05 PNOC vs. Amelyn Buenviaje G.R. Nos.

AUTHOR: BIGALBAL
183200-01.June 29, 2016.
TOPIC: Labor Standards
PONENTE: JARDELEZA, J
CASE LAW/ DOCTRINE: As permanent employee, she may only be removed by just or authorized
causes.
As a probationary employee, an employee may only be validly removed for a just and authorized cause
or when he fails to qualify as a regular employee in accordance with reasonable standards made known
to him by the employer at the time of his engagement.
EMERGENCY RECIT: Buenviaje was hired as an Assistant Marketing Manager, coterminous with her
father who was then the CEO of PNOC. When a new Pres, was assigned, she was placed as a Senior
Marketing Manager and an appointment letter was given to the HR stating her regular status to retroact
on 1 July 2000. However, she was dismissed after she was evaluated in the performance appraisal where
she received an unsatisfactory rating. PNOC invoked that she was a probationary employee and must be
dismissed. Buenviaje filed a complaint for illegal dismissal with the LA- held that she was a regular
employee. When it was elevated with the NLRC- she was a regular employee but removed the solidary
liability of Aquino and Guerzon for the award for damages. In the CA-she was declared still as a regular
employee but returned the award for damages.
Was she illegally dismissed? Yes. May she be considered as a regular employee? Yes.
SC held that Buenviaje has been with PNOC for more than 6 months as stated in her appointment letter
that regular status will retroact on 1 July 2000. Moreover, a probationary employee who worked beyond
6 months is considered a regular employee. Failure also to disclose the reasonable standards at the time
of her engagement may consider an employee as regular. The performance appraisal used with
Buenviaje pertains to managerial employees and not to probationary employees. Also, for an employee
to be dismissed on a just cause, unsatisfactory rating as invoked by PNOC must be gross and habitual in
his duties. The unsatisfactory rating, even if considered as poor performance, does not amount to gross
or habitual neglect of duties. PNOC also failed to follow the twin notice rule as the first notice only had a
bare statement why Buenviaje must be dismissed.
FACTS:
 These are consolidated petitions for review on certiorari of the Decision dated October 31, 2007
and Resolution dated June 3, 2008 of the Court of Appeals (CA) in CA-G.R. S.P. Nos. 94359 and
94458. The CA partially modified the Resolutions of the National Labor Relations Commission
(NLRC) dated September 27, 2005 and January 31, 2006, which in turn partially modified the
Decision 5 of the Labor Arbiter dated December 10, 2004.
 Philippine National Oil Company-Energy Development Corporation (PNOC-EDC) hired Amelyn
Buenviaje (Buenviaje) as Assistant to then CEO Sergio Apostol (Apostol), her father. Her
Employment contract states that she will serve until 30 June 2004, co-terminous with the tenure
of her father, whichever comes first.
 4 Aug. 2003- Apostol approved the creation of PNOC-EDC’s New Marketing Division composed of
30 positions, 7 of which were newly created. Buenviaje assumed the new position as the
Marketing Divisions Manager.
 Buenviaje’s father ran as Governor of Leyte but still discharges his functions under PNOC.
Buenviaje also continued her duties.
 2 Feb. 2004- A new President of PNOC was assigned- Paul Aquino and he appointed Buenvaje as
the Senior Manager for Marketing Division. The appointment letter sent to HR states that
Buenvaje’s regular status will retroact to 1 July 2000. Buenviaje affixed her signature in the letter
signifying that she has read the letter.
 Buenviaje was thereafter subjected to performance appraisal and received a satisfactory grade of
3 (1st week of May 2004). However, her performance appraisal for May-June 2004 was
unsatisfactory.
 VP for Corporate Affairs of PNOC then informed her that she did not qualify for regular
employment and wrote a non-confirmation of appointment and separation addressed to Buenvaje
effective 31 July 2004.
 This prompted Buenviaje to file a complaint before the Labor Arbiter for illegal dismissal and
damages. LA ruled in her favor and ordered her reinstatement without loss of seniority rights and
damages to be paid by Aquino and Guerzon-moral damages-1M, exemplary-500k. LA held that
she is a regular employee relying on the appointment letter given to Buenviaje.
 Both parties appealed to the NLRC. Decision was modified deleting the award of damages and
solidary liability of Aquino and Guerzon. NLRC held that Buenviaje is a regular employee and
PNOC even admitted that Buenviaje was performing the functions of a Marketing Divisions
Manager for MORE THAN 6 MONTHS before she was appointed into a new position. However,
 NLRC held that she was not illegally dismissed because she did not enjoy her security of tenure.
As was written in the appointment letter, noted the condition in Buenviaje's appointment letter,
which provided that her appointment is subject to confirmation by her immediate superior based
on her performance during the next six (6) months, was clear and understood by her. Because of
her unsatisfactory rating, she failed to complete her appointment as a regular employee.
 When it went up to the CA, it modified the decision of the NLRC giving Buenviaje a separation pay
equivalent to ½ month pay for every year in lieu of restatement and to receive full backwages
computed from the time the compensation was withheld. It disagreed with NLRC that Buenviaje
failed to acquire security of tenure and held that Buenviaje’s performance is necessary or
desirable in the usual business hence, a regular employee. Therefore, she may only be removed
for just and authorized causes. The reason of PNOC that BUenviaje failed to qualify for the
position cannot be held as a valid basis for her dismissal.
ISSUE(S): W/N Buenviaje is a regular employee and if in the affirmative, whether she was illegally
dismissed?

HELD: Yes.
