ABS-CBN IJM Workers Union vs. ABS-CBN Corporation

The Mediator-Arbiter and the DOLE Secretary have original and exclusive authority to determine the existence of an employer-employee relationship in certification election proceedings, without needing to rely on or await a prior determination by the labor arbiter or the NLRC in a separate proceeding.

ABS-CBN Corporation is a domestic corporation principally engaged in broadcasting television and radio content in the Philippines. In 2002, ABS-CBN adopted the Internal Job Market System (IJM), a database providing a list of accredited technical or creative manpower and talents who offer their services for a fee, including competency ratings and corresponding professional rates. Workers hired through the IJM system include Electronic Field Production Camera Personnel, Studio Camera Personnel, OB Van Operators, Technical Directors, Light Operators, Video Engineers, Video Editors, Compositing Artists, VTR Personnel, Audio Personnel, Audio Engineers, Crane Operators, and Drivers. These IJM workers formed the ABS-CBN IJM Workers Union (AIWU), registered with the Department of Labor under NCR-QCFOO-UR-06-005-09. Prior NLRC rulings in Payonan, et al. vs. ABS-CBN and Jalog, et al. vs. ABS-CBN had found no employer-employee relationship between ABS-CBN and certain IJM workers, while Supreme Court rulings in ABS-CBN vs. Nazareno and ABS-CBN vs. Marquez had declared similarly situated workers as regular employees.

ABS-CBN Corporation, formerly ABS-CBN Broadcasting Corporation, is a domestic corporation principally engaged in the business of broadcasting television and radio content in the Philippines. Sometime in 2002, ABS-CBN adopted the Internal Job Market System (IJM), a database providing a list of accredited technical or creative manpower and talents who offer their services for a fee. The database includes, among other things, the competency rating of the technical manpower and their corresponding professional rates. Workers hired through the IJM system include Electronic Field Production Camera Personnel, Studio Camera Personnel, OB Van Operators, Technical Directors, Light Operators, Video Engineers, Video Editors, Compositing Artists, VTR Personnel, Audio Personnel, Audio Engineers, Crane Operators, and Drivers. Together, these IJM workers formed the ABS-CBN IJM Workers Union (AIWU), registered with the Department of Labor under NCR-QCFOO-UR-06-005-09.

On November 23, 2009, AIWU, through its president Antonio B. S. Perez, filed a petition before the Bureau of Labor Relations praying for the conduct of a certification election among IJM workers. AIWU alleged that it sought to represent 1,101 employees from the IJM work pool and be certified as their exclusive bargaining agent. According to the union, no sole and exclusive bargaining agent had been certified or voluntarily recognized by ABS-CBN, and no certification, consent, or run-off election had been conducted in the bargaining unit within one year prior to filing. The petition was supported by 369 IJM workers comprising 33.51% of the total bargaining unit through their signatures, and was docketed as NCR-OD-M-0911-006.

In response, ABS-CBN filed a Comment dated December 18, 2009, seeking denial of the petition on the ground that no employer-employee relationship existed between the company and the IJM workers. While ABS-CBN averred that it did not seek to participate in the certification election, it called attention to NLRC rulings in Payonan, et al. vs. ABS-CBN and Jalog, et al. vs. ABS-CBN, both resolved in favor of ABS-CBN after finding no employment relationship existed between the parties. These cases involved 71 of the 369 signatories to the petition. After the parties submitted their respective memoranda, the Mediator-Arbiter issued an Order dated April 14, 2010, denying the petition for certification election for lack of employer-employee relationship, reasoning that the DOLE was bound to respect the NLRC's determination in Payonan and Jalog, even if those cases were pending appeal before the Court of Appeals.

