Fuji Television Network Inc. v. Espiritu

SECOND DIVISION
[G.R. Nos. 204944-45. December 3, 2014.]
FUJI TELEVISION NETWORK, INC., petitioner, vs. ARLENE S.

ESPIRITU, respondent.
DECISION
LEONEN, J : p
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.
We decide this petition for review 1 on certiorari filed by Fuji Television

Network, Inc., seeking the reversal of the Court of Appeals' decision 2 dated
June 25, 2012, affirming with modification the decision 3 of the National Labor
Relations Commission.
In 2005, Arlene S. Espiritu ("Arlene") was engaged by Fuji Television

Network, Inc. ("Fuji") as a news correspondent/producer 4 "tasked to report
Philippine news to Fuji through its Manila Bureau field office." 5 Arlene's
employment contract initially provided for a term of one (1) year but was
successively renewed on a yearly basis with salary adjustment upon every
renewal. 6
Sometime in January 2009, Arlene was diagnosed with lung cancer. 7 She
informed Fuji about her condition. In turn, the Chief of News Agency of Fuji,
Yoshiki Aoki, informed Arlene "that the company will have a problem renewing
her contract" 8 since it would be difficult for her to perform her job.9 She
"insisted that she was still fit to work as certified by her attending physician." 10
After several verbal and written communications, 11 Arlene and Fuji
signed a non-renewal contract on May 5, 2009 where it was stipulated that her
contract would no longer be renewed after its expiration on May 31, 2009. The
contract also provided that the parties release each other from liabilities and
responsibilities under the employment contract. 12 SDTIaE
In consideration of the non-renewal contract, Arlene "acknowledged

receipt of the total amount of US$18,050.00 representing her monthly salary
from March 2009 to May 2009, year-end bonus, mid-year bonus, and separation
pay." 13 However, Arlene affixed her signature on the non-renewal contract with
the initials "U.P." for "under protest." 14
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On May 6, 2009, the day after Arlene signed the non-renewal contract,
she filed a complaint for illegal dismissal and attorney's fees with the National
Capital Region Arbitration Branch of the National Labor Relations Commission.
She alleged that she was forced to sign the non-renewal contract when Fuji
came to know of her illness and that Fuji withheld her salaries and other
benefits for March and April 2009 when she refused to sign. 15
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 equivalent to four (4) years.
16
In the decision 17 dated September 10, 2009, Labor Arbiter Corazon C.

Borbolla dismissed Arlene's complaint. 18 Citing Sonza v. ABS-CBN 19 and
applying the four-fold test, the Labor Arbiter held that Arlene was not Fuji's
employee but an independent contractor. 20
Arlene appealed before the National Labor Relations Commission. In its
decision dated March 5, 2010, the National Labor Relations Commission
reversed the Labor Arbiter's decision. 21 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
Fuji's business. 22 The National Labor Relations Commission ordered Fuji to pay
Arlene backwages, computed from the date of her illegal dismissal. 23 The
dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby
rendered GRANTING the instant appeal. The Decision of the Labor
Arbiter dated 19 September 2009 is hereby REVERSED and SET ASIDE,
and a new one is issued ordering respondents-appellees to pay
complainant-appellant backwages computed from the date of her
illegal dismissal until finality of this Decision.
SO ORDERED. 24
Arlene and Fuji filed separate motions for reconsideration. 25 Both motions
were denied by the National Labor Relations Commission for lack of merit in the
resolution dated April 26, 2010. 26
From the decision of the National Labor Relations Commission, both
parties filed separate petitions for certiorari 27 before the Court of Appeals. The
Court of Appeals consolidated the petitions and considered the following issues
for resolution:
1) Whether or not Espiritu is a regular employee or a fixed-term
contractual employee;
2) Whether or not Espiritu was illegally dismissed; and

3) Whether or not Espiritu is entitled to damages and attorney's
fees. 28
In the assailed decision, the Court of Appeals affirmed the National Labor
Relations Commission with the modification that Fuji immediately reinstate
Arlene to her position as News Producer without loss of seniority rights, and pay
her backwages, 13th-month pay, mid-year and year-end bonuses, sick leave
and vacation leave with pay until reinstated, moral damages, exemplary
damages, attorney's fees, and legal interest of 12% per annum of the total
monetary awards. 29
The Court of Appeals ruled that:
WHEREFORE, for lack of merit, the petition of Fuji Television
Network, Inc. and Yoshiki Aoki is DENIED and the petition of Arlene S.
Espiritu is GRANTED. Accordingly, the Decision dated March 5, 2010 of
the National Labor Relations Commission, 6th Division in NLRC NCR
Case No. 05-06811-09 and its subsequent Resolution dated April 26,
2010 are hereby AFFIRMED with MODIFICATIONS, as follows:
Fuji Television, Inc. is hereby ORDERED to immediately

REINSTATE Arlene S. Espiritu to her position as News Producer without
loss of seniority rights and privileges and to pay her the following:
1. Backwages at the rate of $1,900.00 per month

computed from May 5, 2009 (the date of dismissal), until
reinstated;
2. 13th Month Pay at the rate of $1,900.00 per annum from
the date of dismissal, until reinstated;
3. One and a half (1 1/2) months pay or $2,850.00 as

midyear bonus per year from the date of dismissal, until
reinstated;
4. One and a half (1 1/2) months pay or $2,850.00 as year-

end bonus per year from the date of dismissal, until reinstated;
5. Sick leave of 30 days with pay or $1,900.00 per year

from the date of dismissal, until reinstated; and
6. Vacation leave with pay equivalent to 14 days or

$1,425.00 per annum from date of dismissal, until reinstated.
7. The amount of P100,000.00 as moral damages;

