ABS-CBN Corporation vs. Concepcion

An OB van driver is a regular employee, not an independent contractor, where the employer hired him despite his limited skills, trained him, provided his tools, controlled his work schedules and methods, disciplined him, and paid him fixed wages with statutory deductions — none of which evince the unique skills, freedom from control, or fee-bargaining power characteristic of independent contractors.

ABS-CBN Corporation is a domestic corporation principally engaged in television and radio broadcasting, with its Amended Articles of Incorporation listing among its secondary purposes the recording, reproduction, and production of audio-video content, as well as the provision of creative production and post-production services. The network obtains content through various schemes — block-time, line production, co-production, self-production, foreign canned shows, live coverages, licensed programs, or combinations thereof — and maintains an Internal Job Market system for workers it classifies as "talents." Respondent Jaime C. Concepcion was engaged as an OB van driver and generator set operator under the Engineering Department, assigned to various television programs, and later joined the workers' union that demanded regularization of Internal Job Market members.

ABS-CBN Corporation hired Jaime C. Concepcion in June 1999 as an OB van driver under its Engineering Department, tasking him with overseeing the generator set used during tapings and shootings of programs aired by the network. He was assigned to numerous television programs over the years, including Ariba-Ariba, Bituin, Maalaala Mo Kaya, Tayong Dalawa, Wowowee, TV Patrol World, and many others. Respondent acted as property custodian over all equipment, especially the generator set, and was supervised by ABS-CBN personnel regarding his work schedules, program assignments, and reporting times. He was required to comply with company rules and was subjected to disciplinary sanctions; in one instance in 2003, he received a memorandum from the OB Van Supervisor requiring a written explanation for the overheating of a generator set, with a warning of further disciplinary action for non-compliance.

Respondent was paid salaries twice a month through payslips bearing ABS-CBN's corporate name, and his Certificates of Compensation Payment/Tax Withheld reflected deductions for SSS, Pag-IBIG, and PhilHealth, identifying ABS-CBN as his employer. At the time of his dismissal, he was receiving ₱558.16 per day or ₱69.77 per hour. He was also required to attend seminars and workshops to ensure optimal performance. Eventually, respondent was placed in ABS-CBN's Internal Job Market work pool and joined the workers' union. As the union pressed for regularization of its members, ABS-CBN began coercing respondent and other union members to sign contracts waiving their rights to regularization, imposing deadlines for compliance.

On 06 August 2010, respondent filed an initial complaint for regularization. On 01 September 2010, after he refused to sign the employment contract prepared by ABS-CBN, he was dismissed from service. He thereupon amended his complaint to include illegal dismissal. ABS-CBN maintained that respondent was an independent contractor or "talent," not a regular employee, asserting that its principal business was broadcasting rather than production and that it was not legally obliged to produce its own programs. It pointed to its various content-acquisition schemes — block-time, line production, co-production, self-production, foreign canned shows, live coverages, licensed programs, and combinations thereof — to distance itself from the production activities in which respondent's services were utilized.

• Procedural Defect: ABS-CBN argued that the CA should have dismissed respondent's Petition for Certiorari because respondent failed to file a motion for reconsideration before the NLRC Special Division before elevating the case to the appellate court.
• Independent Contractor Status: ABS-CBN insisted that respondent was a "talent" and independent contractor, not a regular employee, because he worked as an OB van driver handling specialized equipment for outside broadcasting, a role it characterized as distinct from that of an ordinary office driver.
• Stare Decisis / Binding Precedent: ABS-CBN invoked the doctrine of stare decisis, pointing to the CA's ruling in Jalog vs. ABS-CBN Broadcasting Corporation, which declared cameramen, crane operators, VTR men, and drivers to be independent contractors, and which was affirmed by the Supreme Court. It urged the Court to "set straight" the CA's departure from that ruling.
• Nature of Business: ABS-CBN maintained that its principal business was broadcasting, not production, and that it was not legally obliged to produce programs, emphasizing its various content-acquisition schemes to argue that respondent's work was not necessary or desirable to its usual business or trade.

