G.R. No. 186243 ; April 11, 2011
HACIENDA PRIMERA DEVELOPMENT CORPORATION and ANNA KATRINA E. HERNANDEZ, Petitioners, vs. MICHAEL S. VILLEGAS, Respondent.

FACTS

Petitioner Hacienda Primera Development Corporation hired respondent Michael S. Villegas as General Manager of Amorita Resort under a three-month probationary employment contract starting January 1, 2007. The contract specified salary and benefits but did not state the reasonable standards for regularization. On March 14, 2007, respondent was informed through a call from Paramount Consultancy and Management to report to Manila, where he learned his services were terminated without a written notice. He filed a complaint for illegal dismissal. Petitioner claimed his termination was due to his failure to qualify as a regular employee, citing his alleged failure to conceptualize and complete financial budgets, sales projections, room rates, website development, and a marketing plan. The Labor Arbiter ruled in favor of respondent, declaring the dismissal illegal and ordering reinstatement, backwages, moral and exemplary damages, and attorney’s fees. The NLRC partially granted petitioner’s appeal, dismissing the illegal dismissal charge but ordering payment of salary for the unexpired portion of the probationary contract (March 16-31, 2007). The Court of Appeals set aside the NLRC decision, reinstated the Labor Arbiter’s decision with modification (awarding separation pay in lieu of reinstatement due to strained relations), and remanded the case for computation. Petitioners elevated the case to the Supreme Court.

ISSUE

Whether respondent, a probationary employee, was illegally dismissed.

RULING

Yes, respondent was illegally dismissed. The Supreme Court denied the petition and affirmed the Court of Appeals Decision and Resolution. The Labor Code (Article 281) and its Implementing Rules provide that a probationary employee may be terminated for a just cause or when he fails to qualify as a regular employee according to reasonable standards made known to him at the time of engagement. In this case, petitioner failed to specify, much less prove, that the reasonable standards for respondent’s regularization were made known to him at the start of his employment. The employment contract contained no such standards, and petitioner merely claimed respondent was “presumed to know” the standards as General Manager. Due process requires that an employee be apprised beforehand of the conditions and terms of advancement. Consequently, respondent is deemed to have been a regular employee from the start. His termination was therefore illegal. The Court found no merit in petitioner’s assigned errors regarding backwages, damages, attorney’s fees, separation pay, or the finality of the NLRC resolution.