FIRST DIVISION

[G.R. No. 138051. June 10, 2004]

JOSE Y. SONZA, petitioner, vs. ABS-CBN BROADCAST NG COR!ORAT ON, respondent. DEC S ON
CAR! O, J."

T#e C$%e Before this Court is a petition for review on certiorari assailing the ! "ar#h 1$$$ De#ision of the Court of %ppeals in C%&'(R( S) No( *$1$+ ,is-issing the petition file, ./ 0ose 1( Son2a 34SON5%67( The Court of %ppeals affir-e, the fin,ings of the National 8a.or Relations Co--ission 34N8RC679 whi#h affir-e, the 8a.or %r.iter:s ,is-issal of the #ase for la#; of <uris,i#tion(
[1] [ ]

T#e &$'(% In "a/ 1$$*9 respon,ent %BS&CBN Broa,#asting Corporation 34%BS& CBN67 signe, an %gree-ent 34%gree-ent67 with the "el an, 0a/ "anage-ent an, Develop-ent Corporation 34"0"DC67( %BS&CBN was represente, ./ its #orporate offi#ers while "0"DC was represente, ./ SON5%9 as )resi,ent an, 'eneral "anager9 an, Car-ela Tiang#o 34TI%N'CO679 as =V) an, Treasurer( Referre, to in the %gree-ent as 4%'=NT96 "0"DC agree, to provi,e SON5%:s servi#es e>#lusivel/ to %BS&CBN as talent for ra,io an, television( The %gree-ent liste, the servi#es SON5% woul, ren,er to %BS& CBN9 as follows?

a. b.

Co-host for Mel & Jay radio program, 8:00 to 10:00 a.m., Mondays to Fridays; Co-host for Mel & Jay tele ision program, !:"0 to #:00 p.m., $%ndays.
[@]

%BS&CBN agree, to pa/ for SON5%:s servi#es a -onthl/ talent fee of )@1+9+++ for the first /ear an, )@1A9+++ for the se#on, an, thir, /ear of the %gree-ent( %BS&CBN woul, pa/ the talent fees on the 1+ th an, Bth ,a/s of the -onth( On 1 %pril 1$$!9 SON5% wrote a letter to %BS&CBN:s )resi,ent9 =ugenio 8ope2 III9 whi#h rea,s?

&ear Mr. 'ope(, )e *o%ld li+e to ,all yo%r attention to the -greement dated May 1../ entered into by yo%r goodself on behalf of -0$-C01 *ith o%r ,ompany relati e to o%r talent J2$3 4. $215-. -s yo% are *ell a*are, Mr. $on(a irre o,ably resigned in ie* of re,ent e ents ,on,erning his programs and ,areer. )e ,onsider these a,ts of the station iolati e of the -greement and the station as in brea,h thereof. 6n this ,onne,tion, *e hereby ser e noti,e of res,ission of said -greement at o%r instan,e effe,ti e as of date. Mr. $on(a informed %s that he is *ai ing and reno%n,ing re,o ery of the remaining amo%nt stip%lated in paragraph # of the -greement b%t reser es the right to see+ re,o ery of the other benefits %nder said -greement. 7han+ yo% for yo%r attention. 8ery tr%ly yo%rs, 9$gd.: J2$3 4. $215;resident and <en. Manager
[*]

On @+ %pril 1$$!9 SON5% file, a #o-plaint against %BS&CBN .efore the Depart-ent of 8a.or an, =-plo/-ent9 National Capital Region in Cue2on Cit/( SON5% #o-plaine, that %BS&CBN ,i, not pa/ his salaries9 separation pa/9 servi#e in#entive leave pa/9 1@ th -onth pa/9 signing .onus9 travel allowan#e an, a-ounts ,ue un,er the =-plo/ees Sto#; Option )lan 34=SO)67( On 1+ 0ul/ 1$$!9 %BS&CBN file, a "otion to Dis-iss on the groun, that no e-plo/er&e-plo/ee relationship e>iste, .etween the parties( SON5% file, an Opposition to the -otion on 1$ 0ul/ 1$$!( "eanwhile9 %BS&CBN #ontinue, to re-it SON5%:s -onthl/ talent fees through his a##ount at )CIBan;9 Cue2on %venue Bran#h9 Cue2on Cit/( In 0ul/ 1$$!9 %BS&CBN opene, a new a##ount with the sa-e .an; where %BS& CBN ,eposite, SON5%:s talent fees an, other pa/-ents ,ue hi- un,er the %gree-ent( In his Or,er ,ate, De#e-.er 1$$!9 the 8a.or %r.iter ,enie, the -otion to ,is-iss an, ,ire#te, the parties to file their respe#tive position papers( The 8a.or %r.iter rule,?
[B]

6n this instant ,ase, ,omplainant for ha ing in o+ed a ,laim that he *as an employee of respondent ,ompany %ntil -pril 1!, 1..= and that he *as not paid ,ertain ,laims, it is s%ffi,ient eno%gh as to ,onfer >%risdi,tion o er the instant ,ase in this 2ffi,e. -nd as to *hether or not s%,h ,laim *o%ld entitle ,omplainant to re,o er %pon the ,a%ses of a,tion asserted is a matter to be resol ed only after and as a res%lt of a hearing. 7h%s, the respondent?s plea of la,+ of employer-employee relationship may be pleaded only as a matter of defense. 6t behoo es %pon it the d%ty to pro e that there really is no employer-employee relationship bet*een it and the ,omplainant.

The 8a.or %r.iter then #onsi,ere, the #ase su.-itte, for resolution( The parties su.-itte, their position papers on * Fe.ruar/ 1$$A( On 11 "ar#h 1$$A9 SON5% file, a Repl/ to Respon,ent:s )osition )aper with "otion to =>punge Respon,ent:s %nne> * an, %nne> B fro- the Re#or,s( %nne>es * an, B are affi,avits of %BS&CBN:s witnesses So##oro Vi,anes an, Rolan,o V( Cru2( These witnesses state, in their affi,avits that the prevailing pra#ti#e in the television an, .roa,#ast in,ustr/ is to treat talents li;e SON5% as in,epen,ent #ontra#tors( The 8a.or %r.iter ren,ere, his De#ision ,ate, D 0ul/ 1$$A ,is-issing the #o-plaint for la#; of <uris,i#tion( The pertinent parts of the ,e#ision rea, as follows?
[!]

