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.

This special civil action for certiorari stemmed from a
complaint for reinstatement and backwages filed by
private respondent Carmelita B. Reyes against the petitioners University of
Santo Tomas (UST), Friar Pedro Escudero and Josefina
Aguilar, the Assistant Regent and Principal, respectively, of the Elementary
School Department of UST.

Carmelita B. Reyes
was appointed by petitioner UST on June 17, 1972 as a teacher with a “probationary rank” in the
latter’s Elementary School Department, “with all the duties, rights and
privileges appertaining thereto in accordance with the Statutes and Faculty
Code of the University and other existing rules and regulations” [Rollo, p. 7.] This appointment expressly provided that it was to take effect on July 5, 1972 and will terminate at the
end of the 1972-1973 school year.

On June 7,
1973, Reyes’s
appointment was renewed effective on June 4, 1973 and to terminate at the end of the school
year 1973-1974.  Her appointment was
again renewed on April 2, 1974, to take effect on June 3,
1974 and to terminate at the end of schoolyear 1974-1975. 
There was no mention in these two renewals whether her appointment was permanent or still
probationary.

On February
7, 1975, private
respondent Reyes received from petitioners a notice of termination of her
services, advising her that she will
not be given a new contract of appointment for the ensuing schoolyear.  Claiming
that she was illegally terminated she filed on February 14, 1975 a
complaint for reinstatement with
backwages with Regional Office No. IV of the
Department of Labor.

On November
13, 1975, Labor
Arbiter Ricarte T. Soriano
rendered a decision upholding the termination of Reyes but ordering petitioner to grant her separation pay equivalent to one and one-half months
pay.  The Labor Arbiter justified the
award in this wise:

*           *           *

Although the respondents have shown by overwhelming evidence to the
satisfaction of the undersigned that the dismissal was justified, hence,
reinstatement of the complainant is unwarranted, the undersigned Arbiter finds
it rather still reasonable to order respondents to pay complainant one-half month pay for every year of service.  The same is in line with the goals of the
Labor Code to be more sympathetic to the cause of the laborers. 
[Rollo, p. 68.]

From this decision of the Labor Arbiter, both parties appealed to
the National Labor Relations Commission (NLRC). 
The NLRC however found no valid cause for the termination and ordered petitioners to reinstate Reyes to her former
position with full backwages from the time her
services were terminated on February 7, 1975 up
to her actual reinstatement
without loss of seniority rights and other benefits appertaining thereto.

On appeal to the
Secretary of Labor, the then Acting Secretary of Labor, Amado
G. Inciong,
issued an Order dated November
22, 1977 modifying
the NLRC decision by deleting the order for the reinstatement of
Reyes and ordering petitioners to instead pay her
separation pay equivalent to one-half month salary for every year of service.

Private respondent
appealed to the Office of the President and on May 27, 1980, the Office of the President rendered a
decision reversing that of the Acting Secretary of Labor, the decretal portion of which reads:

In view of the foregoing, respondents-appellees
should reinstate complainant-appellant Carmelita B. Reyes to her former
position with full back wages from the time her services were terminated on February 7, 1975 up to her actual reinstatement, without loss
of seniority rights, as well as to other pertinent benefits.  [Rollo, p. 36.]

Hence, petitioner filed the instant special civil action for certiorari
seeking to annul the decision of the respondent Office of the President on the
principal ground that the private respondent Reyes has not been illegally terminated
and therefore, the order for her reinstatement with full backwages
had no legal basis.

The pivotal issue in this
case is whether grave abuse of discretion can be attributed to the respondent
Office of the President in holding that private respondent Reyes was dismissed illegally.

Petitioners maintain that
Reyes last appointment was one with a fixed period; i.e., from
June 3, 1974
until the end of the 1974-1975 school year, hence her employment was not covered by then Article 318* of the
Labor Code prohibiting dismissals without any just cause.  Petitioners assert that Reyes’ appointment
terminates upon expiration of the period fixed therein such that when Reyes was sent a notice of the
termination of her services as of the end of the 1974-1975 schoolyear,
petitioners were merely enforcing the provisions of her last appointment.  Moreover, Reyes’ employment was subject as
well to the UST Faculty Code which prescribes a three-year probationary period
in accordance with the 1970 Manual of Regulations for Private Schools.  That Code requires a third renewal of the
annual appointment in order that
a teacher may be considered permanent, thus:

*        *           *

The provisions of Sections 3 and 4 notwithstanding, faculty members
who have rendered three consecutive years (six semesters) of satisfactory
service on full time basis as determined by the pertinent rules of the
University and of the Bureau of Private Schools shall be considered permanent
upon the third renewal of their annual appointment.” x x x

*        *           *

[Rollo, p. 16.]