8. The amount of P50,000.00 as exemplary damages;
9. Attorney's fees equivalent to 10% of the total monetary
awards herein stated; and
10. Legal interest of twelve percent (12%) per annum of
the total monetary awards computed from May 5, 2009, until
their full satisfaction.
The Labor Arbiter is hereby DIRECTED to make another re-

computation of the above monetary awards consistent with the above
directives.
SO ORDERED. 30
In arriving at the decision, the Court of Appeals held that Arlene was a
regular employee because she was engaged to perform work that was
necessary or desirable in the business of Fuji, 31 and the successive renewals of
her fixed-term contract resulted in regular employment. 32
According to the Court of Appeals, Sonza does not apply in order to

establish that Arlene was an independent contractor because she was not
contracted on account of any peculiar ability, special talent, or skill. 33 The fact
that everything used by Arlene in her work was owned by Fuji negated the idea
of job contracting. 34
The Court of Appeals also held that Arlene was illegally dismissed
because Fuji failed to comply with the requirements of substantive and
procedural due process necessary for her dismissal since she was a regular
employee. 35
The Court of Appeals found that Arlene did not sign the non-renewal
contract voluntarily and that the contract was a mere subterfuge by Fuji to
secure its position that it was her choice not to renew her contract. She was left
with no choice since Fuji was decided on severing her employment. 36
Fuji filed a motion for reconsideration that was denied in the resolution 37
dated December 7, 2012 for failure to raise new matters. 38 EASIHa
Aggrieved, Fuji filed this petition for review and argued that the Court of
Appeals erred in affirming with modification the National Labor Relations
Commission's decision, holding that Arlene was a regular employee and that
she was illegally dismissed. Fuji also questioned the award of monetary claims,
benefits, and damages. 39
Fuji points out that Arlene was hired as a stringer, and it informed her
that she would remain one. 40 She was hired as an independent contractor as
defined in Sonza. 41 Fuji had no control over her work. 42 The employment
contracts were executed and renewed annually upon Arlene's insistence to
which Fuji relented because she had skills that distinguished her from ordinary
employees. 43 Arlene and Fuji dealt on equal terms when they negotiated and
entered into the employment contracts. 44 There was no illegal dismissal
because she freely agreed not to renew her fixed-term contract as evidenced
by her e-mail correspondences with Yoshiki Aoki. 4 5 In fact, the signing of the
non-renewal contract was not necessary to terminate her employment since
"such employment terminated upon expiration of her contract." 46 Finally, Fuji
had dealt with Arlene in good faith, thus, she should not have been awarded
damages. 47
Fuji alleges that it did not need a permanent reporter since the news
reported by Arlene could easily be secured from other entities or from the
internet. 48 Fuji "never controlled the manner by which she performed her
functions." 49 It was Arlene who insisted that Fuji execute yearly fixed-term
contracts so that she could negotiate for annual increases in her pay. 50
Fuji points out that Arlene reported for work for only five (5) days in
February 2009, three (3) days in March 2009, and one (1) day in April 2009. 51
Despite the provision in her employment contract that sick leaves in excess of
30 days shall not be paid, Fuji paid Arlene her entire salary for the months of
March, April, and May; four (4) months of separation pay; and a bonus for two
and a half months for a total of US$18,050.00. 52 Despite having received the
amount of US$18,050.00, Arlene still filed a case for illegal dismissal. 53
Fuji further argues that the circumstances would show that Arlene was not
illegally dismissed. The decision to not renew her contract was mutually agreed
upon by the parties as indicated in Arlene's e-mail 54 dated March 11, 2009
where she consented to the non-renewal of her contract but refused to sign
anything. 55 Aoki informed Arlene in an e-mail 56 dated March 12, 2009 that she
did not need to sign a resignation letter and that Fuji would pay Arlene's salary
and bonus until May 2009 as well as separation pay. 57
Arlene sent an e-mail dated March 18, 2009 with her version of the non-
renewal agreement that she agreed to sign this time. 58 This attached version
contained a provision that Fuji shall re-hire her if she was still interested to
work for Fuji. 59 For Fuji, Arlene's e-mail showed that she had the power to
bargain. 60
Fuji then posits that the Court of Appeals erred when it held that the
elements of an employer-employee relationship are present, particularly that of
control; 61 that Arlene's separation from employment upon the expiration of her
contract constitutes illegal dismissal; 62 that Arlene is entitled to reinstatement;
63 and that Fuji is liable to Arlene for damages and attorney's fees.64
This petition for review on certiorari under Rule 45 was filed on February
8, 2013. 65 On February 27, 2013, Arlene filed a manifestation 66 stating that
this court may not take jurisdiction over the case since Fuji failed to authorize
Corazon E. Acerden to sign the verification. 67 Fuji filed a comment on the
manifestation 68 on March 9, 2013.
Based on the arguments of the parties, there are procedural and

substantive issues for resolution:
I. Whether the petition for review should be dismissed as Corazon

E. Acerden, the signatory of the verification and certification
of non-forum shopping of the petition, had no authority to
sign the verification and certification on behalf of Fuji;
II. Whether the Court of Appeals correctly determined that no
grave abuse of discretion was committed by the National
Labor Relations Commission when it ruled that Arlene was a
regular employee, not an independent contractor, and that
she was illegally dismissed; and
III. Whether the Court of Appeals properly modified the National
Labor Relations Commission's decision by awarding
reinstatement, damages, and attorney's fees.
The petition should be dismissed. HSTAcI

