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7/21/2019 Fuji vs. Espiritu http://slidepdf.com/reader/full/fuji-vs-espiritu 1/21 G.R. No. 204944-45, December 03, 2014 FUJI TELEVISION NETOR!, IN"., Petitioner , v. #RLENE S. ES$IRITU, Respondent . D E " I S I O N LEONEN, J.% 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. Termination is the last resort. At the very least, a competent public health authority must certify that the disease cannot be cured within six (6) months, even with appropriate treatment. e decide this petition for review !  on certiorari filed by "u#i Television $etwor%, Inc., see%ing the reversal of the &ourt of Appeals' decision  dated une *, +!, affirming with modification the decision  of the $ational -abor elations &ommission. In ++*, Arlene /. 0spiritu (1Arlene2) was engaged by "u#i Television $etwor%, Inc. (1"u#i2) as a news correspondent3producer 4  1tas%ed to report 5hilippine news to "u#i through its anila 7ureau field office.2 *  Arlene's employment contract initially provided for a term of one (!) year but was successively renewed on a yearly basis with salary ad#ustment upon every renewal. 6 chanoblesvirtual-awlibrary /ometime in anuary ++8, Arlene was diagnosed with lung cancer. 9  /he informed "u#i about her condition. In turn, the &hief of $ews Agency of "u#i, :oshi%i Ao%i, informed Arlene 1that the company will have a problem renewing her contract2 ;  since it would be difficult for her to perform her #ob. 8  /he  1insisted that she was still fit to wor% as certified by her attending physician.2 !+ chanoblesvirtual-awlibrary After several verbal and written communications, !!  Arlene and "u#i signed a non<renewal contract on ay *, ++8 where it was stipulated that her contract would no longer be renewed after its expiration on ay !, ++8. The contract also provided that the parties release each other from liabilities and responsibilities under the employment contract. ! chanoblesvirtual-awlibrary In consideration of the non<renewal contract, Arlene 1ac%nowledged receipt of the total amount of =/>!;,+*+.++ representing her monthly salary from arch ++8 to ay ++8, year<end bonus, mid< year bonus, and separation pay.2 !  ?owever, Arlene affixed her signature on the non<renewal contract with the initials 1=.5.2 for 1under protest.2 !4 chanoblesvirtual-awlibrary @n ay 6, ++8, the day after Arlene signed the non<renewal contract, she filed a complaint for illegal dismissal and attorney's fees with the $ational &apital egion Arbitration 7ranch of the $ational -abor elations &ommission. /he alleged that she was forced to sign the non<renewal contract when "u#i came to %now of her illness and that "u#i withheld her salaries and other benefits for arch and April ++8 when she refused to sign. !* chanoblesvirtual-awlibrary Arlene claimed that she was left with no other recourse but to sign the non<renewal contract, and it was only upon signing that she was given her salaries and bonuses, in addition to separation pay euivalent to four (4) years. !6 chanoblesvirtual-awlibrary In the decision !9  dated /eptember !+, ++8, -abor Arbiter &oraBon &. 7orbolla dismissed Arlene's complaint. !;  &iting Sonza v. ABS-CBN !8  and applying the four<fold test, the -abor Arbiter held that Arlene was not "u#i's employee but an independent contractor. + chanoblesvirtual-awlibrary Arlene appealed before the $ational -abor elations &ommission. In its decision dated arch *, +!+, the $ational -abor elations &ommission reversed the -abor Arbiter's decision. !  It held that Arlene was a regular employee with respect to the activities for which she was employed since she continuously rendered services that were deemed necessary and desirable to "u#i's business.  The $ational -abor elations &ommission ordered "u#i to pay Arlene bac%wages, computed from the date of her illegal dismissal.  The dispositive portion of the decision readsC chanroblesvirtuallawlibrary &EREFORE, premises considered, #udgment is hereby rendered DA$TI$D the instant appeal. The Eecision of the -abor Arbiter dated !8 /eptember ++8 is hereby 0F0/0E and /0T A/IE0, and a new one is issued ordering respondents<appellees to pay complainant<appellant bac%wages computed from the date of her illegal dismissal until finality of this Eecision.

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G.R. No. 204944-45, December 03, 2014

FUJI TELEVISION NETOR!, IN"., Petitioner , v. #RLENE S. ES$IRITU, Respondent .

D E " I S I O N

LEONEN, J.%

It is the burden of the employer to prove that a person whose services it pays for is an independentcontractor rather than a regular employee with or without a fixed term. That a person has a diseasedoes not per se entitle the employer to terminate his or her services. Termination is the last resort. Atthe very least, a competent public health authority must certify that the disease cannot be cured withinsix (6) months, even with appropriate treatment.

e decide this petition for review! on certiorari filed by "u#i Television $etwor%, Inc., see%ing thereversal of the &ourt of Appeals' decision dated une *, +!, affirming with modification thedecision of the $ational -abor elations &ommission.

In ++*, Arlene /. 0spiritu (1Arlene2) was engaged by "u#i Television $etwor%, Inc. (1"u#i2) as a newscorrespondent3producer 4 1tas%ed to report 5hilippine news to "u#i through its anila 7ureau fieldoffice.2 * Arlene's employment contract initially provided for a term of one (!) year but was successivelyrenewed on a yearly basis with salary ad#ustment upon every renewal.6

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/ometime in anuary ++8, Arlene was diagnosed with lung cancer.9 /he informed "u#i about hercondition. In turn, the &hief of $ews Agency of "u#i, :oshi%i Ao%i, informed Arlene 1that the company willhave a problem renewing her contract2 ; since it would be difficult for her to perform her #ob.8 /he

 1insisted that she was still fit to wor% as certified by her attending physician.2 !+chanoblesvirtual-awlibrary

After several verbal and written communications,!! Arlene and "u#i signed a non<renewal contract on ay*, ++8 where it was stipulated that her contract would no longer be renewed after its expiration on ay!, ++8. The contract also provided that the parties release each other from liabilities andresponsibilities under the employment contract.!

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In consideration of the non<renewal contract, Arlene 1ac%nowledged receipt of the total amount of=/>!;,+*+.++ representing her monthly salary from arch ++8 to ay ++8, year<end bonus, mid<year bonus, and separation pay.2 ! ?owever, Arlene affixed her signature on the non<renewal contractwith the initials 1=.5.2 for 1under protest.2 !4

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@n ay 6, ++8, the day after Arlene signed the non<renewal contract, she filed a complaint for illegaldismissal and attorney's fees with the $ational &apital egion Arbitration 7ranch of the $ational -aborelations &ommission. /he alleged that she was forced to sign the non<renewal contract when "u#i cameto %now of her illness and that "u#i withheld her salaries and other benefits for arch and April ++8when she refused to sign.!*

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Arlene claimed that she was left with no other recourse but to sign the non<renewal contract, and it wasonly upon signing that she was given her salaries and bonuses, in addition to separation pay euivalentto four (4) years.!6

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In the decision!9 dated /eptember !+, ++8, -abor Arbiter &oraBon &. 7orbolla dismissed Arlene'scomplaint.!; &iting Sonza v. ABS-CBN !8 and applying the four<fold test, the -abor Arbiter held that Arlenewas not "u#i's employee but an independent contractor.+

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Arlene appealed before the $ational -abor elations &ommission. In its decision dated arch *, +!+,the $ational -abor elations &ommission reversed the -abor Arbiter's decision.! It held that Arlene wasa regular employee with respect to the activities for which she was employed since she continuouslyrendered services that were deemed necessary and desirable to "u#i's business. The $ational -aborelations &ommission ordered "u#i to pay Arlene bac%wages, computed from the date of her illegaldismissal. The dispositive portion of the decision readsC chanroblesvirtuallawlibrary

&EREFORE, premises considered, #udgment is hereby rendered DA$TI$D the instant appeal. TheEecision of the -abor Arbiter dated !8 /eptember ++8 is hereby 0F0/0E and /0T A/IE0, and a new

one is issued ordering respondents<appellees to pay complainant<appellant bac%wages computed fromthe date of her illegal dismissal until finality of this Eecision.

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SO ORDERED.4

Arlene and "u#i filed separate motions for reconsideration.* 7oth motions were denied by the $ational-abor elations &ommission for lac% of merit in the resolution dated April 6, +!+.6

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"rom the decision of the $ational -abor elations &ommission, both parties filed separate petitions for

certiorari9 before the &ourt of Appeals. The &ourt of Appeals consolidated the petitions and consideredthe following issues for resolutionC chanroblesvirtuallawlibrary

!) hether or not 0spiritu is a regular employee or a fixed<term contractual employeeG

) hether or not 0spiritu was illegally dismissedG and

) hether or not 0spiritu is entitled to damages and attorney's fees. ;

In the assailed decision, the &ourt of Appeals affirmed the $ational -abor elations &ommission with themodification that "u#i immediately reinstate Arlene to her position as $ews 5roducer without loss ofseniority rights, and pay her bac%wages, !th<month pay, mid<year and year<end bonuses, sic% leaveand vacation leave with pay until reinstated, moral damages, exemplary damages, attorney's fees, andlegal interest of !H per annum of the total monetary awards.8

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The &ourt of Appeals ruled thatC chanroblesvirtuallawlibrary

&EREFORE, for lac% of merit, the petition of "u#i Television $etwor%, Inc. and :oshi%i Ao%iis DENIED and the petition of Arlene /. 0spiritu is GR#NTED. Accordingly, the Eecision dated arch *,+!+ of the $ational -abor elations &ommission, 6th Eivision in $-& $& &ase $o. +*<+6;!!<+8 andits subseuent esolution dated April 6, +!+ are hereby #FFIR'ED with 'ODIFI"#TIONS, asfollowsC

"u#i Television, Inc. is hereby ORDERED to immediately REINSTATE Arlene /. 0spiritu to her positionas $ews 5roducer without loss of seniority rights and privileges and to pay her the followingC chanroblesvirtuallawlibrary

!. 7ac%wages at the rate of >!,8++.++ per month computed from ay *, ++8 (the date of dismissal),until reinstatedG

. !th onth 5ay at the rate of >!,8++.++ per annum from the date of dismissal, until reinstatedG

. @ne and a half (!) months pay or >,;*+.++ as midyear bonus per year from the date of dismissal,until reinstatedG

4. @ne and a half (!) months pay or >,;*+.++ as year<end bonus per year from the date of dismissal,until reinstatedG

*. /ic% leave of + days with pay or >!,8++.++ per year from the date of dismissal, until reinstatedG and

6. Facation leave with pay euivalent to !4 days or >!,4*.++ per annum from date of dismissal, untilreinstated.

9. The amount of 5!++,+++.++ as moral damagesG

;. The amount of 5*+,+++.++ as exemplary damagesG

8. Attorney's fees euivalent to !+H of the total monetary awards herein statedG and

!+. -egal interest of twelve percent (!H) per annum of the total monetary awards computed from ay*, ++8, until their full satisfaction.

