EDI-Staffbuilders International, Inc. vs National Labor Relations Commission

written by Howard

G.R. No. 145587 – 563 Phil. 1 – 537 SCRA 409 – Civil Law – Conflict of Laws – Private International Law – Proof of Foreign Law – Processual Presumption

Labor Law – Jurisdiction and Reliefs – Filipino fired abroad may file labor case against employer’s local agent

In 1993, EDI-Staffbuilders, Inc. (EDI), upon request of Omar Ahmed Ali Bin Bechr Est. (OAB), a company in Saudi Arabia, sent to OAB resumes from which OAB can choose a computer specialist. Eleazar Gran was selected. It was agreed that his monthly salary shall be $. But five months into his service in Saudi Arabia, Gran received a termination letter and right there and then was removed from his post. The termination letter states that he was incompetent because he does not know the ACAD system which is required in his line of work; that he failed to enrich his knowledge during his 5 month stay to prove his competence; that he is disobedient because he failed to submit the required daily reports to OAB. Gran then signed a quitclaim whereby he declared that he is releasing OAB from any liability in exchange of 2, Riyal.

When Gran returned, he filed a labor case for illegal dismissal against EDI and OAB. EDI in its defense averred that the dismissal is valid because when Gran and OAB signed the employment contract, both parties agreed that Saudi labor laws shall govern all matters relating to the termination of Gran’s employment; that under Saudi labor laws, Gran’s termination due to incompetence and insubordination is valid; that Gran’s insubordination and incompetence is outlined in the termination letter Gran received. The labor arbiter dismissed the labor case but on appeal, the National Labor Relations Commission (NLRC) reversed the decision of the arbiter. The Court of Appeals likewise affirmed the NLRC.

ISSUE: Whether or not the Saudi labor laws should be applied.

HELD: No. The specific Saudi labor laws were not proven in court. EDI did not present proof as to the existence and the specific provisions of such foreign law. Hence, processual presumption applies and Philippine labor laws shall be used. Under our laws, an employee like Gran shall only be terminated upon just cause. The allegations against him, at worst, shall only merit a suspension not a dismissal. His incompetence is not proven because prior to being sent to Saudi Arabia, he underwent the required trade test to prove his competence. The presumption therefore is that he is competent and that it is upon OAB and EDI to prove otherwise. No proof of his incompetence was ever adduced in court. His alleged insubordination is likewise not proven. It was not proven that the submission of daily track records is part of his job as a computer specialist. There was also a lack of due process. Under our laws, Gran is entitled to the two notice rule whereby prior to termination he should receive two notices. In the case at bar, he only received one and he was immediately terminated on the same day he received the notice.

Lastly, the quitclaim may not also release OAB from liability. Philippine laws is again applied here sans proof of Saudi laws. Under Philippine Laws, a quitclaim is generally frowned upon and are strictly examined. In this case, based on the circumstances, Gran at that time has no option but to sign the quitclaim. The quitclaim is also void because his separation pay was merely 2,948 Riyal which is lower than the $ monthly salary (3,190 Riyal).

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