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PHIL. FEDERATION OF CREDIT COOPERATIVES v. NLRC

FACTS:

In September 1982, Victoria Abril was employed by petitioner Philippine Federation of Credit Cooperatives, Inc. (PFCCI) as a Junior Auditor/Field Examiner. She then held different positions within the company, including office secretary in 1985 and cashier-designate from January to April 1988. After going on leave for the birth of her child, Abril discovered that her former position as office secretary had been permanently filled by another employee. However, Abril accepted the position of Regional Field Officer and signed a contract stating that her employment status would be probationary for six months. After the probationary period, Abril continued to work until she was presented with another employment contract for one year, which was terminated at the end of the contracted period. Abril filed a complaint for illegal dismissal and the Labor Arbiter dismissed it. On appeal, the National Labor Relations Commission (NLRC) reversed the decision and ordered PFCCI to reinstate Abril to her position or equivalent, with full backwages. PFCCI filed a petition challenging the decision of the NLRC.

ISSUES:

  1. Whether the respondent's employment status was probationary, contractual, or regular.

  2. Whether the respondent was illegally dismissed.

RULING:

  1. Employment Status The Court ruled that the respondent, having completed the probationary period and allowed to work thereafter, became a regular employee entitled to security of tenure under the Constitution and labor laws. Any ambiguity in the contract is construed against the employer, making the employee a regular one.

  2. Illegal Dismissal The Court affirmed that the dismissal of the respondent, premised on the alleged expiration of the contract, was illegal, and thus entitles the respondent to the reliefs prayed for, including reinstatement and backwages.

PRINCIPLES:

  1. Probationary Employment Period and Regularization A probationary employee who is engaged to work beyond the probationary period of six months shall be considered a regular employee (Article 281 of the Labor Code).

  2. Security of Tenure for Probationary Employees Probationary employees cannot be terminated except for just cause as provided by law or under the employment contract.

  3. Employment Contract Interpretation Ambiguities in employment contracts, being contracts of adhesion, are construed strictly against the employer (Article 1702 of the Civil Code).

  4. Regular and Casual Employment Definition Employment is deemed regular where the employee performs activities necessary or desirable in the usual business of the employer, except for employment fixed for a specific project or undertaking. An employee who has rendered at least one year of service is also considered a regular employee with respect to the activity in which he is employed (Article 280 of the Labor Code).

  5. Contract of Adhesion Stipulations in employment contracts must be clear, and any ambiguity is interpreted in favor of the employee.

  6. Right to Security of Tenure The right to security of tenure is guaranteed under the Constitution and labor laws, and an employee can only be dismissed for just or authorized causes under Articles 282, 283, and 284 of the Labor Code.