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ENBANC
ABBOTT
LABORATORIES,
CECILLE
A.
PHILIPPINES,
TERRIBLE, EDWIN D. FEIST,
MARIA OLIVIA T. YABUTC.
MISA,
TERES ITA
BERNARDO, AND ALLAN G.
ALMAZAR,
Petitioners,
-versusPEARLIE ANN F. ALCARAZ,
Respondent.

G.R. No. 192571

Present:
SERENO, C.J.,
CARPIO,
VELASCO, JR.,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA,
REYES,
PERLAS-BERNABE, and
LEONEN,JJ.
..~

Promulgated:

JULY 23, 201~


--- ----------------x

x-----------------------------------------------------------------------------~

DECISION

PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari 1 are the Decision 2
dated December 10,2009 and Resolution 3 dated June 9, 2010 ofthe Court of
Appeals (CA) in CA-G.R. SP No. 101045 which pronounced that the
National Labor Relations Commission (NLRC) did not gravely abuse its
discretion when it ruled that respondent Pearlie Ann F. Alcaraz (Alcaraz)
was illegally dismissed from her employment.

Ro//o(G.R.No.192571),pp.l4-58.
Id. at I 040-1054. Penned by Associate Justice Isaias Dicdican, with Associate Justices Remedios A.
Salazar-Fernando and Romeo F. Barza, concuiTing.
Id. at I 139-1140.

Decision

G.R. No. 192571

The Facts
On June 27, 2004, petitioner Abbott Laboratories, Philippines
(Abbott) caused the publication in a major broadsheet newspaper of its need
for a Medical and Regulatory Affairs Manager (Regulatory Affairs
Manager) who would: (a) be responsible for drug safety surveillance
operations, staffing, and budget; (b) lead the development and
implementation of standard operating procedures/policies for drug safety
surveillance and vigilance; and (c) act as the primary interface with internal
and external customers regarding safety operations and queries.4 Alcaraz
who was then a Regulatory Affairs and Information Manager at Aventis
Pasteur Philippines, Incorporated (another pharmaceutical company like
Abbott) showed interest and submitted her application on October 4,
2004.5
On December 7, 2004, Abbott formally offered Alcaraz the abovementioned position which was an item under the companys Hospira
Affiliate Local Surveillance Unit (ALSU) department.6 In Abbotts offer
sheet,7 it was stated that Alcaraz was to be employed on a probationary
basis.8 Later that day, she accepted the said offer and received an electronic
mail (e-mail) from Abbotts Recruitment Officer, petitioner Teresita C.
Bernardo (Bernardo), confirming the same. Attached to Bernardos e-mail
were Abbotts organizational chart and a job description of Alcarazs work.9
On February 12, 2005, Alcaraz signed an employment contract which
stated, inter alia, that she was to be placed on probation for a period of six
(6) months beginning February 15, 2005 to August 14, 2005. The said
contract was also signed by Abbotts General Manager, petitioner Edwin
Feist (Feist):10
PROBATIONARY EMPLOYMENT
Dear Pearl,
After having successfully passed the pre-employment requirements, you
are hereby appointed as follows:

4
5
6

8
9
10

Id. at 74.
Id. at 75-76.
Id. at 51-52. Based on Abbotts organizational structure, the Regulatory Affairs Manager was under
the umbrella of Hospira ALSU, a sub-department in Abbotts Hospital Care Division. ALSU serves as
a transition body of Hospira, Inc., a corporation based in the United States of America, while it is in
the process of organization in the Philippines. Abbott intended to cede the qualified employees under
ALSU to Hospira once the latter obtained its own legal personality to engage in business in the
Philippines.
Id. at 165-168. Abbott sent Alcaraz an initial offer sheet on December 1, 2004. The compensation
contained therein was re-negotiated and thus, the increased offer as per the offer sheet dated December
7, 2004.
Id. at 167-168.
Id. at 127, 169-172.
Id. at 174.

Decision

3
Position Title
Department

G.R. No. 192571

: Regulatory Affairs Manager


: Hospira

The terms of your employment are:


Nature of Employment
Effectivity
Basic Salary

: Probationary
: February 15, 2005 to August 14, 2005
: P110,000.00/ month

It is understood that you agree to abide by all existing policies, rules and
regulations of the company, as well as those, which may be hereinafter
promulgated.
Unless renewed, probationary appointment expires on the date indicated
subject to earlier termination by the Company for any justifiable reason.
If you agree to the terms and conditions of your employment, please
signify your conformity below and return a copy to HRD.
Welcome to Abbott!
Very truly yours,
Sgd.
EDWIN D. FEIST
General Manager
CONFORME:
Sgd.
PEARLIE ANN FERRER-ALCARAZ

During Alcarazs pre-employment orientation, petitioner Allan G.


