FUJI TELEVISION NETWORK, INC., Petitioner, vs. ARLENE S. ESPIRITU, Respondent.
G.R. No. 204944-45 December 3, 2014
CONCEPT: It is the burden of the employer to prove that a person whose services it pays for is an independent contractor rather than a regular employee with or without a fixed term. That a person has a disease does not per se entitle the employer to terminate his or her services.
FACTS: In 2005,
Arlene S. Espiritu ("Arlene") was engaged by Fuji Television Network,
Inc. ("Fuji") as a news correspondent/producer "tasked to
report Philippine news to Fuji through its Manila Bureau field
office." Arlene's employment contract initially provided for a term
of 1 year but was successively renewed on a yearly basis with salary adjustment
upon every renewal.
Sometime in January 2009, Arlene
was diagnosed with lung cancer. She informed Fuji about her condition. In
turn, the Chief of News Agency of Fuji, Yoshiki Aoki, informed Arlene
"that the company will have a problem renewing her
contract" since it would be difficult for her to perform her
job. She "insisted that she was still fit to work as certified
by her attending physician."
After several verbal and written
communications, Arlene and Fuji signed a non-renewal contract on May 5,
2009 where it was stipulated that her contract would no longer be renewed after
its expiration. The contract also provided that the parties release each other
from liabilities and responsibilities under the employment contract.
In consideration of the
non-renewal contract, Arlene "acknowledged receipt of the total amount of
US$18,050.00 representing her monthly salary from March 2009 to May 2009,
year-end bonus, mid-year bonus, and separation pay." However, Arlene
affixed her signature on the non-renewal contract with the initials
"U.P." for "under protest."
The day after Arlene signed the
non-renewal contract, she filed a complaint for illegal dismissal with the NCR
Arbitration Branch of NLRC. Arlene claimed that she was left with no other
recourse but to sign the non-renewal contract.
Labor Arbiter Corazon C. Borbolla
dismissed Arlene's complaint saying that she was an independent contractor. The
National Labor Relations Commission reversed the Labor Arbiter's
decision. It held that Arlene was a regular employee.
In the assailed decision, the CA
affirmed the NLRC with the modification that Fuji immediately reinstate Arlene
to her position as News Producer without loss of seniority rights, and pay her
backwages, 13th-month pay, mid-year and year-end bonuses, sick leave and
vacation leave with pay until reinstated, moral damages, exemplary damages,
attorney's fees, and legal interest of 12% per annum of the total monetary
awards.
ISSUE: Whether Arlene was a regular
employee and whether she was illegally dismissed or not.
RULING: Arlene is a regular employee and was illegally dismissed by
Fuji.
Fuji alleges that Arlene was an
independent contractor, citing Sonza v. ABS-CBN and relying on the
following facts: (1) she was hired because of her skills; (2) her salary was
US$1,900.00, which is higher than the normal rate; (3) she had the power to
bargain with her employer; and (4) her contract was for a fixed term.
Arlene also argues that Sonza is
not applicable because she was a plain reporter for Fuji, unlike Jay Sonza who
was a news anchor, talk show host, and who enjoyed a celebrity status.
Art 280 of Labor Code classifies
employees into regular, project, seasonal, and casual. It further classifies
regular employees into two kinds: (1) those "engaged to perform
activities which are usually necessary or desirable in the usual business or
trade of the employer"; and (2) casual employees who have "rendered
at least one year of service, whether such service is continuous or
broken." Another classification
of employees, i.e., employees with fixed-term contracts, was recognized
in Brent School, Inc. v. Zamora.
Fuji's argument that Arlene was
an independent contractor under a fixed-term contract is contradictory.
Employees under fixed-term contracts
cannot be independent contractors because in fixed-term contracts, an
employer-employee relationship exists. The test in this kind of contract is
not the necessity grid desirability of the employee's activities, "but the
day certain agreed upon by the parties for the commencement and termination of
the employment relationship."
Application
of the four-fold test
The Court of Appeals did not err
when it relied on the ruling in Dumpit-Murillo and affirmed
the ruling of the NLRC finding that Arlene was a regular employee. Arlene was
hired by Fuji as a news producer, but
there was no showing that she was hired because of unique skills that would
distinguish her from ordinary employees. Neither was there any showing that she
had a celebrity status. Her monthly salary amounting to US$1,900.00 appears to
be a substantial sum. However, wages
should not be the conclusive factor in determining whether one is an
employee or an independent contractor.
Fuji had the power to dismiss
Arlene, as provided for in her contract. Her contract also indicated that
Fuji had control over her work
because she was required to work for 8 hours from Monday to Friday, although on
flexible time.
On the power to control, Arlene alleged that Fuji gave her instructions on
what to report. Even the mode of transportation in carrying out her
functions was controlled by Fuji. Thus, Arlene was not an independent contractor.
Arlene
was a regular employee with a fixed-term contract
The test for determining regular
employment is whether there is a reasonable connection between the employee's
activities and the usual business of the employer. Article 280 provides that
the nature of work must be "necessary or desirable in the usual business
or trade of the employer" as the test for determining regular employment.
Arlene's tasks included
monitoring and getting news stories, reporting interviewing subjects in front
of a video camera," "the timely submission of news and current
events reports pertaining to the Philippines, and traveling to Fuji's regional
office in Thailand." She also had to report for work in Fuji's office in
Manila from Mondays to Fridays, 8 hours per day. She had no equipment and
had to use the facilities of Fuji to accomplish her tasks.
That the successive renewals of
Arlene's contract indicated the necessity and desirability of her work in the
usual course of Fuji's business. Because of this, Arlene had become a regular employee with the right to security of
tenure.
Fuji also argues that Arlene's
contract merely expired; hence, she was not illegally dismissed.
As a regular employee, Arlene was
entitled to security of tenure. Thus, on the right to security of tenure, no
employee shall be dismissed, unless there are just or authorized causes and
only after compliance with procedural and substantive due process is conducted.
The expiration of Arlene's
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. To make matters worse, Arlene was asked
to sign a letter of resignation prepared by Fuji. Due process must still be
observed in the pre-termination of fixed-term contracts of employment.
In addition, the CA and the NLRC
found that Arlene was dismissed because of her health condition.
For dismissal under Article 284
to be valid, two requirements must be complied with: (1) the employee's disease cannot be cured within six (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"; and (2) certification issued by a competent public health authority
that even with proper medical treatment, the disease cannot be cured within six
(6) months. The burden of
proving compliance with these requisites is on the employer. Non-compliance
leads to the conclusion that the dismissal was illegal.
There is no evidence showing that
Arlene was accorded due process. After informing her employer of her lung
cancer, she was not given the chance to present medical certificates. It did
not ask her how her condition would affect her work. Worse, it did not present
any certificate from a competent public health authority. What Fuji did was to
inform her that her contract would no longer be renewed, and when she did not
agree, her salary was withheld. For failure of Fuji to comply with due process,
Arlene was illegally dismissed
The Court of Appeals'
modification of the National Labor Relations Commission's decision was proper
because the law itself provides that illegally dismissed employees are entitled
to reinstatement, backwages including allowances, and all other benefits.
On reinstatement, the No evidence
was presented by Fuji to prove that reinstatement was no longer feasible. Fuji
did not allege that it ceased operations or that Arlene's position, was no
longer available. Nothing in the records shows that Arlene's reinstatement
would cause an atmosphere of antagonism in the workplace.