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not continuous and merely intermittent, the law deems repeated and Third. Petitioner could always discharge respondents should it find their
continuing need for its performance as sufficient evidence of the work unsatisfactory, and respondents are highly dependent on the petitioner
necessity if not indispensability of that activity to the business. Hence, for continued work.
the employment is considered regular, but only with respect to such
activity and while such activity exists. Fourth. The degree of control and supervision exercised by petitioner over
respondents through its supervisors negates the allegation that respondents
Thus, there are two kinds of regular employees under the law: are independent contractors.
(1) those engaged to perform activities which are necessary or
desirable in the usual business or trade of the employer; and 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,
(2) those casual employees who have rendered at least one year of does not furnish an independent business or professional service, such work
service, whether continuous or broken, with respect to the activities in is a regular employment of such employee and not an independent
which they are employed. contractor. The Court will peruse beyond any such agreement to examine
the facts that typify the parties’ actual relationship
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 VS JAY SONZA CASE
persisting need for their services is sufficient evidence of the necessity and
indispensability of such services to petitioner’s business or trade. While A. Selection and Engagement of Employee
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 ABS-CBN engaged SONZA’S services to co-host its television and radio
specific undertaking or in fact tasked to perform functions which are vital, programs because of SONZA’S peculiar skills, talent and celebrity status.
necessary and indispensable to the usual trade or business of the employer. SONZA contends that the "discretion used by respondent in specifically
We note further that petitioner did not report the termination of respondents’ selecting and hiring complainant over other broadcasters of possibly similar
employment in the particular "project" to the Department of Labor and experience and qualification as complainant belies respondent’s claim of
Employment Regional Office having jurisdiction over the workplace within 30 independent contractorship."
days following the date of their separation from work, using the prescribed
form on employees’ termination/ dismissals/suspensions.
Independent contractors often present themselves to possess unique skills,
expertise or talent to distinguish them from ordinary employees. The specific
In the case at bar, however, the employer-employee relationship between selection and hiring of SONZA, because of his unique skills, talent and
petitioner and respondents has been proven. celebrity status not possessed by ordinary employees, is a circumstance
indicative, but not conclusive, of an independent contractual relationship. If
First. In the selection and engagement of respondents, no peculiar or SONZA did not possess such unique skills, talent and celebrity status, ABS-
unique skill, talent or celebrity status was required from them because they CBN would not have entered into the Agreement with SONZA but would
were merely hired through petitioner’s personnel department just like any have hired him through its personnel department just like any other
ordinary employee. employee.
Second. The so-called "talent fees" of respondents correspond to wages In any event, the method of selecting and engaging SONZA does not
given as a result of an employer-employee relationship. Respondents did not conclusively determine his status. We must consider all the circumstances of
have the power to bargain for huge talent fees, a circumstance negating the relationship, with the control test being the most important element.
independent contractual relationship.
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.
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 Concerning regular employment, the law provides for 2 kinds of employees,
GR No. 164652 namely: 1.) Those who are engaged to perform activities which are usually
June 8, 2007 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
Facts: 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
On October 2, 1995, under talent contract no. NT95-1805, private employee or the duration of his employment.
respondent Associated Broadcasting Company (ABC) hired petitioner
Thelma Dumpit-Murillo as a newscaster and co-anchor of Balitang-Balita, an The primary standard of determining regular employment is the reasonable
early evening news program. The contract was for a period of 3 months. It connection between the particular activity performed by the employee vis-a-
renewed under talent contract nos. NT95-1915, NT96-3002, NT98-4984, vis the usual trade or business of the employer. This connection can be
and NT99-5649. In addition, petitioner’s services were engaged for the determined by considering the nature of the work performed and its relation
program “Live on Five.” On September 30, 1999, after 4 years of repeated to the scheme of the particular business or trade in its entirety. If the
renewals, petitioner’s talent contract expired. Two weeks after the expiration employee has been performing the job for at least a year, even if the
of the last contract, petitioner sent a letter to Mr. Jose Javier, Vice President performance is not continuous and merely intermittent, the law deems
for news and public affairs of ABC, informing the latter that she was still repeated and continuing need for its performance as sufficient evidence of
interested in renewing her contract subject to a salary increase, thereafter, the necessity if not indispensability of that activity to the business.
petitioner stopped reporting for work. On November 5, 1999 she wrote Mr.
Javier another letter.
Held: Yes.
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of wages, power of dismissal, and power to control the putative employees'
Philippine Bank of Communication vs NLRC conduct. With respect to the selection and engagement of the employee,
GR No. L-66598 although Orpiada was not personally selected by PBC, his selection was still
subject to the acceptance of the bank.