@@@ )hile ;hilippine >%rispr%den,e has not yet, *ith ,ertainty, to%,hed on the Atr%e nat%re of the ,ontra,t of a talent,B it stands to reason that a AtalentB as abo e-des,ribed ,annot be ,onsidered as an employee by reason of the pe,%liar ,ir,%mstan,es s%rro%nding the engagement of his ser i,es. 6t m%st 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. 7he benefits ,onferred to ,omplainant %nder the May 1../ -greement are ,ertainly ery m%,h higher than those generally gi en to employees. For one, ,omplainant $on(a?s monthly talent fees amo%nt to a staggering ;"1#,000. Moreo er, his engagement as a talent *as ,o ered by a spe,ifi, ,ontra,t. 'i+e*ise, he *as not bo%nd to render eight 98: ho%rs of *or+ per day as he *or+ed only for s%,h n%mber of ho%rs as may be ne,essary. 7he fa,t that per the May 1../ -greement ,omplainant *as a,,orded some benefits normally gi en to an employee is in,onseC%ential. Whatever benefits complainant enjoyed arose from specific agreement by the parties and not by reason of employer-employee relationship. -s ,orre,tly p%t by the respondent, A-ll these benefits are merely talent fees and other ,ontra,t%al benefits and sho%ld not be deemed as Dsalaries, *ages andEor other rem%neration? a,,orded to an employee, not*ithstanding the nomen,lat%re appended to these benefits. -propos to this is the r%le that the term or nomen,lat%re gi en to a stip%lated benefit is not ,ontrolling, b%t the intent of the parties to the -greement ,onferring s%,h benefit.B The fact that complainant was made subject to respondent s !ules and !egulations, likewise, does not detract from the absence of employeremployee relationship. -s held by the $%preme Co%rt, A7he line sho%ld be dra*n bet*een r%les that merely ser e as g%idelines to*ards the a,hie ement of the m%t%ally desired res%lt *itho%t di,tating the means or methods to be employed in attaining it, and those that ,ontrol or fi@ the methodology and bind or restri,t the party hired to the %se of s%,h

means. 7he first, *hi,h aim only to promote the res%lt, ,reate no employeremployee relationship %nli+e the se,ond, *hi,h address both the res%lt and the means to a,hie e it.B 96ns%lar 'ife -ss%ran,e Co., 'td. s. 1'FC, et al., <.F. 1o. 8//8/, 1o ember 1!, 1.8.:. @ @ @ 93mphasis s%pplied:
[A]

SON5% appeale, to the N8RC( On * Fe.ruar/ 1$$D9 the N8RC ren,ere, a De#ision affir-ing the 8a.or %r.iter:s ,e#ision( SON5% file, a -otion for re#onsi,eration9 whi#h the N8RC ,enie, in its Resolution ,ate, @ 0ul/ 1$$D( On ! O#to.er 1$$D9 SON5% file, a spe#ial #ivil a#tion for #ertiorari .efore the Court of %ppeals assailing the ,e#ision an, resolution of the N8RC( On ! "ar#h 1$$$9 the Court of %ppeals ren,ere, a De#ision ,is-issing the #ase(
[D]

Een#e9 this petition( T#e Ru)*n+% o, (#e N-RC $n. Cou/( o, A00e$)% The Court of %ppeals affir-e, the N8RC:s fin,ing that no e-plo/er& e-plo/ee relationship e>iste, .etween SON5% an, %BS&CBN( %,opting the N8RC:s ,e#ision9 the appellate #ourt Fuote, the following fin,ings of the N8RC?

@ @ @ the May 1../ -greement *ill readily re eal that MJM&C entered into the ,ontra,t merely as an agent of ,omplainant $on(a, the prin,ipal. 0y all indi,ation and as the la* p%ts it, the a,t of the agent is the a,t of the prin,ipal itself. 7his fa,t is made parti,%larly tr%e in this ,ase, as admittedly MJM&C Dis a management ,ompany de oted e@,l%si ely to managing the ,areers of Mr. $on(a and his broad,ast partner, Mrs. Carmela C. 7iang,o.? 92pposition to Motion to &ismiss: Clearly, the relations of prin,ipal and agent only a,,r%es bet*een ,omplainant $on(a and MJM&C, and not bet*een -0$-C01 and MJM&C. 7his is ,lear from the pro isions of the May 1../ -greement *hi,h spe,ifi,ally referred to MJM&C as the D-<317?. -s a matter of fa,t, *hen ,omplainant herein %nilaterally res,inded said May 1../ -greement, it *as MJM&C *hi,h iss%ed the noti,e of res,ission in behalf of Mr. $on(a, *ho himself signed the same in his ,apa,ity as ;resident. Moreo er, pre io%s ,ontra,ts bet*een Mr. $on(a and -0$-C01 re eal the fa,t that histori,ally, the parties to the said agreements are -0$-C01 and Mr. $on(a. -nd it is only in the May 1../ -greement, *hi,h is the latest -greement e@e,%ted bet*een -0$-C01 and Mr. $on(a, that MJM&C fig%red in the said -greement as the agent of Mr. $on(a. )e find it erroneo%s to assert that MJM&C is a mere Dlabor-only? ,ontra,tor of -0$-C01 s%,h that there e@istGsH employer-employee relationship bet*een the latter and Mr. $on(a. 2n the ,ontrary, )e find it ind%bitable,