Petitioners maintain that
Reyes failed to render three consecutive years of satisfactory service [Rollo, pp. 16-17,]
as shown by her poor efficiency rating found established by the Labor Arbiter,
and that it is the third renewal of the appointment of Reyes
which is the operative act that will confer her a permanent status.  Since her appointment was not renewed for the
third time, petitioners insist that she has not attained permanent status [Rollo, p. 17.]

There is merit in the
petition.

The provisions of the Labor Code, in force at the time the cause
of action of Reyes accrued on February
7, 1975 (Villones v. Employees’
Compensation Commission, G.R. No. L-46200, July 30, 1979, 92 SCRA 320], states
that “(t)he termination of employment of probationary employees and those
employed with a fixed period shall be subject to such regulations as the
Secretary of Labor may prescribe to prevent the circumvention
of the right of the employees  to be secured in their
employment as provided herein”
[Section 320; Underscoring supplied.]

Under Section 6, Rule I, Book VI of the Rules Implementing the
Labor Code:

Section 6.  Probationary and
fixed period employment.  — (a) Where
the work for which an employee has been engaged is learnable or apprenticeable  in
accordance with the standards prescribed by the Department of Labor, the
probationary employment period of the employee shall be limited to the
authorized learnership or apprenticeable
period, whichever is applicable.

(b)     Where the work is
neither learnable nor apprenticeable the probationary
period of employment shall not exceed 6 months from the date the employee
actually started working.

*           *           *

However, the six-month probationary period prescribed by the
Secretary of Labor is merely the general rule.
 The recognized exceptions to this
rule, as further set forth in Policy Instructions No. 11 issued by the
Secretary of Labor on April 23, 1976,
are:

*           *           *

Probationary employment has been the subject of misunderstanding in
some quarters.  Some people believe six
(6) months is the probationary period in all
cases.  On the other hand,
employees who have already served the probationary period are sometimes
required to serve again on probation.

Under the Labor Code, six (6)
months is the general probationary period,
but the probationary period is actually
the period needed to determine fitness
for the job.  This
period, for lack of a better measurement,
is deemed to be the period needed to
learn the job.

Thus, if the job is apprenticeable, then the probationary
period is the apprenticeship period, which
may be six (6) months, less than
six (6) months, or more than six
(6) months, depending upon the nature of the job.  Therefore, upon graduation an apprentice may not be put under
probationary employment in the company in which he trained.  In another company, however, the probationary
period for him would be six (6) months. 
The reason is to allow the employer to test his working habits and other
personal traits with respect to his fitness for regularization in the
company.  If the job
is learnable = = can be learned within
three months = = then the probationary  period is three months
or less.  The learner upon
completion of the learning period must be considered regular.

The probationary employment of professors,
instructors and teachers shall be subject
to standards established by the Department
of Education and Culture.

*           *           *

[Rollo, p. 110;
Underscoring Supplied.]

It is thus clear that the
Labor Code authorizes different probationary periods according to the requirements of the particular
job.  For private school teachers, the
period of probation is governed by the
1970 Manual of Regulations for Private Schools, adopted by the Department of Education and Culture pursuant to the provisions of Act No. 2076, as amended
by Act No. 3075 and Commonwealth Act. No. 180. 
Paragraph 75 of the Manual provides that “(f)ull-time
teachers who have rendered three consecutive years of satisfactory service shall
be considered permanent,” while the preceding paragraph requires that the
employment contracts be in writing with at least one schoolyear’s
duration.  That the probationary period
for private school teachers is three years has already been confirmed by this
Court in the recent case of Labajo v. Alejandro
[G.R. No. 80383, September 26, 1988]
wherein it was declared:

*           *           *

The three (3)-year period of service mentioned in paragraph 75 (of
the Manual of Regulations for Private Schools) is of course the maximum
period or upper limit, so to speak, of probationary employment allowed in the
case of private school teachers.  This necessarily implies that a regular or
permanent employment status may, under certain conditions, be attained in less
than three (3) years.  By and large,
however, whether or not one has indeed attained permanent status in one’s
employment, before the passage of three (3) years, is a matter of proof. [at p. 7.]

*           *           *

The best proof as to whether
Reyes had already attained permanent status, is her contract with petitioner UST. 
That contract which was only the second renewal of her original
probationary appointment reads as follows:

April
2, 1974

Mrs. Carmelita Reyes

Elementary School Department

University
of Santo Tomas

Dear Mrs. Reyes,

Upon recommendation of the Elementary’s
Council of the ELEMENTARY SCHOOL DEPARTMENT

I have the pleasure to appoint you

TEACHER

with all the duties, rights and privileges
appertaining thereto in accordance with the Statutes and Faculty Code of the
University and other existing rules and regulations.

