These are the related Labor Law Cases or Jurisprudence.
1. Concept
a. Unique skills and talents
| Sonza v. ABS-CBN Broadcasting Corporation |
| G.R. No. 138051, 10 June 2004 |
| Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The specific selection and hiring of [Complainant], because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. If [Complainant] did not possess such unique skills, talent and celebrity status, [the Company] would not have entered into the Agreement with [Complainant] but would have hired him through its personnel department just like any other employee. |
| Fuji Television Network, Inc. v. Espiritu |
| G.R. No. 204944-45, 03 December 2014 |
| Jurisprudence has recognized another kind of independent contractor: individuals with unique skills and talents that set them apart from ordinary employees. There is no trilateral relationship in this case because the independent contractor himself or herself performs the work for the principal. In other words, the relationship is bilateral. |
b. Own manner and method of doing work
| Television and Production Exponents, Inc. v. Servaña |
| G.R. No. 167648, 28 January 2008 |
| [BACKGROUND] |
| [The Company] is a domestic corporation engaged in the production of television programs, such as the long-running variety program, “Eat Bulaga!”. Its president is [A. Tuviera] (Tuviera). [the Complainant] [R. Servaña] had served as a security guard for [the Company] from March 1987 until he was terminated on 3 March 2000. |
| [The Complainant] filed a complaint for illegal dismissal and nonpayment of benefits against [the Company]. He alleged that he was first connected with Agro-Commercial Security Agency but was later on absorbed by [the Company] as a regular company guard. He was detailed at Broadway Centrum in Quezon City where “Eat Bulaga!” regularly staged its productions. On 2 March 2000, [the Complainant] received a memorandum informing him of his impending dismissal on account of [the Company’s] decision to contract the services of a professional security agency. At the time of his termination, [the Complainant] was receiving a monthly salary of P6,000.00. He claimed that the holiday pay, unpaid vacation and sick leave benefits and other monetary considerations were withheld from him. He further contended that his dismissal was undertaken without due process and violative of existing labor laws, aggravated by nonpayment of separation pay. |
| [RESOLUTION – BY THE SUPREME COURT] |
| [The Company] further denies exercising control over [the Complainant] and maintains that the latter is an independent contractor. Aside from possessing substantial capital or investment, a legitimate job contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its own responsibility according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. [The Company] failed to establish that [the Complainant] is an independent contractor. As found by the Court of Appeals: |
| We find the annexes submitted by the private [the Complainant]s insufficient to prove that herein petitioner is indeed an independent contractor. None of the above conditions exist in the case at bar. [The Company] failed to show that [the Complainant] has substantial capital or investment to be qualified as an independent contractor. They likewise failed to present a written contract which specifies the performance of a specified piece of work, the nature and extent of the work and the term and duration of the relationship between herein [the Complainant] and [the Company]. |
| x x x |
| [The Company] relies on Policy Instruction No. 40, issued by the Department of Labor, in classifying [the Complainant] as a program employee and equating him to be an independent contractor. |
| Policy Instruction No. 40 defines program employees as— |
| x x x those whose skills, talents or services are engaged by the station for a particular or specific program or undertaking and who are not required to observe normal working hours such that on some days they work for less than eight (8) hours and on other days beyond the normal work hours observed by station employees and are allowed to enter into employment contracts with other persons, stations, advertising agencies or sponsoring companies. The engagement of program employees, including those hired by advertising or sponsoring companies, shall be under a written contract specifying, among other things, the nature of the work to be performed, rates of pay and the programs in which they will work. The contract shall be duly registered by the station with the Broadcast Media Council within three (3) days from its consummation. |
| [The Company] failed to adduce any evidence to prove that it complied with the requirements laid down in the policy instruction. It did not even present its contract with [the Complainant]. Neither did it comply with the contract-registration requirement. |
| Even granting arguendo that [the Complainant] is a program employee, stills, classifying him as an independent contractor is misplaced. The Court of Appeals had this to say: |
| We cannot subscribe to [the Company’s] conflicting theories. The theory of [the Company] that [the Complainant] is an independent contractor runs counter to their very own allegation that [the Complainant] is a talent or a program employee. An independent contractor is not an employee of the employer, while a talent or program employee is an employee. The only difference between a talent or program employee and a regular employee is the fact that a regular employee is entitled to all the benefits that are being prayed for. This is the reason why [the Company] try to seek refuge under the concept of an independent contractor theory. For if [the Complainant] were indeed an independent contractor, [the Company] will not be liable to pay the benefits prayed for in [the Complainant’s] complaint. |
| More importantly, [the Complainant] had been continuously under the employ of [the Company] from 1995 until his termination in March 2000, or for a span of 5 years. Regardless of whether or not [the Complainant] had been performing work that is necessary or desirable to the usual business of [the Company], [the Complainant] is still considered a regular employee under Article 280 of the Labor Code… |
| ABS-CBN Corporation v. Concepcion |
| G.R. No. 230576, 05 October 2020 |
| [BACKGROUND] |
| [The Company] is a domestic corporation principally engaged in the business of broadcasting television and radio content in the Philippines… |
| x x x |
| [The Company] claims that it is not its principal business nor its legal obligation to produce television programs. It can operate its business without producing any of its own television programs. Just like any other broadcasting companies, it has several options in terms of where and how to obtain content to broadcast or air, and the means of generating revenues. These options include the following schemes: (1) block-time; (2) line production; (3) Co-production; (4) Self-production; (5) Foreign canned shows; (6) Live Coverages; (7) Licensed Programs; and (8) a combination of the foregoing schemes. |
| [The Complainant] maintains that he was hired by [the Company] as OB (Outside Broadcast) van driver in June 1999 under the Engineering Department and was given the task to oversee the generator used during tapings/shooting of programs aired by [the Company]. He was assigned to different TV Programs at the time of his employment, and acted as property custodian over all equipment, especially the generator used in their tapings/shootings. According to [the Complainant], he was supervised by [the Company] personnel with respect to his work schedules, the programs he was assigned to, and the time he was supposed to report for work. He was made to comply with company rules, and for infractions committed, he was subjected to penalties and sanctions. In one instance in 2003 he was issued a Memo from [the Company] TV Engineering Division for the alleged overheating of a generator set. |
| [The Complainant] asserts that eventually, he was placed in the Internal Job Market work pool devised by [the Company] and joined the workers’ union. As a result of the union’s constant demands for regularization, [the Company] started coercing complainant and other union members to sign contracts indicating they were waiving their rights to regularization and giving them deadlines within which to do so. Thus, [the Complainant] filed an initial complaint for regularization on 06 August 2010. A month later, or on 01 September 2010, [the Complainant] was dismissed from service after he refused to sign the employment contract prepared by [the Company]. This prompted [the Complainant] to amend his labor complaint to include illegal dismissal. At the time of his dismissal on 01 September 2010, he was receiving a salary of Php558.16/day or Php69.77 per hour. |
| [RESOLUTION – BY THE SUPREME COURT] |
| The records show that [the Complainant] was directly hired by [the Company]. He was receiving salaries twice a month with payslips bearing the ABS CBN’s corporate name. His Certificates of Compensation Payment/Tax Withheld, indicate that his salary is being deducted for SSS, Pag-Ibig, Philhealth, among others, which certificates indicate that his employer is [the Company]. |
| At the time of [the Complainant’s] dismissal on 01 September 2010, he was receiving a salary of Php558.16/day or Php69.77 per hour. Although wages are not a conclusive factor, it may indicate whether one is an independent contractor. |
| An independent contractor enjoys independence and freedom from the control and supervision of his principal. This is opposed to an employee who is subject to the employer’s power to control the means and methods by which the employee’s work is to be performed and accomplished. |
| Here, [the Company] has production and field supervisors to monitor [the Complainant] in his works and to see to it that he follows the required standards set by [the Company]. The network has the power to discipline [the Complainant], and in fact, he was once subjected to a disciplinary action. [the Complainant], just like any normal employee, was required to attend seminars and workshops to ensure their optimal performance at work. |
| Undaunted, [the Company] insists that [the Complainant] is a talent, thus, an independent contractor. This argument, however, deserves scant consideration. [the Complainant] cannot be considered a talent of [the Company] as he is neither an actor nor a star. Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees which [the Complainant] does not have. Notwithstanding, [the Company] tries to project [the Complainant] as not an ordinary office driver, but an OB van driver. |
| [The Company’s] asseveration rests on flimsy ground. Driving an OB van which is equipped with specialized equipment does not make the driver a standout. Parenthetically, [the Company] took pains in discussing what other workers do, such as audioman or sound engineer, cameraman, gaffer, and lightman but failed to discuss the nature of the job of an OB Van Driver, except that it includes the handling of the OB Van. |
| [The Company] has not disputed that at the time [the Complainant] was hired by the Human Resource Department, his driving skills were limited and that he had no knowledge in operating a generator set. It was the network which provided him the necessary trainings and seminars to develop his skills.52 Moreover, the tools and instrumentalities needed by [the Complainant] for his work is provided to him53 – the OB Van and the generator set. [the Company] could also assign him to any show or programs where the production group would need his services. |
| It does not escape our attention that [the Complainant] has no power to bargain and negotiate for his fee. The power to bargain talent fees way above the salary scales of ordinary employees is a circumstance indicative of an independent contractual relationship. That [the Company] classified him as a talent is of no moment and does not make him an independent contractor. It is not the will or word of the employer which determines the nature of employment of an employee but the nature of the activities performed by such employee in relation to the particular business or trade of the employer. Hence, not being an independent contractor, [the Complainant] is necessarily an employee of [the Company]. |
3. Tests
a. Four-fold test
| Sonza v. ABS-CBN Broadcasting Corporation |
| G.R. No. 138051, 10 June 2004 |
