#3 LVN PICTURES INC. VS.
PHILIPPINE MUSICIANS GUILD The companies denied that they have any musicians as
DOCTRINE/S:
Employer and employee.—Musicians, who supply the musical
background for movie productions, are employees of film
companies under the facts stated in the decision. They work
under the supervision of the movie director who is an employee
of the film company.
Criterion for employer-employee relationship-—An employer-
employee relationship exists where the person for whom the
services are performed reserves a right to control not only the
end to be achieved but also the means to be used in reaching
such end. It may exist notwithstanding the intervention of an
alleged independent contractor who may hire and fire the
workers.
FACTS:
In its petition in the lower court, the Philippine Musicians Guild
(FFW), hereafter referred to as the Guild, averred that it is a duly
registered legitimate labor organization; that LVN Pictures, Inc.,
Sampaguita Pictures, Inc., and Premiere Productions, Inc. are
corporations, duly organized under the Philippine laws, engaged
in the making of motion pictures and in the processing and
distribution thereof; that said companies employ musicians for
the purpose of making music recordings for title music,
background music, musical numbers, finale music and other
incidental music, without which a motion picture is incomplete;
that ninety-five (95%) percent of all the musicians playing for the
musical recordings of said companies are members of the Guild;
and that the same has no knowledge of the existence of any
other legitimate labor organization representing musicians in
said companies. Premised upon these allegations, the Guild
prayed that it be certified as the sole and exclusive bargaining
agency for all musicians working in the aforementioned
companies.
employees, and alleged that the musical numbers in the films of
the companies are furnished by independent contractors.
The RTC rejected this pretense and sustained the theory of the
Guild. A reconsideration of the order complained of having been
denied by the Court en banc, LVN Pictures, Inc. and
Sampaguita Pictures, Inc. filed these petitions for review by
certiorari.
the Guild seeks to be, and was, certified as the sole and
exclusive bargaining agency for the musicians working in the
aforesaid film companies. It does not intend to represent the
other employees therein.
ISSUE:
Whether or not the musicians in question are employees of the
film companies.
RULING:
Yes. In order to determine whether a person who performs work
for another is the latter’s employee or an independent
contractor, the National Labor Relations relies on ‘the right to
control’ test. Under this test an employer-employee relationship
exist where the person for whom the services are performed
reserves the right to control not only the end to be achieved, but
also the manner and means to be used in reaching the end.
In this case, the work of the musical director and musicians is a
functional and integral part of the enterprise performed at the
same studio substantially under the direction and control of the
company.
Furthermore, the film companies summon the musicians to
work, through the musical directors. The film companies,
through the musical directors, fix the date, the time and the
place of work. The film companies, not the musical directors,
provide the transportation to and from the studio. The film
companies furnish meal at dinner time.
The motion picture director — not the musical director — “solely
directs and performance of the musicians before the camera“.
The motion picture director “supervises the performance of all
the actors, including the musicians who appear in the scenes,
so that in the actual performance to be shown in the screen, the
musical director’s intervention has stopped.” Or, as testified to in
the lower court, “the movie director tells the musical director
what to do; tells the music to be cut or tells additional music in
this part or he eliminates the entire music he does not (want) or
he may want more drums or move violin or piano, as the case
may be”. The movie director “directly controls the activities of
the musicians.” He “says he wants more drums and the
drummer plays more” or “if he wants more violin or he does not
like that.”
It is well settled that "an employer-employee relationship exists
x x x where the person for whom the services are performed
reserves a right to control not only the end to be achieved but
also the means to be used in reaching such end x x x."
The decisive nature of said control over the "means to be used”
by reason of said control, the employer-employee relationship
was held to exist between the management and the workers,
notwithstanding the intervention of an alleged independent
contractor, who had, and exercise, the power to hire and fire
said workers. The aforementioned control over the means to be
used" in reaching the desired end is possessed and exercised
by the film companies over the musicians in the cases before
us.
#4 MANILA GOLF AND COUNTRY CLUB INC. VS. IAC
DOCTRINE/S:
No employer-employee relationship exists between golf clubs
and persons rendering caddying services for the clubs’
members.
A caddy is not required to exercise his occupation in the
premises of petitioner. He may work with any other golf club or
he may seek employment a caddy or otherwise with any entity
or individual without restriction by petitioner.
