THIRD DIVISION

[G.R. No. 149440. January 28, 2003]

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and

CRISTINE SEGURA, petitioners, vs. NATIONAL FEDERATION OF SUGARCANE
WORKERS-FOOD AND GENERAL TRADE, respondents.

DECISION

PANGANIBAN, J.:

Although the employers have shown that respondents performed work that was
seasonal in nature, they failed to prove that the latter worked only for the duration
of one particular season. In fact, petitioners do not deny that these workers have
served them for several years already. Hence, they are regular -- not seasonal --
employees.

The Case

Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking
to set aside the February 20, 2001 Decision of the Court of Appeals[1] (CA) in CA-GR
SP No. 51033. The dispositive part of the Decision reads:

WHEREFORE, premises considered, the instant special civil action for certiorari is
hereby DENIED. [2]

On the other hand, the National Labor Relations Commission (NLRC) Decision,[3]
upheld by the CA, disposed in this wise:

WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET
ASIDE and VACATED and a new one entered declaring complainants to have been
illegally dismissed. Respondents are hereby ORDERED to reinstate complainants
except Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva to their
previous position and to pay full backwages from September 1991 until reinstated.
Respondents being guilty of unfair labor practice are further ordered to pay
complainant union the sum of P10,000.00 as moral damages and P5,000.00 as
exemplary damages.[4]

The Facts

The facts are summarized in the NLRC Decision as follows:

Contrary to the findings of the Labor Arbiter that complainants [herein respondents]
refused to work and/or were choosy in the kind of jobs they wanted to perform, the
records is replete with complainants persistence and dogged determination in going
back to work.

Indeed, it would appear that respondents did not look with favor workers having
organized themselves into a union. Thus, when complainant union was certified as
the collective bargaining representative in the certification elections, respondents
under the pretext that the result was on appeal, refused to sit down with the union
for the purpose of entering into a collective bargaining agreement. Moreover, the
workers including complainants herein were not given work for more than one
month. In protest, complainants staged a strike which was however settled upon the
signing of a Memorandum of Agreement which stipulated among others that:

a) The parties will initially meet for CBA negotiations on the 11th day of January
1991 and will endeavor to conclude the same within thirty (30) days.

b) The management will give priority to the women workers who are members of
the union in case work relative x x x or amount[ing] to gahit and [dipol] arises.

c) Ariston Eruela Jr. will be given back his normal work load which is six (6) days in a
week.

d) The management will provide fifteen (15) wagons for the workers and that
existing workforce prior to the actual strike will be given priority. However, in case
the said workforce would not be enough, the management can hire additional
workers to supplement them.

e) The management will not anymore allow the scabs, numbering about eighteen
(18) workers[,] to work in the hacienda; and

f) The union will immediately lift the picket upon signing of this agreement.

However, alleging that complainants failed to load the fifteen wagons, respondents
reneged on its commitment to sit down and bargain collectively. Instead,
respondent employed all means including the use of private armed guards to
prevent the organizers from entering the premises.

Moreover, starting September 1991, respondents did not any more give work
assignments to the complainants forcing the union to stage a strike on January 2,
1992. But due to the conciliation efforts by the DOLE, another Memorandum of
Agreement was signed by the complainants and respondents which provides:

Whereas the union staged a strike against management on January 2, 1992

grounded on the dismissal of the union officials and members;

Whereas parties to the present dispute agree to settle the case amicably once and
for all;

Now therefore, in the interest of both labor and management, parties herein agree
as follows:

1. That the list of the names of affected union members hereto attached and made
part of this agreement shall be referred to the Hacienda payroll of 1990 and
determine whether or not this concerned Union members are hacienda workers;
2. That in addition to the payroll of 1990 as reference, herein parties will use as
guide the subjects of a Memorandum of Agreement entered into by and between
the parties last January 4, 1990;

3. That herein parties can use other employment references in support of their
respective claims whether or not any or all of the listed 36 union members are
employees or hacienda workers or not as the case may be;

4. That in case conflict or disagreement arises in the determination of the status of

the particular hacienda workers subject of this agreement herein parties further
agree to submit the same to voluntary arbitration;

5. To effect the above, a Committee to be chaired by Rose Mengaling is hereby

created to be composed of three representatives each and is given five working
days starting Jan. 23, 1992 to resolve the status of the subject 36 hacienda workers.
(Union representatives: Bernardo Torres, Martin Alas-as, Ariston Arulea Jr.)

Pursuant thereto, the parties subsequently met and the Minutes of the Conciliation
Meeting showed as follows:

The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko
based on who received their 13th month pay. The following are deemed not
considered employees:

1. Luisa Rombo

2. Ramona Rombo

3. Bobong Abrega

4. Boboy Silva
The name Orencio Rombo shall be verified in the 1990 payroll.

The following employees shall be reinstated immediately upon availability of work:

1. Jose Dagle 7. Alejandro Tejares

2. Rico Dagle 8. Gaudioso Rombo

3. Ricardo Dagle 9. Martin Alas-as Jr.

4. Jesus Silva 10. Cresensio Abrega

5. Fernando Silva 11. Ariston Eruela Sr.

6. Ernesto Tejares 12. Ariston Eruela Jr.

When respondents again reneged on its commitment, complainants filed the

present complaint.

But for all their persistence, the risk they had to undergo in conducting a strike in
the face of overwhelming odds, complainants in an ironic twist of fate now find
themselves being accused of refusing to work and being choosy in the kind of work
they have to perform.[5] (Citations omitted)

Ruling of the Court of Appeals

The CA affirmed that while the work of respondents was seasonal in nature, they
were considered to be merely on leave during the off-season and were therefore still
employed by petitioners. Moreover, the workers enjoyed security of tenure. Any
infringement upon this right was deemed by the CA to be tantamount to illegal
dismissal.

The appellate court found neither rhyme nor reason in petitioners argument that it
was the workers themselves who refused to or were choosy in their work. As found
by the NLRC, the record of this case is replete with complainants persistence and
dogged determination in going back to work.[6]

The CA likewise concurred with the NLRCs finding that petitioners were guilty of
unfair labor practice.

Hence this Petition.[7]

Issues

Petitioners raise the following issues for the Courts consideration:

A. Whether or not the Court of Appeals erred in holding that respondents,

admittedly seasonal workers, were regular employees, contrary to the clear
provisions of Article 280 of the Labor Code, which categorically state that seasonal
employees are not covered by the definition of regular employees under paragraph
1, nor covered under paragraph 2 which refers exclusively to casual employees who
have served for at least one year.

B. Whether or not the Court of Appeals erred in rejecting the ruling in Mercado, xxx,
and relying instead on rulings which are not directly applicable to the case at bench,
viz, Philippine Tobacco, Bacolod-Murcia, and Gaco, xxx.

C. Whether or not the Court of Appeals committed grave abuse of discretion in

upholding the NLRCs conclusion that private respondents were illegally dismissed,
that petitioner[s were] guilty of unfair labor practice, and that the union be awarded
moral and exemplary damages.[8]

Consistent with the discussion in petitioners Memorandum, we shall take up Items A

and B as the first issue and Item C as the second.

The Courts Ruling

The Petition has no merit.

First Issue:

Regular Employment

At the outset, we must stress that only errors of law are generally reviewed by this
Court in petitions for review on certiorari of CA decisions.[9] Questions of fact are
not entertained.[10] The Court is not a trier of facts and, in labor cases, this doctrine
applies with greater force.[11] Factual questions are for labor tribunals to resolve.
[12] In the present case, these have already been threshed out by the NLRC. Its
findings were affirmed by the appellate court.

Contrary to petitioners contention, the CA did not err when it held that respondents
were regular employees.

Article 280 of the Labor Code, as amended, states:

Art. 280. Regular and Casual Employment. - The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual business
or trade of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the
duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exist. (Italics supplied)

For respondents to be excluded from those classified as regular employees, it is not

enough that they perform work or services that are seasonal in nature. They must
have also been employed only for the duration of one season. The evidence proves
the existence of the first, but not of the second, condition. The fact that respondents
-- with the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy
Silva -- repeatedly worked as sugarcane workers for petitioners for several years is
not denied by the latter. Evidently, petitioners employed respondents for more than
one season. Therefore, the general rule of regular employment is applicable.

In Abasolo v. National Labor Relations Commission,[13] the Court issued this

clarification:

[T]he test of whether or not an employee is a regular employee has been laid down
in De Leon v. NLRC, in which this Court held:

The primary standard, therefore, of determining regular employment is the

reasonable connection between the particular activity performed by the employee
in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual trade or business of the
employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its
entirety. Also if the employee has been performing the job for at least a year, even if
the performance is not continuous and merely intermittent, the law deems repeated
and continuing need for its performance as sufficient evidence of the necessity if
not indispensability of that activity to the business. Hence, the employment is
considered regular, but only with respect to such activity and while such activity
exists.
xxxxxxxxx

x x x [T]he fact that [respondents] do not work continuously for one whole year but
only for the duration of the x x x season does not detract from considering them in
regular employment since in a litany of cases this Court has already settled that
seasonal workers who are called to work from time to time and are temporarily laid
off during off-season are not separated from service in said period, but merely
considered on leave until re-employed.[14]

The CA did not err when it ruled that Mercado v. NLRC[15] was not applicable to the
case at bar. In the earlier case, the workers were required to perform phases of
agricultural work for a definite period of time, after which their services would be
available to any other farm owner. They were not hired regularly and repeatedly for
the same phase/s of agricultural work, but on and off for any single phase thereof.
On the other hand, herein respondents, having performed the same tasks for
petitioners every season for several years, are considered the latters regular
employees for their respective tasks. Petitioners eventual refusal to use their
services -- even if they were ready, able and willing to perform their usual duties
whenever these were available -- and hiring of other workers to perform the tasks
originally assigned to respondents amounted to illegal dismissal of the latter.

The Court finds no reason to disturb the CAs dismissal of what petitioners claim was
their valid exercise of a management prerogative. The sudden changes in work
assignments reeked of bad faith. These changes were implemented immediately
after respondents had organized themselves into a union and started demanding
collective bargaining. Those who were union members were effectively deprived of
their jobs. Petitioners move actually amounted to unjustified dismissal of
respondents, in violation of the Labor Code.

Where there is no showing of clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and the burden
is on the employer to prove that the termination was for a valid and authorized
cause.[16] In the case at bar, petitioners failed to prove any such cause for the
dismissal of respondents who, as discussed above, are regular employees.

Second Issue:

Unfair Labor Practice

The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as
follows:

Indeed, from respondents refusal to bargain, to their acts of economic inducements

resulting in the promotion of those who withdrew from the union, the use of armed
guards to prevent the organizers to come in, and the dismissal of union officials and
members, one cannot but conclude that respondents did not want a union in their
haciendaa clear interference in the right of the workers to self-organization.[17]

We uphold the CAs affirmation of the above findings. Indeed, factual findings of
labor officials, who are deemed to have acquired expertise in matters within their
respective jurisdictions, are generally accorded not only respect but even finality.
Their findings are binding on the Supreme Court.[18] Verily, their conclusions are
accorded great weight upon appeal, especially when supported by substantial
evidence.[19] Consequently, the Court is not duty-bound to delve into the accuracy
of their factual findings, in the absence of a clear showing that these were arbitrary
and bereft of any rational basis.[20]

The finding of unfair labor practice done in bad faith carries with it the sanction of
moral and exemplary damages.[21]

WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED.
Costs against petitioners.

SO ORDERED.

SECOND DIVISION

[G.R. No.100518. January 24, 2000]

ASSOCIATION OF TRADE UNIONS (ATU), RODOLFO MONTECLARO and

EDGAR JUESAN, petitioners, vs. HON. COMISSIONERS OSCAR N. ABELLA,
MUSIB N. BUAT, LEON GONZAGA JR., ALGON ENGINEERING CONSTRUCTION
CORP., ALEX GONZALES and EDITHA YAP, respondents.

DECISION

QUISUMBING, J.:
This special civil action for certiorari under Rule 65 of the Rules of Court assails the
resolution of the National Labor Relations Commission promulgated on May 17,
1991, which modified the decision of the labor arbiter.

Respondent company is a domestic corporation engaged in road construction

projects of the government. From 1968 to 1989, it engaged the services of the
following workers to work on various projects on different dates: Rodolfo Monteclaro
(mechanic), Edgar Juesan[1] (painter), Victorio Lunzaga (tanker driver), Alfredo Jalet
(batteryman), Julito Macabodbod (trailer helper), Ramon Tabada (carpenter), Remsy,
[2] Asensi (machinist), Armand Acero (helper mechanic), Lordito Tatad (painter
helper), Rogelio Tantuan (painter), Teodoro Tabio (checker), Gemudo[3] Asejo
(electrician), Roland Olivar (latheman), Valeriano Mijas[4] (driver), Jose Noval
(welder), Felimon Lagbao (mechanic), Pedro Roche (head welder), and Justiniano
Sollano (carpenter). Their contracts indicate the particular project they are
assigned, the duration of their employment and their daily wage.

In February 1989, the above-named workers joined petitioner union as members.

Accordingly, petitioner union filed a petition for certification election with the
regional office of the labor department. Respondent company opposed the petition
on the ground that the workers were project employees and therefore not qualified
to form part of the rank and file collective bargaining unit. Not for long, the Med-
Arbiter dismissed the petition for certification election. On appeal, the Secretary of
Labor and Employment reversed the Med-Arbiter's decision and ordered the
immediate holding of a certification election. Oldmis o

Meanwhile, the national president of petitioner union sent a demand letter to

respondent company seeking the payment of wage differentials to some affected
union members. As said demand was unheeded, petitioner union and the concerned
workers filed a complaint for payment of wage differentials and other benefits
before the Regional Office of the Department of Labor and Employment.

Shortly thereafter, respondent company terminated the employment of

aforementioned workers owing to the completion of its projects or the expiration of
workers' contracts. Respondent company explained the circumstances surrounding
the separation of the workers from the service as follows:
"(1) The Contract No. 2AIPD-C-10 Second Agusan Irrigation Project of NIA wherein
some of the herein complainants were assigned was already 98% completed when
complaints were filed. With the near completion of the contract, services of the
following complainants were no longer needed:

(a) Gerundio Asejo

(b) Victorio Lunzaga

(c) Ramon R. Tabada

(d) Alfredo E. Julet (sic)

(e) Julito C. Macabodbod

(2) In the case of Contract No. 2AIPD-C-II-second Agusan Irrigation Project of NIA,
the following complainants were terminated because of the 95% completion of the
phase of the project and expiration of their contract of employment:

(a) Remsy B. Asensi

(b) Rolando G. Olivar

(c) Edgar A. Juezan

(d) Rodolfo G. Monteclaro

(e) Valeriano S. Meyas (sic)

(f) Jose F. Noval

(g) Pedro M. Roche

(3) In Contract Package R11 1/209, Davao del Norte, the contracts of employment of
Armand T. Acero and Felimon J. Dagbao (sic) Jr. expired.

(4) In the Widening and Improvement of Rafael Castillo St., Davao City Project,
where complainant Teodoro Tabio was assigned, he was terminated because he
went on absent without leave (AWOL) while Lordito Tatad's contract of employment
expired."[5] Ncmmis
However, the affected workers claim that they were dismissed because of their
union activities. In view of the alleged illegal dismissals and harassment by their
employer, the workers staged a strike on May 17, 1989. Upon complaint of
respondent company, Labor Arbiter Newton Sancho declared said strike illegal and
decreed further that Victorio Lunzaga, Alfred Jalet, Julito Macabodbod, Ramon
Tabada and Remsy Asensi, who had participated in the strike, were deemed to have
lost their employment status.

On appeal, the National Labor Relations Commission affirmed said decision.

Petitioner union then elevated the matter to this Court by way of petition for
certiorari which was eventually dismissed.[6]

Meanwhile, the aggrieved workers filed with the Regional Arbitration Branch of the
NLRC their individual complaints against private respondent company for illegal
dismissal, unfair labor practice, underpayment of wages, 13th month pay, holiday
pay and overtime pay. They also sought reinstatement with back wages. The cases
were consolidated and assigned to Labor Arbiter Nicolas Sayon for arbitration.
However, noting that a similar case had been filed before the regional office of the
labor department, the labor arbiter refrained from resolving the issue of
underpayment of monetary benefits. He also found the charge of unfair labor
practice untenable. But, on the charge of illegal dismissal, he ruled on October 31,
1989, as follows:

"WHEREFORE in view of the foregoing, judgment is hereby rendered declaring the

dismissal of the following complainants illegal; namely:

1. Victorio C. Lunzaga

2. Julito C. Macabodbod

3. Alfredo E. Jalet

4. Gerundio F. Asejo

5. Ramon R. Tabada
"Respondent ALGON Engineering Construction Corporation and Alex Gonzales and
Edith Yap, are hereby ordered to reinstate the above-named complainants to their
former positions without loss of seniority rights plus six months backwages based
on their latest salary rate at the time of their dismissal, which is P65.00 per day
equivalent to monthly rate of P1,700.83, a total ofP 10,204.99 per complainant or in
the total amount of P51,024.95.

"The case of illegal dismissal filed by Armand Acero, Lordito Tatad, Teodoro Tabio,
Ramon Olivar, Valeriano Miyas, Jose Noval, Felimon Lagbao, Pedro Roche, Remsy
Asensi, Rodolfo Monteclaro, Edgar Juesan and Justiniano Sollano are hereby ordered
dismissed for lack of merit.

"SO ORDERED."[7] Scnc m

Petitioners and private respondents separately appealed the Labor Arbiters ruling to
the National Labor Relations Commission. Pending appeal, Edgar Juesan, Lordito
Tatad and Ramon Tabada filed their respective duly sworn affidavits of desistance
and motions to withdraw their complaints and money claims against private
respondents. Said motions were seasonably granted.

On May 17, 1991, the NLRC promulgated its resolution modifying the decision of
Labor Arbiter Nicolas Sayon. It held that the labor arbiter erred in not resolving the
issue of underpayment of wages because not all of the original complainants filed
the same money claims with the labor department.[8] Thus, it awarded monetary
benefits to qualified workers. The NLRC disposed of the case as follows:

"Accordingly, the appealed decision is hereby modified as follows:

"1. Respondent ALGON Engineering Construction Corporation is hereby ordered to

pay the complainants hereinafter enumerated, the following sums:

WAGE DIFFERENTIALS:
1. VALERIANO MIJAS

December 14, 1987 to April 15, 1989

419 days x P64.00/day . = P26,816.00

Less:

December 14, 1987 to April 15, 1989

419 days x P61.00/day . = P25,559.00

TOTAL. . .= P 1,257.00

SERVICE INCENTIVE LEAVE PAY: Sdaa miso

1) RAMSI ASENSI

5 days x P64.00 . . .= P320.00

2) VICTORIO LUNZAGA

10 days x P64.00 . . = 640.00

5 days x 53.00 . . .= 265.00 P905.00

3) JULIETO MACABODBOD

10 days x P64.00 . . = P640.00

5 days x 53.00 . . .= .265.00..P905.00

4) GERONIMO ASEJO

10 days x P64.00 . . = 640.00

5 days x 53.00 . . .= .265.000..P905.00

5) ALFREDO JALET

10 days x P64.00 . . = 640.00

5 days x 53.00 . . .=. 265.00 P905.00

6) VALERIANO MIJAS

10 days x P64.00 . . = 640.00

5 days x 53.00 . . .= . 265.00 . P905.00

7) PEDRO ROCHE

5 days x P64.00 . . .= 320.00

8) RODOLFO MONTECLARO

5 days x P64.00 . . .= 320.00

13th MONTH PAY:

1) RAMSI ASENSI

26 days x P64.00 x 10 mos. =

P16,640.00 x 1/12 . = P1,386.67

2) VICTORIO LUNZAGA

26 days x P64.00 x 12 mos. =

P19,968.00 x 1/12 . = P1,664.00

3) JULIETO MACABODBOD Sdaad

26 days x P64.00 x 12 mos. =

P19,968.00 x 1/12 . = P1,664.00

4) GERONIMO ASEJO

26 days x P64.00 x 12 mos. =

P19,968.00 x 1/12 . = P1,664.00

5) ALFREDO JALET

26 days x P64.00 x 12 mos. =

P19,968.00 x 1/12 . = P1,664.00

6) VALERIANO MIJAS
26 days x P64.00 x 12 mos. =

P19,968.00 x 1/12 . = P1,664.00

7) PEDRO ROCHE

26 days x P64.00 x 12 mos. =

P19,968.00 x 1/12 . = P1,664.00

8) RODOLFO MONTECLARO

26 days x P64.00 x 12 mos. =

P19,968.00 x 1/12 . = Pl,664.00

9) JOSE NAVAL

26 days x P64.00 x 3 mos. =

P4,992.00 x 1/12 . = P 416.00

"2. The complaints of Edgar Juezon (sic), Lordito Tadtad and Ramon Tabada are
hereby dismissed as prayed for by said complainants.

"3. The complainants for illegal dismissal filed by Victorio Lunzaga (Lonzaga) and
Alfredo Jalet (Jalit) are hereby dismissed for having been rendered moot and
academic by Our decision in Case No. RAB-11-05-00352-89.

"4. The complaints of Macabodbod and Asejo for illegal dismissal are hereby
DISMISSED for lack of merit. Juris
"5. The charge of unfair labor practice is hereby dismissed for lack of merit.

"SO ORDERED."[9]

As noted by the Solicitor General, private respondents filed their motion for
reconsideration, which was denied.[10] We find, however, that herein petitioners did
not move for reconsideration, as the petition did not so indicate and none appears
on the records before us.

Filing a petition for certiorari under Rule 65 without first moving for reconsideration
of the assailed resolution generally warrants the petition's outright dismissal. As we
consistently held in numerous cases,[11] a motion for reconsideration by a
concerned party is indispensable for it affords the NLRC an opportunity to rectify
errors or mistakes it might have committed before resort to the courts can be had.

It is settled that certiorari will lie only if there is no appeal or any other plain, speedy
and adequate remedy in the ordinary course of law against acts of public
respondents.[12] Here, the plain and adequate remedy expressly provided by law
was a motion for reconsideration of the impugned resolution, based on palpable or
patent errors, to be made under oath and filed within ten (10) days from receipt of
the questioned resolution of the NLRC, a procedure which is jurisdictional.[13]
Further, it should be stressed that without a motion for reconsideration seasonably
filed within the ten-day reglementary period, the questioned order, resolution or
decision of NLRC, becomes final and executory after ten (10) calendar days from
receipt thereof.[14] Moreover, even if procedural lapses were to be set aside, we
find no cogent reason sufficient to justify a departure from public respondent's
decision, as hereafter elucidated.

In this recourse, petitioners impute the following errors on the part of public
respondent:

[I]
"THAT THE HONORABLE COMMISSION ERRED IN HOLDING THAT THE DISMISSAL OF
FIVE COMPLAINANTS WERE JUSTIFIED IN VIEW OF THE FACT THAT THEIR COMPLAINT
HAVE BEEN RENDERED MOOT AND ACADEMIC BY ITS DECISION IN CASE NO. RAB-
O5-00353-89.

[II]

THAT HONORABLE COMMISSION AGAIN ERRED IN DISMISSING THE COMPLAINT OF

THE COMPLAINANTS MACABODBOD AND ASEJO FOR LACK OF MERIT. Sup rema

[III]

THE HONORABLE COMMISSION SERIOUSLY ERRED IN AFFIRMING THE DECISION OF

THE LABOR ARBITER DISMISSING PETITIONER'S CHARGE OF UNFAIR LABOR
PRACTICE AGAINST THE RESPONDENT CORPORATION.

[IV]

QUESTION OF LAW."[15]

In petitions for certiorari under Rule 65 of the Rules of Court, it may be noted that
"want of jurisdiction" and "grave abuse of discretion,"[16] and not merely reversible
error, are the proper grounds for review. The respondent acts without jurisdiction if
he does not have the legal authority to decide a case. There is excess of jurisdiction
if the respondent, having the power to determine the case, oversteps his lawful
authority. And there is grave abuse of discretion where the respondent acts in a
capricious, whimsical, arbitrary or despotic manner, in effect equivalent to lack of
jurisdiction.[17] Here, petitioners neither assail the jurisdiction of public respondent
nor attribute any grave abuse of discretion on the part of the labor tribunal.
Necessarily, this petition must fail, for lack of substantial requisites under Rule 65.

Nevertheless, if only to cast aside all doubts for the benefit of the concerned
workers, we assayed into the merits of the case. As properly stated by the Solicitor
General, the point of inquiry here is whether petitioners are regular or project
employees of respondent company.

The Labor Code defines regular, project and casual employees as follows:

"ART 280. Regular and Casual Employment. - The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual business
or trade of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the
duration of the season.

And employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists." (Italics supplied.) Juris sc

Thus, regular employees are those who have been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the
employer even if the parties enter into an agreement stating otherwise.[18] In
contrast, project employees are those whose employment has been fixed for a
specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee, or where the work or
services to be performed is seasonal in nature and the employment is for the
duration of the season.[19]

Furthermore, Policy Instruction No. 20,[20] which was in force during the period of
petitioners' employment, stated:

"Project employees are those employed in connection with a particular construction

project. Non-project (regular) employees are those employed by a construction
company without reference to any particular project.
Project employees are not entitled to termination pay if they are terminated as a
result of the completion of the project or any phase thereof in which they are
employed, regardless of the number of projects in which they have been employed
by a particular construction company. Moreover, the company is not required to
obtain clearance from the Secretary of Labor in connection with such termination.
What is required of the company is report to the nearest Public Employment Office
for statistical purposes."

In the case at bar, the contracts of employment of the petitioners attest to the fact
that they had been hired for specific projects, and their employment was
coterminous with the completion of the project for which they had been hired. Said
contracts expressly provide that the workers' tenure of employment would depend
on the duration of any phase of the project or the completion of the awarded
government construction projects in any of their planned phases. Further,
petitioners were informed in advance that said project or undertaking for which they
were hired would end on a stated or determinable date. Besides, public respondent
noted that respondent company regularly submitted reports of termination of
services of project workers to the regional office of the labor department as required
under Policy Instruction No. 20. This compliance with the reportorial requirement
confirms that petitioners were project employees.

Considering that petitioners were project employees, whose nature of employment

they were fully informed about, at the time of their engagement, related to a
specific project, work or undertaking, their employment legally ended upon
completion of said project. The termination of their employment could not be
regarded as illegal dismissal.

WHEREFORE, the instant petition is DISMISSED, and the assailed RESOLUTION of

respondent NLRC dated May 17, 1991, is AFFIRMED.

No pronouncement as to costs.

SO ORDERED.

FIRST DIVISION
ABS-CBN BROADCASTING G.R. No. 164156

CORPORATION,

Petitioner, Present

PANGANIBAN, C.J., Chairperson,

YNARES-SANTIAGO,

- versus - AUSTRIA-MARTINEZ,

CALLEJO, SR., and

CHICO-NAZARIO, JJ.

MARLYN NAZARENO, Promulgated:

MERLOU GERZON,

JENNIFER DEIPARINE,

and JOSEPHINE LERASAN,

Respondents. September 26, 2006

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CALLEJO, SR., J.:

Before us is a petition for review on certiorari of the Decision[1] of the Court of

Appeals (CA) in CA-G.R. SP No. 76582 and the Resolution denying the motion for
reconsideration thereof. The CA affirmed the Decision[2] and Resolution[3] of the
National Labor Relations Commission (NLRC) in NLRC Case No. V-000762-2001 (RAB
Case No. VII-10-1661-2001) which likewise affirmed, with modification, the decision
of the Labor Arbiter declaring the respondents Marlyn Nazareno, Merlou Gerzon,
Jennifer Deiparine and Josephine Lerasan as regular employees.

The Antecedents
Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the
broadcasting business and owns a network of television and radio stations, whose
operations revolve around the broadcast, transmission, and relay of
telecommunication signals. It sells and deals in or otherwise utilizes the airtime it
generates from its radio and television operations. It has a franchise as a
broadcasting company, and was likewise issued a license and authority to operate
by the National Telecommunications Commission.

Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as

production assistants (PAs) on different dates. They were assigned at the news and
public affairs, for various radio programs in the Cebu Broadcasting Station, with a
monthly compensation of P4,000. They were issued ABS-CBN employees
identification cards and were required to work for a minimum of eight hours a day,
including Sundays and holidays. They were made to perform the following tasks and
duties:

a) Prepare, arrange airing of commercial broadcasting based on the daily

operations log and digicart of respondent ABS-CBN;

b) Coordinate, arrange personalities for air interviews;

c) Coordinate, prepare schedule of reporters for scheduled news reporting and

lead-in or incoming reports;

d) Facilitate, prepare and arrange airtime schedule for public service

announcement and complaints;

e) Assist, anchor program interview, etc; and

f) Record, log clerical reports, man based control radio.[4]

Their respective working hours were as follows:

Name Time No. of Hours

1. Marlene Nazareno 4:30 A.M.-8:00 A.M. 7

8:00 A.M.-12:00 noon

2. Jennifer Deiparine 4:30 A.M.-12:00M.N. (sic) 7

3. Joy Sanchez 1:00 P.M.-10:00 P.M.(Sunday) 9 hrs.

9:00 A.M.-6:00 P.M. (WF) 9 hrs.

4. Merlou Gerzon 9:00 A.M.-6:00 P.M. 9 hrs.[5]

The PAs were under the control and supervision of Assistant Station Manager Dante
J. Luzon, and News Manager Leo Lastimosa.

On December 19, 1996, petitioner and the ABS-CBN Rank-and-File Employees

executed a Collective Bargaining Agreement (CBA) to be effective during the period
from December 11, 1996 to December 11, 1999. However, since petitioner refused
to recognize PAs as part of the bargaining unit, respondents were not included to
the CBA.[6]

On July 20, 2000, petitioner, through Dante Luzon, issued a Memorandum informing
the PAs that effective August 1, 2000, they would be assigned to non-drama
programs, and that the DYAB studio operations would be handled by the studio
technician. Thus, their revised schedule and other assignments would be as follows:

Monday Saturday

4:30 A.M. 8:00 A.M. Marlene Nazareno.

Miss Nazareno will then be assigned at the Research Dept.

From 8:00 A.M. to 12:00

4:30 P.M. 12:00 MN Jennifer Deiparine

Sunday

5:00 A.M. 1:00 P.M. Jennifer Deiparine

1:00 P.M. 10:00 P.M. Joy Sanchez

Respondent Gerzon was assigned as the full-time PA of the TV News Department

reporting directly to Leo Lastimosa.

On October 12, 2000, respondents filed a Complaint for Recognition of Regular

Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay,
Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against
the petitioner before the NLRC. The Labor Arbiter directed the parties to submit
their respective position papers. Upon respondents failure to file their position
papers within the reglementary period, Labor Arbiter Jose G. Gutierrez issued an
Order dated

April 30, 2001, dismissing the complaint without prejudice for lack of interest to
pursue the case. Respondents received a copy of the Order on May 16, 2001.[7]
Instead of re-filing their complaint with the NLRC within 10 days from May 16, 2001,
they filed, on June 11, 2001, an Earnest Motion to Refile Complaint with Motion to
Admit Position Paper and Motion to Submit Case For Resolution.[8] The Labor Arbiter
granted this motion in an Order dated June 18, 2001, and forthwith admitted the
position paper of the complainants. Respondents made the following allegations:

1. Complainants were engaged by respondent ABS-CBN as regular and full-time

employees for a continuous period of more than five (5) years with a monthly salary
rate of Four Thousand (P4,000.00) pesos beginning 1995 up until the filing of this
complaint on November 20, 2000.

Machine copies of complainants ABS-CBN Employees Identification Card and salary

vouchers are hereto attached as follows, thus:
I. Jennifer Deiparine:

Exhibit A - ABS-CBN Employees Identification Card

Exhibit B, - ABS-CBN Salary Voucher from Nov.

Exhibit B-1 & 1999 to July 2000 at P4,000.00

Exhibit B-2

Date employed: September 15, 1995

Length of service: 5 years & nine (9) months

II. Merlou Gerzon - ABS-CBN Employees Identification Card

Exhibit C

Exhibit D

Exhibit D-1 &

Exhibit D-2 - ABS-CBN Salary Voucher from March

1999 to January 2001 at P4,000.00

Date employed: September 1, 1995

Length of service: 5 years & 10 months

III. Marlene Nazareno

Exhibit E - ABS-CBN Employees Identification Card

Exhibit E - ABS-CBN Salary Voucher from Nov.

Exhibit E-1 & 1999 to December 2000

Exhibit :E-2

Date employed: April 17, 1996

Length of service: 5 years and one (1) month

IV. Joy Sanchez Lerasan

Exhibit F - ABS-CBN Employees Identification Card

Exhibit F-1 - ABS-CBN Salary Voucher from Aug.

Exhibit F-2 & 2000 to Jan. 2001

Exhibit F-3

Exhibit F-4 - Certification dated July 6, 2000

Acknowledging regular status of

Complainant Joy Sanchez Lerasan

Signed by ABS-CBN Administrative

Officer May Kima Hife

Date employed: April 15, 1998

Length of service: 3 yrs. and one (1) month[9]

Respondents insisted that they belonged to a work pool from which petitioner chose
persons to be given specific assignments at its discretion, and were thus under its
direct supervision and control regardless of nomenclature. They prayed that
judgment be rendered in their favor, thus:

WHEREFORE, premises considered, this Honorable Arbiter is most respectfully

prayed, to issue an order compelling defendants to pay complainants the following:

1. One Hundred Thousand Pesos (P100,000.00) each

and by way of moral damages;

2. Minimum wage differential;

3. Thirteenth month pay differential;

4. Unpaid service incentive leave benefits;

5. Sick leave;

6. Holiday pay;

7. Premium pay;

8. Overtime pay;
9. Night shift differential.

Complainants further pray of this Arbiter to declare them regular and permanent
employees of respondent ABS-CBN as a condition precedent for their admission into
the existing union and collective bargaining unit of respondent company where they
may as such acquire or otherwise perform their obligations thereto or enjoy the
benefits due therefrom.

Complainants pray for such other reliefs as are just and equitable under the
premises.[10]

For its part, petitioner alleged in its position paper that the respondents were PAs
who basically assist in the conduct of a particular program ran by an anchor or
talent. Among their duties include monitoring and receiving incoming calls from
listeners and field reporters and calls of news sources; generally, they perform leg
work for the anchors during a program or a particular production. They are
considered in the industry as program employees in that, as distinguished from
regular or station employees, they are basically engaged by the station for a
particular or specific program broadcasted by the radio station. Petitioner asserted
that as PAs, the complainants were issued talent information sheets which are
updated from time to time, and are thus made the basis to determine the programs
to which they shall later be called on to assist. The program assignments of
complainants were as follows:

a. Complainant Nazareno assists in the programs:

1) Nagbagang Balita (early morning edition)

2) Infor Hayupan

3) Arangkada (morning edition)

4) Nagbagang Balita (mid-day edition)

b. Complainant Deiparine assists in the programs:

1) Unzanith
2) Serbisyo de Arevalo

3) Arangkada (evening edition)

4) Balitang K (local version)

5) Abante Subu

6) Pangutana Lang

c. Complainant Gerzon assists in the program:

1) On Mondays and Tuesdays:

(a) Unzanith

(b) Serbisyo de Arevalo

(c) Arangkada (evening edition)

(d) Balitang K (local version)

(e) Abante Sugbu

(f) Pangutana Lang

2) On Thursdays

Nagbagang Balita

3) On Saturdays

(a) Nagbagang Balita

(b) Info Hayupan

(c) Arangkada (morning edition)

(d) Nagbagang Balita (mid-day edition)

4) On Sundays:

(a) Siesta Serenata

(b) Sunday Chismisan

(c) Timbangan sa Hustisya

(d) Sayri ang Lungsod

(e) Haranahan[11]

Petitioner maintained that PAs, reporters, anchors and talents occasionally sideline
for other programs they produce, such as drama

talents in other productions. As program employees, a PAs engagement is

coterminous with the completion of the program, and may be extended/renewed
provided that the program is on-going; a PA may also be assigned to new programs
upon the cancellation of one program and the commencement of another. As such
program employees, their compensation is computed on a program basis, a fixed
amount for performance services irrespective of the time consumed. At any rate,
petitioner claimed, as the payroll will show, respondents were paid all salaries and
benefits due them under the law.[12]

Petitioner also alleged that the Labor Arbiter had no jurisdiction to involve the CBA
and interpret the same, especially since respondents were not covered by the
bargaining unit.

On July 30, 2001, the Labor Arbiter rendered judgment in favor of the respondents,
and declared that they were regular employees of petitioner; as such, they were
awarded monetary benefits. The fallo of the decision reads:

WHEREFORE, the foregoing premises considered, judgment is hereby rendered

declaring the complainants regular employees of the respondent ABS-CBN
Broadcasting Corporation and directing the same respondent to pay complainants
as follows:

I - Merlou A. Gerzon P12,025.00

II - Marlyn Nazareno 12,025.00

III - Jennifer Deiparine 12,025.00

IV - Josephine Sanchez Lerazan 12,025.00

_________

P48,100.00

plus ten (10%) percent Attorneys Fees or a TOTAL aggregate amount of PESOS:
FIFTY TWO THOUSAND NINE HUNDRED TEN (P52,910.00).

Respondent Veneranda C. Sy is absolved from any liability.

SO ORDERED.[13]

However, the Labor Arbiter did not award money benefits as provided in the CBA on
his belief that he had no jurisdiction to interpret and apply the agreement, as the
same was within the jurisdiction of the Voluntary Arbitrator as provided in Article
261 of the Labor Code.

Respondents counsel received a copy of the decision on August 29, 2001.

Respondent Nazareno received her copy on August 27, 2001, while the other
respondents received theirs on September 8, 2001. Respondents signed and filed
their Appeal Memorandum on September 18, 2001.

For its part, petitioner filed a motion for reconsideration, which the Labor Arbiter
denied and considered as an appeal, conformably with Section 5, Rule V, of the
NLRC Rules of Procedure. Petitioner forthwith appealed the decision to the NLRC,
while respondents filed a partial appeal.

In its appeal, petitioner alleged the following:

1. That the Labor Arbiter erred in reviving or re-opening this case which had long
been dismissed without prejudice for more than thirty (30) calendar days;

2. That the Labor Arbiter erred in depriving the respondent of its Constitutional
right to due process of law;

3. That the Labor Arbiter erred in denying respondents Motion for

Reconsideration on an interlocutory order on the ground that the same is a
prohibited pleading;

4. That the Labor Arbiter erred when he ruled that the complainants are
regular employees of the respondent;

5. That the Labor Arbiter erred when he ruled that the complainants are
entitled to 13th month pay, service incentive leave pay and salary differential; and

6. That the Labor Arbiter erred when he ruled that complainants are entitled to
attorneys fees.[14]

On November 14, 2002, the NLRC rendered judgment modifying the decision of the
Labor Arbiter. The fallo of the decision reads:

WHEREFORE, premises considered, the decision of Labor Arbiter Jose G. Gutierrez

dated 30 July 2001 is SET ASIDE and VACATED and a new one is entered ORDERING
respondent ABS-CBN Broadcasting Corporation, as follows:

1. To pay complainants of their wage differentials and other benefits arising from
the CBA as of 30 September 2002 in the aggregate amount of Two Million Five
Hundred, Sixty-One Thousand Nine Hundred Forty-Eight Pesos and 22/100
(P2,561,948.22), broken down as follows:
a. Deiparine, Jennifer - P 716,113.49

b. Gerzon, Merlou - 716,113.49

c. Nazareno, Marlyn - 716,113.49

d. Lerazan, Josephine Sanchez - 413,607.75

Total - P 2,561,948.22

2. To deliver to the complainants Two Hundred Thirty-Three (233) sacks of rice as

of 30 September 2002 representing their rice subsidy in the CBA, broken down as
follows:

a. Deiparine, Jennifer - 60 Sacks

b. Gerzon, Merlou - 60 Sacks

c. Nazareno, Marlyn - 60 Sacks

d. Lerazan, Josephine Sanchez - 53 Sacks

Total 233 Sacks; and

3. To grant to the complainants all the benefits of the CBA after 30 September
2002.

SO ORDERED.[15]

The NLRC declared that the Labor Arbiter acted conformably with the Labor Code
when it granted respondents motion to refile the complaint and admit their position
paper. Although respondents were not parties to the CBA between petitioner and
the ABS-CBN Rank-and-File Employees Union, the NLRC nevertheless granted and
computed respondents monetary benefits based on the 1999 CBA, which was
effective until September 2002. The NLRC also ruled that the Labor Arbiter had
jurisdiction over the complaint of respondents because they acted in their individual
capacities and not as members of the union. Their claim for monetary benefits was
within the context of Article 217(6) of the Labor Code. The validity of respondents
claim does not depend upon the interpretation of the CBA.

The NLRC ruled that respondents were entitled to the benefits under the CBA
because they were regular employees who contributed to the profits of petitioner
through their labor. The NLRC cited the ruling of this Court in New Pacific Timber &
Supply Company v. National Labor Relations Commission.[16]

Petitioner filed a motion for reconsideration, which the NLRC denied.

Petitioner thus filed a petition for certiorari under Rule 65 of the Rules of Court
before the CA, raising both procedural and substantive issues, as follows: (a)
whether the NLRC acted without jurisdiction in admitting the appeal of respondents;
(b) whether the NLRC committed palpable error in scrutinizing the reopening and
revival of the complaint of respondents with the Labor Arbiter upon due notice
despite the lapse of 10 days from their receipt of the July 30, 2001 Order of the
Labor Arbiter; (c) whether respondents were regular employees; (d) whether the
NLRC acted without jurisdiction in entertaining and resolving the claim of the
respondents under the CBA instead of referring the same to the Voluntary
Arbitrators as provided in the CBA; and (e) whether the NLRC acted with grave
abuse of discretion when it awarded monetary benefits to respondents under the
CBA although they are not members of the appropriate bargaining unit.

On February 10, 2004, the CA rendered judgment dismissing the petition. It held
that the perfection of an appeal shall be upon the expiration of the last day to
appeal by all parties, should there be several parties to a case. Since respondents
received their copies of the decision on September 8, 2001 (except respondent
Nazareno who received her copy of the decision on August 27, 2001), they had until
September 18, 2001 within which to file their Appeal Memorandum. Moreover, the
CA declared that respondents failure to submit their position paper on time is not a
ground to strike out the paper from the records, much less dismiss a complaint.

Anent the substantive issues, the appellate court stated that respondents are not
mere project employees, but regular employees who perform tasks necessary and
desirable in the usual trade and business of petitioner and not just its project
employees. Moreover, the CA added, the award of benefits accorded to rank-and-file
employees under the 1996-1999 CBA is a necessary consequence of the NLRC
ruling that respondents, as PAs, are regular employees.

Finding no merit in petitioners motion for reconsideration, the CA denied the same
in a Resolution[17] dated June 16, 2004.

Petitioner thus filed the instant petition for review on certiorari and raises the
following assignments of error:

1. THE HONORABLE COURT OF APPEALS ACTED WITHOUT JURISDICTION AND

GRAVELY ERRED IN UPHOLDING THE NATIONAL LABOR RELATIONS COMMISSION
NOTWITHSTANDING THE PATENT NULLITY OF THE LATTERS DECISION AND
RESOLUTION.

2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING

THE RULING OF THE NLRC FINDING RESPONDENTS REGULAR EMPLOYEES.

3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING

THE RULING OF THE NLRC AWARDING CBA BENEFITS TO RESPONDENTS.[18]

Considering that the assignments of error are interrelated, the Court shall resolve
them simultaneously.

Petitioner asserts that the appellate court committed palpable and serious error of
law when it affirmed the rulings of the NLRC, and entertained respondents appeal
from the decision of the Labor Arbiter despite the admitted lapse of the
reglementary period within which to perfect
the same. Petitioner likewise maintains that the 10-day period to appeal must be
reckoned from receipt of a partys counsel, not from the time the party learns of the
decision, that is, notice to counsel is notice to party and not the other way around.
Finally, petitioner argues that the reopening of a complaint which the Labor Arbiter
has dismissed without prejudice is a clear violation of Section 1, Rule V of the NLRC
Rules; such order of dismissal had already attained finality and can no longer be set
aside.

Respondents, on the other hand, allege that their late appeal is a non-issue because
it was petitioners own timely appeal that empowered the NLRC to reopen the case.
They assert that although the appeal was filed 10 days late, it may still be given
due course in the interest of substantial justice as an exception to the general rule
that the negligence of a counsel binds the client. On the issue of the late filing of
their position paper, they maintain that this is not a ground to strike it out from the
records or dismiss the complaint.

We find no merit in the petition.

We agree with petitioners contention that the perfection of an appeal within the
statutory or reglementary period is not only mandatory, but also jurisdictional;
failure to do so renders the assailed decision final and executory and deprives the
appellate court or body of the legal authority to alter the final judgment, much less
entertain the appeal. However, this Court has time and again ruled that in
exceptional cases, a belated appeal may be given due course if greater injustice
may occur if an appeal is not given due course than if the reglementary period to
appeal were strictly followed.[19] The Court resorted to this extraordinary measure
even at the expense of sacrificing order and efficiency if only to serve the greater
principles of substantial justice and equity.[20]

In the case at bar, the NLRC did not commit a grave abuse of its discretion in giving
Article 223[21] of the Labor Code a liberal application to prevent the miscarriage of
justice. Technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties.[22] We have held in a
catena of cases that technical rules are not binding in labor cases and are not to be
applied strictly if the result would be detrimental to the workingman.[23]
Admittedly, respondents failed to perfect their appeal from the decision of the Labor
Arbiter within the reglementary period therefor. However, petitioner perfected its
appeal within the period, and since petitioner had filed a timely appeal, the NLRC
acquired jurisdiction over the case to give due course to its appeal and render the
decision of November 14, 2002. Case law is that the party who failed to appeal from
the decision of the Labor Arbiter to the NLRC can still participate in a separate
appeal timely filed by the adverse party as the situation is considered to be of
greater benefit to both parties.[24]

We find no merit in petitioners contention that the Labor Arbiter abused his
discretion when he admitted respondents position paper which had been belatedly
filed. It bears stressing that the Labor Arbiter is mandated by law to use every
reasonable means to ascertain the facts in each case speedily and objectively,
without technicalities of law or procedure, all in the interest of due process.[25]
Indeed, as stressed by the appellate court, respondents failure to submit a position
paper on time is not a ground for striking out the paper from the records, much less
for dismissing a complaint.[26] Likewise, there is simply no truth to petitioners
assertion that it was denied due process when the Labor Arbiter admitted
respondents position paper without requiring it to file a comment before admitting
said position paper. The essence of due process in administrative proceedings is
simply an opportunity to explain ones side or an opportunity to seek reconsideration
of the action or ruling complained of. Obviously, there is nothing in the records that
would suggest that petitioner had absolute lack of opportunity to be heard.[27]
Petitioner had the right to file a motion for reconsideration of the Labor Arbiters
admission of respondents position paper, and even file a Reply thereto. In fact,
petitioner filed its position paper on April 2, 2001. It must be stressed that Article
280 of the Labor Code was encoded in our statute books to hinder the
circumvention by unscrupulous employers of the employees right to security of
tenure by indiscriminately and absolutely ruling out all written and oral agreements
inharmonious with the concept of regular employment defined therein.[28]

We quote with approval the following pronouncement of the NLRC:

The complainants, on the other hand, contend that respondents assailed the Labor
Arbiters order dated 18 June 2001 as violative of the NLRC Rules of Procedure and
as such is violative of their right to procedural due process. That while suggesting
that an Order be instead issued by the Labor Arbiter for complainants to refile this
case, respondents impliedly submit that there is not any substantial damage or
prejudice upon the refiling, even so, respondents suggestion acknowledges
complainants right to prosecute this case, albeit with the burden of repeating the
same procedure, thus, entailing additional time, efforts, litigation cost and precious
time for the Arbiter to repeat the same process twice. Respondents suggestion,
betrays its notion of prolonging, rather than promoting the early resolution of the
case.

Although the Labor Arbiter in his Order dated 18 June 2001 which revived and re-
opened the dismissed case without prejudice beyond the ten (10) day reglementary
period had inadvertently failed to follow Section 16, Rule V, Rules Procedure of the
NLRC which states:

A party may file a motion to revive or re-open a case dismissed without prejudice
within ten (10) calendar days from receipt of notice of the order dismissing the
same; otherwise, his only remedy shall be to re-file the case in the arbitration
branch of origin.

the same is not a serious flaw that had prejudiced the respondents right to due
process. The case can still be refiled because it has not yet prescribed. Anyway,
Article 221 of the Labor Code provides:

In any proceedings before the Commission or any of the Labor Arbiters, the rules of
evidence prevailing in courts of law or equity shall not be controlling and it is the
spirit and intention of this Code that the Commission and its members and the
Labor Arbiters shall use every and all reasonable means to ascertain the facts in
each case speedily and objectively and without regard to technicalities of law or
procedure, all in the interest of due process.

The admission by the Labor Arbiter of the complainants Position Paper and
Supplemental Manifestation which were belatedly filed just only shows that he acted
within his discretion as he is enjoined by law to use every reasonable means to
ascertain the facts in each case speedily and objectively, without regard to
technicalities of law or procedure, all in the interest of due process. Indeed, the
failure to submit a position paper on time is not a ground for striking out the paper
from the records, much less for dismissing a complaint in the case of the
complainant. (University of Immaculate Conception vs. UIC Teaching and Non-
Teaching Personnel Employees, G.R. No. 144702, July 31, 2001).
In admitting the respondents position paper albeit late, the Labor Arbiter acted
within her discretion. In fact, she is enjoined by law to use every reasonable means
to ascertain the facts in each case speedily and objectively, without technicalities of
law or procedure, all in the interest of due process. (Panlilio vs. NLRC, 281 SCRA 53).

The respondents were given by the Labor Arbiter the opportunity to submit position
paper. In fact, the respondents had filed their position paper on 2 April 2001. What
is material in the compliance of due process is the fact that the parties are given
the opportunities to submit position papers.

Due process requirements are satisfied where the parties are given the
opportunities to submit position papers. (Laurence vs. NLRC, 205 SCRA 737).

Thus, the respondent was not deprived of its Constitutional right to due process of
law.[29]

We reject, as barren of factual basis, petitioners contention that respondents are

considered as its talents, hence, not regular employees of the broadcasting
company. Petitioners claim that the functions performed by the respondents are not
at all necessary, desirable, or even vital to its trade or business is belied by the
evidence on record.

Case law is that this Court has always accorded respect and finality to the findings
of fact of the CA, particularly if they coincide with those of the Labor Arbiter and the
National Labor Relations Commission, when supported by substantial evidence.[30]
The question of whether respondents are regular or project employees or
independent contractors is essentially factual in nature; nonetheless, the Court is
constrained to resolve it due to its tremendous effects to the legions of production
assistants working in the Philippine broadcasting industry.

We agree with respondents contention that where a person has rendered at least
one year of service, regardless of the nature of the activity performed, or where the
work is continuous or intermittent, the employment is considered regular as long as
the activity exists, the reason being that a customary appointment is not
indispensable before one may be formally declared as having attained regular
status. Article 280 of the Labor Code provides:

ART. 280. REGULAR AND CASUAL EMPLOYMENT.The provisions of written agreement

to the contrary notwithstanding and regardless of the oral agreement of the parties,
an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer except where the employment has been fixed for
a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the
duration of the season.

In Universal Robina Corporation v. Catapang,[31] the Court reiterated the test in

determining whether one is a regular employee:

The primary standard, therefore, of determining regular employment is the

reasonable connection between the particular activity performed by the employee
in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of the
employer. The connection can be

determined by considering the nature of work performed and its relation to the
scheme of the particular business or trade in its entirety. Also, if the employee has
been performing the job for at least a year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing need
for its performance as sufficient evidence of the necessity if not indispensability of
that activity to the business. Hence, the employment is considered regular, but only
with respect to such activity and while such activity exists.[32]

As elaborated by this Court in Magsalin v. National Organization of Working Men:[33]

Even while the language of law might have been more definitive, the clarity of its
spirit and intent, i.e., to ensure a regular workers security of tenure, however, can
hardly be doubted. In determining whether an employment should be considered
regular or non-regular, the applicable test is the reasonable connection between the
particular activity performed by the employee in relation to the usual business or
trade of the employer. The standard, supplied by the law itself, is whether the work
undertaken is necessary or desirable in the usual business or trade of the employer,
a fact that can be assessed by looking into the nature of the services rendered and
its relation to the general scheme under which the business or trade is pursued in
the usual course. It is distinguished from a specific undertaking that is divorced from
the normal activities required in carrying on the particular business or trade. But,
although the work to be performed is only for a specific project or seasonal, where a
person thus engaged has been performing the job for at least one year, even if the
performance is not continuous or is merely intermittent, the law deems the
repeated and continuing need for its performance as being sufficient to indicate the
necessity or desirability of that activity to the business or trade of the employer. The
employment of such person is also then deemed to be regular with respect to such
activity and while such activity exists.[34]

Not considered regular employees are project employees, the completion or

termination of which is more or less determinable at the time of employment, such
as those employed in connection with a particular construction project, and
seasonal employees whose employment by its nature is only desirable for a limited
period of time. Even then, any employee who has rendered at least one year of
service, whether continuous or intermittent, is deemed regular with respect to the
activity performed and while such activity actually exists.

It is of no moment that petitioner hired respondents as talents. The fact that

respondents received pre-agreed talent fees instead of salaries, that they did not
observe the required office hours, and that they were permitted to join other
productions during their free time are not conclusive of the nature of their
employment. Respondents cannot be considered talents because they are not
actors or actresses or radio specialists or mere clerks or utility employees. They are
regular employees who perform several different duties under the control and
direction of ABS-CBN executives and supervisors.
Thus, there are two kinds of regular employees under the law: (1) those engaged to
perform activities which are necessary or desirable in the usual business or trade of
the employer; and (2) those casual employees who have rendered at least one year
of service, whether continuous or broken, with respect to the activities in which they
are employed.[35]

The law overrides such conditions which are prejudicial to the interest of the worker
whose weak bargaining situation necessitates the succor of the State. What
determines whether a certain employment is regular or otherwise is not the will or
word of the employer, to which the worker oftentimes acquiesces, much less the
procedure of hiring the employee or the manner of paying the salary or the actual
time spent at work. It is the character of the activities performed in relation to the
particular trade or business taking into account all the circumstances, and in some
cases the length of time of its performance and its continued existence.[36] It is
obvious that one year after they were employed by petitioner, respondents became
regular employees by operation of law.[37]

Additionally, respondents cannot be considered as project or program employees

because no evidence was presented to show that the duration and scope of the
project were determined or specified at the time of their engagement. Under
existing jurisprudence, project could refer to two distinguishable types of activities.
First, a project may refer to a particular job or undertaking that is within the regular
or usual business of the employer, but which is distinct and separate, and
identifiable as such, from the other undertakings of the company. Such job or
undertaking begins and ends at determined or determinable times. Second, the
term project may also refer to a particular job or undertaking that is not within the
regular business of the employer. Such a job or undertaking must also be
identifiably separate and distinct from the ordinary or regular business operations of
the employer. The job or undertaking also begins and ends at determined or
determinable times.[38]

The principal test is whether or not the project employees were assigned to carry
out a specific project or undertaking, the duration and scope of which were specified
at the time the employees were engaged for that project.[39]
In this case, it is undisputed that respondents had continuously performed the same
activities for an average of five years. Their assigned tasks are necessary or
desirable in the usual business or trade of the petitioner. The persisting need for
their services is sufficient evidence of the necessity and indispensability of such
services to petitioners business or trade.[40] While length of time may not be a sole
controlling test for project employment, it can be a strong factor to determine
whether the employee was hired for a specific undertaking or in fact tasked to
perform functions which are vital, necessary and indispensable to the usual trade or
business of the employer.[41] We note further that petitioner did not report the
termination of respondents employment in the particular project to the Department
of Labor and Employment Regional Office having jurisdiction over the workplace
within 30 days following the date of their separation from work, using the prescribed
form on employees termination/ dismissals/suspensions.[42]

As gleaned from the records of this case, petitioner itself is not certain how to
categorize respondents. In its earlier pleadings, petitioner classified respondents as
program employees, and in later pleadings, independent contractors. Program
employees, or project employees, are different from independent contractors
because in the case of the latter, no employer-employee relationship exists.

