G.R. No. L-54448 October 28, 1983
UNIVERSITY OF SANTO TOMAS, et al., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and LIBRADO CANICOSA, respondents.

FACTS

Private respondent Librado Canicosa was appointed as an instructor and later served as the Medical Officer for the University of Santo Tomas (UST) and its hospital starting in 1950. Initially uncompensated, he later received a monthly salary. In 1974, due to his expressed dissatisfaction over his status, a reorganization formally created the position of Personnel Health Officer. By a letter dated August 6, 1974, he was appointed to this new position with defined duties, a slightly increased salary, and a fixed term ending October 31, 1975. Canicosa assumed the position in January 1975. After taking an approved leave abroad, he returned to find another person appointed to his position. UST refused to reinstate him, claiming his fixed-term appointment had lawfully expired.
The Labor Arbiter found the dismissal illegal, ordering reinstatement with full backwages. The National Labor Relations Commission (NLRC) affirmed this decision. UST elevated the case to the Supreme Court, arguing that Canicosa knowingly accepted a fixed-term contract, thereby abandoning his prior indefinite employment. They also contended that applying the amended Labor Code provisions, which strengthened security of tenure, to acts prior to its effectivity was erroneous.

ISSUE

Whether the termination of Librado Canicosa’s employment upon the expiration of the fixed period stipulated in his 1974 appointment was valid.

RULING

The Supreme Court dismissed the petition and upheld the NLRC’s decision, ruling the dismissal was illegal. The Court rejected UST’s argument that Canicosa abandoned his old position by accepting the new fixed-term appointment. It found that the positions of Medical Officer and Personnel Health Officer were substantively identical, involving the same duty of serving the medical needs of employees; the change was a mere alteration in title, not a fundamentally new office. Consequently, Canicosa’s long-term employment, spanning 25 years without any record of unsatisfactory service, had already vested in him a permanent status and the right to security of tenure.
The Court held that the imposition of a fixed term in the 1974 appointment was “clearly oppressive and arbitrary,” designed to circumvent this vested right. This conclusion was bolstered by evidence that the reorganization and term-setting were ill-motivated, aimed at easing Canicosa out due to his criticisms of hospital management. His tacit acceptance of the new terms was deemed ineffective against this backdrop of bad faith. The termination, therefore, constituted an illegal dismissal. The Court found no abuse of discretion in the NLRC’s application of the law, emphasizing the paramount policy of protecting security of tenure, and ordered Canicosa’s reinstatement with backwages.