G.R. No. 164078; November 23, 2007
AMA COMPUTER COLLEGE, PARAÑAQUE, ET AL., Petitioners, vs. ROLANDO A. AUSTRIA, Respondent.

FACTS

Respondent Rolando Austria was hired by AMA Computer College as a probationary college dean on April 24, 2000. On August 22, 2000, his appointment was confirmed in a memorandum effective until September 17, 2000, which also stipulated that he would revert to a faculty position if he gave up the deanship or failed to meet performance standards. In August 2000, Austria was charged with leaking test questions, gross inefficiency, and failure to monitor operations. After an investigation, he was dismissed on September 29, 2000, for loss of trust and confidence.
Austria filed a complaint for illegal dismissal. The Labor Arbiter ruled that due process was observed but that Austria had substantially refuted the charges. However, the Arbiter limited his relief to salary and allowances until September 17, 2000, interpreting his appointment as fixed-term. The NLRC reversed, finding Austria to have attained regular employment status and declaring his dismissal illegal, awarding separation pay and backwages. The Court of Appeals affirmed the NLRC’s ruling.

ISSUE

Whether respondent Rolando Austria was a regular employee whose dismissal was illegal.

RULING

The Supreme Court affirmed the CA and NLRC, ruling that Austria was a regular employee illegally dismissed. The Court clarified that a probationary employee who is allowed to work after the probationary period becomes a regular employee under Article 281 of the Labor Code. Austria’s probationary period was for three months, ending on July 24, 2000. His continued work thereafter, coupled with the August 22, 2000 confirmation memorandum, converted his status to regular. The subsequent memorandum setting a September 17, 2000 endpoint was ineffective to impose a new fixed-term contract, as it was issued unilaterally by the employer after regularization had already occurred.
On the validity of dismissal, the Court found that petitioners failed to prove by substantial evidence the alleged grounds for termination. The charges of leaking test questions and gross inefficiency were not supported by convincing proof. Loss of trust and confidence, to be a valid cause, must be based on willful breach and must be substantiated. Here, the evidence was insufficient. Consequently, the dismissal was without just cause. As reinstatement was deemed not feasible, the award of separation pay in lieu of reinstatement and backwages was proper. The Court emphasized the security of tenure of regular employees, which can only be terminated for just or authorized causes established by the employer.