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On this point, we are in agreement that petitioner’s Respondent Coca-Cola Bottlers Phils., Inc. is
application for leave should have been approved by hereby ORDERED:
the company. His absence was due to a fortuitous
event outside of petitioner’s control. (1) to immediately reinstate petitioner Navarro to
his former position without loss of seniority rights
In our view, petitioner had no wrongful, perverse or and other privileges;
even negligent attitude, intended to defy the order
of his employer when he absented himself. He did
(2) to pay his full backwages, inclusive of docketed as NLRC-NCR Case No. 00-07-05252-
allowances, and his other benefits or their monetary 95.
equivalent computed from the time he was illegally
dismissed up to the time of his actual Respondent narrated that he began working for
reinstatement; and Mohd Al Motairi,3 the President and General
Manager of the Al Waha Workshop, on January 8,
(3) to pay petitioner Navarro attorney’s fees 1995. Along with his Filipino co-workers, he was
equivalent to 10% of his total monetary award. subjected to inhuman and unbearable working
conditions, to wit:
Costs against respondents.
1. [He] was required to work from 7:00
SO ORDERED. o’clock in the morning to 10:00 o’clock in the
evening everyday, except Friday, or six (6)
hours overtime work daily from the usual
eight (8) working hours per day.
This is a petition for review on certiorari under Rule 4. [S]ome of complainant’s letters that were
45 of the Rules of Court assailing the Decision1 of sent by his family were not given by
the Court of Appeals (CA) in CA-G.R. SP No. respondent Muthiri and/or his staff x x x.4
64744, as well as the Resolution2 dated February
20, 2004 denying the motion for reconsideration
When respondent asked Motairi for his salary, he
thereof.
was told that since a huge sum had been paid to
the agency for his recruitment and deployment, he
The antecedent facts are as follows: would only be paid after the said amount had
already been recovered. He was also told that his
On November 7, 1994, respondent Romil V. salary was only 800 Saudi Riyals (SAR) per month,
Cuambot applied for deployment to Saudi Arabia as in contrast to the SAR1200 that was promised him
a car body builder with petitioner G & M Philippines, under the contract. Motairi warned that he would be
Inc., a duly licensed placement and recruitment sent home the next time he demanded for his
agency. Respondent’s application was duly salary. Due to his family’s incessant letters asking
processed and he later signed a two-year for financial support, however, respondent
employment contract to work at the Al Waha mustered the courage to again demand for his
Workshop in Unaizah City, Gassim, Kingdom of salaries during the second week of July 1996. True
Saudi Arabia. He left the country on January 5, to his word, Motairi ordered him to pack up and
1995. However, respondent did not finish his leave. He was able to purchase his plane ticket
contract and returned to the Philippines barely six only through the contributions of his fellow Filipinos.
months later, on July 24, 1995. On July 26, 1995, Motairi even accompanied him to the airport when
he filed before the National Labor Relations he bought his plane ticket. In the meantime, his
Commission (NLRC) a complaint for unpaid wages, wife had been making inquiries about him.
withheld salaries, refund of plane ticket and
repatriation bond, later amended to include illegal To corroborate his claims, respondent submitted
dismissal, claim for the unexpired portion of his the following documents: an undated letter5 he had
employment contract, actual, exemplary and moral written addressed to the Philippine Labor Attaché in
damages, and attorney’s fees. The complaint was Riyadh, with Arabic translation;6 his wife’s
letter7 dated June 28, 1995 addressed to the amounts of ₱49,000.00 and ₱20,000.00,
"Gulangco Monteverde Agency, Manila Head respectively, including interests, until the
Office," asking for a "favor to help [her] husband to same will be fully paid;
come home as early as possible;" a fax
message8 dated July 17, 1995 from a (4) Ordering the respondents to pay, jointly
representative of the Land Bank of the Philippines and severally, complainant moral damages
(LBP) to a counterpart in Riyadh, asking for in the amount of ₱150,000.00 and
assistance to locate respondent;9 and the exemplary damages in the amount of
reply10 from the Riyadh LBP representative ₱150,000.00, including interests, until the
requesting for contact numbers to facilitate same will be fully paid;
communication with respondent.1âwphi1
(5) Ordering the respondents to pay, jointly
Respondent further claimed that his employer’s and severally, complainant for and as
actuations violated Articles 83 and 103 of the Labor attorney’s fees in the amount of ₱68,172.48
Code. While he was entitled to terminate his or the amount equivalent to 10% of the total
employment in accordance with Article 285 (b) due amount of the foregoing claims and
to the treatment he received, he did not exercise damages that may be awarded by the
this right. He was nevertheless illegally dismissed Honorable Office to the complainant.11
by his employer when he tried to collect the salaries
due him. Respondent further claimed that the In its position paper, petitioner alleged that
reduction of his monthly salary from SAR1,200 to respondent was deployed "for overseas work as car
SAR800 and petitioner’s failure to furnish him a body builder for its Principal Golden Wings Est. for
copy of the employment contract before his General Services and Recruitment in Saudi Arabia
departure amounted to prohibited practices under for an employment period of 24 months, with a
Article 34 (i) and (k) of the Labor Code. monthly salary of US$400.00."12 It insisted that
respondent was religiously paid his salaries as they
Respondent prayed for the following relief: fell due. After working for a little over seven
months, respondent pleaded with his employer to
WHEREFORE, premises considered, complainant be allowed to return home since there were family
most respectfully prays unto this Honorable Office problems he had to settle personally. Respondent
that the instant complaint be given due course and even submitted a resignation letter13 dated July 23,
that a decision be rendered in his favor and against 1995.
respondents G & M (Phils.), Inc., Alwaha (sic)
Workshop and/or Muhamd (sic) Muthiri, as follows: To support its claim that respondent had been paid
his salaries as they fell due, petitioner submitted in
(1) Ordering the respondents to pay, jointly evidence copies of seven payslip14 authenticated
and severally, complainant the unpaid by the Philippine Labor Attaché in Riyadh, Saudi
salaries and overtime pay in the amounts of Arabia. Petitioner asserted that since respondent
₱61,560.00 and ₱66,484.80, respectively, only worked for a little over seven months and did
including interests, until the same will be not finish his contract, he should pay the cost of the
fully paid; plane ticket. It pointed out that according to the
standard employment contract, the employer would
(2) Ordering the respondents to pay, jointly provide the employee with a free plane ticket for the
and severally, complainant[’s] salary for the flight home only if the worker finishes his contract.
unexpired portion of the contract in the
amount of ₱184,680.00, including interests, Respondent countered that his signatures in the
until the same will be fully paid; purported payslips were forged. He denied having
received his salaries for the said period, except
(3) Ordering the respondents to pay, jointly only for the SAR100 as monthly allowance. He
and severally, complainant[’s] actual pointed out that the authentication of the alleged
expenses which he incurred in applying for pay slips and resignation letter before the labor
the job, including expenses in leaving for attaché in Riyadh is immaterial, since the
the job, including expenses in leaving for documents themselves were falsified.
Saudi Arabia and plane ticket, as well as
repatriation bond and incidental expenses in Respondent further claimed that petitioner required
going home to the Philippines in the him to pay a ₱10,000.00 placement fee and that he
had to borrow ₱2,000.00 from a relative. He was handwriting. Under the circumstances, the only
then told that the amount would be considered as logical conclusion is that both the payslips and the
an advance payment and that the balance would be handwritten letter-resignation were prepared and
deducted from his salary. He was not, however, signed by one and the same person definitely not
given any receipt. He insisted that the employment the complainant.
contract which he signed indicated that he was
supposed to receive a monthly salary of SAR1,200 With the foregoing findings and conclusions, this
for working eight hours a day, excluding overtime Arbitration Branch is of the well-considered view
pay. He was repeatedly promised to be furnished a that complainant was not paid his salaries from
copy of the contract and was later told that it would January 5, 1995 up to July 23, 1995 and that he
be given to his wife, Minda. However, she was also was unjustifiably dismissed from his employment
given the run-around and was told that the contract when he repeatedly demanded for his unpaid
had already been given to her husband. salaries. Respondents are, therefore, liable to pay
the complainant his salaries from January 5, 1995
To counter the allegation of forgery, petitioner up to July 23, 1995 which amount to US$2,640.00
claimed that there was a great possibility that (US$400 x 6.6 mos). Further, respondents are also
respondent had changed his signature while liable to the complainant for the latter’s salaries for
abroad so that he could file a complaint for illegal the unexpired portion of his contract up to the
dismissal upon his return. The argument that the maximum of three (3) months pursuant to Section
stroke and handwriting on the payslip was written 10 of RA 8042, which amount to US$1,200.00.
by one and the same person is mere conjecture, as Respondents must also refund complainant’s plane
respondent could have requested someone, i.e., fare for his return flight. And finally, being
the cashier, to prepare the resignation letter for compelled to litigate his claims, it is but just and x x
him. While it is the employer who fills up the pay x that complainant must be awarded attorney’s fees
slip, respondent could have asked another at the rate of ten percent (10%) of the judgment
employee to prepare the resignation letter, award.
particularly if he (respondent) did not know how to
phrase it himself. Moreover, it could not be WHEREFORE, all the foregoing premises
presumed that the payslip and resignation letter considered, judgment is hereby rendered ordering
were prepared by one and the same person, as the respondents to pay complainant the aggregate
respondent is not a handwriting expert. Petitioner sum of US$3,840.00 or its equivalent in Philippine
further pointed out that respondent has different Currency at the exchange rate prevailing at the
signatures, not only in the pleadings submitted time of payment, and to refund complainant’s plane
before the Labor Arbiter, but also in respondents’ fare for his return flight. Further, respondents are
personal documents. ordered to pay complainant attorney’s fees at the
rate of Ten percent (10%) of the foregoing
On January 30, 1997, Labor Arbiter Jose De Vera judgment award.15
ruled in favor of respondent on the following
ratiocination: Petitioner appealed the Decision of the Labor
Arbiter to the NLRC, alleging that the Labor Arbiter,
What convinced this Arbitration Branch about the not being a handwriting expert, committed grave
unreliability of the complainant’s signature in the abuse of discretion amounting to lack of jurisdiction
payslip is the close semblance of the handwritings in finding for respondent. In its Decision16 dated
in the payslips and the handwritings in the December 9, 1997, the NLRC upheld this
purported handwritten resignation of the contention and remanded the case "to the
complainant. It unmistakably appears to this Arbitration Branch of origin for referral to the
Arbitration Branch that the payslips as well as the government agency concerned for calligraphy
handwritten letter-resignation were prepared by one examination of the questioned documents."17
and the same person. If it were true that the
handwritten letter-resignation was prepared by the The case was then re-raffled to Labor Arbiter
complainant, it follows that he also prepared the Enrico Angelo Portillo. On September 11, 1998, the
payslips because the handwritings in both parties agreed to a resetting to enable petitioner to
documents are exactly the same and identical. But secure the original copies of documents from its
[this] is quite unbelievable that complainant himself foreign principal. However, on December 9, 1998,
as the payee prepared the payslips with the the parties agreed to submit the case for resolution
corresponding entries therein in his own
based on the pleadings and on the evidence on petitioner’s control, and it was petitioner that
record. repeatedly failed to produce the original copies.
