Manila Hotel Corporation vs National Labor Relations Commission

In May 1988, Marcelo Santos was an overseas worker in Oman. In June 1988, he was recruited by Palace Hotel in Beijing,
China. Due to higher pay and benefits, Santos agreed to the hotel’s job offer and so he started working there in
November 1988. The employment contract between him and Palace Hotel was however without the intervention of the
Philippine Overseas Employment Administration (POEA). In August 1989, Palace Hotel notified Santos that he will be laid
off due to business reverses. In September 1989, he was officially terminated.

In February 1990, Santos filed a complaint for illegal dismissal against Manila Hotel Corporation (MHC) and Manila Hotel
International, Ltd. (MHIL). The Palace Hotel was impleaded but no summons were served upon it. MHC is a government
owned and controlled corporation. It owns 50% of MHIL, a foreign corporation (Hong Kong). MHIL manages the affair of
the Palace Hotel. The labor arbiter who handled the case ruled in favor of Santos. The National Labor Relations
Commission (NLRC) affirmed the labor arbiter.

ISSUE: Whether or not the NLRC has jurisdiction over the case.

HELD: No. The NLRC is a very inconvenient forum for the following reasons:
1. The only link that the Philippines has in this case is the fact that Santos is a Filipino;
2. However, the Palace Hotel and MHIL are foreign corporations – MHC cannot be held liable because it merely
owns 50% of MHIL, it has no direct business in the affairs of the Palace Hotel. The veil of corporate fiction can’t be
pierced because it was not shown that MHC is directly managing the affairs of MHIL. Hence, they are separate entities.
3. Santos’ contract with the Palace Hotel was not entered into in the Philippines;
4. Santos’ contract was entered into without the intervention of the POEA (had POEA intervened, NLRC still
does not have jurisdiction because it will be the POEA which will hear the case);
5. MHIL and the Palace Hotel are not doing business in the Philippines; their agents/officers are not residents
of the Philippines;
Due to the foregoing, the NLRC cannot possibly determine all the relevant facts pertaining to the case. It is not
competent to determine the facts because the acts complained of happened outside our jurisdiction. It cannot
determine which law is applicable. And in case a judgment is rendered, it cannot be enforced against the Palace
Hotel (in the first place, it was not served any summons).
The Supreme Court emphasized that under the rule of forum non conveniens, a Philippine court or agency may
assume jurisdiction over the case if it chooses to do so provided:
(1) that the Philippine court is one to which the parties may conveniently resort to;
(2) that the Philippine court is in a position to make an intelligent decision as to the law and the facts; and
(3) that the Philippine court has or is likely to have power to enforce its decision.
None of the above conditions are apparent in the case at bar.
JO vs. NLRC
Ponente: QUISUMBING, J

FACTS: Private respondent Peter Mejila worked as barber in a barbershop owned by Dina Tan who subsequently sold the
same to petitioners Paz Martin Jo and Cesar Jo. All the employees were absorbed by the new owners. Jo designated Mejila
as caretaker. Thereafter, Mejila had an altercation with his co-barber, Jorge Tinoy. The bickerings, characterized by
constant exchange of personal insults during working hours, became serious so that Mejila reported the matter to Atty.
Macaraya of the labor department. Macaraya summoned Mejila and petitioners to a conference and found out that the
dispute was not between Mejila and petitioners but between Mejila and Tinoy. During the mediation meeting Mejila
demanded payment for separation pay and other monetary benefits although he was not being dismissed. Mejila
continued reporting for work at the barbershop but after some time he began working as a regular barber at a different
barbershop leaving the keys and getting his belongings from the old barbershop. Mejila then filed a complaint for illegal
dismissal with prayer for payment of separation pay, other monetary benefits, attorney’s fees and damages. Significantly,
the complaint did not seek reinstatement as a positive relief. In its decision, Labor Arbiter found that Mejila was an
employee of petitioners, and that he was not dismissed but had left his job voluntarily because of his misunderstanding
with his co-worker. The Labor Arbiter dismissed the complaint, but ordered petitioners to pay Mejila his 13th month pay
and attorney’s fees. Both parties appealed to the NLRC who in turn set aside the labor arbiter’s judgment, sustaining the
labor arbiter’s finding as to the existence of employer-employee relationship, but it ruled that Mejila was illegally
dismissed. Hence, the petitioners were ordered to reinstate Mejila and pay the latter’s backwages, 13th month pay,
separation pay and attorney’s fees for failure to observe due process before dismissing the complaint. Its motion for
reconsideration having been denied in a Resolution, petitioners filed the instant petition.