that MJM&C is an agent, not of -0$-C01, b%t of the talentE,ontra,tor Mr. $on(a, as e@pressly admitted by the latter and MJM&C in the May 1../ -greement. 6t may not be amiss to state that >%risdi,tion o er the instant ,ontro ersy indeed belongs to the reg%lar ,o%rts, the same being in the nat%re of an a,tion for alleged brea,h of ,ontra,t%al obligation on the part of respondentappellee. -s sC%arely apparent from ,omplainant-appellant?s ;osition ;aper, his ,laims for ,ompensation for ser i,es, D1" th month pay?, signing bon%s and tra el allo*an,e against respondent-appellee are not based on the 'abor Code b%t rather on the pro isions of the May 1../ -greement, *hile his ,laims for pro,eeds %nder $to,+ ;%r,hase -greement are based on the latter. - portion of the ;osition ;aper of ,omplainant-appellant bears per%sal: DInder Gthe May 1../ -greementH *ith respondent -0$-C01, the latter ,ontra,t%ally bo%nd itself to pay ,omplainant a signing bon%s ,onsisting of shares of sto,+sJ*ith F683 KI1&F3& 7K2I$-1& ;3$2$ 9;!00,000.00:. $imilarly, ,omplainant is also entitled to be paid 1" th month pay based on an amo%nt not lo*er than the amo%nt he *as re,ei ing prior to effe,ti ity of 9the: -greement?. Inder paragraph . of 9the May 1../ -greement:, ,omplainant is entitled to a ,omm%table tra el benefit amo%nting to at least 2ne K%ndred Fifty 7ho%sand ;esos 9;1!0,000.00: per year.? 7h%s, it is pre,isely be,a%se of ,omplainant-appellant?s o*n re,ognition of the fa,t that his ,ontra,t%al relations *ith -0$-C01 are fo%nded on the 1e* Ci il Code, rather than the 'abor Code, that instead of merely resigning from -0$-C01, ,omplainant-appellant ser ed %pon the latter a Dnoti,e of res,ission? of -greement *ith the station, per his letter dated -pril 1, 1..=, *hi,h asserted that instead of referring to %npaid employee benefits, Dhe is *ai ing and reno%n,ing re,o ery of the remaining amo%nt stip%lated in paragraph # of the -greement b%t reser es the right to s%,h re,o ery of the other benefits %nder said -greement.? 9-nne@ " of the respondent -0$-C01?s Motion to &ismiss dated J%ly 10, 1..=:. 3 idently, it is pre,isely by reason of the alleged iolation of the May 1../ -greement andEor the $to,+ ;%r,hase -greement by respondent-appellee that ,omplainant-appellant filed his ,omplaint. Complainant-appellant?s ,laims being an,hored on the alleged brea,h of ,ontra,t on the part of respondent-appellee, the same ,an be resol ed by referen,e to ,i il la* and not to labor la*. ConseC%ently, they are *ithin the realm of ,i il la* and, th%s, lie *ith the reg%lar ,o%rts. -s held in the ,ase of &ai-Chi 3le,troni,s Man%fa,t%ring s. 8illarama, L"8 $CF- L=#, L1 1o ember 1../, an action for breach of contractual obligation is intrinsically a civil dispute . 93mphasis s%pplied:
[$]

The Court of %ppeals rule, that the e>isten#e of an e-plo/er&e-plo/ee relationship .etween SON5% an, %BS&CBN is a fa#tual Fuestion that is within the <uris,i#tion of the N8RC to resolve( % spe#ial #ivil a#tion for #ertiorari e>ten,s onl/ to issues of want or e>#ess of <uris,i#tion of the N8RC( Su#h a#tion #annot #over an inFuir/ into the #orre#tness of the evaluation of the evi,en#e whi#h serve, as .asis of the N8RC:s #on#lusion( The Court of %ppeals a,,e, that it #oul, not re&e>a-ine the parties: evi,en#e an, su.stitute the fa#tual fin,ings of the N8RC with its own(
[1+] [11] [1 ] [1@]

T#e %%ue In assailing the ,e#ision of the Court of %ppeals9 SON5% #onten,s that?

7K3 C2IF7 2F -;;3-'$ <F-83'4 3FF3& 61 -FF6FM61< 7K3 1'FC?$ &3C6$621 -1& F3FI$61< 72 F61& 7K-7 -1 3M;'243F-3M;'2433 F3'-7621$K6; 3M6$73& 037)331 $215- -1& -0$-C01, &3$;673 7K3 )36<K7 2F C217F2''61< '-), JIF6$;FI&31C3 -1& 386&31C3 72 $I;;2F7 $ICK F61&61<.
[1*]

T#e Cou/(1% Ru)*n+ Ge affir- the assaile, ,e#ision( No #onvin#ing reason e>ists to warrant a reversal of the ,e#ision of the Court of %ppeals affir-ing the N8RC ruling whi#h uphel, the 8a.or %r.iter:s ,is-issal of the #ase for la#; of <uris,i#tion( The present #ontrovers/ is one of first i-pression( %lthough )hilippine la.or laws an, <urispru,en#e ,efine #learl/ the ele-ents of an e-plo/er& e-plo/ee relationship9 this is the first ti-e that the Court will resolve the nature of the relationship .etween a television an, ra,io station an, one of its 4talents(6 There is no #ase law stating that a ra,io an, television prograhost is an e-plo/ee of the .roa,#ast station( The instant #ase involves .ig na-es in the .roa,#ast in,ustr/9 na-el/ 0ose 40a/6 Son2a9 a ;nown television an, ra,io personalit/9 an, %BS&CBN9 one of the .iggest television an, ra,io networ;s in the #ountr/( SON5% #onten,s that the 8a.or %r.iter has <uris,i#tion over the #ase .e#ause he was an e-plo/ee of %BS&CBN( On the other han,9 %BS&CBN insists that the 8a.or %r.iter has no <uris,i#tion .e#ause SON5% was an in,epen,ent #ontra#tor( Employee or Independent Contractor?

