FACTS:

In this case, Othello C. Moreno filed a complaint against A' Prime Security Agency, Inc. for various labor violations. Moreno claimed that he worked as a security guard for Sugarland Security Services, Inc., a sister company of the petitioner, for one year. He was then rehired by petitioner and assigned to the U.S. Embassy Building in Manila. Moreno alleged that he was forced to sign new probationary contracts and was terminated after six months. He also claimed that his salary deductions for withholding tax were not properly accounted for and that he was underpaid.

On the other hand, A' Prime Security Agency, Inc. argued that Moreno was hired on a probationary basis. They claimed that he received warnings for sleeping on the job and being involved in a quarrel with another security guard. The petitioner stated that Moreno's probationary employment ended because he did not meet their standards.

The Labor Arbiter ruled in favor of Moreno, ordering the petitioner to reinstate him as a regular employee and pay backwages from the time of his dismissal until reinstatement. The claim for underpayment of wages was dismissed. The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's decision with a slight modification, limiting the backwages to three years and setting aside the order for refunding deductions.

Petitioner filed a motion for reconsideration, which was denied by the NLRC. They then filed a special civil action for certiorari before the court, alleging grave abuse of discretion by the NLRC.

The issues to be resolved include determining whether Moreno's employment with petitioner is a continuation of his previous employment and whether the termination of Moreno's probationary contract was legitimate.

ISSUES:

1. Whether private respondent's employment with A' Prime Security Services, Inc. was just a continuation of his previous employment with Sugarland Security Services, Inc.

2. Whether the termination of the probationary contract by the petitioner was a legitimate exercise of discretion.

3. Whether the petitioner is liable for the payment of private respondent's back wages and reinstatement.

RULING:

1. The Court affirmed the finding of the NLRC that there was a valid continuation of employment between private respondent and A' Prime Security Services, Inc., even though they are distinct and different entities. The Court held that the records of the case provide evidence linking the two companies as sister companies, and therefore private respondent's employment with Sugarland Security Services, Inc. can be considered in determining his employment status with A' Prime Security Services, Inc.

2. The Court held that the termination of the probationary contract by the petitioner was a legitimate exercise of discretion. The Court found that there were valid grounds for the termination, such as the private respondent's violation of company rules and regulations and his failure to meet the company's standards during the probationary period.

3. The Court affirmed the order for the payment of private respondent's back wages and reinstatement. The Court held that the termination of private respondent's employment was illegal, and therefore he is entitled to be reinstated to his former position and receive back wages.

PRINCIPLES:

• Employment with sister companies can be considered in determining employment status.

• Termination of a probationary contract may be justified if there are valid grounds for termination.

• Illegal termination of employment entitles the employee to reinstatement and payment of back wages.