FACTS:

The petitioner, Redentor Agustin, accepted a job offer as an Executive Chef from Alphaland Corporation and started working at the Balesin Island Club's Kitchen. However, after only four months, Agustin received a Notice of Termination stating that he did not meet the company's standards for his position and that his employment was terminated immediately. Agustin filed a complaint for illegal dismissal, alleging that he was not informed of the standards for regular employment. The Labor Arbiter ruled in favor of Agustin, finding him to have been illegally dismissed. The NLRC affirmed the Arbiter's decision, stating that Alphaland failed to establish that Agustin was properly informed of the reasonable standards for his position. Alphaland's motion for reconsideration was denied by the NLRC. Alphaland then filed a petition for certiorari before the Court of Appeals, which also upheld the decision of the Labor Arbiter and NLRC. The CA disregarded affidavits submitted by Alphaland as evidence on the grounds that they were presented for the first time on appeal without explanation. Agustin filed a petition before the Supreme Court seeking reinstatement and additional backwages. The Supreme Court found Agustin's petition meritorious and held that as a regular employee, he was entitled to reinstatement and additional backwages.

ISSUES:

1. Whether or not Agustin is entitled to backwages from the time of his illegal dismissal until reinstatement.

2. Whether or not Agustin was a regular employee of Alphaland.

3. Whether the dismissal of Agustin from employment complied with the two-fold due process requirement.

4. Whether the dismissal of Agustin was for a just cause.

5. Whether or not Redentor Y. Agustin is entitled to back wages and separation pay.

6. Whether or not Alphaland Corporation is liable to pay legal interest on the monetary awards.

RULING:

1. Yes, Agustin is entitled to backwages. The award of backwages is a legal consequence of the finding that Agustin was illegally dismissed by Alphaland. The Court has the authority to review matters not otherwise assigned as errors on appeal, if it finds their consideration necessary in arriving at a complete and just resolution of the case or to serve the interests or to avoid dispensing piecemeal justice.

2. Yes, Agustin was a regular employee of Alphaland. The lower courts found that Agustin was hired as a probationary employee without being informed of the reasonable standards by which his probationary employment was to be assessed. The standards set were too general and failed to specify with clarity what was expected of Agustin as an Executive Chef. Therefore, Agustin's dismissal was illegal and he should be considered a regular employee. Additionally, Agustin served as a consultant prior to being hired as an Executive Chef on a probationary status, which is contrary to the ordinary course of business.

3. The Supreme Court held that Alphaland failed to observe both substantive and procedural due process in dismissing Agustin from employment. The dismissal did not comply with the two-fold due process requirement and there was no just cause for dismissal.

4. Redentor Y. Agustin is entitled to back wages and separation pay. He is awarded back wages from July 6, 2011 until the finality of the decision. The amount of P245,000 previously received by Agustin must be deducted from the awards. Separation pay is also granted to Agustin at the rate of one month salary for every year of service.

5. Alphaland Corporation is ordered to pay legal interest of six percent per annum on the monetary awards computed from the finality of the decision until full satisfaction.

PRINCIPLES:

• An employee who is illegally dismissed is entitled to backwages as a legal consequence.

• The Court has the authority to review matters not assigned as errors on appeal if their consideration is necessary for a complete and just resolution of the case or to avoid dispending piecemeal justice.

• Probationary employment shall not exceed six months and the employer must inform the employee of the reasonable standards by which their probationary employment will be assessed. If no standards are made known, the employee shall be deemed a regular employee.

• Dismissal of regular employees requires the observance of substantive and procedural due process.

• Substantive due process means that the dismissal must be for any of the just causes provided under the Labor Code or the company rules and regulations.

• Procedural due process means that the employee must be accorded the twin-notice rule and the opportunity to be heard and defend himself.

• To be a just cause for dismissal, there must be a valid company rule or regulation violated.

• Standards set by the employer must be reasonable and specific to apprise the employee of what is expected of him.

• An illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges, full backwages, and other benefits or their monetary equivalent.

• The award of additional backwages from the time of illegal dismissal until reinstatement is a logical consequence of finding the employee as a regular employee who was illegally dismissed.

• Separation pay may be awarded instead of reinstatement when the continued relationship between the employee and employer is no longer viable due to strained relations and antagonism.

• An employee who is illegally dismissed is entitled to back wages and separation pay.

• Back wages should be computed from the time of illegal dismissal until the finality of the decision.

• Separation pay should be awarded to an illegally dismissed employee at the rate of one month salary for every year of service.

• Legal interest of six percent per annum shall be imposed on monetary awards.