PASVIL/Pascual Liner, Inc., Workers Union-NAFLU vs.

NLRC
G.R. No. 124823
July 28, 1999

FACTS:
 On August 3, 1994, the petitioner union filed a Notice of Strike with the NCMB-
NCR against private respondent Pasvil for ULP consisting in union busting,
discrimination and discouraging union membership.
 On January 24, 1995, the NCMB-NCR notified the Union President that the issues
raised are not proper subjects of a Notice of Strike (as the real issues of validity of
dismissal of the Union President is pending before the Labor Arbiter, and the
certification election is pending before the DOLE Secretary), but are appropriate
for Preventive Mediation.
 A series of conciliation conferences was thereafter conducted by the NCMB which
failed however to amicably settle the dispute. As a consequence, on February 18,
1995, the petitioner union staged a strike. Further efforts to effect settlement
achieved nothing and the strike continued.
 On February 21, 1995, upon petition of private respondent Pasvil, then DOLE
Secretary Confesor, pursuant to Art. 263(g), assumed jurisdiction over the case and
certified it to the NLRC for compulsory arbitration.
 Notwithstanding receipt of the return-to-work order, Secretary Confesor found
that petitioner union continued to picket and barricade Pasvil’s premises thereby
preventing the workers wanting to report back to work from entering the
premises. Thus, on February 24, 1995, she reiterated the return-to-work order and
deputized the Station Commander of the Novaliches Police Station to assist.
 The conciliation conferences were scheduled, but only representatives of Pasvil
appeared. On this account, the parties were ordered to submit their Position Papers
which they complied.
 On August 21, 1995, Pasvil moved for the early resolution of the case.
 On January 15, 1996, the NLRC declared the still-ongoing strike illegal (as there
was no legitimate reason to strike and that the strikers did not comply with the
DOLE Secretary’s return-to-work order) and consequently deemed the union
officers who acted as leaders thereof, herein petitioners, to have lost their
employment status. However, the charge of ULP was dismissed for lack of merit.
 On January 31, 1996, MR was denied.

ISSUES:
 WON the NLRC acted with grave abuse of discretion in ruling on the illegality of
the strike thus violating the doctrine laid down in PAL vs. Secretary of Labor and
 Employment that the Labor Secretary’s authority to resolve a labor dispute over
which he has assumed jurisdiction encompasses only the issues involved therein,
not the legality or illegality of the strike.
 WON the NLRC acted with grave abuse of discretion in declaring the strike illegal
and considering petitioners to have lost their employment status.

RULING:
 No, there was no grave abuse of discretion.
Art. 217 provides the jurisdiction of the Labor Arbiters to hear and decide cases
involving the legality of strikes and lock-outs, “except as otherwise provided under
this Code.” Art. 263(g) of the same Code provides for this exception.
In this case, what was certified to the NLRC was the entire labor dispute
including the strike which was then ongoing. It was thus necessary for the NLRC
to rule on the matter.
Interphil Employees v. Interphil
Topic: Jurisdiction of DOLE, Illegal Strike (Work Slowdown), Evidence in labor cases
Relevant Provisions: (just the title of the provision)
 Art 236(g), Labor Code – Joint jurisdiction between LAs and Sec. of Labor

G. R. No. 142824
Dec. 19, 2001
Kapunan J.

Petitioners: Interphil Employees Union (Union)

Respondents: Interphl Laboratories, Inc.

Summary: (Note: this is what I think the main doctrine is. Read the digest for the
other issues). The Interphil Union wanted the company to renegotiate, or at least
guarantee an extension of the CBA before it expired. When the company wanted to
defer negotiation to the proper period, the employees conducted “overtime boycott”
and “work slowdown.” The company filed with the Labor Arbiter to declare the strike
illegal. Eventually, another case was born in front of the Sec. Of Labor. The Sec of
Labor directed the LA to hear the case and report to the Secretary. Both the LA and
the Sec. ruled against the union. The union said that the Sec had no jurisdiction to
rule on the case, since it was in front of the LA. The SC held that because of art.
236(g), the Sec has jurisdiction over these acts which were intertwined with the labor
dispute in front of him.

