CHAPTER 22: EMPLOYMENT
PRINCIPLES AND CASES IN PRIVATE INTERNATIONAL LAW:
A PROCEDURAL APPROACH
-oOo-
MARK ANGELO S. DELA PEÑA
To cite this online book, please use the following:
Dela Peña. 2023. "Principles and Cases in Private International Law: A Procedural Approach." Published by Project Jurisprudence - Philippines. Published: September 17, 2023. Link: [Insert link] Last accessed: [Insert date of access].
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While employment is contractual in nature, it is not merely contractual but is actually impressed with public policy. Although this chapter on employment should be under the umbrella of the chapter on contracts, this author believes that jurisprudence and conflict of laws rules in labor cases have evolved enough to deserve treatment in a separate chapter.
EDI-STAFFBUILDERS v. NLRC
In the case of EDI-Staffbuilders (EDI) v. NLRC,[1] petitioner EDI, a corporation engaged in the recruitment and placement of overseas Filipino workers (OFWs) collaborated with ESI, another recruitment agency, to process the documentation and deployment of respondent Eleazar S. Gran to Saudi Arabia. Gran signed an employment contract that granted him a monthly salary of $850.00 for a period of two years. Gran was then deployed to Riyadh, Kingdom of Saudi Arabia on February 7, 1994. Upon arrival in Riyadh, Gran questioned the discrepancy in his monthly salary, i.e., his employment contract stated $850.00 while his Philippine Overseas Employment Agency (POEA) Information Sheet indicated $600.00 only. However, through the assistance of the EDI office in Riyadh, the foreign employer agreed to pay Gran $850.00 a month.
After only five months of work, Gran was terminated through a letter of termination due to alleged noncompliance with contract requirements by the recruitment agency primarily on salary and contract duration, noncompliance with pre-qualification requirements by the recruitment agency, and insubordination or disobedience to top management order and/or instructions (non-submission of daily activity reports despite several instructions).
After arrival in the Philippines, Gran sued the recruitment agencies for underpayment of wages/salaries and illegal dismissal.
The Supreme Court ruled in favor of Gran. In cases involving OFWs, the rights and obligations among and between the OFW, the local recruiter/agent, and the foreign employer/principal are governed by the employment contract. A contract freely entered into is considered law between the parties; hence, should be respected. In formulating the contract, the parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.[2]
In Gran’s case, the employment contract signed by Gran specifically stated that Saudi Labor Laws would govern matters not provided for in the contract (e.g. specific causes for termination, termination procedures, etc.). Being the law intended by the parties (lex loci intentiones) to apply to the contract, Saudi labor laws should govern all matters relating to the termination of the employment of Gran.
In international law, the party who wants to have a foreign law applied to a dispute or case has the burden of proving the foreign law. The foreign law is treated as a question of fact to be properly pleaded and proved as the judge or labor arbiter cannot take judicial notice of a foreign law. S/he is presumed to know only domestic or forum law.[3]
Unfortunately for petitioner, it was not able to prove the pertinent Saudi laws on the matter; thus, the international law doctrine of presumed-identity approach or processual presumption should apply.[4] Where a foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign law is the same as Philippine law.[5] Thus, Philippine labor laws should determine whether Gran’s termination was legal.
In illegal dismissal cases, Philippine law and jurisprudence mandate that the employer should prove that the dismissal of employees or personnel is legal and just.[6] The employer shoulders the burden of proving that the dismissal is for just and valid causes; and failure to do so would necessarily mean that the dismissal was not justified and therefore illegal.[7] Taking into account the character of the charges and the penalty meted to an employee, the employer is bound to adduce clear, accurate, consistent, and convincing evidence to prove that the dismissal is valid and legal.[8] This is consistent with the principle of security of tenure as guaranteed by the Constitution and reinforced by the Labor Code of the Philippines.[9]
The only pieces of evidence presented against Gran on the ground of insubordination were letters, one of which was unsigned. Regarding the allegation of incompetence, the same did not have any factual foundation. Incompetence may be shown by weighing it against a standard, benchmark, or criterion. However, EDI failed to establish any such bases to show how petitioner found Gran incompetent.
Even though EDI and/or ESI were merely the local employment or recruitment agencies and not the foreign employer, they should have adduced additional evidence to convincingly show that Gran’s employment was validly and legally terminated. The burden devolves not only upon the foreign-based employer but also on the employment or recruitment agency for the latter is not only an agent of the former, but is also solidarily liable with the foreign principal for any claims or liabilities arising from the dismissal of the worker.[10]
Another issue in the EDI case was whether Gran was afforded due process. Considering the Philippine labor law was applied by the Supreme Court, owing to the absence of proof of foreign law, Gran’s dismissal should be evaluated on the basis of Philippine due process requirements.
Procedurally, if the dismissal is based on a just cause, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: (a) a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, (b) a notice of the decision to dismiss. On the other hand, if the dismissal is based on authorized causes, the employer must give the employee and the Department of Labor and Employment (DOLE) written notices each at least thirty days prior to the effectivity of the intended separation. This is called the twin notice rule or the two notice rule.[11] Obviously, Gran was not afforded due process.
