FIRST DIVISION

[G.R. No. 128845. June 1, 2000]

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS ISAE!, petitioner, vs. HON. LEONARDO A. "UISU#$ING %n &%' ()*)(%+, )' +&e Se(-e+)-, o. L)/o- )n0 E1*2o,1en+3 HON. CRESENCIANO $. TRAJANO %n &%' ()*)(%+, )' +&e A(+%n4 Se(-e+)-, o. L)/o- )n0 E1*2o,1en+3 DR. $RIAN #ACCAULE5 %n &%' ()*)(%+, )' +&e Su*e-%n+en0en+ o. In+e-n)+%on)2 S(&oo26#)n%2)3 )n0 INTERNATIONAL SCHOOL, INC., respondents. DECISION
7A8UNAN, J.9 Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent School, mostl Filipinos, cr discrimination! "e agree! That the local-hires are paid more than their colleagues in other schools is, of course, beside the point! The point is that emplo ees should be given e#ual pa for $or% of e#ual value! That is a principle long honored in this &urisdiction! That is a principle that rests on fundamental notions of &ustice! That is the principle $e uphold toda ! 'rivate respondent International School, Inc! (the School, for short), pursuant to 'residential Decree *+,, is a domestic educational institution established primaril for dependents of foreign diplomatic personnel and other temporar residents! To enable the School to continue carr ing out its educational program and improve its standard of instruction, Section ,(c) of the same decree authori0es the School to
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emplo its o$n teaching and management personnel selected b it either locall or abroad, from 'hilippine or other nationalities, such personnel being e1empt from other$ise applicable la$s and regulations attending their emplo ment, e1cept la$s that have been or $ill be enacted for the protection of emplo ees! 2ccordingl , the School hires both foreign and local teachers as members of its facult , classif ing the same into t$o3 (.) foreign-hires and (,) local-hires! The School emplo s four tests to determine $hether a facult member should be classified as a foreign-hire or a local hire3 a!!!!!"hat is one4s domicile5

b!!!!!"here is one4s home econom 5 c!!!!!To $hich countr does one o$e economic allegiance5 d!!!!!"as the individual hired abroad specificall to $or% in the School and $as the School responsible for bringing that individual to the 'hilippines5
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Should the ans$er to an of these #ueries point to the 'hilippines, the facult member is classified as a local hire6 other$ise, he or she is deemed a foreignhire! The School grants foreign-hires certain benefits not accorded local-hires! These include housing, transportation, shipping costs, ta1es, and home leave travel allo$ance! Foreign-hires are also paid a salar rate t$ent -five percent (,78) more than local-hires! The School &ustifies the difference on t$o 9significant economic disadvantages9 foreign-hires have to endure, namel 3 (a) the 9dislocation factor9 and (b) limited tenure! The School e1plains3 2 foreign-hire $ould necessaril have to uproot himself from his home countr , leave his famil and friends, and ta%e the ris% of deviating from a promising career path-all for the purpose of pursuing his profession as an educator, but this time in a foreign land! The ne$ foreign hire is faced $ith economic realities3 decent abode for oneself and:or for one4s famil , effective means of transportation, allo$ance for the education of one4s children, ade#uate insurance against illness and death, and of course the primar benefit of a basic salar :retirement compensation! ;ecause of a limited tenure, the foreign hire is confronted again $ith the same economic realit after his term3 that he $ill eventuall and inevitabl return to his home countr $here he $ill have to confront the uncertaint of obtaining suitable emplo ment after a long period in a foreign land! The compensation scheme is simpl the School4s adaptive measure to remain competitive on an international level in terms of attracting competent professionals in the field of international education!
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"hen negotiations for a ne$ collective bargaining agreement $ere held on <une .==7, petitioner International School 2lliance of >ducators, 9a legitimate labor union and the collective bargaining representative of all facult members9 of the School, contested the difference in salar rates bet$een foreign and local-hires! This issue, as $ell as the #uestion of $hether foreign-hires should be included in
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the appropriate bargaining unit, eventuall caused a deadloc% bet$een the parties! On September *, .==7, petitioner filed a notice of stri%e! The failure of the National @onciliation and Aediation ;oard to bring the parties to a compromise prompted the Department of Babor and >mplo ment (DOB>) to assume &urisdiction over the dispute! On <une .C, .==D, the DOB> 2cting Secretar , @rescenciano ;! Tra&ano, issued an Order resolving the parit and representation issues in favor of the School! Then DOB> Secretar Beonardo 2! Euisumbing subse#uentl denied petitioner4s motion for reconsideration in an Order dated Aarch .=, .==*! 'etitioner no$ see%s relief in this @ourt! 'etitioner claims that the point-of-hire classification emplo ed b the School is discriminator to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination! The School disputes these claims and gives a brea%do$n of its facult members, numbering +F in all, $ith nationalities other than Filipino, $ho have been hired locall and classified as local hires! The 2cting Secretar of Babor found that these non-Filipino local-hires received the same benefits as the Filipino localhires3
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The compensation pac%age given to local-hires has been sho$n to appl to all, regardless of race! Truth to tell, there are foreigners $ho have been hired locall and $ho are paid e#uall as Filipino local hires!
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The 2cting Secretar upheld the point-of-hire classification for the distinction in salar rates3 The principle 9e#ual pa for e#ual $or%9 does not find application in the present case! The international character of the School re#uires the hiring of foreign personnel to deal $ith different nationalities and different cultures, among the student population! "e also ta%e cogni0ance of the e1istence of a s stem of salaries and benefits accorded to foreign hired personnel $hich s stem is universall recogni0ed! "e agree that certain amenities have to be provided to these people in order to entice them to render their services in the 'hilippines and in the process remain competitive in the international mar%et! Furthermore, $e too% note of the fact that foreign hires have limited contract of emplo ment unli%e the local hires $ho en&o securit of tenure! To appl parit therefore, in $ages and other benefits $ould also re#uire parit in other terms and conditions of emplo ment $hich include the emplo ment contract!

