Television and production exponents v.

Servaña 2008

(1.)

42 SCRA 578 – Labor Law – Labor Standards – Regular Employee – Employer-employee

relationship – Four Fold Test

Servaña started out as a security for the Agro-Commercial Security Agency (ACSA) since 1987.
The agency had a contract with TV network RPN 9.

On the other hand, Television and Production Exponents, Inc (TAPE). is a company in charge of
TV programming and was handling shows like Eat Bulaga! Eat Bulaga! was then with RPN 9.

In 1995, RPN 9 severed its relations with ACSA. TAPE retained the services of Servaña as a
security guard and absorbed him.

In 2000, TAPE contracted the services of Sun Shield Security Agency. It then notified Servaña
that he is being terminated because he is now a redundant employee.

Servaña then filed a case for illegal Dismissal. The Labor Arbiter ruled that Servaña’s dismissal is
valid on the ground of redundancy but though he was not illegally dismissed he is still entitled to
be paid a separation pay which is amounting to one month pay for every year of service which
totals to P78,000.00.

TAPE appealed and argued that Servaña is not entitled to receive separation pay for he is
considered as a talent and not as a regular employee; that as such, there is no employee-
employer relationship between TAPE and Servaña. The National Labor Relations Commission
ruled in favor of TAPE. It ruled that Servaña is a program employee. Servaña appealed before
the Court of Appeals.

The Court of Appeals reversed the NLRC and affirmed the LA. The CA further ruled that TAPE
and its president Tuviera should pay for nominal damages amounting to P10,000.00.

ISSUE: Whether or not there is an employee-employer relationship existing between TAPE and
Servaña.

HELD: Yes. Servaña is a regular employee.

In determining Servaña’s nature of employment, the Supreme Court employed the Four Fold
Test:
1. Whether or not employer conducted the selection and engagement of the employee.

Servaña was selected and engaged by TAPE when he was absorbed as a “talent” in 1995. He is
not really a talent, as termed by TAPE, because he performs an activity which is necessary and
desirable to TAPE’s business and that is being a security guard. Further, the primary evidence of
him being engaged as an employee is his employee identification card. An identification card is
usually provided not just as a security measure but to mainly identify the holder thereof as a
bona fide employee of the firm who issues it.
2. Whether or not there is payment of wages to the employee by the employer.
Servaña is definitely receiving a fixed amount as monthly compensation. He’s receiving P6,000.00
a month.
3. Whether or not employer has the power to dismiss employee.

The Memorandum of Discontinuance issued to Servaña to notify him that he is a redundant

employee evidenced TAPE’s power to dismiss Servaña.
4. Whether or not the employer has the power of control over the employee.

The bundy cards which showed that Servaña was required to report to work at fixed hours of the
day manifested the fact that TAPE does have control over him. Otherwise, Servaña could have
reported at any time during the day as he may wish.

Therefore, Servaña is entitled to receive a separation pay.

On the other hand, the Supreme Court ruled that Tuviera, as president of TAPE, should not be
held liable for nominal damages as there was no showing he acted in bad faith in terminating
Servaña.

Regular Employee Defined:

One having been engaged to perform an activity that is necessary and desirable to a company’s
business.

SECOND DIVISION
TELEVISION AND PRODUCTION G.R. No. 167648
EXPONENTS, INC. and/or ANTONIO
P. TUVIERA, Present:
Petitioners,
QUISUMBING, J.,
Chairperson,
CARPIO,
- versus - CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
ROBERTO C. SERVAA,
Respondent. Promulgated:
January 28, 2008

x----------------------------------------------------------------------------x

DECISION

TINGA, J.:
 This petition for review under Rule 45 assails the 21 December 2004 Decision[1] and 8
April 2005 Resolution[2] of the Court of Appeals declaring Roberto Servaa (respondent) a regular
employee of petitioner Television and Production Exponents, Inc. (TAPE). The appellate court
likewise ordered TAPE to pay nominal damages for its failure to observe statutory due process in
the termination of respondents employment for authorized cause.

TAPE is a domestic corporation engaged in the production of television programs, such as

the long-running variety program, Eat Bulaga!. Its president is Antonio P. Tuviera
(Tuviera). Respondent Roberto C. Servaa had served as a security guard for TAPE from March
1987 until he was terminated on 3 March 2000.

Respondent filed a complaint for illegal dismissal and nonpayment of benefits against TAPE. He
alleged that he was first connected with Agro-Commercial Security Agency but was later on
absorbed by TAPE as a regular company guard. He was detailed at Broadway Centrum in Quezon
City where Eat Bulaga! regularly staged its productions. On 2 March 2000, respondent received a
memorandum informing him of his impending dismissal on account of TAPEs decision to contract
the services of a professional security agency. At the time of his termination, respondent was
receiving a monthly salary of P6,000.00. He claimed that the holiday pay, unpaid vacation and
sick leave benefits and other monetary considerations were withheld from him. He further
contended that his dismissal was undertaken without due process and violative of existing labor
laws, aggravated by nonpayment of separation pay.[3]

In a motion to dismiss which was treated as its position paper, TAPE countered that the labor
arbiter had no jurisdiction over the case in the absence of an employer-employee relationship
between the parties. TAPE made the following assertions: (1) that respondent was initially
employed as a security guard for Radio Philippines Network (RPN-9); (2) that he was tasked to
assist TAPE during its live productions, specifically, to control the crowd; (3) that when RPN-9
severed its relationship with the security agency, TAPE engaged respondents services, as part of
the support group and thus a talent, to provide security service to production staff, stars and
guests of Eat Bulaga! as well as to control the audience during the one-and-a-half hour noontime
program; (4) that it was agreed that complainant would render his services until such time that
respondent company shall have engaged the services of a professional security agency; (5) that
in 1995, when his contract with RPN-9 expired, respondent was retained as a talent and a member
of the support group, until such time that TAPE shall have engaged the services of a professional
security agency; (6) that respondent was not prevented from seeking other employment, whether
or not related to security services, before or after attending to his Eat Bulaga! functions; (7) that
sometime in late 1999, TAPE started negotiations for the engagement of a professional security
agency, the Sun Shield Security Agency; and (8) that on 2 March 2000, TAPE issued memoranda
to all talents, whose functions would be rendered redundant by the engagement of the security
agency, informing them of the managements decision to terminate their services.[4]

TAPE averred that respondent was an independent contractor falling under the talent
group category and was working under a special arrangement which is recognized in the
industry.[5]

Respondent for his part insisted that he was a regular employee having been engaged to perform
an activity that is necessary and desirable to TAPEs business for thirteen (13) years.[6]

On 29 June 2001, Labor Arbiter Daisy G. Cauton-Barcelona declared respondent to be a regular

employee of TAPE. The Labor Arbiter relied on the nature of the work of respondent, which is
securing and maintaining order in the studio, as necessary and desirable in the usual business
activity of TAPE. The Labor Arbiter also ruled that the termination was valid on the ground of
redundancy, and ordered the payment of respondents separation pay equivalent to one (1)-
month pay for every year of service. The dispositive portion of the decision reads:

WHEREFORE, complainants position is hereby declared redundant. Accordingly,

respondents are hereby ordered to pay complainant his separation pay computed
at the rate of one (1) month pay for every year of service or in the total amount
of P78,000.00.[7]

On appeal, the National Labor Relations Commission (NLRC) in a Decision[8] dated 22 April
2002 reversed the Labor Arbiter and considered respondent a mere program employee, thus:

We have scoured the records of this case and we find nothing to support the Labor
Arbiters conclusion that complainant was a regular employee.

xxxx

The primary standard to determine regularity of employment is the reasonable

connection between the particular activity performed by the employee in relation
 to the usual business or trade of the employer. This connection can be determined
by considering the nature and work performed and its relation to the scheme of
the particular business or trade in its entirety. x x x Respondent company is
engaged in the business of production of television shows. The records of this case
also show that complainant was employed by respondent company beginning
1995 after respondent company transferred from RPN-9 to GMA-7, a fact which
complainant does not dispute. His last salary was P5,444.44 per month. In such
industry, security services may not be deemed necessary and desirable in the usual
business of the employer. Even without the performance of such services on a
regular basis, respondents companys business will not grind to a halt.

xxxx

Complainant was indubitably a program employee of respondent company. Unlike

[a] regular employee, he did not observe working hours x x x. He worked for other
companies, such as M-Zet TV Production, Inc. at the same time that he was
working for respondent company. The foregoing indubitably shows that
complainant-appellee was a program employee. Otherwise, he would have two (2)
employers at the same time.[9]

Respondent filed a motion for reconsideration but it was denied in a Resolution[10] dated 28 June
2002.

Respondent filed a petition for certiorari with the Court of Appeals contending that the NLRC
acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it reversed
the decision of the Labor Arbiter. Respondent asserted that he was a regular employee
considering the nature and length of service rendered.[11]

Reversing the decision of the NLRC, the Court of Appeals found respondent to be a regular
employee. We quote the dispositive portion of the decision:

IN LIGHT OF THE FOREGOING, the petition is hereby GRANTED. The

Decision dated 22 April 2002 of the public respondent NLRC reversing the Decision
of the Labor Arbiter and its Resolution dated 28 June 2002 denying petitioners
motion for reconsideration are REVERSED and SET ASIDE. The Decision
dated 29 June 2001 of the Labor Arbiter
is REINSTATED with MODIFICATION in that private respondents are ordered
to pay jointly and severally petitioner the amount of P10,000.00 as nominal
damages for non-compliance with the statutory due process.

SO ORDERED.[12]
Finding TAPEs motion for reconsideration without merit, the Court of Appeals issued a
Resolution[13] dated 8 April 2005 denying said motion.

TAPE filed the instant petition for review raising substantially the same grounds as those in its
petition for certiorari before the Court of Appeals. These matters may be summed up into one
main issue: whether an employer-employee relationship exists between TAPE and respondent.

On 27 September 2006, the Court gave due course to the petition and considered the
case submitted for decision.[14]

At the outset, it bears emphasis that the existence of employer-employee relationship is ultimately
a question of fact. Generally, only questions of law are entertained in appeals by certiorari to the
Supreme Court. This rule, however, is not absolute. Among the several recognized exceptions is
when the findings of the Court of Appeals and Labor Arbiters, on one hand, and that of the NLRC,
on the other, are conflicting,[15] as obtaining in the case at bar.

