Carmela Tiangco, Petitioner, v. ABS-CBN Broadcasting Corporation, Respondent; G.R. No. 200434
Petitioner Carmela C. Tiangco (petitioner) was initially engaged by respondent ABS-CBN Corporation (ABS-CBN) as Talent Newscaster, on an exclusive basis, on 22 July 1986 with a monthly talent fee of ₱8,000.00 for a period of 1 year. Subsequently, petitioner’s contract was renewed several times.
Upon expiration of the contract dated 27 April 1991, ABS-CBN entered into the May 1994 Agreement (Agreement) with Mel & Jay; Management and Development Corporation (MJMDC), committing to provide petitioner’s services to ABS-CBN as exclusive talent for radio and television.
Thereafter, ABS-CBN issued the Memorandum dated 08 February 1995 (Memorandum) concerning commercial appearances of its talents and regular employees. Citing the “clear … need to protect the integrity and credibility of the news and public affairs programs”, the Memorandum; directed all on-air and/or on-camera talents and employees in the Radio and the News and Public Affairs Departments to refrain from appearing in commercial advertisements, violation of which shall be considered a serious breach of company rules and regulations.
Petitioner allegedly violated the Memorandum when she appeared in a Tide commercial that aired sometime in December 1995. Consequently, on 16 January 1996, ABS-CBN placed petitioner under suspension for three months without pay from her co-anchor positions in TV Patrol on Channel 2 and Mel & Jay radio program over at DZMM.
To clarify matters connected with the suspension, the parties met and exchanged several correspondences where they expressed their views and misgivings on the issue. The parties exerted efforts to come up with an amicable solution, but in the end could not come to an agreement. Petitioner maintained that she had the verbal approval of ABS-CBN management to proceed with the Tide commercial; that the three-month suspension without pay was harsh and unjust. On the other hand, ABS-CBN, through Frederico M. Garcia, denied that such verbal approval was ever given to petitioner, and that the penalty of suspension was decided after a lengthy and careful deliberation and on the basis of all the attendant facts and circumstances.
On 11 March 1996, petitioner filed a complaint against ABS-CBN and its officers for illegal dismissal, illegal suspension, and claims for backwages, separation pay, 13th month pay, travel, vacation benefits of ₱150,000.00, shares of stocks, damages, and attorney’s fees.
Ruling of the Labor Arbiter
Labor Arbiter Jose De Vera, in his 29 April 1999 Decision, ruled in favor of petitioner.
Appeal to NLRC
On 07 May 1999, ABS-CBN appealed this decision to the National Labor Relations Commission (NLRC) on the ground of lack of jurisdiction considering that no employer-employee relationship existed between ABS-CBN and petitioner.
Subsequently, ABS-CBN filed a Manifestation informing the NLRC of the Supreme Court’s decision dated 10 June 2004 in the case of Sonza v. ABS-CBN Broadcasting Corporation, involving Jay Sonza, the other half of the “Mel & Jay” show. ABS-CBN manifested that the Supreme Court pronounced that broadcast and entertainment talents like Sonza are not employees but independent contractors.
Ruling of the NLRC
The NLRC rendered its Decision dated 31 July 2006 and reversed LA De Vera’s decision.
The NLRC held that it cannot adopt the LA’s findings based on the principle of stare decisis. This, considering that Sonza and petitioner were similarly situated as both were covered by the Agreement containing identical provisions. As such, the Court’s ruling in Sonza applied equally to both of them.
Appeal to the CA
Petitioner elevated the NLRC’s decision to the Court of Appeals (CA) via a Petition for Certiorari on the ground that the NLRC committed grave abuse of discretion when it applied Sonza vs. ABS-CBN Broadcasting Corp. without considering the substantial differences in the situations.
On 08 September 2010, the case was referred to the Philippine Mediation Center (PMC)-CA for mediation pursuant to A.M. No. 04-3-15-SC. Thereafter, the parties executed and signed a Partial Settlement Agreement.
Ruling of the CA
On 27 January 2012, the CA rendered the assailed Decision based on the Partial Settlement Agreement.
The CA noted the stipulation in the Partial Settlement Agreement that the said agreement shall not in any way be considered as an admission or denial that would affect the other issues submitted for final adjudication. Further, the CA ruled that “the final settlement of the monetary claims of Petitioner [petitioner herein] against Private Respondent [ABS-CBN], the remaining issue raised in the instant Petition of whether or not the Public Respondent committed grave abuse of discretion in refusing to inhibit itself in the resolution of the case, has now become moot and academic.”
