TERMINATION OF PROBATIONARY EMPLOYMENT BASED ON DELIBERATELY FALSE RATING AMOUNTS TO ILLEGAL DISMISSAL

Termination of employment that is based on alleged unsatisfactory performance rating was effected merely as a subterfuge and amounts to illegal dismissal.

Thus, the SC held in the following case:

Skyway O & M Corporation vs. Reinante
G.R. No. 222233, August 28, 2019

Factual findings of quasi-judicial bodies; Factual findings of quasi-judicial bodies like the NLRC, if supported by substantial evidence, are accorded respect and even finality by this Court, more so when they coincide with those of the LA; Such factual findings are given more weight when affirmed by the CA; Probationary; Deliberately giving an unmeritorious rating to prevent probationary from attaining the status of a regular employee results in illegal dismissal; Unsatisfactory rating used as a subterfuge; Waiver or quitclaim; Employee’s waiver or quitclaim cannot prevent the employee from demanding benefits to which he or she is entitled, and from filing an illegal dismissal case; Waivers or quitclaims are looked upon with disfavor, and are frowned upon for being contrary to public policy; Unless it  can be shown that the person executing the waiver voluntarily did so, with full understanding of its contents, and with reasonable and credible consideration, the same is  not a valid and binding undertaking; Burden of proof in waiver; The burden is with the employer to prove that the waiver or quitclaim was voluntarily executed; Moral and exemplary damages; Moral and exemplary damages may be awarded where the illegal dismissal was orchestrated as a  retaliatory action

Facts:

Petitioner Skyway O &  M Corporation (Skyway) hired Wilfredo Reinante (Wilfredo) as Intelligence Officer for a fixed period.

Immediately thereafter, Skyway renewed Wilfredo’s services and appointed him as a probationary employee. In May 2009, Wilfredo took a vacation leave and filed an application for sick leave upon the advice of his physician due to hypertension.

In a Memorandum, Skyway disapproved his application for vacation leave and directed him to report for work to discuss his on-the-job performance and continued absence without proper authority.

Wilfredo received a pre-termination notice from Skyway’s Traffic Safety Management and Security Department (TSMSD) for supposedly failing to meet the pre-performance standards of the company based on the Performance Appraisal Report submitted by his supervisor, Augusto Alcantara.

On his last day as probationary employee, Wilfredo was dismissed. Based on the termination letter, his performance during the probationary period starting November 26, 2008 to April 2009 was below average. Hence, he failed to meet the performance standards set forth by Skyway. Five days later, Wilfredo secured a clearance certificate and claimed his terminal pay through an attorney-in-fact.

Meanwhile, Wilfredo filed administrative complaints against Augusto, assailing the latter’s authority to assess his performance, as well as against Skyway for hiring and promoting unqualified security officers. The parties eventually entered into a compromise agreement/amicable settlement wherein Wilfredo agreed not to file any case against Skyway and to withdraw the administrative cases he had filed against its security officers.

Notwithstanding demand, TSMSD failed to comply with the terms and conditions of the compromiseagreement prompting Wilfredo to file a  complaint for constructive dismissal, non-payment of service incentive leave, moral and exemplary damages, and attorney’s fees.

LA Ruling:

The LA rendered a Decision ordering Skyway to pay Wilfredo’s backwages, separation pay, pro-rated 13^th month, moral and exemplary damages, among others.

Skyway appealed to the NLRC.

NLRC Ruling:

The NLRC affirmed with modification the disquisition of the LA by deleting the award of 13th month pay.

According to the NLRC, Wilfredo’s appraisal report has no basis and was biased. For failure of Skyway to show by substantial evidence the basis of the said evaluation that led to Wilfredo’s termination, the NLRC found his dismissal illegal.

Aggrieved, Skyway filed a Motion for Reconsideration, but it was denied for lack of merit. Thereafter, Skyway filed a petition for certiorari with the CA which was dismissed in the assailed Decision.

CA Ruling:

The CA held that Wilfredo was rehired for the same position as Intelligence Officer after his fixed term employment had expired.

Hence, the CA held further that it  can be inferred that management was satisfied with his performance; and that he was qualified and competent for the job; otherwise, it would not have engaged him as a probationary employee.