Aggrieved, AIWU appealed to the DOLE Secretary, arguing that its members performed functions necessary and desirable to ABS-CBN's principal business and that the conditions of their employment satisfied the four-fold test. AIWU further cited the Supreme Court's rulings in ABS-CBN vs. Nazareno and ABS-CBN vs. Marquez, which declared similarly situated "talents" as regular employees. ABS-CBN countered that the circumstances in Nazareno and Marquez occurred before the IJM System was implemented, rendering those pronouncements inapplicable. On August 13, 2010, DOLE Secretary Rosalinda Dimapilis-Baldoz rendered a Decision granting AIWU's appeal, reversing the Mediator-Arbiter's Order, and ordering the conduct of a certification election. The DOLE Secretary found the controlling jurisprudence to be the Nazareno case, holding that IJM workers were similarly situated to the production assistants therein, and that the evidence showed badges of an employer-employee relationship satisfying all four elements.

ABS-CBN filed a Motion for Reconsideration, which the DOLE Secretary denied on October 26, 2010. ABS-CBN then elevated the case to the Court of Appeals via a petition for certiorari, arguing that the DOLE Secretary committed grave abuse of discretion in disregarding the NLRC's rulings in Payonan and Jalog and in encroaching upon the jurisdiction of the labor arbiter and the Court of Appeals. The Court of Appeals granted the petition, ruling that the existence or absence of an employer-employee relationship is a question of fact within the competence and primary jurisdiction of the labor arbiter and the NLRC, and that the DOLE Secretary should have respected the NLRC's factual findings or held the issue in abeyance. AIWU's Motion for Reconsideration was denied, prompting the present petition before the Supreme Court.

• DOLE Secretary's Jurisdiction: AIWU maintained that the DOLE Secretary has jurisdiction to decide issues of employer-employee relationship in certification election proceedings, citing the Supreme Court's ruling in M.Y. San Biscuits, Inc. vs. Acting Secretary Bienvenido E. Laguesma.
• Regular Employment Status: AIWU argued that its members are tasked with functions and activities that are not only desirable but also necessary to the principal and usual business of ABS-CBN, and that numerous documents show that the conditions of IJM workers' employment satisfied the four-fold test.
• Applicability of Precedents: AIWU contended that "talents" and similarly situated employees had already been declared regular employees by the Supreme Court in ABS-CBN vs. Nazareno and ABS-CBN vs. Marquez, and that the NLRC issued a ruling in Herrera vs. ABS-CBN deeming audio personnel to be regular employees.
• Overturned NLRC Rulings: AIWU stressed that the Commission's ruling in Payonan had been overturned by the Court of Appeals, which, after consolidating the Payonan and Herrera cases, found that IJM workers were regular employees entitled to benefits and privileges accorded to all other regular employees.

• No Employer-Employee Relationship: ABS-CBN argued that no employer-employee relationship existed between the IJM workers and the company, seeking denial of the petition for certification election on this ground.
• Inapplicability of Nazareno and Marquez: ABS-CBN countered that the circumstances obtaining in the Nazareno and Marquez cases occurred before the IJM System was implemented, rendering the Supreme Court's pronouncements therein inapplicable to AIWU members.
• Binding Force of NLRC Rulings: ABS-CBN contended that the DOLE Secretary erred in disregarding the NLRC's rulings in Payonan and Jalog, which found no employer-employee relationship and which should have been respected.
• Jurisdictional Encroachment: ABS-CBN posited that the DOLE encroached upon the powers of the labor arbiter, which had original and exclusive jurisdiction in deciding controversies arising from an employer-employee relationship, and of the Court of Appeals, which possessed jurisdiction to determine whether the NLRC committed grave abuse of discretion.

• Jurisdiction of DOLE Secretary: Whether the DOLE Secretary committed grave abuse of discretion in resolving the issue of the existence of an employer-employee relationship.
• Grant of Certification Election: Whether the DOLE Secretary committed grave abuse of discretion in granting the petition for certification election.

• Jurisdiction of DOLE Secretary: No. The DOLE Secretary did not commit grave abuse of discretion in resolving the issue of employer-employee relationship, as the Mediator-Arbiter and the DOLE Secretary have original and exclusive authority to determine the existence of such relationship in certification election proceedings without needing to await a prior NLRC determination.
• Grant of Certification Election: No. The DOLE Secretary properly granted the petition for certification election, the IJM workers having been established as regular employees of ABS-CBN through substantial evidence and consistent jurisprudence, entitling them to self-organization and collective bargaining.