• Regular Employment: Respondent maintained that he was hired by ABS-CBN as an OB van driver in June 1999, supervised by ABS-CBN personnel as to work schedules and program assignments, required to comply with company rules, and subjected to disciplinary sanctions, all indicative of an employer-employee relationship.
• Illegal Dismissal: Respondent asserted that he was dismissed on 01 September 2010 after refusing to sign a contract waiving his right to regularization, and that his dismissal lacked just or authorized cause.
• Futility of Motion for Reconsideration: Respondent explained in the Prefatory Statement of his Petition for Certiorari that filing a motion for reconsideration before the NLRC Special Division would have been useless, given the highly questionable procedure by which the Special Division was created and the pattern of NLRC Divisions being inhibited whenever they ruled against ABS-CBN.

• Procedural Regularity: Whether respondent's failure to file a motion for reconsideration before the NLRC Special Division before filing a Petition for Certiorari with the CA is fatal to his petition.
• Binding Precedent: Whether the CA was bound by the ruling in Jalog vs. ABS-CBN Broadcasting Corporation under the doctrine of stare decisis.
• Employment Status: Whether respondent is a regular employee of ABS-CBN or an independent contractor.
• Illegal Dismissal: Whether respondent was illegally dismissed and entitled to reinstatement, backwages, and other monetary benefits.

• Procedural Regularity: No. The failure to file a motion for reconsideration was not fatal, as recognized exceptions to the rule applied — specifically, where the issues raised before the certiorari court were the same as those passed upon by the lower court, and where a motion for reconsideration would be useless.
• Binding Precedent: No. The CA was not bound by Jalog, which was affirmed by the Supreme Court only via a Minute Resolution dismissing the petition for lack of verification and failure to show reversible error, and which therefore did not constitute binding precedent on parties not involved in that action.
• Employment Status: Yes, respondent is a regular employee. The four-fold test, particularly the control test, was satisfied: ABS-CBN selected and engaged respondent, paid his wages with statutory deductions, possessed the power of dismissal, and exercised control over the means and methods of his work; respondent lacked the unique skills, fee-bargaining power, and independence from control characteristic of independent contractors.
• Illegal Dismissal: Yes, respondent was illegally dismissed. His dismissal did not fall under any just or authorized cause under the Labor Code, entitling him to reinstatement, full backwages, 13th month pay, holiday pay, and attorney's fees.

• Procedural Regularity: While the general rule requires a motion for reconsideration before a special civil action for certiorari, well-defined exceptions exist. Two exceptions were present: (b) the issues raised before the NLRC — the existence of an employer-employee relationship and illegal dismissal — were the very same questions raised before the CA; and (d) a motion for reconsideration would be useless, given the questionable creation of the Special Division and the pattern of inhibitions whenever NLRC Divisions ruled against ABS-CBN. Moreover, in labor cases, the rules of procedure ought not to be applied rigidly, as they were adopted to secure substantial justice, and labor determinations should be not only secundum rationem but also secundum caritatem.

• Binding Precedent: The Supreme Court's affirmation of the CA Decision in Jalog was effected through a Minute Resolution promulgated on 05 October 2011, which dismissed the petition for lack of verification and failure to show reversible error. Citing Read-Rite Philippines, Inc. vs. Francisco and Philippine Health Care Providers, Inc. vs. Commissioner of Internal Revenue, the Court explained that while a minute resolution affirming a CA ruling constitutes res judicata as to the same parties and subject matter, it is not binding precedent on other parties or another subject matter. Even assuming Jalog had binding effect, the Court is not precluded from revisiting doctrines and precedents, as Abaria vs. National Labor Relations Commission established that the doctrine of stare decisis is not cast in stone and may be set aside upon a showing that circumstances in a particular case override the benefits derived from adherence to precedent.

