PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC v. HON. RUBEN D.

TORRES

As a result of published stories of abused Filipino housemaids in HongKong, DOLE Secretary issued a
department order temporarily suspending the recruitment of private employment agencies of Filipino
Domestic helpers going to Hong Kong. The DOLE itself, through the POEA took over the business of
deploying such Hong Kong-bound workers. PASEI, the largest national organization for private
employment and recruitment agencies, filed a petition to annul the DOLE and POEA circulars and to
prohibit implementation Due to the following reasons:

that the DOLE acted with grave abuse of discretion and/or in excess of their rule-making authority in
issuing said circulars;

2. that the assailed circulars are contrary to the Constitution, are unreasonable, unfair and
oppressive; and

3. that the requirements of publication and filing with the Office of the National Administrative
Register were not complied with.

ISSUE:

Whether DOLE has the authority to issue the said circulars?

RULING:

Yes, Article 36 of the Labor Code grants the Labor Secretary the power to restrict and regulate
recruitment and placement activities.

The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not

unconstitutional, unreasonable and oppressive. It has been necessitated by "the growing complexity
of the modern society" (

Said Administrative Order merely restricted the scope or area of petitioner's business operations by
excluding therefrom recruitment and deployment of domestic helpers for Hong Kong till after the
establishment of the "mechanisms" that will enhance the protection of Filipino domestic helpers
going to Hong Kong.

They are reasonable, valid and justified under the general welfare clause of the Constitution, since
the recruitment and deployment business, as it is conducted today, is affected with public interest.

The questioned circulars are therefore a valid exercise of the police power as delegated to the
executive branch of Government.
SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION-AFW et. al., petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, et. al., respondents

Facts: Petitioners, the rank-and-file employee-union officers and members of San Juan De Dios
Hospital Employees Association sent a four (4)-page letter with attached support signatures
requesting and pleading for the expeditious implementation and payment by respondent Juan De Dios
Hospital of the 40 HOURS/5-DAY WORKWEEK with compensable weekly two (2) days off provided
for by Republic Act 5901 as clarified for enforcement by the Secretary of Labor’s Policy Instructions
No. 54 dated April 12, 1988.”

Respondent hospital failed to give a favorable response; thus, petitioners filed a complaint regarding
their claims for statutory benefits under the above-cited law and policy issuance. On February 26,
1992, the Labor Arbiter dismissed the complaint. Petitioners appealed before public respondent
National Labor Relations Commission which affirmed the Labor Arbiter’s decision.

Issue: Whether Policy Instructions No. 54 issued by then Labor Secretary (now Senator) Franklin M.
Drilon is valid or not.

Ruling: The policy instruction is not valid. This issuance clarifies the enforcement policy of this
Department on the working hours and compensation of personnel employed by hospital/clinics with a
bed capacity of 100 or more and those located in cities and municipalities with a population of one
million or more.

Reliance on Republic Act No. 5901, however, is misplaced for the said statute, as correctly ruled by
respondent NLRC, and has long been repealed with the passage of the Labor Code on May 1, 1974.
Article 302 of which explicitly provide: “All labor laws not adopted as part of this Code either directly or
by reference are hereby repealed. All provisions of existing laws, orders, decrees, rules and
regulations inconsistent herewith are likewise repealed.” Accordingly, only Article 83 of the Labor Code
which appears to have substantially incorporated or reproduced the basic provisions of Republic Act
No. 5901 may support Policy Instructions No. 54 on which the latter’s validity may be gauged. Article
83 of the Labor Code states: Normal Hours of Work. -- The normal hours of work of any employee
shall not exceed eight (8) hours a day.

“Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in
hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours
for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the
exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in
which case they shall be entitled to an additional compensation of at least thirty per cent (30%) of their
regular wage for work on the sixth day. For purposes of this Article, “health personnel” shall include:
resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory
technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or
clinic personnel.”
A cursory reading of Article 83 of the Labor Code betrays petitioners’ position that “hospital employees”
are entitled to “a full weekly salary with paid two (2) days’ off if they have completed the 40-hour/5-day
workweek”. What Article 83 merely provides are: (1) the regular office hour of eight hours a day, five
days per week for health personnel, and (2) where the exigencies of service require that health
personnel work for six days or forty-eight hours then such health personnel shall be entitled to an
additional compensation of at least thirty percent of their regular wage for work on the sixth day. There
is nothing in the law that supports then Secretary of Labor’s assertion that “personnel in subject
hospitals and clinics are entitled to a full weekly wage for seven (7) days if they have completed the
40-hour/5-day workweek in any given workweek”. Needless to say, the Secretary of Labor exceeded
his authority by including a two days off with pay in contravention of the clear mandate of the statute.
Administrative interpretation of the law is at best merely advisory, and the Court will not hesitate to
strike down an administrative interpretation that deviates from the provision of the statute.
Ester Asuncion v. Nlrc

Facts

Asuncion was employed as an accountant/bookkeeper by Mabini Medical Clinic. Official of DOLE

conducted a routine inspection and discovered upon Asuncion’s disclosure , violations of labor standars
laws, such as non-coverage from sss of the employees. Mabini was made to correct these violations.

Medical diector dr. Juco, charged asuncion with offenses such as chronic absenteeism, habitual
tardiness, loitering, disobedience and insubordination. Asuncion was required to explain within 2 days
why he should not be terminated. Asuncion responded after 3 days.

On tht same day, dr. Juco dismissed asuncion on the ground of disobedience of lawful orders and for her
failure to submit her rreply within the 2 day period.

LA declared tnatasuncion was illegaly dismissed. Nlrc set aside labor arbiters ruling.

ISSUE:

Whether asuncion was dismissed for just or authorized causes.

RULING:

Yes! There is lack of evidence to establish the charges of absenteeism andd tardiness.

A worker’s employment is property in the constitutional sense. He cannot be deprived of his work
without due process. In order for dismissal to be valid, not only must it be based on just cause
supported by clear and convincing evidence, the employee must also be given an opportunity to be
heard.

Court, likewise, takes note of the fact that the two-day period given to petitioner to
explain and answer the charges against her was most unreasonable, considering that she
was charged with several offenses and infractions (35 absences, 23 half-days and 108
tardiness), some of which were allegedly committed almost a year before, not to
mention the fact that the charges leveled against her lacked particularity.
Apart from chronic absenteeism and habitual tardiness, petitioner was also made to
answer for loitering and wasting of company time, getting salary of an absent employee
without acknowledging or signing for it and disobedience and insubordination. [18] Thus,
the Labor Arbiter found that actually petitioner tried to submit her explanation on
August 11, 1994 or within the two-day period given her, but private respondents
prevented her from doing so by instructing their staff not to accept complainants
explanation, which was the reason why her explanation was submitted a day later.
what would qualify as sufficient or ample opportunity, as required by law, would be every kind of
assistance that management must accord to the employee to enable him to prepare adequately for his
defense. In the case at bar, private respondents cannot be gainsaid to have given petitioner the ample
opportunity to answer the charges leveled against her.
LETRAN CALAMBA F%ACULTY and EMPLOYEES ASSOCIATION,
Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
COLEGIO DE SAN JUAN DE LETRAN CALAMBA, INC.
FACTS: On October 8, 1992, the Letran Calamba Faculty and Employees
Association (petitioner) filed with Regional Arbitration Branch No. IV of the National
Labor Relations Commission (NLRC) a Complaint against Colegio de San Juan de
Letran, Calamba, Inc. (respondent) for collection of various monetary claims due its
members. Subsequently, these three cases were consolidated.

The Labor Arbiter (LA) dismissed both the money claims of the petitioners and the
petition to declare strike illegal filed by respondent. Both parties appealed to the
NLRC and CA who both affirmed the decision of LA.

