THE CASE OF LWV CONSTRUCTION V. DUPO - 37 PJP 21

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This is the case of LWV Construction v. Dupo (2009).[1]

In the case of LWV Construction v. Dupo, petitioner, a domestic corporation which recruited Filipino workers, hired respondent as Civil Structural Superintendent to work in Saudi Arabia for its principal, Mohammad Al-Mojil Group/Establishment (MMG).

On February 26, 1992, respondent signed his first overseas employment contract, renewable after one year. It was renewed five times on the following dates: May 10, 1993, November 16, 1994, January 22, 1996, April 14, 1997, and March 26, 1998. All renewals were fixed-period contracts for one year. The sixth and last contract stated that respondent’s employment started upon reporting to work and ended whenever he left the work site. Respondent left Saudi Arabia on April 30, 1999 and arrived in the Philippines on May 1, 1999.

On May 28, 1999, respondent informed MMG, through the petitioner, that he needed to extend his vacation because his son was hospitalized. He also sought a promotion with salary adjustment. In reply, MMG informed respondent that his promotion was subject to management’s review; that his services were still needed; that he was issued a plane ticket for his return flight to Saudi Arabia on May 31, 1999; and, that his decision regarding his employment must be made and communicated within seven days for, otherwise, MMG would be compelled to cancel his employment slot.

On July 6, 1999, respondent resigned. According to respondent, when he followed up his claim for long service award on December 7, 2000, petitioner informed him that MMG did not respond.

On December 11, 2000, respondent filed a complaint for payment of service award against petitioner before the National Labor Relations Commission (“NLRC”), Regional Arbitration Branch, Cordillera Administrative Region, Baguio City. According to respondent, under the laws of Saudi Arabia, an employee who rendered at least five years in a company within the jurisdiction of Saudi Arabia should be entitled to the so-called long service award which was known to others as longevity pay of at least one-half month pay for every year of service. In excess of the period of five years, an employee, under said foreign laws, should be paid one month pay for every year of service, in both cases inclusive of all benefits and allowances.

For its part, petitioner offered payment and prescription as defenses. Petitioner maintained that MMG had paid its workers their service award or severance pay every conclusion of their labor contracts pursuant to Article 87 of Saudi Labor Law. Under Article 87, payment of the award should be at the end or termination of the labor contract concluded for a specific period. Petitioner also argued that, based on the payroll, respondent was already paid his service award or severance pay for his latest (sixth) employment contract.

Petitioner added that under Article 13 of the Saudi Labor Law, the action to enforce payment of the service award must be filed within one year from the termination of a labor contract for a specific period. Respondent’s six contracts ended when he left Saudi Arabia on the following dates: April 15, 1993, June 8, 1994, December 18, 1995, March 21, 1997, March 16, 1998 and April 30, 1999. Petitioner concluded that the one-year prescriptive period under Saudi Labor Law had already lapsed because respondent filed his complaint on December 11, 2000, or one year and seven months after his sixth contract ended.

The Labor Arbiter sided with respondent and ordered petitioner to pay the former a total of Php713,418.96.

Essentially, the issue for the Supreme Court to resolve was whether respondent was entitled to a service award or longevity pay under the pertinent provisions of the Saudi Labor Law. Related to this issue were petitioner’s defenses of payment and prescription.

The Court found that respondent was already paid his service award. Reading different parts of the Saudi Labor Law, it held that respondent’s computation was wrong.

As to the matter of prescription, the Court said that the Labor Code of the Philippines (“LCP”) should apply, not Article 13 of the Saudi Labor Law. In the light of the 1987 Constitution’s policy on protection to labor, a foreign law’s shorter prescriptive period for the claim of workers cannot override the three-year prescriptive period under the LCP. Thus, respondent’s complaint was filed well within the three-year prescriptive period under Article 291 of the LCP.

In other words, the Court held that the constitutional policy on protection to labor should override the doctrine of borrowing statutes under the old Code of Civil Procedure. While Saudi Labor Law provided a shorter period of prescription, the LCP’s longer period should prevail in furtherance of social justice.

[1] 610 Phil. 164 [ G.R. No. 172342. July 13, 2009 ] LWV CONSTRUCTION CORPORATION, PETITIONER, VS. MARCELO B. DUPO, RESPONDENT.