The e>isten#e of an e-plo/er&e-plo/ee relationship is a Fuestion of fa#t( %ppellate #ourts a##or, the fa#tual fin,ings of the 8a.or %r.iter an, the N8RC not onl/ respe#t .ut also finalit/ when supporte, ./ su.stantial evi,en#e( Su.stantial evi,en#e -eans su#h relevant evi,en#e as a reasona.le -in, -ight a##ept as a,eFuate to support a #on#lusion( % part/ #annot prove the a.sen#e of su.stantial evi,en#e ./ si-pl/ pointing out that there is #ontrar/ evi,en#e on re#or,9 ,ire#t or #ir#u-stantial( The Court ,oes not su.stitute its own <u,g-ent for that of the tri.unal in ,eter-ining where the weight of evi,en#e lies or what evi,en#e is #re,i.le(
[1B] [1!] [1A]

SON5% -aintains that all essential ele-ents of an e-plo/er&e-plo/ee relationship are present in this #ase( Case law has #onsistentl/ hel, that the ele-ents of an e-plo/er&e-plo/ee relationship are? 3a7 the sele#tion an, engage-ent of the e-plo/eeH 3.7 the pa/-ent of wagesH 3#7 the power of ,is-issalH an, 3,7 the e-plo/er:s power to #ontrol the e-plo/ee on the -eans an, -etho,s ./ whi#h the wor; is a##o-plishe,( The last ele-ent9 the so&#alle, 4'on(/o) (e%(69 is the -ost i-portant ele-ent(
[1D] [1$]

A. Selection and Engagement of Employee %BS&CBN engage, SON5%:s servi#es to #o&host its television an, ra,io progra-s .e#ause of SON5%:s pe#uliar s;ills9 talent an, #ele.rit/ status( SON5% #onten,s that the 4,is#retion use, ./ respon,ent in spe#ifi#all/ sele#ting an, hiring #o-plainant over other .roa,#asters of possi.l/ si-ilar e>perien#e an, Fualifi#ation as #o-plainant .elies respon,ent:s #lai- of in,epen,ent #ontra#torship(6 In,epen,ent #ontra#tors often present the-selves to possess uniFue s;ills9 e>pertise or talent to ,istinguish the- fro- or,inar/ e-plo/ees( The spe#ifi# sele#tion an, hiring of SON5%9 because of his unique skills talent and celebrity status not possessed by ordinary employees 9 is a #ir#u-stan#e in,i#ative9 .ut not #on#lusive9 of an in,epen,ent #ontra#tual relationship( If SON5% ,i, not possess su#h uniFue s;ills9 talent an, #ele.rit/ status9 %BS&CBN woul, not have entere, into the %gree-ent with SON5% .ut woul, have hire, hi- through its personnel ,epart-ent <ust li;e an/ other e-plo/ee( In an/ event9 the -etho, of sele#ting an, engaging SON5% ,oes not #on#lusivel/ ,eter-ine his status( Ge -ust #onsi,er all the #ir#u-stan#es of the relationship9 with the #ontrol test .eing the -ost i-portant ele-ent( !. "ayment of #ages %BS&CBN ,ire#tl/ pai, SON5% his -onthl/ talent fees with no part of his fees going to "0"DC( SON5% asserts that this -o,e of fee pa/-ent shows that he was an e-plo/ee of %BS&CBN( SON5% also points out that %BS& CBN grante, hi- .enefits an, privileges 4whi#h he woul, not have en<o/e, if he were trul/ the su.<e#t of a vali, <o. #ontra#t(6

%ll the talent fees an, .enefits pai, to SON5% were the result of negotiations that le, to the %gree-ent( If SON5% were %BS&CBN:s e-plo/ee9 there woul, .e no nee, for the parties to stipulate on .enefits su#h as 4SSS9 "e,i#are9 > > > an, 1@th -onth pa/6 whi#h the law auto-ati#all/ in#orporates into ever/ e-plo/er&e-plo/ee #ontra#t( Ghatever .enefits SON5% en<o/e, arose fro- #ontra#t an, not .e#ause of an e-plo/er& e-plo/ee relationship(
[ +] [ 1] [ ]

SON5%:s talent fees9 a-ounting to )@1A9+++ -onthl/ in the se#on, an, thir, /ear9 are so huge an, out of the or,inar/ that the/ in,i#ate -ore an in,epen,ent #ontra#tual relationship rather than an e-plo/er&e-plo/ee relationship( %BS&CBN agree, to pa/ SON5% su#h huge talent fees pre#isel/ .e#ause of SON5%:s uniFue s;ills9 talent an, #ele.rit/ status not possesse, ./ or,inar/ e-plo/ees( O.viousl/9 SON5% a#ting alone possesse, enough .argaining power to ,e-an, an, re#eive su#h huge talent fees for his servi#es( The power to .argain talent fees wa/ a.ove the salar/ s#ales of or,inar/ e-plo/ees is a #ir#u-stan#e in,i#ative9 .ut not #on#lusive9 of an in,epen,ent #ontra#tual relationship( The pa/-ent of talent fees ,ire#tl/ to SON5% an, not to "0"DC ,oes not negate the status of SON5% as an in,epen,ent #ontra#tor( The parties e>pressl/ agree, on su#h -o,e of pa/-ent( In,er the %gree-ent9 "0"DC is the %'=NT of SON5%9 to who- "0"DC woul, have to turn over an/ talent fee a##ruing un,er the %gree-ent( C. "o$er of %ismissal For violation of an/ provision of the %gree-ent9 either part/ -a/ ter-inate their relationship( SON5% faile, to show that %BS&CBN #oul, ter-inate his servi#es on groun,s other than .rea#h of #ontra#t9 su#h as retren#h-ent to prevent losses as provi,e, un,er la.or laws(
[ @]

During the life of the %gree-ent9 %BS&CBN agree, to pa/ SON5%:s talent fees as long as 4%'=NT an, 0a/ Son2a shall faithfull/ an, #o-pletel/ perfor- ea#h #on,ition of this %gree-ent(6 =ven if it suffere, severe .usiness losses9 %BS&CBN #oul, not retren#h SON5% .e#ause %BS&CBN re-aine, o.ligate, to pa/ SON5%:s talent fees ,uring the life of the %gree-ent( This #ir#u-stan#e in,i#ates an in,epen,ent #ontra#tual relationship .etween SON5% an, %BS&CBN(
[ *]

SON5% a,-its that even after %BS&CBN #ease, .roa,#asting his progra-s9 %BS&CBN still pai, hi- his talent fees( )lainl/9 %BS&CBN a,here, to its un,erta;ing in the %gree-ent to #ontinue pa/ing SON5%:s talent fees ,uring the re-aining life of the %gree-ent even if %BS&CBN #an#elle, SON5%:s progra-s through no fault of SON5%(
[ B]

SON5% assails the 8a.or %r.iter:s interpretation of his res#ission of the %gree-ent as an a,-ission that he is not an e-plo/ee of %BS&CBN( The 8a.or %r.iter state, that 4if it were true that #o-plainant was reall/ an e-plo/ee9 he woul, -erel/ resign9 instea,(6 SON5% ,i, a#tuall/ resign fro%BS&CBN .ut he also9 as presi,ent of "0"DC9 res#in,e, the

%gree-ent( SON5%:s letter #learl/ .ears this out( Eowever9 the -anner ./ whi#h SON5% ter-inate, his relationship with %BS&CBN is i--aterial( Ghether SON5% res#in,e, the %gree-ent or resigne, fro- wor; ,oes not ,eter-ine his status as e-plo/ee or in,epen,ent #ontra#tor(
[ !]

