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case. Said musical directors control neither the music to be played, nor the musicians playing it. The
Premier Production did not appeal the decision of the Court en banc (thats why its not one of the
petitioners in the case) film companies summon the musicians to work, through the musical
directors. The film companies, through the musical directors, fix the date, the time and the place of
work. The film companies, not the musical directors, provide the transportation to and from the
studio. The film companies furnish meal at dinner time. It is well settled that "an employeremployee 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 means to be used in reaching such end .
. . ." The decisive nature of said control over the "means to be used", is illustrated in the case of
Gilchrist Timber Co., et al., in which, by reason of said control, the employer-employee relationship
was held to exist between the management and the workers, notwithstanding the intervention of an
alleged independent contractor, who had, and exercise, the power to hire and fire said workers. The
aforementioned control over the means to be used" in reading the desired end is possessed and
exercised by the film companies over the musicians in the cases before us. WHEREFORE, the order
appealed from is hereby affirmed, with costs against petitioners herein. It is so ordered
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. The respondents Nazareno, Gerzon,
Deiparine, and Lerasan as production assistants (PAs) on different dates were employed by the
Petitioner, assigned at the news and public affairs, for various radio programs in the Cebu
Broadcasting Station, with a monthly compensation of P4,000. They were issued ABS-CBN
employees identification cards and were required to work for a minimum of eight hours a day,
including Sundays and holidays. They were under the control and supervision of Assistant Station
Manager Dante J. Luzon, and News Manager Leo Lastimosa.
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
directed the parties to submit their respective position paper however they failed to file their
position papers within the reglementary period, Labor Arbiter Jose G. Gutierrez dismissed the
complaint without prejudice for lack of interest to pursue the case. Respondents received a copy of
the Order on May 16, 2001. Instead of re-filing their complaint with the NLRC within 10 days from
May 16, 2001, they filed, on June 11, 2001, an Earnest Motion to Refile Complaint with Motion to
Admit Position Paper and Motion to Submit Case for Resolution. The Labor Arbiter granted this
motion in an Order dated June 18, 2001, and forthwith admitted the position paper of the
complainants.
On July 30, 2001, 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. On
appeal to the NLRC, it ruled that respondents were entitled to the benefits under the CBA because
they were regular employees who contributed to the profits of petitioner through their
labor. Petitioner thus filed a petition for certiorari under Rule 65 of the Rules of Court before the CA,
raising both procedural and substantive issues. CA Affirmed the ruling of the NLRC.
ISSUE
Whether the appellate court committed palpable and serious error of law when it affirmed the
rulings of the NLRC, and entertained respondents appeal from the decision of the Labor Arbiter
despite the admitted lapse of the reglementary period within which to perfect the appeal.
HELD
We agree with petitioners contention that the perfection of an appeal within the statutory or
reglementary period is not only mandatory, but also jurisdictional; failure to do so renders the
assailed decision final and executory and deprives the appellate court or body of the legal authority
to alter the final judgment, much less entertain the appeal. However, this Court has time and again
ruled that in exceptional cases, a belated appeal may be given due course if greater injustice may
occur if an appeal is not given due course than if the reglementary period to appeal were strictly
followed. The Court resorted to this extraordinary measure even at the expense of sacrificing order
and efficiency if only to serve the greater principles of substantial justice and equity.
In the case at bar, the NLRC did not commit a grave abuse of its discretion in giving Article 223 of the
Labor Code a liberal application to prevent the miscarriage of justice. Technicality should not be
allowed to stand in the way of equitably and completely resolving the rights and obligations of the
parties. We have held in a catena of cases that technical rules are not binding in labor cases and are
not to be applied strictly if the result would be detrimental to the workingman.
On December 14, 2000, private respondent Galera was verbally informed by Steedman that her
employment had been terminated. She received her termination letter the following day. Her
termination prompted Galera to commence a complaint for illegal dismissal before the labor arbiter.
The labor arbiter found WPP, Steedman, Webster, and Lansang liable for illegal dismissal and
damages. Furthermore the labor arbiter stated that Galera was not only illegally dismissed but was
also not accorded due process, saying that Galera was not given an opportunity by WPP to defend
herself and explain her side. Thus, WPP did not observe both substantive and procedural due
process in terminating Galeras employment. The labor arbiter ordered WPP to reinstate Galera and
to pay her backwages, transportation and housing benefits, and moral and exemplary damages,
among others.
On appeal, the NLRC reversed the labor arbiters ruling. The NLRC ruled that Galera was WPPs VicePresident, and therefore, a corporate officer at the time she was removed by the Board of Directors
on 14 December 2000. The NLRC ruled that the labor arbiter had no jurisdiction over the case
because being a corporate officer, a case arising from her termination is considered as an intracorporate dispute, which was cognizable by the Securities and Exchange Commission under P.D. 902A (but now by the Regional Trial Courts designated as Commercial Courts by the Supreme Court
pursuant to Section 5.2 of RA No.8799).
The Court of Appeals reversed the NLRC. It ruled that Galeras appointment by the Board of
Directors of the WPP as Vice President for Media had no legal effect as WPPs by-laws provided for
only one Vice-President, which at that time was occupied. Furthermore, WPPs by-laws did not
include a managing director as among its corporate officers. The Court of Appeals ordered WPP to
pay Galera backwages and separation pay, as well as housing benefits, moral and exemplary
damages, and attorneys fees, among others.
The case was subsequently elevated to the Supreme Court.
Issues:
1. Is Galera an employee or a corporate officer of WPP?
2. Did the labor arbiter have jurisdiction over the case?
3. Was Galera illegally dismissed?
4. Is Galera entitled to collect the award of backwages and damages even if she did not have an
alien employment permit when she commenced her employment in the Philippines?
