Sameer Overseas Placement Agency, Inc. vs. NLRC

A probationary employee may be terminated only for just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. The employer bears the burden of proving just or valid cause for dismissal, and the power to terminate a probationary employment contract is subject to limitations: it must be exercised in accordance with the specific requirements of the contract, the dissatisfaction of the employer must be real and in good faith, and there must be no unlawful discrimination in the dismissal.

Sameer Overseas Placement Agency, Inc. is a local recruitment placement agency that deployed Filipino workers for overseas employment. Private respondent Priscila Endozo applied to the agency in June 1993 for overseas employment in Taiwan as a domestic helper. The employment was governed by the Labor Code, particularly Article 281 on probationary employment, and by Republic Act No. 8042, which vested jurisdiction over claims of overseas workers with the National Labor Relations Commission.

In June 1993, Priscila Endozo applied to Sameer Overseas Placement Agency, Inc., a local recruitment placement agency, for overseas employment in Taiwan as a domestic helper. She was initially found to have a "minimal spot" and was advised to rest for at least two months. On April 6, 1994, petitioner told Endozo that she would be finally deployed to Taiwan and required her to pay P30,000.00, which she did, but petitioner did not issue any receipt.

On April 8, 1994, Endozo left for Taiwan to be employed as a housemaid of Sung Kui Mei with a monthly salary of NT$13,380.00 for a period of one year. However, she stayed in Taiwan only for eleven days, as her employer terminated her services and sent her home on April 19, 1994 for alleged incompetence. Immediately upon her return, she confronted the petitioner agency, and Rose Mahinay of said agency told her that she was just unlucky and that she would be refunded the amount of P50,000.00.

On June 20, 1995, Endozo filed with the Philippine Overseas Employment Administration a complaint against petitioner for illegal dismissal, payment of salary corresponding to the unexpired portion of her contract, illegal exaction, violation of the Labor Code, falsification of contract of employment, attorney's fees and costs. Meantime, on June 7, 1995, Congress enacted Republic Act No. 8042, vesting jurisdiction over claims of overseas workers with the NLRC, and consequently, respondent's claim was transferred to the NLRC Arbitration Branch in San Pablo City.

The employment contract was for a definite period of one year, with six months probationary period. Under the contract of employment, the employer could terminate the services of private respondent during the probationary period for "being found losing ability to work." After only eleven days of work, the Taiwanese employer terminated private respondent's employment for alleged incompetence. The Labor Arbiter found that private respondent was illegally dismissed, and the NLRC affirmed in toto, leading to the petition before the Supreme Court.

• Validity of Termination During Probationary Period: Petitioner argued that the employer in Taiwan could lawfully terminate private respondent's employment as domestic helper for incompetence during the probationary period of her employment.

• Illegal Dismissal: The Solicitor General, on behalf of the public respondent, submitted that private respondent had been illegally dismissed by her foreign employer, entitling her to payment of her salaries corresponding to the unexpired portion of her contract.

• Validity of Termination of Probationary Employee: Whether the employer in Taiwan could lawfully terminate private respondent's employment as domestic helper for incompetence during the probationary period of her employment.

• Validity of Termination of Probationary Employee: No. The termination of respondent Endozo's employment was not justified and hence illegal. A probationary employee may be terminated only for just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement, and the employer bears the burden of proving just or valid cause for dismissal.

• Validity of Termination of Probationary Employee: The Court applied the elementary rule in labor relations that even a probationary employee is entitled to security of tenure and cannot be terminated except for cause. Under Article 281 of the Labor Code, a probationary employee may be terminated on two grounds: (a) for just cause or (b) when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. The Court cited the limitations on the power of the employer to terminate a probationary employment contract: first, it must be exercised in accordance with the specific requirements of the contract; secondly, the dissatisfaction of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and thirdly, 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. In this case, petitioner was not able to present convincing proof establishing respondent Endozo's alleged incompetence. The Court emphasized that due process dictates that an employee be apprised beforehand of the conditions of his employment and of the terms of advancement therein, and that implicit in Article 281 is the requirement that reasonable standards be previously made known by the employer to the probationary employee at the time of his engagement. Consequently, private respondent was entitled to payment of her salaries corresponding to the unexpired portion of her contract of employment for a period of one year.

• Security of Tenure of Probationary Employees — Even a probationary employee is entitled to security of tenure and cannot be terminated except for cause. Under Article 281 of the Labor Code, a probationary employee may be terminated on two grounds: (a) for just cause or (b) when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. The Court applied this doctrine to hold that the dismissal of the domestic helper after eleven days of work, without proof of just cause or communicated standards, was illegal.

