INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE) V.

LEONARDO QUISUMBING
June 1, 2000 | Kapunan, J,
Minimum Wage > Rules > Equal Pay for Work of Equal Value
AKGL

DOCTRINE: Equal pay for equal work means that persons who work with substantially equal qualifications, skill,
effort and responsibility, under similar conditions, should be paid similar salaries.
CASE SUMMARY: International School hires teachers and classifies them into local hires and foreign hires. Foreign
hires receive 25% more than local hires, plus other benefits (e.g., housing, transpo). ISAE contested the said
difference, but the School still did not grant equal pay between local and foreign hires.

FACTS:
 International School, Inc. is a domestic educational institution established primarily for dependents of foreign
diplomatic personnel and other temporary residents. 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.
 Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying the same
into two: (1) foreignhires and (2) localhires. (See notes for the test to determine W/N foreign/local hire)
 The School grants foreignhires certain benefits not accorded localhires. These include housing,
transportation, shipping costs, taxes, and home leave travel allowance. Foreignhires are also paid a salary
rate 25% more than localhires. The School justifies the difference on two “significant economic
disadvantages” foreignhires have to endure, namely: (a) the “dislocation factor” and (b) limited tenure.
 When negotiations for the new CBA arose, International School Alliance of Educators contested the
difference in salary rates between foreign and localhires. Because of the deadlock, ISAE filed a notice of
strike.
 [School’s Argument] 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. (Note: Not all local hires are Filipinos. 38 of which are foreigners)
 [DOLE] Upheld the pointofhire classification for the distinction in salary rates. The principle “equal pay for
equal work” does not find application in the present case, because of the following: 1. certain amenities have
to be provided to these people in order to entice them to render their services in the Philippines; 2. foreign
hires have limited contract of employment unlike the local hires who enjoy security of tenure; 3. the Union
cannot also invoke the equal protection clause to justify its claim of parity.

ISSUE: W/N the point-of-hire classification may justify the 25% additional salary for the foreign hires of the
International School? NO!

RULING:
 Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. 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.
 Art. 7, of the Int’l Covenant on Economic, Social, and Cultural Rights 1 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” notwithstanding.
 If an employer accords employees the same position and rank, the presumption is that these employees
perform equal work. 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.
 The employer in this case has failed to discharge this burden. There is no evidence here that foreignhires
perform 25% more efficiently or effectively than the local hires. Both groups have similar functions and
responsibilities, which they perform under similar working conditions.
o The School cannot invoke the need to entice foreign hires to leave their domicile to rationalize the
distinction in salary rates.
1
“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”
 INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE) V. LEONARDO QUISUMBING
o The “dislocation factor” and the foreignhires’ limited tenure also cannot serve as valid bases for the
distinction in salary rates. The dislocation factor and limited tenure affecting foreignhires are
adequately compensated by certain benefits.
 In this case, we find the pointofhire classification employed by respondent School to justify the distinction in
the salary rates of foreignhires and local hires to be an invalid classification.

DISPOSITION: 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 foreignhires
higher salaries than local hires.

NOTES:
Re: Constitutionality of the classification
 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 his duties, [to] act with justice, give everyone his due, and observe honesty and good faith.”
 International laws (e.g., Universal Declaration of Human Rights, the International Covenant on Economic,
Social, and Cultural Rights, and the International Convention on the Elimination of All Forms of Racial
Discrimination) proscribes discrimination.
 The Constitution 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 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.”
Re: Bargaining Units representing both Local and Foreing Hires
 Foreignhires do not belong to the same bargaining unit as the localhires. 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.
Test to Determnine W/N Local Hire or Foreign Hires
 The School employs four tests to determine whether a faculty member should be classifled as a foreignhire
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?