FUJI TELEVISION NETWORK INC V ARLENE ESPIRITU Dealt on equal terms when they negotiated and entered into

hey negotiated and entered into the employment

DEC 3 2014 | LEONEN, J contracts; execute yearly fixed term contracts so she could negotiate for annual
increases in her pay

FACTS: No illegal dismissal because she freely agreed not to renew her fixed-term contract
2005 - ARLENE was engaged by FUJI as a news correspondent/producer tasked to (evidenced by her e-mail correspondence with YOSHIKI AOKI

report PH news to FUJI through its Manila Bureau field oce.

Signing of the non-renewal contract was not necessary to terminate her
Employment contract initially provided for a term of 1 year but was successively employment since such employment terminated upon expiration of her contract

renewed on a yearly basis with salary adjustment upon every renewal

Did not need a permanent reporter since the news reported by Arlene could easily
2009 - ARLENE was diagnosed with lung cancer
be secured from other entities or from the internet

Company will have a problem renewing her contract since it would be dicult for Reported for work only 5 days in FEB, 3 days in MAR, and 1 day in APR 2009 but
her to perform her job
was paid her entire salary

ARLENE: insisted that she was still fit to work as certified by her attending ARLENE sent an e-mail [MAR 18] with her version of the non-renewal agreement
physician
stating that FUJI shall rehire her if she was still interested to work for FUJI - power
MAY 5 - Sent verbal and written communications, ARLENE & FUJI signed a non- to bargain

renewal contract - stipulated that her contract would no longer be renewed after its
expiration on May 31 2009
ISSUES:
- In consideration of the non-renewal contract, ARLENE acknowledged receipt 1. WON ARLENE WAS A REGULAR EMPLOYEE OR INDEPENDENT
of the total amount of US$18,050 representing her monthly salary from MAR - CONTRACTOR? REGULAR EMPLOYEE
MAY 2009, year-end bonus, mid-year bonus, and separation pay.
LABOR CASES, quantum of proof required is substantial evidence [such amount of
- Axed her signature with the initials U.P. for under protest
relevant evidence which a reasonable mind might accept as adequate to justify a
MAY 6 - filed a complaint for illegal dismissal and attorneys fees; forced to sign conclusion]

the non-renewal contract when FUJI came to know of her illness and that FUJI
withheld her salaries and other benefits for MAR & APR 2009 when she refused to FUJI: ARLENE was an independent contractor [SONZA V ABSCBN]

sign
(1) Hired because of her skills

LA: complaint dismissed; SONZA V ABS-CBN and applying the four-fold test - (2) Salary was US$1900 which is higher than the normal rate

ARLENE was not FUJIs employee but an independent contractor

(3) Had the power to bargain with her employer

NLRC: LA decision REVERSED; ARLENE was a regular employee with respect to (4) Contract was for a fixed term

the activities for which she was employed since she continuously rendered services ARLENE: She was a regular employee

that were deemed necessary and desirable to FUJIs business

(1) FUJI had control and supervision over her work

CA: armed NLRC with MODIFICATION - reinstate ARLENE to her position as News News events that she covered were all based on the instructions of FUJI

Producer; ARLENE was a regular employee because she was engaged to perform (2) Successive renewal of her employment contracts for 4 years indicate that
work that was necessary or desirable in the business of FUJI, and the successive her work was necessary and desirable

renewals of her fixed-term contract resulted in regular employment

(3) FUJIs payment of separation pay equivalent to 1 months pay per year of
SONZA does not apply since she was not contracted on account of any peculiar service indicates that she was a regular employee

ability, special talent, or skill

(4) FUJI owns the laptop computer and mini-camera that she used for work

Everything used by ARLENE in her work was owned by FUJI

(5) SONZA not applicable because she was a plain reporter for FUJI unlike
Illegally dismissed because FUJI failed to comply with the requirements of SONZA who was a news anchor, talk show host and who enjoyed a
substantive and procedural due process necessary for her dismissal
celebrity status

Did not sign the non-renewal contract voluntarily and that the contract was a mere (6) Her illness is not a ground for her dismissal because her attending physician
subterfuge to secure FUJIs position that it was her choice not to renew
certified that she was fit to work

FUJI: ARLENE was hired as a stringer, and it informed her that she would remain (7) Signed the non-renewal agreement with quitclaim because she was not in a
one; hired as an independent contractor - SONZA
position to reject the non-renewal agreement and she badly needed the
Had no control over her work; never controlled the manner by which she salary withheld for her sustenance and medication

performed her functions

Employment contracts executed and renewed annually upon ARLENEs insistence ART 280 REGULAR AND CASUAL EMPLOYMENT

to which FUJI relented because she had skills that distinguished her from ordinary 1. Regular

employees
a. Those engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer

 b. Rendered at least 1 year of service whether such service is continuous or whether such job, work or service is to be performed or completed within or
broken
outside the premises of the principal [there is a trilateral relationship in legitimate
2. Project
job contracting and subcontracting arrangements among the principal, contractor,
3. Seasonal
and employees of the contractor]

