Labor Law Review Cases 1

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Republic of the PhilippinesSUPREME COURT

ManilaFIRST DIVISION

G.R. No. 118892 March 11, 1998FILIPINAS BROADCASTING NETWORK, INC.,vs.

NATIONAL LABOR RELATIONS COMMISSION and SIMEON MAPA JR.,respondents.PANGANIBAN, J.:As a rule, factual findings of the NLRC are binding on this Court.However, when the findings of the NLRC and the labor arbiter arecontradictory, this Court may review questions of fact. Where theevidence clearly shows the absence of an employer-employeerelationship, a claim for unpaid wages, thirteenth month pay, holidayand rest pay and other employment benefits must necessarily fail.

The CaseBefore us is a petition forcertiorariassailing the April 29, 1994 Decisionof the National Labor Relations Commission, 1in Case No. 05-08-00348-92, entitled "Simeon M. Mapa Jr., v. DZRC Radio Station." Thedispositive portion of the challenged Decision reads:

WHEREFORE, premises considered, the appealeddecision is set aside, and a new judgement is entered,declaring that complainant is an employee ofrespondent and is entitled to his claims for the paymentof his services from March 11, 1990 to January 16, 1992.2

Petitioner also impugns the November 9, 1994 Resolution 3of the NLRCdenying the motion for reconsideration.The October 13, 1993 decision of the labor arbiter, 4which the NLRCreversed and set aside, disposed as follows:

This Arbitration Branch, based on the facts andcircumstances established by the parties in this case isinclined to believe that complainant Simeon M. Mapa,Jr., had not been an employee of the respondent DZRCRadio Station before February 16, 1992. 5He was but avolunteer reporter when accommodated to air his reporton the respondent radio station as his application foremployment with the respondent as field reporter hadnot been accepted yet or approved before February,1992. There was no employer-employee relations thatexisted between the complainant and the respondentsince March 11, 1990 until February 16, 1992. The

complainant is not entitled to his claim for any salaries,

premium pay for holiday and rest day, holiday pay and13th month pay against the respondent DZRC RadioStation/Salvio Fortuno.WHEREFORE, in the light of the foregoing premises,

judgment is hereby rendered dismissing the complaintin this case for lack of merit. 6

The FactsVersion of Private Respondent

Petitioner and private respondent submitted different versions of thefacts. The facts as viewed by private respondent are as follows: 7

The complainant (herein private respondent) began towork for the respondent as a radio reporter startingMarch 11, 1990. On May 14, 1990, upon being informedby then respondent's Station Manager, Mr. PlaridelBrocales, that complainant's employment withrespondent is being blocked by Ms. Brenda Bayona ofDZGB, complainant's previous employer, the saidcomplainant took a leave of absence. In the first week ofJune, 1990, the respondent thru Mr. Antonio Llarena,then an employee of the respondent, asked thecomplainant to return to work even as he was assuredthat his salaries will be paid to him already. Thus, thecomplainant continued to work for the respondent sincethen. On September 5, 1991, again the complainant tooka leave of absence because of his desperation over thefailure of respondent to make good its promise ofpayment of salaries. He was reinstated on January 16,1992 and resigned on February 27, 1992 when hedecided to run for an elective office in the town ofDaraga, Albay. Unfortunately, the respondent paid salaryto the complainant only for the period from January 16,1992 up to February 27, 1992. Respondent did not paythe complainant for all the services rendered by thelatter from March 11, 1990 up to January 16, 1992.

As may be gleaned from its memorandum, 8petitioner's version of thefacts is as follows:

1. On or before April 1990, Mapa was dismissed from hisemployment with PBN-DZGB Legaspi. At this time, Mapafiled a case for illegal dismissal against PBN-DZGBLegaspi docketed as RAV V Case No. 05-04-00120-90entitled "Simeon Mapa, Jr. v. People's BroadcastingNetwork-DZGB Legaspi, Jorge Bayona and Arturo Osia";2. On or about May 1990, Mapa sought employment fromDZRC as a radio reporter. However, DZRC required ofprivate respondent the submission of a clearance from


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his former employer. Otherwise, his application wouldnot be acted upon;3. On May 14, 1990, Mapa was informed by DZRC's thenstation manager, Mr. Plaridel "Larry" Brocales, that hisapplication for employment was "being blocked by Ms.Brenda Bayona of DZGB, Mapa's former employer." Thisfact is supported by Mapa's position paper before theHonorable Labor Arbiter . . . ;

4. Taking pity on Mapa and pending the issuance of theclearance from PBN-DZGB Legaspi, Mr. Larry Brocalesgranted the request of Mapa to be accommodated onlyas a volunteer reporter of DZRC on a part-time basis. Asa volunteer reporter, Mapa was not to be paid wages asan employee of DZRC but he was permitted to findsponsors whose business establishments will beadvertised every time he goes on the air. Mostimportantly, Mapa's only work consisted of occasionalnewsbits or on-the-spot reporting of incidents ornewsworthy occurrences, which was very seldom.5. Mapa's friends, who were also in the same situationas he was, declared in an affidavit dated June 10, 1993that:WE, ALLAN ALMARIO and ELMER ANONUEVO, of legalage, single, with postal address at Washington Drive,Legaspi City, under oath, depose and state:1. We personally know Simeon "Jun" Mapa, a formervolunteer reporter at DZRC just like us;2. As volunteer reporters we know that we will notreceive any salary or allowance from DZRC because ourwork was purely voluntary;3. As incentive for us, the management of DZRC allowedus to get our own sponsors whose businessestablishment we mention[ed] every after field reportwas made by us;4. The management did not require or oblige us torender a report. We were on our own. We ma[d]e orrender[ed] a report as we [saw] fit;5. During our stint as volunteer reporters we had severalsponsors each who paid us P300.00 per month (each).

xxx xxx xxx6. Having no radio gadgets to begin with, DZRC loanedMapa the necessary equipment such as handheld radiosand reporting gadgets. Mapa was to do occasionalreporting only, i.e., a few minutes each day at anirregular time period at Mapa's own convenience. Mapa

advertised his sponsors and pocketed the payment of

these sponsors for his advertising services. In addition,DZRC had no control over the manner by [sic] which hewas to make his reports. Nor were the said reportssubject to editing by DZRC;7. In an Affidavit dated June 10, 1993 executed by one ofMapa's sponsors, the same reads as follows:I, CARLITO V. BAYLON, of legal age, married, resident ofDona Maria Subdivision, Daraga, Albay, under oath,

depose and state:1. I am a lawyer by profession. At the same time, I amowner of "Kusina ni Manoy" a restaurant situated inDaraga, Albay;2. I personally know Simeon "Jun" Mapa. Sometime inMay, 1990 he went to me and asked if I could be one ofhis sponsors because he was accommodated by DZRCas volunteer reporter. He explained to me that, he willnot be receiving any salary from DZRC[;] hence, he wassoliciting my support;3. Taking pity on him, I agreed to be one of hissponsors. The condition was, I will have to pay himP300.00/month. In exchange thereto, he will have tomention the name of my restaurant every time herenders a report on the air;4. My sponsorship lasted for about (5) months afterwhich I discontinued it when I rarely heard Jun Mapa inDZRC program.

xxx xxx xxx8. On November 7, 1990, in his testimony against hisformer employer, Mapa declared under oath, to wit:ATTY. LOBRIGO:On paragraph 14 of the same affidavit it states and Iquote: 13. Having been left with an empty stomach, Iwas compelled to apply for employment with anotherradio station. On March 11, 1990, I applied foremployment with DZRC. Unfortunately, my applicationwould not yet be acted [upon] favorablybecause of themalicious and oppressive imputations to me by myformer employer.My question is what is now the status of youremployment with DZRC?WITNESS:I am at present on a volunteer status because my formeremployer at DZGB did not give me clearance and I amrequired to submit that clearance to DZRC. (Emphasissupplied).


