Case Summary (G.R. No. 74246)
Petitioners
Mariwasa Manufacturing, Inc. and Angel T. Dazo sought review by certiorari and prohibition of the Deputy Minister’s order reinstating Dequila and awarding back wages, asserting that the Deputy Minister acted with grave abuse of discretion and that the extension of probation was lawful.
Respondents
Deputy Minister Vicente Leogardo, Jr., who reversed a regional director’s dismissal of Dequila’s complaint and ordered reinstatement with back wages; private respondent Dequila, who filed a complaint for illegal dismissal and alleged violations of Presidential Decrees Nos. 928 and 1389.
Key Dates and Employment Timeline
- Employment commenced on January 10, 1979 (probationary hire as general utility worker).
- Six‑month probation expired July 10, 1979.
- Probation was extended by written agreement for three months from July 10 to October 9, 1979.
- Termination occurred at the end of the extended period.
- An administrative order awarding back wages was later amended to limit back wages to December 20, 1982.
Applicable Law and Constitutional Basis
Primary statutory provision: Article 282, Labor Code, which sets a general six‑month ceiling on probationary employment (except apprenticeship agreements), permits termination for just cause or failure to qualify according to reasonable standards made known by the employer, and provides that an employee allowed to work after the probationary period is considered regular. The Court’s analysis was informed by the constitutional policy favoring security of tenure as reflected in the Labor Code; the 1987 Constitution was the operative constitutional framework relevant to labor policy and security of tenure at the time of this decision.
Facts Established and Uncontested Matters
There was no dispute as to the basic facts: Dequila was a probationary employee who, after six months, was found not to have met required standards. Rather than terminating him immediately, the employer and Dequila executed a written agreement extending probation for three months. Dequila again failed to meet standards and was dismissed at the end of the extension. Administrative adjudicators reached conflicting conclusions: the regional director dismissed Dequila’s complaint; the Deputy Minister reversed and ordered reinstatement and back wages (later limited to a specified date).
Procedural History
Dequila filed a complaint with the Ministry of Labor alleging illegal dismissal and statutory violations. The regional director dismissed the complaint; on appeal the Deputy Minister reversed and ordered reinstatement with back wages. Petitioners then sought Supreme Court review by certiorari and prohibition, challenging the Deputy Minister’s decision as an abuse of discretion or beyond jurisdiction. The Supreme Court granted the petition.
Legal Issue Presented
Whether, notwithstanding Article 282’s stated six‑month limit on probationary employment, employer and employee may validly agree to extend the probationary period beyond six months — specifically where the extension is agreed at or immediately after the expiration of the statutory period.
Relevant Precedent Applied
The Court relied on its earlier decision in Buiser v. Leogardo, Jr., which upheld the validity of an employment contract providing for an eighteen‑month probationary period. Buiser recognized that parties may agree to a probationary term longer than six months where the nature of the work or agreement of the parties so requires, and that such agreements fall within legitimate managerial prerogative and contractual freedom.
Court’s Reasoning and Analysis
- The Court read Article 282 in context and construed its six‑month prescription as a general rule subject to lawful exceptions grounded in contract and the nature of particular employment arrangements.
- The Court found no principled distinction between an initially stipulated longer probation (as in Buiser) and an extension of probation by mutual agreement at the end of the six‑month period. Both result in a probationary period longer than six months by agreement of the parties.
- The extension in this case was shown by the record to be voluntary and ex gratia — a firm‑granted opportunity for the employee to improve — not a stratagem to evade statutory protections. The absence of evidence that the extension was a sham or coercive was material to the Court’s conclusion.
- By agreeing to the extension, the employee effectively waived any entitlement that would arise from completion of the initial six‑month period, insofar as he consented that the probationary relationship continue and that his performance be further tested. The Court found nothing in the statute that prohibits such a waiver.
- The Court rejected the argument that allowing voluntary extensions undermines the constitutional guarantee of security of tenure. On the contrary, permitting reasonable, voluntary extensions can further an employee’s prospects of demonstratin
Case Syllabus (G.R. No. 74246)
Case Citation and Decision Date
- Reported at 251 Phil. 417, First Division, G.R. No. 74246.
- Decision rendered January 26, 1989.
- Decision authored by Justice Narvasa.
Parties
- Petitioners: Mariwasa Manufacturing, Inc., and Angel T. Dazo (Vice-President for Administration).
- Respondents: Hon. Vicente Leogardo, Jr., in his capacity as Deputy Minister of the Ministry of Labor and Employment, and private respondent Joaquin A. Dequila (also spelled Dequilla in parts of the record).
Factual Background
- Joaquin A. Dequila was hired by Mariwasa Manufacturing, Inc. as a general utility worker on January 10, 1979, on probationary employment.
- Upon expiration of the initial six-month probationary period, Dequila was informed that his work had proved unsatisfactory and failed to meet required standards.
- Instead of dismissing him immediately, Mariwasa, with Dequila’s written consent, extended his probationary period for an additional three months: from July 10 to October 9, 1979.
- Dequila’s performance did not improve during the three-month extension, and Mariwasa terminated his employment at the end of that extended period.
Administrative Proceedings and Orders
- Dequila filed a complaint with the Ministry of Labor against Mariwasa and Angel T. Dazo for illegal dismissal and alleged violations of Presidential Decrees Nos. 928 and 1389 (Case No. NCR-STF-10-6282-79).
- Director Francisco L. Estrella of the Ministry’s National Capital Region dismissed Dequila’s complaint after hearing, ruling that the termination was justified and dismissing money claims for insufficiency of evidence.
- On appeal to the Office of the Minister, Deputy Minister Vicente Leogardo, Jr. reversed the Regional Director’s disposition:
- He held that Dequila had become a regular employee at the time of dismissal and therefore could not have been lawfully dismissed for failure to meet company standards as a probationary worker.
- He ordered Dequila reinstated to his former position without loss of seniority and awarded full back wages from the date of dismissal until actual reinstatement.
- The reinstatement/back wages order was later apparently amended to limit payment of back wages from the date of dismissal to December 20, 1982.
Question Presented
- Whether, notwithstanding Article 282 of the Labor Code, probationary employment may validly be extended beyond the prescribed six-month period by agreement of the employer and the employee.
Relevant Statute (Article 282, Labor Code) — Quoted in the Decision
- "Art. 282. Probationary Employment. 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."
Parties’ Positions and Solicitor General’s Stance
- Petitioners (Mariwasa and Dazo) contended that the Deputy Minister’s reversal was rendered with grave abuse of discretion an