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I. CONSTITUTIONAL PROVISIONS
A. Construction in favor of Labor
Moreover, it is a well-settled doctrine that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writing, should be resolved in the former’s favor. The policy is to extend the doctrine to a greater number of employees who can avail themselves of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection to labor. (Lepanto Consolidated Mining Co. vs. Moreno Dumapis, et. al., G.R. No. 163210 August 13, 2008).
B. Protection to Labor
Art. XIII, Sec. 3: "The State shall afford full protection to labor...."
In affording full protection to labor, this Court must ensure equal work opportunities regardless of sex, race or creed. Even as we, in every case, attempt to carefully balance the fragile relationship between employees and employers, we are mindful of the fact that the policy of the law is to apply the Labor Code to a greater number of employees. This would enable employees to avail of the benefits accorded to them by law, in line with the constitutional mandate giving maximum aid and protection to labor, promoting their welfare and reaffirming it as a primary social economic force in furtherance of social justice and national development. (Angelina Francisco vs NLRC. G.R. No. 170087 August 31, 2006).
The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers. The commitment under the fundamental law is that the cause of labor does not prevent us from sustaining the employer when the law is clearly on its side. (Estrellita G. Salazar vs Philippine Duplicators, Inc, G.R. No. 154628 December 6, 2006).
Dismissal is the ultimate penalty that can be meted to an employee. The Constitution does not condone wrongdoing by an employee; nevertheless, it urges a moderation of the sanction that may be applied to him. Where a penalty less punitive would suffice, whatever missteps may have been committed by the worker ought not to be visited with a consequence so severe such as dismissal from employment. For the Constitution guarantees the right of the workers to “security of tenure.” The misery and pain attendant to the loss of jobs then could be avoided if there is acceptance of the view that under certain circumstances of the case the workers should not be deprived of their means of livelihood. Indeed, the consistent rule is that if doubt exists between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. The employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. (Marival Trading Inc. vs NLRC. G.R. No. 169600 June 26, 2007).
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II. ILLEGAL RECRUITMENT
A. Elements of illegal recruitment
In order to hold a person liable for illegal recruitment, the following elements must concur: (1) the offender undertakes any of the activities within the meaning of “recruitment and placement” under Article 13(b)20 of the Labor Code, or any of the prohibited practices enumerated under Article 34 of the Labor Code (now Section 6 of RA 8042) and (2) the offender has no valid license or authority required by law to enable him to lawfully engage in recruitment and placement of workers. In the case of illegal recruitment in large scale, a third element is added: that the offender commits any of the acts of recruitment and placement against three or more persons, individually or as a group. All three elements are present in the case at bar. (People of the Philippines v. Melissa Chua and Clarita NG Chua. G.R. No. 187052 September 13, 2012)
Inarguably, appellant Chua engaged in recruitment when she represented to private complainants that she could send them to Taiwan as factory workers upon submission of the required documents and payment of the placement fee. The four private complainants positively identified appellant as the person who promised them employment as factory workers in Taiwan for a fee of P80,000. The Senior Labor Employment Officer of the POEA presented a certification to the effect that appellant Chua is not licensed by the POEA to recruit workers for overseas employment. The prosecution witnesses were positive and categorical in their testimonies that they personally met appellant and that the latter promised to send them abroad for employment. Appellant cannot escape liability by conveniently limiting her participation as a cashier of Golden Gate. The provisions of Article 13(b) of the Labor Code and Section 6 of RA 8042 are unequivocal that illegal recruitment may or may not be for profit. It is immaterial, therefore, whether appellant remitted the placement fees to “the agency’s treasurer” or appropriated them. (People of the Philippines v. Melissa Chua and Clarita NG Chua. G.R. No. 187052 September 13, 2012).
Article 38(a) of the Labor Code, as amended, specifies that recruitment activities undertaken by non-licensees or non-holders of authority are deemed illegal and punishable by law. When the illegal recruitment is committed against three or more persons, individually or as a group, then it is deemed committed in large scale and carries with it stiffer penalties as the same is deemed a form of economic sabotage. But to prove illegal recruitment, it must be shown that the accused, without being duly authorized by law, gave complainants the distinct impression that he had the power or ability to send them abroad for work, such that the latter were convinced to part with their money in order to be employed. It is important that there must at least be a promise or offer of an employment from the person posing as a recruiter, whether locally or abroad. (People of the Philippines vs. Teresita “Tessie” Laogo. G.R. No. 176264 January 10, 2011).
1. Simple illegal recruitment
The Supreme Court defines 4 types of illegal recruitment:
(a) Simple or licensee: illegal recruitment committed by a licensee or holder of authority against one or two persons only;
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(b) Non-licensee: illegal recruitment committed by any person who is neither a licensee nor holder of authority(c) Syndicated;
(d) Large scale or qualified People vs. Sadiosa
2. Illegal recruitment by a syndicate or committed in large scale
Accused-appellants posits that the prosecution failed to prove that there were more than two persons involved in the alleged crime of illegal recruitment for it to be qualified as syndicated illegal recruitment, since the trial court held only two of the accused liable for the crime. The Supreme Court however dismissed accused-appellants’ contention. In this case, the prosecution was able to establish that accused-appellants’ Bernadette and Franz were not the only ones who had conspired to bring the victims to Malaysia. It was also able to establish at the very least, through the credible testimonies of the witnesses, that (1) Jun and Macky were the escorts of the women to Malaysia; (2) a certain Tash was their financier; (3) a certain Bunso negotiated with Macky for the price the former would pay for the expenses incurred in transporting the victims to Malaysia; and (4) Mommy Cindy owned the prostitution house where the victims worked. The concerted efforts of all these persons resulted in the oppression of the victims. Clearly, it was established beyond reasonable doubt that accused-appellant, together with at least two other persons, came to an agreement to commit the felony and decided to commit it. The accused appellants were convicted of the crime of illegal recruitment committed by a syndicate. (People of the Philippines v. Nurfrashir Hashim y Saraban, et al. G.R. No. 194255 June 13, 2012).