Almazar (Almazar), Hospiras Country Transition Manager, briefed her on
her duties and responsibilities as Regulatory Affairs Manager, stating that:
(a) she will handle the staff of Hospira ALSU and will directly report to
Almazar on matters regarding Hopiras local operations, operational budget,
and performance evaluation of the Hospira ALSU Staff who are on
probationary status; (b) she must implement Abbotts Code of Good
Corporate Conduct (Code of Conduct), office policies on human resources
and finance, and ensure that Abbott will hire people who are fit in the
organizational discipline; (c) petitioner Kelly Walsh (Walsh), Manager of
the Literature Drug Surveillance Drug Safety of Hospira, will be her
immediate supervisor; (d) she should always coordinate with Abbotts
human resource officers in the management and discipline of the staff; (e)
Hospira ALSU will spin off from Abbott in early 2006 and will be officially
incorporated and known as Hospira, Philippines. In the interim, Hospira
ALSU operations will still be under Abbotts management, excluding the
technical aspects of the operations which is under the control and
supervision of Walsh; and (f) the processing of information and/or raw
material data subject of Hospira ALSU operations will be strictly confined
and controlled under the computer system and network being maintained
and operated from the United States. For this purpose, all those involved in

Decision

G.R. No. 192571

Hospira ALSU are required to use two identification cards: one, to identify
them as Abbotts employees and another, to identify them as Hospira
employees.11
On March 3, 2005, petitioner Maria Olivia T. Yabut-Misa (Misa),
Abbotts Human Resources (HR) Director, sent Alcaraz an e-mail which
contained an explanation of the procedure for evaluating the performance of
probationary employees and further indicated that Abbott had only one
evaluation system for all of its employees. Alcaraz was also given copies of
Abbotts Code of Conduct and Probationary Performance Standards and
Evaluation (PPSE) and Performance Excellence Orientation Modules
(Performance Modules) which she had to apply in line with her task of
evaluating the Hospira ALSU staff.12
Abbotts PPSE procedure mandates that the job performance of a
probationary employee should be formally reviewed and discussed with the
employee at least twice: first on the third month and second on the fifth
month from the date of employment. The necessary Performance
Improvement Plan should also be made during the third-month review in
case of a gap between the employees performance and the standards set.
These performance standards should be discussed in detail with the
employee within the first two (2) weeks on the job. It was equally required
that a signed copy of the PPSE form must be submitted to Abbotts Human
Resources Department (HRD) and shall serve as documentation of the
employees performance during his/her probationary period. This shall form
the basis for recommending the confirmation or termination of the
probationary employment.13
During the course of her employment, Alcaraz noticed that some of
the staff had disciplinary problems. Thus, she would reprimand them for
their unprofessional behavior such as non-observance of the dress code,
moonlighting, and disrespect of Abbott officers. However, Alcarazs method
of management was considered by Walsh to be too strict.14 Alcaraz
approached Misa to discuss these concerns and was told to lie low and let
Walsh handle the matter. Misa even assured her that Abbotts HRD would
support her in all her management decisions.15
On April 12, 2005, Alcaraz received an e-mail from Misa requesting
immediate action on the staffs performance evaluation as their probationary
periods were about to end. This Alcaraz eventually submitted.16

11
12
13
14
15
16

Id. at 127-128.
Id. at 1042-1043.
Id.
Id. at 1044.
Id.
Id.

Decision

G.R. No. 192571

On April 20, 2005, Alcaraz had a meeting with petitioner Cecille


Terrible (Terrible), Abbotts former HR Director, to discuss certain issues
regarding staff performance standards. In the course thereof, Alcaraz
accidentally saw a printed copy of an e-mail sent by Walsh to some staff
members which essentially contained queries regarding the formers job
performance. Alcaraz asked if Walshs action was the normal process of
evaluation. Terrible said that it was not.17
On May 16, 2005, Alcaraz was called to a meeting with Walsh and
Terrible where she was informed that she failed to meet the regularization
standards for the position of Regulatory Affairs Manager.18 Thereafter,
Walsh and Terrible requested Alcaraz to tender her resignation, else they be
forced to terminate her services. She was also told that, regardless of her
choice, she should no longer report for work and was asked to surrender her
office identification cards. She requested to be given one week to decide on
the same, but to no avail.19
On May 17, 2005, Alcaraz told her administrative assistant, Claude
Gonzales (Gonzales), that she would be on leave for that day. However,
Gonzales told her that Walsh and Terrible already announced to the whole
Hospira ALSU staff that Alcaraz already resigned due to health reasons.20
On May 23, 2005, Walsh, Almazar, and Bernardo personally handed
to Alcaraz a letter stating that her services had been terminated effective
May 19, 2005.21 The letter detailed the reasons for Alcarazs termination
particularly, that Alcaraz: (a) did not manage her time effectively; (b) failed
to gain the trust of her staff and to build an effective rapport with them; (c)
failed to train her staff effectively; and (d) was not able to obtain the
knowledge and ability to make sound judgments on case processing and
article review which were necessary for the proper performance of her
duties.22 On May 27, 2005, Alcaraz received another copy of the said
termination letter via registered mail.23
Alcaraz felt that she was unjustly terminated from her employment
and thus, filed a complaint for illegal dismissal and damages against Abbott
and its officers, namely, Misa, Bernardo, Almazar, Walsh, Terrible, and
Feist.24 She claimed that she should have already been considered as a
regular and not a probationary employee given Abbotts failure to inform her
of the reasonable standards for her regularization upon her engagement as
required under Article 29525 of the Labor Code. In this relation, she

17
18
19
20
21
22
23
24
25

Id. at 1044-1045.
Id. at 1045.
Id.
Id. at 1046.
Id. at 1047.
Id. at 19-21, 78, and 80-81.
Id. at 1047.
Id. at 255. See Labor Arbiter (LA) Decision dated March 30, 2006.
Formerly, Article 281 of the Labor Code; renumbered pursuant to Republic Act No. 10151.

