Case Summary (G.R. No. 226240)
Petition and Proceedings Before Labor Agencies
Petitioner filed a complaint for illegal dismissal before the National Labor Relations Commission (NLRC), alleging that she was dismissed without justifiable cause or procedure, and that her employer failed to provide notice or explanation for terminating her employment after the probationary period. Respondent denied illegal dismissal and maintained that petitioner failed to meet the reasonable standards necessary for regularization, supported by performance evaluations and aptitude test results.
Labor Arbiter’s Findings and Decision
The Labor Arbiter ruled in favor of petitioner, declaring her dismissal illegal due to the lack of justifiable cause and procedural due process. The Labor Arbiter found that petitioner did not abandon her employment, emphasizing that abandonment requires a deliberate refusal to resume work. As termination was unlawful, the petitioner was entitled to reinstatement or, given the strained relationship, separation pay, backwages, moral and exemplary damages, and attorney's fees. Solidary liability was dismissed against the Chief Executive Officer due to insufficient evidence of bad faith.
NLRC’s Decision
The NLRC modified the Labor Arbiter’s decision by removing the award for moral and exemplary damages, citing insufficient evidence showing that the dismissal was done in an arbitrary, capricious, or malicious manner. It upheld the finding of illegal dismissal due to failure to prove just cause for termination and ordered payment of backwages, separation pay, and attorney’s fees. The Respondent’s motion for reconsideration was denied.
Court of Appeals’ Ruling
The Court of Appeals reversed the NLRC’s ruling, annulling the declaration of illegal dismissal. It held that petitioner’s status as a probationary employee was established, and that her dismissal for failing to meet reasonable job-related standards was lawful. Tests and performance appraisals showed petitioner’s inability to satisfy the employer’s criteria for regularization. However, the Court found that the manner of dismissal was procedurally defective, as petitioner was not formally notified in writing but was instead informed by text messages, and due process was not observed. As a consequence, the Court awarded nominal damages of ₱30,000. Petitioner's motion for reconsideration was denied.
Issue Presented
Whether petitioner was illegally dismissed by respondent, considering both substantive and procedural due process in terminating a probationary employee under Republic Act No. 7702 and other applicable labor laws, particularly the Omnibus Rules Implementing the Labor Code under the 1987 Philippine Constitution.
Probationary Employment and Legal Standards
A probationary employee is subject to a trial period (maximum six months) during which the employer observes the employee’s fitness and competency. The employer must inform the probationary employee, at the time of engagement, of the reasonable standards against which regularization will be measured. Failure by the employee to meet these standards justifies termination without the strict two-notice rule required for regular employees. If no standards are communicated, the employee is deemed regular.
Findings on Petitioner’s Status and Performance
The employment agreement explicitly classified petitioner as probationary with six months’ duration and provided for evaluations at the third and fifth months. Petitioner underwent aptitude tests and performance appraisals, consistently receiving below-average scores. Such results demonstrated failure to meet communicated performance standards, thereby giving the employer lawful ground to deny regularization and terminate employment.
Procedural Due Process Deficiency
Despite the lawful substantive cause for dismissal, the Court of Appeals—and ultimately the Supreme Court—concurred that dismissal procedures were flawed. Petitioner was not formally notified in writing within a reasonable time; the text message communications failed to satisfy due process requirements under Section 2, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code. The subsequent issuance of a Notice of Absence Without Official Leave (NAWOL) was considered an afterthought and insufficient to cure the procedural lapse.
Legal Principles on Dismissal of Probationary Employees
Termination of probationary employees for failure to qualify under known standards requires written notice served within a reasonable time from the effective termination date, but does not require the full procedural due process applicable to regular employees. An employer’
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Case Syllabus (G.R. No. 226240)
Case Background and Parties Involved
- Petitioner Myra M. Moral filed a complaint for illegal dismissal against her employer, Momentum Properties Management Corporation (respondent) and/or its CEO, Steve Li.
- The litigated issue originated from petitioner’s probationary employment as a Leasing Assistant starting 26 June 2013.
- Petitioner alleged unlawful dismissal without due notice and justifiable cause on 27 December 2013.
- Respondent denied illegal dismissal but confirmed petitioner’s probationary status and elaborated on performance deficiencies and procedural steps followed before termination.
Summary of Petitioner’s Allegations and Respondent’s Defense
- Petitioner claimed:
- Dismissal was abrupt and without notice or explanation.
- Respondent ignored inquiries about reasons for termination.
- Her dismissal violated substantive and procedural due process.
- Respondent contended:
- Petitioner was evaluated during her probation period as per Employment Agreement.
- Petitioner failed written aptitude tests and performance appraisals.
- She disregarded efforts to discuss performance and potential contract extension.
- Respondent complied with procedural requirements before ending employment.
Labor Arbiter’s Findings and Decision
- The Labor Arbiter declared petitioner was illegally dismissed due to lack of just cause and procedural due process.
- Found respondent’s claim of abandonment invalid, emphasizing requirement for deliberate and unjustified refusal to return to work.
- Awarded backwages, separation pay, moral and exemplary damages, and attorney’s fees to petitioner.
- Distinguished bad faith against respondent but not to CEO Steve Li due to insufficient evidence.
National Labor Relations Commission (NLRC) Decision
- NLRC modified Labor Arbiter’s decision by deleting moral and exemplary damages due to lack of clear and convincing evidence of malicious dismissal.
- Reduced monetary award accordingly.
- Confirmed petitioner was dismissed as she was not on payroll beyond 27 December 2013.
- Denied respondent’s motion for reconsideration.
Court of Appeals (CA) Ruling
- CA annulled and set aside the NLRC decision and resolution.
- Held petitioner was dismissed but respondent failed to observe procedural due process—dismissal communicated through informal text messages rather than formal written notice.
- Recognized petitioner’s probationary employment status, acknowledging right of respondent to terminate based on failure to meet reasonable standards.
- Awarded nominal damages of Php30,000.00 to respondent for procedural defect.
- Denied petitioner’s motion for reconsideration, leading to petitioner’s elevated petition to the Supreme Court.
Issue Presented for Supreme Court Review
- Whether petitioner was illegally dismissed by respondent, considering:
- Petitioner’s probationary status.
- Compliance with substantive grounds for dismissal.
- Observance of procedural due process.
Applicable Legal Principles on Probationary Employment
- Probationary employment s