G.R. No. 152318 - Deutsche Gesellschaft fur Technische Zusammenarbeit vs. Court of Appeals

On 7 September 1971, the Federal Republic of Germany and the Republic of the Philippines ratified an Agreement concerning Technical Co-operation. The Agreement provided for a five-year term, tacit one-year extensions, and continuation of project provisions after expiry until completion.
On 10 December 1999, both governments executed an Arrangement to implement a project called Social Health Insurance – Networking and Empowerment (SHINE). Under this Arrangement:

The German government, through GTZ (Deutsche Gesellschaft für Technische Zusammenarbeit GmbH), was to second experts, provide local personnel, supply equipment, and meet related costs.
The Philippine government, through the Department of Health (DOH) and the Philippine Health Insurance Corporation (PhilHealth), was to provide local experts, administrative support, project offices, and legal and administrative frameworks, including exemptions from duties.

Between December 1998 and September 1999, GTZ hired six Filipino nationals under fixed-term contracts signed by Dr. Rainer Tollkötter (an adviser of GTZ) to serve as information systems manager, project assistants, programmers, and driver/messenger.
In September 1999, Anne Nicolay became SHINE Project Manager. Private respondents objected to Nicolay’s management style and alleged she deviated from the project’s original objectives, misused resources, and displayed cultural insensitivity.
On 8 June 2000, private respondents sent Nicolay a letter demanding resolution of their concerns or they would no longer stay on the project. On 21 June 2000, Nicolay construed this letter as resignations and demanded formal resignations. Negotiations failed, and on 11 July 2000 Nicolay issued notices of pre-termination of their contracts for “serious and gross insubordination.”

On 21 August 2000, private respondents filed illegal dismissal complaints with the National Labor Relations Commission (NLRC) through a Labor Arbiter. GTZ moved to dismiss for lack of jurisdiction, invoking sovereign immunity; the Labor Arbiter denied the motion for lack of DFA certification and because GTZ was a “private corporation.”
On 15 October 2001, the Labor Arbiter rendered a decision in favor of private respondents, finding illegal dismissal and lack of due process. GTZ did not appeal to the NLRC but filed a Rule 65 certiorari petition with the Court of Appeals (CA).
On 10 December 2001, the CA dismissed the petition for being the wrong remedy (failure to appeal to the NLRC). A motion for reconsideration was denied on 4 March 2002. GTZ then filed a Rule 45 petition with the Supreme Court.

Whether the Court of Appeals had jurisdiction to entertain GTZ’s certiorari petition despite GTZ’s failure to first appeal the Labor Arbiter’s decision to the NLRC.
Whether GTZ, as the implementing agency of the Federal Republic of Germany, was immune from suit in Philippine courts.