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See p. 2 of Position Paper of DZRC before the LaborArbiter and pp. 4-5 of the Transcript of StenographerNotes dated November 7, 1990, attached and marked asAnnex "F" and Annex "F-1 ", Petition forCertiorari;9. It cannot be overstressed that Mapa's application foremployment could not have been acted upon because ofthe lack of the pre-requisite clearance.10. Lacking in sponsors, Mapa soon failed to provide

petitioner with newsbits, finding it unprofitable tocontinue since he had no available sources of funding.Sometime in September 1991, Mapa quit his part-timeendeavor with DZRC, as attested to by the Office ofSupervisor/Traffic Manager Ignacio Casi in an Affidavitdated June 10, 1992, to wit:1. I am the Office Supervisor/Traffic Manager of DZRC-AM;2. Sometime in May, 1990 Simeon "Jun" Mapa went tomy office inside our radio station. He asked me if hecould be accommodated as Radio Reporter of DZRC, ashe was dismissed from DZGB. I referred him to LarryBrocales, our Station Manager then;3. Larry Brocales told Jun Mapa that he cannot beaccommodated because he has no clearance fromDZGB. Jun Mapa, almost teary eyed, pleaded to LarryBrocales that he be accommodated as volunteerreporter, that is, he will not receive any salary but thathe intimated that he be allowed to look for sponsorswhose business establishment, for a fee, will have to bementioned after every report is made. Larry Brocalestook pity on Jun Mapa and accommodated him;4. Jun Mapa, just like the other volunteer reporters, wasnot obliged to render field reports, at a particular timeand in a particular program. They render report as theywish or see fit;5. The management (DZRC) does not collect anythingfrom the sponsors of Jun Mapa. They (sponsors) paydirectly to him;.6. Being the Office Supervisor, I know for a fact that JunMapa seldom renders report on the air. He has noassigned program either. He was on and off the air, so tospeak;7. Finally, some time in September, 1991, Jun Mapa toldme that he is quitting already because his sponsorswere no longer paying him of his monthly contract withthem. (Emphasis supplied).

(See Annex "G", Petition forCertiorari);

11. Subsequently, Mapa sent a letter dated October 7, 1991 to Ms. DianaC. Gozum, General Manager of petitioner FBN. In the said letter, Mapawrote and admitted that:

I am [sic] Mr. Simeon Mapa, Jr. respectfully request yourgood office to reconsider my previous applicationsubmitted last March 1990 as a reporter of DZRC AM.May I inform you that since the submission of suchapplication I worked until September 6, 1991 for free of

services [sic]. Hoping that I'll be given the chance to berecognized as a regular reporter.With this, I respectfully wish to follow up my applicationfor recognition.May I also inform you that the case I have with myprevious job with the other company has commenced.Attached herewith is my resume.I am once again submitting myself for an interview withyour office at a time convenient to you.Thank you.(See Annex "H", Petition forCertiorari);12. Reacting to the letter mentioned in the immediatelypreceding paragraph, DZRC favorably acted upon theapplication of Mapa and accepted him as a radioreporter on January 16, 1992;13. On February 27, 1992, Mapa resigned as a radioreporter in order to run for an elective office in the May1992 elections and was paid all his salaries and benefitsfor the period of his employment commencing fromJanuary 16, 1992 until February 27, 1992;14. Having no work to do and no employment in sight,Mapa filed a complaint against FBN-DZRC on August1992, claiming the payment of salaries, premium pay,holiday pay as well as 13th month pay for the period 28February 1990 until January 16, 1992;

On October 13, 1993, Labor Arbiter Emeterio Ranola dismissed thecomplaint for lack of merit, finding that no employer-employeerelationship existed between Mapa and DZRC during the period March11, 1990 to February 16, 1992. 9

Findings of the NLRCIn holding that there was an employer-employee relationship, the NLRCset aside the labor arbiter's findings:

In his appeal, complainant insists that there was anemployer-employee relationship between him and therespondent. In support of his contention, he cites thepayroll for February 16 to 29, 1992, the ID card issued tohim as employee and regular reporter by the

respondent: [sic] the program schedules of DZRC


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showing the regular program of the station indicatinghis name: [sic] the affidavit of Antonio Llarena, programsupervisor of DZRC, stating that he [was] a regularreporter under his supervision and the list of reportinggadgets issued to regular reporter.The existence of employer employee relationship isdetermined by the following elements, namely: 1)selection and engagement of the employee; 2) the

payment of wages; 3) the power of dismissal; and 4) thepower to control employees' conduct although the latteris the most important element. (Rosario Brothers, Inc.vs. Ople, 131 SCRA 72)Considering the totality of the evidence adduced by theparties, we are of the opinion that the complainant is aregular reporter of the respondent. Firstly, the work ofthe complainant is being supervised by the programsupervisor of the respondent; secondly, the complainantuses the reporting gadgets of the respondent. Thirdly,he has no reporting gadgets of his own; Fourthly, theprogram schedule is prepared by the respondent; andLastly, he was paid salary for the period from February16 to 29, 1992 and covered under the Social SecuritySystem. There is no showing in the record that his workfrom February 16, 1992 was different from his workbefore said period. 10

The NLRC subsequently denied petitioner's motion for reconsideration11on November 9, 1994. 12Hence, this petition. 13

IssuePetitioner alleges that Public Respondent NLRC committed graveabuse of discretion as follows: 14

I. . . in declaring Mapa as an employee of petitionerbefore January 16, 1992. The test of an employer-employee relationship was erroneously applied to thefacts of this case.

II. . . in disregarding significant facts which clearly andconvincingly show that the private respondent was notan employee of the petitioner before 16 January 1992.

In the main, the issue in this case is whether private respondent was anemployee of petitioner for the period March 11, 1990 to January 15,1992.

The Court's RulingThe petition is meritorious.

Main Issue:

Private Respondent Was Not an Employee

During the Period in ControversyAs a rule, the NLRC's findings are accorded great respect, even finality,by this Court. This rule, however, is not without qualification. ThisCourt held Jimenez v. NLRC15:

The review of labor cases elevated to us on certiorariisconfined to questions of jurisdiction or grave abuse ofdiscretion. 16As a rule, this Court does not reviewsupposed errors in the decision of the NLRC which raise

factual issues, because factual findings of agenciesexercising quasi-judicial functions are accorded notonly respect but even finality, aside from theconsideration that the Court is essentially not a trier offacts. However, in the case at bar, a review of therecords thereof with an assessment of the facts isnecessary since the factual findings of the NLRC andthe labor arbiter are at odds with each other. 17

In the present case, a review of the factual findings of the publicrespondent is in order, for said findings differ from those of the laborarbiter. 18Worse, the facts alleged by the private respondent and reliedupon by the public respondent do not prove an employer-employeerelationship. 19In this light, we will review and overrule thefindings of the NLRC.The following are generally considered in the determination of theexistence of an employer-employee relationship: (1) the manner ofselection and engagement, (2) the payment of wages, (3) the presenceor absence of the power of dismissal, and (4) the presence or absenceof the power of control; of these four, the last one is the mostimportant. 20

Engagement and Payment of WagesLet us consider the circumstances of the private respondent'sengagement in DZRC before January 16, 1992. Petitioner did not act onhis application for employment as a radio reporter because privaterespondent admittedly failed to present a clearance from his formeremployer. Nevertheless, private respondent "volunteered" his services,knowing that he would not be paid wages, and that he had to rely onfinancial sponsorships of business establishments that would beadvertised in his reports. In other words, private respondent willinglyacted as a volunteer reporter, fully cognizant that he was not anemployee and that he would not receive any compensation directlyfrom the petitioner, but only from his own advertising sponsors.The nature of private respondent's engagement is evident from theaffidavit of Allan Almario and Elmer Anonuevo who served underidentical circumstances. The two affirmed the following:

1. We personally know Simeon "Jun" Mapa, a volunteerreporter at DZRC just like us;


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2. As volunteer reporters we know [sic] that we will notreceive any salary or allowance from DZRC because ourwork was purely voluntary;3. As incentive for us, the management of DZRC allowedus to get our own sponsors whose businessestablishments we mention every after [sic] field reportwas made by us;

xxx xxx xxx4. During our stint as volunteer reporters we had severalsponsors each who paid us P300.00 per month. 21

The above statement is corroborated by Carlito Baylon, one of privaterespondent's advertising sponsors. In his affidavit dated June 10, 1993,he averred:

2. I personally know Simeon "Jun" Mapa.Sometime in May, 1990 he went to me and asked if Icould be one of his sponsors because he wasaccommodated by DZRC as volunteer reporter. Heexplained to me that, he will not be receiving any salaryfrom DZRC[,] hence, he was soliciting my support;3. Taking pity on him, I agreed to be one of hissponsors. The condition was, I will have to pay himP300.00/month. In exchange thereto, he will have tomention the name of my restaurant everytime herenders a report on the air;4. My sponsorship lasted for about five (5) months afterwhich I discontinued it when I rarely heard Jun Mapa inDZRC program. 22

Indeed, private respondent himself admitted that he worked under thesaid circumstances. The bio-data sheet signed by Mapa himself, inwhich he acknowledged that he was not an employee, states in part:

Work experiences:DWGW Reporter/Newscaster 1970-1980DZGB Reporter 1983-1990DZRC Reporter 1990-1991

for free not recognized due to no appointment. 23(Emphasis supplied.)