Jurisprudence is abound with cases that recite the factors to be considered in determining the
existence of employer-employee relationship, namely: (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 with respect to the means and method by which the work is to be
accomplished.[16] The most important factor involves the control test. Under the control test, there
is an employer-employee relationship when the person for whom the services are performed
reserves the right to control not only the end achieved but also the manner and means used to
achieve that end.[17]

In concluding that respondent was an employee of TAPE, the Court of Appeals applied
the four-fold test in this wise:

First. The selection and hiring of petitioner was done by private

respondents. In fact, private respondents themselves admitted having engaged the
services of petitioner only in 1995 after TAPE severed its relations with RPN
Channel 9.

By informing petitioner through the Memorandum dated 2 March 2000, that

his services will be terminated as soon as the services of the newly hired security
agency begins, private respondents in effect acknowledged petitioner to be their
 employee. For the right to hire and fire is another important element of the
employer-employee relationship.

Second. Payment of wages is one of the four factors to be considered in

determining the existence of employer-employee relation. . . Payment as admitted
by private respondents was given by them on a monthly basis at a rate
of P5,444.44.

Third. Of the four elements of the employer-employee relationship, the

control test is the most important. x x x

The bundy cards representing the time petitioner had reported for work are
evident proofs of private respondents control over petitioner more particularly with
the time he is required to report for work during the noontime program of Eat
Bulaga! If it were not so, petitioner would be free to report for work anytime even
not during the noontime program of Eat Bulaga! from 11:30 a.m. to 1:00 p.m. and
still gets his compensation for being a talent. Precisely, he is being paid for being
the security of Eat Bulaga! during the above-mentioned period. The daily time
cards of petitioner are not just for mere record purposes as claimed by private
respondents. It is a form of control by the management of private respondent
TAPE.[18]

TAPE asseverates that the Court of Appeals erred in applying the four-fold test in determining the
existence of employer-employee relationship between it and respondent. With respect to the
elements of selection, wages and dismissal, TAPE proffers the following arguments: that it never
hired respondent, instead it was the latter who offered his services as a talent to TAPE; that the
Memorandum dated 2 March 2000 served on respondent was for the discontinuance of the
contract for security services and not a termination letter; and that the talent fees given to
respondent were the pre-agreed consideration for the services rendered and should not be
construed as wages. Anent the element of control, TAPE insists that it had no control over
respondent in that he was free to employ means and methods by which he is to control and
manage the live audiences, as well as the safety of TAPEs stars and guests.[19]

The position of TAPE is untenable. Respondent was first connected with Agro-Commercial
Security Agency, which assigned him to assist TAPE in its live productions. When the security
agencys contract with RPN-9 expired in 1995, respondent was absorbed by TAPE or, in the latters
language, retained as talent.[20] Clearly, respondent was hired by TAPE. Respondent presented
his identification card[21] to prove that he is indeed an employee of TAPE. It has been in held that
in a business establishment, an identification card is usually provided not just as a security
measure but to mainly identify the holder thereof as a bona fide employee of the firm who issues
it.[22]

Respondent claims to have been receiving P5,444.44 as his monthly salary while TAPE prefers to
designate such amount as talent fees. Wages, as defined in the Labor Code, are remuneration or
earnings, however designated, capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece or commission basis, or other method of calculating the same,
which is payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for service rendered or to be rendered. It is beyond
dispute that respondent received a fixed amount as monthly compensation for the services he
rendered to TAPE.

The Memorandum informing respondent of the discontinuance of his service proves that TAPE
had the power to dismiss respondent.

Control is manifested in the bundy cards submitted by respondent in evidence. He was required
to report daily and observe definite work hours. To negate the element of control, TAPE presented
a certification from M-Zet Productions to prove that respondent also worked as a studio security
guard for said company. Notably, the said certificate categorically stated that respondent reported
for work on Thursdays from 1992 to 1995. It can be recalled that during said period, respondent
was still working for RPN-9. As admitted by TAPE, it absorbed respondent in late 1995.[23]

TAPE further denies exercising control over respondent and maintains that the latter is an
independent contractor.[24] Aside from possessing substantial capital or investment, a legitimate
job contractor or subcontractor carries on a distinct and independent business and undertakes to
perform the job, work or service on its own account and under its own responsibility according
to its own manner and method, and free from the control and direction of the principal in all
matters connected with the performance of the work except as to the results thereof.[25] TAPE
failed to establish that respondent is an independent contractor. As found by the Court of Appeals:
 We find the annexes submitted by the private respondents insufficient to
prove that herein petitioner is indeed an independent contractor. None of the
above conditions exist in the case at bar. Private respondents failed to show that
petitioner has substantial capital or investment to be qualified as an independent
contractor. They likewise failed to present a written contract which specifies the
performance of a specified piece of work, the nature and extent of the work and
the term and duration of the relationship between herein petitioner and private
respondent TAPE.[26]

TAPE relies on Policy Instruction No. 40, issued by the Department of Labor, in classifying
respondent as a program employee and equating him to be an independent contractor.

Policy Instruction No. 40 defines program employees as

x x x those whose skills, talents or services are engaged by the station for
a particular or specific program or undertaking and who are not required to
observe normal working hours such that on some days they work for less than
eight (8) hours and on other days beyond the normal work hours observed by
station employees and are allowed to enter into employment contracts with other
persons, stations, advertising agencies or sponsoring companies. The engagement
of program employees, including those hired by advertising or sponsoring
companies, shall be under a written contract specifying, among other things, the
nature of the work to be performed, rates of pay and the programs in which they
will work. The contract shall be duly registered by the station with the Broadcast
Media Council within three (3) days from its consummation.[27]

TAPE failed to adduce any evidence to prove that it complied with the requirements laid
down in the policy instruction. It did not even present its contract with respondent.Neither did it
comply with the contract-registration requirement.

Even granting arguendo that respondent is a program employee, stills, classifying him as
an independent contractor is misplaced. The Court of Appeals had this to say:

We cannot subscribe to private respondents conflicting theories. The theory

of private respondents that petitioner is an independent contractor runs counter
to their very own allegation that petitioner is a talent or a program employee. An
independent contractor is not an employee of the employer, while a talent or
program employee is an employee. The only difference between a talent or
program employee and a regular employee is the fact that a regular employee is
entitled to all the benefits that are being prayed for. This is the reason why private
 respondents try to seek refuge under the concept of an independent contractor
theory. For if petitioner were indeed an independent contractor, private
respondents will not be liable to pay the benefits prayed for in petitioners
complaint.[28]

More importantly, respondent had been continuously under the employ of TAPE from 1995
until his termination in March 2000, or for a span of 5 years. Regardless of whether or not
respondent had been performing work that is necessary or desirable to the usual business of
TAPE, respondent is still considered a regular employee under Article 280 of the Labor Code which
provides:

Art. 280. Regular and Casual Employment.The provisions of written

agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of engagement of the employee or where
the work or service to be performed is seasonal in nature and employment is for
the duration of the season.

An employment shall be deemed to be casual if it is not covered by the

preceding paragraph. Provided, that, any employee who has rendered at least one
year of service, whether such service is continuous or broken, shall be considered
a regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.

As a regular employee, respondent cannot be terminated except for just cause or when
authorized by law.[29] It is clear from the tenor of the 2 March 2000 Memorandum that
respondents termination was due to redundancy. Thus, the Court of Appeals correctly disposed
of this issue, viz:

Article 283 of the Labor Code provides that the employer may also
terminate the employment of any employee due to the installation of labor saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation
of operation of the establishment or undertaking unless the closing is for the
purpose of circumventing the provisions of this Title, by serving a written notice
on the workers and the Ministry of Labor and Employment at least one (1) month
before the intended date thereof. In case of termination due to the installation of
labor saving devices or redundancy, the worker affected thereby shall be entitled
to a separation pay equivalent to at least his one (1) month pay or to at least one
(1) month pay for every year or service, whichever is higher.

xxxx

We uphold the finding of the Labor Arbiter that complainant [herein

petitioner] was terminated upon [the] managements option to professionalize the
security services in its operations. x x x However, [we] find that although
petitioners services [sic] was for an authorized cause, i.e., redundancy, private
respondents failed to prove that it complied with service of written notice to the
Department of Labor and Employment at least one month prior to the intended
date of retrenchment. It bears stressing that although notice was served upon
petitioner through a Memorandum dated 2 March 2000, the effectivity of his
dismissal is fifteen days from the start of the agencys take over which was on 3
March 2000. Petitioners services with private respondents were severed less than
the month requirement by the law.

Under prevailing jurisprudence the termination for an authorized cause

requires payment of separation pay. Procedurally, if the dismissal is based on
authorized causes under Articles 283 and 284, the employer must give the
employee and the Deparment of Labor and Employment written notice 30 days
prior to the effectivity of his separation. Where the dismissal is for an authorized
cause but due process was not observed, the dismissal should be upheld. While
the procedural infirmity cannot be cured, it should not invalidate the
dismissal. However, the employer should be liable for non-compliance with
procedural requirements of due process.

xxxx

Under recent jurisprudence, the Supreme Court fixed the amount

of P30,000.00 as nominal damages. The basis of the violation of petitioners right
to statutory due process by the private respondents warrants the payment of
indemnity in the form of nominal damages. The amount of such damages is
addressed to the sound discretion of the court, taking into account the relevant
circumstances. We believe this form of damages would serve to deter employer
from future violations of the statutory due process rights of the employees. At the
very least, it provides a vindication or recognition of this fundamental right granted
to the latter under the Labor Code and its Implementing Rules. Considering the
circumstances in the case at bench, we deem it proper to fix it at P10,000.00.[30]
 In sum, we find no reversible error committed by the Court of Appeals in its assailed
decision.

However, with respect to the liability of petitioner Tuviera, president of TAPE, absent any
showing that he acted with malice or bad faith in terminating respondent, he cannot be held
solidarily liable with TAPE.[31] Thus, the Court of Appeals ruling on this point has to be modified.

WHEREFORE, the assailed Decision and Resolution of the Court of Appeals are AFFIRMED
with MODIFICATION in that only petitioner Television and Production Exponents, Inc. is liable to
pay respondent the amount of P10,000.00 as nominal damages for non-compliance with the
statutory due process and petitioner Antonio P. Tuviera is accordingly absolved from liability.

SO ORDERED.
 FIRST DIVISION

G.R. No. 164156 September 26, 2006

ABS-CBN BROADCASTING CORPORATION, petitioner,

vs.
MARLYN NAZARENO, MERLOU GERZON, JENNIFER DEIPARINE, and JOSEPHINE
LERASAN, respondents.

