b. Co-host for Mel & Jay television program, 5:30 to 7:00 p.m.

,
FIRST DIVISION Sundays.[3]

ABS-CBN agreed to pay for SONZAs services a monthly talent fee

of P310,000 for the first year and P317,000 for the second and third year
[G.R. No. 138051. June 10, 2004] of the Agreement. ABS-CBN would pay the talent fees on the 10th and
25th days of the month.
On 1 April 1996, SONZA wrote a letter to ABS-CBNs President,
JOSE Y. SONZA, petitioner, vs. ABS-CBN BROADCASTING Eugenio Lopez III, which reads:
CORPORATION, respondent.
Dear Mr. Lopez,
DECISION
We would like to call your attention to the Agreement dated May 1994
CARPIO, J.:
entered into by your goodself on behalf of ABS-CBN with our company
relative to our talent JOSE Y. SONZA.

The Case As you are well aware, Mr. Sonza irrevocably resigned in view of recent
events concerning his programs and career. We consider these acts of the
station violative of the Agreement and the station as in breach thereof. In
Before this Court is a petition for review on certiorari[1] assailing this connection, we hereby serve notice of rescission of said Agreement at
the 26 March 1999 Decision[2] of the Court of Appeals in CA-G.R. SP No. our instance effective as of date.
49190 dismissing the petition filed by Jose Y. Sonza (SONZA). The Court
of Appeals affirmed the findings of the National Labor Relations
Mr. Sonza informed us that he is waiving and renouncing recovery of the
Commission (NLRC), which affirmed the Labor Arbiters dismissal of the
remaining amount stipulated in paragraph 7 of the Agreement but
case for lack of jurisdiction.
reserves the right to seek recovery of the other benefits under said
Agreement.

The Facts Thank you for your attention.