Facts: With respect to wages, PBC remitted to CESI amounts corresponding to the
Philippine Bank of Communications (PBC) and the Corporate Executive daily service rate and CESI paid the wages. Orpiada did not even appear in
Search Inc. (CESI) entered into a letter agreement dated January 1976 the payroll of PBC, but was listed in the payroll of CESI. With respect to
under which CESI undertook to provide temporary services to PBC power of dismissal, after withdrawal from his assignment, he was also
consisting of the temporary services of 11 messengers. Attached to the letter terminated by CESI. It would appear that he was hired by CESI specifically
was a list of messengers to be assigned, which included Ricardo Orpiada for assignment with PBC. With regards to control, since Orpiada performed
Ricardo Orpiada was thus assigned to work with the petitioner bank. As his functions within the bank’s premises, not within CESI’s premises, he
such, he rendered must have been subject to at least the same control and supervision that the
services to the bank, within the premises of the bank and alongside other bank exercises. Application of the above factors in the specific context of this
people also rendering services to the bank. There was some question as to case appears to yield mixed results so far as concerns the existence of an
when Ricardo Orpiada commenced rendering services to the bank. As noted employer- employer relationship between the bank and Orpiada. Under the
above, the letter agreement was dated January 1976. However,4.the general rule set out in the first and second paragraphs of Article 106, an
position employer who enters into a contract with a contractor for the performance of
paper submitted by (CESI) to the National Labor Relations Commission work for the employer, does not thereby create an employer-employee
stated that (CESI) hired Ricardo Orpiada on 25 June 1975 as a Temporary relationship between himself
Service employee, and assigned him to work with the petitioner bank "as and the employees of the contractor. Thus, the employees of the contractor
evidenced by the appointment memo issued to him on 25 June 1975. " remain the contractor's employees and his alone. Nonetheless when a
October 1976, PBC requested CESI to withdraw Orpiada’s assignment contractor fails to pay the wages of his employees in accordance with the
because his services Labor Code, the employer who contracted out the job to the contractor
were no longer needed. Orpiada instituted a complaint with the Dept of becomes jointly and severally liable with his contractor to the employees of
Labor for illegal dismissal and failure to pay 13th month pay. After the latter "to the extent of the work performed under the contract" as such
investigation, the Office of the Regional Director issued an order dismissing employer were the employer of the contractor's employees. We hold that, in
Orpiada’s complaint for failure to show existence of an employer-employee the circumstances 'instances of this case, (CESI) was engaged in "labor-
relationship between the bank and himself. Orpiada succeeded in having his only" or attracting vis-avis the petitioner and in respect Ricardo Orpiada, and
complaint certified for compulsory arbitration, CESI was made an additional that because there is labor-only contracting, the petitioner bank is liable to
respondent. Labor Arbiter Dogelio rendered a decision ordering PBC to Orpiada as if Orpiada had been directly, employed not only by (CESI) but
reinstated Orpiada to the same or equivalent position with full back wages also by the bank. It may well be that the bank may in turn proceed against
and to pay his 13th month pay. On appeal, NLRC modified the lBaor Arbiter’s (CESI) to obtain reimbursement of, or some contribution to, the amounts
decision limiting back wages to two years and affirmed in all other aspects which the bank will have to pay to Orpiada; but this it is not necessary to
determine here.
Issue:
Whether or not an employer-employee relationship existed
Held
Yes, there was an employer-employee relationship. The court affirmed the
NLRC decision.
Ratio:
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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
Case Digests delimit the free exercise of management prerogative pertaining to the hiring
of contractual employees. A collective bargaining agreement is the law
G.R. No. 170054 : between the parties. A collective bargaining agreement or CBA refers to the
January 21, 2013 negotiated contract between a legitimate labor organization and the
GOYA, INC., Petitioner, v. GOYA, INC. EMPLOYEES UNION-FFW, employer concerning wages, hours of work and all other terms and
Respondent. PERALTA, J.: 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,
FACTS: Petitioner Goya Inc. (Goya) hired contractual employees from PESO good customs, public order or public policy. Thus, where the CBA is clear
Resources Development Corporation (PESO). This prompted Goya, Inc. and unambiguous, it becomes the law between the parties and compliance
Employees Union-FFW (Union) to request for a grievance conference on the therewith is mandated by the express policy of the law. As repeatedly held,
ground that the contractual workers do not belong to the categories of the exercise of management prerogative is not unlimited; it is subject to the
employees stipulated in their CBA. The Union also argued that hiring limitations found in law, collective bargaining agreement or the general
contractual employees is contrary to the union security clause embodied in principles of fair play and justice. Petition is DENIED.
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.
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