ULPIANO P. SARMIENTO III Teacher-Lawyer

Contracts in General

- is a meeting of minds between two

(2) persons whereby one binds

himself with respect to the other, to

give something or to render some

service (Art. 1305, Civil Code)

Article 10, 1987 Constitution

“No law impairing the obligations

of contracts shall be passed.”

Freedom to Contract

Article 1306, Civil Code provides—

“The contracting parties may

establish such stipulations, clauses,

terms and conditions as they may

deem convenient, xxx.”

Hence…

Article 1159, Civil Code declares—

“Obligations arising from

contracts have the force of law

between the contracting parties and

SHOULD be COMPLIED with in

GOOD FAITH.”

Binding Efficacy

Agreement must not be

contrary to law, morals, good

customs, public order or public

policy. (Art. 1306, Civil Code)

Limitations to Freedom to Contract

State intervenes in cases

where contracts are affected by

public policy such as in labor

contracts.

Thus…

Types of contracts (like employment

contracts for teachers and rank-and-file)

have the effect of weakening the

consensual nature of the contracting

parties by giving undue advantage to one

of the parties xxx requiring State

intervention to PREVENT INJUSTICE.

(Those who have less in life; must have

more in law.)

Reason:

Stipulation in the contract or even

in the CBA that violates or is contrary

to law, rules and regulations shall

NOT be VALID.

Hence…

“xxx educational institutional are

impressed with public interest xxx are

under the control and supervision of the

State. xxx Squarely, all laws, rules and

regulations governing educational

institutions are MANDATORY in character

and shall be strictly complied with. Any

waiver to this effect will be against public

policy. xxx (For) xxx it will xxx open the

door to the employment of direful low

quality and inefficient faculty xxx.” (Sec. 118,

MORPHE)

11

The Supreme Court in the

case of Escorpizo vs. University

of Baguio, held that a school

CBA must be read in conjunction

with statutory and administrative

regulations governing faculty

qualifications.

TO HAVE BINDING

EFFICACY THERE MUST BE

CONSENT

2 Elements:

1. Offer

2. Acceptance

1. Offer

• Must be definite

• Must be intentional

• Must be complete

• Must be directed to person offeror

intends to enter into contract

Elements of Consent

2. Acceptance

• Must be absolute

• Must be directed to offeror

• Must be made with intention to be

bound

• Must be made within proper time

• Must be communicated to offeree

CONSENT may be—

1. Express (oral/written)

2. Implied

3. Presumed

The agreement governing the

employer-employee relationship

between the school and its teachers

MUST be embodied in a WRITTEN

EMPLOYMENT CONTRACT.

The Contract is the single most

important element of the educator’s

employment. (Mamchack &

Mamchack, “School Administrator’s

Encyclopeadia”)

A teacher’s contract should

specify the services and duties he

shall perform and all other terms of

his employment.

The Teacher’s Contract

These particulars vary, but

generally such a contract may include

details on:

• sick leave

• time of employment

• tenure and the grant thereof,

• various rights (such as the right to a

hearing or grievance procedure), and

• even the school and level to which

he may be assigned.

Schools usually spell out these

matters in a handbook and simply

refer to the salient portions thereof in

the educator’s contract. Teacher is

then provided a copy of the

handbook.

Important:

The contract must at least contain

provisions on:

• designation

• qualifications

• salary rate

• nature of service, and

• date of effectivity and expiration of the

agreement

These are matters which differ for

each individual.

DepEd Policy:

To require schools to enter into

written contracts of at least one

year’s duration for elementary and

secondary teachers

CHED:

One semester’s duration for

college teachers.

These contracts must be duly

signed by the Chairman of the Board

of Directors or his authorized

representative.

AND

must also be signed by the Teacher/

Personnel to manifest agreement

Rule to Ensure Binding Efficacy

of Employment Contract in

Accordance with the ‘TRUE’

Agreement of Parties (School and

Personnel)

If Contract of Employment is NOT

in writing, CONSENT is IMPLIED and

EMPLOYMENT is PRESUMED and

shall be GOVERNED by Labor/

Education Laws.

Illustration:

Contract for Non-Academic

Rank-and-File

CONTRACT must be in WRITING and:

1ST : State that personnel is

PROBATIONARY

2ND : Must state the reasonable

standards to qualify as REGULAR

employee

Therefore:

• No formal written contract—

employment of NEWLY HIRED is

REGULAR.

• No reasonable standards made known

to employee to qualify as regular—

NEWLY HIRED may only be separated

by the same CAUSES (authorized or

just) that JUSTIFIES termination of

REGULAR EMPLOYEE

Reason:

Contract for Non-Academic Rank-

and-File

Article 280, Labor Code—

For an employee to be considered

regular, he must be engaged to

perform duties that are usually

necessary or desirable to the

employer’s ordinary course of

business or trade.

