G.R. No. L-63316 - Buiser vs. Leogardo, Jr.

Petitioners Iluminada Ver Buiser, Ma. Cecilia Rillo-Acuna, and Ma. Mercedes P. Intengan were employed by General Telephone Directory Company as telephone sales representatives.
They entered into an “Employment Contract (on Probationary Status)” with the respondent:

The contract provided for an eighteen (18) month probationary period—from May 1980 to October 1981—stating that during this period the employee may be terminated at the company’s discretion without notice or termination pay.
A key feature of the contract was the imposition of sales quotas, failure to meet which could lead to dismissal.

On May 27, 1981, following their dismissal, the petitioners filed a complaint for illegal dismissal with the Ministry of Labor and Employment in the National Capital Region (Case No. NCR-STF-5-2851-81), claiming back-wages, earned commissions, and other benefits.
The Regional Director of the Ministry issued an Order on September 21, 1982, dismissing the petitioners’ complaints except for the claim for allowances.
A motion for reconsideration was subsequently filed, which was treated as an appeal to the Minister of Labor.

On appeal, Deputy Minister Vicente Leogardo, Jr. issued an Order on January 7, 1983.
This Order affirmed the Regional Director’s decision, ruling that:

The petitioners had not attained regular status because the company was justified in requiring a longer (18-month) probationary period.
Their dismissal for failure to meet sales quotas was valid.

The imposition of an 18-month probationary period instead of the Labor Code prescribed six (6) months, thus denying them security of tenure.
The ruling that their dismissal was for a just and valid cause.
The denial of their claims for commissions accrued during their employment.

They argued that, under Articles 281 and 282 of the Labor Code, having served continuously for over six (6) months, they should have been deemed regular employees regardless of the probationary stipulation.

Article 282: Sets the general limit for probationary employment at six (6) months, except where extended by an apprenticeship agreement or by specific job requirements.
Article 281: Provides the basis for deeming employment as regular beyond certain conditions, notwithstanding prior agreements.

Policy Instruction No. 11 of the Minister of Labor and Employment clarifies that the probationary period should reflect the actual time needed for an employee to learn the job, which in specialized contexts (e.g., telephone sales) may extend beyond six (6) months.
The Collective Bargaining Agreement (Article V) acknowledged an 18-month probationary period for telephone or sales representatives.

Whether the extension of the probationary period to eighteen (18) months, as stipulated in the employment contract and recognized by company policy and the Collective Bargaining Agreement, contravened the mandatory six (6) month limit under the Labor Code.
Whether the dismissal of the petitioners for failing to meet sales quotas constitutes a just and valid cause under the Labor Code.
Whether being employed for over six (6) months automatically rendered the petitioners regular employees, thereby entitling them to security of tenure and other benefits, including the earned commissions.
Whether the Regional Director and the Deputy Minister of Labor committed grave abuse of discretion, amounting to lack of jurisdiction, in affirming the dismissal of the petitioners’ claims.