The -abor Arbiter is hereby DIRECTED to ma%e another re<computation of the above monetary awardsconsistent with the above directives.

SO ORDERED.+

In arriving at the decision, the &ourt of Appeals held that Arlene was a regular employee because she

was engaged to perform wor% that was necessary or desirable in the business of "u#i, ! and thesuccessive renewals of her fixed<term contract resulted in regular employment.

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According to the &ourt of Appeals, Sonza does not apply in order to establish that Arlene was anindependent contractor because she was not contracted on account of any peculiar ability, special talent,or s%ill. The fact that everything used by Arlene in her wor% was owned by "u#i negated the idea of #obcontracting.4

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The &ourt of Appeals also held that Arlene was illegally dismissed because "u#i failed to comply with the

reuirements of substantive and procedural due process necessary for her dismissal since she was aregular employee.*

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The &ourt of Appeals found that Arlene did not sign the non<renewal contract voluntarily and that thecontract was a mere subterfuge by "u#i to secure its position that it was her choice not to renew hercontract. /he was left with no choice since "u#i was decided on severing her employment. 6

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"u#i filed a motion for reconsideration that was denied in the resolution 9 dated Eecember 9, +! forfailure to raise new matters.;

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Aggrieved, "u#i filed this petition for review and argued that the &ourt of Appeals erred in affirming withmodification the $ational -abor elations &ommission's decision, holding that Arlene was a regularemployee and that she was illegally dismissed. "u#i also uestioned the award of monetary claims,benefits, and damages.8

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"u#i points out that Arlene was hired as a stringer, and it informed her that she would remain one. 4+ /hewas hired as an independent contractor as defined in /onBa.4! "u#i had no control over her wor%.4 Theemployment contracts were executed and renewed annually upon Arlene's insistence to which "u#irelented because she had s%ills that distinguished her from ordinary employees.4 Arlene and "u#i dealton eual terms when they negotiated and entered into the employment contracts. 44 There was no illegaldismissal because she freely agreed not to renew her fixed<term contract as evidenced by her e<mailcorrespondences with :oshi%i Ao%i.4* In fact, the signing of the non<renewal contract was not necessaryto terminate her employment since 1such employment terminated upon expiration of hercontract.2 46"inally, "u#i had dealt with Arlene in good faith, thus, she should not have been awardeddamages.49

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"u#i alleges that it did not need a permanent reporter since the news reported by Arlene could easily besecured from other entities or from the internet.4; "u#i 1never controlled the manner by which sheperformed her functions.2 48 It was Arlene who insisted that "u#i execute yearly fixed<term contracts sothat she could negotiate for annual increases in her pay.*+

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"u#i points out that Arlene reported for wor% for only five (*) days in "ebruary ++8, three () days inarch ++8, and one (!) day in April ++8.*! Eespite the provision in her employment contract that sic%leaves in excess of + days shall not be paid, "u#i paid Arlene her entire salary for the months of arch,April, and ayG four (4) months of separation payG and a bonus for two and a half months for a total of=/>!;,+*+.++.* Eespite having received the amount of =/>!;,+*+.++, Arlene still filed a case for illegaldismissal.*

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"u#i further argues that the circumstances would show that Arlene was not illegally dismissed. Thedecision to not renew her contract was mutually agreed upon by the parties as indicated in Arlene's e<mail*4 dated arch !!, ++8 where she consented to the non<renewal of her contract but refused to signanything.** Ao%i informed Arlene in an e<mail*6 dated arch !, ++8 that she did not need to sign aresignation letter and that "u#i would pay Arlene's salary and bonus until ay ++8 as well as separation

pay.*9chanoblesvirtual-awlibrary

Arlene sent an e<mail dated arch !;, ++8 with her version of the non<renewal agreement that sheagreed to sign this time.*; This attached version contained a provision that "u#i shall re<hire her if shewas still interested to wor% for "u#i.*8 "or "u#i, Arlene's e<mail showed that she had the power tobargain.6+

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"u#i then posits that the &ourt of Appeals erred when it held that the elements of an employer<employeerelationship are present, particularly that of controlG6! that Arlene's separation from employment uponthe expiration of her contract constitutes illegal dismissalG6 that Arlene is entitled to reinstatementG6andthat "u#i is liable to Arlene for damages and attorney's fees. 64

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This petition for review on certiorari under ule 4* was filed on "ebruary ;, +!.6* @n "ebruary 9,+!, Arlene filed a manifestation66 stating that this court may not ta%e #urisdiction over the case since

"u#i failed to authoriBe &oraBon 0. Acerden to sign the verification.69

 "u#i filed a comment on themanifestation6; on arch 8, +!.

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7ased on the arguments of the parties, there are procedural and substantive issues for resolutionC

I. hether the petition for review should be dismissed as &oraBon 0. Acerden, the signatory of theverification and certification of non<forum shopping of the petition, had no authority to sign theverification and certification on behalf of "u#iG

II. hether the &ourt of Appeals correctly determined that no grave abuse of discretion wascommitted by the $ational -abor elations &ommission when it ruled that Arlene was a regularemployee, not an independent contractor, and that she was illegally dismissedG and

III. hether the &ourt of Appeals properly modified the $ational -abor elations &ommission'sdecision by awarding reinstatement, damages, and attorney's fees.

The petition should be dismissed.

IV()*+* o /e er**c(*o (+ cer**c(*o ((* orm /o*

In its comment on Arlene's manifestation, "u#i alleges that &oraBon was authoriBed to sign theverification and certification of non<forum shopping because r. /hu#i :ano was empowered under thesecretary's certificate to delegate his authority to sign the necessary pleadings, including the verificationand certification against forum shopping.68

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@n the other hand, Arlene points out that the authority given to r. /hu#i :ano and r. in 0to in thesecretary's certificate is only for the petition for certiorari before the &ourt of Appeals. 9+ "u#i did notattach any board resolution authoriBing &oraBon or any other person to file a petition for review oncertiorari with this court.9! /hu#i :ano and in 0to could not re<delegate the power that was delegated tothem.9 In addition, the special power of attorney executed by /hu#i :ano in favor of &oraBon indicatedthat she was empowered to sign on behalf of /hu#i :ano, and not on behalf of "u#i.9

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T/e R)e o "or re6*re /e

bm**o o er**c(*o (+

cer**c(*o ((* orm /o*

ule 9, /ection 4 of the !889 ules of &ivil 5rocedure provides the reuirement of verification, while/ection * of the same rule provides the reuirement of certification against forum shopping. Thesesections stateCchanroblesvirtuallawlibrary

SE". 4. Verification. J 0xcept when otherwise specifically reuired by law or rule, pleadings need notbe under oath, verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleading and that the allegationstherein are true and correct of his %nowledge and belief.

A pleading reuired to be verified which contains a verification based on 1information and belief,2 or upon 1%nowledge, information and belief,2 or lac%s a proper verification, shall be treated as an unsigned

pleading.

SE". 5. Certification against forum shopping.7 The plaintiff or principal party shall certify underoath in the complaint or other initiatory pleading asserting a claim for relief or in a sworn certificationannexed thereto and simultaneously filed therewithC (a) that he has not theretofore commenced anyaction or filed any claim involving the same issues in any court, tribunal or uasi<#udicial agency and, tothe best of his %nowledge, no such other action or claim is pending thereinG (b) if there is such otherpending action or claim, a complete statement of the present status thereofG and (c) if he shouldthereafter learn that the same or similar action or claim has been filed or is pending, he shall report thatfact within five (*) days therefrom to the court wherein his aforesaid complaint or initiatory pleading hasbeen filed.

"ailure to comply with the foregoing reuirements shall not be curable by mere amendment of thecomplaint or other initiatory pleading but shall be cause for the dismissal of the case without pre#udice,unless otherwise provided, upon motion and after hearing. The submission of a false certification or non<compliance with any of the underta%ings therein shall constitute indirect contempt of court, withoutpre#udice to the corresponding administrative and criminal actions. If the acts of the party or his counsel

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clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissalwith pre#udice and shall constitute direct contempt, as well as a cause for administrative sanctions.

/ection 4(e) of ule 4*94 reuires that petitions for review should 1contain a sworn certification againstforum shopping as provided in the last paragraph of section , ule 4.2 /ection * of the same ruleprovides that failure to comply with any reuirement in /ection 4 is sufficient ground to dismiss thepetition.

Eec o o-com)*(ce

Uy v. Landbank 9* discussed the effect of non<compliance with regard to verification and stated thatC chanroblesvirtuallawlibrary

KtLhe reuirement regarding verification of a pleading is formal, not #urisdictional. /uch reuirement issimply a condition affecting the form of pleading, the non<compliance of which does not necessarilyrender the pleading fatally defective. Ferification is simply intended to secure an assurance that theallegations in the pleading are true and correct and not the product of the imagination or a matter ofspeculation, and that the pleading is filed in good faith. The court may order the correction of thepleading if the verification is lac%ing or act on the pleading although it is not verified, if the attendingcircumstances are such that strict compliance with the rules may be dispensed with in order that theends of #ustice may thereby be served.96 (&itations omitted)

Shipside Incorporated v. Court o Appea!s99

 cited the discussion in =y and differentiated its effect fromnon<compliance with the reuirement of certification against forum shoppingC chanroblesvirtuallawlibrary

@n the other hand, the lac% of certification against forum shopping is generally not curable by thesubmission thereof after the filing of the petition. /ection *, ule 4* of the !889 ules of &ivil 5rocedureprovides that the failure of the petitioner to submit the reuired documents that should accompany thepetition, including the certification against forum shopping, shall be sufficient ground for the dismissalthereof. "he sa#e ru!e app!ies to certiications a$ainst oru# shoppin$ si$ned by a person on beha! o acorporation %hich are unacco#panied by proo that said si$natory is authorized to i!e a petition on

beha! o the corporation.9; (0mphasis supplied)

Eec o b(*() com)*(ce8*/ /e re6*reme o er**c(*o

(+ cer**c(*o ((* orm /o*

Although the general rule is that failure to attach a verification and certification against forum shoppingis a ground for dismissal, there are cases where this court allowed substantial compliance.

