Tuesday, July 31, 2018

Pakistan International Airlines vs Ople


The principle of party autonomy in contracts is not, however, an absolute principle. The rule in Article 1306, of our Civil Code is that the contracting parties may establish such stipulations as they may deem convenient, "provided they are not contrary to law, morals, good customs, public order or public policy." Thus, counter-balancing the principle of autonomy of contracting parties is the equally general rule that provisions of applicable law, especially provisions relating to matters affected with public policy, are deemed written into the contract. Put a little differently, the governing principle is that parties may not contract away applicable provisions of law especially peremptory provisions dealing with matters heavily impressed with public interest. The law relating to labor and employment is clearly such an area and parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other.


Pakistan International Airlines vs Ople
G.R. No. 61594, September 28, 1990

Facts:

In 1978, Pakistan International Airlines Corporation (PIA), a foreign corporation licensed to do business in the Philippines, executed in Manila, two separate contracts of employment, one with Farrales and the other with Mamasig. The contracts provided in pertinent portion as follows:

5. Duration of Employment 
This agreement is for a period of 3 years, but can be extended by the mutual consent of the parties. 

6. Termination
xxx 
Notwithstanding anything to contrary as herein provided, PIA reserves the right to terminate this agreement at any time by giving the EMPLOYEE notice in writing in advance one month before the intended termination or in lieu thereof, by paying the EMPLOYEE wages equivalent to one month’s salary.
xxx 
10. Applicable Law
This agreement shall be construed and governed under and by the laws of Pakistan, and only the Courts of Karachi, Pakistan shall have the jurisdiction to consider any matter arising out of or under this agreement.
xxx

After their training, Farrales and Mamasig commenced their services as flight attendants with base station in Manila.

Roughly 1 year and 4 months prior to the expiration of the contracts, PIA sent Farrales and Mamasig separate letters, informing them that they will be terminated effective September 1, 1980.

Farrales and Mamasig jointly instituted a complaint for illegal dismissal against PIA with the then Ministry of Labor and Employment (MOLE).

PIA submitted its position paper, but no evidence, and there claimed that both Farrales and Mamasig were habitual absentees; that both were in the habit of bringing in from abroad sizeable quantities of “personal effects”; and that PIA personnel at the Manila International Airport had been discreetly warned by customs officials to advise private respondents to discontinue that practice. PIA further claimed that the services of both private respondents were terminated pursuant to the provisions of the employment contract.

The Regional Director held that the dismissal was illegal and ordered PIA to reinstate Farrales and Mamasig with full backwages or, in the alternative, the payment to them of the amounts equivalent to their salaries for the remainder of the fixed three-year period of their employment contracts.

PIA appealed. Invoking paragraphs 5 and 6 of the contract of employment, PIA claimed that it is authorized to shorten the 3-year term at any time and for any cause satisfactory to itself. It argued that its relationship with Farrales and Mamasig was governed by the provisions of its contract rather than by the general provisions of the Labor Code.


Issues:

1. Should the employment contract prevail over the general provisions of the Labor Code?
2. Which law should govern over the case? Which court has jurisdiction?


Held:

1). A contract freely entered into should, of course, be respected since a contract is the law between the parties. The principle of party autonomy in contracts is not, however, an absolute principle. The rule in Article 1306, of our Civil Code is that the contracting parties may establish such stipulations as they may deem convenient, "provided they are not contrary to law, morals, good customs, public order or public policy." Thus, counter-balancing the principle of autonomy of contracting parties is the equally general rule that provisions of applicable law, especially provisions relating to matters affected with public policy, are deemed written into the contract. Put a little differently, the governing principle is that parties may not contract away applicable provisions of law especially peremptory provisions dealing with matters heavily impressed with public interest. The law relating to labor and employment is clearly such an area and parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. It is thus necessary to appraise the contractual provisions invoked by petitioner PIA in terms of their consistency with applicable Philippine law and regulations.