This time, the complaint was dismissed for lack of The CA reversed the ruling of the NLRC. According
merit. According to Labor Arbiter Portillo, aside to the appellate court, a visual examination of the
from respondent’s bare allegations, he failed to questioned signatures would instantly reveal
substantiate his claim of poor working conditions significant differences in the handwriting
and long hours of employment. The fact that he movement, stroke, and structure, as well as the
executed a handwritten resignation letter is enough quality of lines of the signatures; Labor Arbiter
evidence of the fact that he voluntarily resigned Portillo committed patent error in examining the
from work. Moreover, respondent failed to submit signatures, and it is the decision of Labor Arbiter
any evidence to refute the pay slips duly signed De Vera which must be upheld. The CA also
and authenticated by the labor attaché in Saudi pointed out the initial ruling of the NLRC (Second
Arabia, inasmuch as their probative value cannot Division) dated December 9, 1997 which set aside
be impugned by mere self-serving allegations. The the earlier decision of Labor Arbiter De Vera
Labor Arbiter concluded that as between the oral included a special directive to the Arbitration
allegations of workers that they were not paid Branch of origin to endorse the questioned
monetary benefits and the documentary evidence documents for calligraphy examination. However,
presented by employer, the latter should prevail. 18 respondent Cuambot failed to produce original
copies of the documents; hence, Labor Arbiter
Respondent appealed the decision before the Portillo proceeded with the case and ruled in favor
NLRC, alleging that the Labor Arbiter failed to of petitioner G.M.Phils. The dispositive portion of
consider the genuineness of the signature which the CA ruling reads:
appears in the purported resignation letter dated
July 23, 1995, as well as those that appear in the IN VIEW OF ALL THE FOREGOING, the instant
seven pay slips. He insisted that these documents petition is hereby GRANTED. Accordingly, the
should have been endorsed to the National Bureau assailed Resolutions dated 27 December 2000 and
of Investigation Questioned Documents Division or 12 February 2001, respectively, of the NLRC
the Philippine National Police Crime Laboratory for Second Division are hereby SET ASIDE and the
calligraphy examination. Decision dated 20 February 1997 rendered by
Labor Arbiter Jose De Vera is hereby
The NLRC dismissed the appeal for lack of merit in REINSTATED.20
a Resolution19 dated December 27, 2000. It held
that the questioned documents could not be Petitioner filed a motion for reconsideration, which
endorsed to the agency concerned since mere the CA denied for lack of merit in its
photocopies had been submitted in evidence. The Resolution21 dated February 20, 2004.
records also revealed that petitioner had
communicated to the foreign employer abroad, who Hence, the present petition, where petitioner claims
sent the original copies, but there was no response that –
from respondent. It also stressed that during the
December 9, 1998 hearing, the parties agreed to THE COURT OF APPEALS GRAVELY ERRED ON
submit the case for resolution on the basis of the A MATTER OF LAW IN HOLDING THAT LABOR
pleadings and the evidence on record; if ARBITER ENRICO PORTILLO GRAVELY
respondent had wanted to have the documents ABUSED HIS DISCRETION WHEN HE HELD
endorsed to the NBI or the PNP, he should have THAT THE SIGNATURES APPEARING ON THE
insisted that the documents be examined by a QUESTIONED DOCUMENTS ARE THOSE OF
handwriting expert of the government. Thus, THE PETITIONER.22
respondent was estopped from assailing the Labor
Arbiter’s ruling. Petitioner points out that most of the signatures
which Labor Arbiter De Vera used as standards for
Unsatisfied, respondent elevated the matter to the comparison with the signatures appearing on the
CA via petition for certiorari. He pointed out that he questioned documents were those in the pleadings
merely acceded to the submission of the case for filed by the respondent long after the questioned
resolution due to the inordinate delays in the case. documents had been supposedly signed by him. It
Moreover, the questioned documents were within claims that respondent affixed his signatures on the
pleadings in question and intentionally made them
different from his true signature so that he could discretion when he ruled in favor of petitioner
later on conveniently impugn their authenticity. without abiding by the Commission’s directive.
Petitioner claims that "had Labor Arbiter De Vera
taken pains in considering these circumstances, he We note, however, that a remand of the case at this
could have determined that respondent may have juncture would only result in unnecessary delay,
actually intentionally given a different name and especially considering that this case has been
slightly changed his signature in his application, pending since 1995. Indeed, it is this Court’s duty to
which name and signature he used when he signed settle, whenever possible, the entire controversy in
the questioned letter of resignation and payslips, a single proceeding, "leaving no root or branch to
only to conveniently disown the same when he bear the seeds of future litigation."27Hence, the
came back to the country to file the present case shall be fully resolved on its merits.
case."23 Thus, according to petitioner, the CA
clearly committed a palpable error of law when it We find that petitioner’s failure to submit the
reversed the ruling of the NLRC, which in turn original copies of the pay slips and the resignation
affirmed Labor Arbiter Portillo’s decision. letter raises doubts as to the veracity of its claim
that they were actually signed/penned by
For his part, respondent contends that petitioner’s respondent. The failure of a party to produce the
arguments were already raised in the pleadings original copy of the document which is in issue has
filed before Labor Arbiter De Vera which had been taken against such party, and has even been
already been passed upon squarely in the Labor considered as a mere "bargaining chip," a dilatory
Arbiter’s Decision of January 30, 1997. tactic so that such party would be granted the
opportunity to adduce controverting evidence.28 In
The determinative issues in this case are fact, petitioner did not even present in evidence the
essentially factual in nature - (a) whether the original copy of the employment contract, much
signatures of respondent in the payslips are mere less a machine copy, giving credence to
forgeries, and (b) whether respondent executed the respondent’s claim that he was not at all given a
resignation letter. Generally, it is not our function to copy of the employment contract after he signed it.
review findings of fact. However, in case of a What petitioner presented was a mere photocopy of
divergence in the findings and conclusions of the the OCW Info Sheet29 issued by the Philippine
NLRC on the one hand, and those of the Labor Overseas Employment Administration as well as
Arbiter and the CA on the other, the Court may the Personal Data Sheet30which respondent filled
examine the evidence presented by the parties to up. It bears stressing that the original copies of all
determine whether or not the employee was these documents, including the employment
illegally dismissed or voluntarily resigned from contract, were in the possession of petitioner, or, at
employment.24 The instant case thus falls within the the very least, petitioner’s principal.
exception.
Moreover, as correctly noted by the CA, the
We have carefully examined the evidence on opinions of handwriting experts, although helpful in
record and find that the petition must fail. the examination of forged documents because of
the technical procedure involved in the analysis,
In its Decision25 dated December 9, 1997, the are not binding upon the courts.31 As such, resort to
NLRC had ordered the case remanded to the Labor these experts is not mandatory or indispensable to
Arbiter precisely so that the questioned documents the examination or the comparison of handwriting.
purportedly signed/executed by respondent could A finding of forgery does not depend entirely on the
be subjected to calligraphy examination by experts. testimonies of handwriting experts, because the
It is precisely where a judgment or ruling fails to judge must conduct an independent examination of
make findings of fact that the case may be the questioned signature in order to arrive at a
remanded to the lower tribunal to enable it to reasonable conclusion as to its authenticity.32 No
determine them.26 However, instead of referring the less than Section 22, Rule 132 of the Rules of
questioned documents to the NBI or the PNP as Court explicitly authorizes the court, by itself, to
mandated by the Commission’s ruling, Labor make a comparison of the disputed handwriting
Arbiter Portillo proceeded to rule in favor of "with writings admitted or treated as genuine by the
petitioner, concluding that respondent’s signatures party against whom the evidence is offered or
were not forged, and as such, respondent’s proved to be genuine to the satisfaction of the
separation from employment was purely voluntary. judge." Indeed, the authenticity of signatures is not
In fine, then, the Labor Arbiter gravely abused his a highly technical issue in the same sense that
questions concerning, e.g., quantum physics or It is a well-settled doctrine, that if doubts exist
topology, or molecular biology, would constitute between the evidence presented by the employer
matters of a highly technical nature. The opinion of and the employee, the scales of justice must be
a handwriting expert on the genuineness of a tilted in favor of the latter. It is a time-honored rule
questioned signature is certainly much less that in controversies between a laborer and his
compelling upon a judge than an opinion rendered master, doubts reasonably arising from the
by a specialist on a highly technical issue.33 evidence, or in the interpretation of agreements and
writing should be resolved in the former’s favor.
Even a cursory perusal of the resignation The policy is to extend the doctrine to a greater
letter34 and the handwritten pay slips will readily number of employees who can avail of the benefits
show that they were written by only one person. A under the law, which is in consonance with the
mere layman will immediately notice that the avowed policy of the State to give maximum aid
strokes and letters in the documents are very and protection of labor.
similar, if not identical, to one another. It is also
quite apparent from a comparison of the signatures Moreover, one who pleads payment has the burden
in the pay slips that they are inconsistent, irregular, of proving it. The reason for the rule is that the
with uneven and faltering strokes. pertinent personnel files, payrolls, records,
remittances and other similar documents – which
We also find it unbelievable that after having waited will show that overtime, differentials, service
for so long to be deployed to Saudi Arabia and with incentive leave, and other claims of workers have
the hopes of opportunity to earn a better living been paid – are not in the possession of the worker
within his reach, respondent would just suddenly but in the custody and absolute control of the
decide to abandon his work and go home due to employer. Thus, the burden of showing with legal
"family problems." At the very least, respondent certainty that the obligation has been discharged
could have at least specified the reason or with payment falls on the debtor, in accordance
elaborated on the details of such an urgent matter with the rule that one who pleads payment has the
so as not to jeopardize future employment burden of proving it.38 Only when the debtor
opportunities. introduces evidence that the obligation has been
extinguished does the burden shift to the creditor,
That respondent also filed the complaint who is then under a duty of producing evidence to
immediately gives more credence to his claim that show why payment does not extinguish the
he was illegally dismissed.1âwphi1 He arrived in obligation.39 In this case, petitioner was unable to
the Philippines on July 24, 1995, and immediately present ample evidence to prove its claim that
filed his complaint for illegal dismissal two days respondent had received all his salaries and
later, on July 26, 1995. benefits in full.1âwphi1
We are not impervious of petitioner’s claim that IN LIGHT OF ALL THE FOREGOING, the Petition
respondent could have asked another person to is DENIED for lack of merit. The Decision of the
execute the resignation letter for him. However, Court of Appeals in CA-G.R. SP No. 64744 is
petitioner failed to present even an affidavit from a AFFIRMED. Costs against the petitioners.
representative of its foreign principal in order to
support this allegation. SO ORDERED.
SO ORDERED. xxxx
a) The Agent shall canvass for applications for Life The first step to transforming Manulife into a big
Insurance, Annuities, Group policies and other league player has been very clear – to increase the
products offered by the Company, and collect, in number of agents to at least 1,000 strong for a start.
exchange for provisional receipts issued by the Agent, This may seem diametrically opposed to the way
money due to or become due to the Company in Manulife was run when you first joined the
organization. Since then, however, substantial to confirm your statement and it took you to name
changes have taken place in the organization, as Malou Samson as a source of the same, an allegation
these have been influenced by developments both that Malou herself denied at our meeting and in your
from within and without the company. very presence.
Issue # 2: "Some Managers are unhappy with their 1. You will hire at your expense a competent assistant
earnings and would want to revert to the position of who can unload you of much of the routine tasks
agents." which can be easily delegated. This assistant should
be so chosen as to complement your skills and help
This is an often repeated issue you have raised with you in the areas where you feel "may not be your cup
me and with Kevin. For this reason, I placed the issue of tea."
on the table before the rest of your Region’s Sales
Managers to verify its validity. As you must have
noted, no Sales Manager came forward on their own
You have stated, if not implied, that your work as Thus, the threshold issue is the existence of an
Regional Manager may be too taxing for you and for employment relationship. A finding that none exists
your health. The above could solve this problem. renders the question of illegal dismissal moot; a
finding that an employment relationship exists, on the
xxxx other hand, necessarily leads to the need to
determine the validity of the termination of the
2. Effective immediately, Kevin and the rest of the relationship.
Agency Operations will deal with the North Star
Branch (NSB) in autonomous fashion. x x x A. Tongko’s Case for Employment Relationship
I have decided to make this change so as to reduce Tongko asserted that as Unit Manager, he was paid
your span of control and allow you to concentrate an annual over-rider not exceeding ₱50,000.00,
more fully on overseeing the remaining groups under regardless of production levels attained and exclusive
Metro North, your Central Unit and the rest of the of commissions and bonuses. He also claimed that as
Sales Managers in Metro North. I will hold you solely Regional Sales Manager, he was given a travel and
responsible for meeting the objectives of these entertainment allowance of ₱36,000.00 per year in
remaining groups. addition to his overriding commissions; he was tasked
with numerous administrative functions and
xxxx supervisory authority over Manulife’s employees,
aside from merely selling policies and recruiting
agents for Manulife; and he recommended and
The above changes can end at this point and they
recruited insurance agents subject to vetting and
need not go any further. This, however, is entirely
approval by Manulife. He further alleges that he was
dependent upon you. But you have to understand that
assigned a definite place in the Manulife offices when
meeting corporate objectives by everyone is primary
he was not in the field – at the 3rd Floor, Manulife
and will not be compromised. We are meeting tough
Center, 108 Tordesillas corner Gallardo Sts., Salcedo
challenges next year, and I would want everybody on
Village, Makati City – for which he never paid any
board. Any resistance or holding back by anyone will
rental. Manulife provided the office equipment he
be dealt with accordingly.6
used, including tables, chairs, computers and printers
(and even office stationery), and paid for the
Subsequently, de Dios wrote Tongko another letter, electricity, water and telephone bills. As Regional
dated December 18, 2001, terminating Tongko’s Sales Manager, Tongko additionally asserts that he
services: was required to follow at least three codes of
conduct.9
It would appear, however, that despite the series of
meetings and communications, both one-on-one B. Manulife’s Case – Agency Relationship with
meetings between yourself and SVP Kevin O’Connor, Tongko
some of them with me, as well as group meetings with
your Sales Managers, all these efforts have failed in
Manulife argues that Tongko had no fixed wage or
helping you align your directions with Management’s
salary. Under the Agreement, Tongko was paid
avowed agency growth policy.
commissions of varying amounts, computed based on
the premium paid in full and actually received by
xxxx Manulife on policies obtained through an agent. As
sales manager, Tongko was paid overriding sales
On account thereof, Management is exercising its commission derived from sales made by agents under
prerogative under Section 14 of your Agents Contract his unit/structure/branch/region. Manulife also points
as we are now issuing this notice of termination of out that it deducted and withheld a 10% tax from all
your Agency Agreement with us effective fifteen days commissions Tongko received; Tongko even declared
from the date of this letter.7 himself to be self-employed and consistently paid
taxes as such—i.e., he availed of tax deductions such
Tongko responded by filing an illegal dismissal as ordinary and necessary trade, business and
complaint with the National Labor Relations professional expenses to which a business is entitled.
