JOSE Y.

SONZA vs ABS-CBN BROADCASTING CORPORATION

FACTS: In May 1994, respondent ABS-CBN Broadcasting Corporation (ABS-CBN)
signed an Agreement with the Mel and Jay Management and Development Corporation
(MJMDC). ABS-CBN was represented by its corporate officers while MJMDC was
represented by SONZA, as President and General Manager, and Carmela Tiangco, as
EVP and Treasurer. MJMDC agreed to provide SONZAs services exclusively to ABSCBN as talent for radio and television. ABS-CBN agreed to pay for SONZAs services a
monthly fee for 310,000.00 for first year and 317,000.00 for second and third year of
the Agreement.
On April 1, 1996, SONZA wrote a letter to ABS-CBN President stating his resignation
and rescission of the said Agreement. SONZA filed a complaint against ABS-CBN
before the DOLE-NCR QC. SONZA claimed that ABS-CBN did not pay his salaries,
separation pay, service incentive leave pay, 13 th month pay, signing bonus, travel
allowance and amount due under the ESOP.
ABS-CBN filed a Motion to Dismiss on the ground that no-employer employee
relationship existed between the parties.
The Labor Arbiter rendered his Decision dismissing the complaint for lack of
jurisdiction.
The NLRC affirms the LAs decision.
The Court of Appeals affirmed the NLRCs finding that there is no employer-employee
relationship.
ISSUE:
1. Whether or not SONZA is an independent contractor;
2. Whether or not Policy Instruction No. 40 issued by Minister of Labor Blas Ople
settled the status of workers in the broadcast industry?
RULING:
1. SONZA is an independent contractor not an employee of ABS-CBN. First,
ABS-CBN engaged SONZAs services to co-host its television and radio
programs because of SONZAs peculiar skills, talents and celebrity status is a
circumstance indicative, but not conclusive, of an independent contractual
relationship. Second, SONZAs talent fees, amounting to 317,000.00 monthly
are so huge and out of the ordinary that they indicate more an independent
contractual relationship rather than employer-employee relationship. Third, ABSCBN remained obligated to pay SONZAs talent fees during the remaining life of

the Agreement even if it suffered severe business losses which indicate an

independent contractual relationship. Fourth, ABS-CBN engaged SONZAs
services specifically to co-host the Mel & Jay programs. ABS-CBN did not
assign any other work to SONZA and to perform his work, SONZA only needed
his skills and talent. How SONZA delivered his lines, appeared in television and
sounded on radio were outside ABS-CBNs control. Also, SONZA did not have to
render eight hours of work per day.
2. No, Policy Instruction No. 40 is a mere executive issuance which does not
have the force and effect of law. Under this policy, the types of employees in
the broadcast industry are the station and program employees and that there is
no legal presumption that it determines SONZAs statues. A mere executive
issuance cannot exclude independent contractors from the class of service to the
broadcast industry. The classification of workers in the broadcast industry into
only two groups under Policy Instruction No. 40 is not binding especially when
the classification has no basis in law or in fact.

NATIONAL SERVICE CORPORATION (NASECO) and ARTURO PEREZ vs NLRC

FACTS: Eugenia Credo was an employee of the NASECO, a domestic corporation

which provides security guards as well as messengerial, janitorial and other similar
manpower services to the Philippine National Bank (PNB) and its agencies. She was
first employer with NASECO as a lady guard. She was promoted to Clerk Typist, the
Personal Clerk until she became Chief of Property and Records.
Credo was administratively charged by Sisinio Lloren, Manager of Finance of NASECO,
stemming for her non-compliance with Llorens memorandum regarding certain entry of
procedures in the company. And when Credo was called by Lloren to his office to
explain, Credo showed resentment and behaved in a scandalous manner. Credo was
again called to meet the Acting General Manager of NASECO. After said meeting,
Credo was place on forced leave status for 15 days. Before the expiration of 15-day
leave, Credo filed a complaint against NASECO for placing her on forced leave, without
due process. While Credo was on forced leave, NASECO deliberated and
recommended Credos termination with forfeiture of benefits. Credo was called again to
be informed that shed was being charged with certain offences in which Credo was
made to explain her side in connection with the charges filed against her, however due
to her failure to do so, she was handed a Notice of Termination.
Credo filed a supplemental complain for illegal dismissal alleging just and authorized
cause for her dismissal and lack of opportunity to be heard.
The Labor Arbiter dismissed Credos complain and directed NASECO to pay Credo
separation pay. Both parties appealed to NLRC which directed NASECO to reinstate
Credo with 6 months backwages and without loss of seniority rights and other
privileges.
ISSUE:
1. Whether or not NASECO comply with the guidelines in effecting Credos
dismissal;
2. Whether or not NLRC has jurisdiction in the case at bar?
RULING:
1. No, NASECO did not comply with the guidlines in effecting Credos dismissal.
Although she was apprised and given the chance to explain her side of the
charges filed against her, this chance was given perfunctorily thus rendering
illusory Credos roght to security of tenure. Credo was not given ample
opportunity to be heard and defend herself and shows that NASECO was already
bent on terminating her services. Thus. Credos dismissal was effected withour
procedural fairness.

2. NLRC has jurisdiction in the case. NASECO cites National Housing Corporation
vs Juco where Court held that there should no longer be any question at this
time that employees of Government-owned or controlled corporations are given
by the civil service law and civil service rules and regulations. Yet, said case
should not be given retroactive effect to cases that arose before its promulgation
on January 17, 1985. To do otherwise would be oppressive to Credo and other
employees similarly situated because prior to the ruling of the said case, the
Court recognized the applicability of the Labor Code and the authority of the
NLRC to exercise jurisdiction over disputed involving terms and conditions of
employment in the GOCCs among them the NASECO. NLRC has jurisdiction
because it is 1987 Constitution that governs at the time of the decision.