend himself therefrom before dismissal is effected. Neither of these requirements can be dispensed with without running afoul of the due process requirement of the Constitution (Century Textile Mills, Inc., et al. v. NLRC, et al., G.R. No. 77859, May 25,1988). In the case at bar, respondent Grulla was not, in any manner, notified of the charges against him before he was outrightly dismissed. Neither was any hearing or investigation conducted by the company to give the respondent a chance to be heard concerning the alleged unsatisfactory performance of his work. In view of the foregoing, the dismissal of respondent Grulla violated the security of tenure under the contract of employment which specifically provides that the contract term shall be for a period of twelve (12) calendar months. Consequently the respondent Grulla should be paid his salary for the unexpired portion of his contract of employment which is ten (10) months (See Cuales v. NLRC, et al., No. L-57379 April 28, 1983, 121 SCRA 812). The findings of the POEA and the respondent Commission that the respondent Grulla is entitled to salaries in the amount of US$ 3,700.00 or its equivalent in Philippine currency for the unexpired portion of his contract and the sum of P1,000.00 as reimbursement of medical expenses bear great weight. Well-established is the principle that findings of administrative agencies which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even finality. Judicial review by this Court on labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the labor officer or office based his or its determination but are limited to issues of jurisdiction or grave abuse of discretion (Special Events and Central Shipping Office Workers Union v. San Miguel Corporation, Nos. L51002-06, May 30, 1983, 122 SCRA 557). In the instant case, the assailed Resolution of the respondent Commission is not tainted with arbitrariness that would amount to grave abuse of discretion or lack of jurisdiction and therefore, We find no reason to disturb the same. ACCORDINGLY, premises considered, the instant petition is dismissed for lack of merit and the resolution of the respondent Commission dated January 17, 1986 is hereby AFFIRMED. The temporary restraining order issued on April 23, 1986 is lifted. SO ORDERED. G.R. No. 74246 January 26, 1989

MARIWASA MANUFACTURING, INC., and ANGEL T. DAZO, petitioners, vs. HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of Ministry of Labor and Employment judgment, and JOAQUIN A. DEQUILA, respondents. Cruz, Agabin, Atienza & Alday for petitioners. The Solicitor General of public respondent. Norberto M. Alensuela, Sr. for private respondent.

NARVASA, J.: There is no dispute about the facts in this case, and the only question for the Court is whether or not, Article 282 of the Labor Code notwithstanding, probationary employment may validly be extended beyond the prescribed six-month period by agreement of the employer and the employee. Private respondent Joaquin A. Dequila (or Dequilla) was hired on probation by petitioner Mariwasa Manufacturing, Inc. (hereafter, Mariwasa only) as a general utility worker on January 10, 1979. Upon the expiration of the probationary period of six months, Dequila was informed by his employer that his work had proved unsatisfactory and had failed to meet the required standards. To give him a chance to improve his performance and qualify for regular employment, instead of dispensing with his service then and there, with his written consent Mariwasa extended his probation period for another three months from July 10 to October 9, 1979. His performance, however, did not improve and on that account Mariwasa terminated his employment at the end of the extended period. 1 Dequila thereupon filed with the Ministry of Labor against Mariwasa and its VicePresident for Administration, Angel T. Dazo, a complaint for illegal dismissal and violation of Presidential Decrees Nos. 928 and 1389. 2 His complaint was dismissed after hearing by Director Francisco L. Estrella, Director of the Ministry's National Capital Region, who ruled that the termination of Dequila's employment was in the circumstances justified and rejected his money claims for insufficiency of evidence. 3 On appeal to the Office of the Minister, however, said disposition was reversed. Respondent Deputy Minister Vicente Leogardo, Jr. held that Dequila was already a regular employee at the time of his dismissal, therefore, could not have been lawfully dismissed for failure to meet company standards as a probationary worker. He was ordered reinstated to his former position without loss of seniority and with full back wages from the date of his dismissal until actually reinstated. 4 This last order appears later to have been amended so as to direct payment of Dequila's back wages from the date of his dismissal to December 20, 1982 only. 5 Mariwasa and Dazo, now petitioners, thereafter be sought this Court to review Hon. Leogardo's decision on certiorari and prohibition, urging its reversal for having been rendered with grave abuse of discretion and/or without or in excess of jurisdiction. 6 The petition, as well as the parties' comments subsequently submitted all underscore the fact that the threshold issue here is, as first above stated, the legal one of whether employer and employee may by agreement extend the probationary period of

employment beyond the six months prescribed in Art. 282 of the Labor Code, which provides that: Art. 282. Probationary Employment. 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 probationary period shall be considered a regular employee.' The Court agrees with the Solicitor General, who takes the same position as the petitioners, that such an extension may lawfully be covenanted, notwithstanding the seemingly restrictive language of the cited provision. Buiser vs. Leogardo, Jr . 7 recognized agreements stipulating longer probationary periods as constituting lawful exceptions to the statutory prescription limiting such periods to six months, when it upheld as valid an employment contract between an employer and two of its employees that provided for an eigthteen-month probation period. This Court there held: 'It is petitioners' submission that probationary employment cannot exceed six (6) months, the only exception being apprenticeship and learnership agreements as provided in the Labor Code; that the Policy Instruction of the Minister of Labor and Employment nor any agreement of the parties could prevail over this mandatory requirement of the law; that this six months prescription of the Labor Code was mandated to give further efficacy to the constitutionally-guaranteed security of tenure of workers; and that the law does not allow any discretion on the part of the Minister of Labor and Employment to extend the probationary period for a longer period except in the aforecited instances. Finally, petitioners maintain that since they are regular employees, they can only be removed or dismissed for any of the just and valid causes enumerated under Article 283. of the Labor Code. We reject petitioners' contentions. They have no basis in law. 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. xxx