In the case at bar, the foregoing elements are present. Appellant, in conspiracy with her co-accused, misrepresented to have the power, influence, authority and business to obtain overseas employment upon payment of a placement fee which was duly collected from complainants Rogelio Legaspi, Dennis Dimaano, Evelyn Estacio, Soledad Atle and Luz Minkay. Further, the certification issued by the Philippine Overseas Employment Administration (POEA) and the testimony of Ann Abastra Abas, a representative of said government agency, established that appellant and her co-accused did not possess any authority or license to recruit workers for overseas employment. And, since there were five (5) victims, the trial court correctly found appellant liable for illegal recruitment in large scale. (People of the Philippines vs Beth Temporada. G.R. No. 173473 December 17, 2008).
The appellant is guilty of large scale illegal recruitment. The essential elements of large scale illegal recruitment are: a) the offender has no valid license or authority required by law to enable him to lawfully engage in recruitment and placement of workers; b) the offender undertakes any of the activities within the meaning of “recruitment and placement” under Article 13(b) of the Labor Code, or any of the prohibited practices enumerated under Article 34 of the said Code (now Section 6 of RA 8042); and c) the offender committed the same against three (3) or more persons, individually or as a group, are present in this case. The prosecution adduced proof beyond reasonable doubt
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that the appellant enlisted the three (3) complainants for overseas employment without any license to do so. (People of the Philippines v. Mariavic Espenilla y Mercado. G.R. No. 193667 February 29, 2012).3. Liabilities
The above provisions are clear that the private employment agency shall assume joint and solidary liability with the employer. This Court has, time and again, ruled that private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment. This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him. This is in line with the policy of the state to protect and alleviate the plight of the working class. (Santosa B. Datuman vs. First Cosmopolitan Manpower and Promotion Services Inc. G.R. No. 156029 November 14, 2008).
Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment. This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. (Becmen Service Exporter vs. Spouses Simplicio and Mila Cuaresma. G.R. Nos. 182978-79, G.R. Nos. 184298-99, April 7, 2009).
4. Theory of imputed knowledge
The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal, employer Xiong, not the other way around. The knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent Sunace. There being no substantial proof that Sunace knew of and consented to be bound under the 2-year employment contract extension, it cannot be said to be privy thereto. As such, it and its "owner" cannot be held solidarily liable for any of Divina’s claims arising from the 2-year employment extension. (Sunance International Management Services, Inc. vs NLRC. G.R. No. 161757 January 25, 2006).
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III. LABOR STANDARDS
A. Hours of work
The philosophy underlying the exclusion of piece workers from the Eight-Hour Labor Law is that said workers are paid depending upon the work they do "irrespective of the amount of time employed" in doing said work. Such freedom as to hours of work does not obtain in the case of the laborers herein involved, since they are assigned by the employer to work in two shifts for 12 hours each shift. Thus it cannot be said that for all purposes these workers fall outside the law requiring payment of compensation for work done in excess of eight hours. At least for the purpose of recovering the full differential pay stipulated in the bargaining agreement as due to laborers who perform 12 hours of work under the night shift, said laborers should be deemed pro tanto or to that extent within the scope of the afore-stated law. (Red Coconut Products, Ltd. vs CIR. G.R. No. L-21348 June 30, 1966).
The Court reiterated that the rendition of overtime work and the submission of sufficient proof that said work was actually performed are conditions to be satisfied before a seaman could be entitled to overtime pay which should be computed on the basis of 30% of the basic monthly salary. In short, the contract provision guarantees the right to overtime pay but the entitlement to such benefit must first be established. Realistically speaking, a seaman, by the very nature of his job, stays on board a shipor vessel beyond the regular eight-hour work schedule. For the employer to give him overtime pay for the extra hours when he might be sleeping or attending to his personal chores or even just lulling away his time would be extremely unfair and unreasonable. (Stolt-Nielsen Marine Services (Phils.) Inc. vs. NLRC. G.R. No. 109156. July 11, 1996).
Petitioner did not submit to the secretary of labor a proposed wage rate — based on time and motion studies and reached after consultation with the representatives from both workers' and employers' organization — which would have applied to its piece-rate workers. Without those submissions, the labor arbiter had the duty to use the daily minimum wage rate for non-agricultural workers prevailing at the time of private respondent's dismissal, as prescribed by the Regional Tripartite Wages and Productivity Boards. Put differently, petitioner did not take the initiative of proposing an appropriate wage rate for its piece-rate workers. In the absence of such wage rate, the labor arbiter cannot be faulted for applying the prescribed minimum wage rate in the computation of private respondent's separation pay. In fact, it acted and ruled correctly and legally in the premises. It is clear, therefore, that the applicable minimum wage for an eight-hour working day is the basis for the computation of the separation pay of piece-rate workers like private respondent. The computed daily wage should not be reduced on the basis of unsubstantiated claims that her daily working hours were less than eight. Aside from its bare assertion, petitioner presented no clear proof that private respondent's regular working day was less than eight hours. (Pulp and Paper, Inc. vs NLRC. G.R. No. 116593 September 24, 1997).
Thus, the eight-hour work period does not include the meal break. Nowhere in the law may it be inferred that employees must take their meals within the company premises. Employees are not prohibited from going out of the premises as long as they return to their posts on time. Private
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respondent’s act, therefore, of going home to take his dinner does not constitute abandonment. (Philippine Airlines vs. NLRC. G.R. No. 132805 Feb. 2, 1999).There is no dispute that petitioners were employees of private respondents although they were paid not on the basis of time spent on the job but according to the quantity and the quality of work produced by them. There are two categories of employees paid by results: (1) those whose time and performance are supervised by the employer. (Here, there is an element of control and supervision over the manner as to how the work is to be performed. A piece-rate worker belongs to this category especially if he performs his work in the company premises.); and (2) those whose time and performance are unsupervised. (Here, the employer’s control is over the result of the work. Workers on pakyao and takay basis belong to this group.) Both classes of workers are paid per unit accomplished. Piece-rate payment is generally practiced in garment factories where work is done in the company premises, while payment on pakyao and takay basis is commonly observed in the agricultural industry, such as in sugar plantations where the work is performed in bulk or in volumes difficult to quantify. Petitioners belong to the first category, i.e., supervised employees.(Avelino Lambo vs NLRC. G.R. No. 111042 October 26, 1999).
