The amended complaint sought the payment of the Art. 80: Friday shall be deemed to be a weekly day of rest
unexpired portion of the employment contracts, which on full pay.
was terminated prematurely, and secondarily, the If employee worked, 150% of his normal wage shall be
payment of the interest of the earnings of the Travel and paid to him x x x.
Reserved Fund; interest on all the unpaid benefits; area
wage and salary differential pay; fringe benefits; Art. 81; x x x When conditions of work require the worker
reimbursement of SSS and premium not remitted to the to work on any official holiday, he shall be paid an
SSS; refund of withholding tax not remitted to the BIR; additional sum equivalent to 150% of his normal wage.
penalties for committing prohibited practices; as well as
the suspension of the license of AIBC and the Art. 84: Every worker who has completed one years
accreditation of BRII continuous service with his employer shall be entitled to
Laos on full pay for a period of not less than 21 days for
On October 2, 1984, the POEA Administrator denied the each year increased to a period not less than 28 days after
Motion to Strike Out of the Records filed by AIBC but five continuous years of service.
required the claimants to correct the deficiencies in the
complaint pointed out. A worker shall be entitled to such leave upon a quantum
meruit in respect of the proportion of his service in that
AIB and BRII kept on filing Motion for Extension of year.
Time to file their answer. The POEA kept on granting
such motions. Art. 107: A contract of employment made for a period of
indefinite duration may be terminated by either party
On November 14, 1984, claimants filed an opposition to thereto after giving the other party prior notice before
the motions for extension of time and asked that AIBC such termination, in writing, in respect of monthly paid
and BRII declared in default for failure to file their workers and fifteen days notice in respect of other
answers. workers. The party terminating a contract without the
required notice shall pay to the other party compensation
On December 27, 1984, the POEA Administrator issued equivalent to the amount of wages payable to the worker
an order directing AIBC and BRII to file their answers for the period of such notice or the unexpired portion
within ten days from receipt of the order. thereof.
(at madami pang motions ang na-file, new complainants Art. Ill: x x x the employer concerned shall pay to such
joined the case, ang daming inavail na remedies ng both worker, upon termination of employment, a leaving
parties) indemnity for the period of his employment calculated on
On June 19, 1987, AIBC finally submitted its answer to the basis of fifteen days wages for each year of the first
the complaint. At the same hearing, the parties were given three years of service and of one months wages for each
a period of 15 days from said date within which to submit year of service thereafter. Such worker shall be entitled to
their respective position papers. On February 24, 1988, payment of leaving indemnity upon a quantum meruit in
AIBC and BRII submitted position paper. On October 27, proportion to the period of his service completed within a
1988, AIBC and BRII filed a Consolidated Reply, year.
POEA Adminitartor rendered his decision which awarded
the amount of $824, 652.44 in favor of only 324 ISSUE:
complainants. Claimants submitted their Appeal
Memorandum For Partial Appeal from the decision of 1. WON the foreign law should govern or the
the POEA. AIBC also filed its MR and/or appeal in contract of the parties.(WON the complainants who have
addition to the Notice of Appeal filed earlier. worked in Bahrain are entitled to the above-mentioned
benefits provided by Amiri Decree No. 23 of Bahrain).
NLRC promulgated its Resolution, modifying the
decision of the POEA. The resolution removed some of
the benefits awarded in favor of the claimants. NLRC
2. WON the Bahrain Law should apply in the case. does not operate as a statute but as a set of contractual
(Assuming it is applicable WON complainants claim for terms deemed written in the contract.
the benefits provided therein have prescribed.)
A basic policy of contract is to protect the expectation of
RULING: the parties. Such party expectation is protected by giving
effect to the parties own choice of the applicable law. The
1. NLRC set aside Section 1, Rule 129 of the 1989 choice of law must, however, bear some relationship the
Revised Rules on Evidence governing the pleading and parties or their transaction. There is no question that the
proof of a foreign law and admitted in evidence a simple contracts sought to be enforced by claimants have a direct
copy of the Bahrains Amiri Decree No. 23 of 1976 connection with the Bahrain law because the services
(Labour Law for the Private Sector). were rendered in that country.
NLRC applied the Amiri Deere, No. 23 of 1976, which 2. NLRC ruled that the prescriptive period for the
provides for greater benefits than those stipulated in the filing of the claims of the complainants was 3 years, as
overseas-employment contracts of the claimants. It was of provided in Article 291 of the Labor Code of the
the belief that where the laws of the host country are more Philippines, and not ten years as provided in Article 1144
favorable and beneficial to the workers, then the laws of of the Civil Code of the Philippines nor one year as
the host country shall form part of the overseas provided in the Amiri Decree No. 23 of 1976.
employment contract. It approved the observation of the
POEA Administrator that in labor proceedings, all doubts Article 156 of the Amiri Decree No. 23 of 1976 provides:
in the implementation of the provisions of the Labor Code A claim arising out of a contract of employment shall not
and its implementing regulations shall be resolved in actionable after the lapse of one year from the date of the
favor of labor. expiry of the Contract.
