Case Digest: Edi-Staff Builders International vs. NLRC, GR No. 145587, October 26, 2007

Private International Law  

  • Petitioner: EDI-Staffbuilders International, Inc.

  • Respondent: Eleazar S. Gran

  • Forum:  Philippines


Recit Version:

  • Petitioner EDI-Staffbuilders International, Inc. and Expertise Search International (ESI) recruited and deployed Eleazar S. Gran to Omar Ahmed Ali Bin Bechr Est. (OAB) in Saudi Arabia as a Computer Specialist. Gran signed an employment contract with OAB, which stated a monthly salary of USD 850.00, but his POEA Information Sheet listed USD 600.00. Despite questioning the discrepancy, Gran received the agreed USD 850.00 monthly. After five months, OAB terminated Gran’s employment for alleged contract non-compliance and insubordination, leading Gran to file a complaint with the NLRC upon his return to the Philippines.

  • The issue was whether Saudi Labor laws or Philippine laws should govern Gran's dismissal. The contract specified Saudi Labor laws for termination matters, but EDI failed to prove these laws in court. Consequently, the court applied Philippine labor laws by default, following the principle of presumed-identity when foreign laws are not properly established.

  • Regarding the justification for Gran's dismissal, EDI claimed he was terminated for incompetence and insubordination. However, under Philippine law, the burden of proving a lawful dismissal falls on the employer. EDI's evidence was insufficient to substantiate claims of incompetence and insubordination. Thus, EDI did not meet the burden of proof required to validate Gran's dismissal under Philippine labor standards.

Facts:

  • Petitioner EDI-Staffbuilders International, Inc. is a corporation engaged in the recruitment and placement of Overseas Filipino Workers (OFWs).

  • Expertise Search International (ESI) is another recruitment agency that collaborated with EDI to process the deployment of respondent Eleazar S. Gran to Saudi Arabia.

  • Eleazar S. Gran was recruited by EDI and deployed by ESI to work for Omar Ahmed Ali Bin Bechr Est. (OAB) in Riyadh, Saudi Arabia as a "Computer Specialist."

  • Gran signed an employment contract with OAB for a monthly salary of USD 850.00, though his Philippine Overseas Employment Agency (POEA) Information Sheet indicated only USD 600.00. 

  • Upon arrival in Riyadh, Gran questioned the salary discrepancy, but with the help of EDI's Riyadh office, OAB agreed to pay him USD 850.00 per month.

  • After working for five months, OAB terminated Gran’s employment, due to alleged non-compliance with contract and pre-qualification requirements, as well as insubordination. 

  • After his arrival in the Philippines, Gran filed a complaint with the NLRC for underpayment of wages and illegal dismissal.


Issue: Whether Saudi Labor Jaws should govern Gran's dismissal from employment. YES


EDI contended that Saudi Labor laws should apply in the resolution of Gran's complaint. 


Second and Third Issues: 

Whether Gran's dismissal is justifiable by reason of incompetence, insubordination, and disobedience


In cases involving OFWs, the rights and obligations among and between the OFW, the local recruiter/agent, and the foreign employer/principal are governed by the employment contract. A contract freely entered into is considered law between the parties; and hence, should be respected. In formulating the contract, the parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.


In the present case, the employment contract signed by Gran specifically states that Saudi Labor Laws will govern matters not provided for in the contract (e.g. specific causes for termination, termination procedures, etc.). Being the law intended by the parties (lex loci intentiones) to apply to the contract, Saudi Labor Laws should govern all matters relating to the termination of the employment of Gran.


In international law, the party who wants to have a foreign law applied to a dispute or case has the burden of proving the foreign law. The foreign law is treated as a question of fact to be properly pleaded and proved as the judge or labor arbiter cannot take judicial notice of a foreign law. He is presumed to know only domestic or forum law.


Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the matter; thus, the International Law doctrine of presumed-identity approach or processual presumption comes into play. Where a foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign law is the same as ours. Thus, we apply Philippine labor laws in determining the issues presented before us.


Petitioner EDI claims that it had proven that Gran was legally dismissed due to incompetence and insubordination or disobedience.


This claim has no merit.


In illegal dismissal cases, it has been established by Philippine law and jurisprudence that the employer should prove that the dismissal of employees or personnel is legal and just.


Section 33 of Article 277 of the Labor Code states that:


ART. 277. MISCELLANEOUS PROVISIONS39


(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the workers to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. x x x


In many cases, it has been held that in termination disputes or illegal dismissal cases, the employer has the burden of proving that the dismissal is for just and valid causes; and failure to do so would necessarily mean that the dismissal was not justified and therefore illegal. Taking into account the character of the charges and the penalty meted to an employee, the employer is bound to adduce clear, accurate, consistent, and convincing evidence to prove that the dismissal is valid and legal.  This is consistent with the principle of security of tenure as guaranteed by the Constitution and reinforced by Article 277 (b) of the Labor Code of the Philippines. 