We therefore, hold and rule that the probationary employment of petitioners set to eighteen (18) months is legal and valid and that the Regional Director and the Deputy Minister of Labor and Employment committed no abuse of discretion in ruling accordingly. The single difference between Buiser and the present case: that in the former involved an eighteen-month probationary period stipulated in the original contract of employment, whereas the latter refers to an extension agreed upon at or prior to the expiration of the statutory six-month period, is hardly such as to warrant or even suggest a different ruling here. In both cases the parties' agreements in fact resulted in extensions of the period prescribed by law. That in this case the inability of the probationer to make the grade became apparent only at or about the end of the six-month period, hence an extension could not have been pre-arranged as was done in Buiser assumes no adverse significance, given the lack, as pointed out by the Solicitor General, of any indication that the extension to which Dequila gave his agreement was a mere stratagem of petitioners to avoid the legal consequences of a probationary period satisfactorily completed. For aught that appears of record, the extension of Dequila's probation 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. The law, surely, was never meant to produce such an inequitable result. 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. The Court finds nothing in the law which by any fair interpretation prohibits such a waiver. And no public policy protecting the employee and the security of his tenure is served by prescribing voluntary agreements which, by reasonably extending the period of probation, actually improve and further a probationary employee's prospects of demonstrating his fitness for regular employment. Having reached the foregoing conclusions, the Court finds it unnecessary to consider and pass upon the additional issue raised in the Supplemental Petition 8 that the back wages adjudged in favor of private respondent Dequila were erroneously computed. WHEREFORE, the petition is granted. The orders of the public respondent complained of are reversed and set aside. Private respondent's complaint against petitioners for illegal dismissal and violation of Presidential Decrees 928 and 1389 is dismissed for lack of merit, without pronouncement as to costs. SO ORDERED. G.R. No. 109114 September 14, 1993 HOLIDAY INN MANILA and/or HUBERT LINER and BABY DISQUITADO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (Second Division) and ELENA HONASAN, respondents. Inocentes, De Leon, Leogardo, Atienza, Manaye & Azucena Law Office for petitioners.

Florante M. Yambot for private respondent.

The petitioners now fault the NLRC for having entertained Honasan's appeal although it was filed out of time and for holding that 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. The petition has no merit. On the timeliness of the appeal, it is well-settled that all notices which a party is entitled to receive must be coursed through his counsel of record. Consequently, the running of the reglementary period is reckoned from the date of receipt of the judgment by the counsel of the appellant. 9 Notice to the appellant himself is not sufficient notice. 10 Honasan's counsel received the decision of the Labor Arbiter on May 18, 1992. 11 Before that, however, the appeal had already been filed by Honasan herself, on May 8, 1992. 12 The petitioners claim that she filed it on the thirteenth but this is irrelevant. Even if the latter date was accepted, the appeal was nevertheless still filed on time, in fact even before the start of the reglementary period. On the issue of illegal dismissal, we find that 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 onthe-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 stating as follows: Art. 279. Security of Tenure In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

CRUZ, J.: 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. 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 Through counsel, 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. 5 The complaint was dismissed on April 22, 1992 by the Labor Arbiter, 6 who held that her separation was justified under Article 281 of the Labor Code providing as follows: 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. On appeal, this decision was reversed by the NLRC, which held that Honasan had become a regular employee and so could not be dismissed as a probationer. 7 In its own decision dated November 27, 1992, the NLRC ordered the petitioners to reinstate Honasan "to her former position without loss of seniority rights and other privileges with backwages without deduction and qualification." Reconsideration was denied in a resolution dated January 26, 1993. 8

The grounds for the removal of a regular employee are enumerated in Articles 282, 283 and 284 of the Labor Code. The procedure for such removal is prescribed in Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code. These rules were not observed in the case at bar as Honasan was simply told that her services were being terminated because they were found to be unsatisfactory. No administrative investigation of any kind was undertaken to justify this ground. She was not even accorded prior notice, let alone a chance to be heard. 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. Not having done so, they may dismiss her now only upon proof of any of the legal grounds for the separation of regular employees, to be established according to the prescribed procedure. The policy of the Constitution is to give the utmost protection to the working class when subjected to such maneuvers as the one attempted by the petitioners. This Court is fully committed to that policy and has always been quick to rise in defense of the rights of labor, as in this case. WHEREFORE, the petition is DISMISSED, with costs against petitioners. It is so ordered. G.R. No. 94523 October 27, 1992 ST. THERESITA'S ACADEMY and/or THE SERVANTS OF ST. JOSEPH, Represented by SR. ANITA BAGO, petitioners, vs. THE NATIONAL LABOR RELATIONS COMMISSION and LILIA ARIOLA, respondents.

