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ABBOTT LAB PHILS V ALCARAZ (2013)

FACTS: Abbott Lab advertised a job opening for a
Regulatory Affairs Manager who will (1) be responsible for
drug safety surveillance operations, staffing and budget; (2)
lead the development and implementation of standa rd
operating procedures for drug safety surveillance; (3) act as
primary interface with internal and external customers
regarding safety operations and queries.
Pearlie Ann Alcaraz who was then employed by Aventis
Pasteur, another pharmaceutical company, applied for the
job. Abbott offered her the position under the Hospita, ALSU
Department. The offer was for her to be employed on a
probationary basis. She accepted the offer and received an
email from Abbotts Recruitment Officer, Teresita
Bernardo, confirming the offer, and an organizational chart
and job description.
Subsequently, an employment contract was signed by her
and Edwin Feist, GM of Abbott. By signing the contract,
Alcaraz agreed to abide by all existing policies, rules and
regulations of the company as well as those which will be
subsequently promulgated. Unless
renewed, the
probationary appointment expires on the date indicated
subject to earlier termination by the company for any
justifiable reason.
During her pre-employment orientation, Allan Almazar,
Hospiras Country Transition Manager, briefed her on her
duties and responsibilities:
a)

b)

c)

d)
e)

f)

She will handle the staff of Hospira and will directly

report to Almazar on matters regarding local
operations, budget and performance evaluation of
staff who are on probationary status
She must implement the Abbotts Code of Conduct,
office policies on HR and finance, and ensure that
Abbott will hire people who are fit in the
organizational discipline
Kelly Walsh, Manager of the Literature Drug
Surveillance Drug Safety will be her immediate
supervisor
She should always coordinate with Abbotts HR
officers in the management and discipline of the
staff
Hospira ALSU will spin off from Abbott in 2006 and
will be incorporated as Hospira PH. For the
meantime, Hospira will still be under Abbotts
management
The processing of information and raw material data
of Hospira will be strictly confined and controlled
under the computer system and network being
maintained and operated from the US.

Maria Misa, Abbotts HR Director, sent Alcaraz an email

containing an explanation of the procedure for evaluating the
performance of probationary employees and indicated that
they only had one evaluation system for all employees.
Alcaraz was then given the Code of Conduct and
Probationary Performance Standards and Evaluation and
Performance Orientation Modules which she had to apply in
line with her task of evaluating the Hospira staff.
Abbotts procedure mandates that the performance of the
probationary employee should be formally reviewed and

discussed with the employee at least twice: 1 st in the 3 rd

month and 2 nd on the 5 th month from date of employment.
The necessary Performance Improvement Plan should also
be made during the 3 rd month review in case of a gap
between the performance and the standards set. These
should be discussed in detail with the employee within the
first two weeks on the job. It was equally required that a
signed copy of the Probationary Performance Standards and
Evaluation (PPSE) forms must be submitted to the HRD and
shall serve as documentation of the employees performance
during the probationary period. This shall become the basis
for the confirmation or termination of employment.
During her employment, Alcaraz noticed some disciplinary
problems with the staff, so she would reprimand them for
their unprofessional behavior such as non-observance of the
dress code, moonlighting, and disrespect of Abbott officers.
However, Walsh considered her method to be too strict.
Alcaraz approached Misa to discuss these concerns and was
told to lie low and let Walsh handle the matter. Misa then
assured her that the HRD would support her in all her
management decisions.
Alcaraz received an email from Misa requesting for
immediate action on the staffs performance evaluation a s
their probationary periods were about to end. Alcaraz
submitted the same.
Alcaraz had a meeting with Cecille Terrible, former HR
director, to discuss certain issues regarding staff
performance standards. During which, Alcaraz accidentally
saw a printed copy of an email sent by Walsh to some staff
asking about Alcaraz job performance. Alcaraz asked if
Walshs action was the normal process of evaluation. Terrible
said 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. Thereafter, they
asked her to tender her resignation, or else they will be
forced to terminate her services. She was also told that
regardless of her choice, she should no longer report to work.
Walsh, Alzamar and Bernardo personally handed her a
letter stating that her services had been terminated effective
May 19, 2005. The letter detailed the reasons:
a.) She did not manage her time effectively
b.) She failed to gain the trust of her staff and to build
an effective rapport with them
c.) She failed to train her staff effectively, and
d.) She was unable 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.
Subsequently, she received another copy of the letter via
registered mail.
Aggrieved, Alcaraz filed a complaint for illegal dismissal and
damages against Abbott and its officers namely, Misa (HR
dir), Bernardo (Recruitment Ofcr), Almazar (mgr), Walsh
(supervisor), Terrible (HR dir) and Feist (GM). She
claimed that she should have already been considered a
regular and not a probationary employee given Abbotts
failure to inform her of the reasonable standards for her

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regularization upon her engagement as required on the
Labor Code. 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 stated that the
officers maliciously connived to illegally dismiss her when (1)
they threated her with termination; (2) she as ordered not to
enter the company premises even if she was still an
employee; (3) they publicly announced that she already
resigned in order to humiliate her.
Defense: valid termination for failing to satisfy the prescribed
standards for her regularization which were made known to
her at the time of her engagement.

CA: 2nd Petition affirmed the NLRC in upholding the

execution. MR was denied. Order attained finality upon
failure of Abbott to file an appeal.

ISSUES:
(1) W/N Alcaraz was sufficiently informed of the
reasonable standards to qualify her as a regular
employee
(2) W/N Alcaraz was validly terminated
(3) W/N the officers were personally liable
HELD:

LA: dismissed her complaint for lack of merit.

