G.R. No. 90492, August 20, 1990
FELISA D. CARANDANG, petitioner, vs. HON. CEFERINO E. DULAY, MIRASOL V. CORLETO AND ROBERTO P. TOLENTINO, as Commissioners of the NLRC, DIOCESAN SCHOOLS OF LA UNION AND CECILIA N. RIVERA, respondents.

FACTS

Petitioner Felisa D. Carandang was hired as a teacher by respondent Diocesan Schools of La Union from 1974 to 1979, after which she resigned. In February 1985, she applied for re-employment, stating in her letter that she was willing to undergo the “usual operational procedure.” She was re-hired in March 1985 and was later appointed as Officer-in-Charge (OIC) with the rank of principal for the school years 1986-87 and 1987-88. In a letter dated March 25, 1988, the school informed her that her contract as teacher and OIC would not be renewed for the following school year due to her failure to pass the evaluation for probationary employees.
The labor arbiter ruled in favor of Carandang, declaring her dismissal illegal and awarding backwages, separation pay (including her 1974-79 service), moral and exemplary damages, and attorney’s fees. The National Labor Relations Commission (NLRC) reversed this decision, holding that Carandang was a probationary employee validly separated within the three-year evaluation period under the Manual of Regulations for Private Schools for failing the performance evaluation.

ISSUE

Whether the NLRC committed grave abuse of discretion in ruling that petitioner was a probationary employee validly separated from service.

RULING

Yes, the NLRC committed grave abuse of discretion. The Supreme Court ruled that while Carandang correctly started as a probationary employee upon her re-employment in 1985, having resigned in 1979, she attained permanent status before her termination. Paragraph 75 of the Manual of Regulations provides that full-time teachers who have rendered three consecutive years of satisfactory service shall be considered permanent. This three-year period is the maximum probationary period; permanent status can be attained earlier upon proof of satisfactory service.
The Court found that Carandang’s permanent status was established before March 1988. She served continuously from March 1985, received successive appointments including as OIC/Principal, and her service was evidently satisfactory as she was retained and given additional responsibilities. The school’s claimed grounds for non-renewal—such as failing evaluation, violating policies, and improper conduct of ceremonies—were unsupported by evidence and found to be fabrications. As a permanent employee dismissed without just or authorized cause, her termination was illegal.
Consequently, she is entitled to backwages from her illegal dismissal until the finality of the resolution, and separation pay in lieu of reinstatement due to strained relations, computed at one month’s pay per year of service from March 1985 to March 1988 (not including her 1974-79 service, as she had resigned). The awards of moral damages (P10,000.00), exemplary damages (P5,000.00), and attorney’s fees equivalent to 10% of the total monetary award were reinstated as fair and reasonable.