Saudi Arabian Airlines v. Rebesencio

G.R. No. 198587January 14, 2015Leonen, J.Second Division

Philippine tribunals validly exercised jurisdiction over Saudia despite a foreign choice-of-law clause; forum non conveniens must be timely pleaded and factually shown, and terminating flight attendants for becoming pregnant is void sex discrimination.

Doctrine

A foreign corporation maintaining a Philippine office is doing business here and is subject to Philippine jurisdiction, service on that office being sufficient. Forum non conveniens must be clearly pleaded as a ground for dismissal at the earliest possible opportunity, else it is waived, and the movant must show that litigation has in fact commenced in another jurisdiction which has chosen to exercise jurisdiction. A choice-of-law clause cannot override Philippine labor law and constitutional policy; an employment stipulation voiding the contract of a flight attendant who becomes pregnant is void sex discrimination.

Facts

Four Filipina flight attendants hired through the POEA by Saudi Arabian Airlines, a foreign corporation with a Philippine office, were told in 2006 that their approved maternity leaves had been disapproved by Jeddah and that they must resign or be terminated with loss of benefits. Saudia relied on its Unified Employment Contract declaring a cabin attendant's contract void upon pregnancy. The attendants executed handwritten resignation letters, some on Saudia letterheads pre-typed with the word 'RESIGNATION,' then sued for illegal dismissal and money claims. Saudia contested the Labor Arbiter's jurisdiction, invoked forum non conveniens and Saudi law, and claimed voluntary resignation.

Issues and how the Court ruled

Whether the Labor Arbiter and the NLRC may exercise jurisdiction over Saudi Arabian Airlines and apply Philippine law, notwithstanding its invocation of forum non conveniens and a foreign choice-of-law clause.

Yes. Saudia's own admission that it maintains a Philippine office makes it a foreign corporation 'doing business' under Section 3(d) of the Foreign Investments Act, suable here, and there being no real distinction between 'Saudia Jeddah' and 'Saudia Manila,' service on its Manila office vested jurisdiction over its person. Choice of law and forum non conveniens are entirely different matters; stipulating foreign governing law neither divests Philippine tribunals of jurisdiction nor automatically compels abstention. Forum non conveniens is a discretionary, factual defense that must be clearly pleaded at the earliest possible opportunity, and the movant must show that a suit has in fact been commenced in another jurisdiction which has chosen to exercise jurisdiction — none of which Saudia established.

Whether the parties' contractual choice of Saudi Arabian law may be given effect to defeat the application of Philippine labor law.

No. While autonomy of contracts under Article 1306 allows parties to select the governing law, that choice must not offend law, morals, good customs, public order, or public policy of the forum. Labor contracts are impressed with public interest under Article 1700, and applicable provisions of law, especially those affected with public policy, are deemed written into the contract. A policy voiding the employment of a flight attendant who becomes pregnant restricts employment on the basis of no other consideration but sex, and contravenes Article II, Section 14 of the Constitution and the CEDAW; it cannot be enforced here.

Whether respondents voluntarily resigned or were illegally (constructively) dismissed, and whether Brenda J. Betia may be held personally liable.

Respondents were illegally dismissed. Nothing on record supports Saudia's claim of voluntary resignation; the attendants were made to choose between resigning and outright termination with forfeiture of benefits, and some resignations were written on Saudia letterheads already bearing the typed word 'RESIGNATION.' The Court sustained the award of backwages, separation pay, and attorney's fees, and held the responsible corporate officer solidarily liable for having acted with bad faith and patent malice in effecting the discriminatory dismissals.

Ratio

Contractual autonomy, including choice-of-law stipulations, yields to the forum's law, morals, public order, and public policy; because labor contracts are impressed with public interest and the Constitution and CEDAW command the State to actively ensure equality between men and women, a foreign employer cannot use foreign law or forum non conveniens to enforce a pregnancy-based termination policy against Filipino workers.

Remember it as

💡 Pregnant stewardesses grounded by Saudi law — but the Philippine Constitution and CEDAW let them fly home to justice.

From the Supreme Court's own index

ApplicationTransnational transaction entail differing laws on the requirements for the validity of the formalities and substantive provisions of contracts and their interpretation.
ApplicationWhile there is no statutorily established mode of settling conflict of laws situations on matters pertaining to substantive contents of contracts, three modes have emerged that may be applied in solving the legal conflict,to wit: (1) lex loci contractus or the law of the place of the making; (2) lex loci solutionis or the law of the place of performance; and (3) lex loci intentionis or the law intended by the parties.
Forum non conveniensA means devised to address parallel litigation arising in multiple jurisdictions; it is applied as a basis for a court to decline its exercise of jurisdiction.
Forum non conveniensAny evaluation of the propriety of contracting parties’ choice of a forum and its incidents must grapple with two (2) considerations: (1) the availability and adequacy of recourse to a foreign land; and (2) the question of where, as between the forum court and a foreign court, the balance of interests inhering in a dispute weighs more heavily.
Forum non conveniensNot a ground for a motion for reconsideration; it would be improper to dismiss an action pursuant to forum non coveniens based merely on a perceived, likely, or hypothetical multiplicity of fora; the defendant must plead and show that a prior suit has, in fact, been brought in another jurisdiction and that a foreign tribunal haschosen to exercise jurisdiction.
Forum non conveniensRelates to forum, not to the choice of governing law; that forum non conveniens may ultimately result in the application of foreign law is merely an incident of its application.
Forum non conveniensThe mere invocation of forum non coveniens nor the averment of foreign elements does not automatically divest a court of jurisdiction.
Forum non conveniensWhile a Philippine tribunal (acting as the forum court) is 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, goodcustoms, public order, or public policy that underlie the contract central to the controversy.
Validity ofA choice of law governing the validity of contracts or the interpretation of its provisions does not necessarily imply forum non conveniens .
Doing businessShall include opening offices whether called liaison offices or branches and any other act or acts that imply a continuity of commercial dealings or arrangements and contemplate to that extent theperformance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of commercial gain or of the purpose and object of the business organization.
Exemplary damagesWarranted not only to remind employers of the need to adhere to the requirements of procedural and substantive due process in the termination of employment, but more importantly, to demonstrate that genderdiscrimination should in no case be countenanced.
Illegal dismissalIllegally dismissed employee entitled to full backwages, benefits and separation pay.

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