G.R. No. 205727. January 18, 2017.
RUTCHER T. DAGASDAS, Petitioner, vs. GRAND PLACEMENT AND GENERAL SERVICES CORPORATION, Respondent.

FACTS

Petitioner Rutcher T. Dagasdas, a civil engineer, was recruited by respondent Grand Placement and General Services Corporation (GPGS) for deployment to Saudi Arabia. His initial contract listed him as a Network Technician, allegedly to facilitate visa processing. Upon arrival, he signed a new contract with the foreign principal, Industrial & Management Technology Methods Co. Ltd. (ITM), designating him as a Superintendent with a three-month probationary period. He was assigned tasks unsuitable to his qualifications. After raising concerns, he was transferred but was later terminated during his probationary period for alleged poor performance. He signed a quitclaim and was repatriated. Dagasdas then filed an illegal dismissal case against GPGS and its foreign principals, alleging misrepresentation and termination without just cause and due process.
The Labor Arbiter dismissed the complaint, upholding the probationary dismissal. The National Labor Relations Commission (NLRC) reversed, finding illegal dismissal and ordering payment of salaries for the unexpired portion of the contract. The Court of Appeals reinstated the Labor Arbiter’s decision, ruling the dismissal was valid during the probationary period. Dagasdas elevated the case to the Supreme Court via a Petition for Review on Certiorari.

ISSUE

Whether or not petitioner Dagasdas was illegally dismissed.

RULING

Yes, the Supreme Court ruled that Dagasdas was illegally dismissed. The Court emphasized that while employers have the prerogative to terminate probationary employees for failing to meet reasonable standards, this must be exercised within legal bounds. The foreign principal, ITM, failed to prove that Dagasdas was apprised of the reasonable performance standards for his position at the time of his engagement. Termination based merely on a contract clause allowing dismissal during probation, without demonstrating that the employee was informed of such standards and failed to meet them, is invalid.
Furthermore, the Court found that the circumstances indicated bad faith. The initial contract for a Network Technician, a position mismatched with Dagasdas’s qualifications as a civil engineer, constituted misrepresentation. This created a situation where he was set up to fail, undermining the good faith requirement in exercising management prerogative. The subsequent termination, allegedly for poor performance in a role he was not qualified for, was therefore unjust. The quitclaim he signed was also declared void for being executed under these coercive circumstances. Consequently, GPGS, as the local recruitment agency, was held jointly and severally liable with its foreign principal for the illegal dismissal. The NLRC decision was reinstated.