ISSUES: Whether or not there exists an employer-employee relationship between petitioners and private respondent.

HELD: 1. In determining the existence of an employer-employee relationship, the following elements are considered: (1)
the selection and engagement of the workers; (2) power of dismissal; (3) the payment of wages by whatever means; and
(4) the power to control the worker’s conduct, with the latter assuming primacy in the overall consideration. The power
of control refers to the existence of the power and not necessarily to the actual exercise thereof. It is not essential for the
employer to actually supervise the performance of duties of the employee; it is enough that the employer has the right to
wield that power. Undoubtedly, the services performed by private respondent as barber is related to, and in the pursuit
of the principal business activity of petitioners. Later on, petitioners tapped private respondent to serve concurrently as
caretaker of the shop. Certainly, petitioners had the power to dismiss private respondent being the ones who engaged
the services of the latter. In fact, private respondent sued petitioners for illegal dismissal, albeit contested by the latter.
There was enough basis to declare private respondent an employee of petitioners.
Republic v. Asiapro Cooperative (G.R. No. 172101)

Facts: Respondent Asiapro Cooperative is composed of owners-members with primary objectives of providing them
savings and credit facilities and livelihood services. In discharge of said objectives, Asiapro entered into several service
contracts with Stanfilco. Sometime later, the cooperative owners-members requested Stanfilco’s help in registering them
with SSS and remitting their contributions. Petitioner SSS informed Asiapro that being actually a manpower contractor
supplying employees to Stanfilco, it must be the one to register itself with SSS as an employer and remit the contributions.
Respondent continuously ignoring the demand of SSS the latter filed before the SSC. Asiapro alleges that there exists no
employer-employee relationship between it and its owners-members. SSC ruled in favor of SSS. On appeal, CA reversed
the decision.

Issue: Whether or not there is employer-employee relationship between Asiapro and its owners-members.

Ruling: YES. In determining the existence of an employer-employee relationship, the following elements are considered:
(1) the selection and engagement of the workers;
(2) the payment of wages by whatever means;
(3) the power of dismissal; and
(4) the power to control the worker‘s conduct, with the latter assuming primacy in the overall consideration.

All the aforesaid elements are present in this case. First. It is expressly provided in the Service Contracts that it is the
respondent cooperative which has the exclusive discretion in the selection and engagement of the owners-members as
well as its team leaders who will be assigned at Stanfilco. Second. It cannot be doubted then that those stipends or shares
in the service surplus are indeed wages, because these are given to the owners-members as compensation in rendering
services to respondent cooperative‘s client, Stanfilco. Third. It is also stated in the above-mentioned Service Contracts
that it is the respondent cooperative which has the power to investigate, discipline and remove the owners-members and
its team leaders who were rendering services at Stanfilco. Fourth. In the case at bar, it is the respondent cooperative which
has the sole control over the manner and means of performing the services under the Service Contracts with Stanfilco as
well as the means and methods of work. Also, the respondent cooperative is solely and entirely responsible for its owners-
members, team leaders and other representatives at Stanfilco. All these clearly prove that, indeed, there is an employer-
employee relationship between the respondent cooperative and its owners-members.
Insular Life Assurance v. NLRC and Melecio Basiao (G.R. No. 84484)

Facts: Petitioner Insular Life entered into a contract with respondent Basiao where the latter is authorized to solicit for
insurance policies. Sometime later, the parties entered into another contract which caused Basiao to organize an agency
in order to fulfill its terms. The contract being subsequently terminated by petitioner, Basiao sued the latter which
prompted also for the termination of their engagement under the first contract. Basiao thus filed before the Ministry of
Labor seeking to recover alleged unpaid commissions. Petitioner contends that Basiao is not an employee but an
independent contractor for which they have no obligation to pay said commissions. The Labor Arbiter found for Basiao
ruling that there exists employer-employee relationship between him and petitioner. NLRC affirmed.

Issue: Whether or not employer-employee relationship existed between petitioner and Basiao.

