Sonza vs. ABS-CBN Broadcasting
The Court of
Corporation
Facts:
In May 1994, ABS-CBN Broadcasting
Corporation (ABS-CBN), represented by its
corporate officers, signed an Agreement with
Mel and Jay Management and Development
Corporation (MJMDC), represented by Sonza
and Carmela Tiangco whereby Agent MJMDC
agreed to provide exclusive services of Sonza
as talent for radio and television to ABS-CBN.
The Agreement includes monthly talent fee of
P310,000 for first year and P317,000 for the
second and third year.
However, on April 1, 1996, Sonza
wrote a letter to ABS-CBN where he stated
that he has resigned and that considering the
acts of ABS-CBN violating the Agreement he
is rescinding the Agreement. He also stated
that he is waiving and renouncing recovery of
the remaining amount stipulated in the
Agreement but he reserves his right to other
benefits.
On April 30, 1996, Sonza filed a
complaint against ABS-CBN before the
Department of Labor and Employment
(DOLE) on the grounds of nonpayment of
salaries, separation pay, service incentive leave
pay, 13th month pay, signing bonus, travel
allowance and amounts under the Employees
Stock Option Plan. ABS-CBN filed a motion
to dismiss stating that there is no employer-
employee relationship that existed between the
parties. ABS-CBN, at this point, is still
remitting Sonzas monthly talent fees through
his PCIBank Account. Subsequently, the
Labor Arbiter dismissed the complaint for lack
of jurisdiction on the ground that there exists
no employer-employee relationship between
the parties. On appeal, NLRC affirmed the
decision of the Labor Arbiter.
Appeals dismissed the case.
Issue:
WoN there is an employer-employee
relationship between the parties
Held:
There is no employer-employee
relationship between the parties. 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.
In the case at bar, ABS-CBN engaged
the services of Sonza on account of his unique
or peculiar skills in broadcasting. This specific
selection is indicative of an independent
contractual relationship. Also, all the talent
fees and benefits were paid as stipulated in the
Agreeement. If Sonza was an employee of
ABS-CBN, then there would be no need to
stipulate such fees because the law
automatically includes these fees in every
employer-employee contract. The huge
amount of Sonzas talent fees is indicative of
his power to bargain. This power to bargain is
not available to ordinary employees. Again,
this is indicative of an independent contractual
relationship. Moreover, ABS-CBN may only
terminate Sonzas services on the ground of
breach of contract. Even if it suffers losses,
ABS-CBN should still pay for the Sonzas
talent fees as it is not a ground for termination
stipulated in the Agreement. This restricted
power to dismiss is indicative of independent
contractual relationship. Lastly, applying the
control test, it can be deduced that ABS-CBN
did not exercise control over the means and
methods of performance of Sonzas work.
ABS-CBNs control is limited only to the
result of Sonzas work, i.e. whether to
broadcast the final product or not.
Furthermore, the rules and standards of
performance covering talents of ABS-CBN
stipulated in the agreement contains mere
guidelines towards the achievement of the
mutually desired result. It does not show any
power of control. Also, exclusivity of services
does not indicate power of control as a
characteristic of an employer-employee
relationship. The hiring of excusive talents is a
widespread and accepted practice in the
entertainment industry. It is not designed for
control but for the protection of the investment
of the broadcast station.
Thus, given these facts, it is established
that there is no employer-employee
relationship between ABS-CBN and Sonza.
There is an independent contractual
relationship between them.