PERFORMANCE EVALUATION MADE AFTER THE CASE WAS FILED IS NOT FAIR AND ACCURATE ASSESSMENT AND MERE SELF-SERVING

Performance evaluation allegedly showing the employee’s inefficiency and shortcomings in the performance of his job was made only more than one month after his dismissal. Thus, is not fair and accurate assessment.

Dionella A. Gopio vs. Salvador B. Bautista
G.R. No. 205953, June 6, 2018

Performance evaluation; Illegal dismissal; One-month pay in lieu of one-month notice; Procedural due process; Fixed-period employment; Unexpired term; Solidary liability

Facts:

Respondent Salvador A. Bautista (Bautista) was hired as a Project Manager for Shorncliffe (PNG) Limited (Shomcliffe) in Papua New Guinea through Job Asia Management Services (Job Asia), a single proprietorship owned by petitioner Dionella A. Gopio (Gopio), which is engaged in the business of recruitment, processing, and deployment of land-based manpower for overseas work. Bautista’s contract stated that his employment shall be valid and effective for 31 months with a net monthly salary of P40,000.00.

On October 4, 2008, he arrived at his workplace in Papua New Guinca. On July 6, 2009 or just nine months after his deployment in Papua New Guinea, Bautista was served a notice of termination effective July 10, 2009 on the alleged grounds of unsatisfactory performance and failure to meet the standards of the company. He was paid his salary for the period July 1 to 10, 2009, annual leave credits, and one-month pay net of taxes.

Thereafter, he was repatriated on July 11, 2009. Bautista lodged a complaint with the arbitration branch of the NLRC against Job Asia, Gopio, and Shomcliffe for illegal dismissal and monetary claims. He claimed that he was terminated without just cause since there had been no job evaluation conducted prior to Shorncliffe’s decision to dismiss him from employment.

As a result, Bautisa is entitled to the payment of his salaries for the unexpired portion of his contract, or for 22 months. He alleged that while his contract contained an understated monthly income of P40,000.00, he was actually being paid the amount of P115,850.00 a month. Other than salaries, Bautista also claimed unrealized employment benefits, nine days sick leave pay, four weeks recreation leave pay, moral and exemplary damages, as well as attorney’s fees.

Job Asia, Gopio and Shorncliffe for their part, argued that Bautista’s employment was terminated because he failed to meet Shorncliffe’s standards. To buttress their claim, they submitted in evidence the work performance evaluation report on Bautista.

LA Ruling:

The Labor Arbiter (LA) rendered his Decision finding Bautista to have been illegally dismissed as the dismissal was not proven to be for a just cause and Shomcliffe failed to observe due process.

The Labor Arbiter held that the work performance evaluation allegedly showing Bautista’s inefficiency and shortcomings in the performance of his job was made only on August 22, 2009 or more than one month after Bautista’s dismissal. Thus, the findings therein are mere conclusions of fact, at best self-serving and merits no consideration.

Moreover, Shorncliffe failed to observe due process by not giving Bautista the twin notices required by law. The latter was not notified of the intention to dismiss him or the acts or omissions complained of. Neither was he notified of the decision to dismiss him and given an opportunity to answer and rebut the charges against him in between notices.

Labor Arbiter also rejected the argument that Bautista’s employment was terminated on the basis of Article 4.3 of the employment contract by giving him one-month salary in lieu of one month’s written notice.

Undaunted, Job Asia, Gopio, and Shorncliffe filed an appeal with the NLRC.

NLRC Ruling:

The NLRC issued its Decision setting aside the Decision of the Labor Arbiter and dismissing the complaint for illegal dismissal and monetary claims for lack of merit. Nevertheless, it ordered that Bautista be indemnified nominal damages in the amount of P40,000.00.

The NLRC held that the parties were bound by the terms and conditions of the employment contract that bore the stamp of approval of the Philippine Overseas Employment Administration (POEA). Consequently, it found that Bautista’s contract was pre-terminated in accordance with Article 4.3 thereof.

Contrary to the Labor Arbiter’s finding, the NLRC upheld the reports of Shorncliffe’s officers pertaining to his unsatisfactory performance and incompetence, and thus declared Bautista’s employment to have been terminated for a just cause. It, however, held that Bautista was not afforded due process, for which he should be awarded indemnity pegged at the rate of his basic salary for one month as stated in his employment contract, or P40,000.00.

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The NLRC found no bad faith or malice on the part of Job Asia, Gopio, or Shomcliffe that would have been the basis for an award of moral and exemplary damages and attorney’s fees.

Bautista filed a motion for reconsideration of the NLRC Decision, but it was denied. Hence, he filed a petition for certiorari with the CA.

CA Ruling:

The CA rendered its Decision annulling and setting aside the NLRC Decision and reinstating that of the Labor Arbiter. It held that Article 4.3 of the employment contract violates the provisions of the Labor Code on security of tenure since it gives the employer the option to do away with the notice requirement as long as he grants one-month salary to the employee in lieu thereof.

The provision deprives the employee of due process and violates his right to be apprised of the grounds for his termination without giving him an opportunity to defend himself and refute the charges against him. Moreover, the term “other grounds” is all-encompassing and makes the employee susceptible to arbitrary dismissal.

The CA also held that Job Asia, Gopio, and Shorncliffe failed to substantiate their claim that Bautista was discharged for just cause. Their claim that the latter was dismissed for performing below standards was not backed by any proof Further, Bautista was notified of his termination only four days prior to the intended date of dismissal without evidence of an assessment of his performance and the results thereof. Neither was he served a notice of any wrongdoing prior to the service of the notice of his termination.

Thus, the petition before the SC.