The provisions of paragraphs 5 and 6 of the employment agreement between petitioner PIA and private respondents must be read together and when so read, the fixed period of three (3) years specified in paragraph 5 will be seen to have been effectively neutralized by the provisions of paragraph 6 of that agreement. Paragraph 6 in effect took back from the employee the fixed three (3)-year period ostensibly granted by paragraph 5 by rendering such period in effect a facultative one at the option of the employer PIA. Because the net effect of paragraphs 5 and 6 of the agreement here involved is to render the employment of private respondents Farrales and Mamasig basically employment at the pleasure of petitioner PIA, the Court considers that paragraphs 5 and 6 were intended to prevent any security of tenure from accruing in favor of private respondents even during the limited period of three (3) years, and thus to escape completely the thrust of Articles 280 and 281 of the Labor Code.

2.) The first clause of paragraph 10 cannot be invoked to prevent the application of Philippine labor laws and regulations to the subject matter of this case, i.e., the employer-employee relationship between petitioner PIA and private respondents. We have already pointed out that the relationship is much affected with public interest and that the otherwise applicable Philippine laws and regulations cannot be rendered illusory by the parties agreeing upon some other law to govern their relationship. Neither may petitioner invoke the second clause of paragraph 10, specifying the Karachi courts as the sole venue for the settlement of dispute; between the contracting parties. Even a cursory scrutiny of the relevant circumstances of this case will show the multiple and substantive contacts between Philippine law and Philippine courts, on the one hand, and the relationship between the parties, upon the other: the contract was not only executed in the Philippines, it was also performed here, at least partially; private respondents are Philippine citizens and respondents, while petitioner, although a foreign corporation, is licensed to do business (and actually doing business) and hence resident in the Philippines; lastly, private respondents were based in the Philippines in between their assigned flights to the Middle East and Europe. All the above contacts point to the Philippine courts and administrative agencies as a proper forum for the resolution of contractual disputes between the parties. Under these circumstances, paragraph 10 of the employment agreement cannot be given effect so as to oust Philippine agencies and courts of the jurisdiction vested upon them by Philippine law. Finally, and in any event, the petitioner PIA did not undertake to plead and prove the contents of Pakistan law on the matter; it must therefore be presumed that the applicable provisions of the law of Pakistan are the same as the applicable provisions of Philippine law.

Thursday, July 19, 2018

Arellano University Employees and Workers Union vs Court of Appeals


An ordinary striking worker may not be declared to have lost his employment status by mere participation in an illegal strike. With respect to the union officers, their mere participation in the illegal strike warrants their dismissal.


Arellano University Employees and Workers Union 
vs. Court of Appeals
G.R. No. 139940, September 19, 2006

Facts:

The Arellano University Employees and Workers Union (the Union), the exclusive bargaining representative of about 380 rank-and-file employees of Arellano University, Inc. (the University), filed with the National Conciliation and Mediation Board (NCMB) a Notice of Strike charging the University with Unfair Labor Practice (ULP). After several controversies and petitions, a strike was staged. In the Order of August 5, 1998, the DOLE Secretary directed the strikers to return to work within twenty-four (24) hours. The order was served upon the Union on August 6, 1998, and the following day, August 7, 1998, at about 3:00 p.m., the Union lifted its strike.

The University filed a Petition to Declare the Strike Illegal before the National Labor Relations Commission (NLRC). The NLRC granted the petition and declared the loss of employment status of all the strikers for knowingly defying the Return-to-Work Order of the DOLE Secretary. 


Issue:

Whether or not an employee is deemed to have lost his employment by mere participation in an illegal strike


Held:

Article 264 of the Labor Code provides:

Article 264. x x x Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status

Under the immediately quoted provision, an ordinary striking worker may not be declared to have lost his employment status by mere participation in an illegal strike. There must be proof that he knowingly participated in the commission of illegal acts during the strike. While the University adduced photographs showing strikers picketing outside the university premises, it failed to identify who they were. It thus failed to meet the substantiality of evidence test applicable in dismissal cases. 

With respect to the union officers, their mere participation in the illegal strike warrants their dismissal.