In any event, the parties stipulated:
Section 1. Regular Working Hours - A normal workday shall consist of not more than eight (8) hours. The regular working hours for the Company shall be from 7:30 A.M. to 4:30 P.M. The schedule of shift work shall be maintained; however the company may change the prevailing work time at its discretion, should such change be necessary in the operations of the Company. All employees shall observe such rules as have been laid down by the company for the purpose of effecting control over working hours.
It is evident from the foregoing provision that the working hours may be changed, at the discretion of the company, should such change be necessary for its operations, and that the employees shall observe such rules as have been laid down by the company. In the case before us, Labor Arbiter Caday found that respondent company had to adopt a continuous 24-hour work daily schedule by reason of the nature of its business and the demands of its clients. It was established that the employees adhered to the said work schedule since 1988. The employees are deemed to have waived the eight-hour schedule since they followed, without any question or complaint, the two-shift schedule while their CBA was still in force and even prior thereto. The two-shift schedule effectively changed the working hours stipulated in the CBA. As the employees assented by practice to this arrangement, they cannot now be heard to claim that the overtime boycott is justified because they were not obliged to work beyond eight hours. (Interphil Laboratories Employees Union vs Interphil Laboratories. G.R. No. 142824. December 19, 2001)
With respect, however, to the award of overtime pay, the correct criterion in determining whether or not sailors are entitled to overtime pay is not whether they were on board and cannot leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours. In the present case, the Court finds that private respondent is not entitled to overtime pay because he failed to present any evidence to prove that he rendered service in excess of the regular eight working hours a day. (PCL Shipping Philippine, Inc. and U-Ming Marine Transport Corporation, vs NLRC. G.R. No. 153031,December 14, 2006).
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Apropos the monetary claims, there is insufficient evidence to prove petitioners’ entitlement thereto. As crew members, petitioners were required to stay on board the vessel by the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board. It could not have been the purpose of our law to require their employers to give them overtime pay or night shift differential, even when they are not actually working. Thus, the correct criterion in determining whether they are entitled to overtime pay or night shift differential is not whether they were on board and cannot leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours. In this case, petitioners failed to submit sufficient proof that overtime and night shift work were actually performed to entitle them to the corresponding pay. (Lazaro V. Dacut, et al. vs CA, et al., G.R. No. 169434 March 28, 2008).Hence, it being improbable that respondent rendered overtime work during the unexpired term of his contract, the inclusion of his “guaranteed overtime” pay into his monthly salary as basis in the computation of his salaries for the entire unexpired period of his contract has no factual or legal basis and the same should have been disallowed. (Bahia Shipping Services, Inc. vs. Reynaldo Chua. G.R. No. 162195 April 8, 2008).
D.O. No. 21 sanctions the waiver of overtime pay in consideration of the benefits that the employees will derive from the adoption of a compressed workweek scheme, thus:
The compressed workweek scheme was originally conceived for establishments wishing to save on energy costs, promote greater work efficiency and lower the rate of employee absenteeism, among others. Workers favor the scheme considering that it would mean savings on the increasing cost of transportation fares for at least one (1) day a week; savings on meal and snack expenses; longer weekends, or an additional 52 off-days a year, that can be devoted to rest, leisure, family responsibilities, studies and other personal matters, and that it will spare them for at least another day in a week from certain inconveniences that are the normal incidents of employment, such as commuting to and from the workplace, travel time spent, exposure to dust and motor vehicle fumes, dressing up for work, etc. Thus, under this scheme, the generally observed workweek of six (6) days is shortened to five (5) days but prolonging the working hours from Monday to Friday without the employer being obliged for pay overtime premium compensation for work performed in excess of eight (8) hours on weekdays, in exchange for the benefits abovecited that will accrue to the employees. Moreover, the adoption of a compressed workweek scheme in the company will help temper any inconvenience that will be caused the petitioners by their transfer to a farther workplace.( Bisig Manggawa sa Tryco, et al. vs. NLRC, et al., G.R. No. 151309 October 15, 2008).
In the absence of any concrete proof that additional service beyond the normal working hours and days had been rendered, overtime pay cannot be granted. Handwritten itemized computations are self-serving, unreliable and unsubstantiated evidence to sustain the grant of salary differentials, particularly overtime pay. Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries stated therein.(AbdulJuahid R. Pigcaulan vs. Security and Credit Investigation, Inc. G.R. No. 173648, January 16, 2011).
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A claim for overtime pay will not be granted in the absence of any factual and legal basis. In this respect, the records indicated that the labor arbiter granted Menese’s claim for holiday pay, rest day and premium pay on the basis of payrolls. There is no such proof in support of Menese’s claim for overtime pay other than her contention that she worked from 8:00 a.m. up to 5:00 p.m. She presented no evidence to show that she was working during the entire one hour meal break. The Supreme Court thus found the NLRC’s deletion of the overtime pay award in order. (Emirate Security and Maintenance Systems, Inc. vs. Glenda M. Menese. G.R. No. 182848 October 5, 2011).However, the Court decided that they are not entitled to overtime and premium pays. The burden of proving entitlement to overtime pay and premium pay for holidays and rest days rests on the employee because these are not incurred in the normal course of business. In the present case, the petitioners failed to adduce any evidence that would show that they actually rendered service in excess of the regular eight working hours a day, and that they in fact worked on holidays and rest days. (Wilgen Loon, et al. v. Power Master, Inc., et al., G.R. No. 189404, December 11, 2013).