In Loyo!a v. Court o Appea!s,98 petitioner Alan -oyola submitted the reuired certification one day afterfiling his electoral protest.;+ This court considered the subseuent filing as substantial compliance sincethe purpose of filing the certification is to curtail forum shopping.;!

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In L&P 'arketin$( Inc. v. 'onter(; a. -ourdes Eela 5eMa signed the verification and certificationagainst forum shopping but failed to attach the board resolution indicating her authority to sign.; In amotion for reconsideration, -E5 ar%eting attached the secretary's certificate uoting the boardresolution that authoriBed Eela 5eMa.;4 &iting /hipside, this court deemed the belated submission assubstantial compliance since -E5 ar%eting complied with the reuirementG what it failed to do was toattach proof of Eela 5eMa's authority to sign.;*

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)avtor 'ana$e#ent Phi!s.( Inc. v. Nationa! Labor Re!ations Co##ission;6 and *enera! 'i!!in$Corporation v. Nationa! Labor Re!ations Co##ission;9 involved petitions that were dismissed for failureto attach any document showing that the signatory on the verification and certification against forum<shopping was authoriBed.;; In both cases, the secretary's certificate was attached to the motion forreconsideration.;8 This court considered the subseuent submission of proof indicating authority to signas substantial compliance.8+

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 A!tres v. +#p!eo8! summariBed the rules on verification and certification against forum shopping in thismannerC chanroblesvirtuallawlibrary

"or the guidance of the bench and bar, the &ourt restates in capsule form the #urisprudentialpronouncements . . . respecting non<compliance with the reuirement on, or submission of defective,verification and certification against forum shoppingC

!) A distinction must be made between non<compliance with the reuirement on orsubmission of defective verification, and non<compliance with the reuirement on or

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submission of defective certification against forum shopping.

) As to verification, non<compliance therewith or a defect therein does not necessarilyrender the pleading fatally defective. The court may order its submission orcorrection or act on the pleading if the attending circumstances are such that strictcompliance with the ule may be dispensed with in order that the ends of #usticemay be served thereby.

) Ferification is deemed substantially complied with when one who has ample%nowledge to swear to the truth of the allegations in the complaint or petition signsthe verifcation, and when matters alleged in the petition have been made in goodfaith or are true and correct.

4) As to certification against forum shopping, non<compliance therewith or a defecttherein, unli%e in verification, is generally not curable by its subseuent submissionor correction thereof, unless there is a need to relax the ule on the ground of

 1substantial compliance2 or presence of 1special circumstances or compellingreasons.2 

*) The certification against forum shopping must be signed by all the plaintiffs orpetitioners in a caseG otherwise, those who did not sign will be dropped as parties

to the case. =nder reasonable or #ustifiable circumstances, however, as when all theplaintiffs or petitioners share a common interest and invo%e a common cause ofaction or defense, the signature of only one of them in the certification againstforum shopping substantially complies with the ule.

6) "inally, the certification against forum shopping must be executed by the party<pleader, not by his counsel. If, however, for reasonable or #ustifiable reasons, theparty<pleader is unable to sign, he must execute a /pecial 5ower of Attorneydesignating his counsel of record to sign on his behalf.8

T/ere 8( b(*() com)*(ceb F* Te)e**o Ne8or:, Ic.

7eing a corporation, "u#i exercises its power to sue and be sued through its board of directors or duly

authoriBed officers and agents. Thus, the physical act of signing the verification and certification againstforum shopping can only be done by natural persons duly authoriBed either by the corporate by<laws ora board resolution.8

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In its petition for review on certiorari, "u#i attached ?idea%i @ta's secretary's certificate,84 authoriBing/hu#i :ano and in 0to to represent and sign for and on behalf of "u#i.8* The secretary's certificate wasduly authenticated86 by /ulpicio &onfiado, &onsul<Deneral of the 5hilippines in apan. -i%ewise attachedto the petition is the special power of attorney executed by /hu#i :ano, authoriBing &oraBon to sign onhis behalf.89 The verification and certification against forum shopping was signed by &oraBon.8;

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Arlene filed the manifestation dated "ebruary 9, +!, arguing that the petition for review should bedismissed because &oraBon was not duly authoriBed to sign the verification and certification againstforum shopping.

"u#i filed a comment on Arlene's manifestation, stating that &oraBon was properly authoriBed to sign. @n

the basis of the secretary's certificate, /hu#i :ano was empowered to delegate his authority.

Nuoting the board resolution dated ay !, +!+, the secretaryOs certificate statesC chanroblesvirtuallawlibrary

(a) The &orporation shall file a 5etition for &ertiorari with the &ourt of Appeals, against 5hilippines'$ational -abor elations &ommission (1$-&2) and Arlene /. 0spiritu, pertaining to NLR"-N"R "(e

No. L#" 00-002;9<-09, R#= No. 05-0;>11-00 and entitled ?#r)ee S. E*r* . F* Te)e**oNe8or:, Ic.@Ao/*:* #o:*B, and participate in any other subseuent proceeding that maynecessarily arise therefrom, including but not limited to the filing of appeals in the appropriate venueG

(b) 'r. S/* A(o (+ 'r. J* Eo be authoriBed, as they are hereby authoriBed, to verify andexecute the certification against non<forum shopping which may be necessary or reuired to be attachedto any pleading to KsicL submitted to the &ourt of AppealsG and the authority to so verify and certify forthe &orporation in favor of the said persons shall subsist and remain effective until the termination of the

said caseG

. . . .

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(d) 'r. S/* A(o (+ 'r. J* Eo be authoriBed, as they are hereby authoriBed, to represent andappear on behalf the KsicL &orporation in all stages of the KsicL this case and in any other proceedingthat may necessarily arise thereform KsicL, and to act in the &orporation's name, place and stead todetermine, propose, agree, decide, do, and perform any and all of the followingC

!. The possibility of amicable settlement or of submission to alternative mode of disputeresolutionG

. The simplification of the issueG

. The necessity or desirability of amendments to the pleadingsG

4. The possibility of obtaining stipulation or admission of facts and documentsG and

*. /uch other matters as may aid in the prompt disposition of the action.88(0mphasis in theoriginalG Italics omitted)

/hu#i :ano executed a special power of attorney appointing s. a. &oraBon 0. Acerden and r. oisesA. ollera as his attorneys<in<fact.!++ The special power of attorney statesC chanroblesvirtuallawlibrary

That I, S&UJI A#NO, of legal age, apanese national, with office address at <4<; Eaiba, inato<Pu,To%yo, !9<;+;; apan, and being the representative of "u#i TF, I$c., KsicL (evidenced by the attached/ecretary's &ertificate) one of the respondents in NLR"-N"R "(e No. 05-0;>11-00 e*)e+

? Arlene S. Espiritu v. u!i Television Net"or#$ Inc.%&oshi#i Ao#i'$ an( su)se*uentl+ (oc#ete()efore the Court of Appeals as".#. G.R. S.$. No. 114>;< CConsoli(ate( "ith S, No. --//0 dohereby ma%e, constitute and appoint '. '(. "or(o E. #cer+e (+ 'r. 'o*e #. Ro))er( as mytrue and lawful attorneys<in<fact for me and my name, place and stead to act and represent me in theabove<mentioned case, with special power to ma%e admission3s and stipulations and3or to ma%e andsubmit as well as to accept and approve compromise proposals upon such terms and conditions andunder such covenants as my attorney<in<fact may deem fit, and to engage the services of V*))( J+((+ "r L(8 O*ce as the legal counsel to represent the &ompany in the /upreme &ourtG

The said Attorneys<in<"act are hereby further authoriBed to ma%e, sign, execute and deliver such papersor documents as may be necessary in furtherance of the power thus granted, particularly to sign andexecute the verification and certification of non<forum shopping needed to be filed.!+! (0mphasis in theoriginal)

In its comment!+ on Arlene's manifestation, "u#i argues that /hu#i :ano could further delegate hisauthority because the board resolution empowered him to ,act in the Corporations na#e( p!ace and

stead to deter#ine( propose( a$ree( decided sic/( do and peror# any and a!! o the o!!o%in$0 . . . suchother #atters as #ay aid in the pro#pt disposition o the action.2 !+

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To clarify, "u#i attached a verification and certification against forum shopping, but Arlene uestions&oraBon's authority to sign. Arlene argues that the secretary's certificate empowered /hu#i :ano to file apetition for certiorari before the &ourt of Appeals, and not a petition for review before this court, andthat since /hu#i :ano's authority was delegated to him, he could not further delegate such power.oreover, &oraBon was representing /hu#i :ano in his personal capacity, and not in his capacity asrepresentative of "u#i.

A review of the board resolution uoted in the secretary's certificate shows that "u#i shall 1 i!e a Petitionor Certiorari %ith the Court o Appea!s2 !+4 and ,participate in any other subse1uent proceedin$ that #ay 

necessari!y arise therero#( inc!udin$ but not !i#ited to the i!in$ o appea!s in the appropriatevenue(2 !+* and that /hu#i :ano and in 0to are authoriBed to represent "u#i 1in any other proceedin$ that#ay necessari!y arise thereor# KsicL.2 !+6 As pointed out by "u#i, /hu#i :ano and in 0to were alsoauthoriBed to ,act in the Corporations na#e( p!ace and stead to deter#ine( propose( a$ree( decide( do(and peror# any and a!! o the o!!o%in$0 . . . 2. Such other #atters as #ay aid in the pro#ptdisposition o the action.2 !+9

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&onsidering that the subseuent proceeding that may arise from the petition for certiorari with the &ourtof Appeals is the filing of a petition for review with this court, "u#i substantially complied with the

procedural reuirement.

