Case Summary (G.R. No. L-63316)
Petitioners’ Employment Contracts and Terms
Each petitioner executed an “Employment Contract (On Probationary Status)” specifying an 18-month probationary period (May 1980–October 1981). The contracts expressly provided that during probation the employer might terminate employment without notice or termination pay, and justified the extended probation on the ground that the employer could evaluate a telephone sales representative’s effectiveness only after published ads (published the year following solicitation). The company also established sales quotas as measurable standards of performance.
Procedural History
Petitioners were terminated for failure to meet quotas (Buiser and Rillo-Acuna on May 14, 1981; Intengan on May 18, 1981). They filed complaints for illegal dismissal and unpaid commissions with the National Capital Region, Ministry of Labor and Employment on May 27, 1981 (Case No. NCR‑STF‑5‑2851‑81). The Regional Director dismissed their complaints except for allowances (Order dated September 21, 1982). A motion for reconsideration treated as an appeal was denied by Deputy Minister Leogardo (Order dated January 7, 1983). Petitioners filed a petition for certiorari alleging grave abuse of discretion amounting to lack of jurisdiction.
Legal Issues Presented
- Whether a probationary employment period may lawfully exceed six months under Articles 281–282 of the Labor Code; 2) whether the dismissals for failure to meet sales quotas constituted dismissal for a just cause; and 3) whether petitioners were entitled to commissions, particularly in light of a Collective Bargaining Agreement (CBA) executed after their termination.
Applicable Law and Policy Guidance
Articles 281–282 of the Labor Code (as quoted by the parties) set the general rule that probationary employment shall not exceed six months, but recognize the concept of probationary employment and regularization after satisfactory completion. Policy Instruction No. 11 of the Minister of Labor and Employment (quoted in the records) explains that six months is the general probationary period but clarifies that the probationary period is the period needed to determine fitness for the job; the period may be longer where necessary to evaluate job fitness. The company’s CBA (Article V) expressly recognized an 18-month probationary period for telephone or sales representatives.
Court’s Analysis on the Probationary Period
The Court rejected petitioners’ contention that probationary employment is absolutely limited to six months. It recognized the general six-month rule but emphasized exceptions where the nature of the work or an agreement (company policy or CBA) justifies a longer probationary period. The Court relied on Policy Instruction No. 11 to support the proposition that the probationary period is measured by the time reasonably required to determine fitness for the job. Given the company’s business model—where solicited advertisements are published only the year following solicitation—the Court found it reasonable that the company required eighteen months to evaluate selling capacity and conduct. The employment contracts and the CBA provision for an 18‑month probationary period were found not to be contrary to law, morals, or public policy.
Court’s Ruling on Just Cause for Dismissal
The Court held that failure to meet reasonable work standards or quotas—reflecting inefficiency—is a valid ground for dismissal. It treated the enforcement of sales quotas as an exercise of managerial prerogative, acceptable so long as exercised in good faith for the employer’s legitimate interests. The petitioners’ failure to meet assigned sales quotas thus constituted just cause for termination regardless of employment status (probationary or regular). The Court cited existing authority recognizing dismissal for failure to meet work standards and referred to a prior decision involving the same private respondent (Arthur Golez v. NLRC and General Telephone Directory Co.) in which similar contentions were rejected.
Commission Claim and Timing of the Collective Bargaining Agreement
Petitioners based their commission claim on a Collective Bargaining Agreement executed in September 1981. The Court found that petitioners had been terminated in May 19
...continue readingCase Syllabus (G.R. No. L-63316)
Case Caption and Nature of Proceeding
- Petition for certiorari filed by petitioners Iluminada Ver Buiser, Ma. Cecilia Rillo-Acuna and Ma. Mercedes P. Intengan.
- Respondents: Hon. Vicente Leogardo, Jr., Deputy Minister of the Ministry of Labor & Employment, and General Telephone Directory Company (private respondent).
- Relief sought: Setting aside the Order of the Deputy Minister of Labor and Employment affirming the Regional Director, National Capital Region, in Case No. NCR-STF-5-2851-81, which dismissed petitioners' complaint for alleged illegal dismissal and unpaid commissions.
- Ground alleged for relief: Grave abuse of discretion amounting to lack of jurisdiction by the public respondent.
Factual Background — Employment and Duties
- Petitioners were employed by the private respondent General Telephone Directory Company as sales representatives.
- Their duty: soliciting advertisements for inclusion in a telephone directory (Yellow Pages of the PLDT Telephone Directories).
- Hiring dates:
- Iluminada Ver Buiser and Ma. Mercedes P. Intengan: executed "Employment Contract (on Probationary Status)" on May 26, 1980.
- Ma. Cecilia Rillo-Acuna: executed the same contract on June 11, 1980.
- Common contractual provision: employment as telephone sales representative on probationary status for eighteen (18) months, i.e., from May 1980 to October 1981, inclusive.
- Contractual clause regarding termination during probation: "It is understood that during the probationary period of employment, the Employee may be terminated at the pleasure of the company without the necessity of giving notice of termination or the payment of termination pay."
- Contractual rationale for extended probation: the company could determine true character, conduct and selling capabilities only after publication of the directory, and that it takes about eighteen (18) months before worth as a telephone sales representative can be fully evaluated since advertisements solicited for a particular year are published only the following year.
Sales Quotas and Termination Facts
- Private respondent prescribed sales quotas to be accomplished or met by the petitioners.
- Petitioners failed to meet their respective sales quotas.
- Termination dates:
- Iluminada Ver Buiser and Ma. Cecilia Rillo-Acuna: terminated on May 14, 1981.
- Ma. Mercedes P. Intengan: terminated on May 18, 1981.
- Petitioners filed a complaint with the National Capital Region, Ministry of Labor and Employment, docketed as Case No. NCR-STF-5-2851-81, on May 27, 1981. Claims included illegal dismissal, back wages, earned commissions and other benefits.
Administrative Proceedings and Orders
- Regional Director, National Capital Region, issued an Order dated September 21, 1982:
- Dismissed the complaints of the petitioners except for claim for allowances, which the private respondent was ordered to pay.
- Petitioners filed a motion for reconsideration on September 30, 1982; this motion was treated as an appeal to the Minister of Labor.
- Deputy Minister Vicente Leogardo, Jr. issued an Order dated January 7, 1983:
- Affirmed the Regional Director's Order dated September 21, 1982.
- Ruled that petitioners had not attained permanent status since the private respondent was justified in requiring a longer period of probation.
- Ruled that termination of petitioners' services was valid because petitioners failed to meet their sales quotas.
Petitioners' Assignments of Error and Legal Contentions
- General contention: public respondent committed grave abuse of discretion amounting to lack of jurisdiction.
- Specific assignments:
- Grave abuse of discretion in ruling probationary employment was eighteen (18) months instead of the six (6) months mandated under the Labor Code; therefore petitioners were not entitled to security of tenure while under eighteen (18) month probation.
- Grave abuse of discretion in ruling petitioners were dismissed for a just and valid cause.
- Grave abuse of discretion in ruling petitioners were not entitled to the commissions they had earned and accrued during their period of employment.
- Statutory basis cited by petitioners: Articles 281 and 282 of the Labor Code, contending that having served continuously for over six (6) months they became automatically regular employees notwithstanding an agreement to the contrary.
Applicable Statutory Provisions Quoted by Petitioners
- Article 282 (Probationary Employment) quoted in full as in the source:
- "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. (As amended by PD 850)."
- Article 281 (Regular and Casual Employment) quoted in full as in the source:
- "The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. (As amended by PD 850)."