In his letter dated October 7, 1991, which he sent to the generalmanager of Filipinas Broadcasting Network (owner of DZRC), Mapaagain acknowledged in the following words that he was not anemployee:

I am [sic] Mr. Simeon Mapa, Jr. respectfully request yourgood office to reconsider my previous applicationsubmitted last March 1990 as a reporter of DZRC AM.May I inform you that since the submission of suchapplication I worked until September 6, 1991 for free of

services [sic]. Hoping that I'll be given the chance to berecognized as a regular reporter.With this, I respectfully wish to follow up my applicationfor recognition. [Emphasis supplied.]

There is no indication that these two admissions were made underduress. Indeed, private respondent himself did not dispute theirvoluntariness or veracity. It is clear that he rendered services knowingthat he was not an employee. Aware that he would not be paid wages,he described himself as a "volunteer reporter" who was, as evidentfrom his letter, hoping for "the chance to be recognized as a regularreporter." In fact, petitioner acted favorably on this letter and acceptedhis application as an employee effective on January 16, 1992.

Power of DismissalLikewise, the evidence on record shows that petitioner did not exercisethe power to dismiss private respondent during the period in question.In September 1991, Private Respondent Mapa ceased acting as avolunteer reporter, not because he was fired, but because he stoppedsending his reports. Ignacio Casi, Office Supervisor of DZRC, declaredin his affidavit that Mapa told him that "he [was] quitting alreadybecause his sponsors were no longer paying him of [sic] his monthlycontract with them." Mapa did not controvert this statement. In fact, hisaforesaid letter of October 17, 1991 expressed his hope of being "giventhe chance to be recognized as a regular reporter." Privaterespondent's attitude in said letter is inconsistent with the notion thathe had been dismissed.

Mapa Was Not Subjectto Control of Petitioner

The most crucial test the control test demonstrates all too clearlythe absence of an employer-employee relationship. No one at the DZRChad the power to regulate or control private respondents' activities orinputs. Unlike the regular reporters, he was not subject to anysupervision by petitioner or its officials. Regular reporters "are requiredby the petitioner to adhere to a program schedule which delineates thetime when they are to render their reports, as well as the topic to bereported upon. The substance of their reports are [sic] oftentimesscreened by the station prior to [their] actual airing. In contrast,volunteer reporters are never given such a program schedule but aremerely advised to inform the station of the reports they would makefrom time to time." 24Indeed, DZRC, the petitioner's radio station, exercised no editorialrights over his reports. He had no fixed day or time for making hisreports; in fact, he was not required to report anything at all. Whetherhe would air anything depended entirely on him and his convenience.The absence of petitioner's control over private respondent is manifestfrom the sworn statement of the traffic manager of petitioner, Ignacio

Casi, who deposed in part:


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xxx xxx xxx4. Jun Mapa, just like the other volunteer reporters, wasnot obliged to render field reports, at a particular timeand in a particular program. They render report as theywish or see fit;5. The management (DZRC) does not collect anythingfrom the sponsors of Jun Mapa. They (sponsors) paydirectly to him;6. Being the Office Supervisor, I Know for a fact that JunMapa seldom renders report on the air. He has noassigned program either. He was on and off the air, soto speak;7. Finally, some time in September, 1991, Jun Mapa toldme that he is quitting already because his sponsorswere no longer paying him of his monthly contract withthem.

In Encyclopedia Britannica (Philippines) Inc., v. NLRC, 25we reiteratedthat there could be no employer-employee relationship where "theelement of control is absent; where a person who works for anotherdoes so more or less at his own pleasure and is not subject to definitehours or conditions of work[;] and in turn is compensated according tothe result of his efforts and not the, amount thereof, we should not findthat the relationship of employer-employee exists." In the present case,private respondent worked at his "own pleasure and [was] not subjectto definite hours or conditions of work."

"Evidence" Found by NLRC Not ApplicableIn its two-page 26holding that there was an employer-employeerelationship, the NLRC relied on the following:

(1) the payroll for February 16 to 29, 1992,(2) the ID card issued to him as employee and regularreporter by the respondent,(3) the program schedules of DZRC showing the regularprogram of the station indicating his name:(4) the affidavit of Antonio Llarena, program supervisorof DZRC, stating that he [was] under his supervision,and(5) the list of reporting gadgets issued to regularreporter.

Other than the items enumerated above, no other document wasconsidered by the NLRC. In other words, its conclusion was basedsolely on these alleged pieces of evidence. It dearly committed graveabuse of discretion in its factual findings, because all the abovedocuments relate to the period January 16, 1992 to February 28, 1992and not to the period March 11, 1990 to January 15, 1992 which are theinclusive dates in controversy.

The payroll 27from February 16, 1992 to February 27, 1992 does notdemonstrate that private respondent was an employee prior to saidperiod. Lest it be forgotten, the question in this case pertains to thestatus of private respondent from March 11, 1990 to January 15, 1992.The said payroll may prove that private respondent was an employeeduring said days in February 1992, but not for the period which is thesubject of the present controversy.Furthermore, neither the identification cards nor the SSS numberprinted at the back thereof indicate the date of issuance. Likewise, theSSS number does not show that he was a member during the period incontroversy; much less, that he became so by reason of hisemployment with petitioner.Similarly inapplicable is the program schedule 28which allegedlyshowed the regular program of the station and indicated the name ofprivate respondent as an employee. The document is a mere photocopyof a typewritten schedule. There is absolutely no indicium of itsauthenticity. Moreover, it is undated; hence, it does not indicatewhether such schedule pertained to the period in dispute, that is, March11, 1990 to January 15, 1992. Worse, the heading thereof was entitled"Radio DZRC Programming Proposal. [emphasis supplied]" A proposalis "put forth merely for consideration and acceptance." 29It cannot, byitself, prove that such program was implemented and that privaterespondent acted as an employee of petitioner.Neither does the list of returned gadgets support the conclusion of theNLRC. It must be stressed that such gadgets were essential to enablethe private respondent to access the specific radio frequency andfacilities of the radio station. Being exclusive properties of the radiostation, such, gadgets could not have been purchased, as they werenot commercially available. In any event, the list of returned gadgetswas dated February 27, 1992 again, a date not in controversy. Suchdocument, by itself, does not prove that private respondent was anemployee from March 20, 1990 to January 15, 1992.The affidavit of Antonio Llarena 30, an employee of DZRC, stating thatthe private respondent was under his supervision, is vague, evenmisleading; it declared merely that Llarena was "in charge" of saidrespondent. Such language could not be construed to mean that heexercised supervision and control over private respondent.Indubitably the NLRC based its findings of employer-employeerelationship from the circumstances attendant when the privaterespondent was already a regular employee. Uncontroverted is thestatement that the private respondent was a regular employee fromJanuary 16, 1992 to February 28, 1992, for which period he received allemployee benefits. But such period, it must be stressed again, is notcovered by private respondent's complaint.In sum, the evidence, which Public Respondent NLRC, relies upon,

does not justify the reversal of the labor arbiter's ruling which, in turn,


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we find amply supported by the records. Clearly, private respondentwas not an employee during the period in question.WHEREFORE, the petition is hereby GRANTED and the assailedDecision and Resolution are hereby SET ASIDE. The Order of the LaborArbiter dated October 13, 1993 dismissing the case for lack of merit ishereby REINSTATED. No costs.SO ORDERED.David, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur.


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G.R. No. 170087 August 31, 2006ANGELINA FRANCISCO, Petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION, KASEI CORPORATION,SEIICHIRO TAKAHASHI, TIMOTEO ACEDO, DELFIN LIZA, IRENEBALLESTEROS, TRINIDAD LIZA and RAMON ESCUETA, Respondents.

