SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER AQUACULTURE

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Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 86773 February 14, 1992

SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-

AQUACULTURE DEPARTMENT (SEAFDEC-AQD), DR. FLOR

LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE

DIV.), BEN DELOS REYES (FINANCE OFFICER), petitioners,

vs.

NATIONAL LABOR RELATIONS COMMISSION and JUVENAL

LAZAGA, respondents.

Ramon Encarnacion for petitioners.

Caesar T. Corpus for private respondent.

NOCON, J.:

This is a petition for certiorari to annul and set aside the July 26, 1988 decision of

the National Labor Relations Commission sustaining the labor arbiter, in holding

herein petitioners Southeast Asian Fisheries Development Center-Aquaculture

Department (SEAFDEC-AQD), Dr. Flor Lacanilao, Rufil Cuevas and Ben de los

Reyes liable to pay private respondent Juvenal Lazaga the amount of P126,458.89

plus interest thereon computed from May 16, 1986 until full payment thereof is

made, as separation pay and other post-employment benefits, and the resolution

denying the petitioners' motion for reconsideration of said decision dated January

9, 1989.

The antecedent facts of the case are as follows:

SEAFDEC-AQD is a department of an international organization, the Southeast

Asian Fisheries Development Center, organized through an agreement entered into

in Bangkok, Thailand on December 28, 1967 by the governments of Malaysia,

Singapore, Thailand, Vietnam, Indonesia and the Philippines with Japan as the

sponsoring country (Article 1, Agreement Establishing the SEAFDEC).

On April 20, 1975, private respondent Juvenal Lazaga was employed as a Research

Associate an a probationary basis by the SEAFDEC-AQD and was appointed Senior

External Affairs Officer on January 5, 1983 with a monthly basic salary of

P8,000.00 and a monthly allowance of P4,000.00. Thereafter, he was appointed to

the position of Professional III and designated as Head of External Affairs Office

with the same pay and benefits.

On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD

sent a notice of termination to private respondent informing him that due to the

financial constraints being experienced by the department, his services shall be

terminated at the close of office hours on May 15, 1986 and that he is entitled to

separation benefits equivalent to one (1) month of his basic salary for every year of

service plus other benefits (Rollo, p. 153).

Upon petitioner SEAFDEC-AQD's failure to pay private respondent his separation

pay, the latter filed on March 18, 1987 a complaint against petitioners for non-

payment of separation benefits plus moral damages and attorney's fees with the

Arbitration Branch of the NLRC (Annex "C" of Petition for Certiorari).

Petitioners in their answer with counterclaim alleged that the NLRC has no

jurisdiction over the case inasmuch as the SEAFDEC-AQD is an international

organization and that private respondent must first secure clearances from the

proper departments for property or money accountability before any claim for

separation pay will be paid, and which clearances had not yet been obtained by the

private respondent.

A formal hearing was conducted whereby private respondent alleged that the non-

issuance of the clearances by the petitioners was politically motivated and in bad

faith. On the other hand, petitioners alleged that private respondent has property

accountability and an outstanding obligation to SEAFDEC-AQD in the amount of

P27,532.11. Furthermore, private respondent is not entitled to accrued sick leave

benefits amounting to P44,000.00 due to his failure to avail of the same during his

employment with the SEAFDEC-AQD (Annex "D", Id.).

On January 12, 1988, the labor arbiter rendered a decision, the dispositive portion

of which reads:

WHEREFORE, premises considered, judgment is hereby rendered

ordering respondents:

1. To pay complainant P126,458.89, plus legal interest thereon

computed from May 16, 1986 until full payment thereof is made,

as separation pay and other post-employment benefits;

2. To pay complainant actual damages in the amount of P50,000,

plus 10% attorney's fees.

All other claims are hereby dismissed.

SO ORDERED. (Rollo, p. 51, Annex "E")

On July 26, 1988, said decision was affirmed by the Fifth Division of the NLRC

except as to the award of P50,000.00 as actual damages and attorney's fees for

being baseless. (Annex "A", p. 28, id.)

On September 3, 1988, petitioners filed a Motion for Reconsideration (Annex

"G", id.) which was denied on January 9, 1989. Thereafter, petitioners instituted

this petition for certiorari alleging that the NLRC has no jurisdiction to hear and

decide respondent Lazaga's complaint since SEAFDEC-AQD is immune from suit

owing to its international character and the complaint is in effect a suit against the

State which cannot be maintained without its consent.

