The compensation scheme is simply the School’s adaptive

ISAE vs Quisumbing
measure to remain competitive on an international level
in terms of attracting competent professionals in the field
Facts: The International School, Inc., pursuant to
of international education. The compensation package
Presidential Decree 732, is a domestic educational
given to local-hires has been shown to apply to all,
institution established primarily for dependents of
regardless of race. There are foreigners who have been
foreign diplomatic personnel and other temporary
hired locally and who are paid equally as Filipino local
residents.
hires.
To enable the School to continue carrying out its
educational program and improve its standard of
When negotiations for a new collective bargaining
instruction, Section 2(c) of the same decree authorizes the
agreement were held on June 1995, the International
School to employ its own teaching and management
School Alliance of Educators (ISAE), “a legitimate labor
personnel selected by it either locally or abroad, from
union and the collective bargaining representative of all
Philippine or other nationalities, such personnel being
faculty members” of the School, contested the difference
exempt from otherwise applicable laws and regulations
in salary rates between foreign and local-hires. This issue,
attending their employment, except laws that have been
as well as the question of whether foreign-hires should be
or will be enacted for the protection of employees.
included in the appropriate bargaining unit, eventually
caused a deadlock between the parties. On 7 September
Accordingly, the School hires both foreign and local
1995, ISAE filed a notice of strike. The failure of the
teachers as members of its faculty, classifying the same
National Conciliation and Mediation Board to bring the
into two: (1) foreign-hires and (2) local-hires.
parties to a compromise prompted the Department of

The School employs four tests to determine whether a Labor and Employment (DOLE) to assume jurisdiction

faculty member should be classified as a foreign-hire or a over the dispute.

local hire, i.e. (a) What is one’s domicile? (b) Where is

On 10 June 1996, the DOLE Acting Secretary,
one’s home economy? (c) To which country does one owe
Crescenciano B. Trajano, issued an Order resolving the
economic allegiance? (d) Was the individual hired abroad
parity and representation issues in favor of the School.
specifically to work in the School and was the School
Then DOLE Secretary Leonardo A. Quisumbing
responsible for bringing that individual to the
subsequently denied ISAE’s motion for reconsideration
Philippines?
in an Order dated 19 March 1997. ISAE sought relief from

The School grants foreign-hires certain benefits not the Supreme Court.

accorded local-hires. These include housing,

Issue: Whether or not the School unduly discriminated
transportation, shipping costs, taxes, and home leave
against the local-hires on the ground that it violated the
travel allowance. Foreign-hires are also paid a salary rate
25% more than local-hires. equal protection clause.
Decision: That public policy abhors inequality and

The School justifies the difference on two “significant discrimination is beyond contention. Our Constitution

economic disadvantages” foreign-hires have to endure, and laws reflect the policy against these evils. The

namely: (a) the “dislocation factor” and (b) limited tenure. Constitution in the Article on Social Justice and Human