D E C I S I O NYNARES-SANTIAGO, J.:This petition for review on certiorariunder Rule 45 of the Rules of Courtseeks to annul and set aside the Decision and Resolution of the Court of

Appeals dated October 29, 2004 1 and October 7, 2005,2 respectively, in CA-G.R. SP No. 78515 dismissing the complaint for constructive dismissal filedby herein petitioner Angelina Francisco. The appellate court reversed and setaside the Decision of the National Labor Relations Commission (NLRC)dated April 15, 2003, 3in NLRC NCR CA No. 032766-02 which affirmed withmodification the decision of the Labor Arbiter dated July 31, 2002, 4 in NLRC-NCR Case No. 30-10-0-489-01, finding that private respondents were liablefor constructive dismissal.In 1995, petitioner was hired by Kasei Corporation during its incorporationstage. She was designated as Accountant and Corporate Secretary and wasassigned to handle all the accounting needs of the company. She was alsodesignated as Liaison Officer to the City of Makati to secure businesspermits, construction permits and other licenses for the initial operation of thecompany. 5

Although she was designated as Corporate Secretary, she was not entrustedwith the corporate documents; neither did she attend any board meeting norrequired to do so. She never prepared any legal document and neverrepresented the company as its Corporate Secretary. However, on someoccasions, she was prevailed upon to sign documentation for the company. 6

In 1996, petitioner was designated Acting Manager. The corporation alsohired Gerry Nino as accountant in lieu of petitioner. As Acting Manager,petitioner was assigned to handle recruitment of all employees and performmanagement administration functions; represent the company in all dealingswith government agencies, especially with the Bureau of Internal Revenue(BIR), Social Security System (SSS) and in the city government of Makati;and to administer all other matters pertaining to the operation of KaseiRestaurant which is owned and operated by Kasei Corporation. 7

For five years, petitioner performed the duties of Acting Manager. As ofDecember 31, 2000 her salary was P27,500.00 plus P3,000.00 housingallowance and a 10% share in the profit of Kasei Corporation. 8In January 2001, petitioner was replaced by Liza R. Fuentes as Manager.

Petitioner alleged that she was required to sign a prepared resolution for her

replacement but she was assured that she would still be connected withKasei Corporation. Timoteo Acedo, the designated Treasurer, convened ameeting of all employees of Kasei Corporation and announced that nothinghad changed and that petitioner was still connected with Kasei Corporationas Technical Assistant to Seiji Kamura and in charge of all BIR matters. 9

Thereafter, Kasei Corporation reduced her salary by P2,500.00 a monthbeginning January up to September 2001 for a total reduction of P22,500.00as of September 2001. Petitioner was not paid her mid-year bonus allegedlybecause the company was not earning well. On October 2001, petitioner didnot receive her salary from the company. She made repeated follow-ups withthe company cashier but she was advised that the company was not earningwell. 10On October 15, 2001, petitioner asked for her salary from Acedo and the restof the officers but she was informed that she is no longer connected with thecompany. 11Since she was no longer paid her salary, petitioner did not report for workand filed an action for constructive dismissal before the labor arbiter.Private respondents averred that petitioner is not an employee of KaseiCorporation. They alleged that petitioner was hired in 1995 as one of itstechnical consultants on accounting matters and act concurrently asCorporate Secretary. As technical consultant, petitioner performed her workat her own discretion without control and supervision of Kasei Corporation.Petitioner had no daily time record and she came to the office any time shewanted. The company never interfered with her work except that from time totime, the management would ask her opinion on matters relating to herprofession. Petitioner did not go through the usual procedure of selection ofemployees, but her services were engaged through a Board Resolutiondesignating her as technical consultant. The money received by petitionerfrom the corporation was her professional fee subject to the 10% expandedwithholding tax on professionals, and that she was not one of those reportedto the BIR or SSS as one of the companys employees. 12Petitioners designation as technical consultant depended solely upon the willof management. As such, her consultancy may be terminated any time

considering that her services were only temporary in nature and dependenton the needs of the corporation.To prove that petitioner was not an employee of the corporation, privaterespondents submitted a list of employees for the years 1999 and 2000 dulyreceived by the BIR showing that petitioner was not among the employeesreported to the BIR, as well as a list of payees subject to expandedwithholding tax which included petitioner. SSS records were also submittedshowing that petitioners latest employer was Seiji Corporation.13The Labor Arbiter found that petitioner was illegally dismissed, thus:WHEREFORE, premises considered, judgment is hereby rendered asfollows:1. finding complainant an employee of respondent corporation;

2. declaring complainants dismissal as illegal;
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3. ordering respondents to reinstate complainant to her former positionwithout loss of seniority rights and jointly and severally pay complainant hermoney claims in accordance with the following computation:a. Backwages 10/2001 07/2002 275,000.00(27,500 x 10 mos.)b. Salary Differentials (01/2001 09/2001) 22,500.00c. Housing Allowance (01/2001 07/2002) 57,000.00d. Midyear Bonus 2001 27,500.00e. 13th Month Pay 27,500.00f. 10% share in the profits of KaseiCorp. from 1996-2001 361,175.00g. Moral and exemplary damages 100,000.00h. 10% Attorneys fees 87,076.50P957,742.50If reinstatement is no longer feasible, respondents are ordered to paycomplainant separation pay with additional backwages that would accrue upto actual payment of separation pay.SO ORDERED. 14

On April 15, 2003, the NLRC affirmed with modification the Decision of theLabor Arbiter, the dispositive portion of which reads:PREMISES CONSIDERED, the Decision of July 31, 2002 is herebyMODIFIED as follows:1) Respondents are directed to pay complainant separation pay computed atone month per year of service in addition to full backwages from October2001 to July 31, 2002;2) The awards representing moral and exemplary damages and 10% sharein profit in the respective accounts of P100,000.00 and P361,175.00 aredeleted;3) The award of 10% attorneys fees shall be based on salary differentialaward only;4) The awards representing salary differentials, housing allowance, mid yearbonus and 13th month pay are AFFIRMED.SO ORDERED. 15

On appeal, the Court of Appeals reversed the NLRC decision, thus:WHEREFORE, the instant petition is hereby GRANTED. The decision of theNational Labor Relations Commissions dated April 15, 2003 is herebyREVERSED and SET ASIDE and a new one is hereby rendered dismissingthe complaint filed by private respondent against Kasei Corporation, et al. forconstructive dismissal.SO ORDERED. 16

The appellate court denied petitioners motion for reconsideration, hence, thepresent recourse.The core issues to be resolved in this case are (1) whether there was anemployer-employee relationship between petitioner and private respondentKasei Corporation; and if in the affirmative, (2) whether petitioner was

illegally dismissed.

Considering the conflicting findings by the Labor Arbiter and the NationalLabor Relations Commission on one hand, and the Court of Appeals on theother, there is a need to reexamine the records to determine which of thepropositions espoused by the contending parties is supported by substantialevidence.17

We held in Sevilla v. Court of Appeals18that in this jurisdiction, there hasbeen no uniform test to determine the existence of an employer-employeerelation. Generally, courts have relied on the so-called right of control testwhere the person for whom the services are performed reserves a right tocontrol not only the end to be achieved but also the means to be used inreaching such end. In addition to the standard of right-of-control, the existingeconomic conditions prevailing between the parties, like the inclusion of theemployee in the payrolls, can help in determining the existence of anemployer-employee relationship.However, in certain cases the control test is not sufficient to give a completepicture of the relationship between the parties, owing to the complexity ofsuch a relationship where several positions have been held by the worker.There are instances when, aside from the employers power to control theemployee with respect to the means and methods by which the work is to beaccomplished, economic realities of the employment relations help provide acomprehensive analysis of the true classification of the individual, whether asemployee, independent contractor, corporate officer or some other capacity.The better approach would therefore be to adopt a two-tiered test involving:(1) the putative employers power to control the employee with respect to themeans and methods by which the work is to be accomplished; and (2) theunderlying economic realities of the activity or relationship.This two-tiered test would provide us with a framework of analysis, whichwould take into consideration the totality of circumstances surrounding thetrue nature of the relationship between the parties. This is especiallyappropriate in this case where there is no written agreement or terms ofreference to base the relationship on; and due to the complexity of therelationship based on the various positions and responsibilities given to theworker over the period of the latters employment.