2 perusal of the parties4 .==,-.==7 @;2 points us to the conditions and provisions for salar and professional compensation $herein the parties agree as follo$s3 2ll members of the bargaining unit shall be compensated onl in accordance $ith 2ppendi1 @ hereof provided that the Superintendent of the School has the discretion to recruit and hire e1patriate teachers from abroad, under terms and conditions that are consistent $ith accepted international practice! 2ppendi1 @ of said @;2 further provides3 The ne$ salar schedule is deemed at e#uit $ith the Overseas Recruited Staff (OSRS) salar schedule! The ,78 differential is reflective of the agreed value of s stem displacement and contracted status of the OSRS as differentiated from the tenured status of Bocall Recruited Staff (BRS)! To our mind, these provisions demonstrate the parties4 recognition of the difference in the status of t$o t pes of emplo ees, hence, the difference in their salaries! The Gnion cannot also invo%e the e#ual protection clause to &ustif its claim of parit ! It is an established principle of constitutional la$ that the guarantee of e#ual protection of the la$s is not violated b legislation or private covenants based on reasonable classification! 2 classification is reasonable if it is based on substantial distinctions and appl to all members of the same class! Veril , there is a substantial distinction bet$een foreign hires and local hires, the former en&o ing onl a limited tenure, having no amenities of their o$n in the 'hilippines and have to be given a good compensation pac%age in order to attract them to &oin the teaching facult of the School!
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"e cannot agree! That public polic abhors ine#ualit and discrimination is be ond contention! Our @onstitution and la$s reflect the polic against these evils! The @onstitution in the 2rticle on Social <ustice and Human Rights e1horts @ongress to 9give highest priorit to the enactment of measures that protect and enhance the right of all people to human dignit , reduce social, economic, and political ine#ualities!9 The ver broad 2rticle .= of the @ivil @ode re#uires ever person, 9in the e1ercise of
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his rights and in the performance of his duties, -to/ act $ith &ustice, give ever one his due, and observe honest and good faith!9 International la$, $hich springs from general principles of la$, li%e$ise proscribes discrimination! Ieneral principles of la$ include principles of e#uit , i!e!, the general principles of fairness and &ustice, based on the test of $hat is reasonable! The Gniversal Declaration of Human Rights, the International @ovenant on >conomic, Social, and @ultural Rights, the International @onvention on the >limination of 2ll Forms of Racial Discrimination, the @onvention against Discrimination in >ducation, the @onvention (No! ...) @oncerning Discrimination in Respect of >mplo ment and Occupation - all embod the general principle against discrimination, the ver antithesis of fairness and &ustice! The 'hilippines, through its @onstitution, has incorporated this principle as part of its national la$s!
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In the $or%place, $here the relations bet$een capital and labor are often s%e$ed in favor of capital, ine#ualit and discrimination b the emplo er are all the more reprehensible! The @onstitution specificall provides that labor is entitled to 9humane conditions of $or%!9 These conditions are not restricted to the ph sical $or%place - the factor , the office or the field - but include as $ell the manner b $hich emplo ers treat their emplo ees!
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The @onstitution also directs the State to promote 9e#ualit of emplo ment opportunities for all!9 Similarl , the Babor @ode provides that the State shall 9ensure e#ual $or% opportunities regardless of se1, race or creed!9 It $ould be an affront to both the spirit and letter of these provisions if the State, in spite of its primordial obligation to promote and ensure e#ual emplo ment opportunities, closes its e es to une#ual and discriminator terms and conditions of emplo ment!
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Discrimination, particularl in terms of $ages, is fro$ned upon b the Babor @ode! 2rticle .+7, for e1ample, prohibits and penali0es the pa ment of lesser compensation to a female emplo ee as against a male emplo ee for $or% of e#ual value! 2rticle ,?F declares it an unfair labor practice for an emplo er to discriminate in regard to $ages in order to encourage or discourage membership in an labor organi0ation!
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Notabl , the International @ovenant on >conomic, Social, and @ultural Rights, supra, in 2rticle * thereof, provides3 The States 'arties to the present @ovenant recogni0e the right of ever one to the en&o ment of &ust and favourable conditions of $or%, $hich ensure, in particular3