| [BACKGROUND] |
| In May 1994, respondent [the Company] Broadcasting Corporation… signed an Agreement (“Agreement”) with the Mel and Jay Management and Development Corporation (“MJMDC”). [The Company] was represented by its corporate officers while MJMDC was represented by [Complainant]. [Complainant], as President and General Manager, and [C. Tiangco] (“TIANGCO”), as EVP and Treasurer. Referred to in the Agreement as “AGENT,” MJMDC agreed to provide [Complainant’s] services exclusively to [the Company] as talent for radio and television. The Agreement listed the services [Complainant] would render to [the Company], as follows: |
| a. Co-host for Mel & Jay radio program, 8:00 to 10:00 a.m., Mondays to Fridays; |
| b. Co-host for Mel & Jay television program, 5:30 to 7:00 p.m., Sundays. |
| [The Company] agreed to pay for [Complainant’s] services a monthly talent fee of ₱310,000 for the first year and ₱317,000 for the second and third year of the Agreement. [The Company] would pay the talent fees on the 10th and 25th days of the month. |
| On 1 April 1996, [Complainant] wrote a letter to [the Company]’s President, [E. Lopez III], which reads: |
| Dear Mr. Lopez, |
| We would like to call your attention to the Agreement dated May 1994 entered into by your goodself on behalf of [the Company] with our company relative to our talent [herein: Complainant]. |
| As you are well aware, [Complainant] irrevocably resigned in view of recent events concerning his programs and career. We consider these acts of the station violative of the Agreement and the station as in breach thereof. In this connection, we hereby serve notice of rescission of said Agreement at our instance effective as of date. |
| [Complainant] informed us that he is waiving and renouncing recovery of the remaining amount stipulated in paragraph 7 of the Agreement but reserves the right to seek recovery of the other benefits under said Agreement. |
| Thank you for your attention. |
| Very truly yours, |
| (Sgd.) |
| [Complainant] |
| President and Gen. Manager |
| On 30 April 1996, [Complainant] filed a complaint against [the Company] before the Department of Labor and Employment, National Capital Region in Quezon City. [Complainant] complained that [the Company] did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan (“ESOP”). |
| On 10 July 1996, [the Company] filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties. [Complainant] filed an Opposition to the motion on 19 July 1996. |
| [RESOLUTION – BY THE SUPREME COURT] |
| Employee or Independent Contractor? |
| x x x |
| [Complainant] maintains that all essential elements of an employer-employee relationship are present in this case. Case law has consistently held that the elements of an employer-employee relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished. The last element, the so-called “control test”, is the most important element. |
| A. Selection and Engagement of Employee |
| [The Company] engaged [Complainant]’s services to co-host its television and radio programs because of [Complainant]’s peculiar skills, talent and celebrity status. [Complainant] contends that the “discretion used by respondent in specifically selecting and hiring [Complainant] over other broadcasters of possibly similar experience and qualification as [Complainant] belies respondent’s claim of independent contractorship.” |
| Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The specific selection and hiring of [Complainant], because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. If [Complainant] did not possess such unique skills, talent and celebrity status, [the Company] would not have entered into the Agreement with [Complainant] but would have hired him through its personnel department just like any other employee. |
| In any event, the method of selecting and engaging [Complainant] does not conclusively determine his status. We must consider all the circumstances of the relationship, with the control test being the most important element. |
| B. Payment of Wages |
| [The Company] directly paid [Complainant] his monthly talent fees with no part of his fees going to MJMDC. [Complainant] asserts that this mode of fee payment shows that he was an employee of [the Company]. [Complainant] also points out that [the Company] granted him benefits and privileges “which he would not have enjoyed if he were truly the subject of a valid job contract.” |
| All the talent fees and benefits paid to [Complainant] were the result of negotiations that led to the Agreement. If [Complainant] were [the Company’s] employee, there would be no need for the parties to stipulate on benefits such as “SSS, Medicare, x x x and 13th month pay” which the law automatically incorporates into every employer-employee contract. Whatever benefits [Complainant] enjoyed arose from contract and not because of an employer-employee relationship. |
| [Complainant]’s talent fees, amounting to ₱317,000 monthly in the second and third year, are so huge and out of the ordinary that they indicate more an independent contractual relationship rather than an employer-employee relationship. [the Company] agreed to pay [Complainant] such huge talent fees precisely because of [Complainant]’s unique skills, talent and celebrity status not possessed by ordinary employees. Obviously, [Complainant] acting alone possessed enough bargaining power to demand and receive such huge talent fees for his services. The power to bargain talent fees way above the salary scales of ordinary employees is a circumstance indicative, but not conclusive, of an independent contractual relationship. |
| The payment of talent fees directly to [Complainant] and not to MJMDC does not negate the status of [Complainant] as an independent contractor. The parties expressly agreed on such mode of payment. Under the Agreement, MJMDC is the AGENT of [Complainant], to whom MJMDC would have to turn over any talent fee accruing under the Agreement. |
| C. Power of Dismissal |
| For violation of any provision of the Agreement, either party may terminate their relationship. [Complainant] failed to show that [the Company] could terminate his services on grounds other than breach of contract, such as retrenchment to prevent losses as provided under labor laws. |
| During the life of the Agreement, [the Company] agreed to pay [Complainant]’s talent fees as long as “AGENT and Jay [Complainant] shall faithfully and completely perform each condition of this Agreement.” Even if it suffered severe business losses, [the Company] could not retrench [Complainant] because [the Company] remained obligated to pay [Complainant]’s talent fees during the life of the Agreement. This circumstance indicates an independent contractual relationship between [Complainant] and [the Company]. |
| [Complainant] admits that even after [the Company] ceased broadcasting his programs, [the Company] still paid him his talent fees. Plainly, [the Company] adhered to its undertaking in the Agreement to continue paying [Complainant]’s talent fees during the remaining life of the Agreement even if [the Company] cancelled [Complainant]’s programs through no fault of [Complainant]. |
| [Complainant] assails the Labor Arbiter’s interpretation of his rescission of the Agreement as an admission that he is not an employee of [the Company]. The Labor Arbiter stated that “if it were true that [Complainant] was really an employee, he would merely resign, instead.” [Complainant] did actually resign from [the Company] but he also, as president of MJMDC, rescinded the Agreement. [Complainant]’s letter clearly bears this out. However, the manner by which [Complainant] terminated his relationship with [the Company] is immaterial. Whether [Complainant] rescinded the Agreement or resigned from work does not determine his status as employee or independent contractor. |
| D. Power of Control |
| Since there is no local precedent on whether a radio and television program host is an employee or an independent contractor, we refer to foreign case law in analyzing the present case. The United States Court of Appeals, First Circuit, recently held in Alberty-Vélez v. Corporación De Puerto Rico Para La Difusión Pública (“WIPR”) that a television program host is an independent contractor. We quote the following findings of the U.S. court: |
| Several factors favor classifying Alberty as an independent contractor. First, a television actress is a skilled position requiring talent and training not available on-the-job. x x x In this regard, Alberty possesses a master’s degree in public communications and journalism; is trained in dance, singing, and modeling; taught with the drama department at the University of Puerto Rico; and acted in several theater and television productions prior to her affiliation with “Desde Mi Pueblo.” Second, Alberty provided the “tools and instrumentalities” necessary for her to perform. Specifically, she provided, or obtained sponsors to provide, the costumes, jewelry, and other image-related supplies and services necessary for her appearance. Alberty disputes that this factor favors independent contractor status because WIPR provided the “equipment necessary to tape the show.” Alberty’s argument is misplaced. The equipment necessary for Alberty to conduct her job as host of “Desde Mi Pueblo” related to her appearance on the show. Others provided equipment for filming and producing the show, but these were not the primary tools that Alberty used to perform her particular function. If we accepted this argument, independent contractors could never work on collaborative projects because other individuals often provide the equipment required for different aspects of the collaboration. x x x |
| Third, WIPR could not assign Alberty work in addition to filming “Desde Mi Pueblo.” Alberty’s contracts with WIPR specifically provided that WIPR hired her “professional services as Hostess for the Program Desde Mi Pueblo.” There is no evidence that WIPR assigned Alberty tasks in addition to work related to these tapings. x x x (Emphasis supplied) |
| Applying the control test to the present case, we find that [Complainant] is not an employee but an independent contractor. The control test is the most important test our courts apply in distinguishing an employee from an independent contractor.29 This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well – the less control the hirer exercises, the more likely the worker is considered an independent contractor. |
| First, [Complainant] contends that [the Company] exercised control over the means and methods of his work. |
| [Complainant]’s argument is misplaced. [the Company] engaged [Complainant]’s services specifically to co-host the “Mel & Jay” programs. [the Company] did not assign any other work to [Complainant]. To perform his work, [Complainant] only needed his skills and talent. How [Complainant] delivered his lines, appeared on television, and sounded on radio were outside [the Company]’s control. [Complainant] did not have to render eight hours of work per day. The Agreement required [Complainant] to attend only rehearsals and tapings of the shows, as well as pre- and post-production staff meetings. [the Company] could not dictate the contents of [Complainant]’s script. However, the Agreement prohibited [Complainant] from criticizing in his shows [the Company] or its interests. The clear implication is that [Complainant] had a free hand on what to say or discuss in his shows provided he did not attack [the Company] or its interests. |
| We find that [the Company] was not involved in the actual performance that produced the finished product of [Complainant]’s work. [the Company] did not instruct [Complainant] how to perform his job. [the Company] merely reserved the right to modify the program format and airtime schedule “for more effective programming.” [the Company]’s sole concern was the quality of the shows and their standing in the ratings. Clearly, [the Company] did not exercise control over the means and methods of performance of [Complainant]’s work. |
| [Complainant] claims that [the Company]’s power not to broadcast his shows proves [the Company]’s power over the means and methods of the performance of his work. Although [the Company] did have the option not to broadcast [Complainant]’s show, [the Company] was still obligated to pay [Complainant]’s talent fees… Thus, even if [the Company] was completely dissatisfied with the means and methods of [Complainant]’s performance of his work, or even with the quality or product of his work, [the Company] could not dismiss or even discipline [Complainant]. All that [the Company] could do is not to broadcast [Complainant]’s show but [the Company] must still pay his talent fees in full. |
