Factors/Tests – Employer/Employee Relationship

G.R. No. 199166

Begino v. ABS-CBN Corporation
Perez, J.

Summarized by Lulu Querido

ABS-CBN hired the petitioners as cameramen/editors and reporters for TV Patrol Bicol
Program under Talent Contracts. Petitioners were required to follow ABS-CBN’s policies, were
given schedules that they have to follow, and were disallowed from engaging in any similar work
with ABS-CBN’s competitors. Petitioners filed for claims and argued that they were regular
employees. ABS-CBN argued that they were merely independent contractors. LA and NLRC both
ruled that they were regular employees, which was reversed by CA. SC ruled that they were
regular employees, despite the name of the contract, because of the degree of control ABS-CBN
had over the petitioners.

IMPORTANT PEOPLE
Petitioners: Nelson Begino, Gener Del Valle, Ma. Cristina Sumayao, Monina Avila-Llorin
Labor Arbiter Jesus Orlando Quiñones

FACTS
1. Petitioners were hired by Amalia Villafuerte as ABS-CBN’s regional manager of its
Regional Network Group in Naga City, Bicol.
2. They were hired as cameramen/editors and as reporters for TV Patrol Bicol Program.
3. It was provided in their Talent Contracts that:
a. Contracts are renewable, ranging from every 3 months to 1 year;
b. Petitioners have to follow the polices, standards, and guidelines of ABS-CBN;
c. They are not allowed to work for or engage in similar work with ABS-CBN’s
competitors;
d. They will be provided with Project Assignment Forms, which will state the
duration of a project and its budget; and
e. Nothing in the contract shall be construed to establish an employer-
employee relationship.
4. Petitioners filed claims for regularization, underpayment of overtime pay, holiday pay,
13th month pay, service incentive leave pay, damages and atty.’s fees with NLRC (1st
complaint). They argued that were considered as regular employees (despite the fact
their contracts are labeled as Talent Contracts) as evidenced by:
a. Have to wear company IDs
b. ABS-CBN provided all the equipment needed
c. ABS-CBN had direct control and supervision over them – told them what news
to be covered, what routes to take, when to start their workday
d. Subject to annual competency assessment.
5. Respondents argued that petitioners’ weren’t regular employees, but were
independent contracts because:

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 a. Main business of ABS-CBN is to broadcast TV and radio content, not generate
programs;
b. ABS-CBN can’t afford to provide regular work for talents on a per project,
weekly, or daily basis
c. Petitioners were hired as talents for their skills, knowledge or expertise.
d. Petitioners were never subjected to any control or restrictions on the means
and methods by which to perform their tasks – limited to general guidelines on
conduct and performance to uphold the company’s standards.
6. During the pendency of the 1st complaint, petitioners were terminated.
7. Petitioners filed another complaint for regularization, payment of labor standard
benefits, illegal dismissal and unfair labor practice (2nd complaint).
a. Dismissed because it violated rules against forum shopping and issues of the
2nd complaint hinged on the decision of the 1st complaint.
8. Labor Arbiter Jesus Orlando Quiñones ruled on the 1st complaint that petitioners were
regular employees as seen in the exclusivity and prohibition clauses under their Talent
Contracts (see fact #3c). He also ordered respondents to:
a. Pay for P2, 440, 908.36, which represented the salaries/wage differentials,
holiday pay, service incentive leave pay, and 13th month pay, including atty’s
fees.
b. Admit petitioners back to work OR reinstate in the payroll.
9. Respondents appealed to NLRC.
10. During the pendency of said appeal, petitioners filed another complaint for illegal
dismissal, regularization, non-payment of salaries and 13th month pay, unfair labor
practice, damages and atty.’s fees (3rd complaint)
11. NLRC didn’t rule on 3rd complaint, but on the appeal. It affirmed LA’s decision.
12. Respondents appealed with a Rule 65 petition for certiorari to CA.
13. CA reversed the rulings of LA and NLRC because:
a. Petitioners were engaged as talents for specific projects as seen in their Talent
Contracts/Project Assignment Forms;
b. They were paid in talent fees from the budget allocated to the program;
c. ABS-CBN did not exercise any control over the manner and method of the
performance of petitioners’ jobs; merely compliance with company standards.
14. After petitioners’ MR was dismissed, they filed a Rule 45 petition for review on
certiorari with SC.

