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[1991V808] LINA B. OCTAVIANO, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and GENERAL DIESEL POWER CORPORATION, respondents.
D.R. Dando & Associates Law Offices for petitioner.
K.V. Faylona & Associates for private respondent.1991 Oct 32nd DivisionG.R. No.
88636D E C I S I O N
SARMIENTO, J.:
The petitioner, Lina Octaviano, assails the decision of the National Labor Relations
Commission (NLRC), Fourth Division, dated March 20, 1989, affirming with
modification the decision of the labor arbiter reducing her award of full backwages
to only one (1) year.
The facts in brief are:
The private respondent, General Diesel Power Corporation, hired Lina as a
component mechanic and issued a temporary employment as such from November
21, 1984 up to May 21, 1985. 1 She was however made to work, in fact, as a
secretary and parts clerk. 2
On May 22, 1985, the private respondent extended her another contract of
employment providing a probationary period of six (6) months. 3 On November 21,
1985, she was terminated, as management decided to end her probationary
employment. 4
On January 20, 1986, she was rehired as a parts clerk. 5 Pursuant to management's
prior arrangement, she was issued a six-month probationary employment. On June
5, 1986, she was again dismissed. 6
On July 8, 1986, she lodged a complaint for illegal dismissal and then filed an
amended complaint on January 30, 1987.
On May 22, 1988, Labor Arbiter Felipe T. Garduque II ordered her reinstatement
without loss of seniority rights and privileges, with full backwages from her
dismissal on June 5, 1986 up to her actual reinstatement, including her legal holiday
pay for ten regular holidays, and unpaid wages and allowance from June 1-15, 1986
in the amounts of P500.00 and P215.00, respectively, and 13th month pay in the
sum of P416.00 less P213.70 for advances and canteen bills, with ten (10)% thereof
as attorney's fee. 7 All other claims were dismissed. The respondent corporation
appealed to the NLRC interposing grave abuse of discretion.
The NLRC affirmed the labor arbiter's ruling but reduced the award of full
backwages to only one year. Ironically, the NLRC cited in particular Lina's
educational background to justify the reduction. We quote:

It is not disputed that herein complainant is a graduate of chemical engineering and

that the periods of her separate employment contracts range from six (6) months to
one (1) year. Having technical or engineering background, it would not be difficult
for complainant to find a job during her period of lay-off. As such, she is therefore
not expected to remain idle and wait for a windfall for this would be tantamount to
rewarding her for her idleness during her lay off. It is therefore more reasonable to
limit her backwages to one (1) year effective from her termination from the service
on June 15, 1986. **
The petitioner now complains that the NLRC erred in limiting the award of
backwages to one year. She invokes Article 279 of the Labor Code, which
guarantees security of tenure to a regular employee, prohibiting his termination,
except for a just cause, and entitling an unjustly dismissed worker to reinstatement
with full backwages.
We find the petition meritorious and we grant it. We rule that the NLRC gravely
abused its discretion in limiting the award of backwages to one year.
The facts of the case as indicated by the arbiter and the NLRC are uncorroborated.
Lina was unjustly and unlawfully terminated even after she had already completed
successive three six-month probationary periods of employment which should have
converted her status to that of a regular employee. Her termination, therefore,
violated her right to security of tenure in her employment. But even probationary
employees are protected by law. For one, probationary employment should not
exceed six (6) months from the date the employee started working, unless it is
covered by an apprenticeship agreement stipulating a longer period. 8 True, 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 the reasonable standards made known by the employer to the
employee at the time of his employment. 9 But the law is explicit that an employee
who is allowed to work after a probationary period shall be considered a regular
employee. 10
It is clear from the foregoing that Lina should be considered a regular employee on
all counts. First, the nature of her job as a parts clerk required her to perform
activities which were deemed necessary and desirable in the usual business of
General Diesel Power Corporation, in connection with dealing in parts, sales, and
services. (She was neither contracted for a specified project nor required to perform
work that was seasonable in nature.)
Under Article 280 of the Labor Code, when one performs such activities, he is
deemed a regular employee, "[t]he provisions of written agreement to the contrary
notwithstanding . . ." Second, her employment was not covered by any
apprenticeship agreement. Third, she was rehired on May 22, 1985 and on January
20, 1986. This fact of rehiring negates management's claims that she failed to
qualify as a regular employee. On the contrary, management promoted her to parts
clerk. Finally, at the risk of being repetitious, Lina had been re-hired to work not only
after her first six-month probationary period from November 21, 1984 to May 21,
1985, she had been also re-hired to work immediately after her second six-month
probationary period from May 22, 1985 to November 21, 1985; and then again on

