9 Isae Vs Quisumbing
9 Isae Vs Quisumbing
DECISION
KAPUNAN, J.:
Receiving salaries less than their counterparts hired abroad, the local-hires of private
respondent School, mostly Filipinos, cry discrimination. We agree. That the local-hires
are paid more than their colleagues in other schools is, of course, beside the point. The
point is that employees should be given equal pay for work of equal value. That is a
principle long honored in this jurisdiction. That is a principle that rests on fundamental
notions of justice. That is the principle we uphold today.
Private respondent International School, Inc. (the School, for short), pursuant to
Presidential Decree 732, is a domestic educational institution established primarily for
dependents of foreign diplomatic personnel and other temporary residents. To enable
[1]
the School to continue carrying out its educational program and improve its standard of
instruction, Section 2(c) of the same decree authorizes the School to
Accordingly, the School hires both foreign and local teachers as members of its faculty,
classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs
four tests to determine whether a faculty member should be classified as a foreign-hire
or a local hire:
d.....Was the individual hired abroad specifically to work in the School and
was the School responsible for bringing that individual to the Philippines? [2]
Should the answer to any of these queries point to the Philippines, the faculty member
is classified as a local hire; otherwise, he or she is deemed a foreign-hire.
The School grants foreign-hires certain benefits not accorded local-hires. These include
housing, transportation, shipping costs, taxes, and home leave travel allowance.
Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-
hires. The School justifies the difference on two "significant economic disadvantages"
foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure.
The School explains:
Because of a limited tenure, the foreign hire is confronted again with the
same economic reality after his term: that he will eventually and inevitably
return to his home country where he will have to confront the uncertainty
of obtaining suitable employment after a long period in a foreign land.
When negotiations for a new collective bargaining agreement were held on June 1995,
petitioner International School Alliance of Educators, "a legitimate labor union and the
collective bargaining representative of all faculty members" of the School, contested
[4]
the difference in salary rates between foreign and local-hires. This issue, as well as the
question of whether foreign-hires should be included in the appropriate bargaining unit,
eventually caused a deadlock between the parties.
On September 7, 1995, petitioner filed a notice of strike. The failure of the National
Conciliation and Mediation Board to bring the parties to a compromise prompted the
Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute.
On June 10, 1996, the DOLE Acting Secretary, Crescenciano B. Trajano, issued an
Order resolving the parity and representation issues in favor of the School. Then DOLE
Secretary Leonardo A. Quisumbing subsequently denied petitioner's motion for
reconsideration in an Order dated March 19, 1997. Petitioner now seeks relief in this
Court.
The School disputes these claims and gives a breakdown of its faculty members,
numbering 38 in all, with nationalities other than Filipino, who have been hired locally
and classified as local hires. The Acting Secretary of Labor found that these non-
[5]
The compensation package given to local-hires has been shown to apply to all,
regardless of race. Truth to tell, there are foreigners who have been hired locally and
who are paid equally as Filipino local hires.[6]
The Acting Secretary upheld the point-of-hire classification for the distinction in salary
rates:
The principle "equal pay for equal work" does not find application in the
present case. The international character of the School requires the hiring
of foreign personnel to deal with different nationalities and different
cultures, among the student population.
Furthermore, we took note of the fact that foreign hires have limited
contract of employment unlike the local hires who enjoy security of tenure.
To apply parity therefore, in wages and other benefits would also require
parity in other terms and conditions of employment which include the
employment contract.
The Union cannot also invoke the equal protection clause to justify its
claim of parity. It is an established principle of constitutional law that the
guarantee of equal protection of the laws is not violated by legislation or
private covenants based on reasonable classification. A classification is
reasonable if it is based on substantial distinctions and apply to all
members of the same class. Verily, there is a substantial distinction
between foreign hires and local hires, the former enjoying only a limited
tenure, having no amenities of their own in the Philippines and have to be
given a good compensation package in order to attract them to join the
teaching faculty of the School. [7]
We cannot agree.
That public policy abhors inequality and discrimination is beyond contention. Our
Constitution and laws reflect the policy against these evils. The Constitution in the [8]
Article on Social Justice and Human Rights exhorts Congress to "give highest priority to
the enactment of measures that protect and enhance the right of all people to human
dignity, reduce social, economic, and political inequalities." The very broad Article 19 of
the Civil Code requires every person, "in the exercise of his rights and in the
performance of his duties, [to] act with justice, give everyone his due, and observe
honesty and good faith."
International law, which springs from general principles of law, likewise proscribes
[9]
discrimination. General principles of law include principles of equity, i.e., the general
[10]
principles of fairness and justice, based on the test of what is reasonable. The [11]
Social, and Cultural Rights, the International Convention on the Elimination of All
[13]
Occupation - all embody the general principle against discrimination, the very
[16]
antithesis of fairness and justice. The Philippines, through its Constitution, has
incorporated this principle as part of its national laws.