| Clearly, [the Company’s] right not to broadcast [Complainant]’s show, burdened as it was by the obligation to continue paying in full [Complainant]’s talent fees, did not amount to control over the means and methods of the performance of [Complainant]’s work. [the Company] could not terminate or discipline [Complainant] even if the means and methods of performance of his work – how he delivered his lines and appeared on television – did not meet [the Company’s] approval. This proves that [the Company’s] control was limited only to the result of [Complainant]’s work, whether to broadcast the final product or not. In either case, [the Company] must still pay [Complainant]’s talent fees in full until the expiry of the Agreement. |
| In Vaughan, et al. v. Warner, et al., the United States Circuit Court of Appeals ruled that vaudeville performers were independent contractors although the management reserved the right to delete objectionable features in their shows. Since the management did not have control over the manner of performance of the skills of the artists, it could only control the result of the work by deleting objectionable features. |
| [Complainant] further contends that [the Company] exercised control over his work by supplying all equipment and crew. No doubt, [the Company] supplied the equipment, crew and airtime needed to broadcast the “Mel & Jay” programs. However, the equipment, crew and airtime are not the “tools and instrumentalities” [Complainant] needed to perform his job. What [Complainant] principally needed were his talent or skills and the costumes necessary for his appearance. Even though [the Company] provided [Complainant] with the place of work and the necessary equipment, [Complainant] was still an independent contractor since [the Company] did not supervise and control his work. [the Company’s] sole concern was for [Complainant] to display his talent during the airing of the programs. |
| A radio broadcast specialist who works under minimal supervision is an independent contractor. [Complainant]’s work as television and radio program host required special skills and talent, which [Complainant] admittedly possesses. The records do not show that [the Company] exercised any supervision and control over how [Complainant] utilized his skills and talent in his shows. |
| Second, [Complainant] urges us to rule that he was [the Company’s] employee because [the Company] subjected him to its rules and standards of performance. [Complainant] claims that this indicates [the Company’s] control “not only [over] his manner of work but also the quality of his work.” |
| The Agreement stipulates that [Complainant] shall abide with the rules and standards of performance “covering talents” of [the Company]. The Agreement does not require [Complainant] to comply with the rules and standards of performance prescribed for employees of [the Company]. The code of conduct imposed on [Complainant] under the Agreement refers to the “Television and Radio Code of the Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which has been adopted by the COMPANY… as its Code of Ethics.” The KBP code applies to broadcasters, not to employees of radio and television stations. Broadcasters are not necessarily employees of radio and television stations. Clearly, the rules and standards of performance referred to in the Agreement are those applicable to talents and not to employees of [the Company]. |
| In any event, not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former. In this case, [Complainant] failed to show that these rules controlled his performance. We find that these general rules are merely guidelines towards the achievement of the mutually desired result, which are top-rating television and radio programs that comply with standards of the industry. We have ruled that: |
| Further, not every form of control that a party reserves to himself over the conduct of the other party in relation to the services being rendered may be accorded the effect of establishing an employer-employee relationship. The facts of this case fall squarely with the case of Insular Life Assurance Co., Ltd. vs. NLRC. In said case, we held that: |
| Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. |
| The Vaughan case also held that one could still be an independent contractor although the hirer reserved certain supervision to insure the attainment of the desired result. The hirer, however, must not deprive the one hired from performing his services according to his own initiative. |
| Lastly, [Complainant] insists that the “exclusivity clause” in the Agreement is the most extreme form of control which [the Company] exercised over him. |
| This argument is futile. Being an exclusive talent does not by itself mean that [Complainant] is an employee of [the Company]. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control. |
| The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry. This practice is not designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station. The broadcast station normally spends substantial amounts of money, time and effort “in building up its talents as well as the programs they appear in and thus expects that said talents remain exclusive with the station for a commensurate period of time.” Normally, a much higher fee is paid to talents who agree to work exclusively for a particular radio or television station. In short, the huge talent fees partially compensates for exclusivity, as in the present case. |
| x x x |
| Talents as Independent Contractors |
| [The Company] claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like [Complainant] as independent contractors. [Complainant] argues that if such practice exists, it is void for violating the right of labor to security of tenure. |
| The right of labor to security of tenure as guaranteed in the Constitution arises only if there is an employer-employee relationship under labor laws. Not every performance of services for a fee creates an employer-employee relationship. To hold that every person who renders services to another for a fee is an employee – to give meaning to the security of tenure clause – will lead to absurd results. |
| Individuals with special skills, expertise or talent enjoy the freedom to offer their services as independent contractors. The right to life and livelihood guarantees this freedom to contract as independent contractors. The right of labor to security of tenure cannot operate to deprive an individual, possessed with special skills, expertise and talent, of his right to contract as an independent contractor. An individual like an artist or talent has a right to render his services without any one controlling the means and methods by which he performs his art or craft. This Court will not interpret the right of labor to security of tenure to compel artists and talents to render their services only as employees. If radio and television program hosts can render their services only as employees, the station owners and managers can dictate to the radio and television hosts what they say in their shows. This is not conducive to freedom of the press. |
| Different Tax Treatment of Talents and Broadcasters |
| The National Internal Revenue Code (“NIRC”) in relation to Republic Act No. 7716,55 as amended by Republic Act No. 8241,56 treats talents, television and radio broadcasters differently. Under the NIRC, these professionals are subject to the 10% value-added tax (“VAT”) on services they render. Exempted from the VAT are those under an employer-employee relationship. This different tax treatment accorded to talents and broadcasters bolters our conclusion that they are independent contractors, provided all the basic elements of a contractual relationship are present as in this case. |
1) Power of control
| Dumpit-Murillo v. CA, Associated Broadcasting Company |
| G.R. No. 164652, 08 June 2007 |
| [BACKGROUND] |
| On October 2, 1995, under Talent Contract No. NT95-1805, [the Company – a broadcasting business] hired [the Complainant] as a newscaster and co-anchor for Balitang-Balita, an early evening news program. The contract was for a period of three months. It was renewed under Talent Contracts Nos. NT95-1915, NT96-3002, NT98-4984 and NT99-5649.5 In addition, [the Complainant’s] services were engaged for the program “Live on Five.” On September 30, 1999, after four years of repeated renewals, [the Complainant’s] talent contract expired. Two weeks after the expiration of the last contract, [the Complainant] sent a letter to Mr. Jose Javier, Vice President for News and Public Affairs of [the Company], informing the latter that she was still interested in renewing her contract subject to a salary increase. Thereafter, [the Complainant] stopped reporting for work. On November 5, 1999, she wrote Mr. Javier another letter, which we quote verbatim: |
| x x x x |
| Dear Mr. Javier: |
| On October 20, 1999, I wrote you a letter in answer to your query by way of a marginal note ‘what terms and conditions’ in response to my first letter dated October 13, 1999. To date, or for more than fifteen (15) days since then, I have not received any formal written reply. Xxx |
| In view hereof, should I not receive any formal response from you until Monday, November 8, 1999, I will deem it as a constructive dismissal of my services. |
| x x x x |
| A month later, [the Complainant] sent a demand letter to [the Company], demanding: (a) reinstatement to her former position; (b) payment of unpaid wages for services rendered from September 1 to October 20, 1999 and full backwages; (c) payment of 13th month pay, vacation/sick/service incentive leaves and other monetary benefits due to a regular employee starting March 31, 1996. [the Company] replied that a check covering [the Complainant’s] talent fees for September 16 to October 20, 1999 had been processed and prepared, but that the other claims of [the Complainant] had no basis in fact or in law. |
| [RESOLUTION – BY THE SUPREME COURT] |
| On the second issue, [the Company] contend that the Court of Appeals did not err when it upheld the validity of the talent contracts voluntarily entered into by [the Complainant]. It further stated that prevailing jurisprudence has recognized and sustained the absence of employer-employee relationship between a talent and the media entity which engaged the talent’s services on a per talent contract basis, citing the case of Sonza v. ABS-CBN Broadcasting Corporation. |
| [The Complainant] avers however that an employer-employee relationship was created when the [the Company] started to merely renew the contracts repeatedly fifteen times or for four consecutive years. |
| Again, we agree with [the Complainant]. The Court of Appeals committed reversible error when it held that [the Complainant] was a fixed-term employee. [the Complainant] was a regular employee under contemplation of law. The practice of having fixed-term contracts in the industry does not automatically make all talent contracts valid and compliant with labor law. The assertion that a talent contract exists does not necessarily prevent a regular employment status. |
| Further, the Sonza case is not applicable. In Sonza, the television station did not instruct Sonza how to perform his job. How Sonza delivered his lines, appeared on television, and sounded on radio were outside the television station’s control. Sonza had a free hand on what to say or discuss in his shows provided he did not attack the television station or its interests. Clearly, the television station did not exercise control over the means and methods of the performance of Sonza’s work. In the case at bar, [the Company] had control over the performance of [the Complainant’s] work. Noteworthy too, is the comparatively low ₱28,000 monthly pay of [the Complainant] vis the ₱300,000 a month salary of Sonza, that all the more bolsters the conclusion that [the Complainant] was not in the same situation as Sonza. |
| The contract of employment of [the Complainant] with [the Company] had the following stipulations: |
| x x x x |
| 1. SCOPE OF SERVICES – TALENT agrees to devote his/her talent, time, attention and best efforts in the performance of his/her duties and responsibilities as Anchor/Program Host/Newscaster of the Program, in accordance with the direction of [the Company] and/or its authorized representatives. |
