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Republic of the Philippines

G.R. No. 128845 June 1, 2000
HON. LEONARDO A. "UISUM#ING $n %$& '()('$*+ (& *%e Se',e*(,+ o- L(.o, (n/
E0)1o+0en*2 HON. CRESENCIANO #. TRAJANO $n %$& '()('$*+ (& *%e A'*$n3
Se',e*(,+ o- L(.o, (n/ E0)1o+0en*2 DR. #RIAN MACCAULE4 $n %$& '()('$*+ (&
*%e Su)e,$n*en/en* o- In*e,n(*$on(1 S'%oo15M(n$1(2 (n/ INTERNATIONAL
SCHOOL, INC., respondents.
Receivin salaries less than their counterparts hired abroad, the local!hires of private
respondent School, "ostl# Filipinos, cr# discri"ination. $e aree. That the local!hires
are paid "ore than their colleaues in other schools is, of course, beside the point. The
point is that e"plo#ees should be iven e%ual pa# for &or' of e%ual value. That is a
principle lon honored in this (urisdiction. That is a principle that rests on funda"ental
notions of (ustice. That is the principle &e uphold toda#.1wphi1.nt
Private respondent International School, Inc. )the School, for short*, pursuant to
Presidential Decree +,-, is a do"estic educational institution established pri"aril# for
dependents of forein diplo"atic personnel and other te"porar# residents.
To enable
the School to continue carr#in out its educational prora" and i"prove its standard of
instruction, Section -)c* of the sa"e decree authori/es the School to e"plo# its o&n
teachin and "anae"ent personnel selected b# it either locall# or abroad, fro"
Philippine or other nationalities, such personnel bein e0e"pt fro" other&ise applicable
la&s and reulations attendin their e"plo#"ent, e0cept la&s that have been or &ill be
enacted for the protection of e"plo#ees.
1ccordinl#, the School hires both forein and local teachers as "e"bers of its facult#,
classif#in the sa"e into t&o2 ).* forein!hires and )-* local!hires. The School e"plo#s
four tests to deter"ine &hether a facult# "e"ber should be classified as a forein!hire
or a local hire2
a. $hat is one3s do"icile4
b. $here is one3s ho"e econo"#4
c. To &hich countr# does one o&e econo"ic alleiance4
d. $as the individual hired abroad specificall# to &or' in the School and &as
the School responsible for brinin that individual to the Philippines4
Should the ans&er to an# of these %ueries point to the Philippines, the facult# "e"ber
is classified as a local hire5 other&ise, he or she is dee"ed a forein!hire.
The School rants forein!hires certain benefits not accorded local!hires.1avvphi1
These include housin, transportation, shippin costs, ta0es, and ho"e leave travel
allo&ance. Forein!hires are also paid a salar# rate t&ent#!five percent )-67* "ore
than local!hires. The School (ustifies the difference on t&o 8sinificant econo"ic
disadvantaes8 forein!hires have to endure, na"el#2 )a* the 8dislocation factor8 and )b*
li"ited tenure. The School e0plains2
1 forein!hire &ould necessaril# have to uproot hi"self fro" his ho"e countr#,
leave his fa"il# and friends, and ta'e the ris' of deviatin fro" a pro"isin
career path 9 all for the purpose of pursuin his profession as an educator,
but this ti"e in a forein land. The ne& forein hire is faced &ith econo"ic
realities2 decent abode for oneself and:or for one3s fa"il#, effective "eans of
transportation, allo&ance for the education of one3s children, ade%uate
insurance aainst illness and death, and of course the pri"ar# benefit of a
basic salar#:retire"ent co"pensation.
;ecause of a li"ited tenure, the forein hire is confronted aain &ith the sa"e
econo"ic realit# after his ter"2 that he &ill eventuall# and inevitabl# return to
his ho"e countr# &here he &ill have to confront the uncertaint# of obtainin
suitable e"plo#"ent after alon period in a forein land.
The co"pensation sche"e is si"pl# the School3s adaptive "easure to re"ain
co"petitive on an international level in ter"s of attractin co"petent
professionals in the field of international education.
$hen neotiations for a ne& collective barainin aree"ent &ere held on <une .==6,
petitioner International School 1lliance of >ducators, 8a leiti"ate labor union and the
collective barainin representative of all facult# "e"bers8
of the School, contested
the difference in salar# rates bet&een forein and local!hires. This issue, as &ell as the
%uestion of &hether forein!hires should be included in the appropriate barainin unit,
eventuall# caused a deadloc' bet&een the parties.