B. Wages
The term "wages" differs from the term "salary." Wages apply to compensation for manual labor, skilled or unskilled, paid at stated times and measured by the day, week, month or season; while salary denotes a higher grade of employment or a superior grade of services and implies a position or office. By contrast, the term "wages" indicates a considerable pay for a lower and less responsible character of employment, while "salary" is suggestive of a larger and more important service)
The distinction between salary and wage in Gaa vs CA was only for the purpose of Art. 1708 of the Civil Code which provides that "the laborers' wage shall not be subject to execution or attachment except for debts incurred for food, shelter, clothing, and medical attendance. (Rosario A. Gaa vs CA G.R. No. L-44169 Dec. 3, 1985).
Every worker should, according to the Labor Code, "be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;" this, of course, even if the worker does no work on these holidays. The regular holidays include: "New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth of December, and the day designated by law for holding a general election (or national referendum or plebiscite). (Wellington Investment and Manufacturing Corp. vs. Cresenciano B. Trajano
G.R. No. 114698 July 3, 1995).
The Labor Arbiter accepted hook, line and sinker the private respondent’s bare claim that the reason the monetary benefits received by petitioner between 1981 to 1987 were less than the minimum wage was because petitioner did not factor in the meals, lodging, electric consumption and the water she received during the period in her computations. Granting that means and lodging were provided and indeed constituted facilities, such facilities could not be deducted without the employer complying first with certain legal requirements. Without satisfying these
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requirements, the employer simply cannot deduct the value from the employee’s wages. First proof must be shown that such facilities are customarily furnished by the trade. Second, the provision of deductible facilities must be voluntarily accepted in writing by the employee. Finally, facilities must be charged at fair and reasonable value. These requirements were not met in the instance case. More significantly, the food and lodging or the electricity and water consumed by the petitioner were not facilities but supplements. A benefit or privilege granted to an employee for the convenience of the employer is not a facility. The criterion in making a distinction between the two not so much lies in the king (food, lodging) but the purpose. Considering therefore, that hotel workers are required to work different shifts and are expected to be available at various odd hours, their ready availability is necessary matter in the operations of a small hotel, such as the private respondent’s hotel. (Norma Mabeza vs. NLRC. G.R. No. 118506. April 18, 1997).Second, by nature, commissions are given to employees only if the employer receives income. Employees, as a reward, receive a percentage of the earnings of the employer, which they, through their efforts, helped produce. Commissions are also given in the form of incentives or encouragement so that employees will be inspired to put a little more industry into their tasks. Commissions can also be considered as direct remunerations for services rendered. All these different concepts of commissions are incongruent with the claim that an employee can continue to receive them indefinitely after reaching his mandatory retirement age. (International Broadcasting Corp. vs Reynaldo Benedicto. G.R. No. 152843, July 20, 2006).
A diminution of pay is prejudicial to the employee and amounts to constructive dismissal. Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to an employee. In Globe Telecom, Inc. v. Florendo-Flores, we ruled that where an employee ceases to work due to a demotion of rank or a diminution of pay, an unreasonable situation arises which creates an adverse working environment rendering it impossible for such employee to continue working for her employer. Hence, her severance from the company was not of her own making and therefore amounted to an illegal termination of employment. (Angelina Francisco, vs. National Labor Relations Commission,
G.R. No. 170087, August 31, 2006).
Respecting petitioner’s claim for holiday pay, Forest Hills contends that petitioner failed to prove that she actually worked during specific holidays. Article 94 of the Labor Code provides, however, that
(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;
(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate.
The provision that a worker is entitled to twice his regular rate if he is required to work on a holiday implies that the provision entitling a worker to his regular rate on holidays applies even if
he does not work. (Lilia P. Labadan vs. Forest Hills Academy. G.R. No. 172295 December 23, 2008).
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The term “basic salary” of an employee for the purpose of computing the thirteenth-month pay was interpreted to include all remuneration or earnings paid by the employer for services rendered, but does not include allowances and monetary benefits which are not integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night differential and holiday pay, and cost-of-living allowances. However, these salary-related benefits should be included as part of the basic salary in the computation of the thirteenth-month pay if, by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees. (Central Azucarera De Tarlac vs. Central Azucarera De Tarlac Labor Union-NLU. G.R. No. 188949, July 26, 2010).Article 100 of the Labor Code, otherwise known as the Non-Diminution Rule, mandates that benefits given to employees cannot be taken back or reduced unilaterally by the employer because the benefit has become part of the employment contract, written or unwritten. The rule against diminution of benefits applies if it is shown that the grant of the benefit is based on an express policy or has ripened into a practice over a long period of time and that the practice is consistent and deliberate. Nevertheless, the rule will not apply if the practice is due to error in the construction or application of a doubtful or difficult question of law. But even in cases of error, it should be shown that the correction is done soon after discovery of the error. (Central Azucarera De Tarlac vs. Central Azucarera De Tarlac Labor Union-NLU. G.R. No. 188949, July 26, 2010).
As correctly observed by the CA and the LA, these duties clearly pertained to "Division Managers/Department Managers/ Supervisors," which respondent was not, as he was merely a team supervisor. Petitioners themselves described respondent as "the superior of a call center agent; he heads and guides a specific number of agents, who form a team." From the foregoing, respondent is thus entitled to his claims for holiday pay, service incentive leave pay, overtime pay and rest day pay, (Clientologic Philippines Inc. vs Benedict Castro. G.R. No. 186070 April 11, 2011).
There is diminution of benefits when the following requisites are present: (1) the grant or benefit is founded on a policy or has ripened into a practice over a long period of time; (2) the practice is consistent and deliberate; (3) the practice is not due to error in the construction or application of a doubtful or difficult question of law; and (4) the diminution or discontinuance is done unilaterally by the employer. (Ricardo E. Vergara, Jr. vs Coca-Cola Bottlers Philippines Inc.
G.R. No. 176985 April 1, 2013).