FACTS:
 The union and Interphil have a CBA in place. It’s to be effeective from Aug 1,
1990, to July 31, 1993.
 Sometime in Feb. 1993, Nestor Ocampo (union president) and Hernando
Clemente (union director) approached Salazar (VP for HR), asking him about
the CBA.
o They wanted to know what the company’s stand was regarding the
duration of the CBA
o Salazar said it would better be discussed during the formal negotiations.
o They approached him again in March, and they got the same reply.
 They approached him again in April, asking for a meeting to discuss the CBA –
Salazar acceded, and he was asked if he would be amenable to making the new
CBA effective for 2 years, starting Aug 1, 1993.
 o Salazar said, again, that it was premature to discuss this, and the company
couldn’t make a decision right then and there.
 The very next day (April 16, 1993), all the rank and file employees suddenly
refused to follow the normal two-shift work schedule (6am-6pm, and 6pm-
6am).
 At 2pm (first shift) and at 2am (2nd shift), the employees simply left the
workplace without sealing the containers or securing the materials they were
working with.
 Salazar, alarmed, asked the employees “What’s going on???” (not his exact
words, siguro nagmura pa yun)
o They merely said “ask the union officers.”
 Salazar immediately called for a meeting with the officers, and they said that the
employees would only return to the normal work schedule if the company
would agree to their demands regarding the effectivity and duration of the CBA.
o Salazar, again, said that this would be better discussed during the formal
negotiations.
 The union was not satisfied – they continued the “overtime boycott” (notice,
they would leave after exactly 8 hours of work)
o They also conducted a work slowdown campaign when they were working
– production was thus substiantially delayed.
 The union submitted their CBA proposal, and the company submitted their
counterproposal.
 On September 3, 1993, the company filed with the NLRC a petition to declare
the boycot and slowdown illegal – they said that it amounted to illegal strike.
o This was assigned to Labor Arbiter Caday.
 On Oct. 22, 1993, the company filed with the National Conciliation and
Mediation Board (NCMB) a request for preventive mediation – however, the
parties were unable to arrive at an agreement
o Thus, the company filed, on Nov. 15, with the Secretary of Labor and
Employment, a petition for assumption of jurisdiction.
 On Jan. 24, 1994, the union filed with the NCMB a Notice of Strike, citing unfair
labor practice. They staged a strike on Feb. 12. (kapal).
 On Feb 14, the Secretary of Labor, Nieves Confesor, issued an assumption order
over the labor dispute.
o On March 2, Confesor ordered the company to accept all the striking
workers, and the union to stop striking and return to work.
o This order said that “all pending cases which were direct offshoots of the
labor dispute are subsumed herewith.”
  Meanwhile, the case before LA Caday continued.
o The union filed for consolidation of the case with the labor dispute
pending before the Secretary.
o Caday held the proceedings in abeyance
o However, on June 6, Acting Secretary Brillanted directed Caday and
another arbiter to proceed with the case.
 On Sept 5, Caday submitted the recommendation to Sec. of Labor, Quisumbing,
who approved and adopted the report into his order dated August 13, 1997 (I
wonder what’s been going on the past 4 years. Strike parin ba sila?)
o The overtime boycott and work slowdown were declared an illegal strike
o Several union officers were fired
o The union was charged with unfair labor practice for violating the CBA,
which prohibited the union or any employee from striking or engaging in
slowdown or interruption of work. They were ordered to cease and desist.
 Union moved for reconsideration – denied. They moved up to the CA –
dismissed.

Hence, this petition.

ISSUES:
1. Did the CA err in disregarding the “parol evidence rule?”
2. Did the CA err in not declaring the company’s act of extending substantial
separation package to the involved officers as tantamount to condonation if
there was any misdeed committed?
3. Did the CA err in holding that the Sec. of Labor has jurisdiction over a case
(petition to declare a strike illegal), which was pending before the labor arbiter?

