CA: no illegal dismissal in HNU ex-faculty’s case

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CA: no illegal dismissal in HNU ex-faculty’s case

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The Court of Appeals reversed an earlier ruling of the National Labor Relations Commission (NLRC) that a former member of the faculty of Holy Name University (HNU) had been illegally dismissed.

Setting aside the NLRC 7th Division’s decision, the 19th Division of the Court of Appeals (CA) reinstated on February 26 this year, the Labor Arbiter’s decision on February 27, 2012 stating that the concerned former faculty member, Arlene Palgan, was not illegally dismissed and that her term of employment simply expired.

This is contained in a 14-page decision penned by Associate Justice Edgardo Delos Santos as concurred by Associate Justice Ma. Luisa Quijano-Padilla and Associate Justice Marie Christine Azcarraga-Jacob.

Delos Santos pointed out in the decision that “mere completion of the three-year probation, even with an above-average performance, does not guarantee that the employee will automatically acquire a permanent employment status”.


The associate justice also cited that Palgan’s five-month clinical experience at Gov. Celestino Gallares Memorial Hospital fell short of the one-year clinical experience set by law as least minimum academic requirement to qualify to be a full-time member of the faculty in a college of nursing.

“Failure to possess the basic academic qualifications required for a faculty member logically divests her of the right to attain permanent status,” the Court of Appeals ruled.

Palgan was a faculty member of HNU College of Nursing and was first employed in the second semester of school year 1994-1995 as a probationary employee on a full-time basis.

HNU retained Palgan as a probationary employee on full-time basis in the succeeding school years 1995-1996, 1996-1997, and 1997-1998.

In the school years 1998-1999 and 1999-2000, Palgan served as part-time faculty member and served full-time again in school year 2000-2001.

Palgan stopped teaching in the school years 2001-2004 after she got elected as municipal councilor of Carmen.


She ceased to be connected with HNU for almost three years since then.


Sometime in 2004, Palgan rejoined HNU and was given a full-time load in the school years 2004-2005, 2005-2006 and 2006-2007–for which she signed contracts for faculty members on a term or semestral employment.

HNU, however, sent a notice dated February 28, 2007 to inform Palgan that her contract term of employment which would expire on March 31, 2007 would no longer be renewed.

Palgan filed a complaint on November 10, 2010 for illegal dismissal, pointing out that she was already a regular employee when her contract was not renewed by HNU.


She also claimed that she was not afforded due process and sought moral and exemplary damages.

Palgan cited that she had served HNU for more than six consecutive regular semesters with satisfactory and excellent performance and sterling qualifications.


Based on the Manual of Regulations for Private School Teachers, Palgan cited that she already attained the status of a regular employee.

Further citing the absence of any valid or justifiable cause for her dismissal as she had never been guilty of infractions under the Labor Code, Palgan asserted that her employment was illegally terminated.

However, HNU contended that Palgan was not dismissed but her contract of employment merely expired on March 31, 2007.

HNU cited that for the school years 1995-1996, 1996-1997 and 1997-1998, Palgan received letters of appointment for each and every semester.

Definite commencement and end of her employment had been indicated in the letters.

This shows that HNU had the right not to renew her contract when Palgan’s probationary appointment for the period June 1, 1997 until March 31, 1998 expired.

HNU further explained that in the school years 2004-2005, 2005-2006 and 2006-2007, Palgan remained a probationary employee.

This is the reason that while Palgan had served for six semesters, her mere completion of the probationary period did not automatically make her a permanent employee, aside from her failure to comply with all the conditions of her probationary period satisfactorily, according to HNU.

The Labor Arbiter rendered a decision dated February 27, 2012 that dismissed Palgan’s complaint for lack of merit.

The Labor Arbiter agreed that Palgan’s employment as a teacher was probationary in character.

It was also pointed out that permanent appointment needs completion of a three-year period as pre-requisite for a permanent status.

Rendering three years of service “does not automatically ripen into a permanent appointment since a teacher needs to work full-time with satisfactory service”.

Based on this premise, the Labor Arbiter agreed that HNU had the right not to renew Palgan’s contract of employment upon its expiration on March 21, 2011 as covered by management prerogative.

Since Palgan’s dismissal from work was not illegal, there was also no basis for the award of monetary claims.

