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COMPUTATION OF BACKWAGES OF TERMINATED PROBATIONARY EMPLOYEE, A REVIEW OF DIVERGENT RULINGS
Geraldine M. Barbosa signed a probationary employment contract in September 2013 as Training Supervisor with C.P. Reyes Hospital for a period of six months, from September 4, 2013 to March 4, 2014.
Under the contract, she is required Barbosa to “get or maintain an average of a passing score equivalent to 80% (Satisfactory).” The contract also provided that “[f]ailure to meet the reasonable standard set by C.P. Reyes may warrant the penalty of termination of employment.”
However, C.P. Reyes terminated Barbosa’s probationary employment. Barbosa’s evaluators noted that while she gained passing marks, she “lacked initiative, demonstrated poor time management, needed improvement with documentation, and more familiarization with common nursing procedure.”
C.P. Reyes also alleged that Barbosa was very unreceptive of her performance evaluations and that she even accused her evaluators of deliberately giving her low marks, apparently influenced by a certain “[Ma’am] Flor.” Further, they claim that due process was complied with in Barbosa’s termination because her employment was probationary, and that the two-notice rule does not apply to probationary employees.
Finally, C.P. Reyes Hospital alleged that Barbosa had 13 absences in the course of her employment, some of which were unauthorized. Thus, C.P. Reyes Hospital deemed it proper to terminate the employment of Barbosa.
The LA ruled that Barbosa was illegally dismissed. The NLRC reversed the LA. The CA reversed the ruling of the NLRC. The Supreme Court affirmed the CA.
On the issue of whether the backwages should be computed up to the end of probationary contract or actual reinstatement or finality of Decision, as the case may be, the Supreme Court held that backwages should be computed from January 1, 2014, when compensation was withheld from Barbosa, until finality of the Court’s Decision.
The CA awarded Barbosa backwages, among others, computed from the time of her illegal dismissal on November 29, 2013 up to the finality of the decision. The CA, recognizing that reinstatement is no longer possible due to the strained relations between Barbosa and C.P. Reyes Hospital, relied on the rulings of the Supreme Court in Univac Development, Inc. vs. Soriano, Aliling vs. Feliciano, and in Lopez vs. 1-fon. Javier.
C.P. Reyes Hospital et al., on the other hand, also recognizing that reinstatement is no longer possibie, invoked the Court’s ruling in Robinsons Galleria/Robinsons Supermarket C01poration vs. Ranchez, where the Court awarded backwages only up to the end date of the probationary employment contract.
In resolving the conflicting positions, the SC found Aliling and Univac to be inapplicable because in those cases, the respective employments were ultimately held to be regular, whereas in this case, it is undisputed that Barbosa’s employment status was and remained probationary.
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On the other hand, the factual milieu in Lopez is similar to this case. Macario Lopez (Macario) was appointed General Manager of La Union Transport Services Cooperative on a probationary basis. The NLRC found that he was illegally dismissed but limited the award of backwages to the unexpired portion of his probationary employment contract, finding that “had he not been dismissed, Jvlacario would have completed his probationary period.”
The Court upheld the finding of illegal dismissal but ruled that Macario was entitled to backwages up to the finality of its Decision. The SC arrived at this conclusion by holding,_first, that the constitutional guarantee of security of tenure is extended to employees regardless of whether they are regular or probationary, and second, that the Labor Code provision awarding backwages from the time compensation was withheld up to the time of actual reinstatement applies to probationary employees.
Noting that Macario’s reinstatement “would not be conducive to industrial harmony,” the SC then ruled that backwages must be awarded up to the finality of its Decision instead.
In its 2003 Decision in Cebu Marine Beach Resort vs. NLRC, the SC affirmed Lopez. In 2010, the SC once again cited and affirmed Lopez in the case of SHS Perforated Materials, Inc. v. Dioz, 101 ruling that “probationary employees who are unjustly dismissed during the probationary period are entitled to reinstatement and payment of full backwages and other benefits and privileges from the time they were dismissed up to their actual reinstatement.” Since the employee’s reinstatement was no longer feasible, it upheld the CA Decision awarding backwages up to the date of the employee’s “supposed actual reinstatement.”
A year later, the Court decided differenily in Robinsons Galleria, which C.P. Reyes Hospital cited as its basis in assail.ing the CA’s award of backwages. The Court ruled that backwages for an illegally or constructively dismissed probationary employee must be computed only up to the end of their probationary employment contract, and not the employee’s actual reinstatement.
In the face of this jurisprudential conflict, the Court deems it necessary to state explicitly that illegally dismissed probationary employees, like regular employees, are entitled to backwages up to their actual reinstatement. in case reinstatement is proven to be infeasible due to strained relations between the employer and the employee and other analogous causes, backwages shall be computed from the time compensation was withheld up to the finality of the Decision.
According to the SC, this ruling is more in keeping with constitutional and statutory guarantees in favor of labor. As the SC held in Lopez, the Constitution did not distinguish between regular and probationary employees in guaranteeing the right to security of tenure.
Similarly, the Labor Code, as amended by Republic Act No. 6715, made no such distinction in providing that an illegally dismissed employee is entitled to “reinstatement withom loss of seniority rights and other privileges and to their full backwages, inclusive of allowances, and to [their] other benefits or their monetary equivalent computed from the time [their]compensation was withheld from [them] up to the time of [their] actual reinstatement.” As the Constitution and the law did not distinguish, the Court should not as well.
Further, contrary to the findings in Robinsons Galleria, the lapse of the probationary contract, without an appointment as regular employee does not sever the employer-employee relationship. In fact, a probationary employee who is allowed to work beyond the probationary period is, by force of law, considered a regular employee.!08 In one case. the Court has held that absent any grounds to tem1inate a probationary employee, there is no reason to sever the employment and, consequently, the employee is entitled to continued employment “even beyond the probationary period.”
The SC points out two things: First, the mere lapse of the probationary employment without regularization does not, and should not, by itself, sever the employment relationship. In fact, Art. 296 of the Labor Code specifically stated that a probationary employee who is “allowed to work after” the probationary period that they were not validly dismissed prior to the expiration of the probationary period shall be considered a regular employee.
The change in the status from probationary to regular, happens ipso facto, or by force and operation of law, without any further act or deed on the part of the employer and the employee. The lapse of the period, to truly sever the employer-employee relationship, must be coupled with a showing that the employee is either validly dismissed for just or authorized causes or has failed to qualify for regularization.
Specifically, where there are no valid grounds to terminate a probationary employment, the SC, in Philippine Manpower Services, Inc. v. NLRC held that there is no reason to sever the employment and that the probationary employee in that case is entitled to work even beyond the probationary period.
Second, in this case, the lapse of the probationary period was caused by C.P. Reyes Hospital, who decided to dismiss Barbosa well before the period lapsed on specious and unlawful grounds. This fact makes it more crucial for the Court to rule that when the employer illegally dismissed the probationary employee, the mere lapse of probationary employment will not automatically sever the employment relationship as to allow the employer to limit the backwages to which a probationary employee is entitled.
The Court will not permit an employer to prematurely unshackle itself from the employment relationship and its monetary consequences by the mere expedient of illegally terminating a probationary employee. Therefore, Barbosa should be entitled to backwages from the time compensation was withheld up to her actual reinstatement. In this case, however, both the LA and the CA recognized that reinstatement was no longer feasible due to the strained relations between the parties, which the SC respects.
Hence, backwages must be awarded up to the finality of the Court’s Decision.
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