[ G.R. No.

218282, September 09, 2020 ]

REDENTOR Y. AGUSTIN, PETITIONER, VS. ALPHALAND CORPORATION, ET

AL., RESPONDENTS.

DECISION

Ruling of the Court

The petition is meritorious.

In the case of St. Michael's Institute v. Santos,41 a group of teachers with regular
employment status were dismissed for joining a public rally and disrupting classes.42 The LA
found and declared that there was just cause for the dismissal since they were guilty of
dereliction of duty and insubordination.43 On appeal, the NLRC reversed the ruling of the
LA and held that the teachers had been illegally dismissed. However, the NLRC in its
Decision did not award backwages. The employer in St. Michael's Institute filed a Petition
for Certiorari. The CA sustained the decision of the NLRC and in addition, awarded
backwages to the teachers who were illegally dismissed.44 Undaunted, the employer filed a
Petition for Review on Certiorari before this Court. In the said petition, the employer averred
that when the CA awarded backwages in favor of the employees, it "unwittingly reversed a
time-honored doctrine that a party who has not appealed cannot obtain from the appellate
court any affirmative relief other than the ones granted in the appealed decision."45 To this
issue, this Court ruled that the award of backwages is merely a legal consequence of the
finding that the employees were illegally dismissed by the employer. In unequivocal terms,
this Court explained in the said case that: "the [Court] is imbued with sufficient authority and
discretion to review matters, not otherwise assigned as errors on appeal, if it finds that their
consideration is necessary in arriving at a complete and just resolution of the case or to serve
the interests or to avoid dispensing piecemeal justice."46

The case of Alphaland and Agustin presents Us with a similar factual milieu. In the same
vein as St. Michael's Institute, the case at bar involves a regular employee who was declared
illegally dismissed yet was not properly awarded backwages from the time of illegal
dismissal until reinstatement.

Based on two grounds, this Court holds that Agustin was a regular employee of Alphaland.

First, The LA, NLRC, and later on the CA uniformly found that Agustin was hired from the
management's standpoint as a probationary employee but was not informed of the reasonable
standards by which his probationary employment was to be assessed. The standards set are
too general and failed to specify with clarity what is expected of Agustin as an Executive
Chef.47 Consequently, the lower courts found that Agustin's dismissal was illegal. This
finding warrants the application of the following self-explanatory provisions:

Article 296 of the Labor Code

Article 296. 281 Probationary Employment. – Probationary employment shall not exceed six

(6) months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a 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. An employee who is allowed to
work after a probationary period shall be considered a regular employee.

Section 6 (d) of the Implementing Rules of Book VI, Rule I of the Labor Code

Section 6. Probationary Employment. – There is probationary employment where the

employee, upon his engagement, is made to undergo a trial period during which the employer
determines his fitness to qualify for regular employment based on reasonable standards made
known to him at the time of engagement.

Probationary employment shall be governed by the following rules:

xxxx

(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. (Emphasis supplied).

Considering the foregoing, the probationary period set in the contract of employment dated
July 6, 2011 is therefore purposeless. In no case was Agustin hired on a probationary status
by Alphaland. As of July 6, 2011, Agustin became part of Alphaland Corporation as a regular
employee of the company without a fixed term of employment.

Second, Agustin served as a consultant prior to being hired as an Executive Chef allegedly on
a probationary status. The Consultancy Engagement Offer48 provides that Agustin served as
a consultant from June 6, 2011 until July 5, 2011, with a salary of P50,000.00. Narrated in the
Memorandum49 submitted by Alphaland, Agustin as a consultant, was responsible for setting
up the kitchen, choosing the equipment, laying out the job description for each kitchen staff,
and the preparation of menus for all cuisines that the Club will offer. Following the
completion of Agustin's tasks as the Club's consultant, Alphaland proceeded to search for an
Executive Chef to head the Club's restaurants. Since the opening of the Club was fast
approaching, Alphaland hired Agustin as the Executive Chef for all the Club's restaurants.
Alphaland claims that since it still had to assess and determine whether Agustin's skills as
Executive Chef are at par with what the Club requires, it hired Agustin as a probationary
employee.50

We find this circumstance contrary to the ordinary course of business. Mainly, consultants
are hired to provide their expert advice and opinion on what needs to be done. Records show
that Agustin has been in the culinary industry for almost 19 years already, won several
contests, and has served well-known establishments in the Philippines and abroad.51 When
Alphaland hired Agustin as Consultant, without doubt, it was fully aware of his qualifications
and skills to set up the "kitchen" at the Balesin Island Club. This Court cannot agree that
Agustin was hired as Executive Chef on probationary basis since the tasks for which Agustin
was engaged as a Consultant were the very same tasks he had to do as an Executive Chef. In
both engagements, Agustin was tasked to take over the kitchen planning.

