INDUSTRIAL PERSONNEL & MANAGEMENT SERVICES, INC (IPAMS) et  Exception: parties may agree that a foreign law shall

y agree that a foreign law shall govern the

al v. DE VERA and ARRIOLA employment contract, with the ff requisites:
March 7, 2016 | Mendoza, J.
Requisites If absent…
Facts That it is expressly stipulated domestic labor laws shall apply
in the overseas employment in accordance with the principle
 Canadian company SNC Lavalin Engineers & Contractors, Inc. contract that a specific foreign of lex loci contractus (Sameer
(SNC-Lavalin) hired Alberto Arriola the position of Safety Officer in its law shall govern Overseas and PCL Shipping)
Ambatovy Project site in Madagascar through its local manning That the foreign law invoked international law doctrine of
agency IPAMS must be proven before the processual presumption
o For a period of 19 months from Jun 9, 2008 to Dec 31, 2009 courts pursuant to the operates (EDI-Staffbuilders and
Philippine rules on evidence ATCI Overseas)
o Contract processed with POEA
That the foreign law stipulated Philippine law governs
 Arriola was given notice of pre-termination after 3 months due to
in the overseas employment (Pakistan Int’l)
“diminishing workload in the area of his expertise and the contract must not be contrary
unavailability of alternative assignments,” effective 2 days after his to law, morals, good Art 17(1) CC: “laws which have,
receipt of the same, and consequently repatriated customs, public order, or for their object, public order,
o Paid CA$2,636.80 based on Canadian labor law public policy of the Philippines public policy and good customs
 Filed a complaint before LA claiming SNC-Lavalin owed him unpaid shall not be rendered ineffective
salaries and that there was no sufficient notice and valid reason for by laws of a foreign country”
his early termination Art 1306 CC: “stipulations,
o Insisted petitioners must prove applicability of Canadian law clauses, terms and conditions
before it could be applied to his employment contract in a contract must not be
contrary to law, morals, good
 LA dismissed complaint for lack of merit, ruling that the rights and
customs, public order, or public
obligations between OFW, recruiter and foreign employer were
policy
governed by EDI-Staffbuilders Int’l v NLRC
That the overseas employment Cannot be invoked bec it’s an
o Particular labor laws of a foreign country incorporated in a contract must be processed unexamined foreign law
contract freely entered into between an OFW and a foreign through the POEA
employer through the latter’s agent was valid Violation of Art 18 LC: “no
o Petitioner able to submit copy of Employment Standards Act employer may hire a Filipino
(ESA) of Ontario worker for overseas
 NLRC reversed LA decision employment except through the
o PNB v Cabansag - whether employed locally or overseas, all boards and entities authorized
Filipino workers enjoyed the protective mantle of Philippine by the Sec of Labor”
labor and social legislation, contract stipulations to the
contrary notwithstanding Court’s review of relevant laws and jurisprudence:
 CA affirmed, held ESA cannot apply bec contrary to the Constitution
 RA 8042 (Migrant Workers Act) - does not categorically provide that
Issues foreign laws are absolutely and automatically applicable in overseas
1. When should an overseas labor contract be governed by a foreign law? employment contract
 Pakistan Int’l – “labor relationship between OFW and the foreign
 Gen rule: Philippine laws apply even to overseas employment employer is “much affected with public interest and that the otherwise
contracts –> Art XIII Sec 3 Constitution stating that State shall afford applicable Philippine laws and regulations cannot be rendered
full protection to labor, whether local or overseas
 illusory by the parties agreeing upon some other law to govern their severance pay computed on the basis of the period within
relationship.” which the notice should have been given
 EDI-Staffbuilders – in this case, the overseas contract specifically
3. W/N Arriola was validly dismissed pursuant to the employment contract -
stated that Saudi Labor Laws would govern matters not provided for
NO
in the contract. Employer failed to prove the said foreign law though
so the doctrine of processual presumption came into play and the  No authorized cause for dismissal was proven
Philippine labor laws were applied o Art 279 LC - the employer shall not terminate the services of
 ATCI Overseas Corp v Echin – held that R.A. No. 8042 afforded an employee except for a just cause or when authorized by
OFWs with a recourse against local agencies and the foreign law
employers to assure them of an immediate and sufficient payment of o Not clear what specific authorized cause was used to justify
what was due; failed Arriola’s dismissal
 Sameer Overseas v. Cabiles - security of tenure for labor was o No evidence except news article from Financial Post
guaranteed by the Consti and employees were not stripped of the asserting the weakened economy of Madagascar due to the
same when they moved to work in other jurisdictions (cited PCL global financial crisis
Shipping, held that lex loci contractus governed)
 Saudia v Rebesencio - while a Philippine tribunal was called upon to
respect the parties' choice of governing law, such respect must not
be so permissive as to lose sight of considerations of law, morals,
good customs, public order, or public policy that underlie the contract
central to the controversy

2. W/N foreign law will apply to the case - NO

 Petitioners able to comply only with the 2nd and 4th requisites
o Even though an authenticated copy of ESA was submitted, it
didn’t mean that said foreign law could be automatically
applied to the case
 Foreign law was not expressly specified in the employment contract
o SNC-Lavalin Simply asserted that the terms and conditions
of Arriola’s employment were embodied in the company’s
Expatriate Policy
o Foreign employers must be obligated at the onset of the
contract that a foreign law shall govern it so that the OFW
would be informed of the applicable law before signing
 Foreign law invoked (ESA) is contrary to the Consti and LC, esp. the
right to security of tenure and due process
o ESA doesn’t require any ground for early termination of
employment – employer has absolute power to end the
employment of an employee even on the most whimsical
grounds
o ESA allows the employer to dispense with the prior notice of
termination to an employee by simply paying the latter a