a!!!!!Remuneration $hich provides all $or%ers, as a minimum, $ith3 i!!!!!Fair $ages and e#ual remuneration for $or% of e#ual value $ithout distinction of an %ind, in particular $omen being guaranteed conditions of $or% not inferior to those en&o ed b men, $ith e#ual pa for e#ual $or%6 1 1 1! The foregoing provisions impregnabl institutionali0e in this &urisdiction the long honored legal truism of 9e#ual pa for e#ual $or%!9 'ersons $ho $or% $ith substantiall e#ual #ualifications, s%ill, effort and responsibilit , under similar conditions, should be paid similar salaries! This rule applies to the School, its 9international character9 not$ithstanding!
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The School contends that petitioner has not adduced evidence that local-hires perform $or% e#ual to that of foreign-hires! The @ourt finds this argument a little cavalier! If an emplo er accords emplo ees the same position and ran%, the presumption is that these emplo ees perform e#ual $or%! This presumption is borne b logic and human e1perience! If the emplo er pa s one emplo ee less than the rest, it is not for that emplo ee to e1plain $h he receives less or $h the others receive more! That $ould be adding insult to in&ur ! The emplo er has discriminated against that emplo ee6 it is for the emplo er to e1plain $h the emplo ee is treated unfairl !
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The emplo er in this case has failed to discharge this burden! There is no evidence here that foreign-hires perform ,78 more efficientl or effectivel than the local-hires! ;oth groups have similar functions and responsibilities, $hich the perform under similar $or%ing conditions! The School cannot invo%e the need to entice foreign-hires to leave their domicile to rationali0e the distinction in salar rates $ithout violating the principle of e#ual $or% for e#ual pa ! 9Salar 9 is defined in ;lac%4s Ba$ Dictionar (7th ed!) as 9a re$ard or recompense .o- 'e-:%(e' *e-.o-1e0.9 Similarl , the 'hilippine Begal >nc clopedia states that 9salar 9 is the 9-c/onsideration paid at regular intervals .o- +&e -en0e-%n4 o. 'e-:%(e'!9 In Songco v. National Labor Relations Commission, $e said that3
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9salar 9 means a recompense or consideration made to a person for his pains or industr in another man4s business! "hether it be derived from 9salarium,9 or more fancifull from 9sal,9 the pa of the Roman soldier, it carries $ith it the fundamental idea of compensation .o- 'e-:%(e' -en0e-e0. (>mphasis supplied!)