I
Validity of the verification and certification against forum shopping
In its comment on Arlene's manifestation, Fuji alleges that Corazon was

authorized to sign the verification and certification of non-forum shopping
because Mr. Shuji Yano was empowered under the secretary's certificate to
delegate his authority to sign the necessary pleadings, including the
verification and certification against forum shopping. 69
On the other hand, Arlene points out that the authority given to Mr. Shuji
Yano and Mr. Jin Eto in the secretary's certificate is only for the petition for
certiorari before the Court of Appeals. 70 Fuji did not attach any board
resolution authorizing Corazon or any other person to file a petition for review
on certiorari with this court. 71 Shuji Yano and Jin Eto could not re-delegate the
power that was delegated to them. 72 In addition, the special power of attorney
executed by Shuji Yano in favor of Corazon indicated that she was empowered
to sign on behalf of Shuji Yano, and not on behalf of Fuji. 73
The Rules of Court requires the
submission of verification and
certification against forum shopping
Rule 7, Section 4 of the 1997 Rules of Civil Procedure provides the
requirement of verification, while Section 5 of the same rule provides the
requirement of certification against forum shopping. These sections state:
SEC. 4. Verification. — Except when otherwise specifically
required by law or rule, pleadings need not be under oath, verified or
accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the

pleading and that the allegations therein are true and correct of his
knowledge and belief.
A pleading required to be verified which contains a verification
based on "information and belief," or upon "knowledge, information
and belief," or lacks a proper verification, shall be treated as an
unsigned pleading.
SEC. 5. Certification against forum shopping. — The

plaintiff or principal party shall certify under oath in the complaint or
other initiatory pleading asserting a claim for relief or in a sworn
certification annexed thereto and simultaneously filed therewith: (a)
that he has not theretofore commenced any action or filed any claim
involving the same issues in any court, tribunal or quasi-judicial agency
and, to the best of his knowledge, no such other action or claim is
pending therein; (b) if there is such other pending action or claim, a
complete statement of the present status thereof; and (c) if he should
thereafter learn that the same or similar action or claim has been filed
or is pending, he shall report that fact within five (5) days therefrom to
the court wherein his aforesaid complaint or initiatory pleading has
been filed.
Failure to comply with the foregoing requirements shall not be

curable by mere amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion and after hearing.
The submission of a false certification or non-compliance with any of
the undertakings therein shall constitute indirect contempt of court,
without prejudice to the corresponding administrative and criminal
actions. If the acts of the party or his counsel clearly constitute willful
and deliberate forum shopping, the same shall be ground for summary
dismissal with prejudice and shall constitute direct contempt, as well as
a cause for administrative sanctions.
Section 4 (e) of Rule 45 74 requires that petitions for review should

"contain a sworn certification against forum shopping as provided in the last
paragraph of section 2, Rule 42." Section 5 of the same rule provides that
failure to comply with any requirement in Section 4 is sufficient ground to
dismiss the petition.
Effects of non-compliance
Uy v. Landbank 75 discussed the effect of non-compliance with regard to
verification and stated that:
[t]he requirement regarding verification of a pleading is formal,
not jurisdictional. Such requirement is simply a condition affecting the
form of pleading, the non-compliance of which does not necessarily
render the pleading fatally defective. Verification is simply intended to
secure an assurance that the allegations in the pleading are true and
correct and not the product of the imagination or a matter of
speculation, and that the pleading is filed in good faith. The court may
order the correction of the pleading if the verification is lacking or act
on the pleading although it is not verified, if the attending
circumstances are such that strict compliance with the rules may be
dispensed with in order that the ends of justice may thereby be served.
76 (Citations omitted)
Shipside Incorporated v. Court of Appeals 77 cited the discussion in Uy and

differentiated its effect from non-compliance with the requirement of
certification against forum shopping:
On the other hand, the lack of certification against forum
shopping is generally not curable by the submission thereof after the
filing of the petition. Section 5, Rule 45 of the 1997 Rules of Civil
Procedure provides that the failure of the petitioner to submit the
required documents that should accompany the petition, including the
certification against forum shopping, shall be sufficient ground for the
dismissal thereof. The same rule applies to certifications against forum
shopping signed by a person on behalf of a corporation which are
unaccompanied by proof that said signatory is authorized to file a
petition on behalf of the corporation. 78 (Emphasis supplied)
Effects of substantial compliance
with the requirement of verification
and certification against forum shopping

Although the general rule is that failure to attach a verification and
certification against forum shopping is a ground for dismissal, there are cases
where this court allowed substantial compliance.
I n Loyola v. Court of Appeals, 79 petitioner Alan Loyola submitted the
required certification one day after filing his electoral protest. 80 This court
considered the subsequent filing as substantial compliance since the purpose
of filing the certification is to curtail forum shopping. 81
I n LDP Marketing, Inc. v. Monter , 82 Ma. Lourdes Dela Peña signed the
verification and certification against forum shopping but failed to attach the
board resolution indicating her authority to sign. 83 In a motion for
reconsideration, LDP Marketing attached the secretary's certificate quoting the
board resolution that authorized Dela Peña. 84 Citing Shipside, this court
deemed the belated submission as substantial compliance since LDP Marketing
complied with the requirement; what it failed to do was to attach proof of Dela
Peña's authority to sign. 85
Havtor Management Phils., Inc. v. National Labor Relations Commission 86

a n d General Milling Corporation v. National Labor Relations Commission 87
involved petitions that were dismissed for failure to attach any document
showing that the signatory on the verification and certification against forum-
shopping was authorized. 88 In both cases, the secretary's certificate was
attached to the motion for reconsideration. 89 This court considered the
subsequent submission of proof indicating authority to sign as substantial
compliance. 90
Altres v. Empleo 91 summarized the rules on verification and certification