On Septe"ber +, .==6, petitioner filed a notice of stri'e. The failure of the National
@onciliation and Mediation ;oard to brin the parties to a co"pro"ise pro"pted the
Depart"ent of Aabor and >"plo#"ent )DOA>* to assu"e (urisdiction over the dispute.
On <une .B, .==C, the DOA> 1ctin Secretar#, @rescenciano ;. Tra(ano, issued an
Order resolvin the parit# and representation issues in favor of the School. Then DOA>
Secretar# Aeonardo 1. Duisu"bin subse%uentl# denied petitioner3s "otion for
reconsideration in an Order dated March .=, .==+. Petitioner no& see's relief in this
Petitioner clai"s that the point!of!hire classification e"plo#ed b# the School is
discri"inator# to Filipinos and that the rant of hiher salaries to forein!hires
constitutes racial discri"ination.
The School disputes these clai"s and ives a brea'do&n of its facult# "e"bers,
nu"berin ,E in all, &ith nationalities other than Filipino, &ho have been hired locall#
and classified as local hires.
The 1ctin Secretar# of Aabor found that these non!
Filipino local!hires received the sa"e benefits as the Filipino local!hires.
The co"pensation pac'ae iven to local!hires has been sho&n to appl# to all,
reardless of race. Truth to tell, there are foreiners &ho have been hired
locall# and &ho are paid e%uall# as Filipino local hires.
The 1ctin secretar# upheld the point!of!hire classification for the distinction in salar#
The Principle 8e%ual pa# for e%ual &or'8 does not find applications in the
present case. The international character of the School re%uires the hirin of
forein personnel to deal &ith different nationalities and different cultures,
a"on the student population.
$e also ta'e coni/ance of the e0istence of a s#ste" of salaries and benefits
accorded to forein hired personnel &hich s#ste" is universall# reconi/ed.
$e aree that certain a"enities have to be provided to these people in order
to entice the" to render their services in the Philippines and in the process
re"ain co"petitive in the international "ar'et.
Further"ore, &e too' note of the fact that forein hires have li"ited contract of
e"plo#"ent unli'e the local hires &ho en(o# securit# of tenure. To appl# parit#
therefore, in &aes and other benefits &ould also re%uire parit# in other ter"s
and conditions of e"plo#"ent &hich include the e"plo#"ent &hich include the
e"plo#"ent contract.
1 perusal of the parties3 .==-!.==6 @;1 points us to the conditions and
provisions for salar# and professional co"pensation &herein the parties aree
as follo&s2
1ll "e"bers of the barainin unit shall be co"pensated onl# in
accordance &ith 1ppendi0 @ hereof provided that the Superintendent
of the School has the discretion to recruit and hire e0patriate teachers
fro" abroad, under ter"s and conditions that are consistent &ith
accepted international practice.
1ppendi0 @ of said @;1 further provides2
The ne& salar# schedule is dee"ed at e%uit# &ith the Overseas
Recruited Staff )OSRS* salar# schedule. The -67 differential is
reflective of the areed value of s#ste" displace"ent and contracted
status of the OSRS as differentiated fro" the tenured status of
Aocall# Recruited Staff )ARS*.
To our "ind, these provisions de"onstrate the parties3 reconition of the
difference in the status of t&o t#pes of e"plo#ees, hence, the difference in
their salaries.
The Fnion cannot also invo'e the e%ual protection clause to (ustif# its clai" of
parit#. It is an established principle of constitutional la& that the uarantee of
e%ual protection of the la&s is not violated b# leislation or private covenants
based on reasonable classification. 1 classification is reasonable if it is based
on substantial distinctions and appl# to all "e"bers of the sa"e class. Veril#,
there is a substantial distinction bet&een forein hires and local hires, the
for"er en(o#in onl# a li"ited tenure, havin no a"enities of their o&n in the
Philippines and have to be iven a ood co"pensation pac'ae in order to
attract the" to (oin the teachin facult# of the School.
$e cannot aree.
That public polic# abhors ine%ualit# and discri"ination is be#ond contention. Our
@onstitution and la&s reflect the polic# aainst these evils. The @onstitution
in the
1rticle on Social <ustice and Gu"an Rihts e0horts @onress to 8ive hihest priorit# to
the enact"ent of "easures that protect and enhance the riht of all people to hu"an
dinit#, reduce social, econo"ic, and political ine%ualities.8 The ver# broad 1rticle .= of
the @ivil @ode re%uires ever# person, 8in the e0ercise of his rihts and in the
perfor"ance of his duties, HtoI act &ith (ustice, ive ever#one his due, and observe
honest# and ood faith.