"hile $e recogni0e the need of the School to attract foreign-hires, salaries should not be used as an enticement to the pre&udice of local-hires! The localhires perform the same services as foreign-hires and the ought to be paid the same salaries as the latter! For the same reason, the 9dislocation factor9 and the foreign-hires4 limited tenure also cannot serve as valid bases for the distinction in salar rates! The dislocation factor and limited tenure affecting foreign-hires are ade#uatel compensated b certain benefits accorded them $hich are not en&o ed b local-hires, such as housing, transportation, shipping costs, ta1es and home leave travel allo$ances! The @onstitution en&oins the State to 9protect the rights of $or%ers and promote their $elfare,9 9to afford labor full protection!9 The State, therefore, has the right and dut to regulate the relations bet$een labor and capital! These relations are not merel contractual but are so impressed $ith public interest that labor contracts, collective bargaining agreements included, must ield to the common good! Should such contracts contain stipulations that are contrar to public polic , courts $ill not hesitate to stri%e do$n these stipulations!
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In this case, $e find the point-of-hire classification emplo ed b respondent School to &ustif the distinction in the salar rates of foreign-hires and local hires to be an invalid classification! There is no reasonable distinction bet$een the services rendered b foreign-hires and local-hires! The practice of the School of according higher salaries to foreign-hires contravenes public polic and, certainl , does not deserve the s mpath of this @ourt! "e agree, ho$ever, that foreign-hires do not belong to the same bargaining unit as the local-hires! 2 bargaining unit is 9a group of emplo ees of a given emplo er, comprised of all or less than all of the entire bod of emplo ees, consistent $ith e#uit to the emplo er indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the la$!9 The factors in determining the appropriate collective bargaining unit are (.) the $ill of the emplo ees (Ilobe Doctrine)6 (,) affinit and unit of the emplo ees4 interest, such as substantial similarit of $or% and duties, or similarit of compensation and $or%ing conditions (Substantial Autual Interests Rule)6 (+) prior collective bargaining histor 6 and (?) similarit of emplo ment status! The basic test of an asserted bargaining unit4s acceptabilit is $hether or not it is fundamentall the combination $hich $ill best assure to all emplo ees the e1ercise of their collective bargaining rights!
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It does not appear that foreign-hires have indicated their intention to be grouped together $ith local-hires for purposes of collective bargaining! The collective bargaining histor in the School also sho$s that these groups $ere al$a s treated separatel ! Foreign-hires have limited tenure6 local-hires en&o securit of tenure! 2lthough foreign-hires perform similar functions under the same $or%ing

conditions as the local-hires, foreign-hires are accorded certain benefits not granted to local-hires! These benefits, such as housing, transportation, shipping costs, ta1es, and home leave travel allo$ance, are reasonabl related to their status as foreign-hires, and &ustif the e1clusion of the former from the latter! To include foreign-hires in a bargaining unit $ith local-hires $ould not assure either group the e1ercise of their respective collective bargaining rights! ;HEREFORE, the petition is IIV>N DG> @OGRS>! The petition is hereb IR2NT>D IN '2RT! The Orders of the Secretar of Babor and >mplo ment dated <une .C, .==D and Aarch .=, .==*, are hereb R>V>RS>D and S>T 2SID> insofar as the uphold the practice of respondent School of according foreign-hires higher salaries than local-hires! SO ORDERED. Puno, and Pardo, JJ., concur! Davide, Jr., C.J., (Chairman), on official leave! Ynares Santiago, J., on leave!

Issued on June 19, 1975 (authorizing International School, Inc. to Donate Its Real Pro erties to the !o"ern#ent o$ the Re u%lic o$ the Phili ines and !ranting It &ertain Rights.' [(] Rollo, . )(*. [)] Id., at )(+. [+] Id., at *.
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Id., at )(5. ,he %rea-do.n is as $ollo.s/

0#ericans 0ustralian 1elgian 1ritish 1ur#ese &anadian &hinese 2rench !er#an Indian Ja anese 3ala4sian 5e. 6ealander S anish
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7 17 7( 71 7( 71 7( 7( 71 71 75 71 71 71 71

Id., at )9.