DECISION

CALLEJO, SR., J.:

Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) in
CA-G.R. SP No. 76582 and the Resolution denying the motion for reconsideration thereof. The
CA affirmed the Decision2 and Resolution3 of the National Labor Relations Commission (NLRC) in
NLRC Case No. V-000762-2001 (RAB Case No. VII-10-1661-2001) which likewise affirmed, with
modification, the decision of the Labor Arbiter declaring the respondents Marlyn Nazareno,
Merlou Gerzon, Jennifer Deiparine and Josephine Lerasan as regular employees.

The Antecedents

Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting

business and owns a network of television and radio stations, whose operations revolve around
the broadcast, transmission, and relay of telecommunication signals. It sells and deals in or
otherwise utilizes the airtime it generates from its radio and television operations. It has a
franchise as a broadcasting company, and was likewise issued a license and authority to
operate by the National Telecommunications Commission.

Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production

assistants (PAs) on different dates. 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. They were issued ABS-CBN employees’ identification cards and were required to
work for a minimum of eight hours a day, including Sundays and holidays. They were made to
perform the following tasks and duties:

a) Prepare, arrange airing of commercial broadcasting based on the daily operations log and
digicart of respondent ABS-CBN;

b) Coordinate, arrange personalities for air interviews;

c) Coordinate, prepare schedule of reporters for scheduled news reporting and lead-in or
incoming reports;

d) Facilitate, prepare and arrange airtime schedule for public service announcement and
complaints;

e) Assist, anchor program interview, etc; and

f) Record, log clerical reports, man based control radio.4

Their respective working hours were as follows:

Name Time No. of Hours

1. Marlene Nazareno 4:30 A.M.-8:00 A.M. 7 ½

8:00 A.M.-12:00 noon

2. Jennifer Deiparine 4:30 A.M.-12:00M.N. (sic) 7 ½

3. Joy Sanchez 1:00 P.M.-10:00 P.M.(Sunday) 9 hrs.

9:00 A.M.-6:00 P.M. (WF) 9 hrs.

4. Merlou Gerzon 9:00 A.M.-6:00 P.M. 9 hrs.5

The PAs were under the control and supervision of Assistant Station Manager Dante J. Luzon,
and News Manager Leo Lastimosa.

On December 19, 1996, petitioner and the ABS-CBN Rank-and-File Employees executed a
Collective Bargaining Agreement (CBA) to be effective during the period from December 11,
1996 to December 11, 1999. However, since petitioner refused to recognize PAs as part of the
bargaining unit, respondents were not included to the CBA.6

On July 20, 2000, petitioner, through Dante Luzon, issued a Memorandum informing the PAs
that effective August 1, 2000, they would be assigned to non-drama programs, and that the
DYAB studio operations would be handled by the studio technician. Thus, their revised schedule
and other assignments would be as follows:

Monday – Saturday

4:30 A.M. – 8:00 A.M. – Marlene Nazareno.

Miss Nazareno will then be assigned at the Research Dept.

From 8:00 A.M. to 12:00

4:30 P.M. – 12:00 MN – Jennifer Deiparine

Sunday

5:00 A.M. – 1:00 P.M. – Jennifer Deiparine

1:00 P.M. – 10:00 P.M. – Joy Sanchez

Respondent Gerzon was assigned as the full-time PA of the TV News Department reporting
directly to Leo Lastimosa.

On October 12, 2000, 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. The
Labor Arbiter directed the parties to submit their respective position papers. Upon respondents’
failure to file their position papers within the reglementary period, Labor Arbiter Jose G.
Gutierrez issued an Order dated April 30, 2001, dismissing the complaint without prejudice for
lack of interest to pursue the case. Respondents received a copy of the Order on May 16,
2001.7 Instead of re-filing their complaint with the NLRC within 10 days from May 16, 2001,
they filed, on June 11, 2001, an Earnest Motion to Refile Complaint with Motion to Admit
Position Paper and Motion to Submit Case For Resolution.8 The Labor Arbiter granted this
motion in an Order dated June 18, 2001, and forthwith admitted the position paper of the
complainants. Respondents made the following allegations:

1. Complainants were engaged by respondent ABS-CBN as regular and full-time employees for
a continuous period of more than five (5) years with a monthly salary rate of Four Thousand
(P4,000.00) pesos beginning 1995 up until the filing of this complaint on November 20, 2000.

Machine copies of complainants’ ABS-CBN Employee’s Identification Card and salary vouchers
are hereto attached as follows, thus:

I. Jennifer Deiparine:

Exhibit "A" - ABS-CBN Employee’s Identification Card

Exhibit "B", - ABS-CBN Salary Voucher from Nov.

Exhibit "B-1" & 1999 to July 2000 at P4,000.00

Exhibit "B-2"

Date employed: September 15, 1995

Length of service: 5 years & nine (9) months

II. Merlou Gerzon - ABS-CBN Employee’s Identification Card

Exhibit "C"

Exhibit "D"

Exhibit "D-1" &

Exhibit "D-2" - ABS-CBN Salary Voucher from March

1999 to January 2001 at P4,000.00

Date employed: September 1, 1995

Length of service: 5 years & 10 months

III. Marlene Nazareno

Exhibit "E" - ABS-CBN Employee’s Identification Card

Exhibit "E" - ABS-CBN Salary Voucher from Nov.

Exhibit "E-1" & 1999 to December 2000

Exhibit :E-2"

Date employed: April 17, 1996

Length of service: 5 years and one (1) month

IV. Joy Sanchez Lerasan

Exhibit "F" - ABS-CBN Employee’s Identification Card

Exhibit "F-1" - ABS-CBN Salary Voucher from Aug.

Exhibit "F-2" & 2000 to Jan. 2001

Exhibit "F-3"

Exhibit "F-4" - Certification dated July 6, 2000

Acknowledging regular status of

Complainant Joy Sanchez Lerasan

Signed by ABS-CBN Administrative

Officer May Kima Hife

Date employed: April 15, 1998

Length of service: 3 yrs. and one (1) month9

Respondents insisted that they belonged to a "work pool" from which petitioner chose persons
to be given specific assignments at its discretion, and were thus under its direct supervision and
control regardless of nomenclature. They prayed that judgment be rendered in their favor,
thus:

WHEREFORE, premises considered, this Honorable Arbiter is most respectfully prayed, to issue
an order compelling defendants to pay complainants the following:

1. One Hundred Thousand Pesos (P100,000.00) each

and by way of moral damages;

2. Minimum wage differential;

3. Thirteenth month pay differential;

4. Unpaid service incentive leave benefits;

5. Sick leave;

6. Holiday pay;

7. Premium pay;

8. Overtime pay;

9. Night shift differential.

Complainants further pray of this 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 of respondent company where they may as such acquire or otherwise
perform their obligations thereto or enjoy the benefits due therefrom.

Complainants pray for such other reliefs as are just and equitable under the premises.10

For its part, petitioner alleged in its position paper that the respondents were PAs who basically
assist in the conduct of a particular program ran by an anchor or talent. Among their duties
include monitoring and receiving incoming calls from listeners and field reporters and calls of
news sources; generally, they perform leg work for the anchors during a program or a
particular production. They are considered in the industry as "program employees" in that, as
distinguished from regular or station employees, they are basically engaged by the station for a
particular or specific program broadcasted by the radio station. Petitioner asserted that as PAs,
the complainants were issued talent information sheets which are updated from time to time,
and are thus made the basis to determine the programs to which they shall later be called on to
assist. The program assignments of complainants were as follows:

a. Complainant Nazareno assists in the programs:

1) Nagbagang Balita (early morning edition)

2) Infor Hayupan

3) Arangkada (morning edition)

4) Nagbagang Balita (mid-day edition)

b. Complainant Deiparine assists in the programs:

1) Unzanith

2) Serbisyo de Arevalo

3) Arangkada (evening edition)

4) Balitang K (local version)

5) Abante Subu

6) Pangutana Lang

c. Complainant Gerzon assists in the program:

1) On Mondays and Tuesdays:

(a) Unzanith

(b) Serbisyo de Arevalo

(c) Arangkada (evening edition)

(d) Balitang K (local version)

(e) Abante Sugbu

(f) Pangutana Lang

2) On Thursdays

Nagbagang Balita
3) On Saturdays

(a) Nagbagang Balita

(b) Info Hayupan

(c) Arangkada (morning edition)

(d) Nagbagang Balita (mid-day edition)

4) On Sundays:

(a) Siesta Serenata

(b) Sunday Chismisan

(c) Timbangan sa Hustisya

(d) Sayri ang Lungsod

(e) Haranahan11

Petitioner maintained that PAs, reporters, anchors and talents occasionally "sideline" for other
programs they produce, such as drama talents in other productions. As program employees, a
PA’s engagement is coterminous with the completion of the program, and may be
extended/renewed provided that the program is on-going; a PA may also be assigned to new
programs upon the cancellation of one program and the commencement of another. As such
program employees, their compensation is computed on a program basis, a fixed amount for
performance services irrespective of the time consumed. At any rate, petitioner claimed, as the
payroll will show, respondents were paid all salaries and benefits due them under the law.12

Petitioner also alleged that the Labor Arbiter had no jurisdiction to involve the CBA and interpret
the same, especially since respondents were not covered by the bargaining unit.

On July 30, 2001, the Labor Arbiter rendered judgment in favor of the respondents, and
declared that they were regular employees of petitioner; as such, they were awarded monetary
benefits. The fallo of the decision reads:

WHEREFORE, the foregoing premises considered, judgment is hereby rendered declaring the
complainants regular employees of the respondent ABS-CBN Broadcasting Corporation and
directing the same respondent to pay complainants as follows:

I - Merlou A. Gerzon P12,025.00

II - Marlyn Nazareno 12,025.00

III - Jennifer Deiparine 12,025.00

IV - Josephine Sanchez Lerazan 12,025.00

_________

P48,100.00

plus ten (10%) percent Attorney’s Fees or a TOTAL aggregate amount of PESOS: FIFTY TWO
THOUSAND NINE HUNDRED TEN (P52,910.00).

Respondent Veneranda C. Sy is absolved from any liability.

SO ORDERED.13

However, the Labor Arbiter did not award money benefits as provided in the CBA on his belief
that he had no jurisdiction to interpret and apply the agreement, as the same was within the
jurisdiction of the Voluntary Arbitrator as provided in Article 261 of the Labor Code.

Respondents’ counsel received a copy of the decision on August 29, 2001. Respondent
Nazareno received her copy on August 27, 2001, while the other respondents received theirs on
September 8, 2001. Respondents signed and filed their Appeal Memorandum on September 18,
2001.

