UP Law F2021 044 Dumpit-Murillo v.

CA
Labor 1 Control Test (also Article 280, Labor Code) 2007 Quisumbing, Acting CJ.

SUMMARY Murillo was hired as a newscaster by ABC under a 3-month contract, which was continually renewed for
4 years. When Murillo indicated her desire for a salary increase in the next renewal, ABC chose not to renew her
contract. Murillo then filed a complaint for illegal dismissal with the NLRC. Initially, the Labor Arbiter dismissed the
complaint but the NLRC reversed this and ruled that (1) there existed an employer-employee relationship between
ABC and Murillo, (2) she was a regular employee, and that (3) she was illegally dismissed. The CA reversed the NLRC
but the SC ultimately upheld the NLRC’s decision.
FACTS1
 On October 2, 1995, Associated Broadcasting Company (“ABC”) hired Thelma Dumpit-Murillo
(“Murillo”) as a newscaster and co-anchor for “Balitang-Balita,” an early evening news program, and the
program “Live on Five,” under a 3-month contract.
 On September 30, 1999, after four years of repeated renewals, Murillo’s talent contract expired. Two
weeks later, Murillo wrote to Jose Javier (“Javier”), Vice President for News and Public Affairs of ABC,
informing the latter that she was still interested in renewing her contract subject to a salary increase.
Thereafter, Murillo stopped reporting for work.
 On November 5, 1999, she wrote Javier another letter, stating that should she not receive by November
8, 1999 a formal reply to the terms and conditions of the renewal that she set forth in earlier letters, she
will deem it as a “constructive dismissal” of her services.
 A month later, Murillo sent a demand letter to ABC, demanding:
1. Reinstatement to her former position;
2. Payment of unpaid wages for services rendered from September 1 to October 20, 1999; and,
3. Full backwages and payment of 13th month pay, vacation/sick/service incentive leaves and other
monetary benefits due to a regular employee starting March 31, 1996.
 ABC replied that it was preparing a check for #2; however, it also alleged that there was no basis for the
other claims.
 On December 20, 1999, Murillo filed a Complaint with the NLRC against ABC, Javier and Edward Tan
(“Tan”), for illegal constructive dismissal, nonpayment of salaries, overtime pay, premium pay, separation
pay, holiday pay, service incentive leave pay, vacation/sick leaves and 13th month pay. She likewise
demanded payment for moral, exemplary and actual damages, as well as for attorney's fees.
 LABOR ARBITER: On March 29, 2000, the Labor Arbiter dismissed the complaint.
 NLRC: On August 30, 2000, the NLRC reversed the Labor Arbiter and held that:
1. An employer-employee relationship existed between Murillo and ABC;
2. The subject talent contract was void;
3. Murillo was a regular employee illegally dismissed; and,
4. She was entitled to reinstatement and backwages OR separation pay, aside from 13th month pay and
service incentive leave pay, moral and exemplary damages and attorney's fees.
 The NLRC subsequently denied ABC’s Motion for Reconsideration.
 COURT OF APPEALS: After initially dismissing the petition (for failure to attach particular documents),
the CA eventually reversed the NLRC’s decision on the ground of grave abuse of discretion. The CA held
that Murillo was a fixed-term employee and not a regular employee within the ambit of Article 280 of
the Labor Code because her job, as anticipated and agreed upon, was only for a specified time.
 Thus, Murillo appealed to the Supreme Court.

RATIO
[RELEVANT] W/N there existed an employer-employee relationship between ABC and Murillo
YES. The Court cited Manila Water Company, Inc. v. Pena2 in discussing the 4 elements to determine the
existence of an employer-employee relationship:
1
Please note that I underlined each of the characters’ names at the first instance that each appeared in the facts; meanwhile, dates, periods,
and article numbers (along with some emphasized facts) are in bold letters.
2
GR No. 158255, July 8, 2004, 434 SCRA 53.
 1. Selection and engagement of the employee;
2. Payment of wages;
3. Power of dismissal; and,
4. Employer’s power to control.
Of the 4, the most important one is the employer’s control of the employee’s work, not only as to the result, but
also with regard to the means and methods of accomplishing such work.

Perusing the duties imposed on Murillo by her contract with ABC3, the SC found that ABC did have control over
her work. In addition, ABC also dictated her work assignments and payment of her salaries. ABC also had the
power to dismiss her. Thus, there existed an employer-employee relationship between ABC and Murillo.

ABC contends that the case of Sonza v. ABS-CBN Broadcasting Corporation4 is applicable, which recognizes and
upholds the absence of an employer-employee relationship between a talent and the media entity which
engaged the talent’s services on a “per talent contract” basis.

However, that case is inapplicable because in Sonza, ABS-CBN did not instruct Sonza how to perform his job (e.g.
how he delivers his lines, appeared on TV, sounded on radio, and what topics he must tackle in his shows,
provided he did not attack ABS-CBN). In other words, ABS-CBN in Sonza did not exercise control over the means
and methods of the performance of Sonza’s work.

In this case, ABC did have control over the performance of Murillo’s work. The Court also noted the difference
in monthly salary between Murillo (P28,000) and Sonza (P300,000) to further bolster the conclusion that
Murillo is not similarly situated with Sonza.

