G.R. No. 161654 ; May 5, 2006
DUSIT HOTEL NIKKO, Petitioner, vs. RENATO M. GATBONTON, Respondent

FACTS

Respondent Renato M. Gatbonton was hired by petitioner Dusit Hotel Nikko as Chief Steward under a three-month probationary contract from November 21, 1998, to February 21, 1999. The hotel alleged that at the end of this period, his performance was unsatisfactory, leading to a recommended two-month extension of his probation until April 22, 1999. However, on March 24, 1999, he was informed of his poor ratings. A notice of termination was served on March 31, 1999, effective April 9, 1999. Gatbonton filed a complaint for illegal dismissal.
The Labor Arbiter ruled in Gatbonton’s favor, declaring him a regular employee at the time of termination due to the hotel’s failure to prove he was evaluated during the initial probation or that a valid extension was communicated. The NLRC reversed this, noting a Personnel Action Form indicated an extension, thus making Gatbonton still probationary when dismissed. The Court of Appeals reinstated the Labor Arbiter’s decision, prompting the hotel’s petition to the Supreme Court.

ISSUE

The core issues were: (1) whether Gatbonton was still a probationary employee at the time of his dismissal, and (2) whether his termination was valid.

RULING

The Supreme Court denied the petition, affirming the Court of Appeals with modification. The Court held that Gatbonton had attained regular employment status. Under Article 281 of the Labor Code, a probationary employee who is allowed to work beyond the probationary period becomes a regular employee. The hotel failed to substantiate its claim of a valid extension. It presented no proof that Gatbonton was formally evaluated during the initial three-month probation or that the alleged extension was effectively communicated to and accepted by him. The mere notation on a Personnel Action Form, without clear communication to the employee, was insufficient.
Consequently, Gatbonton was deemed a regular employee as of February 22, 1999. As a regular employee, he could only be dismissed for just or authorized causes. The hotel failed to discharge its burden of proving a valid cause for termination. His dismissal was therefore illegal, entitling him to reinstatement, full backwages, and benefits. However, the Court deleted the order for unpaid salaries, as the hotel sufficiently proved these were already paid. The decision underscores the employer’s burden to strictly comply with procedural and substantive requirements in terminating probationary employment.