Title
AMA COMPUTER COLLEGE vs. AUSTRIA
Case
G.R. No. 164078
Decision Date
Nov 23, 2007
Rolando Austria, a fixed-term dean at AMA Computer College, was unlawfully dismissed before term expiration. SC ruled his employment ended on the fixed term, denying reinstatement but awarding proportionate pay.
employment
fixed term
benefits

Case Summary (G.R. No. 164078)

Factual Background

AMA hired respondent on probationary employment as college dean effective April 24, 2000. On August 22, 2000, AMA’s Officer-in-Charge (OIC), Academic Affairs, issued a memorandum confirming respondent as Dean of AMA College, Paranaque, with the stated effectivity and duration from April 17, 2000 to September 17, 2000. The memorandum also provided that respondent would receive transportation allowance of P1,560.00. It further stated that if respondent gave up the deanship or failed to meet AMA’s standards based on evaluation, he would be considered for a faculty position and would lose the transportation allowance as dean and receive the faculty rate.

Sometime in August 2000, AMA charged respondent with violating provisions on Employees Conduct and Discipline in its orientation handbook. The specific allegations were: (1) leaking of test questions; (2) failure to monitor general requirements vital to the operations of the company; and (3) gross inefficiency. Respondent filed a memorandum dated August 29, 2000 refuting the charges. AMA then placed him on preventive suspension from September 8, 2000 to October 10, 2000, and issued notices of investigation.

After deliberation, AMA notified respondent on September 29, 2000 that his services as dean were terminated effective immediately. The notice expressly tied the termination to findings of gross inefficiency and loss of trust and confidence, and cited the handbook offenses for the conduct alleged. Respondent was instructed to report for clearance and to turn over documents and responsibilities. He was also barred from entering the company premises unless with clearance from human resources.

Initiation of the Labor Case

On October 27, 2000, respondent filed a Complaint for Illegal Dismissal, Illegal Suspension, Non-Payment of Salary and 13th Month Pay, with a prayer for damages and attorney’s fees against AMA and the other petitioners. The matter proceeded to trial on the merits before the Labor Arbiter.

Labor Arbiter’s Ruling

In a Decision dated December 6, 2000, the Labor Arbiter held that AMA accorded respondent due process in terminating him. The Labor Arbiter, however, found that respondent had substantially refuted the charges of gross inefficiency, incompetence, and leaking of test questions. The Labor Arbiter nevertheless ruled that reinstatement could no longer be granted because respondent’s deanship was only until September 17, 2000, consistent with the fixed duration stated in his appointment.

Accordingly, the Labor Arbiter ordered AMA to pay respondent proportionate salary and proportionate transportation allowance for the period from September 8, 2000 to September 17, 2000, plus whatever salary and benefits were withheld prior to September 8, 2000. The Labor Arbiter dismissed the remainder of the claims for lack of merit.

NLRC Proceedings and Disposition

Respondent appealed to the NLRC. In its Decision dated March 31, 2003, the NLRC sustained respondent’s appeal in a manner different from the Labor Arbiter. The NLRC reasoned that AMA did not contravene respondent’s assertion that he attained regular status after serving the three-month probationary period under the handbook. The NLRC thus sustained the Labor Arbiter’s finding that AMA failed to establish the grounds for dismissal, but rejected the Labor Arbiter’s conclusion that respondent’s appointment was limited to April 24 to September 17, 2000.

The NLRC declared that respondent was a regular employee and that he was illegally dismissed. However, instead of ordering reinstatement, the NLRC held that reinstatement would not promote industrial harmony. It thus vacated the Labor Arbiter’s decision and ordered separation pay computed at one month per year of service plus full backwages from September 29, 2000 until December 6, 2000, amounting to P100,378.80.

AMA then filed a Motion for Reconsideration, which the NLRC denied for being filed out of time and for lack of merit. Respondent also filed a Motion for Partial Reconsideration, which the NLRC denied for lack of merit.

CA Ruling on Certiorari

Petitioners assailed the NLRC ruling before the CA through a petition for certiorari under Rule 65. In a Decision dated March 29, 2004, the CA denied the petition. It held that, based on the handbook and respondent’s appointment, respondent was a regular employee. It further stated that his employment could only be terminated for causes under Article 282 of the Labor Code and only after observance of due process requirements. The CA also affirmed the Labor Arbiter and NLRC conclusions that respondent sufficiently rebutted the charges and that petitioners failed to prove the grounds for dismissal.