C. Wage distortion
It is therefore opportune to re-state the general principles enunciated in that case, summarized in Metro Transit Organization, Inc. vs. NLRC, et al., as follows:
(a) The concept of wage distortion assumes an existing grouping or classification of employees which establishes distinctions among such employees on some relevant or legitimate
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basis. This classification is reflected in a differing wage rate for each of the existing classes of employees.(b) Wage distortions have often been the result of government- decreed increases in minimum wages. There are, however, other causes of wage distortions, like the merger of two (2) companies (with differing classification of employees and different wage rates) where the surviving company absorbs all the employees of the dissolved corporation. (In the present Metro case, as already noted, the wage distortion arose because the effectivity dates of wage increases given to each of the two (2) classes of employees (rank-and-file and supervisory) had not been synchronized in their respective CBAs.).
(c) Should a wage distortion exist, there is no legal requirement that, in the rectification of that distortion by re-adjustment of the wage rates of the differing classes of employees, the gap which had previously or historically existed be restored in precisely the same amount. In other words, correction of a wage distortion may be done by re-establishing a substantial or significant gap (as distinguished from the historical gap) between the wage rates of the differing classes of employees.
(d) The re-establishment of a significant difference in wage rates may be the result of resort to grievance procedures or collective bargaining negotiations. (Manilia Mandarin Employees Union vs NLRC. G.R. No. 108556 November 19, 1996).
The term "wage distortion", under the Rules Implementing Republic Act 6727, is defined, thus: (p) Wage Distortion means a situation where an increase in prescribed wage rates results in the elimination or severe contradiction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.
The issue of whether or not a wage distortion exists as a consequence of the grant of a wage increase to certain employees, we agree, is, by and large, a question of fact the determination of which is the statutory function of the NLRC.
We find the formula suggested then by Commissioner Bonto-Perez, which has also been the standard considered by the regional Tripartite Wages and Productivity Commission for the correction of pay scale structures in cases of wage distortion, 15 to well be the appropriate measure to balance the respective contentions of the parties in this instance. We also view it as being just and equitable
Minimum Wage = % x Prescribed = Distortion —————— Increased Adjustment
Actual Salary
(Metropolitan Bank and Trust Company Employees Union-ALU-TUCP vs NLRC G.R. No. 102636 September 10, 1993)
Even assuming that there is a decrease in the wage gap between the pay of the old employees and the newly hired employees, to Our mind said gap is not significant as to obliterate or result in severe contraction of the intentional quantitative differences in the salary rates between the
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employee group. As already stated, the classification under the wage structure is based on the rank of an employee, not on seniority. For this reason, ,wage distortion does not appear to exist.(Bankard Employees Union-Workers Alliance Trade Unions vs NLRC. G.R. No. 140689 February 17, 2004).
D. 13th month pay
It was erroneous for the CA to apply the case of Philippine Agricultural Commercial and Industrial Workers Union. Notably in the said case, it was established that the drivers and conductors praying for 13th- month pay were not paid purely on commission. Instead, they were receiving a commission in addition to a fixed or guaranteed wage or salary. Thus, the Court held that bus drivers and conductors who are paid a fixed or guaranteed minimum wage in case their commission be less than the statutory minimum, and commissions only in case where they are over and above the statutory minimum, are entitled to a 13th-month pay equivalent to one-twelfth of their total earnings during the calendar year.
On the other hand, in his Complaint, respondent admitted that he was paid on commission only. Moreover, this fact is supported by his pay slips which indicated the varying amount of commissions he was receiving each trip. Thus, he was excluded from receiving the 13th-month pay benefit. (King of Kings Transport Inc. vs Santiago O. Mamac. G.R. No. 166208,June 29, 2007).
Insofar as what constitutes “basic salary,” the foregoing discussions equally apply to the computation of petitioner’s 13th month pay. As held in San Miguel Corporation v. Inciong:
Under Presidential Decree 851 and its implementing rules, the basic salary of an employee is used as the basis in the determination of his 13th-month pay. Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the
computation of the mandatory bonus.
Under the Rules and Regulations Implementing Presidential Decree 851, the following compensations are deemed not part of the basic salary:
a) Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of Instruction No. 174;
b) Profit sharing payments;
c) All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975. (Rogelio Reyes vs NLRC. G.R. No. 160233, August 8, 2007)
The practice of petitioner in giving 13th-month pay based on the employees’ gross annual earnings which included the basic monthly salary, premium pay for work on rest days and special holidays, night shift differential pay and holiday pay continued for almost thirty (30) years and has ripened into a company policy or practice which cannot be unilaterally withdrawn. The petitioner cannot claim that the practice arose from an erroneous application of the law since no doubtful or difficult question of law is involved in this case. The guidelines set by the law are not difficult to decipher. (Central Azucarera De Tarlac vs. Central Azucarera De Tarlac Labor Union-NLU G.R. No. 188949, July 26, 2010).
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The argument of petitioner that the grant of the benefit was not voluntary and was due to error in the interpretation of what is included in the basic salary deserves scant consideration. No doubtful or difficult question of law is involved in this case. The guidelines set by the law are not difficult to decipher. The voluntariness of the grant of the benefit was manifested by the number of years the employer had paid the benefit to its employees. Petitioner only changed the formula in the computation of the 13th-month pay after almost 30 years and only after the dispute between the management and employees erupted. This act of petitioner in changing the formula at this time cannot be sanctioned, as it indicates a badge of bad faith. (Central Azucarera De Tarlac vs. Central Azucarera De Tarlac Labor Union-NLU. G.R. No. 188949, July 26, 2010)E. Separation pay
However, the circumstances obtaining in this case do not warrant the reinstatement of respondents. Antagonism caused a severe strain in the parties’ employer-employee relationship. Thus, a more equitable disposition would be an award of separation pay equivalent to at least one month pay, or one month pay for every year of service, whichever is higher, (with a fraction of at least six (6) months being considered as one (1) whole year), in addition to their full backwages, allowances and other benefits. (Grandspan Development Corporation, vs. Ricardo Bernardo, et. al. G.R. No. 141464,September 21, 2005).
We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. (Ha Yuan Restaurant vs National Labor Relations Commission and Juvy Soria G.R. No. 147719 January 27, 2006).
