Legend Hotel v. Hernani S.
Realuyo 1998 by Christine Velazco, restaurant manager, for the increase of his
18 July 2012 | Bersamin, J.
By: Jocs Dilag
SUMMARY:
The Pianist. Joey was a pianist in Legend Hotel for almost 7years until he was
canned because of alleged cost-cutting measure by the latter. Is Joey’s
remuneration denominated as talent fee included in LC definition of “wages”?
Yes, whatever ER calls it, it is still included in the sense and context of LC
definition of wages.
FACTS:
Joey R. Roa (stage name) worked as a pianist at the Legend Hotel’s Tanglaw
Restaurant from September 1992 with an initial rate of P400.00/night (later
increased to P750) that was given to him after each night’s performance. During
his employment, he could not choose the time of performance, which had been
fixed from 7:00 pm to 10:00 pm for 3 - 6 times/week. He added that the Legend
Hotel’s restaurant manager had required him to conform with the venue’s motif
and that he had been subjected to the rules on employees’ representation
checks and chits, a privilege granted to other employees.
9 July 1999: The management had notified him that as a cost-cutting measure,
his services as a pianist would no longer be required effective 30 July. Thus, he
filed complaint for ULP, constructive illegal dismissal, underpayment /
nonpayment of premium pay for holidays, separation pay, service incentive
leave pay and 13th month pay.
Hotel: He’s just a talent not an employee
LA: Employer-Employee relationship exists;
NLRC: No ER-EE relationship;
CA: Reinstated LA
ISSUES/HELD:
WON Joey was an employee of Legend. YES, all four requisites of ER-EE
relationship are present.
WON the fact that he doesn’t work for 8 hours negates the ER-EE
relationship. NO, Labor Code only set a maximum number of hours as “normal
work hours” (8hrs) but did not prohibit work of less than 8 hours.
If he is an employee, whether he was validly terminated. NO, retrenchment
was not valid for failing to prove that such was necessary due to business losses
RATIO:
WRT ER-EE Relationship
The Ct resolved this issue by enumerating the requisites for er-ee relationship
to be established:
a. SELECTION – The hotel actually wielded the power of selection
evidenced by the express written recommendation dated January 12,
remuneration.
b. WAGES - Legend Hotel: Remunerations were talent fee not included in LC
definition of wages
SC: The remuneration he receives (P400 or P750) denominated as talent
fees was fixed on the basis of his talent and skill and the quality of the
music he played during the hours of performance each night, taking into
account the prevailing rate for similar talents in the entertainment
industry. Remuneration even though denominated as talent fee is
included in the term “wages” provided in A97(f) 1 of Labor Code. Clearly,
respondent received compensation for the services he rendered as a
pianist in petitioner’s hotel. Hotel cannot use the service contract to rid
itself of the consequences of its employment of respondent.
c. DISMISSAL - The memorandum informing Joey of the discontinuance of
his service because of the present business or financial condition of hotel
showed that the latter had the power to dismiss him from employment
d. CONTROL – He could not choose the time and place of his performance,
he’s sometimes required to perform only Tagalog songs or music or to
wear barong Tagalog to conform to the Filipiniana motif, and he was
subjected to the rules on employees’ representation check and chits, a
privilege granted to other employees.
Hotel’s argument: He only works for 3 hours/day, thus he’s not an employee
SC: In providing that the " normal hours of work of any employee shall not
exceed eight (8) hours a day," Article 83 of the Labor Code only set a
maximum of number of hours as "normal hours of work" but did not
prohibit work of less than eight hours.
WRT cause of termination
The reason given by Legend Hotel was retrenchment due to business losses.
However, in termination cases the burden of proving that the termination is
valid lies with the employer. Here, they didn’t even try to submit evidence to
prove their claim. For failing to substantiate their claim with substantial
evidence, the Ct said that the retrenchment wasn’t valid.
1XXX wage paid to any employee shall mean the remuneration or earnings, however designated,
capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece,
or commission basis, or other method of calculating the same, which is payable by an employer to
an employee under a written or unwritten contract of employment for work done or to be done,
or for services rendered or to be rendered, and includes the fair and reasonable value, as
determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished
by the employer to the employee.