This appointment takes effect on June 3, 1974 and terminates at the end of the1974-1975
school year.

Sincerely,

(signed)

FR. EXCELSIO GARCIA,
O.P

Assistant to the Rector for

Academic Affairs

NON-TENURED

APPOINTMENT

ACCEPTED:

(signed)

CARMELITA B. REYES

DATED: June 3, 1974

The above contract reveals two significant points: 1) that the
contract is one with a definite period to start on June 3, 1974 to end at the close of the 1974-75 schoolyear and 2) that Reyes’ signature appears underneath
the words “NON-TENURED APPOINTMENT ACCEPTED.” These features in the
contract indicate that the appointment of Reyes subsists only for the 1974-75 schoolyear.  That the
contract contained the words “non-tenured appointment accepted”
reveals the nonpermanent status of her employment.  Nothing therein states that a permanent
appointment was extended to her nor that UST was obliged to extend her one upon
the expiration of the above contract.

Moreover no vested right to a permanent appointment had as yet
accrued in her favor since she had not yet completed the prerequisite three
year period necessary for the acquisition of permanent status, as required both
by the Manual of Regulations for Private Schools and the UST Faculty Code.  That her appointment was only for a fixed
duration is further evinced by the fact that on February 7, 1975, before the expiration of the
abovementioned contract, Reyes was served a notice that she may not expect her
appointment to be renewed the next schoolyear and
that her probationary employment was to
terminate at the close of the schoolyear
1974-75.  Although Reyes was allowed to
complete her term according to the stipulated period, indeed no new contract was extended her.  Reyes however construed the February 7, 1975 notice as a notice of termination and claims
that it constituted dismissal without
just cause and thus filed the
instant case.

Reyes’ argument is not
persuasive.  It loses sight of the fact that
her employment was probationary, contractual in nature, and one with a definite period.  At the expiration of the period stipulated in
the contract, her appointment was deemed terminated and the letter informing
her of the non-renewal of her contract is not a condition sine qua
non before Reyes may be deemed
to have ceased in the employ of
petitioner UST.  The notice is a mere reminder that Reyes’ contract of employment was due to expire and that the contract would no longer be renewed.  It is not a letter of termination.  The interpretation that the notice is only
reminder is consistent with the court’s finding in Labajo,
supra, where the Court in construing a similar letter sent to private
school teachers whose contracts with San Andres High School were due to expire said:

*           *           *

Such letter was either a formal reminder to private respondents
that their respective contracts of employment with petitioners for school year
1984-85 were due do expire on 31 March 1985, or advance notice that such contracts would no longer be
renewed for school year 1985-86, or both. 
[at p. 10.]

As to the question of the existence of just cause to justify the
dismissal, the Court finds applicable here the case of Biboso
v. Victorias Milling Company,
Inc., [G.R. No. L-44360, March
31, 1977, 76 SCRA 250, (1977).] 
In that case, the Court held that while probationary employees enjoy
security of tenure such that they cannot be removed except for cause as
provided by law, such protection extends only during the period of
probation.  Once that period expires, the constitutional protection
could no longer be invoked.  This has been reiterated in subsequent cases
[Manila Hotel Corporation v. NLRC, G.R. No. 53453, January 22, 1986, 141 SCRA
169; Euro-Linea, Phils.,
Inc. v. National Labor Relations Commission, G.R. No 75782, December
1, 1987, 156 SCRA
78; Labajo Alejandro, et al. supra.]

In the instant case,
the probation period provided is three
years covered by three separate
written annual contracts.  Reyes as a probationary and contractual employee was entitled to security of
tenure only during the three year period of her probation and such protection
ended the moment her last
employment contract expired at the close of schoolyear
1974-75 and she was not extended a renewal
of her appointment.

The Office of the
President therefore gravely abused it
discretion in finding that Reyes was illegally terminated, in ordering her reinstatement
and in awarding her backwages “from the time her services were terminated on February 7, 1975 up to her actual reinstatement”
[Rollo, p. 36.]

WHEREFORE, the decision of the respondent Office of the
President is hereby SET ASIDE, and the
Order of the Assistant Secretary of Labor dated November 22, 1977 is REINSTATED.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr.,
Feliciano, and Bidin,
JJ., concur.

* Now Art. 279 as amended.  Art. 318 then read as follows:

Art. 318. In cases of employment
without a definite period, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this chapter. An employee who is unjustly dismissed
from work shall be entitled to reinstatement
without loss of seniority rights and to his back wages computed from the time
his compensation was withheld from him up to the time of his reinstatement.