retired on March 30, 1976 with separation benefits in the amount of P4,927.30. For a while, worked as an insurance underwriter. In 1979, the Mother superior invited her to go back as a school teacher because the school needed qualified and good teachers in Mathematics and English. The complainant accepted on condition that she should be considered a regular teacher and not as newly hired teacher. That condition was accepted without hesitation. She signed a contract with the school which was renewable yearly. Complainant and her co-teachers were paid summer living allowance in 1979-1980 and 1980-1981. However, in June 1981, that amount was deducted from their salaries. Complainant and her co-teachers protested against the deduction. A meeting was called by the school to explain that the payment of the summer living allowance had been a mistake, hence, it must be paid back to the school. Another meeting was called by the Mother Superior to discuss the legality of the deduction and/or nonpayment of the summer living allowance. In that meeting, the complainant and her co-teachers pleaded for the revival of the summer living allowance but they were advised by the Mother Superior that the school could not afford to give it to them. The matter was referred to the Ministry of Labor and Employment. Because of the agitation for the payment of the summer living allowance, the Siervas de San Jose, which owns and operates respondent school in Silay City, held a board meeting on January 19, 1983 (Exhibit I), wherein it was resolved that effective school year 1983-84, no Siervas de San Jose School shall rehire a retired teacher and that any rehired who is at present a member of the faculty shall be notified that her/his Teacher's Contract will not be renewed for the coming year. After four (4) years of continuous satisfactory service, complainant was notified on March 1, 1983 that her contract would no longer be renewed at the end of the school year 198283. A report was made to the office of the Ministry of Labor and Employment regarding the impending termination of her teacher's contract (Annex E). On April 7, 1985, private respondent filed in the NLRC, National Arbitration Branch No. VI Bacolod City, a complaint against the petitioner for Illegal Dismissal praying for reinstatement with backwages, ECOLA, non-payment of allowances, underpayment of 13th month pay and damages. On August 14, 1987, the Labor Arbiter rendered a decision ordering the petitioner to pay the private respondent separation pay computed at one-half (1/2) month for every year of her 4-year service with the school. On appeal by the school to the NLRC, the latter ruled that: (1) the year-to-year contract between petitioner and private respondent violated Art. 280 of the Labor Code, hence, despite the fixed period provided therein, private respondent became a "regular" employee who could not be dismissed except for cause; (2) when the year-to-year contracts went beyond three years, private respondent became a "regular" or "permanent" employee, pursuant to Sec. 75 of the Manual of Regulations for private schools, which provides that "full-time teachers who have rendered three consecutive years of satisfactory service shall be considered permanent" (p. 11, Rollo); and

GRIO-AQUINO, J.: Petition for certiorari with application for preliminary injunction and/or restraining order to annul and/or set aside the resolution dated July 2, 1990 of the Fourth Division of the National Labor Commission (Cebu City) (NLRC, for short), affirming with modification the decision dated August 14, 1987 of the Labor Arbiter of Bacolod City in RAB-VI-Case No. 0201-83. The dispositive portion of the decision of the NLRC reads as follows: WHEREFORE, the appeal filed by respondent is hereby dismissed for lack of merit and the decision of Labor Arbiter dated August 14, 1987 is hereby MODIFIED. Respondent is hereby ordered to pay complainant her backwages limited to three (3) years without deduction and qualification starting April 1983. In lieu of reinstatement, respondents are hereby ordered to give separation pay to herein complainant computed at the rate of one month's salary for every year of service from June 1979 up to March 1986, the end of the three (3) year rule on backwages. (p. 39, Rollo.) The private respondents, Lilia G. Ariola, had been employed as a school teacher since the school year 1954-55 up to the school year 1975-76 (or for 22 continuous years). She

(3) the policy of the school of no longer renewing the year-to-year contracts of teachers who had been recalled from retirement, violated the security of tenure of the complainant. On July 2, 1990, the NLRC issued the resolution quoted earlier in this decision. In its petition for review of that decision, the petitioner alleges that: 1. the NLRC decision is clearly contrary to the decision of this Court; 2. the NLRC ruling confuses the three year-to-year probationary contracts given to new teachers before they become "regular and permanent," with the year-to-year or other fixed period contract given to teachers who are being recalled from retirement; for the year-to-year contract with a retired teacher is not intended to test the teacher's fitness to be hired on a permanent basis, unlike a new teacher who must first be tested; and 3. it is the prerogative of an employer to adopt a policy of not rehiring retired teachers and of not renewing the annual contracts of teachers who have been recalled from retirement. A review of the records of this case shows that the NLRC did not abuse its discretion in affirming with modification the decision of the Labor Arbiter. Article 280 of the Labor Code defines regular employment as follows: Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. (Emphasis supplied.) With respect to school teachers, paragraph 75 of the Manual or Regulations for Private Schools provides: Full-time teachers who have rendered three (3) years of satisfactory service shall be considered permanent. (p. 63, Rollo.)

