G.R. No. 178125 - The Orchard Golf and Country Club vs. Francisco

Philippine National Oil Company-Energy Development Corporation (PNOC-EDC) initially hired Amelyn Buenviaje as an assistant to the then Chairman/President, Sergio A.F. Apostol, who was also her father.
Her employment contract stated that she would serve until June 30, 2004 or co-terminus with Apostol’s tenure, whichever came first.

In connection with organizational changes, PNOC-EDC created a new Marketing Division with thirty positions; among these, seven were new positions, including that of Marketing Division Manager.
Buenviaje was designated to the position of Marketing Division Manager at the creation of the division.
On February 2, 2004, after the appointment of Paul Aquino as the new President of PNOC-EDC, Buenviaje was promoted to Senior Manager for the Marketing Division.
The appointment letter explicitly stated that her status would be changed “from Assistant to the President (co-terminus)” to regular status, with the regularization being retroactive to July 1, 2001, and included a clause that her appointment, though regular, was subject to confirmation based on her performance over the next six months.

Buenviaje underwent a performance appraisal in early May 2004 under the company’s policy.

In the first evaluation covering February 1, 2004 – April 30, 2004, she received a satisfactory grade (rating of three).
In the second evaluation covering May 1, 2004 – June 30, 2004, she received an unsatisfactory grade (rating of four).

The evaluation was performed using a performance appraisal form intended for regular employees, and the standards required were not communicated clearly at the time of her appointment.
Subsequent written communications from PNOC-EDC—via Vice President Ester Guerzon and President Paul Aquino—informed her of non-confirmation and ultimately her separation effective July 31, 2004.
Notwithstanding her written rebuttal regarding the appraisal, further letters reiterated her termination, and Aquino instructed her to prepare a turnover report before her move-out.

Buenviaje filed a complaint before the Labor Arbiter alleging illegal dismissal, non-payment of benefits (including 13th month pay), illegal deductions, and claimed moral and exemplary damages, along with attorney’s fees and backwages.
The Labor Arbiter ruled in her favor, declaring her a regular employee, and ordered reinstatement (or backwages) plus awards for damages and attorney fees, basing his decision on the clear language of the appointment letter and the irregularities in the performance evaluations.
The National Labor Relations Commission (NLRC) modified the Labor Arbiter’s ruling by granting financial assistance and accrued wages while deleting awards for moral, exemplary damages, and the joint and several liabilities of Aquino and Guerzon.
The Court of Appeals (CA) partially modified the NLRC resolution, affirming separation pay in lieu of reinstatement, backwages, and the deletion of joint and several liabilities; however, it also affirmed the awards for moral and exemplary damages and attorney’s fees.
Consolidated petitions reached the Supreme Court for review, which ultimately clarified the employee’s status and the legality of her dismissal.

Whether Amelyn Buenviaje was properly designated as a permanent (regular) employee from the time of her hiring and subsequent appointment, or whether she was merely on a probationary basis subject to later confirmation.

Whether PNOC-EDC complied with both the substantive and procedural due process requirements in dismissing Buenviaje, including clear notice of grounds and an opportunity to be heard.
Whether the use of an appraisal form designed for regular employees, as opposed to a probationary employee’s evaluation process, impacted the due process in her dismissal.

Whether an unsatisfactory performance rating (transitioning from a satisfactory rating in the first appraisal to an unsatisfactory one in the second) sufficed as a just or authorized cause for dismissal.
Whether the performance evaluations themselves, in light of ambiguous and uncommunicated standards, can justify termination.

Whether Buenviaje is entitled to reinstatement or, given strained relations, to separation pay with full backwages.
Whether she is entitled to moral and exemplary damages as well as attorney’s fees for the manner of her dismissal.

Whether Paul Aquino and Ester Guerzon should be held jointly and severally liable for the alleged illegal dismissal, or if their liability remains strictly within the ambit of the corporation’s management prerogative.