Petitioner’s Contention: Since the pay for excess loads or overloads does not
fall under any of the enumerated exclusions in the computation of basic pay of an
employee (such as cash equivalents of unused vacation and sick leave credits,
overtime, premium, night differential, holiday pay and cost-of-living allowances); and
considering that the said overloads are being performed within the normal working
period of eight hours a day, it only follows that the overloads should be included in
the computation of the faculty members’ 13th-month pay.

Respondent’s Contention: Contrary to the asseveration of petitioner, prior to

the issuance of the DOLE Order, the prevailing rule is to exclude excess teaching
load, which is akin to overtime, in the computation of a teacher’s basic salary and,
ultimately, in the computation of his 13th-month pay.

ISSUE: Whether or not an overload must be included for the purposes of computing
the 13th month pay of a teacher.

RULING: NO. An overload pay, owing to its very nature and definition, may not
be considered as part of a teacher’s regular or basic salary, because it is being paid for
additional work performed in excess of the regular teaching load.
Overload work” is sometimes misunderstood as synonymous to “overtime work” as
this term is used and understood in the Labor Code. These two terms are not the same
because overtime work is work rendered in excess of normal working hours of eight
in a day (Art. 87, Labor Code). Considering that overload work may be performed
either within or outside eight hours in a day, overload work may or may not be
overtime work.

Any teaching load in excess of the normal or regular teaching load shall be considered
as overload and does not form part of the regular or basic pay.
In accordance with Article 83 of the Labor Code of the Philippines, as amended, the
normal hours of work of school academic personnel shall not exceed eight (8) hours a
day. Any work done in addition to the eight (8) hours daily work
shall constitute overtime work.

Under the Labor Code of the Philippines. To cite a few provisions:

“Art. 87 – Overtime work. Work may be performed beyond eight

(8) hours a day provided that the employee is paid for the overtime
work, additional compensation equivalent to his regular wage plus
at least twenty-five (25%) percent thereof.”

It is clear that overtime pay is an additional compensation other than and

added to the regular wage or basic salary, for reason of which such is categorically
excluded from the definition of basic salary under the Supplementary Rules and
Regulations Implementing Presidential Decree 851.

Similarly, even if an overload is performed within the normal eight-hour working day,
an overload is still an additional or extra teaching work which is performed after the
regular teaching load has been completed. Hence, any pay given as compensation for
such additional work should be considered as extra and not deemed as part of the
regular or basic salary.
SINGER SEWING MACHINE COMPANY, petitioner
vs.
HON. FRANKLIN M. DRILON, MED-ARBITER FELIX B. CHAGUILE, JR., and SINGER MACHINE
COLLECTORS UNION-BAGUIO (SIMACUB)

FACTS:
SIMACUB filed a petition for direct certification as the sole and exclusive bargaining agent of all
collectors of the Singer Sewing Machine Company, Baguio City