FACTS:
Respondents were caddies and employees of Manila Golf &
Country Club who originally filed a petition with the Social
Security Commission (SSC) for coverage and availment of
benefits under the Social Security Act. They alleged that
although the petitioners were employees of the Manila Golf and
Country Club, a domestic corporation, the latter had not
registered them as such with the SSS.
In the case before the SSC, the respondent Club alleged that
the petitioners, caddies by occupation, were allowed into the
Club premises to render services as such to the individual
members and guests playing the Club's golf course and who
themselves paid for such services; that as such caddies, the
petitioners were not subject to the direction and control of the
Club as regards the manner in which they performed their work;
and hence, they were not the Club's employees.
ISSUE:
whether or not persons rendering caddying services for
members of golf clubs and their guests in said clubs’ courses or
premises are the employees of such clubs and therefore within
the compulsory coverage of the Social Security System (SSS)
RULING:
No existence of employer-employee relationship.
In the very nature of things, caddies must submit to some
supervision of their conduct while enjoying the privilege of
pursuing their occupation within the premises and grounds of
whatever club they do their work in. For all that is made to
appear, they work for the club to which they attach themselves
on sufferance but, on the other hand, also without having to
observe any working hours, free to leave anytime they please,
to stay away for as long they like. It is not pretended that if found
remiss in the observance of said rules, any discipline may be
meted them beyond barring them from the premises which, it
may be supposed, the Club may do in any case even absent
any breach of the rules, and without violating any right to work
on their part. All these considerations clash frontally with the
concept of employment.
The IAC would point to the fact that the Club suggests the rate
of fees payable by the players to the caddies as still another
indication of the latter's status as employees. It seems to the
Court, however, that the intendment of such fact is to the
contrary, showing that the Club has not the measure of control
over the incidents of the caddies' work and compensation that
an employer would possess. Court agree that the group rotation
system so-called, is less a measure of employer control than an
assurance that the work is fairly distributed, a caddy who is
absent when his turn number is called simply losing his turn to
serve and being assigned instead the last number for the day.
Moreover, as pointed out by petitioner which was never refuted
that: has no means of compelling the presence of a caddy. A
caddy is not required to exercise his occupation in the premises
of petitioner. He may work with any other golf club or he may
seek employment a caddy or otherwise with any entity or
individual without restriction by petitioner.
#5 TAN VS. LAGRAMA
DOCTRINE/S:
Four-Fold Test to Determine the Existence of an Employer-
Employee Relationship. —In determining whether there is an
employer-employee relationship, we have applied a “four-fold
test,” to wit: (1) whether the alleged employer has the power of
selection and engagement of employees; (2) whether he has
control of the employee with respect to the means and methods
by which work is to be accomplished; (3) whether he has the
power to dismiss; and (4) whether the employee was paid
wages.
Of the four elements of the employer-employee relationship, the
“control test” is the most important. Compared to an employee,
an independent contractor is 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. Hence,
while an independent contractor enjoys independence and
freedom from the control and supervision of his 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.
The right to hire and fire is another important element of the
employer-employee relationship
The primary standard for 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.
FACTS:
Petitioner Rolando Tan is the president of Supreme Theater
Corporation and the general manager of Crown and Empire
Theaters in Butuan City. Private respondent Leovigildo Lagrama
is a painter, making ad billboards and murals for the motion
pictures shown at the Empress, Supreme, and Crown Theaters
for more than 10 years, from September 1, 1988 to October 17,
1998.
Private respondent Lagrama was summoned by Tan and
upbraided that he urinated in his work area. When Lagrama
asked what Tan was saying, Tan told him, “Don’t say anything
further. I don’t want you to draw anymore. From now on, no
more drawing. Get out.”
Lagrama denied the charge against him. He claimed that he
was not the only one who entered the drawing area and that,
even if the charge was true, it was a minor infraction to warrant
his dismissal. He filed a complaint and alleged that he was
illegally dismissed, he also sought reinvestigation and payment
of benefits.
Petitioner Tan denied that Lagrama was his employee. He
asserted that Lagrama was an independent contractor who did
his work according to his methods, while he (petitioner) was only
interested in the result thereof. He insisted that he was paid on a
fixed piece- work basis, i.e., that he was paid for every painting
turned out as ad billboard or mural for the pictures shown in the
three theaters, on the basis of a “no mural/billboard drawn, no
pay” policy.