Commission (NLRC) Arbitration Branch. He
essentially alleged – despite the clear terms of the Manulife asserts that the labor tribunals have no
letter terminating his Agency Agreement – that he was jurisdiction over Tongko’s claim as he was not its
Manulife’s employee before he was illegally employee as characterized in the four-fold test and
dismissed.8 our ruling in Carungcong v. National Labor Relations
Commission.10
The Conflicting Rulings of the Lower Tribunals administrative functions. De Dios’
letter harped on the direction Manulife
The labor arbiter decreed that no employer-employee intended to take, viz., greater agency
relationship existed between the parties. However, the recruitment as the primary means to
NLRC reversed the labor arbiter’s decision on appeal; sell more policies; Tongko’s alleged
it found the existence of an employer-employee failure to follow this directive led to the
relationship and concluded that Tongko had been termination of his employment with
illegally dismissed. In the petition for certiorari with the Manulife.
Court of Appeals (CA), the appellate court found that
the NLRC gravely abused its discretion in its ruling The Motion for Reconsideration
and reverted to the labor arbiter’s decision that no
employer-employee relationship existed between Manulife disagreed with our Decision and filed the
Tongko and Manulife. present motion for reconsideration on the
following GROUNDS:
Our Decision of November 7, 2008
1. The November 7[, 2008] Decision violates
In our Decision of November 7, 2008, we reversed the Manulife’s right to due process by: (a)
CA ruling and found that an employment relationship confining the review only to the issue of
existed between Tongko and Manulife. We concluded "control" and utterly disregarding all the other
that Tongko is Manulife’s employee for the following issues that had been joined in this case; (b)
reasons: mischaracterizing the divergence of
conclusions between the CA and the NLRC
1. Our ruling in the first Insular11 case did not decisions as confined only to that on "control";
foreclose the possibility of an insurance agent (c) grossly failing to consider the findings and
becoming an employee of an insurance conclusions of the CA on the majority of the
company; if evidence exists showing that the material evidence, especially [Tongko’s]
company promulgated rules or regulations declaration in his income tax returns that he
that effectively controlled or restricted an was a "business person" or "self-employed";
insurance agent’s choice of methods or the and (d) allowing [Tongko] to repudiate his
methods themselves in selling insurance, an sworn statement in a public document.
employer-employee relationship would be
present. The determination of the existence of 2. The November 7[, 2008] Decision
an employer-employee relationship is thus on contravenes settled rules in contract law and
a case-to-case basis depending on the agency, distorts not only the legal
evidence on record. relationships of agencies to sell but also
distributorship and franchising, and ignores
2. Manulife had the power of control over the constitutional and policy context of
Tongko, sufficient to characterize him as an contract law vis-à-vis labor law.
employee, as shown by the following
indicators: 3. The November 7[, 2008] Decision ignores
the findings of the CA on the three elements
2.1 Tongko undertook to comply with of the four-fold test other than the "control"
Manulife’s rules, regulations and other test, reverses well-settled doctrines of law on
requirements, i.e., the different codes employer-employee relationships, and grossly
of conduct such as the Agent Code of misapplies the "control test," by selecting,
Conduct, the Manulife Financial Code without basis, a few items of evidence to the
of Conduct, and the Financial Code of exclusion of more material evidence to
Conduct Agreement; support its conclusion that there is "control."
2.2 The various affidavits of Manulife’s 4. The November 7[, 2008] Decision is judicial
insurance agents and managers, who legislation, beyond the scope authorized by
occupied similar positions as Tongko, Articles 8 and 9 of the Civil Code, beyond the
showed that they performed powers granted to this Court under Article VIII,
administrative duties that established Section 1 of the Constitution and contravenes
employment with Manulife;12 and through judicial legislation, the constitutional
prohibition against impairment of contracts
2.3 Tongko was tasked to recruit under Article III, Section 10 of the
some agents in addition to his other Constitution.
5. For all the above reasons, the November of who can be in the insurance business, who can act
7[, 2008] Decision made unsustainable and for and in behalf of an insurer, and how these parties
reversible errors, which should be corrected, shall conduct themselves in the insurance business.
in concluding that Respondent Manulife and Section 186 of the Insurance Code provides that "No
Petitioner had an employer-employee person, partnership, or association of persons shall
relationship, that Respondent Manulife transact any insurance business in the Philippines
illegally dismissed Petitioner, and for except as agent of a person or corporation authorized
consequently ordering Respondent Manulife to do the business of insurance in the Philippines."
to pay Petitioner backwages, separation pay, Sections 299 and 300 of the Insurance Code on
nominal damages and attorney’s fees.13 Insurance Agents and Brokers, among other
provisions, provide:
THE COURT’S RULING
Section 299. No insurance company doing business
A. The Insurance and the Civil Codes; in the Philippines, nor any agent thereof, shall pay any
the Parties’ Intent and Established commission or other compensation to any person for
Industry Practices services in obtaining insurance, unless such person
shall have first procured from the Commissioner a
We cannot consider the present case purely from a license to act as an insurance agent of such company
labor law perspective, oblivious that the factual or as an insurance broker as hereinafter provided.
antecedents were set in the insurance industry so that
the Insurance Code primarily governs. Chapter IV, No person shall act as an insurance agent or as an
Title 1 of this Code is wholly devoted to "Insurance insurance broker in the solicitation or procurement of
Agents and Brokers" and specifically defines the applications for insurance, or receive for services in
agents and brokers relationship with the insurance obtaining insurance, any commission or other
company and how they are governed by the Code compensation from any insurance company doing
and regulated by the Insurance Commission. business in the Philippines or any agent thereof,
without first procuring a license so to act from the
The Insurance Code, of course, does not wholly Commissioner x x x The Commissioner shall satisfy
regulate the "agency" that it speaks of, as agency is a himself as to the competence and trustworthiness of
civil law matter governed by the Civil Code. Thus, at the applicant and shall have the right to refuse to
the very least, three sets of laws – namely, the issue or renew and to suspend or revoke any such
Insurance Code, the Labor Code and the Civil Code – license in his discretion.
1avvphi1.net
Thus, under the Insurance Code, the agent must, as a With particular relevance to the present case is the
matter of qualification, be licensed and must also act provision that "In the execution of the agency, the
within the parameters of the authority granted under agent shall act in accordance with the instructions of
the license and under the contract with the principal. the principal."23 This provision is pertinent for
Other than the need for a license, the agent is limited purposes of the necessary control that the principal
in the way he offers and negotiates for the sale of the exercises over the agent in undertaking the assigned
company’s insurance products, in his collection task, and is an area where the instructions can intrude
activities, and in the delivery of the insurance contract into the labor law concept of control so that minute
or policy. Rules regarding the desired results (e.g., the consideration of the facts is necessary. A related
required volume to continue to qualify as a company article is Article 1891 of the Civil Code which binds the
agent, rules to check on the parameters on the agent to render an account of his transactions to the
authority given to the agent, and rules to ensure that principal.
industry, legal and ethical rules are followed) are built-
in elements of control specific to an insurance agency B. The Cited Case
and should not and cannot be read as elements of
control that attend an employment relationship The Decision of November 7, 2008 refers to the first
governed by the Labor Code. Insular and Grepalife cases to establish that the
company rules and regulations that an agent has to
On the other hand, the Civil Code defines an agent as comply with are indicative of an employer-employee
a "person [who] binds himself to render some service relationship.24 The Dissenting Opinions of Justice
or to do something in representation or on behalf of Presbitero Velasco, Jr. and Justice Conchita Carpio
another, with the consent or authority of the Morales also cite Insular Life Assurance Co. v.
latter."16 While this is a very broad definition that on its National Labor Relations Commission (second Insular
face may even encompass an employment case)25 to support the view that Tongko is Manulife’s
relationship, the distinctions between agency and employee. On the other hand, Manulife cites the
employment are sufficiently established by law and Carungcong case and AFP Mutual Benefit
jurisprudence. Association, Inc. v. National Labor Relations
Commission (AFPMBAI case)26 to support its
Generally, the determinative element is the control allegation that Tongko was not its employee.
exercised over the one rendering service. The
employer controls the employee both in the results A caveat has been given above with respect to the
and in the means and manner of achieving this result. use of the rulings in the cited cases because none of
The principal in an agency relationship, on the other them is on all fours with the present case; the
hand, also has the prerogative to exercise control uniqueness of the factual situation of the present case
over the agent in undertaking the assigned task based prevents it from being directly and readily cast in the
on the parameters outlined in the pertinent laws. mold of the cited cases. These cited cases are
themselves different from one another; this difference
Under the general law on agency as applied to underscores the need to read and quote them in the
insurance, an agency must be express in light of the context of their own factual situations.
need for a license and for the designation by the
insurance company. In the present case, the The present case at first glance appears aligned with
Agreement fully serves as grant of authority to Tongko the facts in the Carungcong, the Grepalife, and the
as Manulife’s insurance agent.17 This agreement is second Insular Life cases. A critical difference,
supplemented by the company’s agency practices however, exists as these cited cases dealt with the
and usages, duly accepted by the agent in carrying proper legal characterization of a subsequent
out the agency.18 By authority of the Insurance Code, management contract that superseded the original
an insurance agency is for compensation,19 a matter agency contract between the insurance company and
the Civil Code Rules on Agency presumes in the its agent. Carungcong dealt with a subsequent
absence of proof to the contrary.20 Other than the Agreement making Carungcong a New Business
compensation, the principal is bound to advance to, or Manager that clearly superseded the Agreement
to reimburse, the agent the agreed sums necessary designating Carungcong as an agent empowered to
for the execution of the agency.21 By implication at solicit applications for insurance. The Grepalife case,
least under Article 1994 of the Civil Code, the on the other hand, dealt with the proper legal
principal can appoint two or more agents to carry out characterization of the appointment of the Ruiz
brothers to positions higher than their original position
as insurance agents. Thus, after analyzing the duties matter of law that is for the courts to determine. At the
and functions of the Ruiz brothers, as these were same time, though, the characterization the parties
enumerated in their contracts, we concluded that the gave to their relationship in the Agreement cannot
company practically dictated the manner by which the simply be brushed aside because it embodies their
Ruiz brothers were to carry out their jobs. Finally, the intent at the time they entered the Agreement, and
second Insular Life case dealt with the implications of they were governed by this understanding throughout
de los Reyes’ appointment as acting unit manager their relationship. At the very least, the provision on
which, like the subsequent contracts in the the absence of employer-employee relationship
Carungcong and the Grepalife cases, was clearly between the parties can be an aid in considering the
defined under a subsequent contract. In all these cited Agreement and its implementation, and in
cases, a determination of the presence of the Labor appreciating the other evidence on record.
Code element of control was made on the basis of the
stipulations of the subsequent contracts. The parties’ legal characterization of their intent,
although not conclusive, is critical in this case
In stark contrast with the Carungcong, the Grepalife, because this intent is not illegal or outside the
and the second Insular Life cases, the only contract or contemplation of law, particularly of the Insurance and
document extant and submitted as evidence in the the Civil Codes. From this perspective, the provisions
present case is the Agreement – a pure agency of the Insurance Code cannot be disregarded as this
agreement in the Civil Code context similar to the Code (as heretofore already noted) expressly
original contract in the first Insular Life case and the envisions a principal-agent relationship between the
contract in the AFPMBAI case. And while Tongko was insurance company and the insurance agent in the
later on designated unit manager in 1983, Branch sale of insurance to the public. For this reason, we
1awph!1
Manager in 1990, and Regional Sales Manager in can take judicial notice that as a matter of Insurance
1996, no formal contract regarding these undertakings Code-based business practice, an agency relationship
appears in the records of the case. Any such contract prevails in the insurance industry for the purpose of
or agreement, had there been any, could have at the selling insurance. The Agreement, by its express
very least provided the bases for properly ascertaining terms, is in accordance with the Insurance Code
the juridical relationship established between the model when it provided for a principal-agent
parties. relationship, and thus cannot lightly be set aside nor
simply be considered as an agreement that does not
These critical differences, particularly between the reflect the parties’ true intent. This intent, incidentally,
present case and the Grepalife and the second is reinforced by the system of compensation the
Insular Life cases, should therefore immediately drive Agreement provides, which likewise is in accordance
us to be more prudent and cautious in applying the with the production-based sales commissions the
rulings in these cases. Insurance Code provides.
