ABS-CBN BROADCASTING CORPORATION, petitioner,
vs.
MARLYN NAZARENO, MERLOU GERZON, JENNIFER DEIPARINE, and
JOSEPHINE LERASAN
G. R. No. 164 156
September 26, 2006
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
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 can be considered as regular
employees, YES
Held: The Supreme Court ruled in the affirmative.
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.
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
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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.
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.
In this case, it is undisputed that respondents had continuously performed
the same activities for an average of five years. Their assigned tasks are
necessary or desirable in the usual business or trade of the petitioner. The
persisting need for their services is sufficient evidence of the necessity and
indispensability of such services to petitioner’s business or trade. While
length of time may not be a sole controlling test for project employment, it
can be a strong factor to determine whether the employee was hired for a
specific undertaking or in fact tasked to perform functions which are vital,
necessary and indispensable to the usual trade or business of the employer.
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.
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. The Court will peruse beyond any such agreement to examine
the facts that typify the parties’ actual relationship
VS JAY SONZA CASE
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
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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.

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 Dumpit-Murillo vs Court of Appeals
GR No. 164652
June 8, 2007
Facts:
On October 2, 1995, under talent contract no. NT95-1805, private
respondent Associated Broadcasting Company (ABC) hired petitioner
Thelma Dumpit-Murillo as a newscaster and co-anchor of Balitang-Balita, an
early evening news program. The contract was for a period of 3 months. It
renewed under talent contract nos. NT95-1915, NT96-3002, NT98-4984,
and NT99-5649. In addition, petitioner’s services were engaged for the
program “Live on Five.” On September 30, 1999, after 4 years of repeated
renewals, petitioner’s talent contract expired. Two weeks after the expiration
of the last contract, petitioner sent a letter to Mr. Jose Javier, Vice President
for news and public affairs of ABC, informing the latter that she was still
interested in renewing her contract subject to a salary increase, thereafter,
petitioner stopped reporting for work. On November 5, 1999 she wrote Mr.
Javier another letter.
Concerning regular employment, the law provides for 2 kinds of employees,
namely: 1.) Those who are engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer; and
2.) Those who have rendered at least one year of service, whether
continuous or broken with respect to the activity in which they are employed.
In other words, regular status arises from either the nature of work of the
employee or the duration of his employment.
The primary standard of determining regular employment is the reasonable
connection between the particular activity performed by the employee vis-a-
vis the usual trade or business of the employer. This connection can be
determined by considering the nature of the work performed and its relation
to the scheme of the particular business or trade in its entirety. 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.

Issue: Whether or not the continuous renewal of petitioner’s talent contracts

constitute regularity in the employment status.

Held: Yes.

An employer-employee relationship was created when the private

respondents started to merely renew the contracts repeatedly 15 times for 4
consecutive years.

Petitioner was a regular employee under contemplation of law. The practice

of having fixed-term contracts in the industry does not automatically make all
talent contracts valid and compliant with labor law. The assertion that a talent
contract exists does not necessarily prevent a regular employment status.
The elements to determine the existence of an employment relationship are:
a.) The selection and engagement of the employee; b.) The payment of
wages; c.) The power of dismissal; and d.) The employer’s control of the
employee’s conduct, not only as to the result of the work to be done, but also
as to the means and methods to accomplish it.

The duties of petitioner as enumerated in her employment contract indicate

that ABC had control over the work or petitioner. Aside from control, ABC
also dictated the work assignments and payment of petitioner’s wages. ABC
also had power to dismiss her. All these being present, clearly there existed
an employment relationship between petitioner and ABC.

