SONZA VS.

ABSCBN
RESPONDENT ABSC-BN filed an agreement with Mel and
Jay Dev’t Corp which was represented by Petitioner
SONZA as Mel and Jay’s President and Gen. manager.

Referred to in the Agreement as "AGENT," MJMDC

agreed to provide SONZA's services exclusively to ABS-
CBN as talent for radio and television.
 To co-host for Mel and Jay radio and television
programs.
 SOnza’s services were to be paid P310k/month
 (MJMDC is a management company devoted
exclusively to managing the careers of Mr. Sonza and
his broadcast partner, Mrs. Carmela C. Tiangco)
However, SONZA wrote to ABSCBN unilaterally
rescinding the Agreement.
 He also filed a complaint against ABSCBN for
separation pay, service incentive leave pay, 13th
month pay, signing bonus, travel allowance.
o ABS filed MTD that NO EE ER existed.
LA: Dismissed the case for lack of jurisdiction to the
detriment of SOnza. He was an independent contractor
  It must be noted that complainant was engaged by
respondent by reason of his peculiar skills and talent
as a TV host and a radio broadcaster. Unlike an
ordinary employee, he was free to perform the
services he undertook to render in accordance with
his own style.
NLRC: Affirmed.
CA: Affirmed.
 The existence of an employer-employee relationship
between SONZA and ABS-CBN is a factual question
that is within the jurisdiction of the NLRC to resolve.
 The agreement reveals that MJMDC is an agent of
Sonza, principal.
o The relations of principal and agent only accrues
between complainant Sonza and MJMDC, and
not between ABS-CBN and MJMDC.
o As a matter of fact, when complainant herein
unilaterally rescinded said May 1994
Agreement, it was MJMDC which issued the
notice of rescission in behalf of Mr. Sonza, who
himself signed the same in his capacity as
President.
SONZA contends that the Labor Arbiter has jurisdiction
over the case because he was an employee of ABS-CBN.
On the other hand, ABS-CBN insists that the Labor
Arbiter has no jurisdiction because SONZA was an
independent contractor.

Before the SC, Sonza contends:

CA erred in not rulin that there is an EE ER relationship.
ISSUE: W/N SONZA IS AN EMPLOYEE
HELD: NO.
1. Selection and Engagement: NO.
The specific selection and hiring of SONZA, 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.
2. Wages
SONZA's talent fees, amounting to P317,000 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.
ABS-CBN agreed to pay SONZA such huge talent fees
precisely because of SONZA's unique skills, talent and
celebrity status not possessed by ordinary employees.
The payment of talent fees directly to SONZA and not to
MJMDC does not negate the status of SONZA as an
independent contractor.

Power of Dismissal
For violation of any provision of the Agreement, either
party may terminate their relationship.

Power of Control
ABSCBN didn’t have power to control the means and
methods of work. To perform his work, SONZA only
needed his skills and talent. How SONZA delivered his
lines, appeared on television, and sounded on radio were
outside ABS-CBN's control.
(Result only) ABS-CBN's sole concern was the quality of
the shows and their standing in the ratings. Clearly, ABS-
CBN did not exercise control over the means and
methods of performance of SONZA's work.
Despite the fact that ABSCBN Has the power w/n to
broadcast his show? YES. All that ABS-CBN could do is not
to broadcast SONZA's show but ABS-CBN must still pay
his talent fees in full. This did not amount to control over
the means and methods of the performance of SONZA's
work. This proves that ABS-CBN's control was limited
only to the result of SONZA's work, whether to broadcast
the final product or not.

NO EE-ER Despite the fact that ABSCBN supplied tools

and equipemtns? YES.
The equipment, crew and airtime are not the "tools and
instrumentalities" SONZA needed to perform his job.
What SONZA principally needed were his talent or skills
and the costumes necessary for his appearance. 38 Even
though ABS-CBN provided SONZA with the place of work
and the necessary equipment, SONZA was still an
independent contractor since ABS-CBN did not supervise
and control his work
How about the rules and standards? Did that control
the means and methods of SOnza’s work? NO.
The Agreement does not require SONZA to comply with
the rules and standards of performance prescribed for
employees of ABSCBN.
The code of conduct imposed on SONZA 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 (ABS-CBN) as
its Code of Ethics."
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. Here, SONZA 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.