ISSUE with HOLDING

1. WON CA erred in not dismissing respondent’s Rule 65 Petition for certiorari when the
latter didn’t file a notice of appeal with NLRC and didn’t verify and certify the
memorandum of appeal – NO.

Petitioners belatedly brought up this issue before the CA and SC, therefore they’re not
in the proper position to assail it. Also, the Court has adopted a liberal interpretation of
procedural rules on appeal if it favors the interest of substantive justice.

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 2. WON Petitioners are regular employees – YES.

To determine the existence of an employer-employee relationship, the Court applies

the four-fold test:
a) Selection and engagement of the employee
b) Payment of wages
c) Power of dismissal
d) Employer’s power to control the employee on the means and methods by which
the work is accomplished (aka control test).

The control test is the most crucial and determinative indicator of the
presence/absence of said relationship. The control test involves the employer having
the right to control the end result and the manner and means to be used to achieve
such result.

In disputing the argument that petitioners were independent contractors because they
were employed under Talent Contracts, SC discussed the 4 kinds of employees under
Art. 280 of the Labor Code1. Jurisprudence also added contractual or fixed term
employees, which if not for the fixed term, they would be considered regular
employees.

Just because the petitioners were hired under Talent Contracts (with a limited period)
doesn’t necessarily translate to them being independent contractors; it doesn’t prevent
a regular employment status either. SC pointed out that they have struck down
agreements that imposed contractually stipulated periods of employment, which
prevented the employee from acquiring security of tenure.

What controls is if there was a reasonable connection between the activity

performed by the employee in relation to the business/trade of the employer. In this
case, the petitioners were subsequently re-hired throughout the years to provide
their services daily to respondent’s news program. If an employee has been working
for at least one year (even if intermittent), it shall be considered as continuing
performance and sufficient evidence that the work is necessary in the business.

The latter had control and supervision over the former because the latter provided all
the necessary equipment, retained “all creative, administrative, financial and, legal

1 4 kinds of employees according to Art. 280:

1. Regular employees: engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer
2. Project employees: employment is fixed for a specific project
3. Seasonal employees: work is seasonal in nature and is limited to the duration of
the season
4. Casual employees: not any of the 3 mentioned above.

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 control of the program” they were assigned, and required the former to perform their
functions according to their schedules.

DISPOSITIVE PORTION
CA Decision is reversed and set aside. LA and NLRC decisions are reinstated.

DOCTRINE
four-fold test:
a) Selection and engagement of the employee
b) Payment of wages
c) Power of dismissal
d) Employer’s power to control the employee on the means and methods by which the work
is accomplished (aka control test).

The control test involves the employer having the right to control the end result and the manner
and means to be used to achieve such result.

If there was a reasonable connection between the activity performed by the employee in relation
to the business/trade of the employer.

RELEVANCE TO THE LESSON

If an employee has been working for at least one year (even if intermittent), it shall be considered
as continuing performance and sufficient evidence that the work is necessary in the business.

OTHER NOTES
SC commented that Rule 45 is not the proper remedy because said Rule is for question
of law. The question in this case involves a question of fact because it involves conflicting
findings of LA/NLRC and CA.

SC also discussed how Sonza v. ABS-CBN (Court in that case ruled that the existence of
exclusivity clause and prohibitions in Talent Contracts does not determine if there is an
employer-employee relationship) doesn’t apply to this case because both different set of
facts.
a) Petitioners were hired like any ordinary employee while Sonza was a TV/radio
personality.
b) Petitioners didn’t have the power to bargain for their “talent fees”.
c) Respondents can easily discharge the petitioners when the former finds the
latter’s work unsatisfactory.
d) Degree of control and supervision exercised by respondent negates the
allegation that they are independent contractors.