G.R. No. L-43890 July 16, 1984
OCEANIC BIC DIVISION (FFW) and PABLITO ORDANOSO, petitioners, vs. FLERIDA RUTH P. ROMERO AS VOLUNTARY ARBITRATOR, OCEANIC BIC MANUFACTURING, and GLICERIO LEDESMA, respondents.

FACTS

Petitioner Pablito Ordanoso was initially hired by respondent Oceanic Bic Manufacturing under a six-month temporary employment contract from October 3, 1973, to April 3, 1974, which included a stipulation allowing the company to terminate him should his services be unsatisfactory. Upon its expiration, he was rehired under a second six-month probationary contract from April 4 to October 4, 1974, with an explicit note advising him to improve his performance. The company conducted periodic performance ratings based on specific criteria. Ordanoso consistently received below-average ratings and was given several memoranda warning him to improve. Due to his continued unsatisfactory performance, his employment was terminated on October 3, 1974.
The union filed a complaint for illegal dismissal and unfair labor practice. The parties eventually selected a voluntary arbitrator, who ruled in favor of the company, holding that the dismissal was justified and that no prior clearance from the Secretary of Labor was required under Presidential Decree No. 21. The petitioners sought review, arguing the dismissal was illegal for lack of the required prior clearance.

ISSUE

The primary issue is whether the dismissal of a probationary employee for unsatisfactory performance requires prior clearance from the Secretary of Labor under P.D. No. 21 and its implementing rules.

RULING

The Supreme Court dismissed the petition and affirmed the voluntary arbitrator’s decision. The legal logic centered on the interpretation of the clearance and reporting requirements under Section 11 of P.D. No. 21 and Sections 1, 3, and 10 of its Implementing Instructions. The Court clarified that the rules created a distinction based on an employee’s length of service and employment status. For employees with less than one year of service, the employer must submit a report to the Department of Labor within one week after termination. For those with one year or more of service, prior clearance from the Secretary of Labor is required before termination.
Applying these rules to Ordanoso, his total service from his first temporary contract to his probationary dismissal was exactly one year. The Court reasoned that the requirement for prior clearance applies only to those who have served for one year or more. Since Ordanoso’s service did not exceed one year, his dismissal fell under the rule requiring only a post-termination report, not prior clearance. The Court found the company had valid cause for dismissal due to his documented unsatisfactory performance and the warnings provided. It emphasized that requiring prior clearance in such a case would be unfair to the employer, forcing it to retain a below-average worker due to a procedural ambiguity. Thus, the dismissal was legal and complied with the applicable law.