Labor arbiter: in favor of Lagrama
NLRC 5th division: Reversed LA. Lagrama an independent
contractor.
CA: Adopted LA’s decision, petitioner Tan exercised control
over Lagrama’s work by dictating the time when Lagrama
should submit his billboards and murals and setting rules on the
use of the work area and rest room.
ISSUE:
whether or not an employer- employee relationship existed
between petitioner and private respondent
RULING:
Applying Four Fold Test
A. Power of Selection and Engagement of Employees – Tan
engaged the services of Lagrama without the intervention of
third party
B. Power of Control - Evidence shows that the Lagrama
performed his work as painter and under the supervision and
control of Tan.
1. Lagrama worked in a designated work area
inside the theater of Tan for the use of
which petitioner prescribed rules, which
rules included the observance of
cleanliness and hygeine and prohibition
against urinating in the work area and any
other place other than rest rooms and
2. Tan's control over Lagrama's work
extended not only the use of work area but
also the result of Lagrama;s work and the
manner and means by which the work was
to be accomplished
3. Lagrama is not an independent contractor
because he did not enjoy independence
and freedom from the control and
supervision of Tan and he was subjected to
Tan's control over the means and methods
by which his work is to be performed and
accomplished
C. Payment of Wages
1. Lagrama worked for Tan on a fixed piece
work basis is of no moment. Payment by
result is a method of compensation and
does not define the essence of the relation.
2. Tat Lagrama was not reported as an
employee to the SSS is not conclusive, on
the question whether he was an employee,
otherwise Tan would be rewarded for his
failure or even neglect to perform his
obligation.
D.Power of Dismissal – by Tan stating that he had the right to
fire Lagrama, Tan in effect acknowledged Lagrama to be his
employee
#6 TONGKO VS. MANUFACTURERS LIFE
DOCTRINE/S:
The Court set out the elements of an employer-employee
relationship, thus: Jurisprudence is firmly settled that whenever
the existence of an employment relationship is in dispute, four
elements constitute the reliable yardstick: (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. It is the so-called “control test” which
constitutes the most important index of the existence of the
employer-employee relationship that is, whether the employer
controls or has reserved the right to control the employee not
only as to the result of the work to be done but also as to the
means and methods by which the same is to be accomplished.
Stated otherwise, an employer-employee relationship exists
where the person for whom the services are performed reserves
the right to control not only the end to be achieved but also the
means to be used in reaching such end.
Control not only applies to the work or goal to be done but also
to the means and methods to accomplish it; Not all forms of
control would establish an employer-employee relationship.
FACTS:
Taking from the November 2008 decision, the facts are as
follows:
Manufacturers Life Insurance, Co. is a domestic corporation
engaged in life insurance business. De Dios was its President
and Chief Executive Officer. Petitioner Tongko started his
relationship with Manulife in 1977 by virtue of a Career Agent's
Agreement.
Pertinent provisions of the agreement state that:
It is understood and agreed that the Agent is an independent
contractor and nothing contained herein shall be construed or
interpreted as creating an employer-employee relationship
between the Company and the Agent.
a) The Agent shall canvass for applications for Life Insurance,
Annuities, Group policies and other products offered by the
Company, and collect, in exchange for provisional receipts
issued by the Agent, money due or to become due to the
Company in respect of applications or policies obtained by or
through the Agent or from policyholders allotted by the
Company to the Agent for servicing, subject to subsequent
confirmation of receipt of payment by the Company as
evidenced by an Official Receipt issued by the Company directly
to the policyholder.
b) The Company may terminate this Agreement for any breach
or violation of any of the provisions hereof by the Agent by
giving written notice to the Agent within fifteen (15) days from
the time of the discovery of the breach. No waiver,
extinguishment, abandonment, withdrawal or cancellation of the
right to terminate this Agreement by the Company shall be
construed for any previous failure to exercise its right under any
provision of this Agreement.
c) Either of the parties hereto may likewise terminate his
Agreement at any time without cause, by giving to the other
party fifteen (15) days notice in writing.
