388 Phil.
661
FIRST DIVISION
[ G.R. No. 128845. June 01, 2000 ]
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE),
PETITIONER, VS. HON. LEONARDO A. QUISUMBING IN HIS
CAPACITY AS THE SECRETARY OF LABOR AND EMPLOYMENT;
HON. CRESENCIANO B. TRAJANO IN HIS CAPACITY AS THE
ACTING SECRETARY OF LABOR AND EMPLOYMENT; DR. BRIAN
MACCAULEY IN HIS CAPACITY AS THE SUPERINTENDENT OF
INTERNATIONAL SCHOOL-MANILA; AND INTERNATIONAL
SCHOOL, INC., RESPONDENTS.
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.[1] To enable 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
employ its own teaching and management personnel selected by it
either locally or abroad, from Philippine or other nationalities, such
personnel being exempt from otherwise applicable laws and
regulations attending their employment, except laws that have been or
will be enacted for the protection of employees.
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:
a. What is one's domicile?
b. Where is one's home economy?
c. To which country does one owe economic allegiance?
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:
A foreign-hire would necessarily have to uproot himself from his home
country, leave his family and friends, and take the risk of deviating
from a promising career path-all for the purpose of pursuing his
profession as an educator, but this time in a foreign land. The new
foreign hire is faced with economic realities: decent abode for oneself
and/or for one's family, effective means of transportation, allowance
for the education of one's children, adequate insurance against illness
and death, and of course the primary benefit of a basic
salary/retirement compensation.
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.
The compensation scheme is simply the School's adaptive measure to
remain competitive on an international level in terms of attracting
competent professionals in the field of international education.[3]
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"[4] of
the School, contested 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.
Petitioner claims that the point-of-hire classification employed by the School is
discriminatory to Filipinos and that the grant of higher salaries to foreign-hires
constitutes racial discrimination.
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.[5]The Acting Secretary of Labor found that
these non-Filipino local-hires received the same benefits as the Filipino local-
hires:
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.
We also take cognizance of the existence of a system of salaries and
benefits accorded to foreign hired personnel which system is
universally recognized. We agree that certain amenities have to be
provided to these people in order to entice them to render their
services in the Philippines and in the process remain competitive in the
international market.
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.
A perusal of the parties' 1992-1995 CBA points us to the conditions and
provisions for salary and professional compensation wherein the
parties agree as follows:
All members of the bargaining unit shall be compensated
only in accordance with Appendix C hereof provided that the
Superintendent of the School has the discretion to recruit and
hire expatriate teachers from abroad, under terms and
conditions that are consistent with accepted international
practice.
Appendix C of said CBA further provides:
The new salary schedule is deemed at equity with the
Overseas Recruited Staff (OSRS) salary schedule. The 25%
differential is reflective of the agreed value of system
displacement and contracted status of the OSRS as
differentiated from the tenured status of Locally Recruited
Staff (LRS).
To our mind, these provisions demonstrate the parties' recognition of
the difference in the status of two types of employees, hence, the
difference in their salaries.
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[8] in the 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,[9] likewise
proscribes discrimination. General principles of law include principles of equity,
[10] i.e., the general principles of fairness and justice, based on the test of what is
reasonable.[11] The Universal Declaration of Human Rights,[12] the International
Covenant on Economic, Social, and Cultural Rights,[13] the International
Convention on the Elimination of All Forms of Racial Discrimination,[14] the
Convention against Discrimination in Education,[15] the Convention (No. 111)
Concerning Discrimination in Respect of Employment and Occupation[16] - all
embody the general principle against discrimination, the very 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.
The Constitution[17] specifically provides that labor is entitled to "humane
conditions of 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.
The Constitution[18] also directs the State to promote "equality of employment
opportunities for all." Similarly, the Labor Code[19] provides that the State shall
"ensure 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]
Discrimination, particularly in terms of wages, is frowned upon by the Labor
Code. Article 135, for example, prohibits and penalizes[21] the payment of lesser
compensation 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:
The States Parties to the present Covenant recognize the right of
everyone to the enjoyment of just and favourable conditions of work,
which ensure, in particular:
a. Remuneration which provides all workers, as a
minimum, with:
i. Fair wages and equal remuneration for work of
equal value without distinction of any kind, in
particular women being guaranteed conditions
of work not inferior to those enjoyed by men,
with equal pay for equal work;
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.[22] This rule applies to the School, its
"international character" notwithstanding.
The School contends that petitioner has not adduced evidence that local-hires
perform work equal to that of foreign-hires.[23] The Court finds this argument a
little cavalier. If an 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,[24] we said that:
"salary" means a recompense or consideration made to a person for his pains or
industry in another man's business. Whether it be derived from "salarium," or
more fancifully from "sal," the pay of the Roman soldier, it carries with it the
fundamental idea of compensation for services rendered. (Emphasis supplied.)
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,"[25] "to afford labor full protection."[26] The State, therefore, has
the right and duty to regulate the relations between labor and capital.[27] These
relations are not merely contractual but are so impressed with public interest
that labor contracts, collective bargaining agreements included, must yield to the
common good.[28] Should such 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."[29] The
factors in determining the appropriate 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.[30]
The basic test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights.[31]
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.
Puno, and Pardo, JJ., concur.
Davide, Jr., C.J., (Chairman), on official leave.
Ynares-Santiago, J., on leave.
[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:
Americans - 17
Australian -2
Belgian -1
British -2
Burmese -1
Canadian -2
Chinese -2
French -1
German -1
Indian -5
Japanese -1
Malaysian -1
New 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)
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