Case Digest (G.R. No. 199371)
Facts:
De La Salle University, through its officials Brother Daniel Ortiz, FSC, Dean Patricio Ceballos, and Frank Tajanan, employed Lolita U. Lao as a full-time probationary assistant professor for the school year 1975-76, after her appointment was included in the faculty list and payroll. Lao signed a contract for full-time faculty for 1975-76, but the university president did not sign it because Tajanan did not forward the contract to him, and the contract was never effectively completed or delivered.
Lao taught during the first semester and was informed in August and September 1975 that her probationary status would end at the close of the first semester and that the university would not enter into a permanent contract. After her services were terminated on October 15, 1975, Lao filed a petition in the Court of First Instance for injunctive relief and PHP 99,000 damages, later amending her petition to limit the damages sought. The trial court found a violation of her contractual rights and awarded moral and exemplary damages plus attorney’s fees; the Court of Appeals affirmed. The university and officials appealed, contending that the case fell within the jurisdiction of the National Labor Relations Commission.
Issues:
- Whether the claim for damages by Lolita U. Lao against De La Salle University and its officials fell within the exclusive jurisdiction of the Labor Arbiter/NLRC as an employer-employee dispute.
- Whether Lao had a valid cause of action for damages premised on the alleged violation of a permanent employment contract.
Ruling:
The Court reversed and set aside the Court of Appeals decision and dismissed Lao’s amended petition. It held that the Labor Arbiter and the NLRC had no jurisdiction because the dispute required judicial determination of whether a permanent employment relationship existed and whether employer-employee relations were present in the manner alleged.
On the merits, the Court ruled that Lao was a probationary employee and that the alleged contract for permanent employment was not completed because it was not signed by the university president, was legally withdrawn before effectivity, and was never delivered to Lao. Consequently, Lao had no cause of action for damages.
Ratio:
Jurisdiction under article 265(f), later article 217(5) of the Labor Code, turns on the existence of employer-employee relations. Although such relations are generally assumed in employer-employee cases, the Court found that it was necessary in this case to determine whether Lao became a permanent employee; this factual and legal determination required a full-dress trial and was not suited to the Labor Arbiter’s position-paper procedure.
Substantively, the Court found no enforceable permanent employment contract. The university president never signed the permanent contract, it was withdrawn before it became effective, and it was not delivered to Lao; therefore, Lao remained a probationary employee whose services the university could legally terminate at the end of the probationary period. Because no permanent contract was effectively formed, Lao could not maintain a damages claim for its alleged breach.
Doctrine:
- Labor Arbiter/NLRC jurisdiction under article 265(f), later article 217(5) of the Labor Code does not obtain when the controversy requires judicial determination of the existence and nature of the alleged permanent employment relationship.
- A probationary employee’s dismissal at the end of the probationary term is within the employer’s prerogative when no enforceable permanent contract was effectively completed and delivered.
- A purported contract for permanent employment not signed by the employer’s required authority, withdrawn before effectivity, and never delivered cannot be enforced against the employer.