[NOT RELEVANT] W/N Murillo was a regular employee of ABC

YES. Under Article 280 of the Labor Code5, there are 2 kinds of regular employees:
1. Those who are engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer; (nature of the work) and,
2. Those who have rendered at least 1 year of service, whether continuous or broken, with respect to the
activity in which they are employed. (duration of employment)

3
The relevant portion of the contract read as follows:
“1. SCOPE OF SERVICES — TALENT agrees to devote his/her talent, time, attention and best efforts in the performance of
his/her duties and responsibilities as Anchor/Program Host/Newscaster of the Program, in accordance with the direction of
ABC and/or its authorized representatives.
1.1. DUTIES AND RESPONSIBILITIES — TALENT shall:
a. Render his/her services as a newscaster on the Program;
b. Be involved in news-gathering operations by conducting interviews on- and off-the-air;
c. Participate in live remote coverages when called upon;
d. Be available for any other news assignment, such as writing, research or camera work;
e. Attend production meetings;
f. On assigned days, be at the studios at least one (1) hour before the live telecasts;
g. Be present promptly at the studios and/or other place of assignment at the time designated by ABC;
h. Keep abreast of the news;
i. Give his/her full cooperation to ABC and its duly authorized representatives in the production and promotion of
the Program; and
j. Perform such other functions as may be assigned to him/her from time to time.”
4
GR No. 138051, June 10, 2004, 431 SCRA 583.
5
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 services 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 activity exists.
The primary standard for determining regular employment is the reasonable connection between the
particular activity performed by the employee compared with the usual trade or business of the employer.
This connection may be established by examining the nature of the work and its relation to the employer’s
business. The other manner of establishing such a connection is to ascertain whether the employee has been
performing such work for at least 1 year, whether continuous or intermittent, in which case the law deems
repeated and continuous need for the work as sufficient evidence of the necessity of such work to the
employer’s business.

In this case, the SC found that Murillo’s work was necessary or desirable in the usual trade or business of ABC.
Moreover, Murillo was contracted for 4 years, indicative of such necessity or desirability of Murillo’s work to
ABC’s business.

Murillo’s contract was also not a valid fixed-term employment. For such contract to be valid, there should be no
force, duress, improper pressure, or any other factor which vitiates consent, or any moral dominance by the
employer over the employee. Neither will such a contract be valid if its purpose was to perpetually prevent the
employee’s acquisition of security of tenure.

In this case, the SC stated that the two parties did not appear to deal with each other on equal terms, as she had
no choice but to affix her signature upon each renewal of her contract, for fear of losing her job “that she loved”
and “had grown accustomed to”; otherwise, ABC may simply choose not to renew he contract. Moreover, ABC’s
repeated extension of Murillo’s 3-month contract for 4 years unduly evades her regularization and acquisition of
security of tenure. Thus, there is no valid fixed-term employment contract between ABC and Murillo—Murillo
is a regular employee of ABC.

[NOT RELEVANT] W/N Murillo was illegally dismissed

YES. As an employee (Issue # 1) who is of regular status (Issue # 2), Murillo is entitled to security of tenure and
may only be dismissed for just cause [substantive due process] after notice and hearing [procedural due
process]. Because ABC observed neither requirement for a valid dismissal, Murillo was thus illegally dismissed.

DISPOSITIVE “WHEREFORE, the challenged Decision dated January 30, 2004 and Resolution dated June 23,
2004 of the Court of Appeals in CA-G.R. SP No. 63125, which held that the petitioner was a fixed-term employee,
are REVERSED and SET ASIDE. The NLRC decision is AFFIRMED. Costs against private respondents. SO
ORDERED.”

Meanwhile, the NLRC decision referred to is as follows:

“WHEREFORE, the Decision of the Arbiter dated 29 March 2000 is hereby REVERSED/SET ASIDE and a NEW
ONE promulgated:
1. Declaring respondents [ABC, Jose Javier, and Edward Tan] to have illegally dismissed complainant
[Murillo] from her regular work therein and thus, ordering them to reinstate her in her former
position without loss of seniority right[s] and other privileges and to pay her full backwages,
inclusive of allowances and other benefits, including 13th month pay based on her said latest
rate of P28,000.00/mo. from the date of her illegal dismissal on 21 October 1999 up to finality
hereof, or at complainant's option, to pay her separation pay of one (1) month pay per year of
service based on said latest monthly rate, reckoned from date of hire on 30 September 1995 until
finality hereof;
2. To pay complainant's accrued Service Incentive Leave Pay of 5 days pay per year and 13th
month pay for the years 1999, 1998 and 1997 of P19,236.00 and P84,000.00, respectively and her
accrued salary from 16 September 1999 to 20 October 1999 of P32,760.00 plus legal interest at
12% from date of judicial demand on 20 December 1999 until finality hereof;
3. To pay complainant moral damages of P500,000.00, exemplary damages of P350,000.00 and
10% of the total of the adjudged monetary awards as attorney's fees.
Other monetary claims of complainant are dismissed for lack of merit. SO ORDERED.” (emphases mine)