The control test initially found application in the case ofViaa v. Al-Lagadanand Piga, 19and lately in Leonardo v. Court of Appeals, 20where we held thatthere is an employer-employee relationship when the person for whom theservices are performed reserves the right to control not only the endachieved but also the manner and means used to achieve that end.In Sevilla v. Court of Appeals, 21we observed the need to consider theexisting economic conditions prevailing between the parties, in addition to thestandard of right-of-control like the inclusion of the employee in the payrolls,to give a clearer picture in determining the existence of an employer-employee relationship based on an analysis of the totality of economiccircumstances of the worker.Thus, the determination of the relationship between employer and employee

depends upon the circumstances of the whole economic activity, 22such as:
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(1) the extent to which the services performed are an integral part of theemployers business; (2) the extent of the workers investment in equipmentand facilities; (3) the nature and degree of control exercised by the employer;(4) the workers opportunity for profit and loss; (5) the amount of initiative,skill, judgment or foresight required for the success of the claimedindependent enterprise; (6) the permanency and duration of the relationshipbetween the worker and the employer; and (7) the degree of dependency ofthe worker upon the employer for his continued employment in that line ofbusiness. 23The proper standard of economic dependence is whether the worker isdependent on the alleged employer for his continued employment in that lineof business. 24 In the United States, the touchstone of economic reality inanalyzing possible employment relationships for purposes of the FederalLabor Standards Act is dependency. 25By analogy, the benchmark ofeconomic reality in analyzing possible employment relationships for purposesof the Labor Code ought to be the economic dependence of the worker onhis employer.By applying the control test, there is no doubt that petitioner is an employeeof Kasei Corporation because she was under the direct control andsupervision of Seiji Kamura, the corporations Technical Consultant. Shereported for work regularly and served in various capacities as Accountant,Liaison Officer, Technical Consultant, Acting Manager and CorporateSecretary, with substantially the same job functions, that is, renderingaccounting and tax services to the company and performing functionsnecessary and desirable for the proper operation of the corporation such assecuring business permits and other licenses over an indefinite period ofengagement.Under the broader economic reality test, the petitioner can likewise be said tobe an employee of respondent corporation because she had served thecompany for six years before her dismissal, receiving check vouchersindicating her salaries/wages, benefits, 13th month pay, bonuses andallowances, as well as deductions and Social Security contributions from

August 1, 1999 to December 18, 2000. 26 When petitioner was designated

General Manager, respondent corporation made a report to the SSS signedby Irene Ballesteros. Petitioners membership in the SSS as manifested by acopy of the SSS specimen signature card which was signed by the Presidentof Kasei Corporation and the inclusion of her name in the on-line inquirysystem of the SSS evinces the existence of an employer-employeerelationship between petitioner and respondent corporation. 27

It is therefore apparent that petitioner is economically dependent onrespondent corporation for her continued employment in the latters line ofbusiness.In Domasig v. National Labor Relations Commission, 28 we held that in abusiness establishment, an identification card is provided not only as asecurity measure but mainly to identify the holder thereof as a bona fide

employee of the firm that issues it. Together with the cash vouchers covering

petitioners salaries for the months stated therein, these matters constitutesubstantial evidence adequate to support a conclusion that petitioner was anemployee of private respondent.We likewise ruled in Flores v. Nuestro29that a corporation who registers itsworkers with the SSS is proof that the latter were the formers employees.The coverage of Social Security Law is predicated on the existence of anemployer-employee relationship.Furthermore, the affidavit of Seiji Kamura dated December 5, 2001 hasclearly established that petitioner never acted as Corporate Secretary andthat her designation as such was only for convenience. The actual nature ofpetitioners job was as Kamuras direct assistant with the duty of acting asLiaison Officer in representing the company to secure construction permits,license to operate and other requirements imposed by government agencies.Petitioner was never entrusted with corporate documents of the company,nor required to attend the meeting of the corporation. She was never privy tothe preparation of any document for the corporation, although once in a whileshe was required to sign prepared documentation for the company. 30The second affidavit of Kamura dated March 7, 2002 which repudiated theDecember 5, 2001 affidavit has been allegedly withdrawn by Kamura himselffrom the records of the case. 31Regardless of this fact, we are convinced thatthe allegations in the first affidavit are sufficient to establish that petitioner isan employee of Kasei Corporation.Granting arguendo, that the second affidavit validly repudiated the first one,courts do not generally look with favor on any retraction or recantedtestimony, for it could have been secured by considerations other than to tellthe truth and would make solemn trials a mockery and place the investigationof the truth at the mercy of unscrupulous witnesses. 32 A recantation does notnecessarily cancel an earlier declaration, but like any other testimony thesame is subject to the test of credibility and should be received with caution.33

Based on the foregoing, there can be no other conclusion that petitioner is anemployee of respondent Kasei Corporation. She was selected and engagedby the company for compensation, and is economically dependent upon

respondent for her continued employment in that line of business. Her mainjob function involved accounting and tax services rendered to respondentcorporation on a regular basis over an indefinite period of engagement.Respondent corporation hired and engaged petitioner for compensation, withthe power to dismiss her for cause. More importantly, respondent corporationhad the power to control petitioner with the means and methods by which thework is to be accomplished.The corporation constructively dismissed petitioner when it reduced hersalary by P2,500 a month from January to September 2001. This amounts toan illegal termination of employment, where the petitioner is entitled to fullbackwages. Since the position of petitioner as accountant is one of trust andconfidence, and under the principle of strained relations, petitioner is further

entitled to separation pay, in lieu of reinstatement. 34
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A diminution of pay is prejudicial to the employee and amounts toconstructive dismissal. Constructive dismissal is an involuntary resignationresulting in cessation of work resorted to when continued employmentbecomes impossible, unreasonable or unlikely; when there is a demotion inrank or a diminution in pay; or when a clear discrimination, insensibility ordisdain by an employer becomes unbearable to an employee. 35 In GlobeTelecom, Inc. v. Florendo-Flores,36 we ruled that where an employee ceasesto work due to a demotion of rank or a diminution of pay, an unreasonablesituation arises which creates an adverse working environment rendering itimpossible for such employee to continue working for her employer. Hence,her severance from the company was not of her own making and thereforeamounted to an illegal termination of employment.In affording full protection to labor, this Court must ensure equal workopportunities regardless of sex, race or creed. Even as we, in every case,attempt to carefully balance the fragile relationship between employees andemployers, we are mindful of the fact that the policy of the law is to apply theLabor Code to a greater number of employees. This would enableemployees to avail of the benefits accorded to them by law, in line with theconstitutional mandate giving maximum aid and protection to labor,promoting their welfare and reaffirming it as a primary social economic forcein furtherance of social justice and national development.WHEREFORE, the petition is GRANTED. The Decision and Resolution ofthe Court of Appeals dated October 29, 2004 and October 7, 2005,respectively, in CA-G.R. SP No. 78515 are ANNULLED and SET ASIDE.The Decision of the National Labor Relations Commission dated April 15,2003 in NLRC NCR CA No. 032766-02, is REINSTATED. The case isREMANDED to the Labor Arbiter for the recomputation of petitioner AngelinaFranciscos full backwages from the time she was illegally terminated untilthe date of finality of this decision, and separation pay representing one-halfmonth pay for every year of service, where a fraction of at least six monthsshall be considered as one whole year.SO ORDERED.CONSUELO YNARES-SANTIAGO

Associate JusticeWE CONCUR:

ARTEMIO V. PANGANIBANChief JusticeChairperson

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

ROMEO J. CALLEJO, SR.Associate Justice

MINITA V. CHICO-NAZARIOAssociate Justice

C E R T I F I C A T I O NPursuant to Section 13, Article VIII of the Constitution, it is hereby certified

that the conclusions in the above Decision were reached in consultation

before the case was assigned to the writer of the opinion of the CourtsDivision.ARTEMIO V. PANGANIBANChief Justice
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G.R. No. 164156 September 26, 2006ABS-CBN BROADCASTING CORPORATION, petitioner,vs.MARLYN NAZARENO, MERLOU GERZON, JENNIFER DEIPARINE, andJOSEPHINE LERASAN, respondents.

D E C I S I O NCALLEJO, SR., J.:Before us is a petition for review on certiorari of the Decision1 of the Court of

Appeals (CA) in CA-G.R. SP No. 76582 and the Resolution denying themotion for reconsideration thereof. The CA affirmed the Decision2 andResolution3of the National Labor Relations Commission (NLRC) in NLRCCase No. V-000762-2001 (RAB Case No. VII-10-1661-2001) which likewiseaffirmed, with modification, the decision of the Labor Arbiter declaring therespondents Marlyn Nazareno, Merlou Gerzon, Jennifer Deiparine andJosephine Lerasan as regular employees.

The AntecedentsPetitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in thebroadcasting business and owns a network of television and radio stations,whose operations revolve around the broadcast, transmission, and relay oftelecommunication signals. It sells and deals in or otherwise utilizes theairtime it generates from its radio and television operations. It has a franchiseas a broadcasting company, and was likewise issued a license and authorityto operate by the National Telecommunications Commission.Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasanas production assistants (PAs) on different dates. They were assigned at thenews and public affairs, for various radio programs in the Cebu BroadcastingStation, with a monthly compensation of P4,000. They were issued ABS-CBN employees identification cards and were required to work for aminimum of eight hours a day, including Sundays and holidays. They were

made to perform the following tasks and duties:a) Prepare, arrange airing of commercial broadcasting based on the dailyoperations log and digicart of respondent ABS-CBN;b) Coordinate, arrange personalities for air interviews;c) Coordinate, prepare schedule of reporters for scheduled news reportingand lead-in or incoming reports;d) Facilitate, prepare and arrange airtime schedule for public serviceannouncement and complaints;e) Assist, anchor program interview, etc; andf) Record, log clerical reports, man based control radio.4

Their respective working hours were as follows:Name Time No. of Hours

1. Marlene Nazareno 4:30 A.M.-8:00 A.M. 7

8:00 A.M.-12:00 noon2. Jennifer Deiparine 4:30 A.M.-12:00M.N. (sic) 7 3. Joy Sanchez 1:00 P.M.-10:00 P.M.(Sunday) 9 hrs.9:00 A.M.-6:00 P.M. (WF) 9 hrs.4. Merlou Gerzon 9:00 A.M.-6:00 P.M. 9 hrs.5

The PAs were under the control and supervision of Assistant StationManager Dante J. Luzon, and News Manager Leo Lastimosa.On December 19, 1996, petitioner and the ABS-CBN Rank-and-FileEmployees executed a Collective Bargaining Agreement (CBA) to beeffective during the period from December 11, 1996 to December 11, 1999.However, since petitioner refused to recognize PAs as part of the bargainingunit, respondents were not included to the CBA.6On July 20, 2000, petitioner, through Dante Luzon, issued a Memoranduminforming the PAs that effective August 1, 2000, they would be assigned tonon-drama programs, and that the DYAB studio operations would be handledby the studio technician. Thus, their revised schedule and other assignmentswould be as follows:Monday Saturday4:30 A.M. 8:00 A.M. Marlene Nazareno.Miss Nazareno will then be assigned at the Research Dept.From 8:00 A.M. to 12:004:30 P.M. 12:00 MN Jennifer DeiparineSunday5:00 A.M. 1:00 P.M. Jennifer Deiparine1:00 P.M. 10:00 P.M. Joy SanchezRespondent Gerzon was assigned as the full-time PA of the TV NewsDepartment reporting directly to Leo Lastimosa.On October 12, 2000, respondents filed a Complaint for Recognition ofRegular Employment Status, Underpayment of Overtime Pay, Holiday Pay,Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Paywith Damages against the petitioner before the NLRC. The Labor Arbiterdirected the parties to submit their respective position papers. Uponrespondents failure to file their position papers within the reglementary

period, Labor Arbiter Jose G. Gutierrez issued an Order dated April 30, 2001,dismissing the complaint without prejudice for lack of interest to pursue thecase. Respondents received a copy of the Order on May 16, 2001. 7 Insteadof re-filing their complaint with the NLRC within 10 days from May 16, 2001,they filed, on June 11, 2001, an Earnest Motion to Refile Complaint withMotion to Admit Position Paper and Motion to Submit Case For Resolution.8The Labor Arbiter granted this motion in an Order dated June 18, 2001, andforthwith admitted the position paper of the complainants. Respondentsmade the following allegations:1. Complainants were engaged by respondent ABS-CBN as regular and full-time employees for a continuous period of more than five (5) years with amonthly salary rate of Four Thousand (P4,000.00) pesos beginning 1995 up

until the filing of this complaint on November 20, 2000.
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Machine copies of complainants ABS-CBN Employees Identification Cardand salary vouchers are hereto attached as follows, thus:I. Jennifer Deiparine:Exhibit "A" - ABS-CBN Employees Identification CardExhibit "B", - ABS-CBN Salary Voucher from Nov.Exhibit "B-1" & 1999 to July 2000 at P4,000.00Exhibit "B-2"Date employed: September 15, 1995Length of service: 5 years & nine (9) monthsII. Merlou Gerzon - ABS-CBN Employees Identification CardExhibit "C"Exhibit "D"Exhibit "D-1" &Exhibit "D-2" - ABS-CBN Salary Voucher from March1999 to January 2001 at P4,000.00Date employed: September 1, 1995Length of service: 5 years & 10 monthsIII. Marlene NazarenoExhibit "E" - ABS-CBN Employees Identification CardExhibit "E" - ABS-CBN Salary Voucher from Nov.Exhibit "E-1" & 1999 to December 2000

Exhibit :E-2"Date employed: April 17, 1996Length of service: 5 years and one (1) monthIV. Joy Sanchez LerasanExhibit "F" - ABS-CBN Employees Identification CardExhibit "F-1" - ABS-CBN Salary Voucher from Aug.Exhibit "F-2" & 2000 to Jan. 2001Exhibit "F-3"Exhibit "F-4" - Certification dated July 6, 2000

Acknowledging regular status ofComplainant Joy Sanchez LerasanSigned by ABS-CBN Administrative

Officer May Kima HifeDate employed: April 15, 1998Length of service: 3 yrs. and one (1) month9

Respondents insisted that they belonged to a "work pool" from whichpetitioner chose persons to be given specific assignments at its discretion,and were thus under its direct supervision and control regardless ofnomenclature. They prayed that judgment be rendered in their favor, thus:WHEREFORE, premises considered, this Honorable Arbiter is mostrespectfully prayed, to issue an order compelling defendants to paycomplainants the following:1. One Hundred Thousand Pesos (P100,000.00) eachand by way of moral damages;

2. Minimum wage differential;

3. Thirteenth month pay differential;4. Unpaid service incentive leave benefits;5. Sick leave;6. Holiday pay;7. Premium pay;8. Overtime pay;9. Night shift differential.Complainants further pray of this Arbiter to declare them regular andpermanent employees of respondent ABS-CBN as a condition precedent fortheir admission into the existing union and collective bargaining unit ofrespondent company where they may as such acquire or otherwise performtheir obligations thereto or enjoy the benefits due therefrom.Complainants pray for such other reliefs as are just and equitable under thepremises.10

For its part, petitioner alleged in its position paper that the respondents werePAs who basically assist in the conduct of a particular program ran by ananchor or talent. Among their duties include monitoring and receivingincoming calls from listeners and field reporters and calls of news sources;generally, they perform leg work for the anchors during a program or aparticular production. They are considered in the industry as "programemployees" in that, as distinguished from regular or station employees, they

are basically engaged by the station for a particular or specific programbroadcasted by the radio station. Petitioner asserted that as PAs, thecomplainants were issued talent information sheets which are updated fromtime to time, and are thus made the basis to determine the programs towhich they shall later be called on to assist. The program assignments ofcomplainants were as follows:a. Complainant Nazareno assists in the programs:1) Nagbagang Balita (early morning edition)2) Infor Hayupan3) Arangkada (morning edition)4) Nagbagang Balita (mid-day edition)b. Complainant Deiparine assists in the programs:

1) Unzanith2) Serbisyo de Arevalo3) Arangkada (evening edition)4) Balitang K (local version)5) Abante Subu6) Pangutana Langc. Complainant Gerzon assists in the program:1) On Mondays and Tuesdays:(a) Unzanith(b) Serbisyo de Arevalo(c) Arangkada (evening edition)(d) Balitang K (local version)

(e) Abante Sugbu
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(f) Pangutana Lang2) On ThursdaysNagbagang Balita3) On Saturdays(a) Nagbagang Balita(b) Info Hayupan(c) Arangkada (morning edition)(d) Nagbagang Balita (mid-day edition)4) On Sundays:(a) Siesta Serenata(b) Sunday Chismisan(c) Timbangan sa Hustisya(d) Sayri ang Lungsod(e) Haranahan11

