G.R. No. 167638.

June 22, 2005

ABS-CBN vs. MARQUEZ

Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated JUN 22 2005.
G.R. No. 167638 (ABS-CBN Broadcasting Corporation vs. Henrie Marquez, et al.)
Before us is this petition for review on certiorari assailing the December 20, 2004
decision of the Court of Appeals in CA-G.R. SP No. 81750, reversing and setting
[1]

aside an earlier decision of National Labor Relations Commission (NLRC), 4th Division,
[2]

Cebu City in Case No. V-000967-00 which, in turn, reversed the decision of the Labor
[3]

Arbiter in a complaint for illegal dismissal commenced by the herein respondents

against petitioner ABS-CBN Broadcasting Corporation.
Petitioner hired the services of respondents on various dates starting December,
1994 to undertake the production in the Cebuano dialect of television serial programs
for petitioner’s week-day afternoon time slots in Cebu. Respondents were assigned
among three (3) production groups, each with its own set of directors, writers,
videographers, lightsmen, editors, actors and utility personnel. Each production group
was given a weekly budget, initially at P30,000.00, which was later increased to
P40,000.00 a week.
The television-series did so well that several more were subsequently produced.
The production groups were continuously engaged to film succeeding programs to
replace the concluded ones.
On June 15, 1999, respondents addressed a letter to petitioner asking for a 25%
increase in their weekly budget, but the same was denied by petitioner’s AVP for the
Visayas Cluster, Ma. Luisa L. Ascalon. Instead, respondents were informed of the
termination of their services effective August 13, 1999.
On August 27, 1999, respondents filed with the Regional Arbitration Branch (RAB)
at Region VII of the Department of Labor and Employment their consolidated complaint
for illegal dismissal; illegal deduction; non-payment of overtime and holiday pay;
premium pay for holiday, rest day and night shift differential; non-payment of 13 th month
pay, service incentive leave, separation pay, backwages; and attorney’s fees.
On June 15, 2000, the Executive Labor Arbiter of RAB VII rendered a decision in [4]

favor of respondents and ordered petitioner to pay to them their money claims.
However, on petitioner’s appeal, the NLRC’S 4th Division at Cebu City reversed the
decision of the Labor Arbiter, thus:
WHEREFORE, premises considered, judgment is hereby rendered granting the
appeal of [petitioner], reversing and setting aside the Decision of the Executive Labor
Arbiter dated 15 June 2000 and promulgating a new one dismissing all the
consolidated complaints for lack of merit.
SO ORDERED.
 Respondents moved for a reconsideration but their motion was denied by the
NLRC’s 4th Division in its resolution of July 30, 2003.
From there, respondents went to the Court of Appeals via a petition for certiorari,
thereat docketed as CA-G.R. SP No. 81750, imputing grave abuse of discretion on the
part of the NLRC’s 4th Division in setting aside the Labor Arbiter’s findings and in ruling
that they were hired as contractual or project employees, i.e. as “talents” engaged for
specific projects, under the special work arrangements with the petitioner, and in
upholding the legality of their dismissal.
Respondents asserted that they are petitioner’s regular employees and emphasized
the fact of their continuous work after each tele-series program and the very nature of
their work, which is “necessary and desirable” to the business or trade of their
employer . They also asseverated that the application of the “four-fold test” in labor laws
[5]

clearly shows the existence of an employer-employee relationship between the parties.

For its part, petitioner insisted that respondents were hired as program employees
in the nature of contractual or project employment; that respondents were mere
“talents”, i.e. they were contracted because of their expertise or talents as program
employees; and that respondents were, in effect, mere program employees under
Policy Instruction No. 40, series of 1979 whom petitioner contracted due to their
expertise for particular projects, in this case the production of the Visayan tele-series
programs.
In the herein assailed decision dated December 20, 2004, the Court of Appeals
[6]

reversed that of the NLRC and reinstated the earlier decision of the Labor Arbiter, to wit:
WHEREFORE, the Petition for Certiorari is GRANTED, and the assailed Decision
and Resolution of the National Labor Relation Commission (NLRC), 4th Division, Cebu
City, in Case No. V-000050-02, are hereby REVERSED and SET ASIDE. The Decision
of Executive Labor Arbiter of 15 June 2000 finding an employer-employee relationship
between [respondents] and [petitioner] ABS-CBN Broadcasting Corporation and
ordering the latter to pay [respondents’] money claims is REINSTATED in toto except
that the computation of the backwages thereof should be reckoned until the finality of
this decision. No pronouncement as to costs.
SO ORDERED.
Applying the “four-fold test” to determine the existence of an employer-employee
relationship between the parties, the Court of Appeals viewed respondents as regular
employees of petitioner and not independent contractors.
Respondents’ employment with petitioner passed the “four-fold test” on employer-
employee relations, namely: (1) the selection and engagement of the employee, or the
power to hire; (2) the payment of wages; (3) the power to dismiss; and (4) the power to
control the employee .[7]