Sometime in 2001, De Dios addressed a letter to Tongko, then
one of the Metro North Managers, regarding meetings wherein
De Dios found Tongko's views and comments to be unaligned
with the directions the company was taking. De Dios also
expressed his concern regarding the Metro North Managers'
interpretation of the company's goals. He maintains that
Tongko's allegations are unfounded. Some allegations state that
some Managers are unhappy with their earnings, that they're
earning less than what they deserve and that these are the
reasons why Tonko's division is unable to meet agency
development objectives. However, not a single Manager came
forth to confirm these allegations. Finally, De Dios related his
worries about Tongko's inability to push for company
development and growth.
De Dios subsequently sent Tongko a letter of termination in
accordance with Tongko's Agents Contract. Tongko filed a
complaint with the NLRC against Manulife for illegal dismissal,
alleging that he had an employer-employee relationship with De
Dios instead of a revocable agency by pointing out that the latter
exercised control over him through directives regarding how to
manage his area of responsibility and setting objectives for him
relating to the business. Tongko also claimed that his dismissal
was without basis and he was not afforded due process. The
NLRC ruled that there was an employer-employee relationship
as evidenced by De Dios's letter which contained the manner
and means by which Tongko should do his work. The NLRC
ruled in favor of Tongko, affirming the existence of the
employer-employee relationship.
The Court of Appeals, however, set aside the NLRC's ruling. It
applied the four-fold test for determining control and found the
elements in this case to be lacking, basing its decision on the
same facts used by the NLRC. It found that Manulife did not
exert control over Tongko, there was no employer-employee
relationship and thus the NLRC did not have jurisdiction over the
case.
The Supreme Court reversed the ruling of the Court of Appeals
and ruled in favor of Tongko. However, the Supreme Court
issued another Resolution dated June 29, 2010, reversing its
decision. Tongko filed a motion for reconsideration, which is
now the subject of the instant case.
ISSUE:
Did the Supreme Court err in issuing the June 29, 2010
resolution, reversing its earlier decision that an employer-
employee relationship existed?
RULING:
The Supreme Court finds no reason to reverse the June 29,
2010 decision. Control over the performance of the task of one
providing service both with respect to the means and manner,
and the results of the service is the primary element in
determining whether an employment relationship exists. The
Supreme Court ruled petitioners Motion against his favor since
he failed to show that the control Manulife exercised over him
was the control required to exist in an employer-employee
relationship; Manulifes control fell short of this norm and carried
only the characteristic of the relationship between an insurance
company and its agents, as defined by the Insurance Code and
by the law of agency under the Civil Code.
In the Supreme Courts June 29, 2010 Resolution, they noted
that there are built-in elements of control specific to an
insurance agency, which do not amount to the elements of
control that characterize an employment relationship governed
by the Labor Code.The Insurance Code provides definite
parameters in the way an agent negotiates for the sale of the
companys insurance products, his collection activities and his
delivery of the insurance contract or policy. They do not reach
the level of control into the means and manner of doing an
assigned task that invariably characterizes an employment
relationship as defined by labor law.
To reiterate, guidelines indicative of labor law "control" do not
merely relate to the mutually desirable result intended by the
contractual relationship; they must have the nature of dictating
the means and methods to be employed in attaining the result.
Tested by this norm, Manulifes instructions regarding the
objectives and sales targets, in connection with the training and
engagement of other agents, are among the directives that the
principal may impose on the agent to achieve the assigned
tasks.They are targeted results that Manulife wishes to attain
through its agents. Manulifes codes of conduct, likewise, do not
necessarily intrude into the insurance agents means and
manner of conducting their sales. Codes of conduct are norms
or standards of behavior rather than employer directives into
how specific tasks are to be done.
#7 INSULAR LIFE ASSURANCE VS. NLRC
DOCTRINE/S:
It is true that the “control test” expressed in the following
pronouncement of the Court in the 1956 case of Viana vs. Alejo
Al-Lagadan: “x x x In determining the existence of employer-
employee relationship, the following elements are generally
considered, namely: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal;
and (4) the power to control the employee conduct—although
the latter is the most important element (35 Am. Jur. 445). x x x,”
has been followed and applied in later cases, some fairly recent.
Indeed, it is without question a valid test of the character of a
contract or agreement to render service. 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.