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@n the issue of whether /hu#i :ano validly delegated his authority to &oraBon, Article !;8 of the &ivil&ode of the 5hilippines statesC chanroblesvirtuallawlibrary

AT. !;8. The agent may appoint a substitute if the principal has not prohibited him from doing soG buthe shall be responsible for the acts of the substituteC

(!) hen he was not given the power to appoint oneG

() hen he was given such power, but without designating the person, and the person appointed wasnotoriously incompetent or insolvent.

All acts of the substitute appointed against the prohibition of the principal shall be void.

The secretary's certificate does not state that /hu#i :ano is prohibited from appointing a substitute. Infact, he is empowered to do acts that will aid in the resolution of this case.

This court has recogniBed that there are instances when officials or employees of a corporation can signthe verification and certification against forum shopping without a board resolution. In  Ca$ayan 3a!!ey&ru$ Corporation v. CIR,!+; it was held thatCchanroblesvirtuallawlibrary

In sum, we have held that the following officials or employees of the company can sign the verification

and certification without need of a board resolutionC (!) the &hairperson of the 7oard of Eirectors, ()the 5resident of a corporation, () the Deneral anager or Acting Deneral anager, (4) 5ersonnel @fficer,and (*) an 0mployment /pecialist in a labor case.

hile the above cases!+8 do not provide a complete listing of authoriBed signatories to the verificationand certification reuired by the rules, the determination of the sufficiency of the authority was done ona case to case basis. The rationale applied in the foregoing cases is to #ustify the authority of corporateofficers or representatives of the corporation to sign the verification or certificate against forumshopping, being Qin a position to verify the truthfulness and correctness of the allegations in thepetition.' !!+

&oraBon's affidavit!!! states that she is the 1oice #ana$er and resident interpreter o the 'ani!a Bureauo 4u5i "e!evision Net%ork( Inc.2 !! and that she has ,he!d the position or the !ast t%enty-three

years.6 !!chanoblesvirtual-awlibrary

As the office manager for years, &oraBon can be considered as having %nowledge of all matters in"u#i's anila 7ureau @ffice and is in a position to verify 1the truthfulness and the correctness of theallegations in the 5etition.2 !!4

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Thus, "u#i substantially complied with the reuirements of verification and certification against forumshopping.

7efore resolving the substantive issues in this case, this court will discuss the procedural parameters ofa ule 4* petition for review in labor cases.

II

$roce+r() (r(meer o e**o or re*e8 * )(bor c(e

Article of the -abor &ode

!!*

 does not provide any mode of appeal for decisions of the $ational -aborelations &ommission. It merely states that 1KtLhe decision of the &ommission shall be final andexecutory after ten (!+) calendar days from receipt thereof by the parties.2 7eing final, it is no longerappealable. ?owever, the finality of the $ational -abor elations &ommission's decisions does not meanthat there is no more recourse for the parties.

In St. 'artin 4unera! )o#e v. Nationa! Labor Re!ations Co##ission(!!6 this court cited severalcases!!9and re#ected the notion that this court had no #urisdiction to review decisions of the $ational-abor elations &ommission. It stated that this court had the power to review the acts of the $ational-abor elations &ommission to see if it %ept within its #urisdiction in deciding cases and also as a form of chec% and balance.!!; This court then clarified that #udicial review of $ational -abor elations&ommission decisions shall be by way of a petition for certiorari under ule 6*. &iting the doctrine ofhierarchy of courts, it further ruled that such petitions shall be filed before the &ourt of Appeals. "romthe &ourt of Appeals, an aggrieved party may file a petition for review on certiorari under ule 4*.

A petition for certiorari under ule 6* is an original action where the issue is limited to grave abuse ofdiscretion. As an original action, it cannot be considered as a continuation of the proceedings of the

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labor tribunals.

@n the other hand, a petition for review on certiorari under ule 4* is a mode of appeal where the issueis limited to uestions of law. In labor cases, a ule 4* petition is limited to reviewing whether the &ourtof Appeals correctly determined the presence or absence of grave abuse of discretion and deciding other

 #urisdictional errors of the $ational -abor elations &ommission.!!8chanoblesvirtual-awlibrary

In 7dan$o v. Nationa! Labor Re!ations Co##ission,!+ this court explained that a petition for certiorari isan extraordinary remedy that is 1available only and restrictively in truly exceptional cases2 !! and that itssole office 1is the correction of errors of #urisdiction including commission of grave abuse of discretionamounting to lac% or excess of #urisdiction.2 ! A petition for certiorari does not include a review offindings of fact since the findings of the $ational -abor elations &ommission are accorded finality.! Incases where the aggrieved party assails the $ational -abor elations &ommission's findings, he or shemust be able to show that the &ommission 1acted capriciously and whimsically or in total disregard ofevidence material to the controversy.2 !4

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hen a decision of the &ourt of Appeals under a ule 6* petition is brought to this court by way of apetition for review under ule 4*, only uestions of law may be decided upon. As held in 'era!co

Industria! v. Nationa! Labor Re!ations Co##issionC!*chanoblesvirtual-awlibrary

This &ourt is not a trier of facts. ell<settled is the rule that the #urisdiction of this &ourt in a petition for

review on certiorari under ule 4* of the evised ules of &ourt is limited to reviewing only errors oflaw, not of fact, unless the factual findings complained of are completely devoid of support from theevidence on record, or the assailed #udgment is based on a gross misapprehension of facts. 7esides,factual findings of uasi<#udicial agencies li%e the $-&, when affirmed by the &ourt of Appeals, areconclusive upon the parties and binding on this &ourt.!6

Career Phi!ippines v. Serna,!9 citing 'ontoya v. "rans#ed(!; is instructive on the parameters of #udicialreview under ule 4*Cchanroblesvirtuallawlibrary

As a rule, only uestions of law may be raised in a ule 4* petition. In one case, we discussed theparticular parameters of a ule 4* appeal from the &A's ule 6* decision on a labor case, as followsC &hanoblesFirtualawlibrary

In a ule 4* review, we consider the correctness of the assailed &A decision, in contrast with the reviewfor #urisdictional error that we underta%e under ule 6*. "urthermore, ule 4* limits us to the review ofuestions of law raised against the assailed &A decision. In ruling for legal correctness, we have to view

the &A decision in the same context that the petition for certiorari it ruled upon was presented to itG %ehave to e8a#ine the CA decision ro# the pris# o %hether it correct!y deter#ined the presence or

absence o $rave abuse o discretion in the NLRC decision beore it( not on the basis o %hether theNLRC decision on the #erits o the case %as correct. In other words, we have to be %eenly aware thatthe &A undertoo% a ule 6* review, not a review on appeal, of the $-& decision challenged beforeit.!8 (0mphasis in the original)

ustice 7rion's dissenting opinion in Abott -aboratories, PhiIippines v. AIcaraz !+ discussed that inpetitions for review under ule 4*, 1the Court si#p!y deter#ines %hether the !e$a! correctness o the

CAs indin$ that the NLRC ru!in$ . . . had basis in act and in Ia%.6 !! In this %ind of petition, the properuestion to be raised is, 1D*+ /e "# correc) +eerm*e 8/e/er /e NLR" comm*e+ r(e

(be o +*cre*o * r)* o /e c(eB!chanoblesvirtual-awlibrary

ustice 7rion's dissenting opinion also laid down the following guidelinesC chanroblesvirtuallawlibrary

If the $-& ruling has basis in the evidence and the applicable law and #urisprudence, then no graveabuse of discretion exists and the &A should so declare and, accordingly,(ismiss the petition. If graveabuse of discretion exists, then the &A must grant the petition and nullify the $-& ruling, entering atthe same time the ruling that is #ustified under the evidence and the governing law, rules and

 #urisprudence. In our ule 4* review, this &ourt must (en+  the petition if it finds that the &A correctlyacted.!(0mphasis in the original)

These parameters shall be used in resolving the substantive issues in this petition. cralawred

III

Deerm*(*o o em)ome ( br+e o roo 

In this case, there is no uestion that Arlene rendered services to "u#i. ?owever, "u#i alleges that Arlenewas an independent contractor, while Arlene alleges that she was a regular employee. To resolve thisissue, we ascertain whether an employer<employee relationship existed between "u#i and Arlene.

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This court has often used the four<fold test to determine the existence of an employer<employeerelationship. =nder the four<fold test, the 1control test2 is the most important.!4 As to how the elementsin the four<fold test are proven, this court has discussed thatC chanroblesvirtuallawlibrary

KtLhere is no hard and fast rule designed to establish the aforesaid elements. Any competent andrelevant evidence to prove the relationship may be admitted. Identification cards, cash vouchers, socialsecurity registration, appointment letters or employment contracts, payrolls, organiBation charts, and

personnel lists, serve as evidence of employee status.!*

If the facts of this case vis<R<vis the four<fold test show that an employer<employee relationship existed,we then determine the status of Arlene's employment, i.e., whether she was a regular employee.elative to this, we shall analyBe Arlene's fixed<term contract and determine whether it supports herargument that she was a regular employee, or the argument of "u#i that she was an independentcontractor. e shall scrutiniBe whether the nature of Arlene's wor% was necessary and desirable to "u#i'sbusiness or whether "u#i only needed the output of her wor%. If the circumstances show that Arlene'swor% was necessary and desirable to "u#i, then she is presumed to be a regular employee. The burden of proving that she was an independent contractor lies with "u#i.

In labor cases, the uantum of proof reuired is substantial evidence.!6 1/ubstantial evidence2 has beendefined as 1such amount of relevant evidence which a reasonable mind might accept as adeuate to

 #ustify a conclusion.2 !9chanoblesvirtual-awlibrary

If Arlene was a regular employee, we then determine whether she was illegally dismissed. In complaintsfor illegal dismissal, the burden of proof is on the employee to prove the fact of dismissal. !; @nce theemployee establishes the fact of dismissal, supported by substantial evidence, the burden of proof shiftsto the employer to show that there was a #ust or authoriBed cause for the dismissal and that due processwas observed.!8

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IV/e/er /e "or o #e() correc) (*rme+ /e N(*o() L(bor Re)(*o "omm**oH

*+* /( #r)ee 8( ( re)(r em)oee

"u#i alleges that Arlene was an independent contractor, citing Sonza v. ABS-CBN  and relying on thefollowing factsC (!) she was hired because of her s%illsG () her salary was =/>!,8++.++, which is higherthan the normal rateG () she had the power to bargain with her employerG and (4) her contract was for

a fixed term. According to "u#i, the &ourt of Appeals erred when it ruled that Arlene was forced to signthe non<renewal agreement, considering that she sent an email with another version of the non<renewalagreement.!4+ "urther, she is not entitled to moral damages and attorney's fees because she acted in badfaith when she filed a labor complaint against "u#i after receiving =/>!;,+*+.++ representing her salaryand other benefits.!4!

