Aragones v. Alltech Biotechnology Corp.

On April 1, 2016, Alltech Biotechnology Corporation offered Paolo Aragones the post of Swine Technical Manager – Pacific. Aragones signed the Offer Letter on April 18, 2016 and e-mailed a signed copy to Alltech. The letter set a commencement date of July 1, 2016 and a six-month probationary period, and it required him to sign an employment contract on his first day. On April 25, 2016 he resigned from Cargill Philippines. Alltech's head office then allegedly adopted a global restructuring program in May 2016 that abolished the position as redundant. By letter dated June 10, 2016, Alltech informed Aragones and offered him PHP 140,000.00, one month's salary, as a gesture of goodwill. Aragones filed a complaint for non-payment of wages, damages, backwages and other money claims. The Labor Arbiter found illegal dismissal. The NLRC reversed and dismissed the complaint for lack of an employer-employee relationship, and the Court of Appeals affirmed, reasoning that the relationship never commenced because the position was abolished before July 1, 2016.

1. 1Whether an employer-employee relationship existed between Aragones and Alltech although the agreed start date had not yet arrived.
2. 2Whether Aragones was illegally dismissed and is entitled to his monetary claims.

Yes to both. The employment contract was perfected on April 18, 2016, when Aragones accepted a certain offer and made his acceptance known to Alltech; an accepted offer can no longer be withdrawn. Unlike Santiago, C.F. Sharp and Sagun, where employment depended on a suspensive condition (deployment; a background check), the July 1, 2016 start date was a period, a day certain that must come. Under Article 1193 of the Civil Code, a period does not affect the existence of the obligation; it only sets when the obligation becomes demandable. Hence the employer-employee relationship already existed on April 18, 2016, and only the duties to work and to pay wages were deferred. The requirement to sign a contract on the first day did not change this, and the four-fold test was unnecessary because Alltech admitted the offer and its acceptance. Even if the start date were a condition, it would be deemed fulfilled under Article 1186 because Alltech prevented its fulfillment. The claims therefore fall within labor jurisdiction under Art. 224 [formerly Art. 217] of the Labor Code. On the merits, redundancy under Art. 298 requires adequate proof. The Vice President's uncorroborated, general affidavit did not show how the restructuring abolished this position, so the dismissal was illegal. Following C.P. Reyes Hospital v. Barbosa, backwages and separation pay in lieu of reinstatement run from July 1, 2016 until finality, with 10% attorney's fees. No moral or exemplary damages were awarded because bad faith was not shown. The total award earns 6% legal interest from finality until full payment. The petition was granted, the CA rulings annulled and set aside, and Alltech held liable; the Labor Arbiter will compute the awards.