• Employment Status: The employer bears the burden to prove that a person whose services it pays for is an independent contractor rather than a regular employee. Jurisprudence recognizes two kinds of independent contractors: legitimate job contractors and individuals with unique skills and talents that set them apart from ordinary employees. In Paragele vs. GMA Network, Inc., the Court emphasized that to be considered an independent contractor, it must be shown that the worker was hired because of unique skills and talents and that the network did not exercise control over the means and methods of the work. Applying the four-fold test, all elements were satisfied: ABS-CBN directly hired respondent, paid his wages through payslips bearing its corporate name with statutory deductions, possessed the power of dismissal, and exercised control through production and field supervisors who monitored his work and enforced company standards. Respondent had been subjected to disciplinary action and was required to attend seminars and workshops. He lacked unique skills at hiring — his driving skills were limited and he had no knowledge of generator set operation; ABS-CBN provided the necessary training. The tools and instrumentalities (the OB van and generator set) were provided by ABS-CBN, which could assign him to any program needing his services. He had no power to bargain or negotiate for his fee, a circumstance indicative of employment rather than independent contractual relationship. Driving an OB van equipped with specialized equipment did not make the driver a standout, and ABS-CBN failed to discuss the nature of the OB van driver's job beyond handling the OB van. Respondent could not be considered a "talent" as he was neither an actor nor a star. The classification by the employer does not determine the nature of employment; rather, it is the nature of the activities performed in relation to the employer's business. Under Article 294 of the Labor Code, respondent qualified as a regular employee under both categories: his work as OB van driver and generator set operator was necessary or desirable in ABS-CBN's usual business, and he had rendered more than one year of service since 1999. ABS-CBN's argument that its principal business was broadcasting, not production, was rejected because the nature of the work must be viewed from the perspective of the business or trade in its entirety, and its Amended Articles of Incorporation expressly included production among its secondary purposes.

• Illegal Dismissal: Security of tenure is a constitutionally guaranteed right, and employees may not be terminated except for just or authorized causes under the Labor Code. Respondent's dismissal fell under neither Article 297 (just causes) nor Article 298 (authorized causes). An employee unjustly dismissed is entitled to reinstatement without loss of seniority rights and full backwages inclusive of allowances and other benefits. Following Maraguinot vs. National Labor Relations Commission, the computation of backwages should deduct amounts corresponding to periods when respondent's production group was not engaged in shooting programs. Respondent was also entitled to 13th month pay, holiday pay, and attorney's fees equivalent to ten percent of the total monetary award. All amounts due shall earn legal interest pursuant to Nacar vs. Gallery Frames. The case was remanded to the Labor Arbiter for computation, with ABS-CBN directed to furnish the necessary data.

• Four-Fold Test for Employer-Employee Relationship — The existence of an employer-employee relationship is determined by four elements: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct, known as the control test. The control test is the most important element, examining whether the employer controls the means and methods by which the work is performed, not merely the result. The Court applied all four elements to respondent's circumstances and found each satisfied.

• Independent Contractor — Unique Skills and Talents Exception — Jurisprudence recognizes a category of independent contractors comprising individuals with unique skills and talents that set them apart from ordinary employees, such as columnists with distinctive viewpoints, cockfighting masiadores and sentenciadores, and basketball referees. To qualify, the worker must have been hired because of unique skills or talents, and the hiring party must not exercise control over the means and methods of the work. The Court found that respondent, an OB van driver trained by ABS-CBN and lacking distinctive skills at hiring, did not fall within this category.

• Burden of Proof on Employer — The employer bears the burden to prove that a person whose services it pays for is an independent contractor rather than a regular employee. ABS-CBN failed to discharge this burden.

• Nature of Work Test for Regular Employment — Under Article 294 of the Labor Code, an employee is regular if engaged to perform activities usually necessary or desirable in the usual business or trade of the employer, or if the employee has rendered at least one year of service. The nature of the work performed must be viewed from the perspective of the business or trade in its entirety, not on a confined scope. The Court held that respondent's work was necessary or desirable to ABS-CBN's business, which included production as reflected in its Amended Articles of Incorporation.

• Effect of Minute Resolution as Precedent — A minute resolution that denies or dismisses a petition for failure to comply with formal and substantive requirements deems the challenged decision sustained, but it constitutes res judicata only with respect to the same subject matter and same parties; it is not binding precedent on other parties or another subject matter.

• Stare Decisis — Under the doctrine of stare decisis, a court adheres to a principle of law applicable to a certain state of facts and applies it to future cases where the facts are substantially the same. The doctrine is not cast in stone, however, and the Court may set it aside upon a showing that circumstances in a particular case override the benefits derived from adherence to precedent.

• Exceptions to Motion for Reconsideration in Certiorari — A special civil action for certiorari under Rule 65 will not lie unless a motion for reconsideration is filed before the respondent court, except in defined circumstances including where the issues raised have been duly raised and passed upon by the lower court, or where a motion for reconsideration would be useless.