Petitioners reliance on the ruling of this Court in Sonza v. ABS-CBN Broadcasting

Corporation[43] is misplaced. In that case, the Court explained why Jose Sonza, a
well-known television and radio personality, was an independent contractor and not
a regular employee:

A. Selection and Engagement of Employee

ABS-CBN engaged SONZAS services to co-host its television and radio programs
because of SONZAS peculiar skills, talent and celebrity status. SONZA contends that
the discretion used by respondent in specifically selecting and hiring complainant
over other broadcasters of possibly similar experience and qualification as
complainant belies respondents claim of independent contractorship.

Independent contractors often present themselves to possess unique skills,

expertise or talent to distinguish them from ordinary employees. The specific
selection and hiring of SONZA, because of his unique skills, talent and celebrity
status not possessed by ordinary employees, is a circumstance indicative, but not
conclusive, of an independent contractual relationship. If SONZA did not possess
such unique skills, talent and celebrity status, ABS-CBN would not have entered into
the Agreement with SONZA but would have hired him through its personnel
department just like any other employee.

In any event, the method of selecting and engaging SONZA does not conclusively
determine his status. We must consider all the circumstances of the relationship,
with the control test being the most important element.

B. Payment of Wages

ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going
to MJMDC. SONZA asserts that this mode of fee payment shows that he was an
employee of ABS-CBN. SONZA also points out that ABS-CBN granted him benefits
and privileges which he would not have enjoyed if he were truly the subject of a
valid job contract.

All the talent fees and benefits paid to SONZA were the result of negotiations that
led to the Agreement. If SONZA were ABS-CBNs employee, there would be no need
for the parties to stipulate on benefits such as SSS, Medicare, x x x and 13th month
pay which the law automatically incorporates into every employer-employee
contract. Whatever benefits SONZA enjoyed arose from contract and not because of
an employer-employee relationship.

SONZAs talent fees, amounting to P317,000 monthly in the second and third year,
are so huge and out of the ordinary that they indicate more an independent
contractual relationship rather than an employer-employee relationship. ABS-CBN
agreed to pay SONZA such huge talent fees precisely because of SONZAS unique
skills, talent and celebrity status not possessed by ordinary employees. Obviously,
SONZA acting alone possessed enough bargaining power to demand and receive
such huge talent fees for his services. The power to bargain talent fees way above
the salary scales of ordinary employees is a circumstance indicative, but not
conclusive, of an independent contractual relationship.

The payment of talent fees directly to SONZA and not to MJMDC does not negate the
status of SONZA as an independent contractor. The parties expressly agreed on
such mode of payment. Under the Agreement, MJMDC is the AGENT of SONZA, to
whom MJMDC would have to turn over any talent fee accruing under the Agreement.
[44]

In the case at bar, however, the employer-employee relationship between petitioner

and respondents has been proven.

First. In the selection and engagement of respondents, no peculiar or unique skill,

talent or celebrity status was required from them because they were merely hired
through petitioners personnel department just like any ordinary employee.

Second. The so-called talent fees of respondents correspond to wages given as a

result of an employer-employee relationship. Respondents did not have the power
to bargain for huge talent fees, a circumstance negating independent contractual
relationship.

Third. Petitioner could always discharge respondents should it find their work
unsatisfactory, and respondents are highly dependent on the petitioner for
continued work.

Fourth. The degree of control and supervision exercised by petitioner over

respondents through its supervisors negates the allegation that respondents are
independent contractors.

The presumption is that when the work done is an integral part of the regular
business of the employer and when the worker, relative to the employer, does not
furnish an independent business or professional service, such work is a regular
employment of such employee and not an independent contractor.[45] The Court
will peruse beyond any such agreement to examine the facts that typify the parties
actual relationship.[46]

It follows then that respondents are entitled to the benefits provided for in the
existing CBA between petitioner and its rank-and-file employees. As regular
employees, respondents are entitled to the benefits granted to all other regular
employees of petitioner under the CBA.[47] We quote with approval the ruling of the
appellate court, that the reason why production assistants were excluded from the
CBA is precisely because they were erroneously classified and treated as project
employees by petitioner:

x x x The award in favor of private respondents of the benefits accorded to rank-

and-file employees of ABS-CBN under the 1996-1999 CBA is a necessary
consequence of public respondents ruling that private respondents as production
assistants of petitioner are regular employees. The monetary award is not
considered as claims involving the interpretation or implementation of the collective
bargaining agreement. The reason why production assistants were excluded from
the said agreement is precisely because they were classified and treated as project
employees by petitioner.

As earlier stated, it is not the will or word of the employer which determines the
nature of employment of an employee but the nature of the activities performed by
such employee in relation to the particular business or trade of the employer.
Considering that We have clearly found that private respondents are regular
employees of petitioner, their exclusion from the said CBA on the misplaced belief
of the parties to the said agreement that they are project employees, is therefore
not proper. Finding said private respondents as regular employees and not as mere
project employees, they must be accorded the benefits due under the said
Collective Bargaining Agreement.

A collective bargaining agreement is a contract entered into by the union

representing the employees and the employer. However, even the non-member
employees are entitled to the benefits of the contract. To accord its benefits only to
members of the union without any valid reason would constitute undue
discrimination against non-members. A collective bargaining agreement is binding
on all employees of the company. Therefore, whatever benefits are given to the
other employees of ABS-CBN must likewise be accorded to private respondents who
were regular employees of petitioner.[48]
Besides, only talent-artists were excluded from the CBA and not production
assistants who are regular employees of the respondents. Moreover, under Article
1702 of the New Civil Code: In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living of the laborer.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The
assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 76582
are AFFIRMED. Costs against petitioner.

SO ORDERED.

ROMEO J. CALLEJO, SR.

Associate Justice

G.R. No. L-48494 February 5, 1990

BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE, petitioners,

vs.

RONALDO ZAMORA, the Presidential Assistant for Legal Affairs, Office of

the President, and DOROTEO R. ALEGRE, respondents.

Quasha, Asperilla, Ancheta, Pea & Nolasco for petitioners.

Mauricio G. Domogon for respondent Alegre.

NARVASA, J.:
The question presented by the proceedings at bar 1 is whether or not the provisions
of the Labor Code, 2 as amended, 3 have anathematized "fixed period employment"
or employment for a term.

The root of the controversy at bar is an employment contract in virtue of which

Doroteo R. Alegre was engaged as athletic director by Brent School, Inc. at a yearly
compensation of P20,000.00. 4 The contract fixed a specific term for its existence,
five (5) years, i.e., from July 18, 1971, the date of execution of the agreement, to
July 17, 1976. Subsequent subsidiary agreements dated March 15, 1973, August 28,
1973, and September 14, 1974 reiterated the same terms and conditions, including
the expiry date, as those contained in the original contract of July 18, 1971. 5

Some three months before the expiration of the stipulated period, or more precisely
on April 20,1976, Alegre was given a copy of the report filed by Brent School with
the Department of Labor advising of the termination of his services effective on July
16, 1976. The stated ground for the termination was "completion of contract,
expiration of the definite period of employment." And a month or so later, on May
26, 1976, Alegre accepted the amount of P3,177.71, and signed a receipt therefor
containing the phrase, "in full payment of services for the period May 16, to July 17,
1976 as full payment of contract."

However, at the investigation conducted by a Labor Conciliator of said report of

termination of his services, Alegre protested the announced termination of his
employment. He argued that although his contract did stipulate that the same
would terminate on July 17, 1976, since his services were necessary and desirable
in the usual business of his employer, and his employment had lasted for five years,
he had acquired the status of a regular employee and could not be removed except
for valid cause. 6 The Regional Director considered Brent School's report as an
application for clearance to terminate employment (not a report of termination),
and accepting the recommendation of the Labor Conciliator, refused to give such
clearance and instead required the reinstatement of Alegre, as a "permanent
employee," to his former position without loss of seniority rights and with full back
wages. The Director pronounced "the ground relied upon by the respondent (Brent)
in terminating the services of the complainant (Alegre) . . . (as) not sanctioned by
P.D. 442," and, quite oddly, as prohibited by Circular No. 8, series of 1969, of the
Bureau of Private Schools. 7
Brent School filed a motion for reconsideration. The Regional Director denied the
motion and forwarded the case to the Secretary of Labor for review. 8 The latter
sustained the Regional Director. 9 Brent appealed to the Office of the President.
Again it was rebuffed. That Office dismissed its appeal for lack of merit and affirmed
the Labor Secretary's decision, ruling that Alegre was a permanent employee who
could not be dismissed except for just cause, and expiration of the employment
contract was not one of the just causes provided in the Labor Code for termination
of services. 10

The School is now before this Court in a last attempt at vindication. That it will get
here.

The employment contract between Brent School and Alegre was executed on July
18, 1971, at a time when the Labor Code of the Philippines (P.D. 442) had not yet
been promulgated. Indeed, the Code did not come into effect until November 1,
1974, some three years after the perfection of the employment contract, and rights
and obligations thereunder had arisen and been mutually observed and enforced.

At that time, i.e., before the advent of the Labor Code, there was no doubt whatever
about the validity of term employment. It was impliedly but nonetheless clearly
recognized by the Termination Pay Law, R.A. 1052, 11 as amended by R.A. 1787. 12
Basically, this statute provided that

In cases of employment, without a definite period, in a commercial, industrial, or

agricultural establishment or enterprise, the employer or the employee may
terminate at any time the employment with just cause; or without just cause in the
case of an employee by serving written notice on the employer at least one month
in advance, or in the case of an employer, by serving such notice to the employee
at least one month in advance or one-half month for every year of service of the
employee, whichever is longer, a fraction of at least six months being considered as
one whole year.

The employer, upon whom no such notice was served in case of termination of
employment without just cause, may hold the employee liable for damages.
The employee, upon whom no such notice was served in case of termination of
employment without just cause, shall be entitled to compensation from the date of
termination of his employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice.

There was, to repeat, clear albeit implied recognition of the licitness of term
employment. RA 1787 also enumerated what it considered to be just causes for
terminating an employment without a definite period, either by the employer or by
the employee without incurring any liability therefor.

Prior, thereto, it was the Code of Commerce which governed employment without a
fixed period, and also implicitly acknowledged the propriety of employment with a
fixed period. Its Article 302 provided that

In cases in which the contract of employment does not have a fixed period, any of
the parties may terminate it, notifying the other thereof one month in advance.

The factor or shop clerk shall have a right, in this case, to the salary corresponding
to said month.

The salary for the month directed to be given by the said Article 302 of the Code of
Commerce to the factor or shop clerk, was known as the mesada (from mes,
Spanish for "month"). When Article 302 (together with many other provisions of the
Code of Commerce) was repealed by the Civil Code of the Philippines, Republic Act
No. 1052 was enacted avowedly for the precise purpose of reinstating the mesada.

Now, the Civil Code of the Philippines, which was approved on June 18, 1949 and
became effective on August 30,1950, itself deals with obligations with a period in
section 2, Chapter 3, Title I, Book IV; and with contracts of labor and for a piece of
work, in Sections 2 and 3, Chapter 3, Title VIII, respectively, of Book IV. No
prohibition against term-or fixed-period employment is contained in any of its
articles or is otherwise deducible therefrom.
It is plain then that when the employment contract was signed between Brent
School and Alegre on July 18, 1971, it was perfectly legitimate for them to include in
it a stipulation fixing the duration thereof Stipulations for a term were explicitly
recognized as valid by this Court, for instance, in Biboso v. Victorias Milling Co., Inc.,
promulgated on March 31, 1977, 13 and J. Walter Thompson Co. (Phil.) v. NLRC,
promulgated on December 29, 1983. 14 The Thompson case involved an executive
who had been engaged for a fixed period of three (3) years. Biboso involved
teachers in a private school as regards whom, the following pronouncement was
made:

What is decisive is that petitioners (teachers) were well aware an the time that their
tenure was for a limited duration. Upon its termination, both parties to the
employment relationship were free to renew it or to let it lapse. (p. 254)

Under American law 15 the principle is the same. "Where a contract specifies the
period of its duration, it terminates on the expiration of such period." 16 "A contract
of employment for a definite period terminates by its own terms at the end of such
period." 17

The status of legitimacy continued to be enjoyed by fixed-period employment

contracts under the Labor Code (Presidential Decree No. 442), which went into
effect on November 1, 1974. The Code contained explicit references to fixed period
employment, or employment with a fixed or definite period. Nevertheless,
obscuration of the principle of licitness of term employment began to take place at
about this time

Article 320, entitled "Probationary and fixed period employment," originally stated
that the "termination of employment of probationary employees and those
employed WITH A FIXED PERIOD shall be subject to such regulations as the
Secretary of Labor may prescribe." The asserted objective to was "prevent the
circumvention of the right of the employee to be secured in their employment as
provided . . . (in the Code)."

Article 321 prescribed the just causes for which an employer could terminate "an
employment without a definite period."
And Article 319 undertook to define "employment without a fixed period" in the
following manner: 18

An employment shall be deemed to be without a definite period for purposes of this

Chapter where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season.

The question immediately provoked by a reading of Article 319 is whether or not a

voluntary agreement on a fixed term or period would be valid where the employee
"has been engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer." The definition seems a non sequitur.
From the premise that the duties of an employee entail "activities which are
usually necessary or desirable in the usual business or trade of the employer the"
conclusion does not necessarily follow that the employer and employee should be
forbidden to stipulate any period of time for the performance of those activities.
There is nothing essentially contradictory between a definite period of an
employment contract and the nature of the employee's duties set down in that
contract as being "usually necessary or desirable in the usual business or trade of
the employer." The concept of the employee's duties as being "usually necessary or
desirable in the usual business or trade of the employer" is not synonymous with or
identical to employment with a fixed term. Logically, the decisive determinant in
term employment should not be the activities that the employee is called upon to
perform, but the day certain agreed upon by the parties for the commencement and
termination of their employment relationship, a day certain being understood to be
"that which must necessarily come, although it may not be known when." 19
Seasonal employment, and employment for a particular project are merely
instances employment in which a period, where not expressly set down, necessarily
implied.

Of course, the term period has a definite and settled signification. It means,
"Length of existence; duration. A point of time marking a termination as of a cause
or an activity; an end, a limit, a bound; conclusion; termination. A series of years,
months or days in which something is completed. A time of definite length. . . . the
period from one fixed date to another fixed date . . ." 20 It connotes a "space of
time which has an influence on an obligation as a result of a juridical act, and either
suspends its demandableness or produces its extinguishment." 21 It should be
apparent that this settled and familiar notion of a period, in the context of a
contract of employment, takes no account at all of the nature of the duties of the
employee; it has absolutely no relevance to the character of his duties as being
"usually necessary or desirable to the usual business of the employer," or not.

Subsequently, the foregoing articles regarding employment with "a definite period"
and "regular" employment were amended by Presidential Decree No. 850, effective
December 16, 1975.

Article 320, dealing with "Probationary and fixed period employment," was altered
by eliminating the reference to persons "employed with a fixed period," and was
renumbered (becoming Article 271). The article 22 now reads:

. . . Probationary employment.Probationary employment shall not exceed six

months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employee
who has been engaged in a probationary basis may be terminated for a just cause
or when he fails to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a probationary period shall
be considered a regular employee.

Also amended by PD 850 was Article 319 (entitled "Employment with a fixed
period," supra) by (a) deleting mention of employment with a fixed or definite
period, (b) adding a general exclusion clause declaring irrelevant written or oral
agreements "to the contrary," and (c) making the provision treat exclusively of
"regular" and "casual" employment. As revised, said article, renumbered 270, 23
now reads:

. . . Regular and Casual Employment.The provisions of written agreement to the

contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual business
or trade of the employer except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or service to be
employed is seasonal in nature and the employment is for the duration of the
season.

An employment shall be deemed to he casual if it is not covered by the preceding

paragraph: provided, that, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such actually exists.

The first paragraph is identical to Article 319 except that, as just mentioned, a
clause has been added, to wit: "The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreements of the parties . . ." The
clause would appear to be addressed inter alia to agreements fixing a definite
period for employment. There is withal no clear indication of the intent to deny
validity to employment for a definite period. Indeed, not only is the concept of
regular employment not essentially inconsistent with employment for a fixed term,
as above pointed out, Article 272 of the Labor Code, as amended by said PD 850,
still impliedly acknowledged the propriety of term employment: it listed the "just
causes" for which "an employer may terminate employment without a definite
period," thus giving rise to the inference that if the employment be with a definite
period, there need be no just cause for termination thereof if the ground be
precisely the expiration of the term agreed upon by the parties for the duration of
such employment.

Still later, however, said Article 272 (formerly Article 321) was further amended by
Batas Pambansa Bilang 130, 24 to eliminate altogether reference to employment
without a definite period. As lastly amended, the opening lines of the article
(renumbered 283), now pertinently read: "An employer may terminate an
employment for any of the following just causes: . . . " BP 130 thus completed the
elimination of every reference in the Labor Code, express or implied, to employment
with a fixed or definite period or term.

It is in the light of the foregoing description of the development of the provisions of

the Labor Code bearing on term or fixed-period employment that the question
posed in the opening paragraph of this opinion should now be addressed. Is it then
the legislative intention to outlaw stipulations in employment contracts laying down
a definite period therefor? Are such stipulations in essence contrary to public policy
and should not on this account be accorded legitimacy?
On the one hand, there is the gradual and progressive elimination of references to
term or fixed-period employment in the Labor Code, and the specific statement of
the rule 25 that

. . . Regular and Casual Employment. The provisions of written agreement to the

contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual business
or trade of the employer except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or service to be
employed is seasonal in nature and the employment is for the duration of the
season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: provided, that, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such actually exists.

There is, on the other hand, the Civil Code, which has always recognized, and
continues to recognize, the validity and propriety of contracts and obligations with a
fixed or definite period, and imposes no restraints on the freedom of the parties to
fix the duration of a contract, whatever its object, be it specie, goods or services,
except the general admonition against stipulations contrary to law, morals, good
customs, public order or public policy. 26 Under the Civil Code, therefore, and as a
general proposition, fixed-term employment contracts are not limited, as they are
under the present Labor Code, to those by nature seasonal or for specific projects
with pre-determined dates of completion; they also include those to which the
parties by free choice have assigned a specific date of termination.

Some familiar examples may be cited of employment contracts which may be

neither for seasonal work nor for specific projects, but to which a fixed term is an
essential and natural appurtenance: overseas employment contracts, for one, to
which, whatever the nature of the engagement, the concept of regular employment
will all that it implies does not appear ever to have been applied, Article 280 of the
Labor Code not withstanding; also appointments to the positions of dean, assistant
dean, college secretary, principal, and other administrative offices in educational
institutions, which are by practice or tradition rotated among the faculty members,
and where fixed terms are a necessity, without which no reasonable rotation would
be possible. Similarly, despite the provisions of Article 280, Policy, Instructions No. 8
of the Minister of Labor 27 implicitly recognize that certain company officials may
be elected for what would amount to fixed periods, at the expiration of which they
would have to stand down, in providing that these officials," . . . may lose their jobs
as president, executive vice-president or vice-president, etc. because the
stockholders or the board of directors for one reason or another did not re-elect
them."

There can of course be no quarrel with the proposition that where from the
circumstances it is apparent that periods have been imposed to preclude acquisition
of tenurial security by the employee, they should be struck down or disregarded as
contrary to public policy, morals, etc. But where no such intent to circumvent the
law is shown, or stated otherwise, where the reason for the law does not exist, e.g.,
where it is indeed the employee himself who insists upon a period or where the
nature of the engagement is such that, without being seasonal or for a specific
project, a definite date of termination is a sine qua non, would an agreement fixing
a period be essentially evil or illicit, therefore anathema? Would such an agreement
come within the scope of Article 280 which admittedly was enacted "to prevent the
circumvention of the right of the employee to be secured in . . . (his) employment?"

As it is evident from even only the three examples already given that Article 280 of
the Labor Code, under a narrow and literal interpretation, not only fails to exhaust
the gamut of employment contracts to which the lack of a fixed period would be an
anomaly, but would also appear to restrict, without reasonable distinctions, the right
of an employee to freely stipulate with his employer the duration of his
engagement, it logically follows that such a literal interpretation should be
eschewed or avoided. The law must be given a reasonable interpretation, to
preclude absurdity in its application. Outlawing the whole concept of term
employment and subverting to boot the principle of freedom of contract to remedy
the evil of employer's using it as a means to prevent their employees from obtaining
security of tenure is like cutting off the nose to spite the face or, more relevantly,
curing a headache by lopping off the head.

It is a salutary principle in statutory construction that there exists a valid

presumption that undesirable consequences were never intended by a legislative
measure, and that a construction of which the statute is fairly susceptible is
favored, which will avoid all objecionable mischievous, undefensible, wrongful, evil
and injurious consequences. 28

Nothing is better settled than that courts are not to give words a meaning which
would lead to absurd or unreasonable consequences. That s a principle that does
back to In re Allen decided oil October 27, 1903, where it was held that a literal
interpretation is to be rejected if it would be unjust or lead to absurd results. That is
a strong argument against its adoption. The words of Justice Laurel are particularly
apt. Thus: "The fact that the construction placed upon the statute by the appellants
would lead to an absurdity is another argument for rejecting it. . . ." 29

. . . We have, here, then a case where the true intent of the law is clear that calls for
the application of the cardinal rule of statutory construction that such intent of spirit
must prevail over the letter thereof, for whatever is within the spirit of a statute is
within the statute, since adherence to the letter would result in absurdity, injustice
and contradictions and would defeat the plain and vital purpose of the statute. 30

Accordingly, and since the entire purpose behind the development of legislation
culminating in the present Article 280 of the Labor Code clearly appears to have
been, as already observed, to prevent circumvention of the employee's right to be
secure in his tenure, the clause in said article indiscriminately and completely ruling
out all written or oral agreements conflicting with the concept of regular
employment as defined therein should be construed to refer to the substantive evil
that the Code itself has singled out: agreements entered into precisely to
circumvent security of tenure. It should have no application to instances where a
fixed period of employment was agreed upon knowingly and voluntarily by the
parties, without any force, duress or improper pressure being brought to bear upon
the employee and absent any other circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee dealt with each other on
more or less equal terms with no moral dominance whatever being exercised by the
former over the latter. Unless thus limited in its purview, the law would be made to
apply to purposes other than those explicitly stated by its framers; it thus becomes
pointless and arbitrary, unjust in its effects and apt to lead to absurd and
unintended consequences.

Such interpretation puts the seal on Bibiso 31 upon the effect of the expiry of an
agreed period of employment as still good rulea rule reaffirmed in the recent case
of Escudero vs. Office of the President (G.R. No. 57822, April 26, 1989) where, in the
fairly analogous case of a teacher being served by her school a notice of
termination following the expiration of the last of three successive fixed-term
employment contracts, the Court held:

Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her
employment was probationary, contractual in nature, and one with a definitive
period. At the expiration of the period stipulated in the contract, her appointment
was deemed terminated and the letter informing her of the non-renewal of her
contract is not a condition sine qua non before Reyes may be deemed to have
ceased in the employ of petitioner UST. The notice is a mere reminder that Reyes'
contract of employment was due to expire and that the contract would no longer be
renewed. It is not a letter of termination. The interpretation that the notice is only a
reminder is consistent with the court's finding in Labajo supra. ... 32

Paraphrasing Escudero, respondent Alegre's employment was terminated upon the

expiration of his last contract with Brent School on July 16, 1976 without the
necessity of any notice. The advance written advice given the Department of Labor
with copy to said petitioner was a mere reminder of the impending expiration of his
contract, not a letter of termination, nor an application for clearance to terminate
which needed the approval of the Department of Labor to make the termination of
his services effective. In any case, such clearance should properly have been given,
not denied.

WHEREFORE, the public respondent's Decision complained of is REVERSED and SET

ASIDE. Respondent Alegre's contract of employment with Brent School having
lawfully terminated with and by reason of the expiration of the agreed term of
period thereof, he is declared not entitled to reinstatement and the other relief
awarded and confirmed on appeal in the proceedings below. No pronouncement as
to costs.

SO ORDERED.

Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,

Corts, Grio-Aquino, Medialdea and Regalado, JJ., concur.

Fernan, C.J., took no part.

SECOND DIVISION

[G.R. Nos. 114858-59. September 7, 2001]

COLUMBUS PHILIPPINES BUS CORPORATION, petitioner, vs. NATIONAL

LABOR RELATIONS COMMISSION, ZENAIDA DOMASIG and ROMAN
DOMASIG, respondents.

DECISION

DE LEON, JR., J.:

This is a petition for certiorari[1] which seeks to nullify the Resolution[2] dated
October 29, 1993 of the National Labor Relations Commission (NLRC) affirming the
Decision[3] dated September 8, 1992 of the Labor Arbiter Ceferina J. Diosana who
found and adjudged that private respondents Roman and Zenaida Domasig were
illegally dismissed by petitioner Columbus Philippines Bus Corporation from their
positions as driver and bus conductress, respectively.

Petitioner Columbus Philippines Bus Corporation is engaged in the business of

operating passenger buses. Since the start of its operations in 1990, it has
maintained a list of drivers and conductors who rendered service in its bus units
allegedly on a first come first served basis and compensated purely on commission.
The drivers and conductors/conductress worked for about ten (10) to fifteen (15)
days a month and were allegedly not required to work everyday.

Private respondent Roman Domasig started working as a driver with the petitioner
on August 30, 1990 with a daily income ranging from Three Hundred Fifty Pesos
(P350.00) to Six Hundred Fifty Pesos (P650.00), while his wife and co-respondent,
Zenaida Domasig, was employed as a bus conductress on October 1, 1990 with a
daily income of Two Hundred Fifty Pesos (P250.00) to Five Hundred Pesos (P500.00).
The employment of private respondents Roman and Zenaida Domasig with the
petitioner was abruptly terminated on January 21 and 22, 1992, respectively, for
their having allegedly formed a labor union.

Thus, these two (2) related cases of unfair labor practice, illegal dismissal, illegal
deductions from salary, and non-payment of service incentive leave pay and 13th
month pay were instituted by private respondents against petitioner Columbus
Philippines Bus Corporation and its officers, Atty. Ferdinand Catabian and Mrs.
Amelia de Dios, before the Department of Labor and Employment (DOLE),
Arbitration Branch in Manila, National Capital Region. The said related cases were
assigned to Labor Arbiter Ceferina J. Diosa.

In his Sinumpaang Salaysay private respondent Roman Domasig alleged, among

others, the following in his affidavit-complaint, to wit:

xxx xxx xxx

3. Sa tindi ng galit ng pangasiwaan at upang hindi mabuo ang itinatayo naming

unyon, akoy basta na lamang pinababa mula sa aking regular na bus na may
numerong 109 nuong ika-21 ng Enero 1992, bandang alas 4:30 ng madaling araw
nang akoy papalabas na sa garahe at bumiyahe na sana. Simula na noon hindi na
ako pinalabas sa biyahe. Ibinigay na sa iba ang aking regular na bus.

4. Kamiy napilitang magtayo ng unyon dahil sa mahirap na kalagayan namin sa

trabaho. Hinaharap namin ang sumusunod:

(a) Mahabang oras sa trabaho. Umaabot sa higit kumulang 19 hanggang 20 oras

ang ginugugol namin sa trabaho. Kailangang nasa garahe na kami at lumabas ng
alas-4 ng madaling araw at makaalis lamang pagkatapos makapag-engreso ng
collection bandang hatinggabi na.
(b) Illegal deductions. Tuwing may labas kami, sapilitang kinakaltasan ang aming
sahod para daw sa pulis. Hindi na nga kami binibigyan ng mga benepisyong
itinatakda ng batas gaya ng 13th month pay at service incentive leave, kinakaltasan
pa kami para daw sa pulis.