Decision

G.R. No. 192571

contended that while her employment contract stated that she was to be
engaged on a probationary status, the same did not indicate the standards on
which her regularization would be based.26 She further averred that the
individual petitioners maliciously connived to illegally dismiss her when: (a)
they threatened her with termination; (b) she was ordered not to enter
company premises even if she was still an employee thereof; and (c) they
publicly announced that she already resigned in order to humiliate her.27
On the contrary, petitioners maintained that Alcaraz was validly
terminated from her probationary employment given her failure to satisfy the
prescribed standards for her regularization which were made known to her at
the time of her engagement.28
The LA Ruling
In a Decision dated March 30, 2006,29 the LA dismissed Alcarazs
complaint for lack of merit.
The LA rejected Alcarazs argument that she was not informed of the
reasonable standards to qualify as a regular employee considering her
admissions that she was briefed by Almazar on her work during her preemployment orientation meeting30 and that she received copies of Abbotts
Code of Conduct and Performance Modules which were used for evaluating
all types of Abbott employees.31 As Alcaraz was unable to meet the
standards set by Abbott as per her performance evaluation, the LA ruled that
the termination of her probationary employment was justified.32 Lastly, the
LA found that there was no evidence to conclude that Abbotts officers and
employees acted in bad faith in terminating Alcarazs employment.33
Displeased with the LAs ruling, Alcaraz filed an appeal with the
National Labor Relations Commission (NLRC).
The NLRC Ruling
On September 15, 2006, the NLRC rendered a Decision,34 annulling
and setting aside the LAs ruling, the dispositive portion of which reads:

26
27
28
29
30
31
32
33
34

Rollo (G.R. No. 192571), p. 267.


Id. at 261-262.
Id. at 263-267.
Id. at 255-274. Penned by Labor Arbiter Jovencio Ll. Mayor, Jr.
Id. at 269.
Id. at 270.
Id. at 271-272.
Id. at 273.
Id. at 356-378. Penned by Commissioner Romeo L. Go, with Commissioners Benedicto Ernesto R.
Bitonio, Jr. (on leave) and Perlita B. Velasco, concurring.

Decision

G.R. No. 192571

WHEREFORE, the Decision of the Labor Arbiter dated 31 March


2006 [sic] is hereby reversed, annulled and set aside and judgment is
hereby rendered:
1. Finding respondents Abbot [sic] and individual respondents to
have committed illegal dismissal;
2. Respondents are ordered to immediately reinstate complainant
to her former position without loss of seniority rights immediately upon
receipt hereof;
3. To jointly and severally pay complainant backwages computed
from 16 May 2005 until finality of this decision. As of the date hereof the
backwages is computed at
a. Backwages for 15 months b. 13th month pay
TOTAL

PhP 1,650,000.00
110,000.00
PhP 1,760,000.00

4. Respondents are ordered to pay complainant moral damages of


P50,000.00 and exemplary damages of P50,000.00.
5. Respondents are also ordered to pay attorneys fees of 10% of
the total award.
6. All other claims are dismissed for lack of merit.
SO ORDERED.

35

The NLRC reversed the findings of the LA and ruled that there was
no evidence showing that Alcaraz had been apprised of her probationary
status and the requirements which she should have complied with in order to
be a regular employee.36 It held that Alcarazs receipt of her job description
and Abbotts Code of Conduct and Performance Modules was not equivalent
to her being actually informed of the performance standards upon which she
should have been evaluated on.37 It further observed that Abbott did not
comply with its own standard operating procedure in evaluating
probationary employees.38 The NLRC was also not convinced that Alcaraz
was terminated for a valid cause given that petitioners allegation of
Alcarazs poor performance remained unsubstantiated.39
Petitioners filed a motion for reconsideration which was denied by the
NLRC in a Resolution dated July 31, 2007.40

35
36
37
38
39
40

Id. at 377-378.
Id. at 367.
Id. at 368.
Id. at 369.
Id. at 370-373.
Id. at 413-416. Penned by Commissioner Romeo L. Go, with Presiding Commissioner Gerardo C.
Nograles and Commissioner Perlita B. Velasco, concurring.