The overseas-employment contracts, which were As a general rule, a foreign procedural law will not be
prepared by AIBC and BRII themselves, provided that the applied in the forum (local court), Procedural matters,
laws of the host country became applicable to said such as service of process, joinder of actions, period and
contracts if they offer terms and conditions more requisites for appeal, and so forth, are governed by the
favorable than those stipulated therein. However there laws of the forum. This is true even if the action is based
was a part of the employment contract which provides that upon a foreign substantive law.
the compensation of the employee may be adjusted
downward so that the total computation plus the non- A law on prescription of actions is sui generis in Conflict
waivable benefits shall be equivalent to the of Laws in the sense that it may be viewed either as
compensation therein agree, another part of the same procedural or substantive, depending on the
provision categorically states that total remuneration and characterization given such a law. In Bournias v. Atlantic
benefits do not fall below that of the host country Maritime Company (220 F. 2d. 152, 2d Cir. [1955]),
regulation and custom. where the issue was the applicability of the Panama Labor
Code in a case filed in the State of New York for claims
Any ambiguity in the overseas-employment contracts arising from said Code, the claims would have prescribed
should be interpreted against AIBC and BRII, the parties under the Panamanian Law but not under the Statute of
that drafted it. Article 1377 of the Civil Code of the Limitations of New York. The U.S. Circuit Court of
Philippines provides: Appeals held that the Panamanian Law was procedural as
The interpretation of obscure words or stipulations in a it was not specifically intended to be substantive, hence,
contract shall not favor the party who caused the the prescriptive period provided in the law of the forum
obscurity. should apply. The Court observed: . . . we are dealing
with a statute of limitations of a foreign country, and it is
Said rule of interpretation is applicable to contracts of not clear on the face of the statute that its purpose was to
adhesion where there is already a prepared form limit the enforceability, outside as well as within the
containing the stipulations of the employment contract foreign country concerned, of the substantive rights to
and the employees merely take it or leave it. The which the statute pertains. We think that as a yardstick for
presumption is that there was an imposition by one party determining whether that was the purpose, this test is the
against the other and that the employees signed the most satisfactory one.
contracts out of necessity that reduced their bargaining
power. The Court further noted: Applying that test here it
We read the overseas employment contracts in question appears to us that the libellant is entitled to succeed, for
as adopting the provisions of the Amiri Decree No. 23 of the respondents have failed to satisfy us that the
1976 as part and parcel thereof. The parties to a contract Panamanian period of limitation in question was
may select the law by which it is to be governed. In such specifically aimed against the particular rights which the
a case, the foreign law is adopted as a system to regulate libellant seeks to enforce. The Panama Labor Code is a
the relations of the parties, including questions of their statute having broad objectives. The American court
capacity to enter into the contract, the formalities to be applied the statute of limitations of New York, instead of
observed by them, matters of performance, and so forth. the Panamanian law, after finding that there was no
Instead of adopting the entire mass of the foreign law, the showing that the Panamanian law on prescription was
parties may just agree that specific provisions of a foreign intended to be substantive. Being considered merely a
statute shall be deemed incorporated into their contract procedural law even in Panama, it has to give way to the
as a set of terms. By such reference to the provisions of law of the forum (local Court) on prescription of actions.
the foreign law, the contract does not become a foreign
contract to be governed by the foreign law. The said law
However the characterization of a statute into a the claimants were deployed in Indonesia under different
procedural or substantive law becomes irrelevant when terms and condition of employment.
the country of the forum (local Court) has a borrowing
statute. Said statute has the practical effect of treating the Inasmuch as the First requirement of a class suit is not
foreign statute of limitation as one of substance. A present (common or general interest based on the Amiri
borrowing statute directs the state of the forum (local Decree of the State of Bahrain), it is only logical that only
Court) to apply the foreign statute of limitations to the those who worked in Bahrain shall be entitled to rile their
pending claims based on a foreign law. While there are claims in a class suit.
several kinds of borrowing statutes, one form provides
that an action barred by the laws of the place where it While there are common defendants (AIBC and BRII)
accrued will not be enforced in the forum even though the and the nature of the claims is the same (for employees
local statute was not run against it. benefits), there is no common question of law or fact.