International la&, &hich sprins fro" eneral principles of la&,
li'e&ise proscribes
discri"ination. Jeneral principles of la& include principles of e%uit#,
i.e., the eneral
principles of fairness and (ustice, based on the test of &hat is reasonable.
Fniversal Declaration of Gu"an Rihts,
the International @ovenant on >cono"ic,
Social, and @ultural Rihts,
the International @onvention on the >li"ination of 1ll
For"s of Racial Discri"ination,
the @onvention aainst Discri"ination in >ducation,
the @onvention )No. ...* @oncernin Discri"ination in Respect of >"plo#"ent and
9 all e"bod# the eneral principle aainst discri"ination, the ver#
antithesis of fairness and (ustice. The Philippines, throuh its @onstitution, has
incorporated this principle as part of its national la&s.
In the &or'place, &here the relations bet&een capital and labor are often s'e&ed in
favor of capital, ine%ualit# and discri"ination b# the e"plo#er are all the "ore
The @onstitution
specificall# provides that labor is entitled to 8hu"ane conditions of
&or'.8 These conditions are not restricted to the ph#sical &or'place 9 the factor#, the
office or the field 9 but include as &ell the "anner b# &hich e"plo#ers treat their
The @onstitution
also directs the State to pro"ote 8e%ualit# of e"plo#"ent
opportunities for all.8 Si"ilarl#, the Aabor @ode
provides that the State shall 8ensure
e%ual &or' opportunities reardless of se0, race or creed.8 It &ould be an affront to both
the spirit and letter of these provisions if the State, in spite of its pri"ordial obliation to
pro"ote and ensure e%ual e"plo#"ent opportunities, closes its e#es to une%ual and
discri"inator# ter"s and conditions of e"plo#"ent.
Discri"ination, particularl# in ter"s of &aes, is fro&ned upon b# the Aabor @ode.
1rticle .,6, for e0a"ple, prohibits and penali/es
the pa#"ent of lesser co"pensation
to a fe"ale e"plo#ee as aainst a "ale e"plo#ee for &or' of e%ual value. 1rticle -?E
declares it an unfair labor practice for an e"plo#er to discri"inate in reard to &aes in
order to encourae or discourae "e"bership in an# labor orani/ation.
Notabl#, the International @ovenant on >cono"ic, Social, and @ultural Rihts, supra, in
1rticle + thereof, provides2
The States Parties to the present @ovenant reconi/e the riht of ever#one to
the en(o#"ent of (ust and favourable conditions of &or', &hich ensure, in
a. Re"uneration &hich provides all &or'ers, as a "ini"u", &ith2
)i* Fair &aes and e%ual re"uneration for &or' of e%ual
value &ithout distinction of an# 'ind, in particular &o"en
bein uaranteed conditions of &or' not inferior to those
en(o#ed b# "en, &ith e%ual pa# for e%ual &or'5
0 0 0 0 0 0 0 0 0
The foreoin provisions i"prenabl# institutionali/e in this (urisdiction the lon honored
leal truis" of 8e%ual pa# for e%ual &or'.8 Persons &ho &or' &ith substantiall# e%ual
%ualifications, s'ill, effort and responsibilit#, under si"ilar conditions, should be paid
si"ilar salaries.
This rule applies to the School, its 8international character8
The School contends that petitioner has not adduced evidence that local!hires perfor"
&or' e%ual to that of forein!hires.
The @ourt finds this aru"ent a little cavalier. If an
e"plo#er accords e"plo#ees the sa"e position and ran', the presu"ption is that these
e"plo#ees perfor" e%ual &or'. This presu"ption is borne b# loic and hu"an
e0perience. If the e"plo#er pa#s one e"plo#ee less than the rest, it is not for that
e"plo#ee to e0plain &h# he receives less or &h# the others receive "ore. That &ould
be addin insult to in(ur#. The e"plo#er has discri"inated aainst that e"plo#ee5 it is
for the e"plo#er to e0plain &h# the e"plo#ee is treated unfairl#.
The e"plo#er in this case has failed to dischare this burden. There is no evidence
here that forein!hires perfor" -67 "ore efficientl# or effectivel# than the local!hires.
;oth roups have si"ilar functions and responsibilities, &hich the# perfor" under
si"ilar &or'in conditions.
The School cannot invo'e the need to entice forein!hires to leave their do"icile to
rationali/e the distinction in salar# rates &ithout violatin the principle of e%ual &or' for
e%ual pa#.