• Jurisdiction of DOLE Secretary: The Court of Appeals erred in holding that the determination of employer-employee relationship is exclusively within the competence of the labor arbiter and the NLRC. While Article 224 of the Labor Code vests the labor arbiter with original and exclusive jurisdiction over claims arising from employer-employee relations, this does not vest the labor arbiter with sole authority to decide all matters involving the existence of such relationship. The present controversy involves the propriety of a certification election, cognizable by the Bureau of Labor Relations under Article 232 of the Labor Code, which has original and exclusive authority to act on all disputes arising from or affecting labor-management relations. Because the purpose of a certification election is to determine which organization will represent employees in collective bargaining, the nature of the relationship between the union members and the company must first be determined. The Mediator-Arbiter must necessarily make a finding as to the existence of employer-employee relations, which is subject to review by the DOLE Secretary on appeal under Article 272 of the Labor Code. In M.Y. San Biscuits, Inc. vs. Acting Sec. Laguesma, the Court emphatically held that the Mediator-Arbiter and the DOLE Secretary are sufficiently empowered to make their own independent finding as to the existence of such relationship, without having to rely and wait for a determination by the labor arbiter or the NLRC in a separate proceeding. The Court of Appeals' reliance on Bombo Radyo was misplaced, as that case's limitation on DOLE's power had been modified by the Court En Banc in a Resolution dated March 6, 2012, which declared that the DOLE has the power to independently determine whether an employer-employee relationship exists, and such determination must be respected to the exclusion of the NLRC to eliminate conflicting conclusions. Furthermore, the NLRC's rulings in Payonan and Jalog were not binding, as they had not attained finality — they were still pending before the Court of Appeals during the DOLE Secretary's resolution. Even assuming finality, conclusiveness of judgment could not apply to the other AIWU members who were not parties in those cases. The totality of facts and circumstances must be considered in determining employer-employee relationship, and the status of 71 workers did not settle the status of the remaining 1,030 AIWU members. Grave abuse of discretion, defined as capricious, whimsical, or arbitrary exercise of judgment tantamount to lack of jurisdiction, could not be attributed to the DOLE Secretary simply because her findings conflicted with the NLRC's.

• Grant of Certification Election: The DOLE Secretary's finding that IJM workers are regular employees was anchored on substantial evidence and consistent with Supreme Court jurisprudence. The DOLE Secretary correctly applied Nazareno, finding IJM workers similarly situated to the production assistants therein. The purported "talents" could not be considered independent contractors because: (a) the arrangement did not constitute contracting or sub-contracting under Department Order No. 18-02, as there was no indication of a contract for a specific job within a definite period; (b) the alleged contractors lacked substantial capital or investment; (c) the IJM set-up was in the nature of a prohibited in-house agency; and (d) the talents performed activities necessary and desirable to ABS-CBN's ordinary business. The evidence showed badges of employer-employee relationship: IJM workers were hired by the company and placed under supervision of technical directors; payment of wages was made directly by the company; ABS-CBN reported the workers to BIR, SSS, and PAG-IBIG as its employees; IJM workers were issued company identification cards; personnel discipline was enforced through the company's Technical Operations Division; and personnel movements such as promotion were approved by the Head of ABS-CBN Entertainment Group. The element of control rested with ABS-CBN, as shown by personnel memoranda issued to IJM workers. The DOLE Secretary's findings were also consistent with the Court's rulings in Del Rosario, Concepcion, Gava, and Tajanlangit, which uniformly declared IJM workers as regular employees. In Del Rosario, the En Banc ruling evaluated the IJM workers' circumstances and found all elements of the four-fold test satisfied: ABS-CBN hired the workers through its personnel department, paid their salaries, wielded the power to discipline and dismiss, and exercised control over the means and methods of their work. The continuous rehiring of IJM workers from one program to another bestowed upon them regular employment status, notwithstanding the IJM System's work pool arrangement. The implementation of the IJM System did not differentiate the regular employees in Nazareno from IJM workers, as the concept of hiring remained the same. Sixty-four signatories of the present petition had already been declared regular employees in prior rulings. Having established the existence of an employer-employee relationship, the DOLE Secretary did not gravely abuse her discretion in granting the petition for certification election, as no other ground was raised to deny it besides the purported absence of such relationship.

