G.R. No. 82325 September 26, 1989
ESPIRITU SANTO PAROCHIAL SCHOOL, SISTER MARY MARTINEZ, and SISTER MA. ENCARNACION DE LOS SANTOS, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, ESPIRITU SANTO PAROCHIAL SCHOOL FACULTY ASSOCIATION, EVANGELINE LOPEZ, CONSTANCIA TEMPONGKO MARISSA, MARTIN BRAVO, EDITHA ESPIRITU, VIVIAN CAPATI and CORAZON HADAP, respondents.

FACTS

The seven individual private respondents were hired by petitioner Espiritu Santo Parochial School as probationary teachers on June 1, 1984. Their services were terminated between April 1 and 15, 1985, prior to the start of the next school year. They subsequently filed a complaint for illegal dismissal and unfair labor practice. The Labor Arbiter ruled in their favor, ordering reinstatement with backwages. The National Labor Relations Commission (NLRC) affirmed the illegal dismissal finding but dismissed the unfair labor practice charge for insufficient evidence.
Petitioners contended before the Supreme Court that the teachers were not dismissed; their fixed-term contracts for the school year 1984-1985 had simply expired and were not renewed. They argued that probationary employment for teachers operates on a schoolyear-to-schoolyear basis, and they relied on the case of Biboso v. Victorias Milling Co., which recognized that probationary contracts may stipulate a specific period. They further asserted there was no anti-union bias, as the non-renewal was recommended by head teachers who were themselves union leaders.

ISSUE

Whether the termination of the probationary teachers’ services, by non-renewal of their contracts at the end of the school year, constituted illegal dismissal.

RULING

Yes, the termination constituted illegal dismissal. The Supreme Court denied the petition and affirmed the NLRC decision, limiting backwages to three years. The legal logic is anchored on the convergence of the Labor Code and the Manual of Regulations for Private Schools. While Article 281 (then Article 282) of the Labor Code allows termination of probationary employees for a just cause or failure to meet reasonable standards made known at the time of engagement, the Manual of Regulations for Private Schools specifically establishes a three-year probationary period for teachers. Within this period, a teacher can only be dismissed for a just or authorized cause.
The Court distinguished the cited Biboso case, noting that there the employment contracts explicitly stipulated a definite period ending on a specific date. In the present case, the teachers’ appointment papers contained no such fixed period; therefore, the three-year probationary rule under the Manual applied. The school’s internal manual provision, stating that a probationary teacher’s contract “automatically terminates” at the end of every school year, was invalid as it contravened the mandatory regulations of the Manual, which has the force of law.
Crucially, the petitioners failed to prove that the non-renewal was for a just cause or due to the teachers’ failure to meet performance standards. The record showed the teachers received favorable performance ratings (80% to 90%). The absence of proven anti-union motivation did not excuse the dismissal, as the core violation was the lack of a valid cause for termination as required by law. Thus, the NLRC committed no grave abuse of discretion in finding the dismissals illegal.