Furthermore, paragraphs 7 and 9 of the Teacher's Contract which the petitioner and the private respondent signed, categorically stipulated: 7. This CONTRACT SHALL BE IN FULL FORCE AND EFFECT during the school year 1982-1983 from June to March, unless sooner terminated by either party for valid causes and approved by the Director of Private Schools. In the absence of valid cause(s) for termination of services, this CONTRACT shall be rendered for the same period until the teacher shall have gained a Regular or Permanent Status, pursuant to the pertinent provisions of the Manual of Regulations for Private Schools. 9. This CONTRACT shall not affect the Permanent Status of the teacher, even if entered into every school year; provided that the Probationary Period for new teachers shall be three (3) years. (Emphasis supplied, p. 79, Rollo.) The record shows that after Arciola retired in 1976, she was rehired three (3) years later and rendered four (4) more years of satisfactory service to the petitioner in the school years 1979-1980, 1980-1981, 1981-1982, and 1982-1983. When she was rehired in 1979 she did not have to undergo the 3-year probationary employment for new teachers for her teaching competence had already been tried and tested during her 22 years of service to the school in 1954 to 1976. She re-entered the service in 1979 as a regular or permanent teacher. She could not be discharged solely on account of the expiration of her fourth annual contract. She could only be dismissed for cause and with due process, as provided in Article 279 of the Labor Code. The NLRC did not abuse its discretion in holding that her dismissal from the service, on account for the expiration of her annual contract, was illegal and that the school is liable to pay her backwages and separation pay. WHEREFORE, the petition for certiorari is DISMISSED, with costs against the petitioner. SO ORDERED. G.R. No. 96779 November 10, 1993 PINE CITY EDUCATIONAL CENTER and EUGENIO BALTAO, petitioners, vs. THE NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION) and DANGWA BENTREZ, ROLAND PICART, APOLLO RIBAYA, SR., RUPERTA RIBAYA, VIRGINIA BOADO, CECILIA EMOCLING, JANE BENTREZ, LEILA DOMINGUEZ, ROSE ANN BERMUDEZ and LUCIA CHAN, respondents. Tenefrancia, Agranzamendez, Liceralde & Associates for petitioners. Reynaldo B. Cajucom for private respondents.

NOCON, J.: The is a petition for certiorari seeking the reversal of the resolution of public respondent National Labor Relations Commission dated November 29, 1990, in NLRC Case No. 0104-0056-89, which affirmed in toto the decision of the Labor Arbiter dated February 28,1990. The antecedent facts are, a follows: Private respondents Dangwa Bentrez, Roland Picart, Apollo Ribaya, Sr., Ruperta Ribaya, Virginia Boado, Cecilia Emocling, Jane Bentrez, Leila Dominguez, Rose Ann Bermudez and Lucia Chan were all employed as teachers on probationary basis by petitioner Pines City Educational Center, represented in this proceedings by its President, Eugenio Baltao. With the exception of Jane Bentrez who was hired as a grade school teacher, the remaining private respondents were hired as college instructors. All the private respondents, except Roland Picart and Lucia Chan, signed contracts of employment with petitioner for a fixed duration. On March 31, 1989, due to the expiration of private respondents' contracts and their poor performance as teachers, they were notified of petitioners' decision not to renew their contracts anymore. On April 10, 1989, private respondents filed a complaint for illegal dismissal before the Labor Arbiter, alleging that their dismissals were without cause and in violation of due process. Except for private respondent Leila Dominguez who worked with petitioners for one semester, all other private respondents were employed for one to two years. They were never informed in writing by petitioners regarding the standards or criteria of evaluation so as to enable them to meet the requirements for appointment as regular employees. They were merely notified in writing by petitioners, through its chancellor, Dra. Nimia R. Concepcion, of the termination of their respective services as on March 31, 1989, on account of their below-par performance as teachers. For their part, petitioners contended that private respondents' separation from employment, apart from their poor performance, was due to the expiration of the periods stipulated in their respective contracts. In the case of private respondent Dangwa Bentrez, the duration of his employment contract was for one year, or beginning June, 1988 to March 1989 whereas in the case of the other private respondents, the duration of their employment contracts was for one semester, or beginning November, 1988 to March 1989. These stipulations were the laws that governed their relationships, and there was nothing in said contracts which was contrary to law, morals, good customs and public policy. They argued further that they cannot be compelled o enter into new contracts with private respondents. they concluded that the separation of private respondents from the service was justified. On February 28, 1990, the Labor Arbiter rendered judgment in favor of private respondents, the dispositive portion of which reads: WHEREFORE, in the light of the foregoing considerations, judgment is hereby rendered ORDERING the respondents to reinstate the complainants immediately to their former positions and to pay their full backwages and other benefits and privileges without qualification and deduction from the time they were dismissed up to their actual reinstatement. Thus respondents should pay complainants the following:

BACKWAGES NOTE: Computation covers only the period complainants were terminated up to January 31, 1990 or 10 months and does not include backwages from January 31, 1990 up to their actual reinstatement. 1) ROLAND PICART a) Latest salary per month P2,136.00 b) Multiplied by period covered (March 31, 1989 to January 31, 1990) x 10 months c) Equals backwages due P21,360.00 2) LUCIA CHAN a) Latest salary per month P1,600.00 b) Multiplied by period covered x 10 months c) Equals backwages due P16,000.00 3) LEILA DOMINGUEZ a) Latest salary per month P1,648.24 b) Multiplied by period covered x 10 months c) Equals backwages due P16,482.40 4) RUPERTA RIBAYA a) Latest salary per month P1,856.00 b) Multiplied by period covered x 10 months c) Equals backwages due P18,560.00 5) CECILIA EMOCLING a) Latest salary per month P1,648.00 b) Multiplied by period covered x 10 months c) Equals backwages due P16,480.00 6) ROSE ANN BERMUDEZ a) Latest salary per month P2,600.00 b) Multiplied by period covered x 10 months c) Equals backwages due P26,000.00 7) DANGWA BENTREZ

