G.R. No. 211273 - Son vs. University of Santo Tomas

Case Summary (G.R. No. 211273)

Factual Background

The petitioners were full-time professors in the UST Colleges of Fine Arts and Design and Philosophy, hired in June 2004 and June 2005 on papers designating them as probationary faculty who must obtain the requisite graduate degree and render satisfactory service to attain tenure. The parties were covered by a collective bargaining agreement, the UST–UST Faculty Union CBA, whose Article XV, Section 1 provided that a faculty member given a tenure-track appointment who rendered six consecutive semesters of satisfactory full-time service carrying at least a fifteen-unit load would attain tenure, and that a faculty admitted without a master’s degree shall finish it in five semesters or be separated. Petitioners did not possess master’s degrees, enrolled in graduate programs, but failed to complete them and continued to teach beyond the prescribed period. Following a March 3, 2010 CHED memorandum directing strict implementation of minimum faculty qualifications under CHED Memorandum Order No. 40-08, UST informed affected faculty that it would cease reappointment of those who failed to complete their master’s degrees but allowed written appeals in limited circumstances. Petitioners did not file written appeals and on June 11, 2010 received non-renewal or termination letters signed by the Dean of the College of Fine Arts and Design stating failure to obtain the required master’s degree as the reason.

Labor Arbiter Proceedings

Petitioners filed labor complaints for illegal dismissal, unfair labor practice, and money claims. They urged that the CBA vested them with tenure by default and that respondents’ refusal to recognize that tenure and failure to observe procedural safeguards constituted illegal dismissal and bad faith. Respondents countered that the CBA provision on tenure by default was contrary to CHED Memorandum Order No. 40-08 and therefore void, that CHED’s regulation took precedence, and that nonrenewal complied with due process and Article 281 of the Labor Code. On March 17, 2011 the Labor Arbiter rendered a decision in NLRC Case Nos. NCR-07-09179-10, NCR-07-09180-10, and NCR-07-09181-10 in favor of petitioners, finding illegal dismissal and unfair labor practice, upholding the CBA provision on tenure by default, and awarding backwages, damages, and attorney’s fees.

NLRC Proceedings and Decisions

Respondents appealed to the NLRC. On August 10, 2011 the NLRC dismissed the appeal and affirmed the Labor Arbiter, holding the CBA took precedence over CHED Memorandum Order No. 40-08 and that petitioners had acquired tenure by default. After recusals and reassignment, the Special Division on March 26, 2012 set aside the NLRC’s earlier decision and dismissed petitioners’ complaints, ruling that CHED Memorandum Order No. 40-08 had the force of law, that the CBA provision on tenure by default conflicted with it and was null and void. Petitioners moved for reconsideration; the case was reassigned to the Second Division which on October 30, 2012 granted petitioners’ motion for reconsideration, set aside the Special Division decision, and reinstated the Labor Arbiter’s decision, reasoning that the CHED Memorandum was directory, not mandatory, and could not be applied retroactively to invalidate a 2006 CBA. The NLRC thereafter denied respondents’ motion for reconsideration in a January 22, 2013 Resolution.

Court of Appeals Decision

Respondents filed a petition for certiorari with the Court of Appeals. On September 27, 2013 the CA granted the petition, reversed and set aside the August 10, 2011 and October 30, 2012 NLRC Decisions and the January 22, 2013 Resolution, and reinstated the Special Division’s March 26, 2012 dismissal of petitioners’ complaints. The CA held that contractual stipulations cannot prevail over legal prescriptions, that the CBA provision granting tenure by default was contrary to law and must yield to CHED Memorandum Order No. 40-08, and that petitioners had not acquired vested tenurial rights because they failed to meet the master’s degree requirement. The CA emphasized the institution’s protected right of academic freedom under Article XIV, Section 5(2), 1987 Constitution, and the school’s management prerogative to set and apply reasonable standards for faculty qualifications.

Issues Presented on Certiorari

Petitioners challenged the CA’s ruling to the Supreme Court, alleging that the CA erred in finding no illegal dismissal. The central issue presented was whether petitioners acquired tenure under the parties’ CBA such that their nonrenewal constituted illegal dismissal, or whether the statutory and administrative minimum faculty qualifications embodied in DECS Order 92 and CHED Memorandum Order No. 40-08 precluded attainment of tenure and justified nonrenewal.

Parties’ Contentions Before the Supreme Court

Before the Supreme Court petitioners argued that the CBA and its tenure-by-default provision constituted the law between the parties and vested them with tenure; that respondents acted in bad faith by requiring a written appeal that effectively nullified tenure; that respondents’ continued hiring of non-master’s degree holders after petitioners’ separation invoked estoppel against respondents; and that respondents violated the twin-notice rule and procedural due process. Respondents maintained that the master’s degree requirement is a mandatory qualification not subject to private agreement, invoked precedents including Herrera-Manaois v. St. Scholastica’s College, University of the East v. Pepanio, and related authorities, and argued that CHED Memorandum Order No. 40-08 had the force of law and superseded the CBA provision, that petitioners remained probationary until they obtained the requisite degrees, and that nonrenewal was a lawful exercise of academic freedom and management prerogative.

