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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
In the case of C.P. Reyes Hospital et al., vs. Barbosa, G.R. No. 228357, April 16, 2024, the Supreme Court held 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.
Facts:
Barbosa filed a Complaint for illegal dismissal against C.P. Reyes Hospital et al.
Barbosa alleged that she applied for the position of Training Supervisor with C.P. Reyes Hospital. In September 2013, she was instructed to sign a probationary employment contract for a period of six months, from September 4, 2013 to March 4, 2014. Under the contract, Barbosa would train as a Staff Nurse for the first two months; as Ward Head Nurse and Supervisor for the next two months; and finally, as Training Supervisor for the last two months. The contract 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 this Hospital may warrant the penalty of termination of [Barbosa’s] employment.”
On November 27, 2013, Barbosa received a Notice to Explain from Lirio directing her to explain why no disciplinary action should be taken against her for being absent without official leave (AWOL) on November 4, 7, and 8, 2013. On the same day, Reyes told Barbosa that she will not be made a regular employee.
In a Letter dated November 28, 2013, Barbosa explained that she was able to notify the supervisor on duty regarding her November 4 absence, and that for the absences on November 7 and 8, she submitted a medical certificate, as well as the requisite leave forms.
On November 29, 2013, Barbosa received a Letter from Reyes formally terminating her probationary employment. The Letter stated:
“As stated on your Probationary Contract, continuous employment shall ripen only upon showing of satisfactory performance during your training period. Unfortunately, the negative performance feedback received by this office due to attitude including the attendance records reflects that you have failed to meet the reasonable standards set by the Hospital. In this regard, please be informed that your probationary contract shall end on the stated date, without renewal or regularization.”
C.P. Reyes Hospital confirmed that it hired Barbosa on a probationary basis as Training Supervisor. During her 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 Hospital 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.
Issues:
- Whether Barbosa was illegally dismissed; and
- Whether the CA correctly awarded backwages computed from the time of Barbosa’s illegal dismissal up to finality of the Decision, with legal interest of 6% per annum from the time of illegal dismissal until fully paid.
The Supreme Court’s Decision:
1. Barbosa was illegally dismissed from her employment.
The termination of probationary employment must be for any of the following grounds:
(1) just and authorized causes, or
(2) failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of engagement.
Therefore, C.P. Reyes Hospital’s contention that it may also consider “other factors apart from the performance evaluation in determining whether a probationary employee is to be terminated” is without merit. These “other factors,” as earlier stated, are those set out in Lirio’s evaluation, the routine written examination on the generic names of drugs, and Barbosa’s absences.
To reiterate, probationary employment may be terminated, among other grounds, when the employee fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of engagement.
If an employer opts to dismiss an employee on the ground of failure to qualify, the law requires that the reasonable standards for qualification must have been communicated to the employee at the time of engagement. This is to apprise them of what they need to accomplish and how they need to perform their job, failing at which, they will not be regularized.
C.P. Reyes Hospital claims it is allowed to terminate its probationary employees based on factors outside of the reasonable performance standards communicated to Barbosa. The Court finds this argument erroneous. Unless these other factors constitute just or authorized causes—themselves allowable grounds for termination—or constitute an exception to the rule laid out by jurisprudence as stated in the previous paragraph, such that there is no need for the C.P. Reyes Hospital et al. to inform Barbosa of them, then they may not be considered as valid grounds for termination.
C.P. Reyes Hospital relies on another ground to justify the dismissal of Barbosa—her supposed absenteeism for 12 days during her probationary employment, or one-sixth of her two-month probationary employment.
The Court finds that C.P. Reyes Hospital’s claim of Barbosa’s absenteeism is not supported by the records.Further, the CA also pointed to C.P. Reyes Hospital’s Code of Conduct to show that the penalty of dismissal in this case was too severe. In the Code of Conduct, the penalty for being AWOL is a written warning on the first offense, a two-day suspension on the second offense, and dismissal only upon the fifth offense.
Thus, this Supreme Court sustains the findings of the CA that these supposed absences cannot be considered a just cause to terminate Barbosa’s employment.
2. Barbosa should be entitled to backwages from the time compensation was withheld up to the finality of the Decision.
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.
The computation of the backwages until the finality of the Decision is consistent with the mandate under Article 294 of the Labor Code that “‘full backwages’ shall be computed from the time the ‘compensation was withheld’ from the employee up to the time of ‘actual reinstatement,’ and the jurisprudential pronouncement that if reinstatement is no longer feasible, it would be up to the finality of the decision. This reckoning period applies to regular and probationary employees alike.
Article 296 of the Labor Code states that a probationary employee who “is allowed to work after” a probationary period-shall be considered a regular employee. In the present case, Barbosa, a probationary employee, was found to have been illegally dismissed from work. Had she not been illegally dismissed, she would have continued with performing her tasks and therefore “allowed to work” after the probationary period. She would have become a regular employee, and earned compensation as such. Therefore, she is entitled to backwages similar to an illegally dismissed regular employee. This interpretation is more consistent with the State’s policy in favor of labor.
The Court 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 Court, 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 this Court respects. Hence, backwages must be awarded up to the finality of the Court’s Decision.
However, the Court does not agree with the CA that the award must be reckoned from the date of notice of Barbosa’s dismissal, November 29, 2013. Rather, it must be computed from the time compensation was withheld. The evidence on record shows that the effective date of the termination is December 30, 2013. Accordingly, substantial evidence was presented—which Barbosa did not rebut—that she received her final salary, covering December 16 to 31, 2013, and pro-rated 13th month pay, totaling PHP 5,135.86.
Thus, backwages should be computed from January 1, 2014, when compensation was withheld from Barbosa, until finality of the Court’s Decision.
Further, the Court affirms the CA’s award of separation pay, equivalent to one month pay, in lieu of reinstatement, which is deemed proper when reinstatement is no longer practical or in the best interest of the parties, such as when the filing of the illegal dismissal case resulted in strained relations between the parties.
Additionally, pursuant to prevailing jurisprudence, the monetary awards due to Barbosa shall earn interest at the rate of 6% per annum from the finality of this Decision until full payment.
Source:
C.P. Reyes Hospital and Angeline M. Reyes vs. Geraldine M. Barbosa
G.R. No. 228357 | April 16, 2024
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