FACTS: Respondent Gatbonton was hired as Chief Steward in petitioner Dusit Hotel Nikko’s Food and Beverage Department. He signed a three-month probationary employment contract until February 21, 1999. At the start of his employment, the standards by which he would be assessed to qualify for regular employment were explained to him.
The hotel alleged that at the end of the probation period, the Director of its Food and Beverage Department observed that Gatbonton failed to meet the qualification standards for Chief Steward; and recommended a two-month extension of Gatbonton’s probationary period, or until April 22, 1999. At the end of the 4th month, on March 24, 1999, Gatbonton was informed that the he had poor ratings on overall efficiency and did not qualify as Chief Steward.
A notice of termination of probationary employment effective April 9, 1999, on the above alleged grounds, was served on Gatbonton. Subsequently, Gatbonton filed a complaint for illegal dismissal and non-payment of wages, with prayers for reinstatement, full backwages, and damages, including attorney’s fees.
The Labor Arbiter found that at the time of the respondent’s termination, he was already a regular employee; and ordered Dusit Hotel Nikko to reinstate Gatbonton to his former position as regular Chief Steward without loss of seniority rights and other benefits with full backwages from the time of his illegal dismissal up to actual reinstatement.
The NLRC reversed the Labor Arbiter’s decision and declared the respondent’s dismissal legal.
The CA reinstated the decision of the Labor Arbiter.
ISSUE: Whether or not the respondent was a regular employee at the time of his dismissal and was he validly terminated.
RULING: Yes, the respondent was a regular employee at the time of his dismissal and he was illegally terminated.
The Supreme Court held that, a probationary employee can be legally terminated either: (1) for a just cause; or (2) when the employee fails to qualify as a regular employee in accordance with the reasonable standards made known to him by the employer at the start of the employment. Nonetheless, the power of the employer to terminate an employee on probation is not without limitations. First, this power must be exercised in accordance with the specific requirements of the contract. Second, the dissatisfaction on the part of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and Third, there must be no unlawful discrimination in the dismissal. In termination cases, the burden of proving just or valid cause for dismissing an employee rests on the employer.
Here, the petitioner did not present proof that the respondent was evaluated nor that his probationary employment was validly extended. In the absence of any evaluation or valid extension, we cannot conclude that respondent failed to meet the standards of performance set by the hotel for a chief steward.
At the expiration of the three-month period, Gatbonton had become a regular employee. It is an elementary rule in the law on labor relations that a probationary employee engaged to work beyond the probationary period of six months, as provided under Article 281 of the Labor Code, or for any length of time set forth by the employer (in this case, three months), shall be considered a regular employee. This is clear in the last sentence of Article 281. Any circumvention of this provision would put to naught the State’s avowed protection for labor.
Since respondent was not dismissed for a just or authorized cause, his dismissal was illegal, and he is entitled to reinstatement without loss of seniority rights, and other privileges as well as to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