Petitioner maintained that PAs, reporters, anchors and talents occasionally"sideline" for other programs they produce, such as drama talents in other

productions. As program employees, a PAs engagement is coterminous withthe completion of the program, and may be extended/renewed provided thatthe program is on-going; a PA may also be assigned to new programs uponthe cancellation of one program and the commencement of another. As suchprogram employees, their compensation is computed on a program basis, a

fixed amount for performance services irrespective of the time consumed. Atany rate, petitioner claimed, as the payroll will show, respondents were paid

all salaries and benefits due them under the law.12

Petitioner also alleged that the Labor Arbiter had no jurisdiction to involve theCBA and interpret the same, especially since respondents were not coveredby the bargaining unit.On July 30, 2001, the Labor Arbiter rendered judgment in favor of therespondents, and declared that they were regular employees of petitioner; assuch, they were awarded monetary benefits. The fallo of the decision reads:WHEREFORE, the foregoing premises considered, judgment is herebyrendered declaring the complainants regular employees of the respondent

ABS-CBN Broadcasting Corporation and directing the same respondent to

pay complainants as follows:I - Merlou A. Gerzon P12,025.00II - Marlyn Nazareno 12,025.00III - Jennifer Deiparine 12,025.00IV - Josephine Sanchez Lerazan 12,025.00

_________P48,100.00plus ten (10%) percent Attorneys Fees or a TOTAL aggregate amount ofPESOS: FIFTY TWO THOUSAND NINE HUNDRED TEN (P52,910.00).Respondent Veneranda C. Sy is absolved from any liability.SO ORDERED.13

However, the Labor Arbiter did not award money benefits as provided in the

CBA on his belief that he had no jurisdiction to interpret and apply the

agreement, as the same was within the jurisdiction of the Voluntary Arbitratoras provided in Article 261 of the Labor Code.Respondents counsel received a copy of the decision on August 29, 2001.Respondent Nazareno received her copy on August 27, 2001, while the otherrespondents received theirs on September 8, 2001. Respondents signed andfiled their Appeal Memorandum on September 18, 2001.For its part, petitioner filed a motion for reconsideration, which the Labor

Arbiter denied and considered as an appeal, conformably with Section 5,Rule V, of the NLRC Rules of Procedure. Petitioner forthwith appealed thedecision to the NLRC, while respondents filed a partial appeal.In its appeal, petitioner alleged the following:1. That the Labor Arbiter erred in reviving or re-opening this case which hadlong been dismissed without prejudice for more than thirty (30) calendardays;2. That the Labor Arbiter erred in depriving the respondent of itsConstitutional right to due process of law;3. That the Labor Arbiter erred in denying respondents Motion forReconsideration on an interlocutory order on the ground that the same is aprohibited pleading;4. That the Labor Arbiter erred when he ruled that the complainants areregular employees of the respondent;

5. That the Labor Arbiter erred when he ruled that the complainants areentitled to 13th month pay, service incentive leave pay and salary differential;and6. That the Labor Arbiter erred when he ruled that complainants are entitledto attorneys fees.14

On November 14, 2002, the NLRC rendered judgment modifying the decisionof the Labor Arbiter. The fallo of the decision reads:WHEREFORE, premises considered, the decision of Labor Arbiter Jose G.Gutierrez dated 30 July 2001 is SET ASIDE and VACATED and a new one isentered ORDERING respondent ABS-CBN Broadcasting Corporation, asfollows:1. To pay complainants of their wage differentials and other benefits arising

from the CBA as of 30 September 2002 in the aggregate amount of TwoMillion Five Hundred, Sixty-One Thousand Nine Hundred Forty-Eight Pesosand 22/100 (P2,561,948.22), broken down as follows:a. Deiparine, Jennifer - P 716,113.49b. Gerzon, Merlou - 716,113.49c. Nazareno, Marlyn - 716,113.49d. Lerazan, Josephine Sanchez - 413,607.75Total - P 2,561,948.222. To deliver to the complainants Two Hundred Thirty-Three (233) sacks ofrice as of 30 September 2002 representing their rice subsidy in the CBA,broken down as follows:a. Deiparine, Jennifer - 60 Sacks

b. Gerzon, Merlou - 60 Sacks
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c. Nazareno, Marlyn - 60 Sacksd. Lerazan, Josephine Sanchez - 53 SacksTotal 233 Sacks; and3. To grant to the complainants all the benefits of the CBA after 30September 2002.SO ORDERED.15

The NLRC declared that the Labor Arbiter acted conformably with the LaborCode when it granted respondents motion to refile the complaint and admittheir position paper. Although respondents were not parties to the CBAbetween petitioner and the ABS-CBN Rank-and-File Employees Union, theNLRC nevertheless granted and computed respondents monetary benefitsbased on the 1999 CBA, which was effective until September 2002. TheNLRC also ruled that the Labor Arbiter had jurisdiction over the complaint ofrespondents because they acted in their individual capacities and not asmembers of the union. Their claim for monetary benefits was within thecontext of Article 217(6) of the Labor Code. The validity of respondents claimdoes not depend upon the interpretation of the CBA.The NLRC ruled that respondents were entitled to the benefits under theCBA because they were regular employees who contributed to the profits ofpetitioner through their labor. The NLRC cited the ruling of this Court in NewPacific Timber & Supply Company v. National Labor Relations Commission.16

Petitioner filed a motion for reconsideration, which the NLRC denied.Petitioner thus filed a petition for certiorari under Rule 65 of the Rules ofCourt before the CA, raising both procedural and substantive issues, asfollows: (a) whether the NLRC acted without jurisdiction in admitting theappeal of respondents; (b) whether the NLRC committed palpable error inscrutinizing the reopening and revival of the complaint of respondents withthe Labor Arbiter upon due notice despite the lapse of 10 days from theirreceipt of the July 30, 2001 Order of the Labor Arbiter; (c) whetherrespondents were regular employees; (d) whether the NLRC acted without

jurisdiction in entertaining and resolving the claim of the respondents underthe CBA instead of referring the same to the Voluntary Arbitrators asprovided in the CBA; and (e) whether the NLRC acted with grave abuse of

discretion when it awarded monetary benefits to respondents under the CBAalthough they are not members of the appropriate bargaining unit.On February 10, 2004, the CA rendered judgment dismissing the petition. Itheld that the perfection of an appeal shall be upon the expiration of the lastday to appeal by all parties, should there be several parties to a case. Sincerespondents received their copies of the decision on September 8, 2001(except respondent Nazareno who received her copy of the decision on

August 27, 2001), they had until September 18, 2001 within which to file theirAppeal Memorandum. Moreover, the CA declared that respondents failure tosubmit their position paper on time is not a ground to strike out the paperfrom the records, much less dismiss a complaint.

Anent the substantive issues, the appellate court stated that respondents are

not mere project employees, but regular employees who perform tasks

necessary and desirable in the usual trade and business of petitioner and notjust its project employees. Moreover, the CA added, the award of benefitsaccorded to rank-and-file employees under the 1996-1999 CBA is anecessary consequence of the NLRC ruling that respondents, as PAs, areregular employees.Finding no merit in petitioners motion for reconsideration, the CA denied thesame in a Resolution17 dated June 16, 2004.Petitioner thus filed the instant petition for review on certiorari and raises thefollowing assignments of error:1. THE HONORABLE COURT OF APPEALS ACTED WITHOUTJURISDICTION AND GRAVELY ERRED IN UPHOLDING THE NATIONALLABOR RELATIONS COMMISSION NOTWITHSTANDING THE PATENTNULLITY OF THE LATTERS DECISION AND RESOLUTION.2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN

AFFIRMING THE RULING OF THE NLRC FINDING RESPONDENTSREGULAR EMPLOYEES.3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN

AFFIRMING THE RULING OF THE NLRC AWARDING CBA BENEFITS TORESPONDENTS.18

Considering that the assignments of error are interrelated, the Court shallresolve them simultaneously.