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Arlene argues that she was a regular employee because "u#i had control and supervision over her wor%.The news events that she covered were all based on the instructions of "u#i. !4 /he maintains that thesuccessive renewal of her employment contracts for four (4) years indicates that her wor% wasnecessary and desirable.!4 In addition, "u#i's payment of separation pay euivalent to one (!) month'spay per year of service indicates that she was a regular employee.!44 To further support her argumentthat she was not an independent contractor, she states that "u#i owns the laptop computer and mini<camera that she used for wor%.!4*

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Arlene also argues that Sonza is not applicable because she was a plain reporter for "u#i, unli%e ay/onBa who was a news anchor, tal% show host, and who en#oyed a celebrity status.!46

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@n her illness, Arlene points out that it was not a ground for her dismissal because her attendingphysician certified that she was fit to wor%.!49

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Arlene admits that she signed the non<renewal agreement with uitclaim, not because she agreed to itsterms, but because she was not in a position to re#ect the non<renewal agreement. "urther, she badlyneeded the salary withheld for her sustenance and medication.!4; /he posits that her acceptance ofseparation pay does not bar filing of a complaint for illegal dismissal. !48

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Article ;+ of the -abor &ode provides thatC chanroblesvirtuallawlibrary

#r. 2>0. Re)(r (+ c(() em)ome. The provisions of written agreement to the contrarynotwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to

be regular where the employee has been engaged to perform activities which are usually necessary ordesirable in the usual business or trade of the employer, except where the employment has been fixed

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for a specific pro#ect or underta%ing the completion or termination of which has been determined at thetime of the engagement of the employee or where the wor% or services to be performed is seasonal innature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraphG 5rovided,That, any employee who has rendered at least one year of service, whether such service is continuous orbro%en, shall be considered a regular employee with respect to the activity in which he is employed and

his employment shall continue while such activity exist.

This provision classifies employees into regular, pro#ect, seasonal, and casual. It further classifies regularemployees into two %indsC (!) those 1engaged to perform activities which are usually necessary ordesirable in the usual business or trade of the employer2G and () casual employees who have 1renderedat least one year of service, whether such service is continuous or bro%en.2 

Another classification of employees, i.e., employees with fixed<term contracts, was recogniBed in Brent

Schoo!( Inc. v. 9a#ora!*+ where this court discussed thatC chanroblesvirtuallawlibrary

-ogically, the decisive determinant in the term employment should not be the activities that theemployee is called upon to perform, but the day certain agreed upon by the parties for thecommencement and termination of their employment relationship, a day certain being understood to be

 1that which must necessarily come, although it may not be %nown when.2 !*! (0mphasis in the original)

This court further discussed that there are employment contracts where 1a fixed term is an essential andnatural appurtenance2 !* such as overseas employment contracts and officers in educationalinstitutions.!*

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D**c*o (mo *e+-erm

em)oee, *+ee+e cor(cor,(+ re)(r em)oee

*'A Net%ork( Inc. v. Pabri$a!*4 expounded the doctrine on fixed<term contracts laid down in 7rent inthe following mannerC chanroblesvirtuallawlibrary

&ogniBant of the possibility of abuse in the utiliBation of fixed<term employment contracts, weemphasiBed in 7rent that where from the circumstances it is apparent that the periods have been

imposed to preclude acuisition of tenurial security by the employee, they should be struc% down ascontrary to public policy or morals. e thus laid down indications or criteria under which 1termemployment2 cannot be said to be in circumvention of the law on security of tenure, namelyC chanroblesvirtuallawlibrary

!) The fixed period of employment was %nowingly and voluntarily agreed upon by the parties withoutany force, duress, or improper pressure being brought to bear upon the employee and absent any othercircumstances vitiating his consentG or

) It satisfactorily appears that the employer and the employee dealt with each other on more or lesseual terms with no moral dominance exercised by the former or the latter.These indications, which must be read together, ma%e the 7rent doctrine applicable only in a few specialcases wherein the employer and employee are on more or less in eual footing in entering into thecontract. The reason for this is evidentC when a prospective employee, on account of special s%ills ormar%et forces, is in a position to ma%e demands upon the prospective employer, such prospective

employee needs less protection than the ordinary wor%er. -esser limitations on the parties' freedom ofcontract are thus reuired for the protection of the employee. !** (&itations omitted)

"or as long as the guidelines laid down in Brent  are satisfied, this court will recogniBe the validity of thefixed<term contract.

In Labayo$ v. '.:. San Biscuits( Inc.,!*6 this court upheld the fixed<term employment of petitionersbecause from the time they were hired, they were informed that their engagement was for a specificperiod. This court stated thatC chanroblesvirtuallawlibrary

KsLimply put, petitioners were not regular employees. hile their employment as mixers, pac%ers andmachine operators was necessary and desirable in the usual business of respondent company, they wereemployed temporarily only, during periods when there was heightened demand for production.&onseuently, there could have been no illegal dismissal when their services were terminated onexpiration of their contracts. There was even no need for notice of termination because they %newexactly when their contracts would end. &ontracts of employment for a fixed period terminate on theirown at the end of such period.

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&ontracts of employment for a fixed period are not unlawful. hat is ob#ectionable is the practice ofsome scrupulous employers who try to circumvent the law protecting wor%ers from the capricioustermination of employment.!*9 (&itation omitted)

Caparoso v. Court o Appea!s!*; upheld the validity of the fixed<term contract of employment. &aparosoand Nuindipan were hired as delivery men for three () months. At the end of the third month, they

were hired on a monthly basis. In total, they were hired for five (*) months. They filed a complaint forillegal dismissal.!*8 This court ruled that there was no evidence indicating that they were pressured intosigning the fixed<term contracts. There was li%ewise no proof that their employer was engaged in hiringwor%ers for five (*) months only to prevent regulariBation. In the absence of these facts, the fixed<termcontracts were upheld as valid.!6+

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@n the other hand, an independent contractor is defined asC chanroblesvirtuallawlibrary

. . . one who carries on a distinct and independent business and underta%es to perform the #ob, wor%, orservice on its own account and under one's own responsibility according to one's own manner andmethod, free from the control and direction of the principal in all matters connected with theperformance of the wor% except as to the results thereof.!6!

In view of the 1distinct and independent business2 of independent contractors, no employer<employee

relationship exists between independent contractors and their principals.

Independent contractors are recogniBed under Article !+6 of the -abor &odeC chanroblesvirtuallawlibrary

#r. 10;. "or(cor or bcor(cor. henever an employer enters into a contract with anotherperson for the performance of the former's wor%, the employees of the contractor and of the latter'ssubcontractor, if any, shall be paid in accordance with the provisions of this &ode.

. . . .

The /ecretary of -abor and 0mployment may, by appropriate regulations, restrict or prohibit thecontracting<out of labor to protect the rights of wor%ers established under this &ode. In so prohibiting orrestricting, he may ma%e appropriate distinctions between labor<only contracting and #ob contracting aswell as differentiations within these types of contracting and determine who among the parties involved

shall be considered the employer for purposes of this &ode, to prevent any violation or circumvention ofany provision of this &ode.

There is 1labor<only2 contracting where the person supplying wor%ers to an employer does not havesubstantial capital or investment in the form of tools, euipment, machineries, wor% premises, amongothers, and the wor%ers recruited and placed by such person are performing activities which are directlyrelated to the principal business of such employer. In such cases, the person or intermediary shall beconsidered merely as an agent of the employer who shall be responsible to the wor%ers in the samemanner and extent as if the latter were directly employed by him.

In Eepartment @rder $o. !;<A, /eries of +!!, of the Eepartment of -abor and 0mployment, acontractor is defined as havingC chanroblesvirtuallawlibrary

Sec*o 3. . . .

. . . .

(c) . . . an arrangement whereby a principal agrees to put out or farm out with a contractor theperformance or completion of a specific #ob, wor% or service within a definite or predetermined period,regardless of whether such #ob, wor% or service is to be performed or completed within or outside thepremises of the principal.

This department order also states that there is a trilateral relationship in legitimate #ob contracting andsubcontracting arrangements among the principal, contractor, and employees of the contractor. There isno employer<employee relationship between the contractor and principal who engages the contractor'sservices, but there is an employer<employee relationship between the contractor and wor%ers hired toaccomplish the wor% for the principal.!6

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urisprudence has recogniBed another %ind of independent contractorC individuals with uniue s%ills and

talents that set them apart from ordinary employees. There is no trilateral relationship in this casebecause the independent contractor himself or herself performs the wor% for the principal. In other

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words, the relationship is bilateral.

In 7rozco v. Court o Appea!s,!6 ilhelmina @roBco was a columnist for the 5hilippine Eaily Inuirer.This court ruled that she was an independent contractor because of her 1talent, s%ill, experience, andher uniue viewpoint as a feminist advocate.2 !64 In addition, the 5hilippine Eaily Inuirer did not havethe power of control over @roBco, and she wor%ed at her own pleasure.!6*

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Se#b!ante v. Court o Appea!s!66 involved a #asiador !69 and a sentenciador .!6; This court ruled that 1petitioners performed their functions as #asiador and sentenciador  free from the direction and controlof respondents2 !68 and that the #asiador and sentenciador  1relied mainly on their Qexpertise that ischaracteristic of the coc%fight gambling.'2 !9+ ?ence, no employer<employee relationship existed.

Bernarte v. Phi!ippine Basketba!! Association!9! involved a bas%etball referee. This court ruled that 1areferee is an independent contractor, whose special s%ills and independent #udgment are reuiredspecifically for such position and cannot possibly be controlled by the hiring party.2 !9

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In these cases, the wor%ers were found to be independent contractors because of their uniue s%ills andtalents and the lac% of control over the means and methods in the performance of their wor%.