For its part, petitioner filed a motion for reconsideration, which the Labor Arbiter denied and
considered as an appeal, conformably with Section 5, Rule V, of the NLRC Rules of Procedure.
Petitioner forthwith appealed the decision to the NLRC, while respondents filed a partial appeal.

In its appeal, petitioner alleged the following:

1. That the Labor Arbiter erred in reviving or re-opening this case which had long been
dismissed without prejudice for more than thirty (30) calendar days;

2. That the Labor Arbiter erred in depriving the respondent of its Constitutional right to due
process of law;

3. That the Labor Arbiter erred in denying respondent’s Motion for Reconsideration on an
interlocutory order on the ground that the same is a prohibited pleading;

4. That the Labor Arbiter erred when he ruled that the complainants are regular employees of
the respondent;

5. That the Labor Arbiter erred when he ruled that the complainants are entitled to 13th month
pay, service incentive leave pay and salary differential; and

6. That the Labor Arbiter erred when he ruled that complainants are entitled to attorney’s
fees.14
On November 14, 2002, the NLRC rendered judgment modifying the decision of the Labor
Arbiter. The fallo of the decision reads:

WHEREFORE, premises considered, the decision of Labor Arbiter Jose G. Gutierrez dated 30 July
2001 is SET ASIDE and VACATED and a new one is entered ORDERING respondent ABS-CBN
Broadcasting Corporation, as follows:

1. To pay complainants of their wage differentials and other benefits arising from the CBA as of
30 September 2002 in the aggregate amount of Two Million Five Hundred, Sixty-One Thousand
Nine Hundred Forty-Eight Pesos and 22/100 (P2,561,948.22), broken down as follows:

a. Deiparine, Jennifer - P 716,113.49

b. Gerzon, Merlou - 716,113.49

c. Nazareno, Marlyn - 716,113.49

d. Lerazan, Josephine Sanchez - 413,607.75

Total - P 2,561,948.22

2. To deliver to the complainants Two Hundred Thirty-Three (233) sacks of rice as of 30

September 2002 representing their rice subsidy in the CBA, broken down as follows:

a. Deiparine, Jennifer - 60 Sacks

b. Gerzon, Merlou - 60 Sacks

c. Nazareno, Marlyn - 60 Sacks

d. Lerazan, Josephine Sanchez - 53 Sacks

Total 233 Sacks; and

3. To grant to the complainants all the benefits of the CBA after 30 September 2002.

SO ORDERED.15

The NLRC declared that the Labor Arbiter acted conformably with the Labor Code when it
granted respondents’ motion to refile the complaint and admit their position paper. Although
respondents were not parties to the CBA between petitioner and the ABS-CBN Rank-and-File
Employees Union, the NLRC nevertheless granted and computed respondents’ monetary
benefits based on the 1999 CBA, which was effective until September 2002. The NLRC also
ruled that the Labor Arbiter had jurisdiction over the complaint of respondents because they
acted in their individual capacities and not as members of the union. Their claim for monetary
benefits was within the context of Article 217(6) of the Labor Code. The validity of respondents’
claim does not depend upon the interpretation of the CBA.
The NLRC ruled that respondents were entitled to the benefits under the CBA because they
were regular employees who contributed to the profits of petitioner through their labor. The
NLRC cited the ruling of this Court in New Pacific Timber & Supply Company v. National Labor
Relations Commission.16

Petitioner filed a motion for reconsideration, which the NLRC denied.

Petitioner thus filed a petition for certiorari under Rule 65 of the Rules of Court before the CA,
raising both procedural and substantive issues, as follows: (a) whether the NLRC acted without
jurisdiction in admitting the appeal of respondents; (b) whether the NLRC committed palpable
error in scrutinizing the reopening and revival of the complaint of respondents with the Labor
Arbiter upon due notice despite the lapse of 10 days from their receipt of the July 30, 2001
Order of the Labor Arbiter; (c) whether respondents were regular employees; (d) whether the
NLRC acted without jurisdiction in entertaining and resolving the claim of the respondents under
the CBA instead of referring the same to the Voluntary Arbitrators as provided in the CBA; and
(e) whether the NLRC acted with grave abuse of discretion when it awarded monetary benefits
to respondents under the CBA although they are not members of the appropriate bargaining
unit.

On February 10, 2004, the CA rendered judgment dismissing the petition. It held that the
perfection of an appeal shall be upon the expiration of the last day to appeal by all parties,
should there be several parties to a case. Since respondents received their copies of the
decision on September 8, 2001 (except respondent Nazareno who received her copy of the
decision on August 27, 2001), they had until September 18, 2001 within which to file their
Appeal Memorandum. Moreover, the CA declared that respondents’ failure to submit their
position paper on time is not a ground to strike out the paper from the records, much less
dismiss a complaint.

Anent the substantive issues, the appellate court stated that respondents are not mere project
employees, but regular employees who perform tasks necessary and desirable in the usual
trade and business of petitioner and not just its project employees. Moreover, the CA added,
the award of benefits accorded to rank-and-file employees under the 1996-1999 CBA is a
necessary consequence of the NLRC ruling that respondents, as PAs, are regular employees.

Finding no merit in petitioner’s motion for reconsideration, the CA denied the same in a
Resolution17 dated June 16, 2004.

Petitioner thus filed the instant petition for review on certiorari and raises the following
assignments of error:

1. THE HONORABLE COURT OF APPEALS ACTED WITHOUT JURISDICTION AND GRAVELY

ERRED IN UPHOLDING THE NATIONAL LABOR RELATIONS COMMISSION NOTWITHSTANDING
THE PATENT NULLITY OF THE LATTER’S DECISION AND RESOLUTION.

2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING OF THE
NLRC FINDING RESPONDENTS REGULAR EMPLOYEES.
3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING OF THE
NLRC AWARDING CBA BENEFITS TO RESPONDENTS.18

Considering that the assignments of error are interrelated, the Court shall resolve them
simultaneously.

Petitioner asserts that the appellate court committed palpable and serious error of law when it
affirmed the rulings of the NLRC, and entertained respondents’ appeal from the decision of the
Labor Arbiter despite the admitted lapse of the reglementary period within which to perfect the
same. Petitioner likewise maintains that the 10-day period to appeal must be reckoned from
receipt of a party’s counsel, not from the time the party learns of the decision, that is, notice to
counsel is notice to party and not the other way around. Finally, petitioner argues that the
reopening of a complaint which the Labor Arbiter has dismissed without prejudice is a clear
violation of Section 1, Rule V of the NLRC Rules; such order of dismissal had already attained
finality and can no longer be set aside.

Respondents, on the other hand, allege that their late appeal is a non-issue because it was
petitioner’s own timely appeal that empowered the NLRC to reopen the case. They assert that
although the appeal was filed 10 days late, it may still be given due course in the interest of
substantial justice as an exception to the general rule that the negligence of a counsel binds the
client. On the issue of the late filing of their position paper, they maintain that this is not a
ground to strike it out from the records or dismiss the complaint.

We find no merit in the petition.

We agree with petitioner’s contention that the perfection of an appeal within the statutory or
reglementary period is not only mandatory, but also jurisdictional; failure to do so renders the
assailed decision final and executory and deprives the appellate court or body of the legal
authority to alter the final judgment, much less entertain the appeal. However, this Court has
time and again ruled that in exceptional cases, a belated appeal may be given due course if
greater injustice may occur if an appeal is not given due course than if the reglementary period
to appeal were strictly followed.19 The Court resorted to this extraordinary measure even at the
expense of sacrificing order and efficiency if only to serve the greater principles of substantial
justice and equity.20

In the case at bar, the NLRC did not commit a grave abuse of its discretion in giving Article
22321 of the Labor Code a liberal application to prevent the miscarriage of justice. Technicality
should not be allowed to stand in the way of equitably and completely resolving the rights and
obligations of the parties.22 We have held in a catena of cases that technical rules are not
binding in labor cases and are not to be applied strictly if the result would be detrimental to the
workingman.23

Admittedly, respondents failed to perfect their appeal from the decision of the Labor Arbiter
within the reglementary period therefor. However, petitioner perfected its appeal within the
period, and since petitioner had filed a timely appeal, the NLRC acquired jurisdiction over the
case to give due course to its appeal and render the decision of November 14, 2002. Case law
is that the party who failed to appeal from the decision of the Labor Arbiter to the NLRC can still
participate in a separate appeal timely filed by the adverse party as the situation is considered
to be of greater benefit to both parties.24

We find no merit in petitioner’s contention that the Labor Arbiter abused his discretion when he
admitted respondents’ position paper which had been belatedly filed. It bears stressing that the
Labor Arbiter is mandated by law to use every reasonable means to ascertain the facts in each
case speedily and objectively, without technicalities of law or procedure, all in the interest of
due process.25 Indeed, as stressed by the appellate court, 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.26 Likewise, there is simply no truth to petitioner’s assertion that it was
denied due process when the Labor Arbiter admitted respondents’ position paper without
requiring it to file a comment before admitting said position paper. The essence of due process
in administrative proceedings is simply an opportunity to explain one’s side or an opportunity to
seek reconsideration of the action or ruling complained of. Obviously, there is nothing in the
records that would suggest that petitioner had absolute lack of opportunity to be
heard.27 Petitioner had the right to file a motion for reconsideration of the Labor Arbiter’s
admission of respondents’ position paper, and even file a Reply thereto. In fact, petitioner filed
its position paper on April 2, 2001. It must be stressed that Article 280 of the Labor Code was
encoded in our statute books to hinder the circumvention by unscrupulous employers of the
employees’ right to security of tenure by indiscriminately and absolutely ruling out all written
and oral agreements inharmonious with the concept of regular employment defined therein.28

We quote with approval the following pronouncement of the NLRC:

The complainants, on the other hand, contend that respondents assailed the Labor Arbiter’s
order dated 18 June 2001 as violative of the NLRC Rules of Procedure and as such is violative of
their right to procedural due process. That while suggesting that an Order be instead issued by
the Labor Arbiter for complainants to refile this case, respondents impliedly submit that there is
not any substantial damage or prejudice upon the refiling, even so, respondents’ suggestion
acknowledges complainants right to prosecute this case, albeit with the burden of repeating the
same procedure, thus, entailing additional time, efforts, litigation cost and precious time for the
Arbiter to repeat the same process twice. Respondent’s suggestion, betrays its notion of
prolonging, rather than promoting the early resolution of the case.

