G.R. No. 121791 – 360 Phil. 652 – 300 SCRA 469 – Mercantile Law – Corporation Law – By-Laws Must Not Impair Existing Rights
In 1981, Enrique Salafranca was hired as an administrative officer by the Philamlife Village Homeowners Association, Inc. (PVHAI). Salafranca was tasked to manage the village’s day to day activities. His employment was originally for 6 months only but his contract was renewed multiple times until 1983. But even after 1983, he was still allowed to continue work even without a renewed contract. In 1987, PVHAI amended its by-laws. Among the amendment was a provision that the administrative officer (Salafranca) shall have a tenure which is co-terminus with the Board of Directors which appointed him. In 1992, the tenure of said Board of Directors expired and so Salafranca’s services was terminated.
ISSUE: Whether or not Salafranca was illegally dismissed.
HELD: Yes. At that time, Salafranca already enjoys security of tenure because he is already a regular employee. It is true that PVHAI has the right to amend its by-laws but such amendment must not impair existing contracts or rights. In this case, the provision that Salafranca’s position shall be co-terminus with the appointing Board impairs his right to security of tenure which has already vested even prior to the amendment of the by-laws in 1987.