In other words, there are different %inds of independent contractorsC those engaged in legitimate #obcontracting and those who have uniue s%ills and talents that set them apart from ordinary employees.

/ince no employer<employee relationship exists between independent contractors and their principals,their contracts are governed by the &ivil &ode provisions on contracts and other applicable laws. !9

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A contract is defined as 1a meeting of minds between two persons whereby one binds himself, withrespect to the other, to give something or to render some service.2 !94 5arties are free to stipulate onterms and conditions in contracts as long as these 1are not contrary to law, morals, good customs, publicorder, or public policy.2 !9* This presupposes that the parties to a contract are on eual footing. They canbargain on terms and conditions until they are able to reach an agreement.

@n the other hand, contracts of employment are different and have a higher level of regulation becausethey are impressed with public interest. Article SIII, /ection of the !8;9 &onstitution provides fullprotection to laborC chanroblesvirtuallawlibrary

#r*c)e III. Soc*() J*ce (+ &m( R*/

. . . .

L(bor

/ection . The /tate shall afford full protection to labor, local and overseas, organiBed and unorganiBed,and promote full employment and euality of employment opportunities for all.

It shall guarantee the rights of all wor%ers to self<organiBation, collective bargaining and negotiations,and peaceful concerted activities, including the right to stri%e in accordance with law. They shall beentitled to security of tenure, humane conditions of wor%, and a living wage. They shall also participatein policy and decision<ma%ing processes affecting their rights and benefits as may be provided by law.

The /tate shall promote the principle of shared responsibility between wor%ers and employers and the

preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce theirmutual compliance therewith to foster industrial peace.

The /tate shall regulate the relations between wor%ers and employers, recogniBing the right of labor toits #ust share in the fruits of production and the right of enterprises to reasonable returns oninvestments, and to expansion and growth.

Apart from the constitutional guarantee of protection to labor, Article !9++ of the &ivil &ode statesC chanroblesvirtuallawlibrary

AT. !9++. The relations between capital and labor are not merely contractual. They are so impressedwith public interest that labor contracts must yield to the common good. Therefore, such contracts aresub#ect to the special laws on labor unions, collective bargaining, stri%es and loc%outs, closed shop,wages, wor%ing conditions, hours of labor and similar sub#ects.

In contracts of employment, the employer and the employee are not on eual footing. Thus, it is sub#ectto regulatory review by the labor tribunals and courts of law. The law serves to eualiBe the uneual.The labor force is a special class that is constitutionally protected because of the ineuality between

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capital and labor.!96 This presupposes that the labor force is wea%.

?owever, the level of protection to labor should vary from case to caseG otherwise, the state mightappear to be too paternalistic in affording protection to labor. As stated in *'A Net%ork( Inc. v.

Pabri$a(the ruling in 7rent applies in cases where it appears that the employer and employee are oneual footing.!99 This recogniBes the fact that not all wor%ers are wea%. To reiterate the discussionin *'A Net%ork v. Pabri$aCchanroblesvirtuallawlibrary

The reason for this is evidentC when a prospective employee, on account of special s%ills or mar%etforces, is in a position to ma%e demands upon the prospective employer, such prospective employeeneeds less protection than the ordinary wor%er. -esser limitations on the parties' freedom of contract arethus reuired for the protection of the employee.!9;

The level of protection to labor must be determined on the basis of the nature of the wor%, ualificationsof the employee, and other relevant circumstances.

"or example, a prospective employee with a bachelor's degree cannot be said to be on eual footing witha grocery bagger with a high school diploma. 0mployees who ualify for #obs reuiring specialualifications such as 1KhavingL a aster's degree2 or 1KhavingL passed the licensure exam2 are differentfrom employees who ualify for #obs that reuire 1Kbeing aL high school graduateG with pleasingpersonality.2 In these situations, it is clear that those with special ualifications can bargain with the

employer on eual footing. Thus, the level of protection afforded to these employees should be different.

"u#i's argument that Arlene was an independent contractor under a fixed<term contract is contradictory.0mployees under fixed<term contracts cannot be independent contractors because in fixed<termcontracts, an employer<employee relationship exists. The test in this %ind of contract is not the necessityand desirability of the employee's activities, 1but the day certain agreed upon by the parties for thecommencement and termination of the employment relationship.2 !98 "or regular employees, thenecessity and desirability of their wor% in the usual course of the employer's business are thedetermining factors. @n the other hand, independent contractors do not have employer<employeerelationships with their principals.

?ence, before the status of employment can be determined, the existence of an employer<employeerelationship must be established.

The four<fold test

!;+

 can be used in determining whether an employer<employee relationship exists. Theelements of the four<fold test are the followingC (!) the selection and engagement of the employeeG ()the payment of wagesG () the power of dismissalG and (4) the power of control, which is the mostimportant element.!;!

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The 1power of control2 was explained by this court in Corpora!( Sr. v. Nationa! Labor Re!ations

Co##issionC!;chanoblesvirtual-awlibrary

The power to control refers to the existence of the power and not necessarily to the actual exercisethereof, nor is it essential for the employer to actually supervise the performance of duties of theemployee. It is enough that the employer has the right to wield that power. !; (&itation omitted)

7rozco v. Court o Appea!s further elucidated the meaning of 1power of control2 and stated thefollowingC chanroblesvirtuallawlibrary

-ogically, the line should be drawn between rules that merely serve as guidelines towards theachievement of the mutually desired result without dictating the means or methods to be employed inattaining it, and those that control or fix the methodology and bind or restrict the party hired to the useof such means. The first, which aim only to promote the result, create no employer<employeerelationship unli%e the second, which address both the result and the means used to achieve it. . . .!;4 (&itation omitted)

In Locsin( et a!. v. Phi!ippine Lon$ &istance "e!ephone Co#pany(!;* the 1power of control2 was defined as 1the/ ri$ht to contro! not on!y the end to be achieved but a!so the #eans to be used in reachin$ such

end .2 !;6chanoblesvirtual-awlibrary

?ere, the &ourt of Appeals applied Sonza v. ABS-CBN and &u#pit-'uri!!o v. Court o Appea!s!;9 indetermining whether Arlene was an independent contractor or a regular employee.

In deciding Sonza and &u#pit-'uri!!o( this court used the four<fold test. 7oth cases involvednewscasters and anchors. ?owever, /onBa was held to be an independent contractor, while Eumpit<

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urillo was held to be a regular employee.

"om(r*o o /e So( (+Dm*-'r*))o c(e *

/e or-o)+ e

/onBa was engaged by A7/<&7$ in view of his 1uniue s%ills, talent and celebrity status not possessed

by ordinary employees.2 !;; ?is wor% was for radio and television programs.!;8 @n the other hand,Eumpit<urillo was hired by A7& as a newscaster and co<anchor.!8+

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/onBa's talent fee amounted to 5!9,+++.++ per month, which this court found to be a substantialamount that indicated he was an independent contractor rather than a regular employee.!8! eanwhile,Eumpit<urillo's monthly salary was 5;,+++.++, a very low amount compared to what /onBareceived.!8

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Sonza was unable to prove that A7/<&7$ could terminate his services apart from breach of contract.There was no indication that he could be terminated based on #ust or authoriBed causes under the -abor&ode. In addition, A7/<&7$ continued to pay his talent fee under their agreement, even though hisprograms were no longer broadcasted.!8 Eumpit<urillo was found to have been illegally dismissed byher employer when they did not renew her contract on her fourth year with A7&.!84

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In /onBa, this court ruled that A7/<&7$ did not control how /onBa delivered his lines, how he appearedon television, or how he sounded on radio.!8* All that /onBa needed was his talent.!86 "urther, 1A7/<&7$could not terminate or discipline /@$A even if the means and methods of performance of his wor% . . .did not meet A7/<&7$'s approval.2 !89 In Eumpit<urillo, the duties and responsibilities enumerated inher contract was a clear indication that A7& had control over her wor%.!8;

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#)*c(*o o /e or-o)+ e

The &ourt of Appeals did not err when it relied on the ruling in &u#pit-'uri!!o and affirmed the ruling ofthe $ational -abor elations &ommission finding that Arlene was a regular employee. Arlene was hiredby "u#i as a news producer, but there was no showing that she was hired because of uniue s%ills thatwould distinguish her from ordinary employees. $either was there any showing that she had a celebritystatus. ?er monthly salary amounting to =/>!,8++.++ appears to be a substantial sum, especially ifcompared to her salary when she was still connected with DA. !88 Indeed, wages may indicate whetherone is an independent contractor. ages may also indicate that an employee is able to bargain with theemployer for better pay. ?owever, wages should not be the conclusive factor in determining whether oneis an employee or an independent contractor.

"u#i had the power to dismiss Arlene, as provided for in paragraph * of her professional employmentcontract.++ ?er contract also indicated that "u#i had control over her wor% because she was reuired towor% for eight (;) hours from onday to "riday, although on flexible time. +! /onBa was not reuired towor% for eight (;) hours, while Eumpit<urillo had to be in A7& to do both on<air and off<air tas%s.

@n the power to control, Arlene alleged that "u#i gave her instructions on what to report. + 0ven themode of transportation in carrying out her functions was controlled by "u#i. 5aragraph 6 of her contractstatesCchanroblesvirtuallawlibrary

6. Euring the travel to carry out wor%, if there is change of place or change of place of wor%, thetrain, bus, or public transport shall be used for the trip. If the 0mployee uses the private carduring the wor% and there is an accident the 0mployer shall not be responsible for the damage,which may be caused to the 0mployee.+

Thus, the &ourt of Appeals did not err when it upheld the findings of the $ational -abor elations&ommission that Arlene was not an independent contractor.