ABS-CBN VS. NAZARENO

Petitioner Employed respondents (4 of them) as
Production Assistants (PAs).
EXCLUSIVITY CLAUSE?
NO. Exclusivity in broadcasting doesn’t mean existence
of EE-ER.
. Being an exclusive talent does not by itself mean that
SONZA is an employee of ABS-CBN. Even an independent
contractor can validly provide his services exclusively to
the hiring party. In the broadcast industry, exclusivity is
not necessarily the same as control.
The hiring of exclusive talents is a widespread and
accepted practice in the entertainment industry.

MJMSC AS AGENT OF SONZA

In a labor-only contract, there are three parties
involved:
(1) the "labor-only" contractor;
(2) the employee who is ostensibly under the employ of
the "labor-only" contractor; and
(3) the principal who is deemed the real employer.
Under this scheme, the "labor-only" contractor is the
agent of the principal.
Is this present here? NO.
There are only 2 parties:
MJMDC merely acted as SONZA's agent. The Agreement
expressly states that MJMDC acted as the "AGENT" of
SONZA.

The records don’t show that MJMDC is the agent of

ABSCBN. The President and General Manager of MJMDC
is SONZA himself. It is absurd to hold that MJMDC, which
is owned, controlled, headed and managed by SONZA,
acted as agent of ABS-CBN in entering into the
Agreement with SONZA, who himself is represented by
MJMDC. That would make MJMDC the agent of both
ABS-CBN and SONZA.

Policy Instruction 40 mere executive issuance which does

not have the force and effect of law. There is no legal
presumption that Policy Instruction No. 40 determines
SONZA's status.

Does it violate security of tenure?

NO. The right of labor to security of tenure as
guaranteed in the Constitution 53 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.

Jurisdiction of SONZA’s claims

SONZA seeks the recovery of allegedly unpaid talent fees,
13th month pay, separation pay, service incentive leave,
signing bonus, travel allowance, and amounts due under
the Employee Stock Option Plan. We agree with the
7ndings of the Labor Arbiter and the Court of Appeals
that SONZA's claims are all based on the May 1994
Agreement and stock option plan, and not on the Labor
Code. Clearly, the present case does not call for an
application of the Labor Code provisions but an
interpretation and implementation of the May 1994
Agreement. In effect, SONZA's cause of action is for
breach of contract which is intrinsically a civil dispute
cognizable by the regular courts.
NAZARENO
They were assigned at the news and public affairs, for
various radio programs in the Cebu Broadcasting Station,
with a monthly compensation of P4,000.
 Issued ID Cards
 Worked at least 8h/ everyday including Holidays.
The PAs were under the control and supervision of
Assistant Station Manager Dante J. Luzon, and News
Manager Leo Lastimosa.

Petitioner and its rank and file employees executed a

CBA but petitioner refused to recognize PAs as part of
the bargaining unit, so respondents were not included to
the CBA.
Respondents filed a Complaint for Recognition of Regular
Employment Status, Underpayment of Overtime Pay,
Holiday Pay, Premium Pay, Service Incentive Pay, Sick
Leave Pay, and 13th Month Pay with Damages against
the petitioner before the NLRC.

In their position paper before the LA, Complainants were

engaged by respondent ABS-CBN as regular and full-time
employees for a continuous period of more than five (5)
years.
Complainants pray to the Arbiter to declare them regular
and permanent employees of respondent ABS-CBN as a
condition precedent for their admission into the existing
union and collective bargaining unit.
ABSCBN answered that the respondents were PAs who
basically assist in the conduct of a particular program ran
by an anchor or talent.
 Petitioner maintained that PAs, reporters, anchors
and talents occasionally "sideline" for other
programs they produce.
 Labor Arbiter had no jurisdiction to involve the CBA
and interpret the same, especially since respondents
were not covered by the bargaining unit.
LA: GRANTED; There is EE-ER.
NLRC: Modified. respondents were entitled to the
benefits under the CBA because they were regular
employees who contributed to the profits of petitioner
through their labor.
CA: Affirmed; Dismissed ABS’ appeal.
 respondents are not mere project employees, but
regular employees who perform tasks necessary and
desirable in the usual trade and business of
petitioner.

w/n respondents late filing is a ground to dismiss their

case: NO.
respondents' failure to submit a position paper on time is
not a ground for striking out the paper from the records,
much less for dismissing a complaint.

w/n respondents are regular employees

HELD: Yes.
Petitioner's claim that the functions performed by the
respondents are not at all necessary, desirable, or even
vital to its trade or business is belied by the evidence on
record.