SS machine opposed because union members are not employees but are independent
contractors evidenced by the collection agency agreement they signed.
Med-arbiter ruled that there exists an er-ee relationship and granted the certification
election which was affirmed hy Drilon. The company files the present petition on
determination of relationship. The union insists that the provisions of the Collection
Agreement belie the company’s position that the union members are independent
contractors.
ISSUE:
Whether there is er-ee relationship.
RULING:
NONE. If the union members are not employees, no right to organize for the purpose
of bargaining or as a bargain agent cannot br recognized.
The ff. Elements are generally considered in determination of the relationship:
selection and engagement of ees, payment of wages, power of dismissal and power to
control ees conduct.
The nature of relationship between a comppany and its collecting agents
depends on the circumstances of each particular relationship. Not all
collecting agents are employees and neither aree all collecting agents
independent contractors. The agreement confirms the status of the collecting
agents as inndepemdent contractor. The requirement that collection agents
utilize only receipt forms and reports forms issued bynthe company and that
reports shall be submitted at least once a week is not necessarily an indication
of control over the means by which the job collection is to be performed. Even
if report requirements are to be called cont4ol measures, any control is only
with respect to the end result of the collection since the requirements regulate
he things to be done after the performance of the collection job or the
rendition of service.
The plain language of the agreement reveals that the designation as collection
agent does not create an employment relationship and that the applicant to be
considered at all times as an independent contractor.
Since the private respondents are not employees of the company, they are not
entitled to the constitutional right to form or join a lanor organization for the
purposes of collective bargaining. There is no constitutional and legal basis for
their union to be granted their petition for direct certification.
Manila golf and country club inc. V. IAC
FACTS:
The caddies of manila golf country club petitioned with Social Security
Commission (SSC) for coverage and availment of benefits under the Social
Security Act as amended.
MGC had not registered them as employed with the sss based on the absence
of two elements: (1) payment of wages (paid by golf players themselves and
not by the respondent club); and (2) control and supervission over them,
(manner in which they performed work).
SSC dismissed their petition, thus they appealed to IAC. IAC declaed that er1-
ee relationship and Fermin Llamar passed the so-called “control test” 24-hour
rules and regulations, group rotation system, club’s “suggesting” the rate of
fees payable to the caddies.
ISSUES:
Whether caddies are employees of manila golf and cohntry club.

RULING:
NO. 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.
ENCYCLOPEDIA BRITANNICA INC vs NLRC Case Digest
ENCYCLOPEDIA BRITANNICA (Philippines), INC. vs. NLRC

264 SCRA 4

Facts: Limjoco was a Sales Divison of Encyclopaedia Britannica and was in charge of selling the
products through some sales representatives. As compensation, he would receive commissions from
the products sold by his agents. He was also allowed to use the petitioner’s name, goodwill and logo.
It was agreed that office expenses would be deducted from Limjoco’s commissions.

In 1974, Limjoco resigned to pursue his private business and filed a complaint against petitioner for
alleged non-payment of separation pay and other benefits and also illegal deduction from sales
commissions. Petitioner alleged that Limjoco was not an employee of the company but an independent
dealer authorized to promote and sell its products and in return, received commissions therein.
Petitioner also claims that it had no control and supervision over the complainant as to the manners
and means he conducted his business operations. Limjoco maintained otherwise. He alleged he was
hired by the petitioner and was assigned in the sales department.

The Labor Arbiter ruled that Limjoco was an employee of the company. NLRC also affirmed the
decision and opined that there was no evidence supporting allegation that Limjoco was an independent
contractor or dealer.

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

Ruling: There was no employee-employer relationship. In determining the relationship, the following
elements must be present: selection and engagement of the employee, payment of wages, power of
dismissal and power to control the employee’s conduct. The power of control is commonly regarded
as the most crucial and determinative indicator of the presence or absence of an employee-employer
relationship. Under the control test, an employee-employer relationship exists where the person for
whom the services are performed reserves a right to control not only the end to be achieved, but also
the manner and means to be employed in reaching that end.

The issuance of guidelines by the petitioner was merely guidelines on company policies which sales
managers follow and impose on their respective agents. Limjoco was not an employee of the company
since he had the free rein in the means and methods for conducting the marketing operations. He was
merely an agent or an independent dealer of the petitioner. He was free to conduct his work and he
was free to engage in other means of livelihood.

In ascertaining the employee-employer relationship, the factual circumstances must be considered.

The element of control is absent 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 in turn is compensated in
according to the result of his efforts and not the amount thereof. Hence, there was no employee-
employer relationship
380 SCRA 467

Facts: Petitioner Erlinda Ramos was advised to undergo an operation for the removal of her stone in
the gall bladder. She was referred to Dr. Hosaka, a surgeon, who agreed to do the operation. The
operation was scheduled on June 17, 1985 in the De los Santos Medical Center. Erlinda was admitted
to the medical center the day before the operation. On the following day, she was ready for operation
as early as 7:30 am. Around 9:30, Dr. Hosaka has not yet arrived. By 10 am, Rogelio wanted to pull
out his wife from the operating room. Dr. Hosaka finally arrived at 12:10 pm more than 3 hours of the
scheduled operation.

