ARLENE PALGAN vs. HOLY NAME UNIVERSITY AND/OR FR.

FRANCISCO
ESTEPA, SVD/FR. ERNESTO LAGURA, SVD
G.R. No. 219916
February 10, 2021

Facts:
Petitioner Arlene Palgan started working as a Casual or Assistant Clinical Instructor for
two semesters for S.Y. 1992-1993 in Holy Name University’s College of Nursing. She alleged
that upon her hiring, HNU did not inform her of the standards for the evaluation of her
satisfactory completion of her probationary period. In the second semester of S.Y. 1994-1995,
she was hired as a full-time Clinical Instructor until S.Y. 1998-1999, and was assigned at the
Medical Ward. During the second semester of S.Y. 1998-1999, she was transferred to the
Guidance Center as a Nursing Guidance Instructor handling guidance, education, and graduate
school courses. At this time, she was elected as Municipal Councilor of Carmen, Bohol. Upon
her reelection as Municipal Councilor for the 2001-2004 term, she took a leave of absence from
HNU. Sometime in the year 2004, petitioner rejoined HNU and was given a full-time load for the
S.Y. 2004-2005. For S.Y. 2005-2006 and 2006-2007, petitioner signed contracts for
term/semestral employment. However, HNU informed Arlene that her contract of employment,
which would have expired on March 31, 2007, will no longer be renewed. Petitioner then filed
an illegal dismissal case against respondent HNU. Arlene argued that since she taught at HNU
for more than six consecutive regular semesters, she already attained the status of a regular
employee pursuant to the Manual of Regulations for Private School Teachers. There having been
no valid or justifiable cause for her dismissal as she was not guilty of any infractions under the
Labor Code or the Manual of Regulations for Private School Teachers, petitioner claimed that
her employment was illegally terminated. On the other hand, respondents contended that in S.Y.
2004-2005, 2005-2006 and 2006-2007, Arlene remained a probationary employee. The
completion of her probationary period did not automatically make her a permanent employee
since she failed to comply with all the conditions of her probationary employment satisfactorily.
Respondents insisted that petitioner was not dismissed; rather, her contract of employment
merely expired on March 31, 2007.

The Labor Arbiter dismissed the complaint for lack of merit. The NLRC denied Arlene’s
appeal and affirmed the ruling of the Arbiter. However, on reconsideration, the NLRC reversed
its earlier pronouncement and ruled that Arlene has been illegally dismissed. On appeal by HNU,
the appellate court issued the assailed Decision reversing the Resolution of the NLRC. Hence,
the instant Petition for Review on Certiorari.

Issue:
Whether or not petitioner Arlene was illegally dismissed by respondent HNU.

Ruling:
The Court held that petitioner did not meet all the criteria required to be considered as a
permanent employee under the Manual of Regulations for Private Schools. The following are the
requisites before a private school teacher acquires permanent status, namely: 1) The teacher
serves full-time; 2) he/she must have rendered three consecutive years of service; and 3) such
service must have been satisfactory. While petitioner has rendered three consecutive years of
satisfactory service, she was, however, not a full-time teacher at the College of Nursing of HNU.
It must be stressed that only a full-time teaching personnel can acquire regular or permanent
status. Thus, given that petitioner was not a full-time teaching personnel due to the apparent lack
of the required clinical experience under the governing law and its relevant regulations, she
could not have acquired permanent status no matter the length of her satisfactory service.

The evidence on record would show that petitioner was not illegally dismissed since no
dismissal occurred in the first place. Her fixed-term contract merely expired. Jurisprudence has
long recognized the validity of fixed-term employment contracts, as long as such contracts do
not circumvent the employee's right to security of tenure. The Court has laid down the criteria
under which fixed-term employment could not be said to be in circumvention of the law on
security of tenure, thus: (1) the fixed period of employment was knowingly and voluntarily
agreed upon by the parties without any force, duress, or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his consent; or (2) it
satisfactorily appears that the employer and the employee dealt with each other on more or less
equal terms with no moral dominance exercised by the former or the latter.

As applied in this case, the fixed-term contracts presented as evidence would reveal that
the parties intended that their employee-employer relationship would last only for a specific
period. Considering petitioner's part-time status, even if no written fixed-term contract was
presented, judicial notice can be made upon the fact that teachers’ employment contracts are for
a specific semester or term. With respect to consent, the fixed-term contracts must be presumed
to be knowingly and voluntarily entered into. It is a basic rule that one who alleges defect or lack
of valid consent to a contract by reason of fraud or undue influence must establish by full, clear
and convincing evidence such specific acts that vitiated a party’s consent, otherwise, the latter’s
presumed consent to the contract prevails. In this case, petitioner merely alleged that she was a
regular employee and that her being a contractual employee was just a lame reason given by
HNU to terminate her without due process. These self-serving and unsubstantiated allegations
are not the clear and convincing evidence required to overturn the presumption mentioned
earlier. Thus, the fixed-term contracts should be presumed as having been knowingly and
voluntarily entered into by both parties. For the second requisite of a valid fixed-term contract,
petitioner was more or less on equal footing with HNU. Petitioner, by her own admission, was an
honor graduate and has stellar qualifications. Moreover, she has also admitted that she is an
elected public official and appears to be quite popular. These facts would make apparent that
petitioner is not a mere run-of-the-mill employee, and that she certainly has the capability to be
on equal footing in dealing with her employer when it came to her employment terms. Hence,
the Court concluded that petitioner was validly contracted for a fixed-term. The expiry of her
latest contract on March 31, 2007, effectively ended the employee-employer relationship she had
with HNU. No dismissal, whether illegal or not, ever happened. Therefore, she is not entitled to
any of the reliefs sought.