G.R. No. L-57822, April 26, 1989
FR. PEDRO ESCUDERO, O.P., JOSEFINA AGUILAR and UNIVERSITY OF SANTO TOMAS, petitioners, vs. OFFICE OF THE PRESIDENT OF THE PHILIPPINES and CARMELITA B. REYES, respondents.

FACTS

Private respondent Carmelita B. Reyes was appointed by petitioner University of Santo Tomas (UST) as a probationary teacher in its Elementary School Department for the school year 1972-1973. Her appointment was renewed for the next two consecutive school years, 1973-1974 and 1974-1975, with each contract specifying a termination date at the end of the respective school year. On February 7, 1975, before the expiration of her third contract, Reyes received a notice from UST advising her that she would not be given a new contract for the ensuing school year. Reyes filed a complaint for illegal dismissal and sought reinstatement with backwages. The Labor Arbiter upheld the termination but awarded separation pay. The National Labor Relations Commission (NLRC) later found the dismissal illegal and ordered reinstatement with backwages. The Secretary of Labor modified this by deleting the reinstatement order and retaining only the separation pay. On appeal, the Office of the President reversed the Secretary of Labor and reinstated the NLRC’s decision ordering Reyes’s reinstatement with full backwages.

ISSUE

Whether the Office of the President committed grave abuse of discretion in ruling that private respondent Carmelita B. Reyes was illegally dismissed and in ordering her reinstatement with backwages.

RULING

Yes, the Office of the President committed grave abuse of discretion. The Supreme Court ruled that Reyes was a probationary employee whose employment was governed by a fixed-term contract. Her initial and subsequent renewed appointments were expressly limited to one school year each. Under the UST Faculty Code, which incorporated the 1970 Manual of Regulations for Private Schools, a teacher acquires permanent status only upon the third renewal of an annual appointment after rendering three consecutive years of satisfactory service. Reyes’s third contract for school year 1974-1975 was the final year of her probationary period. The notice sent on February 7, 1975, was not a letter of termination but a reminder that her fixed-term contract was due to expire and would not be renewed. As held in Biboso v. Victorias Milling Co., Inc., probationary employees enjoy security of tenure only during the probationary period. Once that period expires, as fixed by contract, the constitutional protection ceases. Since Reyes’s last contract ended by its own terms, and she was not extended a renewal, there was no illegal dismissal. The expiration of a fixed-term contract is a separate juridical concept from dismissal for cause. Consequently, the order for reinstatement and backwages had no legal basis. The Court set aside the decision of the Office of the President and reinstated the Order of the Secretary of Labor awarding separation pay only.