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LEGEND HOTEL (MANILA) v.

HERNANI REALUYO - Petitioner’s control was demonstrated by the following:


Inherent Inequality in the employer-employee relations | 18 July 2012 | J. Bersamin a. resp. could not choose time and place of his performance
b. resp. was required to perform only Tagalog songs or to wear Tagalog to conform to
Nature of Case: Appeal the hotel’s motif
Digest maker: Africa c. resp. was subjected to the rules on employees’ representation check and chits, a
privilege granted to other employees.
SUMMARY: Roa was dismissed for his services as pianist at the Legendary Hotel’s Tanglaw
- Petitioner could not seek refuge behind the service contract entered into with respondent. It
Restaurant as part of the latter’s cost-cutting measure. The Court held that the employer-
is the law that defines and governs an employment relationship, whose terms are not
employee relationship was manifested by the evident power of the employer to control the
restricted to those fixed in the written contract, for other factors, like the nature of the work
work of the employee. There was also no valid reason for dismissal as the hotel failed to
the employee has been called upon to perform, are also considered.
prove the losses of its business operation.

2. WON Roa was illegally terminated. — YES


DOCTRINE: The power of the employer to control the work of the employee is considered
- Retrenchment is a management prerogative resorted to by employers to avoid or minimize
the most significant determinant of the existence of an employer-employee relationship. This
business losses.
test whether the person for whom the services are performed reserves the right to control
- For retrenchment to be justified, the following stands should be met:
both the end achieved and the manner and means used to achieve that end.
a. The expected losses should be substantial and not merely de minimis in extent;
b. The substantial losses apprehended must be reasonably imminent;
FACTS: c. The retrenchment must be reasonably necessary and likely to effectively prevent the
1. Realuyo, whose stage name was Joey R. Roa, averred that he had worked as a pianist at the expected losses; and
Legendary Hotel’s Tanglaw Restaurant from 7pm to 10pm 3-6 times/week with an initial d. The alleged losses, if already incurred, and the expected imminent losses sought to be
rate of Php400/night, which was initially increased to Php750/night. forestalled must be proved by sufficient and convincing evidence.
2. On 9 July 1999, as part of the hotel’s cost-cutting measure, the management notified him - Furthermore, the burden of proving that the dismissal was for a valid or authorized cause
that his services as a pianist were no longer required. rests upon the employer.
3. Realuyo then filed a complaint for alleged unfair labor practice, constructive illegal - In this case, petitioner did not submit evidence of the losses to its business operations and
dismissal, and the underpayment/nonpayment of his premium pay for holidays, the economic havoc it would thereby imminently sustain. It only claimed that respondent’s
separation pay, service incentive leave pay, and 13th month pay. termination was due to its “present business/financial condition. Therefore, there was no
4. This was dismissed by the Labor Arbiter, a decision affirmed by the National labor valid cause for the retrenchment of respondent.
Relations Commission. However, this was set aside by the CA, hence this appeal.
5. Legend Hotel contends that the court erred in ruling that an employer-employee
relationship exists between the hotel and Roa and that the termination is illegal. RULING: CA ruling affirmed, subject to the modification that should reinstatement be no
longer feasible, petitioner shall pay to respondent separation pay of one month for every year
ISSUE/S & RATIO: of service computed from September 1992 until the finality of this decision, and full backwages
1. WON an employer-employee relationship exists between the hotel and Roa. — YES from the time his compensation was withheld until the finality of this decision.
- The factors that determine the issue include who has the power to select the employee, who
pays the employee’s wages, who has the power to dismiss the employee, and who exercises
control of the methods and results by which the work of the employee is accomplished.
- Of these factors, 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 test 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.
- Petitioner argued that it has no control as the respondent could beg off from his nightly
performance, and that he had the prerogative to choose the musical arrangement. The Court
disagrees.

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