Whether or not petitioner was an employee of ABS-CBN.
An independent contractor is one who carries on a distinct and independent business and undertakes to perform the job, work, or service on their own account and under their own responsibility according to their own manner and method, free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. Hence, while an independent contractor enjoys independence and freedom from the control and supervision of their principal, an employee is subject to the employer’s power to control the means and the methods by which the employee’s work is to be performed and accomplished.
In the landmark case of Sonza v. ABS-CBN Broadcasting Corporation, the Court declared therein petitioner, Jose Y. Sonza (Sonza), a television and radio broadcasting talent, as an independent contractor. As previously mentioned, MJMDC, on behalf of Sonza, similarly signed an Agreement with ABS-CBN, being the on-air program partner of herein petitioner. The Agreement stated that Sonza was to serve as a talent for radio and television for ABS-CBN exclusively.
On 1 April 1996, Sonza rescinded the Agreement based on ABS CBN’s alleged breach. Sonza later filed a complaint against ABS-CBN claiming that he was not paid his salaries, service incentive leave, and 13th month pay, among others, on the premise that he was an ABS-CBN employee. In its defense, ABS-CBN argued that Sonza was an independent contractor. The Court agreed with ABS-CBN.
Notably, the Court held Sonza to not be applicable in the cases of Nazareno, Dumpit-Murillo, Begino and Concepcion because, unlike in Sonza, the complainants in these cases did not possess unique skills, talent, and celebrity status for which they were hired in their respective capacities as production assistants, newscaster and co-anchor, camera operator, editor, reporters, and OB van driver. The Court further found that there was a remarkable gap between the compensation in Sonza with those of the complainants in Nazareno, Dumpit-Murillo, Begino, and Concepcion.
This tells us that there is no inflexible rule to determine if a person is an employee or an independent contractor; thus, the characterization of the relationship must be made based on the particular circumstances of each case. There are several factors that may be considered by the courts, but the right to control remains the dominant factor in determining whether one is an employee or an independent contractor.
Petitioner claims that she was an ABS-CBN employee based on the four-fold test:
First, ABS-CBN specifically selected and hired her for her individual and peculiar talents, skills, personality, and celebrity status;
Second, ABS-CBN paid her salaries through a payroll account every 10th and 25th day of each month and withheld compensation income tax;
Third, petitioner was subject to ABS-CBN’s rules and regulation as, in fact, ABS-CBN placed her under a three-month suspension without pay; and
Fourth, unlike her role as co-host of “Mel & Jay”, ABS-CBN controlled the means and method of her performance of her job as newscaster for TV Patrol starting in 1986 as she was merely tasked to read the news. Petitioner further maintains that she also assumed the roles as Director for Lingkod Bayan, a job grade S4, segment producer in TV Patrol, and news reporter.
Petitioner was an independent contractor
First, petitioner’s acknowledgment that she was hired by reason of her peculiar talents, skills, personality, and celebrity status proved the presence of one of the elements of an independent contractor. A unique skill, expertise, or talent is one of the factors in determining the nature of a person’s status at work.
Second, payment through the company payroll on specified dates with income tax withheld at source is not conclusive proof of employer-employee relations. Such an arrangement is oftentimes agreed upon only for purposes of convenience and does not, in itself, create a badge of employment status. What is notable is petitioner’s talent fee package, which as of her last contract” was at ₱410,000.00 for the first year and ₱417,000.00 for the second and third years. In addition, petitioner was given a signing bonus of ₱500,000.00 worth of ABS-CBN stocks.
This extraordinarily high rate is given to those with unique skills, expertise, or talent like petitioner, who is considered an expert in the field with special qualities that an ordinary employee does not normally possess. This placed her on equal terms with ABS-CBN as she was allowed the power to bargain for the terms of her engagement, including her talent fee. Unlike ordinary employees, who are usually in a position of weakness, petitioner had a say on the terms of her engagement.
Third, petitioner viewed her three-month suspension without pay as proof that ABS-CBN had power of discipline over her. This is incorrect. The suspension itself was improper under the circumstances. Records showed that ABS-CBN suspended petitioner for her alleged violation of the Memorandum prohibiting talents from appearing in commercials. The prohibition was likewise imprinted in petitioner’s contract” as part of the warranty, stating that “she shall not appear in commercials nor plug, mention, or otherwise promote in the radio and television programs herein any radio or television program, segment or feature of any other radio or television station without the prior written approval of the company.”
