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[LABOR] Pacific Consultants International, Jens Henrichsen v. Klaus K. Schonfeld.

Klaus K. Schonfeld
Canadian Citizen
Resident of New Westminster, British Columbia, Canada
Had been a consultant in the field of environmental engineering and water supply
and sanitation.
Pacicon Philippines, Inc. (PPI)
Corporation in the Philippines
subsidiary of Pacific Intl of Japan (PCIJ)
Engaged in the business of providing specialty and technical services both in and out
of the Philippines
PPIs President, Jens Henrichsen, also a director of PCIJ
was based in Japan
commuted from Japan to Manila, vice versa
PCIJ, 1997
Decided to engage in consultancy services for water and sanitation in the
Employed Klaus K. Schonfeld, through Jen Henrichsen, as PPIs Sector Manager of
Water and Sanitation Department
Assigned in the Philippines (where PPI will have to provide a separate contract, but
which embodies the terms and conditions of the contract pf Schonfeld with PCIJ)
His salary was to be paid partly by PPI and PCIJ.
U$2,100 by Pacicon
U$4,900 by PCIJ
Any question of intepretation, understanding or fulfillment of conditions of
employment, shall be finally settled by Court of Arbitration in London

As required by Rule XIV po the Omnibus Rules Implementing the Labor Code,
Applied for an Alien Employment Permit before the DOLE
DOLE, Feb 1999
granted application
issued the Permit
valid until Jan 2000
Prior Permit, having worked for PPI upon execution of their contract, has received
his due compensation
PPIs President Jens Henrichsen, May 1999
sent letter to Schonfeld,
terminated his services effective Aug 4 1999
a) PCIJ and PPI had not been successful in the water and sanitation sector in the
requested Schonfeld to still stay put even after Aug 4 1999, until such time that he
would be able to report on certain projects and discuss all the opportunities
Henrichsen had developed.

Schonfeld worked until Oct 1999 but was only partially paid of his several money
before LA
against PPI and Henrichsen
Illegal Dismissal, separation pay, other monetary benefits

a) PPI had not notified the DOLE of its decision to close one of its departments,
which resulted in his dismissal;
b) PPI and Henrichsen failed to notify him that his employment was terminated after
August 4, 1999.
c) PPI acted in BF in dismissing him from
PPI and Henrichsen
a) Labor Arbiter had no jurisdiction over the subject matter and that the venue was
improperly laid.
(i) Schonfeld was a Canadian citizen,
(ii) Schonfeld was employed and dismissed by PCIJ, a foreign corporation with
principal office in Tokyo, Japan.
Since Schonfeld's cause of action was based on his letter of employment executed
in Japan
under the principle of lex loci contractus, the complaint should have been filed in
Tokyo, Japan.
(iii) Further, as per agreed in the contract,
any employment-related dispute should be brought before the London Court of
b) PCIJ paid respondent's salaries and only coursed it through PPI.
c) although Henrichsen was both a director of PCIJ and president of PPI, it was he
who signed the termination letter of respondent upon instructions of PCIJ.
PCIJ's letterhead was used to inform him that his employment was terminated
d) PPI only served as a conduit.
e) Employment Permit issued by DOLE to Schonfeld was not sufficient proof that he
was an employee of PPI.
Made only for accommodation in favor of PCIJ
Schonfelds Reply
a) Employed by PPI to work in the Philippines under contract separate from his
January 7, 1998 contract of employment with PCIJ.

b) It is inconsequential that PPI is a wholly-owned subsidiary of PCIJ

The two corporations still have separate and distinct personalities;
c) Received instruction from Henrichsen, who was president of PPI
d) Phil. labor laws shall apply in this case
In favor of PCIJ
The contract of employment between respondent and PCIJ was controlling
Philippines was only the "duty station" where Schonfeld was required to work
PCIJ remained respondent's employer despite his having been sent to the
Due to their agreement, the matter must be settled in Court of Arbitration in London
Found for Schonfeld
a) Applied four-fold test
PPI was employer of Schonfel
b) as to venue, even if parties declared in the contract,
the parties were not precluded from bringing a case related thereto in other venues.
the venue is not exclusive
In favor of Schonfeld
1) the CA is not proscribed from reviewing the evidence on record, even if the lower
courts concurred in the finding of facts.
especially if the lower courts, misappreciated the evidence to such an extent as to
compel a contrary conclusion

a) In CAB, Labor Arbiter and the NLRC merely focused on the Letter of Employment
and the General Conditions of Employment.
2) Alien Employment Permit
a) Section 4, and 5 Rule XIV (Employment of Aliens) of the Omnibus Rules
"No alien seeking employment, whether as a resident or non-resident, may enter the
Philippines without first securing an employment permit from the Ministry. If an alien
enters the country under a non-working visa and wishes to be employed thereafter,
he may only be allowed to be employed upon
presentation of a duly approved employment permit.
" Requirements for employment permit applicants. The application for an
employment permit shall be accompanied by the following:

(b) Contract of employment between the employer and the principal which shall
embody the following, among others:
1. That the non-resident alien worker shall comply with all applicable laws and rules
and regulations of the Philippines;
2. That the non-resident alien worker and the employer shall bind themselves to train
at least two (2) Filipino understudies for a period to be determined by the Minister;
3. That he shall not engage in any gainful employment other than that for which he
was issued a permit.
b) In CAB
Schonfeld had an employment contract with PPI;
Otherwise, PPI would not have filed an application for a Permit with the DOLE.
Thus estopped from alleging that the PCIJ, not PPI, had been the employer of
respondent all along.
3) Employer-Employee Relationship with PPI
a) applying the four-fold test
the power to control and supervise petitioner's work performance devolved upon the
power to terminate the employment relationship was exercised by the President of

the PPI.
It is not the letterhead used by the company in the termination letter which controls,
but the person who exercised the power to terminate the employee.
4) As to the venue,
a) As per Philippine Banking Corporation v. Tensuan
While stipulations regarding venue is considered valid and enforceable, it does not,
as a rule, supersede the general rule set forth in Rule 4 of the Revised Rules of
Court in the absence of qualifying or restrictive words.
They should be considered merely as an agreement or additional forum, not as
limiting venue to the specified place.
They are not exclusive but, rather permissive.
b) If the intention of the parties were to restrict venue, there must be accompanying
language clearly and categorically expressing their purpose and design that actions
between them be litigated only at the place named by them.
no restrictive words like "only," "solely," "exclusively in this court," "in no other court
save ," "particularly," "nowhere else but/except ," or words of equal import were
stated in the contract
5) As to the aplication of the principle of forum non conveniens
The Labor Code does not include forum non conveniens as a ground for the
dismissal of the complaint.
The propriety of dismissing a case based on this principle requires a factual
determination; hence, it is properly considered as defense