Cadalin vs POEA Administrator

Facts:

BRII is a foreign corporation and is engaged in construction; while AIBC is a domestic

corporation licensed as a service contractor to recruit, mobilize and deploy Filipino
workers for overseas employment on behalf of its foreign principals. Bienvenido M..
Cadalin and 2 others, in their own behalf and on behalf of 728 other overseas contract
workers, instituted a class suit by filing an "Amended Complaint" with the POEA for money
claims arising from their recruitment by AIBC and employment by BRII. The amended
complaint principally sought the payment of the unexpired portion of the employment
contracts, which was terminated prematurely. Claimants are of the view that Article 291
of the Labor Code of the Philippines refers only to claims "arising from the employer's
violation of the employee's right as provided by the Labor Code." They assert that their
claims are based on the violation of their employment contracts and therefore the claims
may be brought within ten years as provided by Article 1144 of the Civil Code of the
Philippines. AIBC and BRII, insisting that the actions on the claims have prescribed under
the Amiri Decree No. 23 of 1976 which provides that, "A claim arising out of a contract of
employment shall not be actionable after the lapse of one year from the date of the expiry
of the contract. Thus, they argue that there is in force in the Philippines a "borrowing
law," which is Section 48 of the Code of Civil Procedure and that where such kind of law
exists, it takes precedence over the common-law conflicts rule.

Issue:

Whether it is the Bahrain law on prescription of action based on the Amiri Decree No. 23
of 1976 or a Philippine law on prescription that shall be the governing law

Held:

As a general rule, a foreign procedural law will not be applied in the forum. This is true
even if the action is based upon a foreign substantive law. A law on prescription of actions
is sui generis in Conflict of Laws in the sense that it may be viewed either as procedural
or substantive, depending on the characterization given such a law.

However, the characterization of a statute into a procedural or substantive law becomes

irrelevant when the country of the forum has a "borrowing statute." A "borrowing statute"
directs the state of the forum to apply the foreign statute of limitations to the pending
claims based on a foreign law. Section 48 of our Code of Civil Procedure is of this kind.
Said Section provides: If by the laws of the state or country where the cause of action
arose, the action is barred, it is also barred in the Philippine Islands.
In the light of the 1987 Constitution, however, Section 48 cannot be enforced ex propio
vigore insofar as it ordains the application in this jurisdiction of of the Amiri Decree No.
23 of 1976. The courts of the forum will not enforce any foreign claims obnoxious to the
forums public policy. To enforce the one-year prescriptive period of the Amiri Decree
No. 23 of 1976 as regards the claims in question would contravene the public policy on
the protection to labor.