a) Latest salary per month P1,700.00 b) Multiplied by period covered x 10 months c) Equals backwages due P17,000.00 8) JANE BENTREZ a) Latest salary per month P1,315.44 b) ultiplied by period covered x 10 months c) Equals backwages due P13,154.40 9) APOLLO RIBAYA a) Latest salary per month P1,875.00 b) Multiplied by period covered x 10 months c) Equals backwages due P18,7500.00 10) VIRGINIA BOADO a) Latest salary per month P1,648.24 b) Multiplied by period covered x 10 months c) Equals backwages due P16,482.40 SUMMARY 1) Roland Picart 21,360.00 2) Lucia Chan 16,000.00 3) Leila Dominguez 16,482.40 4) Ruperta Ribaya 18,560.00 5) Cecilia Emocling 16,480.00 6) Rose Ann Bermudez 26,000.00 7) Dangwa Bentrez 17,000.00 8) Jane Bentrez 13,154.40 9) Apollo Ribaya 18,750.00 10) Virginia Boado 16,482.40 GRAND TOTAL (Backwages) P180,269.20 Complainants claims for indemnity pay, premium pay for holidays and rest days, illegal deduction, 13th month pay and underpayment are hereby DENIED for lack of merit. SO ORDERED. 1 In support of this decision, the Labor Arbiter rationalized that the teacher's contracts 2 are vague and do not include the specific description of duties and assignments of private respondents. They do not categorically state that there will be no renewal because their appointments automatically terminate at the end of the semester. Petitioners did not present any written evidence to substantiate their allegation that the Academic

Committee has evaluated private respondents' performance during their one semester employment. On the contrary, they were hastily dismissed. On appeal to the National Labor Relations Commission, the decision was affirmed in toto in its resolution dated November 29, 1990, with the additional reasoning that "the stipulation in the contract providing for a definite period in the employment of complainant is obviously null and void, as such stipulation directly assails the safeguards laid down in Article 280 (of the Labor Code), 3 which explicitly abhors the consideration of written or oral agreements pertaining to definite period in regular employments. 4 Hence, the present petition for certiorari with prayer for the issuance of a temporary restraining order. As prayed for, this Court issued a temporary restraining order on March 11, 1991, enjoining respondents from enforcing the questioned resolution. 5 Petitioners raise this sole issue: "THAT THERE IS PRIMA FACIE EVIDENCE OF GRAVE ABUSE OF DISCRETION ON THE PART OF THE LABOR ARBITER BY WANTONLY, CAPRICIOUSLY AND MALICIOUSLY DISREGARDING PROVISIONS OF THE LAW AND JURISPRUDENCE LAID DOWN IN DECISIONS OF THE HONORABLE SUPREME COURT." 6 Petitioners reiterate their previous arguments, relying heavily in the case of Brent School, Inc. et al., v. Zamora, et al. 7 It is quite easy to resolve the present controversy because the Brent case, which is a product of extensive research, already provides the answer. We were categorical therein that: Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent circumvention of the employee's right to be secure in his tenure, the clause in said article indiscriminately and completely ruling out all written and oral agreements conflicting with the concept of regular employment as defined therein should be construed to refer to the substantive evil that the Code itself has singled out: agreements entered into precisely to prevent security of tenure. It should have no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer or employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the law would be made to apply to purposes other than those expressly stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended consequences. (Emphasis supplied.) The ruling was reiterated in Pakistan International Airlines Corporation v. Ople, etc., et al. 8 and La Sallete of Santiago, Inc. v. NLRC, et al. 9 In the present case, however, We have to make a distinction.

Insofar as the private respondents who knowingly and voluntarily agreed upon fixed periods of employment are concerned, their services were lawfully terminated by reason of the expiration of the periods of their respective contracts. These are Dangwa Bentrez, Apollo Ribaya, Sr., Ruperta Ribaya, Virginia Boado, Cecilia Emocling, Jose Bentrez, Leila Dominguez and Rose Ann Bermudez. Thus, public respondent committed grave abuse of discretion in affirming the decision of the Labor Arbiter ordering the reinstatement and payment of full backwages and other benefits and privileges. With respect to private respondents Roland Picart and Lucia Chan, both of whom did not sign any contract fixing the periods of their employment nor to have knowingly and voluntarily agreed upon fixed periods of employment, petitioners had the burden of proving that the termination of their services was legal. As probationary employees, they are likewise protected by the security of tenure provision of the Constitution. Consequently, they cannot be removed from their positions unless for cause. 10 On the other hand, petitioner contended that base don the evaluation of the Academic Committee their performance as teachers was poor. The Labor Arbiter, however, was not convinced. Thus he found as follows: Respondents likewise aver that the Academic Committee has evaluated their performance during their one semester employment (see Annexes "M" to "X" of complainants' position paper). However, they did not present any written proofs or evidence to support their allegation. 11 xxx xxx xxx There is absolutely nothing in the record which will show that the complainants were afforded even an iota of chance to refute respondents' allegations that the complainants did not meet the reasonable standards and criteria set by the school. . . . 12 We concur with these factual findings, there being no showing that they were resolved arbitrarily. 13 Thus, the order for their reinstatement and payment of full backwages and other benefits and privileges from the time they were dismissed up to their actual reinstatement is proper, conformably with Article 279 of the Labor Code, as amended by Section 34 of Republic Act No. 6715, 14 which took effect on March 21, 1989. 15 It should be noted that private respondents Roland Picart and Lucia Chan were dismissed illegally on March 31, 1989, or after the effectivity of said amendatory law. However, in ascertaining the total amount of backwages payable to them, we go back to the rule prior to the mercury drug rule 16 that the total amount derived from employment elsewhere by the employee from the date of dismissal up to the date of reinstatement, if any, should be deducted therefrom. 17 We restate the underlying reason that employees should not be permitted to enrich themselves at the expense of their employer. 18 In addition, the law abhors double compensation. 19 to this extent, our ruling in Alex Ferrer, et al., v. NLRC, et al., G.R. No. 100898, promulgated on July 5, 1993, is hereby modified. Public respondent cannot claim not knowing the ruling in the Brent case because in its questioned resolution, it is stated that one of the cases invoked by petitioners in their appeal is said case. 20 This notwithstanding, it disregarded Our ruling therein without any reason at all and expressed the erroneous view that:

The agreement of the parties fixing a definite date for the termination of the employment relations is contrary to the specific provision of Article 280. being contrary to law, the agreement cannot be legitimized. . . . 21 Stare decisis et no quieta movere. Once a case ha been decided one way, then another case, involving exactly the same point at issue, should be decided in the same manner. Public respondent had no choice on the matter. It could not have ruled in any other way. This Tribunal having spoken in the Brent case, its duty was to obey. 22 Let it be warned that to defy its decisions is to court contempt. 23 WHEREFORE, the resolution of public respondent National Labor Relations Commission dated November 29, 1990 is hereby MODIFIED. private respondents Roland Picart and Lucia Chan are ordered reinstated without loss of seniority rights and other privileges and their backwages paid in full inclusive of allowances, and to their other benefits or their monetary equivalent pursuant to Article 279 of the Labor Code, as amended by Section 34 of Republic Act No. 6715, subject to deduction of income earned elsewhere during the period of dismissal, if any, to be computed from the time they were dismissed up to the time of their actual reinstatement. the rest of the Labor Arbiter's decision dated February 28, 1990, as affirmed by the NLRC is set aside. The temporary restraining order issued on March 11, 1991 is made permanent.

SO ORDERED.
PHILIPPINE DAILY INQUIRER, INC., - versus -LEON M. MAGTIBAY, JR. and PHILIPPINE DAILY INQUIRER EMPLOYEES UNION (PDIEU), GARCIA, J.: By this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Philippine Daily Inquirer, Inc. (PDI) seeks the reversal and setting aside of the decision[1] dated May 25, 2004 of the Court of Appeals (CA) in CA G.R. SP No. 78963, affirming the resolution dated September 23, 2002 of the National Labor Relations Commission (NLRC) in NLRC Case No. 00-03-01945-96. The affirmed NLRC resolution reversed an earlier decision dated July 29, 1996 of the Labor Arbiter in NLRC Case No. 011800-96, which dismissed the complaint for illegal dismissal filed by the herein respondent Leon Magtibay, Jr. against the petitioner. The factual antecedents are undisputed: On February 7, 1995, PDI hired Magtibay, on contractual basis, to assist, for a period of five months from February 17, 1995, the regular phone operator. Before the expiration of Magtibays contractual employment, he and PDI agreed to a fifteen-day contract extension, or from July 17, 1995 up to July 31, 1995, under the same conditions as the existing contract. After the expiration of Magtibays contractual employment, as extended, PDI announced the creation and availability of a new position for a second telephone operator who would undergo probationary employment. Apparently, it was PDIs policy to accord regular employees preference for new vacancies in the company. Thus, Ms. Regina M. Layague, a PDI employee and member of respondent PDI Employees Union (PDIEU),

filed her application for the new position. However, she later withdrew her application, paving the way for outsiders or non-PDI employees, like Magtibay in this case, to apply. After the usual interview for the second telephone operator slot, PDI chose to hire Magtibay on a probationary basis for a period of six (6) months. The signing of a written contract of employment followed. On March 13, 1996, or a week before the end the agreed 6-month probationary period, PDI officer Benita del Rosario handed Magtibay his termination paper, grounded on his alleged failure to meet company standards. Aggrieved, Magtibay immediately filed a complaint for illegal dismissal and damages before the Labor Arbiter. PDIEU later joined the fray by filing a supplemental complaint for unfair labor practice. Magtibay anchored his case principally on the postulate that he had become a regular employee by operation of law, considering that he had been employed by and had worked for PDI for a total period of ten months, i.e., four months more than the maximum six-month period provided for by law on probationary employment. He also claimed that he was not apprised at the beginning of his employment of the performance standards of the company, hence, there was no basis for his dismissal. Finally, he described his dismissal as tainted with bad faith and effected without due process.