Although there was basis to hold petitioner responsible for the breach, ABS-CBN has no basis to suspend. The tie that binds ABS-CBN and petitioner was the Agreement they signed in May 1994. There is nothing in the Agreement that allows ABS-CBN to suspend petitioner for violating its rules. Its remedy should have been to terminate the Agreement as stipulated. In any case, the petitioner’s improper suspension had been rectified with the Partial Settlement Agreement wherein one of the monetary claims paid by ABS-CBN was petitioner’s salaries during the period of her suspension.
Lastly, petitioner alleged that ABS-CBN controlled the manner she performed her job, particularly as a news anchor of TV Patrol, as she merely read the news. As a news anchor, petitioner is tasked to read or present a news copy that she or another person wrote. Nothing on record, however, shows that petitioner performed other tasks in relation to being an anchor, or that ABS-CBN dictated how petitioner should read the news or perform her other related tasks, if any. As a well-known veteran news anchor, petitioner’s manner in delivering the news was distinctly her own. Her voice, stature, aura, and representation, form part of the unique qualities that impelled ABS-CBN to pick her for the job. Petitioner “reading the news” is not the same as an average person reading the same news. The impact would simply not be the same as there is premium that goes with petitioner’s stature.
As regards the other positions petitioner assumed, i.e., segment producer and Director of Lingkod Bayan, there were no specifics presented in terms of job description vis-a-vis ABS-CBN’s control in its performance. As for the Director of Lingkod Bayan, petitioner merely alleged that it was in job grade S4, a supervisory position in ABS-CBN’s company job classification. Nomenclatures are not controlling in determining the nature of the job.
The Court notes that petitioner admitted that she was not under the control of ABS-CBN in her role as co-host of the “Mel & Jay” show in her Petition, saying, “unlike her job as ‘co-host’ of respondent ABS-CBN’s television and radio programs Mel & Jay, how petitioner performed her job as ‘newscaster’ for TV Patrol was 100% under the sole and exclusive control of respondent ABS-CBN.”
Necessity and Desirability of Work and Repeated Contract Renewal
To strengthen her claim that she was an employee, petitioner invoked the rulings of this Court in Fuji Television Network Inc. vs. Espiritu and in Dumpit-Afurillo. In these cases, the Court ruled that the repeated renewals of complainants’ contracts indicated the necessity and desirability of their work in the usual course of respondents’ business. Petitioner maintains that her tasks as newscaster, segment producer, and reporter,among others, were necessary and desirable to ABS-CBN’s business and that, her contract were renewed several times during her 10- year employment. Her submission is misplaced. In Fuji and Dumpit-Murillo, the fact that the complainants in said cases were employees of the respondents was already established. The Court merely used the repeated renewals of contract to show that the complainants were performing jobs that are usually necessary and desirable to the respondents’ business for purposes of determining if they were regular employees under Article 280 of the Labor Code. Here, petitioner’s employment status was disproved.
Applicability of Sonza v. ABS-CBN
Likewise, petitioner challenges the applicability of Sonza to her case based on these differences:
“First, the difference in what petitioner and Jay Sonza were made to do under their May 1994 Agreements. Second, the difference in their employment history with private respondent which petitioner, unlike Jay Sonza, was fortunate to have been given a full-blown trial. The facts and circumstances of her ten (10) year employment with private respondent have been laid bare for this Honorable Court to appreciate, and for the Honorable Court to uphold, as did the Labor Arbiter a quo, petitioner’s right and entitlement as a regular employee of private respondent.
The Court agrees with petitioner that she is not similarly situated with Sonza in terms of the roles she assumed under the Agreement and her length of stay with the network. However, despite the dissimilarities, there is one important element that petitioner and Sonza share – they both possessed unique skills, expertise, and talent, for which they were both engaged as ABS-CBN’s exclusive talents. In Sonza, we ruled:
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 addition, petitioner failed to establish that ABS-CBN controlled the manner in which she performed her job as news anchor for TV Patrol. On the contrary, the Court finds that petitioner performed the job according to her own manner and method, free from the network’s control. Possession of unique skills, expertise, or talent is a persuasive element of an independent contractor. It becomes conclusive if it is established that the worker performed the work according to their own manner and method and free from the principal’s control except to the result.
All told, the Court concludes that petitioner is an independent contractor.
Read: SONZA v. ABS-CBN