LOLITA R. LACUESTA, PETITIONER, VS. ATENEO DE MANILA UNIVERSITY, DR. LEOVINO MA. GARCIA AND DR. MARIJO RUIZ, RESPONDENTS.

Lacuesta versus Ateneo de Manila University

The Case

This is a petition for review on certiorari brought by Lolita Lacuesta against Ateneo de Manila University and two of its deans, Dr. Leovino Garcia and Dr. Marijo Ruiz. Lacuesta claims she was illegally dismissed from her teaching post and seeks reinstatement, back wages, and damages. The case matters because it settles a question examiners love: for faculty members of private educational institutions, which law governs the acquisition of permanent status — the Labor Code, or the Manual of Regulations for Private Schools? The Court also speaks on the validity of quitclaims and on the academic freedom of institutions of higher learning.

Procedural History

Lacuesta filed a complaint for illegal dismissal with the Labor Arbiter. The Labor Arbiter ruled in her favor, holding that she could not be terminated by the mere lapse of her probationary period but only for just cause or failure to meet the employer's standards, and that her quitclaim did not bar her complaint. He ordered reinstatement with full back wages. On appeal, the National Labor Relations Commission reversed the Labor Arbiter, finding no illegal dismissal and upholding the quitclaim as valid. Lacuesta's motion for reconsideration was denied. She then filed a petition for certiorari before the Court of Appeals, which dismissed the petition, found no grave abuse of discretion, and affirmed the Commission. Hence, this petition for review on certiorari before the Supreme Court.

Facts

Ateneo hired Lacuesta on a contractual basis as a part-time lecturer in its English Department for the second semester of school year 1988 to 1989, and re-hired her on the same basis for both semesters of school year 1989 to 1990. On July 13, 1990, she was first appointed as a full-time instructor on probation, effective June 1, 1990 until March 31, 1991. Her probationary contract was renewed twice, for a second year until March 31, 1992, and a third year until March 31, 1993. During these three years she was on probation status.

In a letter dated January 27, 1993, Dean Leovino Garcia notified her that her contract would no longer be renewed because she did not integrate well with the English Department. She appealed to the University President, Fr. Joaquin Bernas, S.J., who explained that she was not being terminated; her contract would simply expire. He noted that a permanent appointment is made only upon the recommendation of the Dean and confirmation of the Committee on Faculty Rank and Permanent Appointment, and that any appointment he might extend would be tantamount to a midnight appointment. He later offered her a job as book editor in the University Press. Lacuesta applied for clearance to collect her final salary as instructor and, on April 16, 1993, signed a Quitclaim, Discharge and Release.

She then worked as editor in the University Press from April 1, 1993 to March 31, 1994, with a two-month extension, and later agreed to extend her contract to October 31, 1994. She decided not to have her contract renewed due to a severe back problem, did not report back to work, and submitted her clearance on February 20, 1995. On December 23, 1996, she filed her complaint for illegal dismissal.

Issues

• Whether or not the Manual of Regulations for Private Schools, rather than the Labor Code, determines the acquisition of regular or permanent status of faculty members in an educational institution.
• Whether or not Lacuesta was illegally dismissed.
• Whether or not the quitclaim she signed bars her claims for illegal dismissal and for moral and exemplary damages.

Applicable Provisions

Section 93 of the 1992 Manual of Regulations for Private Schools provides:

Section 93. Regular or Permanent Status. Those who have served the probationary period shall be made regular or permanent. Full-time teachers who have satisfactorily completed their probationary period shall be considered regular or permanent.

This is the standard the Court applies to determine whether a faculty member has attained permanent status.

Section 92 of the same Manual provides:

Section 92. Probationary Period. Subject in all instances to compliance with Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on the trimester basis.

This fixes the probationary period for tertiary-level teachers, which bears on when permanent status may be acquired.

Article 281 of the Labor Code, invoked by the petitioner, provides:

Article 281. Probationary Employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

The Court rejects its application here, holding that the Manual, not the Labor Code, governs the status of faculty members.

Ruling

On the first issue, the Court ruled for the respondents. The Manual of Regulations for Private Schools, and not the Labor Code, determines whether a faculty member in an educational institution has attained regular or permanent status. Under Policy Instructions Number 11 of the Department of Labor and Employment, the probationary employment of professors, instructors, and teachers is subject to the standards established by the Department of Education and Culture, and those standards are embodied in the Manual. The requisites to acquire permanent employment, or security of tenure, are: the teacher is a full-time teacher; the teacher must have rendered three consecutive years of service; and such service must have been satisfactory. A part-time teacher cannot acquire permanent status, so the three semesters Lacuesta served as a part-time lecturer could not be credited to her.

On the second issue, the Court held that completing the probation period does not automatically qualify her as a permanent employee. She could qualify only upon fulfilling the reasonable standards for permanent employment. Consistent with academic freedom and constitutional autonomy, an institution of higher learning has the prerogative to provide standards for its teachers and to determine whether these standards have been met. At the end of the probation period, the decision to re-hire an employee on probation belongs to the university as the employer alone. Probationary employees enjoy security of tenure, but only within the period of probation, and upon expiration of their contract they cannot automatically claim security of tenure and compel their employers to renew. Lacuesta did not attain permanent status and was not illegally dismissed; her contract merely expired.

On the third issue, the Court held that not all quitclaims are per se invalid or against public policy, except where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or where the terms of settlement are unconscionable on their face. There was no showing that Lacuesta was coerced into signing the quitclaim, and nothing on its face was shown to be unconscionable. The quitclaim bars the present action.

Doctrine

For a Bar answer, state these rules. First, the Manual of Regulations for Private Schools, not the Labor Code, determines whether a faculty member of a private educational institution has attained regular or permanent status. Second, the requisites of permanent status are: the teacher is a full-time teacher; the teacher has rendered three consecutive years of service; and the service was satisfactory. Third, a part-time teacher cannot acquire permanent status, and part-time service is not credited toward the three-year requirement. Fourth, completing the probationary period does not automatically confer permanent status; the institution, consistent with academic freedom, sets reasonable standards and decides whether they are met, and the decision to re-hire belongs to the employer alone. Fifth, probationary employees enjoy security of tenure only within the probationary period, and upon expiration of the contract they cannot compel renewal. Sixth, quitclaims are not per se invalid; they are struck down only where the waiver was wangled from an unsuspecting or gullible person, or where the terms are unconscionable on their face.

Disposition

The petition was denied for lack of merit, and the Court of Appeals decision and resolution were affirmed; the respondents prevailed.

Remember This

Memorize this line: the Manual of Regulations for Private Schools, not the Labor Code, governs the permanent status of faculty, and a part-time teacher can never acquire it. Examiners use this case to test the Labor Code versus the Manual distinction, the requisites of faculty tenure, and the validity of quitclaims.