GR 194906; (September, 2015) (Digest)
G.R. No. 194906 September 9, 2015.
LORALEI P. HALILI, Petitioner, vs. JUSTICE FOR CHILDREN INTERNATIONAL, ROB MORRIS, and GUNDELINA A. VELAZCO, Respondents.
FACTS
Petitioner Loralei P. Halili was hired by respondent Justice For Children International (JFCI), an international non-governmental organization, as its Consultant Program Coordinator on April 18, 2006. Her employment contract was for a fixed term of one year, from May 15, 2006 to May 14, 2007. The contract contained a termination clause stating that either party may terminate the agreement “at anytime by giving four (4) weeks written notice.” On July 13, 2006, JFCI enforced this clause by informing Halili that her services were being terminated, effective August 16, 2006. Halili filed a complaint for illegal dismissal before the National Labor Relations Commission (NLRC). She argued that while the termination clause existed, its arbitrary exercise violated the doctrine of abuse of rights and that JFCI failed to observe due process. Respondents countered that no employer-employee relationship existed and, even assuming one did, there was no illegal dismissal as her employment was for a term that lapsed upon notice. The Labor Arbiter ruled in favor of Halili, ordering payment of unpaid salaries for the contract’s unexpired portion. The NLRC affirmed this decision. The Court of Appeals reversed the NLRC, upholding the validity of the termination clause and finding the dismissal valid. Halili elevated the case to the Supreme Court via a petition for review on certiorari.
ISSUE
Whether or not the Court of Appeals erred in granting respondents’ petition for certiorari, thereby validating the termination of Halili’s employment based solely on the contract’s termination clause without requiring a legal cause.
RULING
The Supreme Court GRANTED the petition, REVERSED and SET ASIDE the Decision of the Court of Appeals, and REINSTATED the NLRC Decision and Resolution which found Halili’s dismissal illegal.
The Court ruled that applicable laws are read into every contract, especially labor contracts which are imbued with public interest. While the fixed-term employment contract contained a clause allowing termination “at anytime” upon four weeks’ written notice, this clause could not be interpreted as a blanket license to terminate without cause. For the clause to be operative, the party invoking it must have: (1) a legal cause for terminating the contract, and (2) notify the other party in writing four weeks prior. The contract’s silence on the need for a legal cause did not sufficiently show an intent to dispense with it. The Court distinguished the case from Price v. Innodata Phils., Inc., where a contract explicitly allowed termination “with or without cause,” which was struck down as invalid for disregarding security of tenure. Here, JFCI failed to prove any just or authorized cause for Halili’s dismissal by substantial evidence. Furthermore, respondents’ belated argument of loss of trust and confidence could not be considered as it was raised for the first time on appeal. Consequently, the pre-termination was infirm, and the NLRC did not gravely abuse its discretion in ruling the dismissal illegal.