Decision

G.R. No. 192571

Aggrieved, petitioners filed with the CA a Petition for Certiorari with


Prayer for Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction, docketed as CA G.R. SP No. 101045 (First CA
Petition), alleging grave abuse of discretion on the part of NLRC when it
ruled that Alcaraz was illegally dismissed.41
Pending resolution of the First CA Petition, Alcaraz moved for the
execution of the NLRCs Decision before the LA, which petitioners strongly
opposed. The LA denied the said motion in an Order dated July 8, 2008
which was, however, eventually reversed on appeal by the NLRC.42 Due to
the foregoing, petitioners filed another Petition for Certiorari with the CA,
docketed as CA G.R. SP No. 111318 (Second CA Petition), assailing the
propriety of the execution of the NLRC decision.43
The CA Ruling
With regard to the First CA Petition, the CA, in a Decision44 dated
December 10, 2009, affirmed the ruling of the NLRC and held that the latter
did not commit any grave abuse of discretion in finding that Alcaraz was
illegally dismissed.
It observed that Alcaraz was not apprised at the start of her
employment of the reasonable standards under which she could qualify as a
regular employee.45 This was based on its examination of the employment
contract which showed that the same did not contain any standard of
performance or any stipulation that Alcaraz shall undergo a performance
evaluation before she could qualify as a regular employee.46 It also found
that Abbott was unable to prove that there was any reasonable ground to
terminate Alcarazs employment.47 Abbott moved for the reconsideration of
the aforementioned ruling which was, however, denied by the CA in a
Resolution48 dated June 9, 2010.
The CA likewise denied the Second CA Petition in a Resolution dated
May 18, 2010 (May 18, 2010 Resolution) and ruled that the NLRC was
correct in upholding the execution of the NLRC Decision.49 Thus,
petitioners filed a motion for reconsideration.
While the petitioners motion for reconsideration of the CAs May 18,
2010 Resolution was pending, Alcaraz again moved for the issuance of a

41
42
43
44
45
46
47
48
49

Id. at 417-450.
Id. at 1403.
Id.
Id. at 1040-1054.
Id at 1052.
Id.
Id. at 1053.
Id. at 1139-1140.
Id. at 1218.

Decision

G.R. No. 192571

writ of execution before the LA. On June 7, 2010, petitioners received the
LAs order granting Alcarazs motion for execution which they in turn
appealed to the NLRC through a Memorandum of Appeal dated June 16,
2010 (June 16, 2010 Memorandum of Appeal ) on the ground that the
implementation of the LAs order would render its motion for
reconsideration moot and academic.50
Meanwhile, petitioners motion for reconsideration of the CAs May
18, 2010 Resolution in the Second CA Petition was denied via a Resolution
dated October 4, 2010.51 This attained finality on January 10, 2011 for
petitioners failure to timely appeal the same.52 Hence, as it stands, only the
issues in the First CA petition are left to be resolved.
Incidentally, in her Comment dated November 15, 2010, Alcaraz also
alleges that petitioners were guilty of forum shopping when they filed the
Second CA Petition pending the resolution of their motion for
reconsideration of the CAs December 10, 2009 Decision i.e., the decision in
the First CA Petition.53 She also contends that petitioners have not complied
with the certification requirement under Section 5, Rule 7 of the Rules of
Court when they failed to disclose in the instant petition the filing of the
June 16, 2010 Memorandum of Appeal filed before the NLRC.54
The Issues Before the Court
The following issues have been raised for the Courts resolution: (a)
whether or not petitioners are guilty of forum shopping and have violated the
certification requirement under Section 5, Rule 7 of the Rules of Court; (b)
whether or not Alcaraz was sufficiently informed of the reasonable standards
to qualify her as a regular employee; (c) whether or not Alcaraz was validly
terminated from her employment; and (d) whether or not the individual
petitioners herein are liable.
The Courts Ruling
A.

Forum
Shopping
and
Violation of Section 5, Rule 7
of the Rules of Court.

At the outset, it is noteworthy to mention that the prohibition against


forum shopping is different from a violation of the certification requirement

50
51
52
53
54

Id.
Id. at 1219.
Rollo (G.R. No. 193976), p. 30.
Rollo (G.R. No. 192571), pp.1223-1228.
Id. at 1224.

Decision

10

G.R. No. 192571

under Section 5, Rule 7 of the Rules of Court. In Sps. Ong v. CA,55 the Court
explained that:
x x x The distinction between the prohibition against forum
shopping and the certification requirement should by now be too
elementary to be misunderstood. To reiterate, compliance with the
certification against forum shopping is separate from and independent of
the avoidance of the act of forum shopping itself. There is a difference in
the treatment between failure to comply with the certification requirement
and violation of the prohibition against forum shopping not only in terms
of imposable sanctions but also in the manner of enforcing them. The
former constitutes sufficient cause for the dismissal without prejudice [to
the filing] of the complaint or initiatory pleading upon motion and after
hearing, while the latter is a ground for summary dismissal thereof and for
direct contempt. x x x. 56

