Case Summary (G.R. No. L-21484)
Collective Bargaining Dispute
During the 1995 CBA negotiations, ISAE contested the salary differential and the exclusion of foreign-hires from its bargaining unit. After deadlock and a strike notice, DOLE Acting Secretary Trajano ruled in favor of the School’s classification and salary scheme; Secretary Quisumbing denied reconsideration. ISAE elevated the matter to the Supreme Court.
Issue on Wage Discrimination
Whether the School’s point-of-hire classification and the 25% salary premium for foreign-hires violate the principle of equal pay for work of equal value under the 1987 Constitution, the Labor Code, and international law.
Issue on Bargaining Unit Composition
Whether foreign-hires should be included in the same bargaining unit as local-hires under collective bargaining provisions.
Constitutional and Statutory Principles
The 1987 Constitution mandates humane work conditions (Art. XIII § 3), promotes equality of employment opportunities (Art. XIII § 14), and obliges the State to protect labor (Art. II § 18). The Labor Code forbids wage discrimination (Art. 135 on equal work; Art. 248 on unfair labor practices), and the Civil Code requires justice and equity in contractual relations (Art. 19). International instruments ratified by the Philippines reinforce non-discrimination and equal remuneration for work of equal value.
Rationale on Equal Pay
The Court affirms the long-standing presumption that employees of the same rank and position perform equal work. The employer bears the burden to justify any salary disparity. The School failed to demonstrate that foreign-hires render 25% greater value. Dislocation hardship and contract tenure are insufficient to outweigh the constitutional guarantee of equal pay for equal work. The additional in-kind benefits given to foreign-hires do not justify a permanent salary premium.
Rationale on Bargaining Unit
Collective bargaining units are determined by employee will, unity of interests, bargaining history, and similarity of status. Foreign-hires neither sought inclus
Case Syllabus (G.R. No. L-21484)
Background and Context
- The dispute arises from salary differentials between foreign-hires and local-hires at International School, Inc. (“the School”), a domestic educational institution created under Presidential Decree No. 732.
- The School caters primarily to dependents of foreign diplomatic personnel and temporary residents and is authorized to employ teaching and management personnel locally or abroad, subject only to laws enacted for employee protection.
- Faculty are divided into two categories: foreign-hires and local-hires. Differences in compensation and benefits are granted to foreign-hires to offset alleged “economic disadvantages.”
Facts of the Case
- The School applies four tests to classify hires:
• One’s domicile
• Location of one’s home economy
• Country of economic allegiance
• Point-of-hire and relocation responsibility by the School - If any test points to the Philippines, the individual is deemed a local-hire; otherwise, a foreign-hire.
- Foreign-hires receive benefits not afforded local-hires, including housing, transportation, shipping costs, tax assistance, home-leave travel allowance, and a 25% higher salary rate.
- The School justifies the premium salary based on:
• “Dislocation factor” – uprooting, family separation, career deviation, housing, schooling, insurance, and living costs abroad
• “Limited tenure” – uncertainty upon repatriation and job continuity after contract expiration
Procedural History
- June 1995: International School Alliance of Educators (ISAE), the certified bargaining representative of all faculty, contests the salary differential and inclusion of foreign-hires in the bargaining unit.
- September 7, 1995: Petitioner files a notice of strike.
- Failure of conciliation before the NCMB leads DOLE to assume jurisdiction.
- June 10, 1996: Acting Secretary Cresenciano B. Trajano issues an order resolving parity and representation issues in favor of the School.
- March 19, 1997: Secretary Leonardo A. Quisumbing denies petitioner’s motion for reconsideration.
- Petitioner elevates the case to the Supreme Court by petition for certiorari.
Legal Issues
- Whether the point-of-hire classification and resulting salary differential constitute unlawful discrimination and violate the principle of “equal pay for equal work.”
- Whether foreign-hires should be included in the same bargaining unit as local-hires for collective bargaining purposes.