Even de Dios’ letter is not determinative of control as The present case must be distinguished from the
it indicates the least amount of intrusion into Tongko’s second Insular Life case that showed the hallmarks of
exercise of his role as manager in guiding the sales an employer-employee relationship in the
agents. Strictly viewed, de Dios’ directives are merely management system established. These were:
operational guidelines on how Tongko could align his exclusivity of service, control of assignments and
operations with Manulife’s re-directed goal of being a removal of agents under the private respondent’s unit,
"big league player." The method is to expand and furnishing of company facilities and materials as
well as capital described as Unit Development Fund.
All these are obviously absent in the present case. If nevertheless only an agent whose basic contract
there is a commonality in these cases, it is in the yields no evidence of means-and-manner control.
collection of premiums which is a basic authority that
can be delegated to agents under the Insurance This conclusion renders unnecessary any further
Code. discussion of the question of whether an agent may
simultaneously assume conflicting dual personalities.
As previously discussed, what simply happened in But to set the record straight, the concept of a single
Tongko’s case was the grant of an expanded sales person having the dual role of agent and employee
agency role that recognized him as leader amongst while doing the same task is a novel one in our
agents in an area that Manulife defined. Whether this jurisprudence, which must be viewed with caution
consequently resulted in the establishment of an especially when it is devoid of any jurisprudential
employment relationship can be answered by support or precedent. The quoted portions in Justice
concrete evidence that corresponds to the Carpio-Morales’ dissent,33 borrowed from both the
following questions: Grepalife and the second Insular Life cases, to
support the duality approach of the Decision of
as lead agent, what were Tongko’s specific November 7, 2008, are regrettably far removed from
functions and the terms of his additional their context – i.e., the cases’ factual situations, the
engagement; issues they decided and the totality of the rulings in
was he paid additional compensation as a so- these cases – and cannot yield the conclusions that
called Area Sales Manager, apart from the the dissenting opinions drew.
commissions he received from the insurance
sales he generated; The Grepalife case dealt with the sole issue of
what can be Manulife’s basis to terminate his whether the Ruiz brothers’ appointment as zone
status as lead agent; supervisor and district manager made them
can Manulife terminate his role as lead agent employees of Grepalife. Indeed, because of the
separately from his agency contract; and presence of the element of control in their contract of
to what extent does Manulife control the engagements, they were
means and methods of Tongko’s role as lead considered Grepalife’s employees. This did not mean,
agent? however, that they were simultaneously considered
agents as well as employees of Grepalife; the Court’s
The answers to these questions may, to some extent, ruling never implied that this situation existed insofar
be deduced from the evidence at hand, as partly as the Ruiz brothers were concerned. The Court’s
discussed above. But strictly speaking, the questions statement – the Insurance Code may govern the
cannot definitively and concretely be answered licensing requirements and other particular duties of
through the evidence on record. The concrete insurance agents, but it does not bar the application of
evidence required to settle these questions is simply the Labor Code with regard to labor standards and
not there, since only the Agreement and the anecdotal labor relations – simply means that when an
affidavits have been marked and submitted as insurance company has exercised control over its
evidence. agents so as to make them their employees, the
relationship between the parties, which was otherwise
Given this anemic state of the evidence, particularly one for agency governed by the Civil Code and the
on the requisite confluence of the factors Insurance Code, will now be governed by the Labor
determinative of the existence of employer-employee Code. The reason for this is simple – the contract of
relationship, the Court cannot conclusively find that agency has been transformed into an employer-
the relationship exists in the present case, even if employee relationship.
such relationship only refers to Tongko’s additional
functions. While a rough deduction can be made, the The second Insular Life case, on the other hand,
answer will not be fully supported by the substantial involved the issue of whether the labor bodies have
evidence needed. jurisdiction over an illegal termination dispute
involving parties who had two contracts – first, an
Under this legal situation, the only conclusion that can original contract (agency contract), which was
be made is that the absence of evidence showing undoubtedly one for agency, and another subsequent
Manulife’s control over Tongko’s contractual duties contract that in turn designated the agent acting unit
points to the absence of any employer-employee manager (a management contract). Both the Insular
relationship between Tongko and Manulife. In the Life and the labor arbiter were one in the position that
context of the established evidence, Tongko remained both were agency contracts. The Court disagreed with
an agent all along; although his subsequent duties this conclusion and held that insofar as the
made him a lead agent with leadership role, he was management contract is concerned, the labor arbiter
has jurisdiction. It is in this light that we remanded the
case to the labor arbiter for further proceedings. We FIRST DIVISION
never said in this case though that the insurance
agent had effectively assumed dual personalities for G.R. No. 138051 June 10, 2004
the simple reason that the agency contract has been
effectively superseded by the management contract. JOSE Y. SONZA, petitioner,
The management contract provided that if the vs.
appointment was terminated for any reason other than ABS-CBN BROADCASTING
for cause, the acting unit manager would be reverted CORPORATION, respondent.
to agent status and assigned to any unit.
DECISION
The dissent pointed out, as an argument to support its
employment relationship conclusion, that any doubt in
CARPIO, J.:
the existence of an employer-employee relationship
should be resolved in favor of the existence of the
relationship.34This observation, apparently drawn from The Case
Article 4 of the Labor Code, is misplaced, as Article 4
applies only when a doubt exists in the Before this Court is a petition for review on
"implementation and application" of the Labor Code certiorari1 assailing the 26 March 1999 Decision2 of
and its implementing rules; it does not apply where no the Court of Appeals in CA-G.R. SP No. 49190
doubt exists as in a situation where the claimant dismissing the petition filed by Jose Y. Sonza
clearly failed to substantiate his claim of employment ("SONZA"). The Court of Appeals affirmed the
relationship by the quantum of evidence the Labor findings of the National Labor Relations Commission
Code requires. ("NLRC"), which affirmed the Labor Arbiter’s dismissal
of the case for lack of jurisdiction.
On the dissent’s last point regarding the lack of
jurisprudential value of our November 7, 2008 The Facts
Decision, suffice it to state that, as discussed above,
the Decision was not supported by the evidence In May 1994, respondent ABS-CBN Broadcasting
adduced and was not in accordance with controlling Corporation ("ABS-CBN") signed an Agreement
jurisprudence. It should, therefore, be reconsidered ("Agreement") with the Mel and Jay Management and
and abandoned, but not in the manner the dissent Development Corporation ("MJMDC"). ABS-CBN was
suggests as the dissenting opinions are as factually represented by its corporate officers while MJMDC
and as legally erroneous as the Decision under was represented by SONZA, as President and
reconsideration. General Manager, and Carmela Tiangco
("TIANGCO"), as EVP and Treasurer. Referred to in
In light of these conclusions, the sufficiency of the Agreement as "AGENT," MJMDC agreed to
Tongko’s failure to comply with the guidelines of de provide SONZA’s services exclusively to ABS-CBN as
Dios’ letter, as a ground for termination of Tongko’s talent for radio and television. The Agreement listed
agency, is a matter that the labor tribunals cannot rule the services SONZA would render to ABS-CBN, as
upon in the absence of an employer-employee follows:
relationship. Jurisdiction over the matter belongs to
the courts applying the laws of insurance, agency and a. Co-host for Mel & Jay radio program, 8:00
contracts. to 10:00 a.m., Mondays to Fridays;
WHEREFORE, considering the foregoing discussion, b. Co-host for Mel & Jay television program,
we REVERSE our Decision of November 7, 5:30 to 7:00 p.m., Sundays.3
2008, GRANTManulife’s motion for reconsideration
and, accordingly, DISMISS Tongko’s petition. No ABS-CBN agreed to pay for SONZA’s services a
costs. monthly talent fee of ₱310,000 for the first year and
₱317,000 for the second and third year of the
SO ORDERED. Agreement. ABS-CBN would pay the talent fees on
the 10th and 25th days of the month.
Mr. Sonza informed us that he is waiving and The Labor Arbiter then considered the case submitted
renouncing recovery of the remaining amount for resolution. The parties submitted their position
stipulated in paragraph 7 of the Agreement papers on 24 February 1997.
but reserves the right to seek recovery of the
other benefits under said Agreement. On 11 March 1997, SONZA filed a Reply to
Respondent’s Position Paper with Motion to Expunge
Thank you for your attention. Respondent’s Annex 4 and Annex 5 from the
Records. Annexes 4 and 5 are affidavits of ABS-
Very truly yours, CBN’s witnesses Soccoro Vidanes and Rolando V.
Cruz. These witnesses stated in their affidavits that
the prevailing practice in the television and broadcast
(Sgd.)
industry is to treat talents like SONZA as independent
JOSE Y. SONZA
contractors.
President and Gen.
Manager4
The Labor Arbiter rendered his Decision dated 8 July
1997 dismissing the complaint for lack of
On 30 April 1996, SONZA filed a complaint against
jurisdiction.6 The pertinent parts of the decision read
ABS-CBN before the Department of Labor and
as follows:
Employment, National Capital Region in Quezon City.
SONZA complained that ABS-CBN did not pay his
salaries, separation pay, service incentive leave pay, xxx
13th month pay, signing bonus, travel allowance and
amounts due under the Employees Stock Option Plan While Philippine jurisprudence has not yet,
("ESOP"). with certainty, touched on the "true nature of
the contract of a talent," it stands to reason
On 10 July 1996, ABS-CBN filed a Motion to Dismiss that a "talent" as above-described cannot be
on the ground that no employer-employee relationship considered as an employee by reason of the
existed between the parties. SONZA filed an peculiar circumstances surrounding the
Opposition to the motion on 19 July 1996. engagement of his services.
Meanwhile, ABS-CBN continued to remit SONZA’s It must be noted that complainant was
monthly talent fees through his account at PCIBank, engaged by respondent by reason of his
Quezon Avenue Branch, Quezon City. In July 1996, peculiar skills and talent as a TV host and
ABS-CBN opened a new account with the same bank a radio broadcaster. Unlike an ordinary
where ABS-CBN deposited SONZA’s talent fees and employee, he was free to perform the
other payments due him under the Agreement. services he undertook to render in
accordance with his own style. The benefits
conferred to complainant under the May 1994
In his Order dated 2 December 1996, the Labor
Agreement are certainly very much higher
Arbiter5 denied the motion to dismiss and directed the
than those generally given to employees. For
parties to file their respective position papers. The
one, complainant Sonza’s monthly talent fees
Labor Arbiter ruled:
amount to a staggering ₱317,000. Moreover,
his engagement as a talent was covered by a
In this instant case, complainant for having specific contract. Likewise, he was not bound
invoked a claim that he was an employee of
to render eight (8) hours of work per day as he The Rulings of the NLRC and Court of Appeals
worked only for such number of hours as may
be necessary. The Court of Appeals affirmed the NLRC’s finding that
no employer-employee relationship existed between
The fact that per the May 1994 Agreement SONZA and ABS-CBN. Adopting the NLRC’s
complainant was accorded some benefits decision, the appellate court quoted the following
normally given to an employee is findings of the NLRC:
inconsequential. Whatever benefits
complainant enjoyed arose from specific x x x the May 1994 Agreement will readily
agreement by the parties and not by reveal that MJMDC entered into the contract
reason of employer-employee merely as an agent of complainant Sonza, the
relationship. As correctly put by the principal. By all indication and as the law puts
respondent, "All these benefits are merely it, the act of the agent is the act of the
talent fees and other contractual benefits and principal itself. This fact is made particularly
should not be deemed as ‘salaries, wages true in this case, as admittedly MJMDC ‘is a
and/or other remuneration’ accorded to an management company devoted exclusively to
employee, notwithstanding the nomenclature managing the careers of Mr. Sonza and his
appended to these benefits. Apropos to this is broadcast partner, Mrs. Carmela C. Tiangco.’
the rule that the term or nomenclature given to (Opposition to Motion to Dismiss)
a stipulated benefit is not controlling, but the
intent of the parties to the Agreement Clearly, the relations of principal and agent
conferring such benefit." only accrues between complainant Sonza and
MJMDC, and not between ABS-CBN and
The fact that complainant was made MJMDC. This is clear from the provisions of
subject to respondent’s Rules and the May 1994 Agreement which specifically
Regulations, likewise, does not detract referred to MJMDC as the ‘AGENT’. As a
from the absence of employer-employee matter of fact, when complainant herein
relationship. As held by the Supreme Court, unilaterally rescinded said May 1994
"The line should be drawn between rules that Agreement, it was MJMDC which issued the
merely serve as guidelines towards the notice of rescission in behalf of Mr. Sonza,
achievement of the mutually desired result who himself signed the same in his capacity
without dictating the means or methods to be as President.
employed in attaining it, and those that control
or fix the methodology and bind or restrict the Moreover, previous contracts between Mr.
party hired to the use of such means. The Sonza and ABS-CBN reveal the fact that
first, which aim only to promote the result, historically, the parties to the said agreements
create no employer-employee relationship are ABS-CBN and Mr. Sonza. And it is only in
unlike the second, which address both the the May 1994 Agreement, which is the latest
result and the means to achieve it." (Insular Agreement executed between ABS-CBN and
Life Assurance Co., Ltd. vs. NLRC, et al., G.R. Mr. Sonza, that MJMDC figured in the said
No. 84484, November 15, 1989). Agreement as the agent of Mr. Sonza.