The CA’s dispositive portion denied the petition for lack of merit and affirmed the NLRC decision with modification, referring to the computation of backwages. Petitioners’ motion for reconsideration was denied in a Resolution dated June 11, 2004. Petitioners then filed the present petition for review on certiorari.

Petitioners’ Arguments in the Supreme Court

Petitioners contended that respondent, as a college dean, was an academic personnel under Section 4(m)(4)(c) of the Manual. According to petitioners, his probationary employment was therefore governed by Section 92 of the Manual rather than the Labor Code or AMA’s handbook. They asserted that respondent had not yet become a regular employee. They also argued that respondent’s employment was a fixed term, as found by the Labor Arbiter, but that the fixed term was terminated earlier for just causes. Petitioners further argued that the award of backwages to respondent was oppressive because the record showed no order of reinstatement and because respondent’s employment had a fixed period.

Respondent’s Arguments in the Supreme Court

Respondent maintained that the NLRC and the CA had already found him to be a regular employee and that he was illegally dismissed. He argued that the petition raised questions of fact, including whether he was regular and whether dismissal was justified, and that these were no longer reviewable. Respondent also stated that petitioners challenged his regular status only for the first time before the CA, not before the Labor Arbiter and NLRC. He added that petitioners failed to discharge the burden of proving a valid ground for dismissal, as found by the Labor Arbiter, NLRC, and CA. Respondent further maintained that the CA’s award of backwages—from the date of actual dismissal until finality—was consonant with Article 279 of the Labor Code and thus proper.

Issues and the Court’s Approach

The Court identified two ultimate issues: (1) the nature of respondent’s employment, and (2) whether respondent was lawfully dismissed. It recognized that the first question—whether respondent was regular, probationary, or fixed term—was essentially factual. Nevertheless, it resolved the matter because of its far-reaching effects on the academe and because the findings of the Labor Arbiter and the NLRC were inconsistent, which opened the door to review under the Court’s doctrine in Molina v. Pacific Plans, Inc. and its related jurisprudence.

The Court observed that the Labor Arbiter had treated respondent’s appointment as one with a fixed term ending September 17, 2000, while the NLRC and CA had treated respondent as a regular employee based on the alleged service of the probationary period required under the handbook.

Legal Basis and Reasoning: Nature of Employment as Fixed Term

The Court held that the parties could agree to a fixed period of employment even for duties that are necessary or desirable in the employer’s usual business. It reasoned that Article 280 of the Labor Code does not prohibit or proscribe employment contracts with fixed periods, and that there was nothing contradictory between a definite period and the employee’s duties.

The Court found Brent School, Inc. v. Zamora instructive. It stressed that the validity question does not turn solely on the nature of the employee’s duties. Rather, it centers on the day certain agreed upon by the parties for the commencement and termination of the employment relationship, particularly when the position is one in which fixed terms are a practical necessity through tradition or rotation. It cited that deanship-type positions are commonly treated, by practice or tradition, as employment for fixed terms.

Applying this doctrine, the Court ruled that respondent’s situation fell within Brent School. First, the Court pointed to the appointment letter, which clearly confirmed respondent as Dean effective April 17, 2000 to September 17, 2000. It also noted that the letter’s last paragraph provided for possible consideration for a faculty position if respondent relinquished the deanship or failed to meet standards, which was consistent with the rotation concept. Second, the Court held that respondent’s failure to sign the letter was immaterial. It relied on Brent School that the statutory clause barring agreements conflicting with regular employment exists to prevent circumvention of security of tenure, and it should not apply where the parties knowingly and voluntarily agreed to a fixed period absent vitiated consent, moral dominance, or other circumstances that would invalidate consent. The Court found that respondent voluntarily accepted the employment, assumed the deanship, and performed the functions, without proof that consent had been vitiated or that respondent objected to the fixed term.

Legal Basis and Reasoning: Regular Status Claim and the Manual

Petitioners alternatively relied on Section 92 of the Manual, together with Section 4(m)(4)(c), to argue for a three-month probationary regime. They contended that respondent’s position as dean should be treated as part of school officials responsible for academic matters, so that the probationary rules were not those in the handbook. Petitioners further asserted that the handbook did not specific

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