Petitioner never denied having engaged the services of respondents. Neither did it
controvert the fact that respondents received their pay from petitioner twice a month
thru automated teller machines (ATM) and respondents were issued payslips bearing
petitioner’s corporate name on the heading. The payment of wages clearly rests upon
petitioner. While a weekly budget is given and the directors are ostensibly given a free
hand on how to spend the same subject only to petitioner’s budgetary limitation, the
hard reality is that such payments were done by the petitioner itself.
As correctly observed by the Labor Arbiter, the elements of control and supervision
over the respondents were evident. Petitioner employed production supervisors who
monitored and saw to it that the filming of the series shall be finished within a time-
frame and the production output to conform to petitioner’s standards. These were
bolstered by various memoranda issued by petitioner relative to production work-
approval of filming and editing schedule, new assignments of production crew and
reminders to tele-series directors and editors regarding the standard policy on editing
services. Respondents have to follow company rules in the work done in company
premises. An overseer, in the person of an executive producer, is assigned by petitioner
over each production crew to make sure that the end result is acceptable to petitioner,
and the executive producer can dictate the work to be re-done. Petitioner also has
control in the assignments of crew members and can thus re-assign or transfer any of
them to another production group, thereby belying petitioner’s contention that the
directors are the ones that control the whole production. All these, taken together,
unmistakably show petitioner’s power of control over respondents’ work.
Anent the power of dismissal and suspension, it cannot be denied that petitioner
exercised such. The records clearly show that petitioner sanctioned disciplinary
measures on some of the respondents for some infraction of company rules thru
disciplinary measures on erring employees. For sure, respondent Orlando Carillo was
suspended for one week by his production head on January 25, 1999 for failure to edit
an episode which was to be sent to petitioner’s Zamboanga station for airing.
Additionally, the fact that petitioner itself provided the production equipment such as
video cameras, lights, microphone and TV monitors, largely discounts petitioner’s claim
that respondents were independent contractors.
It may be so that respondents were assigned to a particular tele-series. However,
petitioner can and did immediately reassign them to a new production upon completion
of a previous one. Hence, they were continuously employed, the tele-series being a
regular feature in petitioner’s network programs. Petitioner’s continuous engagement of
respondents from one production after another, for more than five years, made the latter
part of petitioner’s workpool who cannot be separated from the service without cause as
they are considered regular. A project employee or a member of a workpool may
acquire the status of a regular employee when the following concur: there is
continuous rehiring of project employees even after the cessation of the project; [8]

and the tasks performed by the alleged “project employee” are vital, necessary,
and indispensable to the usual business or trade of his employer. It cannot be
[9]

denied that the services of respondents as members of a crew in the production of a

tele-series are undoubtedly connected with the business of the petitioner. This Court
has held that the primary standard in determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the
business or trade of his employer. Here, the activity performed by respondents is,
[10]

without doubt, vital to petitioner’s trade or business.