(1) LA rejected her 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 on her work during the preemployment orientation meeting, she received
copies of the Code of Conduct and Performance
Modules used to evaluate all employees.
(2) She was unable to meet the standards set by Abbott
as per her performance evaluation which justified
her termination.
(3) There was no evidence that the officers acted in bad
faith.
NLRC: reversed the ruling and ruled that Abbott and its
officers were guilty of having illegally dismissed Alcaraz.
NLRC ordered reinstatement and payment of backwages,
th
13 month, moral and exemplary damages and attys fees, to
be paid jointly and severally by Abbott and the officers.
NLRC racionated that there was no evidence that Alcaraz
was apprised of her probationary status and the
requirements which she should comply with in order to be a
regular employee. Mere receipt of the job description, Code
of Conduct and Performance Module was not equivalent to
her being actually informed of the performance standards
upon which she should have been evaluated on. Abbott did
not comply with its own SOP in evaluating probationary
employees. NLRC was not convinced that termination was
for a valid cause given that Abbotts allegation of Alcaraz
poor performance was unsubstantiated.
The Abbott filed a Petition for Certiorari before the CA.
Pending such, Alcaraz moved for the execution of NLRCs
Decision before the LA. LA denied but NLRC reversed and
granted the motion. A 2 nd Petition for Certiorari was filed by
Abbott before the CA, assailing the propriety of the execution
of the NLRC decision.
CA: 1 st Petition affirmed NLRC and held that there was
illegal dismissal. Alcaraz was not apprised at the start of her
employment of the reasonable standards under which she
would qualify as a regular employee. This was based on its
examination of the employment contract which showed that
the same did not contain any standard of performance or any
stipulation that Alcaraz shall undergo a performance
evaluation before she could qualify as a regular employee.
Moreover, Abbott was unable to prove that there was any
reasonable ground to terminate the employment.

(1) YES. Probationary employee like a regular employee

enjoys security of tenure. However, probationary
employee aside from just or authorized causes of
termination, may also be terminated for failure to qualify
as a regular employee in accordance with the
reasonable standards made known by the ER to the EE
at the time of the engagement. Thus, the services of an
RR who has been engaged on probationary basis may
be terminated for any of the ff: (a) just or (b) authorized
cause; (c) when he fails to qualify in accordance with
reasonable standards prescribed by the ER.
If the ER fails to inform the probationary EE of the
reasonable standards upon which the regularization
would be based on at the time of the engagement, then
the said EE shall be deemed a regular EE.
REQTS: 1: communicate regularization standards to the
EE, and 2: comm at the time of the engagement.
ER is deemed to have complied when it has exerted
reasonable efforts to apprise the EE of what he is
expected to do or accomplish during the trial period. (e)
is when the job is self-descriptive in nature (maids,
cooks, drivers or messengers)
Upon examination of the records, Abbott had complied
with the requirements when it clearly conveyed her
duties and responsibilities prior to, during the time of
engagement and during the early stages of her
employment.
1. News ad with JD
2. Offer sheet probationary status
3. Employment contract Probationary for 6mos
4. Upon her acceptance, she was emailed copies of
the org structure and JD
5. She underwent a pre-employment orientation
6. Required to undergo a training program
7. Received copies of Code of Conduct and
Performance Modules which was explained by Misa
8. Moreover, she used to work for a pharma co and
had admitted having extensive training and
background to acquire the necessary skills for the
job.
Given these, Alcaraz was well-aware that her
regularization would depend on her ability and capacity
to fulfill the requirements of her position, and her failure
to do so would be a valid cause to terminate the EMP.

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(2) YES. The two-notice rule does not govern the
termination of probationary employees if brought
about by failure to meet the reasonable standards of
the ER. It shall be sufficient that a written notice is
served the EE within a reasonable time from the
effective date of termination.
The letter personally handed to her and the copy
sent to her thru registered mail were sufficient
compliance with the requirement. It contained the
reason for her termination which was her failure to
meet the reasonable standards for regularization
considering her lack of time and people
management and decision-making skills, which
were necessary in the performance of her functions.
*** Despite the existence of a valid cause for termination and
the compliance with the termination procedure, Abbott
breached its contractual obligation to Alcaraz when it failed to
abide by its own procedure in evaluating the performance of
a probationary employee.
Company policies are deemed to be an implied contract
which creates an obligation on both the EE and ER to abide
by the same. Abbotts procedure on work performance
mandates that the EEs performance should be formally
reviewed and discussed with the EE at least twice: 1 st during
the 3 rd month and 2 nd on the 5 th month. It also requires for a
3rd month review to bridge the gap between the EEs
performance and the standards set. A signed copy of the
PSSE must then be submitted to HRD.
No PSSE was ever accomplished to evaluate Alcaraz.
Neither was her performance evaluation discussed with her.
Its violation of its own policy renders the termination of
Alcaraz procedurally infirm, warranting the payment of
nominal damages.
(3) NO. GR: directors and officers are not personally
liable for corporate acts. (e) when they act assent to
unlawful acts or act in bad faith and gross
negligence in directing the affairs of the corporation,
or when there is a conflict of interest resulting in
damages to the corporation, among others.
Alcaraz alleges that the officers acted in BF with
regard to the supposed crude manner by which her
employment was terminated. However, her
assertions were unfounded since no evidence was
presented to impute bad faith or malice. The fact
that she was prevented from entering the premises
does not necessarily indicate bad faith.
BF cannot be presumed and he who alleges it need
to prove the same.