| 1.1. DUTIES AND RESPONSIBILITIES – TALENT shall: |
| a. Render his/her services as a newscaster on the Program; |
| b. Be involved in news-gathering operations by conducting interviews on- and off-the-air; |
| c. Participate in live remote coverages when called upon; |
| d. Be available for any other news assignment, such as writing, research or camera work; |
| e. Attend production meetings; |
| f. On assigned days, be at the studios at least one (1) hour before the live telecasts; |
| g. Be present promptly at the studios and/or other place of assignment at the time designated by [the Company]; |
| h. Keep abreast of the news; |
| i. Give his/her full cooperation to [the Company] and its duly authorized representatives in the production and promotion of the Program; and |
| j. Perform such other functions as may be assigned to him/her from time to time. |
| x x x x |
| 1.3 COMPLIANCE WITH STANDARDS, INSTRUCTIONS AND OTHER RULES AND REGULATIONS – TALENT agrees that he/she will promptly and faithfully comply with the requests and instructions, as well as the program standards, policies, rules and regulations of [the Company], the KBP and the government or any of its agencies and instrumentalities. |
| x x x x |
| In Manila Water Company, Inc. v. Pena, we said that the elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee, (b) the payment of wages, (c) the power of dismissal, and (d) the employer’s power to control. The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. |
| The duties of [the Complainant] as enumerated in her employment contract indicate that [the Company] had control over the work of [the Complainant]. Aside from control, [the Company] also dictated the work assignments and payment of [the Complainant’s] wages. [the Company] also had power to dismiss her. All these being present, clearly, there existed an employment relationship between [the Complainant] and [the Company]. |
| Fuji Television Network, Inc. v. Espiritu |
| G.R. No. 204944-45, 03 December 2014 |
| [BACKGROUND] |
| In 2005, [Complainant] was engaged by [the Company] as a news correspondent/producer “tasked to report Philippine news to [the Company] through its Manila Bureau field office.” [Complainant’s] employment contract initially provided for a term of one (1) year but was successively renewed on a yearly basis with salary adjustment upon every renewal. Sometime in January 2009, [Complainant] was diagnosed with lung cancer. She informed [the Company] about her condition. In turn, the Chief of News Agency of [the Company], [Y. Aoki], informed [Complainant] “that the company will have a problem renewing her contract” since it would be difficult for her to perform her job. She “insisted that she was still fit to work as certified by her attending physician.” |
| After several verbal and written communications, [Complainant] and [the Company] signed a non-renewal contract on May 5, 2009 where it was stipulated that her contract would no longer be renewed after its expiration on May 31, 2009. The contract also provided that the parties release each other from liabilities and responsibilities under the employment contract. |
| In consideration of the non-renewal contract, [Complainant] “acknowledged receipt of the total amount of US$18,050.00 representing her monthly salary from March 2009 to May 2009, year-end bonus, mid-year bonus, and separation pay.” However, [Complainant] affixed her signature on the nonrenewal contract with the initials “U.P.” for “under protest.” |
| On May 6, 2009, the day after [Complainant] signed the non-renewal contract, she filed a complaint for illegal dismissal and attorney’s fees with the National Capital Region Arbitration Branch of the National Labor Relations Commission. She alleged that she was forced to sign the nonrenewal contract when [the Company] came to know of her illness and that [the Company] withheld her salaries and other benefits for March and April 2009 when she refused to sign. |
| [Complainant] claimed that she was left with no other recourse but to sign the non-renewal contract, and it was only upon signing that she was given her salaries and bonuses, in addition to separation pay equivalent to four (4) years. |
| [RESOLUTION – BY THE SUPREME COURT] |
| Determination of employment status; burden of proof |
| In this case, there is no question that [Complainant] rendered services to [the Company]. However, [the Company] alleges that [Complainant] was an independent contractor, while [Complainant] alleges that she was a regular employee. To resolve this issue, we ascertain whether an employer-employee relationship existed between [the Company] and [Complainant]. |
| x x x |
| [The Company] alleges that [Complainant] was an independent contractor, citing Sonza v. ABS-CBN and relying on the following facts: (1) she was hired because of her skills; (2) her salary was US$1,900.00, which is higher than the normal rate; (3) she had the power to bargain with her employer; and (4) her contract was for a fixed term. According to [the Company], the Court of Appeals erred when it ruled that [Complainant] was forced to sign the non-renewal agreement, considering that she sent an email with another version of the non-renewal agreement. |
| Further, she is not entitled to moral damages and attorney’s fees because she acted in bad faith when she filed a labor complaint against [the Company] after receiving US$18,050.00 representing her salary and other benefits. [Complainant] argues that she was a regular employee because [the Company] had control and supervision over her work. The news events that she covered were all based on the instructions of [the Company]. She maintains that the successive renewal of her employment contracts for four (4) years indicates that her work was necessary and desirable. In addition, [the Company’s] payment of separation pay equivalent to one (1) month’s pay per year of service indicates that she was a regular employee. To further support her argument that she was not an independent contractor, she states that [the Company] owns the laptop computer and mini-camera that she used for work. [Complainant] also argues that Sonza is not applicable because she was a plain reporter for [the Company], unlike Jay Sonza who was a news anchor, talk show host, and who enjoyed a celebrity status. On her illness, [Complainant] points out that it was not a ground for her dismissal because her attending physician certified that she was fit to work. |
| x x x |
| Distinctions among fixed-term employees, independent contractors, and regular employees |
| GMA Network, Inc. v. Pabriga expounded the doctrine on fixed term contracts laid down in Brent in the following manner: |
| Cognizant of the possibility of abuse in the utilization of fixed term employment contracts, we emphasized in Brent that where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down as contrary to public policy or morals. We thus laid down indications or criteria under which “term employment” cannot be said to be in circumvention of the law on security of tenure, namely: |
| 1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or |
| 2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. |
| These indications, which must be read together, make the Brent doctrine applicable only in a few special cases wherein the employer and employee are on more or less in equal footing in entering into the contract. The reason for this is evident: whena prospective employee, on account of special skills or market forces, is in a position to make demands upon the prospective employer, such prospective employee needs less protection than the ordinary worker. Lesser limitations on the parties’ freedom of contract are thus required for the protection of the employee… |
| x x x |
| In view of the “distinct and independent business” of independent contractors, no employer-employee relationship exists between independent contractors and their principals. Independent contractors are recognized under Article 106 of the Labor Code: |
| Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for the performance of the former’s work, the employees of the contractor and of the latter’s subcontractor, if any, shall be paid in accordance with the provisions of this Code. |
| x x x |
| Jurisprudence has recognized another kind of independent contractor: individuals with unique skills and talents that set them apart from ordinary employees. There is no trilateral relationship in this case because the independent contractor himself or herself performs the work for the principal. In other words, the relationship is bilateral. |
| In Orozco v. Court of Appeals, [W. Orozco] was a columnist for the Philippine Daily Inquirer. This court ruled that she was an independent contractor because of her “talent, skill, experience, and her unique viewpoint as a feminist advocate.” In addition, the Philippine Daily Inquirer did not have the power of control over Orozco, and she worked at her own pleasure. |
| Semblante v. Court of Appeals involved a masiador and a sentenciador. This court ruled that “petitioners performed their functions as masiador and sentenciador free from the direction and control of respondents” and that the masiador and sentenciador “relied mainly on their ‘expertise that is characteristic of the cockfight gambling.’” Hence, no employer-employee relationship existed. |
| Bernarte v. Philippine Basketball Association involved a basketball referee. This court ruled that “a referee is an independent contractor, whose special skills and independent judgment are required specifically for such position and cannot possibly be controlled by the hiring party.” |
| In these cases, the workers were found to be independent contractors because of their unique skills and talents and the lack of control over the means and methods in the performance of their work. |
| In other words, there are different kinds of independent contractors: those engaged in legitimate job contracting and those who have unique skills and talents that set them apart from ordinary employees. |
| Since no employer-employee relationship exists between independent contractors and their principals, their contracts are governed by the Civil Code provisions on contracts and other applicable laws. |
| x x x |
| [The Company’s] argument that [Complainant] was an independent contractor under a fixed-term contract is contradictory. Employees under fixed-term contracts cannot be independent contractors because in fixed-term contracts, an employer-employee relationship exists. The test in this kind of contract is not the necessity and desirability of the employee’s activities, “but the day certain agreed upon by the parties for the commencement and termination of the employment relationship.” For regular employees, the necessity and desirability of their work in the usual course of the employer’s business are the determining factors. On the other hand, independent contractors do not have employer-employee relationships with their principals. Hence, before the status of employment can be determined, the existence of an employer-employee relationship must be established. |
| The four-fold test can be used in determining whether an employer employee relationship exists. The elements of the four-fold test are the following: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power of control, which is the most important element. |
| The “power of control” was explained by this court in Corporal, Sr. v. National Labor Relations Commission: |
| The power to control refers to the existence of the power and not necessarily to the actual exercise thereof, nor is it essential for the employer to actually supervise the performance of duties of the employee. It is enough that the employer has the right to wield that power… |
| Orozco v. Court of Appeals further elucidated the meaning of “power of control” and stated the following: |
| Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it… |
| In Locsin, et al. v. Philippine Long Distance Telephone Company, the “power of control” was defined as “[the] right to control not only the end to be achieved but also the means to be used in reaching such end.” |
| x x x |
| Application of the four-fold test |