 We agree with the Court of Appeals when it upheld the conclusion of the Labor
Arbiter that petitioner broadcasts and produces its own television series and other
programs, whether in Cebu or in Manila; and that there is no distinction between its
Cebu station and the mother station because they are one and the same, more so due
to lack of showing by the petitioner that its Cebu station is independent from its mother
station. It cannot thus be said that petitioner is primarily just involved in mere
broadcasting from satellite feeds or other sources. That the production of the television
series is vital, necessary and desirable to petitioner’s usual business is beyond
question.
It is a matter of record that respondents have rendered almost five (5) years of
continuous service to petitioner, doing work that is necessary and desirable to the usual
business of the latter. Hence, even granting on the extreme that respondents were not
performing work that is vital, necessary and indispensable to the usual business of
petitioner, nonetheless the second paragraph of Article 280 of the Labor Code still
applies. It reads:
ART. 280. REGULAR AND CASUAL EMPLOYMENT
xxx xxx xxx
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. (Emphasis supplied).
We thus rule and so hold that respondents are petitioner’s regular employees, at
least with respect to the production of petitioner’s Visayan tele-series programs and until
such activity exists.
Petitioner relied upon and took undue advantage of Policy Instruction No. 40, by
treating herein respondents as talents and classifying them as independent contractors
and freelancers.
Policy Instruction No. 40 pertinently provides:
Program employees are those whose skills, talents or services are engaged by the
station for a particular or specific program or undertaking and who are not required to
observe normal working hours such that on some days they work for less than eight (8)
hours and on other days beyond the normal work hours observed by station employees
and are allowed to enter into employment contracts with other persons, stations,
advertising agencies or sponsoring companies. The engagement of program
employees, including those hired by advertising or sponsoring companies, shall be
under a written contract specifying, among other things, the nature of the work to
be performed, rates of pay, and the programs in which they will work. The
contract shall be duly registered by the station with the Broadcast Media Council
within three days from its consummation. (Emphasis supplied)
Ironically, however, petitioner failed to adduce an iota proof that the requirements
for program employment were even complied with by it. It is basic that project or
contractual employees are appraised of the project they will work under a written
contract, specifying, inter alia, the nature of work to be performed and the rates of pay
and the program in which they will work. Sadly, however, no such written contract was
ever presented by the petitioner. Petitioner is in the best of position to present these
documents. And because none was presented, we have every reason to surmise that
no such written contract was ever accomplished by the parties, thereby belying
petitioner’s posture.
Worse, there was no showing of compliance with the requirement that after every
engagement or production of a particular television series, the required reports were
filed with the proper government agency, as provided no less under the very Policy
Instruction invoked by the petitioner, nor under the Omnibus Implementing Rules of the
Labor Code for project employees. This alone bolsters respondents’ contention that
they were indeed petitioner’s regular employees since their employment was not only
for a particular program.
To recapitulate, respondents, due to their length of service, had already attained the
status of regular employment and are thus entitled to security of tenure provided for
under our labor laws. Consequently, they may only be validly dismissed from service
upon petitioner’s compliance with the legal requisites for termination, both in their
substantive and procedural aspects. In this connection, it bears emphasis that under the
Labor Code and its Omnibus Implementing Rules, not only must the dismissal be for a
just or authorized cause , but that the rudimentary requirements of due process: notice
[11]

and hearing, must likewise be observed before a regular employee may be dismissed.
[12]

Without the concurrence of these two requisites, the termination would be, in the eyes
of the law, illegal .[13]

It is incumbent upon petitioner to prove that its dismissal of respondents was for a
valid cause and that they were afforded procedural due process before termination. As
it is, petitioner failed to discharge this burden. Its only assertion is that the dismissal was
due to the expiration or completion of contract, which is not even a ground for
termination allowed by law. Worse, petitioner failed to establish that respondents were
given ample opportunity to contest the legality of their dismissal. All that petitioner did
was simply to furnish them with their walking papers. Inarguably, petitioner denied them
of due process. In fine, with petitioner’s failure to establish compliance with the legal
requirements on termination of employment under the Labor Code, the appellate court
was correct in declaring respondents’ dismissal as tainted with illegality.
WHEREFORE, the instant petition is hereby DENIED.
SO ORDERED.
Very truly yours,
(Sgd.) LUCITA ABJELINA-
SORIANO
Clerk of Court

Penned by Associate Justice Vicente L. Yap with Associate Justices Mercedes Gozo-dadole and
[1]

Pampio A. Abarintos, concurring.

[2]
Penned by Commissioner Edgardo M. Emerlan and concurred in by Commissioner Oscar S. Uy, with
Presiding Commissioner Irenea E. Ceniza, dissenting.
[3]
Penned by Executive Labor Arbiter Reynoso A. Belarmino.
[4]
Rollo, pp. 556-578.
[5]
Vide: Maraguinot, Jr. vs. NLRC, et al., G.R. No. 120969, January 22, 1998.
[6]
Rollo, pp.57-69.
[7]
Vinoya vs. NLRC, G.R. No. 126586, February 2, 2000, citing Rhone-Poulenc Agrochemicals, Inc. vs.
NLRC, et al., 217 SCRA 249 [1993].
[8]
Philippine National Construction Corporation vs. NLRC, 174 SCRA 191, 193 [1989].
[9]
Capital Industrial Construction Group vs. NLRC, 221 SCRA 169, 473, 474[1993.
[10]
Mgantto vs. NLRC, 185 SCRA 21 [1990].
[11]
Articles 281-284 of the Labor Code.
[12]
Vinoya vs. NLRC, supra, citing Shaw vs. NLRC, 202 SCRA 7 [1991].
[13]
Shaw vs. NLRC, supra, citing San Miguel Corporation vs. NLRC, 173 SCRA 314 [1989].