When an insurance agent is free to adopt his own selling
methods or is free to sell insurance at his own time, he is an
independent contractor.
FACTS:
Petitioner Insular Life entered into a contract with respondent
Basiao where the latter is authorized to solicit for insurance
policies. Sometime later, the parties entered into another
contract which caused Basiao to organize an agency in order to
fulfill its terms.
The contract being subsequently terminated by petitioner,
Basiao sued the latter which prompted also for the termination
of their engagement under the first contract. Basiao thus filed
before the Ministry of Labor seeking to recover alleged unpaid
commissions. Petitioner contends that Basiao is not an
employee but an independent contractor for which they have no
obligation to pay said commissions. The Labor Arbiter found for
Basiao ruling that there exists employer-employee relationship
between him and petitioner. NLRC affirmed.
ISSUE:
Whether or not employer-employee relationship existed
between petitioner and Basiao.
RULING:
No. In determining the existence of employer-employee
relationship, the following elements are generally considered,
namely: (1) the selection and engagement of the employee; (2)
the payment of wages; (3) the power of dismissal; and (4) the
power to control the employees’ conduct — although the latter is
the most important element. 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.
Rules and regulations governing the conduct of the business are
provided for in the Insurance Code and enforced by the
Insurance Commissioner. It is, therefore, usual and expected for
an insurance company to promulgate a set of rules to guide its
commission agents in selling its policies that they may not run
afoul of the law and what it requires or prohibits. None of these
really invades the agent’s contractual prerogative to adopt his
own selling methods or to sell insurance at his own time and
convenience, hence cannot justifiably be said to establish an
employer-employee relationship between him and the company.
The Court, therefore, rules that under the contract invoked by
him, Basiao was not an employee of the petitioner, but a
commission agent, an independent contractor whose claim for
unpaid commissions should have been litigated in an ordinary
civil action.
#8 BROTHERHOOD MOVEMENT VS. ZAMORA
DOCTRINE/S:
In determining the existence of an employer-employee
relationship, the elements that are generally considered are the
following: (a) the selection and engagement of the employee; (b)
the payment of wages; (Q) the power of dismissal; and (d) the
employer’s power to control the employee with respect to the
means and methods by which the work is to be accomplished. It
is the so-called “control test” that is the most important element.
FACTS:
Petitioners are workers who have been employed at the San
Miguel Parola Glass Factory since 1961, averaging about 7
years of service at the tie of their termination. They worked as
“cargadores” or “pahinantes” at the SM Plant. Work in the glass
factory was neither regular nor continuous, depending wholly on
the volume of bottles manufactured to be loaded and unloaded,
as well as the business activity of the company. Work, at times,
exceeded the 8 hours a day and necessitated work on Sundays
and holidays. For this, they were neither paid overtime nor
compensation for work on Sundays and holidays.
In 1969, petitioners organized and affiliated themselves with
BLUM and engaged in union activities. Believing themselves
entitled to overtime and holiday pay, the petitioners pressed the
management and aired other grievances. However, their gripes
and grievances were not heeded by the respondents. San
Miguel refused to bargain with BLUM alleging that the workers
are not their employees. It alleges that petitioners are
employees of Guaranteed Labor Contractor, an independent
labor contracting firm.
ISSUE:
whether or not an employer-employee relationship exists
between petitioners-members of the “Brotherhood Labor Unit
Movement of the Philippines” (BLUM) and respondent San
Miguel Corporation,
RULING:
As for the first element, uncontroverted is the fact for an average
of 7 years, each of the petitioners had worked continuously and
exclusively for the respondent company’s shipping and
warehousing department. Considering the length of time that the
petitioners have worked with the respondent company, there is
justification to conclude that they were engaged to perform
activities necessary or desirable in the usual business or trade
of the respondent, and the petitioners are therefore, regular
employees. Despite past shutdowns of the glass plant for
repairs, the petitioners, thereafter, promptly returned to their
jobs, never having been replaced, or assigned elsewhere until
the present controversy arose. The term of the petitioners’
employment appears indefinite. The continuity and habitually of
petitioners’ work bolsters their claim of employee status vis-a-vis
respondent company.
As for the second element, the alleged independent contractors
in the case at bar were paid a lump sum representing only the
salaries the workers were entitle to, arrived at by adding the
salaries of each worker which depend on the volume of work
they had accomplished individually. The amount paid by the
respondent company to the alleged independent contractor
considers no business expenses or capital outlay of the latter.
