ILUMINADA VER BUISER, MA CECILIA RILLO-ACUÑA AND MA. MERCEDES P. INTENGAN, PETITIONERS, VS. HON. VICENTE LEOGARDO, JR., IN HIS CAPACITY AS DEPUTY MINISTER OF THE MINISTRY OF LAB…

This is a petition for certiorari seeking to set aside the
Order of the Deputy Minister of Labor and Employment, affirming the
Order of the Regional Director, National Capital Region, in Case No.
NCR-STF-5-2851-81, which dismissed the petitioners’ complaint for
alleged illegal dismissal and unpaid commission.

Petitioners were employed by the private respondent GENERAL TELEPHONE
DIRECTORY COMPANY as sales representatives and charged with the duty of
soliciting advertise­ments for inclusion in a telephone directory.

The records show that petitioners Iluminada Ver Buiser and Ma. Mercedes
P. Intengan entered into an “Employment Contract (on Probationary
Status)” on May 26, 1980 with private respondent, a corporation engaged
in the business of publication and circulation of the directory of the
Philippine Long Distance Telephone Company. Petitioner Ma. Cecilia
Rillo-Acuña entered into the same employment contract on June 11, 1980
with the private respondent.

Among others, the “Employment Contract (On Probationary Status)” included the following common provisions:

“1. The company hereby employs the employee as telephone sales
representative on a probationary status for a period of eighteen (18)
months, i.e. from May 1980 to October 1981, inclusive. It is understood
that during the probationary period of employment, the Employee may be
terminated at the pleasure of the company without the necessity of
giving notice of termination or the payment of termination pay.

“The Employee recognizes the fact that the nature of the telephone
sales representative’s job is such that the company would be able to
determine his true character, conduct and selling capabilities only
after the publication of the directory, and that it takes about eighteen
(18) months before his worth as a telephone sales representative can be
fully evaluated inasmuch as the advertisement solicited by him for a
particular year are published in the directory only the following year.”

Corollary to this, the private respondent prescribed sales quotas to be
accomplished or met by the petitioners. Failing to meet their
respective sales quotas, the peti­tioners were dismissed from the
service by the private respondent. The records show that the private
respondent terminated the services of petitioners Iluminada Ver Buiser
and Cecilia Rillo-Acuña on May 14, 1981 and peti­tioner Ma. Mercedes P.
Intengan on May 18, 1981 for their failure to meet their sales quotas.

Thus, on May 27, 1981, petitioners filed with the National Capital
Region, Ministry of Labor and Employment, a complaint for illegal
dismissal with claims for back-wages, earned commissions and other
benefits, docketed as Case No. NCR-STF-5-2851-81.

The Regional Director of said ministry, in an Order dated September 21,
1982, dismissed the complaints of the petitioners, except the claim for
allowances which private respondent was ordered to pay. A
reconsideration of the Order was sought by the petitioners in a motion
filed on September 30, 1982. This motion, however, was treated as an
appeal to the Minister of Labor.

On appeal, Deputy Minister Vicente Leogardo, Jr. of the Ministry of
Labor issued an Order dated January 7, 1983, affirming the Regional
Director’s Order dated September 21, 1982, wherein it ruled that the
petitioners have not attained permanent status since private respondent
was justified in requiring a longer period of probation, and that the
termination of petitioners’ services was valid since the latter failed
to meet their sales quotas.

Hence, this petition for certiorari on the alleged ground that
public respondent committed grave abuse of discretion amounting to lack
of jurisdiction. Specifically, petitioners submit that:

1. The Hon. Regional Director and the Hon. Deputy Minister
committed grave abuse of discretion amounting to lack of jurisdiction in
ruling that the probationary employment of petitioners herein is
eighteen (18) months instead of the mandated six (6) months under the
Labor Code, and in consequently further ruling that petitioners are not
entitled to security of tenure while under said probation for 18 months.

2. The Hon. Regional Director and the Hon. Deputy Minister
committed grave abuse of discretion amounting to lack of jurisdiction in
ruling that petitioners were dismissed for a just and valid cause.

3. The Hon. Regional Director and the Hon. Deputy Minister
committed grave abuse of discretion amounting to lack of jurisdiction in
ruling that petitioners are not entitled to the commissions they have
earned and accrued during their period of employment.

Petitioners contend that under Articles 281-282 of the Labor Code,
having served the respondent company continuously for over six (6)
months, they have become automatically regular employees notwithstanding
an agreement to the contrary. Articles 281-282 read thus:

“Art. 282. 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. (As amended by PD 850).”

“Art. 281. Regular and Casual Employment. – The provisions of
written agreement to the contrary notwithstanding and regardless of the
oral agreements of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and the
employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: Provided, That, any employee who has rendered
at least one year of service, whether such service is continuous or
broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while
such actually exists. (As amended by PD 850).”

It is petitioners’ submission that probationary employment cannot exceed
six (6) months, the only ex­ception being apprenticeship and
learnership agreements as provided in the Labor Code; that the Policy
Instruction of the Minister of Labor and Employment nor any agreement of
the parties could prevail over this mandatory requirement of the law;
that this six months prescription of the Labor Code was mandated to give
further efficacy to the constitutionally-guaranteed security of tenure
of workers; and that the law does not allow any discretion on the part
of the Minister of Labor and Employment to extend the probationary
period for a longer period except in the aforecited instances. Finally,
petitioners maintain that since they are regular employees, they can
only be removed or dismissed for any of the just and valid causes
enumerated under Article 283 of the Labor Code.