| The Court of Appeals did not err when it… affirmed the ruling of the National Labor Relations Commission finding that [Complainant] was a regular employee. [Complainant] was hired by [the Company] as a news producer, but there was no showing that she was hired because of unique skills that would distinguish her from ordinary employees. Neither was there any showing that she had a celebrity status. Her monthly salary amounting to US$1,900.00 appears to be a substantial sum, especially if compared to her salary when she was still connected with GMA. Indeed, wages may indicate whether one is an independent contractor. Wages may also indicate that an employee is able to bargain with the employer for better pay. However, wages should not be the conclusive factor in determining whether one is an employee or an independent contractor. |
| [The Company] had the power to dismiss [Complainant], as provided for in paragraph 5 of her professional employment contract.200 Her contract also indicated that [the Company] had control over her work because she was required to work for eight (8) hours from Monday to Friday, although on flexible time…. |
| On the power to control, [Complainant] alleged that [the Company] gave her instructions on what to report. Even the mode of transportation in carrying out her functions was controlled by [the Company]. Paragraph 6 of her contract states: |
| 6. During the travel to carry out work, if there is change of place or change of place of work, the train, bus, or public transport shall be used for the trip. If the Employee uses the private car during the work and there is an accident the Employer shall not be responsible for the damage, which may be caused to the Employee. |
| Thus, the Court of Appeals did not err when it upheld the findings of the National Labor Relations Commission that [Complainant] was not an independent contractor. |
| Tiangco v. ABS-CBN Broadcasting Corporation |
| G.R. No. 200434, 06 December 2021 |
| [BACKGROUND] |
| [The Complainant] was initially engaged by [the Company – broadcasting network] as Talent Newscaster, on an exclusive basis, on 22 July 1986 with a monthly talent fee of Php8,000.00 for a period of 1 year. Subsequently, [the Complainant’s] contract was renewed [several times]… |
| Upon expiration of the contract dated 27 April 1991, [the Company] entered into the May 1994 Agreement (Agreement) with Mel & Jay Management and Development Corporation (MJMDC), committing to provide [the Complainant’s] services to [the Company] as exclusive talent for radio and television under the following stipulations: |
| The AGENT shall provide the services of [the Complainant] for the COMPANY as exclusive talent for Radio and Television. As Talent she shall render the following services: |
| a. Co-anchor TV Patrol news program aired Mondays to Fridays at 6:00 – 7:00 p.m.; |
| b. Co-host Mel & Jay radio program aired Mondays to Fridays at 8:00 – 10:00 a.m.; |
| c. Co-host Mel & Jay television program aired Sundays at 5:30 to 7:00 p.m.; |
| d. As executive director for Lingkod Bayan; |
| The AGENT warrants and obliges talent not to anchor and/or appear in any radio or television program in any other television or radio station without prior written approval of the COMPANY. AGENT further warrants that she shall not appear in commercials nor plug, mention, or otherwise, promote in the radio and television programs herein any radio or television program, segment or feature of any other radio or television station without the prior written approval of the COMPANY; |
| x x x |
| The COMPANY shall provide her with the following benefits: SSS, Medicare, healthcare, executive life and accident insurance, and a 13thmonth pay based on an amount not lower than the amount she was receiving prior to the effectivity of this Agreement. |
| In the event of cancellation of this Agreement through no fault of the AGENT and its talent, COMPANY agrees to pay the full amount specified in this Agreement for the remaining period covered by this Agreement, provided that she shall not render any service for or in any other radio or television production of any person, firm, corporation or any entity competing with the COMPANY until the expiry date hereof. |
| The COMPANY and AGENT [agree] that the Agreement is for a period of three (3) years effective March 01, 1994 to April 30, 1997. |
| AGENT agrees that talent shall abide by the rules, regulations and standards of performance of the COMPANY covering talents, and that talent is bound to comply with the Television and Radio Code of the Kapisanan ng mga Broadkaster sa Pilipinas (KBP), which has been adopted by the COMPANY as its Code of Ethics. AGENT shall perform and keep all of the duties and obligations assumed or entered by the AGENT hereunder using its best talents and abilities. Any violation of or non-conformity with this provision by talent shall be a valid and sufficient ground for the immediate termination of this Agreement. |
| x x x |
| Thereafter, [the Company] issued the Memorandum dated 08 February 1995 (Memorandum) concerning commercial appearances of its talents and regular employees. Citing the “clear… need to protect the integrity and credibility of the news and public affairs programs[,]” the Memorandum directed all on-air and/or on-camera talents and employees in the Radio and the News and Public Affairs Departments to refrain from appearing in commercial advertisements, violation of which shall be considered a serious breach of company rules and regulations. |
| [The Complainant] allegedly violated the Memorandum when she appeared in a Tide commercial that aired sometime in December 1995. Consequently, on 16 January 1996, [the Company] placed [the Complainant] under suspension for three months without pay from her co-anchor positions in TV Patrol on Channel 2 and Mel & Jay radio program over at DZMM. |
| To clarify matters connected with the suspension, the parties met and exchanged several correspondences where they expressed their views and misgivings on the issue. The parties exerted efforts to come up with an amicable solution, but in the end could not come to an agreement. [the Complainant] maintained that she had the verbal approval of [the Company] management to proceed with the Tide commercial; that the three-month suspension without pay was harsh and unjust. On the other hand, [the Company], through [F. Garcia], denied that such verbal approval was ever given to [the Complainant], and that the penalty of suspension was decided after a lengthy and careful deliberation and on the basis of all the attendant facts and circumstances. |
| [RESOLUTION – BY THE SUPREME COURT] |
| [The Complainant] was an independent contractor |
| An independent contractor is one who carries on a distinct and independent business and undertakes to perform the job, work, or service on their own account and under their own responsibility according to their own manner and method, free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. Hence, while an independent contractor enjoys independence and freedom from the control and supervision of their principal, an employee is subject to the employer’s power to control the means and methods by which the employee’s work is to be performed and accomplished. |
| x x x |
| … there is no inflexible rule to determine if a person is an employee or an independent contractor; thus, the characterization of the relationship must be made based on the particular circumstances of each case. There are several factors that may be considered by the courts, but the right to control remains the dominant factor in determining whether one is an employee or an independent contractor. |
| [The Complainant] claims that she was [the Company’s] employee based on the four-fold test: first, [the Company] specifically selected and hired her for her individual and peculiar talents, skills, personality, and celebrity status; second, [the Company] paid her salaries through a payroll account every 10th and 25th day of each month and withheld compensation income tax; third, [the Complainant] was subject to [the Company]’s rules and regulations, as in fact, ABS-CBN placed her under a three-month suspension without pay; and fourth, unlike her role as co-host of “Mel & Jay,” [the Company] controlled the means and method of -her performance of her job as newscaster for TV Patrol starting in 1986 as she was merely tasked to read the news. [The Complainant] further maintains that she also assumed the roles as Director for Lingkod Bayan, a job grade S4, segment producer in TV Patrol, and news reporter. |
| The Court disagrees. |
| First, [the Complainant’s] acknowledgment that she was hired by reason of her peculiar talents, skills, personality, and celebrity status proved the presence of one of the elements of an independent contractor. A unique skill, expertise, or talent is one of the factors in determining the nature of a person’s status at work. |
| Second, payment through the company payroll on specified dates with income tax withheld at source is not conclusive proof of employer-employee relations. Such an arrangement is oftentimes agreed upon only for purposes of convenience and does not, in itself, create a badge of employment status. What is notable is [the Complainant’s] talent fee package, which as of her last contract was at Php410,000.00 for the first year and Php417,000.00 for the second and third years. In addition, [the Complainant] was given a signing bonus of Php500,000.00 worth of [the Company] stocks. |
| This extraordinarily high rate is given to those with unique skills, expertise, or talent like [the Complainant], who is considered an expert in the field with special qualities that an ordinary employee does not normally possess. This placed her on equal terms with [the Company] as she was allowed the power to bargain for the terms of her engagement, including her talent fee. Unlike ordinary employees, who are usually in a position of weakness, [the Complainant] had a say on the terms of her engagement. |
| Third, [the Complainant] viewed her three-month suspension without pay as proof that [the Company] had power of discipline over her. This is incorrect. The suspension itself was improper under the circumstances. Records showed that [the Company] suspended [the Complainant] for her alleged violation of the Memorandum prohibiting talents from appearing in commercials. The prohibition was likewise imprinted in [the Complainant’s] contract as part of the that warranty, stating “she shall not appear in commercials nor plug, mention, or otherwise promote in the radio and television programs herein any radio or television program, segment or feature of any other radio or television station without the prior written approval of the company.” |
| Although there was basis to hold [the Complainant] responsible for the breach, [the Company] has no basis to suspend. The tie that binds [the Company] and [the Complainant] was the Agreement they signed in May 1994. There is nothing in the Agreement that allows [the Company] to suspend [the Complainant] for violating its rules. Its remedy should have been to terminate the Agreement as stipulated. In any case, the [the Complainant’s] improper suspension had been rectified with the Partial Settlement Agreement wherein one of the monetary claims paid by [the Company] was [the Complainant’s] salaries during the period of her suspension. |
| Lastly, [the Complainant] alleged that [the Company] controlled the manner she performed her job, particularly as a news anchor of TV Patrol, as she merely read the news. As a news anchor, [the Complainant] is tasked to read or present a news copy that she or another person wrote. Nothing on record, however, shows that [the Complainant] performed other tasks in relation to being an anchor, or that [the Company] dictated how [the Complainant] should read the news or perform her other related tasks, if any. As a well-known veteran news anchor, [the Complainant’s] manner in delivering the news was distinctly her own. Her voice, stature, aura, and representation, form part of the unique qualities that impelled [the Company] to pick her for the job. [the Complainant] “reading the news” is not the same as an average person reading the same news. The impact would simply not be the same as there is premium that goes with [the Complainant’s] stature. |
| As regards the other positions [the Complainant] assumed, i.e., segment producer and Director of Lingkod Bayan, there were no specifics presented in terms of job description vis-a-vis [the Company]’s control in its performance. As for the Director of Lingkod Bayan, [the Complainant] merely alleged that it was in job grade S4, a supervisory position in [the Company’s] company job classification. Nomenclatures are not controlling in determining the nature of the job. |