Under paragraph 9 of (the May 1994 In assailing the decision of the Court of Appeals,
Agreement), complainant is entitled to SONZA contends that:
a commutable travel benefit
amounting to at least One Hundred THE COURT OF APPEALS GRAVELY
Fifty Thousand Pesos (₱150,000.00) ERRED IN AFFIRMING THE NLRC’S
per year.’ DECISION AND REFUSING TO FIND THAT
AN EMPLOYER-EMPLOYEE
Thus, it is precisely because of complainant- RELATIONSHIP EXISTED BETWEEN
appellant’s own recognition of the fact that his SONZA AND ABS-CBN, DESPITE THE
contractual relations with ABS-CBN are WEIGHT OF CONTROLLING LAW,
founded on the New Civil Code, rather than JURISPRUDENCE AND EVIDENCE TO
the Labor Code, that instead of merely SUPPORT SUCH A FINDING.14
resigning from ABS-CBN, complainant-
appellant served upon the latter a ‘notice of The Court’s Ruling
rescission’ of Agreement with the station, per
his letter dated April 1, 1996, which asserted We affirm the assailed decision.
that instead of referring to unpaid employee
benefits, ‘he is waiving and renouncing
No convincing reason exists to warrant a reversal of
recovery of the remaining amount stipulated in
the decision of the Court of Appeals affirming the
paragraph 7 of the Agreement but reserves
NLRC ruling which upheld the Labor Arbiter’s
the right to such recovery of the other benefits
dismissal of the case for lack of jurisdiction.
under said Agreement.’ (Annex 3 of the
respondent ABS-CBN’s Motion to Dismiss
dated July 10, 1996). The present controversy is one of first impression.
Although Philippine labor laws and jurisprudence
define clearly the elements of an employer-employee
Evidently, it is precisely by reason of the
relationship, this is the first time that the Court will
alleged violation of the May 1994 Agreement
resolve the nature of the relationship between a
and/or the Stock Purchase Agreement by
television and radio station and one of its "talents."
respondent-appellee that complainant-
There is no case law stating that a radio and
appellant filed his complaint. Complainant-
television program host is an employee of the
appellant’s claims being anchored on the
broadcast station.
alleged breach of contract on the part of
respondent-appellee, the same can be
The instant case involves big names in the broadcast skills, talent and celebrity status, ABS-CBN would not
industry, namely Jose "Jay" Sonza, a known have entered into the Agreement with SONZA but
television and radio personality, and ABS-CBN, one of would have hired him through its personnel
the biggest television and radio networks in the department just like any other employee.
country.
In any event, the method of selecting and engaging
SONZA contends that the Labor Arbiter has SONZA does not conclusively determine his status.
jurisdiction over the case because he was an We must consider all the circumstances of the
employee of ABS-CBN. On the other hand, ABS-CBN relationship, with the control test being the most
insists that the Labor Arbiter has no jurisdiction important element.
because SONZA was an independent contractor.
B. Payment of Wages
Employee or Independent Contractor?
ABS-CBN directly paid SONZA his monthly talent fees
The existence of an employer-employee relationship with no part of his fees going to MJMDC. SONZA
is a question of fact. Appellate courts accord the asserts that this mode of fee payment shows that he
factual findings of the Labor Arbiter and the NLRC not was an employee of ABS-CBN. SONZA also points
only respect but also finality when supported by out that ABS-CBN granted him benefits and privileges
substantial evidence.15 Substantial evidence means "which he would not have enjoyed if he were truly the
such relevant evidence as a reasonable mind might subject of a valid job contract."
accept as adequate to support a conclusion.16 A party
cannot prove the absence of substantial evidence by All the talent fees and benefits paid to SONZA were
simply pointing out that there is contrary evidence on the result of negotiations that led to the Agreement. If
record, direct or circumstantial. The Court does not SONZA were ABS-CBN’s employee, there would be
substitute its own judgment for that of the tribunal in no need for the parties to stipulate on benefits such as
determining where the weight of evidence lies or what "SSS, Medicare, x x x and 13th month pay"20 which
evidence is credible.17 the law automatically incorporates into every
employer-employee contract.21Whatever benefits
SONZA maintains that all essential elements of an SONZA enjoyed arose from contract and not because
employer-employee relationship are present in this of an employer-employee relationship.22
case. Case law has consistently held that the
elements of an employer-employee relationship are: SONZA’s talent fees, amounting to ₱317,000 monthly
(a) the selection and engagement of the employee; in the second and third year, are so huge and out of
(b) the payment of wages; (c) the power of dismissal; the ordinary that they indicate more an independent
and (d) the employer’s power to control the employee contractual relationship rather than an employer-
on the means and methods by which the work is employee relationship. ABS-CBN agreed to pay
accomplished.18 The last element, the so-called SONZA such huge talent fees precisely because of
"control test", is the most important element.19 SONZA’s unique skills, talent and celebrity status not
possessed by ordinary employees. Obviously,
A. Selection and Engagement of Employee SONZA acting alone possessed enough bargaining
power to demand and receive such huge talent fees
ABS-CBN engaged SONZA’s services to co-host its for his services. The power to bargain talent fees way
television and radio programs because of SONZA’s above the salary scales of ordinary employees is a
peculiar skills, talent and celebrity status. SONZA circumstance indicative, but not conclusive, of an
contends that the "discretion used by respondent in independent contractual relationship.
specifically selecting and hiring complainant over
other broadcasters of possibly similar experience and The payment of talent fees directly to SONZA and not
qualification as complainant belies respondent’s claim to MJMDC does not negate the status of SONZA as
of independent contractorship." an independent contractor. The parties expressly
agreed on such mode of payment. Under the
Independent contractors often present themselves to Agreement, MJMDC is the AGENT of SONZA, to
possess unique skills, expertise or talent to distinguish whom MJMDC would have to turn over any talent fee
them from ordinary employees. The specific selection accruing under the Agreement.
and hiring of SONZA, because of his unique skills,
talent and celebrity status not possessed by C. Power of Dismissal
ordinary employees, is a circumstance indicative,
but not conclusive, of an independent contractual For violation of any provision of the Agreement, either
relationship. If SONZA did not possess such unique party may terminate their relationship. SONZA failed
to show that ABS-CBN could terminate his services at the University of Puerto Rico; and acted in
on grounds other than breach of contract, such as several theater and television productions
retrenchment to prevent losses as provided under prior to her affiliation with "Desde Mi
labor laws.23 Pueblo." Second, Alberty provided the
"tools and instrumentalities" necessary for
During the life of the Agreement, ABS-CBN agreed to her to perform. Specifically, she provided, or
pay SONZA’s talent fees as long as "AGENT and Jay obtained sponsors to provide, the costumes,
Sonza shall faithfully and completely perform each jewelry, and other image-related supplies and
condition of this Agreement."24 Even if it suffered services necessary for her appearance.
severe business losses, ABS-CBN could not retrench Alberty disputes that this factor favors
SONZA because ABS-CBN remained obligated to pay independent contractor status because WIPR
SONZA’s talent fees during the life of the Agreement. provided the "equipment necessary to tape
This circumstance indicates an independent the show." Alberty’s argument is misplaced.
contractual relationship between SONZA and ABS- The equipment necessary for Alberty to
CBN. conduct her job as host of "Desde Mi Pueblo"
related to her appearance on the show.
SONZA admits that even after ABS-CBN ceased Others provided equipment for filming and
broadcasting his programs, ABS-CBN still paid him producing the show, but these were not the
his talent fees. Plainly, ABS-CBN adhered to its primary tools that Alberty used to perform her
undertaking in the Agreement to continue paying particular function. If we accepted this
SONZA’s talent fees during the remaining life of the argument, independent contractors could
Agreement even if ABS-CBN cancelled SONZA’s never work on collaborative projects because
programs through no fault of SONZA.25 other individuals often provide the equipment
required for different aspects of the
collaboration. x x x
SONZA assails the Labor Arbiter’s interpretation of his
rescission of the Agreement as an admission that he
is not an employee of ABS-CBN. The Labor Arbiter Third, WIPR could not assign Alberty work
stated that "if it were true that complainant was really in addition to filming "Desde Mi
an employee, he would merely resign, instead." Pueblo." Alberty’s contracts with WIPR
SONZA did actually resign from ABS-CBN but he specifically provided that WIPR hired her
also, as president of MJMDC, rescinded the "professional services as Hostess for the
Agreement. SONZA’s letter clearly bears this Program Desde Mi Pueblo." There is no
out.26 However, the manner by which SONZA evidence that WIPR assigned Alberty tasks in
terminated his relationship with ABS-CBN is addition to work related to these tapings. x x
immaterial. Whether SONZA rescinded the x28 (Emphasis supplied)
Agreement or resigned from work does not determine
his status as employee or independent contractor. Applying the control test to the present case, we find
that SONZA is not an employee but an independent
D. Power of Control 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
Since there is no local precedent on whether a radio
extent of control the hirer exercises over a worker.
and television program host is an employee or an
The greater the supervision and control the hirer
independent contractor, we refer to foreign case law
exercises, the more likely the worker is deemed an
in analyzing the present case. The United States
employee. The converse holds true as well – the less
Court of Appeals, First Circuit, recently held
control the hirer exercises, the more likely the worker
in Alberty-Vélez v. Corporación De Puerto Rico
is considered an independent contractor.30
Para La Difusión Pública ("WIPR")27 that a
television program host is an independent contractor.
We quote the following findings of the U.S. court: First, SONZA contends that ABS-CBN exercised
control over the means and methods of his work.
Several factors favor classifying Alberty as an
independent contractor. First, a television SONZA’s argument is misplaced. ABS-CBN engaged
actress is a skilled position requiring talent SONZA’s services specifically to co-host the "Mel &
and training not available on-the-job. x x x Jay" programs. ABS-CBN did not assign any other
In this regard, Alberty possesses a master’s work to SONZA. To perform his work, SONZA only
degree in public communications and needed his skills and talent. How SONZA delivered
journalism; is trained in dance, singing, and his lines, appeared on television, and sounded on
modeling; taught with the drama department radio were outside ABS-CBN’s control. SONZA did
not have to render eight hours of work per day. The control the result of the work by deleting objectionable
Agreement required SONZA to attend only rehearsals features.37
and tapings of the shows, as well as pre- and post-
production staff meetings.31 ABS-CBN could not SONZA further contends that ABS-CBN exercised
dictate the contents of SONZA’s script. However, the control over his work by supplying all equipment and
Agreement prohibited SONZA from criticizing in his crew. No doubt, ABS-CBN supplied the equipment,
shows ABS-CBN or its interests.32 The clear crew and airtime needed to broadcast the "Mel & Jay"
implication is that SONZA had a free hand on what to programs. However, the equipment, crew and airtime
say or discuss in his shows provided he did not attack are not the "tools and instrumentalities" SONZA
ABS-CBN or its interests. needed to perform his job. What SONZA principally
needed were his talent or skills and the costumes
We find that ABS-CBN was not involved in the actual necessary for his appearance.38Even though ABS-
performance that produced the finished product of CBN provided SONZA with the place of work and the
SONZA’s work.33 ABS-CBN did not instruct SONZA necessary equipment, SONZA was still an
how to perform his job. ABS-CBN merely reserved the independent contractor since ABS-CBN did not
right to modify the program format and airtime supervise and control his work. ABS-CBN’s sole
schedule "for more effective programming."34 ABS- concern was for SONZA to display his talent during
CBN’s sole concern was the quality of the shows and the airing of the programs.39
their standing in the ratings. Clearly, ABS-CBN did not
exercise control over the means and methods of A radio broadcast specialist who works under minimal
performance of SONZA’s work. supervision is an independent contractor.40 SONZA’s
work as television and radio program host required
SONZA claims that ABS-CBN’s power not to special skills and talent, which SONZA admittedly
broadcast his shows proves ABS-CBN’s power over possesses. The records do not show that ABS-CBN
the means and methods of the performance of his exercised any supervision and control over how
work. Although ABS-CBN did have the option not to SONZA utilized his skills and talent in his shows.
broadcast SONZA’s show, ABS-CBN was still
obligated to pay SONZA’s talent fees... Thus, even if Second, SONZA urges us to rule that he was ABS-
ABS-CBN was completely dissatisfied with the means CBN’s employee because ABS-CBN subjected him to
and methods of SONZA’s performance of his work, or its rules and standards of performance. SONZA
even with the quality or product of his work, ABS-CBN claims that this indicates ABS-CBN’s control "not only
could not dismiss or even discipline SONZA. All that [over] his manner of work but also the quality of his
ABS-CBN could do is not to broadcast SONZA’s show work."
but ABS-CBN must still pay his talent fees in full.35
The Agreement stipulates that SONZA shall abide
Clearly, ABS-CBN’s right not to broadcast SONZA’s with the rules and standards of performance
show, burdened as it was by the obligation to continue "covering talents"41 of ABS-CBN. The Agreement
paying in full SONZA’s talent fees, did not amount to does not require SONZA to comply with the rules and
control over the means and methods of the standards of performance prescribed for employees of
performance of SONZA’s work. ABS-CBN could not ABS-CBN. The code of conduct imposed on SONZA
terminate or discipline SONZA even if the means and under the Agreement refers to the "Television and
methods of performance of his work - how he Radio Code of the Kapisanan ng mga Broadcaster sa
delivered his lines and appeared on television - did Pilipinas (KBP), which has been adopted by the
not meet ABS-CBN’s approval. This proves that ABS- COMPANY (ABS-CBN) as its Code of Ethics."42 The
CBN’s control was limited only to the result of KBP code applies to broadcasters, not to employees
SONZA’s work, whether to broadcast the final product of radio and television stations. Broadcasters are not
or not. In either case, ABS-CBN must still pay necessarily employees of radio and television
SONZA’s talent fees in full until the expiry of the stations. Clearly, the rules and standards of
Agreement. performance referred to in the Agreement are those
applicable to talents and not to employees of ABS-
In Vaughan, et al. v. Warner, et al.,36 the United CBN.