%. "o$er of Control Sin#e there is no lo#al pre#e,ent on whether a ra,io an, television progra- host is an e-plo/ee or an in,epen,ent #ontra#tor9 we refer to foreign #ase law in anal/2ing the present #ase( The Inite, States Court of %ppeals9 First Cir#uit9 re#entl/ hel, in Alberty&'(le) v. Corporaci*n %e "uerto +ico "ara ,a %ifusi*n "-blica ./#I"+01 that a television progra- host is an in,epen,ent #ontra#tor( Ge Fuote the following fin,ings of the I(S( #ourt?
[ A]

$e eral fa,tors fa or ,lassifying -lberty as an independent ,ontra,tor. "irst, a television actress is a skilled position re#uiring talent and training not available on-the-job. @ @ @ 6n this regard, -lberty possesses a master?s degree in p%bli, ,omm%ni,ations and >o%rnalism; is trained in dan,e, singing, and modeling; ta%ght *ith the drama department at the Ini ersity of ;%erto Fi,o; and a,ted in se eral theater and tele ision prod%,tions prior to her affiliation *ith A&esde Mi ;%eblo.B $econd, %lberty provided the &tools and instrumentalities' necessary for her to perform. $pe,ifi,ally, she pro ided, or obtained sponsors to pro ide, the ,ost%mes, >e*elry, and other image-related s%pplies and ser i,es ne,essary for her appearan,e. -lberty disp%tes that this fa,tor fa ors independent ,ontra,tor stat%s be,a%se )6;F pro ided the AeC%ipment ne,essary to tape the sho*.B -lberty?s arg%ment is mispla,ed. 7he eC%ipment ne,essary for -lberty to ,ond%,t her job as host of A&esde Mi ;%ebloB related to her appearan,e on the sho*. 2thers pro ided eC%ipment for filming and prod%,ing the sho*, b%t these *ere not the primary tools that -lberty %sed to perform her parti,%lar f%n,tion. 6f *e a,,epted this arg%ment, independent ,ontra,tors ,o%ld ne er *or+ on ,ollaborati e pro>e,ts be,a%se other indi id%als often pro ide the eC%ipment reC%ired for different aspe,ts of the ,ollaboration. @ @ @ Third, W()! could not assign %lberty work in addition to filming &*esde +i )ueblo.B -lberty?s ,ontra,ts *ith )6;F spe,ifi,ally pro ided that )6;F hired her Aprofessional ser i,es as Kostess for the ;rogram &esde Mi ;%eblo.B 7here is no e iden,e that )6;F assigned -lberty tas+s in addition to *or+ related to these tapings. @ @ @ 93mphasis s%pplied:
[ D]

%ppl/ing the 'on(/o) (e%( to the present #ase9 we fin, that SON5% is not an e-plo/ee .ut an in,epen,ent #ontra#tor( The #ontrol test is the 2o%( *20o/($n( test our #ourts appl/ in ,istinguishing an e-plo/ee fro- an in,epen,ent #ontra#tor( This test is .ase, on the e>tent of #ontrol the hirer e>er#ises over a wor;er( The greater the supervision an, #ontrol the hirer e>er#ises9 the -ore li;el/ the wor;er is ,ee-e, an e-plo/ee( The #onverse
[ $]

hol,s true as well J the less #ontrol the hirer e>er#ises9 the -ore li;el/ the wor;er is #onsi,ere, an in,epen,ent #ontra#tor(
[@+]

First9 SON5% #onten,s that %BS&CBN e>er#ise, #ontrol over the -eans an, -etho,s of his wor;( SON5%:s argu-ent is -ispla#e,( %BS&CBN engage, SON5%:s servi#es spe#ifi#all/ to #o&host the 4"el K 0a/6 progra-s( %BS&CBN ,i, not assign an/ other wor; to SON5%( To perfor- his wor;9 SON5% onl/ nee,e, his s;ills an, talent( Eow SON5% ,elivere, his lines9 appeare, on television9 an, soun,e, on ra,io were outsi,e %BS&CBN:s #ontrol( SON5% ,i, not have to ren,er eight hours of wor; per ,a/( The %gree-ent reFuire, SON5% to atten, onl/ rehearsals an, tapings of the shows9 as well as pre& an, post&pro,u#tion staff -eetings( %BS&CBN #oul, not ,i#tate the #ontents of SON5%:s s#ript( Eowever9 the %gree-ent prohi.ite, SON5% fro- #riti#i2ing in his shows %BS&CBN or its interests( The #lear i-pli#ation is that SON5% ha, a free han, on what to sa/ or ,is#uss in his shows provi,e, he ,i, not atta#; %BS&CBN or its interests(
[@1] [@ ]

Ge fin, that %BS&CBN was not involve, in the a#tual perfor-an#e that pro,u#e, the finishe, pro,u#t of SON5%:s wor;( %BS&CBN ,i, not instru#t SON5% how to perfor- his <o.( %BS&CBN -erel/ reserve, the right to -o,if/ the progra- for-at an, airti-e s#he,ule 4for -ore effe#tive progra--ing(6 %BS&CBN:s sole #on#ern was the Fualit/ of the shows an, their stan,ing in the ratings( Clearl/9 %BS&CBN ,i, not e>er#ise #ontrol over the -eans an, -etho,s of perfor-an#e of SON5%:s wor;(
[@@] [@*]

