G.R. No. 177937; January 19, 2011
ROBINSONS GALLERIA/ROBINSONS SUPERMARKET CORPORATION and/or JESS MANUEL, Petitioners, vs. IRENE R. RANCHEZ, Respondent.

FACTS

Respondent Irene R. Ranchez was a probationary cashier employed by petitioner Robinsons Supermarket Corporation from October 15, 1997, to March 14, 1998. On October 30, 1997, she reported the loss of ₱20,299.00 cash, which she had placed inside a company locker. Petitioner Jess Manuel, the Operations Manager, ordered her to be strip-searched by company guards, but nothing was found. Respondent acknowledged responsibility and requested to settle the amount, but petitioner Manuel instead reported the matter to the police and requested an inquest by the Quezon City Prosecutor’s Office. An information for Qualified Theft was filed on November 5, 1997, and respondent was detained for two weeks due to inability to immediately post bail. On November 25, 1997, she filed a complaint for illegal dismissal and damages. On March 12, 1998, petitioners sent her a notice of termination/expiration of probationary employment dated March 9, 1998. The Labor Arbiter dismissed her complaint, ruling she was not yet dismissed when she filed it. The NLRC reversed, finding constructive dismissal and denial of due process, ordering reinstatement with backwages. The Court of Appeals affirmed with modification, ordering separation pay if reinstatement was not possible due to strained relations.

ISSUE

Whether respondent was illegally terminated from employment by petitioners.

RULING

Yes, respondent was illegally terminated. The Supreme Court ruled that respondent, a probationary employee, was constructively dismissed effective October 30, 1997, and was denied substantive and procedural due process. Petitioners failed to conduct a proper administrative investigation, instead pre-judging her guilt and relying solely on police and prosecutor proceedings. The strip-search, police report, and subsequent detention rendered her continued employment impossible, unreasonable, and unlikely, constituting constructive dismissal. Her failure to report for work after release from jail was not abandonment. The lapse of her probationary contract did not validly terminate her employment because constructive dismissal had already occurred. Probationary employees enjoy security of tenure and can only be terminated for just or authorized cause, or failure to meet reasonable standards made known to them, with due process. Petitioners violated these requirements. The Court affirmed the CA decision with modification, upholding the award of backwages and separation pay in lieu of reinstatement due to strained relations.