Although the Labor Arbiter in his Order dated 18 June 2001 which revived and re-opened the
dismissed case without prejudice beyond the ten (10) day reglementary period had
inadvertently failed to follow Section 16, Rule V, Rules Procedure of the NLRC which states:

"A party may file a motion to revive or re-open a case dismissed without prejudice within ten
(10) calendar days from receipt of notice of the order dismissing the same; otherwise, his only
remedy shall be to re-file the case in the arbitration branch of origin."

the same is not a serious flaw that had prejudiced the respondents’ right to due process. The
case can still be refiled because it has not yet prescribed. Anyway, Article 221 of the Labor Code
provides:

"In any proceedings before the Commission or any of the Labor Arbiters, the rules of evidence
prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of
this Code that the Commission and its members and the Labor Arbiters shall use every and all
reasonable means to ascertain the facts in each case speedily and objectively and without
regard to technicalities of law or procedure, all in the interest of due process."

The admission by the Labor Arbiter of the complainants’ Position Paper and Supplemental
Manifestation which were belatedly filed just only shows that he acted within his discretion as
he is enjoined by law to use every reasonable means to ascertain the facts in each case
speedily and objectively, without regard to technicalities of law or procedure, all in the interest
of due process. Indeed, the 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 in the case of the
complainant. (University of Immaculate Conception vs. UIC Teaching and Non-Teaching
Personnel Employees, G.R. No. 144702, July 31, 2001).

"In admitting the respondents’ position paper albeit late, the Labor Arbiter acted within her
discretion. In fact, she is enjoined by law to use every reasonable means to ascertain the facts
in each case speedily and objectively, without technicalities of law or procedure, all in the
interest of due process". (Panlilio vs. NLRC, 281 SCRA 53).

The respondents were given by the Labor Arbiter the opportunity to submit position paper. In
fact, the respondents had filed their position paper on 2 April 2001. What is material in the
compliance of due process is the fact that the parties are given the opportunities to submit
position papers.

"Due process requirements are satisfied where the parties are given the opportunities to submit
position papers". (Laurence vs. NLRC, 205 SCRA 737).

Thus, the respondent was not deprived of its Constitutional right to due process of law.29

We reject, as barren of factual basis, petitioner’s contention that respondents are considered as
its talents, hence, not regular employees of the broadcasting company. 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.

Case law is that this Court has always accorded respect and finality to the findings of fact of the
CA, particularly if they coincide with those of the Labor Arbiter and the National Labor Relations
Commission, when supported by substantial evidence.30 The question of whether respondents
are regular or project employees or independent contractors is essentially factual in nature;
nonetheless, the Court is constrained to resolve it due to its tremendous effects to the legions
of production assistants working in the Philippine broadcasting industry.

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. Article 280 of the Labor Code provides:

ART. 280. REGULAR AND CASUAL EMPLOYMENT.—The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer except
where the employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the employment is for the
duration of the season.

In Universal Robina Corporation v. Catapang,31 the Court reiterated the test in determining
whether one is a regular employee:

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 test is whether the former is usually necessary or
desirable in the usual business or trade 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. Hence, the employment is considered regular,
but only with respect to such activity and while such activity exists.32

As elaborated by this Court in Magsalin v. National Organization of Working Men:33

Even while the language of law might have been more definitive, the clarity of its spirit and
intent, i.e., to ensure a "regular" worker’s security of tenure, however, can hardly be doubted.
In determining whether an employment should be considered regular or non-regular, the
applicable test is the reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer. The standard, supplied by
the law itself, is whether the work undertaken is necessary or desirable in the usual business or
trade of the employer, a fact that can be assessed by looking into the nature of the services
rendered and its relation to the general scheme under which the business or trade is pursued in
the usual course. It is distinguished from a specific undertaking that is divorced from the normal
activities required in carrying on the particular business or trade. But, although the work to be
performed is only for a specific project or seasonal, where a person thus engaged has been
performing the job for at least one year, even if the performance is not continuous or is merely
intermittent, the law deems the repeated and continuing need for its performance as being
sufficient to indicate the necessity or desirability of that activity to the business or trade of the
employer. The employment of such person is also then deemed to be regular with respect to
such activity and while such activity exists.34

Not considered regular employees are "project employees," the completion or termination of
which is more or less determinable at the time of employment, such as those employed in
connection with a particular construction project, and "seasonal employees" whose employment
by its nature is only desirable for a limited period of time. Even then, any employee who has
rendered at least one year of service, whether continuous or intermittent, is deemed regular
with respect to the activity performed and while such activity actually exists.
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. Respondents cannot be considered "talents"
because they are not actors or actresses or radio specialists or mere clerks or utility employees.
They are regular employees who perform several different duties under the control and
direction of ABS-CBN executives and supervisors.

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.35

The law overrides such conditions which are prejudicial to the interest of the worker whose
weak bargaining situation necessitates the succor of the State. What determines whether a
certain employment is regular or otherwise is not the will or word of the employer, to which the
worker oftentimes acquiesces, much less the procedure of hiring the employee or the manner
of paying the salary or the actual time spent at work. It is the character of the activities
performed in relation to the particular trade or business taking into account all the
circumstances, and in some cases the length of time of its performance and its continued
existence.36 It is obvious that one year after they were employed by petitioner, respondents
became regular employees by operation of law.37

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. Under existing jurisprudence, project could refer to
two distinguishable types of activities. First, 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. Such job
or undertaking begins and ends at determined or determinable times. Second, the term project
may also refer to a particular job or undertaking that is not within the regular business of the
employer. Such a job or undertaking must also be identifiably separate and distinct from the
ordinary or regular business operations of the employer. The job or undertaking also begins and
ends at determined or determinable times.38

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.39

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.40 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.41 We note further that petitioner did not report the termination of respondents’
employment in the particular "project" to the Department of Labor and Employment Regional
Office having jurisdiction over the workplace within 30 days following the date of their
separation from work, using the prescribed form on employees’ termination/
dismissals/suspensions.42

As gleaned from the records of this case, petitioner itself is not certain how to categorize
respondents. In its earlier pleadings, petitioner classified respondents as program employees,
and in later pleadings, independent contractors. Program employees, or project employees, are
different from independent contractors because in the case of the latter, no employer-employee
relationship exists.

Petitioner’s reliance on the ruling of this Court in Sonza v. ABS-CBN Broadcasting

Corporation43 is misplaced. In that case, the Court explained why Jose Sonza, a well-known
television and radio personality, was an independent contractor and not a regular employee:

A. Selection and Engagement of 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. SONZA contends that the "discretion used
by respondent in specifically selecting and hiring complainant over other broadcasters of
possibly similar experience and qualification as complainant belies respondent’s claim of
independent contractorship."

Independent contractors often present themselves to possess unique skills, expertise or talent
to distinguish them from ordinary employees. The specific selection and hiring of 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. If
SONZA did not possess such unique skills, talent and celebrity status, ABS-CBN would not have
entered into the Agreement with SONZA but would have hired him through its personnel
department just like any other employee.

In any event, the method of selecting and engaging SONZA does not conclusively determine his
status. We must consider all the circumstances of the relationship, with the control test being
the most important element.

B. Payment of Wages

ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to MJMDC.
SONZA asserts that this mode of fee payment shows that he was an employee of ABS-CBN.
SONZA also points out that ABS-CBN granted him benefits and privileges "which he would not
have enjoyed if he were truly the subject of a valid job contract."

All the talent fees and benefits paid to 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. Whatever benefits SONZA
enjoyed arose from contract and not because of an employer-employee relationship.
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. Obviously, SONZA acting alone possessed enough bargaining power to
demand and receive such huge talent fees for his services. The power to bargain talent fees
way above the salary scales of ordinary employees is a circumstance indicative, but not
conclusive, of an independent contractual relationship.

The payment of talent fees directly to SONZA and not to MJMDC does not negate the status of
SONZA as an independent contractor. The parties expressly agreed on such mode of payment.
Under the Agreement, MJMDC is the AGENT of SONZA, to whom MJMDC would have to turn
over any talent fee accruing under the Agreement.44

In the case at bar, however, the employer-employee relationship between petitioner and
respondents has been proven.

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.

The presumption is that when the work done is an integral part of the regular business of the
employer and when the worker, relative to the employer, does not furnish an independent
business or professional service, such work is a regular employment of such employee and not
an independent contractor.45 The Court will peruse beyond any such agreement to examine the
facts that typify the parties’ actual relationship.46

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.47 We
quote with approval the ruling of the appellate court, that the reason why production assistants
were excluded from the CBA is precisely because they were erroneously classified and treated
as project employees by petitioner:

x x x The award in favor of private respondents of the benefits accorded to rank-and-file

employees of ABS-CBN under the 1996-1999 CBA is a necessary consequence of public
respondent’s ruling that private respondents as production assistants of petitioner are regular
employees. The monetary award is not considered as claims involving the interpretation or
implementation of the collective bargaining agreement. The reason why production assistants
were excluded from the said agreement is precisely because they were classified and treated as
project employees by petitioner.

As earlier stated, it is not the will or word of the employer which determines the nature of
employment of an employee but the nature of the activities performed by such employee in
relation to the particular business or trade of the employer. Considering that We have clearly
found that private respondents are regular employees of petitioner, their exclusion from the
said CBA on the misplaced belief of the parties to the said agreement that they are project
employees, is therefore not proper. Finding said private respondents as regular employees and
not as mere project employees, they must be accorded the benefits due under the said
Collective Bargaining Agreement.

A collective bargaining agreement is a contract entered into by the union representing the
employees and the employer. However, 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.48

Besides, only talent-artists were excluded from the CBA and not production assistants who are
regular employees of the respondents. Moreover, under Article 1702 of the New Civil Code: "In
case of doubt, all labor legislation and all labor contracts shall be construed in favor of the
safety and decent living of the laborer."

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The assailed
Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 76582 are AFFIRMED. Costs
against petitioner.

SO ORDERED.

Panganiban, C.J., Chairperson, Ynares-Santiago, Austria-Martinez, Chico-Nazario, J.J., concur.

ABS-CBN BROADCASTING CORPORATION vs. MARLYN NAZARENO et al.

G.R. No. 164156

September 26, 2006

Facts:

Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting business and
owns a network of television and radio stations, whose operations revolve around the broadcast,
transmission, and relay of telecommunication signals. It sells and deals in or otherwise utilizes the
airtime it generates from its radio and television operations. It has a FRANCHISE as a broadcasting
company, and was likewise issued a license and authority to operate by the National
Telecommunications Commission.

Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants
(PAs) on different dates. They were assigned at the news and public affairs, for various radio programs in
the Cebu Broadcasting Station. On December 19, 1996, petitioner and the ABS-CBN Rank-and-File
Employees executed a Collective Bargaining Agreement (CBA) to be effective during the period from
December 11, 1996 to December 11, 1999. However, since petitioner refused to recognize PAs as part of
the bargaining unit, respondents were not included to the CBA.

On October 12, 2000, 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. The Labor Arbiter rendered
judgment in favor of the respondents, and declared that they were regular employees of petitioner as
such, they were awarded monetary benefits. NLRC affirmed the decision of the Labor Arbiter. Petitioner
filed a motion for reconsideration but CA dismissed it.

Issue: Whether or not the respondents were considered regular employees of ABS-CBN.

Ruling:

The respondents are regular employees of ABS-CBN. It was held 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.
In Universal Robina Corporation v. Catapang, the Court states that 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 test is
whether the former is usually necessary or desirable in the usual business or trade 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. Hence, the employment is considered regular, but only
with respect to such activity and while such activity exists.

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. In the case at bar, however, the employer-employee relationship between
petitioner and respondents has been proven. 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. Respondents did not
have the power to bargain for huge talent fees, a circumstance negating independent contractual
relationship. Respondents are highly dependent on the petitioner for continued work. The degree of
control and supervision exercised by petitioner over respondents through its supervisors negates the
allegation that respondents are independent contractors.

The presumption is that when the work done is an integral part of the regular business of the employer
and when the worker, relative to the employer, does not furnish an independent business or
professional service, such work is a regular employment of such employee and not an independent
contractor. As regular employees, respondents are entitled to the benefits granted to all other regular
employees of petitioner under the CBA . Besides, only talent-artists were excluded from the CBA and not
production assistants who are regular employees of the respondents. Moreover, under Article 1702 of
the New Civil Code: “In case of doubt, all labor legislation and all labor contracts shall be construed in
favor of the safety and decent living of the laborer.”
 Republic of the Philippines
Supreme Court
Manila

SECOND DIVISION
FARLEY FULACHE, MANOLO G.R. No. 183810
JABONERO, DAVID CASTILLO,
JEFFREY LAGUNZAD, MAGDALENA
MALIG-ON BIGNO, FRANCISCO
Present:
CABAS, JR., HARVEY PONCE and
ALAN C. ALMENDRAS,
Petitioners, CARPIO, J., Chairperson,
BRION,
DEL CASTILLO,
ABAD, and
- versus - PEREZ, JJ.

Promulgated:
ABS-CBN BROADCASTING
CORPORATION,
January 21, 2010
Respondent.

x--------------------------------------------------------------------------------------x
DECISION

BRION, J.:

The petition for review on certiorari[1] now before us seeks to set aside the
decision[2] and resolution[3] of the Court of Appeals, Nineteenth Division (CA)
promulgated on March 25, 2008 and July 8, 2008, respectively, in CA- G.R. SP No.
01838.[4]
 The Antecedents

The Regularization Case.

In June 2001, petitioners Farley Fulache, Manolo Jabonero, David Castillo, Jeffrey
Lagunzad, Magdalena Malig-on Bigno, Francisco Cabas, Jr., Harvey Ponce and Alan
C. Almendras (petitioners) and Cresente Atinen (Atinen) filed two separate
complaints for regularization, unfair labor practice and several money claims
(regularization case) against ABS-CBN Broadcasting Corporation-Cebu (ABS-
CBN). Fulache and Castillo were drivers/cameramen; Atinen, Lagunzad and
Jabonero were drivers; Ponce and Almendras were cameramen/editors; Bigno was
a PA/Teleprompter Operator-Editing, and Cabas was a VTR man/editor. The
complaints (RAB VII Case Nos. 06-1100-01 and 06-1176-01) were consolidated and
were assigned to Labor Arbiter Julie C. Rendoque.
The petitioners alleged that on December 17, 1999, ABS-CBN and the ABS-CBN
Rank-and-File Employees Union (Union) executed a collective bargaining
agreement (CBA) effective December 11, 1999 to December 10, 2002; they only
became aware of the CBA when they obtained copies of the agreement; they
learned that they had been excluded from its coverage as ABS-CBN considered
them temporary and not regular employees, in violation of the Labor Code. They
claimed they had already rendered more than a year of service in the company and,
therefore, should have been recognized as regular employees entitled to security
of tenure and to the privileges and benefits enjoyed by regular employees. They
asked that they be paid overtime, night shift differential, holiday, rest day and
service incentive leave pay. They also prayed for an award of moral damages and
attorneys fees.
ABS-CBN explained the nature of the petitioners employment within the
framework of its operations. It claimed that: it operates in several divisions, one of
which is the Regional Network Group (RNG). The RNG exercises control and
supervision over all the ABS-CBN local stations to ensure that ABS-CBN programs
are extended to the provinces. A local station, like the Cebu station, can resort to
cost-effective and cost-saving measures to remain viable; local stations produced
shows and programs that were constantly changing because of the competitive
nature of the industry, the changing public demand or preference, and the seasonal
nature of media broadcasting programs. ABS-CBN claimed, too, that the production
of programs per se is not necessary or desirable in its business because it could
generate profits by selling airtime to block-timers or through advertising.

ABS-CBN further claimed that to cope with fluctuating business conditions, it

contracts on a case-to-case basis the services of persons who possess the necessary
talent, skills, training, expertise or qualifications to meet the requirements of its
programs and productions. These contracted persons are called talents and are
considered independent contractors who offer their services to broadcasting
companies.

Instead of salaries, ABS-CBN pointed out that talents are paid a pre-arranged
consideration called talent fee taken from the budget of a particular program and
subject to a ten percent (10%) withholding tax. Talents do not undergo
probation. Their services are engaged for a specific program or production, or a
segment thereof. Their contracts are terminated once the program, production or
segment is completed.

ABS-CBN alleged that the petitioners services were contracted on various dates by
its Cebu station as independent contractors/off camera talents, and they were not
entitled to regularization in these capacities.

On January 17, 2002, Labor Arbiter Rendoque rendered his

decision[5] holding that the petitioners were regular employees of ABS-CBN, not
independent contractors, and are entitled to the benefits and privileges of regular
employees.

ABS-CBN appealed the ruling to the National Labor Relations Commission (NLRC)
Fourth Division, mainly contending that the petitioners were independent
contractors, not regular employees.[6]

The Illegal Dismissal Case.

While the appeal of the regularization case was pending, ABS-CBN dismissed
Fulache, Jabonero, Castillo, Lagunzad and Atinen (all drivers) for their refusal to
sign up contracts of employment with service contractor Able Services. The four
drivers and Atinen responded by filing a complaint for illegal dismissal (illegal
dismissal case). The case (RAB VII Case No. 07-1300-2002) was likewise handled by
Labor Arbiter Rendoque.

In defense, ABS-CBN alleged that even before the labor arbiter rendered his
decision of January 17, 2002 in the regularization case, it had already undertaken a
comprehensive review of its existing organizational structure to address its
operational requirements. It then decided to course through legitimate service
contractors all driving, messengerial, janitorial, utility, make-up, wardrobe and
security services for both the Metro Manila and provincial stations, to improve its
operations and to make them more economically viable. Fulache, Jabonero,
Castillo, Lagunzad and Atinen were not singled out for dismissal; as drivers, they
were dismissed because they belonged to a job category that had already been
contracted out. It argued that even if the petitioners had been found to have been
illegally dismissed, their reinstatement had become a physical impossibility
because their employer-employee relationships had been strained and that Atinen
had executed a quitclaim and release.
In her April 21, 2003 decision in the illegal dismissal case,[7] Labor Arbiter Rendoque
upheld the validity of ABS-CBN's contracting out of certain work or services in its
operations. The labor arbiter found that petitioners Fulache, Jabonero, Castillo,
Lagunzad and Atinen had been dismissed due to redundancy, an authorized cause
under the law.[8] He awarded them separation pay of one (1) months salary for
every year of service.

Again, ABS-CBN appealed to the NLRC which rendered on December 15, 2004 a
joint decision on the regularization and illegal dismissal cases.[9] The NLRC ruled
that there was an employer-employee relationship between the petitioners and
ABS-CBN as the company exercised control over the petitioners in the performance
of their work; the petitioners were regular employees because they were engaged
to perform activities usually necessary or desirable in ABS-CBN's trade or business;
they cannot be considered contractual employees since they were not paid for the
result of their work, but on a monthly basis and were required to do their work in
accordance with the companys schedule. The NLRC thus affirmed with modification
the labor arbiter's regularization decision of January 17, 2002, additionally granting
the petitioners CBA benefits and privileges.

The NLRC reversed the labor arbiters ruling in the illegal dismissal case; it
found that petitioners Fulache, Jabonero, Castillo, Lagunzad and Atinen had been
illegally dismissed and awarded them backwages and separation pay in lieu of
reinstatement. Under both cases, the petitioners were awarded CBA benefits and
privileges from the time they became regular employees up to the time of their
dismissal.

The petitioners moved for reconsideration, contending that Fulache, Jabonero,

Castillo and Lagunzad are entitled to reinstatement and full backwages, salary
increases and other CBA benefits as well as 13th month pay, cash conversion of sick
and vacation leaves, medical and dental allowances, educational benefits and
service awards. Atinen appeared to have been excluded from the motion and there
was no showing that he sought reconsideration on his own.
ABS-CBN likewise moved for the reconsideration of the decision, reiterating that
Fulache, Jabonero, Castillo and Lagunzad were independent contractors, whose
services had been terminated due to redundancy; thus, no backwages should have
been awarded. It further argued that the petitioners were not entitled to the CBA
benefits because they never claimed these benefits in their position paper before
the labor arbiter while the NLRC failed to make a clear and positive finding that that
they were part of the bargaining unit; neither was there evidence to support this
finding.

The NLRC resolved the motions for reconsideration on March 24, 2006[10] by
reinstating the two separate decisions of the labor arbiter dated January 17,
2002,[11] and April 21, 2003,[12] respectively. Thus, on the regularization issue, the
NLRC stood by the ruling that the petitioners were regular employees entitled to
the benefits and privileges of regular employees. On the illegal dismissal case, the
petitioners, while recognized as regular employees, were declared dismissed due
to redundancy. The NLRC denied the petitioners second motion for reconsideration
in its order of May 31, 2006 for being a prohibited pleading. [13]

The CA Petition and Decision

The petitioners went to the CA through a petition for certiorari under Rule
65 of the Rules of Court.[14] They charged the NLRC with grave abuse of discretion
in: (1) denying them the benefits under the CBA; (2) finding no evidence that they
are part of the companys bargaining unit; (3) not reinstating and awarding
backwages to Fulache, Jabonero, Castillo and Lagunzad; and (4) ruling that they are
not entitled to damages and attorneys fees.
ABS-CBN, on the other hand, questioned the propriety of the petitioners use of
a certiorari petition. It argued that the proper remedy for the petitioners was an
appeal from the reinstated decisions of the labor arbiter.