But still, petitioners insist that since respondent already received her separation benefits, she can no longer claim that they coerced her to retire. On this point, the Court of Appeals ruled that employees who receive their separation pay are not barred from contesting the legality of their dismissal from the service and their acceptance of those benefits would not amount to estoppel. We agree. Otherwise, employees who have been forced to resign and accept their separation pay can no longer resort to legal remedies. (Amkor Technology Philippines, Inc. vs Nory A. Juangco. G.R. No. 166507, September 27, 2006).
Since the circumstances obtaining in this case do not warrant private respondent’s reinstatement in the light of the antagonism generated by this litigation which must have caused a severe strain in the parties' employer-employee relationship, an award of separation pay in lieu of reinstatement, equivalent to one month pay for every year of service, in addition to full backwages, allowances, and other benefits or the monetary equivalent thereof, is in order. The
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award of attorney’s fees is sanctioned by law and must be upheld.(Petron Corporation vs National Labor Relations Commission. G.R. No. 154532 October 27, 2006).Considering, however, the supervening event that SMC’s Magnolia Division has been acquired by another entity, it appears that private respondent’s reinstatement is no longer feasible. Instead, he should be awarded separation pay as an alternative. Likewise, owing to petitioner’s bad faith, it should be held liable to pay damages for causing undue injury and inconvenience to the private respondent in its contractual hiring-firing-rehiring scheme. (San Miguel Corporation, vs. NLRC G.R. No. 147566 December 6, 2006).
At this point, reinstatement is out of the question. Petitioner is now 71 years old and therefore well over the statutory compulsory retirement age. For this reason, we grant her separation pay in lieu of reinstatement. It is also for this reason that we modify the award of backwages in her favor, to be computed from the time of her illegal dismissal on November 18, 1993 up to her compulsory retirement age. (Alpha C. Jaculbe vs Siliman University. G.R. No. 156934 March 16, 2007).
Although long years of service might generally be considered for the award of separation benefits or some form of financial assistance to mitigate the effects of termination, this case is not the appropriate instance for generosity under the Labor Code nor under our prior decisions. The fact that private respondent served petitioner for more than twenty years with no negative record prior to his dismissal, in our view of this case, does not call for such award of benefits, since his violation reflects a regrettable lack of loyalty and worse, betrayal of the company. If an employee’s length of service is to be regarded as a justification for moderating the penalty of dismissal, such gesture will actually become a prize for disloyalty, distorting the meaning of social justice and undermining the efforts of labor to cleanse its ranks of undesirables. (Central Pangasinan Electric Cooperative Inc. vs NLRC. G.R. No. 163561, July 24, 2007).
The general rule is that when just causes for terminating the services of an employee under Art. 282 of the Labor Code exist, the employee is not entitled to separation pay. The apparent reason behind the forfeiture of the right to termination pay is that lawbreakers should not benefit from their illegal acts. The dismissed employee, however, is entitled to “whatever rights, benefits and privileges [s/he] may have under the applicable individual or collective bargaining agreement with the employer or voluntary employer policy or practice or under the Labor Code and other existing laws. This means that the employee, despite the dismissal for a valid cause, retains the right to receive from the employer benefits provided by law, like accrued service incentive leaves. With respect to benefits granted by the CBA provisions and voluntary management policy or practice, the entitlement of the dismissed employees to the benefits depends on the stipulations of the CBA or the company rules and policies. (Toyota Motor Phils. Corp. Workers Association (TMPCWA) vs NLRC/ G.R. Nos. 158786 &158789, G.R. Nos. 158798-99, October 19, 2007).
Petitioner’s separation pay is pegged at the amount equivalent to petitioner’s one (1) month pay, or one-half (1/2) month pay for every year of service, whichever is higher, reckoned from his first day of employment up to finality of this decision. Full backwages, on the other hand, should be
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computed from the date of his illegal dismissal until the finality of this decision. (Bienvenido D. Goma vs. Pamplona Plantation, Inc., G.R. No. 160905, July 4, 2008).We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. (Central Philippines Bandag Retreaders. Inc. vs. Prudencio Diasnes
G.R. No. 163607, July 14, 2008).
Since petitioner was not faultless in regard to the offenses imputed against her, we hold that the award of separation pay only, without backwages, is proper. (Elizabeth D. Palteng vs UCPB G.R. No. 172199, February 27, 2009).
We thus find the dismissal to be illegal. Consequently, respondent is entitled to reinstatement without loss of seniority rights and other privileges, and to full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time of the withholding of the employee's compensation up to the time of actual reinstatement. If reinstatement is not possible due to the strained relations between the employer and the employee, separation pay should instead be paid the employee equivalent to one month salary for every year of service, computed from the time of engagement up to the finality of this decision. (M+W Zander Philippines Inc. and Rolf Wiltschek vs Trinidad M. Enriquez
G.R. No. 169173, June 5, 2009).
Above all, the intention to sever the employer-employee relationship was not duly established by respondents. The prior submission of a medical certificate that petitioner is fit to resume work negates the claim of respondents that the former demanded for separation pay on account of her failing health. Certainly, petitioner cannot demand for separation benefits on the ground of illness while at the same time presenting a certification that she is fit to work. Respondents could have denied petitioner’s demand at that instance and ordered her to return to work had it not been their intention to sever petitioner from their employ. Hence, we find the allegation that petitioner presented herself for work but was refused by respondents more credible. (Concepcion Faeldonia vs. Tong Yak Groceries, Jayme Go and Merlita Go. G.R. No. 182499, October 2, 2009).