As to the first, forum shopping takes place when a litigant files


multiple suits involving the same parties, either simultaneously or
successively, to secure a favorable judgment. It exists where the elements of
litis pendentia are present, namely: (a) identity of parties, or at least such
parties who represent the same interests in both actions; (b) identity of rights
asserted and relief prayed for, the relief being founded on the same facts;
and (c) the identity with respect to the two preceding particulars in the two
(2) cases is such that any judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata in the
other case.57
In this case, records show that, except for the element of identity of
parties, the elements of forum shopping do not exist. Evidently, the First CA
Petition was instituted to question the ruling of the NLRC that Alcaraz was
illegally dismissed. On the other hand, the Second CA Petition pertains to
the propriety of the enforcement of the judgment award pending the
resolution of the First CA Petition and the finality of the decision in the
labor dispute between Alcaraz and the petitioners. Based on the foregoing, a
judgment in the Second CA Petition will not constitute res judicata insofar
as the First CA Petition is concerned. Thus, considering that the two
petitions clearly cover different subject matters and causes of action, there
exists no forum shopping.
As to the second, Alcaraz further imputes that the petitioners violated
the certification requirement under Section 5, Rule 7 of the Rules of Court58

55
56
57

58

433 Phil. 490, 501-502 (2002).


Id. at 501-502. (Citations omitted)
Republic v. Mangotara, G.R. Nos. 170375, 170505, 173355-56, 173401, 173563-64, 178779 &
178894, July 7, 2010, 624 SCRA 360, 428, citing NBI-Microsoft Corporation v. Hwang, 499 Phil. 423,
435-436 (2005).
Sec. 5. Certification against forum shopping. The plaintiff or principal party shall certify under oath
in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification
annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any
action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and,
to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other

Decision

11

G.R. No. 192571

by not disclosing the fact that it filed the June 16, 2010 Memorandum of
Appeal before the NLRC in the instant petition.
In this regard, Section 5(b), Rule 7 of the Rules of Court requires that
a plaintiff who files a case should provide a complete statement of the
present status of any pending case if the latter involves the same issues as
the one that was filed. If there is no such similar pending case, Section 5(a)
of the same rule provides that the plaintiff is obliged to declare under oath
that to the best of his knowledge, no such other action or claim is pending.
Records show that the issues raised in the instant petition and those in
the June 16, 2010 Memorandum of Appeal filed with the NLRC likewise
cover different subject matters and causes of action. In this case, the validity
of Alcarazs dismissal is at issue whereas in the said Memorandum of
Appeal, the propriety of the issuance of a writ of execution was in question.
Thus, given the dissimilar issues, petitioners did not have to disclose in the
present petition the filing of their June 16, 2010 Memorandum of Appeal
with the NLRC. In any event, considering that the issue on the propriety of
the issuance of a writ of execution had been resolved in the Second CA
Petition which in fact had already attained finality the matter of
disclosing the June 16, 2010 Memorandum of Appeal is now moot and
academic.
Having settled the foregoing procedural matter, the Court now
proceeds to resolve the substantive issues.

B.

Probationary
employment;
grounds for termination.

A probationary employee, like a regular employee, enjoys security of


tenure. However, in cases of probationary employment, aside from just or
authorized causes of termination, an additional ground is provided under
Article 295 of the Labor Code, i.e., the probationary employee may also be
terminated for failure to qualify as a regular employee in accordance with
the reasonable standards made known by the employer to the employee at
the time of the engagement.59 Thus, the services of an employee who has
been engaged on probationary basis may be terminated for any of the
following: (a) a just or (b) an authorized cause; and (c) when he fails to

59

pending action or claim, a complete statement of the present status thereof; and (c) if he should
thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that
fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading
has been filed.
xxxx
Robinsons Galleria/Robinsons Supermarket Corporation v. Ranchez, G.R. No. 177937, January 19,
2011, 640 SCRA 135, 142.

Decision

12

G.R. No. 192571

qualify as a regular employee in accordance with reasonable standards


prescribed by the employer.60
Corollary thereto, Section 6(d), Rule I, Book VI of the Implementing
Rules of the Labor Code provides that if the employer fails to inform the
probationary employee of the reasonable standards upon which the
regularization would be based on at the time of the engagement, then the
said employee shall be deemed a regular employee, viz.:
(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 made to comply with two (2)


requirements when dealing with a probationary employee: first, the
employer must communicate the regularization standards to the probationary
employee; and second, the employer must make such communication at the
time of the probationary employees engagement. If the employer fails to
comply with either, the employee is deemed as a regular and not a
probationary employee.
Keeping with these rules, an employer is deemed to have made known
the standards that would qualify a probationary employee to be a regular
employee when it has exerted reasonable efforts to apprise the employee of
what he is expected to do or accomplish during the trial period of probation.
This goes without saying that the employee is sufficiently made aware of his
probationary status as well as the length of time of the probation.
The exception to the foregoing is when the job is self-descriptive in
nature, for instance, in the case of maids, cooks, drivers, or messengers.61
Also, in Aberdeen Court, Inc. v. Agustin,62 it has been held that the rule on
notifying a probationary employee of the standards of regularization should
not be used to exculpate an employee who acts in a manner contrary to basic
knowledge and common sense in regard to which there is no need to spell
out a policy or standard to be met. In the same light, an employees failure to
perform the duties and responsibilities which have been clearly made known
to him constitutes a justifiable basis for a probationary employees nonregularization.

