De La Salle Araneta University, Inc. vs. Dr. Eloisa G. Magdurulang

A probationary employee who is constructively dismissed is entitled only to the benefits appurtenant to the unexpired portion of the fixed-term contract then in effect, not to benefits covering the entire remainder of the probationary period. For academic personnel in private higher education institutions, regular or permanent status requires: (a) full-time employment; (b) completion of the required probationary period of six consecutive semesters or nine consecutive trimesters; and (c) satisfactory service. Mere completion of the probationary period does not ipso facto make the employee permanent, as the decision to re-hire belongs to the educational institution alone.

Petitioner De La Salle Araneta University, Inc. is a private educational institution for higher education. Respondent Dr. Eloisa G. Magdurulang was hired as a faculty member, initially on a part-time basis and later as a full-time faculty member and BSBA Program Coordinator. The employment of academic personnel in private higher education institutions is governed not by the Labor Code's general six-month probationary rule but by the standards established by the Commission on Higher Education, specifically Sections 117 and 118 of the Manual of Regulations for Private Higher Education (MORPHE), which the 2009 DLSAU Personnel Handbook expressly adopts.

Respondent Dr. Eloisa G. Magdurulang was initially hired by petitioner De La Salle Araneta University, Inc. as a part-time faculty member for the College of Business for the second semester of SY 2007-2008 (November 5, 2007-March 18, 2008) and the summer semester of 2008 (March 31, 2008-May 13, 2008). For the second semester of SY 2008-2009 (October 13, 2008-May 31, 2009), she was appointed as a full-time faculty member and BSBA Program Coordinator, with the designation renewed for the first and second semesters of SY 2009-2010 (June 1, 2009-May 31, 2010).

During the pendency of respondent's contract for SY 2009-2010, the University's Acting Assistant Dean recommended to the University President that respondent be accorded permanent status effective the second semester of SY 2009-2010. While the University President initially acceded to the recommendation, he ultimately did not extend a permanent appointment, citing Section 117 of the MORPHE, which provides that the probationary employment of academic teaching personnel shall not be more than six consecutive semesters or nine consecutive trimesters of satisfactory service. Instead, on November 4, 2009, the University President issued a reappointment to respondent as full-time faculty member and BSBA Program Coordinator for the first and second semesters of SY 2010-2011 (June 1, 2010-May 31, 2011), with a re-classified ranking of Assistant Professor 4 on a contractual basis.

Respondent wrote a letter dated January 18, 2010 asking clarification as to why her rank was changed from Associate Professor 2 to Assistant Professor 4, resulting in diminution of salaries and benefits, and why she was not extended a permanent appointment despite the favorable recommendation. The University President responded on February 23, 2010, explaining that she could not be extended a regular and permanent appointment because she had yet to finish the probationary period of six straight semesters under Section 3.1.3 of the 2009 DLSAU Personnel Handbook, which adopts Section 117 of the MORPHE. On July 20, 2010, respondent wrote another letter reiterating her concerns to the new University President, but before he could answer, she filed a complaint claiming that despite her reappointment for SY 2010-2011, she was no longer given any teaching load and her position as BSBA Program Coordinator was discontinued. Respondent insisted she had already attained regular employee status since she had been teaching for about three years beginning in 2007, and considering the Acting Assistant Dean's recommendation for her permanent appointment.

Petitioner countered that it neither constructively nor actually dismissed respondent, maintaining that she had yet to complete the probationary period of six consecutive semesters under the MORPHE and the 2009 DLSAU Personnel Handbook. Petitioner pointed out that respondent's appointments throughout her probationary employment were on a fixed-term basis, which she voluntarily and freely accepted, and that it was within the university's prerogative to re-hire her or not at the end of such contracts. The Labor Arbiter dismissed the complaint, but the NLRC reversed, declaring respondent constructively dismissed. The CA modified the NLRC ruling, deleting reinstatement but awarding backwages for three semesters.

• No Constructive Dismissal: Petitioner argued that it neither constructively nor actually dismissed respondent, maintaining that it could not appoint her to a regular and permanent position because she had yet to complete the probationary period of six consecutive semesters under the MORPHE and the 2009 DLSAU Personnel Handbook.
• Fixed-Term Contracts: Petitioner pointed out that respondent's appointments throughout her probationary employment were on a fixed-term basis, which she voluntarily and freely accepted, and that it was within the university's prerogative to re-hire her or not at the end of such contracts.

