ABBOTT v ALCARAZ

FACTS

Petitioner Abbott Laboratories, Philippines (Abbott) caused the publication in a major

broadsheet newspaper of its need for a Medical and Regulatory Affairs Manager
(Regulatory Affairs Manager) who would: (a) be responsible for drug safety surveillance
operations, staffing, and budget; (b) lead the development and implementation of
standard operating procedures/policies for drug safety surveillance and vigilance; and (c)
act as the primary interface with internal and external customers regarding safety
operations and queries.4 Alcaraz - who was then a Regulatory Affairs and Information
Manager at Aventis Pasteur Philippines, Incorporated (another pharmaceutical company
like Abbott) – showed interest and submitted her application.

Abbott formally offered Alcaraz the abovementioned position. n Abbott’s offer sheet.7 it
was stated that Alcaraz was to be employed on a probationary basis.8 Later that day, she
accepted the said offer and received an electronic mail (e-mail) from Abbott’s Recruitment
Officer, petitioner Teresita C. Bernardo (Bernardo), confirming the same. Attached to
Bernardo’s e-mail were Abbott’s organizational chart and a job description of Alcaraz’s
work.
Alcaraz signed an employment contract which stated, inter alia, that she was to be placed
on probation for a period of six (6) months beginning February 15, 2005 to August 14,
2005. The said contract was also signed by Abbott’s General Manager, petitioner Edwin
Feist (Feist).

During the course of her employment, Alcaraz noticed that some of the staff had
disciplinary problems. Thus, she would reprimand them for their unprofessional behavior
such as non-observance of the dress code, moonlighting, and disrespect of Abbott
officers. However, Alcaraz’s method of management was considered by Walsh (Manager
of the Literature Drug Surveillance Drug Safety of Hospira which Alvaraz’s unit is a part
of) to be "too strict.

Alcaraz had a meeting with petitioner Cecille Terrible (Terrible), Abbott’s former HR
Director, to discuss certain issues regarding staff performance standards. In the course
thereof, Alcaraz accidentally saw a printed copy of an e-mail sent by Walsh to some staff
members which essentially contained queries regarding the former’s job performance.
Alcaraz asked if Walsh’s action was the normal process of evaluation. Terrible said that
it was not.

Alcaraz was called to a meeting with Walsh and Terrible where she was informed that
she failed to meet the regularization standards for the position of Regulatory Affairs
Manager.18 Thereafter, Walsh and Terrible requested Alcaraz to tender her resignation,
else they be forced to terminate her services. She was also told that, regardless of her
choice, she should no longer report for work and was asked to surrender her office
identification cards. She requested to be given one week to decide on the same, but to
no avail.

Alcaraz told her administrative assistant, Claude Gonzales (Gonzales), that she would be
on leave for that day. However, Gonzales told her that Walsh and Terrible already
announced to the whole Hospira ALSU staff that Alcaraz already resigned due to health
reasons.

On May 23, 2005, Walsh, Almazar, and Bernardo personally handed to Alcaraz a letter
stating that her services had been terminated effective May 19, 2005.21 The letter detailed
the reasons for Alcaraz’s termination – particularly, that Alcaraz: (a) did not manage her
time effectively; (b) failed to gain the trust of her staff and to build an effective rapport with
them; (c) failed to train her staff effectively; and (d) was not able to obtain the knowledge
and ability to make sound judgments on case processing and article review which were
necessary for the proper performance of her duties.22 On May 27, 2005, Alcaraz received
another copy of the said termination letter via registered mail.
Alcaraz felt that she was unjustly terminated and thus, filed a complaint for illegal
dismissal.
She claimed that she should have already been considered as a regular and not a
probationary employee given Abbott’s failure to inform her of the reasonable standards
for her regularization upon her engagement as required under Article 295 of the Labor
Code. In this relation, she contended that while her employment contract stated that she
was to be engaged on a probationary status, the same did not indicate the standards on
which her regularization would be based. She further averred that the individual
petitioners maliciously connived to illegally dismiss her when: (a) they threatened her with
termination; (b) she was ordered not to enter company premises even if she was still an
employee thereof; and (c) they publicly announced that she already resigned in order to
humiliate her.
On the contrary, petitioners m
ntained that Alcaraz was validly terminated from her probationary employment given her
failure to satisfy the prescribed standards for her regularization which were made known
to her at the time of her engagement.

LA RULING

A dismissed Alcaraz’s complaint for lack of merit. The LA rejected Alcaraz’s argument
that she was not informed of the reasonable standards to qualify as a regular employee
considering her admissions that she was briefed by Almazar (HR) on her work during her
pre-employment orientation meeting and that she received copies of Abbott’s Code of
Conduct and Performance Modules which were used for evaluating all types of Abbott
employees.

NLRC RULING
The NLRC reversed the findings of the LA and ruled that there was no evidence showing
that Alcaraz had been apprised of her probationary status and the requirements which
she should have complied with in order to be a regular employee. It held that Alcaraz’s
receipt of her job description and Abbott’s Code of Conduct and Performance Modules
was not equivalent to her being actually informed of the performance standards upon
which she should have been evaluated on.