| The Court notes that [the Complainant] admitted that she was not under the control of [the Company] in her role as co-host of the “Mel & Jay” show in her Petition, saying, “unlike her job as ‘co-host’ of respondent [the Company’s] television and radio programs Mel & Jay, how [the Complainant] performed her job as ‘newscaster’ for TV Patrol was 100% under the sole and exclusive control of respondent [the Company].” |
| To strengthen her claim that she was an employee, [the Complainant] invoked the rulings of this Court in Fuji Television Network Inc. vs. Espiritu and in Dumpit-Murillo. In these cases, the Court ruled that the repeated renewals of complainants’ contracts indicated the necessity and desirability of their work in the usual course of respondents’ business. |
| [The Complainant] maintains that her tasks as newscaster, segment producer, reporter, and among others, were necessary and desirable to [the Company’s] business and that, her contract were renewed several times during her 10- year employment. Her submission is misplaced. In Fuji and Dumpit-Murillo, the fact that the complainants in said cases were employees of the respondents was already established. The Court merely used the repeated renewals of contract to show that the complainants were performing jobs that are usually necessary and desirable to the respondents’ business for purposes of determining if they were regular employees under Article 280 of the Labor Code. Here, [the Complainant’s] employment status was disproved. |
| x x x |
| In addition, [the Complainant] failed to establish that [the Company] controlled the manner in which she performed her job as news anchor for TV Patrol. On the contrary, the Court finds that [the Complainant] performed the job according to her own manner and method, free from the network’s control. Possession of unique skills, expertise, or talent is a persuasive element of an independent contractor. It becomes conclusive if it is established that the worker performed the work according to their own manner and method and free from the principal’s control except to the result. |
| Begino v. ABS-CBN Corporation |
| G.R. No. 199166, 20 April 2015 |
| [BACKGROUND] |
| [The Company] is a television and radio broadcasting corporation which, for its Regional Network Group in Naga City, employed respondent [A. Villafuerte] as Manager. There is no dispute regarding the fact that, thru Villafuerte, ABS-CBN engaged the services of [the Complainants] [N. Begino] and [G. Del Valle] sometime in 1996 as Cameramen/Editors for TV Broadcasting. [the Complainants’] [M. Sumayao] and [M. Avila-Llorin] were likewise similarly engaged as reporters sometime in 1996 and 2002, respectively. With their 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, [the Complainants] 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, [the Complainants] were tasked with coverage of news items for subsequent daily airings in [the Company’s] TV Patrol Bicol Program. |
| While specifically providing that nothing therein shall be deemed or construed to establish an employer-employee relationship between the parties, the aforesaid Talent Contracts included, among other matters, provisions on the following matters: (a) the Talent’s creation and performance of work in accordance with the [the Company’s] professional standards and compliance with its policies and guidelines covering intellectual property creators, industry codes as well as the rules and regulations of the Kapisanan ng mga Broadcasters sa Pilipinas (KBP) and other regulatory agencies; (b) the Talent’s non-engagement in similar work for a person or entity directly or indirectly in competition with or adverse to the interests of ABS-CBN and non-promotion of any product or service without prior written consent; and (c) the results-oriented nature of the talent’s work which did not require them to observe normal or fixed working hours. Subjected to contractor’s tax, [the Complainants’] remunerations were denominated as Talent Fees which, as of last renewal, were admitted to be pegged per airing day at P273.35 for Begino, P 302.92 for Del Valle, P 323.08 for Sumayao and P 315.39 for Llorin. |
| [RESOLUTION – BY THE SUPREME COURT] |
| The Court finds that, notwithstanding the nomenclature of their Talent Contracts and/or Project Assignment Forms and the terms and condition embodied therein, [the Complainants] are regular employees of ABS-CBN. Time and again, it has been ruled that the test to determine whether employment is regular or not is the reasonable connection between the activity performed by the employee in relation to the business or trade of the employer. As cameramen/editors and reporters, [the Complainants] were undoubtedly performing functions necessary and essential to [the Company’s] business of broadcasting television and radio content. It matters little that [the Complainants’] services were engaged for specified periods for TV Patrol Bicol and that they were paid according to the budget allocated therefor. Aside from the fact that said program is a regular weekday fare of the [the Company’s] Regional Network Group in Naga City, the record shows that, from their initial engagement in the aforesaid capacities, [the Complainants] were continuously re-hired by respondents over the years. To the mind of the Court, [the Company’s] repeated hiring of [the Complainants’] for its long-running news program positively indicates that the latter were [the Company’s] regular employees. |
| x x x |
| As cameramen/editors and reporters, it also appears that [the Complainants] were subject to the control and supervision of respondents which, first and foremost, provided them with the equipments essential for the discharge of their functions. Prepared at the instance of respondents, [the Complainants’] Talent Contracts tellingly provided that ABS-CBN retained “all creative, administrative, financial and legal control” of the program to which they were assigned. Aside from having the right to require [the Complainants] “to attend and participate in all promotional or merchandising campaigns, activities or events for the Program,” ABS-CBN required the former to perform their functions “at such locations and Performance/Exhibition Schedules” it provided or, subject to prior notice, as it chose determine, modify or change. Even if they were unable to comply with said schedule, [the Complainants] were required to give advance notice, subject to [the Company’s] approval. However obliquely worded, the Court finds the foregoing terms and conditions demonstrative of the control respondents exercised not only over the results of [the Complainants’] work but also the means employed to achieve the same. |
| In finding that [the Complainants] were regular employees, the NLRC further ruled that the exclusivity clause and prohibitions in their Talent Contracts and/or Project Assignment Forms were likewise indicative of [the Company’s] control over them. Brushing aside said finding, however, the CA applied the ruling in Sonza v. ABS-CBN Broadcasting Corporation where similar restrictions were considered not necessarily determinative of the existence of an employer-employee relationship. Recognizing that independent contractors can validly provide his exclusive services to the hiring party, said case enunciated that guidelines for the achievement of mutually desired results are not tantamount to control. As correctly pointed out by [the Complainants], however, parallels cannot be expediently drawn between this case and that of Sonza case which involved a well-known television and radio personality who was legitimately considered a talent and amply compensated as such. While possessed of skills for which they were modestly recompensed by respondents, [the Complainants] lay no claim to fame and/or unique talents for which talents like actors and personalities are hired and generally compensated in the broadcast industry. |
| x x x |
| Rather than the project and/or independent contractors respondents claim them to be, it is evident from the foregoing disquisition that [the Complainants’] are regular employees of ABS-CBN. This conclusion is borne out by the ineluctable showing that [the Complainants] perform functions necessary and essential to the business of ABS-CBN which repeatedly employed them for a long-running news program of its Regional Network Group in Naga City. In the course of said employment, [the Complainants] were provided the equipments they needed, were required to comply with the Company’s policies which entailed prior approval and evaluation of their performance. Viewed from the prism of these considerations, we find and so hold that the CA reversibly erred when it overturned the NLRC’s affirmance of the Labor Arbiter’s finding that an employer-employee relationship existed between the parties. Given the fact, however, that Sub-RAB-V-05-03-00039-08 had not been consolidated with this case and appears, for all intents and purposes, to be pending still, the Court finds that the reinstatement of [the Complainants] ordered by said labor officer and tribunal should, as a relief provided in case of illegal dismissal, be left for determination in said case. |
b. Economic reality test
| Orozco v. CA, Philippine Daily Inquirer |
| G.R. No. 155207, 13 August 2008 |
| [BACKGROUND] |
| In March 1990, [the Company] engaged the services of [the Complainant] to write a weekly column for its Lifestyle section. She religiously submitted her articles every week, except for a six-month stint in New York City when she, nonetheless, sent several articles through mail. She received compensation of P250.00 – later increased to P300.00 – for every column published. |
| On November 7, 1992, [the Complainant’s] column appeared in the [the Company] for the last time. [the Complainant] claims that her then editor, Ms. [L. Logarta], told her that respondent [L. Magsanoc], [the Company’s] Editor in Chief, wanted to stop publishing her column for no reason at all and advised [the Complainant] to talk to Magsanoc herself. [the Complainant] narrates that when she talked to Magsanoc, the latter informed her that it was [the Company’s] Chairperson [E. Apostol] who had asked to stop publication of her column, but that in a telephone conversation with Apostol, the latter said that Magsanoc informed her (Apostol) that the Lifestyle section already had many columnists. |
| On the other hand, [the Company] claims that in June 1991, Magsanoc met with the Lifestyle section editor to discuss how to improve said section. They agreed to cut down the number of columnists by keeping only those whose columns were well-written, with regular feedback and following. In their judgment, [the Complainant’s] column failed to improve, continued to be superficially and poorly written, and failed to meet the high standards of the newspaper. Hence, they decided to terminate [the Complainant’s] column. |
| [RESOLUTION – BY THE SUPREME COURT] |
| We rule for [the Company]. |
| x x x |
| It is true that [the Complainant] herself admitted that she “was not, and [had] never been considered respondent’s employee because the terms of works were arbitrarily decided upon by the respondent.” However, the employment status of a person is defined and prescribed by law and not by what the parties say it should be. |
| This Court has constantly adhered to the “four-fold test” to determine whether there exists an employer-employee relationship between parties. The four elements of an employment relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee’s conduct. |
| Of these four elements, it is the power of control which is the most crucial and most determinative factor, so important, in fact, that the other elements may even be disregarded. As this Court has previously held: |
| the significant factor in determining the relationship of the parties is the presence or absence of supervisory authority to control the method and the details of performance of the service being rendered, and the degree to which the principal may intervene to exercise such control. |
| In other words, the test is whether the employer controls or has reserved the right to control the employee, not only as to the work done, but also as to the means and methods by which the same is accomplished. |