(k) Wala kaming kaseguruhan sa trabaho. Kapag kamiy nagreklamo, kami agad
nilang tatanggalin. Napakadali nilang gawin. Hindi ka lang bibigyan ng bus
assignment, wala ka ng magagawa.

5. Tulad ng ganitong kalagayan namin sa trabaho, inumpisahan naming

mangumbinsi sa kapwa naming empleyado noong Disyembre pa ng nakaraang
taon. Ang ilan sa mga kasama ko ay sina Leon Agarao, Santiago Tagum, Alejandro
Bayroon at Zenaida Domasig. Silay tinanggal din sa trabaho. Kumuha kami ng
Sama-Samang Pahayag mula sa National Federation of Labor para papirmahan sa
mga nais sumapi sa Unyon. Columbus Workers Union ang aming lokal at itoy isinapi
namin sa National Federation of Labor (NFL).

6. Pagpasok ng bagong taon, 1992, mayroon na kaming napapirma na higit sa

limampu (50). Mahigit tatlong daan kami, drayber at konduktor. Sa unang linggo pa
lamang ng Enero 1992. Natutunan ng kompanya ang kilos namin. Tinawag na ako ni
Atty. Ferdinand Catabian, General Manager ng CPBC bago akoy tuluyan niyang
tinanggal noong ika-21 ng Enero 1992 at tinanong kung totoo na mayroon kaming
itinatatag na unyon. Tinanggihan ko noon at akoy kanyang binigyan ng babala ng
ganito: Domasig, ayaw ko ng unyon. Kapag mayroon akong mapapanghawakang
ebidensiya na kayoy nagtatayo ng unyon at ikaw ay kasama, titiyakin ko sa iyo na
tanggal ka agad.

7. Dumating ang araw namin noong ika-21 ng Enero. Noong araw na iyon, humigit
kumulang alas 4:30 ng madaling araw, akoy papalabas ng garahe. Dala-Dala ko ang
aking regular bus No. 109. Pinahinto ako ni Legorio Vellesar, dating dispatcher at
ngayon ay traffic supervisor at sinabihan na itabi ko ang bus dahil kakausapin daw
ako ni Atty. Catabian. Kinabahan na ako nang ibigay sa iba ang aking
minamanehong bus.

8. Pagpasok ko sa opisina ni Atty. Catabian, sinabihan agad ako ni Atty. Catabian ng

ganito: Domasig, Hindi ka na makakalusot pa. Tingnan mo ito. Mayroon siyang
ipinakitang xerox copy ng aming pinapipirmahan Sama-Samang Pahayag. Sa xerox
na ito nakita ko ang pirma ni Zenaida Domasig. Domasig, ito ang ebidensiya na
ikaw ay kasama sa unyon. Alam mo Domasig, akoy , mabuting kaibigan ngunit
masamang kaaway. Sinabi ko sa iyo noon na kapag may mahawakan akong
ebidensiya na nagtatayo kayo ng unyon maghihiwalay tayo. Ayaw na ayaw ko ng
unyon. Pagkasabi nito ni Atty. Catabian, akoy kanyang pinalabas na dahil marami
pang driver at konductor na nakapila sa labas.

9. Katunayan, bago kinausap ni Atty. Catabian, marami na sa mga kapwa ko

employado ang kinausap ni Atty. Catabian. Pinapipirma sila sa isang kasulatan na
kung saan binabawi nila ang kanilang pirma sa Sama-Samang Pahayag. Ang hindi
pumirma ay hindi na pinalabas sa biyahe.

10. Ganon man ang nangyari, pinagpasiyahan pa rin ng mga kasama kong
namumuno, kasama ako, na ipagpatuloy pa rin ang pagtatayo ng unyon. Dahil dito,
ipinasiya ng mga namumuno, kasama ako at si Zenaida Domasig, na huwag
pumirma sa kasulatan at ihain na ang petition for certification election.

11. Nagdulot na matinding pagkabalisa at takot sa amin ni Zenaida Domasig ang

biglang pagtanggal nila sa amin. Wala na kaming aasahan para sa araw-araw na
pangangailangan ng aming pamilya. Nabaon kami sa utang at malaking kahihiyan
sa mga kapit-bahay at kaibigan namin. Tuloy hating-gabi na kung minsan, pinag-
iisipan pa rin namin ang kinabukasan ng mga bata: ano kaya ang kanilang
kinabukasan. Kung kami o isa sa amin ay tatalikod sa aming pinirmahan,
mapapahamak din ang kapwa naming empleyado at tuluyang mawasak ang unyon.

12. Sadyang napakalupit at hindi makatao ang ginawa ng kompanya sa aming mag-
asawa at sa kapwa namin empleyado. Wala man lamang notice sa amin. Hindi man
lang kami pinagpaliwanag. Wala naman anumang violations na nagawa namin kundi
ang pagtatayo ng unyon.

13. Dahil dito, hinihingi ko sa Tanggapan ito na ibalik sa akin, para sa pamilya, ang
nawalang sahod ko sa panahon na akoy tanggal sa trabaho. Tuwing labas kumikita
ako mula P350 hanggang P650.00 sa loob ng 20 oras humigit kumulang. Hinihingi
ko rin na ibalik ako sa trabaho at pagbayarin ang kompanya ng damages bunga ng
pinsalang tinamasa namin.
Private respondent Zenaida Domasig also made the following allegations in her
affidavit-complaint, to wit:

3. Kami'y nagtayo ng unyon dahil sa api naming kalagayan sa trabaho. Napakahaba

ang oras ng trabaho namin. Kailangan pumasok kami ng alas-4 ng madaling araw at
makakuwi kami ng alas-12 ng hatinggabi. Salitan ng trabaho at pahinga ang aming
pagtatarabaho: dalawang (2) araw na labas at dalawang (2) araw na pahinga.
Maraming sapilitang kaltas mula sa sahod namin. Tuwing labas namin kinakaltasan
kami ng halagang P18.50 ngunit hindi maliwanag kung para saan ito. Mayroon P300
namang resibong ibinibigay. Kapag magreklamo kami, hindi naman kami
pasasampahin sa bus.

4. Ang benepisyong itinatakda ng batas ay hindi pa ibinibigay. Akoy nagkasakit mula

ika-15 ng Nobyembre 1991 hanggang ika-14 ng Disyembre1991. Gumawa ako ng
sick leave application: isa para sa SSS at isa para sa Employees Compensation
Commission. Si Ginoong Roman Domasig ang nagpapirma ng aking applications sa
kompanya. Ngunit, hindi nila ibinalik kay Ginoong Domasig and aking applications.
Noong lamang ika-12 ng Enero 1992 nila ibinigay sa SSS ang aking sick leave
application. Hindi nila ibinigay sa ECC ang isang application ko at ibinalik na lang
basta sa akin.

5. Ang hindi nila pagfile agad ng aking sick leave ay ginawa ng kompanya upang
magipit kaming mga nangungunang kasapi ng unyon.

6. Sa layuning mapabuti ang aming kalagayan, inumpisahan naming buuin ang

unyon noong mga huling buwan ng 1991. Kumuha kami ng application for
membership sa National Federation of Labor (NFL). Itoy ang Sama-samang Pahayag.
Bago matapos ang taong 1991, kamiy nakapagpapirma ng hindi kukulangin sa
tatlumpu. Sa una o pangalawang linggong Enero 1992, umabot na malamang sa 70
ang nakapirma. Ngunit sa unang linggo pa lamang ng Enero 1992, mukhang
natutunogan ng pangasiwaan na mayroong nagtatayo ng unyon. Inumpisahan na ni
Atty. Ferdinand Catabian na isa-isang pagtatanungin ang kanilang pinaghihinalaang
lider ng unyon.
Isa sa aking asawa sa mga tinatawag at pinagtatanong ni Atty. Catabian. Silay
binigyan ng mahigpit na babala. Tinawag uli si Ginoong Domasig noong ika-21 ng
Enero 1992. Bago siya tinawag marami ng drayber at konduktor/konduktora na
pinatawag ni Atty. Catabian at silay naghihintay na kausapin ni Atty. Catabian. Ang
mga kinausap ay hindi pinalalabas hanggang hindi sila pumirma sa kasulatan na
kanilang binabawi ang kanilang pagsapi sa unyon, ang Columbus Workers Union.
Hindi na pinalabas si Ginoong Domasig mula ng araw na iyon dahil hindi siya
pumirma sa kasulatan.

7. Kinabukasan, ika-22 ng Enero 1992, akoy hindi na rin binigyan ng bus

assignment. Wala namang ibinibintang na violation laban sa akin. Gaya ng nasabi
ko na, wala namang memorandum na ibinigay sa akin. Basta na lamang hindi ako
binibigyan ng bus assignment mula noon magpahanggang ngayon. Ang tanging
dahilan ng pagtanggal nila sa akin ay ang aking pagsapi sa unyon. Akoy isa sa mga
naunang pumirma sa Sama-Samang Pahayag ng pagsapi sa unyon na kinuha namin
mula sa National Federation.

8. Agad agad na pinag-usapan ng liderato ng unyon ang panggigipit ng isinagawa

ng pangasiwaan. Nagpasiya and iba na para makalabas sila at may makain ang
pamilya nila na pumirma sa kasulatan ng pagbawi ng pagiging kasapi nila ng CWU.
Silay pinalabas. Si Felipe Madrid, isa sa lider namin, ay inilipat pa nga sa Air
Conditioned bus pagkatapos niyang pumirma sa kasulatan. Ang dati niyang bus ay
No. 109. Hindi ito Air Con. Ngayon, ang kanyang minamaneho ay Bus No. 17 isang
Air Con Bus. Ang mga hindi pumirma ay hindi na pinalabas.

9. Ganon paman, pinagpasiyahan na ituloy namin ang pagtatayo ng unyon. Kayat

naghain na kami ng isang petition for certification election sa Department of Labor
and Employment.

10. Ang ginawang pagtanggal sa aming mag-asawa ay nagdulot ng malaking

pinsala sa aming pamilya. Nabalisa kaming mag-asawa dahil wala na kaming
maasahang trabaho. Napilitan kami umutang na sa mga kaibigan at kapit-bahay.
Dahil hindi kami makapagbayad sa takdang araw, malaking kahihiyan ang inaabot
namin. Naguguluhan din ang pag-iisip namin lalung-lalo na kapag gutom ang mga
anak namin at wala man lang kaming pambili ng panawid-gutom. Hindi naman
namin maaaring talikuran ang unyon. Kami ang nauna sa pagpapirma sa unyon.
In support of their respective allegations, private respondents submitted
documentary evidence such as the Petition for Certification Election, Sama-samang
Pahayag ng Pagsapi, Payroll Slips and Parking Fee Slip Receipt.

On the other hand, the petitioner failed to attend the scheduled hearings of the said
cases on the alleged ground that it was not notified. It was only after an adverse
judgment of the Labor Arbiter that petitioner finally filed its position papers.

In her Decision dated September 8, 1992, the Labor Arbiter found for the
complainants, herein private respondents, and ordered the petitioner to reinstate
private respondents Roman and Zenaida Domasig to their former positions as driver
and bus conductress, respectively, without loss of seniority rights and with backpay
accruing from January 21, 1992 and January 22, 1992 up to their actual
reinstatement. However, private respondents other money claims were dismissed
for lack of merit.

Aggrieved by the adverse judgment of the Labor Arbiter, petitioner appealed to

public respondent National Labor Relations Commission (NLRC) where it was
assigned to the First Division. On October 29, 1993, the NLRC affirmed in toto the
Labor Arbiters decision, and in its Order[4] dated January 7, 1994 denied the
petitioners motion for reconsideration. The petitioner now challenges the
correctness of the NLRCs decision via the instant petition.

The petitioner Columbus Philippines Bus Corporation alleges that the private
respondents like its other drivers and conductors are not regular employees, that
the services of private respondents were rendered on a first come first served basis
and compensated purely on commission basis; that they worked for only about ten
(10) to fifteen (15) days a month, and only when they felt like doing so.

To determine whether the employment of an employee is regular or casual, Article

280[5] of the Labor Code is definitive; and whether such employment is regular or
casual has nothing to do with the manner of computing and paying the employees
wages or compensation. Rather the said provision of the Labor Code provides that:

The primary standard, x x x of determining a regular employment is the reasonable

connection between the particular activity performed by the employee in relation to
the usual business or trade of the employer. The test is whether the former is
usually necessary or desirable in the usual business or trade of the employer. The
connection can be determined by considering the nature of the work performed and
its relation to the scheme of the particular business or trade in its entirety. Also, if
the employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the repeated
and continuing need for its performance as sufficient evidence of the necessity if
not indispensability of that activity to the business. Hence, the employment is also
consider regular, but only with respect to such activity and while such activity
exists.[6]

Considering the above-quoted standard for determining a regular employment, it

appears that the employment of private respondents is regular. They perform work
necessary and desirable in the business of the petitioner. Without the services of
the bus drivers and conductors, like the private respondents, the petitioner could
not have operated and managed its business of providing transportation services to
the public. However, not all employees paid on commission basis can legally be
considered as regular employees. In the case of Singer Sewing Machine Company v.
Drilon,[7] it was held that while certain individuals were hired to work as collectors
or collecting agents of the company, nevertheless, per a certain written agreement
they were considered as independent contractors and not employees of the
company.

As its principal contention, petitioner ascribes grave abuse of discretion on the part
of public respondent NLRC in affirming the decision of the Labor Arbiter for being
violative of due process and in not ordering the latter to conduct a formal hearing of
the case.

Petitioner argues that it did not receive any notice for the hearing scheduled on
April 14, 1992. It stressed that the registered mail supposedly containing the notice
for the aforesaid hearing was returned unclaimed and that no registry notice from
the post office was ever delivered to it so that it could claim the same. Petitioner
likewise contends that public respondent NLRC disregarded the pronouncement of
this Court in the case of Johnson & Johnson (Phils.) Inc. v. Court of Appeals,[8] where
we held that:

The general rule is that service by registered mail is complete upon actual receipt
thereof by the addressee. The exception is where the addressee does not claim his
mail within 5 days from the date of the first notice of the postmaster, in which case
the service takes effect upon the expiration of such period.

Inasmuch as the exception refers to only constructive and not actual service, such
exception must be applied only upon conclusive proof that a first notice was duly
sent by the postmaster to the addressee. The presumption that official duty has
been regularly performed is not applicable where there is evidence to the contrary,
as in the case at bar.

A certification from the postmaster would be the best evidence to prove that the
notice has been validly sent. The mailman may also testify that the notice was
actually delivered, as we held in Aldecoa vs. Hon. Arellano and Siquenza. The
postmaster should certify not only that the notice was issued or sent but also as to
how, when and to whom the delivery thereof was made.

In the light of the record and the evidence adduced in these two (2) related cases,
petitioners argument appears to be without basis. Hence, the petition must be
dismissed.

Sections 4 and 5 of the Revised Rules of Procedure of the NLRC, provides the rule for
the service of summons and notices in NLRC cases, to wit:

Sec. 4. Service of notices and resolutions. a) Notices or summons and copies of

orders, resolutions or decisions shall be served personally by the bailiff or the duly
authorized public officer or by registered mail on the parties to the case within five
(5) days from receipt thereof by the serving officer; Provided, that where a party is
represented by counsel or authorized representative, service shall be made on the
latter.

xxx xxx xxx

Sec. 5. Proof and completeness of service. The return is prima facie proof of the
facts indicated therein. Service by registered mail is complete upon receipt by the
addressee or his agent.[9]
Considering the above-quoted provisions of the Revised Rules of Procedure of the
NLRC, service by registered mail is complete after five (5) days from the date of first
notice of the postmaster in the event that the addressee fails to claim his registered
mail from the post office. In the instant cases, petitioner merely stressed that the
registered mail containing the notice for the aforesaid scheduled hearing was
returned unclaimed and that it did not allegedly receive any registry notice from the
post office. However, it is a fundamental rule that unless the contrary is proven,
official duty is presumed to have been performed regularly and judicial proceedings
regularly conducted. This presumption of the regularity of the quasi-judicial
proceedings before DOLE includes the presumption of regularity of service of
summons and other notices. It was therefore incumbent upon herein petitioner to
rebut that legal presumption with competent and proper evidence, for the return of
the registered mail as unclaimed is prima facie proof of the facts indicated therein.
[10] But petitioner failed to do so.

A thorough review of the record of this case discloses the following facts and
circumstances, to wit:

1. Petitioner was notified of the hearing on March 12, 1992, at 10:30 oclock in the
morning, with the following warning:

Failure to appear and submit position paper with affidavit of witness or witnesses
and other documentary evidence, if any, will be construed as a waiver of the
opportunity to be heard and case will be heard ex-parte.

2. Since there was no proof of service to petitioner of this scheduled hearing,

another hearing was set on March 26, 1992 at 1:30 oclock in the afternoon.

3. However, on March 16, 1992, petitioner through its liason officer, Mr. Napoleon
Pandes, filed a Manifestation and Motion to Reset Schedule Hearing, stating, among
other things, that the hearing be reset to April 9, 1992 at 9:30 oclock in the morning
or at a later date and time convenient to this Honorable Commission.
4. Thus another hearing was set on April 14, 1992 at 10:00 oclock in the morning
again with the same warning as above quoted.

5. In the April 14, 1992 hearing, private respondents appeared as scheduled and
waited up to 11:05 a.m., but petitioner failed to appear and submit the required
position paper, hence, upon motion of private respondents the case was submitted
for decision.

As clearly gleaned from the foregoing facts, petitioner was afforded more than an
adequate opportunity to present its evidence. In fact, on March 16, 1992, petitioner
through its Liason Officer, Mr. Napoleon Pandes, even filed a Manifestation and
Motion, praying that the hearing set on March 26, 1992 be reset to April 9, 1992 or
at a later date and time convenient to the Commission. But on the re-scheduled
hearing on April 14, 1992, petitioner again failed to appear nor did it file its position
paper. If petitioner were really concerned with the outcome of the instant cases,
petitioner should have verified, at the very least whether its Manifestation and
Motion was acted upon. As correctly stated by the NLRC in its Resolution:

Obviously, respondents were not so inclined as they must have found the same as
an excuse to delay the proceedings in the instant cases. For how else can one
explain respondents failure to show up or follow up on their motions requesting for
resetting, and their filing of a position paper five (5) long months after filing their
motions and only after a Decision not to their liking was rendered by the Labor
Arbiter.

Likewise, notwithstanding petitioners allegation that it has not received the notices
of the Labor Arbiter, it, however, admittedly received a copy of the decision of the
Labor Arbiter, and then seasonably pleaded its case by way of appeal before the
NLRC. In the interest of justice, the NLRC considered petitioners position paper,
even if it was filed late.

As to the question whether the Labor Arbiter should have conducted a formal
hearing, Section 4 of Rule V of the New Rules of Procedure of the NLRC, clearly
provides that:
Determination of Necessity of Hearing. Immediately after the submission by the
parties of their position papers/memorandum, the Labor Arbiter shall motu proprio
determine whether there is need for a formal trial or hearing. At this stage, he may,
at his discretion and for the purpose of making such determination, ask clarificatory
questions to further elicit facts or information, including but not limited to the
subpoena of relevant documentary evidence, if any from any party or witness.

It is clear from the above-quoted procedural rule that the Labor Arbiter has the
authority to determine whether or not there is a necessity for conducting formal
hearings in cases brought before him for adjudication. In other words, the holding of
a formal hearing or trial is discretionary with the Labor Arbiter and is something that
the parties cannot demand as a matter of right.[11] It is entirely within the authority
of the Labor Arbiter to decide a labor case before him, based on the position papers
and supporting documents of the parties, without a trial or formal hearing. The
requirement of due process in labor cases before a Labor Arbiter is satisfied when
the parties are given the opportunity to submit their position papers to which they
are supposed to attach all the supporting documents or documentary evidence that
would prove their respective claims, in the event the Labor Arbiter determines that
no formal hearing would be conducted or that such hearing was not necessary.[12]

Equally without merit is petitioners contention that public respondent NLRC

committed grave abuse of discretion amounting to lack of jurisdiction in holding that
private respondents were illegally dismissed. Petitioners contention that the Labor
Arbiter ruled in favor of private respondents not because of the evidence submitted
by the private respondents but because of petitioners failure to appear in the
scheduled hearing on April 14, 1992 is without factual basis as shown by the record.

The NLRC, in arriving at its decision regarding the illegal dismissal of private
respondents, considered the position papers of the parties and the evidence on
record. The NLRC in its decision agreed with the Labor Arbiters findings and
conclusions and found nothing substantial in petitioners position paper to warrant a
reversal thereof, thus:

At any rate, and in the interest of justice, We have considered respondents Position
Paper, although filed belatedly, and We find that the allegations therein and the
evidence introduced in support thereof (See annexes A to D-12 of respondents
Position Paper; pp. 62-73 of the Records) do not suffice to support respondents
claim that complainants were not dismissed from their employment.
We, therefore, find that the Labor Arbiter did not commit any error in holding that:

Complainants claim that due to their union activities, as they were the ones
instrumental in the formation of the union in the respondents premises, enlisted
employees to be members of the local union, coupled with the fact that a petition
for certification of an election was filed before the Department of Labor and
Employment, in view of which they were not given any bus assignments, which is
tantamount to their dismissal from the service, appears to be credible and with
basis. As above stated, respondents miserably failed to controvert this fact, thus,
complainants should be reinstated to their former positions, Roman Domasig as
driver, and Zenaida Domasig as conductress, with full backwages and other benefits
and without loss of seniority rights.

Well-settled is the jurisprudential rule that factual findings of quasi-judicial agencies,

such as the NLRC, which have acquired expertise because their jurisdiction is
confined to specific matters, are generally accorded not only respect but even
finality. They are binding upon this Court which is not a trier of facts. Only upon
clear showing of grave abuse of discretion, or that such factual findings were arrived
at arbitrarily or in disregard of the evidence on record will this Court step in and
proceed to make its own independent evaluation of the facts.[13] No cogent reason
exists in the instant cases to deviate from this settled rule.

In termination cases, like the ones before us, the burden of proving that the
dismissal of the employees was for a valid and authorized cause rests on the
employer. It was incumbent upon petitioner Columbus Philippines Bus Corporation
to show by substantial evidence that the termination of the employment of private
respondents was validly made and failure to discharge that duty would mean that
the dismissal is not justified and therefore illegal.[14] On the other hand,
abandonment as a just and valid ground for dismissal requires the deliberate,
unjustified refusal of the employee to resume his employment. Mere absence or
failure to report for work, after notice to return, is not enough to amount to such
abandonment.

For a valid finding of abandonment, two (2) factors must be present, viz: (a) the
failure to report for work or absence without valid or justifiable reason; and (b) a
clear intention to sever employer-employee relationship, with the second element
as the more determinative factor being manifested by some overt acts.[15] The
herein petitioner failed to present evidence to justify the dismissal of the private
respondents. The position paper of petitioner merely contains bare allegations that
the hiring of private respondents was purely on commission basis; that they have no
working hours; that they are not required to work everyday and that they work only
when they wish to earn. It also alleged that private respondents were not dismissed
nor suspended, but that they allegedly abandoned their jobs by simply failing to
work.

From the factual findings of the Labor Arbiter, the absence of private respondents
from work was not without valid or justifiable reason. First, on January 21 and 22,
1992, private respondents were asked to relinquish their assigned buses and from
that date forward, they were not given bus assignments. Thus, under the
circumstances, we find private respondents absences supported with valid reason.
Second, it appeared that private respondents never intended to sever their working
relationship with petitioner. Two weeks after private respondents were not given bus
assignments, they filed their subject complaint for illegal dismissal with the DOLE.
An employee who forthwith takes steps to protest his layoff cannot be said to have
abandoned his work.

It is our view and we hold that the finding and conclusion of the Labor Arbiter and
the respondent NLRC that private respondents were illegally dismissed are correct
and not arbitrary. We find no cogent reason to reverse the same.

However, the amount of backwages must be properly computed inasmuch as in

their respective complaints, private respondents Roman and Zenaida Domasig
alleged that they received a daily income ranging from Three Hundred Fifty Pesos
(P350.00) to Six Hundred Fifty Pesos (P650.00), and Two Hundred Fifty Pesos
(P250.00) to Five Hundred Pesos (P500.00) respectively. The pronouncement of this
Court in the case of Icawat v. NLRC,[16] is relevant and instructive, to wit:

x x x, the dismissal of private respondent being illegal, he is entitled to the payment

of backwages. We do not, however, agree with the amount awarded to herein
private respondent in the absence of any factual basis thereof. Private respondent
has not presented any evidence to warrant such award. The statement in his
complaint that he is earning P800.00 to P1,000.00 when he is driving petitioners'
jeepney on a "straight" basis, or P500.00 when driving on "half shift" basis, is purely
self-serving and speculative.
WHEREFORE, the petition is hereby DISMISSED, and the challenged Resolution of
public respondent NLRC is AFFIRMED. The computation of the amount of backwages
to which private respondents Roman Domasig and Zenaida Domasig are entitled is
hereby REMANDED to the Labor Arbiter for appropriate action.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.

G.R. No. 91307 January 24, 1991

SINGER SEWING MACHINE COMPANY, petitioner

vs.

HON. FRANKLIN M. DRILON, MED-ARBITER FELIX B. CHAGUILE, JR., and

SINGER MACHINE COLLECTORS UNION-BAGUIO (SIMACUB), respondents.

Misa, Castro, Villanueva, Oposa, Narvasa & Pesigan for petitioner.

Domogan, Lockey, Orate & Dao-ayan Law Office for private respondent.

GUTIERREZ, JR., J.:

This is a petition for certiorari assailing the order of Med-Arbiter Designate Felix B.
Chaguile, Jr., the resolution of then Labor Secretary Franklin M. Drilon affirming said
order on appeal and the order denying the motion for reconsideration in the case
entitled "In Re: Petition for Direct Certification as the Sole and Exclusive Collective
Bargaining Agent of Collectors of Singer Sewing Machine Company-Singer Machine
Collectors Union-Baguio (SIMACUB)" docketed as OS-MA-A-7-119-89 (IRD Case No.
02-89 MED).
On February 15, 1989, the respondent union filed a petition for direct certification as
the sole and exclusive bargaining agent of all collectors of the Singer Sewing
Machine Company, Baguio City branch (hereinafter referred to as "the Company").

The Company opposed the petition mainly on the ground that the union members
are actually not employees but are independent contractors as evidenced by the
collection agency agreement which they signed.

The respondent Med-Arbiter, finding that there exists an employer-employee

relationship between the union members and the Company, granted the petition for
certification election. On appeal, Secretary of Labor Franklin M. Drilon affirmed it.
The motion for reconsideration of the Secretary's resolution was denied. Hence, this
petition in which the Company alleges that public respondents acted in excess of
jurisdiction and/or committed grave abuse of discretion in that:

a) the Department of Labor and Employment (DOLE) has no jurisdiction over the
case since the existence of employer-employee relationship is at issue;

b) the right of petitioner to due process was denied when the evidence of the
union members' being commission agents was disregarded by the Labor Secretary;

c) the public respondents patently erred in finding that there exists an

employer-employee relationship;

d) the public respondents whimsically disregarded the well-settled rule that

commission agents are not employees but are independent contractors.

