SONZA VS ABS CBN BROADCASTING CORP

CARPIO; J.
FACTS ISSUE RULUNG
ABS-CBN signed an Agreement with THE COURT Labor Arbiter NLRC rendered a Court of Appeals Supreme Court
the Mel and Jay Management and OF APPEALS rendered his Decision Decision affirming the rendered a Decision We affirm the assailed decision.
Development Corporation (“MJMDC”). GRAVELY dismissing the Labor Arbiter’s dismissing the case.
ERRED IN complaint for lack of decision. No convincing reason exists to warrant a
ABS-CBN was represented by its AFFIRMING jurisdiction. The Court of reversal of the decision of the Court of
corporate officers while MJMDC was THE NLRC’S x x x the May 1994 Appeals affirmed Appeals affirming the NLRC ruling which
represented by SONZA, as President DECISION Complainant was Agreement will the NLRC’s finding upheld the Labor Arbiter’s dismissal of the
and General Manager, and Carmela AND engaged by respondent readily reveal that that no employer- case for lack of jurisdiction.
Tiangco, as EVP and Treasurer. REFUSING by reason of his MJMDC entered into employee
TO FIND peculiar skills and talent the contract merely relationship existed The existence of an employer-employee
Referred to in the Agreement as THAT AN as a TV host and a as an agent of between SONZA relationship is a question of fact. Appellate
“AGENT,” MJMDC agreed to provide EMPLOYER- radio broadcaster. complainant Sonza, and ABS-CBN. courts accord the factual findings of the
SONZA’s services exclusively to EMPLOYEE the principal. By all Labor Arbiter and the NLRC only respect
ABS-CBN as talent for radio and RELATIONSHI Unlike an ordinary indication and as the but also finality when supported by
television. P EXISTED employee, he was free law puts it, the act of substantial evidence. Substantial evidence
BETWEEN to perform the services the agent is the act of means such relevant evidence as a
a. Co-host for Mel & Jay radio program, SONZA AND he undertook to render the principal itself. reasonable mind might accept as
8:00 to 10:00 a.m., Mondays to Fridays; ABS-CBN, in accordance with his This fact is made adequate to support a conclusion. A party
DESPITE THE own style. particularly true in cannot prove the absence of substantial
b. Co-host for Mel & Jay television WEIGHT OF this case, as evidence by simply pointing out that there
program, 5:30 to 7:00 p.m., Sundays. CONTROLLIN The benefits conferred admittedly MJMDC is contrary evidence on record, direct or
G LAW, to complainant under ‘is a management circumstantial. The Court does not
ABS-CBN agreed to pay for SONZA’s JURISPRUDE the May 1994 company devoted substitute its own judgment for that of the
services a monthly talent fee of NCE AND Agreement are certainly exclusively to tribunal in determining where the weight of
P310,000 for the first year and EVIDENCE very much higher than managing the evidence lies or what evidence is credible.
P317,000 for the second and third year TO SUPPORT those generally given to careers of Mr. Sonza
of the Agreement. ABS-CBN would pay SUCH A employees. For one, and his broadcast Case law has consistently held that the
the talent fees on the 10th and 25th FINDING. complainant Sonza’s partner, Mrs. elements of an employer-employee
days of the month., 2004 monthly talent fees Carmela C. Tiangco.’ relationship are: (a) the selection and
amount to a staggering (Opposition to Motion engagement of the employee; (b) the
On 1 April 1996, SONZA wrote a letter P317,000. Moreover, to Dismiss) payment of wages; (c) the power of
to ABS-CBN’s President, Eugenio his engagement as a dismissal; and (d) the employer’s power to
Lopez III, which reads: talent was covered by a Clearly, the relations control the employee on the means and
specific contract. of principal and agent methods by which the work is
As you are well aware, Mr. Sonza only accrues accomplished. The last element, the so-
irrevocably resigned in view of recent Likewise, he was not between complainant called “control test,” is the most important
events concerning his programs and bound to render eight Sonza and MJMDC, element.
career. (8) hours of work per and not between
We consider these acts of the station day as he worked only ABS-CBN and Independent contractors often present
violative of the Agreement and the for such number of MJMDC. This is clear themselves to possess unique skills,
station as in breach thereof. In this hours as may be from the provisions of expertise or talent to distinguish them from
connection, we hereby serve notice of necessary. the May 1994 ordinary employees. The specific selection
rescission of said Agreement at our Agreement which and hiring of SONZA, because of his
instance effective as of date. The fact that per the specifically referred unique skills, talent and celebrity status
May 1994 Agreement to MJMDC as the not possessed by ordinary employees, is a
Mr. Sonza informed us that he is complainant was ‘AGENT.’ As a matter circumstance indicative, but not
waiving and renouncing recovery of the accorded some benefits of fact, when conclusive, of an independent contractual
remaining amount stipulated in normally given to an complainant herein relationship. If SONZA did not possess
paragraph 7 of the Agreement but employee is unilaterally rescinded such unique skills, talent and celebrity
reserves the right to seek recovery of inconsequential. said May 1994 status, ABS-CBN would not have entered
the other benefits under said Whatever benefits Agreement, it was into the Agreement with SONZA but would
Agreement. complainant enjoyed MJMDC which issued have hired him through its personnel
arose from specific the notice of department just like any other employee.
On 30 April 1996, SONZA filed a agreement by the rescission in behalf of In any event, the method of selecting and
complaint against ABS-CBN before the parties and not by Mr. Sonza, who engaging SONZA does not conclusively
Department of Labor and Employment, reason of employer- himself signed the determine his status. We must consider all
National Capital Region in Quezon City. employee relationship. same in his capacity the circumstances of the relationship, with
as President. the control test being the most important
ABS-CBN continued to remit SONZA’s As correctly put by the element.