We agree with respondents' contention that where a

person has rendered at least one year of service,
regardless of the nature of the activity performed, or
where the work is continuous or intermittent, the
employment is considered regular as long as the activity
exists, the reason being that a customary appointment is
not indispensable before one may be formally declared
as having attained regular status. (Art 280,LC)

Another Test: Reasonable Connection:

The primary standard, therefore, of determining regular
employment is the reasonable connection between the
particular activity performed by the employee in
relation to the usual trade or business of the employer.
 The connection can be determined by considering
the nature of work performed and its relation to the
scheme of the particular business or trade in its
entirety. Also, if the employee has been performing
the job for at least a year, even if the performance is
 not continuous and merely intermittent, the law
deems repeated and continuing need for its
performance as sufficient evidence of the necessity if
not indispensability of that activity to the business.
It is of no moment that petitioner hired respondents as
"talents." The fact that respondents received pre-agreed
"talent fees" instead of salaries, that they did not
observe the required office hours, and that they were
permitted to join other productions during their free
time are not conclusive of the nature of their
employment.

Thus, there are two kinds of regular employees under the

law: (1) those engaged to perform activities which are
necessary or desirable in the usual business or trade of
the employer; and (2) those casual employees who have
rendered at least one year of service, whether
continuous or broken, with respect to the activities in
which they are employed.

Additionally, respondents cannot be considered as

project or program employees because no evidence was
presented to show that the duration and scope of the
project were determined or specified at the time of their
engagement.
 a project may refer to a particular job or undertaking
that is within the regular or usual business of the
employer, but which is distinct and separate, and
identifiable as such, from the other undertakings of
the company;
 may also refer to a particular job or undertaking that
is not within the regular business of the employer..
The principal test is whether or not the project
employees were assigned to carry out a specific project
or undertaking, the duration and scope of which were
specified at the time the employees were engaged for
that project.

In this case, it is undisputed that respondents had

continuously performed the same activities for an
average of five years. Their assigned tasks are necessary
or desirable in the usual business or trade of the
petitioner. The persisting need for their services is
sufficient evidence of the necessity and indispensability
of such services to petitioner's business or trade.
While length of time may not be a sole controlling test
for project employment, it can be a strong factor to
determine whether the employee was hired for a specific
undertaking or in fact tasked to perform functions which
are vital, necessary and indispensable to the usual trade
or business of the employer.

FOUR-FOLD TEST IN ABSCBN VS NAZARENO compared

from SONZA (negating independent contractual
relationship):
First. In the selection and engagement of respondents,
no peculiar or unique skill, talent or celebrity status was
required from them because they were merely hired
through petitioner's personnel department just like any
ordinary employee.
Second. The so-called "talent fees" of respondents
correspond to wages given as a result of an employer-
employee relationship. Respondents did not have the
power to bargain for huge talent fees, a circumstance
negating independent contractual relationship.
Third. Petitioner could always discharge respondents
should it find their work unsatisfactory, and
respondents are highly dependent on the petitioner for
continued work.
Fourth. The degree of control and supervision exercised
by petitioner over respondents through its supervisors
negates the allegation that respondents are independent
contractors.

Effect: It follows then that respondents are entitled to

the benefits provided for in the existing CBA between
petitioner and its rank-and file employees. As regular
employees, respondents are entitled to the benefits
granted to all other regular employees of petitioner
under the CBA.

BIsan wa silay labot CBA? YES.

(CA ruled and SC affirmed that) Even the non-member
employees are entitled to the benefits of the contract. To
accord its benefits only to members of the union without
any valid reason would constitute undue discrimination
against non-members. A collective bargaining agreement
is binding on all employees of the company. Therefore,
whatever benefits are given to the other employees of
ABS-CBN must likewise be accorded to private
respondents who were regular employees of petitioner.