The Court’s Ruling

The Supreme Court denied the petition and affirmed the Court of Appeals’ September 27, 2013 Decision and January 29, 2014 Resolution in toto. The Court reinstated the NLRC Special Division’s March 26, 2012 Decision dismissing petitioners’ complaints, concluding that petitioners were not illegally dismissed.

Legal Basis and Reasoning

The Court grounded its ruling on the long-established minimum qualification for tertiary faculty that a master’s degree in the field of instruction is required, as embodied in DECS Order 92 (1992 Revised Manual) and continued under CHED Memorandum Order No. 40-08. It held that DECS Order 92 was promulgated under Section 70 of Batas Pambansa Blg. 232 and thus has the force and effect of law. Consequently, the parties to the 2006 CBA had no authority to stipulate a tenure-acquisition mechanism contrary to that regulatory prescription; the contested CBA provision was therefore void ab initio under Art. 1409 of the Civil Code because its object was contrary to law. The Court observed that CHED Memorandum Order No. 40-08 merely reiterated the 1992 requirement an

Case Syllabus (G.R. No. 211273)

Parties and Procedural Posture

Raymond A. Son, Raymond S. Antiola, and Wilfredo E. Pollarco were petitioners before the Supreme Court and were full-time professors employed by University of Santo Tomas.
University of Santo Tomas, its officers named in the caption, and the College of Fine Arts and Design Faculty Council were respondents in the labor proceedings.
Petitioners filed unfair labor practice, illegal dismissal, and money claims before a Labor Arbiter which resulted in a decision in their favor.
The National Labor Relations Commission issued conflicting rulings, culminating in a Special Division decision dismissing petitioners and a Second Division decision reinstating the Labor Arbiter, followed by a Court of Appeals decision reversing the NLRC and reinstating the Special Division dismissal.
Petitioners sought review by the Supreme Court via a Petition for Review on Certiorari contesting the CA decision and denial of reconsideration.

Key Factual Allegations

Petitioners were hired as probationary faculty in 2004 and 2005 under appointment papers explicitly stating probationary status and conditional accession to tenure.
The parties' Collective Bargaining Agreement provided that a faculty member was given tenure after rendering six (6) consecutive semesters of satisfactory full-time service carrying fifteen-unit load or more, with a master’s degree as an entry requirement and a provision that failure to finish a master’s degree in five (5) semesters would result in separation.
Petitioners lacked the required master’s degrees, enrolled in graduate programs, but failed to complete the degrees and continued teaching beyond the prescribed completion period.
On March 3, 2010, CHED issued a Memorandum urging strict implementation of minimum faculty qualifications including the master’s degree requirement in CHED Memorandum Order No. 40-08.
UST notified affected faculty of cessation of reappointment for those who failed to complete master’s degrees and required a written appeal from those due for thesis defense or completion.
Petitioners did not file written appeals and received termination/non-renewal letters dated June 11, 2010, citing failure to obtain the master’s degree as the reason.

Collective Bargaining Provision

The contested CBA provision was Article XV, Section 1, which equated satisfactory service for six (6) consecutive semesters with acquisition of tenure for teaching faculty.
The CBA provision expressly acknowledged a master’s degree as an entry requirement but contained a mechanism deeming tenure attained if the school continued to employ a faculty member beyond the prescribed period without the degree.
Petitioners relied on the CBA provision to claim vested tenurial rights and to contest their non-renewal as illegal dismissal and unfair labor practice.

Regulatory Framework

DECS Order 92 (1992 Revised Manual of Regulations for Private Schools) required a master’s degree as the minimum qualification for undergraduate faculty and was promulgated pursuant to Section 70 of Batas Pambansa Blg. 232.
CHED Memorandum Order No. 40-08 of 2008 (Manual of Regulations for Private Higher Education of 2008) likewise required a master’s degree for undergraduate faculty and was characterized by parties as having the force of law.
The Supreme Court treated the 1992 Manual as having the force and effect of law and held that CHED’s 2008 Memorandum carried forward the same requirement.

Labor Arbiter Ruling

The Labor Arbiter found respondents guilty of illegal dismissal and unfair labor practice and declared the CBA provision granting tenure by default effective between the parties.
The Labor Arbiter concluded that petitioners were not accorded due process prior to termination and awarded backwages, damages, and attorney’s fees to petitioners.

NLRC Proceedings and Rulings

The NLRC initially aff