International School Alliance of Educators Vs Quisumbing
International School Alliance of Educators Vs Quisumbing
International School Alliance of Educators Vs Quisumbing
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G.R. No. 128845. June 1, 2000.
Labor Law; Constitutional Law; That public policy abhors inequality and discrimination is beyond
contention.—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 his
duties, [to] act with justice, give everyone his due, and observe honesty and good faith.”
Same; Same; International law, which springs from general principles of law, likewise proscribes
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.
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* FIRST DIVISION.
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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
1
primarily for dependents of foreign
diplomatic personnel and other temporary residents. 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:
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1 Issuedon 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).
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(1) foreign-hires and (2) local-hires. The School employs four tests to determine whether a faculty
member should be classifled 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 specifically2 to work in the School and was the School responsible for
bringing that individual to the Philippines?
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
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2 Rollo, p. 328.
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The compensation scheme is simply the School’s adaptive measure to remain competitive on3 an
international level in terms of attracting competent professionals in the field of international education.
When negotiations for a new collective bargaining agreement were held on June 1995, petitioner
International School Alliance of Educators, “a 4legitimate labor union and the collective
bargaining representative of all 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.
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,5 with nationalities other than Filipino, who have been hired locally and classified as local
hires. The Acting Secretary of Labor found that these
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3 Id., at. 324.
4 Id., at. 8.
5 Id., at. 325. The breakdown is as follows:
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Americans - 17
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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.
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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 have7
to be given a good compensation package in order to attract them to join the
teaching faculty of the School.
We cannot agree.
That public policy abhors inequality and discrimination is beyond
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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
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7 Id., at 38-39.
8 In Section 1, Article XIII thereof.
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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 9good faith.”
International law, which springs from general principles of 10 law, likewise proscribes
discrimination. General principles of law include principles of equity,
11
i.e., the general principles
of fairness and 12justice, based on the test of what is reasonable. The Universal Declaration 13
of
Human Rights, the International Covenant on Economic, Social, and Cultural Rights, 14 the
International Convention on the Elimination of All Forms of Racial Discrimination, the
Convention against Discrimi-
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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
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eliminating racial discrimination in all its forms and promoting understanding among all races x x x.”
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 x x x.”
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.
22
State, in spite of its primordial obligation to promote and ensure equal employment
opportunities,20 closes its eyes to unequal and discriminatory terms and conditions of
employment.
Discrimination, particularly in terms
21
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.
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:
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
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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.
23
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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.
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“[c]onsideration paid at 24
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. (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
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enjoins the State to 26“protect the rights of workers and promote their
welfare,” “to afford labor full protection.” The27
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 28
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.
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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.
25
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
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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 30 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
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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 shows that these groups were always treated separately. Foreign-hires have limited tenure;
local-hires enjoy security of tenure. Although foreign-hires perform
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29 ToyotaMotor 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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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.
Petition granted in part. Orders of June 10, 1996 and March 19, 1997 reversed and set aside.
Note.—The constitutional policy of providing full protection to labor is not intended to oppress
or destroy management. (Capili vs. National Labor Relations Commission, 270 SCRA 488 [1997])
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