Ruling: NO. In determining the existence of employer-employee relationship, the following elements are generally
considered, namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employees’ conduct — although the latter is the most important element. It
should, however, be obvious that not every form of control that the hiring party reserves to himself over the conduct of
the party hired in relation to the services rendered may be accorded the effect of establishing an employer-employee
relationship between them in the legal or technical sense of the term.
Rules and regulations governing the conduct of the business are provided for in the Insurance Code and enforced
by the Insurance Commissioner. It is, therefore, usual and expected for an insurance company to promulgate a set of rules
to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits.
None of these really invades the agent’s contractual prerogative to adopt his own selling methods or to sell insurance at
his own time and convenience, hence cannot justifiably be said to establish an employer-employee relationship between
him and the company.
Tongko vs Manufacturer’s Life Insurance Co.
GR No. 167622 January 25, 2011

Fact: Petitioner Gregorio Tongko entered into a Career Agent’s Agreement with respondent Manulife. As an agent, his
duties consisted of, among others, canvassing for applications for group policies and other products of the company.
Subsequently, Tongko was named unit manager, branch manager, and regional sales manager. But when he failed to
comply with policies of Manulife, his Agency Agreement was terminated. Tongko filed a complaint with the NLRC
Arbitration Branch. He essentially alleged despite the clear terms of the letter terminating his Agency Agreement that he
was Manulife’s employee before he was illegally dismissed. The labor arbiter decreed that no employer-employee
relationship existed between the parties. However, the NLRC reversed the labor arbiter’s decision on appeal.
When the case went to the CA, it sustained the labor Arbiter’s decision.Manulife asserts that the labor tribunals have no
jurisdiction over Tongko’s claim as he was not its employee as characterized in the four-fold test.

ISSUE: Has the labor arbiter jurisdiction over his complaint for illegal dismissal?

HELD: No. Given the anemic state of the evidence, particularly on the requisite confluence of the factors that would show
an employer-employee relationship, the court cannot conclusively find that the relationship exists in the present case,
even if such relationship only refers to Tongko’s additional functions. While a rough deduction can be made, the answer
will not be fully supported by the substantial evidence needed.Under this legal situation, the only conclusion that can be
made is that the absence of evidence showing Manulife’s control over Tongko’s contractual duties points to the absence
of any employer-employee relationship between Tongko and Manulife. In the context of the established evidence, Tongko
remained an agent all along; although his subsequent duties made him a lead agent with leadership role, he was
nevertheless only an agent whose basic contract yields no evidence of means-and-manner control. In the case, it is a
matter that the labor tribunals cannot rule upon in the absence of an employer-employee relationship. Jurisdiction over
the matter belongs to the courts applying the laws of insurance, agency and contracts.

Issue: Whether or not petitioner as insurance agent is an employee of respondent company.

Held: No. Based on the evidence on record, the petitioner’s occupation was to sell Manulife’s insurance policies and
products from 1977 until the termination of the career agent’s agreement. The evidence also shows that through the
years, Manulife permitted him to exercise guiding authority over other agents who operate under their own agency
agreements with Manulife and whose commissions he shared. Under this scheme — an agreement that pervades the
insurance industry — petitioner in effect became a “lead agent” and his own commissions increased as they included his
share in the commissions of the other agents; he also receive greater reimbursement for expenses and was allowed to
use Manulife’s facilities. His designation also changed from unit manager to branch manager and then to regional sales
manager, to reflect the increase in the number of agents he recruited and guided, as well as the increase in the area where
these agents operated.

In our June 29, 2010 resolution, we noted that there are built in elements of control specific to an insurance agency, which
do not amount to the elements of control that characterizes an employment relationship governed by the labor code. The
insurance code provides definite parameters in the way an agent negotiates for the sale of the company’s insurance
products, his collection activities and his delivery of the insurance contract or policy. In addition, the civil code defines an
agent as a person who binds himself to do something in behalf of another, with the consent or authority of the latter.
Article 1887 of the civil code also provides that in the execution of the agency, the agent shall act in accordance with the
instructions of the principal.
MANILA GOLF CLUB, INC. VS. INTERMEDIATE APPELLATE COURT
237 SCRA 207

Facts: This is originally filed with the Social Security Commission (SSC) via petition of 17 persons who styled themselves as
“ Caddies of Manila Golf and Country Club-PTCCEA” for the coverage and availment of benefits of the Social Security Act
as amended, PTCCEA (Philippine Technical, Clerical, Commercial Employees Association) a labor organization where which
they claim for membership.
The same time two other proceedings were filed and pending. These are certification election case filed by PTCCEA on
behalf of the same caddies of Manila Golf and Country club which was in favor of the caddies and compulsory arbitration
case involving PTCCEA and Manila Golf and Country Club which was dismissed and ruled that there was no employer-
employee relationship between the caddies and the club.

