PROBATIONARY EMPLOYMENT: EMPLOYER HAS THE RIGHT OR IS AT LIBERTY TO CHOOSE WHO WILL BE HIRED AND WHO WILL BE DENIED EMPLOYMENT

As long as the employer has made known to the employee the regularization standards at the time of the employee’s engagement, the refusal of the former to regularize the latter, by reason of the latter’s failure to comply with the regularization standards, is within the ambit of the law.

Thus, the SC held in the following case:

Moral vs. Momentum Properties Management Corporation
G.R. No. 226240, March 6, 2019

Probationary Employment; Reasonable standards; Self-descriptive job; An employer is deemed to have made known the regularization standards when it has exerted reasonable efforts to apprise the employee of what he or she is expected to do or accomplish during the trial period of probation; The exception to the foregoing is when the job is self-descriptive in nature, such as in the case of maids, cooks, drivers, and messengers; Grounds to dismiss a probationary employee; Procedure in terminating probationary employee

Facts:

Petitioner Myra M. Moral (Moral) alleged that, on 26 June 2013, Respondent Momentum Properties Management Corporation (Momentum) hired her as a probationary employee, with her designation being that of a Leasing Assistant. She worked eight hours a day from 9:00 a.m. to 6:00 p.m.

Six months after her employment, she was informed of her dismissal and was advised to no longer report for work. According to Moral, upon inquiring the reason for her dismissal, Momentum Properties coldly ignored her query and thereafter, no longer contacted her. She contended that Momentum Properties failed to provide any notice or justifiable cause as to why her employment was being severed. Because of Momentum Properties’s failure to comply with both substantive and procedural due process requirements, as mandated by law, Moral alleged that she was illegally dismissed.

In its defense, Momentum Properties denied the illegal dismissal allegation of Moral. Momentum Properties acknowledged, however, that Moral was hired by it as a probationary employee, particularly as a Leasing Assistant. Moral’s probationary employment with Momentum Properties was for a period of six months, as indicated by the former’ s Employment Agreement with the latter.

Moral was assigned by Momentum Properties to Solemare Parksuites, a condominium building in Bradco Avenue, Parañaque City, to render clerical and secretarial services necessary in the leasing operations of the building. As a Leasing Assistant, Moral was required to report primarily at the project site in Parañaque City, under the supervision of the Leasing Manager, Elizabeth Tungol (Tungol).

According to Momentum Properties, in line with the provisions of their Employment Agreement, Moral was subjected to the Momentum Properties’s evaluation procedure on the fifth month of her employment. Hence, sometime in November 2013, Moral’s over-all performance and capacity to meet the demands of her work were assessed by her immediate superiors.

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On 29 November 2013, Moral was likewise asked to report to Momentum Properties’s head office in Makati City to take the Verbal, Non-Verbal, and Numerical Examinations which were administered by the Human Resources (HR) Department. Moral garnered below average (BA) scores in the aforesaid tests, rendering her qualifications for regularization doubtful under HR Standards. In addition, Moral’s over-all performance and capacity to meet the demands of her work were assessed by her immediate superior, Tungol. Based on Momentum Properties’s set criteria for quantitative and qualitative performance and developmental assessment, Tungol’ s findings indicated that Moral failed to satisfactorily meet the level of performance expected from her position.

According to Momentum Properties, Moral’s over-all rating indicated a BA score, which made her unqualified for regularization purposes. Hence, in accordance with standard procedure, the HR and Administration Manager, Annie Ocampo (Ocampo), directed Tungol to advise Moral to report to the head office, for the purpose of discussing her poor evaluation scores.

Unfortunately, Moral disregarded the aforesaid request. Thereafter, Tungol was instructed to talk to Moral about possibly extending her employment contract and improving her performance, during such an extension period. Unexpectedly, however, Moral no longer reported for work as of 27 December 2013. In line with standard procedure, on 7 January 2014, Ocampo prepared a Notice of Absence without Official Leave (NAWOL) requiring Moral to submit a written explanation as to why her employment should not be considered terminated due to her absence within five days from receipt thereof. Moral was likewise invited to the head office for a meeting with Ocampo.