SON5% #lai-s that %BS&CBN:s power not to .roa,#ast his shows proves %BS&CBN:s power over the -eans an, -etho,s of the perfor-an#e of his wor;( %lthough %BS&CBN ,i, have the option not to .roa,#ast SON5%:s show9 %BS&CBN was still o.ligate, to pa/ SON5%:s talent fees( Thus9 even if %BS&CBN was #o-pletel/ ,issatisfie, with the -eans an, -etho,s of SON5%:s perfor-an#e of his wor;9 or even with the Fualit/ or pro,u#t of his wor;9 %BS&CBN #oul, not ,is-iss or even ,is#ipline SON5%( %ll that %BS& CBN #oul, ,o is not to .roa,#ast SON5%:s show .ut %BS&CBN -ust still pa/ his talent fees in full(
[@B]

Clearl/9 %BS&CBN:s right not to .roa,#ast SON5%:s show9 .ur,ene, as it was ./ the o.ligation to #ontinue pa/ing in full SON5%:s talent fees9 ,i, not a-ount to #ontrol over the -eans an, -etho,s of the perfor-an#e of SON5%:s wor;( %BS&CBN #oul, not ter-inate or ,is#ipline SON5% even if the -eans an, -etho,s of perfor-an#e of his wor; & how he ,elivere, his lines an, appeare, on television & ,i, not -eet %BS&CBN:s approval( This proves that %BS&CBN:s #ontrol was li-ite, onl/ to the result of SON5%:s wor;9 whether to .roa,#ast the final pro,u#t or not( In either #ase9 %BS&CBN -ust still pa/ SON5%:s talent fees in full until the e>pir/ of the %gree-ent( In 'aughan et al. v. #arner et al. 9 the Inite, States Cir#uit Court of %ppeals rule, that vau,eville perfor-ers were in,epen,ent #ontra#tors although the -anage-ent reserve, the right to ,elete o.<e#tiona.le features in their shows( Sin#e the -anage-ent ,i, not have #ontrol over the -anner of perfor-an#e of the s;ills of the artists9 it #oul, onl/ #ontrol the result of the wor; ./ ,eleting o.<e#tiona.le features(
[@!] [@A]

SON5% further #onten,s that %BS&CBN e>er#ise, #ontrol over his wor; ./ suppl/ing all eFuip-ent an, #rew( No ,ou.t9 %BS&CBN supplie, the eFuip-ent9 #rew an, airti-e nee,e, to .roa,#ast the 4"el K 0a/6 progra-s( Eowever9 the eFuip-ent9 #rew an, airti-e are not the 4tools an, instru-entalities6 SON5% nee,e, to perfor- his <o.( Ghat SON5% prin#ipall/ nee,e, were his talent or s;ills an, the #ostu-es ne#essar/ for his appearan#e( =ven though %BS&CBN provi,e, SON5% with the pla#e of wor; an, the ne#essar/ eFuip-ent9 SON5% was still an in,epen,ent #ontra#tor sin#e %BS&CBN ,i, not supervise an, #ontrol his wor;( %BS& CBN:s sole #on#ern was for SON5% to ,ispla/ his talent ,uring the airing of the progra-s(
[@D] [@$]

% ra,io .roa,#ast spe#ialist who wor;s un,er -ini-al supervision is an in,epen,ent #ontra#tor( SON5%:s wor; as television an, ra,io progra- host reFuire, spe#ial s;ills an, talent9 whi#h SON5% a,-itte,l/ possesses( The re#or,s ,o not show that %BS&CBN e>er#ise, an/ supervision an, #ontrol over how SON5% utili2e, his s;ills an, talent in his shows(
[*+]

Second9 SON5% urges us to rule that he was %BS&CBN:s e-plo/ee .e#ause %BS&CBN su.<e#te, hi- to its rules an, stan,ar,s of perfor-an#e( SON5% #lai-s that this in,i#ates %BS&CBN:s #ontrol 4not onl/ [over] his -anner of wor; .ut also the Fualit/ of his wor;(6 The %gree-ent stipulates that SON5% shall a.i,e with the rules an, stan,ar,s of perfor-an#e 4'o3e/*n+ ($)en(%6 of %BS&CBN( The %gree-ent ,oes not reFuire SON5% to #o-pl/ with the rules an, stan,ar,s of perfor-an#e pres#ri.e, for e-plo/ees of %BS&CBN( The #o,e of #on,u#t i-pose, on SON5% un,er the %gree-ent refers to the 4Television an, Ra,io Co,e of the Lapisanan ng -ga Broa,#aster sa )ilipinas 3LB)79 whi#h has .een a,opte, ./ the CO")%N1 3%BS&CBN7 as its Co,e of =thi#s(6 The LB) #o,e applies to .roa,#asters9 not to e-plo/ees of ra,io an, television stations( Broa,#asters are not ne#essaril/ e-plo/ees of ra,io an, television stations( Clearl/9 the rules an, stan,ar,s of perfor-an#e referre, to in the %gree-ent are those appli#a.le to talents an, not to e-plo/ees of %BS&CBN(
[*1] [* ]

In an/ event9 not all rules i-pose, ./ the hiring part/ on the hire, part/ in,i#ate that the latter is an e-plo/ee of the for-er( In this #ase9 SON5% faile, to show that these rules #ontrolle, his perfor-an#e( Ge fin, that these general rules are -erel/ +u*.e)*ne% towar,s the a#hieve-ent of the -utuall/ ,esire, result9 whi#h are top&rating television an, ra,io progra-s that #o-pl/ with stan,ar,s of the in,ustr/( Ge have rule, that?
[*@]

F%rther, not e ery form of ,ontrol that a party reser es to himself o er the ,ond%,t of the other party in relation to the ser i,es being rendered may be a,,orded the effe,t of establishing an employer-employee relationship. 7he fa,ts of this ,ase fall sC%arely *ith the ,ase of 6ns%lar 'ife -ss%ran,e Co., 'td. s. 1'FC. 6n said ,ase, *e held that: 'ogi,ally, the line sho%ld be dra*n bet*een r%les that merely ser e as g%idelines to*ards the a,hie ement of the m%t%ally desired res%lt *itho%t di,tating the means or methods to be employed in attaining it, and those that ,ontrol or fi@ the methodology and bind or restri,t the party hired to the %se

of s%,h means. 7he first, *hi,h aim only to promote the res%lt, ,reate no employer-employee relationship %nli+e the se,ond, *hi,h address both the res%lt and the means %sed to a,hie e it.
[**]