• Authority of Mediator-Arbiter and DOLE Secretary to Determine Employer-Employee Relationship — The Mediator-Arbiter and the DOLE Secretary have original and exclusive authority to determine the existence of an employer-employee relationship in certification election proceedings, without needing to rely on or await a prior determination by the labor arbiter or the NLRC in a separate proceeding. This authority is necessary and indispensable to the exercise of the Bureau of Labor Relations' jurisdiction over labor-management disputes under Article 232 of the Labor Code. The DOLE Secretary's finding on appeal under Article 272 may only be reviewed and reversed by the DOLE Secretary, not rendered nugatory by a contrary finding of the labor arbiter in a separate proceeding. It would be anomalous to require the Mediator-Arbiter and DOLE Secretary to await NLRC determination, as they could never decide a certification election case if no separate complaint were filed with the labor arbiter.

• Four-Fold Test of Employment Relationship — The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer's power of control over the employee's conduct (the "control test"). This test is not solely limited to the NLRC; the DOLE Secretary or representatives can utilize the same test, even in the course of inspection, making use of the same evidence that would have been presented before the NLRC.

• Res Judicata by Conclusiveness of Judgment — Applies only when: (1) the judgment sought to bar the new action is final; (2) the decision was rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition is a judgment on the merits; and (4) there is identity of parties, but not identity of causes of action, between the first and second action. A ruling that has not attained finality cannot preclude independent resolution of the same issue in a different proceeding. Even if final, conclusiveness of judgment cannot apply to parties who were not involved in the prior case.

• Regular Employment Status of IJM Workers — Workers continuously rehired from one program to another through a work pool system such as the IJM are regular employees, as their functions are necessary and desirable to the usual business or trade of the employer. The implementation of a work pool system does not negate regular employment status where the employer hires, supervises, pays, disciplines, and controls the workers. An essential characteristic of regular employment under Article 280 of the Labor Code is the performance of activities considered necessary and desirable to the overall business or trade of the employer, to be ascertained by considering the nature of the work performed and its relation to the scheme of the particular business in its entirety.

• Grave Abuse of Discretion — To be considered grave abuse of discretion, the rendition of judgment must have been done in a capricious, whimsical, or arbitrary manner tantamount to lack of jurisdiction. A mere conflict in factual findings between the DOLE Secretary and the NLRC does not constitute grave abuse of discretion.

• "It is absurd to suggest that the med-arbiter and Secretary of Labor cannot make their own independent finding as to the existence of such relationship and must have to rely and wait for such a determination by the labor arbiter or NLRC in a separate proceeding." — This passage, quoted from M.Y. San Biscuits, Inc. vs. Acting Sec. Laguesma, articulates the ratio decidendi on the DOLE Secretary's independent authority to determine employer-employee relationship in certification election proceedings.

• "The DOLE must have the power to determine whether or not an employer-employee relationship exists, and from there to decide whether or not to issue compliance orders in accordance with Art. 128 (b) of the Labor Code, as amended by RA 7730." — This passage from the En Banc Resolution in Bombo Radyo establishes the modified doctrine that the DOLE's power to determine employer-employee relationship is not merely preliminary but authoritative, to the exclusion of the NLRC.

• "However, the continuous rehiring of the members of the IJM System work pool from one program to another bestowed upon them regular employment status." — This passage from Del Rosario, adopted by the Court, defines the controlling rule on the regular employment status of workers hired through a work pool system such as the IJM.

• "The prospect of competing conclusions could just as well have been eliminated by according respect to the DOLE findings, to the exclusion of the NLRC, and this We believe is the more prudent course of action to take." — This passage from the Bombo Radyo En Banc Resolution explains the policy rationale for respecting DOLE findings on employer-employee relationship to avoid conflicting conclusions between the DOLE and the NLRC.