The petition is impressed with merit.

Petitioner Southeast Asian Fisheries Development Center-Aquaculture

Department (SEAFDEC-AQD) is an international agency beyond the jurisdiction of

public respondent NLRC.

It was established by the Governments of Burma, Kingdom of Cambodia, Republic

of Indonesia, Japan, Kingdom of Laos, Malaysia. Republic of the Philippines,

Republic of Singapore, Kingdom of Thailand and Republic of Vietnam (Annex "H",

Petition).

The Republic of the Philippines became a signatory to the Agreement establishing

SEAFDEC on January 16,1968. Its purpose is as follows:

The purpose of the Center is to contribute to the promotion of the

fisheries development in Southeast Asia by mutual co-operation

among the member governments of the Center, hereinafter called

the "Members", and through collaboration with international

organizations and governments external to the Center. (Agreement

Establishing the SEAFDEC, Art. 1; Annex "H" Petition)

(p.310, Rollo)

SEAFDEC-AQD was organized during the Sixth Council Meeting of SEAFDEC on

July 3-7, 1973 in Kuala Lumpur, Malaysia as one of the principal departments of

SEAFDEC (Annex "I", id.) to be established in Iloilo for the promotion of research

in aquaculture. Paragraph 1, Article 6 of the Agreement establishing SEAFDEC

mandates:

1. The Council shall be the supreme organ of the Center and all

powers of the Center shall be vested in the Council.

Being an intergovernmental organization, SEAFDEC including its Departments

(AQD), enjoys functional independence and freedom from control of the state in

whose territory its office is located.

As Senator Jovito R. Salonga and Former Chief Justice Pedro L. Yap stated in their

book, Public International Law (p. 83, 1956 ed.):

Permanent international commissions and administrative bodies

have been created by the agreement of a considerable number of

States for a variety of international purposes, economic or social

and mainly non-political. Among the notable instances are the

International Labor Organization, the International Institute of

Agriculture, the International Danube Commission. In so far as

they are autonomous and beyond the control of any one State, they

have a distinct juridical personality independent of the municipal

law of the State where they are situated. As such, according to one

leading authority "they must be deemed to possess a species of

international personality of their own." (Salonga and Yap, Public

International Law, 83 [1956 ed.])

Pursuant to its being a signatory to the Agreement, the Republic of the Philippines

agreed to be represented by one Director in the governing SEAFDEC Council

(Agreement Establishing SEAFDEC, Art. 5, Par. 1, Annex "H",ibid.) and that its

national laws and regulations shall apply only insofar as its contribution to

SEAFDEC of "an agreed amount of money, movable and immovable property and

services necessary for the establishment and operation of the Center" are

concerned (Art. 11, ibid.). It expressly waived the application of the Philippine laws

on the disbursement of funds of petitioner SEAFDEC-AQD (Section 2, P.D. No.

292).

The then Minister of Justice likewise opined that Philippine Courts have no

jurisdiction over SEAFDEC-AQD in Opinion No. 139, Series of 1984 —

4. One of the basic immunities of an international organization is

immunity from local jurisdiction, i.e.,that it is immune from the

legal writs and processes issued by the tribunals of the country

where it is found. (See Jenks, Id., pp. 37-44) The obvious reason

for this is that the subjection of such an organization to the

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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 86773 February 14, 1992 SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT (SEAFDEC-AQD), DR. FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE DIV.), BEN DELOS REYES (FINANCE OFFICER), petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and JUVENAL LAZAGA, respondents. Ramon Encarnacion for petitioners. Caesar T. Corpus for private respondent. NOCON, J.: This is a petition for certiorari to annul and set aside the July 26, 1988 decision of the National Labor Relations Commission sustaining the labor arbiter, in holding herein petitioners Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-AQD), Dr. Flor Lacanilao, Rufil Cuevas and Ben de los Reyes liable to pay private respondent Juvenal Lazaga the amount of P126,458.89 plus interest thereon computed from May 16, 1986 until full payment thereof is made, as separation pay and other post-employment benefits, and the resolution denying the petitioners' motion for reconsideration of said decision dated January 9, 1989. The antecedent facts of the case are as follows: SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries Development Center, organized through an agreement entered into in Bangkok, Thailand on December 28, 1967 by the governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia and the Philippines with Japan as the sponsoring country ( ...
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