• Regular Employee Status: Respondent insisted that she had already attained the status of a regular employee since she had been teaching for about three years beginning in 2007, and considering that the Acting Assistant Dean had recommended her permanent appointment.
• Constructive Dismissal: Respondent claimed that despite her reappointment for SY 2010-2011, she was no longer given any teaching load and her academic administrative position as BSBA Program Coordinator was discontinued, constituting constructive dismissal.

• Probationary Status: Whether respondent was a probationary employee who had not yet acquired regular and permanent status.
• Constructive Dismissal: Whether respondent was constructively dismissed by petitioner, entitling her to benefits appurtenant to the remainder of her probationary period.

• Probationary Status: Yes. Respondent was a probationary employee who failed to acquire regular and permanent status because she had not completed the required six consecutive semesters of probationary service under Section 117 of the MORPHE, her part-time appointments not being countable for regularization purposes.
• Constructive Dismissal: Yes, but with modification. Respondent was constructively dismissed when petitioner unjustifiably deprived her of teaching loads and her functions as BSBA Program Coordinator during the pendency of her appointment for both semesters of SY 2010-2011, but she is entitled only to benefits sourced from her last fixed-term contract covering two semesters, not the entire remainder of her probationary period.

• Probationary Status: The Court applied the rule that the probationary period of academic personnel in private higher education institutions is governed not by the Labor Code's general six-month rule but by the MORPHE. Under Sections 117 and 118 of the MORPHE, for an academic personnel to acquire regular and permanent status, three requisites must concur: (a) full-time employment; (b) completion of the required probationary period of six consecutive semesters or nine consecutive trimesters; and (c) satisfactory service. While respondent complied with the first and third requisites, the second was absent. Her appointments for the second semester of SY 2007-2008 and the summer semester of SY 2008 were on a part-time basis and cannot be counted for regularization. Her full-time appointments for the second semester of SY 2008-2009 and both semesters of SY 2009-2010 consisted only of three consecutive semesters. Even if her full-time appointment for both semesters of SY 2010-2011 were counted, she would only have five consecutive semesters as a full-time professor, still short of the six-semester requirement. The Court also rejected the NLRC's theory that respondent's probationary period was effectively shortened by the Acting Assistant Dean's recommendation, holding that absent circumstances unmistakably showing an agreed abbreviated probationary period, the default probationary term governs. Mere completion of the probationary period does not ipso facto make the employee permanent, as the decision to re-hire belongs to the educational institution alone, consistent with academic freedom and constitutional autonomy.
• Constructive Dismissal: The Court affirmed the CA's ruling that respondent, as a probationary employee, enjoyed limited security of tenure during her probation — she could not be terminated except for just or authorized causes, or if she failed to qualify in accordance with reasonable standards prescribed by petitioner. Petitioner's unjustified acts of depriving her of teaching loads and her functions as BSBA Program Coordinator during the pendency of her appointment for both semesters of SY 2010-2011 constituted constructive dismissal. However, the Court found that the CA erred in awarding respondent benefits for the entire remainder of her probationary period. Citing Magis Young Achievers' Learning Center vs. Manalo, the Court noted that it is an accepted practice among educational institutions to split probationary employment into numerous fixed-term contracts, and it is only when the probationary contract does not indicate any period that it will be assumed the employee was hired for the entire duration of the probationary employment. Respondent's probationary employment lasting five semesters was split into three separate fixed-term contracts: (a) Appointment dated September 23, 2008 for the second semester of SY 2008-2009; (b) Appointment dated May 26, 2009 for both semesters of SY 2009-2010; and (c) Appointment dated November 4, 2009 for both semesters of SY 2010-2011. Since respondent's constructive dismissal occurred during the effectivity of her last contract, she was entitled only to the benefits arising from such contract, and petitioner could not be made to pay benefits for the last semester of probationary employment as there was simply no contract covering the same.

• Probationary Employment of Academic Personnel — The probationary period of employment of academic personnel such as professors, instructors, and teachers, including the determination of whether they have attained regular or permanent status, is governed not by the Labor Code but by the standards established by the Department of Education and the Commission on Higher Education. For private higher education institutions, Section 117 of the MORPHE provides that the probationary employment of academic teaching personnel shall not be more than six consecutive semesters or nine consecutive trimesters of satisfactory service.
• Requisites for Regular or Permanent Status of Academic Personnel — For an academic personnel to acquire regular and permanent employment status, three requisites must concur: (a) he is considered a full-time employee; (b) he has completed the required probationary period; and (c) his service must have been satisfactory. Mere completion of the probationary period does not ipso facto make the employee permanent, as the decision to re-hire belongs to the educational institution alone.
• Fixed-Term Contracts in Probationary Employment — It is an accepted practice among educational institutions that probationary employment is split into numerous fixed-term contracts so that the employer will be given the flexibility to no longer continue with the employee's probationary employment should it become apparent that the latter does not meet the former's standards. It is only when the probationary contract does not indicate any period that it will be assumed that the employee was hired for the entire duration of the probationary employment.
• Limited Security of Tenure of Probationary Employees — A probationary employee enjoys limited security of tenure during the period of probation — that is, he cannot be terminated except for just or authorized causes, or if he fails to qualify in accordance with reasonable standards prescribed by the employer for the acquisition of permanent status.