Dr. Guiterres tried to intubate Erlinda. The nail beds of Erlinda were bluish discoloration in her left
hand. At 3 pm, Erlinda was being wheeled to the Intensive care Unit and stayed there for a month.
Since the ill-fated operation, Erlinda remained in comatose condition until she died.

The family of Ramos sued them for damages.

Issue: Whether or not there was an employee-employer relationship that existed between the medical
center and Drs. Hosaka and Guiterrez.

Ruling: Private Hospitals hire, fire and exercise real control over their attending and visiting consultant
staff. While consultants are not technically employees, the control exercised, the hiring and the right
to terminate consultants fulfill the hallmarks of an employer-employee relationship with the exception
of payment of wages. The control test is determining.

In applying the four fold test, DLSMC cannot be considered an employer of the respondent doctors. It
has been consistently held that in determining whether an employer-employee relationship exists
between the parties, the following elements must be present: (1) selection and engagement of
services; (2) payment of wages; (3) the power to hire and fire; and (4) the power to control not only
the end to be achieved, but the means to be used in reaching such an end.

The hospital does not hire consultants but it accredits and grants him the privilege of maintaining a
clinic and/or admitting patients. It is the patient who pays the consultants. The hospital cannot dismiss
the consultant but he may lose his privileges granted by the hospital. The hospital’s obligation is limited
to providing the patient with the preferred room accommodation and other things that will ensure that
the doctor’s orders are carried out.

The court finds that there is no employer-employee relationship between the doctors and the hospital.
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.
ANGELITO LAZARO vs. SOCIAL SECURITY COMMISSION
435 SCRA 472 (2004)

Facts: Respondent Rosalina M. Laudato filed a petition before the SSC for social security coverage
and remittance of unpaid monthly social security contributions against her three (3) employers. Among
the respondents was herein petitioner Angelito L. Lazaro, proprietor of Royal Star Marketing (“Royal
Star”), which is engaged in the business of selling home appliances.

Lazaro denied that Laudato was an employee but instead claimed that she was an agent of the
company. Lazaro also maintained that she was not mandated to work of definite work hours and thus
not deemed to be a regular employee of Royal Star Marketing, the company of Lazaro.

SSC promulgated a decision rendering that Laudato is a regular employee of Royal Star Marketing
and entitled to social security contributions. Lazaro filed a petition for review before the CA where CA
ruled that Laudato was an employee of Royal Star Marketing. This petition before the Court assails
same arguments raised by Lazaro in SSC. She raised that Laudato was not an employee of Royal
Star Marketing since Royal Star had no control over the activities of Laudato.

Issue: Whether or not Laudato was a regular employee of Royal Star Marketing and thus, entitled to
social security contributions.

Ruling: It is an accepted doctrine that for the purposes of coverage under the Social Security Act, the
determination of employer-employee relationship warrants the application of the “control test,” that is,
whether the employer controls or has reserved the right to control the employee, not only as to the
result of the work done, but also as to the means and methods by which the same is accomplished.

The SSC, applying the control test found that Laudato was an employee of Royal Star. The Court
agrees with the findings of the SSC and the CA. The fact that Laudato was paid by way of commission
does not preclude the establishment of an employer-employee relationship.

In the case of Grepalife v. Judico, the Court upheld the existence of an employer-employee
relationship between the insurance company and its agents, despite the fact that the compensation
that the agents on commission received was not paid by the company but by the investor or the person
insured. The relevant factor remains, as stated earlier, whether the "employer" controls or has
reserved the right to control the "employee" not only as to the result of the work to be done but also
as to the means and methods by which the same is to be accomplished.

