G.R. No. 100629 - Pena vs. National Labor Relations Commission

Petitioners, who are Enelyn E. Peaa, Erlinda A. Biron, Flordeliza A. Abogado, Rosario A. Raaa, Ma. Luisa P. Lanuza, and Josephine S. Dela Cruz, were employed as teachers at Naga Parochial School in Naga City.
Having rendered more than three years of satisfactory service, they enjoyed permanent status under the Manual of Regulations for Private Schools of the Department of Education (1970).

On May 4, 1998, the petitioners were given notice of termination.
The ground for termination was their failure to obtain a minimum efficiency rating of 85% for the two previous school years, as required in the teacher's manual of the respondent school.

A panel evaluation composed of the Principal, Assistant Principal, Area Coordinators, the Prefect of Discipline, the Registrar, and the Student Activity Program Coordinator (with a minimum of eight and a maximum of ten evaluators).
Additional mechanisms including "peer evaluation" for demonstration teaching and grade-level coordinatorship, "self-evaluation" during unannounced classroom observations, and an assessment of personality traits.
A post-conference session with area coordinators to discuss the results after both announced and unannounced visits were completed.

Factors considered in the evaluation included actual teaching performance, personality traits, educational attainment, professional growth, pupil management and discipline, the preparation/submission of reports, and teaching experience.
The petitioners’ ratings over the school years were noted as follows:

Enelyn E. Peaa – SY 1985-1986: 83; SY 1986-1987: 83; SY 1987-1988: 81.23
Erlinda A. Biron – SY 1985-1986: 82; SY 1986-1987: 82; SY 1987-1988: 79.25
Flordeliza A. Abogado – SY 1985-1986: 82; SY 1986-1987: 84; SY 1987-1988: 83.01
Rosario A. Raaa – SY 1985-1986: 77; SY 1986-1987: 84; SY 1987-1988: 80.01
Ma. Luisa P. Lanuza – SY 1985-1986: 78; SY 1986-1987: 84; SY 1987-1988: 82.33
Josephine S. Dela Cruz – SY 1985-1986: 77; SY 1986-1987: 84; SY 1987-1988: 80.02

The Labor Arbiter found the dismissal to be unjustified on several grounds, noting that the criteria used to evaluate efficiency were unclear and arbitrary.
As a remedy, the Labor Arbiter ordered their reinstatement along with the payment of backwages and attorney’s fees.

On appeal, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s decision.

The NLRC held that the petitioners had been sufficiently warned during the evaluation periods of 1985-1986 and 1986-1987.
The NLRC contended that the petitioners were given adequate time to improve their performance.
Considering their length of service, the NLRC awarded the petitioners separation pay equal to one month’s salary for every year of service.

The petitioners argued that the imposed minimum efficiency rating of 85% was unreasonable and arbitrary, given that, by other standards, an average grade would be around 75%.
They asserted that as permanent teachers, their employment could only be terminated on grounds of gross incompetence or inefficiency, and their performance, despite being below the set standard, should still be considered above satisfactory.
They contended that varying criteria, such as the change in the description of the rating from “good” to “satisfactory,” led to inconsistency in performance evaluation.

Whether the imposition of a minimum efficiency rating of 85% by the respondent school constitutes an unreasonable or arbitrary standard for evaluating teacher performance.
Whether the evaluation process, as implemented by the school—including the composition of the evaluators and the procedures used—is fair and provides the petitioners with adequate notice and opportunity to improve.
Whether the termination of the petitioners’ employment, despite their permanent status, aligns with the requirement that dismissal can only occur on the ground of gross incompetence or inefficiency.
Whether the petitioners' argument that a rating scale which positions 75% as average invalidates the requirement of 85% holds merit in the context of the school's prerogative to set high performance standards.
Whether awarding separation pay, as done by the NLRC, sufficiently balances the employer’s right to enforce performance standards with the recognition of the petitioners’ past services.