1.

LEGEND HOTEL (MANILA), OLWNED BY TITANIUM CORPORATION AND/OR, NELSON

NAPUD, IN HIS CAPACITY AS THE PRESIDENT OF PETITIONER CORPORATION,
PETITIONER, VS. HERNANI S. REALUYO, ALSO KNOWN AS JOEY ROA,
RESPONDENT. G.R. No. 153511, July 18, 2012
FACTS: - This labor case for illegal dismissal involves a pianist employed to perform in the
restaurant of a hotel. - August 9, 1999: Realuyo, whose stage name was Joey R. Roa, filed
a complaint for alleged unfair labor practice, constructive illegal dismissal, and the
underpayment/nonpayment of his premium pay for holidays, separation pay, service
incentive leave pay, and 13th month pay. He prayed for attorneys fees, moral damages of
P100,000.00 and exemplary damages for P100,000.00 - Roa averred that he had worked as
a pianist at the Legend Hotels Tanglaw Restaurant from September 1992 with an initial rate
of P400.00/night; and that it had increased to P750.00/night. During his employment, he
could not choose the time of performance, which had been fixed from 7:00PM to 10:00pm
for three to six times a week. - July 9, 1999: the management had notified him that as a
cost-cutting measure, his services as a pianist would no longer be required effective July 30,
1999. - In its defense, petitioner denied the existence of an employer-employee relationship
with Roa, insisting that he had been only a talent engaged to provide live music at Legend
Hotels Madison Coffee Shop for three hours/day on two days each week; and stated that
the economic crisis that had hit the country constrained management to dispense with his
services. - December 29,1999: the Labor Arbiter (LA) dismissed the complaint for lack of
merit upon finding that the parties had no employer-employee relationship, because Roa
was receiving talent fee and not salary, which was reinforced by the fact that Roa received
his talent fee nightly, unlike the regular employees of the hotel who are paid monthly. -
NLRC affirmed the LAs decision on May 31, 2001. - CA set aside the decision of the NLRC,
saying CA failed to take into consideration that in Roas line of work, he was supervised and
controlled by the hotels restaurant manager who at certain times would require him to
perform only tagalong songs or music, or wear barong tagalong to conform with the
Filipinana motif of the place and the time of his performance is fixed. As to the status of Roa,
he is considered a regular employee of the hotel since his job was in furtherance of the
restaurant business of the hotel. Granting that Roa was initially a contractual employee, by
the sheer length of service he had rendered for the company, he had been converted into a
regular employee. - CA held that the dismissal was due to retrenchment in order to avoid or
minimize business losses, which is recognized by law under Art. 283 of the Labor Code.
ISSUES: - WON there was employer-employee relationship between the two, and if so, -
WON Roa was validly terminated
RULING: - YES. Employer-employee relationship existed between the parties. o Roa was
undeniably employed as a pianist of the restaurant. The hotel wielded the power of selection
at the time it entered into the service contract dated Sept. 1, 1992 with Roa. The hotel could
not seek refuge behind the service contract entered into with Roa. It is the law that defines
and governs an employment relationship, whose terms are not restricted to those fixed in
the written contract, for other factors, like the nature of the work the employee has been
called upon to perform, are also considered. o The law affords protection to an employee,
and does not countenance any attempt to subvert its spirit and intent. Any stipulation in
writing can be ignored when the employer utilizes the stipulation to deprive the employee of
his security of tenure. The inequality that characterizes employer-employee relationship
generally tips the scales in favor of the employer, such that the employee is often scarcely
provided real and better options. o The argument that Roa was receiving talent fee and not
salary is baseless. There is no denying that the remuneration denominated as talent fees
was fixed on the basis of his talent, skill, and the quality of music he played during the hours
of his performance. Roas remuneration, albeit denominated as talent fees, was still
considered as included in the term wage in the sense and context of the Labor Code,
 regardless of how petitioner chose to designate the remuneration, as per Article 97(f) of the
Labor Code. o The power of the employer to control the work of the employee is considered
the most significant determinant of the existence of an employer-employee relationship. This
is the so-called control test, and is premised on whether the person for whom the services
are performed reserves the right to control both the end achieved and the manner and
means used to achieve that end. o Lastly, petitioner claims that it had no power to dismiss
respondent due to his not being even subject to its Code of Discipline, and that the power to
terminate the working relationship was mutually vested in the parties, in that either party
might terminate at will, with or without cause. This claim is contrary to the records. Indeed,
the memorandum informing respondent of the discountinuance of his service because of the
financial condition of petitioner showed the latter had the power to dismiss him from