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Philippine Bank of Communication vs NLRC
GR No. L-66598
Facts:
Philippine Bank of Communications (PBC) and the Corporate Executive
Search Inc. (CESI) entered into a letter agreement dated January 1976
under which CESI undertook to provide temporary services to PBC
consisting of the temporary services of 11 messengers. Attached to the letter
was a list of messengers to be assigned, which included Ricardo Orpiada
Ricardo Orpiada was thus assigned to work with the petitioner bank. As
such, he rendered
services to the bank, within the premises of the bank and alongside other
people also rendering services to the bank. There was some question as to
when Ricardo Orpiada commenced rendering services to the bank. As noted
above, the letter agreement was dated January 1976. However,4.the
position
paper submitted by (CESI) to the National Labor Relations Commission
stated that (CESI) hired Ricardo Orpiada on 25 June 1975 as a Temporary
Service employee, and assigned him to work with the petitioner bank "as
evidenced by the appointment memo issued to him on 25 June 1975. "
October 1976, PBC requested CESI to withdraw Orpiada’s assignment
because his services
were no longer needed. Orpiada instituted a complaint with the Dept of
Labor for illegal dismissal and failure to pay 13th month pay. After
investigation, the Office of the Regional Director issued an order dismissing
Orpiada’s complaint for failure to show existence of an employer-employee
relationship between the bank and himself. Orpiada succeeded in having his
complaint certified for compulsory arbitration, CESI was made an additional
respondent. Labor Arbiter Dogelio rendered a decision ordering PBC to
reinstated Orpiada to the same or equivalent position with full back wages
and to pay his 13th month pay. On appeal, NLRC modified the lBaor Arbiter’s
decision limiting back wages to two years and affirmed in all other aspects
Issue:
Whether or not an employer-employee relationship existed
Held
Yes, there was an employer-employee relationship. The court affirmed the
NLRC decision.
Ratio:
There are four factors to verify the existence of an employer-employee
relationship; selection and engagement of the putative employee, payment
of wages, power of dismissal, and power to control the putative employees'
conduct. With respect to the selection and engagement of the employee,
although Orpiada was not personally selected by PBC, his selection was still
subject to the acceptance of the bank.
With respect to wages, PBC remitted to CESI amounts corresponding to the
daily service rate and CESI paid the wages. Orpiada did not even appear in
the payroll of PBC, but was listed in the payroll of CESI. With respect to
power of dismissal, after withdrawal from his assignment, he was also
terminated by CESI. It would appear that he was hired by CESI specifically
for assignment with PBC. With regards to control, since Orpiada performed
his functions within the bank’s premises, not within CESI’s premises, he
must have been subject to at least the same control and supervision that the
bank exercises. Application of the above factors in the specific context of this
case appears to yield mixed results so far as concerns the existence of an
employer- employer relationship between the bank and Orpiada. Under the
general rule set out in the first and second paragraphs of Article 106, an
employer who enters into a contract with a contractor for the performance of
work for the employer, does not thereby create an employer-employee
relationship between himself
and the employees of the contractor. Thus, the employees of the contractor
remain the contractor's employees and his alone. Nonetheless when a
contractor fails to pay the wages of his employees in accordance with the
Labor Code, the employer who contracted out the job to the contractor
becomes jointly and severally liable with his contractor to the employees of
the latter "to the extent of the work performed under the contract" as such
employer were the employer of the contractor's employees. We hold that, in
the circumstances 'instances of this case, (CESI) was engaged in "labor-
only" or attracting vis-avis the petitioner and in respect Ricardo Orpiada, and
that because there is labor-only contracting, the petitioner bank is liable to
Orpiada as if Orpiada had been directly, employed not only by (CESI) but
also by the bank. It may well be that the bank may in turn proceed against
(CESI) to obtain reimbursement of, or some contribution to, the amounts
which the bank will have to pay to Orpiada; but this it is not necessary to
determine here.
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Case Digests
G.R. No. 170054 :
January 21, 2013
GOYA, INC., Petitioner, v. GOYA, INC. EMPLOYEES UNION-FFW,
Respondent. PERALTA, J.:
FACTS: Petitioner Goya Inc. (Goya) hired contractual employees from PESO
Resources Development Corporation (PESO). This prompted Goya, Inc.
Employees Union-FFW (Union) to request for a grievance conference on the
ground that the contractual workers do not belong to the categories of
employees stipulated in their CBA. The Union also argued that hiring
contractual employees is contrary to the union security clause embodied in
the CBA. When the matter remained unresolved, the grievance was referred
to the NCMB for voluntary arbitration. The Union argued that Goya is guilty
of ULP for gross violation of the CBA. The voluntary arbitrator dismissed the
Unions charge of ULP but Goya was directed to observe and comply with
the CBA. While the Union moved for partial consideration of the VA decision,
Goya immediately filed a petition for review before the Court of Appeals to
set aside the VAs directive to observe and comply with the CBA commitment
pertaining to the hiring of casual employees. Goya argued that hiring
contractual employees is a valid management prerogative. The Court of
Appeals dismissed the petition.
within the concept of management prerogative is significantly different from
acknowledging that such act is a valid exercise thereof. What the VA and the
CA correctly ruled was that the Companys act of contracting out/outsourcing
is within the purview of management prerogative. Both did not say, however,
that such act is a valid exercise thereof. Obviously, this is due to the
recognition that the CBA provisions agreed upon by Goya and the Union
delimit the free exercise of management prerogative pertaining to the hiring
of contractual employees. A collective bargaining agreement is the law
between the parties. A collective bargaining agreement or CBA refers to the
negotiated contract between a legitimate labor organization and the
employer concerning wages, hours of work and all other terms and
conditions of employment in a bargaining unit. As in all contracts, the parties
in a CBA may establish such stipulations, clauses, terms and conditions as
they may deem convenient provided these are not contrary to law, morals,
good customs, public order or public policy. Thus, where the CBA is clear
and unambiguous, it becomes the law between the parties and compliance
therewith is mandated by the express policy of the law. As repeatedly held,
the exercise of management prerogative is not unlimited; it is subject to the
limitations found in law, collective bargaining agreement or the general
principles of fair play and justice. Petition is DENIED.

ISSUE: Whether the act of hiring contractual employees is a valid exercise of

management prerogative?

HELD: The petition must fail. LABOR LAW: management prerogative; ULP;
collective bargaining agreement The CA did not commit serious error when it
sustained the ruling that the hiring of contractual employees from PESO was
not in keeping with the intent and spirit of the CBA. In this case, a complete
and final adjudication of the dispute between the parties necessarily called
for the resolution of the related and incidental issue of whether the Company
still violated the CBA but without being guilty of ULP as, needless to state,
ULP is committed only if there is gross violation of the agreement. Goya kept
on harping that both the VA and the CA conceded that its engagement of
contractual workers from PESO was a valid exercise of management
prerogative. It is confused. To emphasize, declaring that a particular act falls