60
61
62

Id.
Id. at 145.
495 Phil. 706, 716-717 (2005).

Decision

13

G.R. No. 192571

In this case, petitioners contend that Alcaraz was terminated because


she failed to qualify as a regular employee according to Abbotts standards
which were made known to her at the time of her engagement. Contrarily,
Alcaraz claims that Abbott never apprised her of these standards and thus,
maintains that she is a regular and not a mere probationary employee.
The Court finds petitioners assertions to be well-taken.
A punctilious examination of the records reveals that Abbott had
indeed complied with the above-stated requirements. This conclusion is
largely impelled by the fact that Abbott clearly conveyed to Alcaraz her
duties and responsibilities as Regulatory Affairs Manager prior to, during the
time of her engagement, and the incipient stages of her employment. On this
score, the Court finds it apt to detail not only the incidents which point out to
the efforts made by Abbott but also those circumstances which would show
that Alcaraz was well-apprised of her employers expectations that would, in
turn, determine her regularization:
(a) On June 27, 2004, Abbott caused the publication in a major
broadsheet newspaper of its need for a Regulatory Affairs Manager,
indicating therein the job description for as well as the duties and
responsibilities attendant to the aforesaid position; this prompted Alcaraz to
submit her application to Abbott on October 4, 2004;
(b) In Abbotts December 7, 2004 offer sheet, it was stated that
Alcaraz was to be employed on a probationary status;
(c) On February 12, 2005, Alcaraz signed an employment contract
which specifically stated, inter alia, that she was to be placed on probation
for a period of six (6) months beginning February 15, 2005 to August 14,
2005;
(d) On the day Alcaraz accepted Abbotts employment offer,
Bernardo sent her copies of Abbotts organizational structure and her job
description through e-mail;
(e) Alcaraz was made to undergo a pre-employment orientation
where Almazar informed her that she had to implement Abbotts Code of
Conduct and office policies on human resources and finance and that she
would be reporting directly to Walsh;
(f)
Alcaraz was also required to undergo a training program as part
of her orientation;

Decision

14

G.R. No. 192571

(g) Alcaraz received copies of Abbotts Code of Conduct and


Performance Modules from Misa who explained to her the procedure for
evaluating the performance of probationary employees; she was further
notified that Abbott had only one evaluation system for all of its employees;
and
(h) Moreover, Alcaraz had previously worked for another
pharmaceutical company and had admitted to have an extensive training
and background to acquire the necessary skills for her job.63
Considering the totality of the above-stated circumstances, it cannot,
therefore, be doubted that Alcaraz was well-aware that her regularization
would depend on her ability and capacity to fulfill the requirements of her
position as Regulatory Affairs Manager and that her failure to perform such
would give Abbott a valid cause to terminate her probationary employment.
Verily, basic knowledge and common sense dictate that the adequate
performance of ones duties is, by and of itself, an inherent and implied
standard for a probationary employee to be regularized; such is a
regularization standard which need not be literally spelled out or mapped
into technical indicators in every case. In this regard, it must be observed
that the assessment of adequate duty performance is in the nature of a
management prerogative which when reasonably exercised as Abbott did
in this case should be respected. This is especially true of a managerial
employee like Alcaraz who was tasked with the vital responsibility of
handling the personnel and important matters of her department.
In fine, the Court rules that Alcarazs status as a probationary
employee and her consequent dismissal must stand. Consequently, in
holding that Alcaraz was illegally dismissed due to her status as a regular
and not a probationary employee, the Court finds that the NLRC committed
a grave abuse of discretion.
To elucidate, records show that the NLRC based its decision on the
premise that Alcarazs receipt of her job description and Abbotts Code of
Conduct and Performance Modules was not equivalent to being actually
informed of the performance standards upon which she should have been
evaluated on.64 It, however, overlooked the legal implication of the other
attendant circumstances as detailed herein which should have warranted a
contrary finding that Alcaraz was indeed a probationary and not a regular
employee more particularly the fact that she was well-aware of her duties
and responsibilities and that her failure to adequately perform the same
would lead to her non-regularization and eventually, her termination.

63
64

Rollo (G.R. No. 192571), p. 1201.


Id. at 367-368, 370.

Decision

15

G.R. No. 192571

Accordingly, by affirming the NLRCs pronouncement which is


tainted with grave abuse of discretion, the CA committed a reversible error
which, perforce, necessitates the reversal of its decision.
C.

Probationary
employment;
termination procedure.

A different procedure is applied when terminating a probationary


employee; the usual two-notice rule does not govern.65 Section 2, Rule I,
Book VI of the Implementing Rules of the Labor Code states that [i]f 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.
As the records show, Alcaraz's dismissal was effected through a letter
dated May 19, 2005 which she received on May 23, 2005 and again on May
27, 2005. Stated therein were the reasons for her termination, i.e., that after
proper evaluation, Abbott determined that she failed to meet the reasonable
standards for her regularization considering her lack of time and people
management and decision-making skills, which are necessary in the
performance of her functions as Regulatory Affairs Manager.66 Undeniably,

65

Refers to the procedure stated in Article 291(b) of the Labor Code, as renumbered pursuant to
Republic Act No. 10151, viz.:
Article 291. Miscellaneous Provisions.
xxxx
(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 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.
xxxx
This procedure is also found in Section 2(d), Rule I, Book VI of the Omnibus Rules Implementing the
Labor Code which state:
xxxx
(d) 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 282 [now,
Article 296] 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.

