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 SONZA’s services exclusively
to ABS-CBN as talent for radio and television.
On 1 April 1996, SONZA wrote a letter to ABS-CBN’s President, Eugenio Lopez III
about the recent event concerning his program and career, and that the said violation
of the company has breached the agreement, thus, the notice of rescission of the
Agreement was sent.
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.
Issue: Whether Sonza was an employee or independent contractor.
Held:
Applying the control test to the present case, we find that SONZA is not an
employee but an independent contractor.
First, SONZA contends that ABS-CBN exercised control over the means and methods
of his work.
SONZA’s argument is misplaced. ABS-CBN engaged SONZA’s 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 ABS-CBN’s 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 SONZA’s 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.
SONZA protests the Labor Arbiter’s 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.
There are essentially only two parties involved under the Agreement, namely,
SONZA and ABS-CBN. MJMDC merely acted as SONZA’s agent. The Agreement
expressly states that MJMDC acted as the “AGENT” of SONZA. The records do not
show that MJMDC acted as ABS-CBN’s 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.
Petition denied.