4. Casual

ANOTHER KIND INDEPENDENT CONTRACTOR: individuals with unique skills

EMPLOYEES WITH FIXED TERM CONTRACTS
and talents that set them apart from ordinary employees [Independent contractor
BRENT SCHOOL INC V ZAMORA - decisive determinant in the term employment himself or herself performs the work for the principal - bilateral relationship]

should not be the activities that the employee is called upon to perform, but the
day certain agreed upon by the parties for the commencement and termination of
their employment relationship, a day certain being understood to be that which
must necessarily come, although it may not be known when.
Orozco, and she worked at her own pleasure.
OROZCO V CA - (columnist for PDI) independent contractor because of her
talent, skill, experience, and her unique viewpoint as a feminist advocate. In
addition, the Philippine Daily Inquirer did not have the power of control over

A fixed term is an essential and natural appurtenance (overseas employment SEMBLANTE V CA - (masiador and sentenciador) - performed their functions free
contracts and ocers in educational institutions)
from the direction and control of respondents and relied mainly on their expertise
that is characteristic of the cockfight gambling hence no employer-employee
FIXED TERM EMPLOYEES V INDEPENDENT CONTRACTORS V REGULAR relationship existed
EMPLOYEES In these cases, the workers were found to be independent contractors because
GMA NETWORK V PABRIGA - Doctrine on fixed term contracts - indications or of their unique skills and talents and the lack of control over the means and
criteria under which term employment cannot be said to be in circumvention of the methods in the performance of their work.
law on security of tenure

1. Fixed term of employment was knowingly and voluntarily agreed upon by the Kinds of Independent Contractors

parties without any force, duress, or improper pressure being brought to bear Those engaged in legitimate contracting

upon the employee and absent any other circumstances vitiating his consent
Those who have unique skills and talents that set them apart from ordinary
2. Employer and the employee dealt with each other on more or less equal terms employees

with no moral dominance exercised by the former on the latter

REASON: When a prospective employee, on account of special skills or market INDEPENDENT CONTRACTORS - GOVERNED BY CIVIL CODE PROVISIONS ON
forces, is in a position to make demands upon the prospective employer, such CONTRACTS AND OTHER APPLICABLE LAWS (presupposes that the parties to a
prospective employee needs less protection than the ordinary worker. Lesser contract are on equal footing)

limitations on the parties freedom of contract are thus required for the protection
of the employee
FUJIS ARGUMENT THAT ARLENE WAS AN INDEPENDENT CONTRACTOR
UNDER A FIXED-TERM CONTRACT IS CONTRADICTORY
LABAYOG V MY SAN BISCUITS INC - Upheld the fixed-term employment because Employees under fixed-term contracts cannot be independent contractors
from the time they were hired, they were informed that their engagement was for a because in fixed-term contracts, an employer-employee relationship exists

specific period
Test of fixed-term contracts: Not the necessity and desirability of the employees
activities, but the day certain agreed upon by the parties for the commencement
CAPAROSO V CA - Upheld the validity of the fixed-term contract of employment; no and termination of the employment relationship

proof their employer was engaged in hiring workers for 5 months only to prevent For regular employees, the necessity and desirability of their work in the usual
regularization
course of the employers business are the determining factors

Independent contractors do not have an employer-employee relationship with their

INDEPENDENT CONTRACTOR - one who carries on a distinct and independent principals

business and undertakes to perform the job, work, or service on its own account and
under ones own responsibility according to ones own manner and method, free Before the status of employment can be determined, the existence of an employer-
from the control and direction of the principal in all matters connected with the employee relationship must be established

performance of the work except as to the results thereof [ART 106 LC]
FOUR-FOLD TEST:
NO employee-employer relationship exists between independent contractors and 1. Selection and engagement of the employee

their principals
2. Payment of wages

DO 18-A-11 - Contractor: having an arrangement whereby a principal agrees to 3. Power of dismissal

put out or farm out with a contractor the performance or completion of a specific 4. Power of control

job, work or service within a definite or predetermined period, regardless of

SONZA V ABS-CBN & DUMPIT-MURILLO V CA (BOTH INVOLVE NEWSCASTERS 2. Monthly salary of US$1,900 appears to be substantial especially if compared to
AND ANCHORS)
her salary when she was still connected with GMA

Wages may also indicate than an employee is able to bargain with the
SONZA DUMPIT-MURILLO employer for better pay HOWEVER wages should not be the conclusive factor
in determining whether one is an employee or an independent contractor

INDEPENDENT CONTRACTOR REGULAR EMPLOYEE 3. FUJI had the power to dismiss ARLENE as provided in paragraph 5 of her
Engaged by ABSCBN in view of his professional employment contract

4. Her contract also indicated that FUJI had control over her work because she was
unique skills, talent and celebrity
Hired by ABSCBN as a newscaster required to work for 8 hours from Monday to Friday although on flexible time

status not possessed by ordinary

and co-anchor FUJI gave her instructions on what to report; even the mode of transportation
employees (work was for radio and in carrying out her functions was controlled by FUJI