The respondents, on the other hand, insist that the provisions of the Collection
Agency Agreement belie the Company's position that the union members are
independent contractors. To prove that union members are employees, it is asserted
that they "perform the most desirable and necessary activities for the continuous
and effective operations of the business of the petitioner Company" (citing Article
280 of the Labor Code). They add that the termination of the agreement by the
petitioner pending the resolution of the case before the DOLE "only shows the
weakness of petitioner's stand" and was "for the purpose of frustrating the
constitutionally mandated rights of the members of private respondent union to
self-organization and collective organization." They also contend that under Section
8, Rule 8, Book No. III of the Omnibus Rules Implementing the Labor Code, which
defines job-contracting, they cannot legally qualify as independent contractors who
must be free from control of the alleged employer, who carry independent
businesses and who have substantial capital or investment in the form of
equipment, tools, and the like necessary in the conduct of the business.

The present case mainly calls for the application of the control test, which if not
satisfied, would lead us to conclude that no employer-employee relationship exists.
Hence, if the union members are not employees, no right to organize for purposes
of bargaining, nor to be certified as such bargaining agent can ever be recognized.
The following elements are generally considered in the determination of the
employer-employee relationship; "(1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power
to control the employee's conduct although the latter is the most important
element" (Mafinco Trading Corporation v. Ople, 70 SCRA 139 [1976]; Development
Bank of the Philippines v. National Labor Relations Commission, 175 SCRA 537
[1989]; Rosario Brothers, Inc. v. Ople, 131 SCRA 72 [1984]; Broadway Motors Inc. v.
NLRC, 156 SCRA 522 [1987]; Brotherhood Labor Unity Movement in the Philippines
v. Zamora, 147 SCRA 49 [1986]).

The Collection Agency Agreement defines the relationship between the Company
and each of the union members who signed a contract. The petitioner relies on the
following stipulations in the agreements: (a) a collector is designated as a collecting
agent" who is to be considered at all times as an independent contractor and not
employee of the Company; (b) collection of all payments on installment accounts
are to be made monthly or oftener; (c) an agent is paid his compensation for service
in the form of a commission of 6% of all collections made and turned over plus a
bonus on said collections; (d) an agent is required to post a cash bond of three
thousand pesos (P3,000.00) to assure the faithful performance and observance of
the terms and conditions under the agreement; (e) he is subject to all the terms and
conditions in the agreement; (f) the agreement is effective for one year from the
date of its execution and renewable on a yearly basis; and (g) his services shall be
terminated in case of failure to satisfy the minimum monthly collection performance
required, failure to post a cash bond, or cancellation of the agreement at the
instance of either party unless the agent has a pending obligation or indebtedness
in favor of the Company.
Meanwhile, the respondents rely on other features to strengthen their position that
the collectors are employees. They quote paragraph 2 which states that an agent
shall utilize only receipt forms authorized and issued by the Company. They also
note paragraph 3 which states that an agent has to submit and deliver at least once
a week or as often as required a report of all collections made using report forms
furnished by the Company. Paragraph 4 on the monthly collection quota required by
the Company is deemed by respondents as a control measure over the means by
which an agent is to perform his services.

The nature of the relationship between a company and its collecting agents
depends on the circumstances of each particular relationship. Not all collecting
agents are employees and neither are all collecting agents independent contractors.
The collectors could fall under either category depending on the facts of each case.

The Agreement confirms the status of the collecting agent in this case as an
independent contractor not only because he is explicitly described as such but also
because the provisions permit him to perform collection services for the company
without being subject to the control of the latter except only as to the result of his
work. After a careful analysis of the contents of the agreement, we rule in favor of
the petitioner.

The requirement that collection agents utilize only receipt forms and report forms
issued by the Company and that reports shall be submitted at least once a week is
not necessarily an indication of control over the means by which the job of
collection is to be performed. The agreement itself specifically explains that receipt
forms shall be used for the purpose of avoiding a co-mingling of personal funds of
the agent with the money collected on behalf of the Company. Likewise, the use of
standard report forms as well as the regular time within which to submit a report of
collection are intended to facilitate order in office procedures. Even if the report
requirements are to be called control measures, any control is only with respect to
the end result of the collection since the requirements regulate the things to be
done after the performance of the collection job or the rendition of the service.

The monthly collection quota is a normal requirement found in similar contractual

agreements and is so stipulated to encourage a collecting agent to report at least
the minimum amount of proceeds. In fact, paragraph 5, section b gives a bonus,
aside from the regular commission every time the quota is reached. As a
requirement for the fulfillment of the contract, it is subject to agreement by both
parties. Hence, if the other contracting party does not accede to it, he can choose
not to sign it. From the records, it is clear that the Company and each collecting
agent intended that the former take control only over the amount of collection,
which is a result of the job performed.

The respondents' contention that the union members are employees of the
Company is based on selected provisions of the Agreement but ignores the
following circumstances which respondents never refuted either in the trial
proceedings before the labor officials nor in its pleadings filed before this Court.

1. The collection agents are not required to observe office hours or report to
Singer's office everyday except, naturally and necessarily, for the purpose of
remitting their collections.

2. The collection agents do not have to devote their time exclusively for SINGER.
There is no prohibition on the part of the collection agents from working elsewhere.
Nor are these agents required to account for their time and submit a record of their
activity.

3. The manner and method of effecting collections are left solely to the
discretion of the collection agents without any interference on the part of Singer.

4. The collection agents shoulder their transportation expenses incurred in the

collections of the accounts assigned to them.

5. The collection agents are paid strictly on commission basis. The amounts paid
to them are based solely on the amounts of collection each of them make. They do
not receive any commission if they do not effect any collection even if they put a lot
of effort in collecting. They are paid commission on the basis of actual collections.

6. The commissions earned by the collection agents are directly deducted by

them from the amount of collections they are able to effect. The net amount is what
is then remitted to Singer." (Rollo, pp. 7-8)
If indeed the union members are controlled as to the manner by which they are
supposed to perform their collections, they should have explicitly said so in detail by
specifically denying each of the facts asserted by the petitioner. As there seems to
be no objections on the part of the respondents, the Court finds that they miserably
failed to defend their position.

A thorough examination of the facts of the case leads us to the conclusion that the
existence of an employer-employee relationship between the Company and the
collection agents cannot be sustained.

The plain language of the agreement reveals that the designation as collection
agent does not create an employment relationship and that the applicant is to be
considered at all times as an independent contractor. This is consistent with the first
rule of interpretation that the literal meaning of the stipulations in the contract
controls (Article 1370, Civil Code; La Suerte Cigar and Cigarette Factory v. Director
of Bureau of Labor, Relations, 123 SCRA 679 [1983]). No such words as "to hire and
employ" are present. Moreover, the agreement did not fix an amount for wages nor
the required working hours. Compensation is earned only on the basis of the
tangible results produced, i.e., total collections made (Sarra v. Agarrado, 166 SCRA
625 [1988]). In Investment Planning Corp. of the Philippines v. Social Security
System, 21 SCRA 924 [1967] which involved commission agents, this Court had the
occasion to rule, thus:

We are convinced from the facts that the work of petitioner's agents or registered
representatives more nearly approximates that of an independent contractor than
that of an employee. The latter is paid for the labor he performs, that is, for the acts
of which such labor consists the former is paid for the result thereof . . . .

xxx xxx xxx

Even if an agent of petitioner should devote all of his time and effort trying to sell its
investment plans he would not necessarily be entitled to compensation therefor. His
right to compensation depends upon and is measured by the tangible results he
produces."
Moreover, the collection agent does his work "more or less at his own pleasure"
without a regular daily time frame imposed on him (Investment Planning
Corporation of the Philippines v. Social Security System, supra; See also Social
Security System v. Court of Appeals, 30 SCRA 210 [1969]).

The grounds specified in the contract for termination of the relationship do not
support the view that control exists "for the causes of termination thus specified
have no relation to the means and methods of work that are ordinarily required of or
imposed upon employees." (Investment Planning Corp. of the Phil. v. Social Security
System, supra)

The last and most important element of the control test is not satisfied by the terms
and conditions of the contracts. There is nothing in the agreement which implies
control by the Company not only over the end to be achieved but also over the
means and methods in achieving the end (LVN Pictures, Inc. v. Philippine Musicians
Guild, 1 SCRA 132 [1961]).

The Court finds the contention of the respondents that the union members are
employees under Article 280 of the Labor Code to have no basis. The definition that
regular employees are those who perform activities which are desirable and
necessary for the business of the employer is not determinative in this case. Any
agreement may provide that one party shall render services for and in behalf of
another for a consideration (no matter how necessary for the latter's business) even
without being hired as an employee. This is precisely true in the case of an
independent contractorship as well as in an agency agreement. The Court agrees
with the petitioner's argument that Article 280 is not the yardstick for determining
the existence of an employment relationship because it merely distinguishes
between two kinds of employees, i.e., regular employees and casual employees, for
purposes of determining the right of an employee to certain benefits, to join or form
a union, or to security of tenure. Article 280 does not apply where the existence of
an employment relationship is in dispute.

Even Section 8, Rule 8, Book III of the Omnibus Rules Implementing the Labor Code
does not apply to this case.1wphi1 Respondents assert that the said provision on
job contracting requires that for one to be considered an independent contractor, he
must have "substantial capital or investment in the form of tools, equipment,
machineries, work premises, and other materials which are necessary in the
conduct of his business." There is no showing that a collection agent needs tools
and machineries. Moreover, the provision must be viewed in relation to Article 106
of the Labor Code which provides:

Art. 106. Contractor or subcontractor. Whenever an employer enters into a

contract with another person for the performance of the former's work, the
employees of the contractor and of the latter's subcontractor, if any, shall be paid in
accordance with the provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and severally
liable with his contractor or subcontractor to such employees to the extent of the
work performed under the contract, in the same manner and extent that he is liable
to employees directly employed by him.

xxx xxx xxx

There is "labor-only" contracting where the person supplying workers to an

employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the workers recruited
and placed by such persons are performing activities which are directly related to
the principal business of such employer. In such cases, the person or intermediary
shall be considered merely as an agent of the employer who shall be responsible to
the workers in the same manner and extent as if the latter were directly employed
by him." (p. 20)

It can readily be seen that Section 8, Rule 8, Book Ill and Article 106 are relevant in
determining whether the employer is solidarily liable to the employees of an alleged
contractor and/or sub-contractor for unpaid wages in case it is proven that there is a
job-contracting situation.

The assumption of jurisdiction by the DOLE over the case is justified as the case was
brought on appeal by the petitioner itself which prayed for the reversal of the Order
of the Med-Arbiter on the ground that the union members are not its employees.
Hence, the petitioner submitted itself as well as the issue of existence of an
employment relationship to the jurisdiction of the DOLE which was faced with a
dispute on an application for certification election.
The Court finds that since private respondents are not employees of the Company,
they are not entitled to the constitutional right to join or form a labor organization
for purposes of collective bargaining. Accordingly, there is no constitutional and
legal basis for their "union" to be granted their petition for direct certification. This
Court made this pronouncement in La Suerte Cigar and Cigarette Factory v. Director
of Bureau of Labor Relations, supra:

. . . The question of whether employer-employee relationship exists is a primordial

consideration before extending labor benefits under the workmen's compensation,
social security, medicare, termination pay and labor relations law. It is important in
the determination of who shall be included in a proposed bargaining unit because, it
is the sine qua non, the fundamental and essential condition that a bargaining unit
be composed of employees. Failure to establish this juridical relationship between
the union members and the employer affects the legality of the union itself. It
means the ineligibility of the union members to present a petition for certification
election as well as to vote therein . . . . (At p. 689)

WHEREFORE, the Order dated June 14,1989 of Med-Arbiter Designate Felix B.

Chaguile, Jr., the Resolution and Order of Secretary Franklin M. Drilon dated
November 2, 1989 and December 14, 1989, respectively are hereby REVERSED and
SET ASIDE. The petition for certification election is ordered dismissed and the
temporary restraining order issued by the Court on December 21, 1989 is made
permanent.

SO ORDERED.

[G.R. No. 138051. June 10, 2004]

JOSE Y. SONZA, petitioner, vs. ABS-CBN BROADCASTING CORPORATION,

respondent.
DECISION

CARPIO, J.:

The Case

Before this Court is a petition for review on certiorari[1] assailing the 26 March 1999
Decision[2] of the Court of Appeals in CA-G.R. SP No. 49190 dismissing the petition
filed by Jose Y. Sonza (SONZA). The Court of Appeals affirmed the findings of the
National Labor Relations Commission (NLRC), which affirmed the Labor Arbiters
dismissal of the case for lack of jurisdiction.

The Facts

In May 1994, respondent ABS-CBN Broadcasting Corporation (ABS-CBN) signed an

Agreement (Agreement) with the Mel and Jay Management and Development
Corporation (MJMDC). ABS-CBN was represented by its corporate officers while
MJMDC was represented by SONZA, as President and General Manager, and Carmela
Tiangco (TIANGCO), as EVP and Treasurer. Referred to in the Agreement as AGENT,
MJMDC agreed to provide SONZAs services exclusively to ABS-CBN as talent for
radio and television. The Agreement listed the services SONZA would render to ABS-
CBN, as follows:

a. Co-host for Mel & Jay radio program, 8:00 to 10:00 a.m., Mondays to Fridays;

b. Co-host for Mel & Jay television program, 5:30 to 7:00 p.m., Sundays.[3]

ABS-CBN agreed to pay for SONZAs services a monthly talent fee of P310,000 for
the first year and P317,000 for the second and third year of the Agreement. ABS-
CBN would pay the talent fees on the 10th and 25th days of the month.
On 1 April 1996, SONZA wrote a letter to ABS-CBNs President, Eugenio Lopez III,
which reads:

Dear Mr. Lopez,

We would like to call your attention to the Agreement dated May 1994 entered into
by your goodself on behalf of ABS-CBN with our company relative to our talent JOSE
Y. SONZA.

As you are well aware, Mr. Sonza irrevocably resigned in view of recent events
concerning his programs and career. We consider these acts of the station violative
of the Agreement and the station as in breach thereof. In this connection, we hereby
serve notice of rescission of said Agreement at our instance effective as of date.

Mr. Sonza informed us that he is waiving and renouncing recovery of the remaining
amount stipulated in paragraph 7 of the Agreement but reserves the right to seek
recovery of the other benefits under said Agreement.

Thank you for your attention.

Very truly yours,

(Sgd.)

JOSE Y. SONZA

President and Gen. Manager[4]

On 30 April 1996, SONZA filed a complaint against ABS-CBN before the Department
of Labor and Employment, National Capital Region in Quezon City. SONZA
complained that ABS-CBN did not pay his salaries, separation pay, service incentive
leave pay, 13th month pay, signing bonus, travel allowance and amounts due under
the Employees Stock Option Plan (ESOP).
On 10 July 1996, ABS-CBN filed a Motion to Dismiss on the ground that no employer-
employee relationship existed between the parties. SONZA filed an Opposition to
the motion on 19 July 1996.

Meanwhile, ABS-CBN continued to remit SONZAs monthly talent fees through his
account at PCIBank, Quezon Avenue Branch, Quezon City. In July 1996, ABS-CBN
opened a new account with the same bank where ABS-CBN deposited SONZAs
talent fees and other payments due him under the Agreement.

In his Order dated 2 December 1996, the Labor Arbiter[5] denied the motion to
dismiss and directed the parties to file their respective position papers. The Labor
Arbiter ruled:

In this instant case, complainant for having invoked a claim that he was an
employee of respondent company until April 15, 1996 and that he was not paid
certain claims, it is sufficient enough as to confer jurisdiction over the instant case
in this Office. And as to whether or not such claim would entitle complainant to
recover upon the causes of action asserted is a matter to be resolved only after and
as a result of a hearing. Thus, the respondents plea of lack of employer-employee
relationship may be pleaded only as a matter of defense. It behooves upon it the
duty to prove that there really is no employer-employee relationship between it and
the complainant.

The Labor Arbiter then considered the case submitted for resolution. The parties
submitted their position papers on 24 February 1997.

On 11 March 1997, SONZA filed a Reply to Respondents Position Paper with Motion
to Expunge Respondents Annex 4 and Annex 5 from the Records. Annexes 4 and 5
are affidavits of ABS-CBNs witnesses Soccoro Vidanes and Rolando V. Cruz. These
witnesses stated in their affidavits that the prevailing practice in the television and
broadcast industry is to treat talents like SONZA as independent contractors.

The Labor Arbiter rendered his Decision dated 8 July 1997 dismissing the complaint
for lack of jurisdiction.[6] The pertinent parts of the decision read as follows:
xxx

While Philippine jurisprudence has not yet, with certainty, touched on the true
nature of the contract of a talent, it stands to reason that a talent as above-
described cannot be considered as an employee by reason of the peculiar
circumstances surrounding the engagement of his services.

It must be noted that complainant was engaged by respondent by reason of his

peculiar skills and talent as a TV host and a radio broadcaster. Unlike an ordinary
employee, he was free to perform the services he undertook to render in
accordance with his own style. The benefits conferred to complainant under the May
1994 Agreement are certainly very much higher than those generally given to
employees. For one, complainant Sonzas monthly talent fees amount to a
staggering P317,000. Moreover, his engagement as a talent was covered by a
specific contract. Likewise, he was not bound to render eight (8) hours of work per
day as he worked only for such number of hours as may be necessary.

The fact that per the May 1994 Agreement complainant was accorded some
benefits normally given to an employee is inconsequential. Whatever benefits
complainant enjoyed arose from specific agreement by the parties and not by
reason of employer-employee relationship. As correctly put by the respondent, All
these benefits are merely talent fees and other contractual benefits and should not
be deemed as salaries, wages and/or other remuneration accorded to an employee,
notwithstanding the nomenclature appended to these benefits. Apropos to this is
the rule that the term or nomenclature given to a stipulated benefit is not
controlling, but the intent of the parties to the Agreement conferring such benefit.

The fact that complainant was made subject to respondents Rules and Regulations,
likewise, does not detract from the absence of employer-employee relationship. As
held by the Supreme Court, The line should be drawn between rules that merely
serve as guidelines towards the achievement of the mutually desired result without
dictating the means or methods to be employed in attaining it, and those that
control or fix the methodology and bind or restrict the party hired to the use of such
means. The first, which aim only to promote the result, create no employer-
employee relationship unlike the second, which address both the result and the
means to achieve it. (Insular Life Assurance Co., Ltd. vs. NLRC, et al., G.R. No.
84484, November 15, 1989).
x x x (Emphasis supplied)[7]

SONZA appealed to the NLRC. On 24 February 1998, the NLRC rendered a Decision
affirming the Labor Arbiters decision. SONZA filed a motion for reconsideration,
which the NLRC denied in its Resolution dated 3 July 1998.

On 6 October 1998, SONZA filed a special civil action for certiorari before the Court
of Appeals assailing the decision and resolution of the NLRC. On 26 March 1999, the
Court of Appeals rendered a Decision dismissing the case.[8]

Hence, this petition.

The Rulings of the NLRC and Court of Appeals

The Court of Appeals affirmed the NLRCs finding that no employer-employee

relationship existed between SONZA and ABS-CBN. Adopting the NLRCs decision,
the appellate court quoted the following findings of the NLRC:

x x x the May 1994 Agreement will readily reveal that MJMDC entered into the
contract merely as an agent of complainant Sonza, the principal. By all indication
and as the law puts it, the act of the agent is the act of the principal itself. This fact
is made particularly true in this case, as admittedly MJMDC is a management
company devoted exclusively to managing the careers of Mr. Sonza and his
broadcast partner, Mrs. Carmela C. Tiangco. (Opposition to Motion to Dismiss)

Clearly, the relations of principal and agent only accrues between complainant
Sonza and MJMDC, and not between ABS-CBN and MJMDC. This is clear from the
provisions of the May 1994 Agreement which specifically referred to MJMDC as the
AGENT. As a matter of fact, when complainant herein unilaterally rescinded said May
1994 Agreement, it was MJMDC which issued the notice of rescission in behalf of Mr.
Sonza, who himself signed the same in his capacity as President.
Moreover, previous contracts between Mr. Sonza and ABS-CBN reveal the fact that
historically, the parties to the said agreements are ABS-CBN and Mr. Sonza. And it is
only in the May 1994 Agreement, which is the latest Agreement executed between
ABS-CBN and Mr. Sonza, that MJMDC figured in the said Agreement as the agent of
Mr. Sonza.

We find it erroneous to assert that MJMDC is a mere labor-only contractor of ABS-

CBN such that there exist[s] employer-employee relationship between the latter and
Mr. Sonza. On the contrary, We find it indubitable, that MJMDC is an agent, not of
ABS-CBN, but of the talent/contractor Mr. Sonza, as expressly admitted by the latter
and MJMDC in the May 1994 Agreement.

It may not be amiss to state that jurisdiction over the instant controversy indeed
belongs to the regular courts, the same being in the nature of an action for alleged
breach of contractual obligation on the part of respondent-appellee. As squarely
apparent from complainant-appellants Position Paper, his claims for compensation
for services, 13th month pay, signing bonus and travel allowance against
respondent-appellee are not based on the Labor Code but rather on the provisions
of the May 1994 Agreement, while his claims for proceeds under Stock Purchase
Agreement are based on the latter. A portion of the Position Paper of complainant-
appellant bears perusal:

Under [the May 1994 Agreement] with respondent ABS-CBN, the latter contractually
bound itself to pay complainant a signing bonus consisting of shares of stockswith
FIVE HUNDRED THOUSAND PESOS (P500,000.00).

Similarly, complainant is also entitled to be paid 13th month pay based on an

amount not lower than the amount he was receiving prior to effectivity of (the)
Agreement.

Under paragraph 9 of (the May 1994 Agreement), complainant is entitled to a

commutable travel benefit amounting to at least One Hundred Fifty Thousand Pesos
(P150,000.00) per year.

Thus, it is precisely because of complainant-appellants own recognition of the fact

that his contractual relations with ABS-CBN are founded on the New Civil Code,
rather than the Labor Code, that instead of merely resigning from ABS-CBN,
complainant-appellant served upon the latter a notice of rescission of Agreement
with the station, per his letter dated April 1, 1996, which asserted that instead of
referring to unpaid employee benefits, he is waiving and renouncing recovery of the
remaining amount stipulated in paragraph 7 of the Agreement but reserves the
right to such recovery of the other benefits under said Agreement. (Annex 3 of the
respondent ABS-CBNs Motion to Dismiss dated July 10, 1996).

Evidently, it is precisely by reason of the alleged violation of the May 1994

Agreement and/or the Stock Purchase Agreement by respondent-appellee that
complainant-appellant filed his complaint. Complainant-appellants claims being
anchored on the alleged breach of contract on the part of respondent-appellee, the
same can be resolved by reference to civil law and not to labor law. Consequently,
they are within the realm of civil law and, thus, lie with the regular courts. As held in
the case of Dai-Chi Electronics Manufacturing vs. Villarama, 238 SCRA 267, 21
November 1994, an action for breach of contractual obligation is intrinsically a civil
dispute.[9] (Emphasis supplied)

The Court of Appeals ruled that the existence of an employer-employee relationship

between SONZA and ABS-CBN is a factual question that is within the jurisdiction of
the NLRC to resolve.[10] A special civil action for certiorari extends only to issues of
want or excess of jurisdiction of the NLRC.[11] Such action cannot cover an inquiry
into the correctness of the evaluation of the evidence which served as basis of the
NLRCs conclusion.[12] The Court of Appeals added that it could not re-examine the
parties evidence and substitute the factual findings of the NLRC with its own.[13]

The Issue

In assailing the decision of the Court of Appeals, SONZA contends that:

THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE NLRCS DECISION AND
REFUSING TO FIND THAT AN EMPLOYER-EMPLOYEE RELATIONSHIP EXISTED
BETWEEN SONZA AND ABS-CBN, DESPITE THE WEIGHT OF CONTROLLING LAW,
JURISPRUDENCE AND EVIDENCE TO SUPPORT SUCH A FINDING.[14]

The Courts Ruling

We affirm the assailed decision.

No convincing reason exists to warrant a reversal of the decision of the Court of

Appeals affirming the NLRC ruling which upheld the Labor Arbiters dismissal of the
case for lack of jurisdiction.

The present controversy is one of first impression. Although Philippine labor laws
and jurisprudence define clearly the elements of an employer-employee
relationship, this is the first time that the Court will resolve the nature of the
relationship between a television and radio station and one of its talents. There is no
case law stating that a radio and television program host is an employee of the
broadcast station.

The instant case involves big names in the broadcast industry, namely Jose Jay
Sonza, a known television and radio personality, and ABS-CBN, one of the biggest
television and radio networks in the country.

SONZA contends that the Labor Arbiter has jurisdiction over the case because he
was an employee of ABS-CBN. On the other hand, ABS-CBN insists that the Labor
Arbiter has no jurisdiction because SONZA was an independent contractor.

Employee or Independent Contractor?

The existence of an employer-employee relationship is a question of fact. Appellate

courts accord the factual findings of the Labor Arbiter and the NLRC not only respect
but also finality when supported by substantial evidence.[15] Substantial evidence
means such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.[16] A party cannot prove the absence of substantial evidence
by simply pointing out that there is contrary evidence on record, direct or
circumstantial. The Court does not substitute its own judgment for that of the
tribunal in determining where the weight of evidence lies or what evidence is
credible.[17]
SONZA maintains that all essential elements of an employer-employee relationship
are present in this case. Case law has consistently held that the elements of an
employer-employee relationship are: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employers power to control the employee on the means and methods by which the
work is accomplished.[18] The last element, the so-called control test, is the most
important element.[19]

A. Selection and Engagement of Employee

ABS-CBN engaged SONZAs services to co-host its television and radio programs
because of SONZAs peculiar skills, talent and celebrity status. SONZA contends that
the discretion used by respondent in specifically selecting and hiring complainant
over other broadcasters of possibly similar experience and qualification as
complainant belies respondents claim of independent contractorship.

Independent contractors often present themselves to possess unique skills,

expertise or talent to distinguish them from ordinary employees. The specific
selection and hiring of SONZA, because of his unique skills, talent and celebrity
status not possessed by ordinary employees, is a circumstance indicative, but not
conclusive, of an independent contractual relationship. If SONZA did not possess
such unique skills, talent and celebrity status, ABS-CBN would not have entered into
the Agreement with SONZA but would have hired him through its personnel
department just like any other employee.

In any event, the method of selecting and engaging SONZA does not conclusively
determine his status. We must consider all the circumstances of the relationship,
with the control test being the most important element.

B. Payment of Wages

ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going
to MJMDC. SONZA asserts that this mode of fee payment shows that he was an
employee of ABS-CBN. SONZA also points out that ABS-CBN granted him benefits
and privileges which he would not have enjoyed if he were truly the subject of a
valid job contract.
All the talent fees and benefits paid to SONZA were the result of negotiations that
led to the Agreement. If SONZA were ABS-CBNs employee, there would be no need
for the parties to stipulate on benefits such as SSS, Medicare, x x x and 13th month
pay[20] which the law automatically incorporates into every employer-employee
contract.[21] Whatever benefits SONZA enjoyed arose from contract and not
because of an employer-employee relationship.[22]

SONZAs talent fees, amounting to P317,000 monthly in the second and third year,
are so huge and out of the ordinary that they indicate more an independent
contractual relationship rather than an employer-employee relationship. ABS-CBN
agreed to pay SONZA such huge talent fees precisely because of SONZAs unique
skills, talent and celebrity status not possessed by ordinary employees. Obviously,
SONZA acting alone possessed enough bargaining power to demand and receive
such huge talent fees for his services. The power to bargain talent fees way above
the salary scales of ordinary employees is a circumstance indicative, but not
conclusive, of an independent contractual relationship.

The payment of talent fees directly to SONZA and not to MJMDC does not negate the
status of SONZA as an independent contractor. The parties expressly agreed on
such mode of payment. Under the Agreement, MJMDC is the AGENT of SONZA, to
whom MJMDC would have to turn over any talent fee accruing under the Agreement.

