G.R. No. 193897 - University of the East vs. Pepanio

Case Summary (G.R. No. 193897)

Applicable Law and Administrative Regulations

Governing constitution: 1987 Philippine Constitution (applicable because the decision date is after 1990).
Administrative instruments and statutes cited in the decision: DECS Revised Manual of Regulations for Private Schools (DECS Order No. 92, s. 1992); DECS-CHED-TESDA-DOLE Joint Order No. 1, s. 1996; Batas Pambansa Blg. 232 (The Education Act of 1982); Republic Act No. 7722 (creation/charter of CHED); NLRC Rules of Procedure (Section 7 on proof and completeness of service).
Relevant precedents and authorities cited: University of Santo Tomas v. NLRC; Escorpizo v. University of Baguio; Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue; Professional Regulation Commission v. De Guzman; St. Luke’s Medical Center Employees’ Association-AFW v. NLRC.

Factual Background

DECS issued the Revised Manual of Regulations for Private Schools (1992), requiring college faculty to hold a master’s degree as the minimum qualification for acquiring regular status. The 1994 Collective Bargaining Agreement (CBA) between UE and its faculty association specified that college faculty without the required postgraduate qualifications would receive semester-to-semester appointments, while qualified faculty would receive probationary appointments and be evaluated over four semesters. In 1996 a joint administrative order reiterated that academic personnel who do not meet minimum academic qualifications shall not acquire tenure or regular status. UE’s internal policy (effective School Year 1996–1997) implemented semester-to-semester hiring for applicants without postgraduate units or master’s degrees when qualified applicants were unavailable.

Employment of Respondents and Subsequent Developments

UE hired Mariti D. Bueno in 1997 and Analiza F. Pepanio in 2000 on semester-to-semester appointments because neither had the required master’s degree. Bueno enrolled in six graduate subjects (no proof of completion in the record); Pepanio earned 27 graduate units but lost credit because she failed to continue within five years. In 2001 a new CBA allowed the university to extend probationary full-time appointments to faculty lacking postgraduate degrees if they complied with the requirement within the probationary period, with the university retaining the option to replace such appointees if a qualified teacher became available. Pursuant to the 2001 CBA, UE gave probationary appointments to both respondents.

Events Leading to Nonrenewal and Claims of Regularization

In October 2003 the UE College Dean notified probationary faculty of impending expiration of probation for those lacking postgraduate qualifications. Pepanio indicated enrollment at PUP Graduate School; Bueno indicated she would return to her province and was not seeking tenure. The Dean later indicated possible two-semester extensions for those who desired it, but Pepanio’s request for three semesters was denied and reduced to two semesters. Ultimately, respondents did not report for work after the school’s communications and later demanded recognition as regular employees based on cumulative service (Bueno: about six-and-a-half years on full load; Pepanio: about three-and-a-half years on full load). When the university did not accede, both filed illegal dismissal complaints before the Labor Arbiter.

Procedural History

Labor Arbiter: On March 10, 2005 the LA found Bueno and Pepanio to be regular employees because they had taught at UE for at least four semesters under the old (1994) CBA; the LA held the new CBA could not deprive them of previously enjoyed benefits and directed reinstatement with backwages.
NLRC: UE appealed to the NLRC. The NLRC set aside the LA decision on September 27, 2006, rejecting technical objections and ruling that the four-semester probationary period under the old CBA did not automatically confer permanent status because statutory and administrative minimum qualifications (DECS Manual and the Joint Order) remained applicable; nonrenewal based on failure to obtain the required postgraduate degrees was not illegal.
Court of Appeals: On petition for certiorari the CA reinstated the LA decision on July 9, 2010 on the ground that UE’s appeal to the NLRC was untimely — the CA accepted respondents’ contention that the registry notice from the post office started the five-day period and that the 10-day appeal period had lapsed when UE filed its NLRC appeal.
Supreme Court: UE filed a petition raising timeliness of appeal, authority to sign verification (corporate secretary’s certificate issue), and whether respondents were illegally dismissed.

Issues Presented to the Supreme Court

Whether UE filed a timely appeal to the NLRC from the Labor Arbiter’s decision.
Whether UE’s petition to the Supreme Court could be given due course despite the absence of a Secretary’s Certificate from UE’s Board of Trustees authorizing Dean Javier to sign verification and the certification against forum shopping.
Whether UE illegally dismissed respondents Bueno and Pepanio, i.e., whether they had acquired regular employment status.

Ruling on Timeliness of UE’s NLRC Appeal

The Court applied the NLRC Rules of Procedure (Section 7) on service by registered mail, which deems service complete upon actual receipt by the addressee or after five days from the postmaster’s first notice if the addressee fails to claim the mail. The Court found no conclusive proof in the record that the post office’s registry notice had been received by UE’s counsel on March 22, 2005 (the date respondents asserted). Because respondents did not produce a copy of a receipt evidencing the alleged registry notice, the Court treated the registry return receipt dated April 4, 2005 (actual receipt by counsel) as conclusive proof of service. Measured from April 4, UE’s appeal to the NLRC was filed within the prescribed 10-day period and therefore timely.