Since Dusit Hotel is explicitly mandated by the afore-quoted statutory provision to pay its employees and management their respective shares in the service charges collected, the hotel cannot claim that payment thereof to its 82 employees constitute substantial compliance with the payment of ECOLA under WO No. 9. Undoubtedly, the hotel employees’ right to their shares in the service charges collected by Dusit Hotel is distinct and separate from their right to ECOLA; gratification by the hotel of one does not result in the satisfaction of the other. (Philippine Hoteliers Inc., Dusit Hotel Nikko-Manila vs National Union of Workers in Hotel, Restaurant,
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and Allied Industries (NUWHRAIN-APL-IUF)-Dusit Hotel Nikko Chapter. G.R. No. 181972, August 25, 2009).In awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for every year of service reckoned from the first day of employment until the finality of the decision. Payment of separation pay is in addition to payment of backwages. And if separation pay is awarded instead of reinstatement, backwages shall be computed from the time of illegal termination up to the finality of the decision. (Agricultural and Industrial Supplies Corp. et al vs. Jueber P. SiazarG.R. No. 177970 August 25, 2010).
Separation pay, on the other hand, is equivalent to one month pay for every year of service, a fraction of six months to be considered as one whole year. Here that would begin from January 31, 1994 when petitioner Belen began his service. Technically the computation of his separation pay would end on the day he was dismissed on August 20, 1999 when he supposedly ceased to render service and his wages ended. But, since Belen was entitled to collect backwages until the judgment for illegal dismissal in his favor became final, here on September 22, 2008, the computation of his separation pay should also end on that date. (Daniel P. Javellana, Jr. vs Albino Belen. G.R. No. 181913. Albino Belen vs. Daniel P. Javellana Jr. and Javellana Farms Inc. G.R. No. 182158, March 5, 2010).
The basis for the payment of backwages is different from that for the award of separation pay. Separation pay is granted where reinstatement is no longer advisable because of strained relations between the employee and the employer. Backwages represent compensation that should have been earned but were not collected because of the unjust dismissal. The basis for computing backwages is usually the length of the employee’s service while that for separation pay is the actual period when the employee was unlawfully prevented from working. (Golden Ace Builders vs. Jose A. Talde. G.R. No. 187200 May 5, 2010).
F. Retirement pay
For the purpose of computing retirement pay, “one-half month salary” shall include all of the following:
15 days salary based on the latest salary rate;
cash equivalent of 5 days of service incentive leave (or vacation leave);
1/12 of the 13th month pay; other benefits as may be agreed upon by employer and employee for inclusion.
But, it shall not include the following: cost of living allowance;
profit-sharing payments; and
other monetary benefits which are not considered as part of or integrated into the regular salary of the employees. (Rogelio Reyes vs NLRC, G.R. No. 160233. August 8, 2007).
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Moreover, it is worthy to note that Bolso applied for benefits under PLDT’s early retirement/redundancy program. Bolso’s counsel even wrote PLDT for the withdrawal of the administrative complaint against Bolso and for the release of the benefits under this program. Therefore, Bolso’s plea for reinstatement in this case conflicts with his application for early retirement, which PLDT denied due to the then pending complaint against him. Reinstatement is plainly irreconcilable with retirement. (Philippine Long Distance Telephone Company vs The Late Romeo F. Bolso. G.R. No. 159701 August 17, 2007).R.A. No. 7641, otherwise known as “The Retirement Pay Law,” only applies in a situation where (1) there is no collective bargaining agreement or other applicable employment contract providing for retirement benefits for an employee; or (2) there is a collective bargaining agreement or other applicable employment contract providing for retirement benefits for an employee, but it is below the requirements set for by law. The reason for the first situation is to prevent the absurd situation where an employee, who is otherwise deserving, is denied retirement benefits by the nefarious scheme of employers in not providing for retirement benefits for their employees. The reason for the second situation is expressed in the latin maxim pacta privata juri publico derogare non possunt. Private contracts cannot derogate from the public law. Alberto Oxales vs. United Laboratories, Inc., G.R. No. 152991 July 21, 2008).
There are two retirement schemes at point in this case: (1) Article 287 of the Labor Code, and; (2) the PAL-ALPAP Retirement Plan and the PAL Pilots’ Retirement Benefit Plan. The two retirement schemes are alternative in nature such that the retired pilot can only be entitled to that which provides for superior benefits. Comparing the benefits under the two (2) retirement schemes, it can readily be perceived that the 22.5 days worth of salary for every year of service provided under Article 287 of the Labor Code cannot match the 240% of salary or almost two and a half worth of monthly salary per year of service provided under the PAL Pilots’ Retirement Benefit Plan, which will be further added to the ₱125,000.00 to which the petitioner is entitled under the PAL-ALPAP Retirement Plan. Clearly then, it is to the petitioner’s advantage that PAL’s retirement plans were applied in the computation of his retirement benefits. (Bibiano C. Elegir vs. Philippine Airlines, Inc. G.R. No. 181995, July 16, 2012).
As found in the Implementing Rules of the Retirement Pay Law and in jurisprudence, only in the absence of an applicable retirement agreement shall Article 287 of the Labor Code apply. There is a proviso however, that an employee’s retirement benefits under any agreement shall not be less than those provided in the said article. The Rules of the Banco Filipino Retirement Fund do not provide for benefits lower than those in the Labor Code. In fact, the bank offers a retirement pay equivalent to one andone-half month salary for every year of service, a rate over and above the one-half month salary threshold provided by the law. Although the Rules of the Banco Filipino Retirement Fund do not grant a rounding off scheme, they nonetheless provide that prorated credit shall be given for incomplete years, regardless of the fraction of months in the retiree’s length of service. Notwithstanding the lack of a rounding-up provision, still, the higher retirement pay, together with the prorated crediting, cannot be deemed to be less favorable than that provided for by the law. Ultimately, the more important threshold to be considered in construing whether the retirement agreement provides lesser benefits, compared to those provided by the Retirement Pay Law, is that the retirement benefits in the said agreement should at least amount to one-half of the employee’s monthly salary. (Banco Filipino Savings and Mortgage Bank vs.