HELD:
 Petition DENIED.
 Decision of lower court AFFIRMED.

RATIO:
 On the matter of jurisdiction
o It is undisputed that the petition to declare the strike illegal was filed
before LA Caday long before the Sec. of Labor and Employment (SOLE –
katamad itype) issued the assumption order.
 o However, issues of “overtime boycott” and “work slowdown” amounting to
illegal strike before Caday are intertwined with the labor dispute before
the SOLE.
 In fact, on March 16, 1994, the Union even asked Caday to suspend
proceedings and consolidate the same with the SOLE.
 When Brillantes ordered Caday to continue the case, both parties
acceded, knowing that there was a directive for him to submit his
recommendation to the SOLE.
o The subsequent participation of the union in the hearing was an
affirmation of the jurisdiction of the SOLE.
o The SC also cited a case – International Pharmaceutical v. Sec. Of Labor
and Associated Labor Union
 Art. 263 (g) of the Labor Code: SOLE has authority to assume
jurisdiction over a labor dispute causing/likely to cause a strike or
lockout in an industry indispensable to national interest
 Necessarily, this extends to all questions arising therefrom, including
cases over which the LA has jurisdiction.
 Art. 217 of the Labor Code has exceptions (“except as otherwise
provided under this code…) – Art. 263(g) is such an exception.
 The SOLE and the Las share jurisdiction, sometimes.
o Thus, the assailed orders are within the province of the SOLE.
 On the matter of evidence
o The union says that the lower courts disregarded the parol evidence rule,
when they upheld the allegation of the company that the schedule was the
two-shift sked mentioned above.
o The CBA provides that the normal working hours were from 730am – 4pm
(normal 8 hour shift)

o Reliance on this rule is misplaced – labor cases before the NLRC od LA

aren’t strictly bound by the rules of evidence. They’re not applied in a very
rigid or technical sense.

o So the LA could in fact accept and consider other evidence than the CBA.

o In any case, the CBA said that the work hours could change at the
company’s discretion.
 o Also, the employees were aware, and in fact complied with the 12-hour
shifts. Their own witnesses show this.

 On the illegal strike

o It’s clear that the actions taken by the union amounted to illegal strike.
o (The SC here just reiterated the facts as stated above).
o They also cited a testimony of a union member
 Essentially, he said that the union officers called for a stop to the
overtime activities. When he disregarded it and actually went to
work, he was branded a traitor by the union officers and was shouted
at.
o The union also claimed that they had no hand in the work slowdown –
there was no change in performance/efficiency for the year 1993
 This was rebuffed by their own witness (she could not answer how
she prepared the productivity reports, because she was on union
leave. She had no knowledge of some of the reports)
 Even then, the comparison is of no moment – undeniably, the
boycott and work slowdown resulted in financial loss and damage to
its reputation.
o The SC classified the acts by the union as a “strike on installment basis.”
 “Slowdown” is an inherently illegal activity wherein the workers
purposefully remain at their positions and accept wages, but at the
same time, select what parts of their allotted task they want to
perform, and refuse to do other work.
 On the substantial separation package
o This is not a form of condonation.
o When the separation payments were given, the officers were still
employees
o The company was just doing its legal obligation
o In fact, they could have withheld these – union should in fact be grateful
to the company.
MSF Tire & Rubber, Inc., vs CA, G.R. No. 128632, August 5, 1999
Facts: Respondent Union filed a notice of strike in the NCMB charging (Phildtread)
with unfair labor practice. Thereafter, they picketed and assembled outside the gate of
Philtread’s plant. Philtread, on the other hand, filed a notice of lockout. Subsequently,
the Secretary of Labor assumed jurisdiction over the labor dispute and certified it for
compulsory arbitration.

During the pendency of the labor dispute, Philtread entered into a Memorandum of
Agreement with Siam Tyre whereby its plant and equipment would be sold to a new
company, herein petitioner, 80% of which would be owned by Siam Tyre and 20% by
Philtread, while the land on which the plant was located would be sold to another
company, 60% of which would be owned by Philtread and 40% by Siam Tyre.