• M.Y. San Biscuits, Inc. vs. Acting Sec. Laguesma, 273 Phil. 482 (1991) — Controlling precedent establishing that the Mediator-Arbiter and the DOLE Secretary have original and exclusive authority to determine the existence of an employer-employee relationship in certification election proceedings, without needing to await NLRC determination. Followed and applied directly.

• People's Broadcasting Service (Bombo Radyo Phils., Inc.) vs. The Secretary of the DOLE, 683 Phil. 509 (2012) — En Banc Resolution modifying the earlier Bombo Radyo decision, declaring that the DOLE has the power to independently determine employer-employee relationship and that such determination must be respected to the exclusion of the NLRC. Followed to reject the Court of Appeals' reliance on the earlier Bombo Radyo ruling.

• ABS-CBN Broadcasting Corp. vs. Nazareno, 534 Phil. 306 (2006) — Controlling precedent on the regular employment status of ABS-CBN production assistants, applied by the DOLE Secretary and affirmed by the Court as instructive on the regular employment status of IJM workers, who were found similarly situated.

• Del Rosario, et al. vs. ABS-CBN Broadcasting Corp., G.R. Nos. 202481, 202495, 202497, 210165, 219125, 222057, 224879, 225101 and 225874, September 8, 2020 — En Banc ruling as the first case that reviewed the status of IJM workers, finding all elements of the four-fold test satisfied and declaring IJM workers as regular employees. Extensively relied upon for the application of the four-fold test and the effect of continuous rehiring through the IJM work pool.

• ABS-CBN Corp. vs. Concepcion, G.R. No. 230576, October 5, 2020 — Followed, declaring IJM workers as regular employees; clarified that even with the finality of Jalog, the Court is not precluded from revisiting doctrines and precedents.

• Gava, et al. vs. ABS-CBN Broadcasting Corp., G.R. No. 214288, January 26, 2021 — Followed, uniformly declaring IJM workers as regular employees of ABS-CBN.

• ABS-CBN Broadcasting Corp. vs. Tajanlangit, et al., G.R. No. 219508, September 14, 2021 — Followed, uniformly declaring IJM workers as regular employees of ABS-CBN.

• Jalog, et al. vs. ABS-CBN Broadcasting Corp., G.R. No. 198065, October 5, 2011 — Distinguished. The Court affirmed the Court of Appeals' ruling finding 11 IJM workers to be independent contractors, but held that the minute resolution constitutes res judicata only as to the same subject matter and same parties, bearing no binding force on the 1,090 other AIWU members in the present petition.

• Article 232 [226], Labor Code — Vesting the Bureau of Labor Relations and Labor Relations Divisions with original and exclusive authority to act on all inter-union and intra-union conflicts and all disputes, grievances, or problems arising from or affecting labor-management relations in all workplaces. Applied to establish the Bureau's jurisdiction over certification election proceedings and the Mediator-Arbiter's incidental authority to determine employer-employee relationship.

• Article 272 [259], Labor Code — Providing that any party to a certification election may appeal the order or results determined by the Mediator-Arbiter directly to the Secretary of Labor and Employment. Applied to establish the DOLE Secretary's appellate jurisdiction over the Mediator-Arbiter's orders in certification election cases.

• Article 224 [217], Labor Code — Vesting the labor arbiter with original and exclusive jurisdiction over claims for damages and other claims arising from employer-employee relations. Distinguished — the Court held this provision did not vest the labor arbiter with sole authority to decide all matters involving the existence of employer-employee relationship.

• Article 280, Labor Code — Defining regular employees as those engaged to perform activities necessary or desirable in the usual business or trade of the employer, and those casual employees who have rendered at least one year of service. Applied to establish the regular employment status of IJM workers.

• Department Order No. 18-02, series of 2002 — Governing contracting and sub-contracting arrangements. Applied by the DOLE Secretary to determine that the IJM arrangement did not constitute legitimate contracting or sub-contracting, and that the IJM set-up was in the nature of a prohibited in-house agency.

Leonen, Acting C.J. (Chairperson), Lazaro-Javier, and Kho, Jr., JJ., concurred. M. Lopez, J., was on official business.