C. Power of Dismissal

For violation of any provision of the Agreement, either party may terminate their
relationship. SONZA failed to show that ABS-CBN could terminate his services on
grounds other than breach of contract, such as retrenchment to prevent losses as
provided under labor laws.[23]

During the life of the Agreement, ABS-CBN agreed to pay SONZAs talent fees as
long as AGENT and Jay Sonza shall faithfully and completely perform each condition
of this Agreement.[24] Even if it suffered severe business losses, ABS-CBN could not
retrench SONZA because ABS-CBN remained obligated to pay SONZAs talent fees
during the life of the Agreement. This circumstance indicates an independent
contractual relationship between SONZA and ABS-CBN.
SONZA admits that even after ABS-CBN ceased broadcasting his programs, ABS-
CBN still paid him his talent fees. Plainly, ABS-CBN adhered to its undertaking in the
Agreement to continue paying SONZAs talent fees during the remaining life of the
Agreement even if ABS-CBN cancelled SONZAs programs through no fault of SONZA.
[25]

SONZA assails the Labor Arbiters interpretation of his rescission of the Agreement
as an admission that he is not an employee of ABS-CBN. The Labor Arbiter stated
that if it were true that complainant was really an employee, he would merely
resign, instead. SONZA did actually resign from ABS-CBN but he also, as president of
MJMDC, rescinded the Agreement. SONZAs letter clearly bears this out.[26]
However, the manner by which SONZA terminated his relationship with ABS-CBN is
immaterial. Whether SONZA rescinded the Agreement or resigned from work does
not determine his status as employee or independent contractor.

D. Power of Control

Since there is no local precedent on whether a radio and television program host is
an employee or an independent contractor, we refer to foreign case law in analyzing
the present case. The United States Court of Appeals, First Circuit, recently held in
Alberty-Vlez v. Corporacin De Puerto Rico Para La Difusin Pblica (WIPR)[27] that a
television program host is an independent contractor. We quote the following
findings of the U.S. court:

Several factors favor classifying Alberty as an independent contractor. First, a

television actress is a skilled position requiring talent and training not available on-
the-job. x x x In this regard, Alberty possesses a masters degree in public
communications and journalism; is trained in dance, singing, and modeling; taught
with the drama department at the University of Puerto Rico; and acted in several
theater and television productions prior to her affiliation with Desde Mi Pueblo.
Second, Alberty provided the tools and instrumentalities necessary for her to
perform. Specifically, she provided, or obtained sponsors to provide, the costumes,
jewelry, and other image-related supplies and services necessary for her
appearance. Alberty disputes that this factor favors independent contractor status
because WIPR provided the equipment necessary to tape the show. Albertys
argument is misplaced. The equipment necessary for Alberty to conduct her job as
host of Desde Mi Pueblo related to her appearance on the show. Others provided
equipment for filming and producing the show, but these were not the primary tools
that Alberty used to perform her particular function. If we accepted this argument,
independent contractors could never work on collaborative projects because other
individuals often provide the equipment required for different aspects of the
collaboration. x x x

Third, WIPR could not assign Alberty work in addition to filming Desde Mi Pueblo.
Albertys contracts with WIPR specifically provided that WIPR hired her professional
services as Hostess for the Program Desde Mi Pueblo. There is no evidence that
WIPR assigned Alberty tasks in addition to work related to these tapings. x x x[28]
(Emphasis supplied)

Applying the control test to the present case, we find that SONZA is not an
employee but an independent contractor. The control test is the most important test
our courts apply in distinguishing an employee from an independent contractor.[29]
This test is based on the extent of control the hirer exercises over a worker. The
greater the supervision and control the hirer exercises, the more likely the worker is
deemed an employee. The converse holds true as well the less control the hirer
exercises, the more likely the worker is considered an independent contractor.[30]

First, SONZA contends that ABS-CBN exercised control over the means and methods
of his work.

SONZAs argument is misplaced. ABS-CBN engaged SONZAs services specifically to

co-host the Mel & Jay programs. ABS-CBN did not assign any other work to SONZA.
To perform his work, SONZA only needed his skills and talent. How SONZA delivered
his lines, appeared on television, and sounded on radio were outside ABS-CBNs
control. SONZA did not have to render eight hours of work per day. The Agreement
required SONZA to attend only rehearsals and tapings of the shows, as well as pre-
and post-production staff meetings.[31] ABS-CBN could not dictate the contents of
SONZAs script. However, the Agreement prohibited SONZA from criticizing in his
shows ABS-CBN or its interests.[32] The clear implication is that SONZA had a free
hand on what to say or discuss in his shows provided he did not attack ABS-CBN or
its interests.

We find that ABS-CBN was not involved in the actual performance that produced the
finished product of SONZAs work.[33] ABS-CBN did not instruct SONZA how to
perform his job. ABS-CBN merely reserved the right to modify the program format
and airtime schedule for more effective programming.[34] ABS-CBNs sole concern
was the quality of the shows and their standing in the ratings. Clearly, ABS-CBN did
not exercise control over the means and methods of performance of SONZAs work.

SONZA claims that ABS-CBNs power not to broadcast his shows proves ABS-CBNs
power over the means and methods of the performance of his work. Although ABS-
CBN did have the option not to broadcast SONZAs show, ABS-CBN was still obligated
to pay SONZAs talent fees. Thus, even if ABS-CBN was completely dissatisfied with
the means and methods of SONZAs performance of his work, or even with the
quality or product of his work, ABS-CBN could not dismiss or even discipline SONZA.
All that ABS-CBN could do is not to broadcast SONZAs show but ABS-CBN must still
pay his talent fees in full.[35]

Clearly, ABS-CBNs right not to broadcast SONZAs show, burdened as it was by the
obligation to continue paying in full SONZAs talent fees, did not amount to control
over the means and methods of the performance of SONZAs work. ABS-CBN could
not terminate or discipline SONZA even if the means and methods of performance
of his work - how he delivered his lines and appeared on television - did not meet
ABS-CBNs approval. This proves that ABS-CBNs control was limited only to the result
of SONZAs work, whether to broadcast the final product or not. In either case, ABS-
CBN must still pay SONZAs talent fees in full until the expiry of the Agreement.

In Vaughan, et al. v. Warner, et al.,[36] the United States Circuit Court of Appeals
ruled that vaudeville performers were independent contractors although the
management reserved the right to delete objectionable features in their shows.
Since the management did not have control over the manner of performance of the
skills of the artists, it could only control the result of the work by deleting
objectionable features.[37]

SONZA further contends that ABS-CBN exercised control over his work by supplying
all equipment and crew. No doubt, ABS-CBN supplied the equipment, crew and
airtime needed to broadcast the Mel & Jay programs. However, the equipment, crew
and airtime are not the tools and instrumentalities SONZA needed to perform his
job. What SONZA principally needed were his talent or skills and the costumes
necessary for his appearance. [38] Even though ABS-CBN provided SONZA with the
place of work and the necessary equipment, SONZA was still an independent
contractor since ABS-CBN did not supervise and control his work. ABS-CBNs sole
concern was for SONZA to display his talent during the airing of the programs.[39]

A radio broadcast specialist who works under minimal supervision is an independent

contractor.[40] SONZAs work as television and radio program host required special
skills and talent, which SONZA admittedly possesses. The records do not show that
ABS-CBN exercised any supervision and control over how SONZA utilized his skills
and talent in his shows.

Second, SONZA urges us to rule that he was ABS-CBNs employee because ABS-CBN
subjected him to its rules and standards of performance. SONZA claims that this
indicates ABS-CBNs control not only [over] his manner of work but also the quality
of his work.

The Agreement stipulates that SONZA shall abide with the rules and standards of
performance covering talents[41] of ABS-CBN. The Agreement does not require
SONZA to comply with the rules and standards of performance prescribed for
employees of ABS-CBN. The code of conduct imposed on SONZA under the
Agreement refers to the Television and Radio Code of the Kapisanan ng mga
Broadcaster sa Pilipinas (KBP), which has been adopted by the COMPANY (ABS-CBN)
as its Code of Ethics.[42] The KBP code applies to broadcasters, not to employees of
radio and television stations. Broadcasters are not necessarily employees of radio
and television stations. Clearly, the rules and standards of performance referred to
in the Agreement are those applicable to talents and not to employees of ABS-CBN.

In any event, not all rules imposed by the hiring party on the hired party indicate
that the latter is an employee of the former.[43] In this case, SONZA failed to show
that these rules controlled his performance. We find that these general rules are
merely guidelines towards the achievement of the mutually desired result, which
are top-rating television and radio programs that comply with standards of the
industry. We have ruled that:

Further, not every form of control that a party reserves to himself over the conduct
of the other party in relation to the services being rendered may be accorded the
effect of establishing an employer-employee relationship. The facts of this case fall
squarely with the case of Insular Life Assurance Co., Ltd. vs. NLRC. In said case, we
held that:
Logically, the line should be drawn between rules that merely serve as guidelines
towards the achievement of the mutually desired result without dictating the means
or methods to be employed in attaining it, and those that control or fix the
methodology and bind or restrict the party hired to the use of such means. The first,
which aim only to promote the result, create no employer-employee relationship
unlike the second, which address both the result and the means used to achieve it.
[44]

The Vaughan case also held that one could still be an independent contractor
although the hirer reserved certain supervision to insure the attainment of the
desired result. The hirer, however, must not deprive the one hired from performing
his services according to his own initiative.[45]

Lastly, SONZA insists that the exclusivity clause in the Agreement is the most
extreme form of control which ABS-CBN exercised over him.

This argument is futile. Being an exclusive talent does not by itself mean that
SONZA is an employee of ABS-CBN. Even an independent contractor can validly
provide his services exclusively to the hiring party. In the broadcast industry,
exclusivity is not necessarily the same as control.

The hiring of exclusive talents is a widespread and accepted practice in the

entertainment industry.[46] This practice is not designed to control the means and
methods of work of the talent, but simply to protect the investment of the broadcast
station. The broadcast station normally spends substantial amounts of money, time
and effort in building up its talents as well as the programs they appear in and thus
expects that said talents remain exclusive with the station for a commensurate
period of time.[47] Normally, a much higher fee is paid to talents who agree to work
exclusively for a particular radio or television station. In short, the huge talent fees
partially compensates for exclusivity, as in the present case.

MJMDC as Agent of SONZA

SONZA protests the Labor Arbiters finding that he is a talent of MJMDC, which
contracted out his services to ABS-CBN. The Labor Arbiter ruled that as a talent of
MJMDC, SONZA is not an employee of ABS-CBN. SONZA insists that MJMDC is a
labor-only contractor and ABS-CBN is his employer.

In a labor-only contract, there are three parties involved: (1) the labor-only
contractor; (2) the employee who is ostensibly under the employ of the labor-only
contractor; and (3) the principal who is deemed the real employer. Under this
scheme, the labor-only contractor is the agent of the principal. The law makes the
principal responsible to the employees of the labor-only contractor as if the principal
itself directly hired or employed the employees.[48] These circumstances are not
present in this case.

There are essentially only two parties involved under the Agreement, namely,
SONZA and ABS-CBN. MJMDC merely acted as SONZAs agent. The Agreement
expressly states that MJMDC acted as the AGENT of SONZA. The records do not
show that MJMDC acted as ABS-CBNs agent. MJMDC, which stands for Mel and Jay
Management and Development Corporation, is a corporation organized and owned
by SONZA and TIANGCO. The President and General Manager of MJMDC is SONZA
himself. It is absurd to hold that MJMDC, which is owned, controlled, headed and
managed by SONZA, acted as agent of ABS-CBN in entering into the Agreement
with SONZA, who himself is represented by MJMDC. That would make MJMDC the
agent of both ABS-CBN and SONZA.

As SONZA admits, MJMDC is a management company devoted exclusively to

managing the careers of SONZA and his broadcast partner, TIANGCO. MJMDC is not
engaged in any other business, not even job contracting. MJMDC does not have any
other function apart from acting as agent of SONZA or TIANGCO to promote their
careers in the broadcast and television industry.[49]

Policy Instruction No. 40

SONZA argues that Policy Instruction No. 40 issued by then Minister of Labor Blas
Ople on 8 January 1979 finally settled the status of workers in the broadcast
industry. Under this policy, the types of employees in the broadcast industry are the
station and program employees.
Policy Instruction No. 40 is a mere executive issuance which does not have the force
and effect of law. There is no legal presumption that Policy Instruction No. 40
determines SONZAs status. A mere executive issuance cannot exclude independent
contractors from the class of service providers to the broadcast industry. The
classification of workers in the broadcast industry into only two groups under Policy
Instruction No. 40 is not binding on this Court, especially when the classification has
no basis either in law or in fact.

Affidavits of ABS-CBNs Witnesses

SONZA also faults the Labor Arbiter for admitting the affidavits of Socorro Vidanes
and Rolando Cruz without giving his counsel the opportunity to cross-examine these
witnesses. SONZA brands these witnesses as incompetent to attest on the
prevailing practice in the radio and television industry. SONZA views the affidavits of
these witnesses as misleading and irrelevant.

While SONZA failed to cross-examine ABS-CBNs witnesses, he was never prevented

from denying or refuting the allegations in the affidavits. The Labor Arbiter has the
discretion whether to conduct a formal (trial-type) hearing after the submission of
the position papers of the parties, thus:

Section 3. Submission of Position Papers/Memorandum

xxx

These verified position papers shall cover only those claims and causes of action
raised in the complaint excluding those that may have been amicably settled, and
shall be accompanied by all supporting documents including the affidavits of their
respective witnesses which shall take the place of the latters direct testimony. x x x

Section 4. Determination of Necessity of Hearing. Immediately after the submission

of the parties of their position papers/memorandum, the Labor Arbiter shall motu
propio determine whether there is need for a formal trial or hearing. At this stage,
he may, at his discretion and for the purpose of making such determination, ask
clarificatory questions to further elicit facts or information, including but not limited
to the subpoena of relevant documentary evidence, if any from any party or
witness.[50]

The Labor Arbiter can decide a case based solely on the position papers and the
supporting documents without a formal trial.[51] The holding of a formal hearing or
trial is something that the parties cannot demand as a matter of right.[52] If the
Labor Arbiter is confident that he can rely on the documents before him, he cannot
be faulted for not conducting a formal trial, unless under the particular
circumstances of the case, the documents alone are insufficient. The proceedings
before a Labor Arbiter are non-litigious in nature. Subject to the requirements of due
process, the technicalities of law and the rules obtaining in the courts of law do not
strictly apply in proceedings before a Labor Arbiter.

Talents as Independent Contractors

ABS-CBN claims that there exists a prevailing practice in the broadcast and
entertainment industries to treat talents like SONZA as independent contractors.
SONZA argues that if such practice exists, it is void for violating the right of labor to
security of tenure.

The right of labor to security of tenure as guaranteed in the Constitution[53] arises

only if there is an employer-employee relationship under labor laws. Not every
performance of services for a fee creates an employer-employee relationship. To
hold that every person who renders services to another for a fee is an employee - to
give meaning to the security of tenure clause - will lead to absurd results.

Individuals with special skills, expertise or talent enjoy the freedom to offer their
services as independent contractors. The right to life and livelihood guarantees this
freedom to contract as independent contractors. The right of labor to security of
tenure cannot operate to deprive an individual, possessed with special skills,
expertise and talent, of his right to contract as an independent contractor. An
individual like an artist or talent has a right to render his services without any one
controlling the means and methods by which he performs his art or craft. This Court
will not interpret the right of labor to security of tenure to compel artists and talents
to render their services only as employees. If radio and television program hosts can
render their services only as employees, the station owners and managers can
dictate to the radio and television hosts what they say in their shows. This is not
conducive to freedom of the press.

Different Tax Treatment of Talents and Broadcasters

The National Internal Revenue Code (NIRC)[54] in relation to Republic Act No. 7716,
[55] as amended by Republic Act No. 8241,[56] treats talents, television and radio
broadcasters differently. Under the NIRC, these professionals are subject to the 10%
value-added tax (VAT) on services they render. Exempted from the VAT are those
under an employer-employee relationship.[57] This different tax treatment accorded
to talents and broadcasters bolters our conclusion that they are independent
contractors, provided all the basic elements of a contractual relationship are present
as in this case.

Nature of SONZAs Claims

SONZA seeks the recovery of allegedly unpaid talent fees, 13th month pay,
separation pay, service incentive leave, signing bonus, travel allowance, and
amounts due under the Employee Stock Option Plan. We agree with the findings of
the Labor Arbiter and the Court of Appeals that SONZAs claims are all based on the
May 1994 Agreement and stock option plan, and not on the Labor Code. Clearly, the
present case does not call for an application of the Labor Code provisions but an
interpretation and implementation of the May 1994 Agreement. In effect, SONZAs
cause of action is for breach of contract which is intrinsically a civil dispute
cognizable by the regular courts.[58]

WHEREFORE, we DENY the petition. The assailed Decision of the Court of Appeals
dated 26 March 1999 in CA-G.R. SP No. 49190 is AFFIRMED. Costs against petitioner.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Panganiban, Ynares-Santiago, and Azcuna, JJ., concur.
THELMA DUMPIT-MURILLO,

Petitioner,

- versus

COURT OF APPEALS, ASSOCIATED BROADCASTING COMPANY, JOSE JAVIER

AND EDWARD TAN,

Respondents.

G.R. No. 164652

Present:

QUISUMBING, J.,* Chairperson,

CARPIO,

CARPIO MORALES,

TINGA, and

VELASCO, JR., JJ.

Promulgated:

June 8, 2007

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

QUISUMBING, J.:

This petition seeks to reverse and set aside both the Decision[1] dated January 30,
2004 of the Court of Appeals in CA-G.R. SP No. 63125 and its Resolution[2] dated
June 23, 2004 denying the motion for reconsideration. The Court of Appeals had
overturned the Resolution[3] dated August 30, 2000 of the National Labor Relations
Commission (NLRC) ruling that petitioner was illegally dismissed.

The facts of the case are as follows:

On October 2, 1995, under Talent Contract No. NT95-1805,[4] private respondent

Associated Broadcasting Company (ABC) hired petitioner Thelma Dumpit-Murillo as
a newscaster and co-anchor for Balitang-Balita, an early evening news program. The
contract was for a period of three months. It was renewed under Talent Contracts
Nos. NT95-1915, NT96-3002, NT98-4984 and NT99-5649.[5] In addition, petitioners
services were engaged for the program Live on Five. On September 30, 1999, after
four years of repeated renewals, petitioners talent contract expired. Two weeks after
the expiration of the last contract, petitioner sent a letter to Mr. Jose Javier, Vice
President for News and Public Affairs of ABC, informing the latter that she was still
interested in renewing her contract subject to a salary increase. Thereafter,
petitioner stopped reporting for work. On November 5, 1999, she wrote Mr. Javier
another letter,[6] which we quote verbatim:

xxxx

Dear Mr. Javier:

On October 20, 1999, I wrote you a letter in answer to your query by way of a
marginal note what terms and conditions in response to my first letter dated
October 13, 1999. To date, or for more than fifteen (15) days since then, I have not
received any formal written reply. xxx

In view hereof, should I not receive any formal response from you until Monday,
November 8, 1999, I will deem it as a constructive dismissal of my services.

xxxx

A month later, petitioner sent a demand letter[7] to ABC, demanding: (a)

reinstatement to her former position; (b) payment of unpaid wages for services
rendered from September 1 to October 20, 1999 and full backwages; (c) payment of
13th month pay, vacation/sick/service incentive leaves and other monetary benefits
due to a regular employee starting March 31, 1996. ABC replied that a check
covering petitioners talent fees for September 16 to October 20, 1999 had been
processed and prepared, but that the other claims of petitioner had no basis in fact
or in law.

On December 20, 1999, petitioner filed a complaint[8] against ABC, Mr. Javier and
Mr. Edward Tan, for illegal constructive dismissal, nonpayment of salaries, overtime
pay, premium pay, separation pay, holiday pay, service incentive leave pay,
vacation/sick leaves and 13th month pay in NLRC-NCR Case No. 30-12-00985-99.
She likewise demanded payment for moral, exemplary and actual damages, as well
as for attorneys fees.

The parties agreed to submit the case for resolution after settlement failed during
the mandatory conference/conciliation. On March 29, 2000, the Labor Arbiter
dismissed the complaint.[9]

On appeal, the NLRC reversed the Labor Arbiter in a Resolution dated August 30,
2000. The NLRC held that an employer-employee relationship existed between
petitioner and ABC; that the subject talent contract was void; that the petitioner was
a regular employee illegally dismissed; and that she was entitled to reinstatement
and backwages or separation pay, aside from 13th month pay and service incentive
leave pay, moral and exemplary damages and attorneys fees. It held as follows:

WHEREFORE, the Decision of the Arbiter dated 29 March 2000 is hereby

REVERSED/SET ASIDE and a NEW ONE promulgated:

1) declaring respondents to have illegally dismissed complainant from her

regular work therein and thus, ordering them to reinstate her in her former position
without loss of seniority right[s] and other privileges and to pay her full backwages,
inclusive of allowances and other benefits, including 13th month pay based on her
said latest rate of P28,000.00/mo. from the date of her illegal dismissal on 21
October 1999 up to finality hereof, or at complainants option, to pay her separation
pay of one (1) month pay per year of service based on said latest monthly rate,
reckoned from date of hire on 30 September 1995 until finality hereof;

2) to pay complainants accrued SILP [Service Incentive Leave Pay] of 5 days pay
per year and 13th month pay for the years 1999, 1998 and 1997 of P19,236.00 and
P84,000.00, respectively and her accrued salary from 16 September 1999 to 20
October 1999 of P32,760.00 plus legal interest at 12% from date of judicial demand
on 20 December 1999 until finality hereof;

3) to pay complainant moral damages of P500,000.00, exemplary damages of

P350,000.00 and 10% of the total of the adjudged monetary awards as attorneys
fees.

Other monetary claims of complainant are dismissed for lack of merit.

SO ORDERED.[10]

After its motion for reconsideration was denied, ABC elevated the case to the Court
of Appeals in a petition for certiorari under Rule 65. The petition was first dismissed
for failure to attach particular documents,[11] but was reinstated on grounds of the
higher interest of justice.[12]

Thereafter, the appellate court ruled that the NLRC committed grave abuse of
discretion, and reversed the decision of the NLRC.[13] The appellate court reasoned
that petitioner should not be allowed to renege from the stipulations she had
voluntarily and knowingly executed by invoking the security of tenure under the
Labor Code. According to the appellate court, petitioner was a fixed-term employee
and not a regular employee within the ambit of Article 280[14] of the Labor Code
because her job, as anticipated and agreed upon, was only for a specified time.[15]

Aggrieved, petitioner now comes to this Court on a petition for review, raising issues
as follows:
I.

THIS HONORABLE COURT CAN REVIEW THE FINDINGS OF THE HONORABLE COURT
OF APPEALS, THE DECISION OF WHICH IS NOT IN ACCORD WITH LAW OR WITH THE
APPLICABLE DECISIONS OF THE SUPREME COURT[;]

II.

THE PRO-FORMA TALENT CONTRACTS, AS CORRECTLY FOUND BY THE NLRC FIRST

DIVISION, ARE ANTI-REGULARIZATION DEVICES WHICH MUST BE STRUCK DOWN
FOR REASONS OF PUBLIC POLICY[;]

III.

BY REASON OF THE CONTINUOUS AND SUCCESSIVE RENEWALS OF THE THREE-

MONTH TALENT CONTRACTS, AN EMPLOYER-EMPLOYEE RELATIONSHIP WAS
CREATED AS PROVIDED FOR UNDER ARTICLE 280 OF THE LABOR CODE[;]

IV.

BY THE CONSTRUCTIVE DISMISSAL OF HEREIN PETITIONER, AS A REGULAR

EMPLOYEE, THERE WAS A DENIAL OF PETITIONERS RIGHT TO DUE PROCESS THUS
ENTITLING HER TO THE MONEY CLAIMS AS STATED IN THE COMPLAINT[.][16]

The issues for our disposition are: (1) whether or not this Court can review the
findings of the Court of Appeals; and (2) whether or not under Rule 45 of the Rules
of Court the Court of Appeals committed a reversible error in its Decision.

On the first issue, private respondents contend that the issues raised in the instant
petition are mainly factual and that there is no showing that the said issues have
been resolved arbitrarily and without basis. They add that the findings of the Court
of Appeals are supported by overwhelming wealth of evidence on record as well as
prevailing jurisprudence on the matter.[17]

Petitioner however contends that this Court can review the findings of the Court of
Appeals, since the appellate court erred in deciding a question of substance in a
way which is not in accord with law or with applicable decisions of this Court.[18]

We agree with petitioner. Decisions, final orders or resolutions of the Court of

Appeals in any case regardless of the nature of the action or proceeding involved
may be appealed to this Court through a petition for review. This remedy is a
continuation of the appellate process over the original case,[19] and considering
there is no congruence in the findings of the NLRC and the Court of Appeals
regarding the status of employment of petitioner, an exception to the general rule
that this Court is bound by the findings of facts of the appellate court,[20] we can
review such findings.
On the second issue, private respondents contend that the Court of Appeals did not
err when it upheld the validity of the talent contracts voluntarily entered into by
petitioner. It further stated that prevailing jurisprudence has recognized and
sustained the absence of employer-employee relationship between a talent and the
media entity which engaged the talents services on a per talent contract basis,
citing the case of Sonza v. ABS-CBN Broadcasting Corporation.[21]

Petitioner avers however that an employer-employee relationship was created when

the private respondents started to merely renew the contracts repeatedly fifteen
times or for four consecutive years.[22]

Again, we agree with petitioner. The Court of Appeals committed reversible error
when it held that petitioner was a fixed-term employee. Petitioner was a regular
employee under contemplation of law. The practice of having fixed-term contracts in
the industry does not automatically make all talent contracts valid and compliant
with labor law. The assertion that a talent contract exists does not necessarily
prevent a regular employment status.[23]

Further, the Sonza case is not applicable. In Sonza, the television station did not
instruct Sonza how to perform his job. How Sonza delivered his lines, appeared on
television, and sounded on radio were outside the television stations control. Sonza
had a free hand on what to say or discuss in his shows provided he did not attack
the television station or its interests. Clearly, the television station did not exercise
control over the means and methods of the performance of Sonzas work.[24] In the
case at bar, ABC had control over the performance of petitioners work. Noteworthy
too, is the comparatively low P28,000 monthly pay of petitioner[25] vis the
P300,000 a month salary of Sonza,[26] that all the more bolsters the conclusion that
petitioner was not in the same situation as Sonza.

The contract of employment of petitioner with ABC had the following stipulations:

xxxx

1. SCOPE OF SERVICES TALENT agrees to devote his/her talent, time, attention and
best efforts in the performance of his/her duties and responsibilities as
Anchor/Program Host/Newscaster of the Program, in accordance with the direction
of ABC and/or its authorized representatives.