We reject petitioners’ contentions. They have no basis in law.

Generally, the probationary period of employment is limited to six (6)
months. The exception to this general rule is when the parties to an
employment contract may agree otherwise, such as when the same is
established by company policy or when the same is required by the nature
of work to be performed by the employee. In the latter case, there is
recognition of the exercise of managerial prerogatives in requiring a
longer period of probationary employment, such as in the present case
where the probationary period was set for eighteen (18) months, i.e.
from May, 1980 to October, 1981 inclusive, especially where the employee
must learn a particular kind of work such as selling, or when the job
requires certain qualifications, skills, experience or training.

Policy Instruction No. 11 of the Minister of Labor and Employment has
clarified any and all doubts on the period of probationary employment.
It states as follows:

“Probationary Employment has been the subject of misunderstanding
in some quarter. Some people believe six (6) months is the probationary
period in all cases. On the other hand, employees who have already
served the probationary period are some­times required to serve again on
probation.

Under the Labor Code, six (6) months is the general probationary
period, but the probationary period is actually the period needed to
determine fitness for the job. This period, for lack of a better
measure­ment is deemed to be the period needed to learn the job.

The purpose of this policy is to protect the worker at the same
time enable the employer to make a meaningful employee selection. This
purpose should be kept in mind in enforcing this provision of the Code.
This issuance shall take effect immediately.”

In the case at bar, it is shown that private respondent Company needs at
least eighteen (18) months to determine the character and selling
capabilities of the petitioners as sales representatives. The Company
is engaged in advertisement and publication in the Yellow Pages of the
PLDT Telephone Directories. Publication of solicited ads are only made a
year after the sale has been made and only then will the company be
able to evaluate the efficiency, conduct, and selling ability of its
sales representatives, the evaluation being based on the published ads.
Moreover, an eighteen-month probationary period is recognized by the
Labor Union in the private respondent company, which is Article V of the
Collective Bargaining Agreement, thus:

“Probationary Period – New employees hired for regular or permanent
shall undergo a probationary or trial period of six (6) months, except
in the cases of telephone or sales representatives where the
probationary period shall be eighteen (18) months.”

And as indicated earlier, the very contracts of employment signed and
acquiesced to by the petitioners specifically indicate that “the company
hereby employs the employee as telephone sales representative on a
probationary status for a period of eighteen (18) months, i.e. from May
1980 to October 1981, inclusive.” This stipulation is not contrary to
law, morals and public policy.

We, therefore, hold and rule that the probationary employment of
petitioners set to eighteen (18) months is legal and valid and that the
Regional Director and the Deputy Minister of Labor and Employment
committed no abuse of discretion in ruling accordingly.

On the second assignment of error that public respondent committed grave
abuse of discretion in ruling that petitioners were dismissed for a
just and valid cause, this is not the first time that this issue has
been raised before this Court. Earlier, in the case of “Arthur Golez
vs. The National Labor Relations Commission and General Telephone
Directory Co.”, G.R. No. L-64459, July 25, 1983, the petition for certiorari which raised the same issue against the herein private respondent was dismissed by this Court for lack of merit.

The practice of a company in laying off workers because they failed to
make the work quota has been recognized in this jurisdiction.
(Philippine American Embroideries vs. Embroidery and Garment Workers, 26
SCRA 634, 639). In the case at bar, the petitioners’ failure to meet
the sales quota assigned to each of them constitute a just cause of
their dismissal, regardless of the permanent or probationary status of
their employment. Failure to observe prescribed standards of work, or
to fulfill reasonable work assignments due to inefficiency may
constitute just cause for dismissal. Such inefficiency is understood to
mean failure to attain work goals or work quotas, either by failing to
complete the same within the allotted reasonable period, or by producing
unsatisfactory results. This management prerogative of requiring
standards may be availed of so long as they are exercised in good faith
for the advancement of the employer’s interest.

Petitioners anchor their claim for commission pay on the Collective
Agreement (CBA) of September 1981, in support of their third assignment
of error. Petitioners cannot avail of this agreement since their
services had been terminated in May, 1981, at a time when the CBA of
September, 1981 was not yet in existence.

In fine, there is nothing in the records to show any abuse or misuse of
power properly vested in the respondent Deputy Minister of Labor and
Employment. For certiorari to lie, “there must be capricious,
arbitrary and whimsical exercise of power, the very antithesis of the
judicial prerogative in accordance with centuries of both civil and
common law traditions.” (Panaligan vs. Adolfo, 67 SCRA 176, 180). The
“abuse of discretion must be grave and patent, and it must be shown that
the discretion was exercised arbitrarily or despotically.” (Palma and
Ignacio vs. Q. & S., Inc., et al., 17 SCRA 97, 100; Philippine
Virginia Tobacco Administration vs. Lucero, 125 SCRA 337, 343).

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

Makasiar, (Chairman), Aquino, Concepcion, Jr., Abad Santos, Escolin, and Cuevas, JJ., concur.