monthly talent fees through his account respondent, “All these Moreover, previous
at PCIBank, Quezon Avenue Branch, benefits are merely contracts between All the talent fees and benefits paid to
Quezon City. In July 1996, ABS-CBN talent fees and other Mr. Sonza and ABS- SONZA were the result of negotiations
opened a new account with the same contractual benefits and CBN reveal the fact that led to the Agreement. If SONZA were
bank where ABS-CBN deposited should not be deemed that historically, the ABS-CBN’s employee, there would be no
SONZA’s talent fees and other as ‘salaries, wages parties to the said need for the parties to stipulate on benefits
payments due him under the and/or other agreements are ABS- such as “SSS, Medicare, x x x and 13th
Agreement. remuneration’ accorded CBN and Mr. Sonza. month pay” which the law automatically
SONZA ABS CBN to an employee, And it is only in the incorporates into every employer-
complained that ABS-CBN filed a notwithstanding the May 1994 employee contract. Whatever benefits
ABS-CBN did not Motion to Dismiss nomenclature Agreement, which is SONZA enjoyed arose from contract and
pay his salaries, on the ground appended to these the latest Agreement not because of an employer-employee
separation pay, that no employer- benefits. Apropos to this executed between relationship.
service incentive employee is the rule that the term ABS-CBN and Mr.
leave pay, 13th relationship or nomenclature given Sonza, that MJMDC SONZA’s talent fees, amounting to
month pay, signing existed between to a stipulated benefit is figured in the said P317,000 monthly in the second and third
bonus, travel the parties. not controlling, but the Agreement as the year, are so huge and out of the ordinary
allowance and SONZA filed an intent of the parties to agent of Mr. Sonza. that they indicate more an independent
amounts due Opposition to the the Agreement contractual relationship rather than an
under the motion on 19 July conferring such benefit.” We find it erroneous employer-employee relationship. ABS-
Employees Stock 1996. to assert that CBN agreed to pay SONZA such huge
Option Plan The fact that MJMDC is a mere talent fees precisely because of SONZA’s
(“ESOP”). complainant was made ‘labor-only’ contractor unique skills, talent and celebrity status
subject to respondent’s of ABS-CBN such not possessed by ordinary employees.
SONZA argues Rules and Regulations, that there exist[s] Obviously, SONZA acting alone
that Policy likewise, does not employer-employee possessed enough bargaining power to
Instruction No. 40 detract from the relationship between demand and receive such huge talent fees
issued by then absence of employer- the latter and Mr. for his services. The power to bargain
Minister of Labor employee relationship. Sonza. On the talent fees way above the salary scales of
Blas Ople on 8 As held by the Supreme contrary, We find it ordinary employees is a circumstance
January 1979 Court, “The line should indubitable, that indicative, but not conclusive, of an
finally settled the be drawn between rules MJMDC is an agent, independent contractual relationship.
status of workers that merely serve as not of ABS-CBN, but
in the broadcast guidelines towards the of the Applying the control test to the present
industry. achievement of the talent/contractor Mr. case, we find that SONZA is not an
mutually desired result Sonza, as expressly employee but an independent contractor.
without dictating the admitted by the latter The control test is the most important test
means or methods to and MJMDC in the our courts apply in distinguishing an
be employed in May 1994 employee from an independent contractor.
attaining it, and those Agreement. This test is based on the extent of control
that control or fix the the hirer exercises over a worker. The
methodology and bind greater the supervision and control the
or restrict the party hirer exercises, the more likely the worker
hired to the use of such is deemed an employee. The converse
means. holds true as well—the less control the
hirer exercises, the more likely the worker
The first, which aim only is considered an independent contractor.
to promote the result,
create no employer- We find that ABS-CBN was not involved in
employee relationship the actual performance that produced the
unlike the second, finished product of SONZA’s work. ABS-
which address both the CBN did not instruct SONZA how to
result and the means to perform his job. ABS-CBN merely
achieve it.” reserved the right to modify the program
format and airtime schedule “for more
effective programming.” ABS-CBN’s sole
concern was the quality of the shows and
their standing in the ratings. Clearly, ABS-
CBN did not exercise control over the
means and methods of performance of
SONZA’s work.

A radio broadcast specialist who works

under minimal supervision is an
independent contractor. SONZA’s work as
television and radio program host required
special skills and talent, which SONZA
admittedly possesses. The records do not
show that ABS-CBN exercised any
supervision and control over how SONZA
utilized his skills and talent in his shows.

Being an exclusive talent does not by itself

mean that SONZA is an employee of ABS-
CBN. Even an independent contractor can
validly provide his services exclusively to
the hiring party. In the broadcast industry,
exclusivity is not necessarily the same as
control.

Under Policy Instruction No. 40 the types

of employees in the broadcast industry are
the station and program employees. Policy
Instruction No. 40 is a mere executive
issuance which does not have the force
and effect of law. There is no legal
presumption that Policy Instruction No. 40
determines SONZA’s status. A mere
executive issuance cannot exclude
independent contractors from the class of
service providers to the broadcast
industry. The classification of workers in
the broadcast industry into only two
groups under Policy Instruction No. 40 is
not binding on this Court, especially when
the classification has no basis either in law
or in fact.

The right of labor to security of tenure as

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

The Labor Arbiter can decide a case

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