Vice-President in the person of Webster. Galera cannot be said to be a director of WPP also because
all five directorship positions provided in the by-laws are already occupied.
The appellate court further justified that Galera was an employee and not a corporate officer by
subjecting WPP and Galeras relationship to the four-fold test: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power
to control the employee with respect to the means and methods by which the work is to be
accomplished. The appellate court found that Sections 1 and 4 of the employment contract mandate
where and how often she is to perform her work; Sections 3, 5, 6 and 7 show that wages she
receives are completely controlled by WPP; and Sections 10 and 11 clearly state that she is subject
to the regular disciplinary procedures of WPP.
(Second Issue):
The Labor Arbiter had jurisdiction over the illegal dismissal complaint filed by Galera. Galera being an
employee, the Labor Arbiter and the NLRC had jurisdiction over her illegal dismissal complaint.
Article 217 of the Labor Code vests the Labor Arbiter with the jurisdiction to hear and decide, among
others termination disputes, involving workers, whether agricultural or non-agricultural.
(Third Issue):
Yes, WPPs dismissal of Galera lacked both substantive and procedural due process.
WPP failed to prove any just or authorized cause for Galeras dismissal. WPP was unable to
substantiate the allegations of Steedmans December 15, 2000 letter to Galera, (questioning her
leadership and competence). Galera, on the other hand, presented documentary evidence in the
form of congratulatory letters, including one from Steedman, which contents are diametrically
opposed to the December 15, 2000 letter. Also, the law requires that the employer must furnish the
worker sought to be dismissed with two written notices before termination of employment can be
legally effected: (1) notice which apprises the employee of the particular acts or omissions for which
his dismissal is sought; and (2) the subsequent notice which informs the employee of the employers
decision to dismiss him. Failure to comply with the requirements taints the dismissal with illegality.
WPPs acts clearly show that Galeras dismissal did not comply with the two-notice rule.
(Fourth Issue):
No, Galera could not claim the employees benefits she is entitled under Philippine Labor Laws. The
law and the rules are consistent in stating that the employment permit must be acquired prior to
employment. Article 40 of the Labor Code states: "Any alien seeking admission to the Philippines for
employment purposes and any domestic or foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment permit from the Department of Labor.
Section 4, Rule XIV, Book 1 of the Implementing Rules and Regulations provides, among others, that
if an alien enters the country under a non-working visa and wishes to be employed thereafter, he
may only be allowed to be employed upon presentation of a duly approved employment permit.
Galera cannot come to this Court with unclean hands. To grant Galeras prayer is to sanction the
violation of the Philippine labor laws requiring aliens to secure work permits before their
employment. We hold that the status quo must prevail in the present case and we leave the parties
where they are. This ruling, however, does not bar Galera from seeking relief from other
jurisdictions.
Directors, and therefore, she could not have been a WPP corporate officer as only the WPP Board of
Directors could appoint and terminate its own corporate officer.
Maraguinot v. NLRC
FACTS:
Petitioner maintains that he was employed by respondents as part of the filming crew. He was
laterpromoted as an electrician. Petitioners tasks contained of loading movie equipment in the
shoothing area.Petitioners sought the assistance of their supervisor, Cesario, to facilitate their
request that respondents adjusttheir salary in accordance with the minimum wage law. Mrs. Cesario
informed petitioners that del Rosario wouldagree to increase their salary only if they signed a blank
employment contract. As petitioner refused to sign,respondents forced Enero (the other petitioner
who worked as a crew member) to go on leave. However, when hereported to work, respondent
refused to take him back. Maraguinot was dropped from the company payroll butwhen he returned,
he was again asked to sign a blank employment contract, and when he still refused,respondents
terminated his services. Petitioners thus sued for illegal dismissal.Private respondents assert that
they contract persons called producers to produce or make movies forprivate respondents and
contend that petitioners are project employees of the associate producers, who act asindependent
contractors. Thus, there is no ER-EE relationship.However, petitioners cited that their performance
of activities is necessary in the usual trade or business of respondents and their work in continuous.
ISSUE:
W/N ER-EE relationship exists
HELD:
Yes.With regards to VIVAs contention that it does not make movies but merely distributes motion
pictures,there is no sufficient proof to prove this contention.In respect to respondents allegation
that petitioners are project employees, it is a settled rule that thecontracting out of labor is allowed
only in case of job contracting. However, assuming that the associate producersare job contactors,
they must then be engaged in the business of making motion pictures. Associate producersmust
have tools necessary to make motion pictures. However, the associate producers in this case have
none of these. The movie-making equipment are supplied to the producers and owned by VIVA.
Thus, it is clear that theassociate producer merely leases the equipment from VIVA.In addition, the
associate producers of VIVA cannot be considered labor-only contractors as they did notsupply,
recruit nor hire the workers. It was Cesario, the Shooting Supervisor of VIVA, who recruited crew
members. Thus, the relationship between VIVA and its producers or associate producers seems to be
that of agency.With regards to the issue of illegal dismissal, petitioners assert that they were regular
employees who wereillegally dismissed. Petitioners in this case had already attained the status of
regular employees in view of VIVAsconduct. Thus, petitioners are entitled to back wages.A project
employee or a member of a work pool may acquire the status of a regular employee when:a.there is
a continuous rehiring of project employees even after a cessation of projectb.the tasks performed by
the alleged project employee are vital and necessary to the business of employer The tasks of
petitioners in loading movie equipment and returning it to VIVAs warehouse and fixing thelighting
system were vital, necessary and indispensable to the usual business or trade of the
employer.Wherefore, petition is granted.
JOSE SONZA vs. ABS-CBN BROADCASTING CORPORATIONG.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 andP317, 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 feesbut
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 employeeemployerrelationship 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.