employment. - NO. Roa was not validly terminated. o The conclusion that Roas termination
was by reason of retrenchment due to an authorized cause under the labor Code is
inevitable. o Retrenchment is one of the authorized causes for the dismissal of employees
recognized by the Labor Code. It is a management prerogative resorted to by employers to
avoid ro to minimize business losses. On this matter, Article 283 of the Labor Code states:
Article 283. Closure of establishment and reduction of personnel. 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. xxx. In case of
retrenchment to prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay
for every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year. o Justifications for retrenchment: a. The expected losses
should be substantial and not merely de minimis in extent; b. The substantial losses
apprehended must be reasonably imminent; c. The retrenchment must be reasonably
necessary and likely to effectively prevent the expected losses; and d. The alleged losses, if
already incurred, and the expected imminent losses sought to be forestalled must be proved
by sufficient and convincing evidence. o In termination cases, the burden of proving that the
dismissal was for a valid or authorized cause rests upon the employer. Here, petitioner did
not submit evidence of the losses to its business operations and the economic havoc it
would thereby imminently sustain. It only claimed that Roas termination was due to its
present business/financial condition. This bare statement fell short of the norm to show a
valid retrenchment. Hence, there was no valid cause for the retrenchment of respondent.
Since the lapse of time since the retrenchment might have rendered Roas reinstatement to
his former job no longer feasible, Legend Hotel should pay him separation pay at the rate of
one month pay for every year of service computed from September 1992 until the finality of
this decision, and full backwages from the time his compensation was withheld until the
finality of this decision.
Petition denied.
2. [ G.R. No. 199683, February 10, 2016 ] ARLENE T. SAMONTE, et al., petitioners, vs. LSGH,
BRO. BERNARD S. OCA, respondents.
FACTS: From 1989, La Salle Greenhills, Inc. (LSGI) contracted the services of medical
professionals, specifically pediatricians, dentists and a physician, to comprise its Health Service
Team (HST). Petitioners, along with other members of the HST signed uniform one-page
Contracts of Retainer for the period of a specific academic cal~ndar beginning in June of a
certain year (1989 and the succeeding 15 years) and terminating in March of the following year
when the school year ends. After fifteen consecutive years of renewal each academic year,
where the last Contract of Retainer was for the school year of 2003-2004, LSGI Head
Administrator, on that last day of the school year, informed the Medical Service Team, including
herein petitioners, that their contracts will no longer be renewed for the following school year by
reason of LSGI's decision to hire two (2) full-time doctors and dentists. When petitioners', along
with their medical colleagues', requests for payment of their separation pay were denied, they
filed a complaint for illegal dismissal with prayer for separation pay, damages and attorney's
fees before the NLRC. They alleged that they were regular employees who could only be
dismissed for just and authorized causes LSGI denied that complainants were regular
employees, asserting: that complainants were independent contractors who were retained by
LSGI by reason of their medical skills and expertise to provide ancillary medical and dental
services; that LSGI had no power to impose disciplinary measures upon complainants including
dismissal from employment; and that LSGI had no power of control over how complainants
actually performed their professional services. The LA dismissied petitioners complaint, but the
NLRC reversed. On appeal, the CA ruled against petitioners. ISSUE: Whether or not the CA
correctly ruled that the NLRC did not commit grave abuse of discretion in ruling that petitioners
were not regular employees who may only be dismissed for just and authorized causes.
RULING: NO. In the case at bar, the CA disregarded the repeated renewals of the Contracts of
Retainer of petitioners spanning a decade and a half. While vague in its sparseness, the
Contract of Retainer very clearly spelled out that LSGI had the power of control over petitioners.
It is enough that the employer has the right to wield that power. In all, given the following: ( 1)
repeated renewal of petitioners' contract for fifteen years, interrupted only by the close of the
school year; (2) the necessity of the work performed by petitioners as school physicians ~and
dentists; and (3) the existence of LSGI's power of control over the means and method pursued
by petitioners in the performance of their job, we rule that petitioners attained regular
employment, entitled to security of tenure who could only be dismissed for just and authorized
causes. Consequently, petitioners were illegally dismissed and are entitled to the twin remedies
of payment of separation pay and full back wages. We order separation pay in lieu of
reinstatement given the time that has lapsed, twelve years, in the litigation of this case.
Petition granted.

