EDI Staff Builders Inc.

vs NLRC (537 SCRA 409)

FACTS: In 1993, EDI-Staffbuilders, Inc. (EDI), upon request of Omar Ahmed Ali Bin Bechr
Est. (OAB), a company in Saudi Arabia, sent to OAB resumes from which OAB can choose
a computer specialist. Eleazar Gran was selected. It was agreed that his monthly salary
shall be $850.00. But five months into his service in Saudi Arabia, Gran received a
termination letter and right there and then was removed from his post. The termination letter
states that he was incompetent because he does not know the ACAD system which is
required in his line of work; that he failed to enrich his knowledge during his 5 month stay to
prove his competence; that he is disobedient because he failed to submit the required daily
reports to OAB. Gran then signed a quitclaim whereby he declared that he is releasing OAB
from any liability in exchange of 2,948.00 Riyal.
When Gran returned, he filed a labor case for illegal dismissal against EDI and OAB. EDI in
its defense averred that the dismissal is valid because when Gran and OAB signed the
employment contract, both parties agreed that Saudi labor laws shall govern all matters
relating to the termination of Grans employment; that under Saudi labor laws, Grans
termination due to incompetence and insubordination is valid; that Grans insubordination
and incompetence is outlined in the termination letter Gran received. The labor arbiter
dismissed the labor case but on appeal, the National Labor Relations Commission (NLRC)
reversed the decision of the arbiter. The Court of Appeals likewise affirmed the NLRC.
ISSUE: Whether or not the Saudi labor laws should be applied.
HELD: No. The specific Saudi labor laws were not proven in court. EDI did not present
proof as to the existence and the specific provisions of such foreign law. Hence, processual
presumption applies and Philippine labor laws shall be used. Under our laws, an employee
like Gran shall only be terminated upon just cause. The allegations against him, at worst,
shall only merit a suspension not a dismissal. His incompetence is not proven because prior
to being sent to Saudi Arabia, he underwent the required trade test to prove his
competence. The presumption therefore is that he is competent and that it is upon OAB and
EDI to prove otherwise. No proof of his incompetence was ever adduced in court. His
alleged insubordination is likewise not proven. It was not proven that the submission of daily
track records is part of his job as a computer specialist. There was also a lack of due
process. Under our laws, Gran is entitled to the two notice rule whereby prior to termination
he should receive two notices. In the case at bar, he only received one and he was
immediately terminated on the same day he received the notice.
Lastly, the quitclaim may not also release OAB from liability. Philippine laws is again
applied here sans proof of Saudi laws. Under Philippine Laws, a quitclaim is generally
frowned upon and are strictly examined. In this case, based on the circumstances, Gran at
that time has no option but to sign the quitclaim. The quitclaim is also void because his
separation pay was merely 2,948 Riyal which is lower than the $850.00 monthly salary
(3,190 Riyal).