Very truly yours,

In May 1994, respondent ABS-CBN Broadcasting Corporation (ABS-
CBN) signed an Agreement (Agreement) with the Mel and Jay
Management and Development Corporation (MJMDC). ABS-CBN was (Sgd.)
represented by its corporate officers while MJMDC was represented by JOSE
SONZA, as President and General Manager, and Carmela Tiangco Y. SONZA
(TIANGCO), as EVP and Treasurer. Referred to in the Agreement as President and Gen.
AGENT, MJMDC agreed to provide SONZAs services exclusively to ABS- Manager[4]
CBN as talent for radio and television. The Agreement listed the services
SONZA would render to ABS-CBN, as follows: On 30 April 1996, SONZA filed a complaint against ABS-CBN before
the Department of Labor and Employment, National Capital Region
a. Co-host for Mel & Jay radio program, 8:00 to 10:00 a.m., in Quezon City. SONZA complained that ABS-CBN did not pay his
Mondays to Fridays; salaries, separation pay, service incentive leave pay, 13th month pay,
signing bonus, travel allowance and amounts due under the Employees While Philippine jurisprudence has not yet, with certainty, touched on the
Stock Option Plan (ESOP). true nature of the contract of a talent, it stands to reason that a talent as
above-described cannot be considered as an employee by reason of the
On 10 July 1996, ABS-CBN filed a Motion to Dismiss on the ground peculiar circumstances surrounding the engagement of his services.
that no employer-employee relationship existed between the parties.
SONZA filed an Opposition to the motion on 19 July 1996.
It must be noted that complainant was engaged by respondent by
Meanwhile, ABS-CBN continued to remit SONZAs monthly talent reason of his peculiar skills and talent as a TV host and a radio
fees through his account at PCIBank, Quezon Avenue Branch,Quezon broadcaster.Unlike an ordinary employee, he was free to
City. In July 1996, ABS-CBN opened a new account with the same bank perform the services he undertook to render in accordance
where ABS-CBN deposited SONZAs talent fees and other payments due with his own style. The benefits conferred to complainant under the
him under the Agreement. May 1994 Agreement are certainly very much higher than those generally
given to employees. For one, complainant Sonzas monthly talent fees
In his Order dated 2 December 1996, the Labor Arbiter[5] denied the amount to a staggering P317,000. Moreover, his engagement as a talent
motion to dismiss and directed the parties to file their respective position was covered by a specific contract. Likewise, he was not bound to render
papers. The Labor Arbiter ruled: eight (8) hours of work per day as he worked only for such number of
hours as may be necessary.
In this instant case, complainant for having invoked a claim that he was
an employee of respondent company until April 15, 1996 and that he was The fact that per the May 1994 Agreement complainant was accorded
not paid certain claims, it is sufficient enough as to confer jurisdiction some benefits normally given to an employee is
over the instant case in this Office. And as to whether or not such claim inconsequential. Whatever benefits complainant enjoyed arose
would entitle complainant to recover upon the causes of action asserted is from specific agreement by the parties and not by reason of
a matter to be resolved only after and as a result of a hearing. Thus, the employer-employee relationship. As correctly put by the
respondents plea of lack of employer-employee relationship may be respondent, All these benefits are merely talent fees and other contractual
pleaded only as a matter of defense. It behooves upon it the duty to prove benefits and should not be deemed as salaries, wages and/or other
that there really is no employer-employee relationship between it and the remuneration accorded to an employee, notwithstanding the
complainant. nomenclature appended to these benefits. Apropos to this is the rule that
the term or nomenclature given to a stipulated benefit is not controlling,
The Labor Arbiter then considered the case submitted for resolution. but the intent of the parties to the Agreement conferring such benefit.
The parties submitted their position papers on 24 February 1997.
On 11 March 1997, SONZA filed a Reply to Respondents Position The fact that complainant was made subject to respondents
Paper with Motion to Expunge Respondents Annex 4 and Annex 5 from Rules and Regulations, likewise, does not detract from the
the Records. Annexes 4 and 5 are affidavits of ABS-CBNs witnesses absence of employer-employee relationship. As held by the
Soccoro Vidanes and Rolando V. Cruz. These witnesses stated in their Supreme Court, The line should be drawn between rules that merely serve
affidavits that the prevailing practice in the television and broadcast as guidelines towards the achievement of the mutually desired result
industry is to treat talents like SONZA as independent contractors. without dictating the means or methods to be employed in attaining it,
and those that control or fix the methodology and bind or restrict the
The Labor Arbiter rendered his Decision dated 8 July party hired to the use of such means. The first, which aim only to promote
1997 dismissing the complaint for lack of jurisdiction.[6] The pertinent the result, create no employer-employee relationship unlike the second,
parts of the decision read as follows: which address both the result and the means to achieve it. (Insular Life
Assurance Co., Ltd. vs. NLRC, et al., G.R. No. 84484, November 15, 1989).
xxx
x x x (Emphasis supplied)[7]
 SONZA appealed to the NLRC. On 24 February 1998, the NLRC We find it erroneous to assert that MJMDC is a mere labor-only
rendered a Decision affirming the Labor Arbiters decision. SONZA filed a contractor of ABS-CBN such that there exist[s] employer-employee
motion for reconsideration, which the NLRC denied in its Resolution relationship between the latter and Mr. Sonza. On the contrary, We find it
dated 3 July 1998. indubitable, that MJMDC is an agent, not of ABS-CBN, but of the
talent/contractor Mr. Sonza, as expressly admitted by the latter and
On 6 October 1998, SONZA filed a special civil action for certiorari MJMDC in the May 1994 Agreement.