Neither does it follow that a person who does not observe normal hours of work cannot be deemed an
employee.
In the case of Cosmopolitan Funeral Homes, Inc. v. Maalat, the employer similarly denied the
existence of an employer-employee relationship, as the claimant according to it, was a “supervisor on
commission basis” who did not observe normal hours of work. This Court declared that there was an
employer-employee relationship, noting that “[the] supervisor, although compensated on commission
basis, [is] exempt from the observance of normal hours of work for his compensation is measured by
the number of sales he makes.”
ABS-CBN BROADCASTING CORPORATION vs. MARLYN NAZARENO et al.
G.R. No. 164156
September 26, 2006

Facts: Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting

business and owns a network of television and radio stations, whose operations revolve around the
broadcast, transmission, and relay of telecommunication signals. It sells and deals in or otherwise
utilizes the airtime it generates from its radio and television operations. It has a franchise as a
broadcasting company, and was likewise issued a license and authority to operate by the National
Telecommunications Commission.

Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants
(PAs) on different dates. They were assigned at the news and public affairs, for various radio programs
in the Cebu Broadcasting Station. On December 19, 1996, petitioner and the ABS-CBN Rank-and-
File Employees executed a Collective Bargaining Agreement (CBA) to be effective during the period
from December 11, 1996 to December 11, 1999. However, since petitioner refused to recognize PAs
as part of the bargaining unit, respondents were not included to the CBA.

On October 12, 2000, respondents filed a Complaint for Recognition of Regular Employment Status,
Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay,
and 13th Month Pay with Damages against the petitioner before the NLRC. The Labor Arbiter rendered
judgment in favor of the respondents, and declared that they were regular employees of petitioner as
such, they were awarded monetary benefits. NLRC affirmed the decision of the Labor Arbiter.
Petitioner filed a motion for reconsideration but CA dismissed it.

Issue: Whether or not the respondents were considered regular employees of ABS-CBN.

Ruling: The respondents are regular employees of ABS-CBN. It was held that where a person has
rendered at least one year of service, regardless of the nature of the activity performed, or where the
work is continuous or intermittent, the employment is considered regular as long as the activity exists,
the reason being that a customary appointment is not indispensable before one may be formally
declared as having attained regular status.

In Universal Robina Corporation v. Catapang, the Court states that the primary standard, therefore, of
determining regular employment is the reasonable connection between the particular activity
performed by the employee in relation to the usual trade or business of the employer. The test is
whether the former is usually necessary or desirable in the usual business or trade of the employer.
The connection can be determined by considering the nature of work performed and its relation to the
scheme of the particular business or trade in its entirety. Also, if the employee has been performing
the job for at least a year, even if the performance is not continuous and merely intermittent, the law
deems repeated and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is considered regular, but only
with respect to such activity and while such activity exists.

Additionally, respondents cannot be considered as project or program employees because no

evidence was presented to show that the duration and scope of the project were determined or
specified at the time of their engagement. In the case at bar, however, the employer-employee
relationship between petitioner and respondents has been proven. In the selection and engagement
of respondents, no peculiar or unique skill, talent or celebrity status was required from them because
they were merely hired through petitioner’s personnel department just like any ordinary employee.
Respondents did not have the power to bargain for huge talent fees, a circumstance negating
independent contractual relationship. Respondents are highly dependent on the petitioner for
continued work. The degree of control and supervision exercised by petitioner over respondents
through its supervisors negates the allegation that respondents are independent contractors.

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, does not furnish an independent business or
professional service, such work is a regular employment of such employee and not an independent
contractor. As regular employees, respondents are entitled to the benefits granted to all other regular
employees of petitioner under the CBA . Besides, only talent-artists were excluded from the CBA and
not production assistants who are regular employees of the respondents. Moreover, under Article 1702
of the New Civil Code: “In case of doubt, all labor legislation and all labor contracts shall be construed
in favor of the safety and decent living of the laborer.”