1
Rights exhorts Congress to “give highest priority to the perform 25% more efficiently or effectively than the local-
enactment of measures that protect and enhance the right hires. Both groups have similar functions and
of all people to human dignity, reduce social, economic, responsibilities, which they perform under similar
and political inequalities.” working conditions. The School cannot invoke the need
The very broad Article 19 of the Civil Code requires every to entice foreign-hires to leave their domicile to
person, “in the exercise of his rights and in the rationalize the distinction in salary rates without
performance of his duties, [to] act with justice, give violating the principle of equal work for equal pay. The
everyone his due, and observe honesty and good faith. point-of-hire classification employed by respondent
School to justify the distinction in the salary rates of
International law, which springs from general principles foreign-hires and local hires to be an invalid classification.
of law, likewise proscribes discrimination. The Universal There is no reasonable distinction between the services
Declaration of Human Rights, the International Covenant rendered by foreign-hires and local-hires. The practice of
on Economic, Social, and Cultural Rights, the the School of according higher salaries to foreign-hires
International Convention on the Elimination of All Forms contravenes public policy.
of Racial Discrimination, the Convention against
ISAE v Quisimbing G.R. No. 128845. June 1, 2000
Discrimination in Education, the Convention (No. 111)
J. Kapunan
Concerning Discrimination in Respect of Employment
and Occupation 16 — all embody the general principle Facts:
The ISM, under Presidential Decree 732, is a domestic
against discrimination, the very antithesis of fairness and educational institution established primarily for
justice. The Philippines, through its Constitution, has dependents of foreign diplomatic personnel and other
temporary residents.
incorporated this principle as part of its national laws.
The local-hires union of the ISM were crying foul over the
disparity in wages that they got compared to that of their
In the workplace, where the relations between capital and foreign teaching counterparts.
These questions are asked to qualify a teacher into a local
labor are often skewed in favor of capital, inequality and or foreign hire.
discrimination by the employer are all the more a.....What is one's domicile?
b.....Where is one's home economy?
reprehensible. If an employer accords employees the
c.....To which country does one owe economic allegiance?
same position and rank, the presumption is that these d.....Was the individual hired abroad specifically to work
employees perform equal work. This presumption is in the School and was the School responsible for bringing
that individual to the Philippines?
borne by logic and human experience. Should any answer point to Philippines, the person is a
local hire. The School grants foreign-hires certain benefits
to the foreign hires such as housing, transportation, and
If the employer pays one employee less than the rest, it is
25% more pay than locals under the theory of (a) the
not for that employee to explain why he receives less or "dislocation factor" and (b) limited tenure. The first was
grounded on leaving his home country, the second was
why the others receive more. That would be adding insult
on the lack of tenure when he returns home.
to injury. The employer has discriminated against that The negotiations between the school and the union
employee; it is for the employer to explain why the caused a deadlock between the parties.
The DOLE resolved in favor of the school, while Dole
employee is treated unfairly. Secretary Quisimbing denied the union’s mfr.
He said, “The Union cannot also invoke the equal
protection clause to justify its claim of parity. It is an
Herein, the International School has failed to discharge
established principle of constitutional law that the
this burden. There is no evidence here that foreign-hires guarantee of equal protection of the laws is not violated
by legislation or private covenants based on
2
reasonable classification. A classification is reasonable if bargaining agreements included, must yield to
it is based on substantial distinctions and apply to all the common good.[
members of the same class. Verily, there is a substantial For the same reason, the "dislocation factor" and the
distinction between foreign hires and local hires, the foreign-hires' limited tenure also cannot serve as valid
former enjoying only a limited tenure, having no bases for the distinction in salary rates. The dislocation
amenities of their own in the Philippines and have to be factor and limited tenure affecting foreign-hires are
given a good compensation package in order to attract adequately compensated by certain benefits accorded
them to join the teaching faculty of the School.” them which are not enjoyed by local-hires, such as
The union appealed to the Supreme Court. housing, transportation, shipping costs, taxes and home
The petitioner called the hiring system discriminatory leave travel allowances.
and racist.
The school alleged that some local hires were in fact of In this case, we find the point-of
foreign origin. They were paid local salaries. hire classification employed by respondent School to
justify the distinction in the salary rates of foreign-hires
Issue: and local hires to be an invalid classification. There is no
Whether or not the hiring system is violative of the equal reasonable distinction between the services rendered by
protection clause foreign-hires and local-hires.
Obiter:
Ruling: However, foreign-hires do not belong to the same
bargaining unit as the local-hires. It does not appear that
Public policy abhors discrimination. The Article on Social foreign-hires have indicated their intention to be grouped
Justice and Human Rights exhorts Congress to "give together with local-hires for purposes of collective
highest priority to the enactment of measures that protect bargaining. The collective bargaining history in the
and enhance the right of all people to human dignity…” School also shows that these groups were always treated
The very broad Article 19 of the Civil Code requires every separately. The housing and other benefits accorded
person, "in the exercise of his rights and in the foreign hires were not given to local hires, thereby
performance of his duties, [to] act with justice, give such admixture will nbot assure any group the power to
everyone his due, and observe honesty and good faith." exercise bargaining rights.
International law prohibits discrimination, such as the The factors in determining the appropriate collective
Universal Declaration of Human Rights and the bargaining unit are (1) the will of the employees (Globe
International Covenant on Economic, Social, and Cultural Doctrine); (2) affinity and unity of the employees' interest,
Rights. The latter promises “Fair wages and equal such as substantial similarity of work and duties, or
remuneration for work of equal value without distinction similarity of compensation and working conditions
of any kind.” (Substantial Mutual Interests Rule); (3) prior collective
In the workplace, where the relations between capital and bargaining history; and (4) similarity of employment
labor are often skewed in favor of capital, inequality and status.
discrimination by the employer are all the more
reprehensible.
The Constitution also directs the State to promote
"equality of employment opportunities for all." Similarly,
the Labor Code provides that the State shall "ensure equal
work opportunities regardless of sex, race or creed.
Article 248 declares it an unfair labor practice for
an employer to discriminate in regard to wages in order
to encourage or discourage membership in any labor
organization.
In this jurisdiction, there is the term “equal pay for equal
work”, pertaining to persons being paid with equal
salaries and have similar skills and similar conditions.
There was no evidence here that foreign-hires perform
25% more efficiently or effectively than the local-hires.
The State, therefore, has the right and duty to regulate the
relations between labor and capital. These relations are
not merely contractual but are so impressed with public
interest that labor contracts, collective