• "The common practice is for the employer and the teacher to enter into a contract, effective for one school year. At the end of the school year, the employer has the option not to renew the contract, particularly considering the teacher's performance. If the contract is not renewed, the employment relationship terminates. If the contract is renewed, usually for another school year, the probationary employment continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract. If renewed, this second renewal of the contract for another school year would then be the last year - since it would be the third school year - of probationary employment. At the end of this third year, the employer may now decide whether to extend a permanent appointment to the employee, primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. For the entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his contract of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his employment contract." — This passage from Magis Young Achievers' Learning Center vs. Manalo, quoted by the Court, establishes the accepted practice of splitting probationary employment into fixed-term contracts and the rule that a probationary employee cannot compel renewal of his contract.
• "It is important that the contract of probationary employment specify the period or term of its effectivity. The failure to stipulate its precise duration could lead to the inference that the contract is binding for the full three-year probationary period." — This quotation states the rule that a probationary contract without a specified period is presumed to cover the entire probationary period, which the Court applied to determine the extent of respondent's entitlement to benefits.
• "While the period of probation may be reduced if the employer voluntarily extends a permanent appointment even before the end of such period, it must be pointed out that absent circumstances which unmistakeably show that an abbreviated probationary period has been agreed upon, the default probationary term still governs." — This passage articulates the rule that the default probationary term governs unless there are unmistakable circumstances showing an agreed abbreviated period, which the Court applied to reject the NLRC's finding that respondent's probationary period was effectively shortened.

• Magis Young Achievers' Learning Center vs. Manalo, 598 Phil. 886 (2009) — Controlling precedent on the practice of splitting probationary employment into fixed-term contracts and the rule that a probationary employee cannot compel renewal of his contract. The Court applied this case to determine that respondent was entitled only to benefits from her last fixed-term contract.
• Lacuesta vs. Ateneo de Manila University, 513 Phil. 329 (2005) — Cited for the rule that the probationary period of academic personnel is governed by standards established by the Department of Education and the Commission on Higher Education, and for the requisites for acquiring regular or permanent status.
• St. Paul College Quezon City vs. Ancheta, 672 Phil. 497 (2011) — Cited for the definition of a probationary employee as one who is on trial for an employer during which the latter determines whether the former is qualified for permanent employment.
• Universidad De Sta. Isabel vs. Sambajon, Jr., 731 Phil. 235 (2014) — Cited for the rule that a probationary employee enjoys limited security of tenure during the period of probation.
• Quebral vs. Angbus Construction, Inc., G.R. No. 221897, November 7, 2016 — Cited for the standard of review in Rule 45 petitions in labor cases, where the Court examines the CA's decision from the prism of whether the CA correctly determined the presence or absence of grave abuse of discretion in the NLRC decision.

• Article 296 (formerly Article 281), Labor Code — Provides the general rule that probationary employment shall not exceed six months from the date the employee started working, unless covered by an apprenticeship agreement stipulating a longer period. The Court noted this as the general rule, with the probationary period of academic personnel being the exception.
• Section 117, Manual of Regulations for Private Higher Education (MORPHE) — Provides that the probationary employment of academic teaching personnel shall not be more than six consecutive semesters or nine consecutive trimesters of satisfactory service. The Court applied this provision to determine that respondent had not completed the required probationary period.
• Section 118, Manual of Regulations for Private Higher Education (MORPHE) — Provides that a full-time academic teaching personnel who has satisfactorily completed his probationary employment and possesses the minimum qualifications shall acquire regular or permanent status if re-hired or re-appointed immediately after the end of his probationary employment. The Court applied this provision to determine the requisites for regular and permanent status.
• Section 3.1.3, 2009 DLSAU Personnel Handbook — Expressly adopts Section 117 of the MORPHE regarding the probationary period of six straight semesters. The University President cited this provision in explaining why respondent could not yet be extended a permanent appointment.

• Carpio, J. (Chairperson)
• Peralta, J.
• Caguioa, J.

• Reyes, Jr., J. — On official leave; no dissenting opinion was rendered.