1.1. DUTIES AND RESPONSIBILITIES TALENT shall:

a. Render his/her services as a newscaster on the Program;

b. Be involved in news-gathering operations by conducting interviews on- and
off-the-air;

c. Participate in live remote coverages when called upon;

d. Be available for any other news assignment, such as writing, research or

camera work;

e. Attend production meetings;

f. On assigned days, be at the studios at least one (1) hour before the live
telecasts;

g. Be present promptly at the studios and/or other place of assignment at the

time designated by ABC;

h. Keep abreast of the news;

i. Give his/her full cooperation to ABC and its duly authorized representatives in
the production and promotion of the Program; and

j. Perform such other functions as may be assigned to him/her from time to

time.

xxxx

1.3 COMPLIANCE WITH STANDARDS, INSTRUCTIONS AND OTHER RULES AND

REGULATIONS TALENT agrees that he/she will promptly and faithfully comply with
the requests and instructions, as well as the program standards, policies, rules and
regulations of ABC, the KBP and the government or any of its agencies and
instrumentalities.[27]

xxxx

In Manila Water Company, Inc. v. Pena,[28] we said that the elements to determine
the existence of an employment relationship are: (a) the selection and engagement
of the employee, (b) the payment of wages, (c) the power of dismissal, and (d) the
employers power to control. The most important element is the employers control of
the employees conduct, not only as to the result of the work to be done, but also as
to the means and methods to accomplish it.[29]

The duties of petitioner as enumerated in her employment contract indicate that

ABC had control over the work of petitioner. Aside from control, ABC also dictated
the work assignments and payment of petitioners wages. ABC also had power to
dismiss her. All these being present, clearly, there existed an employment
relationship between petitioner and ABC.
Concerning regular employment, the law provides for two kinds of employees,
namely: (1) those who are engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer; and (2) those
who have rendered at least one year of service, whether continuous or broken, with
respect to the activity in which they are employed.[30] In other words, regular
status arises from either the nature of work of the employee or the duration of his
employment.[31] In Benares v. Pancho,[32] we very succinctly said:

[T]he primary standard for determining regular employment is the reasonable

connection between the particular activity performed by the employee vis--vis the
usual trade or business of the employer. This connection can be determined by
considering the nature of the work performed and its relation to the scheme of the
particular business or trade in its entirety. If the employee has been performing the
job for at least a year, even if the performance is not continuous and merely
intermittent, the law deems repeated and continuing need for its performance as
sufficient evidence of the necessity if not indispensability of that activity to the
business. Hence, the employment is considered regular, but only with respect to
such activity and while such activity exists.[33]

In our view, the requisites for regularity of employment have been met in the
instant case. Gleaned from the description of the scope of services aforementioned,
petitioners work was necessary or desirable in the usual business or trade of the
employer which includes, as a pre-condition for its enfranchisement, its participation
in the governments news and public information dissemination. In addition, her
work was continuous for a period of four years. This repeated engagement under
contract of hire is indicative of the necessity and desirability of the petitioners work
in private respondent ABCs business.[34]

The contention of the appellate court that the contract was characterized by a valid
fixed-period employment is untenable. For such contract to be valid, it should be
shown that the fixed period was knowingly and voluntarily agreed upon by the
parties. There should have been no force, duress or improper pressure brought to
bear upon the employee; neither should there be any other circumstance that
vitiates the employees consent.[35] It should satisfactorily appear that the
employer and the employee dealt with each other on more or less equal terms with
no moral dominance being exercised by the employer over the employee.[36]
Moreover, fixed-term employment will not be considered valid where, from the
circumstances, it is apparent that periods have been imposed to preclude
acquisition of tenurial security by the employee.[37]

In the case at bar, it does not appear that the employer and employee dealt with
each other on equal terms. Understandably, the petitioner could not object to the
terms of her employment contract because she did not want to lose the job that she
loved and the workplace that she had grown accustomed to,[38] which is exactly
what happened when she finally manifested her intention to negotiate. Being one of
the numerous newscasters/broadcasters of ABC and desiring to keep her job as a
broadcasting practitioner, petitioner was left with no choice but to affix her
signature of conformity on each renewal of her contract as already prepared by
private respondents; otherwise, private respondents would have simply refused to
renew her contract. Patently, the petitioner occupied a position of weakness vis--vis
the employer. Moreover, private respondents practice of repeatedly extending
petitioners 3-month contract for four years is a circumvention of the acquisition of
regular status. Hence, there was no valid fixed-term employment between
petitioner and private respondents.

While this Court has recognized the validity of fixed-term employment contracts in a
number of cases, it has consistently emphasized that when the circumstances of a
case show that the periods were imposed to block the acquisition of security of
tenure, they should be struck down for being contrary to law, morals, good customs,
public order or public policy.[39]

As a regular employee, petitioner is entitled to security of tenure and can be

dismissed only for just cause and after due compliance with procedural due process.
Since private respondents did not observe due process in constructively dismissing
the petitioner, we hold that there was an illegal dismissal.

WHEREFORE, the challenged Decision dated January 30, 2004 and Resolution dated
June 23, 2004 of the Court of Appeals in CA-G.R. SP No. 63125, which held that the
petitioner was a fixed-term employee, are REVERSED and SET ASIDE. The NLRC
decision is AFFIRMED.

Costs against private respondents.

SO ORDERED.

ABS-CBN vs. MARQUEZ

[G.R. No. 167638. June 22, 2005]

THIRD DIVISION

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated JUN 22
2005.

G.R. No. 167638 (ABS-CBN Broadcasting Corporation vs. Henrie Marquez, et al.)
Before us is this petition for review on certiorari assailing the December 20, 2004
decision [1]cralaw of the Court of Appeals in CA-G.R. SP No. 81750, reversing and
setting aside an earlier decision[2]cralaw of National Labor Relations Commission
(NLRC), 4th Division, Cebu City in Case No. V-000967-00 which, in turn, reversed the
decision[3]cralaw of the Labor Arbiter in a complaint for illegal dismissal
commenced by the herein respondents against petitioner ABS-CBN Broadcasting
Corporation.

Petitioner hired the services of respondents on various dates starting December,

1994 to undertake the production in the Cebuano dialect of television serial
programs for petitioner's week-day afternoon time slots in Cebu. Respondents were
assigned among three (3) production groups, each with its own set of directors,
writers, videographers, lightsmen, editors, actors and utility personnel. Each
production group was given a weekly budget, initially at P30,000.00, which was
later increased to P40,000.00 a week.

The television-series did so well that several more were subsequently produced. The
production groups were continuously engaged to film succeeding programs to
replace the concluded ones.

On June 15, 1999, respondents addressed a letter to petitioner asking for a 25%
increase in their weekly budget, but the same was denied by petitioner's AVP for the
Visayas Cluster, Ma. Luisa L. Ascalon. Instead, respondents were informed of the
termination of their services effective August 13, 1999.

On August 27, 1999, respondents filed with the Regional Arbitration Branch (RAB) at
Region VII of the Department of Labor and Employment their consolidated complaint
for illegal dismissal; illegal deduction; non-payment of overtime and holiday pay;
premium pay for holiday, rest day and night shift differential; non-payment of 13th
month pay, service incentive leave, separation pay, backwages; and attorney's
fees.

On June 15, 2000, the Executive Labor Arbiter of RAB VII rendered a
decision[4]cralaw in favor of respondents and ordered petitioner to pay to them
their money claims.
However, on petitioner's appeal, the NLRC'S 4th Division at Cebu City reversed the
decision of the Labor Arbiter, thus:

WHEREFORE, premises considered, judgment is hereby rendered granting the

appeal of [petitioner], reversing and setting aside the Decision of the Executive
Labor Arbiter dated 15 June 2000 and promulgating a new one dismissing all the
consolidated complaints for lack of merit.

SO ORDERED.

Respondents moved for a reconsideration but their motion was denied by the
NLRC's 4th Division in its resolution of July 30, 2003.

From there, respondents went to the Court of Appeals via a petition for certiorari,
thereat docketed as CA-G.R. SP No. 81750, imputing grave abuse of discretion on
the part of the NLRC's 4th Division in setting aside the Labor Arbiter's findings and
in ruling that they were hired as contractual or project employees, i.e. as "talents"
engaged for specific projects, under the special work arrangements with the
petitioner, and in upholding the legality of their dismissal.

Respondents asserted that they are petitioner's regular employees and emphasized
the fact of their continuous work after each tele-series program and the very nature
of their work, which is "necessary and desirable" to the business or trade of their
employer[5]cralaw. They also asseverated that the application of the "four-fold test"
in labor laws clearly shows the existence of an employer-employee relationship
between the parties.

For its part, petitioner insisted that respondents were hired as program employees
in the nature of contractual or project employment; that respondents were mere
"talents", i.e. they were contracted because of their expertise or talents as program
employees; and that respondents were, in effect, mere program employees under
Policy Instruction No. 40, series of 1979 whom petitioner contracted due to their
expertise for particular projects, in this case the production of the Visayan tele-
series programs.
In the herein assailed decision[6]cralaw dated December 20, 2004, the Court of
Appeals reversed that of the NLRC and reinstated the earlier decision of the Labor
Arbiter, to wit:

WHEREFORE, the Petition for Certiorari is GRANTED, and the assailed Decision and
Resolution of the National Labor Relation Commission (NLRC), 4th Division, Cebu
City, in Case No. V-000050-02, are hereby REVERSED and SET ASIDE. The Decision
of Executive Labor Arbiter of 15 June 2000 finding an employer-employee
relationship between [respondents] and [petitioner] ABS-CBN Broadcasting
Corporation and ordering the latter to pay [respondents'] money claims is
REINSTATED in toto except that the computation of the backwages thereof should
be reckoned until the finality of this decision. No pronouncement as to costs.

SO ORDERED.

Applying the "four-fold test" to determine the existence of an employer-employee

relationship between the parties, the Court of Appeals viewed respondents as
regular employees of petitioner and not independent contractors.

Respondents' employment with petitioner passed the "four-fold test" on employer-

employee relations, namely: (1) the selection and engagement of the employee, or
the power to hire; (2) the payment of wages; (3) the power to dismiss; and (4) the
power to control the employee[7]cralaw.

Petitioner never denied having engaged the services of respondents. Neither did it
controvert the fact that respondents received their pay from petitioner twice a
month thru automated teller machines (ATM) and respondents were issued payslips
bearing petitioner's corporate name on the heading. The payment of wages clearly
rests upon petitioner. While a weekly budget is given and the directors are
ostensibly given a free hand on how to spend the same subject only to petitioner's
budgetary limitation, the hard reality is that such payments were done by the
petitioner itself.
As correctly observed by the Labor Arbiter, the elements of control and supervision
over the respondents were evident. Petitioner employed production supervisors who
monitored and saw to it that the filming of the series shall be finished within a time-
frame and the production output to conform to petitioner's standards. These were
bolstered by various memoranda issued by petitioner relative to production work-
approval of filming and editing schedule, new assignments of production crew and
reminders to tele-series directors and editors regarding the standard policy on
editing services. Respondents have to follow company rules in the work done in
company premises. An overseer, in the person of an executive producer, is assigned
by petitioner over each production crew to make sure that the end result is
acceptable to petitioner, and the executive producer can dictate the work to be re-
done. Petitioner also has control in the assignments of crew members and can thus
re-assign or transfer any of them to another production group, thereby belying
petitioner's contention that the directors are the ones that control the whole
production. All these, taken together, unmistakably show petitioner's power of
control over respondents' work.

Anent the power of dismissal and suspension, it cannot be denied that petitioner
exercised such. The records clearly show that petitioner sanctioned disciplinary
measures on some of the respondents for some infraction of company rules thru
disciplinary measures on erring employees. For sure, respondent Orlando Carillo
was suspended for one week by his production head on January 25, 1999 for failure
to edit an episode which was to be sent to petitioner's Zamboanga station for airing.

Additionally, the fact that petitioner itself provided the production equipment such
as video cameras, lights, microphone and TV monitors, largely discounts petitioner's
claim that respondents were independent contractors.

It may be so that respondents were assigned to a particular tele-series. However,

petitioner can and did immediately reassign them to a new production upon
completion of a previous one. Hence, they were continuously employed, the tele-
series being a regular feature in petitioner's network programs. Petitioner's
continuous engagement of respondents from one production after another, for more
than five years, made the latter part of petitioner's workpool who cannot be
separated from the service without cause as they are considered regular. A project
employee or a member of a workpool may acquire the status of a regular employee
when the following concur: there is continuous rehiring of project employees even
after the cessation of the project;[8]cralaw and the tasks performed by the alleged
"project employee" are vital, necessary, and indispensable to the usual business or
trade of his employer.[9]cralaw It cannot be denied that the services of respondents
as members of a crew in the production of a tele-series are undoubtedly connected
with the business of the petitioner. This Court has held that the primary standard in
determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the business or trade of
his employer.[10]cralaw Here, the activity performed by respondents is, without
doubt, vital to petitioner's trade or business.

We agree with the Court of Appeals when it upheld the conclusion of the Labor
Arbiter that petitioner broadcasts and produces its own television series and other
programs, whether in Cebu or in Manila; and that there is no distinction between its
Cebu station and the mother station because they are one and the same, more so
due to lack of showing by the petitioner that its Cebu station is independent from its
mother station. It cannot thus be said that petitioner is primarily just involved in
mere broadcasting from satellite feeds or other sources. That the production of the
television series is vital, necessary and desirable to petitioner's usual business is
beyond question.

It is a matter of record that respondents have rendered almost five (5) years of
continuous service to petitioner, doing work that is necessary and desirable to the
usual business of the latter. Hence, even granting on the extreme that respondents
were not performing work that is vital, necessary and indispensable to the usual
business of petitioner, nonetheless the second paragraph of Article 280 of the Labor
Code still applies. It reads:

ART. 280. REGULAR AND CASUAL EMPLOYMENT

xxx xxx xxx

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph. Provided, That, any employee who has rendered at least one year of
service whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists. (Emphasis supplied).
We thus rule and so hold that respondents are petitioner's regular employees, at
least with respect to the production of petitioner's Visayan tele-series programs and
until such activity exists.

Petitioner relied upon and took undue advantage of Policy Instruction No. 40, by
treating herein respondents as talents and classifying them as independent
contractors and freelancers.

Policy Instruction No. 40 pertinently provides:

Program employees are those whose skills, talents or services are engaged by the
station for a particular or specific program or undertaking and who are not required
to observe normal working hours such that on some days they work for less than
eight (8) hours and on other days beyond the normal work hours observed by
station employees and are allowed to enter into employment contracts with other
persons, stations, advertising agencies or sponsoring companies. The engagement
of program employees, including those hired by advertising or sponsoring
companies, shall be under a written contract specifying, among other things, the
nature of the work to be performed, rates of pay, and the programs in which they
will work. The contract shall be duly registered by the station with the Broadcast
Media Council within three days from its consummation. (Emphasis supplied)

Ironically, however, petitioner failed to adduce an iota proof that the requirements
for program employment were even complied with by it. It is basic that project or
contractual employees are appraised of the project they will work under a written
contract, specifying, inter alia, the nature of work to be performed and the rates of
pay and the program in which they will work. Sadly, however, no such written
contract was ever presented by the petitioner. Petitioner is in the best of position to
present these documents. And because none was presented, we have every reason
to surmise that no such written contract was ever accomplished by the parties,
thereby belying petitioner's posture.

Worse, there was no showing of compliance with the requirement that after every
engagement or production of a particular television series, the required reports
were filed with the proper government agency, as provided no less under the very
Policy Instruction invoked by the petitioner, nor under the Omnibus Implementing
Rules of the Labor Code for project employees. This alone bolsters respondents'
contention that they were indeed petitioner's regular employees since their
employment was not only for a particular program.

To recapitulate, respondents, due to their length of service, had already attained the
status of regular employment and are thus entitled to security of tenure provided
for under our labor laws. Consequently, they may only be validly dismissed from
service upon petitioner's compliance with the legal requisites for termination, both
in their substantive and procedural aspects. In this connection, it bears emphasis
that under the Labor Code and its Omnibus Implementing Rules, not only must the
dismissal be for a just or authorized cause[11]cralaw, but that the rudimentary
requirements of due process: notice and hearing,[12]cralaw must likewise be
observed before a regular employee may be dismissed. Without the concurrence of
these two requisites, the termination would be, in the eyes of the law,
illegal[13]cralaw.

It is incumbent upon petitioner to prove that its dismissal of respondents was for a
valid cause and that they were afforded procedural due process before termination.
As it is, petitioner failed to discharge this burden. Its only assertion is that the
dismissal was due to the expiration or completion of contract, which is not even a
ground for termination allowed by law. Worse, petitioner failed to establish that
respondents were given ample opportunity to contest the legality of their dismissal.
All that petitioner did was simply to furnish them with their walking papers.
Inarguably, petitioner denied them of due process. In fine, with petitioner's failure to
establish compliance with the legal requirements on termination of employment
under the Labor Code, the appellate court was correct in declaring respondents'
dismissal as tainted with illegality.

WHEREFORE, the instant petition is hereby DENIED.

SO ORDERED.

Very truly yours,

(Sgd.) LUCITA ABJELINA-SORIANO

Clerk of Court
G.R. No. 168424 June 8, 2007

CONSOLIDATED BROADCASTING SYSTEM, INC.,

Vs

DANNY OBERIO, ELNA DE PEDRO,

LUISITO VILLAMOR, WILMA

SUGATON, RUFO DEITA, JR.,

EMILY DE GUZMAN, CAROLINE

LADRILLO, JOSE ROBERTO Promulgated:

REGALADO, ROSEBEL NARCISO

& ANANITA TANGETE,

DECISION

YNARES-SANTIAGO, J.:

Assailed in this petition for review is the July 30, 2004 Decision[1] of the
Court of Appeals in CA-G.R. SP No. 77098, which affirmed the December 5,
2001 Decision[2] of the National Labor Relations Commission (NLRC)
holding that respondents were regular employees of petitioner and that
they were illegally dismissed.
Respondents alleged that they were employed as drama talents by DYWB-
Bombo Radyo, a radio station owned and operated by petitioner
Consolidated Broadcasting System, Inc. They reported for work daily for
six days in a week and were required to record their drama production in
advance. Some of them were employed by petitioner since 1974, while the
latest one was hired in 1997.[3] Their drama programs were aired not only
in Bacolod City but also in the sister stations of DYWB in the Visayas and
Mindanao areas.[4]

Sometime in August 1998, petitioner reduced the number of its drama

productions from 14 to 11, but was opposed by respondents. After the
negotiations failed, the latter sought the intervention of the Department
of Labor and Employment (DOLE), which on November 12, 1998, conducted
through its Regional Office, an inspection of DWYB station. The results
thereof revealed that petitioner is guilty of violation of labor standard
laws, such as underpayment of wages, 13th month pay, non-payment of
service incentive leave pay, and non-coverage of respondents under the
Social Security System.

Petitioner contended that respondents are not its employees and refused
to submit the payroll and daily time records despite the subpoena duces
tecum issued by the DOLE Regional Director. Petitioner further argued
that the case should be referred to the NLRC because the Regional
Director has no jurisdiction over the determination of the existence of
employer-employee relationship which involves evidentiary matters that
are not verifiable in the normal course of inspection.

Vexed by the respondents complaint, petitioner allegedly pressured and

intimidated respondents. Respondents Oberio and Delta were suspended
for minor lapses and the payment of their salaries were purportedly
delayed. Eventually, on February 3, 1999, pending the outcome of the
inspection case with the Regional Director, respondents were barred by
petitioner from reporting for work; thus, the former claimed constructive
dismissal.[5]

On April 8, 1999, the DOLE Regional Director issued an order directing

petitioner to pay respondents a total of P318,986.74 representing non-
payment/underpayment of the salary and benefits due them.[6] However,
on July 8, 1999, the Regional Director reconsidered the April 8, 1999 order
and certified the records of the case to the NLRC, Regional Arbitration
Branch VI, for determination of employer-employee relationship.[7]
Respondents appealed said order to the Secretary of Labor.

On October 12, 1999, respondents filed a case for illegal dismissal,

underpayment/non-payment of wages and benefits plus damages against
petitioner. On April 10, 2000, the Labor Arbiter dismissed the case without
prejudice while waiting for the decision of the Secretary of Labor on the
same issue of the existence of an employer-employee relationship
between petitioner and respondents.

On appeal to the NLRC, respondents raised the issue of employer-

employee relationship and submitted the following to prove the existence
of such relationship, to wit: time cards, identification cards, payroll, a
show cause order of the station manager to respondent Danny Oberio and
memoranda either noted or issued by said manager. Petitioner, on the
other hand, did not present any documentary evidence in its behalf and
merely denied the allegations of respondents. It claimed that the radio
station pays for the drama recorded by piece and that it has no control
over the conduct of respondents.

On December 5, 2001, the NLRC rendered a decision holding that

respondents were regular employees of petitioner who were illegally
dismissed by the latter. It further held that respondents complied with the
requirements of the rule on forum shopping. The decretal portion thereof,
provides:

WHEREFORE, premises considered, the decision of Labor Arbiter Ray Alan

T. Drilon dated 10 April 2000 is SET ASIDE and VACATED and a new one
entered.

Ordering respondent Consolidated Broadcasting System, Inc. (Bombo

Radyo Philippines), DYWB to reinstate the complainants without loss of
seniority rights wi[th] full back wages computed from February 1999 up to
the time of actual reinstatement.
SO ORDERED.[8]

Hence, petitioner filed the instant recourse.

The issues for resolution are as follows: (1) Did respondents violate the
rule on forum shopping; (2) whether the NLRC correctly ruled on the
merits of the case instead of remanding the case to the Labor Arbiter; (3)
whether respondents were employees of petitioner; and (4) whether their
dismissal was illegal.

Respondents complaint in the inspection case before the DOLE Regional

Director alleged that they were under the employ of petitioner at the time
of the filing of said complaint. Pending the resolution thereof, they
claimed to have been dismissed; hence, the filing of the present illegal
dismissal case before the Labor Arbiter. The causes of action in these two
complaints are different, i.e., one for violation of labor standard laws, and
the other, for illegal dismissal, but the entitlement of respondents to the
reliefs prayed for hinges on the same issue of the existence of an
employer-employee relationship. While the decision on the said issue by
one tribunal may operate as res judicata on the other, dismissal of the
present illegal dismissal case on the ground of forum shopping, would
work injustice to respondents because it is the law itself which provides
for two separate remedies for their distinct causes of action.

Under Article 217[9] of the Labor Code, termination cases fall under the
jurisdiction of Labor Arbiters. Whereas, Article 128[10] of the same Code
vests the Secretary of Labor or his duly authorized representatives with
the power to inspect the employers records to determine and compel
compliance with labor standard laws. The exercise of the said power by
the Secretary or his duly authorized representatives is exclusive to cases
where employer-employee relationship still exists. Thus, in cases where
the complaint for violation of labor standard laws preceded the
termination of the employee and the filing of the illegal dismissal case, it
would not be in consonance with justice to charge the complainants with
engaging in forum shopping when the remedy available to them at the
time their causes of action arose was to file separate cases before
different fora. Besides, in the instant case, respondent Danny Oberio
disclosed in the verification the pendency of the case regarding wage
differential.[11] In addition, said case was discussed in detail in the
position paper,[12] evincing the absence of any intention on the part of
respondents to mislead the Labor Arbiter.

Similarly, in Benguet Management Corporation v. Court of Appeals,[13]

petitioner filed separate actions to enjoin the foreclosure of real estate
mortgages before the Regional Trial Courts of San Pablo City and
Zambales which has jurisdiction over the place where the properties were
located. In both cases, petitioner contended, among others, that the loan
secured by said mortgages imposed unauthorized penalties, interest and
charges. The Court did not find the mortgagors guilty of forum shopping
considering that since injunction is enforceable only within the territorial
limits of the trial court, the mortgagor is left without remedy as to the
properties located outside the jurisdiction of the issuing court, unless an
application for injunction is made with another court which has jurisdiction
over the latter properties.

By parity of reasoning, it would be unfair to hold respondents in the

instant case guilty of forum shopping because the recourse available to
them after their termination, but pending resolution of the inspection case
before the DOLE, was to file a case for illegal dismissal before the Labor
Arbiter who has jurisdiction over termination disputes.

More importantly, substantial justice dictates that this case be resolved on

the merits considering that the NLRC and the Court of Appeals correctly
found that there existed an employer-employee relationship between
petitioner and respondents and that the latters dismissal was illegal, as
will be discussed hereunder.

In the same vein, the NLRC correctly ruled on the merits instead of
remanding the case to the Labor Arbiter. Respondents specifically raised
the issue of the existence of employer-employee relationship but
petitioner refused to submit evidence to disprove such relationship on the
erroneous contention that to do so would constitute a waiver of the right
to question the jurisdiction of the NLRC to resolve the case on the merits.
[14] This is rather odd because it was the stand of petitioner in the
inspection case before the DOLE that the case should be certified to the
NLRC for the resolution of the issue of employer-employee relationship.
But when the same issue was proffered before the NLRC, it refused to
present evidence and instead sought the dismissal of the case invoking
the pendency of the inspection case before the DOLE. Petitioner refused
to meet head on the substantial aspect of this controversy and resorted to
technicalities to delay its disposition. It must be stressed that labor
tribunals are not bound by technical rules and the Court would sustain the
expedient disposition of cases so long as the parties are not denied due
process.[15] The rule is that, due process is not violated where a person is
given the opportunity to be heard, but chooses not to give his or her side
of the case.[16] Significantly, petitioner never claimed that it was denied
due process. Indeed, no such denial exists because it had all the
opportunities to present evidence before the labor tribunals below, the
Court of Appeals, and even before this Court, but chose not to do so for
reasons which will not warrant the sacrifice of substantial justice over
technicalities.

On the third issue, respondents employment with petitioner passed the

four-fold test on employer-employee relations, namely: (1) the selection
and engagement of the employee, or the power to hire; (2) the payment of
wages; (3) the power to dismiss; and (4) the power to control the
employee.

Petitioner failed to controvert with substantial evidence the allegation of

respondents that they were hired by the former on various dates from
1974 to 1997. If petitioner did not hire respondents and if it was the
director alone who chose the talents, petitioner could have easily shown,
being in possession of the records, a contract to such effect. However,
petitioner merely relied on its contention that respondents were piece
rate contractors who were paid by results.[17] Note that under Policy
Instruction No. 40, petitioner is obliged to execute the necessary contract
specifying the nature of the work to be performed, rates of pay, and the
programs in which they will work. Moreover, project or contractual
employees are required to be apprised of the project they will undertake
under a written contract. This was not complied with by the petitioner,
justifying the reasonable conclusion that no such contracts exist and that
respondents were in fact regular employees.

In ABS-CBN v. Marquez,[18] the Court held that the failure of the employer
to produce the contract mandated by Policy Instruction No. 40 is indicative
that the so called talents or project workers are in reality, regular
employees. Thus

Policy Instruction No. 40 pertinently provides:

Program employees are those whose skills, talents or services are

engaged by the station for a particular or specific program or undertaking
and who are not required to observe normal working hours such that on
some days they work for less than eight (8) hours and on other days
beyond the normal work hours observed by station employees and are
allowed to enter into employment contracts with other persons, stations,
advertising agencies or sponsoring companies. The engagement of
program employees, including those hired by advertising or sponsoring
companies, shall be under a written contract specifying, among other
things, the nature of the work to be performed, rates of pay, and the
programs in which they will work. The contract shall be duly registered by
the station with the Broadcast Media Council within three days from its
consummation. (Emphasis supplied)

Ironically, however, petitioner failed to adduce an iota proof that the

requirements for program employment were even complied with by it. It is
basic that project or contractual employees are appraised of the project
they will work under a written contract, specifying, inter alia, the nature
of work to be performed and the rates of pay and the program in which
they will work. Sadly, however, no such written contract was ever
presented by the petitioner. Petitioner is in the best of position to present
these documents. And because none was presented, we have every reason
to surmise that no such written contract was ever accomplished by the
parties, thereby belying petitioners posture.

Worse, there was no showing of compliance with the requirement that

after every engagement or production of a particular television series, the
required reports were filed with the proper government agency, as
provided no less under the very Policy Instruction invoked by the
petitioner, nor under the Omnibus Implementing Rules of the Labor Code
for project employees. This alone bolsters respondents contention that
they were indeed petitioners regular employees since their employment
was not only for a particular program.
Moreover, the engagement of respondents for a period ranging from 2 to
25 years and the fact that their drama programs were aired not only in
Bacolod City but also in the sister stations of DYWB in the Visayas and
Mindanao areas, undoubtedly show that their work is necessary and
indispensable to the usual business or trade of petitioner. The test to
determine whether employment is regular or not is the reasonable
connection between the particular activity performed by the employee in
relation to the usual business or trade of the employer. Also, if the
employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the
repeated and continuing need for its performance as sufficient evidence of
the necessity, if not indispensability of that activity to the business. Thus,
even assuming that respondents were initially hired as project/contractual
employees who were paid per drama or per project/contract, the
engagement of their services for 2 to 25 years justify their classification
as regular employees, their services being deemed indispensable to the
business of petitioner.[19]

As to the payment of wages, it was petitioner who paid the same as shown
by the payroll bearing the name of petitioner company in the heading with
the respective salaries of respondents opposite their names. Anent the
power of control, dismissal, and imposition of disciplinary measures,
which are indicative of an employer-employee relationship,[20] the same
were duly proven by the following: (1) memorandum[21] duly noted by
Wilfredo Alejaga, petitioners station manager, calling the attention of the
Drama Department to the late submission of scripts by writers and the
tardiness and absences of directors and talents, as well as the imposable
fines of P100 to P200 for future infractions; (2) the memorandum[22] of
the station manager directing respondent Oberio to explain why no
disciplinary action should be taken against him for punching the time card
of a certain Mrs. Fe Oberio who was not physically present in their office;
and (3) the station managers memorandum[23] suspending respondent
Oberio for six days for the said infraction which constituted violation of
petitioners network policy. All these, taken together, unmistakably show
the existence of an employer-employee relationship. Not only did
petitioner possess the power of control over their work but also the power
to discipline them through the imposition of fines and suspension for
violation of company rules and policies.
Finally, we find that respondents were illegally dismissed. In labor cases,
the employer has the burden of proving that the dismissal was for a just
cause; failure to show this would necessarily mean that the dismissal was
unjustified and, therefore, illegal. To allow an employer to dismiss an
employee based on mere allegations and generalities would place the
employee at the mercy of his employer; and the right to security of
tenure, which this Court is bound to protect, would be unduly
emasculated.[24] In this case, petitioner merely contended that it was
respondents who ceased to report to work, and never presented any
substantial evidence to support said allegation. Petitioner therefore failed
to discharge its burden, hence, respondents were correctly declared to
have been illegally dismissed.