Issue: Whether or not rendering caddying services for members of golf clubs and their guests in said clubs’ courses or
premises are the employees of such clubs and therefore within the compulsory coverage of the Social Security System
(SSS).

Ruling: The Court does not agree that the facts logically point to the employer-employee relationship.
In the very nature of things, caddies must submit to some supervision of their conduct while enjoying the privilege of
pursuing their occupation within the premises and grounds of whatever club they do work in. They work for the club to
which they attach themselves on sufferance but, on the other hand, also without having to observe any working hours,
free to leave anytime they please, to stay away for as long they like.
These considerations clash frontally with the concept of employment. It can happen that a caddy who has rendered
services to a player on one day may still find sufficient time to work elsewhere. Under such circumstances, the caddy may
leave the premises and to go to such other place of work that he wishes. These are things beyond the control of the
petitioner.
The caddy (LLamar) is not an employee of petitioner Manila Golf and Country Club and the petitioner is under no obligation
to report him for compulsory coverage of SSS.
Jardin v. NLRC (G.R. No. 119268)

Facts: Petitioners were drivers of private respondent’s taxicabs under the boundary system whose earnings were regularly
deducted washing fee for the taxi units. Petitioners decided to form a labor union to protect their rights and interests on
the belief that the deductions made were illegal. Upon learning, respondent refused to let petitioners drive their taxicabs
when they reported for work. Aggrieved, petitioners filed a complaint for illegal dismissal with the Labor Arbiter but the
latter dismissed said complaint. On appeal, the NLRC tribunal declared that petitioners are employees of private
respondent. On reconsideration however, the decision was reversed by the NLRC tribunal and held that no employer-
employee relationship between the parties exists.

Issue: Whether or not petitioner taxi drivers are employees of respondent company.

Ruling: YES. In a number of cases decided by this Court, we ruled that the relationship between jeepney owners/operators
on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-
lessee. In the case of jeepney owners/operators and jeepney drivers, the former exercise supervision and control over the
latter. The management of the business is in the owner’s hands. The owner as holder of the certificate of public
convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules
promulgated as regards its operation. Now, the fact that the drivers do not receive fixed wages but get only that in excess
of the so-called “boundary” they pay to the owner/operator is not sufficient to withdraw the relationship between them
from that of employer and employee. We have applied by analogy the doctrine to the relationships between bus
owner/operator and bus conductor, auto-calesa owner/operator and driver, and recently between taxi owners/operators
and taxi drivers. Hence, petitioners are undoubtedly employees of private respondent because as taxi drivers they perform
activities which are usually necessary or desirable in the usual business or trade of their employer.
UERMMMC-RDU VS. LAGUESMA GR NOS. 125425-26

Facts:
The resident physicians formed a union called the UERMMC-Resident Doctors Union and filed the petition for certification
so that it will be recognized as the exclusive bargaining agent of all the resident physicians in the hospital for purposes of
collective bargaining.

The petition for certification was dismissed by the Undersecretary, acting under the authority of the Secretary of Labor,
on the ground that there exist no employer-employee relationship between the resident doctors and the hospital.

Issue:
WON resident doctors are employees of the hospital.

Held:
The resident doctors are not employees of the hospital. It is clear that physicians undergo residency training in
order to hone their skills and develop or improve their knowledge in a specialized medical field or discipline. Hence,
residency is basically and simply a continuation of their medical course. However, they are not required or mandated
under any law to further undergo a residence training program. Having passed the medical board examinations, they are
already licensed physicians and could very well engage in the general practice of medicine. It is for the practice of highly
specialized medical disciplines which necessitates further on-the-job training thereon.

Viewed from this perspective, residency training clearly amounts to a pursuit of further education on a specific discipline.
Thus, the relationship between the teaching/training hospital and the resident doctor is not one of employer-employee.
The training/teaching hospital may simply be likened to a medical school/university, but in this instance, the emphasis is
on the practical application and training of its students, the resident doctors.
CALAMBA MEDICAL CENTER VS NATIONAL LABOR RELATIONS COMMISSION571 SCRA 585
(2008)

