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Katrina Isabel L.

Lopez
2013-78121

SLR Topic Proposal

1. Operative Fact Doctrine – unconstitutional

In the Development Acceleration Program case, the Supreme Court held that The doctrine of operative
fact recognizes the existence of the law or executive act prior to the declaration of its unconstitutionality
as an operative fact that produced effects that cannot always be erased, ignored or disregarded. In short, it
nullifies the void law or executive act but sustains its effects. It provides an exception to the general rule
that a void or unconstitutional law produces no effect.

This is the exception to the general rule that a law declared by the Supreme Court as unconstitutional is
void. What the doctrine implies is that a law remains to be operative and constitutional until the same has
been declared void. Thus, the law that has been declared as unconstitutional remains to be operative prior
to the declaration of the Supreme Court on its unconstitutionality.

The doctrine does not stem from any statute but is based on fair play and equity. It operates when the
declaration of a law's unconstitutionality will result in undue burden to those who rely on the law that is
presumed to be legal and constitutional until declared otherwise.

It must be noted, however, that the doctrine of operative fact does not make an unconstitutional law valid
and constitutional. It merely erases the effects of its unconstitutionality before it is judicially declared as
void.

2. The Encompassing Nature of the Employer-Employee Relationship


Entertainment Law - Artist Contracts > Sonza v. ABS-CBN + GMA Employer Employee
Relationship

For the first time, the Supreme Court has determined the nature of the relationship between a broadcasting
network and its radio and television personalities. Applying the so-called 'control' test in the landmark
case, the court ruled that as a network does not control the means and method by which a personality
renders his or her contracted services, the personality is an independent contractor rather than a network
employee (Jose Sonza v ABS-CBN Broadcasting Corporation (431 SCRA 583)). The ruling is a welcome
precedent for broadcasting networks, which are no longer stifled by the stringent constitutional rights of
employees when dealing with radio and television personalities.
Facts
The parties to the case were Jose 'Jay' Sonza, a well-known radio and television personality, and ABS-
CBN Broadcasting Corporation, one of the country's biggest radio and television networks.
Sonza and the network entered into a three-year agreement whereby Sonza undertook to (i) co-host
the Mel and Jay radio programme between 8:00am and 10:00am, Mondays to Fridays, and (ii) co-host
the Mel and Jay television programme between 5:30pm and 7:00pm on Sundays.
In turn, the network agreed to pay Sonza a significant monthly fee and other financial benefits. Sonza
rescinded the agreement in writing shortly before the start of its third year and proceeded to sue the
network in the Labour Court for alleged non-payment of accrued benefits.
The network moved for dismissal on the basis that the Labour Court had no jurisdiction over the case,
given that there was no employer-employee relationship between the parties. Since the Labour Court has
jurisdiction over employer-employee relationships, the principal issue became whether Sonza was an
employee of the network. The Labour Court ruled that Sonza was not an employee. The network hired
him on account of his unique skills and talent as a radio broadcaster and television host. As such, he was
"free to perform the services he undertook to provide, in accordance with his own style". The control test
was applied, according to which if the hiring party exercises no supervision or control over the means and
method by which the hired party provides his or her contracted services, the latter is deemed to be an
independent contractor and not an employee. Accordingly, Sonza's complaint was dismissed for lack of
jurisdiction due to the absence of an employer-employee relationship between the parties.
Sonza appealed to the appellate Labour Commission, the Court of Appeals and the Supreme Court, all of
which rejected his claims. During these appeals, Sonza conceded the applicability of the control test, but
argued that the network had exercised control over the means and method of his work. In his petition
before the Supreme Court, Sonza cited the following circumstances as indicators of this control:

 The network had discretion not to broadcast Sonza's television and radio shows (although in the event
of doing so, it was still liable to pay his fees);

 The agreement stipulated that Sonza should abide with the Television and Radio Code of Ethics of
the Association of Broadcasters of the Philippines; and

 Sonza was tied exclusively to the network for the duration of the agreement.

Judgment
The Supreme Court ruled that these circumstances did not establish control by the network over the
means and method through which Sonza performed his work, since:

 the network's discretion as to whether to broadcast his radio and television programmes involved
control over the result of his work, not over the means and method thereof;

 Sonza's undertaking to adhere to the ethical standards set by the Association of Broadcasters of the
Philippines did not constitute any control by the network over the means and method by which he
performed his work; and

 the exclusivity clause in the agreement was inconsequential as it did not vest the network with any
control over the means and method by which Sonza provided his services.

The Supreme Court added that the following facts had been clearly established:

 The network was not involved in the performance that constituted the finished product of Sonza's
work;

 The network did not instruct Sonza as to how to carry out his job;
 The network did not supervise and control Sonza's work (rather, it was interested only in providing a
platform for his talent during the airing of the programmes in question); and

 The network's sole concern was the overall quality of the shows and their standing in the ratings.