Furthermore, if doubts exist between the evidence presented by the

employer and the employee, the scales of justice must be tilted in favor of
the latter the employer must affirmatively show rationally adequate
evidence that the dismissal was for a justifiable cause. It is a time-honored
rule that in controversies between a laborer and his master, doubts
reasonably arising from the evidence should be resolved in the formers
favor. The policy is to extend the doctrine to a greater number of
employees who can avail of the benefits under the law, which is in
consonance with the avowed policy of the State to give maximum aid and
protection of labor.[25]

When a person is illegally dismissed, he is entitled to reinstatement

without loss of seniority rights and other privileges and to his full
backwages. In the event, however, that reinstatement is no longer
feasible, or if the employee decides not to be reinstated, the employer
shall pay him separation pay in lieu of reinstatement. Such a rule is
likewise observed in the case of a strained employer-employee
relationship or when the work or position formerly held by the dismissed
employee no longer exists. In sum, an illegally dismissed employee is
entitled to: (1) either reinstatement if viable or separation pay if
reinstatement is no longer viable, and (2) backwages. In the instant
controversy, reinstatement is no longer viable considering the strained
relations between petitioner and respondents. As admitted by the latter,
the complaint filed before the DOLE strained their relations with petitioner
who eventually dismissed them from service. Payment of separation pay
instead of reinstatement would thus better promote the interest of both
parties.
Respondents separation pay should be computed based on their
respective one (1) month pay, or one-half (1/2) month pay for every year
of service, whichever is higher, reckoned from their first day of
employment up to finality of this decision. Full backwages, on the other
hand, should be computed from the date of their dismissal until the
finality of this decision.[26]

WHEREFORE, the petition is DENIED. The July 30, 2004 Decision of the
Court of Appeals in CA-G.R. SP No. 77098, finding respondents to be
regular employees of petitioner and holding them to be illegally dismissed
and directing petitioner to pay full backwages, is AFFIRMED with the
MODIFICATION that petitioner is ordered to pay respondents their
separation pay instead of effecting their reinstatement.

SO ORDERED.

THIRD DIVISION

G.R. No. 155207 August 13, 2008

WILHELMINA S. OROZCO, petitioner,

vs.

THE FIFTH DIVISION OF THE HONORABLE COURT OF APPEALS, PHILIPPINE

DAILY INQUIRER, and LETICIA JIMENEZ MAGSANOC, respondents.

DECISION

NACHURA, J.:

The case before this Court raises a novel question never before decided in
our jurisdiction whether a newspaper columnist is an employee of the
newspaper which publishes the column.

In this Petition for Review under Rule 45 of the Revised Rules on Civil
Procedure, petitioner Wilhelmina S. Orozco assails the Decision1 of the
Court of Appeals (CA) in CA-G.R. SP No. 50970 dated June 11, 2002 and its
Resolution2 dated September 11, 2002 denying her Motion for
Reconsideration. The CA reversed and set aside the Decision3 of the
National Labor Relations Commission (NLRC), which in turn had affirmed
the Decision4 of the Labor Arbiter finding that Orozco was an employee of
private respondent Philippine Daily Inquirer (PDI) and was illegally
dismissed as columnist of said newspaper.

In March 1990, PDI engaged the services of petitioner to write a weekly

column for its Lifestyle section. She religiously submitted her articles
every week, except for a six-month stint in New York City when she,
nonetheless, sent several articles through mail. She received
compensation of P250.00 later increased to P300.00 for every column
published.5

On November 7, 1992, petitioners column appeared in the PDI for the last
time. Petitioner claims that her then editor, Ms. Lita T. Logarta,6 told her
that respondent Leticia Jimenez Magsanoc, PDI Editor in Chief, wanted to
stop publishing her column for no reason at all and advised petitioner to
talk to Magsanoc herself. Petitioner narrates that when she talked to
Magsanoc, the latter informed her that it was PDI Chairperson Eugenia
Apostol who had asked to stop publication of her column, but that in a
telephone conversation with Apostol, the latter said that Magsanoc
informed her (Apostol) that the Lifestyle section already had many
columnists.7

On the other hand, PDI claims that in June 1991, Magsanoc met with the
Lifestyle section editor to discuss how to improve said section. They
agreed to cut down the number of columnists by keeping only those
whose columns were well-written, with regular feedback and following. In
their judgment, petitioners column failed to improve, continued to be
superficially and poorly written, and failed to meet the high standards of
the newspaper. Hence, they decided to terminate petitioners column.8

Aggrieved by the newspapers action, petitioner filed a complaint for

illegal dismissal, backwages, moral and exemplary damages, and other
money claims before the NLRC.

On October 29, 1993, Labor Arbiter Arthur Amansec rendered a Decision in

favor of petitioner, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered, finding complainant to be an

employee of respondent company; ordering respondent company to
reinstate her to her former or equivalent position, with backwages.

Respondent company is also ordered to pay her 13th month pay and
service incentive leave pay.

Other claims are hereby dismissed for lack of merit.

SO ORDERED.9

The Labor Arbiter found that:

[R]espondent company exercised full and complete control over the means
and method by which complainants work that of a regular columnist
had to be accomplished. This control might not be found in an instruction,
verbal or oral, given to complainant defining the means and method she
should write her column. Rather, this control is manifested and certained
(sic) in respondents admitted prerogative to reject any article submitted
by complainant for publication.

By virtue of this power, complainant was helplessly constrained to adopt

her subjects and style of writing to suit the editorial taste of her editor.
Otherwise, off to the trash can went her articles.

Moreover, this control is already manifested in column title, "Feminist

Reflection" allotted complainant. Under this title, complainants writing
was controlled and limited to a womans perspective on matters of
feminine interests. That respondent had no control over the subject
matter written by complainant is strongly belied by this observation. Even
the length of complainants articles were set by respondents.

Inevitably, respondents would have no control over when or where

complainant wrote her articles as she was a columnist who could produce
an article in thirty (3) (sic) months or three (3) days, depending on her
mood or the amount of research required for an article but her actions
were controlled by her obligation to produce an article a week. If
complainant did not have to report for work eight (8) hours a day, six (6)
days a week, it is because her task was mainly mental. Lastly, the fact that
her articles were (sic) published weekly for three (3) years show that she
was respondents regular employee, not a once-in-a-blue-moon
contributor who was not under any pressure or obligation to produce
regular articles and who wrote at his own whim and leisure.10

PDI appealed the Decision to the NLRC. In a Decision dated August 23,
1994, the NLRC Second Division dismissed the appeal thereby affirming
the Labor Arbiters Decision. The NLRC initially noted that PDI failed to
perfect its appeal, under Article 223 of the Labor Code, due to non-filing of
a cash or surety bond. The NLRC said that the reason proffered by PDI for
not filing the bond that it was difficult or impossible to determine the
amount of the bond since the Labor Arbiter did not specify the amount of
the judgment award was not persuasive. It said that all PDI had to do
was compute based on the amount it was paying petitioner, counting the
number of weeks from November 7, 1992 up to promulgation of the Labor
Arbiters decision.11

The NLRC also resolved the appeal on its merits. It found no error in the
Labor Arbiters findings of fact and law. It sustained the Labor Arbiters
reasoning that respondent PDI exercised control over petitioners work.

PDI then filed a Petition for Review12 before this Court seeking the
reversal of the NLRC Decision. However, in a Resolution13 dated December
2, 1998, this Court referred the case to the Court of Appeals, pursuant to
our ruling in St. Martin Funeral Homes v. National Labor Relations
Commission.14

The CA rendered its assailed Decision on June 11, 2002. It set aside the
NLRC Decision and dismissed petitioners Complaint. It held that the NLRC
misappreciated the facts and rendered a ruling wanting in substantial
evidence. The CA said:

The Court does not agree with public respondent NLRCs conclusion. First,
private respondent admitted that she was and [had] never been
considered by petitioner PDI as its employee. Second, it is not disputed
that private respondent had no employment contract with petitioner PDI.
In fact, her engagement to contribute articles for publication was based
on a verbal agreement between her and the petitioners Lifestyle Section
Editor. Moreover, it was evident that private respondent was not required
to report to the office eight (8) hours a day. Further, it is not disputed that
she stayed in New York for six (6) months without petitioners permission
as to her leave of absence nor was she given any disciplinary action for
the same. These undisputed facts negate private respondents claim that
she is an employee of petitioner.

Moreover, with regards (sic) to the control test, the public respondent
NLRCs ruling that the guidelines given by petitioner PDI for private
respondent to follow, e.g. in terms of space allocation and length of
article, is not the form of control envisioned by the guidelines set by the
Supreme Court. The length of the article is obviously limited so that all the
articles to be featured in the paper can be accommodated. As to the topic
of the article to be published, it is but logical that private respondent
should not write morbid topics such as death because she is contributing
to the lifestyle section. Other than said given limitations, if the same could
be considered limitations, the topics of the articles submitted by private
respondent were all her choices. Thus, the petitioner PDI in deciding to
publish private respondents articles only controls the result of the work
and not the means by which said articles were written.

As such, the above facts failed to measure up to the control test necessary
for an employer-employee relationship to exist.15

Petitioners Motion for Reconsideration was denied in a Resolution dated

September 11, 2002. She then filed the present Petition for Review.

In a Resolution dated April 29, 2005, the Court, without giving due course
to the petition, ordered the Labor Arbiter to clarify the amount of the
award due petitioner and, thereafter, ordered PDI to post the requisite
bond. Upon compliance therewith, the petition would be given due course.
Labor Arbiter Amansec clarified that the award under the Decision
amounted to P15,350.00. Thus, PDI posted the requisite bond on January
25, 2007.16

We shall initially dispose of the procedural issue raised in the Petition.

Petitioner argues that the CA erred in not dismissing outright PDIs

Petition for Certiorari for PDIs failure to post a cash or surety bond in
violation of Article 223 of the Labor Code.

This issue was settled by this Court in its Resolution dated April 29,
2005.17 There, the Court held:
But while the posting of a cash or surety bond is jurisdictional and is a
condition sine qua non to the perfection of an appeal, there is a plethora
of jurisprudence recognizing exceptional instances wherein the Court
relaxed the bond requirement as a condition for posting the appeal.

xxxx

In the case of Taberrah v. NLRC, the Court made note of the fact that the
assailed decision of the Labor Arbiter concerned did not contain a
computation of the monetary award due the employees, a circumstance
which is likewise present in this case. In said case, the Court stated,

As a rule, compliance with the requirements for the perfection of an

appeal within the reglamentary (sic) period is mandatory and
jurisdictional. However, in National Federation of Labor Unions v. Ladrido
as well as in several other cases, this Court relaxed the requirement of the
posting of an appeal bond within the reglementary period as a condition
for perfecting the appeal. This is in line with the principle that substantial
justice is better served by allowing the appeal to be resolved on the
merits rather than dismissing it based on a technicality.

The judgment of the Labor Arbiter in this case merely stated that
petitioner was entitled to backwages, 13th month pay and service
incentive leave pay without however including a computation of the
alleged amounts.

xxxx

In the case of NFLU v. Ladrido III, this Court postulated that "private
respondents cannot be expected to post such appeal bond equivalent to
the amount of the monetary award when the amount thereof was not
included in the decision of the labor arbiter." The computation of the
amount awarded to petitioner not having been clearly stated in the
decision of the labor arbiter, private respondents had no basis for
determining the amount of the bond to be posted.
Thus, while the requirements for perfecting an appeal must be strictly
followed as they are considered indispensable interdictions against
needless delays and for orderly discharge of judicial business, the law
does admit of exceptions when warranted by the circumstances.
Technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties. But while
this Court may relax the observance of reglementary periods and technical
rules to achieve substantial justice, it is not prepared to give due course
to this petition and make a pronouncement on the weighty issue obtaining
in this case until the law has been duly complied with and the requisite
appeal bond duly paid by private respondents.18

Records show that PDI has complied with the Courts directive for the
posting of the bond;19 thus, that issue has been laid to rest.

We now proceed to rule on the merits of this case.

The main issue we must resolve is whether petitioner is an employee of

PDI, and if the answer be in the affirmative, whether she was illegally
dismissed.

We rule for the respondents.

The existence of an employer-employee relationship is essentially a

question of fact.20 Factual findings of quasi-judicial agencies like the
NLRC are generally accorded respect and finality if supported by
substantial evidence.21

Considering, however, that the CAs findings are in direct conflict with
those of the Labor Arbiter and NLRC, this Court must now make its own
examination and evaluation of the facts of this case.
It is true that petitioner herself admitted that she "was not, and [had]
never been considered respondents employee because the terms of works
were arbitrarily decided upon by the respondent."22 However, the
employment status of a person is defined and prescribed by law and not
by what the parties say it should be.23

This Court has constantly adhered to the "four-fold test" to determine

whether there exists an employer-employee relationship between
parties.24 The four elements of an employment relationship are: (a) the
selection and engagement of the employee; (b) the payment of wages; (c)
the power of dismissal; and (d) the employers power to control the
employees conduct.25

Of these four elements, it is the power of control which is the most

crucial26 and most determinative factor,27 so important, in fact, that the
other elements may even be disregarded.28 As this Court has previously
held:

the significant factor in determining the relationship of the parties is the

presence or absence of supervisory authority to control the method and
the details of performance of the service being rendered, and the degree
to which the principal may intervene to exercise such control.29

In other words, the test is whether the employer controls or has reserved
the right to control the employee, not only as to the work done, but also
as to the means and methods by which the same is accomplished.30

Petitioner argues that several factors exist to prove that respondents

exercised control over her and her work, namely:

a. As to the Contents of her Column The PETITIONER had to insure that

the contents of her column hewed closely to the objectives of its Lifestyle
Section and the over-all principles that the newspaper projects itself to
stand for. As admitted, she wanted to write about death in relation to All
Souls Day but was advised not to.
b. As to Time Control The PETITIONER, as a columnist, had to observe the
deadlines of the newspaper for her articles to be published. These
deadlines were usually that time period when the Section Editor has to
"close the pages" of the Lifestyle Section where the column in located. "To
close the pages" means to prepare them for printing and publication.

As a columnist, the PETITIONERs writings had a definite day on which it

was going to appear. So she submitted her articles two days before the
designated day on which the column would come out.

This is the usual routine of newspaper work. Deadlines are set to fulfill the
newspapers obligations to the readers with regard to timeliness and
freshness of ideas.

c. As to Control of Space The PETITIONER was told to submit only two or

three pages of article for the column, (sic) "Feminist Reflections" per
week. To go beyond that, the Lifestyle editor would already chop off the
article and publish the rest for the next week. This shows that PRIVATE
RESPONDENTS had control over the space that the PETITIONER was
assigned to fill.

d. As to Discipline Over time, the newspaper readers eyes are trained or

habituated to look for and read the works of their favorite regular writers
and columnists. They are conditioned, based on their daily purchase of the
newspaper, to look for specific spaces in the newspapers for their favorite
write-ups/or opinions on matters relevant and significant issues aside
from not being late or amiss in the responsibility of timely submission of
their articles.

The PETITIONER was disciplined to submit her articles on highly relevant

and significant issues on time by the PRIVATE RESPONDENTS who have a
say on whether the topics belong to those considered as highly relevant
and significant, through the Lifestyle Section Editor. The PETITIONER had
to discuss the topics first and submit the articles two days before
publication date to keep her column in the newspaper space regularly as
expected or without miss by its readers.31

Given this discussion by petitioner, we then ask the question: Is this the
form of control that our labor laws contemplate such as to establish an
employer-employee relationship between petitioner and respondent PDI?

It is not.

Petitioner has misconstrued the "control test," as did the Labor Arbiter
and the NLRC.

Not all rules imposed by the hiring party on the hired party indicate that
the latter is an employee of the former. Rules which serve as general
guidelines towards the achievement of the mutually desired result are not
indicative of the power of control.32 Thus, this Court has explained:

It should, however, be obvious that not every form of control that the
hiring party reserves to himself over the conduct of the party hired in
relation to the services rendered may be accorded the effect of
establishing an employer-employee relationship between them in the legal
or technical sense of the term. A line must be drawn somewhere, if the
recognized distinction between an employee and an individual contractor
is not to vanish altogether. Realistically, it would be a rare contract of
service that gives untrammelled freedom to the party hired and eschews
any intervention whatsoever in his performance of the engagement.

Logically, the line should be drawn between rules that merely serve as
guidelines towards the achievement of the mutually desired result without
dictating the means or methods to be employed in attaining it, and those
that control or fix the methodology and bind or restrict the party hired to
the use of such means. The first, which aim only to promote the result,
create no employer-employee relationship unlike the second, which
address both the result and the means used to achieve it. x x x.33
The main determinant therefore is whether the rules set by the employer
are meant to control not just the results of the work but also the means
and method to be used by the hired party in order to achieve such results.
Thus, in this case, we are to examine the factors enumerated by petitioner
to see if these are merely guidelines or if they indeed fulfill the
requirements of the control test.

Petitioner believes that respondents acts are meant to control how she
executes her work. We do not agree. A careful examination reveals that
the factors enumerated by the petitioner are inherent conditions in
running a newspaper. In other words, the so-called control as to time,
space, and discipline are dictated by the very nature of the newspaper
business itself.

We agree with the observations of the Office of the Solicitor General that:

The Inquirer is the publisher of a newspaper of general circulation which is

widely read throughout the country. As such, public interest dictates that
every article appearing in the newspaper should subscribe to the
standards set by the Inquirer, with its thousands of readers in mind. It is
not, therefore, unusual for the Inquirer to control what would be published
in the newspaper. What is important is the fact that such control pertains
only to the end result, i.e., the submitted articles. The Inquirer has no
control over [petitioner] as to the means or method used by her in the
preparation of her articles. The articles are done by [petitioner] herself
without any intervention from the Inquirer.34

Petitioner has not shown that PDI, acting through its editors, dictated how
she was to write or produce her articles each week. Aside from the
constraints presented by the space allocation of her column, there were
no restraints on her creativity; petitioner was free to write her column in
the manner and style she was accustomed to and to use whatever
research method she deemed suitable for her purpose. The apparent
limitation that she had to write only on subjects that befitted the Lifestyle
section did not translate to control, but was simply a logical consequence
of the fact that her column appeared in that section and therefore had to
cater to the preference of the readers of that section.
The perceived constraint on petitioners column was dictated by her own
choice of her columns perspective. The column title "Feminist Reflections"
was of her own choosing, as she herself admitted, since she had been
known as a feminist writer.35 Thus, respondent PDI, as well as her
readers, could reasonably expect her columns to speak from such
perspective.

Contrary to petitioners protestations, it does not appear that there was

any actual restraint or limitation on the subject matter within the
Lifestyle section that she could write about. Respondent PDI did not
dictate how she wrote or what she wrote in her column. Neither did PDIs
guidelines dictate the kind of research, time, and effort she put into each
column. In fact, petitioner herself said that she received "no comments on
her articlesexcept for her to shorten them to fit into the box allotted to
her column." Therefore, the control that PDI exercised over petitioner was
only as to the finished product of her efforts, i.e., the column itself, by way
of either shortening or outright rejection of the column.

The newspapers power to approve or reject publication of any specific

article she wrote for her column cannot be the control contemplated in the
"control test," as it is but logical that one who commissions another to do
a piece of work should have the right to accept or reject the product. The
important factor to consider in the "control test" is still the element of
control over how the work itself is done, not just the end result thereof.

In contrast, a regular reporter is not as independent in doing his or her

work for the newspaper. We note the common practice in the newspaper
business of assigning its regular reporters to cover specific subjects,
geographical locations, government agencies, or areas of concern, more
commonly referred to as "beats." A reporter must produce stories within
his or her particular beat and cannot switch to another beat without
permission from the editor. In most newspapers also, a reporter must
inform the editor about the story that he or she is working on for the day.
The story or article must also be submitted to the editor at a specified
time. Moreover, the editor can easily pull out a reporter from one beat and
ask him or her to cover another beat, if the need arises.
This is not the case for petitioner. Although petitioner had a weekly
deadline to meet, she was not precluded from submitting her column
ahead of time or from submitting columns to be published at a later time.
More importantly, respondents did not dictate upon petitioner the subject
matter of her columns, but only imposed the general guideline that the
article should conform to the standards of the newspaper and the general
tone of the particular section.

Where a person who works for another performs his job more or less at his
own pleasure, in the manner he sees fit, not subject to definite hours or
conditions of work, and is compensated according to the result of his
efforts and not the amount thereof, no employer-employee relationship
exists.36

Aside from the control test, this Court has also used the economic reality
test. The economic realities prevailing within the activity or between the
parties are examined, taking into consideration the totality of
circumstances surrounding the true nature of the relationship between
the parties.37 This is especially appropriate when, as in this case, there is
no written agreement or contract on which to base the relationship. In our
jurisdiction, the benchmark of economic reality in analyzing possible
employment relationships for purposes of applying the Labor Code ought
to be the economic dependence of the worker on his employer.38

Petitioners main occupation is not as a columnist for respondent but as a

womens rights advocate working in various womens organizations.39
Likewise, she herself admits that she also contributes articles to other
publications.40 Thus, it cannot be said that petitioner was dependent on
respondent PDI for her continued employment in respondents line of
business.41

The inevitable conclusion is that petitioner was not respondent PDIs

employee but an independent contractor, engaged to do independent
work.

There is no inflexible rule to determine if a person is an employee or an

independent contractor; thus, the characterization of the relationship
must be made based on the particular circumstances of each case.42
There are several factors43 that may be considered by the courts, but as
we already said, the right to control is the dominant factor in determining
whether one is an employee or an independent contractor.44

In our jurisdiction, the Court has held that an independent contractor is

one who carries on a distinct and independent business and undertakes to
perform the job, work, or service on ones own account and under ones
own responsibility according to ones own manner and method, free from
the control and direction of the principal in all matters connected with the
performance of the work except as to the results thereof.45

On this point, Sonza v. ABS-CBN Broadcasting Corporation46 is

enlightening. In that case, the Court found, using the four-fold test, that
petitioner, Jose Y. Sonza, was not an employee of ABS-CBN, but an
independent contractor. Sonza was hired by ABS-CBN due to his "unique
skills, talent and celebrity status not possessed by ordinary employees," a
circumstance that, the Court said, was indicative, though not conclusive,
of an independent contractual relationship. Independent contractors often
present themselves to possess unique skills, expertise or talent to
distinguish them from ordinary employees.47 The Court also found that,
as to payment of wages, Sonzas talent fees were the result of
negotiations between him and ABS-CBN.48 As to the power of dismissal,
the Court found that the terms of Sonzas engagement were dictated by
the contract he entered into with ABS-CBN, and the same contract
provided that either party may terminate the contract in case of breach by
the other of the terms thereof.49 However, the Court held that the
foregoing are not determinative of an employer-employee relationship.
Instead, it is still the power of control that is most important.

On the power of control, the Court found that in performing his work,
Sonza only needed his skills and talent how he delivered his lines,
appeared on television, and sounded on radio were outside ABS-CBNs
control.50 Thus:

We find that ABS-CBN was not involved in the actual performance that
produced the finished product of SONZAs work. ABS-CBN did not instruct
SONZA how to perform his job. ABS-CBN merely reserved the right to
modify the program format and airtime schedule "for more effective
programming." ABS-CBNs sole concern was the quality of the shows and
their standing in the ratings. Clearly, ABS-CBN did not exercise control
over the means and methods of performance of SONZAs work.

SONZA claims that ABS-CBNs power not to broadcast his shows proves
ABS-CBNs power over the means and methods of the performance of his
work. Although ABS-CBN did have the option not to broadcast SONZAs
show, ABS-CBN was still obligated to pay SONZAs talent fees... Thus, even
if ABS-CBN was completely dissatisfied with the means and methods of
SONZAs performance of his work, or even with the quality or product of
his work, ABS-CBN could not dismiss or even discipline SONZA. All that
ABS-CBN could do is not to broadcast SONZAs show but ABS-CBN must
still pay his talent fees in full.

Clearly, ABS-CBNs right not to broadcast SONZAs show, burdened as it

was by the obligation to continue paying in full SONZAs talent fees, did
not amount to control over the means and methods of the performance of
SONZAs work. ABS-CBN could not terminate or discipline SONZA even if
the means and methods of performance of his work - how he delivered his
lines and appeared on television - did not meet ABS-CBNs approval. This
proves that ABS-CBNs control was limited only to the result of SONZAs
work, whether to broadcast the final product or not. In either case, ABS-
CBN must still pay SONZAs talent fees in full until the expiry of the
Agreement.

In Vaughan, et al. v. Warner, et al., the United States Circuit Court of

Appeals ruled that vaudeville performers were independent contractors
although the management reserved the right to delete objectionable
features in their shows. Since the management did not have control over
the manner of performance of the skills of the artists, it could only control
the result of the work by deleting objectionable features.

SONZA further contends that ABS-CBN exercised control over his work by
supplying all equipment and crew. No doubt, ABS-CBN supplied the
equipment, crew and airtime needed to broadcast the "Mel & Jay"
programs. However, the equipment, crew and airtime are not the "tools
and instrumentalities" SONZA needed to perform his job. What SONZA
principally needed were his talent or skills and the costumes necessary for
his appearance. Even though ABS-CBN provided SONZA with the place of
work and the necessary equipment, SONZA was still an independent
contractor since ABS-CBN did not supervise and control his work. ABS-
CBNs sole concern was for SONZA to display his talent during the airing of
the programs.

A radio broadcast specialist who works under minimal supervision is an

independent contractor. SONZAs work as television and radio program
host required special skills and talent, which SONZA admittedly possesses.
The records do not show that ABS-CBN exercised any supervision and
control over how SONZA utilized his skills and talent in his shows.51

The instant case presents a parallel to Sonza. Petitioner was engaged as a

columnist for her talent, skill, experience, and her unique viewpoint as a
feminist advocate. How she utilized all these in writing her column was
not subject to dictation by respondent. As in Sonza, respondent PDI was
not involved in the actual performance that produced the finished product.
It only reserved the right to shorten petitioners articles based on the
newspapers capacity to accommodate the same. This fact, we note, was
not unique to petitioners column. It is a reality in the newspaper business
that space constraints often dictate the length of articles and columns,
even those that regularly appear therein.

Furthermore, respondent PDI did not supply petitioner with the tools and
instrumentalities she needed to perform her work. Petitioner only needed
her talent and skill to come up with a column every week. As such, she
had all the tools she needed to perform her work.

Considering that respondent PDI was not petitioners employer, it cannot

be held guilty of illegal dismissal.

WHEREFORE, the foregoing premises considered, the Petition is

DISMISSED. The Decision and Resolution of the Court of Appeals in CA-G.R.
SP No. 50970 are hereby AFFIRMED.
SO ORDERED.