The Labor Arbiter likewise dismissed allegations of denial of due process and the commission by PDI of unfair labor practice. PDIEU and Magtibay appealed the decision of the Labor Arbiter to the NLRC. As stated earlier, the NLRC reversed and set aside said decision, effectively ruling that Magtibay was illegally dismissed. According to the NLRC, Magtibays probationary employment had ripened into a regular one. With the NLRCs denial of its motion for reconsideration, PDI went to the CA on a petition for certiorari. Eventually, the CA denied due course to PDIs petition on the strength of the following observations: We agree with the findings of respondent NLRC. Petitioner PDI failed to prove that such rules and regulations were included in or form part of the standards that were supposed to be made known to respondent Magtibay at the time of his engagement as telephone operator. Particularly, as regards the first stated infraction xxx petitioner PDI, contrary to its assertion, stated in its position paper, motion for reconsideration and in this petition that respondent Magtibay failed to abide by the rules and regulations of the company issued by Ms. Benita del Rosario regarding the entry of persons in the operators booth when respondent was already working for petitioner PDI. Further, nowhere can it be found in the list of Basic Responsibility and Specific Duties and Responsibilities (Annex D of the petition) of respondent Magtibay that he has to abide by the duties, rules and regulations that he has allegedly violated. The infractions considered by petitioner PDI as grounds for the dismissal of respondent Magtibay may at most be classified as just causes for the termination of the latters employment. x x x. xxx xxx xxx

PDI, for its part, denied all the factual allegations of Magtibay, adding that his previous contractual employment was validly terminated upon the expiration of the period stated therein. Pressing the point, PDI alleged that the period covered by the contractual employment cannot be counted with or tacked to the period for probation, inasmuch as there is no basis to consider Magtibay a regular employee. PDI additionally claimed that Magtibay was dismissed for violation of company rules and policies, such as allowing his lover to enter and linger inside the telephone operators booth and for failure to meet prescribed company standards which were allegedly made known to him at the start through an orientation seminar conducted by the company. After due proceedings, the Labor Arbiter found for PDI and accordingly dismissed Magtibays complaint for illegal dismissal. The Labor Arbiter premised his holding on the validity of the previous contractual employment of Magtibay as an independent contract. He also declared as binding the stipulation in the contract specifying a fixed period of employment. According to the Labor Arbiter, upon termination of the period stated therein, the contractual employment was also effectively terminated, implying that Magtibay was merely on a probationary status when his services were terminated inasmuch as the reckoning period for probation should be from September 21, 1995 up to March 31, 1996 as expressly provided in their probationary employment contract. In fine, it was the Labor Arbiters position that Magtibays previous contractual employment, as later extended by 15 days, cannot be considered as part of his subsequent probationary employment. Apart from the foregoing consideration, the Labor Arbiter further ruled that Magtibays dismissal from his probationary employment was for a valid reason. Albeit the basis for termination was couched in the abstract, i.e., you did not meet the standards of the company, there were three specific reasons for Magtibays termination, to wit: (1) he repeatedly violated the company rule prohibiting unauthorized persons from entering the telephone operators room; (2) he intentionally omitted to indicate in his application form his having a dependent child; and (3) he exhibited lack of sense of responsibility by locking the door of the telephone operators room on March 10, 1996 without switching the proper lines to the company guards so that incoming calls may be answered by them.

Finally, the three questionable grounds also relied upon by petitioner PDI in dismissing respondent Magtibay may be considered as just causes. However, petitioner PDI did not raise the same as an issue in the present petition because the procedure it adopted in dismissing respondent Magtibay fell short of the minimum requirements provided by law. PDI filed a motion for reconsideration but to no avail. Hence, this recourse by PDI on the following submissions: I. THE COURT OF APPEALS COMMITTED GRAVE ERROR IN FINDING THAT A PROBATIONARY EMPLOYEES FAILURE TO FOLLOW AN EMPLOYERS RULES AND REGULATIONS CANNOT BE DEEMED FAILURE BY SAID EMPLOYEE TO MEET THE STANDARDS OF HIS EMPLOYER THUS EMASCULATING PETITIONERS RIGHT TO CHOOSE ITS EMPLOYEES. II. THE COURT OF APPEALS COMMITTED A GRAVE ERROR IN REFUSING TO FIND THAT PROCEDURAL DUE PROCESS AS LAID DOWN IN SECTION 2, RULE XXIII OF THE IMPLEMENTING RULES OF THE LABOR CODE HAD BEEN OBSERVED BY THE PETITIONER. We GRANT the petition.