• "An independent contractor enjoys independence and freedom from the control and supervision of his principal. This is opposed to an employee who is subject to the employer's power to control the means and methods by which the employee's work is to be performed and accomplished." — This passage articulates the conceptual distinction between an independent contractor and an employee, anchoring the control test as the decisive factor in the analysis.

• "It is not the will or word of the employer which determines the nature of employment of an employee but the nature of the activities performed by such employee in relation to the particular business or trade of the employer." — This formulation establishes that the employer's unilateral classification of a worker as a "talent" or independent contractor is not controlling; the actual nature of the work in relation to the employer's business is the determinant.

• "The nature of the work performed must be viewed from a perspective of the business or trade in its entirety and not on a confirmed scope." — This passage defines the proper analytical framework for determining whether work is necessary or desirable to the employer's usual business, rejecting ABS-CBN's attempt to isolate broadcasting from production.

• "if other parties or another subject matter (even with the same parties and issues) is involved, the minute resolution is not binding precedent." — Quoted from Philippine Health Care Providers, Inc. vs. Commissioner of Internal Revenue via Read-Rite Philippines, Inc. vs. Francisco, this passage clarifies the limited precedential value of minute resolutions and explains why Jalog did not bind the CA in respondent's case.

• Paragele vs. GMA Network, Inc., G.R. No. 235315, July 13, 2020 — Followed. The Court relied on this recent Division decision for the principle that to be considered an independent contractor, the worker must have been hired because of unique skills and talents, and the network must not have exercised control over the means and methods of the work. The Court also cited its observation that meager remuneration undermines the assertion of unique status.

• Read-Rite Philippines, Inc. vs. Francisco, 816 Phil. 851 (2017) — Followed. Cited for the proposition that a minute resolution affirming a CA ruling is not binding precedent on parties not involved in the original action, thereby limiting the precedential effect of Jalog.

• Abaria vs. National Labor Relations Commission, 678 Phil. 64 (2011) — Followed. Cited for the principle that stare decisis is not cast in stone and may be set aside when circumstances in a particular case override the benefits derived from adherence to the doctrine.

• Maraguinot vs. National Labor Relations Commission, 348 Phil. 580 (1998) — Followed. Cited for the principle that in computing backwages of regular employees who were project-based, amounts corresponding to periods when the production group was not engaged in projects should be deducted.

• Nacar vs. Gallery Frames, 716 Phil. 267 (2013) — Followed. Applied to impose legal interest on all monetary awards due to respondent.

• Magsalin vs. National Organization of Working Men, 451 Phil. 254 (2003) — Followed. Cited for the principle that the nature of work must be viewed from the perspective of the business or trade in its entirety, rejecting ABS-CBN's argument that its business was limited to broadcasting.

• ABS-CBN Broadcasting Corporation vs. Nazareno, 534 Phil. 306 (2006) — Followed. Cited for the principle that the power to bargain talent fees above ordinary salary scales is indicative of an independent contractual relationship, a circumstance absent in respondent's case.

• Sonza vs. ABS-CBN Broadcasting Corporation, G.R. No. 138051, June 10, 2004 — Referenced. Cited in connection with the category of independent contractors possessing unique skills and talents.

• Fuji Television Network, Inc. vs. Espiritu, 749 Phil. 388 (2014) — Followed. Cited for the principle that the employer bears the burden to prove independent contractor status, and for the recognition of the unique-skills category of independent contractors.

• Article 294 (formerly Article 280), Labor Code — Defines regular and casual employment, providing that an employee engaged to perform activities usually necessary or desirable in the usual business or trade of the employer is a regular employee, as is one who has rendered at least one year of service. The Court applied both categories to respondent, finding his work necessary or desirable to ABS-CBN's business and his tenure exceeding one year.

• Article 297 (formerly Article 282), Labor Code — Enumerates just causes for termination by employer, including serious misconduct, gross neglect, fraud, commission of a crime, and analogous causes. The Court found that respondent's dismissal did not fall under any of these just causes.

• Article 298 (formerly Article 283), Labor Code — Enumerates authorized causes for termination, including installation of labor-saving devices, redundancy, retrenchment, and closure of establishment. The Court found that respondent's dismissal did not fall under any authorized cause.

• Rule 65, Rules of Court — Governs special civil actions for certiorari. The Court applied the rule's requirement of a prior motion for reconsideration, but found recognized exceptions applicable.

Justices Leonen, Gesmundo, Carandang, and Gaerlan concurred.