Sagun vs. ANZ Global Services and Operations (Manila), Inc.

An employment contract, though perfected upon the meeting of minds and acceptance of the offer, may be subject to a suspensive condition—such as satisfactory completion of background checks—that must be fulfilled before the employer-employee relationship commences and before the employer's obligations acquire obligatory force; failure to satisfy such condition prevents the creation of an employer-employee relationship and validates the withdrawal of the job offer.

Petitioner Enrique Y. Sagun was employed at Hongkong and Shanghai Banking Corporation Electronic Data Processing (Philippines), Inc. (HSBC-EDPI) when he applied online for a position at ANZ Global Services and Operations (Manila), Inc., a domestic corporation engaged in banking products and services. After passing the interview and online examination, ANZ offered him the position of Customer Service Officer, Payments and Cash Resolution through a letter of confirmation dated June 8, 2011, which contained terms requiring satisfactory completion of pre-employment screening and background checks as a condition precedent to employment.

• Petitioner was employed at HSBC-EDPI when he applied online for the position of Payments and Cash Processing Lead at respondent ANZ.
• After passing the interview and online examination, ANZ offered petitioner the position of Customer Service Officer, Payments and Cash Resolution through a letter of confirmation dated June 8, 2011.
• The employment agreement contained a pre-employment screening clause stating that employment was conditional on satisfactory results of police record checks, background checks, reference checks, and other required checks, and that ANZ may choose not to commence employment if these were not satisfactory.
• The agreement also stated that employment was conditional upon holding necessary visas and meeting immigration requirements, and that the appointment would take effect from the date of reporting, not later than July 11, 2011.
• Petitioner accepted the offer on June 8, 2011, and resigned from HSBC-EDPI on June 11, 2011.
• On July 11, 2011, petitioner reported to ANZ but was handed a letter of retraction withdrawing the job offer due to material inconsistencies found in his declared information and documents, particularly regarding his previous employment at Siemens.
• The background check revealed that: (a) he held the position of Level 1, not Level 2 Technical Support Representative at Siemens; and (b) he was terminated for cause due to absence without official leave (AWOL), not because of resignation as he claimed.
• Petitioner failed to satisfactorily explain these discrepancies and also failed to report for work on or before July 11, 2011 as required.

• The employment contract was perfected upon his acceptance of the offer on June 8, 2011, making him an employee of ANZ who could only be dismissed for cause.
• The withdrawal of the job offer constituted illegal dismissal since an employer-employee relationship had already been established.
• He had already resigned from his previous employment in reliance on the job offer, causing him damage.

• The NLRC had no jurisdiction because no employer-employee relationship existed between the parties.
• The job offer was conditional and the effectivity of the employment contract was subject to a term or period.
• Petitioner made material misrepresentations in his job application regarding his position level and reason for separation from Siemens, which justified the withdrawal of the offer.
• Petitioner failed to report for work on or before July 11, 2011; hence, his employment never took effect.
• The impleaded officers (Cruzada and Alcaraz) cannot be held personally liable.

• Procedural Issues: N/A
• Substantive Issues:
  • Whether an employer-employee relationship was created between petitioner and respondents.
  • Whether the withdrawal of the job offer was valid and justified.
  • Whether the CA committed grave abuse of discretion in affirming the NLRC ruling that no employer-employee relationship existed.

• Procedural: N/A
• Substantive:
  • The employment contract was perfected on June 8, 2011 when petitioner signed the offer and agreed to the terms, but it was subject to suspensive conditions (satisfactory completion of background checks and reporting for work on or before July 11, 2011).
  • Under Article 1181 of the Civil Code, in conditional obligations, the acquisition of rights depends upon the happening of the event which constitutes the condition.
  • The satisfactory completion of the background check was a suspensive condition that had to be fulfilled before the employer's obligations would acquire obligatory force and before the employer-employee relationship would commence.
  • Since petitioner failed to explain the discrepancies in his background check (regarding his position level and reason for separation from Siemens), the condition was not satisfied, and thus the obligation to employ did not come into effect.
  • Petitioner also failed to comply with the condition of reporting for work on or before July 11, 2011.
  • Consequently, no employer-employee relationship was created, and the complaint for illegal dismissal was properly dismissed.