States Circuit Court of Appeals ruled that vaudeville
performers were independent contractors although In any event, not all rules imposed by the hiring party
the management reserved the right to delete on the hired party indicate that the latter is an
objectionable features in their shows. Since the employee of the former.43 In this case, SONZA failed
management did not have control over the manner of to show that these rules controlled his performance.
performance of the skills of the artists, it could only We find that these general rules are
merely guidelines towards the achievement of the
mutually desired result, which are top-rating television SONZA protests the Labor Arbiter’s finding that he is
and radio programs that comply with standards of the a talent of MJMDC, which contracted out his services
industry. We have ruled that: to ABS-CBN. The Labor Arbiter ruled that as a talent
of MJMDC, SONZA is not an employee of ABS-CBN.
Further, not every form of control that a party reserves SONZA insists that MJMDC is a "labor-only"
to himself over the conduct of the other party in contractor and ABS-CBN is his employer.
relation to the services being rendered may be
accorded the effect of establishing an employer- In a labor-only contract, there are three parties
employee relationship. The facts of this case fall involved: (1) the "labor-only" contractor; (2) the
squarely with the case of Insular Life Assurance Co., employee who is ostensibly under the employ of the
Ltd. vs. NLRC. In said case, we held that: "labor-only" contractor; and (3) the principal who is
deemed the real employer. Under this scheme, the
Logically, the line should be drawn between "labor-only" contractor is the agent of the
rules that merely serve as guidelines towards principal. The law makes the principal responsible to
the achievement of the mutually desired result the employees of the "labor-only contractor" as if the
without dictating the means or methods to be principal itself directly hired or employed the
employed in attaining it, and those that control employees.48 These circumstances are not present in
or fix the methodology and bind or restrict the this case.
party hired to the use of such means. The
first, which aim only to promote the result, There are essentially only two parties involved under
create no employer-employee relationship the Agreement, namely, SONZA and ABS-CBN.
unlike the second, which address both the MJMDC merely acted as SONZA’s agent. The
result and the means used to achieve it.44 Agreement expressly states that MJMDC acted as the
"AGENT" of SONZA. The records do not show that
The Vaughan case also held that one could still be an MJMDC acted as ABS-CBN’s agent. MJMDC, which
independent contractor although the hirer reserved stands for Mel and Jay Management and
certain supervision to insure the attainment of the Development Corporation, is a corporation organized
desired result. The hirer, however, must not deprive and owned by SONZA and TIANGCO. The President
the one hired from performing his services according and General Manager of MJMDC is SONZA himself. It
to his own initiative.45 is absurd to hold that MJMDC, which is owned,
controlled, headed and managed by SONZA, acted as
Lastly, SONZA insists that the "exclusivity clause" in agent of ABS-CBN in entering into the Agreement
the Agreement is the most extreme form of control with SONZA, who himself is represented by MJMDC.
which ABS-CBN exercised over him. That would make MJMDC the agent of both ABS-CBN
and SONZA.
This argument is futile. Being an exclusive talent does
not by itself mean that SONZA is an employee of As SONZA admits, MJMDC is a management
ABS-CBN. Even an independent contractor can company devoted exclusively to managing the
validly provide his services exclusively to the hiring careers of SONZA and his broadcast partner,
party. In the broadcast industry, exclusivity is not TIANGCO. MJMDC is not engaged in any other
necessarily the same as control. 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
The hiring of exclusive talents is a widespread and
broadcast and television industry.49
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 Policy Instruction No. 40
investment of the broadcast station. The broadcast
station normally spends substantial amounts of SONZA argues that Policy Instruction No. 40 issued
money, time and effort "in building up its talents as by then Minister of Labor Blas Ople on 8 January
well as the programs they appear in and thus expects 1979 finally settled the status of workers in the
that said talents remain exclusive with the station for a broadcast industry. Under this policy, the types of
commensurate period of time."47 Normally, a much employees in the broadcast industry are the station
higher fee is paid to talents who agree to work and program employees.
exclusively for a particular radio or television station.
In short, the huge talent fees partially compensates Policy Instruction No. 40 is a mere executive issuance
for exclusivity, as in the present case. which does not have the force and effect of law. There
is no legal presumption that Policy Instruction No. 40
MJMDC as Agent of SONZA determines SONZA’s status. A mere executive
issuance cannot exclude independent contractors that he can rely on the documents before him, he
from the class of service providers to the broadcast cannot be faulted for not conducting a formal trial,
industry. The classification of workers in the broadcast unless under the particular circumstances of the case,
industry into only two groups under Policy Instruction the documents alone are insufficient. The proceedings
No. 40 is not binding on this Court, especially when before a Labor Arbiter are non-litigious in nature.
the classification has no basis either in law or in fact. Subject to the requirements of due process, the
technicalities of law and the rules obtaining in the
Affidavits of ABS-CBN’s Witnesses courts of law do not strictly apply in proceedings
before a Labor Arbiter.
SONZA also faults the Labor Arbiter for admitting the
affidavits of Socorro Vidanes and Rolando Cruz Talents as Independent Contractors
without giving his counsel the
ABS-CBN claims that there exists a prevailing
opportunity to cross-examine these witnesses. practice in the broadcast and entertainment industries
SONZA brands these witnesses as incompetent to to treat talents like SONZA as independent
attest on the prevailing practice in the radio and contractors. SONZA argues that if such practice
television industry. SONZA views the affidavits of exists, it is void for violating the right of labor to
these witnesses as misleading and irrelevant. security of tenure.
While SONZA failed to cross-examine ABS-CBN’s The right of labor to security of tenure as guaranteed
witnesses, he was never prevented from denying or in the Constitution53 arises only if there is an
refuting the allegations in the affidavits. The Labor employer-employee relationship under labor laws. Not
Arbiter has the discretion whether to conduct a formal every performance of services for a fee creates an
(trial-type) hearing after the submission of the position employer-employee relationship. To hold that every
papers of the parties, thus: person who renders services to another for a fee is an
employee - to give meaning to the security of tenure
Section 3. Submission of Position clause - will lead to absurd results.
Papers/Memorandum
Individuals with special skills, expertise or talent enjoy
xxx the freedom to offer their services as independent
contractors. The right to life and livelihood guarantees
this freedom to contract as independent contractors.
These verified position papers shall cover only
The right of labor to security of tenure cannot operate
those claims and causes of action raised in
to deprive an individual, possessed with special skills,
the complaint excluding those that may have
expertise and talent, of his right to contract as an
been amicably settled, and shall be
independent contractor. An individual like an artist or
accompanied by all supporting documents
talent has a right to render his services without any
including the affidavits of their respective
one controlling the means and methods by which he
witnesses which shall take the place of the
performs his art or craft. This Court will not interpret
latter’s direct testimony. x x x
the right of labor to security of tenure to compel artists
and talents to render their services only as
Section 4. Determination of Necessity of employees. If radio and television program hosts can
Hearing. – Immediately after the submission render their services only as employees, the station
of the parties of their position owners and managers can dictate to the radio and
papers/memorandum, the Labor Arbiter shall television hosts what they say in their shows. This is
motu propio determine whether there is need not conducive to freedom of the press.
for a formal trial or hearing. At this stage, he
may, at his discretion and for the purpose of
Different Tax Treatment of Talents and
making such determination, ask clarificatory
Broadcasters
questions to further elicit facts or information,
including but not limited to the subpoena of
relevant documentary evidence, if any from The National Internal Revenue Code ("NIRC")54 in
any party or witness.50 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
The Labor Arbiter can decide a case based solely on
professionals are subject to the 10% value-added tax
the position papers and the supporting documents
("VAT") on services they render. Exempted from the
without a formal trial.51 The holding of a formal hearing
VAT are those under an employer-employee
or trial is something that the parties cannot demand
relationship.57 This different tax treatment accorded to
as a matter of right.52 If the Labor Arbiter is confident
talents and broadcasters bolters our conclusion that On October 2, 1995, under Talent Contract No. NT95-
they are independent contractors, provided all the 1805,4 private respondent Associated Broadcasting
basic elements of a contractual relationship are Company (ABC) hired petitioner Thelma Dumpit-
present as in this case. Murillo as a newscaster and co-anchor for Balitang-
Balita, an early evening news program. The contract
Nature of SONZA’s Claims was for a period of three months. It was renewed
under Talent Contracts Nos. NT95-1915, NT96-3002,
SONZA seeks the recovery of allegedly unpaid talent NT98-4984 and NT99-5649.5 In addition, petitioner’s
fees, 13th month pay, separation pay, service services were engaged for the program "Live on
incentive leave, signing bonus, travel allowance, and Five." On September 30, 1999, after four years of
amounts due under the Employee Stock Option Plan. repeated renewals, petitioner’s talent contract expired.
We agree with the findings of the Labor Arbiter and Two weeks after the expiration of the last contract,
the Court of Appeals that SONZA’s claims are all petitioner sent a letter to Mr. Jose Javier, Vice
based on the May 1994 Agreement and stock President for News and Public Affairs of ABC,
option plan, and not on the Labor Code. Clearly, informing the latter that she was still interested in
the present case does not call for an application of the renewing her contract subject to a salary increase.
Labor Code provisions but an interpretation and Thereafter, petitioner stopped reporting for work. On
implementation of the May 1994 Agreement. In effect, November 5, 1999, she wrote Mr. Javier another
SONZA’s cause of action is for breach of contract letter,6 which we quote verbatim:
which is intrinsically a civil dispute cognizable by the
regular courts.58 xxxx
Petitioner avers however that an employer-employee d. Be available for any other news assignment, such
relationship was created when the private as writing, research or camera work;
respondents started to merely renew the contracts
repeatedly fifteen times or for four consecutive e. Attend production meetings;
years.22
f. On assigned days, be at the studios at least one (1)
Again, we agree with petitioner. The Court of Appeals hour before the live telecasts;
committed reversible error when it held that petitioner
was a fixed-term employee. Petitioner was a regular g. Be present promptly at the studios and/or other
employee under contemplation of law. The practice of place of assignment at the time designated by ABC;
having fixed-term contracts in the industry does not
automatically make all talent contracts valid and h. Keep abreast of the news;
compliant with labor law. The assertion that a talent
contract exists does not necessarily prevent a regular i. Give his/her full cooperation to ABC and its duly
employment status.23 authorized representatives in the production and
promotion of the Program; and
Further, the Sonza case is not applicable. In Sonza,
the television station did not instruct Sonza how to j. Perform such other functions as may be assigned to
perform his job. How Sonza delivered his lines, him/her from time to time.