against forum shopping in this manner:
For the guidance of the bench and bar, the Court restates in
capsule form the jurisprudential pronouncements . . . respecting non-
compliance with the requirement on, or submission of defective,
verification and certification against forum shopping:
1) A distinction must be made between non-compliance with the
requirement on or submission of defective verification, and non-
compliance with the requirement on or submission of defective
certification against forum shopping.
2) As to verification, non-compliance therewith or a defect therein does
not necessarily render the pleading fatally defective. The court
may order its submission or correction or act on the pleading if
the attending circumstances are such that strict compliance with
the Rule may be dispensed with in order that the ends of justice
may be served thereby.
3) Verification is deemed substantially complied with when one who
has ample knowledge to swear to the truth of the allegations in
the complaint or petition signs the verification, and when matters
alleged in the petition have been made in good faith or are true
and correct.
4) As to certification against forum shopping, non-compliance therewith
or a defect therein, unlike in verification, is generally not curable
by its subsequent submission or correction thereof, unless there
is a need to relax the Rule on the ground of "substantial
compliance" or presence of "special circumstances or compelling
reasons." HSDIaC
5) The certification against forum shopping must be signed by all the

plaintiffs or petitioners in a case; otherwise, those who did not
sign will be dropped as parties to the case. Under reasonable or
justifiable circumstances, however, as when all the plaintiffs or
petitioners share a common interest and invoke a common cause
of action or defense, the signature of only one of them in the
certification against forum shopping substantially complies with
the Rule.
6) Finally, the certification against forum shopping must be executed
by the party-pleader, not by his counsel. If, however, for
reasonable or justifiable reasons, the party-pleader is unable to
sign, he must execute a Special Power of Attorney designating
his counsel of record to sign on his behalf. 92
There was substantial compliance

by Fuji Television Network, Inc.
Being a corporation, Fuji exercises its power to sue and be sued through
its board of directors or duly authorized officers and agents. Thus, the physical
act of signing the verification and certification against forum shopping can only
be done by natural persons duly authorized either by the corporate by-laws or a
board resolution. 93
In its petition for review on certiorari, Fuji attached Hideaki Ota's
secretary's certificate, 94 authorizing Shuji Yano and Jin Eto to represent and
sign for and on behalf of Fuji. 95 The secretary's certificate was duly
authenticated 96 by Sulpicio Confiado, Consul-General of the Philippines in
Japan. Likewise attached to the petition is the special power of attorney
executed by Shuji Yano, authorizing Corazon to sign on his behalf. 97 The
verification and certification against forum shopping was signed by Corazon. 98
Arlene filed the manifestation dated February 27, 2013, arguing that the
petition for review should be dismissed because Corazon was not duly
authorized to sign the verification and certification against forum shopping.
Fuji filed a comment on Arlene's manifestation, stating that Corazon was
properly authorized to sign. On the basis of the secretary's certificate, Shuji
Yano was empowered to delegate his authority.
Quoting the board resolution dated May 13, 2010, the secretary's
certificate states:
(a) The Corporation shall file a Petition for Certiorari with the
Court of Appeals, against Philippines' National Labor Relations
Commission ("NLRC") and Arlene S. Espiritu, pertaining to NLRC-NCR
Case No. LAC 00-002697-09, RAB No. 05-06811-00 and entitled
"Arlene S. Espiritu v. Fuji Television Network, Inc./Yoshiki
Aoki", and participate in any other subsequent proceeding that may
necessarily arise therefrom, including but not limited to the filing of
appeals in the appropriate venue;
(b) Mr. Shuji Yano and Mr. Jin Eto be authorized, as they are
hereby authorized, to verify and execute the certification against non-
forum shopping which may be necessary or required to be attached to
any pleading to [sic] submitted to the Court of Appeals; and the
authority to so verify and certify for the Corporation in favor of the said
persons shall subsist and remain effective until the termination of the
said case;
xxx xxx xxx
(d) Mr. Shuji Yano and Mr. Jin Eto be authorized, as they are
hereby authorized, to represent and appear on behalf the [sic]
Corporation in all stages of the [sic] this case and in any other
proceeding that may necessarily arise thereform [sic], and to act in the
Corporation's name, place and stead to determine, propose, agree,
decide, do, and perform any and all of the following:
1. The possibility of amicable settlement or of submission to
alternative mode of dispute resolution;
2. The simplification of the issue;
3. The necessity or desirability of amendments to the pleadings;
4. The possibility of obtaining stipulation or admission of facts
and documents; and
5. Such other matters as may aid in the prompt disposition of the
action. 99 (Emphasis in the original; Italics omitted)
Shuji Yano executed a special power of attorney appointing Ms. Ma.

Corazon E. Acerden and Mr. Moises A. Rollera as his attorneys-in-fact. 100 The
special power of attorney states:
That I, SHUJI YANO , of legal age, Japanese national, with office
address at 2-4-8 Daiba, Minato-Ku, Tokyo, 137-8088 Japan, and being
the representative of Fuji TV, INc., [sic] (evidenced by the attached
Secretary's Certificate) one of the respondents in NLRC-NCR Case No.
05-06811-00 entitled "Arlene S. Espiritu v. Fuji Television
Network, Inc./Yoshiki Aoki", and subsequently docketed before
the Court of Appeals as C.A. G.R. S.P. No. 114867
(Consolidated with SP No. 114889) do hereby make, constitute and
appoint Ms. Ma. Corazon E. Acerden and Mr. Moises A. Rollera as
my true and lawful attorneys-in-fact for me and my name, place and
stead to act and represent me in the above-mentioned case, with
special power to make admission/s and stipulations and/or to make
and submit as well as to accept and approve compromise proposals
upon such terms and conditions and under such covenants as my
attorney-in-fact may deem fit, and to engage the services of Villa
Judan and Cruz Law Offices as the legal counsel to represent the
Company in the Supreme Court; IcHEaA