66

(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.
Rollo, pp. 78-81.

Decision

16

G.R. No. 192571

this written notice sufficiently meets the criteria set forth above, thereby
legitimizing the cause and manner of Alcarazs dismissal as a probationary
employee under the parameters set by the Labor Code.67
D.

Employers
company
procedure.

violation
policy

of
and

Nonetheless, despite the existence of a sufficient ground to terminate


Alcarazs employment and Abbotts compliance with the Labor Code
termination procedure, it is readily apparent that Abbott breached its
contractual obligation to Alcaraz when it failed to abide by its own
procedure in evaluating the performance of a probationary employee.
Veritably, a company policy partakes of the nature of an implied
contract between the employer and employee. In Parts Depot, Inc. v.
Beiswenger,68 it has been held that:
[E]mployer statements of policy . . . can give rise to contractual rights in
employees without evidence that the parties mutually agreed that the
policy statements would create contractual rights in the employee, and,
hence, although the statement of policy is signed by neither party, can be
unilaterally amended by the employer without notice to the employee, and
contains no reference to a specific employee, his job description or
compensation, and although no reference was made to the policy
statement in pre-employment interviews and the employee does not learn
of its existence until after his hiring. Toussaint, 292 N.W .2d at 892. The
principle is akin to estoppel. Once an employer establishes an express
personnel policy and the employee continues to work while the policy
remains in effect, the policy is deemed an implied contract for so long
as it remains in effect. If the employer unilaterally changes the policy,
the terms of the implied contract are also thereby changed. (Emphasis
and underscoring supplied.)

Hence, given such nature, company personnel policies create an


obligation on the part of both the employee and the employer to abide by the
same.
Records show that Abbotts PPSE procedure mandates, inter alia, that
the job performance of a probationary employee should be formally
reviewed and discussed with the employee at least twice: first on the third
month and second on the fifth month from the date of employment. Abbott
is also required to come up with a Performance Improvement Plan during
the third month review to bridge the gap between the employees
performance and the standards set, if any.69 In addition, a signed copy of the

67
68
69

Id. at 1047.
170 S.W.3d 354 (Ky. 2005).
Rollo (G.R. No. 192571), p. 1052.

Decision

17

G.R. No. 192571

PPSE form should be submitted to Abbotts HRD as the same would serve
as basis for recommending the confirmation or termination of the
probationary employment.70
In this case, it is apparent that Abbott failed to follow the above-stated
procedure in evaluating Alcaraz. For one, there lies a hiatus of evidence that
a signed copy of Alcarazs PPSE form was submitted to the HRD. It was not
even shown that a PPSE form was completed to formally assess her
performance. Neither was the performance evaluation discussed with her
during the third and fifth months of her employment. Nor did Abbott come
up with the necessary Performance Improvement Plan to properly gauge
Alcarazs performance with the set company standards.
While it is Abbotts management prerogative to promulgate its own
company rules and even subsequently amend them, this right equally
demands that when it does create its own policies and thereafter notify its
employee of the same, it accords upon itself the obligation to faithfully
implement them. Indeed, a contrary interpretation would entail a
disharmonious relationship in the work place for the laborer should never be
mired by the uncertainty of flimsy rules in which the latters labor rights and
duties would, to some extent, depend.
In this light, while there lies due cause to terminate Alcarazs
probationary employment for her failure to meet the standards required for
her regularization, and while it must be further pointed out that Abbott had
satisfied its statutory duty to serve a written notice of termination, the fact
that it violated its own company procedure renders the termination of
Alcarazs employment procedurally infirm, warranting the payment of
nominal damages. A further exposition is apropos.
Case law has settled that an employer who terminates an employee for
a valid cause but does so through invalid procedure is liable to pay the latter
nominal damages.
In Agabon v. NLRC (Agabon),71 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. However, the
employer should indemnify the employee for the violation of his statutory
rights.72 Thus, in Agabon, the employer was ordered to pay the employee
nominal damages in the amount of P30,000.00.73

70
71
72
73

Id. at 1043.
G.R. No. 158693, November 17, 2004, 442 SCRA 573.
Id. at 616.
Id. at 620.