?aving established that an employer<employee relationship existed between "u#i and Arlene, the nextuestions for resolution are the followingC Eid the &ourt of Appeals correctly affirm the $ational -aborelations &ommission that Arlene had become a regular employeeU as the nature of Arlene's wor%necessary and desirable for "u#i's usual course of businessU

#r)ee 8( ( re)(r em)oee

8*/ ( *e+-erm cor(c

The test for determining regular employment is whether there is a reasonable connection between the

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employee's activities and the usual business of the employer. Article ;+ provides that the nature ofwor% must be 1necessary or desirable in the usual business or trade of the employer2 as the test fordetermining regular employment. As stated in ABS-CBN Broadcastin$ Corporation v. NazarenoC+4

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In determining whether an employment should be considered regular or non<regular, the applicable testis the reasonable connection between the particular activity performed by the employee in relation tothe usual business or trade of the employer. The standard, supplied by the law itself, is whether the wor%

underta%en is necessary or desirable in the usual business or trade of the employer, a fact that can beassessed by loo%ing into the nature of the services rendered and its relation to the general schemeunder which the business or trade is pursued in the usual course. It is distinguished from a specificunderta%ing that is divorced from the normal activities reuired in carrying on the particular business ortrade.+*

?owever, there may be a situation where an employee's wor% is necessary but is not always desirable inthe usual course of business of the employer. In this situation, there is no regular employment.

In San 'i$ue! Corporation v. Nationa! Labor Re!ations Co##ission,+6 "rancisco de DuBman was hired torepair furnaces at /an iguel &orporation's anila glass plant. ?e had a separate contract for everyfurnace that he repaired. ?e filed a complaint for illegal dismissal three () years after the end of his lastcontract.+9 In ruling that de DuBman did not attain the status of a regular employee, this courtexplainedC chanroblesvirtuallawlibrary

$ote that the plant where private respondent was employed for only seven months is engaged in themanufacture of glass, an integral component of the pac%aging and manufacturing business of petitioner.The process of manufacturing glass reuires a furnace, which has a limited operating life. 5etitionerresorted to hiring pro#ect or fixed term employees in having said furnaces repaired since said activity isnot regularly performed. /aid furnaces are to be repaired or overhauled only in case of need and afterbeing used continuously for a varying period of five (*) to ten (!+) years.

In !88+, one of the furnaces of petitioner reuired repair and upgrading. This was an underta%ingdistinct and separate from petitionerOs business of manufacturing glass. "or this purpose, petitioner musthire wor%ers to underta%e the said repair and upgrading. . . .

. . . .

&learly, private respondent was hired for a specific pro#ect that was not within the regular business ofthe corporation. "or petitioner is not engaged in the business of repairing furnaces. Although the activitywas necessary to enable petitioner to continue manufacturing glass, the necessity therefor arose onlywhen a particular furnace reached the end of its life or operating cycle. @r, as in the second underta%ing,when a particular furnace reuired an emergency repair. In other words, the underta%ings where privaterespondent was hired primarily as helper3bric%layer have specified goals and purposes which are fulfilledonce the designated wor% was completed. oreover, such underta%ings were also identifiably separateand distinct from the usual, ordinary or regular business operations of petitioner, which is glassmanufacturing. These underta%ings, the duration and scope of which had been determined and made%nown to private respondent at the time of his employment, clearly indicated the nature of hisemployment as a pro#ect employee.+;

"u#i is engaged in the business of broadcasting,+8 including news programming.!+ It is based inapan!! and has overseas offices to cover international news.!

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7ased on the record, "u#i's anila 7ureau @ffice is a small unit ! and has a few employees.!4 As such,Arlene had to do all activities related to news gathering. Although "u#i insists that Arlene was a stringer,it alleges that her designation was 1$ews Talent3eporter35roducer.2 !*

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A news producer 1plans and supervises newscast . . . KandL wor%KsL with reporters in the field planningand gathering information. . . .2 !6 Arlene's tas%s included 1KmLonitoring and KgLetting KnLews KsLtories,KrLeporting interviewing sub#ects in front of a video camera,2 !9 1the timely submission of news andcurrent events reports pertaining to the 5hilippinesK,L and traveling KsicL to K"u#i'sL regional office inThailand.2 !; /he also had to report for wor% in "u#i's office in anila from ondays to "ridays, eight (;)hours per day.!8 /he had no euipment and had to use the facilities of "u#i to accomplish her tas%s.

The &ourt of Appeals affirmed the finding of the $ational -abor elations &ommission that the successiverenewals of Arlene's contract indicated the necessity and desirability of her wor% in the usual course of"u#i's business. 7ecause of this, Arlene had become a regular employee with the right to security of

tenure.+ The &ourt of Appeals ruled thatC chanroblesvirtuallawlibrary

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?ere, 0spiritu was engaged by "u#i as a stinger KsicL or news producer for its anila 7ureau. /he washired for the primary purpose of news gathering and reporting to the television networ%'s headuarters.0spiritu was not contracted on account of any peculiar ability or special talent and s%ill that she maypossess which the networ% desires to ma%e use of. 5arenthetically, if it were true that 0spiritu is anindependent contractor, as claimed by "u#i, the fact that everything that she uses to perform her #ob isowned by the company including the laptop computer and mini camera discounts the idea of #obcontracting.!

oreover, the &ourt of Appeals explained that "u#i's argument that no employer<employee relationshipexisted in view of the fixed<term contract does not persuade because fixed<term contracts ofemployment are strictly construed. "urther, the pieces of euipment Arlene used were all owned by"u#i, showing that she was a regular employee and not an independent contractor.

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The &ourt of Appeals li%ewise cited &u#pit-'uri!!o, which involved fixed<term contracts that weresuccessively renewed for four (4) years.4 This court held that 1KtLhis repeated engagement undercontract of hire is indicative of the necessity and desirability of the petitioner's wor% in privaterespondent A7&'s business.2 *

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ith regard to "u#i's argument that Arlene's contract was for a fixed term, the &ourt of AppealscitedPhi!ips Se#iconductors( Inc. v. 4adri1ue!a6 and held that where an employee's contract 1had beencontinuously extended or renewed to the same position, with the same duties and remained in the

employ without any interruption,2 9

 then such employee is a regular employee. The continuous renewalis a scheme to prevent regulariBation. @n this basis, the &ourt of Appeals ruled in favor of Arlene.

As stated in Price( et a!. v. Innodata Corp.( et a!.C;chanoblesvirtual-awlibrary

The employment status of a person is defined and prescribed by law and not by what the parties say itshould be. 0ually important to consider is that a contract of employment is impressed with publicinterest such that labor contracts must yield to the common good. Thus, provisions of applicable statutesare deemed written into the contract, and the parties are not at liberty to insulate themselves and theirrelationships from the impact of labor laws and regulations by simply contracting with eachother.8 (&itations omitted)

Arlene's contract indicating a fixed term did not automatically mean that she could never be a regularemployee. This is precisely what Article ;+ see%s to avoid. The ruling in Brent remains as the exception

rather than the general rule.

"urther, an employee can be a regular employee with a fixed<term contract. The law does not precludethe possibility that a regular employee may opt to have a fixed<term contract for valid reasons. This wasrecogniBed in Brent C "or as long as it was the employee who reuested, or bargained, that the contracthave a 1definite date of termination,2 or that the fixed<term contract be freely entered into by theemployer and the employee, then the validity of the fixed<term contract will be upheld.+

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V

/e/er /e "or o #e() correc) (*rme+/e N(*o() L(bor Re)(*o "omm**oH *+* o *))e() +*m*()

"u#i argues that the &ourt of Appeals erred when it held that Arlene was illegally dismissed, in view ofthe non<renewal contract voluntarily executed by the parties. "u#i also argues that Arlene's contractmerely expiredG hence, she was not illegally dismissed.!

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Arlene alleges that she had no choice but to sign the non<renewal contract because "u#i withheld hersalary and benefits.

ith regard to this issue, the &ourt of Appeals heldC chanroblesvirtuallawlibrary

e cannot subscribe to "u#i's assertion that 0spiritu's contract merely expired and that she voluntarilyagreed not to renew the same. 0ven a cursory perusal of the sub#ect $on<enewal &ontract readilyshows that the same was signed by 0spiritu under protest. hat is apparent is that the $on<enewal&ontract was crafted merely as a subterfuge to secure "u#i's position that it was 0spiritu's choice not torenew her contract.

As a regular employee, Arlene was entitled to security of tenure and could be dismissed only for #ust orauthoriBed causes and after the observance of due process.

The right to security of tenure is guaranteed under Article SIII, /ection of the !8;9 &onstitutionC chanroblesvirtuallawlibrary

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#r*c)e III. Soc*() J*ce (+ &m( R*/

. . . .

L(bor

. . . .

It shall guarantee the rights of all wor%ers to self<organiBation, collective bargaining and negotiations,and peaceful concerted activities, including the right to stri%e in accordance with law. T/e /()) be

e*)e+ o ecr* o ere, humane conditions of wor%, and a living wage. They shall alsoparticipate in policy and decision<ma%ing processes affecting their rights and benefits as may beprovided by law.

Article 98 of the -abor &ode also provides for the right to security of tenure and states thefollowingC chanroblesvirtuallawlibrary

#r. 2<9. Secr* o ere. In cases of regular employment, the employer shall not terminate theservices of an employee except for a #ust cause of when authoriBed by this Title. An employee who isun#ustly dismissed from wor% shall be entitled to reinstatement without loss of seniority rights and otherprivileges and to his full bac%wages, inclusive of allowances, and to his other benefits or their monetary

euivalent computed from the time his compensation was withheld from him up to the time of his actualreinstatement.

Thus, on the right to security of tenure, no employee shall be dismissed, unless there are #ust orauthoriBed causes and only after compliance with procedural and substantive due process is conducted.

0ven probationary employees are entitled to the right to security of tenure. This was explainedinPhi!ippine &ai!y In1uirer( Inc. v. 'a$tibay( ;r .C

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ithin the limited legal six<month probationary period, probationary employees are still entitled tosecurity of tenure. It is expressly provided in the afore<uoted Article ;! that a probationary employeemay be terminated only on two groundsC (a) for #ust cause, or (b) when he fails to ualify as a regularemployee in accordance with reasonable standards made %nown by the employer to the employee at thetime of his engagement.4 (&itation omitted)

The expiration of Arlene's contract does not negate the finding of illegal dismissal by "u#i. The manner bywhich "u#i informed Arlene that her contract would no longer be renewed is tantamount to constructivedismissal. To ma%e matters worse, Arlene was as%ed to sign a letter of resignation prepared by"u#i.* The existence of a fixed<term contract should not mean that there can be no illegal dismissal.Eue process must still be observed in the pre<termination of fixed<term contracts of employment.