In its decision of March 25, 2008,[15] the appellate court brushed aside ABS-
CBNs procedural question, holding that the petition was justified because there is
no plain, speedy or adequate remedy from a final decision, order or resolution of
the NLRC; the reinstatement of the labor arbiters decisions did not mean that the
proceedings reverted back to the level of the arbiter. It likewise affirmed the NLRC
ruling that the petitioners second motion for reconsideration is a prohibited
pleading under the NLRC rules.[16]
On the merits of the case, the CA ruled that the petitioners failed to prove their
claim to CBA benefits since they never raised the issue in the compulsory
arbitration proceedings, and did not appeal the labor arbiters decision which was
silent on their entitlement to CBA benefits. The CA found that the petitioners failed
to show with specificity how Section 1 (Appropriate Bargaining Unit) and the other
provisions of the CBA applied to them.
On the illegal dismissal issue, the CA upheld the NLRC decision reinstating the labor
arbiters April 21, 2003 ruling.[17] Thus, the drivers Fulache, Jabonero, Castillo and
Lagunzad were not illegally dismissed as their separation from the service was due
to redundancy; they had not presented any evidence that ABS-CBN abused its
prerogative in contracting out the services of drivers. Except for separation pay, the
CA denied the petitioners claim for backwages, moral and exemplary damages, and
attorneys fees.

The petitioners moved for reconsideration, but the CA denied the motion in a
resolution promulgated on July 8, 2008.[18] Hence, the present petition.

The Petition
The petitioners challenge the CA ruling on both procedural and substantive
grounds. As procedural questions, they submit that the CA erred in: (1) affirming
the NLRC resolution which reversed its own decision; (2) sustaining the NLRC ruling
that their second motion for reconsideration is a prohibited pleading; (3) not ruling
that ABS-CBN admitted in its position paper before the labor arbiter that they were
members of the bargaining unit as the matter was not raised in its appeal to the
NLRC; and, (4) not ruling that notwithstanding their failure to appeal from the first
decision of the Labor Arbiter, they can still participate in the appeal filed by ABS-
CBN regarding their employment status.

On the substantive aspect, the petitioners contend that the CA gravely erred in: (1)
not considering the evidence submitted to the NLRC on appeal to bolster their
claim that they were members of the bargaining unit and therefore entitled to the
CBA benefits; (2) not ordering ABS-CBN to pay the petitioners salaries, allowances
and CBA benefits after the NLRC has declared that they were regular employees of
ABS-CBN; (3) not ruling that under existing jurisprudence, the position of driver
cannot be declared redundant, and that the petitioners-drivers were illegally
dismissed; and, (4) not ruling that the petitioners were entitled to damages and
attorneys fees.

The petitioners argue that the NLRC resolution of March 24, 2006[19] which set
aside its joint decision of December 15, 2004[20] and reinstated the twin decisions
of the labor arbiter,[21] had the effect of promulgating a new decision based on
issues that were not raised in ABS-CBNs partial appeal to the NLRC. They submit
that the NLRC should have allowed their second motion for reconsideration so that
it may be able to equitably evaluate the parties conflicting versions of the
facts instead of denying the motion on a mere technicality.

On the question of their CBA coverage, the petitioners contend that the CA erred
in not considering that ABS-CBN admitted their membership in the bargaining unit,
for nowhere in its partial appeal from the labor arbiters decision in the
regularization case did it allege that the petitioners failed to prove that they are
members of the bargaining unit; instead, the company stood by its position that
the petitioners were not entitled to the CBA benefits since they were independent
contractors/program employees.

The petitioners submit that while they did not appeal the labor arbiters decision in
the regularization case, ABS-CBN raised the employment status issue in its own
appeal to the NLRC; this appeal laid this issue open for review. They argue that they
could still participate in the appeal proceedings at the NLRC; pursue their position
on the issue; and introduce evidence as they did in their reply to the companys
appeal.[22] They bewail the appellate courts failure to consider the evidence they
presented to the NLRC (consisting of documents and sworn statements
enumerating the activities they are performing) clearly indicating that they are part
of the rank-and-file bargaining unit at ABS-CBN.

The petitioners then proceeded to describe the work they render for the
company. Collectively, they claim that they work as assistants in the production of
the Cebuano news program broadcast daily over ABS-CBN Channel 3, as follows:
Fulache, Jabonero, Castillo and Lagunzad as production assistants to drive the news
team; Ponce and Almendras, to shoot scenes and events with the use of cameras
owned by ABS-CBN; Malig-on Bigno, as studio production assistant and assistant
editor/teleprompter operator; and Cabas, Jr., as production assistant for video
editing and operating the VTR machine recorder. As production assistants, the
petitioners submit that they are rank-and-file employees (citing in support of their
position the Courts ruling in ABS-CBN Broadcasting Corp. v. Nazareno[23]) who are
entitled to salary increases and other benefits under the CBA. Relying on the Courts
ruling in New Pacific Timber and Supply Company, Inc. v. NLRC,[24] they posit that to
exclude them from the CBA would constitute undue discrimination and would
deprive them of monetary benefits they would otherwise be entitled to.

As their final point, the petitioners argue that even if they were not able to prove
that they were members of the bargaining unit, the CA should not have dismissed
their petition.When the CA affirmed the rulings of both the labor arbiter and the
NLRC that they are regular employees, the CA should have ordered ABS-CBN to
recognize their regular employee status and to give them the salaries, allowances
and other benefits and privileges under the CBA.

On the dismissal of Fulache, Jabonero, Castillo and Lagunzad, the petitioners

impute bad faith on ABS-CBN when it abolished the positions of drivers claiming
that the company failed to comply with the requisites of a valid redundancy
action. They maintain that ABS-CBN did not present any evidence on the new
staffing pattern as approved by the management of the company, and did not even
bother to show why it considered the positions of drivers superfluous and
unnecessary; it is not true that the positions of drivers no longer existed because
these positions were contracted out to an agency that, in turn, recruited four
drivers to take the place of Fulache, Jabonero, Castillo and Lagunzad. As further
indication that the redundancy action against the four drivers was done in bad
faith, the petitioners call attention to ABS-CBNs abolition of the position of drivers
after the labor arbiter rendered her decision declaring Fulache, Jabonero, Castillo
and Lagunzad regular company employees. The petitioners object to the dismissal
of the four drivers when they refused to sign resignation letters and join Able
Services, a contracting agency, contending that the four had no reason to resign
after the labor arbiter declared them regular company employees.

Since their dismissal was illegal and attended by bad faith, the petitioners insist
that they should be reinstated with backwages, and should likewise be awarded
moral and exemplary damages, and attorney's fees.

The Case for ABS-CBN

In its Comment filed on January 28, 2009,[25] ABS-CBN presents several grounds
which may be synthesized as follows:

1. The petition raises questions of fact and not of law.

 2. The CA committed no error in affirming the resolution of the NLRC
reinstating the decisions of the labor arbiter.

ABS-CBN submits that the petition should be dismissed for having raised questions
of fact and not of law in violation of Rule 45 of the Rules of Court. It argues that the
question of whether the petitioners were covered by the CBA (and therefore
entitled to the CBA benefits) and whether the petitioners were illegally dismissed
because of redundancy, are factual questions that cannot be reviewed
on certiorari because the Court is not a trier of facts.

ABS-CBN dismisses the petitioners issues and arguments as mere rehash of what
they raised in their pleadings with the CA and as grounds that do not warrant
further consideration. It further contends that because the petitioners did not
appeal the labor arbiter decisions, these decisions had lapsed to finality and could
no longer be the subject of a petition for certiorari; the petitioners cannot obtain
from the appellate court affirmative relief other than those granted in the appealed
decision. It also argues that the NLRC did not commit any grave abuse of discretion
in reinstating the twin decisions of the labor arbiter, thereby affirming that no CBA
benefits can be awarded to the petitioners; in the absence of any illegal dismissal,
the petitioners were not entitled to reinstatement, backwages, damages, and
attorney's fees.

The Court's Ruling

We first resolve the parties procedural questions.

ABS-CBN wants the petition to be dismissed outright for its alleged failure to
comply with the requirement of Rule 45 of the Rules of Court that the petition
raises only questions of law.[26]
We find no impropriety in the petition from the standpoint of Rule 45. The
petitioners do not question the findings of facts of the assailed decisions. They
question the misapplication of the law and jurisprudence on the facts recognized
by the decisions. For example, they question as contrary to law their exclusion from
the CBA after they were recognized as regular rank-and-file employees of ABS-
CBN. They also question the basis in law of the dismissal of the four drivers and the
legal propriety of the redundancy action taken against. To reiterate the established
distinctions between questions of law and questions of fact, we quote hereunder
our ruling in New Rural Bank of Guimba (N.E.) Inc. v. Fermina S. Abad and Rafael
Susan:[27]

We reiterate the distinction between a question of law and a question

of fact. A question of law exists when the doubt or controversy concerns the
correct application of law or jurisprudence to a certain set of facts; or when
the issue does not call for an examination of the probative value of the evidence
presented, the truth or falsehood of the facts being admitted. A question of fact
exists when a doubt or difference arises as to the truth or falsehood of facts or
when the query invites calibration of the whole evidence considering mainly
the credibility of the witnesses, the existence and relevancy of specific
surrounding circumstances, as well as their relation to each other and to the
whole, and the probability of the situation.

We also find no error in the CAs affirmation of the denial of the petitioners second
motion for reconsideration of the March 24, 2006 resolution of the NLRC
reinstating the labor arbiters twin decisions. The petitioners second motion for
reconsideration was a prohibited pleading under the NLRC rules of procedure.[28]

The parties other procedural questions directly bear on the merits of their positions
and are discussed and resolved below, together with the core substantive issues
of: (1) whether the petitioners, as regular employees, are members of the
bargaining unit entitled to CBA benefits; and (2) whether petitioners Fulache,
Jabonero, Castillo and Lagunzad were illegally dismissed.
 The Claim for CBA Benefits

We find merit in the petitioners positions.