Hence...

Such engagement must last

indefinitely and should not be

fixed for a specific period or for a

particular season

Article 280, 2nd par., Labor Code—

Considers as regular anyone

who has rendered at least 1

year’s service regardless of the

nature of his duties. Such

employee must be retained as

long as his services are required

AND this NOT need formal

appointment.

UST vs. NLRC, Canicoza

“It shall definitely NOT allow

repetitive probation by separating an

employee after 5 months’ service to

prevent him from becoming a

regular employee and then hiring

him on probation again without

security of tenure.”

Effect of Probationary Contract of Academic

Personnel Does Not Stipulate Period of

Employment

Espiritu Santo Parochial School et al. vs.

NLRC (76 SCRA 250)

“SC said “xxx contracts

involved here stipulate no

period. In that eventuality,

the 3 years probationary

period provided for in

MRPS must apply.”

In Magis Young Achievers’ Learning

Center vs. Manalo, the Supreme Court

held—

“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 3-year

probationary period.”

Hence… It should be stressed that the

probationary contract must stipulate the

period of effectivity, otherwise it shall

remain in force for the three (3) years

probationary period.

Must Be Signed by Parties Before Date

of Effectivity:

To be VALID and BINDING upon the

employee, the CONTRACT must be

agreed to, expressed by SIGNING the

CONTRACT. If the CONTRACT is NOT

signed, it is deemed NOT

ENFORCEABLE.

Effect If There Is No Enforceable Contract At All

Pines City Education Center, et al. vs. NLRC

(227 SCRA 655)

“Eight (8) probationary

teachers out of 10 signed

contracts with fixed duration.

Upon expiration of contract, all

10 were terminated. Supreme

Court upheld dismissal of 8

teachers, but ordered

reinstatement of two (2) who

did not have contract.”

Contract of School Administrators

Principle:

A distinction between the teaching staff on the one

hand—teachers xxx—and department or administrative

heads or officials, on the other - college or department

secretaries, principals, directors, assistant deans, deans.

The teaching staff xxx may and should acquire tenure in

accordance with the rules and regulations of the DepEd or

CHED and the school’s rules and standards. On the other

hand, teachers appointed to serve as administrative

officials do not normally, and should not expect to acquire,

a second or additional tenure. The acquisition of such

additional tenure is not normal, is the exception rather than

the rule, and should therefore be clearly and specifically

provided by law or contract.” (La Salette of Santiago vs. NLRC,

Javier, 195 SCRA 80)

Also... Where there is no tradition of fixed-term

appointments to the positions xxx administrative

officers to enable the school to rotate these

positions among the faculty members, the

DOLE believes that such appointment is a

consequence of promotion, and hence, not for a

specific term. The appointee therefore acquires

security of tenure.

Hence...

Contract MUST EXPRESSLY

PROVIDE that administrative

position is FOR A FIXED TERM.

Otherwise,

NO CONTRACT stipulating a FIXED-

TERM, the appointment to the administrative

position of a teacher or a newly hired

personnel is deemed REGULAR/

PERMANENT.

• For the teacher, it is a consequence of

a PROMOTION, hence, not JUST for

a term.

• For newly-hired, it is for a REGULAR

employment NOT subject to a Term-

Contract Agreement.

Contract of Part-Time

Principle:

“xxx part-time (academic personnel)

xxx are xxx NOT eligible for regularization

regardless of the number of years served

in the educational institution.”

(Consolidated Order No. 1, s. 1996)

Aklan College vs. Guariño (Aug. 14, 2007)

“xxx the FACT that respondent

(academic personnel) was retained as

ACTING DEAN for 17 years DID NOT

give him a VESTED right to occupy in a

permanent capacity xxx NOT being a

master’s degree holder, he was NEVER

and could NEVER have been appointed

in a permanent capacity as he is NOT

qualified under the law.”

Hence...

Section 66, RMBE

“The employment of part-time school

personnel shall be reckoned in terms of

the need of the school and/or the

availability of qualified applicants.”

Also Section 177, MORPHE

“A part-time employee CANNOT

acquire REGULAR xxx hence may

be terminated when a qualified

teacher becomes available.”

What is Security of Tenure of PART-

TIME Academic Personnel

Answer:

Limited to the period/term as expressly

provided by CONTRACT.

“xxx they remained secured in their

employment during the period of time their

respective contracts of employment

remained in effect. That temporary security

of tenure xxx ended the moment their

employment contracts ended xxx.” (Rev. Fr.

Emmanuel Labajo, et al. Vs. Alejandro, 165 SCRA 747)

May It Be BEFORE Expiration of the

CONTRACT?

