Facts
Bison is the recruitment agency that deployed AAA to the Kingdom of Saudi Arabia (KSA) as an OFW. AAA was hired by Bison as a Cleaning Laborer under a two-year contract and was deployed to Saudi Arabia on October 18, 2017. In January of 2019, after working for fifteen months, AAA underwent routine medical examination and was found positive for Human Immunodeficiency Virus (HIV). As a foreign employer, Bison terminated AAA’s employment, as under the laws of the Kingdom of Saudi Arabia, an HIV+ individual is considered unfit to work. He was sent back to the Philippines on February 8, 2019.
Ruling
The Labor Arbiter dismissed the complaint for illegal dismissal, but ruled that AAA is entitled to his unpaid salary from January 26, 2019 to February 7, 2019, vacation leave pay, and attorney’s fees. The Labor Arbiter decreed that the laws of Saudi Arabia, which state that an HIV+ individual is considered unfit to work, is “a state prerogative of the KSA which deserves our respect.” Further, they also postulated that Republic Act No. 8504, or the “Philippine AIDS Prevention and Control Act of 1998” is a “local law” that should apply only “within our jurisdiction and not to KSA.”
In response, AAA filed a Memorandum of Partial Appeal before the NLRC. Contrary to the Labor Arbiter’s finding, the NLRC found that AAA was illegally dismissed. The NLRC denied the motion for reconsideration filed by Bison. Because of this, Bison filed a petition for certiorari before the CA.
The CA agreed with the NLRC that Philippine law governs the terms of the employment contract as well as the rights of the employee. This conclusion stems from the principle of lex loci contractus, meaning “law of the place where the contract is made.” The CA reasoned that since the law “categorically prohibits the use of a person’s HIV+ condition as a ground for dismissal,” there was no valid cause to terminate AAA.
The CA denied Bison’s motion for reconsideration, causing Bison to file a Petition for Review.
Issue
Bison argues that the CA erred in applying the principle of lex loci contractus rather than the principle of pacta sunt servanda in resolving the legality of AAA’s dismissal. Pacta sunt servanda means “agreements must be kept,” meaning that parties are required to honor their agreements and obligations.
Ruling
The Court will not engage in an academic discussion on the principle of pacta sunt servanda where the case is essentially one for illegal dismissal of an OFW.
Under Section 49(a) of Republic Act No. (RA) 11166, or the Philippine HIV and AIDS Policy Act, it is unlawful for employees to be terminated from work on the sole basis of their HIV status.
Since Philippine law prohibits the use of a person’s HIV-positive condition as a ground for dismissal, there was no valid cause to terminate AAA.
Further, if the foreign law stated in the employment contract contradicts Philippine law, morals, good customs, public order, or public policy, then Philippine law shall apply.
In this case, even if it is proven that Saudi Arabian law prohibits workers who test positive for HIV, RA 11166 takes precedence over it for being against Philippine law.