Title
Mercado vs. AMA Computer College-Paranaque City, Inc.
Case
G.R. No. 183572
Decision Date
Apr 13, 2010
Former AMACC faculty filed for illegal dismissal after non-renewal of contracts due to new performance standards. SC ruled in their favor, citing lack of notice and evidence, awarding separation pay and backwages.

Case Summary (G.R. No. 192591)

Factual Background

The petitioners began their teaching tenure at AMACC on May 25, 1998. They had specific positions: Mercado as Professor 3, Tonog as Assistant Professor 2, and De Leon, Lachica, and Alba, Jr. as Instructor 1. Each petitioner executed individual Teacher's Contracts stipulating non-tenured appointments effective until the expiration of their contracts. In 2000, AMACC introduced new faculty screening guidelines tied to performance appraisals, which the petitioners did not meet, resulting in their contracts not being renewed.

Procedural History

On July 25, 2000, the petitioners filed a complaint against AMACC for various compensation claims and discriminatory practices, leading to a memorandum from AMACC stating that their contracts would not be renewed. The petitioners later amended their complaint to include a claim of illegal dismissal, arguing that the non-renewal was retaliatory due to their earlier complaint. In response, AMACC asserted that the petitioners were still under their probationary period and that their non-renewal was based on their failure to meet performance standards.

Labor Arbiter's Decision

The Labor Arbiter ruled on March 15, 2002, that the petitioners were illegally dismissed. The Arbiter emphasized that AMACC failed to provide a solid basis for the non-renewal of their contracts, as no specific reasons related to underperformance were communicated to the individual petitioners. Furthermore, the Labor Arbiter pointed out that the performance standards applied had not been disclosed at the inception of their employment, violating due process.

National Labor Relations Commission's Ruling

The NLRC affirmed the Labor Arbiter's ruling, citing the relevant provisions under the Manual of Regulations for Private Schools, which specify a longer probationary period for academic personnel than what is provided under the Labor Code. The NLRC ruled that the introduction of new guidelines for evaluation during an existing probationary period was not a valid basis for non-renewal and emphasized the lack of evidence supporting AMACC’s claims regarding the petitioners’ performance.

Court of Appeals Decision

In a decision dated November 29, 2007, the Court of Appeals (CA) granted AMACC's petition, dismissing the complaint for illegal dismissal. The CA ruled that the petitioners had not completed the requisite three consecutive years of satisfactory service to acquire permanent status and that their contracts merely expired, rather than constituting an unlawful dismissal. The CA found AMACC’s refusal to renew the contracts to be justified.

Petition before the Supreme Court

The petitioners challenged the CA's decision on grounds of grave error, asserting that the findings of the Labor Arbiter and NLRC, which held their dismissals as illegal, should have been accorded greater respect. They argued that AMACC did not provide adequate notice regarding performance expectations, thus failing to follow due process.

Findings of the Supreme Court

The Supreme Court agreed with the petitioners, asserting that the CA erred in its assessment of the NLRC's ruling. The Court em

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