Answer:

Yes if expressly provides that “part-

time employment is for the

TERM/PERIOD of the CONTRACT

UNLESS

Otherwise terminated EARLIER when

a qualified teacher becomes available

and is HIRED.

1. Overload Pay

• NOT part of 13th month pay computation

“Overload partakes of the nature of

temporary extra assignment and

compensation therefore shall be considered

as an overload honorarium if performed

within the 8-hour work period and does not

form part of the regular or basic pay.” (DOLE-

DECS-CHED-TESDA Order No. 2, s. 1996, Feb. 7,

1996)

Some Matters/Issues Need to Be Made

Clear in CONTRACT or in Teacher Manuals

The DOLE Legal Services Office in

responds to the DepEd Indorsement dated

February 3, 1992, commented—

“It is clear that extra remuneration over

and above the basic salary of an

employee is not included in the

computation of the 13th month pay. xxx if

by school policy (written and made known

to teacher/personnel) the same is not

considered as part of the basic salary of

qualified teacher.”

2. Bonus in Lieu of 13th Month

In the case of UST Faculty Union vs. NLRC and UST (143 SCRA 564), the Supreme Court declared that –

“xxx where such additional income, xxx or its equivalent is already given by the employer, xxx the 13th month pay need not be given. If, on the other hand, an amount less than that granted by law is given, the employer has only to pay his employees the deficiency.”

Must ALSO be made clear in WRITING and made known to employee.

xxx what the law wants to

prevent is the imposition of a

“double burden” upon the

employer who is already paying

the equivalent of a 13th month

pay.”

3. Retirement Benefit

• Applicability of RA 7641 to Part-time

Teachers

Although the new retirement law has no

specific provisions pertaining to part-time

employees, the DOLE recognizes part-time

employment as a valid employment

arrangement. Part-time employee has the

same right as a regular employee as to the

benefits provided by labor law and

regulations, unless clearly excluded by the

parties in writing (include in the contract).

In the case of Ramon Manalac vs.

ADMU, et al. (NLRC NCR Case No. 00-04-

02931-93 dated June 15, 1994), the NLRC

ruled that–

“xxx We are of the holding that

complainant’s part-time status, was not

among those enumerated as excepted

classes of employees who are not within the

law’s coverage. As such, even part-time

employees, or part-time faculty members are

equally entitled to the benefits mandated by

RA 7941 xxx.”

• Retirement Benefit Distinguished

from Separation Pay

Retirement benefits are intended to

help the employee enjoy the remaining

years of his life.

Separation pay is required in the

cases enumerated in Arts. 283 and 284 of

the Labor Code.

Therefore, a school may either grant

both benefits or opt to amend its

retirement plan to remove any duplication

of benefits by stating in WRITING (in the

contract or retirement plan) that the

amount of benefits the employees stand

to receive from the plan would be

correspondingly reduced by the

separation pay granted to them should

they remain entitled to both.

Qualified Teacher Under the

Enhanced Basic Education

Program

Duly registered professional

teacher and holders of Certificate of

Registration and Professional

License issued by PRC or valid

special/temporary permit

Special/Temporary Permit—

• Those who failed the licensure

examination with rating of NOT lower

than 5% pts from passing GA (para-

teachers for two years)

• To a person who has excelled and gained

international recognition and duly

acknowledged expert in his respective

field of specialization.

By virtue of Section 8 of K-12 Law (RA

10533)

FIRST:

Graduates of SMSEM and Others with

shortage in qualified LET (for elementary/

secondary)

• must pass LET with 5 years, otherwise

remain part-time

• qualified LET applicants include also

graduates admitted by foundations

SECOND:

Graduates admitted by Foundations

duly recognized for their expertise in

the education sector and who

satisfactorily complete requirements

set by organization.

THIRD:

Graduates of TVOC with NC-II

courses to teach specialized subjects

(in secondary only)

AND

Underwent in-service training by

DepEd or HEI

FOURTH:

Faculty of HEI to teach general subjects

(in secondary education only) must:

i. holder of bachelor’s degree

ii. satisfactory served as full-time as HEI

faculty

FIFTH:

Practitioners/professional with

expertise in specialized learning (in

secondary only)

• shall teach part-time only

Basic Issue:

When engaged, would they be

FULL-TIME or PART-TIME?

