G.R. No. 183572; April 13, 2010
YOLANDA M. MERCADO, CHARITO S. DE LEON, DIANA R. LACHICA, MARGARITO M. ALBA, JR., and FELIX A. TONOG, Petitioners, vs. AMA COMPUTER COLLEGE-PARAÑAQUE CITY, INC., Respondent.

FACTS

The petitioners were non-tenured faculty members of AMA Computer College-Parañaque City, Inc. (AMACC), employed under individual Teacher’s Contracts renewed per trimester. For the school year 2000-2001, AMACC implemented new faculty screening guidelines, the Performance Appraisal System for Teachers (PAST), to evaluate faculty for retention and salary increases. The petitioners failed to obtain a passing rating under these new standards and were consequently denied a salary increase. They filed a complaint for underpayment and discriminatory practices.
Subsequently, AMACC sent the petitioners a “Notice of Non-Renewal of Contract,” informing them their contracts would not be renewed upon expiration. The petitioners amended their complaint to include illegal dismissal, alleging retaliation for their initial complaint. AMACC defended its action, stating non-renewal was due to the petitioners’ failure to meet the new PAST standards and other regularization requirements, which was within its management prerogative to maintain academic standards.

ISSUE

Whether the petitioners were illegally dismissed.

RULING

Yes, the petitioners were illegally dismissed. The Supreme Court affirmed the findings of the Labor Arbiter and the NLRC, albeit on a different legal basis. The Court clarified that the petitioners, as academic personnel on a trimester system, were governed by the Manual of Regulations for Private Schools, which sets a probationary period of nine consecutive trimesters of satisfactory service. The petitioners had not completed this period when their contracts were terminated.
The legal flaw in AMACC’s action was its imposition of new performance standards—the PAST guidelines—near the end of the petitioners’ probationary period. An employer cannot terminate a probationary employee for failure to meet reasonable standards if those standards were not made known to the employee at the start of the probation. AMACC failed to prove it had communicated these new criteria to the petitioners at the onset of their employment or probation. Furthermore, AMACC did not substantiate its claim of the petitioners’ failure with concrete evidence, such as their actual performance ratings or evaluation reports. The non-renewal, coming after the petitioners filed a complaint, was deemed tainted with bad faith. Consequently, AMACC was ordered to reinstate the petitioners and pay full backwages.