Momentum Properties averred that as it awaited Moral’s response to various invitations for her to report to the head office, Moral filed a Request for Assistance (RFA) before the NCR Arbitration Branch of the NLRC.

LA Ruling:

The Labor Arbiter rendered a Decision in favor of Moral.

The Labor Arbiter found the allegation of Momentum Properties that Moral was guilty of abandonment untenable. It emphasized that, in order for there to be abandonment, which is a just ground for dismissal, there must be a deliberate and unjustified refusal on the part of the employee to resume employment. It held that mere absence or failure to report for work, after a notice of return is given to such employee, is not enough to amount to abandonment. Hence, it held that Moral was illegally dismissed by Momentum Properties.

Aggrieved, Momentum Properties filed an appeal with the NLRC.

NLRC Ruling:

The NLRC rendered a Decision modifying the Decision of the Labor Arbiter removing the award of moral and exemplary damages from the judgment and reducing the entire amount.

The NLRC upheld the view of the Labor Arbiter that Momentum Properties failed to defend its argument that it did not dismiss Moral. It held that the payroll issued by Momentum Properties did not establish Moral’s employment beyond 27 December 2013, because the document merely covered the periods of 11 and 12 December 2013. On the other hand, Moral presented the text messages she received from Tungol, informing her that she should no longer report for work and instructing her to report to the HR Department to process her clearance and backpay.

Momentum Properties moved for reconsideration, which was denied by the NLRC. Thereafter, it sought to reverse the Decision and Resolution of the NLRC by filing a petition for certiorari with the Court of Appeals.

CA Ruling:

The Court of Appeals granted the petition and annulled and set aside the Decision and Resolution of the NLRC.

The Court of Appeals held that the status of Moral as a probationary employee was established and not contested. Hence, her employment was under Momentum Properties’s observation for a period of six months. It ruled that Momentum Properties had the option of hiring Moral or terminating her services, because she failed to qualify as a regular employee in accordance with the reasonable standards made known to her at the time of her engagement.

The Court of Appeals ruled that, based on the evidence, Moral’s performance evaluation was not up to par. It was established that Moral received abysmal scores in a series of aptitude tests that she took before her six months of probationary employment were done. In the same manner, Moral’s Performance Appraisal Report (PAR) indicated that she did not meet Momentum Properties’s expectations when it came to her performance at work. In most of the components of the subject PAR, Moral received BA scores. Furthermore, the Court of Appeals noted that Moral’s tests were given “appropriately, fairly and with proper notice before they were taken.”

Moral moved for reconsideration, which the Court of Appeals denied. Hence, the instant petition before the Supreme Court.

Issue/s:

Whether or not the employer has the right to refuse to hire on permanent basis the probationary employee who failed the regularization standards

Whether or not a dismissal of probationary through text violates the procedural due process

Whether or not the termination of probationary employee is akin to dismissal for just cause in terms of award of nominal damages

SC Ruling:

A probationary employee is one who is placed on trial by an employer, during which the latter determines whether or not the former is qualified for permanent employment. By virtue of a probationary employment, an employer is given an opportunity to observe the fitness and competency of a probationary employee while at work. During the probationary period of employment, an employer has the right or is at liberty to decide who will be hired and who will be denied employment.

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The essence of a probationary period of employment lies primordially in the purpose or objective of both the employer and the employee during such period. While the employer observes the fitness, propriety, and efficiency of a probationary employee, in order to ascertain whether or not such person is qualified for regularization, the latter seeks to prove to the former that he or she has the qualifications and proficiency to meet the reasonable standards for permanent employment.

As a general rule, probationary employment cannot exceed six months. Otherwise, the employee concerned shall be regarded as a regular employee. Moreover, it is indispensable in probationary employment that the employer informs the employee of the reasonable standards that will be used as basis for his or her regularization at the time of his or her engagement. In the event that the employer fails to comply with the aforementioned, then the employee is considered a regular employee.