Issue/s:

Whether or not an evaluation report on employee performance made after he filed an illegal dismissal case is substantial evidence to prove validity of dismissal

Whether or not a stipulation that an employee be paid the one-month salary instead of equivalent one month written notice is a valid compliance of the procedural due process in termination

Whether or not the complainant is entitled to unexpired term or to three (3) months only

SC Ruling:

The SC denied the petition.

The SC held that the declaration of Paul Thompson was executed only on October 1, 2009, which dates are beyond the date of termination of Bautista’s employment on July 10, 2009. For the SC, the CA correctly concluded that these were made as an afterthought in order to lend credence to the claim that the termination of Bautista’s employment was for a valid reason.

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Citing Skippers United Pacific, Inc. vs. Maguad, the SC held that the Master’s Statement Report presented to corroborate the claim that the dismissal was for just cause, i.e., incompetence, was issued 78 days after repatriation to Manila and two months after the latter instituted a complaint for illegal dismissal before the NLRC. Such report can no longer be a fair and accurate assessment of competence as the same was presented only after the complaint was filed. Its execution was a mere afterthought in order to justify the dismissal which had long been effected before the report was made; hence, such report is a self-serving one.

The SC found that Bautista’s incompetence as the alleged just cause for his dismissal was not proven by substantial evidence.

In addition, Bautista was not accorded due process. Consequently, the Court is not convinced that he was legally dismissed. The due process requirement is not a mere formality that may be dispensed with at will. Its disregard is a matter of serious concern since it constitutes a safeguard of the highest order in response to man’s innate sense of justice.

To meet the requirements of due process, the employer must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected, i.e.: (1) a notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice after due hearing which informs the employee of the employer’s decision to dismiss him.

Here, Bautista was dismissed under Article 4.3 of the employment contract which allegedly permits his employer, Shorncliffe, to terminate the contract on unspecified “other grounds” by giving one month’s written notice of its intention to terminate, or in lieu thereof, to pay the employee a sum equivalent to one month’s salary.

Bautista was notified on July 6, 2009 that his services will be terminated effective on the close of business hours on July 10, 2009, allegedly because his performance was “unsatisfactory and did not meet the standards of the Company. ” He was also paid one-month salary in lieu of one month’s notice of the termination of his employment.

This cannot be considered compliance with the two-notice requirement mandated by the Labor Code in effecting a valid dismissal. The Labor Code requires both notice and hearing; notice alone will not suffice. The requirement of notice is intended to inform the employee concerned of the employer’s intent to dismiss him and the reason for the proposed dismissal. On the other hand, the requirement of hearing affords the employee an opportunity to answer his employer’s charges against him and accordingly defend himself therefrom before dismissal is effected.

In this case, Bautista was not given a chance to defend himself. Five days after the notice was served, he was repatriated. Clearly, he was denied his right to due process.

Article 4.3 deprives the employee of his right to due process of law as it gives the employer the option to do away with the notice requirement provided that it grants one-month salary to the employee in lieu thereof. It denies the employee of the right to be apprised of the grounds for the termination of his employment without giving him an opportunity to defend himself and refute the charges against him.

Moreover, the term “other grounds” is all-encompassing. It makes the employee susceptible to arbitrary dismissal. The employee may be terminated not only for just or authorized causes but also for anything under the sun that may suit his employer. Thus, the employee is left unprotected and at the mercy of his employer, subjected to the latter’s whims.

Hence, the SC refused to sustain the validity of Article 4.3 of the employment contract as it contravenes the constitutionally-protected right of every worker to security of tenure.

Bautista’s employment was for a fixed period of 31 months. Article 4.3 took back this period from him by rendering it in effect a facultative one at the option of Shomcliffe, which may shorten that term at any time and for any cause satisfactory to itself, to a one-month period or even less, by simply paying Bautista a month’s salary. The net effect of Article 4.3 is to render Bautista’s employment basically employment at the pleasure of Shomcliffe. The Court considers that the provision is intended to prevent any security of tenure from accruing in favor of Bautista even during the limited period of 31 months.

While the Civil Code recognizes that parties may stipulate in their contracts such terms and conditions as they may deem convenient, these terms and conditions must not be contrary to law, morals, good customs, public order or policy. The employment contract between Shorncliffe and Bautista is governed by Philippine labor laws. Hence, the stipulations, clauses, and terms and conditions of the contract must not contravene our labor law provisions.

The contract of employment is imbued with public interest. The parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. Also, while a contract is the law between the parties, the provisions of positive law that regulate such contracts are deemed included and shall limit and govern the relations between the parties.

Section 10 of R.A. No. 8042 provides that in case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of 12% per annum, plus his salaries for the unexpired portion of his employment contract or for three months for every year of the unexpired term, whichever is less. The SC declared that the clause “or for three months for every year of the unexpired term, whichever is less” unconstitutional in the 2009 case of Serrano vs. Gallant ,Maritime Services, Inc., and again in the 2014 case of Sameer Overseas Placement Agency, Inc. vs. Cabiles, after the provision found its way again in R.A. No. 10022 which took effect in 2010.

Consistent with the law and the POEA Rules, Gopio’s joint and several liability is incorporated in Bautista’s employment contract with Shorncliffe. Thus she cannot evade liability by claiming that she did not have any control over the foreign employer and had nothing to do with Bautista’s dismissal, because her liability is defined by law and contract.

The burden devolves not only upon the foreign-based employer but also on the employment or recruitment agency to adduce evidence to convincingly show that the worker’s employment was validly and legally terminated. This is because the latter is not only an agent of the former, but is also solidarily liable with the foreign principal for any claims or liabilities arising from the dismissal of the worker. R.A. No. 8042 is a police power measure intended to regulate the recruitment and deployment of OFWs.