Dismissal of regular employees by the employer requires the observance of the two-fold due
process, namely: (1) substantive due process; and (2) procedural due process. Alphaland
failed to observe both substantive and procedural due process in dismissing Agustin from
employment.

Substantive due process means that the dismissal must be for any of the: (1) just causes
provided under Article 297 of the Labor Code or the company rules and regulations
promulgated by the employer; or (2) authorized causes under Article 298 and 299 thereof.
None of these causes exist in the case at bar.

The attendant circumstances in the instant case show that the issue of Agustin's alleged
failure to meet the standards set by Alphaland as a ground for terminating employment was
not proven with substantial evidence. The NLRC correctly observed that "the record is bereft
of any persuasive showing that such dissatisfaction is real and in good faith, not feigned.
How the assessment was made, who made it, and the result of such assessment are not
known. It is only on appeal that Alphaland submitted the affidavits of Mario A. Oreta and
Conrad Nicholson M. Celdran who assessed and evaluated the performance of [Agustin].
[Alphaland] offered no explanation why such affidavits were presented only on appeal. What
comes clear is that the execution of these affidavits – more than one year from [Agustin's]
termination – is just an afterthought x x x."52

Neither does the purported unsatisfactory performance of Agustin as Executive Chef fall
under any of the just causes provided in Article 297 of the Labor Code, such as gross and
habitual neglect or serious misconduct and similar offenses. For misconduct or improper
behavior to be a just cause for dismissal, there must be a valid company rule or regulation
violated. As found by the labor tribunals and by the CA, the standards set by Alphaland are
too general to apprise the employee of what he is expected to do or accomplish. Expecting
Agustin "to render the highest quality of professional service and to always pursue the
interest of the company"53 falls short of the required reasonable standards to be provided by
the employer in order to serve as guidelines for the employee for purposes of evaluating his
performance. Moreover, even if the standards for an Executive Chef need not be spelled out,
Agustin has not acted in a manner contrary to basic knowledge and common sense.

Procedural due process means that the employee must be accorded due process required
under Article 292(b) of the Labor Code, the elements of which are the twin-notice rule and
the employee's opportunity to be heard and to defend himself.54 In the case of Agustin's
dismissal, neither of these elements was satisfied.

Agustin's dismissal, through a Notice of Termination55 dated November 2, 2011, took effect

upon notice.Ꮮαwρhi ৷ Alphaland does not deny the fact that only one Notice of Termination
was sent to Agustin. Without presenting any evidence, Alphaland also failed to discharge its
burden of proving that it afforded Agustin the opportunity to be heard and to explain himself.

Pursuant to Article 294 of the Labor Code, an illegally dismissed employee is entitled to the
following reliefs: (1) reinstatement without loss of seniority rights and other privileges; (2)
full backwages, inclusive of allowances; and (3) other benefits or their monetary equivalent.

Notably, the lower courts awarded backwages merely for the unexpired portion of Agustin's
probationary employment. The fact that Agustin did not appeal the Decision of the LA does
not bar this Court from awarding additional backwages, i.e., backwages from the time of his
illegal dismissal until reinstatement as a regular employee. Following the ruling in St.
Michael's Institute, the grant of such additional backwages is "necessary in arriving at a
complete and just resolution of the case"56 and is a relief granted by substantive law which
cannot be defeated by mere procedural lapses. This award is merely a logical consequence of
the finding that Agustin was a regular employee who has been illegally dismissed by
Alphaland.

Agustin is thus entitled to backwages reckoned from the time he was illegally dismissed on
November 4, 2011, with a P122,500.00 monthly salary, until his reinstatement. However, this
Court finds that the award of separation pay in lieu of reinstatement will be in the best
interest of both parties. This Court recognizes the fact that a continued relationship between
Agustin and Alphaland is no longer viable due to the strained relations57 and antagonism
definitely brought about by the long lapse or passage of time that Agustin was out of
Alphaland's employment from the date of his dismissal until the final resolution of this
case.58

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated September 26,
2014 and the Resolution dated April 20, 2015 of the Court of Appeals in CA-G.R. SP No.
130198 are hereby AFFIRMED with MODIFICATION in that Alphaland Corporation
is ORDERED to pay petitioner Redentor Y. Agustin the following:

(a) Backwages from the date he was illegally dismissed on November 4, 2011 until
the finality of this Decision; and

(b) Separation pay computed from July 6, 2011 until the finality of this Decision, at
the rate of one (1) month salary for every year of service.

The amount of P245,000.00 previously received by petitioner Redentor Y. Agustin by virtue

of the Decision of the Labor Arbiter must be deducted from the foregoing awards.

Further, Alphaland Corporation is ORDERED to pay petitioner Redentor Y. Agustin legal

interest of six percent (6%) per annum of the foregoing monetary awards computed from the
finality of this Decision until full satisfaction.59

The Labor Arbiter is hereby ORDERED to make another recomputation according to the

above directives.

SO ORDERED.