Reason:

- If full-time, may be REGULAR

- If part-time, may not be

REGULAR

DOLE-DECS-CHED-TESDA Order No. 1, s. 1996 provides for the definition of full-time and part-time academic personnel:

Full-time academic personnel are those who meet all the following requirements:

1. Who possess at least the minimum academic qualifications prescribed by the DECS for Basic Education, the CHED for Tertiary Education, and the TESDA for Technical and Vocational Education under their respective Manual of Regulations governing said personnel;

2. Who are paid monthly or hourly based on the regular teaching loads as provided for in the policies, rules and standards of the agency concerned;

3. Whose regular working day of not more than

eight hours a day is devoted to the school;

4. Who have no other remunerative occupation

elsewhere requiring regular hours of work that

will conflict with the working hours in the school;

and

5. Who are not teaching full-time in any other

educational institution.

All teaching or academic personnel who do not

meet the foregoing qualifications are considered

part-time and are therefore not eligible for

regularization regardless of the number of years

served in the educational institution.

NB: Above is reiterated in Sec. 66 of RMBE and

Sec. 177 of MORPHE.

1st Category

Graduates of SMSEM

• Issue: Upon hiring are they:

i. Part-time or full-time

ii. Probationary / full-time

Contract must stipulate their

employment status either as part-

time or probationary full-time.

If part-time, security of tenure is

limited to period/term of

employment in contract.

If Probationary, security of tenure may—

1. 5 years or 3 years, if Contract initially

entered into did not provide (Espiritu

Santo case applies)

2. Shorter period (ex: 1 SY) if contract

stipulates shorter period.

BUT...

if school decides NOT to renew, MUST

prove a just or authorized cause

(Mercado vs. AMA)

NEW DOCTRINE / Ruling

Yolanda M. Mercado et. A., v. AMACC,

Parañaque City April 13, 2010,

Where the SC, although still does not

present the use of “fixed-period contracts”

to newly hired employees under

PROBATION, it however removed the

right of the School to terminate an

employee under PROBATION fixed term

contract on the basis of mere

EXPIRATION thereof.

73

As it now stands, in addition to expiration

of contract, the School must also show that

said employee failed to meet the standards

of the school which must have been made

known to the said employee at the start of

engagement to JUSTIFY non-renewal of

the Expired FIXED-TERM Contract.

74

St. Paul v. Sps. Ancheta

(September 7, 2011)

At the end of this (probationary) third

year, the (school) 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.

75

For the entire duration of this three-

year period, the teacher remains

under probation. Upon 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.

76

2nd Category

Graduates admitted by Foundations

• Need not be graduates of SMSEM

(Although Atty. Estrada states

otherwise in his book)

• Must pass within 5 years LET to be

full-time

Caveat:

Atty. Estrada: Must refer only to graduate of

SMSEM (p. 89 of his book K to 12)

Contract to be entered into must

take into consideration also

whether—

a) They are probationary; or

b) They are part-time

3rd Category

Graduates of Technical-Vocational courses

and the Philippine Qualification Framework

• Must possess the necessary

certification from TESDA

• Must undergo appropriate in-service

training by DepEd or HEI

(to teach in their specialized subjects

only in secondary education)

Note: No College degree; no LET

Contract then MUST recognize

them as PROBATIONARY if

allowed to handle FULL-LOAD

and DEVOTE FULL-TIME to

school.

To be PART-TIME, contract

them ONLY for LESS THAN

FULL-LOAD required for FULL-

TIME.

Technical-Vocational teachers

necessary for schools that will

consider the Tech-Voc Track.

Shortage in licensed teacher

applicants IS NOT a condition-

precedent for graduates of Tech-

Voc.

4th Category

Faculty of Higher Education

Institutions to teach general education

subjects (in Secondary education only)

Conditions:

1) Must be a holder of relevant

bachelor’s degree;

2) Satisfactorily served as full-time

HEI faculty (must then be regular

already)

Note: No LET required

Considerations for Contracts

A. NEWLY HIRED (i.e., College faculty

hired from another institution)

1) If still is teaching FULL-TIME in the

College level, the contract MUST be

FOR PART-TIME

2) If teacher intending to teach full-time in

HS, then must resign from full-time

teaching in College.

B. COLLEGE FACULTY transferred to

Basic Education of the same

institution

1) If to teach part-time in HS, maintains

regular status in College but must still

be full-time.

2) If to teach full-time in HS, then must be

considered part-time in College.

Issue:

Should they be regular already in

HS or considered probationary?

Answer:

CONTRACT must make clear and

faculty made to agree.

Academic Rank and Rate

• While a full-time status in HEI

carries an academic rank and rate

of compensation, the teaching

load of a faculty who is allowed in

SHS/HS DOES NOT, as a matter

of RIGHT (and be protected

against DIMINUTION), GET same

salary rate for teaching in HS

The CONTRACT must however

STATE the rate the College professor

will get for his SHS/HS teaching AND

to which he/she agrees.

If No CONTRACT

Presumption:

Same salary/compensation rate

received in College shall be paid

him for SHS/HS load.

-End-