In addition, the &ourt of Appeals and the $ational -abor elations &ommission found that Arlene wasdismissed because of her health condition. In the non<renewal agreement executed by "u#i and Arlene, itis stated thatC chanroblesvirtuallawlibrary

?00A/, the /0&@$E 5AT: is under$oin$ che#otherapy %hich prevents her ro# continuin$ to

eective!y peror# her unctions under the said &ontract such as the timely submission of news andcurrent events reports pertaining to the 5hilippines and travelling KsicL to the "I/T 5AT:'s regional

office in Thailand.

6

 (0mphasis supplied)

Eisease as a ground for termination is recogniBed under Article ;4 of the -abor &odeC chanroblesvirtuallawlibrary

#r. 2>4. D*e(e ( ro+ or erm*(*o. An employer may terminate the services of anemployee who has been found to be suffering from any disease and whose continued employment isprohibited by law or is pre#udicial to his health as well as to the health of his co<employeesC 5rovided,That he is paid separation pay euivalent to at least one (!) month salary or to one<half (!3) monthsalary for every year of service, whichever is greater, a fraction of at least six (6) months beingconsidered as one (!) whole year.

7oo% FI, ule !, /ection ; of the @mnibus ules Implementing the -abor &ode providesC chanroblesvirtuallawlibrary

/ec. ;. &isease as a $round or dis#issa! . V here the employee suffers from a disease and hiscontinued employment is prohibited by law or pre#udicial to his health or to the health of his co<employees, the employer shall not terminate his employment unless there is a certification by acompetent public health authority that the disease is of such nature or at such a stage that it cannot be

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cured within a period of six (6) months even with proper medical treatment. If the disease or ailmentcan be cured within the period, the employer shall not terminate the employee but shall as% theemployee to ta%e a leave. The employer shall reinstate such employee to his former positionimmediately upon the restoration of his normal health.

"or dismissal under Article ;4 to be valid, two reuirements must be complied withC (!) the employee'sdisease cannot be cured within six (6) months and his 1continued employment is prohibited by law or

pre#udicial to his health as well as to the health of his co<employees2G and () certification issued by acompetent public health authority that even with proper medical treatment, the disease cannot be curedwithin six (6) months.9 The burden of proving compliance with these reuisites is on theemployer.;$on<compliance leads to the conclusion that the dismissal was illegal.8

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There is no evidence showing that Arlene was accorded due process. After informing her employer of herlung cancer, she was not given the chance to present medical certificates. "u#i immediately concludedthat Arlene could no longer perform her duties because of chemotherapy. It did not as% her how hercondition would affect her wor%. $either did it suggest for her to ta%e a leave, even though she wasentitled to sic% leaves. orse, it did not present any certificate from a competent public health authority.hat "u#i did was to inform her that her contract would no longer be renewed, and when she did notagree, her salary was withheld. Thus, the &ourt of Appeals correctly upheld the finding of the $ational-abor elations &ommission that for failure of "u#i to comply with due process, Arlene was illegallydismissed.4+

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VI

/e/er /e "or o #e() roer) mo+**e+/e N(*o() L(bor Re)(*o "omm**oH +ec**o

8/e * (8(r+e+ re*(eme, +(m(e, (+ (oreH ee

The $ational -abor elations &ommission awarded separation pay in lieu of reinstatement, on theground that the filing of the complaint for illegal dismissal may have seriously strained relations betweenthe parties. 7ac%wages were also awarded, to be computed from date of dismissal until the finality ofthe $ational -abor elations &ommission's decision. ?owever, only bac%wages were included in thedispositive portion because the $ational -abor elations &ommission recogniBed that Arlene had receivedseparation pay in the amount of =/>9,6++.++.

The &ourt of Appeals affirmed the $ational -abor elations &ommission's decision but modified it by

awarding moral and exemplary damages and attorney's fees, and all other benefits Arlene was entitledto under her contract with "u#i. The &ourt of Appeals also ordered reinstatement, reasoning that thegrounds when separation pay was awarded in lieu of reinstatement were not proven. 4!

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Article 98 of the -abor &ode providesC chanroblesvirtuallawlibrary

#r. 2<9. Secr* o ere. In cases of regular employment, the employer shall not terminate theservices of an employee except for a #ust cause or when authoriBed by this Title.  An e#p!oyee %ho isun5ust!y dis#issed ro# %ork sha!! be entit!ed to reinstate#ent %ithout !oss o seniority ri$hts and other 

 privi!e$es and to his u!! back%a$es( inc!usive o a!!o%ances( and to his other beneits or their #onetarye1uiva!ent co#puted ro# the ti#e his co#pensation %as %ithhe!d ro# hi# up to the ti#e o his actua! 

reinstate#ent.(0mphasis supplied)

The &ourt of Appeals' modification of the $ational -abor elations &ommission's decision was properbecause the law itself provides that illegally dismissed employees are entitled to reinstatement,bac%wages including allowances, and all other benefits.

@n reinstatement, the $ational -abor elations &ommission ordered payment of separation pay in lieu of reinstatement, reasoning 1that the filing of the instant suit may have seriously abraded the relationshipof the parties so as to render reinstatement impractical.2 4 The &ourt of Appeals reversed this andordered reinstatement on the ground that separation pay in lieu of reinstatement is allowed only inseveral instances such as (!) when the employer has ceased operationsG () when the employee'sposition is no longer availableG () strained relationsG and (4) a substantial period has lapsed from dateof filing to date of finality.4

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@n this matter, <ui5ano v. 'ercury &ru$ Corp.44 is instructiveC chanroblesvirtuallawlibrary

ell<entrenched is the rule that an illegally dismissed employee is entitled to reinstatement as a matterof right. . . .

To protect labor's security of tenure, we emphasiBe that the doctrine of 1strained relations2 should be

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strictly applied so as not to deprive an illegally dismissed employee of his right to reinstatement. 0verylabor dispute almost always results in 1strained relations2 and the phrase cannot be given an overarchinginterpretation, otherwise, an un#ustly dismissed employee can never be reinstated. 4* (&itations omitted)

The &ourt of Appeals reasoned that strained relations are a uestion of fact that must be supported byevidence.46 $o evidence was presented by "u#i to prove that reinstatement was no longer feasible. "u#idid not allege that it ceased operations or that Arlene's position was no longer available. $othing in the

records shows that Arlene's reinstatement would cause an atmosphere of antagonism in the wor%place.Arlene filed her complaint in ++8. "ive (*) years are not yet a substantial period 49 to barreinstatement.

@n the award of damages, "u#i argues that Arlene is not entitled to the award of damages and attorney'sfees because the non<renewal agreement contained a uitclaim, which Arlene signed.

Nuitclaims in labor cases do not bar illegally dismissed employees from filing labor complaints andmoney claim. As explained by Arlene, she signed the non<renewal agreement out of necessity. In Landand )ousin$ &eve!op#ent Corporation v. +s1ui!!o(4; this court explainedC chanroblesvirtuallawlibrary

e have heretofore explained that the reason why uitclaims are commonly frowned upon as contrary topublic policy, and why they are held to be ineffective to bar claims for the full measure of the wor%ers'legal rights, is the fact that the employer and the employee obviously do not stand on the same footing.

The employer drove the employee to the wall. The latter must have to get hold of money. 7ecause, outof a #ob, he had to face the harsh necessities of life. ?e thus found himself in no position to resist moneyproffered. ?is, then, is a case of adherence, not of choice. 48

ith regard to the &ourt of Appeals' award of moral and exemplary damages and attorney's fees, thiscourt has recogniBed in several cases that moral damages are awarded 1when the dismissal is attendedby bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to goodmorals, good customs or public policy.2 *+ @n the other hand, exemplary damages may be awarded whenthe dismissal was effected 1in a wanton, oppressive or malevolent manner.2 *!

chanoblesvirtual-awlibrary

The &ourt of Appeals and $ational -abor elations &ommission found that after Arlene had informed "u#iof her cancer, she was informed that there would be problems in renewing her contract on account ofher condition. This information caused Arlene mental anguish, serious anxiety, and wounded feelingsthat can be gleaned from the tenor of her email dated arch !!, ++8. A portion of her email readsC chanroblesvirtuallawlibrary

I A/ /@ /=5I/0E . . . that at a time when I am at my lowest, being sic% and very wea%, yousuddenly came to deliver to me the $0/ that you will no longer renew my contract. I %new this willcome but I never thought that you will be so Qheartless' and insensitive to deliver that news #ust a monthafter I informed you that I am sic%. I was as%ing for patience and understanding and your response wasnot to 0$0 my contract.*

Apart from Arlene's illegal dismissal, the manner of her dismissal was effected in an oppressive approachwith her salary and other benefits being withheld until ay *, ++8, when she had no other choice but tosign the non<renewal contract. Thus, there was legal basis for the &ourt of Appeals to modify the$ational -abor elations &ommission's decision.

?owever, Arlene received her salary for ay ++8.* &onsidering that the date of her illegal dismissalwas ay *, ++8,*4 this amount may be subtracted from the total monetary award.

ith regard to the award of attorney's fees, Article !!! of the -abor &ode states that 1KiLn cases ofunlawful withholding of wages, the culpable party may be assessed attorney's fees euivalent to tenpercent of the amount of wages recovered.2 -i%ewise, this court has recogniBed that 1in actions forrecovery of wages or where an employee was forced to litigate and, thus, incur expenses to protect hisrights and interest, the award of attorney's fees is legally and morally #ustifiable.2 ** Eue to her illegaldismissal, Arlene was forced to litigate.

In the dispositive portion of its decision, the &ourt of Appeals awarded legal interest at the rate of !Hper annum.*6 In view of this court's ruling in Nacar v. *a!!ery 4ra#es(*9 the legal interest shall bereducd to a rate of 6H per annum from uly !, +! until full satisfaction. chanrobleslaw

&EREFORE, the petition is DENIED. The assailed &ourt of Appeals decision dated une *, +!is#FFIR'ED with the modification that bac%wages shall be computed from une ++8. -egal interestshall be computed at the rate of 6H per annum of the total monetary awards from ay *, ++8 until full

satisfaction.

SO ORDERED.cralawlawlibrary

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