In the workplace, where the relations between capital and labor are often skewed in
favor of capital, inequality and discrimination by the employer are all the more
reprehensible.
work." These conditions are not restricted to the physical workplace - the factory, the
office or the field - but include as well the manner by which employers treat their
employees.
opportunities for all." Similarly, the Labor Code provides that the State shall "ensure
[19]
equal work opportunities regardless of sex, race or creed." It would be an affront to both
the spirit and letter of these provisions if the State, in spite of its primordial obligation to
promote and ensure equal employment opportunities, closes its eyes to unequal and
discriminatory terms and conditions of employment. [20]
to a female employee as against a male employee for work of equal value. Article 248
declares it an unfair labor practice for an employer to discriminate in regard to wages in
order to encourage or discourage membership in any labor organization.
Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in
Article 7 thereof, provides:
x x x.
The foregoing provisions impregnably institutionalize in this jurisdiction the long honored
legal truism of "equal pay for equal work." Persons who work with substantially equal
qualifications, skill, effort and responsibility, under similar conditions, should be paid
similar salaries. This rule applies to the School, its "international character"
[22]
notwithstanding.
The School contends that petitioner has not adduced evidence that local-hires perform
work equal to that of foreign-hires. The Court finds this argument a little cavalier. If an
[23]
employer accords employees the same position and rank, the presumption is that these
employees perform equal work. This presumption is borne by logic and human
experience. If the employer pays one employee less than the rest, it is not for that
employee to explain why he receives less or why the others receive more. That would
be adding insult to injury. The employer has discriminated against that employee; it is for
the employer to explain why the employee is treated unfairly.
The employer in this case has failed to discharge this burden. There is no evidence
here that foreign-hires perform 25% more efficiently or effectively than the local-hires.
Both groups have similar functions and responsibilities, which they perform under
similar working conditions.
The School cannot invoke the need to entice foreign-hires to leave their domicile to
rationalize the distinction in salary rates without violating the principle of equal work for
equal pay.
"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense for
services performed." Similarly, the Philippine Legal Encyclopedia states that "salary" is
the "[c]onsideration paid at regular intervals for the rendering of services." In Songco
v. National Labor Relations Commission, we said that:
[24]
While we recognize the need of the School to attract foreign-hires, salaries should not
be used as an enticement to the prejudice of local-hires. The local-hires perform the
same services as foreign-hires and they ought to be paid the same salaries as the latter.
For the same reason, the "dislocation factor" and the foreign-hires' limited tenure also
cannot serve as valid bases for the distinction in salary rates. The dislocation factor and
limited tenure affecting foreign-hires are adequately compensated by certain benefits
accorded them which are not enjoyed by local-hires, such as housing, transportation,
shipping costs, taxes and home leave travel allowances.
The Constitution enjoins the State to "protect the rights of workers and promote their
welfare," "to afford labor full protection." The State, therefore, has the right and duty
[25] [26]
to regulate the relations between labor and capital. These relations are not merely
[27]
contractual but are so impressed with public interest that labor contracts, collective
bargaining agreements included, must yield to the common good. Should such
[28]
contracts contain stipulations that are contrary to public policy, courts will not hesitate to
strike down these stipulations.
In this case, we find the point-of-hire classification employed by respondent School to
justify the distinction in the salary rates of foreign-hires and local hires to be an invalid
classification. There is no reasonable distinction between the services rendered by
foreign-hires and local-hires. The practice of the School of according higher salaries to
foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of
this Court.
We agree, however, that foreign-hires do not belong to the same bargaining unit as the
local-hires.
A bargaining unit is "a group of employees of a given employer, comprised of all or less
than all of the entire body of employees, consistent with equity to the employer indicate
to be the best suited to serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law." The factors in determining the appropriate
[29]
collective bargaining unit are (1) the will of the employees (Globe Doctrine); (2) affinity
and unity of the employees' interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions (Substantial Mutual Interests Rule);
(3) prior collective bargaining history; and (4) similarity of employment status. The
[30]
It does not appear that foreign-hires have indicated their intention to be grouped
together with local-hires for purposes of collective bargaining. The collective bargaining
history in the School also shows that these groups were always treated separately.
Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-
hires perform similar functions under the same working conditions as the local-hires,
foreign-hires are accorded certain benefits not granted to local-hires. These benefits,
such as housing, transportation, shipping costs, taxes, and home leave travel
allowance, are reasonably related to their status as foreign-hires, and justify the
exclusion of the former from the latter. To include foreign-hires in a bargaining unit with
local-hires would not assure either group the exercise of their respective collective
bargaining rights.
WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED
IN PART. The Orders of the Secretary of Labor and Employment dated June 10, 1996
and March 19, 1997, are hereby REVERSED and SET ASIDE insofar as they uphold
the practice of respondent School of according foreign-hires higher salaries than local-
hires.
SO ORDERED.
[1]
Issued on June 19, 1975 (authorizing International School, Inc. to Donate Its Real Properties to the Government of
the Republic of the Philippines and Granting It Certain Rights.)
[2]
Rollo, p. 328.
[3]
Id., at 324.
[4]
Id., at 8.
[5]
Id., at 325. The breakdown is as follows:
American
s
Australian - 17
Belgian -2
British -1
Burmese -2
Canadian -1
Chinese -2
French -2
German -1
Indian -1
Japanese -5
Malaysian -1
New -1
Zealander -1
Spanish -1
[6]
Id., at 39.
[7]
Id., at 38-39.
[8]
In Section 1, Article XIII thereof.
[9]
Statute of the International Court of Justice, art. 38.
[10]
M. DEFENSOR-SANTIAGO, International Law 75 (1999), citing Judge Hudson in River Meuse Case, (1937)
Ser. A/B No. 70.
[11]
Ibid., citing Rann of Kutch Arbitration (India vs. Pakistan), 50 ILR 2 (1968)
[12]
Adopted by the General Assembly of the United Nations on December 10, 1948. Article 1 thereof states: "All
human beings are born free and equal in dignity and rights." Article 2 provides, "1. Everyone is entitled to all the
rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language,
religion, political or other opinion, national or social origin, property, birth or other status."
[13]
Adopted by the General of the United Nations in Resolution 2200 (XXI) of 16 December 1966. Article 2
provides: "2. The States Parties to the present Covenant undertake to guarantee that the rights enunciated in the
present Covenant will be exercised without discrimination of any kind as to race, colour, sex, language, religion,
political or other opinion, national or social origin, property, birth or other status."
[14]
Adopted by the General assembly of the United Nations in Resolution 2106 (XX) 21 December 1965. Article 2 of
the Convention states: "States Parties condemn racial discrimination and undertake to pursue by all appropriate
means and without delay a policy of eliminating racial discrimination in all its forms and promoting understanding
among all races xxx."
[15]
Adopted at Paris, December 14, 1960. Under Article 3, the States Parties undertake, among others, "to abrogate
any statutory provisions and any administrative instructions and to discontinue any administrative practices which
involve discrimination in education." Under Article 4, "The States Parties to this Convention undertake further more
to formulate, develop and apply a national policy which, by methods appropriate to the circumstances and to
national usage, will tend to promote equality of opportunity and of treatment in the matter of education xxx."
[16]
Adopted by the General Conference of the International Labor Organization at Geneva, June 25, 1958. Article 2
provides that, "Each Member for which this Convention is in force undertakes to declare and pursue a national
policy designed to promote, by methods appropriate to national condition and practice, equality of opportunity and
treatment in respect of employment and occupation, with a view to eliminating any discrimination in respect
thereof."
[17]
In Article XIII, Section 3 thereof.
[18]
Id.
[19]
In Article 3 thereof.
[20]
E.g., Article 135 of the Labor Code declares it unlawful for the employer to require, not only as a condition of
employment, but also as a condition for the continuation of employment, that a woman shall not get married.
[21]
In relation to Articles 288 and 289 of the same Code.
[22]
Indeed, the government employs this rule in fixing the compensation of government employees. Thus, Republic
Act No. 6758 (An Act Prescribing a Revised Compensation and Position Classification System in the Government
and for Other Purposes) declares it "the policy of the State to provide equal pay for substantially equal work and to
base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of
the positions. See also the Preamble of Presidential Decree No. 985 (A Decree Revising the Position Classification
and Compensation Systems in the National Government, and Integrating the same)
[23]
Rollo, p. 491.
[24]
183 SCRA 610 (1990)
[25]
In Section 18, Article II thereof.
[26]
In Section 3, Article XIII thereof. See also Article 3 of the Labor Code.
[27]
See Sec. 3, Article XIII, Constitution. Article 3 of the Labor Code.
[28]
Article 1700, Civil Code.
[29]
Toyota Motor Philippines Corporation vs. Toyota Motor Philippines Federation Labor Union and the Secretary of
Labor and Employment, 268 SCRA 573 (1997); San Miguel Corporation vs. Laguesma, 236 SCRA 595 (1994)
[30]
San Miguel Corporation vs. Laguesma, supra.
[31]
Belyca Corporation vs. Ferrer-Calleja, 168 SCRA 184 (1988)