In light of these facts, the Supreme Court affirmed that Sonza was an independent contractor and not an
employee, commenting as follows:
"Even though the network provided Sonza with a place of work and necessary equipment, he was still an
independent contractor since the network did not supervise and control his work. The network's sole
concern was that Sonza showed off his talents during the airing of the programmes.
A radio broadcast specialist who works under minimal supervision is an independent contractor. Sonza's
work as a radio and television host required special skills and talent, which he admittedly possesses. The
records do not show that the network exercised any supervision and control over how he utilized his skills
and talent in his shows."
Comment
The ruling greatly benefits domestic radio and television networks. Employees in the Philippines enjoy
security of tenure and, as such, their employment cannot be terminated without just cause as provided
under the Labour Code. Mediocrity is no such cause. Thus, if a radio or television personality is
considered to be an employee, the networks cannot simply replace him or her because of poor ratings.
This would stifle a network's ability not only to keep up with its competitors, but also to maintain public
interest in its programmes. Accordingly, the decision to classify radio and television personalities as
independent contractors and not employees provides the networks with a capacity to hire and replace
personalities on a purely contractual basis, thereby enabling them to be flexible and adaptable to the ever-
changing demands of the media and its public.

For further information on this topic please contact Ernesto Caluya at JGLaw (Jimenez Gonzales
Liwanag Bello Valdez Caluya & Fernandez) by telephone (+63 2 815 9071) or by fax (+63 2 817 3251)
or by email (etcaluya@jglawph.com).

CA junks GMA-7's P100-M damage suit vs ABS-CBN

By Edu Punay | Updated August 31, 2011 - 12:00am

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MANILA, Philippines - The Court of Appeals (CA) has dismissed a P100-million damage suit filed by
GMA Network Inc. against its rival network, ABS-CBN Broadcasting Corp., over a fight involving
footage taken of hostage victim Angelo de la Cruz’s arrival in the country in 2004.

In a seven-page decision released Thursday, the CA’s sixth division nullified the orders of a Quezon City
regional trial court in December 2007 and July 2008 that reinstated GMA’s civil case against ABS-CBN.

The CA held that Judge Ofelia Marquez violated provision of the Rules of Court when she reinstated the
case pending a ruling on the criminal complaint for libel from which the damage suit arose.
“Despite the availability of the separate civil action for damages to the private respondents, however, they
cannot file the same in view of the pendency of their criminal complaint. There should be nothing to
suspend since the criminal action was filed ahead of the separate civil action,” stated the ruling penned by
Associate Justice Florito Macalino. Associate Justices Juan Enriquez Jr. and Ramon Bato Jr. concurred in
the ruling.

ABS-CBN broadcasted live De la Cruz’s arrival at the Ninoy Aquino International Airport (NAIA) on
July 22, 2004 and the subsequent press conference on his ordeal in Iraq. Reuters Television Service
carried ABS-CBN’s coverage, based on an existing agreement, on the condition that any footage of De la
Cruz’s arrival would be considered by Reuters under “embargo” against its use by other subscribers in the
country.

However, being a subscriber of both Reuters and CNN, GMA received the live video feed of De la Cruz’s
arrival. GMA carried the Reuters feed in its flash news report simultaneously with its own live broadcast.

Nation ( Article MRec ), pagematch: 1, sectionmatch: 1

ABS-CBN aired a report of GMA’s alleged violation of its intellectual property rights, prompting GMA
to charge ABS-CBN and its executives with libel. The complaint was dismissed by the Quezon City
prosecutor’s office in 2004 for lack of probable cause.

GMA appealed the resolution before the Department of Justice, but was denied. The network’s motion for
reconsideration is still pending before the DOJ.

In November 2005, GMA filed a complaint for damages with the Quezon City RTC, which the court
dismissed because a civil case for defamation must be filed within one year. Acting on GMA’s motion for
reconsideration, the court reinstated the civil case for damages but suspended proceedings until the libel
case is resolved.

Last year, the CA said GMA’s owners and top executives did not violate the intellectual property law
since GMA’s act of airing the five-second footage was in good faith since there was no intention to cause
injury to its rival network.

3. IPL - Copy right infringement, good faith defense, ABS-CBN v. GMA

Good faith, lack of knowledge of the copyright, or lack of intent to infringe is not a defense against
copyright infringement. Copyright, however, is subject to the rules of fair. use and will be judged on a
case-to-case basis. Finding probable cause includes a determination of the defendant's active
participation, particularly when the corporate veil is pierced in cases involving a corporation's
criminal liability.