CA RULING
Affirmed the ruling of the NLRC.

ISSUE
1. Whether or not Alcaraz was sufficiently informed of the reasonable standards to
qualify her as a regular employee.
2. Whether or not Alcaraz was validly terminated from her employment.
 RULING

ISSUE 1:
A probationary employee, like a regular employee, enjoys security of tenure. However, in
cases of probationary employment, aside from just or authorized causes of termination,
an additional ground is provided under Article 295 of the Labor Code, i.e., the probationary
employee may also be terminated for failure to qualify as a regular employee in
accordance with the reasonable standards made known by the employer to the employee
at the time of the engagement.Thus, the services of an employee who has been engaged
on probationary basis may be terminated for any of the following: (a) a just or (b) an
authorized cause; and (c) when he fails to qualify as a regular employee in accordance
with reasonable standards prescribed by the employer. (d) In all cases of probationary
employment, the employer shall make known to the employee the standards under which
he will qualify as a regular employee at the time of his engagement. Where no standards
are made known to the employee at that time, he shall be deemed a regular employee.

In other words, the employer is made to comply with two (2) requirements when dealing
with a probationary employee: first, the employer must communicate the regularization
standards to the probationary employee; and second, the employer must make such
communication at the time of the probationary employee’s engagement. If the employer
fails to comply with either, the employee is deemed as a regular and not a probationary
employee.

A punctilious examination of the records reveals that Abbott had indeed complied with the
above-stated requirements. This conclusion is largely impelled by the fact that Abbott
clearly conveyed to Alcaraz her duties and responsibilities as Regulatory Affairs Manager
prior to, during the time of her engagement, and the incipient stages of her employment.
On this score, the Court finds it apt to detail not only the incidents which point out to the
efforts made by Abbott but also those circumstances which would show that Alcaraz was
well-apprised of her employer’s expectations that would, in turn, determine her
regularization:
(a) On June 27, 2004, Abbott caused the publication in a major broadsheet newspaper of
its need for a Regulatory Affairs Manager, indicating therein the job description for as well
as the duties and responsibilities attendant to the aforesaid position; this prompted
Alcaraz to submit her application to Abbott on October 4, 2004;
(b) In Abbott’s December 7, 2004 offer sheet, it was stated that Alcaraz was to be
employed on a probationary status;
(c) On February 12, 2005, Alcaraz signed an employment contract which specifically
stated, inter alia, that she was to be placed on probation for a period of six (6) months
beginning February 15, 2005 to August 14, 2005;
(d) On the day Alcaraz accepted Abbott’s employment offer, Bernardo sent her copies of
Abbott’s organizational structure and her job description through e-mail;
(e) Alcaraz was made to undergo a pre-employment orientation where Almazar informed
her that she had to implement Abbott’s Code of Conduct and office policies on human
resources and finance and that she would be reporting directly to Walsh;
(f) Alcaraz was also required to undergo a training program as part of her orientation;
(g) Alcaraz received copies of Abbott’s Code of Conduct and Performance Modules from
Misa who explained to her the procedure for evaluating the performance of probationary
employees; she was further notified that Abbott had only one evaluation system for all of
its employees; and
(h) Moreover, Alcaraz had previously worked for another pharmaceutical company and
had admitted to have an "extensive training and background" to acquire the necessary
skills for her job.6

Considering the totality of the above-stated circumstances, it cannot, therefore, be

doubted that Alcaraz was well-aware that her regularization would depend on her ability
and capacity to fulfill the requirements of her position as Regulatory Affairs Manager and
that her failure to perform such would give Abbott a valid cause to terminate her
probationary employment.

In fine, the Court rules that Alcaraz’s status as a probationary employee and her
consequent dismissal must stand. Consequently, in holding that Alcaraz was illegally
dismissed due to her status as a regular and not a probationary employee, the Court finds
that the NLRC committed a grave abuse of discretion.

ISSUE 2:

A different procedure is applied when terminating a probationary employee; the usual

two-notice rule does not govern.65 Section 2, Rule I, Book VI of the Implementing Rules
of the Labor Code states that "if the termination is brought about by the x x x failure of an
employee to meet the standards of the employer in case of probationary employment, it
shall be sufficient that a written notice is served the employee, within a reasonable time
from the effective date of termination."
As the records show, Alcaraz's dismissal was effected through a letter dated May 19,
2005 which she received on May 23, 2005 and again on May 27, 2005. Stated therein
were the reasons for her termination, i.e., that after proper evaluation, Abbott determined
that she failed to meet the reasonable standards for her regularization considering her
lack of time and people management and decision-making skills, which are necessary in
the performance of her functions as Regulatory Affairs Manager. 66 Undeniably, this
written notice sufficiently meets the criteria set forth above, thereby legitimizing the cause
and manner of Alcaraz’s dismissal as a probationary employee under the parameters set
by the Labor Code.