3. Servaa 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 Servaa as a
security guard and absorbed him.

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

Servaa then filed a case for illegal Dismissal. The Labor Arbiter ruled that Servaas 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 Servaa 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 Servaa. The National Labor Relations Commission
ruled in favor of TAPE. It ruled that Servaa is a program employee. Servaa 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
Servaa.

HELD: Yes. Servaa is a regular employee.

In determining Servaas nature of employment, the Supreme Court employed the Four Fold
Test:

1. Whether or not employer conducted the selection and engagement of the employee.

Servaa 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 TAPEs 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.

Servaa is definitely receiving a fixed amount as monthly compensation. Hes receiving

P6,000.00 a month.

3. Whether or not employer has the power to dismiss employee.

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

employee evidenced TAPEs power to dismiss Servaa.

4. Whether or not the employer has the power of control over the employee.

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

Therefore, Servaa 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
Servaa.
4. CONSULTA vs CA Case Digest

[G.R. No. 145443. March 18, 2005]RAQUEL P. CONSULTA, petitioner, vs. COURT OF APPEALS,
PAMANAPHILIPPINES, INC., RAZUL Z. REQUESTO, and ALETA TOLENTINO,
respondents.FACTS:
Consulta was Managing Associate of Pamana. On 1987 she was issued acertification authorizing her to
negotiate for and in behalf of PAMANA with theFederation of Filipino Civilian Employees Association. Consulta
was able to secure anaccount with FFCEA in behalf of PAMANA. However, Consulta claimed that PAMANAdid
not pay her commission for the PPCEA account and filed a complaint for unpaidwages or commission.
ISSUE:
Whether or not Consulta was an employee of PAMANA.
HELD:
The SC held that Pamana was an independent agent and not an employee.The power of control in the four fold
test is missing. The manner in which Consulta wasto pursue her tasked activities was not subject to the control of
PAMANA. Consultafailed to show that she worked definite hours. The amount of time, the methods andmeans,
the management and maintenance of her sales division were left to her sound judgment.Finally, Pamana paid
Consulta not for labor she performed but only for the results of her
labor. Without results, Consultas labor was her own burden and loss. H
er right tocompensation, or to commission, depended on the tangible results of her work -whether she brought in
paying recruits.The fact that the appointment required Consulta to solicit business exclusively for Pamana did not
mean Pamana exercised control over the means and methods of
Consultas work as the term control is understood in labor jurisprudence. Neither did it
make Consulta an employee of Pamana. Pamana did not prohibit Consulta fromengaging in any other business,
or from being connected with any other company, for
as long as the business or company did not compete with Pamanas business. The
exclusivity clause was a reasonable restriction to prevent similar acts prejudicial to
Pamanas business interest. Article 1306 of the Civil Code provides that [t]he
contracting parties may establish such stipulation, clauses, terms and conditions as theymay deem convenient,
provided that they are not contrary to law, morals, goodcustoms, public order, or public policy.There being no
employer-employee relationship between Pamana and Consulta, the
Labor Arbiter and the NLRC had no jurisdiction to entertain and rule on Consultasmoney claim.
Consultas remedy is to file an ordinary civil action to litigate her claim
Petition is dismissed.

