G.R. No. 164532; July 24, 2007
PHILIPPINE DAILY INQUIRER, INC., Petitioner, vs. LEON M. MAGTIBAY, JR. and PHILIPPINE DAILY INQUIRER EMPLOYEES UNION (PDIEU), Respondents.

FACTS

Respondent Leon Magtibay, Jr. was initially hired by petitioner Philippine Daily Inquirer (PDI) on a five-month contractual basis from February 17, 1995, to assist the regular phone operator, with a subsequent fifteen-day extension. After this contractual period, PDI created a new position for a second telephone operator. Following the withdrawal of an internal applicant, Magtibay applied and was hired on September 21, 1995, under a six-month probationary employment contract. On March 13, 1996, a week before the probationary period ended, PDI terminated Magtibay for allegedly failing to meet company standards.
Magtibay filed a complaint for illegal dismissal, arguing he had become a regular employee by operation of law, having worked for a total of ten months exceeding the six-month probationary limit, and that he was not properly apprised of performance standards. The Labor Arbiter dismissed the complaint, upholding the validity of the separate contractual and probationary periods and finding a valid dismissal. The National Labor Relations Commission (NLRC) reversed, ruling Magtibay’s employment had ripened into regular status. The Court of Appeals affirmed the NLRC decision.

ISSUE

Whether Magtibay was illegally dismissed.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the Labor Arbiter’s decision, ruling that Magtibay was validly terminated as a probationary employee. The Court held that his prior contractual employment could not be tacked to his probationary period. The two engagements were distinct: the first was a fixed-term contract for a specific project, which legally terminated upon its expiry, and the second was a separate probationary contract for a new position. The total duration of service did not automatically convert his status, as the six-month probationary period commenced only from the second contract.
The Court found that PDI validly exercised its management prerogative to terminate a probationary employee for failing to meet reasonable standards. It noted that Magtibay was apprised of these standards through an orientation, and his prior work for PDI made him aware of expected competencies. His termination, based on specific infractions like allowing unauthorized persons into the operator’s booth, was for a just cause. The dismissal was procedural, as a probationary employee may be terminated if he fails to qualify as a regular employee in accordance with reasonable standards made known to him at the time of engagement. The NLRC committed grave abuse of discretion in disregarding this substantial evidence.