Risonar, Jr. vs. Cor Jesu College and/or Escuril

A fixed-term employment contract is impliedly renewed for the same period when the employer fails to send the employee the written notice of non-renewal required by the contract 30 days before the expiration of the term. The failure to comply with an express contractual notice requirement renders the termination of the employee's services without just or authorized cause illegal, entitling the employee to backwages and separation pay.

Atty. Marcos D. Risonar, Jr. was appointed Dean of the Law School of Cor Jesu College (CJC), a private educational institution, under a fixed-term employment contract. His appointment letter expressly provided that if CJC did not intend to renew or extend his appointment, he would be informed in writing 30 days before the term appointment ended. The validity of fixed-term employment contracts in educational institutions, particularly for positions like a Dean, is an established principle in Philippine labor law, where the fixed term is considered an essential and natural appurtenance of the appointment.

Atty. Marcos D. Risonar, Jr. was initially appointed Dean of the Law School of Cor Jesu College (CJC) effective August 1, 2003 until May 31, 2004. On June 7, 2004, his appointment was renewed for a term of three years effective June 1, 2004. His appointment letter provided that "if [CJC] does not intend to renew/extend [the petitioner's] appointment[,] he will be informed in writing 30 days before [the] term appointment ends."

After his three-year term ended on May 31, 2007, the petitioner had not received any notice of termination from CJC. Despite the lapse of the term of his appointment, he continued to perform his duties and proceeded to prepare for the forthcoming first semester of school year 2007-2008. In June 2007, Edgardo S. Escuril assumed office as President of CJC. On June 11, 2007, during a party held in honor of the retiree President of CJC, the petitioner was introduced to Escuril, but they did not discuss the status of the petitioner's appointment. On June 25, 2007, the petitioner met with Escuril, and they discussed the situation of the law school; the termination of the petitioner's services was not discussed.

On July 12, 2007, the petitioner received a letter from Escuril informing him that his services as Law School Dean were already terminated and that the new Dean would report on July 13, 2007 for a formal turn-over of office and responsibilities. The petitioner immediately called Escuril to express his disappointment regarding the manner of terminating his service. On July 13, 2007, the petitioner wrote Escuril to protest the termination, pointing out that the written notice of termination was sent and received well beyond the 30-day period indicated in his appointment letter. The respondents ignored the petitioner's protest.

The petitioner claimed that he should have been considered a regular employee since he had continuously and uninterruptedly worked for CJC for four years and performed activities necessary and desirable in the usual business of CJC. He further averred that the respondents' failure to send the required written notice resulted in the automatic renewal of his appointment for another three-year term starting from June 1, 2007. The respondents, for their part, claimed that the petitioner's appointment was a term employment that expired on May 31, 2007, and that the petitioner was orally informed that his term would no longer be renewed. They alleged that the petitioner knew he held the office only temporarily and in a hold-over capacity, and that the lack of written notice was inconsequential since the employment was terminated by reason of the expiration of the period stated in the appointment letter.

• Automatic Renewal: Petitioner argued that the respondents' duty to send him a written notice of termination 30 days prior to the expiration of the term of his appointment was a contractual duty, and their failure to do so resulted in the automatic renewal of his original appointment for another three years.
• Regular Employment: Petitioner argued that he should be considered a regular employee of CJC since he was allowed to work after the expiration of his term of employment and he performed activities which are usually necessary or desirable in the usual business or trade of CJC.
• Illegal Dismissal: Petitioner insisted that the NLRC did not abuse its discretion when it ruled that he was illegally dismissed from his employment, and that no just or authorized cause existed to warrant his dismissal.

• Expiration of Fixed-Term Contract: Respondents maintained that the petitioner's dismissal was valid since his fixed-term contract employment with CJC had already expired on May 31, 2007, and thus he was not illegally dismissed.
• Oral Notice: Respondents claimed that the petitioner was informed orally in a meeting that his term as Law School Dean would no longer be renewed, and that he knew he held the office only temporarily and in a hold-over capacity.
• Non-Regular Employment: Respondents averred that the petitioner could not be considered a regular employee of CJC considering that he had not been in the continued service of CJC for more than two years after the expiration of the term of his appointment as Law School Dean.
• Inconsequential Lack of Written Notice: Respondents argued that the lack of a written notice of termination was inconsequential since the petitioner's employment was terminated by reason of the expiration of the period stated in the appointment letter.

• Nature of Employment: Whether the petitioner's employment with CJC was regular or fixed-term employment.
• Implied Renewal: Whether the respondents' failure to send the petitioner the required written notice of termination 30 days prior to the expiration of his term resulted in the automatic renewal or extension of his appointment.
• Illegal Dismissal: Whether the petitioner was illegally dismissed and is entitled to backwages and separation pay.