KAWANANOKOA V. POLYBLANK
The Kawananokoa case[12] was decided by the United States Supreme Court. There, it was held that, if a part of the mortgage property has been sold to a sovereign power which refuses to waive its exemption (immunity) from suit, the court has the power, as long as all other parties have been joined, to except the land so conveyed and decree the sale of the balance and enter deficiency judgment for sum remaining due if proceeds of sale are insufficient to pay the debt. It was also held that a sovereign is exempt from suit not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends, and, as this doctrine is not confined to full sovereign powers, it extends to those, such as the territories of the United States, which in actual administration originate and change the law of contract and property.
The lower court issued a decree affirming a decree of foreclosure and sale under a mortgage executed by the appellants to the appellee. After the execution of the mortgage, a part of the mortgaged land was conveyed to one Damon and, thereafter, by Damon, to the Territory of Hawaii, and thus became part of a public street. The decree excepted from the sale the land conveyed to the Hawaii, and directed a judgment for the sum remaining due in case the proceeds of the sale were insufficient to pay the debt.
The counter-argument was that the owners of the equity of redemption in all parts of the mortgage land must be joined, and that no deficiency judgment should be entered until all the mortgaged premises have been sold. In arguing this, the appellants said that Hawaii should be made liable to a suit in the same way as a municipal corporation. The United States Supreme Court ruled in favor of immunity.
PAKISTAN INTERNATIONAL AIRLINES V. OPLE
Pakistan Airlines v. Ople[13] is a labor dispute between a foreign corporation licensed to do business in the Philippines and two workers who worked in Pakistan for said corporation under two separate contracts, executed in the Philippines, which contain a choice-of-law and venue restriction. Under said contracts, the law of Pakistan is adopted as the applicable law of the agreement and the venue for settlement of any dispute arising out of or in connection with the agreement should only be in the courts of Karachi, Pakistan. Later, through letters sent to the workers, their employment was terminated.
The Supreme Court was tasked to strike a balance between the autonomy of contracts and the public policy of the Philippines on protection to labor. Obviously, the latter prevailed.
The governing principle is that parties may not contract away applicable provisions of law, especially peremptory provisions dealing with matters heavily impressed with public interest. The law relating to labor and employment is clearly such an area and parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. It is thus necessary to read the contractual provisions side by side with applicable Philippine laws and regulations.
Opting to override the contractual choice of law in the employment agreement, the Supreme Court analyzed the points of contact in the case. It said: “Even a cursory scrutiny of the relevant circumstances of this case will show the multiple and substantive contacts between Philippine law and Philippine courts, on the one hand, and the relationship between the parties, upon the other: the contract was not only executed in the Philippines, it was also performed here, at least partially; private respondents are Philippine citizens and residents, while petitioner, although a foreign corporation, is licensed to do business (and actually doing business) and hence resident in the Philippines; lastly, private respondents were based in the Philippines in between their assigned flights to the Middle East and Europe. All the above contacts point to the Philippine courts and administrative agencies as a proper forum for the resolution of contractual disputes between the parties. Under these circumstances, paragraph 10 of the employment agreement cannot be given effect so as to oust Philippine agencies and courts of the jurisdiction vested upon them by Philippine law. Finally, and in any event, the petitioner PIA did not undertake to plead and prove the contents of Pakistan law on the matter; it must therefore be presumed that the applicable provisions of the law of Pakistan are the same as the applicable provisions of Philippine law.”
[1] 563 Phil. 1 [ G.R. No. 145587. October 26, 2007 ].
[2] Article 1306 of the New Civil Code of the Philippines.
[3] Coquia & E.A. Pangalangan, CONFLICT OF LAWS 157 (1995), p. 144.
[4] Cramton, Currie, Kay, CONFLICT OF LAWS CASES AND COMMENTARIES 56.
[5] Philippine Export and Loan Guarantee Corporation v. V.P. Eusebio Construction Inc., et al., G.R. No. 140047, July 14, 2004.
[6] See the Labor Code of the Philippines.
[7] Ting v. Court of Appeals, G.R. No. 146174, July 12, 2006.
[8] Bank of the Philippine Islands v. Uy, G.R. No. 156994, August 31, 2005.
[9] I Alcantara, PHILIPPINE LABOR AND SOCIAL LEGISLATION 1052 (1999).
[10] Royal Crown Internationale v. NLRC, G.R. No. 78085, October 16, 1989, 178 SCRA 569; see also G & M (Phil.), Inc. v. Willie Batomalaque, G.R. No. 151849, June 23, 2005, 461 SCRA 111.
[11] Agabon v. NLRC, G.R. No. 158693, November 17, 2004.
[12] 205 U.S. 349 (1907).
[13] 268 Phil. 92 [ G.R. No. 61594. September 28, 1990 ].