The 'aughan #ase also hel, that one #oul, still .e an in,epen,ent #ontra#tor although the hirer reserve, #ertain supervision to insure the attain-ent of the ,esire, result( The hirer9 however9 -ust not ,eprive the one hire, fro- perfor-ing his servi#es a##or,ing to his own initiative(
[*B]

Lastly9 SON5% insists that the 4e>#lusivit/ #lause6 in the %gree-ent is the -ost e>tre-e for- of #ontrol whi#h %BS&CBN e>er#ise, over hi-( This argu-ent is futile( Being an e>#lusive talent ,oes not ./ itself -ean that SON5% is an e-plo/ee of %BS&CBN( =ven an in,epen,ent #ontra#tor #an vali,l/ provi,e his servi#es e>#lusivel/ to the hiring part/( In the .roa,#ast in,ustr/9 e>#lusivit/ is not ne#essaril/ the sa-e as #ontrol( The hiring of e>#lusive talents is a wi,esprea, an, a##epte, pra#ti#e in the entertain-ent in,ustr/( This pra#ti#e is not ,esigne, to #ontrol the -eans an, -etho,s of wor; of the talent9 .ut si-pl/ to prote#t the invest-ent of the .roa,#ast station( The .roa,#ast station nor-all/ spen,s su.stantial a-ounts of -one/9 ti-e an, effort 4in .uil,ing up its talents as well as the progra-s the/ appear in an, thus e>pe#ts that sai, talents re-ain e>#lusive with the station for a #o--ensurate perio, of ti-e(6 Nor-all/9 a -u#h higher fee is pai, to talents who agree to wor; e>#lusivel/ for a parti#ular ra,io or television station( In short9 the huge talent fees partiall/ #o-pensates for e>#lusivit/9 as in the present #ase(
[*!] [*A]

2J2%C as Agent of S345A SON5% protests the 8a.or %r.iter:s fin,ing that he is a talent of "0"DC9 whi#h #ontra#te, out his servi#es to %BS&CBN( The 8a.or %r.iter rule, that as a talent of "0"DC9 SON5% is not an e-plo/ee of %BS&CBN( SON5% insists that "0"DC is a 4la.or&onl/6 #ontra#tor an, %BS&CBN is his e-plo/er( In a la.or&onl/ #ontra#t9 there are three parties involve,? 317 the 4la.or& onl/6 #ontra#torH 3 7 the e-plo/ee who is ostensi.l/ un,er the e-plo/ of the 4la.or&onl/6 #ontra#torH an, 3@7 the prin#ipal who is ,ee-e, the real e-plo/er( In,er this s#he-e9 (#e 4)$5o/-on)67 'on(/$'(o/ *% (#e $+en( o, (#e 0/*n'*0$). The law -a;es the prin#ipal responsi.le to the e-plo/ees of the 4la.or&onl/ #ontra#tor6 as if the prin#ipal itself ,ire#tl/ hire, or e-plo/e, the e-plo/ees( These #ir#u-stan#es are not present in this #ase(
[*D]

There are essentiall/ onl/ two parties involve, un,er the %gree-ent9 na-el/9 SON5% an, %BS&CBN( "0"DC -erel/ a#te, as SON5%:s agent( The %gree-ent e>pressl/ states that "0"DC a#te, as the 4%'=NT6 of SON5%( The re#or,s ,o not show that "0"DC a#te, as %BS&CBN:s agent( "0"DC9 whi#h stan,s for "el an, 0a/ "anage-ent an, Develop-ent Corporation9 is a #orporation organi2e, an, owne, ./ SON5% an, TI%N'CO( The )resi,ent an, 'eneral "anager of "0"DC is SON5% hi-self( It is a.sur, to hol, that "0"DC9 whi#h is owne,9 #ontrolle,9 hea,e,

an, -anage, ./ SON5%9 a#te, as agent of %BS&CBN in entering into the %gree-ent with SON5%9 who hi-self is represente, ./ "0"DC( That woul, -a;e "0"DC the agent of .oth %BS&CBN an, SON5%( %s SON5% a,-its9 "0"DC is a -anage-ent #o-pan/ ,evote, e8')u%*3e)6 to -anaging the #areers of SON5% an, his .roa,#ast partner9 TI%N'CO( "0"DC is not engage, in an/ other .usiness9 not even <o. #ontra#ting( "0"DC ,oes not have an/ other fun#tion apart fro- a#ting as agent of SON5% or TI%N'CO to pro-ote their #areers in the .roa,#ast an, television in,ustr/(
[*$]

"olicy Instruction 4o. 67 SON5% argues that )oli#/ Instru#tion No( *+ issue, ./ then "inister of 8a.or Blas Ople on D 0anuar/ 1$A$ finall/ settle, the status of wor;ers in the .roa,#ast in,ustr/( In,er this poli#/9 the t/pes of e-plo/ees in the .roa,#ast in,ustr/ are the station an, progra- e-plo/ees( )oli#/ Instru#tion No( *+ is a -ere e>e#utive issuan#e whi#h ,oes not have the for#e an, effe#t of law( There is no legal presu-ption that )oli#/ Instru#tion No( *+ ,eter-ines SON5%:s status( % -ere e>e#utive issuan#e #annot e>#lu,e in,epen,ent #ontra#tors fro- the #lass of servi#e provi,ers to the .roa,#ast in,ustr/( The #lassifi#ation of wor;ers in the .roa,#ast in,ustr/ into onl/ two groups un,er )oli#/ Instru#tion No( *+ is not .in,ing on this Court9 espe#iall/ when the #lassifi#ation has no .asis either in law or in fa#t( Affidavits of A!S&C!48s #itnesses SON5% also faults the 8a.or %r.iter for a,-itting the affi,avits of So#orro Vi,anes an, Rolan,o Cru2 without giving his #ounsel the opportunit/ to #ross& e>a-ine these witnesses( SON5% .ran,s these witnesses as in#o-petent to attest on the prevailing pra#ti#e in the ra,io an, television in,ustr/( SON5% views the affi,avits of these witnesses as -islea,ing an, irrelevant( Ghile SON5% faile, to #ross&e>a-ine %BS&CBN:s witnesses9 he was never prevente, fro- ,en/ing or refuting the allegations in the affi,avits( The 8a.or %r.iter has the ,is#retion whether to #on,u#t a for-al 3trial&t/pe7 hearing after the su.-ission of the position papers of the parties9 thus?