The said Attorneys-in-Fact are hereby further authorized to
make, sign, execute and deliver such papers or documents as may be
necessary in furtherance of the power thus granted, particularly to sign
and execute the verification and certification of non-forum shopping
needed to be filed. 101 (Emphasis in the original)
In its comment 102 on Arlene's manifestation, Fuji argues that Shuji Yano
could further delegate his authority because the board resolution empowered
him to "act in the Corporation's name, place and stead to determine, propose,
agree, decided [sic], do and perform any and all of the following: . . . such other
matters as may aid in the prompt disposition of the action." 103
To clarify, Fuji attached a verification and certification against forum
shopping, but Arlene questions Corazon's authority to sign. Arlene argues that
the secretary's certificate empowered Shuji Yano to file a petition for certiorari
before the Court of Appeals, and not a petition for review before this court, and
that since Shuji Yano's authority was delegated to him, he could not further
delegate such power. Moreover, Corazon was representing Shuji Yano in his
personal capacity, and not in his capacity as representative of Fuji.
A review of the board resolution quoted in the secretary's certificate
shows that Fuji shall "file a Petition for Certiorari with the Court of Appeals" 104
and "participate in any other subsequent proceeding that may necessarily arise
therefrom, including but not limited to the filing of appeals in the appropriate
venue," 105 and that Shuji Yano and Jin Eto are authorized to represent Fuji "in
any other proceeding that may necessarily arise thereform [sic]." 106 As
pointed out by Fuji, Shuji Yano and Jin Eto were also authorized to "act in the
Corporation's name, place and stead to determine, propose, agree, decide, do,
and perform any and all of the following: . . . 5. Such other matters as may aid
in the prompt disposition of the action." 107
Considering that the subsequent proceeding that may arise from the
petition for certiorari with the Court of Appeals is the filing of a petition for
review with this court, Fuji substantially complied with the procedural
requirement.
On the issue of whether Shuji Yano validly delegated his authority to

Corazon, Article 1892 of the Civil Code of the Philippines states:
ART. 1892. The agent may appoint a substitute if the principal
has not prohibited him from doing so; but he shall be responsible for
the acts of the substitute:
(1) When he was not given the power to appoint one;
(2) When he was given such power, but without designating the
person, and the person appointed was notoriously 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 Shuji Yano is prohibited
from appointing a substitute. In fact, he is empowered to do acts that will aid in
the resolution of this case.
This court has recognized that there are instances when officials or
employees of a corporation can sign the verification and certification against
forum shopping without a board resolution. In Cagayan Valley Drug Corporation
v. CIR, 108 it was held that:
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 resolution: (1) the Chairperson of the Board of Directors, (2)
the President of a corporation, (3) the General Manager or Acting
General Manager, (4) Personnel Officer, and (5) an Employment
Specialist in a labor case.
While the above cases 109 do not provide a complete listing of

authorized signatories to the verification and certification required by
the rules, the determination of the sufficiency of the authority was done
on a case to case basis. The rationale applied in the foregoing cases is
to justify the authority of corporate officers or representatives of the
corporation to sign the verification or certificate against forum
shopping, being 'in a position to verify the truthfulness and correctness
of the allegations in the petition.' 110
Corazon's affidavit 111 states that she is the "office manager and resident
interpreter of the Manila Bureau of Fuji Television Network, Inc." 112 and that
she has "held the position for the last twenty-three years." 113
As the office manager for 23 years, Corazon can be considered as having

knowledge of all matters in Fuji's Manila Bureau Office and is in a position to
verify "the truthfulness and the correctness of the allegations in the Petition."
114
Thus, Fuji substantially complied with the requirements of verification and

certification against forum shopping.
Before resolving the substantive issues in this case, this court will discuss
the procedural parameters of a Rule 45 petition for review in labor cases.
II
Procedural parameters of petitions for review in labor cases
Article 223 of the Labor Code 115 does not provide any mode of appeal for
decisions of the National Labor Relations Commission. It merely states that "
[t]he decision of the Commission shall be final and executory after ten (10)
calendar days from receipt thereof by the parties." Being final, it is no longer
appealable. However, the finality of the National Labor Relations Commission's
decisions does not mean that there is no more recourse for the parties.
I n St. Martin Funeral Home v. National Labor Relations Commission, 116

this court cited several cases 117 and rejected the notion that this court had no
jurisdiction to review decisions of the National Labor Relations Commission. It
stated that this court had the power to review the acts of the National Labor
Relations Commission to see if it kept within its jurisdiction in deciding cases
and also as a form of check and balance. 118 This court then clarified that
judicial review of National Labor Relations Commission decisions shall be by
way of a petition for certiorari under Rule 65. Citing the doctrine of hierarchy of
courts, it further ruled that such petitions shall be filed before the Court of
Appeals. From the Court of Appeals, an aggrieved party may file a petition for
review on certiorari under Rule 45.
A petition for certiorari under Rule 65 is an original action where the issue
is limited to grave abuse of discretion. As an original action, it cannot be
considered as a continuation of the proceedings of the labor tribunals.
On the other hand, a petition for review on certiorari under Rule 45 is a

mode of appeal where the issue is limited to questions of law. In labor cases, a
Rule 45 petition is limited to reviewing whether the Court of Appeals correctly
determined the presence or absence of grave abuse of discretion and deciding
other jurisdictional errors of the National Labor Relations Commission. 119
I n Odango v. National Labor Relations Commission , 120 this court