| The Complainant] argues that several factors exist to prove that respondents exercised control over her and her work, namely: |
| a. As to the Contents of her Column – [The Complainant] had to insure that the contents of her column hewed closely to the objectives of its Lifestyle Section and the over-all principles that the newspaper projects itself to stand for. As admitted, she wanted to write about death in relation to All Souls Day but was advised not to. |
| b. As to Time Control – [The Complainant], as a columnist, had to observe the deadlines of the newspaper for her articles to be published. These deadlines were usually that time period when the Section Editor has to “close the pages” of the Lifestyle Section where the column in located. “To close the pages” means to prepare them for printing and publication. |
| As a columnist, the [the Complainant’s] writings had a definite day on which it was going to appear. So she submitted her articles two days before the designated day on which the column would come out. |
| This is the usual routine of newspaper work. Deadlines are set to fulfill the newspapers’ obligations to the readers with regard to timeliness and freshness of ideas. |
| c. As to Control of Space – [The Complainant] was told to submit only two or three pages of article for the column, (sic) “Feminist Reflections” per week. To go beyond that, the Lifestyle editor would already chop off the article and publish the rest for the next week. This shows that [the Company] had control over the space that the [the Complainant] was assigned to fill. |
| d. As to Discipline – Over time, the newspaper readers’ eyes are trained or habituated to look for and read the works of their favorite regular writers and columnists. They are conditioned, based on their daily purchase of the newspaper, to look for specific spaces in the newspapers for their favorite write-ups/or opinions on matters relevant and significant issues aside from not being late or amiss in the responsibility of timely submission of their articles. |
| The [the Complainant] was disciplined to submit her articles on highly relevant and significant issues on time by the [the Company] who have a say on whether the topics belong to those considered as highly relevant and significant, through the Lifestyle Section Editor. The [the Complainant] had to discuss the topics first and submit the articles two days before publication date to keep her column in the newspaper space regularly as expected or without miss by its readers. |
| Given this discussion by [the Complainant], we then ask the question: Is this the form of control that our labor laws contemplate such as to establish an employer-employee relationship between [the Complainant] and respondent [the Company]? |
| It is not. |
| [The Complainant] has misconstrued the “control test,” as did the Labor Arbiter and the NLRC. |
| Not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former. Rules which serve as general guidelines towards the achievement of the mutually desired result are not indicative of the power of control. Thus, this Court has explained: |
| It should, however, be obvious that not every form of control that the hiring party reserves to himself over the conduct of the party hired in relation to the services rendered may be accorded the effect of establishing an employer-employee relationship between them in the legal or technical sense of the term. A line must be drawn somewhere, if the recognized distinction between an employee and an individual contractor is not to vanish altogether. Realistically, it would be a rare contract of service that gives untrammelled freedom to the party hired and eschews any intervention whatsoever in his performance of the engagement. |
| Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. x x x |
| The main determinant therefore is whether the rules set by the employer are meant to control not just the results of the work but also the means and method to be used by the hired party in order to achieve such results. Thus, in this case, we are to examine the factors enumerated by [the Complainant] to see if these are merely guidelines or if they indeed fulfill the requirements of the control test. |
| [The Complainant] believes that respondents’ acts are meant to control how she executes her work. We do not agree. A careful examination reveals that the factors enumerated by [the Complainant] are inherent conditions in running a newspaper. In other words, the so-called control as to time, space, and discipline are dictated by the very nature of the newspaper business itself. |
| We agree with the observations of the Office of the Solicitor General that: |
| The Inquirer is the publisher of a newspaper of general circulation which is widely read throughout the country. As such, public interest dictates that every article appearing in the newspaper should subscribe to the standards set by the Inquirer, with its thousands of readers in mind. It is not, therefore, unusual for the Inquirer to control what would be published in the newspaper. What is important is the fact that such control pertains only to the end result, i.e., the submitted articles. The Inquirer has no control over [[the Complainant]] as to the means or method used by her in the preparation of her articles. The articles are done by [[the Complainant]] herself without any intervention from the Inquirer. |
| [The Complainant] has not shown that [the Company], acting through its editors, dictated how she was to write or produce her articles each week. Aside from the constraints presented by the space allocation of her column, there were no restraints on her creativity; [the Complainant] was free to write her column in the manner and style she was accustomed to and to use whatever research method she deemed suitable for her purpose. The apparent limitation that she had to write only on subjects that befitted the Lifestyle section did not translate to control, but was simply a logical consequence of the fact that her column appeared in that section and therefore had to cater to the preference of the readers of that section. |
| The perceived constraint on [the Complainant’s] column was dictated by her own choice of her column’s perspective. The column title “Feminist Reflections” was of her own choosing, as she herself admitted, since she had been known as a feminist writer. Thus, [the Company], as well as her readers, could reasonably expect her columns to speak from such perspective. |
| Contrary to [the Complainant’s] protestations, it does not appear that there was any actual restraint or limitation on the subject matter – within the Lifestyle section – that she could write about. [The Company] did not dictate how she wrote or what she wrote in her column. Neither did [the Company’s] guidelines dictate the kind of research, time, and effort she put into each column. In fact, [the Complainant] herself said that she received “no comments on her articles…except for her to shorten them to fit into the box allotted to her column.” Therefore, the control that [the Company] exercised over [the Complainant] was only as to the finished product of her efforts, i.e., the column itself, by way of either shortening or outright rejection of the column. |
| The newspaper’s power to approve or reject publication of any specific article she wrote for her column cannot be the control contemplated in the “control test,” as it is but logical that one who commissions another to do a piece of work should have the right to accept or reject the product. The important factor to consider in the “control test” is still the element of control over how the work itself is done, not just the end result thereof. |
| In contrast, a regular reporter is not as independent in doing his or her work for the newspaper. We note the common practice in the newspaper business of assigning its regular reporters to cover specific subjects, geographical locations, government agencies, or areas of concern, more commonly referred to as “beats.” A reporter must produce stories within his or her particular beat and cannot switch to another beat without permission from the editor. In most newspapers also, a reporter must inform the editor about the story that he or she is working on for the day. The story or article must also be submitted to the editor at a specified time. Moreover, the editor can easily pull out a reporter from one beat and ask him or her to cover another beat, if the need arises. |
| This is not the case for [the Complainant]. Although [the Complainant] had a weekly deadline to meet, she was not precluded from submitting her column ahead of time or from submitting columns to be published at a later time. More importantly, respondents did not dictate upon [the Complainant] the subject matter of her columns, but only imposed the general guideline that the article should conform to the standards of the newspaper and the general tone of the particular section. |
| Where a person who works for another performs his job more or less at his own pleasure, in the manner he sees fit, not subject to definite hours or conditions of work, and is compensated according to the result of his efforts and not the amount thereof, no employer-employee relationship exists. |
| Aside from the control test, this Court has also used the economic reality test. The economic realities prevailing within the activity or between the parties are examined, taking into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate when, as in this case, there is no written agreement or contract on which to base the relationship. In our jurisdiction, the benchmark of economic reality in analyzing possible employment relationships for purposes of applying the Labor Code ought to be the economic dependence of the worker on his employer. |
| [The Complainant’s] main occupation is not as a columnist for respondent but as a women’s rights advocate working in various women’s organizations. Likewise, she herself admits that she also contributes articles to other publications. Thus, it cannot be said that [the Complainant] was dependent on respondent [the Company] for her continued employment in respondent’s line of business. |
| The inevitable conclusion is that [the Complainant] was not respondent [the Company’s] employee but an independent contractor, engaged to do independent work. |
| There is no inflexible rule to determine if a person is an employee or an independent contractor; thus, the characterization of the relationship must be made based on the particular circumstances of each case. There are several factors that may be considered by the courts, but as we already said, the right to control is the dominant factor in determining whether one is an employee or an independent contractor. |
| In our jurisdiction, the Court has held that an independent contractor is one who carries on a distinct and independent business and undertakes to perform the job, work, or service on one’s own account and under one’s own responsibility according to one’s own manner and method, free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. |
| On this point, Sonza v. ABS-CBN Broadcasting Corporation is enlightening. In that case, the Court found, using the four-fold test, that [the complainant]… was not an employee of ABS-CBN, but an independent contractor. Sonza was hired by ABS-CBN due to his “unique skills, talent and celebrity status not possessed by ordinary employees,” a circumstance that, the Court said, was indicative, though not conclusive, of an independent contractual relationship. Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The Court also found that, as to payment of wages, Sonza’s talent fees were the result of negotiations between him and ABS-CBN. As to the power of dismissal, the Court found that the terms of Sonza’s engagement were dictated by the contract he entered into with ABS-CBN, and the same contract provided that either party may terminate the contract in case of breach by the other of the terms thereof. However, the Court held that the foregoing are not determinative of an employer-employee relationship. Instead, it is still the power of control that is most important. |
| x x x |