Skyway filed a Motion for Reconsideration which was denied by the CA. Thus, the petition before the SC.

Issue/s:

Whether or not the factual findings of the quasi-judicial tribunal should be accorded respect in a petition for review on certiorari

Whether or not factual findings of the quasi-judicial tribunal, should be given more weight when affirmed by the CA

Whether or not giving a probationary a deliberately false rating that was used as basis for termination results in illegal dismissal

Whether or not an employee who was terminated as a result of retaliatory act of the employer is entitled to moral and exemplary damages

Whether or not the execution by the employee of a compromise agreement forecloses the right to file labor complaint against the employer

Whether or not a compromise agreement that fails to specify when, how, and in what manner the agreement is to be fulfilled by the parties has reasonable consideration and is valid

SC Ruling:

The SC did not find merit in the petition.

The LA, NLRC and the CA uniformly found that Wilfredo was illegally dismissed. Factual findings of quasi-judicial bodies like the NLRC, if supported by substantial evidence, are accorded respect and even finality by the Court, more so when they coincide with those of the LA. Such factual findings are given more weight when affirmed by the CA.

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. The essence of a probationary period of employment lies primordially in the purpose and objective of both the employer and employee during such period.

On one hand, 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, on the other hand, seeks to prove to the former that he or she has the qualifications and proficiency to meet the reasonable   standards for permanent employment.

Though not on the same plane as that of a permanent employee, a probationary employee enjoys security of tenure. Other than being terminated for a just or authorized cause, a probationary employee may 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.

Simply put, the services of a probationary employee may be terminated for any of the following: (1) a just cause; (2) an authorized cause; and (3) failure to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer.

Here, the fact that Wilfredo was deliberately given an unmeritorious rating to prevent him from attaining the status of a regular employee was acknowledged by Augusto himself, Wilfredo’s supervisor. This is corroborated by Domingo T. Hernandez, an employee of Skyway. Both admitted rendering false and unfounded rating to Wilfredo’s performance when, in truth, he should not have been dismissed from the company.

Considering that Wilfredo was not dismissed for a just or authorized cause, his dismissal from employment was illegal. As properly observed by the CA. the termination of his employment based on his alleged unsatisfactory performance rating was effected merely as a subterfuge after he discovered the hiring or appointment by Skyway of unqualified security officers.

Skyway argues that the previous settlement between the parties constitutes a valid waiver. The employee’s waiver or quitclaim cannot prevent the employee from demanding benefits to which he or she is entitled, and from filing an illegal dismissal case. Waivers or quitclaims are looked upon with disfavor, and are frowned upon for being contrary to public policy.

Unless it can be shown that the person executing the waiver voluntarily did so, with full understanding of its contents, and with reasonable and credible consideration, the same is not a valid and binding undertaking. The burden is with the employer to prove that the waiver or quitclaim was voluntarily executed.

Skyway failed to discharge this burden. As noted by the NLRC, there was no reasonable consideration stipulated in the settlement agreement inasmuch as it failed to specify when, how, and in what manner the agreement is to be fulfilled by the parties. On his part, Wilfredo stressed that the three basic considerations for the settlement are: (1) payment of the amount of P100,000.00; (2) suspension of the so-called significant seven; and (3) a  security officer position.

Skyway maintains, on the other hand, that the only consideration for the contract is the payment of P100,000.00. Obviously, there is no meeting of the minds between the parties.

In view of Wilfredo’s illegal dismissal, he is entitled to backwages and reinstatement. He should be paid full backwages from the time of his illegal dismissal until the finality of this Decision. Anent reinstatement, payment of separation pay in lieu of reinstatement is proper due to the strained relations between the parties. Hence, Wilfredo is entitled to separation pay equivalent to one (1) month salary for every year of service, with a  fraction of at least six ( 6) months considered as one (1) whole year, from the time of his illegal dismissal by Skway until the finality of this Decision.

The award of P20,000.00 as moral damages and P 10,000.00 as exemplary damages to Wilfredo is, likewise, reasonable and proper under the circumstances, because the LA aptly found that the dismissal of Wilfredo was orchestrated as a retaliatory action by Skyway after Wilfredo discovered its hiring of unqualified security officers.