• Nature of Employment: Fixed-term. The petitioner's employment was a fixed-term employment, not regular employment, since the validity of fixed-term employment contracts is settled where the duties consist of activities necessary or desirable in the usual business of the employer, and the fixed period was knowingly and voluntarily agreed upon by the parties on equal terms.
• Implied Renewal: Yes. The respondents' failure to send the required written notice of termination 30 days prior to the expiration of the term logically and necessarily inferred that CJC intended to renew the petitioner's appointment under the same terms and conditions of the original appointment, rendering the petitioner's second term another three years from June 1, 2007 until May 31, 2010.
• Illegal Dismissal: Yes. The petitioner was illegally dismissed since the termination letter provided no just or authorized cause for dismissal, and the petitioner is entitled to backwages computed from the time his compensation was withheld until May 31, 2010, separation pay equivalent to one month salary for every year of service, and attorney's fees of ten percent of the total monetary awards.

• Nature of Employment: The Court held that the petitioner's employment was a fixed-term employment, contrary to his assertion of regular employment. Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period. A contract of employment with a fixed period necessitates that: (1) the fixed period was knowingly and voluntarily agreed upon by the parties without force, duress, or improper pressure, and without circumstances vitiating consent; or (2) it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance exercised by the former. The Court found it indisputable that the petitioner and CJC knowingly and voluntarily agreed upon the fixed period, dealing with each other on equal terms, since appointments to the position of Dean of an educational institution involve an employment contract to which a fixed term is an essential and natural appurtenance.

• Implied Renewal: The Court disagreed with the CA's ruling that the petitioner's fixed-term contract ended automatically after its expiration. The pertinent portion of the appointment letter was clear: should CJC fail to send the required written notice of termination 30 days prior to the expiration of the term, it can be logically and necessarily inferred that CJC intended to renew the petitioner's appointment under such terms and conditions set forth in his original appointment. A contrary interpretation would render inutile the notice requirement. The Court applied Article 1377 of the Civil Code, which provides that the interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity. The conclusion was bolstered by the fact that the respondents allowed the petitioner to continue serving as Law School Dean after the lapse of his original term. The respondents' claim of hold-over capacity was rejected, citing the principle "Commodum ex injuria sua nemo habere debet" — no one should obtain an advantage from his own wrongdoing. The CA's observation that Escuril could not have complied with the 30-day notice because he was only appointed President effective June 1, 2007 was immaterial, since the appointment letter was executed by and between the petitioner and CJC, and CJC, through its previous President, should have sent the required notice.

• Illegal Dismissal: The Court held that fixed-term employees are akin to project employees and enjoy security of tenure albeit limited to the duration of the term indicated in the employment contract. A fixed-term employee, prior to the expiration of the term, may not be dismissed except for a just or authorized cause provided by law or the employment contract and after due process has been afforded. Since the petitioner's appointment was automatically renewed for another three years (June 1, 2007 to May 31, 2010), and the termination letter merely indicated that the petitioner was about to be replaced without providing any reason, the dismissal was illegal for lack of just or authorized cause. The normal consequences of illegal dismissal are reinstatement and payment of backwages; where reinstatement is no longer viable, separation pay equivalent to one month salary for every year of service should be awarded as an alternative, in addition to backwages. Considering that the petitioner's second term was only until May 31, 2010, the monetary awards were limited to such period. Attorney's fees of ten percent were awarded pursuant to Article 111 of the Labor Code, and legal interest at six percent per annum was imposed from the finality of the Decision until fully paid.

• Fixed-Term Employment — A contract of employment with a fixed period is valid where: (1) the fixed period was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear on the employee and without any circumstances vitiating consent; or (2) it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period. The Court applied this doctrine to uphold the validity of the petitioner's fixed-term appointment as Law School Dean, finding that the parties dealt with each other on equal terms.

• Implied Renewal of Fixed-Term Employment — Where an employment contract expressly requires the employer to give the employee written notice of non-renewal 30 days before the expiration of the term, the employer's failure to send such notice logically and necessarily infers an intention to renew the appointment under the same terms and conditions of the original appointment. The Court applied this principle to find that the petitioner's appointment was renewed for another three-year term from June 1, 2007 to May 31, 2010.

• Security of Tenure of Fixed-Term Employees — Fixed-term employees are akin to project employees and enjoy security of tenure albeit limited to the duration of the term indicated in the employment contract. A fixed-term employee, prior to the expiration of the term specified in the employment contract, may not be dismissed except for a just or authorized cause provided by law or the employment contract and after due process has been afforded to the employee. The Court applied this doctrine to find that the petitioner's dismissal without just or authorized cause was illegal.