| The instant case presents a parallel to Sonza. [The Complainant] was engaged as a columnist for her talent, skill, experience, and her unique viewpoint as a feminist advocate. How she utilized all these in writing her column was not subject to dictation by respondent. As in Sonza, [the Company] was not involved in the actual performance that produced the finished product. It only reserved the right to shorten [the Complainant’s] articles based on the newspaper’s capacity to accommodate the same. This fact, we note, was not unique to [the Complainant’s] column. It is a reality in the newspaper business that space constraints often dictate the length of articles and columns, even those that regularly appear therein. |
| Furthermore, [the Company] did not supply [the Complainant] with the tools and instrumentalities she needed to perform her work. [the Complainant] only needed her talent and skill to come up with a column every week. As such, she had all the tools she needed to perform her work. |
| Considering that [the Company] was not [the Complainant]’s employer, it cannot be held guilty of illegal dismissal. |
5. Burden on proof: the Company
| Paragele v. GMA Network, Inc. |
| G.R. No. 235315, 13 July 2020 |
| [BACKGROUND] |
| [Complainants] claimed that they were regular employees of [the Company – a broadcasting/network business], having been employed and dismissed… [positions: cameraman, assistant cameraman; dismissed: May 2013] |
| x x x |
| Countering [the Complainants], [the Company] denied the existence of an employer-employee relationship. It insisted that [the Complainants] were engaged as mere “pinch-hitters or relievers” whose services were engaged only when there was a need for substitute or additional workforce. |
| [RESOLUTION – BY THE SUPREME COURT] |
| [The Company] insists that [the Complainants] were never hired as its employees, “whether probationary, casual[,] or any type of employment.” According to it, [the Complainants] were merely pinch-hitters or freelancers engaged on a per-shoot basis whenever the need for additional workforce arose. |
| [The Company’s] arguments fail to impress. |
| The question of whether an employer-employee relationship existed between [the Complainants] and [the Company] has already been settled by the consistent rulings of the National Labor Relations Commission and the Court of Appeals. To once and for all put this matter to rest, this Court further clarifies their pronouncements. |
| A four-fold test has been applied in determining the existence of an employer-employee relationship. In Begino v. ABS-CBN: |
| To determine the existence of [an employer-employee relationship], case law has consistently applied the four-fold test, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished. Of these criteria, the so-called “control test” is generally regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under this test, an employer-employee relationship is said to exist where the person for whom the services are performed reserves the right to control not only the end result but also the manner and means utilized to achieve the same… |
| Thus, to be considered employees of [the Company], [the Complainants] must prove the following: (1) that [the Company] engaged their services; (2) that [the Company] compensated them; (3) that [the Company] had the power to dismiss them; and more importantly, (4) that [the Company] exercised control over the means and methods of their work. |
| On the power of hiring, there is no question that [the Complainants] were engaged by and rendered services directly to [the Company]. Even [the Company] concedes that it engaged [the Complainants] to perform functions, which had been found by the National Labor Relations Commission and the Court of Appeals to be necessary and desirable to [the Company’s] usual business as both a television and broadcasting company. |
| On the payment of wages, that [the Complainants] were paid so-called “service fees” and not “wages” is merely a matter of nomenclature. Likewise, it is of no consequence that [the Complainants] were paid on a per-shoot basis, since this is only a mode of computing compensation and does not, in any way, preclude [the Company]’s control over the distribution of their wages and the manner by which they carried out their work. |
| It is settled that the mode of computing compensation is not the decisive factor in ascertaining the existence of an employer-employee relationship. What matters is that the employee received compensation from the employer for the services that he or she rendered. Here, there is no question that [the Company] directly compensated [the Complainants] for their services. |
| On the power to dismiss, the Court of Appeals correctly sustained the National Labor Relations Commission in noting that the power of dismissal “is implied and is concomitant with the power to select and engage; in other words, it is also the power to disengage.” [The Company] maintains that [the Complainants] were merely “disengaged” from service. This, again, is a futile effort at splitting hairs. Disengagement in the context of an employer-employee relationship amounts to dismissal. |
| Finally, on the most important element of control, it becomes necessary to determine whether [the Company] exercised control over the means and methods of [the Complainants’] work. Moreover, given [the Company’s] specific representations on the nature of its engagement with [the Complainants], a review of the difference between an independent contractor and an employee is in order. |
| [The Company] rejects an explicit nomenclature recognizing it as having engaged [the Complainants] as “talents” or independent contractors. Yet, its denial of an employer-employee relationship, coupled with the claim that it merely exercised control over the output required of [the Complainants], is an implicit assertion that it engaged [the Complainants] as independent contractors. It also does not escape this Court’s attention that the remuneration given to the [the Complainants] was denominated as “talent fee.” This is consistent with [the Complainants] allegation that they were made to sign contracts indicating that they were “talents” or independent contractors of [the Company]. |
| Chavez v. National Labor Relations defines an independent contractor as: |
| … one who carries on a distinct and independent business and undertakes to perform the job, work, or service on its own account and under its own responsibility according to its own manner and method, free from the control and direction of the principal in all matters connected with the performance, of the work except as to the results thereof… |
| An independent contractor “enjoys independence and freedom from the control and supervision of his principal” as opposed to an employee who is “subject to the employer’s power to control the means and methods by which the employee’s work is to be performed and accomplished.” |
| x x x |
| Evidently, the relationship between [the Company] and [the Complainants] is bilateral since [the Complainants] themselves performed work for [the Company]. Therefore, in order to be considered independent contractors and not employees of [the Company], it must be shown that [the Complainants] were hired because of their “unique skills and talents” and that [the Company] did not exercise control over the means and methods of their work. |
| x x x |
| Here, [the Complainants] were hired by [the Company] as camera operators. There is no showing at all that they were hired because of their “unique skills, talent and celebrity status not possessed by ordinary employees.” |
| They were paid a meager salary ranging from P750.00 to P1500.00 per taping. Though wages are not a “conclusive factor in determining whether one is an employee or an independent contractor,” it “may indicate whether one is an independent contractor.” In this case, the sheer modesty of the remuneration rendered to [the Complainants] undermines the assertion that there was something particularly unique about their status, talents, or skills. |
| More importantly, [the Complainants] were subject to [the Company’s] control and supervision. Moreover: |
| (1) Their recordings and shoots were never left to their own discretion and craft; |
| (2) They were required to follow the work schedules which [the Company] provided to them; |
| (3) They were not allowed to leave the work site during tapings, which often lasted for days; |
| (4) They were also required to follow company rules like any other employee. |
| [The Company] provided the equipment they used during tapings. [the Company] also assigned supervisors to monitor their performance and guarantee their compliance with company protocols and standards. |
| Having satisfied the element of control in determining the existence of an employer-employee relationship, the next matter for resolution is whether [the Complainants] were regular employees of [the Company]. |
| Samonte v. La Salle Greenhills, Inc. |
| G.R. No. 199683, 10 February 2016 |
| [BACKGROUND] |
| From 1989, and for fifteen (15) years thereafter, [the Company – a school] contracted the services of medical professionals, specifically pediatricians, dentists and a physician, to comprise its Health Service Team (HST). |
| [The Complainants – physicians], along with other members of ·the HST signed uniform one-page Contracts of Retainer for the period of a specific academic calendar beginning in June of a certain year (1989 and the succeeding 15 years) and terminating in March of the following year when the school year ends. |
| x x x |
| After fifteen consecutive years of renewal each academic year, where the last Contract of Retainer was for the school year of 2003-2004 i.e., June 1, 2003 to March 31, 2004, [the Company] Head Administrator, Herman Rochester, on that last day of the school year, informed the Medical Service Team, including herein [the Complainants], that their contracts will no longer be renewed for the following school year by reason of [the Company]’s decision to hire two (2) full-time doctors and dentists. One of the physicians from the same Health Service Team was hired by [the Company] as a full-time doctor. |
| [RESOLUTION – BY THE SUPREME COURT] |
| The uniform one-page Contracts of Retainer signed by [the Complainants] were prepared by [the Company] alone. [The Complainants], medical professionals as they were, were still not on equal footing with [the Company] as they obviously did not want to lose their jobs that they had stayed in for fifteen (15) years. There is no specificity in the contracts regarding terms and conditions of employment that would indicate that [the Complainants] and [the Company] were on equal footing in negotiating it. Notably, without specifying what are the tasks assigned to [the Complainants], [the Company] “may upon prior written notice to the retainer, terminate [the] contract should the retainer fail in any way to perform his assigned job/task to the satisfaction of [the Company] or for any other just cause.” |
| While vague in its sparseness, the Contract of Retainer very clearly spelled out that [the Company] had the power of control over [the Complainants]. |
| Time and again we have held that the power of control refers to the existence of the power and not necessarily to the actual exercise thereof, nor is it essential for the employer to actually supervise the performance of duties of the employee. It is enough that the employer has the right to wield that power. |
| In all, given the following: (1) repeated renewal of [the Complainants’] contract for fifteen years, interrupted only by the close of the school year; (2) the necessity of the work performed by [the Complainants] as school physicians and dentists; and (3) the existence of [the Company’s] power of control over the means and method pursued by [the Complainants] in the performance of their job, we rule that [the Complainants] attained regular employment, entitled to security of tenure who could only be dismissed for just and authorized causes. Consequently, [the Complainants] were illegally dismissed and are entitled to the twin remedies of payment of separation pay and full back wages. We order separation pay in lieu of reinstatement given the time that has lapsed, twelve years, in the litigation of this case. |
![Overtime Pay [Filipino Podcast]](https://laborlaw.ph/wp-content/uploads/2023/04/pexels-laborlawph.B2.10.jpg)
![Minimum Wage [English Podcast]](https://laborlaw.ph/wp-content/uploads/2023/04/pexels-laborlawph.B2.19.jpg)
![Clearance [Filipino Podcast]](https://laborlaw.ph/wp-content/uploads/2023/04/pexels-laborlawph.B3.8.jpg)
![SPA Clearance [English Podcast]](https://laborlaw.ph/wp-content/uploads/2023/04/pexels-laborlawph.B3.18.jpg)