As regular employees, the petitioners fall within the coverage of the

bargaining unit and are therefore entitled to CBA benefits as a matter of law and
contract. In the root decision (the labor arbiters decision of January 17, 2002) that
the NLRC and CA affirmed, the labor arbiter declared:

WHEREFORE, IN THE LIGHT OF THE FOREGOING, taking into account the

factual scenario and the evidence adduced by both parties, it is declared
that complainants in these cases are REGULAR EMPLOYEES of
respondent ABS-CBN and not INDEPENDENT CONTRACTORS and thus
henceforth they are entitled to the benefits and privileges attached to
regular status of their employment.

This declaration unequivocally settled the petitioners employment status:

they are ABS-CBNs regular employees entitled to the benefits and privileges of
regular employees. These benefits and privileges arise from entitlements under the
law (specifically, the Labor Code and its related laws), and from their employment
contract as regular ABS-CBN employees, part of which is the CBA if they fall within
the coverage of this agreement. Thus, what only needs to be resolved as an
issue for purposes of implementation of the decision is whether the petitioners fall
within CBA coverage.

The parties 1999-2002 CBA provided in its Article I (Scope of the Agreement)
[29]
that:
 Section 1. APPROPRIATE BARGAINING UNIT. The parties agree
that the appropriate bargaining unit shall be regular rank-and-file
employees of ABS-CBN BROADCASTING CORPORATION but shall not
include:

a) Personnel classified as Supervisor and Confidential

employees;

b) Personnel who are on casual or probationary status as

defined in Section 2 hereof;

c) Personnel who are on contract status or who are paid for

specified units of work such as writer-producers, talent-
artists, and singers.

The inclusion or exclusion of new job classifications into the

bargaining unit shall be subject of discussion between the
COMPANY and the UNION. [emphasis supplied]

Under these terms, the petitioners are members of the appropriate

bargaining unit because they are regular rank-and-file employees and do not
belong to any of the excluded categories. Specifically, nothing in the records shows
that they are supervisory or confidential employees; neither are they casual nor
probationary employees. Most importantly, the labor arbiters decision of January
17, 2002 affirmed all the way up to the CA level ruled against ABS-CBNs submission
that they are independent contractors. Thus, as regular rank-and-file employees,
they fall within CBA coverage under the CBAs express terms and are entitled to its
benefits.
 We see no merit in ABS-CBNs arguments that the petitioners are not entitled
to CBA benefits because: (1) they did not claim these benefits in their position
paper; (2) the NLRC did not categorically rule that the petitioners were members
of the bargaining unit; and (3) there was no evidence of this membership. To
further clarify what we stated above, CBA coverage is not only a question of fact,
but of law and contract. The factual issue is whether the petitioners are regular
rank-and-file employees of ABS-CBN. The tribunals below uniformly answered this
question in the affirmative. From this factual finding flows legal effects touching on
the terms and conditions of the petitioners regular employment. This was what the
labor arbiter meant when he stated in his decision that henceforth they are entitled
to the benefits and privileges attached to regular status of their
employment. Significantly, ABS-CBN itself posited before this Court that the Court
of Appeals did not gravely err nor gravely abuse its discretion when it affirmed the
resolution of the NLRC dated March 24, 2006 reinstating and adopting in toto the
decision of the Labor Arbiter dated January 17, 2002 x x x.[30] This representation
alone fully resolves all the objections procedural or otherwise ABS-CBN raised on
the regularization issue.

The Dismissal of Fulache, Jabonero,

Castillo and Lagunzad

The termination of employment of the four drivers occurred under highly

questionable circumstances and with plain and unadulterated bad faith.

The records show that the regularization case was in fact the root of the
resulting bad faith as this case gave rise and led to the dismissal case. First, the
regularization case was filed leading to the labor arbiters decision[31] declaring the
petitioners, including Fulache, Jabonero, Castillo and Lagunzad, to be regular
employees. ABS-CBN appealed the decision and maintained its position that the
petitioners were independent contractors.
 In the course of this appeal, ABS-CBN took matters into its own hands and
terminated the petitioners services, clearly disregarding its own appeal then
pending with the NLRC. Notably, this appeal posited that the petitioners were not
employees (whose services therefore could be terminated through dismissal under
the Labor Code); they were independent contractors whose services could be
terminated at will, subject only to the terms of their contracts. To justify the
termination of service, the company cited redundancy as its authorized cause but
offered no justificatory supporting evidence. It merely claimed that it was
contracting out the petitioners activities in the exercise of its management
prerogative.

ABS-CBNs intent, of course, based on the records, was to transfer the

petitioners and their activities to a service contractor without paying any attention
to the requirements of our labor laws; hence, ABS-CBN dismissed the petitioners
when they refused to sign up with the service contractor.[32] In this manner, ABS-
CBN fell into a downward spiral of irreconcilable legal positions, all undertaken in
the hope of saving itself from the decision declaring its talents to be regular
employees.
By doing all these, ABS-CBN forgot labor law and its realities.

It forgot that by claiming redundancy as authorized cause for dismissal, it

impliedly admitted that the petitioners were regular employees whose services, by
law, can only be terminated for the just and authorized causes defined under the
Labor Code.

Likewise ABS-CBN forgot that it had an existing CBA with a union, which
agreement must be respected in any move affecting the security of tenure of
affected employees; otherwise, it ran the risk of committing unfair labor practice
both a criminal and an administrative offense.[33] It similarly forgot that an exercise
of management prerogative can be valid only if it is undertaken in good faith and
with no intent to defeat or circumvent the rights of its employees under the laws
or under valid agreements.[34]

Lastly, it forgot that there was a standing labor arbiters decision that, while
not yet final because of its own pending appeal, cannot simply be disregarded. By
implementing the dismissal action at the time the labor arbiters ruling was under
review, the company unilaterally negated the effects of the labor arbiters ruling
while at the same time appealling the same ruling to the NLRC. This unilateral move
is a direct affront to the NLRCs authority and an abuse of the appeal process.

All these go to show that ABS-CBN acted with patent bad faith. A close
parallel we can draw to characterize this bad faith is the prohibition against forum-
shopping under the Rules of Court. In forum-shopping, the Rules characterize as
bad faith the act of filing similar and repetitive actions for the same cause with the
intent of somehow finding a favorable ruling in one of the actions filed. [35] ABS-
CBNs actions in the two cases, as described above, are of the same character, since
its obvious intent was to defeat and render useless, in a roundabout way and other
than through the appeal it had taken, the labor arbiters decision in the
regularization case. Forum-shopping is penalized by the dismissal of the actions
involved. The penalty against ABS-CBN for its bad faith in the present case should
be no less.

The errors and omissions do not belong to ABS-CBN alone. The labor arbiter
himself who handled both cases did not see the totality of the companys actions
for what they were. He appeared to have blindly allowed what he granted the
petitioners with his left hand, to be taken away with his right hand, unmindful that
the company already exhibited a badge of bad faith in seeking to terminate the
services of the petitioners whose regular status had just been recognized. He
should have recognized the bad faith from the timing alone of ABS-CBNs conscious
and purposeful moves to secure the ultimate aim of avoiding the regularization of
its so-called talents.
 The NLRC, for its part, initially recognized the presence of bad faith when it
originally ruled that:
While notice has been made to the employees whose positions
were declared redundant, the element of good faith in abolishing the
positions of the complainants appear to be wanting.In fact, it remains
undisputed that herein complainants were terminated when they
refused to sign an employment contract with Able Services which would
make them appear as employees of the agency and not of ABS-CBN. Such
act by itself clearly demonstrates bad faith on the part of the respondent
in carrying out the companys redundancy program x x x.[36]

On motion for reconsideration by both parties, the NLRC reiterated its

pronouncement that complainants were illegally terminated as extensively
discussed in our Joint Decision dated December 15, 2004.[37] Yet, in an inexplicable
turnaround, it reconsidered its joint decision and reinstated not only the labor
arbiters decision of January 17, 2002 in the regularization case, but also his illegal
dismissal decision of April 21, 2003.[38] Thus, the NLRC joined the labor arbiter in his
error that we cannot but characterize as grave abuse of discretion.

The Court cannot leave unchecked the labor tribunals patent grave abuse of
discretion that resulted, without doubt, in a grave injustice to the petitioners who
were claiming regular employment status and were unceremoniously deprived of
their employment soon after their regular status was recognized. Unfortunately,
the CA failed to detect the labor tribunals gross errors in the disposition of the
dismissal issue. Thus, the CA itself joined the same errors the labor tribunals
committed.

The injustice committed on the petitioners/drivers requires

rectification. Their dismissal was not only unjust and in bad faith as the above
discussions abundantly show. The bad faith in ABS-CBNs move toward its
illegitimate goal was not even hidden; it dismissed the petitioners already
recognized as regular employees for refusing to sign up with its service
contractor. Thus, from every perspective, the petitioners were illegally dismissed.

By law,[39] illegally dismissed employees are entitled to reinstatement

without loss of seniority rights and other privileges and to full backwages, inclusive
of allowances, and to other benefits or their monetary equivalent from the time
their compensation was withheld from them up to the time of their actual
reinstatement. The four dismissed drivers deserve no less.

Moreover, they are also entitled to moral damages since their dismissal was
attended by bad faith.[40] For having been compelled to litigate and to incur
expenses to protect their rights and interest, the petitioners are likewise entitled
to attorneys fees.[41]

WHEREFORE, premises considered, we hereby GRANT the petition. The

decision dated March 25, 2008 and the resolution dated July 8, 2008 of the Court
of Appeals in CA-G.R. SP No. 01838 are hereby REVERSED and SET
ASIDE. Accordingly, judgment is hereby rendered as follows:

1. Confirming that petitioners FARLEY FULACHE, MANOLO JABONERO,

DAVID CASTILLO, JEFFREY LAGUNZAD, MAGDALENA MALIG-ON
BIGNO, FRANCISCO CABAS, JR., HARVEY PONCE and ALAN C.
ALMENDRAS are regular employees of ABS-CBN BROADCASTING
CORPORATION, and declaring them entitled to all the rights, benefits
and privileges, including CBA benefits, from the time they became
regular employees in accordance with existing company practice and
the Labor Code;

2. Declaring illegal the dismissal of Fulache, Jabonero, Castillo and

Lagunzad, and ordering ABS-CBN to immediately reinstate them to
their former positions without loss of seniority rights with full
backwages and all other monetary benefits, from the time they were
dismissed up to the date of their actual reinstatement;

3. Awarding moral damages of P100,000.00 each to Fulache,

Jabonero, Castillo and Lagunzad; and,

4. Awarding attorneys fees of 10% of the total monetary award

decreed in this Decision.

Costs against the respondent.

SO ORDERED.