Facts:

This case involves Petitioners Adstratworld Holdings, Inc., Judito B. Callao, and Judito Dei R. Callao (collectively referred to as "Petitioners") and Respondents Chona A. Magallones and Pauline Joy M. Lucino (collectively referred to as "Respondents"). The crux of the dispute arose from a Petition for Review on Certiorari filed against the Decision of the Court of Appeals (CA) dated November 29, 2016, which reversed the ruling of the National Labor Relations Commission (NLRC). This matter originated from a complaint for illegal dismissal and money claims filed by Respondents against Petitioners.

From January 2012 until July 15, 2013, Respondents served as events marketing and logistics officers for Petitioners without any written employment contract. They were compensated with a basic salary of PHP 10,000, along with a 13th-month pay of PHP 4,000 and a cash bonus of PHP 1,000 during the Christmas party. On July 16, 2013, Petitioners issued probationary contr

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Facts:

Background of Employment

• Respondents, Chona A. Magallones and Pauline Joy M. Lucino, began working for Adstratworld Holdings, Inc. (petitioner) from January 2012 without any written contract.
• They were engaged as events marketing and logistics officers, allegedly performing tasks necessary and desirable in the usual advertising business of Adstratworld.
• Initial compensation included a monthly basic salary of ₱10,000.00 with minimal benefits (13th month pay of ₱4,000.00 and a ₱1,000.00 Christmas bonus).

Shift to Probationary Employment

• On July 16, 2013, petitioners issued written probationary contracts to respondents, effective from that day until December 16, 2013, with an adjusted basic salary of ₱11,000.00.
• The probationary contracts were allegedly intended to evaluate respondents’ performance and determine their eligibility for regularization.
• The issuance of these contracts is contended by respondents to be a ploy to circumvent their right to security of tenure, given that they had already accrued continuous service.

Alleged Illegal Dismissal and Disciplinary Actions

• On January 8, 2014, respondents were dismissed from work and were no longer allowed to report for duty.
• Petitioners argued that respondents were terminated for repeated incidents, including:
• Unauthorized distribution of items (jersey shirts) during work-related projects.
• Violations involving breach of company protocol such as bringing unauthorized items (singlet) into company premises.
• Accumulated instances of tardiness, specifically impacting Pauline Joy M. Lucino.
• Despite explanations provided by respondents, Adstratworld imposed suspensions and issued disciplinary actions prior to ultimately terminating their employment.

Rulings Prior to the Present Case

• Labor Arbiter (LA) Decision (October 3, 2014):
• Dismissed the complaint for illegal dismissal on the ground of respondents’ unsatisfactory performance and alleged disregard of company rules.
• Directed petitioners to pay last pay amounts of ₱5,000.00 to Magallones and ₱6,500.00 to Lucino.
• National Labor Relations Commission (NLRC) Decision (February 4, 2015):
• Affirmed with modification the LA decision, limiting the monetary award to unpaid salary amounting to ₱11,500.00.
• Supported the premise that respondents’ performance and violation of company rules justified non-regularization.
• Court of Appeals (CA) Decision (November 29, 2016):
• Reversed and set aside the NLRC ruling.
• Determined that respondents were in fact regular employees from the commencement of their employment in January 2012, regardless of the probationary contract issued in 2013.
• Held that respondents were illegally dismissed as their dismissal was not for any valid or authorized cause, further noting the lack of due process in the termination.
• Awarded respondents various monetary claims including backwages, separation pay (in lieu of reinstatement), holiday pay, service incentive leave pay, and additional moral, exemplary damages, plus attorney’s fees.
• CA Resolution (July 10, 2017):
• Denied petitioners’ motion for reconsideration, prompting the filing of a petition for review on certiorari.

Contesting Arguments and Disputed Facts

• Respondents argued they were de facto regular employees having performed tasks integral to the company’s operations since January 2012.
• Petitioners maintained that:
• Respondents commenced their employment effectively on July 16, 2013 with the probationary contracts.
• Their termination was justified as the respondents failed to meet the qualifications for regularization, a standard they were duly informed about.
• The evidentiary records, including payslips and contents of the probationary contracts, supported the assertion that respondents had already served in the company prior to the issuance of the contracts.

Issue:

Jurisprudential and Procedural Questions

• Whether the Court of Appeals erred in finding that the NLRC committed grave abuse of discretion by affirming the dismissal of the complaint for illegal dismissal and money claims.
• Whether it was proper for the CA to determine that respondents were regular employees from the start of their employment, thereby rendering their dismissal illegal.
• Whether the factual findings pertaining to the status of employment and the procedural due process in the employee’s termination were correctly evaluated by the CA.
• Whether the evidentiary records sufficiently established that respondents rendered work in ways that were integral to Adstratworld’s usual business operations.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)