**Facts**:
1. **Employment and Initial Duties**: Amelyn A. Buenviaje was hired by PNOC-EDC as an Assistant to the then Chairman/President and CEO Sergio A.F. Apostol (her father), with an employment agreement set until June 30, 2004 or co-terminous with Apostol’s tenure.
2. **Marketing Division Setup**: On August 4, 2003, PNOC-EDC created a Marketing Division, with Buenviaje assuming responsibilities as Marketing Division Manager.
3. **Subsequent Events**: Despite Apostol’s candidacy for Governor on January 5, 2004, both he and Buenviaje continued their duties at PNOC-EDC. On February 2, 2004, Paul Aquino, the new President, appointed Buenviaje as Senior Manager for Marketing Division, retroactive to July 1, 2001.
4. **Performance Appraisals**: Buenviaje underwent a performance appraisal, receiving a satisfactory grade of 3 for May 2004 but an unsatisfactory grade of 4 for the period covering May 1, 2004, to June 30, 2004. This led to her non-confirmation of appointment and subsequent separation from PNOC-EDC, effective July 31, 2004.
5. **Complaint Filed**: On July 2, 2004, Buenviaje filed a complaint for illegal dismissal, unpaid 13th month pay, illegal deduction, and claims for damages, attorney’s fees, and back wages.
**Procedural Posture**:
– The Labor Arbiter ruled in favor of Buenviaje, declaring her a regular employee and her dismissal illegal, ordering her reinstatement and the payment of back wages, moral and exemplary damages, as well as attorney’s fees.
– Both parties appealed to the NLRC, which partially modified the Labor Arbiter’s decision. The NLRC agreed Buenviaje was a regular employee but not illegally dismissed and thus not entitled to damages and attorney’s fees.
– Both parties petitioned for certiorari with the CA, which again modified the NLRC ruling by declaring Buenviaje’s dismissal illegal, awarding her separation pay, back wages, but denied the personal liabilities of Aquino and Guerzon.
**Issues**:
1. Was Buenviaje a permanent employee?
2. Was Buenviaje illegally dismissed?
3. Is Buenviaje entitled to moral and exemplary damages as well as attorney’s fees?
4. Should Buenviaje be awarded separation pay instead of reinstatement?
5. Should Aquino and Guerzon be held jointly and severally liable to Buenviaje?
**Court’s Decision**:
1. **Permanent Employee**: The Supreme Court affirmed Buenviaje as a permanent employee, emphasizing her role did not merely entail probationary status and that any ambiguity in her employment contract should be resolved in her favor.
2. **Illegal Dismissal**: It was held that Buenviaje was dismissed without due process nor just or authorized cause, neither being apprised of standards nor given proper notices before dismissal.
3. **Moral and Exemplary Damages and Attorney’s Fees**: The Court declared Buenviaje entitled to moral (P30,000) and exemplary damages (P25,000) due to the bad faith exhibited by PNOC-EDC in their unfair treatment of her as a probationary employee. Attorney’s fees were granted as she was forced into litigation.
4. **Separation Pay**: The Court agreed with separation pay due to strained relations, awarding full back wages and attorney’s fees in recognition of her forced litigations.
5. **Liabilities of Aquino and Guerzon**: The Court found insufficient evidence of bad faith specific to Aquino and Guerzon to hold them personally liable, despite the corporate entity’s liability.
**Doctrine**:
– **Ambiguities in Employment Agreements**: Resolved in favor of labor, emphasizing protection under labor law (Labor Code provisions).
– **Regular vs. Probationary Status**: Substantive and procedural due process for regular and even probationary employees, highlighting necessary pre-employment conditions of stating explicit performance criteria.
– **Just/Authorized Causes in Dismissals**: Ensures employers substantiate any basis for dismissal, which was not done by PNOC-EDC.
**Class Notes**:
– **Labor Employment Standards**: Employment status determination, including substantive and procedural safeguards.
– **Duties vs. Performance Standards**: Differentiation between job descriptions and specific performance standards that determine employee retention.
– **Separation Pay and Reinstatement**: Contexts invoking separation pay over reinstatement—often used where relations are strained.
– **Executive and Managerial Employee Dismissals**: Must adhere to similar labor protections notwithstanding high ranks.
**Historical Background**:
– Reflects tension and protective labor policies in corporately managed nominations to public offices.
– Illustrates rights of employees in government-affiliated corporations, and labor reforms aligning all employment types under fundamental labor rights.
**Philippine Labor Statutes**:
– **Labor Code Article 297 and 298**: Governs causes for termination and entitlements such as separation pay.
– Ensures rigorous employee protections against arbitrary dismissals and affirms established doctrines respecting employment security and procedural due processes.
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