G.R. No.

152318

April 16, 2009

DEUTSCHE GESELLSCHAFT FR TECHNISCHE ZUSAMMENARBEIT, also known as

GERMAN AGENCY FOR TECHNICAL COOPERATION, (GTZ) HANS PETER PAULENZ and
ANNE NICOLAY, Petitioners,
vs.
HON. COURT OF APPEALS, HON. ARIEL CADIENTE SANTOS, Labor Arbiter of the Arbitration
Branch, National Labor Relations Commission, and BERNADETTE CARMELLA MAGTAAS,
CAROLINA DIONCO, CHRISTOPHER RAMOS, MELVIN DELA PAZ, RANDY TAMAYO and
EDGARDO RAMILLO, Respondents.

FACTS:
The governments of the FederalRepublic of Germany and the Republic of
thePhilippines ratified an Agreement called SocialHealth InsuranceNetworking
andEmpowerment (SHINE which was designed to"enable Philippine families
especially pooronesto maintain their health and securehealth care of sustainable
quality." Privaterespondents were engaged as contractemployees hired by GTZ to
work for SHINE.Nicolay, a Belgian national, assumedthe post of SHINE Project
Manager.Disagreements eventually arose betweenNicolay and private respondents
in matterssuch as proposed salary adjustments, and thecourse Nicolay was taking
in theimplementation of SHINE different from herpredecessors.The dispute
culminated in a signed bythe private respondents, addressed to Nicolay,and copies
furnished officials of the DOH,Philheath, and the director of the Manila officeof GTZ.
The letter raised several issues whichprivate respondents claim had been brought
upseveral times in the past, but have not beengiven appropriate response.In
response, Nicolay wrote each of theprivate respondents a letter, all similarlyworded
except for their respective addressees.She informed private respondents that
theycould no longer find any reason to stay withthe project unless ALL of these
issues beaddressed immediately and appropriately.Under the foregoing premises
andcircumstances, it is now imperative that I amto accept your resignation, which I
expect toreceive as soon as possible.Negotiations ensued between
privaterespondents and Nicolay, but for naught. Eachof the private respondents
received a letterfrom Nicolay, informing them of the pre-termination of their
contracts of employmenton the grounds of "serious and grossinsubordination,
among others, resulting toloss of confidence and trust."
HELD: NO.This self-description of GTZ in its ownofficial website gives further cause
for pause inadopting petitioners argument that GTZ isentitled to immunity from suit
because it is "animplementing agency." The above-quotedstatement does not
dispute thecharacterization of GTZ as an "implementingagency of the Federal
Republic of Germany,"yet it bolsters the notion that as a companyorganized under
private law, it has a legalpersonality independent of that of the FederalRepublic of
Germany.The Court is thus holds and so rulesthat GTZ consistently has been unable

toestablish with satisfaction that it enjoys theimmunity from suit generally enjoyed
by itsparent country, the Federal Republic of Germany.