by: Atty. Gregorio B. Austral, CPA
Security of tenure in fixed-term employment contract
Labor contracts are contracts imbued with public interest. As such, it contains not only what is explicitly stipulated therein but also the statutory provisions that have any bearing on the matter.
A good example of the application of the above principle is the case of Loralei P. Halili. Halili was hired as Consultant Program Coordinator of Justice for Children International (JFCI) for a term of one year with the condition that either party may terminate the same at any time by giving 4 weeks written notice.
On July 13, 2006, JFCI enforced the termination clause by informing Halili that they are terminating her services effective August 16, 2006. Halili filed a complaint before the NLRC claiming that she was illegally dismissed.
Halili contended that while the right to pre-terminate her employment was expressly stipulated in the contract, the arbitrary manner in which it was exercised by JFCI was in clear violation of the doctrine of abuse of rights. She also averred that JFCI failed to comply with the twin requirements of due process, hence, her dismissal was illegal.
In opposition, JFCI maintained that there was no illegal dismissal considering that her employment was for a term that lapsed when she was given a notice of termination.
The court ruled that Halili was illegally dismissed. Although it is stipulated in Halili’s contract that either party may terminate the same “at any time by giving 4 weeks notice”, the said stipulation should not be interpreted as a blanket license by which each of the parties may just abdicate the contract at will. While the said clause is silent on the requirement of a legal cause for the same to be operative, the fundamental principle is that the law is read into every contract. Hence, while the contract allows pre-termination within the stipulated fixed term of one year, the same can be done only when the party invoking the same has (a) a legal cause for terminating it; and (b) notifies the other party in writing 4 weeks prior to the intended date of termination.
The court further noted that even if it is so stipulated that Halili can be pre-terminated “with or without cause”, the said stipulation would still be invalid since as held in Price v. Innodata Phils. such stipulation is repugnant to the basic tenet in labor law that no employee may be terminated except for just or authorized cause (Loralei P. Halili v. Justice for Children International, et.al., G.R. No. 194906, Sep. 9, 2015).