Decision

18

G.R. No. 192571

Proceeding from the same ratio, the Court modified Agabon in the
case of Jaka Food Processing Corporation v. Pacot (Jaka)74 where it created
a distinction between procedurally defective dismissals due to a just cause,
on one hand, and those due to an authorized cause, on the other.
It was explained that if the dismissal is based on a just cause under
Article 282 of the Labor Code (now Article 296) but the employer failed to
comply with the notice requirement, the sanction to be imposed upon him
should be tempered because the dismissal process was, in effect, initiated by
an act imputable to the employee; if the dismissal is based on an authorized
cause under Article 283 (now Article 297) but the employer failed to comply
with the notice requirement, the sanction should be stiffer because the
dismissal process was initiated by the employers exercise of his
management prerogative.75 Hence, in Jaka, where the employee was
dismissed for an authorized cause of retrenchment76 as contradistinguished
from the employee in Agabon who was dismissed for a just cause of neglect
of duty77 the Court ordered the employer to pay the employee nominal
damages at the higher amount of P50,000.00.
Evidently, the sanctions imposed in both Agabon and Jaka proceed
from the necessity to deter employers from future violations of the statutory
due process rights of employees.78 In similar regard, the Court deems it
proper to apply the same principle to the case at bar for the reason that an
employers contractual breach of its own company procedure albeit not
statutory in source has the parallel effect of violating the laborers rights.
Suffice it to state, the contract is the law between the parties and thus,
breaches of the same impel recompense to vindicate a right that has been
violated. Consequently, while the Court is wont to uphold the dismissal of
Alcaraz because a valid cause exists, the payment of nominal damages on
account of Abbotts contractual breach is warranted in accordance with
Article 2221 of the Civil Code.79

Anent the proper amount of damages to be awarded, the Court


observes that Alcarazs dismissal proceeded from her failure to comply with
the standards required for her regularization. As such, it is undeniable that
the dismissal process was, in effect, initiated by an act imputable to the
employee, akin to dismissals due to just causes under Article 296 of the
Labor Code. Therefore, the Court deems it appropriate to fix the amount of
nominal damages at the amount of P30,000.00, consistent with its rulings in
both Agabon and Jaka.

74
75
76
77
78
79

494 Phil. 114, 119-121 (2005).


Id. at 121.
Id. at 122.
Supra note 71, at 605.
Id. at 617.
Article 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.

Decision

E.

Liability
petitioners
officers.

19

of
as

G.R. No. 192571

individual
corporate

It is hornbook principle that personal liability of corporate directors,


trustees or officers attaches only when: (a) they assent to a patently unlawful
act of the corporation, or when they are guilty of bad faith or gross
negligence in directing its affairs, or when there is a conflict of interest
resulting in damages to the corporation, its stockholders or other persons; (b)
they consent to the issuance of watered down stocks or when, having
knowledge of such issuance, do not forthwith file with the corporate
secretary their written objection; (c) they agree to hold themselves
personally and solidarily liable with the corporation; or (d) they are made by
specific provision of law personally answerable for their corporate action.80
In this case, Alcaraz alleges that the individual petitioners acted in bad
faith with regard to the supposed crude manner by which her probationary
employment was terminated and thus, should be held liable together with
Abbott. In the same vein, she further attributes the loss of some of her
remaining belongings to them.81
Alcarazs contention fails to persuade.

A judicious perusal of the records show that other than her unfounded
assertions on the matter, there is no evidence to support the fact that the
individual petitioners herein, in their capacity as Abbotts officers and
employees, acted in bad faith or were motivated by ill will in terminating
Alcarazs services. The fact that Alcaraz was made to resign and not allowed
to enter the workplace does not necessarily indicate bad faith on Abbotts
part since a sufficient ground existed for the latter to actually proceed with
her termination. On the alleged loss of her personal belongings, records are
bereft of any showing that the same could be attributed to Abbott or any of
its officers. It is a well-settled rule that bad faith cannot be presumed and he
who alleges bad faith has the onus of proving it. All told, since Alcaraz
failed to prove any malicious act on the part of Abbott or any of its officers,
the Court finds the award of moral or exemplary damages unwarranted.
WHEREFORE, the petition is GRANTED. The Decision dated
December 10, 2009 and Resolution dated June 9, 2010 of the Court of
Appeals in CA-G.R. SP No. 101045 are hereby REVERSED and SET
ASIDE. Accordingly, the Decision dated March 30, 2006 of the Labor
Arbiter is REINSTATED with the MODIFICATION that petitioner
Abbott Laboratories, Philippines be ORDERED to pay respondent Pearlie

80
81

Carag v. NLRC, 548 Phil. 581, 605 (2007), citing McLeod v. NLRC, 541 Phil. 214, 242 (2007).
Rollo (G.R. No. 192571), pp. 262, 1046.

20

Decision

G.R. No. 192571

Ann F. Alcaraz nominal damages in the amount ofPJO,OOO.OO on account of


its breach of its own company procedure.
SO ORDERED.

ESTELA

~E~-BERNABE
Associate Justice

WE CONCUR:

MARIA LOURDES P. A. SERENO


Chief Justice

Associate Justice

~~~~

TERESITA J. LEONARDO-DE CASTRO


Associate Justice

~LLO
Associate Justice

~S.VILL

PRESBITE 0 J. VELASCO, JR.

Q~~
Associate Justice

~
ROBERTO A. ABAD
Associate Justice

Decision

21

G.R. No. 192571

CERTIFICATION
I certify that the conclusions in the above Decision had been reached
in consultation before the case was assigned to the writer of the opinion of
the Court.

MARIA LOURDES P. A. SERENO


Chief Justice

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