before the Court of Appeals assailing the decision and resolution of the
NLRC. On 26 March 1999, the Court of Appeals rendered a Decision
dismissing the case.[8] It may not be amiss to state that jurisdiction over the instant controversy
indeed belongs to the regular courts, the same being in the nature of an
Hence, this petition. action for alleged breach of contractual obligation on the part of
respondent-appellee. As squarely apparent from complainant-appellants
Position Paper, his claims for compensation for services, 13th month pay,
signing bonus and travel allowance against respondent-appellee are not
The Rulings of the NLRC and Court of Appeals based on the Labor Code but rather on the provisions of the May 1994
Agreement, while his claims for proceeds under Stock Purchase
Agreement are based on the latter. A portion of the Position Paper of
The Court of Appeals affirmed the NLRCs finding that no employer-
complainant-appellant bears perusal:
employee relationship existed between SONZA and ABS-CBN. Adopting
the NLRCs decision, the appellate court quoted the following findings of
the NLRC: Under [the May 1994 Agreement] with respondent ABS-CBN, the latter
contractually bound itself to pay complainant a signing bonus consisting
of shares of stockswith FIVE HUNDRED THOUSAND PESOS
x x x the May 1994 Agreement will readily reveal that MJMDC entered
(P500,000.00).
into the contract merely as an agent of complainant Sonza, the
principal. By all indication and as the law puts it, the act of the agent is the
act of the principal itself. This fact is made particularly true in this case, as Similarly, complainant is also entitled to be paid 13th month pay based on
admittedly MJMDC is a management company devoted exclusively to an amount not lower than the amount he was receiving prior to effectivity
managing the careers of Mr. Sonza and his broadcast partner, Mrs. of (the) Agreement.
Carmela C. Tiangco. (Opposition to Motion to Dismiss)
Under paragraph 9 of (the May 1994 Agreement), complainant is entitled
Clearly, the relations of principal and agent only accrues between to a commutable travel benefit amounting to at least One Hundred Fifty
complainant Sonza and MJMDC, and not between ABS-CBN and Thousand Pesos (P150,000.00) per year.
MJMDC. This is clear from the provisions of the May 1994 Agreement
which specifically referred to MJMDC as the AGENT. As a matter of fact, Thus, it is precisely because of complainant-appellants own recognition of
when complainant herein unilaterally rescinded said May 1994 the fact that his contractual relations with ABS-CBN are founded on the
Agreement, it was MJMDC which issued the notice of rescission in behalf New Civil Code, rather than the Labor Code, that instead of merely
of Mr. Sonza, who himself signed the same in his capacity as President. resigning from ABS-CBN, complainant-appellant served upon the latter a
notice of rescission of Agreement with the station, per his letter dated
Moreover, previous contracts between Mr. Sonza and ABS-CBN reveal the April 1, 1996, which asserted that instead of referring to unpaid employee
fact that historically, the parties to the said agreements are ABS-CBN and benefits, he is waiving and renouncing recovery of the remaining amount
Mr. Sonza. And it is only in the May 1994 Agreement, which is the latest stipulated in paragraph 7 of the Agreement but reserves the right to such
Agreement executed between ABS-CBN and Mr. Sonza, that MJMDC recovery of the other benefits under said Agreement. (Annex 3 of the
figured in the said Agreement as the agent of Mr. Sonza. respondent ABS-CBNs Motion to Dismiss dated July 10, 1996).
Evidently, it is precisely by reason of the alleged violation of the May 1994 The present controversy is one of first impression. Although
Agreement and/or the Stock Purchase Agreement by respondent-appellee Philippine labor laws and jurisprudence define clearly the elements of an
that complainant-appellant filed his complaint. Complainant-appellants employer-employee relationship, this is the first time that the Court will
claims being anchored on the alleged breach of contract on the part of resolve the nature of the relationship between a television and radio
respondent-appellee, the same can be resolved by reference to civil law station and one of its talents. There is no case law stating that a radio and
and not to labor law. Consequently, they are within the realm of civil law television program host is an employee of the broadcast station.
and, thus, lie with the regular courts. As held in the case of Dai-Chi
Electronics Manufacturing vs. Villarama, 238 SCRA 267, 21 November The instant case involves big names in the broadcast industry,
1994, an action for breach of contractual obligation is namely Jose Jay Sonza, a known television and radio personality, and
intrinsically a civil dispute.[9] (Emphasis supplied) ABS-CBN, one of the biggest television and radio network

The Court of Appeals ruled that the existence of an employer-

employee relationship between SONZA and ABS-CBN is a factual
question that is within the jurisdiction of the NLRC to resolve. [10] A special
civil action for certiorari extends only to issues of want or excess of
jurisdiction of the NLRC.[11] Such action cannot cover an inquiry into the
correctness of the evaluation of the evidence which served as basis of the
NLRCs conclusion.[12] The Court of Appeals added that it could not re-
examine the parties evidence and substitute the factual findings of the
NLRC with its own.[13]

The Issue

In assailing the decision of the Court of Appeals, SONZA contends

that:

THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE

NLRCS DECISION AND REFUSING TO FIND THAT AN EMPLOYER-
EMPLOYEE RELATIONSHIP EXISTED BETWEEN SONZA AND ABS-
CBN, DESPITE THE WEIGHT OF CONTROLLING LAW,
JURISPRUDENCE AND EVIDENCE TO SUPPORT SUCH A FINDING.[14]

The Courts Ruling

We affirm the assailed decision.

No convincing reason exists to warrant a reversal of the decision of
the Court of Appeals affirming the NLRC ruling which upheld the Labor
Arbiters dismissal of the case for lack of jurisdiction.