xxxx respect to such activity and while such activity
exists.33
1.3 COMPLIANCE WITH STANDARDS,
INSTRUCTIONS AND OTHER RULES AND In our view, the requisites for regularity of employment
REGULATIONS – TALENT agrees that he/she will have been met in the instant case. Gleaned from the
promptly and faithfully comply with the requests and description of the scope of services aforementioned,
instructions, as well as the program standards, petitioner’s work was necessary or desirable in the
policies, rules and regulations of ABC, the KBP and usual business or trade of the employer which
the government or any of its agencies and includes, as a pre-condition for its enfranchisement,
instrumentalities.27 its participation in the government’s news and public
information dissemination. In addition, her work was
xxxx continuous for a period of four years. This repeated
engagement under contract of hire is indicative of the
In Manila Water Company, Inc. v. Pena,28 we said that necessity and desirability of the petitioner’s work in
the elements to determine the existence of an private respondent ABC’s business.34
employment relationship are: (a) the selection and
engagement of the employee, (b) the payment of The contention of the appellate court that the contract
wages, (c) the power of dismissal, and (d) the was characterized by a valid fixed-period employment
employer’s power to control. The most important is untenable. For such contract to be valid, it should
element is the employer’s control of the employee’s be shown that the fixed period was knowingly and
conduct, not only as to the result of the work to be voluntarily agreed upon by the parties. There should
done, but also as to the means and methods to have been no force, duress or improper pressure
accomplish it.29 brought to bear upon the employee; neither should
there be any other circumstance that vitiates the
The duties of petitioner as enumerated in her employee’s consent.35 It should satisfactorily appear
employment contract indicate that ABC had control that the employer and the employee dealt with each
over the work of petitioner. Aside from control, ABC other on more or less equal terms with no moral
also dictated the work assignments and payment of dominance being exercised by the employer over the
petitioner’s wages. ABC also had power to dismiss employee.36 Moreover, fixed-term employment will not
her. All these being present, clearly, there existed an be considered valid where, from the circumstances, it
employment relationship between petitioner and ABC. is apparent that periods have been imposed to
preclude acquisition of tenurial security by the
employee.37
Concerning regular employment, the law provides for
two kinds of employees, namely: (1) those who are
engaged to perform activities which are usually In the case at bar, it does not appear that the
necessary or desirable in the usual business or trade employer and employee dealt with each other on
of the employer; and (2) those who have rendered at equal terms. Understandably, the petitioner could not
least one year of service, whether continuous or object to the terms of her employment contract
broken, with respect to the activity in which they are because she did not want to lose the job that she
employed.30 In other words, regular status arises from loved and the workplace that she had grown
either the nature of work of the employee or the accustomed to,38 which is exactly what happened
duration of his employment.31 In Benares v. when she finally manifested her intention to negotiate.
Pancho,32 we very succinctly said: 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
…[T]he primary standard for determining regular
affix her signature of conformity on each renewal of
employment is the reasonable connection between
her contract as already prepared by private
the particular activity performed by the employee vis-
respondents; otherwise, private respondents would
à-vis the usual trade or business of the employer. This
have simply refused to renew her contract. Patently,
connection can be determined by considering the
the petitioner occupied a position of weakness vis-à-
nature of the work performed and its relation to the
vis the employer. Moreover, private respondents’
scheme of the particular business or trade in its
practice of repeatedly extending petitioner’s 3-month
entirety. If the employee has been performing the job
contract for four years is a circumvention of the
for at least a year, even if the performance is not
acquisition of regular status. Hence, there was no
continuous and merely intermittent, the law deems
valid fixed-term employment between petitioner and
repeated and continuing need for its performance as
private respondents.
sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence,
the employment is considered regular, but only with
While this Court has recognized the validity of fixed-
term employment contracts in a number of cases, it
has consistently emphasized that when the Respondent ABS-CBN Corporation
circumstances of a case show that the periods were (formerly ABS-CBN Broadcasting
imposed to block the acquisition of security of tenure, Corporation) is a television and radio
they should be struck down for being contrary to law,
morals, good customs, public order or public policy.39
broadcasting corporation which, for its
Regional Network Group in Naga City,
As a regular employee, petitioner is entitled to security employed respondent Amalia Villafuerte
of tenure and can be dismissed only for just cause (Villafuerte) as Manager. There is no
and after due compliance with procedural due
process. Since private respondents did not observe dispute regarding the fact that, thru
due process in constructively dismissing the Villafuerte, ABS-CBN engaged the
petitioner, we hold that there was an illegal dismissal. services of petitioners Nelson Begino
WHEREFORE, the challenged Decision dated
(Begino) and Gener Del Valle (Del Valle)
January 30, 2004 and Resolution dated June 23, sometime in 1996 as
2004 of the Court of Appeals in CA-G.R. SP No. Cameramen/Editors for TV
63125, which held that the petitioner was a fixed-term Broadcasting. Petitioners Ma. Cristina
employee, are REVERSED and SET ASIDE. The
NLRC decision is AFFIRMED. Sumayao (Sumayao) and Monina Avila-
Llorin (Llorin) were likewise similarly
Costs against private respondents. engaged as reporters sometime in 1996
and 2002, respectively. With their
SO ORDERED.
services engaged by respondents thru
Talent Contracts which, though
regularly renewed over the years,
provided terms ranging from three (3)
months to one (1) year, petitioners were
given Project Assignment Forms which
detailed, among other matters, the
duration of a particular project as well as
the budget and the daily technical
requirements thereof. In the aforesaid
capacities, petitioners were tasked with
coverage of news items for subsequent
PEREZ, J.: daily airings in respondents’ TV Patrol
Bicol Program.[2]
The existence of an employer-employee
relationship is at the heart of this While specifically providing that nothing
Petition for Review on Certiorari filed therein shall be deemed or construed to
pursuant to Rule 45 of the Rules of establish an employer-employee
Court, primarily assailing the 29 June relationship between the parties, the
2011 Decision[1] rendered by the Fourth aforesaid Talent Contracts included,
Division of the Court of Appeals (CA) in among other matters, provisions on the
CA-G.R. SP No. 116928 which ruled out following matters: (a) the Talent’s
said relationship between the parties. creation and performance of work in
accordance with the ABS-CBN’s
professional standards and compliance
The Facts with its policies and guidelines covering
intellectual property creators, industry coverage is quite distant, even the start
codes as well as the rules and of their workday. Due to the importance
regulations of the Kapisanan ng mga of the news items they covered and the
Broadcasters sa Pilipinas (KBP) and necessity of their completion for the
other regulatory agencies; (b) the success of the program, petitioners
Talent’s non-engagement in similar claimed that, under pain of immediate
work for a person or entity directly or termination, they were bound by the
indirectly in competition with or adverse company’s policy on, among others,
to the interests of ABS-CBN and non- attendance and punctuality.[6]
promotion of any product or service
without prior written consent; and (c) Aside from the constant evaluation of
the results-oriented nature of the their actions, petitioners were reportedly
talent’s work which did not require them subjected to an annual competency
to observe normal or fixed working assessment alongside other ABS-CBN
hours.[3] Subjected to contractor’s tax, employees, as condition for their
petitioners’ remunerations were continued employment. Although their
denominated as Talent Fees which, as of work involved dealing with emergency
last renewal, were admitted to be pegged situations at any time of the day or
per airing day at P273.35 for Begino, night, petitioners claimed that they were
P302.92 for Del Valle, P323.08 for not paid the labor standard benefits the
Sumayao and P315.39 for Llorin.[4] law extends to regular employees. To
avoid paying what is due them, however,
Claiming that they were regular respondents purportedly resorted to the
employees of ABS-CBN, petitioners filed simple expedient of using said Talent
against respondents the Contracts and/or Project Assignment
complaint[5] docketed as Sub-RAB 05- Forms which denominated petitioners
04-00041-07 before the National Labor as talents, despite the fact that they are
Relations Commission’s (NLRC) Sub- not actors or TV hosts of special skills.
Regional Arbitration Branch No. 5, Naga As a result of this iniquitous situation,
City. In support of their claims for petitioners asseverated that they merely
regularization, underpayment of earned an average of P7,000.00 to
overtime pay, holiday pay, 13th month P8,000.00 per month, or decidedly
pay, service incentive leave pay, lower than the P21,773.00 monthly
damages and attorney's fees, petitioners salary ABS-CBN paid its regular rank-
alleged that they performed functions and-file employees. Considering their
necessary and desirable in ABS-CBN's repeated re-hiring by respondents for
business. Mandated to wear company ostensible fixed periods, this situation
IDs and provided all the equipment they had gone on for years since TV Patrol
needed, petitioners averred that they Bicol has continuously aired from 1996
worked under the direct control and onwards.[7]
supervision of Villafuerte and, at the end
of each day, were informed about the In refutation of the foregoing assertions,
news to be covered the following day, on the other hand, respondents argued
the routes they were to take and, that, although it occasionally engages in
whenever the subject of their news production and generates programs thru
various means, ABS-CBN is primarily simply for the purpose of upholding the
engaged in the business of broadcasting standards of the company and the
television and radio content. Not having strictures of the industry. Never
the full manpower complement to subjected to any control or restrictions
produce its own program, the company over the means and methods by which
had allegedly resorted to engaging they performed or discharged the tasks
independent contractors like actors, for which their services were engaged,
directors, artists, anchormen, reporters, petitioners were, at most, briefed
scriptwriters and various production whenever necessary regarding the
and technical staff, who offered their general requirements of the project to be
services in relation to a particular executed.[9]
program. Known in the industry as
talents, such independent contractors Having been terminated during the
inform ABS- CBN of their availability pendency of the case, Petitioners filed
and were required to accomplish Talent on 10 July 2007 a second complaint
Information Forms to facilitate their against respondents, for regularization,
engagement for and appearance on payment of labor standard benefits,
designated project days. Given the illegal dismissal and unfair labor
unpredictability of viewer preferences, practice, which was docketed as Sub-
respondents argued that the company RAB 05-08-00107-07. Upon
cannot afford to provide regular work respondents’ motion, this complaint was
for talents with whom it negotiates dismissed for violation of the rules
specific or determinable professional against forum shopping in view of the
fees on a per project, weekly or daily fact that the determination of the issues
basis, usually depending on the budget in the second case hinged on the
allocation for a project.[8] resolution of those raised in the
first.[10] On 19 December 2007, however,
Respondents insisted that, pursuant to Labor Arbiter Jesus Orlando Quiñones
their Talent Contracts and/or Project (Labor Arbiter Quiñones) resolved Sub-
Assignment Forms, petitioners were RAB 05-04-00041-07 in favor of
hired as talents, to act as reporters petitioners who, having rendered
and/or cameramen for TV Patrol Bicol services necessary and related to ABS-
for designated periods and rates. Fully CBN’s business for more than a year,
aware that they were not considered or were determined to be its regular
to consider themselves as employees of a employees. With said conclusion found
particular production or film outfit, to be buttressed by, among others, the
petitioners were supposedly engaged on exclusivity clause and prohibitions
the basis of the skills, knowledge or under petitioners’ Talent Contracts
expertise they already possessed and, for and/or Project Assignment Forms which
said reason, required no further training evinced respondents’ control over
from ABS-CBN. Although petitioners them,[11] Labor Arbiter Quiñones
were inevitably subjected to some disposed of the case in the following
degree of control, the same was allegedly wise:
limited to the imposition of general
guidelines on conduct and performance,
WHEREFORE, finding merit in the labor practice, damages and attorney’s
causes of action set forth by the fees. In turn docketed as NLRC Case No.
complainants, judgment is hereby Sub-RAB-V-05-03-00039-08, the
rendered declaring complainants complaint was raffled to Labor Arbiter
MONINA AVILA-LLORIN, GENER L. Quiñones who issued an Order dated 30
DEL VALLE, NELSON V. BEGINO and April 2008, inhibiting himself from the
MA. CRISTINA V. SUMAYAO, as case and denying respondents’ motion
regular employees of respondent to dismiss on the grounds of res
company, ABS-CBN BROADCASTING judicata and forum shopping.[13] Finding
CORPORATION. that respondents’ control over
petitioners was indeed manifest from
Accordingly, respondent ABS-CBN the exclusivity clause and prohibitions in
Broadcasting Corporation is hereby the Talent Contracts and/or Project
ORDERED to pay complainants, subject Assignment Forms, on the other hand,
to the prescriptive period provided the NLRC rendered a Decision dated 31
under Article 291 of the Labor Code, March 2010, affirming said Labor
however applicable, the total amount Arbiter’s appealed
of Php2,440,908.36, representing decision.[14] Undeterred by the NLRC’s
salaries/wage differentials, holiday pay, 31 August 2010 denial of their motion
service incentive leave pay and for reconsideration,[15] respondents filed
13th month pay, to include 10% of the the Rule 65 petition
judgment award as attorney’s fees of the for certiorari docketed before the CA as
judgment award (computation of the CA-G.R. SP No. 116928 which, in
monetary awards are attached addition to taking exceptions to the
hereto as integral part of this findings of the assailed decision, faulted
decision). petitioners for violating the rule against
forum shopping.[16]
Moreover, respondents are directed to
admit back complainants to work under On 29 June 2011, the CA rendered the
the same terms and conditions herein assailed decision, reversing the
prevailing prior to their separation or, at findings of the Labor Arbiter and the
respondents' option, merely reinstated NLRC. Ruling out the existence of forum
in the payroll. shopping on the ground that petitioners'
second and third complaints were
Other than the above, all other claims primarily anchored on their termination
and charges are ordered DISMISSED for from employment after the filing of their
lack of merit.[12] first complaint, the CA nevertheless
discounted the existence of an
Aggrieved by the foregoing decision, employer-employee relation between the
respondents elevated the case on appeal parties upon the following findings and
before the NLRC, during the pendency conclusions: (a) petitioners, were
of which petitioners filed a third engaged by respondents as talents for
complaint against the former, for illegal periods, work and the program specified
dismissal, regularization, non- payment in the Talent Contracts and/or Project
of salaries and 13th month pay, unfair Assignment Forms concluded between
them; (b) instead of fixed salaries, determination made by both the Labor
petitioners were paid talent fees Arbiter and the NLRC of the existence of
depending on the budget allocated for an employer-employee relationship
the program to which they were between the parties, despite established
assigned; (c) being mainly concerned jurisprudence supporting the same.