• Suspensive Condition (Article 1181, Civil Code) — A condition is a future and uncertain event upon which the acquisition or resolution of rights is made to depend. In a contract with a suspensive condition, the effectivity of the obligation takes place only if and when the event which constitutes the condition happens or is fulfilled. If the condition does not happen, the obligation does not come into effect. The Court applied this to hold that the employment contract, though perfected, did not give rise to an employer-employee relationship because the suspensive condition (satisfactory background check) was not fulfilled.
• Three Stages of Contracts — Negotiation (manifestation of interest to agreement), Perfection (agreement upon essential elements), and Consummation (fulfillment of terms leading to extinguishment). The Court used this framework to distinguish between the perfection of the employment contract (which occurred on June 8, 2011) and the commencement of the employer-employee relationship (which never occurred due to the unfulfilled condition).
• Distinction Between Perfection of Contract and Commencement of Employment — Citing Santiago v. CF Sharp Crew Management, Inc., the Court affirmed that a contract of employment may be perfected upon acceptance of the offer, but the employer-employee relationship and the attendant obligations do not commence until the employee actually starts working or the conditions precedent are satisfied.

• "In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the condition." (citing Article 1181 of the Civil Code)
• "In the realm of civil law, a condition is defined as 'every future and uncertain event upon which an obligation or provision is made to depend. It is a future and uncertain event upon which the acquisition or resolution of rights is made to depend by those who execute the juridical act.'"
• "To reiterate, in a contract with a suspensive condition, if the condition does not happen, the obligation does not come into effect. Thus, until and unless petitioner complied with the satisfactory background check, there exists no obligation on the part of ANZ to recognize and fully accord him the rights under the employment contract."

• Santiago v. CF Sharp Crew Management, Inc., 554 Phil. 63 (2007) — Cited by the CA and acknowledged by the Supreme Court to distinguish between the perfection of an employment contract and the commencement of the employer-employee relationship; also regarding the jurisdiction of labor tribunals over claims not strictly arising from employer-employee relationships.
• C.F. Sharp & Co., Inc. v. Pioneer Insurance & Surety Corporation, 682 Phil. 198 (2012) — Cited for the proposition regarding the three stages of contracts (negotiation, perfection, consummation).
• Stolt-Nielsen Transportation Group, Inc. v. Medequillo, Jr., 679 Phil. 297 (2012) — Cited for the principle that an employment contract is perfected at the moment the parties come to agree upon its terms and conditions.
• Gonzales v. The Heirs of Cruz, 373 Phil. 368 (1999) — Cited for the definition of a condition in civil law.
• Insular Life Assurance Co., Ltd v. Toyota Bel-Air, Inc., 573 Phil. 222 (2008) — Cited for the rule that when a contract is subject to a suspensive condition, its effectivity shall take place only if and when the event which constitutes the condition happens or is fulfilled.

• Article 1181, Civil Code — Provides that in conditional obligations, the acquisition of rights depends upon the happening of the event which constitutes the condition; central to the Court's ruling that the employment obligation was conditional upon the satisfactory background check.
• Article 1305, Civil Code — Defines contract as a meeting of minds between two persons whereby one binds himself with respect to the other to give something or to render some service.
• Article 1318, Civil Code — Enumerates the essential requisites of contracts (consent, object, cause).
• Article 1306, Civil Code — Provides that contracting parties may establish stipulations, clauses, terms, and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy; basis for upholding the conditional nature of the employment contract.
• Article 1157, Civil Code — States that contracts are one of the five sources of obligations.
• Article 1156, Civil Code — Defines obligation as the juridical necessity to give, to do or not to do.