TV programs) HENCE, AN EMPLOYER-EMPLOYEE RELATIONSHIP EXISTED BETWEEN FUJI

AND ARLENE
Talent fee amounted to P317, 000 P 2 8 , 0 0 0 ( v e r y l o w a m o u n t
per month (substantial amount) compared to SONZA) ON DETERMINING REGULAR EMPLOYMENT
TEST: Whether there is a reasonable connection between the employees activities
Unable to prove that ABSCBN
and the usual business of the employer (ART 280 LC - the nature of the work must
could terminate his services apart be necessary or desirable in the usual business or trade of the employer)

f ro m b re a c h o f c o n t r a c t ; n o ABSCBN BROADCASTING CORP V NAZARENO - In determining whether an

indication he could be terminated employment should be considered regular or non-regular, the applicable test is the
Illegally dismissed by when they did
based on just or authorized causes reasonable connection between the particular activity performed by the employee
not renew her contract on her 4th
under LC
in relation to the usual business or trade of the employer.

year with ABC

ABSCBN continued to pay his talent IN CASE AT BAR, FUJI is engaged in the business of broadcasting, including
fee under their agreement even news programming based in Japan (FUJIs Manila Bureau Oce is a small unit and
though his programs were no longer had few employees) - ARLENE had to do all activities related to news gathering
broadcasted [although FUJI insists that ARLENE was a stringer, it alleges that her
designation was News Talent/Reporter/Producer]

ABSCBN did not control how TASKS INCLUDED: Monitoring and getting news stories, reporting interviewing
SONZA delivered his lines, how he subjects in front of a video camera, the timely submission of news and current
appeared on TV, or how he sounded events reports pertaining to the PH and traveling to FUJIs regional oce in
on radio - all SONZA needed was Duties and responsibilities THAILAND; had to report for work in FUJIs oce in MANILA from M-F 8hrs per
day; had no equipment and had to use the facilities of FUJI to accomplish her
his talent
enumerated in her contract was a
tasks

ABSCBN could not terminate or clear indication that ABC had

SUCCESSIVE RENEWALS OF ARLENES CONTRACT INDICATED THE
discipline SONZA even if the means control over her work NECESSITY YAND DESIRABILITY OF HER WORK IN THE USUAL COURSE
and methods of performance of his OF FUJIS BUSINESS (had become a regular employee with the right to security
work did not meet ABSCBNs of tenure)

approval DUMPIT-MURILLO - this repeated engagement under contract of hire is

indicative of the necessity and desirability of the petitioners work in private
Had to be in ABC to do both on-air respondent ABCs business

Not required to work for 8 hours

and o-air tasks PHILIPS SEMICONDUCTORS INC V FADRIQUELA - Where an employees
contract had been continuously extended or renewed to the same position,
IN CASE AT BAR, ARLENE WAS A REGULAR EMPLOYEE (DUMPIT-MURILLO with the same duties and remained in the employe without any interruption,
RULING APPLIES) - APPLYING FOUR-FOLD TEST
then such employee is a regular employee - continuous renewal is a scheme
1. ARLENE was hired by FUJI as a news producer but there was no showing that to prevent regularization

she was hired because of unique skills that would distinguish her from ordinary BRENT - An employee can be a regular employee with a fixed-term contract.
employees nor showing that she had celebrity status
For as long as it was the employee who requested, or bargained, that the
contract have a definite date of termination, or that the fixedterm contract be
 freely entered into by the employer and the employee, then the validity of the
fixed-term contract will be upheld

2. WON ARLENE WAS ILLEGALLY DISMISSED? YES

FUJI: Non-renewal contract voluntarily executed by the parties; ARLENEs contract
merely expired HENCE not illegally dismissed

ARLENE: had no choice but to sign the non-renewal contract because FUJI withheld
her salary and benefits

COURT: As a regular employee, ARLENE was entitled to security of tenure and could
be dismissed only for just or authorized causes and after observance of due process
(right to security of tenure - ART XIII SEC 3 1987 CONSTI)

The expiration of Arlenes contract does not negate the finding of illegal dismissal
by Fuji. The manner by which Fuji informed Arlene that her contract would no
longer be renewed is tantamount to constructive dismissal.

The existence of a fixed term contract should not mean that there can be no illegal
dismissal. Due process must still be observed in the pre-termination of fixed-term
contracts of employment.

ART 284 LC - DISEASE AS GROUND FOR TERMINATION & BOOK VI RULE 1

SEC 8 OF THE OMNIBUS RULES IMPLEMENTING THE LABOR CODE
- For dismissal to be valid, two requirements must be complied with:

1. Employees disease cannot be cured within 6 months and his continued

employment is prohibited by law or prejudicial to his health as well as to
the health of his co-employees

2. Certification issued by a competent public health attorney that even with

proper medical treatment, the disease cannot be cured within 6 months

IN CASE AT BAR, no showing that ARLENE was accorded due process - was not
given the chance to present medical certificates; FUJI concluded that ARLENE could
no longer perform her duties because of chemotherapy

WHEREFORE, PETITION DENIED. CA DECISION AFFIRMED WITH

MODIFICATIONS