Ruling on the Board of Trustees’ Authorization / Verification Signing

As a general corporate procedural rule, execution of a verification and certification against forum shopping should be authorized by the corporation’s Board of Trustees. The Court recognized an exception where the signatory is manifestly in a position to verify the truthfulness and correctness of the petition’s allegations. Applying precedent (Cagayan Valley Drug Corporation v. CIR), the Court found Dean Eleanor Javier was in such a position based on the facts of the case and the nature of the allegations. Accordingly, the absence of a Secretary’s Certificate from the Board of Trustees did not prevent UE’s petition from being given due course.

Ruling on Merits: Regularization and Illegality of Dismissal

The Court held that statutory and administrative regulation prescribing minimum academic qualifications for college faculty (the DECS Manual of Regulations and the 1996 Joint Order) are binding and must be read into any CBA

Case Syllabus (G.R. No. 193897)

Procedural Posture and Decision Date

This is a decision of the Supreme Court, Third Division, penned by Justice Abad, dated January 23, 2013 (G.R. No. 193897).
The petition sought review of the Court of Appeals decision in CA-G.R. SP 98872 dated July 9, 2010, which had reinstated the Labor Arbiter’s decision on technical grounds.
The Supreme Court GRANTED the petition, REVERSED the Court of Appeals decision, and REINSTATED the National Labor Relations Commission (NLRC) Decision dated September 27, 2006 and its Resolutions dated December 29, 2006 and February 27, 2007 that dismissed the complaints of Analiza F. Pepanio and Mariti D. Bueno.

Parties and Representation

Petitioners: University of the East (UE), Dean Eleanor Javier, Ronnie Gillego, and Dr. Jose C. Benedicto.
Respondents: Analiza F. Pepanio and Mariti D. Bueno.
The Supreme Court decision was penned by Justice Abad; Justices Velasco, Jr. (Chairperson), Peralta, Mendoza, and Leonen concurred.

Core Legal Issue Presented

Whether UE illegally dismissed respondents Pepanio and Bueno who had been repeatedly extended semester-to-semester or probationary appointments but lacked the required postgraduate degrees for regular status.
Ancillary procedural issues included: (a) whether UE filed a timely appeal to the NLRC from the Labor Arbiter’s Decision; and (b) whether UE’s petition before the Supreme Court could be given due course despite the absence of a Secretary’s Certificate from the UE Board of Trustees authorizing Dean Javier to sign the verification and certification against forum shopping.

Relevant Regulatory and Contractual Framework

DECS Order 92, s. 1992 (Manual of Regulations for Private Schools), Article IX, Section 44, paragraph l(a), required college faculty members to have a master’s degree as the minimum educational qualification for acquiring regular status; the Manual took effect beginning with the summer session of 1993.
DECS-CHED-TESDA-DOLE Joint Order 1, Series of 1996 reiterated that teaching or academic personnel who do not meet the minimum academic qualifications shall not acquire tenure or regular status.
1994 Collective Bargaining Agreement (CBA) between UE and the UE Faculty Association (effective up to 1999) provided that UE would extend only semester-to-semester appointments to college faculty who did not possess the minimum qualifications; those with the qualifications would be given probationary appointments subject to review for four semesters.
2001 CBA between UE and the UE Faculty Association provided that probationary full-time appointments could be extended to faculty lacking requisite postgraduate degrees on condition that they comply within their probationary period; the CBA also gave UE the option to replace probational appointees during the probationary period should a qualified teacher become available at the end of a semester.
Legislative/regulatory delegations: The Education Act of 1982 (Batas Pambansa Bilang 232) delegated administration and supervision of the education system to the Ministry of Education, Culture and Sports (DECS), and later Republic Act No. 7722 transferred the power to prescribe qualifications to the Commission on Higher Education (CHED), authorizing CHED to set minimum standards for higher education institutions.

Facts: Employment Histories and Academic Qualifications of Respondents

Mariti D. Bueno was hired by UE in 1997 on a semester-to-semester basis; she enrolled in six postgraduate subjects at the Philippine Normal University graduate school, but there is no evidence she completed the course.
Analiza F. Pepanio was hired by UE in 2000 on a semester-to-semester basis; she earned 27 units in graduate studies at Gregorio Araneta University Foundation but these units could no longer be credited because she failed to continue within five years.
Both respondents were initially given semester-to-semester appointments because they lacked postgraduate degrees; they therefore could not qualify for probationary or regular status under prevailing regulatory standards.
Pursuant to the 2001 CBA, UE extended probationary appointments to both respondents, making their status conditional upon obtaining the required postgraduate degrees within the probationary period.

Events Leading to the Dispute: Notices, Extensions, and Non-Reporting

In October 2003, Dean Eleanor Javier sent notices (dated October 16 and October 20, 2003) to probationary faculty reminding them of the impending expiration of probationary status for those lacking postgraduate qualifications by the end of the first semester, School Year 2003-2004.
Pepanio replied she was enrolled at the Polytechnic University of the Philippines Graduate School and requested a three-semester extension; the Dean denied the three-semester request and directed Pepanio to ask for a two-semester extension.
Bueno replied she was not interested in acquiring tenure and intended to return to her province; the record does not show whether she submitted a request for extension.
The University subsequently wrote to extend the probationary period for the respondents, but neither Pepanio nor Bueno reported for work thereafter.
Bueno later demanded to be considered a regular employee based on six-and-a-half years of full-load service (hired in 1997 when the 1994 CBA was operative); Pepanio made the same demand citing three-and-a-half years of full-load service.

Filing of Complaints and Labor Arbiter Disposition

Respondents filed