Id., at )*7)9. In Section 1, 0rticle 9III thereo$. [9] Statute o$ the International &ourt o$ Justice, art. )*. [1:] 3. D;2;5S<R7S05,I0!<, International =a. 75 (1999', citing Judge >udson in Ri"er 3euse &ase, (19)7' Ser. 0?1 5o. 7:. [11] Ibid., citing Rann o$ @utch 0r%itration (India vs. Pa-istan', 5: I=R ( (198*' [1(] 0do ted %4 the !eneral 0sse#%l4 o$ the Anited 5ations on Dece#%er 1:, 19+*. 0rticle 1 thereo$ states/ B0ll hu#an %eings are %orn $ree and eCual in dignit4 and rights.B 0rticle ( ro"ides, B1. ;"er4one is entitled to all the rights and $reedo#s set $orth in this Declaration, .ithout distinction o$ an4 -ind, such as race, colour, seD, language, religion, olitical or other o inion, national or social origin, ro ert4, %irth or other status.B [1)] 0do ted %4 the !eneral o$ the Anited 5ations in Resolution ((:: (99I' o$ 18 Dece#%er 1988. 0rticle ( ro"ides/ B(. ,he States Parties to the resent &o"enant underta-e to guarantee that the rights enunciated in the resent &o"enant .ill %e eDercised .ithout discri#ination o$ an4 -ind as to race, colour, seD, language, religion, olitical or other o inion, national or social origin, ro ert4, %irth or other status.B [1+] 0do ted %4 the !eneral asse#%l4 o$ the Anited 5ations in Resolution (1:8 (99' (1 Dece#%er 1985. 0rticle ( o$ the &on"ention states/ BStates Parties conde#n racial discri#ination and underta-e to ursue %4 all a ro riate #eans and .ithout dela4 a olic4 o$ eli#inating racial discri#ination in all its $or#s and ro#oting understanding a#ong all races DDD.B [15] 0do ted at Paris, Dece#%er 1+, 198:. Ander 0rticle ), the States Parties underta-e, a#ong others, Bto a%rogate an4 statutor4 ro"isions and an4 ad#inistrati"e instructions and to discontinue an4 ad#inistrati"e ractices .hich in"ol"e discri#ination in education.B Ander 0rticle +, B,he States Parties to this &on"ention underta-e $urther #ore to $or#ulate, de"elo and a l4 a national olic4 .hich, %4 #ethods a ro riate to the circu#stances and to national usage, .ill tend to ro#ote eCualit4 o$ o ortunit4 and o$ treat#ent in the #atter o$ education DDD.B [18] 0do ted %4 the !eneral &on$erence o$ the International =a%or <rganization at !ene"a, June (5, 195*. 0rticle ( ro"ides that, B;ach 3e#%er $or .hich this &on"ention is in $orce underta-es to declare and ursue a national olic4 designed to ro#ote, %4 #ethods a ro riate to national condition and ractice, eCualit4 o$ o ortunit4 and treat#ent in res ect o$ e# lo4#ent and occu ation, .ith a "ie. to eli#inating an4 discri#ination in res ect thereo$.B [17] In 0rticle 9III, Section ) thereo$. [1*] Id. [19] In 0rticle ) thereo$. [(:] ;.g., 0rticle 1)5 o$ the =a%or &ode declares it unla.$ul $or the e# lo4er to reCuire, not onl4 as a condition o$ e# lo4#ent, %ut also as a condition $or the continuation o$ e# lo4#ent, that a .o#an shall not get #arried. [(1] In relation to 0rticles (** and (*9 o$ the sa#e &ode. [((] Indeed, the go"ern#ent e# lo4s this rule in $iDing the co# ensation o$ go"ern#ent e# lo4ees. ,hus, Re u%lic 0ct 5o. 875* (0n 0ct Prescri%ing a Re"ised &o# ensation and Position &lassi$ication S4ste# in the !o"ern#ent and $or <ther Pur oses' declares it Bthe olic4 o$ the State to ro"ide eCual a4 $or su%stantiall4 eCual .or- and to %ase di$$erences in a4 u on su%stanti"e di$$erences in duties and res onsi%ilities, and Cuali$ication reCuire#ents o$ the ositions. See also the Prea#%le o$ Presidential Decree 5o. 9*5 (0 Decree Re"ising the Position &lassi$ication and &o# ensation S4ste#s in the 5ational !o"ern#ent, and Integrating the sa#e' [()] Rollo, . +91. [(+] 1*) S&R0 81: (199:' [(5] In Section 1*, 0rticle II thereo$. [(8] In Section ), 0rticle 9III thereo$. See also 0rticle ) o$ the =a%or &ode. [(7] See Sec. ), 0rticle 9III, &onstitution. 0rticle ) o$ the =a%or &ode. [(*] 0rticle 17::, &i"il &ode. [(9] ,o4ota 3otor Phili ines &or oration "s. ,o4ota 3otor Phili ines 2ederation =a%or Anion and the Secretar4 o$ =a%or and ;# lo4#ent, (8* S&R0 57) (1997'E San 3iguel &or oration vs. =agues#a, ()8 S&R0 595 (199+' [):] San 3iguel &or oration vs. =agues#a, supra. [)1] 1el4ca &or oration vs. 2errer7&alleFa, 18* S&R0 1*+ (19**'
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