FIRST DIVISION

[G.R. No. 128845. June 1, 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.

Azcuna Yorac Sarmiento Arroyo & Chua Law Offices for petitioner.
The Solicitor General for public respondent.
Bernas Law Office for private respondent.

SYNOPSIS

Private respondent International School, Inc. is a domestic educational

institution established primarily for dependents of foreign diplomatic personnel
and other temporary residents. It hires both foreign and local teachers as
members of its faculty classifying them as foreign-hires and local-hires. It
grants foreign-hires certain benefits as housing, transportation, shipping costs,
taxes and home leave travel allowance which are not accorded to local-hires.
Foreign-hires are also paid a salary rate of twenty-five percent (25%) more than
the local-hires. The school justified the difference on two "significant economic
disadvantages" foreign-hires have to endure, namely: (a) the "dislocation
factor" and (b) limited tenure. When negotiations for a new collective
bargaining agreement were held in June 1995, petitioner International School
Alliance of Educators (ISAE) as a legitimate labor union and the collective
bargaining representative of all the faculty members 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. The
Department of Labor and Employment (DOLE) assumed jurisdiction over the
dispute. It subsequently issued an Order resolving the issues in favor of the
school. The motion for reconsideration of ISAE was also denied. Hence, this
petition.
The Court ruled that the point-of-hire classification employed by
respondent School to justify the distinction in the salary rates of foreign-hires
and local-hires was 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 the Court.
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 The Court agreed, however, that foreign-hires do not belong to the same
bargaining unit as the local-hires. 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. 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 showed 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 justified 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. The orders of the Secretary of Labor were reversed
and set aside insofar as they upheld the practice of respondent School of
according foreign-hires higher salaries than local-hires.

SYLLABUS

1. POLITICAL LAW; CONSTITUTIONAL LAW; PUBLIC POLICY ABHORS

INEQUALITY AND DISCRIMINATION. — That public policy abhors inequality and
discrimination is beyond contention. Our Constitution and laws reflect the policy
against these evils. The Constitution 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
this duties, [to] act with justice, give everyone his due, and observe honesty
and good faith."
2. INTERNATIONAL LAW; SPRINGS FROM GENERAL PRINCIPLES OF LAW
WHICH PROSCRIBE DISCRIMINATION. — International law, which springs from
general principles of law, likewise proscribes discrimination. General principles
of law include principles of equity, i.e., the general principles of fairness and
justice, based on the test of what is reasonable. The Universal Declaration of
Human Rights, the International Covenant on Economic, Social, and Cultural
Rights, the International Convention on the Elimination of All Forms of Racial
Discrimination, the Convention against Discrimination in Education, the
Convention (No. 111) Concerning Discrimination in Respect of Employment and
Occupation — 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.

3. POLITICAL LAW; CONSTITUTIONAL LAW; SOCIAL JUSTICE AND

HUMAN RIGHTS; LABOR; HUMANE CONDITIONS OF WORK INCLUDES THE
MANNER BY WHICH EMPLOYERS TREAT THEIR EMPLOYEES. — The Constitution
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 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.

4. LABOR AND SOCIAL LEGISLATION; LABOR CODE; THE STATE SHALL

ENSURE EQUAL WORK OPPORTUNITIES REGARDLESS OF SEX, RACE OR CREED.
— The Constitution also directs the State to promote "equality of employment
opportunities for all." Similarly, the Labor Code 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.
5. ID.; ID.; PROHIBITS DISCRIMINATION IN TERMS OF WAGES. —
Discrimination, particularly in terms of wages, is frowned upon by the Labor
Code. Article 135, for example, prohibits and penalizes 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.

6. INTERNATIONAL LAW; INTERNATIONAL COVENANT ON ECONOMIC,

SOCIAL AND CULTURAL RIGHTS; INSTITUTIONALIZED THE LONG HONORED
LEGAL TRUISM OF "EQUAL PAY FOR EQUAL WORK." — [T]he International
Covenant on Economic, Social, and Cultural Rights, 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; . . . . 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.

7. LABOR AND SOCIAL LEGISLATION; LABOR CODE; CONDITIONS OF

EMPLOYMENT; EQUAL WORK FOR EQUAL PAY; APPLIED IN CASE AT BAR. — 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. 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
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 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.

8. ID.; ID.; ID.; SALARY; DEFINED. — "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: "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.

9. ID.; ID.; ID.; ID.; "DISLOCATION FACTOR" AND FOREIGN HIRES'

LIMITED TENURE CANNOT SERVE AS VALID BASES FOR DISTINCTION IN SALARY
RATES. — 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.
10. ID.; ID.; THE STATE HAS THE RIGHT AND DUTY TO REGULATE THE
RELATIONS BETWEEN LABOR AND CAPITAL. — 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 to regulate
the relations between labor and capital. 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.
Should such contracts contain stipulations that are contrary to public policy,
courts will not hesitate to strike down these stipulations.

11. ID.; ID.; CONDITIONS OF EMPLOYMENT; POINT-OF-HIRE

CLASSIFICATION TO JUSTIFY THE DISTINCTION IN THE SALARY RATES OF
FOREIGN-HIRES AND LOCAL-HIRES IS AN INVALID CLASSIFICATION. — [W]e 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.
12. ID.; ID.; LABOR RELATIONS; COLLECTIVE BARGAINING UNIT;
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 ELUCIDATED. — 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 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 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.
cADEHI

13. ID.; ID.; ID.; ID.; FOREIGN-HIRES SHOULD NOT BELONG TO THE
SAME BARGAINING UNIT AS LOCAL-HIRES. — We agree, however, that foreign-
hires do not belong to the same bargaining unit as the local-hires. . . . 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.

DECISION

KAPUNAN, J : p

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
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 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. llcd

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
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 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,
Cresenciano 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. cda

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:
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 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.
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 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 favorable 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;
xxx xxx xxx

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
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 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. LLjur

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 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., is on official leave.
Ynares-Santiago, J., is on leave.

Footnotes
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.

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 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 Assembly 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 . . . ."
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 method appropriate to the circumstances
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 and to national usage, will tend to promote equality of opportunity and of
treatment in the matter of education . . . ."

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 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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