Petitioner asserts that the appellate court committed palpable and seriouserror of law when it affirmed the rulings of the NLRC, and entertainedrespondents appeal from the decision of the Labor Arbiter despite theadmitted lapse of the reglementary period within which to perfect the same.Petitioner likewise maintains that the 10-day period to appeal must bereckoned from receipt of a partys counsel, not from the time the party learnsof the decision, that is, notice to counsel is notice to party and not the otherway around. Finally, petitioner argues that the reopening of a complaintwhich the Labor Arbiter has dismissed without prejudice is a clear violation ofSection 1, Rule V of the NLRC Rules; such order of dismissal had alreadyattained finality and can no longer be set aside.Respondents, on the other hand, allege that their late appeal is a non-issue

because it was petitioners own timely appeal that empowered the NLRC toreopen the case. They assert that although the appeal was filed 10 days late,it may still be given due course in the interest of substantial justice as anexception to the general rule that the negligence of a counsel binds theclient. On the issue of the late filing of their position paper, they maintain thatthis is not a ground to strike it out from the records or dismiss the complaint.We find no merit in the petition.We agree with petitioners contention that the perfection of an appeal withinthe statutory or reglementary period is not only mandatory, but also

jurisdictional; failure to do so renders the assailed decision final andexecutory and deprives the appellate court or body of the legal authority toalter the final judgment, much less entertain the appeal. However, this Court

has time and again ruled that in exceptional cases, a belated appeal may be
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given due course if greater injustice may occur if an appeal is not given duecourse than if the reglementary period to appeal were strictly followed.19TheCourt resorted to this extraordinary measure even at the expense ofsacrificing order and efficiency if only to serve the greater principles ofsubstantial justice and equity.20In the case at bar, the NLRC did not commit a grave abuse of its discretion ingiving Article 22321 of the Labor Code a liberal application to prevent themiscarriage of justice. Technicality should not be allowed to stand in the wayof equitably and completely resolving the rights and obligations of theparties.22We have held in a catena of cases that technical rules are notbinding in labor cases and are not to be applied strictly if the result would bedetrimental to the workingman.23

Admittedly, respondents failed to perfect their appeal from the decision of theLabor Arbiter within the reglementary period therefor. However, petitionerperfected its appeal within the period, and since petitioner had filed a timelyappeal, the NLRC acquired jurisdiction over the case to give due course to itsappeal and render the decision of November 14, 2002. Case law is that theparty who failed to appeal from the decision of the Labor Arbiter to the NLRCcan still participate in a separate appeal timely filed by the adverse party asthe situation is considered to be of greater benefit to both parties.24

We find no merit in petitioners contention that the Labor Arbiter abused his

discretion when he admitted respondents position paper which had beenbelatedly filed. It bears stressing that the Labor Arbiter is mandated by law touse every reasonable means to ascertain the facts in each case speedily andobjectively, without technicalities of law or procedure, all in the interest of dueprocess.25Indeed, as stressed by the appellate court, respondents failure tosubmit a position paper on time is not a ground for striking out the paper fromthe records, much less for dismissing a complaint.26 Likewise, there is simplyno truth to petitioners assertion that it was denied due process when theLabor Arbiter admitted respondents position paper without requiring it to filea comment before admitting said position paper. The essence of due processin administrative proceedings is simply an opportunity to explain ones side oran opportunity to seek reconsideration of the action or ruling complained of.

Obviously, there is nothing in the records that would suggest that petitionerhad absolute lack of opportunity to be heard.27 Petitioner had the right to filea motion for reconsideration of the Labor Arbiters admission of respondentsposition paper, and even file a Reply thereto. In fact, petitioner filed itsposition paper on April 2, 2001. It must be stressed that Article 280 of theLabor Code was encoded in our statute books to hinder the circumvention byunscrupulous employers of the employees right to security of tenure byindiscriminately and absolutely ruling out all written and oral agreementsinharmonious with the concept of regular employment defined therein.28We quote with approval the following pronouncement of the NLRC:The complainants, on the other hand, contend that respondents assailed theLabor Arbiters order dated 18 June 2001 as violative of the NLRC Rules of

Procedure and as such is violative of their right to procedural due process.

That while suggesting that an Order be instead issued by the Labor Arbiterfor complainants to refile this case, respondents impliedly submit that there isnot any substantial damage or prejudice upon the refiling, even so,respondents suggestion acknowledges complainants right to prosecute thiscase, albeit with the burden of repeating the same procedure, thus, entailingadditional time, efforts, litigation cost and precious time for the Arbiter torepeat the same process twice. Respondents suggestion, betrays its notionof prolonging, rather than promoting the early resolution of the case.

Although the Labor Arbiter in his Order dated 18 June 2001 which revivedand re-opened the dismissed case without prejudice beyond the ten (10) dayreglementary period had inadvertently failed to follow Section 16, Rule V,Rules Procedure of the NLRC which states:"A party may file a motion to revive or re-open a case dismissed withoutprejudice within ten (10) calendar days from receipt of notice of the orderdismissing the same; otherwise, his only remedy shall be to re-file the case inthe arbitration branch of origin."the same is not a serious flaw that had prejudiced the respondents right todue process. The case can still be refiled because it has not yet prescribed.

Anyway, Article 221 of the Labor Code provides:"In any proceedings before the Commission or any of the Labor Arbiters, therules of evidence prevailing in courts of law or equity shall not be controlling

and it is the spirit and intention of this Code that the Commission and itsmembers and the Labor Arbiters shall use every and all reasonable means toascertain the facts in each case speedily and objectively and without regardto technicalities of law or procedure, all in the interest of due process."The admission by the Labor Arbiter of the complainants Position Paper andSupplemental Manifestation which were belatedly filed just only shows thathe acted within his discretion as he is enjoined by law to use everyreasonable means to ascertain the facts in each case speedily andobjectively, without regard to technicalities of law or procedure, all in theinterest of due process. Indeed, the failure to submit a position paper on timeis not a ground for striking out the paper from the records, much less fordismissing a complaint in the case of the complainant. (University of

Immaculate Conception vs. UIC Teaching and Non-Teaching PersonnelEmployees, G.R. No. 144702, July 31, 2001)."In admitting the respondents position paper albeit late, the Labor Arbiteracted within her discretion. In fact, she is enjoined by law to use everyreasonable means to ascertain the facts in each case speedily andobjectively, without technicalities of law or procedure, all in the interest of dueprocess". (Panlilio vs. NLRC, 281 SCRA 53).The respondents were given by the Labor Arbiter the opportunity to submitposition paper. In fact, the respondents had filed their position paper on 2

April 2001. What is material in the compliance of due process is the fact thatthe parties are given the opportunities to submit position papers.
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"Due process requirements are satisfied where the parties are given theopportunities to submit position papers". (Laurence vs. NLRC, 205 SCRA737).Thus, the respondent was not deprived of its Constitutional right to dueprocess of law.29

We reject, as barren of factual basis, petitioners contention that respondentsare considered as its talents, hence, not regular employees of thebroadcasting company. Petitioners claim that the functions performed by therespondents are not at all necessary, desirable, or even vital to its trade orbusiness is belied by the evidence on record.Case law is that this Court has always accorded respect and finality to thefindings of fact of the CA, particularly if they coincide with those of the Labor

Arbiter and the National Labor Relations Commission, when supported bysubstantial evidence.30 The question of whether respondents are regular orproject employees or independent contractors is essentially factual in nature;nonetheless, the Court is constrained to resolve it due to its tremendouseffects to the legions of production assistants working in the Philippinebroadcasting industry.We agree with respondents contention that where a person has rendered atleast one year of service, regardless of the nature of the activity performed,or where the work is continuous or intermittent, the employment is

considered regular as long as the activity exists, the reason being that acustomary appointment is not indispensable before one may be formallydeclared as having attained regular status. Article 280 of the Labor Codeprovides:

ART. 280. REGULAR AND CASUAL EMPLOYMENT.The provisions ofwritten agreement to the contrary notwithstanding and regardless of the oralagreement of the parties, an employment shall be deemed to be regularwhere the employee has been engaged to perform activities which areusually necessary or desirable in the usual business or trade of the employerexcept where the employment has been fixed for a specific project orundertaking the completion or termination of which has been determined atthe 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 ofthe season.In Universal Robina Corporation v. Catapang,31 the Court reiterated the testin determining whether one is a regular employee:The primary standard, therefore, of determining regular employment is thereasonable connection between the particular activity performed by theemployee in relation to the usual trade or business of the employer. The testis whether the former is usually necessary or desirable in the usual businessor trade of the employer. The connection can be determined by consideringthe nature of work performed and its relation to the scheme of the particularbusiness or trade in its entirety. Also, if the employee has been performingthe job for at least a year, even if the performance is not continuous and

merely intermittent, the law deems repeated and continuing need for its

performance as sufficient evidence of the necessity if not indispensability ofthat activity to the business. Hence, the employment is considered regular,but only with respect to such activity and while such activity exists.32

As elaborated by this Court in Magsalin v. National Organization of WorkingMen:33

Even while the language of law might have been more definitive, the clarity ofits spirit and intent, i.e., to ensure a "regular" workers security of tenure,however, can hardly be doubted. In determining whether an employmentshould be considered regular or non-regular, the applicable test is thereasonable conn

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Labor Law Review Cases 1