$e,tion ". $%bmission of ;osition ;apersEMemorand%m @@@ 7hese erified position papers shall ,o er only those ,laims and ,a%ses of a,tion raised in the ,omplaint e@,l%ding those that may ha e been ami,ably settled, and shall be a,,ompanied by all s%pporting do,%ments in,l%ding the affida its of their respe,ti e *itnesses *hi,h shall ta+e the pla,e of the latter?s dire,t testimony. @ @ @ $e,tion /. &etermination of 1e,essity of Kearing. N 6mmediately after the s%bmission of the parties of their position papersEmemorand%m, the 'abor

-rbiter shall mot% propio determine *hether there is need for a formal trial or hearing. -t this stage, he may, at his dis,retion and for the p%rpose of ma+ing s%,h determination, as+ ,larifi,atory C%estions to f%rther eli,it fa,ts or information, in,l%ding b%t not limited to the s%bpoena of rele ant do,%mentary e iden,e, if any from any party or *itness.
[B+]

The 8a.or %r.iter #an ,e#i,e a #ase .ase, solel/ on the position papers an, the supporting ,o#u-ents without a for-al trial( The hol,ing of a for-al hearing or trial is so-ething that the parties #annot ,e-an, as a -atter of right( If the 8a.or %r.iter is #onfi,ent that he #an rel/ on the ,o#u-ents .efore hi-9 he #annot .e faulte, for not #on,u#ting a for-al trial9 unless un,er the parti#ular #ir#u-stan#es of the #ase9 the ,o#u-ents alone are insuffi#ient( The pro#ee,ings .efore a 8a.or %r.iter are non&litigious in nature( Su.<e#t to the reFuire-ents of ,ue pro#ess9 the te#hni#alities of law an, the rules o.taining in the #ourts of law ,o not stri#tl/ appl/ in pro#ee,ings .efore a 8a.or %r.iter(
[B1] [B ]

9alents as Independent Contractors %BS&CBN #lai-s that there e>ists a prevailing pra#ti#e in the .roa,#ast an, entertain-ent in,ustries to treat talents li;e SON5% as in,epen,ent #ontra#tors( SON5% argues that if su#h pra#ti#e e>ists9 it is voi, for violating the right of la.or to se#urit/ of tenure( The right of la.or to se#urit/ of tenure as guarantee, in the Constitution arises onl/ if there is an e-plo/er&e-plo/ee relationship un,er la.or laws( Not ever/ perfor-an#e of servi#es for a fee #reates an e-plo/er& e-plo/ee relationship( To hol, that ever/ person who ren,ers servi#es to another for a fee is an e-plo/ee & to give -eaning to the se#urit/ of tenure #lause & will lea, to a.sur, results(
[B@]

In,ivi,uals with spe#ial s;ills9 e>pertise or talent en<o/ the free,o- to offer their servi#es as in,epen,ent #ontra#tors( The right to life an, livelihoo, guarantees this free,o- to #ontra#t as in,epen,ent #ontra#tors( The right of la.or to se#urit/ of tenure #annot operate to ,eprive an in,ivi,ual9 possesse, with spe#ial s;ills9 e>pertise an, talent9 of his right to #ontra#t as an in,epen,ent #ontra#tor( %n in,ivi,ual li;e an artist or talent has a right to ren,er his servi#es without an/ one #ontrolling the -eans an, -etho,s ./ whi#h he perfor-s his art or #raft( This Court will not interpret the right of la.or to se#urit/ of tenure to #o-pel artists an, talents to ren,er their servi#es onl/ as e-plo/ees( If ra,io an, television progra- hosts #an ren,er their servi#es onl/ as e-plo/ees9 the station owners an, -anagers #an ,i#tate to the ra,io an, television hosts what the/ sa/ in their shows( This is not #on,u#ive to free,o- of the press( %ifferent 9a: 9reatment of 9alents and !roadcasters

The National Internal Revenue Co,e 34NIRC67 in relation to Repu.li# %#t No( AA1!9 as a-en,e, ./ Repu.li# %#t No( D *19 treats talents9 television an, ra,io .roa,#asters ,ifferentl/( In,er the NIRC9 these professionals are su.<e#t to the 1+M value&a,,e, ta> 34V%T67 on servi#es the/ ren,er( =>e-pte, fro- the V%T are those un,er an e-plo/er&e-plo/ee relationship( This ,ifferent ta> treat-ent a##or,e, to talents an, .roa,#asters .olters our #on#lusion that the/ are in,epen,ent #ontra#tors9 provi,e, all the .asi# ele-ents of a #ontra#tual relationship are present as in this #ase(
[B*] [BB] [B!] [BA]

4ature of S345A8s Claims SON5% see;s the re#over/ of allege,l/ unpai, talent fees9 1@ th -onth pa/9 separation pa/9 servi#e in#entive leave9 signing .onus9 travel allowan#e9 an, a-ounts ,ue un,er the =-plo/ee Sto#; Option )lan( Ge agree with the fin,ings of the 8a.or %r.iter an, the Court of %ppeals that SON5%:s #lai-s are $)) 5$%e. on (#e 9$6 1::4 A+/ee2en( $n. %(o'; o0(*on 0)$n, $n. no( on (#e -$5o/ Co.e. Clearl/9 the present #ase ,oes not #all for an appli#ation of the 8a.or Co,e provisions .ut an interpretation an, i-ple-entation of the "a/ 1$$* %gree-ent( In effe#t9 SON5%:s #ause of a#tion is for .rea#h of #ontra#t whi#h is intrinsi#all/ a #ivil ,ispute #ogni2a.le ./ the regular #ourts(
[BD]

<=ERE&ORE9 we D=N1 the petition( The assaile, De#ision of the Court of %ppeals ,ate, ! "ar#h 1$$$ in C%&'(R( S) No( *$1$+ is %FFIR"=D( Costs against petitioner( SO ORDERED. Davide, Jr., C.J., (Chairman), Panganiban, Ynares-Santiago, an, !c"na, JJ., #on#ur.