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Miguelito M. Lazaro/Miguelito M. Lazaro vs. Banco Filipino Savings and Mortgage Bank, et al .G.R. No. 185346 & G.R. No. 185442 June 27, 2012)IV. TERMINATION OF EMPLOYMENT
A. Employer-Employee RelationshipThe issue of whether or not an employer-employee relationship existed between petitioner and respondent is essentially a question of fact. The factors that determine the issue include who has the power to select the employee, who pays the employee’s wages, who has the power to dismiss the employee, and who exercises control of the methods and results by which the work of the employee is accomplished. Although no particular form of evidence is required to prove the existence of the relationship, and any competent and relevant evidence to prove the relationship may be admitted, a finding that the relationship exists must nonetheless rest on substantial evidence, which is that amount of relevant evidence that a reasonable mind might accept as adequate to justify a conclusion. (Legend Hotel v. Realuyo G.R. No. 153511 July 18, 2012).
1. Four-Fold Test (Indicia of Employment); Economic or Economic Readity Test
a. The power of selection and engagement of the employee
b. payment of wages
c. power of dismissal
d. power to control the employees' conduct
To determine the existence of an employer-employee relationship, case law has consistently applied the four-fold test, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee on the means and methods by which the work is
accomplished. The so-called "control test" is the most important indicator of the presence or absence of an employer-employee relationship. (Sycip, Gorres, Velayo & Company vs. Carol De Raedt. G.R. No. 161366; June 16, 2009).
Among these four tests however, the most important test is the element of control, which has been defined as "one where the employer has reserved the right to control not only the work to be achieved, but the manner and method by which such work is to be achieved. (LVN Pictures vs LVN Musician's Guild. G.R. No. L-12582. January 28, 1961).
It should be remembered that the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. It is not essential that the employer actually supervises the performance of duties of the employee. It is enough that the former has a right to wield the power. (Manila Water Company, Inc. vs. Jose J. Dalumpines. G.R. No. 175501; October 4, 2010).
Under the control test, there is an employer-employee relationship when the person for whom the services are performed reserves the right to control not only the end achieved but also the manner and means used to achieve that end. (Television and Production Exponents, Inc. vs. Roberto C. Servaña. G.R. No. 167648; January 28, 2008). It is sufficient if the task or activity, as well as the means of accomplishing it, is dictated, as in this case where the objectives and activities were laid out, and the specific time for performing them was fixed by the controlling party. (Coca Cola Bottlers, Inc. vs. Dr. Dean N. Climaco. G.R. No. 146881; February 5, 2007).
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Under the control test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end. From the quoted scope of petitioner’s professional services, there is no showing of a power of control over petitioner. The services to be performed by her specified what she needed to achieve but not on how she was to go about it. (Corazon Almirez vs. Infinite Loop Technology. G.R. 162401; January 31, 2006).To bolster the payment of wages and control test, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, submission of his name with the SSS, Pag-ibig, Philhealth, otherwise known as economic test, are also applied in determining employer-employee relationship. (Sevilla vs CA, G.R. No. 44182-3, April 15, 1988).
It should, however, be obvious that not every form of control that the hiring party reserves to himself over the conduct of the party hired in relation to the services rendered may be accorded the effect of establishing an employer-employee relationship between them in the legal or technical sense of the term. A line must be drawn somewhere, if the recognized distinction between an employee and an individual contractor is not to vanish altogether. Realistically, it would be a rare contract of service that gives untrammelled freedom to the party hired and eschews any intervention whatsoever in his performance of the engagement.
Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. (Insular Life Assurance Co. Ltd. G.R. No. 84484 November 15, 1989).
In the present case, the power to control is missing. Pamana tasked Consulta to
organize, develop, manage, and maintain a sales division, submit a number of
enrollments and revenue attainments in accordance with company policies and
guidelines, and to recruit, train and direct her Supervising Associates and Health
Consultants.
[12]However, the manner in which Consulta was to pursue these
activities was not subject to the control of Pamana. Consulta failed to show that
she had to report for work at definite hours. The amount of time she devoted to
soliciting clients was left entirely to her discretion. The means and methods of
recruiting and training her sales associates, as well as the development,
management and maintenance of her sales division, were left to her sound
judgment.(Raquel P. Consulta G.R. No. 145443. March 18, 2005).
2. Kinds of Employment
a. Probationary
A probationary employee, as understood under Article 282 (now Article 281) of the Labor Code, is one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment. A probationary appointment is made to afford the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he will become a proper and efficient employee. The
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word "probationary", as used to describe the period of employment, implies the purpose of the term or period, but not its length.Being in the nature of a "trial period" the essence of a probationary period of employment fundamentally lies in the purpose or objective sought to be attained by both the employer and the employee during said period. The length of time is immaterial in determining the correlative rights of both in dealing with each other during said period. While the employer, as stated earlier, observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other, seeks to prove to the employer, that he has the qualifications to meet the reasonable standards for permanent employment. (International Catholic Migration Commission vs. NLRC and Bernadette Galang. G.R. No. 72222 ; January 30, 1989).
They are considered regular if they are allowed to work beyond the probationary period. Probationary employees enjoy security of tenure in the sense that during their probationary employment, they cannot be dismissed except for cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known to him or her at the time of engagement. But the probationary employee’s security of tenure is limited to the period of probation. (Woodbridge School vs. Pe Benito. G.R. No. 160240; October 28, 2008).
A probationary employee, like a regular employee, enjoys security of tenure. The services of an employee who has been engaged on probationary basis may be terminated for any of the following: (1) a just or (2) an authorized cause and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. (Mylene Carvajal vs. Luzon Development Bank
G.R. No. 186169; August 1, 2012).
Completion of probationary period does not automatically qualify a teacher to become a permanent employee of the University. (Lacuesta vs. Ateneo De Manila University. G.R. No. 152777; December 9, 2005).
While the probationary employee is required to be appraised of the standards against which his performance shall be assessed, there is however no need to inform the probationary employee that he has to follow company rules and regulations – such requirement strains credulity. Due process in failure to qualify as regular employee does not mean “notice and hearing." (Philippine Daily Inquirer vs. Magtibay. G.R. No. 164532; July 24, 2007).
b. Regular
The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. (Macarthur Malicdem and Hermenigildo Flores vs. Marulas Industrial Corporation. G.R. No. 204406; February 26, 2014).
Also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is also considered