explained that a petition for certiorari is an extraordinary remedy that is
"available only and restrictively in truly exceptional cases" 121 and that its sole
office "is the correction of errors of jurisdiction including commission of grave
abuse of discretion amounting to lack or excess of jurisdiction." 122 A petition
for certiorari does not include a review of findings of fact since the findings of
the National Labor Relations Commission are accorded finality. 123 In cases
where the aggrieved party assails the National Labor Relations Commission's
findings, he or she must be able to show that the Commission "acted
capriciously and whimsically or in total disregard of evidence material to the
controversy." 124
When a decision of the Court of Appeals under a Rule 65 petition is
brought to this court by way of a petition for review under Rule 45, only
questions of law may be decided upon. As held in Meralco Industrial v. National
Labor Relations Commission: 125
This Court is not a trier of facts. Well-settled is the rule that the
jurisdiction of this Court in a petition for review on certiorari under Rule
45 of the Revised Rules of Court is limited to reviewing only errors of
law, not of fact, unless the factual findings complained of are
completely devoid of support from the evidence on record, or the
assailed judgment is based on a gross misapprehension of facts.
Besides, factual findings of quasi-judicial agencies like the NLRC, when
affirmed by the Court of Appeals, are conclusive upon the parties and
binding on this Court. 126
Career Philippines v. Serna, 127 citing Montoya v. Transmed , 128 is

instructive on the parameters of judicial review under Rule 45:
As a rule, only questions of law may be raised in a Rule 45
petition. In one case, we discussed the particular parameters of a Rule
45 appeal from the CA's Rule 65 decision on a labor case, as follows:

In a Rule 45 review, we consider the correctness of the
assailed CA decision, in contrast with the review for jurisdictional
error that we undertake under Rule 65. Furthermore, Rule 45
limits us to the review of questions of law raised against the
assailed CA decision. In ruling for legal correctness, we have to
view the CA decision in the same context that the petition for
certiorari it ruled upon was presented to it; we have to examine
the CA decision from the prism of whether it correctly
determined the presence or absence of grave abuse of discretion
in the NLRC decision before it, not on the basis of whether the
NLRC decision on the merits of the case was correct . In other
words, we have to be keenly aware that the CA undertook a Rule
65 review, not a review on appeal, of the NLRC decision
challenged before it. 129 (Emphasis in the original)
Justice Brion's dissenting opinion in Abbott Laboratories, Philippines v.

Alcaraz 130 discussed that in petitions for review under Rule 45, "the Court
simply determines whether the legal correctness of the CA's finding that the
NLRC ruling . . . had basis in fact and in law." 131 In this kind of petition, the
proper question to be raised is, "Did the CA correctly determine whether
the NLRC committed grave abuse of discretion in ruling on the case?"
132
Justice Brion's dissenting opinion also laid down the following guidelines:
aATEDS
If the NLRC ruling has basis in the evidence and the applicable
law and jurisprudence, then no grave abuse of discretion exists and the
CA should so declare and, accordingly, dismiss the petition. If grave
abuse of discretion exists, then the CA must grant the petition and
nullify the NLRC ruling, entering at the same time the ruling that is
justified under the evidence and the governing law, rules and
jurisprudence. In our Rule 45 review, this Court must deny the petition
if it finds that the CA correctly acted. 133 (Emphasis in the original)
These parameters shall be used in resolving the substantive issues in this

petition.
III
Determination of employment status; burden of proof
In this case, there is no question that Arlene rendered services to Fuji.
However, Fuji alleges that Arlene was an independent contractor, while Arlene
alleges that she was a regular employee. To resolve this issue, we ascertain
whether an employer-employee relationship existed between Fuji and Arlene.
This court has often used the four-fold test to determine the existence of
an employer-employee relationship. Under the four-fold test, the "control test"
is the most important. 134 As to how the elements in the four-fold test are
proven, this court has discussed that:
[t]here is no hard and fast rule designed to establish the
aforesaid elements. Any competent and relevant evidence to prove the
relationship may be admitted. Identification cards, cash vouchers,
social security registration, appointment letters or employment
contracts, payrolls, organization charts, and personnel lists, serve as
evidence of employee status. 135
If the facts of this case vis-à-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. Relative to this, we
shall analyze Arlene's fixed-term contract and determine whether it supports
her argument that she was a regular employee, or the argument of Fuji that
she was an independent contractor. We shall scrutinize whether the nature of
Arlene's work was necessary and desirable to Fuji's business or whether Fuji
only needed the output of her work. If the circumstances show that Arlene's
work was necessary and desirable to Fuji, then she is presumed to be a regular
employee. The burden of proving that she was an independent contractor lies
with Fuji.
In labor cases, the quantum of proof required is substantial evidence. 136

"Substantial evidence" has been defined as "such amount of relevant evidence
which a reasonable mind might accept as adequate to justify a conclusion." 137
If Arlene was a regular employee, we then determine whether she was
illegally dismissed. In complaints for illegal dismissal, the burden of proof is on
the employee to prove the fact of dismissal. 138 Once the employee establishes
the fact of dismissal, supported by substantial evidence, the burden of proof
shifts to the employer to show that there was a just or authorized cause for the
dismissal and that due process was observed. 139
IV
Whether the Court of Appeals correctly affirmed the National Labor
Relations Commission's finding that Arlene was a regular employee
Fuji alleges that Arlene was an independent contractor, citing Sonza v.