This Court, to be sure, has for a reason, consistently tended to be partial in favor of workers or employees in labor cases whenever social legislations are involved. However, in its quest to strike a balance between the employers prerogative to choose his employees and the employees right to security of tenure, the Court remains guided by the gem of a holding in an old but still applicable case of Pampanga Bus, Co. v. Pambusco Employees Union, Inc.[2] In it, the Court said: The right of a 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 purchase labor from any person whom it chooses. The employer and the employee have thus an equality of right guaranteed by the Constitution. If the employer can compel the employee to work against the latters will, this is servitude. If the employee can compel the employer to give him work against the employers will, this is oppression. Management and labor, or the employer and the employee are more often not situated on the same level playing field, so to speak. Recognizing this reality, the State has seen fit to adopt measures envisaged to give those who have less in life more in law. Article 279 of the Labor Code which gives employees the security of tenure is one playing field leveling measure: Art. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. x x x. But hand in hand with the restraining effect of Section 279, the same Labor Code also gives the employer a period within which to determine whether a particular employee is fit to work for him or not. This employers prerogative is spelled out in the following provision: Art. 281. Probationary employment. 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. In International Catholic Migration Commission v. NLRC,[3] we have elucidated what probationary employment entails: x x x. A probationary employee, as understood under Article 282 (now Article 281) of the Labor Code, 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. While the employer, as stated earlier, observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other, seeks to prove to the employer, that he has the qualifications to meet the reasonable standards for permanent employment. It is well settled that the employer has the right or is at liberty to choose who will be hired and who will be denied employment. In that sense, 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. x x x. Within the limited legal six-month probationary period, probationary employees are still entitled to security of tenure. It is expressly provided in the afore-quoted Article 281 that a probationary employee may be terminated only on two grounds: (a) for just cause, or (b) 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.[4] PDI invokes the second ground under the premises. In claiming that it had adequately apprised Magtibay of the reasonable standards against which his performance will be gauged for purposes of permanent employment, PDI cited the one-on-one seminar between Magtibay and its Personnel Assistant, Ms. Rachel Isip-Cuzio. PDI also pointed to Magtibays direct superior, Benita del Rosario, who diligently briefed him about his responsibilities in PDI. These factual assertions were never denied nor controverted by Magtibay. Neither did he belie the existence of a specific rule prohibiting unauthorized persons from entering the telephone operators booth and that he violated that prohibition. This notwithstanding, the NLRC and the CA proceeded nonetheless to rule that the records of the case are bereft of any evidence showing that these rules and regulations form part of the so-called company standards. We do not agree with the appellate court when it cleared the NLRC of commission of grave abuse of discretion despite the latters disregard of clear and convincing evidence that there were reasonable standards made known by PDI to Magtibay during his probationary employment. It is on record that Magtibay committed obstinate infractions of company rules and regulations, which in turn constitute sufficient manifestations of his inadequacy to meet reasonable employment norms. The suggestion that Magtibay ought to have been made to understand during his briefing and orientation that he is expected to obey and comply with company rules and regulations strains credulity for acceptance. The CAs observation that nowhere can it be found in the list of Basic Responsibility and Specific Duties and Responsibilities of respondent Magtibay that he has to abide by the duties, rules and regulations that he has allegedly violated is a strained rationalization of an unacceptable conduct of an employee. Common industry practice and ordinary human experience do not support the CAs posture. All employees, be they regular or probationary, are expected to comply with company-imposed rules and regulations, else why establish them in the first place. Probationary employees unwilling to abide by such rules have no right to expect, much less demand, permanent employment. We, therefore find sufficient factual and legal basis, duly established by substantial evidence, for PDI to legally terminate Magtibays probationary employment effective upon the end of the 6month probationary period. It is undisputed that PDI apprised Magtibay of the ground of his termination, i.e., he failed to qualify as a regular employee in accordance with reasonable standards made known to him at the time of engagement, only a week before the expiration of the sixmonth probationary period. Given this perspective, does this make his termination unlawful for being violative of his right to due process of law?

It does not. Unlike under the first ground for the valid termination of probationary employment which is for just cause, the second ground does not require notice and hearing. Due process of law for this second ground consists of making the reasonable standards expected of the employee during his probationary period known to him at the time of his probationary employment. By the very nature of a probationary employment, the employee knows from the very start that he will be under close observation and his performance of his assigned duties and functions would be under continuous scrutiny by his superiors. It is in apprising him of the standards against which his performance shall be continuously assessed where due process regarding the second ground lies, and not in notice and hearing as in the case of the first ground. Even if perhaps he wanted to, Magtibay cannot deny as he has not denied PDIs assertion that he was duly apprised of the employment standards expected of him at the time of his probationary employment when he underwent a one-on-one orientation with PDIs personnel assistant, Ms. Rachel Isip-Cuzio. Neither has he denied nor rebutted PDIs further claim that his direct superior, Benita del Rosario, briefed him regarding his responsibilities in PDI. Lest it be overlooked, Magtibay had previously worked for PDI as telephone operator from February 7, 1995 to July 31, 1995 as a contractual employee. Thus, the Court entertains no doubt that when PDI took him in on September 21, 1995, Magtibay was already very much aware of the level of competency and professionalism PDI wanted out of him for the entire duration of his probationary employment. PDI was only exercising its statutory hiring prerogative when it refused to hire Magtibay on a permanent basis upon the expiration of the six-month probationary period. This was established during the proceedings before the labor arbiter and borne out by the records and the pleadings before the Court. When the NLRC disregarded the substantial evidence establishing the legal termination of Magtibays probationary employment and rendered judgment grossly and directly contradicting such clear evidence, the NLRC commits grave abuse of discretion amounting to lack or excess of jurisdiction. It was, therefore, reversible error on the part of the appellate court not to annul and set aside such void judgment of the NLRC. WHEREFORE, the assailed decision dated May 25, 2004 of the CA in CA G.R. SP No. 78963 is hereby REVERSED and SET ASIDE, and the earlier resolution dated September 23, 2002 of the NLRC in NLRC Case No. 00-03-01945-96 is declared NULL and VOID. The earlier decision dated July 29, 1996 of the Labor Arbiter in NLRC Case No. 011800-96, dismissing respondent Leon Magtibay, Jr.s complaint for alleged illegal dismissal, is REINSTATED.

No pronouncement as to costs.

SO ORDERED.