Petitioner then asked respondent Union to desist from picketing outside its plant. As
the respondent Union refused petitioner’s request, petitioner filed a complaint for
injunction with damages before the RTC. Respondent Union moved to dismiss the
complaint alleging lack of jurisdiction on the part of the trial court.

Petitioner asserts that its status as an “innocent bystander” with respect to the labor
dispute between Philtread and the Union entitles it to a writ of injunction from the
civil courts.

Issue: WON petitioner has shown a clear legal right to the issuance of a writ of
injunction under the “innocent bystander” rule.

Held: In Philippine Association of Free Labor Unions (PAFLU) v. Cloribel, this Court,
through Justice J.B.L. Reyes, stated the “innocent bystander” rule as follows:

The right to picket as a means of communicating the facts of a labor dispute is a phase
of the freedom of speech guaranteed by the constitution. If peacefully carried out, it
cannot be curtailed even in the absence of employer-employee relationship.
The right is, however, not an absolute one. While peaceful picketing is entitled to
protection as an exercise of free speech, we believe the courts are not without power
to confine or localize the sphere of communication or the demonstration to the
parties to the labor dispute, including those with related interest, and to insulate
establishments or persons with no industrial connection or having interest totally
foreign to the context of the dispute. Thus the right may be regulated at the instance
of third parties or “innocent bystanders” if it appears that the inevitable result of its
exercise is to create an impression that a labor dispute with which they have no
connection or interest exists between them and the picketing union or constitute an
invasion of their rights.
Thus, an “innocent bystander,” who seeks to enjoin a labor strike, must satisfy the
court it is entirely different from, without any connection whatsoever to, either party
to the dispute and, therefore, its interests are totally foreign to the context thereof.

In the case at bar, petitioner cannot be said not to have such connection to the
dispute. We find that the “negotiation, contract of sale, and the post transaction”
between Philtread, as vendor, and Siam Tyre, as vendee, reveals a legal relation
between them which, in the interest of petitioner, we cannot ignore. To be sure, the
transaction between Philtread and Siam Tyre, was not a simple sale whereby
Philtread ceased to have any proprietary rights over its sold assets. On the contrary,
Philtread remains as 20% owner of private respondent and 60% owner of Sucat Land
Corporation which was likewise incorporated in accordance with the terms of the
Memorandum of Agreement with Siam Tyre, and which now owns the land were
subject plant is located. This, together with the fact that private respondent uses the
same plant or factory; similar or substantially the same working conditions; same
machinery, tools, and equipment; and manufacture the same products as Philtread,
lead us to safely conclude that private respondent’s personality is so closely linked to
Philtread as to bar its entitlement to an injunctive writ.
SUKHOTHAI CUISINE AND RESTAURANT V CA
Vote

FACTS: The majority of the employees of the petitioner organized themselves into a
union which affiliated with the Philippine Labor Alliance Council (PLAC), and was
designated as PLAC Local 460 Sukhothai Restaurant Chapter (Union). The Union filed
a Notice of Strike with the National Conciliation and Mediation Board (NCMB) on
the ground of unfair labor practice, and particularly, acts of harassment, fault-finding,
and union busting through coercion and interference with union affairs. In a
conciliation conference, the representatives of the petitioner agreed and guaranteed
that there will be no termination of the services of private respondents during the
pendency of the case, with the reservation of the management prerogative to issue
memos to erring employees for the infraction, or violation of company policies. On
the following day, a Strike Vote was conducted and supervised by NCMB personnel,
and the results of the vote were submitted to the NCMB. The petitioner and the
Union entered into a Submission Agreement, thereby agreeing to submit the issue of
unfair labor practice – the subject matter of the foregoing Notice of Strike and the
Strike Vote – for voluntary arbitration with a view to prevent the strike.
During the pendency of the voluntary arbitration proceedings, the petitioner,
dismissed Eugene Lucente, a union member, due to an alleged petty quarrel with a
co-employee. Union filed with the NLRC a complaint for illegal dismissal. Another
union member was relieved from his post, and his employment as cook, terminated.
Union staged a "wildcat strike."
Notice of Strike was re-filed by the private respondents and the protest and was
converted into a "sit-down strike." On the next day, or on June 26, 1999, the same was
transformed into an "actual strike."
Petitioner filed a complaint for illegal strike, seeking to declare the strike illegal, and
to declare respondents, who participated in the commission of illegal acts, to have lost
their employment status. Labor Arbiter ruled in favor of petitioner. However, NLRC
overruled Labor Arbiter and held that the petitioner is guilty of union busting; that
the petitioner violated the Submission Agreement.

ISSUE: Whether the strike staged by the private respondents is illegal; and whether
private respondents are deemed to have lost their employment status by participating
in the commission of illegal acts during the strike
HELD: Yes

RATIO: Respondents insist that the filing of the Notice of Strike on December 3,
1998, the Strike Vote of December 11, 1998, the submission of the results of the vote
to the NCMB on December 21, 1998, and their observation of the 15-day cooling-off
period in case of unfair labor practice as well as the seven-day reporting period of the
results of the strike vote, all satisfy the mandatory requirements under Article 263 of
the Labor Code and are applicable to the June 1999 strike. In support of this theory,
respondents invoke Article 263(f) in that the decision to strike is valid for the
duration of the dispute based on substantially the same grounds considered when the
strike vote was taken, thus, there is no need to repeat the process. Furthermore,
according to the respondents, even assuming for the sake of argument that the Notice
of Strike and Strike Vote in December 1998 cannot be made to apply to the concerted
actions in June 1999, these requirements may nonetheless be dispensed with since the
petitioner is guilty of union busting and, hence, the Union can take action
immediately.

The undisputed fact, however, is that at the time the strike was staged in June
1999, voluntary arbitration between the parties was ongoing by virtue of the January
21, 1999 Submission Agreement. The issue to be resolved under those proceedings
pertained to the very same issues stated in the Notice of Strike of December 3, 1998:
the commission of unfair labor practices, such as acts of harassment, fault-finding, and
union busting through coercion and interference with union affairs.

This Court has held that strikes staged in violation of agreements providing for
arbitration are illegal, since these agreements must be strictly adhered to and
respected if their ends are to be achieved. The rationale of the prohibition under
Article 264 is that once jurisdiction over the labor dispute has been properly acquired
by competent authority, that jurisdiction should not be interfered with by the
application of the coercive processes of a strike. Indeed it is among the chief policies
of the State to promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation, and conciliation, as modes of
settling labor, or industrial disputes
The alleged dismissals of Lucente and respondent Lanorias, both union
members, which allegedly triggered the wildcat strike, are not sufficient grounds to
justify the radical recourse on the part of the private respondents.

For failing to exhaust all steps in the arbitration proceedings by virtue of the
Submission Agreement, in view of the proscription under Article 264 of the Labor
Code, and the prevailing state policy as well as its underlying rationale, this Court
declares that the strike staged by the private respondents is illegal.
MAGIS YOUNG ACHIEVERS' LEARNING CENTER and MRS. VIOLETA T.
CARIÑO v. ADELAIDA P. MANALO

G.R. No. 178835, February 13, 2009

FACTS:
 Respondent Adelaida P. Manalo was hired as a teacher and acting principal of
petitioner Magis Young Achievers’ Learning Center
 on March 29, 2003, respondent wrote a letter of resignation addressed to Violeta T.
Cariño, directress of petitioner
 March 31, 2003, respondent received a letter of termination from petitioner
 The letter stated that the position of PRINCIPAL will be abolished next school
year,therefore respondent cannot renew her contract anymore
3
 On April 4, 2003, respondent instituted against petitioner a Complaint  for illegal
dismissal and non-payment of 13th month pay, with a prayer for reinstatement,
award of full backwages and moral and exemplary damages.
 respondent claimed that her termination violated the provisions of her
employment contract, and that the alleged abolition of the position of Principal
was not among the grounds for termination by an employer under Article 282 5 She
also claimed that she was terminated from service for the alleged expiration of her
employment, but that her contract did not provide for a fixed term or period
7
 Petitioner, in its position paper,  countered that respondent was legally terminated
because the one-year probationary period, from April 1, 2002 to March 3, 2003,
had already lapsed
ISSUE:

1. W/N RESIGNATION OF RESPONDENT MANALO DID NOT BECOME

EFFECTIVE DUE TO ALLEGED LACK OF ACCEPTANCE (YES)
2. W/N RESPONDENT MANALO IS A PERMANENT EMPLOYEE (NO)
3. W/N CONTRACT OF EMPLOYMENT BETWEEN PETITIONER AND
RESPONDENT DID NOT STIPULATE A PERIOD.(YES)
4. W/N RESPONDENT WAS ILLEGALLY DISMISSED (YES)

RATIO:

1. RESIGNATION OF RESPONDENT
 The SC agreed with the CA that the resignation of the respondent is not valid,
not only because there was no express acceptance thereof by the employer, but
because there is a cloud of doubt as to the voluntariness of respondent’s
resignation.
  Voluntary resignation is made with the intention of relinquishing an office,
accompanied by the act of abandonment. It is the acceptance of an employee’s
resignation that renders it operative
41
  In this case, respondent actively pursued her illegal dismissal case against
petitioner, such that she cannot be said to have voluntarily resigned from her
job

2. EMPLOYMENT STATUS
 A probationary employee or probationer is one who is on trial for an
employer, during which the latter determines whether or not he is qualified
for permanent employment
 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
 however, , the law sets a maximum "trial period" during which the employer
may test the fitness and efficiency of the employee.
 Article 281 of the Labor Code: shall not exceed six (6) months
 Section 92 of the 1992 Manual of Regulations for Private Schools: shall not be
more than three (3) consecutive school years
 no vested right to a permanent appointment shall accrue until the employee
has completed the prerequisite three-year period necessary for the acquisition
of a permanent status
 There should be no question that the employment of the respondent, as
teacher, in petitioner school on April 18, 2002 is probationary in character
 She had rendered service as such only from April 18, 2002 until March 31,
2003. She has not completed the requisite three-year period of probationary
employment, as provided in the Manual. She cannot, by right, claim
permanent status
 An "acting" appointment is essentially a temporary appointment, revocable at
will.
3. STIPULATION OF PERIOD
 It is important that the contract of probationary employment specify the
period or term of its effectivity. The failure to stipulate its precise duration
could lead to the inference that the contract is binding for the full three-year
probationary period.25
 We can only apply Article 1702 of the Civil Code which provides that, in case
of doubt, all labor contracts shall be construed in favor of the laborer. Then,
too, settled is the rule that any ambiguity in a contract whose terms are
susceptible of different interpretations must be read against the party who
drafted it. In the case at bar, the drafter of the contract is herein petitioners
and must, therefore, be read against their contention
  In respondent’s copy, the period of effectivity of the agreement remained
blank
 Thus, following Article 1702 of the Civil Code that all doubts regarding labor
contracts should be construed in favor of labor, then it should be respondent’s
copy which did not provide for an express period which should be upheld
4. ILLEGAL DISMISSAL
 probationary employees enjoy security of tenure during the term of their
probationary employment such that they may only be terminated for cause as
provided for by law, or if at the end of the probationary period, the employee
failed to meet the reasonable standards set by the employer at the time of the
employee’s engagement.
 Undeniably, respondent was hired as a probationary teacher and, as such, it
was incumbent upon petitioner to show by competent evidence that she did
not meet the standards set by the school.
 This requirement, petitioner failed to discharge.
 To note, the termination of respondent was effected by that letter stating
that she was being relieved from employment because the school authorities
allegedly decided, as a cost-cutting measure, that the position of "Principal"
was to be abolished. Nowhere in that letter was respondent informed that her
performance as a school teacher was less than satisfactory.
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.

CRUZ, J.:

FACTS:

Elena Honasan applied for employment with the Holiday Inn and was on April 15,
1991, accepted for "on-the-job training" as a telephone operator for a period of three
weeks. For her services, she received food and transportation allowance.   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.

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. 

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. The complaint was dismissed on April 22, 1992 by the Labor Arbiter, 6who
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.   In its own
decision dated November 27, 1992, the NLRC ordered the petitioners to reinstate
Honasan.

ISSUE:
WON the NLRC erred in ordering the reinstatement of Honasan and declaring that
she has obtained the status of a regular employee (NO)

RATIO:

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

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

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.

WHEREFORE, the petition is DISMISSED, with costs against petitioners. It is so

ordered.
JAKA FOOD vs. PACOT et al G.R. No. 151378 March 28, 2005

FACTS: 
Respondents Pacot et al were earlier hired by petitioner JAKA Foods Processing
Corporation until the latter terminated their employment because the corporation
was “in dire financial straits”.  It is not disputed, however, that the termination was
effected without JAKA complying with the requirement under Article 283 of the
Labor Code regarding the service of a written notice upon the employees and the
DOLE at least 1 month before the intended date of termination.

In time, respondents separately filed with the regional Arbitration Branch of the
NLRC complaints for illegal dismissal, underpayment of wages and nonpayment of
SIL and 13th month pay against JAKA and its HRD Manager.

ISSUE: is the dismissal valid, because of non-compliance with the notice

requirement?

HELD: the dismissal is legal, but employer should pay nominal damages for non-
compliance witht the notice requirement

In the case of Agabon vs. NLRC, the court had the opportunity to resolve a similar
question.  Therein, we found that the employees committed a grave offense, i.e.,
abandonment, which is a form of a neglect of duty which, in turn, is one of the just
causes enumerated under Article 282 of the Labor Code.  In said case, we upheld the
validity of the dismissal despite non-compliance with the notice requirement of the
Labor Code.  However, we required the employer to pay the dismissed employees
nominal damages for non-compliance with statutory due process.
**
The difference between Agabon and the instant case is that in the former, the
dismissal was based on a just cause under Article 282 of the Labor Code while in the
present case, respondents were dismissed due to retrenchment, which is one of
the authorized causes under Article 283 of the same Code.

A dismissal for just cause under Article 282 implies that the employee concerned has
committed, or is guilty of, some violation against the employer, i.e. the employee has
committed some serious misconduct, is guilty of some fraud against the employer, or,
as in Agabon, he has neglected his duties.  Thus, it can be said that the employee
himself initiated the dismissal process.

On another breath, a dismissal for an authorized cause under Article 283

does not necessarily imply delinquency or culpability on the part of the employee.
Instead, the dismissal process is initiated by the employer’s exercise of his
management prerogative, i.e. when the employer opts to install labor saving devices,
when he decides to cease business operations or when, as in this case, he undertakes
to implement a retrenchment program.

Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under
Article 282 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; and (2) if the dismissal is
based on an authorized cause under Article 283 but the employer failed to comply
with the notice requirement, the sanction should be stiffer because the dismissal
process was initiated by the employer’s exercise of his management prerogative.

The records before us reveal that, indeed, JAKA was suffering from serious business
losses at the time it terminated respondents’ employment.
**
The clear-cut distinction between a dismissal for just cause under Article 282 and a
dismissal for authorized cause under Article 283 is further reinforced by the fact that
in the first, payment of separation pay, as a rule, is not required, while in the second,
the law requires payment of separation pay.

We find the CA to have been in error when it ordered JAKA to pay respondents
separation pay equivalent to 1 month salary for every year of service.  This is because
in Reahs Corporation vs. NLRC, we made the following declaration:

“The rule, therefore, is that in all cases of business closure or cessation of operation or
undertaking of the employer, the affected employee is entitled to separation pay.
This is consistent with the state policy of treating labor as a primary social economic
force, affording full protection to its rights as well as its welfare.  The exception is
when the closure of business or cessation of operations is due to serious business
losses or financial reverses; duly proved, in which case, the right of affected
employees to separation pay is lost for obvious reasons.  xxx”