ABS-CBN and relying on the following facts: (1) she was hired because of her
skills; (2) her salary was US$1,900.00, which is higher than the normal rate; (3)
she had the power to bargain with her employer; and (4) her contract was for a
fixed term. According to Fuji, the Court of Appeals erred when it ruled that
Arlene was forced to sign the non-renewal agreement, considering that she
sent an email with another version of the non-renewal agreement. 140 Further,
she is not entitled to moral damages and attorney's fees because she acted in
bad faith when she filed a labor complaint against Fuji after receiving
US$18,050.00 representing her salary and other benefits. 141
Arlene argues that she was a regular employee because Fuji had control
and supervision over her work. The news events that she covered were all
based on the instructions of Fuji. 142 She maintains that the successive renewal
of her employment contracts for four (4) years indicates that her work was
necessary and desirable. 143 In addition, Fuji's payment of separation pay
equivalent to one (1) month's pay per year of service indicates that she was a
regular employee. 144 To further support her argument that she was not an
independent contractor, she states that Fuji owns the laptop computer and
mini-camera that she used for work. 145
Arlene also argues that Sonza is not applicable because she was a plain
reporter for Fuji, unlike Jay Sonza who was a news anchor, talk show host, and
who enjoyed a celebrity status. 146
On her illness, Arlene points out that it was not a ground for her dismissal
because her attending physician certified that she was fit to work. 147
Arlene admits that she signed the non-renewal agreement with quitclaim,
not because she agreed to its terms, but because she was not in a position to
reject the non-renewal agreement. Further, she badly needed the salary
withheld for her sustenance and medication. 148 She posits that her acceptance
of separation pay does not bar filing of a complaint for illegal dismissal. 149
Article 280 of the Labor Code provides that:
Art. 280. Regular and casual employment . — The provisions
of written agreement to the contrary notwithstanding 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 or desirable in the usual business or trade
of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which
has been determined at the time of the engagement of the employee
or where the work or services to be performed is seasonal in nature
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 paragraph; Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, 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, project, seasonal, and

casual. It further classifies regular employees into two kinds: (1) those
"engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer"; and (2) casual employees who have
"rendered at least one year of service, whether such service is continuous or
broken."
Another classification of employees, i.e., employees with fixed-term
contracts, was recognized in Brent School, Inc. v. Zamora 150 where this court
discussed that:
Logically, the decisive determinant in the term employment
should not be the activities that the employee is called upon to
perform, but the day certain agreed upon by the parties for the
commencement and termination of their employment relationship, a
day certain being understood to be "that which must necessarily come,
although it may not be known when." 151 (Emphasis in the original)
This court further discussed that there are employment contracts where
"a fixed term is an essential and natural appurtenance" 152 such as overseas
employment contracts and officers in educational institutions. 153
Distinctions among fixed-term
employees, independent contractors,
and regular employees
GMA Network, Inc. v. Pabriga 154 expounded the doctrine on fixed-term

contracts laid down in Brent in the following manner: TSDHCc
Cognizant of the possibility of abuse in the utilization of fixed-

term employment contracts, we emphasized in Brent that where from
the circumstances it is apparent that the periods have been imposed to
preclude acquisition of tenurial security by the employee, they should
be struck down as contrary to public policy or morals. We thus laid
down indications or criteria under which "term employment" cannot be
said to be in circumvention of the law on security of tenure, namely:
1) The fixed period of employment was knowingly and
voluntarily agreed upon by the parties without any force, duress,
or improper pressure being brought to bear upon the employee
and absent any other circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the

employee dealt with each other on more or less equal terms with
no moral dominance exercised by the former or the latter.
These indications, which must be read together, make the Brent

doctrine applicable only in a few special cases wherein the employer
and employee are on more or less in equal footing in entering into the
contract. The reason for this is evident: when a prospective employee,
on account of special skills or market forces, is in a position to make
demands upon the prospective employer, such prospective employee
needs less protection than the ordinary worker. Lesser limitations on
the parties' freedom of contract are thus required for the protection of
the employee. 155 (Citations omitted)
For as long as the guidelines laid down in Brent are satisfied, this court
will recognize the validity of the fixed-term contract.
In Labayog v. M.Y. San Biscuits, Inc. , 156 this court upheld the fixed-term
employment of petitioners because from the time they were hired, they were
informed that their engagement was for a specific period. This court stated
that:
[s]imply put, petitioners were not regular employees. While their
employment as mixers, packers and machine operators was necessary
and desirable in the usual business of respondent company, they were
employed temporarily only, during periods when there was heightened
demand for production. Consequently, there could have been no illegal
dismissal when their services were terminated on expiration of their
contracts. There was even no need for notice of termination because
they knew exactly when their contracts would end. Contracts of
employment for a fixed period terminate on their own at the end of
such period.
Contracts of employment for a fixed period are not unlawful.
What is objectionable is the practice of some scrupulous employers
who try to circumvent the law protecting workers from the capricious
termination of employment. 157 (Citation omitted)
Caparoso v. Court of Appeals 158 upheld the validity of the fixed-term

contract of employment. Caparoso and Quindipan were hired as delivery men
for three (3) months. At the end of the third month, they were hired on a
monthly basis. In total, they were hired for five (5) months. They filed a
complaint for illegal dismissal. 159 This court ruled that there was no evidence
indicating that they were pressured into signing the fixed-term contracts. There
was likewise no proof that their employer was engaged in hiring workers for
five (5) months only to prevent regularization. In the absence of these facts, the
fixed-term contracts were upheld as valid. 160
On the other hand, an independent contractor is defined as:

. . . one who carries on a distinct and independent business and
undertakes to perform the job, work, or service on its own account and
under one's own responsibility according to one's own manner and
method, free from the control and direction of the principal in all
matters connected with the performance of the work except as to the
results thereof. 161
In view of the "distinct and independent business" of independent

contractors, no employer-employee relationship exists between independent
contractors and their principals.
Independent contractors are recognized under Article 106 of the Labor