• Limitations on Termination of Probationary Employment — The power of the employer to terminate a probationary employment contract is subject to limitations: first, it must be exercised in accordance with the specific requirements of the contract; secondly, the dissatisfaction of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and thirdly, there must be no unlawful discrimination in the dismissal. The Court applied these limitations to find that the termination was not justified.

• Burden of Proof in Termination Cases — In termination cases, the burden of proving just or valid cause for dismissing an employee rests on the employer. The Court applied this rule to hold that the petitioner failed to present convincing proof establishing the alleged incompetence of the private respondent.

• Requirement of Reasonable Standards Made Known to Employee — Due process dictates that an employee be apprised beforehand of the conditions of his employment and of the terms of advancement therein. Implicit in Article 281 of the Labor Code is the requirement that reasonable standards be previously made known by the employer to the probationary employee at the time of his engagement. The Court applied this doctrine to find the termination illegal because no such standards were established.

• "Under Article 281 of the Labor Code, a probationary employee may be terminated on two grounds: (a) for just cause or (b) when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement." — This passage states the controlling rule for termination of probationary employees and is the canonical formulation of the doctrine applied in this case.

• "However, 'the power of the employer to terminate a probationary employment contract is subject to limitations. First, it must be exercised in accordance with the specific requirements of the contract. Secondly, the dissatisfaction of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and thirdly, there must be no unlawful discrimination in the dismissal.'" — This passage defines the limitations on the employer's power to terminate a probationary employee and is central to the Court's reasoning.

• "In termination cases, the burden of proving just or valid cause for dismissing an employee rests on the employer." — This passage establishes the burden of proof rule in termination cases, which was decisive in this case because the petitioner failed to present convincing proof of incompetence.

• "Precisely, implicit in Article 281 of the Code is the requirement that reasonable standards be previously made known by the employer to the probationary employee at the time of his engagement." — This passage articulates the due process requirement that reasonable standards be communicated to the probationary employee, which the Court found was not satisfied.

• Philippine Manpower Services, Inc. vs. NLRC, 224 SCRA 691 [1993] — Cited as controlling precedent for the rule that even a probationary employee is entitled to security of tenure and for the grounds for termination under Article 281 of the Labor Code.

• Agoy vs. NLRC, 252 SCRA 588 [1996] — Cited as precedent for the rule that a probationary employee cannot be terminated except for cause.

• Lopez vs. NLRC, 245 SCRA 644 [1995] — Cited as precedent for the rule that a probationary employee cannot be terminated except for cause and for the burden of proof in termination cases.

• Pines City Educational Center vs. NLRC, 227 SCRA 655 [1993] — Cited as precedent for the rule that a probationary employee cannot be terminated except for cause.

• Phil. Federation of Credit Cooperative, Inc. (PFCCI) vs. NLRC (First Division), G.R. No. 121071, December 11, 1998 — Cited as precedent for the rule that a probationary employee cannot be terminated except for cause.

• Orient Express Placement Philippines vs. NLRC, 273 SCRA 256 [1997] — Cited for the rule on grounds for termination of probationary employees and the due process requirement that an employee be apprised beforehand of the conditions of his employment.

• Manila Hotel Corporation vs. NLRC, 141 SCRA 169 [1986] — Cited as the source of the limitations on the power of the employer to terminate a probationary employment contract.

• General Baptist Bible College vs. NLRC, 219 SCRA 549 [1993] — Cited in support of the burden of proof rule in termination cases.

• Anderson vs. NLRC, 252 SCRA 116 [1996] — Cited as precedent for the entitlement of an illegally dismissed employee to payment of salaries corresponding to the unexpired portion of the contract.

• Teknika Skills and Trade Services, Inc. vs. NLRC, 212 SCRA 132 [1992] — Cited as precedent for the entitlement of an illegally dismissed employee to payment of salaries corresponding to the unexpired portion of the contract.

• Article 281, Labor Code — Governs probationary employment. The Court applied this provision to determine the grounds for termination of a probationary employee: just cause or failure to qualify as a regular employee in accordance with reasonable standards made known to the employee at the time of engagement.

• Republic Act No. 8042 — The Migrant Workers and Overseas Filipinos Act of 1995. The Court noted that this law vested jurisdiction over claims of overseas workers with the National Labor Relations Commission, which was the basis for the transfer of respondent's claim from the POEA to the NLRC.

Davide, Jr., C.J., and Puno, J., concurred. Kapunan and Ynares-Santiago, JJ., were on official business abroad.