A probationary employee enjoys security of tenure, although it is not on the same plane as that of a permanent employee. Other than being terminated for a just or authorized cause, a probationary employee may also be dismissed due to his or her failure to qualify in accordance with the standards of the employer made known to him or her at the time of his or her engagement. Hence, the services of a probationary employee may be terminated for any of the following: (1) a just cause; (2) an authorized cause; and (3) when he or she fails to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer.

Referencing Section 6( d), Rule I, Book VI, as amended by Department Order No. 147-15, of the Omnibus Rules Implementing the Labor Code of the Philippines (Labor Code), the SC held that the employer is mandated to comply with two requirements when dealing with a probationary employee, viz: (1) the employer must communicate the regularization standards to the probationary employee; and (2) the employer must make such communication at the time of the probationary employee’s engagement.

If the employer fails to abide by any of the aforementioned obligations, the employee is deemed as a regular, and not a probationary employee. An employer is deemed to have made known the regularization standards when it has exerted reasonable efforts to apprise the employee of what he or she is expected to do or accomplish during the trial period of probation. The exception to the foregoing is when the job is self-descriptive in nature, such as in the case of maids, cooks, drivers, and messengers.

In the instant case, the evidence is clear that Moral is a probationary employee of Momentum Properties. Moral was well-aware that her regularization would depend on her ability and capacity to fulfill the requirements of her position as a Leasing Assistant and that her failure to perform such would give Momentum Properties a valid cause to terminate her probationary employment. A thorough examination of the records of the instant case reveals that Moral failed to comply with the regularization standards of Momentum Properties made known to her at the time of her engagement. Moral’s performance evaluation was substandard, as evinced by her dismal scores in a series of aptitude tests she took before the end of her six-month probationary period.

In the Employee’s Performance Summary part of her PAR, Moral’s scores for her quantitative and qualitative performance and results under the developmental assessment portion were analyzed. For her overall grade, Moral received a 1.43 score, which fell under the rating norm for BA. Based on the abovementioned test results, Momentum Properties was only exercising its statutory hiring prerogative when it refused to hire Moral on a permanent basis, upon the expiration of her six-month probationary period.

It is a well-established principle that an employer has the right or is at liberty to choose who will be hired and who will be denied employment. Accordingly, it is within the exercise of the right to select one’s employees that an employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before the former is hired on a permanent basis. As long as the employer has made known to the employee the regularization standards at the time of the employee’s engagement, the refusal of the former to regularize the latter, by reason of the latter’s failure to comply with the regularization standards, is within the ambit of the law.

With respect to the termination of a probationary employee, a different procedure is applied – the usual two-notice rule does not govern. The two-notice rule is that which is found under Article 292(b) of the Labor Code, as amended by Section 33 of Republic Act No. 10151. The aforementioned procedure is also found in Section 2, Rule I, Book VI, as amended by Department Order No. 147-15, of the Omnibus Rules Implementing the Labor Code.

A perusal of the records reveals that Moral’s dismissal was effected through a series of text messages from Tungol, instead of the abovementioned mandated procedure. As correctly pointed out by the Court of Appeals, the NAWOL issued by Ocampo was nothing more than an afterthought, considering it was furnished to Moral on 7 January 2014 or five days after she was informed of her dismissal. 52 Hence, in view of the procedural infirmity attending the termination of Moral, Momentum Properties is liable to pay nominal damages.

With respect to the proper amount of damages to be awarded in the instant case, the Court notes that Moral’s dismissal proceeded from her failure to comply with the standards required for her regularization. Hence, it is indisputable that the dismissal process was, in effect, initiated by an act imputable to the employee, akin to dismissals due to just causes under Article 297 of the Labor Code. Therefore, the Court deems it appropriate to fix the amount of nominal damages in the sum of P30,000.00, consistent with its ruling in Agabon vs. National Labor Relations Commission.