8Salar#8 is defined in ;lac'3s Aa& Dictionar# )6th ed.* as 8a re&ard or reco"pense for
services perfor"ed.8 Si"ilarl#, the Philippine Aeal >nc#clopedia states that 8salar#8 is
the 8HcIonsideration paid at reular intervals for the renderin of services.8 In Songco v.
National Labor Relations Commission,
&e said that2
8salar#8 "eans a reco"pense or consideration "ade to a person for his pains
or industr# in another "an3s business. $hether it be derived fro" 8salariu",8
or "ore fancifull# fro" 8sal,8 the pa# of the Ro"an soldier, it carries &ith it the
funda"ental idea of co"pensation for services rendered. )>"phasis supplied.*
$hile &e reconi/e the need of the School to attract forein!hires, salaries should not
be used as an entice"ent to the pre(udice of local!hires. The local!hires perfor" the
sa"e services as forein!hires and the# ouht to be paid the sa"e salaries as the latter.
For the sa"e reason, the 8dislocation factor8 and the forein!hires3 li"ited tenure also
cannot serve as valid bases for the distinction in salar# rates. The dislocation factor and
li"ited tenure affectin forein!hires are ade%uatel# co"pensated b# certain benefits
accorded the" &hich are not en(o#ed b# local!hires, such as housin, transportation,
shippin costs, ta0es and ho"e leave travel allo&ances.
The @onstitution en(oins the State to 8protect the rihts of &or'ers and pro"ote their
8to afford labor full protection.8
The State, therefore, has the riht and dut#
to reulate the relations bet&een labor and capital.
These relations are not "erel#
contractual but are so i"pressed &ith public interest that labor contracts, collective
barainin aree"ents included, "ust #ield to the co""on ood.
Should such
contracts contain stipulations that are contrar# to public polic#, courts &ill not hesitate to
stri'e do&n these stipulations.
In this case, &e find the point!of!hire classification e"plo#ed b# respondent School to
(ustif# the distinction in the salar# rates of forein!hires and local hires to be an invalid
classification. There is no reasonable distinction bet&een the services rendered b#
forein!hires and local!hires. The practice of the School of accordin hiher salaries to
forein!hires contravenes public polic# and, certainl#, does not deserve the s#"path# of
this @ourt.1avvphi1
$e aree, ho&ever, that forein!hires do not belon to the sa"e barainin unit as the
1 barainin unit is 8a roup of e"plo#ees of a iven e"plo#er, co"prised of all or less
than all of the entire bod# of e"plo#ees, consistent &ith e%uit# to the e"plo#er, indicate
to be the best suited to serve the reciprocal rihts and duties of the parties under the
collective barainin provisions of the la&.8
The factors in deter"inin the appropriate
collective barainin unit are ).* the &ill of the e"plo#ees )Jlobe Doctrine*5 )-* affinit#
and unit# of the e"plo#ees3 interest, such as substantial si"ilarit# of &or' and duties, or
si"ilarit# of co"pensation and &or'in conditions )Substantial Mutual Interests Rule*5
),* prior collective barainin histor#5 and )?* si"ilarit# of e"plo#"ent status.
basic test of an asserted barainin unit3s acceptabilit# is &hether or not it is
funda"entall# the co"bination &hich &ill best assure to all e"plo#ees the e0ercise of
their collective barainin rihts.
It does not appear that forein!hires have indicated their intention to be rouped
toether &ith local!hires for purposes of collective barainin. The collective barainin
histor# in the School also sho&s that these roups &ere al&a#s treated separatel#.
Forein!hires have li"ited tenure5 local!hires en(o# securit# of tenure. 1lthouh forein!
hires perfor" si"ilar functions under the sa"e &or'in conditions as the local!hires,
forein!hires are accorded certain benefits not ranted to local!hires. These benefits,
such as housin, transportation, shippin costs, ta0es, and ho"e leave travel
allo&ance, are reasonabl# related to their status as forein!hires, and (ustif# the
e0clusion of the for"er fro" the latter. To include forein!hires in a barainin unit &ith
local!hires &ould not assure either roup the e0ercise of their respective collective
barainin rihts.
$G>R>FOR>, the petition is JIV>N DF> @OFRS>. The petition is hereb# JR1NT>D
IN P1RT. The Orders of the Secretar# of Aabor and >"plo#"ent dated <une .B, .==C
and March .=, .==+, are hereb# R>V>RS>D and S>T 1SID> insofar as the# uphold
the practice of respondent School of accordin forein!hires hiher salaries than local!