RATIO:
 Buenviaje was hired as a Marketing Division Manager, a position that performs
activities that are usually necessary and desirable to the business of PNOC-EDC and is
thusly, regular. As an employer, PNOC-EDC has an exclusive management prerogative
to hire someone for the position, either on a permanent status right from the start or
place him first on probation. In either case, the employee's right to security of tenure
immediately attaches at the time of hiring. As permanent employee, she may only be
removed by just or authorized causes.
 As a probationary employee, an employee may only be validly removed for a just and
authorized cause or when he fails to qualify as a regular employee in accordance with
reasonable standards made known to him by the employer at the time of his
engagement.
 Here, PNOC exercised its prerogative to hire Buenviaje on 1 Feb. 2004 and in her appointment
letter, he informed HR to amend Buenviaje’s status from co-terminous to regular. He also said
that her regular status shall be retroactive to 1 July 2001. Nowhere in the letter did it state that
Buenviaje will be employed as a probationary employee. Moreover, the performance appraisal
form used was for permanent managerial employees and not for probationary employees. Thus,
intention of PNOC was to grant regular status to Buenviaje.
 Also, if the clause in the appointment letter did cause an ambiguity in the employment
status of Buenviaje, we hold that the ambiguity should be resolved in her favor. This is
in line with the policy under our Labor Code to afford protection to labor and to
construe doubts in favor of labor.
 Generally, probationary employees cannot exceed 6 months, otherwise, he would be considered
a regular employee. It is also important that the employer inform the employee of the reasonable
standards that will be used as basis for her regularization. Failure to comply would render the
employee as regular.
 PNOC invoked that BUenviaje was informed of these reasonable standards attached with her
appointment letter. In analyzing the case of Buenviaje in the case of Abbott PH vs. Alcaraz, it was
shown that the totality of circumstances pertaining to the regularization of Alcaraz was not the
same situation that happened with BUenviaje. Alcaraz was a probationary employee who was
informed right from the start in her employment contract and offer sheet. She attended trainings
and was informed of Abbott’s Code of Conduct Performance and Appraisal including a procedure
for evaluating her performance as a probationary employee.
 In Buenviaje’s case, what was given to her were the duties and responsibilities her position entail
and no appraisal form was given to her prior to her engagement, unlike in Abbott case.
 The appraisal form specifies the performance standards PNOC-EDC will use, which demonstrates
that PNOC-EDC expected a certain manner, level, or extent by which she should perform her job.
PNOC-EDC knew the job description and the performance appraisal form are DIFFERENT, having
used the latter when it evaluated Buenviaje and not the job description attached to the
appointment letter. The fact that PNOC-EDC used a performance appraisal form with standards
expected from Buenviaje further negates any assumption that these standards were of basic
knowledge and common sense, or that Buenviaje's position was self-descriptive such that there
was no need to spell out the standards at the time of her engagement.
 Since it was proven that she was a permanent employee who may only be removed by just and
 authorized causes, PNOC must comply with the procedural requirement:
1. The dismissal must be for a just or authorized cause;
2. The employer must furnish the employee with two (2) written notices before termination
of employment can be legally effected. The first notice states the particular acts or
omissions for which dismissal is sought while the second notice states the employer's
decision to dismiss the employee; and
3. The employee must be given an opportunity to be heard.
 Even if Buenviaje would be considered a probationary employee, she was still illegally dismissed
because PNOC failed to observe the following:
1) informing the employee of the reasonable standards expected of him during his
probationary period at the time of his engagement; and 2) serving the employee with
a written notice within a reasonable time from the effective date of termination.
 Buenviaje was dismissed due to her unsatisfactory rating. However, there was no proof that per
PNOC’s standards, receiving an unsatisfactory rating from a satisfactory rating of 3 results to
failure to qualify for regularization.
 Unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual
neglect of duties. The fact that an employee's performance is found to be poor or unsatisfactory
does not necessarily mean that the employee is grossly and habitually negligent of or inefficient
in his duties. Buenviaje's performance, poor as it might have been, did not amount to gross and
habitual neglect of duties or gross inefficiency.
 Moreover, PNOC failed to comply with the twin notice rule assuming the dismissal was for a just
cause. The first notice given to Buenviaje only comprises of a bare statement that Buenviaje’s
performance failed to meet PNOC’s minimum requirements.
 Buenviaje is entitled to a separation pay and reinstatement but since the employer-employee
relationship had already been strained, it may be in the form of payment.
 Moreover, it is a well-settled rule that in actions for recovery of wages, or where an employee was
forced to litigate and incur expenses to protect his rights and interests, attorney's fees may be
granted pursuant to Article 111 of the Labor Code. Considering that she was forced to litigate in
order to assert her rights, Buenviaje is entitled to attorney's fees.
 Buenviaje invokes that she is entitled to moral and exemplary damages because Aquino and
Guerzon acted in bad faith through the following acts:
1. They used the evaluation form for regular employees in evaluating Buenviaje;
2. Buenviaje was evaluated using the standards for regular employees;
3. Unlike the first evaluation, Aquino did not sign the second evaluation; and
4. The second evaluation was conducted without Buenviaje's knowledge.
 there was manifest bad faith when Buenviaje was evaluated using the standards and
performance appraisal form for regular employees, yet, in dismissing her, she was treated as a
probationary employee. There was no malice or bad faith against PNOC on the 3 rd and 4th acts. SC
agreed with the LA in awarding damages but opted to reduce it as award is excessive. Aquino
and Guerzon should not be solidarily liable since there was insufficient evidence showing that
they were personally motivated by ill-will in dismissing Buenviaje.
DISSENTING/CONCURRING OPINION(S):