G.R. No. 74004 . August 10, 1989.
A.M. ORETA & CO., INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and SIXTO GRULLA JR., respondents.

FACTS

Private respondent Sixto Grulla Jr. was hired by petitioner A.M. Oreta & Co., Inc., for its foreign principal ENDECO, to work as a carpenter in Jeddah, Saudi Arabia, under a twelve-month contract commencing June 11, 1980. On August 15, 1980, Grulla suffered a work-related accident fracturing his lumbar vertebra, requiring hospitalization. After treatment and being declared fit for work by September 18, 1980, he resumed his duties. However, on October 9, 1980, he received a notice terminating his employment.
Grulla filed a complaint for illegal dismissal with the Philippine Overseas Employment Administration (POEA), seeking payment of salaries for the unexpired ten months of his contract, medical benefits, and reimbursement for medical expenses. The petitioner contended that Grulla was validly dismissed as a probationary employee for unsatisfactory performance, citing a contractual provision allowing termination for violations of company rules. The POEA ruled in favor of Grulla, declaring the dismissal illegal and awarding monetary claims. The National Labor Relations Commission (NLRC) affirmed the POEA decision in toto.

ISSUE

The core issues were: (1) whether Grulla’s dismissal was illegal, and (2) whether he was entitled to salaries for the unexpired portion of his employment contract.

RULING

The Supreme Court dismissed the petition and affirmed the NLRC resolution, ruling that Grulla’s dismissal was illegal and that he was entitled to his claimed salaries. The Court rejected the petitioner’s argument that Grulla was a probationary employee whose dismissal was justified by unsatisfactory performance. Applying Article 280 of the Labor Code, the Court emphasized that the nature of the job determines employment status, not the contract’s label. As a carpenter performing work necessary to the employer’s construction business, Grulla was a regular employee from the start of his engagement under a contract with a fixed twelve-month term.
Crucially, the Court found that the dismissal violated due process. The twin requirements of notice and hearing were absent; Grulla was not informed of any charges nor given an opportunity to defend himself before his outright termination. This procedural flaw rendered the dismissal invalid. Consequently, Grulla was entitled to the security of tenure under his contract, mandating payment of salaries for the unexpired ten-month portion. The Court accorded finality to the factual findings of the POEA and NLRC, noting no grave abuse of discretion, as their conclusions on the award of US$3,700.00 for salaries and P1,000.00 for medical reimbursement were supported by evidence. The temporary restraining order was lifted.