In the instant case, petitioner claims that private respondent Gran was validly dismissed for just cause, due to incompetence and insubordination or disobedience. To prove its allegations, EDI submitted two letters as evidence. The first is the July 9, 1994 termination letter, addressed to Gran, from Andrea E. Nicolaou, Managing Director of OAB. The second is an unsigned April 11, 1995 letter from OAB addressed to EDI and ESI, which outlined the reasons why OAB had terminated Gran's employment.


Petitioner claims that Gran was incompetent for the Computer Specialist position because he had "insufficient knowledge in programming and zero knowledge of [the] ACAD system." Petitioner also claims that Gran was justifiably dismissed due to insubordination or disobedience because he continually failed to submit the required "Daily Activity Reports." However, other than the abovementioned letters, no other evidence was presented to show how and why Gran was considered incompetent, insubordinate, or disobedient. Petitioner EDI had clearly failed to overcome the burden of proving that Gran was validly dismissed.


Petitioner's imputation of incompetence on private respondent due to his "insufficient knowledge in programming and zero knowledge of the ACAD system" based only on the above mentioned letters, without any other evidence, cannot be given credence.


An allegation of incompetence should have a factual foundation. Incompetence may be shown by weighing it against a standard, benchmark, or criterion. However, EDI failed to establish any such bases to show how petitioner found Gran incompetent.


In addition, the elements that must concur for the charge of insubordination or willful disobedience to prosper were not present.


In Micro Sales Operation Network v. NLRC, we held that:


For willful disobedience to be a valid cause for dismissal, the following twin elements must concur: (1) the employee's assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge.


EDI failed to discharge the burden of proving Gran's insubordination or willful disobedience. As indicated by the second requirement provided for in Micro Sales Operation Network, in order to justify willful disobedience, we must determine whether the order violated by the employee is reasonable, lawful, made known to the employee, and pertains to the duties which he had been engaged to discharge. In the case at bar, petitioner failed to show that the order of the company which was violated—the submission of "Daily Activity Reports"—was part of Gran's duties as a Computer Specialist. Before the Labor Arbiter, EDI should have provided a copy of the company policy, Gran's job description, or any other document that would show that the "Daily Activity Reports" were required for submission by the employees, more particularly by a Computer Specialist.


Even though EDI and/or ESI were merely the local employment or recruitment agencies and not the foreign employer, they should have adduced additional evidence to convincingly show that Gran's employment was validly and legally terminated. The burden devolves not only upon the foreign-based employer but also on the employment or recruitment agency for the latter is not only an agent of the former, but is also solidarily liable with the foreign principal for any claims or liabilities arising from the dismissal of the worker.


Thus, petitioner failed to prove that Gran was justifiably dismissed due to incompetence, insubordination, or willful disobedience.


Petitioner also raised the issue that Prieto v. NLRC,4 as used by the CA in its Decision, is not applicable to the present case.


In Prieto, this Court ruled that "[i]t is presumed that before their deployment, the petitioners were subjected to trade tests required by law to be conducted by the recruiting agency to insure employment of only technically qualified workers for the foreign principal." The CA, using the ruling in the said case, ruled that Gran must have passed the test; otherwise, he would not have been hired. Therefore, EDI was at fault when it deployed Gran who was allegedly "incompetent" for the job.


According to petitioner, the Prieto ruling is not applicable because in the case at hand, Gran misrepresented himself in his curriculum vitae as a Computer Specialist; thus, he was not qualified for the job for which he was hired.


We disagree.


The CA is correct in applying Prieto. The purpose of the required trade test is to weed out incompetent applicants from the pool of available workers. It is supposed to reveal applicants with false educational backgrounds, and expose bogus qualifications. Since EDI deployed Gran to Riyadh, it can be presumed that Gran had passed the required trade test and that Gran is qualified for the job. Even if there was no objective trade test done by EDI, it was still EDI's responsibility to subject Gran to a trade test; and its failure to do so only weakened its position but should not in any way prejudice Gran. In any case, the issue is rendered moot and academic because Gran's incompetency is unproved.


WHEREFORE, the petition is DENIED. The October 18, 2000 Decision in CA-G.R. SP No. 56120 of the Court of Appeals affirming the January 15, 1999 Decision and September 30, 1999 Resolution of the NLRC


is AFFIRMED with the MODIFICATION that petitioner EDI-Staffbuilders International, Inc. shall pay the amount of PhP 30,000.00 to respondent Gran as nominal damages for non-compliance with statutory due process.


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