with the result, respondents did not
exercise control over the manner and
method by which petitioner The Court's Ruling
accomplished their work and, at most,
ensured that they complied with the The Court finds the petition impressed
standards of the company, the KBP and with merit.
the industry; and, (d) the existence of an
employer-employee relationship is not Petitioners preliminarily fault the CA for
necessarily established by the exclusivity not dismissing respondents’ Rule 65
clause and prohibitions which are but petition for certiorari in view of the fact
terms and conditions on which the that the latter failed to file a Notice of
parties are allowed to freely stipulate.[17] Appeal from the Labor Arbiter’s decision
and to verify and certify the
Petitioners’ motion for reconsideration Memorandum of Appeal they filed
of the foregoing decision was denied in before the NLRC. While concededly
the CA's 3 October 2011 required under the NLRC Rules of
Resolution,[18] hence, this petition. Procedure, however, these matters
should have been properly raised during
and addressed at the appellate stage
The Issues before the NLRC. Instead, the record
shows that the NLRC took cognizance of
Petitioners seek the reversal of the CA’s respondents’ appeal and proceeded to
assailed Decision and resolve the same in favor of petitioners
by affirming the Labor Arbiter’s
Resolution on the affirmative of the decision. Not having filed their own
following issues: petition for certiorari to take exception
to the liberal attitude the NLRC appears
1. Whether or not the CA seriously and to have adopted towards its own rules of
reversibly erred in not dismissing procedure, petitioners were hardly in the
respondents’ petition for certiorari in proper position to raise the same before
view of the fact that they did file a Notice the CA or, for that matter, before this
of Appeal at the NLRC level and did not, Court at this late stage. Aside from the
by themselves or through their duly settled rule that a party who has not
authorized representative, verify and appealed is not entitled to affirmative
certify the Memorandum of Appeal they relief other than the ones granted in the
filed thereat, in accordance with the decision[19] rendered, liberal
NLRC Rules of Procedure; and interpretation of procedural rules on
appeal had, on occasion, been favored in
2. Whether or not the CA seriously and the interest of substantive justice.[20]
reversibly erred in brushing aside the
Although the existence of an employer- contracts. The recognized supremacy of
employee relationship is, on the other the law over the nomenclature of the
hand, a question of fact[21] which is contract and the stipulations contained
ordinarily not the proper subject of a therein is aimed at bringing life to the
Rule 45 petition for review policy enshrined in the Constitution to
on certiorari like the one at bar, the afford protection to labor.[25] Insofar as
conflicting findings between the labor the nature of one’s employment is
tribunals and the CA justify a further concerned, Article 280 of the Labor
consideration of the matter.[22] To Code of the Philippines also provides as
determine the existence of said relation, follows:
case law has consistently applied the
four-fold test, to wit: (a) the selection ART. 280. Regular and Casual
and engagement of the employee; (b) Employment. — The provisions of
the payment of wages; (c) the power of written agreement to the contrary
dismissal; and (d) the employer's power notwithstanding and regardless of the
to control the employee on the means oral agreement of the parties, an
and methods by which the work is employment shall be deemed to be
accomplished.[23] Of these criteria, the regular where the employee has been
so-called “control test” is generally engaged to perform activities which are
regarded as the most crucial and usually necessary or desirable in the
determinative indicator of the presence usual business or trade of the employer,
or absence of an employer-employee except where the employment has been
relationship. Under this test, an fixed for a specific project or
employer-employee relationship is said undertaking the completion or
to exist where the person for whom the termination of which has been
services are performed reserves the right determined at the time of the
to control not only the end result but engagement of the employee or where
also the manner and means utilized to the work or service to be performed is
achieve the same.[24] seasonal in nature and the employment
is for the duration of the season.
In discounting the existence of said
relationship between the parties, the CA An employment shall be deemed to be
ruled that Petitioners' services were, casual if it is not covered by the
first and foremost, engaged thru their preceding paragraph: Provided, That,
Talent Contracts and/or Project any employee who has rendered at least
Assignment Forms which specified the one year of service, whether such service
work to be performed by them, the is continuous or broken, shall be
project to which they were assigned, the considered a regular employee with
duration thereof and their rates of pay respect to the activity in which he is
according to the budget therefor employed and his employment shall
allocated. Because they are imbued with continue while such actually exists.
public interest, it cannot be gainsaid,
however, that labor contracts are subject It has been ruled that the foregoing
to the police power of the state and are provision contemplates four kinds of
placed on a higher plane than ordinary employees, namely: (a) regular
employees or those who have been periods for TV Patrol Bicol and that they
engaged to perform activities which are were paid according to the budget
usually necessary or desirable in the allocated therefor. Aside from the fact
usual business or trade of the employer; that said program is a regular weekday
(b) project employees or those whose fare of the ABS-CBN’s Regional Network
employment has been fixed for a specific Group in Naga City, the record shows
project or undertaking, the completion that, from their initial engagement in
or termination of which has been the aforesaid capacities, petitioners were
determined at the time of the continuously re-hired by respondents
engagement of the employee; (c) over the years. To the mind of the Court,
seasonal employees or those who work respondents’ repeated hiring of
or perform services which are seasonal petitioners for its long-running news
in nature, and the employment is for the program positively indicates that the
duration of the season; and (d) casual latter were ABS-CBN’s regular
employees or those who are not regular, employees.
project, or seasonal employees.[26] To the
foregoing classification of employee, If the employee has been performing the
jurisprudence has added that of job for at least one year, even if the
contractual or fixed term employee performance is not continuous or merely
which, if not for the fixed term, would intermittent, the law deems the repeated
fall under the category of regular or continuing performance as sufficient
employment in view of the nature of the evidence of the necessity, if not
employee’s engagement, which is to indispensability of that activity in the
perform activity usually necessary or business.[29] Indeed, an employment
desirable in the employer’s business.[27] stops being co-terminous with specific
projects where the employee is
The Court finds that, notwithstanding continuously re-hired due to the
the nomenclature of their Talent demands of the employer’s
Contracts and/or Project Assignment business.[30] When circumstances show,
Forms and the terms and condition moreover, that contractually stipulated
embodied therein, petitioners are periods of employment have been
regular employees of ABS-CBN. Time imposed to preclude the acquisition of
and again, it has been ruled that the test tenurial security by the employee, this
to determine whether employment is Court has not hesitated in striking down
regular or not is the reasonable such arrangements as contrary to public
connection between the activity policy, morals, good customs or public
performed by the employee in relation order.[31] The nature of the employment
to the business or trade of the depends, after all, on the nature of the
employer.[28] As cameramen/editors and activities to be performed by the
reporters, petitioners were undoubtedly employee, considering the nature of the
performing functions necessary and employer’s business, the duration and
essential to ABS-CBN’s business of scope to be done, and, in some cases,
broadcasting television and radio even the length of time of the
content. It matters little that petitioners’ performance and its continued
services were engaged for specified existence.[32] In the same manner that
the practice of having fixed-term their Talent Contracts and/or Project
contracts in the industry does not Assignment Forms were likewise
automatically make all talent contracts indicative of respondents’ control over
valid and compliant with labor law, it them. Brushing aside said finding,
has, consequently, been ruled that the however, the CA applied the ruling
assertion that a talent contract exists in Sonza v. ABS-CBN Broadcasting
does not necessarily prevent a regular Corporation[35] where similar
employment status.[33] restrictions were considered not
necessarily determinative of the
As cameramen/editors and reporters, it existence of an employer-employee
also appears that petitioners were relationship. Recognizing that
subject to the control and supervision of independent contractors can validly
respondents which, first and foremost, provide his exclusive services to the
provided them with the equipments hiring party, said case enunciated that
essential for the discharge of their guidelines for the achievement of
functions. Prepared at the instance of mutually desired results are not
respondents, petitioners’ Talent tantamount to control. As correctly
Contracts tellingly provided that ABS- pointed out by petitioners, however,
CBN retained “all creative, parallels cannot be expediently drawn
administrative, financial and legal between this case and that of Sonza case
control” of the program to which they which involved a well-known television
were assigned. Aside from having the and radio personality who was
right to require petitioners “to attend legitimately considered a talent and
and participate in all promotional or amply compensated as such. While
merchandising campaigns, activities or possessed of skills for which they were
events for the Program,” ABS-CBN modestly recompensed by respondents,
required the former to perform their petitioners lay no claim to fame and/or
functions “at such locations and unique talents for which talents like
Performance/Exhibition Schedules” it actors and personalities are hired and
provided or, subject to prior notice, as it generally compensated in the broadcast
chose determine, modify or change. industry.
Even if they were unable to comply with
said schedule, petitioners were required Later echoed in Dumpit-Murillo v.
to give advance notice, subject to Court of Appeals,[36] this Court has
respondents’ approval.[34] However rejected the application of the ruling in
obliquely worded, the Court finds the the Sonza case to employees similarly
foregoing terms and conditions situated as petitioners in ABS-CBN
demonstrative of the control Broadcasting Corporation v.
respondents exercised not only over the Nazareno.[37] The following distinctions
results of petitioners’ work but also the were significantly observed between
means employed to achieve the same. employees like petitioners and television
or radio personalities like Sonza, to wit:
In finding that petitioners were regular
employees, the NLRC further ruled that First. In the selection and engagement
the exclusivity clause and prohibitions in of respondents, no peculiar or unique
skill, talent or celebrity status was ineluctable showing that petitioners
required from them because they were perform functions necessary and
merely hired through petitioner’s essential to the business of ABS-CBN
personnel department just like any which repeatedly employed them for a
ordinary employee. long-running news program of its
Regional Network Group in Naga City.
Second. The so-called "talent fees" of In the course of said employment,
respondents correspond to wages given petitioners were provided the
as a result of an employer-employee equipments they needed, were required
relationship. Respondents did not have to comply with the Company's policies
the power to bargain for huge talent which entailed prior approval and
fees, a circumstance negating evaluation of their performance. Viewed
independent contractual relationship. from the prism of these considerations,
we find and so hold that the CA
Third. Petitioner could always discharge reversibly erred when it overturned the
respondents should it find their work NLRC's affirmance of the Labor
unsatisfactory, and respondents are Arbiter's finding that an employer-
highly dependent on the petitioner for employee relationship existed between
continued work. the parties. Given the fact, however, that
Sub-RAB-V-05-03-00039-08 had not
Fourth. The degree of control and been consolidated with this case and
supervision exercised by petitioner over appears, for all intents and purposes, to
respondents through its supervisors be pending still, the Court finds that the
negates the allegation that respondents reinstatement of petitioners ordered by
are independent contractors. said labor officer and tribunal should, as
a relief provided in case of illegal
The presumption is that when the work dismissal, be left for determination in
done is an integral part of the regular said case.
business of the employer and when the
worker, relative to the employer, does WHEREFORE, the Court of Appeals'
not furnish an independent business or assailed Decision dated 29 June 2011
professional service, such work is a and Resolution dated 3 October 2011 in
regular employment of such employee CA-G.R. SP No. 116928
and not an independent contractor. The are REVERSED and SET ASIDE.
Court will peruse beyond any such Except for the reinstatement of Nelson
agreement to examine the facts that V. Begino, Gener Del Valle, Monina
typify the parties’ actual Avila-Llorin and Ma. Cristina Sumayao,
relationship.[38] (Emphasis omitted) the National Labor and Relations·
Commission's 31 March 2010 Decision
Rather than the project and/or is, accordingly, REINSTATED.
independent contractors respondents
claim them to be, it is evident from the SO ORDERED.
foregoing disquisition that petitioners
are regular employees of ABS-CBN. This Sereno, C. J., (Chairperson), Leonardo-
conclusion is borne out by the
De Castro, Bersamin, and Perlas- Decision[4] of the Labor Arbiter dismissing
Bernabe, JJ., concur. the complaint filed by respondent Jerry V.
Bustamante.
SO ORDERED.