FACTS: An employment relationship exists between a physician and a hospital if the hospital controls both the means and
the details of the process by which the physician is to accomplish his task. Petitioner Calamba Medical Center (CMC),
engaged the services of medical doctors-spouses Ronaldo Lanzanas (Dr. Ronaldo) and Merceditha Lanzanas (Dr.
Merceditha) as part of its team of resident physicians. They were given, among others, identification cards and work
schedules; and were paid a monthly retainer. They were likewise enrolled in the Social Security System (SSS).
Subsequently, CMC’s medical director issued a Memorandum to Dr. Ronaldo after a resident physician overheard Dr.
Ronaldo and a fellow employee discussing the low admission in the hospital. After the incident involving her husband, Dr.
Merceditha was no longer given any work assignments. Afterwards, the rank and file employees union of Calamba Medical
Center went on a strike. Dr. Ronaldo and Dr. Merceditha meanwhile filed a complaint for illegal suspension and illegal
dismissal, respectively before the National Labor Relations Commission Regional Arbitration Board (NLRC-RAB).
Consequently, the Department of Labor and Employment (DOLE) issued a return to work order. Dr. Ronaldo, on the other
hand, received a notice of termination indicating his failure to return for work. Dr. Ronaldo thus amended his complaint
to illegal dismissal. The CMC contends that the doctors-spouses are not employees of the same, so that they cannot be
illegally dismissed.

ISSUES: Whether or not an employee-employer relationship does not exist between Calamba Medical Center and the
doctors-spouses Lanzanas

HELD: Under the ―control test,‖ an employment relationship exists between a physician and a hospital if the hospital
controls both the means and the details of the process by which the physician is to accomplish his task. Where a person
who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work,
and is compensated according to the result of his efforts and not the amount thereof, the element of control is absent. As
priorly stated, the spouses-doctors maintained specific work-schedules, as determined by petitioner through its medical
director, which consisted of 24-hour shifts totaling forty-eight hours each week and which were strictly to be observed
under pain of administrative sanctions. That CMC exercised control over spouses-doctors gains light from the undisputed
fact that in the emergency room, the operating room, or any department or ward for that matter, spouses-doctors’ work
is monitored through its nursing supervisors, charge nurses and orderlies. Without the approval or consent of CMC or its
medical director, no operations can be undertaken in those areas. For control test to apply, it is not essential for the
employer to actually supervise the performance of duties of the employee, it being enough that it has the right to wield
the power. With respect to spouses-doctors sharing in some hospital fees, this scheme does not sever the employment
tie between them and CMC as this merely mirrors additional form or another form of compensation or incentive similar
to what commission-based employees receive as contemplated in Article 97 (f) of the Labor Code. The spouses-doctors
were in fact made subject to petitioner-hospital’s Code of Ethics, the provisions of which cover administrative and
disciplinary measures on negligence of duties, personnel conduct and behavior, and offenses against persons, property
and the hospital’s interest. More importantly, the CMC itself provided incontrovertible proof of the employment status of
respondents, namely, the identification cards it issued them, the payslips and BIR W-2 (now 2316) Forms which reflect
their status as employees, and the classification as ―salary‖ of their remuneration. Moreover, it enrolled respondents in
the SSS and Medicare (Philhealth) program. It bears noting at this juncture that mandatory coverage under the SSS Law is
premised on the existence of an employer-employee relationship,[35] except in cases of compulsory coverage of the self-
employed. It would be preposterous for an employer to report certain persons as employees and pay their SSS premiums
as well as their wages if they are not its employees.
Tan vs. Lagrama
G.R. No. 151228, August 15, 2002

Facts
Lagrama works for Tan as painter of billboards and murals for the motion pictures shown at the theaters managed by Tan
for more than 10years. Lagrama was dismissed for having urinated in his working area. Lagrama filed a complaint for illegal
dismissal and non payment of benefits.Tan asserted that Lagrama was an independent contractor as he was paid in piece-
work basis.

Issue: W/N Lagrama is an independent contractor or an employee of Tan?

Ruling: Lagrama is an employee not an independent contractor

Applying Four Fold Test
A. Power of Control - Evidence shows that the Lagrama performed his work as painter and under the supervision and
control of Tan. Lagrama worked in a designated work area inside the theater of Tan for the use of which petitioner
prescribed rules, which rules included the observance of cleanliness and hygeine and prohibition against urinating in the
work area and any other place other than rest rooms and Tan's control over Lagrama's work extended not only the use
of work area but also the result of Lagrama;s work and the manner and means by which the work was to be accomplished
Lagrama is not an independent contractor because he did not enjoy independence and freedom from the control and
supervision of Tan and he was subjected to Tan's control over the means and methods by which his work is to be
performed and accomplished
B. Payment of Wages
Lagrama worked for Tan on a fixed piece work basis is of no moment. Payment by result is a method of compensation and
does not define the essence of the relation. That Lagrama was not reported as an employee to the SSS is not conclusive,
on the question whether he was an employee, otherwise Tan would be rewarded for his failure or even neglect to perform
his obligation.
C. Power of Dismissal – by Tan stating that he had the right to fire Lagrama, Tan in effect acknowledged Lagrama to be his
employee
D. Power of Selection and Engagement of Employees – Tan engaged the services of Lagrama without the intervention of
third party.
JOSE SONZA vs. ABS-CBN BROADCASTING CORPORATION, G.R. No. 138051, June 10, 2004

Facts: In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development Corporation
(MJMDC). ABS-CBN was represented by its corporate officers while MJMDC was represented by Sonza, as President and
general manager, and Tiangco as its EVP and treasurer. Referred to in the agreement as agent, MJMDC agreed to provide
Sonza’s services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to pay Sonza a monthly talent
fee of P310, 000 for the first year and P317, 000 for the second and third year.
On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent events concerning his
program and career. After the said letter, Sonza filed with the Department of Labor and Employment a complaint alleging
that ABS-CBN did not pay his salaries, separation pay, service incentive pay,13th month pay, signing bonus, travel
allowance and amounts under the Employees Stock Option Plan (ESOP). ABS-CBN contended that no employee-employer
relationship existed between the parties. However, ABS-CBN continued to remit Sonza’s monthly talent fees but opened
another account for the same purpose.
The Labor Arbiter dismissed the complaint and found that there is no employee-employer relationship. NLRC affirmed the
decision of the Labor Arbiter. CA also affirmed the decision of NLRC.

Issue: Whether or not there was employer-employee relationship between the parties.

Ruling: Case law has consistently held that the elements of an employee-employer relationship are selection and
engagement of the employee, the payment of wages, the power of dismissal and the employer’s power to control the
employee on the means and methods by which the work is accomplished. The last element, the so-called "control test",
is the most important element.
Sonza’s services to co-host its television and radio programs are because of his peculiar talents, skills and celebrity status.
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. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. For
violation of any provision of the Agreement, either party may terminate their relationship. Applying the control test to the
present case, we find that SONZA is not an employee but an independent contractor.
The control test is the most important test our courts apply in distinguishing an employee from an independent contractor.
This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the
hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well – the less control the
hirer exercises, the more likely the worker is considered an independent contractor. To perform his work, SONZA only
needed his skills and talent. How SONZA delivered his lines, appeared on television, and sounded on radio were outside
ABS-CBN’s control. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the right to modify
the program format and airtime schedule "for more effective programming." ABS-CBN’s sole concern was the quality of
the shows and their standing in the ratings.
Clearly, ABS-CBN did not exercise control over the means and methods of performance of Sonza’s work. A radio broadcast
specialist who works under minimal supervision is an independent contractor. Sonza’s work as television and radio
program host required special skills and talent, which SONZA admittedly possesses.
ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like
Sonza as independent contractors. The right of labor to security of tenure as guaranteed in the Constitution arises only if
there is an employer-employee relationship under labor laws. Individuals with special skills, expertise or talent enjoy the
freedom to offer their services as independent contractors. The right to life and livelihood guarantees this freedom to
contract as independent contractors. The right of labor to security of tenure cannot operate to deprive an individual,
possessed with special skills, expertise and talent, of his right to contract as an independent contractor.
FULACHE vs ABS-CBN BROADCASTING CORPORATION Case Digest G.R. No. 183810 January
21, 2010

FACTS: The petitioners in this case are questioning the CBA executed between ABS-CBN and the ABS-CBN Rank-and-File
Employees Union (Union) because under such agreement, they are only considered as temporary and not regular
employees. The petitioners claimed that they should be recognized as regular employees of ABS-CBN because they had
already rendered more than a year of service in the company and, therefore, entitled to the benefits of a regular
employee. 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. Labor Arbiter Rendoque rendered his decision 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.

ISSUE:
WON the petitioners are correct that they should be considered already as regular employees
WON Fulache and the other petitioners were dismissed illegally

RULING:
1. 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.
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.
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
arbiter’s decision of January 17, 2002 – affirmed all the way up to the CA level – ruled against ABS-CBN’s submission that
they are independent contractors. Thus, as regular rank-and-file employees, they fall within CBA coverage under the CBA’s
express terms and are entitled to its benefits.

2. Their dismissal was not only unjust and in bad faith as the above discussions abundantly show. The bad faith in ABS-
CBN’s 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, 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