Dumez Co. v. NLRC

G.R. No. 74495 (July 11, 1996)

SC ruled Saudi law holds General Organization for Social Insurance liable for medical benefits.

Facts:

On May 21, 1982, Dumez Company, a French corporation, through its Philippine-based agent Trans-Orient Engineers, Inc., hired Veronico Ebilane as a carpenter for a project in Riyadh, Saudi Arabia. The parties entered into a one-year overseas employment agreement outlining the terms of Ebilane's employment. Ebilane commenced work on July 3, 1982.

On August 31, 1982, while working, Ebilane experienced severe abdominal pain and was rushed to the Riyadh Central Hospital, where he underwent an appendectomy. During his recovery, he developed complications that resulted in right-sided weakness, numbness, and difficulty speaking, diagnosed as Atrial Fibrillation and CVA embolism.

On September 22, 1982, Dumez Company formally terminated Ebilane's employment effective September 29, 1982, citing his unfitness for work as the reason for dismissal. Ebilane was repatriated to Manila on October 13, 1982.

On November 23, 1982, Ebilane filed a complaint for illegal dismissal with the Workers' Assistance and Adjudication Office of the Philippine Overseas Employment Administration (POEA). He argued that his termination was unjustified as the grounds for dismissal stated in the employment agreement did not apply to his situation.

On January 24, 1984, the POEA Administrator ruled in favor of Ebilane, ordering Dumez Company to pay him medical compensation benefits amounting to U.S.$1,110.00. The Administrator found that while Ebilane could be terminated for medical reasons, the petitioners failed to fulfill their obligation to provide him with daily allowances during his work disability.

Dumez Company appealed the decision to the National Labor Relations Commission (NLRC), which affirmed the POEA's ruling on March 25, 1986. Dumez Company subsequently filed a petition for certiorari with the Supreme Court, seeking to annul the NLRC's decision.

Legal Issues:

  1. Whether the termination of Ebilane's employment was justified under the terms of the employment agreement.
  2. Whether Dumez Company was liable to pay Ebilane medical compensation benefits under the laws of Saudi Arabia and the terms of the employment agreement.

Arguments:

Petitioners (Dumez Company and Trans-Orient Engineers, Inc.):

  • The petitioners contended that Ebilane's termination was justified under the employment agreement, which allowed for dismissal if an employee was deemed unqualified or unfit for work.
  • They argued that the POEA Administrator erred in holding them liable for medical compensation benefits, asserting that under Saudi Arabian law, the obligation to pay such benefits lies with the General Organization for Social Insurance, not the employer.

Respondent (Veronico Ebilane):

  • Ebilane maintained that his termination was without cause, as the grounds cited by the petitioners did not apply to his medical condition.
  • He argued that he was entitled to medical compensation benefits as awarded by the POEA, which he claimed were due under the employment agreement and applicable laws.

Court's Decision and Legal Reasoning:

The Supreme Court granted the petition for certiorari, annulling the decisions of the POEA and the NLRC. The Court held that while the POEA Administrator had the authority to take judicial notice of the GOSI Law of Saudi Arabia, the actual application of that law in this case was erroneous.

The Court emphasized that under the GOSI Law, the obligation to pay medical benefits for work-related injuries or illnesses falls on the General Organization, not the employer, unless the injury was intentionally caused by the employer or resulted from gross negligence. The Court found no evidence that Dumez Company had failed to comply with its obligations under Saudi law.

The Court also noted that the employment agreement explicitly stated that workmen's compensation benefits would be provided according to the laws of the host country, reinforcing that the responsibility for medical compensation lay with the General Organization under Saudi law.

Significant Legal Principles Established:

  1. The obligation to provide medical compensation benefits for work-related injuries or illnesses under foreign law may not necessarily devolve upon the employer if such responsibility is explicitly assigned to a governmental organization under that law.
  2. Administrative and quasi-judicial bodies are not strictly bound by technical rules of evidence, but their decisions must still be grounded in applicable laws and regulations.
  3. The interpretation of employment agreements must align with the governing laws of the host country, particularly in overseas employment contexts.