5. 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 Sonzas
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's President, Eugenio Lopez III, where he
irrevocably resigned in view of the recent events concerning his program and career. The acts
of the station are violative of the Agreement and said letter will serve as notice of rescission of
said contract. The letter also contained the waiver and renunciation for recovery of the
remaining amount stipulated but reserves the right to seek recovery of the other benefits under
said Agreement.
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 Sonzas 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. The LA ruled that he is not an employee by reason of his peculiar skill and talent as
a TV host and a radio broadcaster. Unlike an ordinary employee, he was free to perform his
services in accordance with his own style. NLRC and CA affirmed the LA. Should there be any
complaint, it does not arise from an employer-employee relationship but from a breach of
contract.
ISSUE: Whether or not there was employer-employee relationship between the parties.
HELD:
There is no employer-employee relationship between Sonza and ABS-CBN. Petition denied.
Judgment decision affirmed.
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 employers 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.
A. Selection and Engagement of Employee
ABS-CBN engaged SONZAs services to co-host its television and radio programs because of
SONZAs 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 respondents claim of
independent contractorship.
However, 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.
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-CBNs 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. In addition,
SONZAs talent fees 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 SONZAs unique skills, talent and
celebrity status not possessed by ordinary employees.
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.
During the life of the Agreement, ABS-CBN agreed to pay SONZAs talent fees as long as
AGENT and Jay Sonza shall faithfully and completely perform each condition of this
Agreement. Even if it suffered severe business losses, ABS-CBN could not retrench SONZA
because ABS-CBN remained obligated to pay SONZAs talent fees during the life of the
Agreement. This circumstance indicates an independent contractual relationship between
SONZA and ABS-CBN.
SONZA admits that even after ABS-CBN ceased broadcasting his programs, ABS-CBN still paid
him his talent fees. Plainly, ABS-CBN adhered to its undertaking in the Agreement to continue
paying SONZAs talent fees during the remaining life of the Agreement even if ABS-CBN
cancelled SONZAs programs through no fault of SONZA.
D. Power of Control
First, SONZA contends that ABS-CBN exercised control over the means and methods of his
work. SONZAs argument is misplaced. ABS-CBN engaged SONZAs services specifically to
co-host the Mel & Jay programs. ABS-CBN did not assign any other work to SONZA. 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-CBNs control. SONZA did not
have to render eight hours of work per day. The Agreement required SONZA to attend only
rehearsals and tapings of the shows, as well as pre- and post-production staff meetings. ABS-
CBN could not dictate the contents of SONZAs script. However, the Agreement prohibited
SONZA from criticizing in his shows ABS-CBN or its interests. The clear implication is that
SONZA had a free hand on what to say or discuss in his shows provided he did not attack ABS-
CBN or its interests.
Second, SONZA urges us to rule that he was ABS-CBNs employee because ABS-CBN
subjected him to its rules and standards of performance. SONZA claims that this indicates ABS-
CBNs control not only [over] his manner of work but also the quality of his work." The
Agreement stipulates that SONZA shall abide with the rules and standards of performance
covering talents of ABS-CBN. The Agreement does not require SONZA to comply with the
rules and standards of performance prescribed for employees of ABS-CBN. The code of
conduct imposed on SONZA under the Agreement refers to the Television and Radio Code of
the Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which has been adopted by the
COMPANY (ABS-CBN) as its Code of Ethics. The KBP code applies to broadcasters, not to
employees of radio and television stations. Broadcasters are not necessarily employees of
radio and television stations. Clearly, the rules and standards of performance referred to in the
Agreement are those applicable to talents and not to employees of ABS-CBN.

In any event, not all rules imposed by the hiring party on the hired party indicate that the latter is
an employee of the former. In this case, SONZA failed to show that these rules controlled his
performance. We find that these general rules are merely guidelines towards the achievement
of the mutually desired result, which are top-rating television and radio programs that comply
with standards of the industry.
Lastly, SONZA insists that the exclusivity clause in the Agreement is the most extreme form of
control which ABS-CBN exercised over him. This argument is futile. Being an exclusive talent
does not by itself mean that SONZA is an employee of ABS-CBN. Even an independent
contractor can validly provide his services exclusively to the hiring party. 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. The broadcast station normally
spends substantial amounts of money, time and effort in building up its talents as well as the
programs they appear in and thus expects that said talents remain exclusive with the station for
a commensurate period of time. Normally, a much higher fee is paid to talents who agree to
work exclusively for a particular radio or television station. In short, the huge talent fees partially
compensates for exclusivity, as in the present case.w\