While some claims are based on the Amiri Law of
Section 48 of Code of Civil Procedure is of this kind. It Bahrain, many of the claimants never worked in that
provides: If by the laws of the state or country where the country, but were deployed elsewhere. Thus, each
cause of action arose, the action is barred, it is also barred claimant is interested only in his own demand and not in
in the Philippine Islands. the claims of the other employees of defendants. A
claimant has no concern in protecting the interests of the
Section 48 has not been repealed or amended by the Civil other claimants as shown by the fact, that hundreds of
Code of the Philippines. In the light of the 1987 them have abandoned their co-claimants and have entered
Constitution, however, Section 48 cannot be enforced ex into separate compromise settlements of their respective
proprio vigore insofar as it ordains the application in this claims. The claimants who worked in Bahrain can not be
jurisdiction of Section 156 of the Amiri Decree No. 23 of allowed to sue in a class suit in a judicial proceeding.
1976.
WHEREFORE, all the three petitioners are DISMISSED.
The courts of the forum (local Court) will not enforce any
foreign claim obnoxious to the forums public policy. To
enforce the one-year prescriptive period of the Amiri 2. HSBC VS. SHERMAN
Decree No. 23 of 1976 as regards the claims in question
would contravene the public policy on the protection to FACTS: It appears that sometime in 1981, Eastern Book
labor. Supply Service PTE, Ltd. (COMPANY), a company
In the Declaration of Principles and State Policies, the incorporated in Singapore applied with and was granted
1987 Constitution emphasized that:The state shall by HSBC Singapore branch an overdraft facility in the
promote social justice in all phases of national maximum amount of Singapore dollars 200,000 with
development (Sec. 10). interest at 3% over HSBC prime rate, payable monthly,
The state affirms labor as a primary social economic on amounts due under said overdraft facility.
force. It shall protect the rights of workers and promote
their welfare (Sec. 18). As a security for the repayment by the COMPANY of
In Article XIII on Social Justice and Human Rights, the sums advanced by HSBC to it through the aforesaid
1987 Constitution provides: overdraft facility, in 1982, both private respondents and a
Sec. 3. The State shall afford full protection to labor, certain Lowe, all of whom were directors of the
local and overseas, organized and unorganized, and COMPANY at such time, executed a Joint and Several
promote full employment and equality of employment Guarantee in favor of HSBC whereby private respondents
opportunities for all. and Lowe agreed to pay, jointly and severally, on demand
Thus, the applicable law on prescription is the Philippine all sums owed by the COMPANY to petitioner BANK
law. under the aforestated overdraft facility.
The next question is whether the prescriptive period
governing the filing of the claims is 3 years, as provided The Joint and Several Guarantee provides, inter alia, that:
by the Labor Code or 10 years, as provided by the Civil This guarantee and all rights, obligations and liabilities
Code of the Philippines. arising hereunder shall be construed and determined
under and may be enforced in accordance with the laws
Article 1144 of the Civil Code of the Philippines provides: of the Republic of Singapore. We hereby agree that the
The following actions must be brought within ten years Courts of Singapore shall have jurisdiction over all
from the time the right of action accross: disputes arising under this guarantee.
(1) Upon a written contract; (2) Upon an obligation The COMPANY failed to pay its obligation. Thus, HSBC
created by law; (3) Upon a judgment demanded payment and inasmuch as the private
In this case, the claim for pay differentials is primarily respondents still failed to pay, HSBC filed A complaint
anchored on the written contracts between the litigants, for collection of a sum of money against private
the ten-year prescriptive period provided by Art. 1144(l) respondents Sherman and Reloj before RTC of Quezon
of the New Civil Code should govern. City.
Private respondents filed an MTD on the ground of lack
3. NO. A class suit is proper where the subject matter of of jurisdiction over the subject matter. The trial court
the controversy is one of common or general interest to denied the motion. They then filed before the respondent
many and the parties are so numerous that it is IAC a petition for prohibition with preliminary injunction
impracticable to bring them all before the court. When all and/or prayer for a restraining order. The IAC rendered a
the claims are for benefits granted under the Bahrain law decision enjoining the RTC Quezon City from taking
many of the claimants worked outside Bahrain. Some of further cognizance of the case and to dismiss the same for
filing with the proper court of Singapore which is the Respondents aver that Japanese Law, and not Philippine
proper forum. MR denied, hence this petition. Law, shall apply to the case because the property is
located in Japan. They posit that the principle of lex situs
ISSUE: Do Philippine courts have jurisdiction over the applies.
suit, vis-a-vis the Guarantee stipulation regarding
jurisdiction? Issues and Held: