Republic of the Philippines

Supreme Court
Baguio City
SECOND DIVISION
LEYTE GEOTHERMAL POWER
PROGRESSIVE
EMPLOYEES UNIONALU TUCP,
Petitioner,
- versus -

PHILIPPINE NATIONAL OIL

COMPANY ENERGY DEVELOPMENT
CORPORATION,
Respondent.

G.R. No. 170351

Present:
CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
Promulgated:
March 30, 2011

x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:

Under review is the Decision[1] dated June 30, 2005 of the Court of Appeals
(CA) in CA-G.R. SP No. 65760, which dismissed the petition for certiorari filed
by petitioner Leyte Geothermal Power Progressive Employees Union
ALUTUCP (petitioner Union) to annul and set aside the decision [2] dated
December 10, 1999 of the National Labor Relations Commission (NLRC) in
NLRC Certified Case No. V-02-99.

The facts, fairly summarized by the CA, follow.

[Respondent Philippine National Oil Corporation]-Energy Development
Corporation [PNOC-EDC] is a government-owned and controlled corporation
engaged in exploration, development, utilization, generation and distribution of
energy resources like geothermal energy.
Petitioner is a legitimate labor organization, duly registered with the Department
of Labor and Employment (DOLE) Regional Office No. VIII, TaclobanCity.
Among [respondents] geothermal projects is the Leyte Geothermal Power Project
located at the Greater Tongonan Geothermal Reservation in Leyte. The said
Project is composed of the Tongonan 1 Geothermal Project (T1GP) and the Leyte
Geothermal Production Field Project (LGPF) which provide the power and
electricity needed not only in the provinces and cities of Central and Eastern
Visayas (Region VII and VIII), but also in the island of Luzon as well. Thus, the
[respondent] hired and employed hundreds of employees on a contractual basis,
whereby, their employment was only good up to the completion or termination of
the project and would automatically expire upon the completion of such project.
Majority of the employees hired by [respondent] in its Leyte Geothermal Power
Projects had become members of petitioner. In view of that circumstance, the
petitioner demands from the [respondent] for recognition of it as the collective
bargaining agent of said employees and for a CBA negotiation with it. However,
the [respondent] did not heed such demands of the petitioner. Sometime in 1998
when the project was about to be completed, the [respondent] proceeded to serve
Notices of Termination of Employment upon the employees who are members of
the petitioner.
On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against
the [respondent] on the ground of purported commission by the latter of unfair
labor practice for refusal to bargain collectively, union busting and mass
termination. On the same day, the petitioner declared a strike and staged such
strike.
To avert any work stoppage, then Secretary of Labor Bienvenido E. Laguesma
intervened and issued the Order, dated January 4, 1999, certifying the labor
dispute to the NLRC for compulsory arbitration. Accordingly, all the striking
workers were directed to return to work within twelve (12) hours from receipt of
the Order and for the [respondent] to accept them back under the same terms and
conditions of employment prior to the strike. Further, the parties were directed to
cease and desist from committing any act that would exacerbate the situation.

However, despite earnest efforts on the part of the Secretary of Labor and
Employment to settle the dispute amicably, the petitioner remained adamant and
unreasonable in its position, causing the failure of the negotiation towards a
peaceful compromise. In effect, the petitioner did not abide by [the] assumption
order issued by the Secretary of Labor.
Consequently, on January 15, 1999, the [respondent] filed a Complaint for Strike
Illegality, Declaration of Loss of Employment and Damages at the NLRC-RAB
VIII in Tacloban City and at the same time, filed a Petition for Cancellation of
Petitioners Certificate of Registration with DOLE, Regional Office No. VIII. The
two cases were later on consolidated pursuant to the New NLRC Rules of
Procedure. The consolidated case was docketed as NLRC Certified Case No. V02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99). The
said certified case was indorsed to the NLRC 4th Division in CebuCity on June 21,
1999 for the proper disposition thereof.[3]

In due course, the NLRC 4th Division rendered a decision in favor of respondent, to
wit:
WHEREFORE, based on the foregoing premises, judgment is hereby rendered as
follows:
1. Declaring the officers and members of [petitioner] Union as project
employees;
2. Declaring the termination of their employment by reason of the
completion of the project, or a phase or portion thereof, to which they
were assigned, as valid and legal;
3. Declaring the strike staged and conducted by [petitioner] Union through
its officers and members on December 28, 1998 to January 6, 1999 as
illegal for failure to comply with the mandatory requirements of the
law on strike[;]
4. Declaring all the officers and members of the board of
[petitioner] Union who instigated and spearheaded the illegal strike to
have lost their employment[;]
5. Dismissing the claim of [petitioner] Union against PNOC-EDC for
unfair labor practice for lack of merit[;]
6. Dismissing both parties claims against each other for violation of the
Assumption Order dated January 4, 1999 for lack of factual basis[;]

7. Dismissing all other claims for lack of merit.[4]

Petitioner Union filed a motion for reconsideration of the NLRC decision,

which was subsequently denied. Posthaste, petitioner Union filed a petition
for certiorari before the CA, alleging grave abuse of discretion in the decision of
the NLRC. As previously adverted to, the CA dismissed the petition for certiorari,
thus:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered
by us DISMISSING the Petition. The assailed Decision dated December 10, 1999
of the NLRC 4th Division in NLRC Certified Case No. V-02-99 (NCMB-RAB
VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99) and its Order dated March
30, 2001 are hereby AFFIRMED.
Costs against the Petitioner.[5]

Hence, this appeal by certiorari filed by petitioner Union, positing the following
questions of law:
1. MAY THE HONORABLE COURT OF APPEALS SUSTAIN THE
PROJECT CONTRACTS THAT ARE DESIGNED TO DENY AND DEPRIVE
THE EMPLOYEES THEIR RIGHT TO SECURITY OF TENURE BY MAKING
IT APPEAR THAT THEY ARE MERE PROJECT EMPLOYEES?
2. WHEN THERE ARE NO INTERVALS IN THE EMPLOYEES
CONTRACT, SUCH
THAT THE
SO-CALLED
UNDERTAKING
WAS CONTINUOUS, ARE THE EMPLOYEES PROPERLY TREATED
AS PROJECT EMPLOYEES?
3. MAY THE HONORABLE COURT OF APPEALS IGNORE THE
FIRMS OWN ESTIMATE OF JOB COMPLETION, PROVING THAT THERE
IS STILL 56.25% CIVIL/STRUCTURAL WORK TO BE ACCOMPLISHED,
AND RULE THAT THE EMPLOYEES WERE DISMISSED FOR
COMPLETION [OF] THE PROJECT?
4. MAY A FIRM HIDE UNDER THE SPURIOUS CLOAK OF PROJECT
COMPLETION TO DISMISS EN MASSE THE EMPLOYEES WHO HAVE
ORGANIZED AMONG THEMSELVES A LEGITIMATE LABOR
ORGANIZATION TO PROTECT THEIR RIGHTS?
5. WHEN THERE IS NO STOPPAGE OF WORK, MAY A PROTEST
ACTIVITY BE CONSIDERED AS A STRIKE CONTRARY TO ITS
CONCEPTUAL DEFINITION UNDER ARTICLE 212 (O) OF THE LABOR
CODE OF THE PHILIPPINES?

6. WHEN THE DISMISSAL IS AIMED AT RIDDING THE COMPANY

OF MEMBERS OF THE UNION, IS THIS UNION BUSTING?[6]

Stripped of rhetoric, the issues for our resolution are:

1. Whether the officers and members of petitioner Union are project employees of
respondent; and
2. Whether the officers and members of petitioner Union engaged in an illegal
strike.
On the first issue, petitioner Union contends that its officers and members
performed activities that were usually necessary and desirable to respondents usual
business. In fact, petitioner Union reiterates that its officers and members were
assigned to the Construction Department of respondent as carpenters and masons,
and to other jobs pursuant to civil works, which are usually necessary and desirable
to the department. Petitioner Union likewise points out that there was no interval in
the employment contract of its officers and members, who were all employees of
respondent, which lack of interval, for petitioner Union, manifests that the
undertaking is usually necessary and desirable to the usual trade or business of the
employer.
We cannot subscribe to the view taken by petitioner Union.
The distinction between a regular and a project employment is provided in Article
280, paragraph 1, of the Labor Code:
ART. 280. Regular and Casual Employment. The provisions of written agreement
to the contrary notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the employment has been
fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of

service, whether such service is continuous or broken, shall be considered a

regular employee with respect to the activity in which he is employed and his
employment shall continue while such actually exists.[7]

The foregoing contemplates four (4) kinds of employees: (a) regular employees or
those who have been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer; (b) project employees or
those whose employment has been fixed for a specific project or undertaking[,] the
completion or termination of which has been determined at the time of the
engagement of the employee; (c) seasonal employees or those who work or
perform services which are seasonal in nature, and the employment is for the
duration of the season;[8]and (d) casual employees or those who are not regular,
project, or seasonal employees. Jurisprudence has added a fifth kind a fixed-term
employee.[9]
Article 280 of the Labor Code, as worded, establishes that the nature of the
employment is determined by law, regardless of any contract expressing otherwise.
The supremacy of the law over the nomenclature of the contract and the
stipulations contained therein is to bring to life the policy enshrined in the
Constitution to afford full protection to labor.[10] Thus, labor contracts are placed on
a higher plane than ordinary contracts; these are imbued with public interest and
therefore subject to the police power of the State.[11]
However, notwithstanding the foregoing iterations, project employment
contracts which fix the employment for a specific project or undertaking remain
valid under the law:
x x x By entering into such a contract, an employee is deemed to understand that
his employment is coterminous with the project. He may not expect to be
employed continuously beyond the completion of the project. It is of judicial
notice that project employees engaged for manual services or those for special
skills like those of carpenters or masons, are, as a rule, unschooled. However, this
fact alone is not a valid reason for bestowing special treatment on them or for
invalidating a contract of employment. Project employment contracts are not
lopsided agreements in favor of only one party thereto. The employers interest is
equally important as that of the employee[s] for theirs is the interest that propels
economic activity. While it may be true that it is the employer who drafts project
employment contracts with its business interest as overriding consideration, such

contracts do not, of necessity, prejudice the employee. Neither is the employee

left helpless by a prejudicial employment contract. After all, under the law, the
interest of the worker is paramount.[12]

In the case at bar, the records reveal that the officers and the members of
petitioner Union signed employment contracts indicating the specific project or
phase of work for which they were hired, with a fixed period of employment. The
NLRC correctly disposed of this issue:
A deeper examination also shows that [the individual members of
petitioner Union] indeed signed and accepted the [employment contracts] freely
and voluntarily. No evidence was presented by [petitioner] Union to prove
improper pressure or undue influence when they entered, perfected and
consummated [the employment] contracts. In fact, it was clearly established in the
course of the trial of this case, as explained by no less than the President of
[petitioner] Union, that the contracts of employment were read, comprehended,
and voluntarily accepted by them. x x x.
xxxx
As clearly shown by [petitioner] Unions own admission, both parties had
executed the contracts freely and voluntarily without force, duress or acts tending
to vitiate the worker[s] consent. Thus, we see no reason not to honor and give
effect to the terms and conditions stipulated therein. x x x.[13]

Thus, we are hard pressed to find cause to disturb the findings of the NLRC which
are supported by substantial evidence.
It is well-settled in jurisprudence that factual findings of administrative or quasijudicial bodies, which are deemed to have acquired expertise in matters within
their respective jurisdictions, are generally accorded not only respect but even
finality, and bind the Court when supported by substantial evidence. [14] Rule 133,
Section 5 defines substantial evidence as that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.
Consistent therewith is the doctrine that this Court is not a trier of facts, and
this is strictly adhered to in labor cases. [15] We may take cognizance of and resolve
factual issues, only when the findings of fact and conclusions of law of the Labor
Arbiter or the NLRC are inconsistent with those of the CA.[16]

In the case at bar, both the NLRC and the CA were one in the conclusion that the
officers and the members of petitioner Union were project employees. Nonetheless,
petitioner Union insists that they were regular employees since they performed
work which was usually necessary or desirable to the usual business or trade of
the Construction Department of respondent.
The landmark case of ALU-TUCP v. NLRC[17] instructs on the two (2) categories of
project employees:
It is evidently important to become clear about the meaning and scope of the term
project in the present context. The project for the carrying out of which project
employees are hired would ordinarily have some relationship to the usual business
of the employer. Exceptionally, the project undertaking might not have an
ordinary or normal relationship to the usual business of the employer. In this latter
case, the determination of the scope and parameters of the project becomes fairly
easy. x x x. From the viewpoint, however, of the legal characterization problem
here presented to the Court, there should be no difficulty in designating the
employees who are retained or hired for the purpose of undertaking fish culture or
the production of vegetables as project employees, as distinguished from ordinary
or regular employees, so long as the duration and scope of the project were
determined or specified at the time of engagement of the project employees. For,
as is evident from the provisions of Article 280 of the Labor Code, quoted
earlier, the principal test for determining whether particular employees are
properly characterized as project employees as distinguished from regular
employees, is whether or not the project employees were assigned to carry
out a specific project or undertaking, the duration (and scope) of which were
specified at the time the employees were engaged for that project.
In the realm of business and industry, we note that project could refer to
one or the other of at least two (2) distinguishable types of activities. Firstly, a
project could refer to a particular job or undertaking that is within the regular or
usual business of the employer company, but which is distinct and separate, and
identifiable as such, from the other undertakings of the company. Such job or
undertaking begins and ends at determined or determinable times. The typical
example of this first type of project is a particular construction job or project of a
construction company. A construction company ordinarily carries out two or more
[distinct] identifiable construction projects: e.g., a twenty-five-storey hotel
in Makati; a residential condominium building in BaguioCity; and a domestic air
terminal in Iloilo City. Employees who are hired for the carrying out of one of
these separate projects, the scope and duration of which has been determined and
made known to the employees at the time of employment, are properly treated as
project employees, and their services may be lawfully terminated at completion of
the project.

The term project could also refer to, secondly, a particular job or
undertaking that is not within the regular business of the corporation. Such a job
or undertaking must also be identifiably separate and distinct from the ordinary or
regular business operations of the employer. The job or undertaking also begins
and ends at determined or determinable times.[18]

Plainly, the litmus test to determine whether an individual is a project employee

lies in setting a fixed period of employment involving a specific undertaking which
completion or termination has been determined at the time of the particular
employees engagement.
In this case, as previously adverted to, the officers and the members of petitioner
Union were specifically hired as project employees for respondents Leyte
Geothermal Power Project located at the Greater Tongonan Geothermal
Reservation in Leyte. Consequently, upon the completion of the project or
substantial phase thereof, the officers and the members of petitioner Union could
be validly terminated.
Petitioner Union is adamant, however, that the lack of interval in the
employment contracts of its officer and members negates the latters status
as mere project employees. For petitioner Union, the lack of interval further drives
home its point that its officers and members are regular employees who performed
work which was usually necessary or desirable to the usual business or trade of
respondent.
We are not persuaded.
Petitioner Unions members employment for more than a year does equate to
their regular employment with respondent. In this regard, Mercado, Sr. v.
NLRC[19] illuminates:
The first paragraph [of Article 280 of the Labor Code] answers the question of
who are regular employees. It states that, regardless of any written or oral
agreement to the contrary, an employee is deemed regular where he is engaged in
necessary or desirable activities in the usual business or trade of the
employer, except for project employees.

A project employee has been defined to be one whose employment has been fixed
for a specific project or undertaking, the completion or termination of which has
been determined at the time of the engagement of the employee, or where the
work or service to be performed is seasonal in nature and the employment is for
the duration of the season, as in the present case.
The second paragraph of Art. 280 demarcates as casual employees, all other
employees who do not fall under the definition of the preceding paragraph. The
proviso, in said second paragraph, deems as regular employees those casual
employees who have rendered at least one year of service regardless of the fact
that such service may be continuous or broken.
Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280
is applicable to their case and that the Labor Arbiter should have considered them
regular by virtue of said proviso. The contention is without merit.
The general rule is that the office of a proviso is to qualify or modify only the
phrase immediately preceding it or restrain or limit the generality of the clause
that it immediately follows. Thus, it has been held that a proviso is to be construed
with reference to the immediately preceding part of the provision to which it is
attached, and not to the statute itself or to other sections thereof. The only
exception to this rule is where the clear legislative intent is to restrain or qualify
not only the phrase immediately preceding it (the proviso) but also earlier
provisions of the statute or even the statute itself as a whole.
Policy Instruction No. 12 of the Department of Labor and Employment discloses
that the concept of regular and casual employees was designed to put an end to
casual employment in regular jobs, which has been abused by many employers to
prevent so called casuals from enjoying the benefits of regular employees or to
prevent casuals from joining unions. The same instructions show that the proviso
in the second paragraph of Art. 280 was not designed to stifle small-scale
businesses nor to oppress agricultural land owners to further the interests of
laborers, whether agricultural or industrial. What it seeks to eliminate are abuses
of employers against their employees and not, as petitioners would have us
believe, to prevent small-scale businesses from engaging in legitimate methods to
realize profit. Hence, the proviso is applicable only to the employees who are
deemed casuals but not to the project employees nor the regular employees treated
in paragraph one of Art. 280.
Clearly, therefore, petitioners being project employees, or, to use the correct
term, seasonal employees, their employment legally ends upon completion of the
project or the [end of the] season. The termination of their employment cannot
and should not constitute an illegal dismissal.

Considering our holding that the officers and the members of

petitioner Union were project employees, its claim of union busting is likewise
dismissed.

On the second issue, petitioner Union contends that there was no stoppage of
work; hence, they did not strike. Euphemistically, petitioner Union avers that it
only engaged in picketing,[20] and maintains that without any work stoppage, [its
officers and members] only engaged in xxx protest activity.
We are not convinced. Petitioner Union splits hairs.
To begin with, quite evident from the records is the undisputed fact that
petitioner Union filed a Notice of Strike on December 28, 1998 with the
Department of Labor and Employment, grounded on respondents purported
unfair labor practices, i.e., refusal to bargain collectively, union busting and mass
termination. On even date, petitioner Union declared and staged a strike.
Second, then Secretary of Labor, Bienvenido E. Laguesma, intervened and
issued a Return-to-Work Order[21] dated January 4, 1999, certifying the labor
dispute to the NLRC for compulsory arbitration. The Order narrates the facts
leading to the labor dispute, to wit:
On 28 December 1998, [petitioner Union] filed a Notice of Strike against
[respondent] citing unfair labor practices, specifically: refusal to bargain
collectively, union busting and mass termination as the grounds [therefor]. On the
same day, [petitioner] Union went on strike and took control over [respondents]
facilities of its Leyte Geothermal Project.
Attempts by the National Conciliation and Mediation Board RBVIII to
forge a mutually acceptable solution proved futile.
In the meantime, the strike continues with no settlement in sight placing in
jeopardy the supply of much needed power supply in the Luzon and Visayas
grids.
xxxx
The on-going strike threatens the availability of continuous electricity to these
areas which is critical to day-to-day life, industry, commerce and trade. Without
doubt, [respondents] operations [are] indispensable to the national interest and
falls (sic) within the purview of Article 263 (g) of the Labor Code, as amended,
which warrants (sic) the intervention of this Office.

Third, petitioner Union itself, in its pleadings, used the word strike.
Ultimately, petitioner Unions asseverations are belied by the factual findings
of the NLRC, as affirmed by the CA:
The failure to comply with the mandatory requisites for the conduct of strike is
both admitted and clearly shown on record. Hence, it is undisputed that no strike
vote was conducted; likewise, the cooling-off period was not observed and that
the 7-day strike ban after the submission of the strike vote was not complied with
since there was no strike vote taken.
xxxx
The factual issue of whether a notice of strike was timely filed by
[petitioner] Union was resolved by the evidence on record. The evidence revealed
that [petitioner] Union struck even before it could file the required notice of
strike. Once again, this relied on [petitioner] Unions proof. [Petitioner] Union[s]
witness said:
Atty. Sinsuat : You stated that you struck on 28 December 1998 is that
correct?
Witness : Early in the morning of December 1998.
xxxx
Atty. Sinsuat : And you went there to conduct the strike did you not?
Witness : Our plan then was to strike at noon of December 28 and the
strikers will be positioned at their respective areas.
[22]

Article 263 of the Labor Code enumerates the requisites for holding a strike:
Art. 263. Strikes, picketing, and lockouts. (a) x x x.
x x x x.
(c) In cases of bargaining deadlocks, the duly certified or recognized
bargaining agent may file a notice of strike or the employer may file a notice of
lockout with the Department at least 30 days before the intended date thereof. In
cases of unfair labor practice, the period of notice shall be 15 days and in the
absence of a duly certified bargaining agent, the notice of strike may be filed by
any legitimate labor organization in behalf of its members. However, in case of

dismissal from employment of union officers duly elected in accordance with the
union constitution and by-laws, which may constitute union busting, where the
existence of the union is threatened, the 15-day cooling-off period shall not apply
and the union may take action immediately.
(d) The notice must be in accordance with such implementing rules and
regulations as the Department of Labor and Employment may promulgate.
(e) During the cooling-off period, it shall be the duty of the Department to
exert all efforts at mediation and conciliation to effect a voluntary settlement.
Should the dispute remain unsettled until the lapse of the requisite number of days
from the mandatory filing of the notice, the labor union may strike or the
employer may declare a lockout.
(f) A decision to declare a strike must be approved by a majority of the
total union membership in the bargaining unit concerned, obtained by secret ballot
in meetings or referenda called for that purpose. A decision to declare a lockout
must be approved by a majority of the board of directors of the corporation or
association or of the partners in a partnership, obtained by secret ballot in a
meeting called for that purpose. The decision shall be valid for the duration of the
dispute based on substantially the same grounds considered when the strike or
lockout vote was taken. The Department may, at its own initiative or upon the
request of any affected party, supervise the conduct of the secret balloting. In
every case, the union or the employer shall furnish the Department the results of
the voting at least seven days before the intended strike or lockout, subject to the
cooling-off period herein provided.

In fine, petitioner Unions bare contention that it did not hold a strike cannot
trump the factual findings of the NLRC that petitioner Unionindeed struck against
respondent. In fact, and more importantly, petitioner Union failed to comply with
the requirements set by law prior to holding a strike.
WHEREFORE, the petition is DENIED. The Decision of the Court of
Appeals in CA-G.R. SP No. 65760 is AFFIRMED. Costs against petitioner Union.
[1]

Penned by Associate Justice Isaias P. Dicdican, with Associate Justices Sesinando E. Villon and Enrico A.
Lanzanas, concurring; rollo, pp. 37-47.
[2]
Penned by Commissioner Amorito V. Caete with Presiding Commissioner Irenea E. Ceniza and Commissioner
Bernabe S. Batuhan, concurring; id. at 105-124.
[3]
Supra, note 1, at 38-40.
[4]
Supra note 2, at 123-124.
[5]
Supra, note 1, at 46.
[6]
Petition of Petitioner; rollo, pp. 25-26.
[7]
Emphasis supplied.
[8]
See Phil. Tobacco Flue-Curing & Redrying Corp. v. NLRC, 360 Phil. 218 (1998).

[9]

Asia World Recruitment Inc. v. NLRC, 371 Phil. 745, 755-756 (1999); Palomares v. NLRC, (5TH Division), G.R.
No. 120064, August 15, 1997, 277 SCRA 439, 447-449; Brent School, Inc. v. Zamora, 260 Phil. 747, 758-762
(1990).
[10]
Article XIII, Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work and a living wage. They shall also participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers and the preferential
use of voluntary modes in settling disputes including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share
in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and
growth.
[11]
See Articles 1700 and 1702 of the Civil Code; Villa v. NLRC, 348 Phil. 116, 140-141 (1998).
[12]
Villa v. NLRC, supra, at 141.
[13]
Supra note 2, at 110.
[14]
G & M (Phils.), Inc. v. Cruz, 496 Phil. 119, 123-124 (2005).
[15]
PCL Shipping Philippines, Inc. v. NLRC, G.R. No. 153031, December 14, 2006, 511 SCRA 44, 54.
[16]
Id.
[17]
G.R. No. 109902, August 2, 1994, 234 SCRA 678, 684-686.
[18]
Emphasis supplied.
[19]
G.R No. 79869, September 5, 1991, 201 SCRA 332, 341-343.
[20]
Petitioners Memorandum, rollo, p. 398.
[21]
Id. at 194-195.
[22]
Id. at 115-116.

G.R. No. 85985

August 13, 1993

PHILIPPINE AIRLINES, INC. (PAL), petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ISABEL P. ORTIGUERRA
and PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA), respondents.

Solon Garcia for petitioner.

Adolpho M. Guerzon for respondent PALEA.
MELO, J.:
In the instant petition for certiorari, the Court is presented the issue of whether or
not the formulation of a Code of Discipline among employees is a shared
responsibility of the employer and the employees.

On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966
Code of Discipline. The Code was circulated among the employees and was
immediately implemented, and some employees were forthwith subjected to the
disciplinary measures embodied therein.

Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA)
filed a complaint before the National Labor Relations Commission (NLRC) for unfair
labor practice (Case No. NCR-7-2051-85) with the following remarks: "ULP with
arbitrary implementation of PAL's Code of Discipline without notice and prior
discussion with Union by Management" (Rollo, p. 41). In its position paper, PALEA
contended that PAL, by its unilateral implementation of the Code, was guilty of
unfair labor practice, specifically Paragraphs E and G of Article 249 and Article 253
of the Labor Code. PALEA alleged that copies of the Code had been circulated in
limited numbers; that being penal in nature the Code must conform with the
requirements of sufficient publication, and that the Code was arbitrary, oppressive,
and prejudicial to the rights of the employees. It prayed that implementation of the
Code be held in abeyance; that PAL should discuss the substance of the Code with
PALEA; that employees dismissed under the Code be reinstated and their cases
subjected to further hearing; and that PAL be declared guilty of unfair labor practice
and be ordered to pay damages (pp. 7-14, Record.)

PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer
to prescibe rules and regulations regarding employess' conduct in carrying out their

duties and functions, and alleging that by implementing the Code, it had not
violated the collective bargaining agreement (CBA) or any provision of the Labor
Code. Assailing the complaint as unsupported by evidence, PAL maintained that
Article 253 of the Labor Code cited by PALEA reffered to the requirements for
negotiating a CBA which was inapplicable as indeed the current CBA had been
negotiated.

In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of the
Labor Code was violated when PAL unilaterally implemented the Code, and cited
provisions of Articles IV and I of Chapter II of the Code as defective for, respectively,
running counter to the construction of penal laws and making punishable any
offense within PAL's contemplation. These provisions are the following:

Sec. 2.
Non-exclusivity. This Code does not contain the entirety of the rules
and regulations of the company. Every employee is bound to comply with all
applicable rules, regulations, policies, procedures and standards, including
standards of quality, productivity and behaviour, as issued and promulgated by the
company through its duly authorized officials. Any violations thereof shall be
punishable with a penalty to be determined by the gravity and/or frequency of the
offense.

Sec. 7.
Cumulative Record. An employee's record of offenses shall be
cumulative. The penalty for an offense shall be determined on the basis of his past
record of offenses of any nature or the absence thereof. The more habitual an
offender has been, the greater shall be the penalty for the latest offense. Thus, an
employee may be dismissed if the number of his past offenses warrants such
penalty in the judgment of management even if each offense considered separately
may not warrant dismissal. Habitual offenders or recidivists have no place in PAL.
On the other hand, due regard shall be given to the length of time between
commission of individual offenses to determine whether the employee's conduct
may indicate occasional lapses (which may nevertheless require sterner disciplinary
action) or a pattern of incorrigibility.

Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a
conference but they failed to appear at the scheduled date. Interpreting such failure
as a waiver of the parties' right to present evidence, the labor arbiter considered
the case submitted for decision. On November 7, 1986, a decision was rendered
finding no bad faith on the part of PAL in adopting the Code and ruling that no unfair

labor practice had been committed. However, the arbiter held that PAL was "not
totally fault free" considering that while the issuance of rules and regulations
governing the conduct of employees is a "legitimate management prerogative" such
rules and regulations must meet the test of "reasonableness, propriety and
fairness." She found Section 1 of the Code aforequoted as "an all embracing and all
encompassing provision that makes punishable any offense one can think of in the
company"; while Section 7, likewise quoted above, is "objectionable for it violates
the rule against double jeopardy thereby ushering in two or more punishment for
the same misdemeanor." (pp. 38-39, Rollo.)

The labor arbiter also found that PAL "failed to prove that the new Code was amply
circulated." Noting that PAL's assertion that it had furnished all its employees copies
of the Code is unsupported by documentary evidence, she stated that such "failure"
on the part of PAL resulted in the imposition of penalties on employees who thought
all the while that the 1966 Code was still being followed. Thus, the arbiter concluded
that "(t)he phrase ignorance of the law excuses no one from compliance . . . finds
application only after it has been conclusively shown that the law was circulated to
all the parties concerned and efforts to disseminate information regarding the new
law have been exerted. (p. 39, Rollo.) She thereupon disposed:

WHEREFORE, premises considered, respondent PAL is hereby ordered as follows:

1.

Furnish all employees with the new Code of Discipline;

2.
Reconsider the cases of employees meted with penalties under the New Code
of Discipline and remand the same for further hearing; and

3.
Discuss with PALEA the objectionable provisions specifically tackled in the
body of the decision.

All other claims of the complainant union (is) [are] hereby, dismissed for lack of
merit.

SO ORDERED. (p. 40, Rollo.)

PAL appealed to the NLRC. On August 19, 1988, the NLRC through Commissioner
Encarnacion, with Presiding Commissioner Bonto-Perez and Commissioner Maglaya
concurring, found no evidence of unfair labor practice committed by PAL and
affirmed the dismissal of PALEA's charge. Nonetheless, the NLRC made the following
observations:

Indeed, failure of management to discuss the provisions of a contemplated code of

discipline which shall govern the conduct of its employees would result in the
erosion and deterioration of an otherwise harmonious and smooth relationship
between them as did happen in the instant case. There is no dispute that adoption
of rules of conduct or discipline is a prerogative of management and is imperative
and essential if an industry, has to survive in a competitive world. But labor climate
has progressed, too. In the Philippine scene, at no time in our contemporary history
is the need for a cooperative, supportive and smooth relationship between labor
and management more keenly felt if we are to survive economically. Management
can no longer exclude labor in the deliberation and adoption of rules and
regulations that will affect them.

The complainant union in this case has the right to feel isolated in the adoption of
the New Code of Discipline. The Code of Discipline involves security of tenure and
loss of employment a property right! It is time that management realizes that to
attain effectiveness in its conduct rules, there should be candidness and openness
by Management and participation by the union, representing its members. In fact,
our Constitution has recognized the principle of "shared responsibility" between
employers and workers and has likewise recognized the right of workers to
participate in "policy and decision-making process affecting their rights . . ." The
latter provision was interpreted by the Constitutional Commissioners to mean
participation in "management"' (Record of the Constitutional Commission, Vol. II).

In a sense, participation by the union in the adoption of the code if conduct could
have accelerated and enhanced their feelings of belonging and would have resulted
in cooperation rather than resistance to the Code. In fact, labor-management
cooperation is now "the thing." (pp. 3-4, NLRC Decision ff. p. 149, Original Record.)

Respondent Commission thereupon disposed:

WHEREFORE, premises considered, we modify the appealed decision in the sense

that the New Code of Discipline should be reviewed and discussed with complainant
union, particularly the disputed provisions [.] (T)hereafter, respondent is directed to
furnish each employee with a copy of the appealed Code of Discipline. The pending
cases adverted to in the appealed decision if still in the arbitral level, should be
reconsidered by the respondent Philippine Air Lines. Other dispositions of the Labor
Arbiter are sustained.

SO ORDERED. (p. 5, NLRC Decision.)

PAL then filed the instant petition for certiorari charging public respondents with
grave abuse of discretion in: (a) directing PAL "to share its management prerogative
of formulating a Code of Discipline"; (b) engaging in quasi-judicial legislation in
ordering PAL to share said prerogative with the union; (c) deciding beyond the issue
of unfair labor practice, and (d) requiring PAL to reconsider pending cases still in the
arbitral level (p. 7, Petition; p. 8, Rollo.)

As stated above, the Principal issue submitted for resolution in the instant petition is
whether management may be compelled to share with the union or its employees
its prerogative of formulating a code of discipline.

PAL asserts that when it revised its Code on March 15, 1985, there was no law which
mandated the sharing of responsibility therefor between employer and employee.

Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715,
amending Article 211 of the Labor Code, that the law explicitly considered it a State
policy "(t)o ensure the participation of workers in decision and policy-making
processes affecting the rights, duties and welfare." However, even in the absence of
said clear provision of law, the exercise of management prerogatives was never
considered boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]) it was held
that management's prerogatives must be without abuse of discretion.

In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989]),
we upheld the company's right to implement a new system of distributing its
products, but gave the following caveat:

So long as a company's management prerogatives are exercised in good faith for

the advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid
agreements, this Court will uphold them.
(at p. 28.)

All this points to the conclusion that the exercise of managerial prerogatives is not
unlimited. It is circumscribed by limitations found in law, a collective bargaining
agreement, or the general principles of fair play and justice (University of Sto.
Tomas vs. NLRC, 190 SCRA 758 [1990]). Moreover, as enunciated in Abbott
Laboratories (Phil.), vs. NLRC (154 713 [1987]), it must be duly established that the
prerogative being invoked is clearly a managerial one.

A close scrutiny of the objectionable provisions of the Code reveals that they are not
purely business-oriented nor do they concern the management aspect of the
business of the company as in the San Miguel case. The provisions of the Code
clearly have repercusions on the employee's right to security of tenure. The
implementation of the provisions may result in the deprivation of an employee's
means of livelihood which, as correctly pointed out by the NLRC, is a property right
(Callanta, vs Carnation Philippines, Inc., 145 SCRA 268 [1986]). In view of these
aspects of the case which border on infringement of constitutional rights, we must
uphold the constitutional requirements for the protection of labor and the promotion
of social justice, for these factors, according to Justice Isagani Cruz, tilt "the scales
of justice when there is doubt, in favor of the worker" (Employees Association of the
Philippine American Life Insurance Company vs. NLRC, 199 SCRA 628 [1991] 635).

Verily, a line must be drawn between management prerogatives regarding business

operations per se and those which affect the rights of the employees. In treating the
latter, management should see to it that its employees are at least properly
informed of its decisions or modes action. PAL asserts that all its employees have
been furnished copies of the Code. Public respondents found to the contrary, which
finding, to say the least is entitled to great respect.

PAL posits the view that by signing the 1989-1991 collective bargaining agreement,
on June 27, 1990, PALEA in effect, recognized PAL's "exclusive right to make and
enforce company rules and regulations to carry out the functions of management

without having to discuss the same with PALEA and much less, obtain the latter's
conformity thereto" (pp. 11-12, Petitioner's Memorandum; pp 180-181, Rollo.)
Petitioner's view is based on the following provision of the agreement:

The Association recognizes the right of the Company to determine matters of

management it policy and Company operations and to direct its manpower.
Management of the Company includes the right to organize, plan, direct and control
operations, to hire, assign employees to work, transfer employees from one
department, to another, to promote, demote, discipline, suspend or discharge
employees for just cause; to lay-off employees for valid and legal causes, to
introduce new or improved methods or facilities or to change existing methods or
facilities and the right to make and enforce Company rules and regulations to carry
out the functions of management.

The exercise by management of its prerogative shall be done in a just reasonable,

humane and/or lawful manner.

Such provision in the collective bargaining agreement may not be interpreted as

cession of employees' rights to participate in the deliberation of matters which may
affect their rights and the formulation of policies relative thereto. And one such
mater is the formulation of a code of discipline.

Indeed, industrial peace cannot be achieved if the employees are denied their just
participation in the discussion of matters affecting their rights. Thus, even before
Article 211 of the labor Code (P.D. 442) was amended by Republic Act No. 6715, it
was already declared a policy of the State, "(d) To promote the enlightenment of
workers concerning their rights and obligations . . . as employees." This was, of
course, amplified by Republic Act No 6715 when it decreed the "participation of
workers in decision and policy making processes affecting their rights, duties and
welfare." PAL's position that it cannot be saddled with the "obligation" of sharing
management prerogatives as during the formulation of the Code, Republic Act No.
6715 had not yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212),
cannot thus be sustained. While such "obligation" was not yet founded in law when
the Code was formulated, the attainment of a harmonious labor-management
relationship and the then already existing state policy of enlightening workers
concerning their rights as employees demand no less than the observance of
transparency in managerial moves affecting employees' rights.

Petitioner's assertion that it needed the implementation of a new Code of Discipline

considering the nature of its business cannot be overemphasized. In fact, its being a
local monopoly in the business demands the most stringent of measures to attain
safe travel for its patrons. Nonetheless, whatever disciplinary measures are adopted
cannot be properly implemented in the absence of full cooperation of the
employees. Such cooperation cannot be attained if the employees are restive on
account, of their being left out in the determination of cardinal and fundamental
matters affecting their employment.

WHEREFORE, the petition is DISMISSED and the questioned decision AFFIRMED. No

special pronouncement is made as to costs.

[G.R. No. 138051. June 10, 2004]

JOSE
Y.
SONZA, petitioner, vs.
CORPORATION, respondent.

ABS-CBN

BROADCASTING

DECISION
CARPIO, J.:

The Case
Before this Court is a petition for review on certiorari assailing the 26 March
1999 Decision of the Court of Appeals in CA-G.R. SP No. 49190 dismissing the petition
filed by Jose Y. Sonza (SONZA). The Court of Appeals affirmed the findings of the
National Labor Relations Commission (NLRC), which affirmed the Labor Arbiters
dismissal of the case for lack of jurisdiction.
[1]

[2]

The Facts

In May 1994, respondent ABS-CBN Broadcasting Corporation (ABS-CBN) signed

an Agreement (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 Carmela
Tiangco (TIANGCO), as 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. The Agreement listed the services SONZA would render to ABS-CBN, as
follows:

a. Co-host for Mel & Jay radio program, 8:00 to 10:00 a.m., Mondays to
Fridays;
b. Co-host for Mel & Jay television program, 5:30 to 7:00 p.m., Sundays.

[3]

ABS-CBN agreed to pay for SONZAs services a monthly talent fee of P310,000 for
the first year and P317,000 for the second and third year of the Agreement. ABS-CBN
would pay the talent fees on the 10th and 25th days of the month.
On 1 April 1996, SONZA wrote a letter to ABS-CBNs President, Eugenio Lopez III,
which reads:

Dear Mr. Lopez,

We would like to call your attention to the Agreement dated May 1994 entered into by
your goodself on behalf of ABS-CBN with our company relative to our talent JOSE Y.
SONZA.
As you are well aware, Mr. Sonza irrevocably resigned in view of recent events
concerning his programs and career. We consider these acts of the station violative of
the Agreement and the station as in breach thereof. In this connection, we hereby
serve notice of rescission of said Agreement at our instance effective as of date.
Mr. Sonza informed us that he is waiving and renouncing recovery of the remaining
amount stipulated in paragraph 7 of the Agreement but reserves the right to seek
recovery of the other benefits under said Agreement.
Thank you for your attention.
Very truly yours,
(Sgd.)
JOSE Y. SONZA
President and Gen. Manager

[4]

On 30 April 1996, SONZA filed a complaint against ABS-CBN before the

Department of Labor and Employment, National Capital Region in Quezon City. SONZA
complained that ABS-CBN did not pay his salaries, separation pay, service incentive
leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the
Employees Stock Option Plan (ESOP).
On 10 July 1996, ABS-CBN filed a Motion to Dismiss on the ground that no
employer-employee relationship existed between the parties. SONZA filed an
Opposition to the motion on 19 July 1996.
Meanwhile, ABS-CBN continued to remit SONZAs monthly talent fees through his
account at PCIBank, Quezon Avenue Branch, Quezon City. In July 1996, ABS-CBN
opened a new account with the same bank where ABS-CBN deposited SONZAs talent
fees and other payments due him under the Agreement.
In his Order dated 2 December 1996, the Labor Arbiter denied the motion to
dismiss and directed the parties to file their respective position papers.The Labor Arbiter
ruled:
[5]

In this instant case, complainant for having invoked a claim that he was an employee
of respondent company until April 15, 1996 and that he was not paid certain claims, it
is sufficient enough as to confer jurisdiction over the instant case in this Office. And
as to whether or not such claim would entitle complainant to recover upon the causes
of action asserted is a matter to be resolved only after and as a result of a
hearing. Thus, the respondents plea of lack of employer-employee relationship may be
pleaded only as a matter of defense. It behooves upon it the duty to prove that there
really is no employer-employee relationship between it and the complainant.
The Labor Arbiter then considered the case submitted for resolution. The parties
submitted their position papers on 24 February 1997.
On 11 March 1997, SONZA filed a Reply to Respondents Position Paper with
Motion to Expunge Respondents Annex 4 and Annex 5 from the Records.Annexes 4
and 5 are affidavits of ABS-CBNs witnesses Soccoro Vidanes and Rolando V. Cruz.
These witnesses stated in their affidavits that the prevailing practice in the television
and broadcast industry is to treat talents like SONZA as independent contractors.
The Labor Arbiter rendered his Decision dated 8 July 1997 dismissing the complaint
for lack of jurisdiction. The pertinent parts of the decision read as follows:
[6]

xxx
While Philippine jurisprudence has not yet, with certainty, touched on the true nature
of the contract of a talent, it stands to reason that a talent as above-described cannot be
considered as an employee by reason of the peculiar circumstances surrounding the
engagement of his services.

It must be noted that complainant was engaged by respondent by reason of his

peculiar skills and talent as a TV host and a radio broadcaster. Unlike an
ordinary employee, he was free to perform the services he undertook to render in
accordance with his own style. The benefits conferred to complainant under the May
1994 Agreement are certainly very much higher than those generally given to
employees. For one, complainant Sonzas monthly talent fees amount to a
staggering P317,000.Moreover, his engagement as a talent was covered by a specific
contract. Likewise, he was not bound to render eight (8) hours of work per day as he
worked only for such number of hours as may be necessary.
The fact that per the May 1994 Agreement complainant was accorded some benefits
normally given to an employee is inconsequential. Whatever benefits complainant
enjoyed arose from specific agreement by the parties and not by reason of
employer-employee relationship. As correctly put by the respondent, All these
benefits are merely talent fees and other contractual benefits and should not be
deemed as salaries, wages and/or other remuneration accorded to an employee,
notwithstanding the nomenclature appended to these benefits. Apropos to this is the
rule that the term or nomenclature given to a stipulated benefit is not controlling, but
the intent of the parties to the Agreement conferring such benefit.
The fact that complainant was made subject to respondents Rules and
Regulations, likewise, does not detract from the absence of employer-employee
relationship. As held by the Supreme Court, The line should be drawn between rules
that merely serve as guidelines towards the achievement of the mutually desired result
without dictating the means or methods to be employed in attaining it, and those that
control or fix the methodology and bind or restrict the party hired to the use of such
means. The first, which aim only to promote the result, create no employer-employee
relationship unlike the second, which address both the result and the means to achieve
it. (Insular Life Assurance Co., Ltd. vs. NLRC, et al., G.R. No. 84484, November 15,
1989).
x x x (Emphasis supplied)

[7]

SONZA appealed to the NLRC. On 24 February 1998, the NLRC rendered a

Decision affirming the Labor Arbiters decision. SONZA filed a motion for
reconsideration, which the NLRC denied in its Resolution dated 3 July 1998.
On 6 October 1998, SONZA filed a special civil action for certiorari before the Court
of Appeals assailing the decision and resolution of the NLRC. On 26 March 1999, the
Court of Appeals rendered a Decision dismissing the case.
[8]

Hence, this petition.

The Rulings of the NLRC and Court of Appeals

The Court of Appeals affirmed the NLRCs finding that no employer-employee
relationship existed between SONZA and ABS-CBN. Adopting the NLRCs decision, the
appellate court quoted the following findings of the NLRC:

x x x the May 1994 Agreement will readily reveal that MJMDC entered into the
contract merely as an agent of complainant Sonza, the principal. By all indication and
as the law puts it, the act of the agent is the act of the principal itself. This fact is made
particularly true in this case, as admittedly MJMDC is a management company
devoted exclusively to managing the careers of Mr. Sonza and his broadcast partner,
Mrs. Carmela C. Tiangco. (Opposition to Motion to Dismiss)
Clearly, the relations of principal and agent only accrues between complainant Sonza
and MJMDC, and not between ABS-CBN and MJMDC. This is clear from the
provisions of the May 1994 Agreement which specifically referred to MJMDC as the
AGENT. As a matter of fact, when complainant herein unilaterally rescinded said
May 1994 Agreement, it was MJMDC which issued the notice of rescission in behalf
of Mr. Sonza, who himself signed the same in his capacity as President.
Moreover, previous contracts between Mr. Sonza and ABS-CBN reveal the fact that
historically, the parties to the said agreements are ABS-CBN and Mr. Sonza. And it is
only in the May 1994 Agreement, which is the latest Agreement executed between
ABS-CBN and Mr. Sonza, that MJMDC figured in the said Agreement as the agent of
Mr. Sonza.
We find it erroneous to assert that MJMDC is a mere labor-only contractor of ABSCBN such that there exist[s] employer-employee relationship between the latter and
Mr. Sonza. On the contrary, We find it indubitable, that MJMDC is an agent, not of
ABS-CBN, but of the talent/contractor Mr. Sonza, as expressly admitted by the latter
and MJMDC in the May 1994 Agreement.
It may not be amiss to state that jurisdiction over the instant controversy indeed
belongs to the regular courts, the same being in the nature of an action for alleged
breach of contractual obligation on the part of respondent-appellee. As squarely
apparent from complainant-appellants Position Paper, his claims for compensation for
services, 13thmonth pay, signing bonus and travel allowance against respondentappellee are not based on the Labor Code but rather on the provisions of the May
1994 Agreement, while his claims for proceeds under Stock Purchase Agreement are
based on the latter. A portion of the Position Paper of complainant-appellant bears
perusal:

Under [the May 1994 Agreement] with respondent ABS-CBN, the latter contractually
bound itself to pay complainant a signing bonus consisting of shares of stockswith
FIVE HUNDRED THOUSAND PESOS (P500,000.00).
Similarly, complainant is also entitled to be paid 13 th month pay based on an amount
not lower than the amount he was receiving prior to effectivity of (the) Agreement.
Under paragraph 9 of (the May 1994 Agreement), complainant is entitled to a
commutable travel benefit amounting to at least One Hundred Fifty Thousand Pesos
(P150,000.00) per year.
Thus, it is precisely because of complainant-appellants own recognition of the fact
that his contractual relations with ABS-CBN are founded on the New Civil Code,
rather than the Labor Code, that instead of merely resigning from ABS-CBN,
complainant-appellant served upon the latter a notice of rescission of Agreement with
the station, per his letter dated April 1, 1996, which asserted that instead of referring
to unpaid employee benefits, he is waiving and renouncing recovery of the remaining
amount stipulated in paragraph 7 of the Agreement but reserves the right to such
recovery of the other benefits under said Agreement. (Annex 3 of the respondent
ABS-CBNs Motion to Dismiss dated July 10, 1996).
Evidently, it is precisely by reason of the alleged violation of the May 1994
Agreement and/or the Stock Purchase Agreement by respondent-appellee that
complainant-appellant filed his complaint. Complainant-appellants claims being
anchored on the alleged breach of contract on the part of respondent-appellee, the
same can be resolved by reference to civil law and not to labor law. Consequently,
they are within the realm of civil law and, thus, lie with the regular courts. As held in
the case of Dai-Chi Electronics Manufacturing vs. Villarama, 238 SCRA 267, 21
November 1994, an action for breach of contractual obligation is intrinsically a
civil dispute. (Emphasis supplied)
[9]

The Court of Appeals ruled that the existence of an employer-employee relationship

between SONZA and ABS-CBN is a factual question that is within the jurisdiction of the
NLRC to resolve. A special civil action for certiorari extends only to issues of want or
excess of jurisdiction of the NLRC. Such action cannot cover an inquiry into the
correctness of the evaluation of the evidence which served as basis of the NLRCs
conclusion. The Court of Appeals added that it could not re-examine the parties
evidence and substitute the factual findings of the NLRC with its own.
[10]

[11]

[12]

[13]

The Issue
In assailing the decision of the Court of Appeals, SONZA contends that:

THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE NLRCS

DECISION AND REFUSING TO FIND THAT AN EMPLOYER-EMPLOYEE
RELATIONSHIP EXISTED BETWEEN SONZA AND ABS-CBN, DESPITE THE
WEIGHT OF CONTROLLING LAW, JURISPRUDENCE AND EVIDENCE TO
SUPPORT SUCH A FINDING.
[14]

The Courts Ruling

We affirm the assailed decision.
No convincing reason exists to warrant a reversal of the decision of the Court of
Appeals affirming the NLRC ruling which upheld the Labor Arbiters dismissal of the case
for lack of jurisdiction.
The present controversy is one of first impression. Although Philippine labor laws
and jurisprudence define clearly the elements of an employer-employee relationship,
this is the first time that the Court will resolve the nature of the relationship between a
television and radio station and one of its talents. There is no case law stating that a
radio and television program host is an employee of the broadcast station.
The instant case involves big names in the broadcast industry, namely Jose Jay
Sonza, a known television and radio personality, and ABS-CBN, one of the biggest
television and radio networks in the country.
SONZA contends that the Labor Arbiter has jurisdiction over the case because he
was an employee of ABS-CBN. On the other hand, ABS-CBN insists that the Labor
Arbiter has no jurisdiction because SONZA was an independent contractor.
Employee or Independent Contractor?
The existence of an employer-employee relationship is a question of fact. Appellate
courts accord the factual findings of the Labor Arbiter and the NLRC not only respect
but also finality when supported by substantial evidence. Substantial evidence means
such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion. A party cannot prove the absence of substantial evidence by simply
pointing out that there is contrary evidence on record, direct or circumstantial. The Court
does not substitute its own judgment for that of the tribunal in determining where the
weight of evidence lies or what evidence is credible.
[15]

[16]

[17]

SONZA maintains that all essential elements of an employer-employee relationship

are present in this case. Case law has consistently held that the elements of an
employer-employee relationship are: (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 on the means and methods by which the work is

accomplished. The last element, the so-called control test, is the most important
element.
[18]

[19]

A. Selection and Engagement of Employee

ABS-CBN engaged SONZAs services to co-host its television and radio programs
because of SONZAs peculiar skills, talent and celebrity status.SONZA contends that the
discretion used by respondent in specifically selecting and hiring complainant over other
broadcasters of possibly similar experience and qualification as complainant belies
respondents claim of independent contractorship.
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. If SONZA did not possess such unique skills,
talent and celebrity status, ABS-CBN would not have entered into the Agreement with
SONZA but would have hired him through its personnel department just like any other
employee.
In any event, the method of selecting and engaging SONZA does not conclusively
determine his status. We must consider all the circumstances of the relationship, with
the control test being the most important element.
B. Payment of Wages
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-CBNs employee, there would be no need for
the parties to stipulate on benefits such as SSS, Medicare, x x x and 13 th 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.
[20]

[21]

[22]

SONZAs talent fees, amounting to P317,000 monthly in the second and third year,
are so huge and out of the ordinary that they indicate more an independent contractual
relationship rather than an employer-employee relationship. ABS-CBN agreed to pay
SONZA such huge talent fees precisely because of SONZAs unique skills, talent and
celebrity status not possessed by ordinary employees. Obviously, SONZA acting alone
possessed enough bargaining power to demand and receive such huge talent fees for

his services. The power to bargain talent fees way above the salary scales of ordinary
employees is a circumstance indicative, but not conclusive, of an independent
contractual 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.
C. Power of Dismissal
For violation of any provision of the Agreement, either party may terminate their
relationship. SONZA failed to show that ABS-CBN could terminate his services on
grounds other than breach of contract, such as retrenchment to prevent losses as
provided under labor laws.
[23]

During the life of the Agreement, ABS-CBN agreed to pay SONZAs talent fees as
long as AGENT and Jay Sonza shall faithfully and completely perform each condition of
this Agreement. Even if it suffered severe business losses, ABS-CBN could not
retrench SONZA because ABS-CBN remained obligated to pay SONZAs talent fees
during the life of the Agreement. This circumstance indicates an independent
contractual relationship between SONZA and ABS-CBN.
[24]

SONZA admits that even after ABS-CBN ceased broadcasting his programs, ABSCBN still paid him his talent fees. Plainly, ABS-CBN adhered to its undertaking in the
Agreement to continue paying SONZAs talent fees during the remaining life of the
Agreement even if ABS-CBN cancelled SONZAs programs through no fault of SONZA.

[25]

SONZA assails the Labor Arbiters interpretation of his rescission of the Agreement
as an admission that he is not an employee of ABS-CBN. The Labor Arbiter stated that
if it were true that complainant was really an employee, he would merely resign, instead.
SONZA did actually resign from ABS-CBN but he also, as president of MJMDC,
rescinded the Agreement. SONZAs letter clearly bears this out. However, the manner
by which SONZA terminated his relationship with ABS-CBN is immaterial. Whether
SONZA rescinded the Agreement or resigned from work does not determine his status
as employee or independent contractor.
[26]

D. Power of Control
Since there is no local precedent on whether a radio and television program host is
an employee or an independent contractor, we refer to foreign case law in analyzing the
present case. The United States Court of Appeals, First Circuit, recently held in AlbertyVlez v. Corporacin De Puerto Rico Para La Difusin Pblica (WIPR) that a television
program host is an independent contractor. We quote the following findings of
the U.S. court:
[27]

Several factors favor classifying Alberty as an independent contractor. First, a

television actress is a skilled position requiring talent and training not available
on-the-job. x x x In this regard, Alberty possesses a masters degree in public
communications and journalism; is trained in dance, singing, and modeling; taught
with the drama department at the University of Puerto Rico; and acted in several
theater and television productions prior to her affiliation with Desde Mi
Pueblo. Second, Alberty provided the tools and instrumentalities necessary for
her to perform. Specifically, she provided, or obtained sponsors to provide, the
costumes, jewelry, and other image-related supplies and services necessary for her
appearance. Alberty disputes that this factor favors independent contractor status
because WIPR provided the equipment necessary to tape the show. Albertys argument
is misplaced. The equipment necessary for Alberty to conduct her job as host of
Desde Mi Pueblo related to her appearance on the show.Others provided equipment
for filming and producing the show, but these were not the primary tools that Alberty
used to perform her particular function. If we accepted this argument, independent
contractors could never work on collaborative projects because other individuals often
provide the equipment required for different aspects of the collaboration. x x x
Third, WIPR could not assign Alberty work in addition to filming Desde Mi
Pueblo. Albertys contracts with WIPR specifically provided that WIPR hired her
professional services as Hostess for the Program Desde Mi Pueblo. There is no
evidence that WIPR assigned Alberty tasks in addition to work related to these
tapings. x x x (Emphasis supplied)
[28]

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.
[29]

[30]

First, SONZA contends that ABS-CBN exercised control over the means and
methods of his work.
SONZAs argument is misplaced. ABS-CBN engaged SONZAs services specifically
to co-host the Mel & Jay programs. ABS-CBN did not assign any other work to
SONZA. 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 ABSCBNs control. SONZA did not have to render eight hours of work per day. The
Agreement required SONZA to attend only rehearsals and tapings of the shows, as well
as pre- and post-production staff meetings. ABS-CBN could not dictate the contents of
SONZAs script.However, the Agreement prohibited SONZA from criticizing in his shows
ABS-CBN or its interests. The clear implication is that SONZA had a free hand on what
to say or discuss in his shows provided he did not attack ABS-CBN or its interests.
[31]

[32]

We find that ABS-CBN was not involved in the actual performance that produced
the finished product of SONZAs work. 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-CBNs 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 SONZAs work.
[33]

[34]

SONZA claims that ABS-CBNs power not to broadcast his shows proves ABS-CBNs
power over the means and methods of the performance of his work. Although ABS-CBN
did have the option not to broadcast SONZAs show, ABS-CBN was still obligated to pay
SONZAs talent fees. Thus, even if ABS-CBN was completely dissatisfied with the
means and methods of SONZAs performance of his work, or even with the quality or
product of his work, ABS-CBN could not dismiss or even discipline SONZA. All that
ABS-CBN could do is not to broadcast SONZAs show but ABS-CBN must still pay his
talent fees in full.
[35]

Clearly, ABS-CBNs right not to broadcast SONZAs show, burdened as it was by the
obligation to continue paying in full SONZAs talent fees, did not amount to control over
the means and methods of the performance of SONZAs work. ABS-CBN could not
terminate or discipline SONZA even if the means and methods of performance of his
work - how he delivered his lines and appeared on television - did not meet ABS-CBNs
approval. This proves that ABS-CBNs control was limited only to the result of SONZAs
work, whether to broadcast the final product or not. In either case, ABS-CBN must still
pay SONZAs talent fees in full until the expiry of the Agreement.
In Vaughan, et al. v. Warner, et al., the United States Circuit Court of Appeals
ruled that vaudeville performers were independent contractors although the
management reserved the right to delete objectionable features in their shows. Since
the management did not have control over the manner of performance of the skills of
the artists, it could only control the result of the work by deleting objectionable features.
[36]

[37]

SONZA further contends that ABS-CBN exercised control over his work by
supplying all equipment and crew. No doubt, ABS-CBN supplied the equipment, crew
and airtime needed to broadcast the Mel & Jay programs. However, the equipment,
crew and airtime are not the tools and instrumentalities SONZA needed to perform his
job. What SONZA principally needed were his talent or skills and the costumes
necessary for his appearance. Even though ABS-CBN provided SONZA with the place
of work and the necessary equipment, SONZA was still an independent contractor since
ABS-CBN did not supervise and control his work. ABS-CBNs sole concern was for
SONZA to display his talent during the airing of the programs.
[38]

[39]

A radio broadcast specialist who works under minimal supervision is an

independent contractor. SONZAs work as television and radio program host required
special skills and talent, which SONZA admittedly possesses. The records do not show
that ABS-CBN exercised any supervision and control over how SONZA utilized his skills
and talent in his shows.
[40]

Second, SONZA urges us to rule that he was ABS-CBNs employee because ABSCBN subjected him to its rules and standards of performance. SONZA claims that this

indicates ABS-CBNs control not only [over] his manner of work but also the quality of his
work.
The Agreement stipulates that SONZA shall abide with the rules and standards of
performance covering talents of ABS-CBN. The Agreement does not require SONZA
to comply with the rules and standards of performance prescribed for employees of
ABS-CBN. The code of conduct imposed on SONZA under the Agreement refers to the
Television and Radio Code of the Kapisanan ng mga Broadcaster sa Pilipinas (KBP),
which has been adopted by the COMPANY (ABS-CBN) as its Code of Ethics. The
KBP code applies to broadcasters, not to employees of radio and television
stations. Broadcasters are not necessarily employees of radio and television
stations. Clearly, the rules and standards of performance referred to in the Agreement
are those applicable to talents and not to employees of ABS-CBN.
[41]

[42]

In any event, not all rules imposed by the hiring party on the hired party indicate that
the latter is an employee of the former. In this case, SONZA failed to show that these
rules controlled his performance. We find that these general rules are
merely guidelines towards the achievement of the mutually desired result, which are
top-rating television and radio programs that comply with standards of the industry. We
have ruled that:
[43]

Further, not every form of control that a party reserves to himself over the conduct of
the other party in relation to the services being rendered may be accorded the effect of
establishing an employer-employee relationship. The facts of this case fall squarely
with the case of Insular Life Assurance Co., Ltd. vs. NLRC. In said case, we held that:
Logically, the line should be drawn between rules that merely serve as guidelines
towards the achievement of the mutually desired result without dictating the means or
methods to be employed in attaining it, and those that control or fix the methodology
and bind or restrict the party hired to the use of such means. The first, which aim only
to promote the result, create no employer-employee relationship unlike the second,
which address both the result and the means used to achieve it.
[44]

The Vaughan case also held that one could still be an independent contractor
although the hirer reserved certain supervision to insure the attainment of the desired
result. The hirer, however, must not deprive the one hired from performing his services
according to his own initiative.
[45]

Lastly, SONZA insists that the exclusivity clause in the Agreement is the most
extreme form of control which ABS-CBN exercised over him.
This argument is futile. Being an exclusive talent does not by itself mean that
SONZA is an employee of ABS-CBN. Even an independent contractor can validly
provide his services exclusively to the hiring party. In the broadcast industry, exclusivity
is not necessarily the same as control.
The hiring of exclusive talents is a widespread and accepted practice in the
entertainment industry. This practice is not designed to control the means and
[46]

methods of work of the talent, but simply to protect the investment of the broadcast
station. The broadcast station normally spends substantial amounts of money, time and
effort in building up its talents as well as the programs they appear in and thus expects
that said talents remain exclusive with the station for a commensurate period of time.
Normally, a much higher fee is paid to talents who agree to work exclusively for a
particular radio or television station.In short, the huge talent fees partially compensates
for exclusivity, as in the present case.
[47]

MJMDC as Agent of SONZA

SONZA protests the Labor Arbiters finding that he is a talent of MJMDC, which
contracted out his services to ABS-CBN. The Labor Arbiter ruled that as a talent of
MJMDC, SONZA is not an employee of ABS-CBN. SONZA insists that MJMDC is a
labor-only contractor and ABS-CBN is his employer.
In a labor-only contract, there are three parties involved: (1) the labor-only
contractor; (2) the employee who is ostensibly under the employ of the labor-only
contractor; and (3) the principal who is deemed the real employer. Under this
scheme, the labor-only contractor is the agent of the principal. The law makes the
principal responsible to the employees of the labor-only contractor as if the principal
itself directly hired or employed the employees. These circumstances are not present
in this case.
[48]

There are essentially only two parties involved under the Agreement, namely,
SONZA and ABS-CBN. MJMDC merely acted as SONZAs agent. The Agreement
expressly states that MJMDC acted as the AGENT of SONZA. The records do not show
that MJMDC acted as ABS-CBNs agent. MJMDC, which stands for Mel and Jay
Management and Development Corporation, is a corporation organized and owned by
SONZA and TIANGCO. The President and General Manager of MJMDC is SONZA
himself. It is absurd to hold that MJMDC, which is owned, controlled, headed and
managed by SONZA, acted as agent of ABS-CBN in entering into the Agreement with
SONZA, who himself is represented by MJMDC. That would make MJMDC the agent of
both ABS-CBN and SONZA.
As SONZA admits, MJMDC is a management company devoted exclusively to
managing the careers of SONZA and his broadcast partner, TIANGCO.MJMDC is not
engaged in any other business, not even job contracting. MJMDC does not have any
other function apart from acting as agent of SONZA or TIANGCO to promote their
careers in the broadcast and television industry.
[49]

Policy Instruction No. 40

SONZA argues that Policy Instruction No. 40 issued by then Minister of Labor Blas
Ople on 8 January 1979 finally settled the status of workers in the broadcast

industry. Under this policy, the types of employees in the broadcast industry are the
station and program employees.
Policy Instruction No. 40 is a mere executive issuance which does not have the
force and effect of law. There is no legal presumption that Policy Instruction No. 40
determines SONZAs status. A mere executive issuance cannot exclude independent
contractors from the class of service providers to the broadcast industry. The
classification of workers in the broadcast industry into only two groups under Policy
Instruction No. 40 is not binding on this Court, especially when the classification has no
basis either in law or in fact.
Affidavits of ABS-CBNs Witnesses
SONZA also faults the Labor Arbiter for admitting the affidavits of Socorro Vidanes
and Rolando Cruz without giving his counsel the opportunity to cross-examine these
witnesses. SONZA brands these witnesses as incompetent to attest on the prevailing
practice in the radio and television industry. SONZA views the affidavits of these
witnesses as misleading and irrelevant.
While SONZA failed to cross-examine ABS-CBNs witnesses, he was never
prevented from denying or refuting the allegations in the affidavits. The Labor Arbiter
has the discretion whether to conduct a formal (trial-type) hearing after the submission
of the position papers of the parties, thus:

Section 3. Submission of Position Papers/Memorandum

xxx
These verified position papers shall cover only those claims and causes of action
raised in the complaint excluding those that may have been amicably settled, and shall
be accompanied by all supporting documents including the affidavits of their
respective witnesses which shall take the place of the latters direct testimony. x x x
Section 4. Determination of Necessity of Hearing. Immediately after the submission
of the parties of their position papers/memorandum, the Labor Arbiter shall motu
propio determine whether there is need for a formal trial or hearing. At this stage, he
may, at his discretion and for the purpose of making such determination, ask
clarificatory questions to further elicit facts or information, including but not limited
to the subpoena of relevant documentary evidence, if any from any party or witness.

[50]

The Labor Arbiter can decide a case based solely on the position papers and the
supporting documents without a formal trial. The holding of a formal hearing or trial is
something that the parties cannot demand as a matter of right. If the Labor Arbiter is
confident that he can rely on the documents before him, he cannot be faulted for not
[51]

[52]

conducting a formal trial, unless under the particular circumstances of the case, the
documents alone are insufficient. The proceedings before a Labor Arbiter are nonlitigious in nature. Subject to the requirements of due process, the technicalities of law
and the rules obtaining in the courts of law do not strictly apply in proceedings before a
Labor Arbiter.
Talents as Independent Contractors
ABS-CBN claims that there exists a prevailing practice in the broadcast and
entertainment industries to treat talents like SONZA as independent contractors.
SONZA argues that if such practice exists, it is void for violating the right of labor to
security of tenure.
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.Not every
performance of services for a fee creates an employer-employee relationship. To hold
that every person who renders services to another for a fee is an employee - to give
meaning to the security of tenure clause - will lead to absurd results.
[53]

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. An individual like an artist or
talent has a right to render his services without any one controlling the means and
methods by which he performs his art or craft. This Court will not interpret the right of
labor to security of tenure to compel artists and talents to render their services only as
employees. If radio and television program hosts can render their services only as
employees, the station owners and managers can dictate to the radio and television
hosts what they say in their shows. This is not conducive to freedom of the press.
Different Tax Treatment of Talents and Broadcasters
The National Internal Revenue Code (NIRC) in relation to Republic Act No. 7716,
as amended by Republic Act No. 8241, treats talents, television and radio
broadcasters differently. Under the NIRC, these professionals are subject to the 10%
value-added tax (VAT) on services they render. Exempted from the VAT are those under
an employer-employee relationship. This different tax treatment accorded to talents
and broadcasters bolters our conclusion that they are independent contractors, provided
all the basic elements of a contractual relationship are present as in this case.
[54]

[55]

[56]

[57]

Nature of SONZAs Claims

SONZA seeks the recovery of allegedly unpaid talent fees, 13 th month pay,
separation pay, service incentive leave, signing bonus, travel allowance, and amounts
due under the Employee Stock Option Plan. We agree with the findings of the Labor
Arbiter and the Court of Appeals that SONZAs claims are all based on the May 1994
Agreement and stock option plan, and not on the Labor Code. Clearly, the present
case does not call for an application of the Labor Code provisions but an interpretation
and implementation of the May 1994 Agreement. In effect, SONZAs cause of action is
for breach of contract which is intrinsically a civil dispute cognizable by the regular
courts.
[58]

WHEREFORE, we DENY the petition. The assailed Decision of the Court of

Appeals dated 26 March 1999 in CA-G.R. SP No. 49190 is AFFIRMED.Costs against
petitioner.
SO ORDERED.
[1]

Under Rule 45 of the Rules of Court.

[2]

Penned by Associate Justice Eugenio S. Labitoria with Associate Justices Jesus M. Elbinias and Marina
L. Buzon concurring.

[3]

Rollo, p. 150.

[4]

Ibid., p. 204.

[5]

Donato G. Quinto, Jr.

[6]

Rollo, pp. 114-130.

[7]

Ibid., pp. 123-125.

[8]

Ibid., p. 39.

[9]

Rollo, pp. 37-39.

[10]

Ibid., p. 39.

[11]

Ibid.

[12]

Ibid.

[13]

Ibid.

[14]

Ibid., p. 269.

[15]

Fleischer Company, Inc. v. National Labor Relations Commission, G.R. No. 121608, 26 March 2001,
355 SCRA 105; AFP Mutual Benefit Association, Inc. v. NLRC, G.R. No. 102199, 28 January
1997, 267 SCRA 47; Cathedral School of Technology v. NLRC, G.R. No. 101438, 13 October
1992, 214 SCRA 551. See also Ignacio v. Coca-Cola Bottlers Phils., Inc., 417 Phil. 747
(2001); Gonzales v. National Labor Relations Commission, G.R. No. 131653, 26 March 2001,
355 SCRA 195; Sandigan Savings and Loan Bank, Inc. v. NLRC, 324 Phil. 348 (1996); Magnolia
Dairy Products Corporation v. NLRC, 322 Phil. 508 (1996).

[16]

Madlos v. NLRC, 324 Phil. 498 (1996).

[17]

Domasig v. National Labor Relations Commission, G.R. No. 118101, 16 September 1996, 261 SCRA
779.

[18]

De Los Santos v. NLRC, 423 Phil. 1020 (2001); Traders Royal Bank v. NLRC, 378 Phil. 1081 (1999);
Aboitiz Shipping Employees Association v. National Labor Relations Commission, G.R. No.

78711, 27 June 1990, 186 SCRA 825; Ruga v. National Labor Relations Commission, G.R. Nos.
72654-61, 22 January 1990, 181 SCRA 266.
[19]

Ibid.

[20]

Paragraph 10 of the Agreement provides: The COMPANY shall provide him with the following benefits:
SSS, Medicare, Healthcare, executive life and accident insurance, and a 13 th-month pay based
on an amount not lower than the amount he was receiving prior to the effectivity of this
Agreement.

[21]

Presidential Decree No. 851 (Requiring All Employers to Pay their Employees a 13 th-month Pay) for the
13th month pay; Republic Act No. 1161 (Social Security Law) for the SSS benefits; and Republic
Act No. 7875 (National Health Insurance Act of 1995) for the Philhealth insurance.

[22]

Article 1157 of the Civil Code explicitly provides:

Obligations arise from:

(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts. (Emphasis supplied)
[23]

See Article 283, Labor Code.

[24]

Paragraph 7 of the Agreement states: Provided that the AGENT and Jay Sonza shall faithfully and
completely perform each condition of this Agreement for and in consideration of the aforesaid
services by the AGENT and its talent, the COMPANY agrees to pay the AGENT for the first year
of this Agreement the amount of THREE HUNDRED TEN THOUSAND PESOS ONLY
(P310,000.00) per month, payable on the 10 th and 25th of each month. For the second and third
year of this Agreement, the COMPANY shall pay the amount of THREE HUNDRED SEVENTEEN
THOUSAND PESOS ONLY (P317,000.00) per month, payable likewise on the 10 th and 25th of the
each month.

[25]

Paragraph 11 of the Agreement states: In the event of cancellation of this Agreement through no fault of
the AGENT and its talent, COMPANY agrees to pay the full amount specified in this Agreement
for the remaining period covered by this Agreement, provided that the talent shall not render any
service for or in any other radio or television production of any person, firm, corporation or any
entity competing with the COMPANY until the expiry hereof.

[26]

The opening sentence of the second paragraph of SONZAs letter reads:

As you are well aware, Mr. Sonza irrevocably resigned in view of recent events concerning his
programs and career. xxx
[27]

361 F.3d 1, 2 March 2004.

[28]

See also Spirides v. Reinhardt, 486 F. Supp. 685 (1980).

[29]

In the United States, aside from the right of control test, there are the economic reality test and the
multi-factor test. The tests are drawn from statutes, regulations, rules, policies, rulings, case law
and the like. The right of control test applies under the federal Internal Revenue Code (IRC).
The economic reality test applies to the federal Fair Labor Standards Act (FLSA). [29] The California
Division of Labor Standards Enforcement (DLSE) uses a hybrid of these two tests often referred
to as the multi-factor test in determining who an employee is.

Most courts in the United States have utilized the control test to determine whether one is an
employee. Under this test, a court must consider the hiring partys right to control the manner and

means by which the product is accomplished. Among other factors relevant to this inquiry are the
skills required; the source of the instrumentalities and tools; the location of the work; the duration
of the relationship between the parties; whether the hiring party has the right to assign additional
projects to the hired party; the extent of the hired partys discretion over when and how long to
work; the method of payment; the hired partys role in hiring and paying assistants; whether the
work is part of the regular business of the hiring party; whether the hiring party is in business; the
provision of employee benefits; and the tax treatment of the hired party. (www.piercegorman.com,
quoted from the article entitled Management-side employment law advice for the entertainment
industry with subtitle Classification of Workers: Independent Contractors versus Employee by
David Albert Pierce, Esq.)
[30]

www.piercegorman.com, quoted from the article entitled Management-side employment law advice for
the entertainment industry with subtitle Classification of Workers:Independent Contractors versus
Employee by David Albert Pierce, Esq.

[31]

Paragraph 4 of the Agreement provides: AGENT will make available Jay Sonza for rehearsals and
tapings of the Programs on the day and time set by the producer and director of the Programs
and to attend pre and post production staff meetings.

[32]

Paragraph 15 of the Agreement provides: AGENT, talent shall not use the Programs as a venue to
broadcast or announce any criticism on any operational, administrative, or legal problems,
situations or other matter which may occur, exist or alleged to have occurred or existed within the
COMPANY. Likewise, AGENT, talent shall, in accordance with good broadcast management and
ethics, take up with the proper officers of the COMPANY suggestions or criticisms on any matter
or condition affecting the COMPANY or its relation to the public or third parties.

[33]

In Zhengxing v. Nathanson, 215 F.Supp.2d 114, citing Redd v. Summers, 232 F.3d 933 (D.C. Cir.),
plaintiffs superior was not involved in the actual performance that produced the final product.

[34]

Paragraph 3 of the Agreement provides: The COMPANY reserves the right to modify the program
format and likewise change airtime schedule for more effective programming.

[35]

The right not to broadcast an independent contractors show also gives the radio and television station
protection in case it deems the contents of the show libelous.

[36]

157 F.2d 26, 8 August 1946.

[37]

Ibid.

[38]

In Zhengxing v. Nathanson, 215 F.Supp.2d 114, 5 August 2002, plaintiff was also provided with the
place of work and equipment to be used.

[39]

In the Alberty case, the US Court of Appeals rejected Albertys contention that WIPR provided the
equipment necessary to tape the show. The court held there that the equipment necessary for
Alberty to conduct her job as program host related to her appearance on the show. Others
provided equipment for filming and producing the show, but these were not the primary tools that
Alberty used to perform her particular function. Since Alberty provided, or obtained sponsors to
provide, the costumes, jewelry, and other image-related supplies and services necessary for her
appearance, she provided the tools and instrumentalities necessary for her to perform. The US
Court of Appeals added that if it accepted Albertys argument, independent contractors could
never work on collaborative projects because other individuals often provide the equipment
required for different aspects of the collaboration.

The Alberty case further ruled that while control over the manner, location, and hours of work is often
critical to the independent contractor/employee analysis, it must be considered in light of the work
performed and the industry at issue. Considering the tasks that an actor performs, the court does
not believe that the sort of control identified by Alberty necessarily indicates employee status.

[40]

In Zhengxing, a Chinese language broadcaster and translator was deemed an independent contractor
because she worked under minimal supervision. The U.S. court also found that plaintiff was
required to possess specialized knowledge before commencing her position as a broadcaster.

[41]

Paragraph 13 of the Agreement provides: AGENT agrees that talent shall abide by the rules,
regulations and standards of performance of the COMPANY covering talents, and that talent is
bound to comply with the Television and Radio Code of the Kapisanan ng mga Broadcaster sa
Pilipinas (KBP), which has been adopted by the COMPANY as its Code of Ethics. AGENT shall
perform and keep all of the duties and obligations assumed or entered by the AGENT hereunder
using its best talents and abilities. Any violation of or non-conformity with this provision by talent
shall be a valid and sufficient ground for the immediate termination of the Agreement. (Emphasis
supplied)

[42]

Ibid.

[43]

AFP Mutual Benefit Association, Inc. v. NLRC, G.R. No. 102199, 28 January 1997, 267 SCRA 47.

[44]

Ibid.

[45]

Supra note 36.

[46]

Rollo, p. 302.

[47]

Ibid.

[48]

The second paragraph of Article 106 of the Labor Code reads:

There is labor-only contracting where the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries, work premises,
among others, and the workers recruited and placed by such persons are performing activities
which are directly related to the principal business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer who shall be responsible to
the workers in the same manner and extent as if the latter were directly employed by him.
[49]

Rollo, p. 90.

[50]

New Rules of Procedure of the National Labor Relations Commission, as amended by Resolution 3-99,
series of 1999.

[51]

University of the Immaculate Concepcion v. U.I.C. Teaching and Non-Teaching Personnel and
Employees Union, 414 Phil. 522 (2001).

[52]

Columbus Philippine Bus Corp. v. NLRC, 417 Phil. 81 (2001).

[53]

Section 3, Article XIII of the Constitution.

[54]

Republic Act No. 8424. BIR Revenue Regulations No. 19-99 also provides the following:

SECTION 1. Scope. Pursuant to the provisions of Sections 244 and 108 of the National Internal Revenue
Code of 1997, in relation to Section 17 of Republic Act No. 7716, as amended by Section 11 of
Republic Act 8241, these Regulations are hereby promulgated to govern the imposition of valueadded tax on sale of services by persons engaged in the practice of profession or calling and
professional services rendered by general professional partnerships; services rendered
by actors, actresses, talents, singers and emcees, radio and television broadcasters and
choreographers; musical, radio, movie, television and stage directors; and professional athletes.
SECTION 2. Coverage. Beginning January 1, 2000, general professional partnerships, professionals and
persons described above shall be governed by the provisions of Revenue Regulation No. 7-95,
as amended, otherwise known as the Consolidated Value-Added Tax Regulations. xxx
[55]

Otherwise known as the Expanded Value-Added Tax Law.

[56]

Act amending Republic Act No. 7716, otherwise known as the Expanded Value-Added Tax Law and
other pertinent provisions of the National Internal Revenue Code, as amended (December 20,
1996).

[57]

Section 109 of the NIRC provides:

Exempt transactions. The following shall be exempt from the value-added tax:
xxx
(o) Services rendered by individuals pursuant to an employer-employee relationship; xxx
[58]

Singapore Airlines Ltd. v. Hon. Cruz, etc., et al., 207 Phil. 585 (1983).

[Syllabus]

FIRST DIVISION

[G.R. Nos. 115150-55. September 27, 1996]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. REYDANTE

CALONZO Y AMBROSIO, accused-appellant.
DECISION
BELLOSILLO, J.:
REYDANTE CALONZO Y AMBROSIO was charged with Illegal Recruitment in
Large Scale and five (5) counts of Estafa by Bernardo Miranda, Danilo de los
Reyes, Elmer Clamor, Belarmino Torregrosa and Hazel de Paula. On 5 April 1994 the
Regional Trial Court of Pasig found the accused guilty as charged and sentenced -

1. In Criminal Case No. 98850 for Estafa, to suffer an indeterminate prison term of
eleven (11) years, eleven (11) months and eleven (11) days of prision mayor to fifteen
(15) years, eight (8) months and twenty-one (21) days of reclusion temporal, to
reimburse the complainant-victim Bernardo Miranda in the amount of P120,000.00
and to pay the costs.

2. In Criminal Case No. 98851 for Estafa, to suffer an indeterminate prison term of
eleven (11) years, eleven (11) months and eleven (11) days of prision mayor to fifteen
(15) years, eight (8) months and twentyone (21) days of reclusion temporal, to reimburse the complainant-victim Danilo de
los Reyes in the amount of P120,000.00 and to pay the costs.
3. In Criminal Case No. 98852 for Estafa, to suffer an indeterminate prison term of
eleven (11) years, eleven (11) months and eleven (11) days of prision mayor to fifteen
(15) years, eight (8) months and twenty-one (21) days of reclusion temporal, to
reimburse the complainant-victim Elmer Clamor in the amount of P120,000.00 and to
pay the costs.
4. In Criminal Case No. 98853 for Estafa, to suffer an indeterminate prison term of
nine (9) years, eleven (11) months and eleven (11) days of prision mayor to thirteen
(13) years, eight (8) months and twenty-one (21) days of reclusion temporal, to
reimburse the complainant-victim Belarmino Torregrosa in the amount
of P100,000.00 and to pay the costs.
5. In Criminal Case No. 98854 for Estafa, to suffer an indeterminate prison term of
eleven (11) years, eleven (11) months and eleven (11) days of prision mayor to fifteen
(15) years, eight (8) months and twenty-one (21) days of reclusion temporal, to
reimburse the complainant-victim Hazel de Paula in the amount of P120,000.00 and to
pay the costs.
6. In Criminal Case No. 98855 for Illegal Recruitment (Large Scale), to suffer the
penalty of life imprisonment, to pay a fine of One Hundred Thousand Pesos
(P100,000.00) and to pay the costs.
In the successive service of his sentences, the accused shall be credited in full with the
period of his preventive imprisonment.
The above terms shall also be subject to the application of the Three-Fold Rule. [1]
Accused-appellant in this appeal assails his conviction by the trial court. He claims
that the court below erred in disregarding the testimony of Nenita Mercado, an
employee of the Philippine Overseas Employment Administration (POEA), who
categorically stated that their records indicated that Calonzo never processed
complainants' applications for employment abroad. He concludes from that fact alone
that he cannot be deemed to have engaged in the recruitment of workers for
employment abroad.
As regards the estafa cases, accused-appellant contends that the court a quo erred
in giving credence to the testimonies of prosecution witnesses considering that the

amounts claimed to have been collected by him did not correspond to the amounts
indicated in the receipts presented by the complaining witnesses.
The antecedents: Sometime in February 1992 Danilo de los Reyes and his brotherin-law Belarmino Torregrosa met Reydante Calonzo in the house of Loreta Castaeda
at No. 10 P. Burgos Street, Pasig, Metro Manila. In that meeting Calonzo lost no time in
informing them that he could provide them employment abroad, particularly Italy, for a
fee. Calonzo was so glib and persuasive that De los Reyes and Torregrosa were quickly
convinced to cast their lot with him. Upon returning home they took stock of their assets
and resources and came up with the figures sufficient for the processing of their
applications for employment abroad. Two months after their initial meeting, or on 13
April 1992, De los Reyes gave Calonzo P50,000.00. He also pledged the Ford Fiera of
his brother-in-law to Calonzo for P70,000.00 in order to come up with the P120,000.00
processing fee imposed by Calonzo. The latter then informed De los Reyes of his
"scheduled" departure for Italy on 29 April 1992. However, despite the lapse of the
period, De los Reyes and Torregrosa remained in the Philippines although their recruiter
reiterated his promise to send them to Italy.
On 1 May 1992, instead of sending them to Italy, they were billeted at Aloha Hotel
along Roxas Boulevard. The following day, or on 2 May 1992, they boarded a plane that
was supposed to take them to Italy. But Calonzo had another destination in
mind. They landed in Bangkok instead where their visas for Italy, according to Calonzo,
would be processed. They stayed at P.S. Guest Hotel for one and a half months. While
in Bangkok the accused again collected money from them purportedly to defray the
expenses for their visas. They also incurred expenses for food and accommodation,
and for overstaying, De los Reyes had to pay 2800 bahts to the immigration authorities
only to discover to their utter dismay that Calonzo had already returned to
the Philippines.
In their helplessness in a foreign land they sought the help of Loreta Castaeda by
calling her up in Manila. Castaeda promptly fetched them from Bangkok and brought
them back to the Philippines. The day following their arrival they went to the office of
Calonzo on Padre Faura. Despite their frustrations in Bangkok Calonzo still insisted that
he would send them to Italy as he promised. In their naivet which was no match to the
unmitigated audacity of Calonzo, De los Reyes and Torregrosa still clung to the
promises of Calonzo hoping against hope that the latter would still fulfill them. However
the promises remained unfulfilled so they looked again for Calonzo. But this time their
quarry had already absconded.
They verified from the POEA whether Calonzo or his R. A. C. Business Agency was
duly authorized and licensed to recruit people for employment abroad. The POEA
certified that R. A. C. Business Agency was not licensed to recruit workers for overseas
employment.
Torregrosa substantiated the above account. He testified that he gave Calonzo a
total
of P100,000.00. On
cross-examination however
he stated that hegave such amount on 27 April 1992 and not on 13 April 1992 as
testified to by De los Reyes. But the date appearing on the receipt marked Exhibit A is

13 April 1992. Torregrosa also claimed that while in Bangkok he gave Calonzo an
additional amount of US$100.00.
On her part, Hazel de Paula testified that she first met appellant and the other
complainants at the house of Loreta Castaeda at No. 10 P. Burgos Street, Pasig, Metro
Manila. Convinced that she would eventually be employed in Italy as a domestic helper
she gave Calonzo P120,000.00. Unlike the other complaining witnesses, she was not
able to fly to Bangkok on 2 May 1992 as her passport was not yet available. She left
only on 6 May 1992 where she was met by Calonzo at the airport and brought to
the P.S. Guest Hotel where her companions who had arrived earlier were already
billeted. She said that while in Bangkok Calonzo asked money again from her.
Elmer Clamor, a 28-year old resident of Gen. Trias, Cavite, was similarly situated
with Hazel de Paula. Clamor narrated that he gave CalonzoP120,000.00 for the
latter's commitment to send him to Italy, and in fact while in Bangkok he gave Calonzo
US$250.00 more.
Bernardo Miranda, a construction worker from Talisay, Batangas, was another
victim of Calonzo. Lured by the latter's assurances that he would be sent to Italy, he
gave Calonzo a total of P120,000.00 for the processing of his application for work in
Italy. But, like all the rest of them, Miranda only reached Bangkok. The promised job, his
hard-earned money and Calonzo himself eventually disappeared.
Senior Labor Employment Officer Nenita Mercado of the POEA confirmed that
neither Reydante Calonzo nor his R. A. C. Business Agency was authorized to recruit
workers for employment abroad.
Reydante Calonzo tells us his own story. He admits being engaged in the
consultancy business through his R. A. C. Business Agency but denies any involvement
in recruitment activities. He admits knowing Loreta Castaeda and Leticia Solis as the
two have sought his assistance regarding their real estate business. He denies knowing
the complaining witnesses except Danilo de los Reyes and Belarmino Torregrosa who
once visited him in his office. While he disclaims the receipts presented by the
prosecution as official receipts of his R. A. C. Business Agency he admits that
the signatures thereon were similar to his.
We frustrate the expectations of the accused. Article 13, par. (b), of the Labor Code
defines recruitment and placement as -

(A)ny act of canvassing, enlisting, contracting, transporting, utilizing, hiring or

procuring workers, and includes referrals, contract services, promising or advertising
for employment, locally or abroad, whether for profit or not; Provided, that any person
or entity which, in any manner, offers or promises for a fee employment to two or
more persons shall be deemed engaged in recruitment and placement.
Illegal recruitment is specifically defined in Art. 38 of the Code thus -

(a) Any recruitment activities, including the prohibited practices enumerated under
Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority
shall be deemed illegal and punishable under Article 39 of this Code x x x x
(b) Illegal recruitment when committed by a syndicate or in large scale shall be
considered an offense involving economic sabotage and shall be penalized in
accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring and/or confederating with one another in
carrying out any unlawful or illegal transaction, enterprise or scheme defined under
the first paragraph hereof. Illegal recruitment is deemed committed in large scale if
committed against three (3) or more persons individually or as a group.
All the five (5) complaining witnesses met each other for the first time at the house
of Loreta Castaeda. They were not in any way acquainted with one another prior to that
meeting save for Danilo de los Reyes and his brother-in-law Belarmino
Torregrosa. They all came from different places, yet, they were all united in pointing to
the Calonzo as the person who enticed them to apply for employment abroad. Of
course, Calonzo could not explain what motivated the complaining witnesses to file
these cases against him. The most that Calonzo could do on the witness stand was to
deny all the charges against him.Alas, his denial is at most lame and cannot prevail
over the positive assertions of the complaining witnesses. In People v. Villafuerte [2] we
ruled -

x x x The absence of evidence as to an improper motive actuating the principal

witnesses of the prosecution strongly tends to sustain no improper motive existed and
their testimony is worthy of full faith and credit. Accused-appellant's denial cannot
prevail over the positive assertions of complainants who had no motive to testify
falsely against her except to tell the truth.
Illegal recruitment in large scale is committed when a person "(a) undertakes any
recruitment activity defined under Article 13(b) or any prohibited practice enumerated
under Article 34 of the Labor Code; (b) does not have a license or authority to lawfully
engage
in
the
recruitment and placement ofworkers; and (c) commits the same
against three or more persons, individually or as a group."[3] The
testimony
of
complainants
evidently
showed
that
Calonzo
was
engaged
in recruitment activities in large scale. Firstly, he deluded complainants into believing
that jobs awaited them in Italy by distinctly impressing upon them that he had the facility
to send them for work abroad. He even showed them his passport to lend credence to
his claim. To top it all, he brought them to Bangkok and not to
Italy. Neither did he have any arrangements in Bangkok for the transfer of his recruits to
Italy. Secondly, POEA likewise certified that neither Calonzo nor R. A. C. Business
Agency was licensed to recruit workers for employment abroad. Appellant admitted this

fact himself.Thirdly, appellant recruited five (5) workers thus making the crime illegal
recruitment in large scale constituting economic sabotage.
In his attempt to exculpate himself, although belatedly, Calonzo denies having
received money from the complainants. But as against their positive testimonies, this
denial of appellant is worthless and at most self-serving. All the complaining witnesses
testified that they gave their money to Calonzo through Loreta Castaeda who in turn
gave the amounts to Calonzo in their presence. In support thereof complainants even
presented receipts issued by theR. A. C. Business Agency with Calonzo's signature
affixed thereon. Nobody corroborated Calonzo's denial. Even Loreta who could have
confirmed such denial testified that all the amounts given by the complainants were
turned over by her to Calonzo. The attempt of the defense at reinforcing such denial
proved futile when it presented Carmeo Alix to testify that appellant owned another
import-export business as it had no relevance to his defense.
As regards the conviction of Calonzo for estafa on five (5) counts we ruled
in People v. Turda[4] that recruitment of persons for overseas employment without the
necessary recruiting permit or authority from the POEA constitutes illegal
recruitment; however, where some other crimes or felonies are committed in the
process, conviction under the Labor Code does not preclude punishment under other
statutes. In People v. Romero[5] we said that the elements of estafa were: (a) that the
accused defrauded another by abuse of confidence or by means of deceit, and (b) that
damage or prejudice capable of pecuniary estimation is caused to the offended party or
third person. Corollarily, Art. 315 of the Revised Penal Code provides for its penalty thus
-

1st. The penalty of prision correccional in its maximum period to prision mayor in its
minimum period, if the amount of the fraud is over P12,000 but does not
exceed P22,000, and if such amount exceeds the latter sum, the penalty provided in
this paragraph shall be imposed in its maximum period, adding one year for each
additional P10,000; but the total penalty which may be imposed shall not exceed
twenty years. In such a case, and in connection with the accessory penalties which
may be imposed and for the purpose of the other provisions of this Code, the penalty
shall be termed prision mayor or reclusion temporal, as the case may be.
In the case before us, we are convinced that Calonzo defrauded complainants
through deceit. They were obviously misled into believing that he could provide them
employment in Italy. As a result, the five (5) complainants who desperately wanted to
augment their income and improve their lot parted with their hard-earned money. In
Crim. Cases Nos. 98850, 98851, 98852 and 98854 the amount defrauded of each
complainant was P120,000.00. In consonance with Art. 315 of the Revised Penal Code,
the imposable penalty is prision correccional in its maximum period to prision mayor in
its minimum period the range of which is four (4) years, two (2) months and one (1)
day, to five (5) years, five (5) months and ten (10) days as minimum, while the medium
period is from five (5) years, five (5) months and eleven (11) days, to six (6) years, eight
(8) months and twenty (20) days, and the maximum is six (6) years, eight (8) months

and twenty-one (21) days, to eight (8) years. Since the amount of P120,000.00 was
defrauded
in each case, the maximumpenalty should be taken from the
maximum
period of the penalty prescribed, plus one (1) year for every P10,000.00 in excess
of P22,000.00 which, in these four (4) cases is equivalent to nine (9) additional
years. Hence, the maximum imposable penalty should be fifteen (15) years, eight (8)
months and twenty-one (21) days, to seventeen (17) years of reclusion
temporal medium. Applying the Indeterminate Sentence Law, the minimum penalty shall
be within the range of the penalty next lower in degree to that prescribed in the
Code, i.e., prision correccional minimum to prision correccional medium in any of its
periods. Prision correccional minimum to prision correccional medium ranges from six
(6) months and one (1) day, to four (4) years and two (2) months.Clearly, the penalty
imposed by the court below in each of the aforesaid cases, which is eleven (11) years,
eleven (11) months and eleven (11) days of prision mayor medium, to fifteen (15) years,
eight (8) months and twenty-one (21) days of reclusion temporal medium, is properly
within the range of the imposable penalty.
The same principle would apply to Crim. Case No. 98853 where the amount
defrauded was P100,000.00. The trial court therefore correctly imposed the penalty of
nine (9) years, eleven (11) months and eleven (11) days of prision mayor medium, to
thirteen (13) years, eight (8) months and twenty-one (21) days of reclusion
temporal minimum, which is properly within the range of the imposable penalty.
WHEREFORE,
the
judgment
of
the
court a
quo finding accusedappellant REYDANTE CALONZO Y AMBROSIO guilty of Illegal
Recruitment in Large
Scale in Crim. Case No. 98855 (G.R. No. 115155), and of Estafa in Crim. Case No.
98850 (G.R. No. 115150), Crim. Case No. 98851 (G.R. No. 115151),Crim. Case No.
98852 (G.R. No. 115152), Crim. Case No. 98853 (G.R. No. 115153) and Crim. Case
No. 98854 (G.R. No. 115154) as well as the corresponding penalties imposed by the
court a quo is AFFIRMED, with costs against accused-appellant.
In the service of the various prison terms herein imposed upon accusedappellant, the provisions of Art. 70 of the Revised Penal Code shall be observed.
SO ORDERED.
Padilla, (Chairman), Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.

[1]

Decision penned by Judge Martin S. Villarama Jr., RTC-Br. 156, Pasig City; Rollo, pp. 34-35.
G.R. Nos. 93723-27, 6 May 1994, 232 SCRA 225, 236.
[3]
People v. Comia, G.R. No. 109761, 1 September 1994, 236 SCRA 193.
[4]
G.R. Nos. 97044-46, 6 July 1994, 233 SCRA 713.
[5]
G.R. Nos. 103385-88, 26 July 1993, 224 SCRA 755.
[2]