G.R. No. 98450 July 21, 1993
THE PHILIPPINE MANPOWER SERVICES, INC., ADAWLIAH UNIVERSAL ELECTRONICS and AFISCO INSURANCE CORPORATION, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ARTHUR P. PANGAN, respondents.

FACTS

Private respondent Arthur F. Pangan entered into a two-year employment contract with petitioner Adawliah Universal Electronics as a data entry clerk technician, commencing on April 30, 1988, with a monthly salary of US$550.00. He was deployed by petitioner Philippine Manpower Services, Inc. (Philman). Pangan alleged that he rendered uncompensated overtime work and was ordered to perform additional programming duties without a salary increase. After demanding a salary adjustment, he was terminated on July 21, 1988, by Adawliah’s Administrative Manager on grounds of incompetence, having been paid only US$389.00 for services rendered from July 1-21, 1988. Pangan filed a complaint with the Philippine Overseas Employment Administration (POEA) for illegal dismissal and other monetary claims. The POEA ruled in favor of Pangan, ordering Philman and Adawliah to pay, jointly and severally, US$11,550.00 representing salaries for the unexpired portion of his contract, plus attorney’s fees, with payment in Philippine currency at the exchange rate prevailing at the time of payment. Petitioners appealed to the National Labor Relations Commission (NLRC), which affirmed the POEA decision but modified the conversion rate, ordering payment at the exchange rate prevailing at the time Pangan was illegally dismissed on July 21, 1988. Petitioners’ motion for reconsideration was denied, prompting them to file the instant petition.

ISSUE

Whether the NLRC committed grave abuse of discretion in affirming the finding that private respondent Arthur F. Pangan was illegally dismissed and in ordering petitioners to pay his salaries for the unexpired portion of his contract.

RULING

The petition is dismissed. The Supreme Court upheld the NLRC’s ruling. Probationary employees enjoy constitutional protection of security of tenure and can only be dismissed for just cause as provided by law or the employment contract. The employer bears the burden of proving that the dismissal was for a just cause. In this case, petitioners failed to substantiate their claim that Pangan was incompetent. General averments of unsatisfactory performance, without specific instances or evidence, do not constitute just cause for termination. The contract clause allowing termination for incompetence during the probationary period does not grant the employer unbridled discretion; the existence of the alleged incompetence must still be proven. Consequently, Pangan’s dismissal was illegal. As to the monetary award, the Court affirmed the award of salaries for the unexpired portion of the contract, which is consistent with the rule that an illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges, and to full backwages. The modification by the NLRC regarding the applicable exchange rate (rate at the time of dismissal) was not disturbed, as the petition did not raise it as an issue.