Case Brief: Mitsubishi Motors Philippines Corporation v Chrysler Philippines Labor Union anhd Nelson Paras

G.R. No. 148738             June 29, 2004



Mitsubishi Motors Philippines Corporation (MMPC) is a domestic corporation engaged in the assembly and distribution of Mitsubishi motor vehicles. Chrysler Philippines Labor Union (CPLU) is a legitimate labor organization and the duly certified bargaining agent of the hourly-paid regular rank and file employees of MMPC. Nelson Paras was a member of CPLU. His wife, Cecille Paras, was the President of the Chrysler Philippines Salaried Employees Union (CPSU).

Nelson Paras was first employed by MMPC as a shuttle bus driver on March 19, 1976. He resigned on June 16, 1982. He applied for and was hired as a diesel mechanic and heavy equipment operator in Saudi Arabia from 1982 to 1993. When he returned to the Philippines, he was re-hired as a welder-fabricator at the MMPC tooling shop from October 3, 1994 to October 31, 1994.2 On October 29, 1994, his contract was renewed from November 1, 1994 up to March 3, 1995.3

Sometime in May of 1996, Paras was re-hired on a probationary basis as a manufacturing trainee at the Plant Engineering Maintenance Department. Paras started reporting for work on May 27, 1996. Paras was evaluated by his immediate supervisors Lito R. Lacambacal6and Wilfredo J. Lopez7 after six (6) months, and received an average rating. Later, Lacambacal informed Paras that based on his performance rating, he would be regularized.8

However, the Department and Division Managers, A.C. Velando and H.T. Victoria,9 including Mr. Dante Ong,10reviewed the performance evaluation made on Paras. They unanimously agreed, along with Paras’ immediate supervisors, that the performance of Paras was unsatisfactory.11 As a consequence, Paras was not considered for regularization. On November 26, 1996, he received a Notice of Termination dated November 25, 1996, informing him that his services were terminated effective the said date since he failed to meet the required company standards for regularization.

According to CPLU and Paras, the latter’s dismissal was an offshoot of the heated argument during the CBA negotiations between MMPC Labor Relations Manager, Atty. Carlos S. Cao, on the one hand, and Cecille Paras, the President of the Chrysler Philippines Salaried Employees Union (CPSU) and Paras’ wife, on the other.

Paras and CPLU asserted that pursuant to Article 13 of the New Civil Code, the period of May 27, 1996 to November 26, 1996 consisted of one hundred eighty-three (183) days. They asserted that the maximum of the probationary period is six (6) months, which is equivalent to 180 days; as such, Paras, who continued to be employed even after the 180th day, had become a regular employee as provided for in Article 282 of the Labor Code. They averred that as a regular employee, Paras’ employment could be terminated only for just or authorized causes as provided for under the Labor Code, and after due notice. They posited that in the Letter of Termination dated November 25, 1996, the ground for Paras’ termination was not among those sanctioned by the Labor Code; hence, his dismissal was illegal.

The MMPC, for its part, averred that under Article 13 of the New Civil Code, Paras’ probationary employment which commenced on May 27, 1996 would expire on November 27, 1996. Since he received the notice of termination of his employment on November 25, 1996, the same should be considered to have been served within the six-month probationary period.

Voluntary Arbitrator: The VA declared that hiring an employee on a probationary basis to determine his or her fitness for regular employment was in accord with the MMPC’s exercise of its management prerogative. The VA agreed with the MMPC that the termination of Paras’ employment was effected prior to the expiration of the six-month probationary period.

For its part, the Office of the Solicitor General (OSG), in representation of Voluntary Arbitrator Danilo Lorredo, agreed that Parasand CPLU’s allegation, that the notice of termination was served on Paras’ 183rd day, was erroneous. The OSG opined that the six-month probationary period was to expire on November 27, 1996 and since Paras was served such notice on November 25, 1996, his employment was deemed terminated within the six-month probationary period. It posited that the failure of Paras to get a satisfactory performance rating justified the termination of his probationary employment, and that the inclusion of his five-month contractual employment as welder-fabricator did not qualify him for regular employment.

Court of Appeals: CA agreed with Paras and CPLU’s interpretation that six (6) months is equivalent to one hundred eighty (180 days) and that computed from May 27, 1996, such period expired on November 23, 1996. Thus, when Paras received the letter of termination on November 26, 1996, the same was served on the 183rd day or after the expiration of the six-month probationary period. The CA stated that since he was allowed to work beyond the probationary period, Paras became a regular employee


Whether Paras was already a regular employee on November 26, 1996 (started working May 27, 1996 and terminated November 26, 1996.)


Yes, Paras is a regularized employee.

May 27-31 = 4 days

June 1-30 = 1 month (30 days)

July 1-31 = 1 month (30 days)

Aug 1-31 = 1 month (30 days)

Sept 1-30 = 1 month (30 days)

Oct 1-31 = 1 month (30 days)

Nov 1-26 = 26 days

Under Article 281 of the Labor Code, the employer must inform the employee of the standards for which his employment may be considered for regularization. Such probationary period, unless covered by an apprenticeship agreement, shall not exceed six (6) months from the date the employee started working. The employee’s services may be terminated for just cause or for his failure to qualify as a regular employee based on reasonable standards made known to him

Respondent Paras was employed as a management trainee on a probationary basis. During the orientation conducted on May 15, 1996, he was apprised of the standards upon which his regularization would be based. He reported for work on May 27, 1996. As per the company’s policy, the probationary period was from three (3) months to a maximum of six (6) months.

Applying Article 13 of the Civil Code, the probationary period of six (6) months consists of one hundred eighty (180) days. This is in conformity with paragraph one, Article 13 of the Civil Code, which provides that the months which are not designated by their names shall be understood as consisting of thirty (30) days each. The number of months in the probationary period, six (6), should then be multiplied by the number of days within a month, thirty (30); hence, the period of one hundred eighty (180) days.

As clearly provided for in the last paragraph of Article 13, in computing a period, the first day shall be excluded and the last day included. Thus, the one hundred eighty (180) days commenced on May 27, 1996, and ended on November 23, 1996. The termination letter dated November 25, 1996 was served on respondent Paras only at 3:00 a.m. of November 26, 1996. He was, by then, already a regular employee of the petitioner under Article 281 of the Labor Code.

Under Article 282 of the Labor Code, an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties. Gross negligence has been defined to be the want or absence of even slight care or diligence as to amount to a reckless disregard of the safety of person or property. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. A careful perusal of the records of this case does not show that respondent Paras was grossly negligent in the performance of his duties.

Considering that respondent Paras was not dismissed for a just or authorized cause, his dismissal from employment was illegal. Furthermore, the petitioner’s failure to inform him of any charges against him deprived him of due process. Clearly, the termination of his employment based on his alleged unsatisfactory performance rating was effected merely to cover up and “deodorize” the illegality of his dismissal.


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