GR 205703; (March, 2016) (Digest)
G.R. No. 205703 . March 07, 2016
INDUSTRIAL PERSONNEL & MANAGEMENT SERVICES, INC. (IPAMS), SNC LAVALIN ENGINEERS & CONTRACTORS, INC. AND ANGELITO C. HERNANDEZ, PETITIONERS, VS. JOSE G. DE VERA AND ALBERTO B. ARRIOLA, RESPONDENTS.
FACTS
Respondent Alberto Arriola, a licensed surgeon, was hired by petitioner SNC-Lavalin, a Canadian company, through its local agent IPAMS, to work as a Safety Officer in Madagascar under a 19-month contract. The employment contract was processed with the Philippine Overseas Employment Administration (POEA). After three months of work, Arriola received a notice of pre-termination citing diminishing workload and was subsequently repatriated. He received a separation pay computed under Canadian labor law.
Arriola filed a complaint for illegal dismissal, claiming he was entitled to salaries for the unexpired portion of his contract under Philippine law. Petitioners argued that the termination was valid under Canadian law, specifically Ontario’s Employment Standards Act, which they presented in duly authenticated form. They contended that the contract was governed by Canadian law under the principle of lex loci celebrationis, as the employment documents were processed in Canada.
ISSUE
Whether the employment contract of an Overseas Filipino Worker (OFW) is governed by foreign law or Philippine labor laws.
RULING
The Supreme Court ruled that Philippine labor laws govern the employment contract. The Court emphasized the constitutional mandate to afford full protection to labor, which extends to OFWs. While parties may agree to apply foreign law, such stipulation cannot deprive an OFW of the minimum standards and benefits guaranteed by Philippine law. Republic Act No. 8042 (Migrant Workers Act) explicitly provides that in case of conflict, Philippine law shall apply, especially when it is more favorable to the worker.
The Court distinguished the cited precedent, EDI-Staffbuilders, noting it involved a choice-of-law provision specifically stipulating the application of foreign law, which was absent here. In this case, the contract was processed through the POEA, invoking the protective mantle of Philippine statutes. The petitioners’ invocation of Canadian law was rejected as it would circumvent the mandatory provisions of the Labor Code and R.A. 8042 on termination and monetary awards. Consequently, Arriola’s dismissal was deemed illegal, entitling him to full backwages and other benefits under Philippine law. The Court affirmed the CA decision awarding him salaries for the unexpired portion of his contract.