The NLRC further affirmed the decision of the Labor Arbiter that Palgan was not illegally dismissed and that her term of employment simply expired.

The NLRC explained in its decision dated November 29, 2012 that the existence of the term-to-term contracts covering her employment was clear as she was hired on a semestral term basis.

When HNU no longer renewed her contract, that contract merely expired.

“Consequently, [Palgan] could not have attained permanent status,” according to the court.

Palgan filed a motion for reconsideration on which the NLRC issued a resolution dated March 27, 2013 that set aside its November 29, 2012 decision.

This time, the NLRC believed Palgan would have already attained regular status after serving for four consecutive school years as a probationary employee on full-time basis before she stopped teaching to serve as municipal councilor of Carmen.

When she resumed teaching in 2004, Palgan was again placed on probationary status on a full-time basis.

She was already on her third year of the second phase of probationary employment of contract by then.

While a fixed-term employment is valid, Article 281 of the Labor Code should assume primacy over the contract and that she could only be terminated on any of the just causes of termination, including the failure to meet the reasonable standards necessary to attain regular status.

In this case, the NLRC found that HNU lacked evidence to show that Palgan failed to meet any of the standards contained in the school’s manual.

On this, the NLRC ruled that Palgan was illegally terminated and must be reinstated to her previous position without loss of seniority rights.

She was also entitled to back wages and attorney’s fees for having been compelled to litigate, according to NLRC then.

HNU filed a motion for reconsideration of the NLRC decision dated March 27, 2013, pointing out that Palgan was deemed resigned after she failed to file and secure an approved leave of absence when she stopped working when elected as municipal councilor.

HNU pointed out that she was not a regular employee when she worked again in school year 2004-2005 and it was only right to classify her as probationary only.

HNU also proved that Palgan failed to meet school standards, including statutory and administrative standards aside from failing to obtain satisfactory performance.

The university administration exercised management discretion not to renew her contract when her contract expired.

The Court of Appeals found that Palgan was not illegally dismissed, because she did not acquire permanent employment.

CA cited Batas Pambansa Bilang 232 or The Education Act of 1982 that delegated the administration of the education system and supervision and regulation of educational institutions to the Ministry of Education, Culture and Sports which is now the Department of Education.

The power DECS on the regulation of education institutions for teaching personnel  includes prescribing minimum academic qualifications for teaching personnel. In 1994, the power to prescribe such qualifications was transferred to the Commission on Higher Education (CHED).

The CA also cited a Supreme Court decision stating that the Manual of Regulations for Private Schools, and not the Labor Code, determines whether or not a faculty member in an educational institution has attained regular or permanent status.

Section 92 of the 1992 Manual of Regulations for Private Schools regulations provides that probationary period requires six consecutive regular semesters of satisfactory service for those in the tertiary level and nine consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis.

The court also cited Section 93 of the Manual, defining regular or permanent status as for those who have served the probationary period and full-time teachers who have satisfactorily completed their probation period.

The requisites for permanent status of private school teacher include service as full-time teacher, rendering three consecutive years of service and such service must have been satisfactory.

As to the full-time academic personnel, Palgan failed to comply the requirement of three years of clinical practice in the field of specialization, as required in Article IV of CHED Memorandum Order 30 in 2001 which on updated policies and standards for nursing education.

The court also cited CHED Memorandum 14 in 2009 which is on policies and standards for Bachelor of Science in Nursing Program that provides the faculty qualifications/requirements that include clinical practice of at least one year.

This is in accordance with Republic Act 7722 or the Higher Education Act of 1994 and RA 9173 or the Philippine Nursing Act of 1991.

The court pointed out that Palgan obviously failed to meet this requirement because she only had five-month clinical experience in Gov. Celestino Gallares Memorial Hospital.

“Consequently, not having possessed the minimum academic requirements as a member of the faculty in the college of nursing, [Palgan] could not be considered to have served as a full-time employee,” according to CA.

The court also pointed out that a part-time employee does not attain permanent status no matter how long he or she served the school.

“And, as a part-timer, his services could be terminated by the school without being held liable for illegal dismissal. Hence, when the private respondent’s [Palgan’s] contract expired on March 31, 2007, HNU did not have any obligation to renew the same,” according to CA.

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