Nor is the profit or gain of the alleged contractor in the conduct
of its business provided for as an amount over and above the
workers’ wage.
As to the third element, the petitioners were dismissed allegedly
because of the shutdown of the glass manufacturing plant. The
respondent’s shutdown was merely temporary, one of its
furnaces needing repair. Operations continued after such
repairs, but the petitioners had already been refused entry to the
premises and dismissed from respondent’s service. the closure
of respondent’s warehouse was merely a ploy to get rid of the
petitioners, who were then agitating the respondent company for
benefits, reforms and collective bargaining as a union. There is
no showing that petitioners had been remiss in their obligations
and inefficient in their jobs to warrant their separation
#9 SONZA VS. ABS-CBN
DOCTRINE/S:
Employer-Employee Relationship; Existence of an employer-
employee relationship is a question of fact; Appellate courts
accord the factual findings of the Labor Arbiter and the NLRC
not only respect but also finality when supported by substantial
evidence; Court does not substitute its own judgment for that of
the tribunal in determining where the weight of evidence lies or
what evidence is credible
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.
FACTS:
In May 1994, ABS-CBN signed an agreement with Mel & Jay
Management and Development Corp for a radio and television
program. ABS-CBN agreed to pay for SONZA’s services a
monthly talent fee of P310,000 for the first year and P317,000
for the second and third year of the Agreement. ABS-CBN
would pay the talent fees on the 10th and 25th days of the
month.
On April 1996, Sonza wrote a letter to ABS-CBN President
Eugenio Lopez III about a recent event concerning his programs
and career, and that the said violation of the company has
breached the agreement, thus, the notice of rescission of
Agreement was sent.
At the end of the same month, Sonza filed a complaint against
ABS-CBN before the DOLE for non-payment of salaries,
separation pay, service incentive leave pay, 13th month pay,
signing bonus, travel allowance and amounts due under the
Employees Stock Option Plan (ESOP) which was opposed by
ABS-CBN on the ground there was no employer-employee
relationship existed between the parties.
ISSUE:
Whether Sonza was an employee or independent contractor
RULING:
There was no employer-employee relationship that existed, but
that of an
independent contractor.
Case law has consistently held that the elements of an
employer-employee relationship are:
(a) The selection and engagement of the employee - ABS-CBN
engaged SONZA’s services to co-host its television and radio
programs because of SONZA’s peculiar skills, talent and
celebrity status. 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.
(b) The payment of wages - ABS-CBN directly paid SONZA his
monthly talent fees with no part of his fees going to MJMDC. All
the talent fees and benefits paid to SONZA were the result of
negotiations that led to the Agreement. If SONZA were ABS-
CBN’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.
(c) The power of dismissal - For violation of any provision of the
Agreement, either party may terminate their relationship. During
the life of the Agreement, ABS-CBN agreed to pay SONZA’s
talent fees as long as "AGENT and Jay Sonza shall faithfully
and completely perform each condition of this Agreement." Even
if it suffered severe business losses, ABS-CBN could not
retrench SONZA because ABS-CBN remained obligated to pay
SONZA’s talent fees during the life of the Agreement.
(d) The employer’s power to control the employee on the means
and methods by which the work is accomplished - The control
test is the most important test. 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, ABS-CBN engaged SONZA’s services specifically to co-
host the "Mel & Jay" programs. ABS-CBN did not assign any
other work to SONZA. 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. SONZA did not have to render eight hours
of work per day. The Agreement required SONZA to attend only
rehearsals and tapings of the shows, as well as pre- and post-
production staff meetings. ABS-CBN could not dictate the
contents of SONZA’s script. However, the Agreement prohibited
SONZA from criticizing in his shows ABS-CBN or its interests.
The clear implication is that SONZA had a free hand on what to
say or discuss in his shows provided he did not attack ABS-CBN
or its interests.
Second, The Agreement stipulates that SONZA shall abide with
the rules and standards of performance "covering talents" of
ABS-CBN. The Agreement does not require SONZA to comply
with the rules and standards of performance prescribed for
employees of ABS-CBN. 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." 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 ABS-CBN.
Lastly, 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. 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.