• Commodum ex Injuria Sua Nemo Habere Debet — No one should obtain an advantage from his own wrongdoing. The Court applied this principle to reject the respondents' claim that the petitioner held the position in a hold-over capacity, since it was CJC that prepared the appointment and obligated itself to notify the petitioner in writing 30 days prior to its expiration if it no longer wanted to renew or extend the appointment.

• "Should CJC fail to send the petitioner the required written notice of termination 30 days prior to the expiration of the term of the original appointment, as what happened in this case, it can be logically and necessarily inferred that CJC intended to renew the petitioner's appointment as Law School Dean under such terms and conditions set forth in his original appointment. A contrary interpretation would render inutile the requirement on the part of CJC to send the petitioner a written notice informing him his appointment would no longer be renewed." — This passage articulates the core ratio decidendi: the contractual notice requirement implies automatic renewal upon the employer's failure to comply, as a contrary interpretation would render the requirement meaningless.

• "Fixed-term employees are akin to project employees. The period of employment of fixed-term employees has been fixed prior to engagement while the project employees' employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined likewise at the time of the engagement. A project employee enjoys security of tenure; he may not be dismissed prior to the completion or termination of the project or undertaking except for a just or authorized cause provided by law and after due process has been properly complied with. Similarly, fixed-term employees also enjoy security of tenure albeit limited to the duration of the term indicated in the employment contract." — This passage establishes the doctrinal framework equating fixed-term employees with project employees for purposes of security of tenure, limiting protection to the duration of the term.

• "Commodum ex injuria sua nemo habere debet. No one should obtain an advantage from his own wrong doing. It is [CJC] that prepared the appointment and obligated upon itself to notify [the petitioner] in writing thirty (30) days prior to its expiration if it no longer wanted to renew or extend said appointment. [CJC] should not be allowed to have an advantage arising [from] its own mistake or negligence." — This passage, quoted from the NLRC, applies the equitable principle that the employer cannot benefit from its own failure to comply with the contractual notice requirement.

• Brent School, Inc. vs. Zamora, 260 Phil. 747 (1990) — Cited as controlling authority for the proposition that appointments to the position of Dean of an educational institution involve an employment contract to which a fixed term is an essential and natural appurtenance.
• Labayog vs. M.Y. San Biscuits, Inc., 527 Phil. 67 (2006) — Cited for the principle that where the duties of the employee consist of activities which are necessary or desirable in the usual business of the employer, the parties are not prohibited from agreeing on the duration of employment.
• AMA Computer College, Parañaque, and/or Amable C. Aguiluz IX vs. Austria, 536 Phil. 745 (2007) — Cited for the proposition that Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period.
• Caparoso vs. Court of Appeals, 544 Phil. 721 (2007) — Cited for the requisites of a valid fixed-term employment contract.
• Archbuild Masters and Construction, Inc. vs. NLRC, 321 Phil. 869 (1995) — Cited for the principle that a project employee enjoys security of tenure and may not be dismissed prior to the completion of the project except for just or authorized cause and after due process.
• Macasero vs. Southern Industrial Gases Philippines and/or Lindsay, 597 Phil. 494 (2009) — Cited for the normal consequences of illegal dismissal: reinstatement without loss of seniority rights and payment of backwages, with separation pay as an alternative where reinstatement is no longer viable.
• Lambert Pawnbrokers and Jewelry Corporation, et al. vs. Binamira, 639 Phil. 1 (2010) — Cited for the principle that where an employee was forced to litigate and incurred expenses to protect his rights and interest, the award of attorney's fees is legally and morally justifiable.
• Garza vs. Coca-Cola Bottlers Philippines, Inc., et al., 725 Phil. 41 (2014); Nacar vs. Gallery Frames, et al., 716 Phil. 267 (2013) — Cited for the imposition of legal interest at the rate of six percent per annum from the finality of the Decision until fully paid.

• Article 280, Labor Code — Defines regular and casual employment. The Court applied this provision to determine that the petitioner's employment was fixed-term, not regular, since Article 280 does not proscribe or prohibit an employment contract with a fixed period.
• Article 1377, Civil Code — Provides that the interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity. The Court applied this provision to interpret the appointment letter against CJC, which prepared the contract and caused any ambiguity.
• Article 111, Labor Code — Governs attorney's fees in cases of unlawful withholding of wages, allowing assessment of attorney's fees equivalent to ten percent of the amount of wages recovered. The Court applied this provision to award attorney's fees of ten percent of the total monetary awards.

Velasco, Jr. (Chairperson), Peralta, Perez, and Jardeleza, JJ., concurred.