June 10, 2004 | G.R. No. 138051
Jose "Jay" Y. Sonza, petitioner
ABS-CBN Broadcasting Corp., respondent
FACTS:
In May 1994, ABS-CBN signed an Agreement with the Mel and Jay Management and Development Corporation (MJMDC). MJMDC agreed to provide Jay Sonza’s services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to pay for Sonza's services a monthly talent fee of ₱310,000 for the first year and ₱317,000 for the second and third year of the Agreement.
On April 1, 1996, Sonza wrote a letter wrote a letter to ABS-CBN President Eugenio Lopez III, accusing ABS-CBN of violating the Agreement.
On April 30, 1996, Sonza filed a complaint before the Department of Labor and Employment (DOLE), alleging that that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan.
ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties.
LABOR ARBITER: Dismissed Sonza's complaint for lack of jurisdiction, ruling that because Sonza is a "talent," he cannot be considered an employee.
NLRC: Dismissed Sonza's Motion for Reconsideration.
COURT OF APPEALS: Affirmed NLRC ruling. The CA ruled that the allegations of Sonza against ABS-CBN did not constitute a labor dispute because there was no employer-employee relationship to begin with. If anything, Sonza's allegations constitute an action for breach of contractual obligation, which is intrinsically a civil dispute to be resolved by a civil court, not the Labor Arbiter or the NLRC.
ISSUE:
Whether Jay Sonza was an employee of ABS-CBN? -- NO.
HELD:
(a) Selection and engagement of employee
ABS-CBN engaged Sonza's services to co-host its television and radio programs because of his peculiar skills, talent and celebrity status. These are indicative, but not conclusive, of an independent contractual relationship
(b) Payment of wages
The Court held that whatever benefits Sonza enjoyed (SSS, Medicare, 13th month pay) arose from contract and not because of an employer-employee relationship
(c) Power of dismissal
For violation of any provision of the Agreement, either party may terminate their relationship. Sonza failed to show that ABS-CBN could terminate his services on grounds other than breach of contract, such as retrenchment to prevent losses as provided under labor laws.
(d) Power of control
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.
In Sonza's case, ABS-CBN did not exercise control over the means and methods of his work. The Court found that ABS-CBN was not involved in the actual performance that produced the finished product of Sonza's work.
Second, the fact that he was subjected to ABS-CBN's rules and standards of performance was not determinative of control as it was under his contract that he " shall abide with the rules and standards of performance covering talents of ABS-CBN."
Third, the "exclusivity" clause in the Agreement was not a form of control. In the broadcast industry, exclusivity is not necessarily the same as control. The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry. This practice is not designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station.
Finally, the Supreme Court held that 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. Not every performance of services for a fee creates an employer-employee relationship.
To hold that every person who renders services to another for a fee is an employee - to give meaning to the security of tenure clause - will lead to absurd results."