January 20, 1986, she was rehired on a probationary status her third and was
again terminated on June 5, 1986. Thus, we can readily see that Lina had been hired
and again and again rehired and again and again and again fired. We perceive these
successive hirings and firings as a ploy to avoid the obligations imposed by law on
employers for the protection and benefit of probationary employees, who, more
often than not, are kept in the bondage, so to speak, of unending probationary
employment without any complaint due to the serious unemployment problem
besetting our country today. The Court can not countenance this overreaching. No
member of the country's work force must be allowed to be taken advantage of by
any employer.
An employee who is allowed to work after a probationary period, shall be considered
a regular employee. 11 The fact that Lina worked on a contract-to-contract basis
can not alter the character of her employment, because contracts can not override
the mandate of law. 12 Hence, by operation of law, she has likewise, become a
regular employee. 13
We find self-defeating the private respondent's arguments that the petitioner, while
in her probationary periods, had failed to measure up to the standards of her work
and had been found unfit for her job, in the light of the circumstance discussed
earlier. Second, the private respondent failed to establish that there had beer
reasonable standards set forth by the company by which Lina would measure up to
as a regular employee. If indeed there were, the respondent should have attached
copies of those standards, as annexes to its pleadings; the records reveal nothing of
the sort, hence, we dismiss such trivial justifications.
We agree with the petitioner that she was unceremoniously terminated by the
respondent company to prevent her from becoming a regular employee and exclude
her from all the benefits thereto. As we previously stated, this is not only a common
but a convenient practice of unscrupulous employers to circumvent the law on
security of tenure. Security of tenure, which is a right of paramount value
guaranteed by the Constitution, should not be denied to the workers by such
strategem. We cannot permit such a subterfuge, if we are to be true to the law and
social justice. The law and social justice mandate that an employee whose
termination was illegal is entitled to reinstatement with full backwages. 14
Under Article 279 of the Code, "[a]n employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement." Backwages, as
we have defined, represent compensation that should have been earned but were
not collected because of unjust dismissal. 15 Such being the case, the award of
backwages computed from the time of Lina's dismissal up to the time of her
reinstatement is not tantamount to rewarding idleness but to enable her to recover
her loss of income during her lack of employment caused by her dismissal. Clearly
then, the NLRC committed a grave abuse of discretion when it reduced the award of
backwages to one year and compounded that abuse by giving the reason that the
petitioner could have easily landed a better-paying job if she seriously looked for
one, she being a chemical engineering graduate.

Worth noting is the manifestation of the Solicitor General when required to

comment by the Court: that "[H]e does not agree with the position of the public
respondent, NLRC and cannot represent said public respondent in this case without,
in his honest belief and understanding, going against the law, the evidence and
jurisprudence."
The respondent also argues that the petitioner should not be entitled to backwages
because she was given separation pay upon termination of her employment.
Furthermore, she also signed a quitclaim discharging the company from any liability.
These arguments are devoid of merit. The fact that the petitioner received
separation pay should not be taken against her for it is but natural for her to accept
whatever amounts the company would give her. Her receipt of separation pay does
not relieve the company of its obligations under the law.
Backwages and separation pay are reliefs distinct and separate from each other.
Payment of backwages in the form of relief that restores the income that was lost by
reason of unlawful dismissal is distinguished from separation pay which provides the
employee money during the period in which he is locating a new job. 16 We have
moreover held that a quitclaim will not stop a dismissed employee from complaining
to the authorities. 17
We have consistently adopted the policy of awarding backwages to illegally
dismissed employees equivalent to three years without qualification or deduction, in
order to avoid protracted delay in the execution of the award for backwages due to
extended hearings and unavoidable delays and difficulties encountered in
determining the earnings of laid-off employees ordered to be reinstated with
backwages during the pendency of the case for purposes of deducting the same
from the gross backwages awarded. 18 In the case at bar, we can not find a good
reason why we should depart from this established policy. The company had
unlawfully terminated the petitioner from her work. We take this opportunity to
reaffirm our concern for the lowly worker who, like the petitioner, is often at the
mercy of her employer, by reinstating her to her previous position or its equivalent,
with backwages.
WHEREFORE, the petition is GRANTED. The private respondent is ORDERED to
REINSTATE the petitioner to her former position without loss of seniority rights and
other privileges, with backwages equivalent to three years without deduction or
qualification.
Costs against the private respondent.
SO ORDERED.
Melencio-Herrera (Chairman) Paras, Padilla and Regalado, JJ., concur.
Footnotes
1. Rollo, Annex, "D", 36.
2. Id., 5.

3. Id., Annex "E," 37.

4. Id., Annex "F," 38.
5. Id., Annex "G," 39.
6. Id., Annex "H," 40.
7. Id., Annex "A," 14-18.
** mphasis supplied.
8. Book Sir, Title I, Article 281, The Labor Code.
9. Supra.
10. Supra.
11. Cebu Royal Plants (SMC) vs. The Honorable Deputy Minister of Labor and
Employment, et al., G.R. No. 58639, August 12, 1987, 153 SCRA 38.
12. Beta Electric Company vs. National Labor Relations Commission, et al., G.R. No.
86408, February 15, 1990, 182 SCRA 384.
13. Supra.
14. Ruffy vs. NLRC, G.R. No. 84193, February 15, 1990, 182 SCRA 365.
15. Lim vs. NLRC, G.R. No. 79975, March 16, 1989, 171 SCRA 388.
16. Santos vs. NLRC, G.R. No. 76721, September 2, 1987, 154 SCRA 166.
17. Olacao, et al. vs. NLRC, G.R. No. 81390, August 29, 1989, 177 SCRA 38.
18. Feati University Faculty Club vs. Feati University, No. L-31503, August 15, 1974,
58 SCRA 395, cited in Mariners Polytechnic School, et al. vs. Leogardo, Jr., et al., G.R.
No. 74271, March 31, 1989, 171 SCRA 597.
\---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---/
([1991V808] LINA B. OCTAVIANO, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and GENERAL DIESEL POWER CORPORATION, respondents.
D.R. Dando & Associates Law Offices for petitioner.
K.V. Faylona & Associates for private respondent., G.R. No. 88636, 1991 Oct 3, 2nd
Division)