BRENT SCHOOL, INC vs. ZAMORA (1990) FACTS: Respondent Doroteo R.

. Alegre was engaged as athletic director by Brent School, Inc. for a fixed and specific term of five ( ! years, "#$% &', &()& *+ "#$% &), &(), S-bse.-ent s-bsidiary agreements reiterated the same terms and conditions, incl-ding the expiry date, as those contained in the original contract.

Alegre was given a copy of the report filed by Brent School with the Department of Labor advising of the termination of his services effective on July 16, 1 !6" #he stated ground for the termination was $completion of contract, e%piration of the definite period of employment"$ And a month or so later, on May 26, 1976, Alegre accepted the amount of P3,177.71, and signed a receipt therefor containing the phrase, "in full payment of ser ices for the period May 16, to !uly 17, 1976 as full payment of contract."
/ months before the expiration of the stip-lated period, Alegre was terminated on the gro-nd of completion of contract and expiration of definite period of employment Alegre protested that since his services were necessary and desirable in the -s-al b-siness of his 0R, and his employment had lasted for years, he had ac.-ired the stat-s of a reg-lar employee and co-ld not be removed except for valid ca-se.

"he #egional $irector considered %rent &chool's report as an application for clearance to terminate employment (not a report of termination), and accepting the recommendation of the *a+or ,onciliator, refused to gi e such clearance and instead re-uired the reinstatement of Alegre, as a "permanent employee," to his former position .ithout loss of seniority rights and .ith full +ac/ .ages. "he $irector pronounced "the %rent &chool filed a motion for reconsideration. "he #egional $irector denied the motion and for.arded the case to the &ecretary of *a+or for re ie.. 0 #he latter sustained the &egional Director" 9 %rent appealed to the 1ffice of the President. Again it .as re+uffed. #hat 'ffice dismissed its appeal for lac( of merit and affirmed the Labor Secretary)s decision, ruling that Alegre was a permanent employee who could not be dismissed e%cept for *ust cause, and e%piration of the employment contract was not one of the *ust causes provided in the Labor +ode for termination of services" 12 #he employment contract between Brent School and Alegre was e%ecuted on July 1,, 1 !1, at a time when the Labor +ode of the -hilippines .-"D" //01 had not yet been promulgated" 2ndeed, the +ode did not come into effect until 3ovember 1, 1 !/, some three years after the perfection of the employment contract, and rights and obligations thereunder had arisen and been mutually observed and enforced" At that time, i"e", before the advent of the Labor +ode, there was no doubt whatever about the validity of term employment" 2t was impliedly but nonetheless clearly recogni4ed by the #ermination -ay Law, &"A" 1560, 11 as amended by &"A" 1!,!" 12 Basically, this statute provided that7

 -rior, thereto, it was the +ode of +ommerce which governed employment without a fi%ed period, and also implicitly ac(nowledged the propriety of employment with a fi%ed period" 2ts Article 850 provided that 7 2t is plain then that when the employment contract was signed between Brent School and Alegre on July 1,, 1 !1, it was perfectly legitimate for them to include in it a stipulation fi%ing the duration thereof Stipulations for a term were e%plicitly recogni4ed as valid by this +ourt, for instance, in Biboso v" Victorias Milling Co", Inc", promulgated on 9arch 81, 1 !!, 13 and J" Walter Thompson Co" .Phil"1 v" NLRC, promulgated on December 0 , 1 ,8" 13 #heThompson case involved an e%ecutive who had been engaged for a fi%ed period of three .81 years" Biboso involved teachers in a private school as regards whom, the following pronouncement was made: Still later, however, said Article 2 2 .formerly Article 8011 was further amended by Batas Pambansa Bilang 185, 23to eliminate altogether reference to employment without a definite period" As lastly amended, the opening lines of the article .renumbered 0,81, now pertinently read: $An employer may terminate an employment for any of the following *ust causes: " " " $ B- 185 thus completed the elimination of every reference in the Labor +ode, e%press or implied, to employment with a fi%ed or definite period or term" 2t is in the light of the foregoing description of the development of the provisions of the Labor +ode bearing on term or fi%ed;period employment that the <uestion posed in the opening paragraph of this opinion should now be addressed" 2s it then the legislative intention to outlaw stipulations in employment contracts laying down a definite period therefor= Are such stipulations in essence contrary to public policy and should not on this account be accorded legitimacy= #here is, on the other hand, the +ivil +ode, which has always recogni4ed, and continues to recogni4e, the validity and propriety of contracts and obligations with a fi%ed or definite period, and imposes no restraints on the freedom of the parties to fi% the duration of a contract, whatever its ob*ect, be it specie, goods or services, e%cept the general admonition against stipulations contrary to law, morals, good customs, public order or public policy" 26 >nder the +ivil +ode, therefore, and as a general proposition, fi%ed;term employment contracts are not limited, as they are under the present Labor +ode, to those by nature seasonal or for specific pro*ects with pre;determined dates of completion? they also include those to which the parties by free choice have assigned a specific date of termination"
Issue: Whether Alegre was lawfully teminiated? HELD: YES Ar !"#e $%0 does not proscribe or prohibit employment contract with a fixed period, 1R+2ID0D the same is entered into by the parties witho-t any force, d-ress or improper press-re -pon the 00 and in the absence of vitiating consent Re&s'(: 3ontracts of employment govern the relationship of the parties. Any stip-lation in the contract, not contrary to law, morals, good c-stoms, p-blic order and p-blic policy, is valid, binding and m-st be respected.

444*his practice is however legally .-estionable if done in a more or less contin-o-s basis with the ob5ective of avoiding reg-lari6ation as it in effect circ-mvents the law on sec-rity of ten-re of the wor7ers. In the 3AB, the employment contract is valid, binding, and m-st be respected.

Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article 0,5 of the Labor +ode clearly appears to have been, as already observed, to prevent circumvention of the employee)s right to be secure in his tenure, the clause in said article indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of regular employment as defined therein should be construed to refer to the substantive evil that the +ode itself has singled out: agreements entered into precisely to circumvent security of tenure" 2t should have no application to instances where a fi%ed period of employment was agreed upon (nowingly and voluntarily 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 where it satisfactorily appears that the employer and employee dealt with each other on more or less e<ual terms with no moral dominance whatever being e%ercised by the former over the latter" >nless thus limited in its purview, the law would be made to apply to purposes other than those e%plicitly stated by its framers? it thus becomes pointless and arbitrary, un*ust in its effects and apt to lead to absurd and unintended conse<uences" -araphrasing !sc"#ero, respondent Alegre)s employment was terminated upon the e%piration of his last contract with Brent School on July 16, 1 !6 without the necessity of any notice" #he advance written advice given the Department of Labor with copy to said petitioner was a mere reminder of the impending e%piration of his contract, not a letter of termination, nor an application for clearance to terminate which needed the approval of the Department of Labor to ma(e the termination of his services effective" 2n any case, such clearance should properly have been given, not denied"