Code:
Art. 106. Contractor or subcontractor . — Whenever an
employer enters into a contract with another person for the
performance of the former's work, the employees of the contractor and
of the latter's subcontractor, if any, shall be paid in accordance with
the provisions of this Code.
xxx xxx xxx
The Secretary of Labor and Employment may, by appropriate

regulations, restrict or prohibit the contracting-out of labor to protect
the rights of workers established under this Code. In so prohibiting or
restricting, he may make appropriate distinctions between labor-only
contracting and job contracting as well as differentiations within these
types of contracting and determine who among the parties involved
shall be considered the employer for purposes of this Code, to prevent
any violation or circumvention of any provision of this Code.
There is "labor-only" contracting where the person supplying
workers to an employer does not have substantial capital or investment
in the form of tools, equipment, machineries, work premises, among
others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal
business of such employer. In such cases, the person or intermediary
shall be considered merely as an agent of the employer who shall be
responsible to the workers in the same manner and extent as if the
latter were directly employed by him.
In Department Order No. 18-A, Series of 2011, of the Department of Labor

and Employment, a contractor is defined as having:
Section 3. . . .
xxx xxx xxx

(c) . . . an arrangement whereby a principal agrees to put out or
farm out with a contractor the performance or completion of a specific
job, work or service within a definite or predetermined period,
regardless of whether such job, work or service is to be performed or
completed within or outside the premises of the principal.
This department order also states that there is a trilateral relationship in

legitimate job contracting and subcontracting arrangements among the
principal, contractor, and employees of the contractor. There is no employer-
employee relationship between the contractor and principal who engages the
contractor's services, but there is an employer-employee relationship between
the contractor and workers hired to accomplish the work for the principal. 162
Jurisprudence has recognized another kind of independent contractor:

individuals with unique skills and talents that set them apart from ordinary
employees. There is no trilateral relationship in this case because the
independent contractor himself or herself performs the work for the principal. In
other words, the relationship is bilateral.
In Orozco v. Court of Appeals, 163 Wilhelmina Orozco was a columnist for
the Philippine Daily Inquirer. This court ruled that she was an independent
contractor because of her "talent, skill, experience, and her unique viewpoint
as a feminist advocate." 164 In addition, the Philippine Daily Inquirer did not
have the power of control over Orozco, and she worked at her own pleasure. 165
Semblante v. Court of Appeals 166 involved a masiador 167 and a
sentenciador. 168 This court ruled that "petitioners performed their functions as
masiador and sentenciador free from the direction and control of respondents"
169 and that the masiador and sentenciador "relied mainly on their 'expertise
that is characteristic of the cockfight gambling.'" 170 Hence, no employer-
employee relationship existed.
Bernarte v. Philippine Basketball Association 171 involved a basketball

referee. This court ruled that "a referee is an independent contractor, whose
special skills and independent judgment are required specifically for such
position and cannot possibly be controlled by the hiring party." 172
In these cases, the workers were found to be independent contractors

because of their unique skills and talents and the lack of control over the
means and methods in the performance of their work.
In other words, there are different kinds of independent contractors:
those engaged in legitimate job contracting and those who have unique skills
and talents that set them apart from ordinary employees.
Since no employer-employee relationship exists between independent

contractors and their principals, their contracts are governed by the Civil Code
provisions on contracts and other applicable laws. 173
A contract is defined as "a meeting of minds between two persons

whereby one binds himself, with respect to the other, to give something or to
render some service." 174 Parties are free to stipulate on terms and conditions
in contracts as long as these "are not contrary to law, morals, good customs,
public order, or public policy." 175 This presupposes that the parties to a
contract are on equal footing. They can bargain on terms and conditions until
they are able to reach an agreement.
On the other hand, contracts of employment are different and have a

higher level of regulation because they are impressed with public interest.
Article XIII, Section 3 of the 1987 Constitution provides full protection to labor:
ARTICLE XIII. SOCIAL JUSTICE AND HUMAN RIGHTS. —
xxx xxx xxx

LABOR
Section 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment
and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization,

collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law. They
shall be entitled to security of tenure, humane conditions of work, and
a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by
law.
The State shall promote the principle of shared responsibility

between workers and employers and the preferential use of voluntary
modes in settling disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and

employers, recognizing the right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns on
investments, and to expansion and growth.
Apart from the constitutional guarantee of protection to labor, Article

1700 of the Civil Code states:
ART. 1700. The relations between capital and labor are not
merely contractual. They are so impressed with public interest that
labor contracts must yield to the common good. Therefore, such
contracts are subject to the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.
In contracts of employment, the employer and the employee are not on
equal footing. Thus, it is subject to regulatory review by the labor tribunals and
courts of law. The law serves to equalize the unequal. The labor force is a
special class that is constitutionally protected because of the inequality
between capital and labor. 176 This presupposes that the labor force is weak.
However, the level of protection to labor should vary from case to case;
otherwise, the state might appear to be too paternalistic in affording protection
to labor. As stated in GMA Network, Inc. v. Pabriga, the ruling in Brent applies in
cases where it appears that the employer and employee are on equal footing.
177 This recognizes the fact that not all workers are weak. To reiterate the
discussion in GMA Network v. Pabriga:
The reason for this is evident: when a prospective employee, on
account of special skills or market forces, is in a position to make
demands upon the prospective employer, such prospective employee
needs less protection than the ordinary worker. Lesser limitations on
the parties' freedom of contract are thus required for the protection of
the employee. 178
The level of protection to labor must be determined on the basis of the

nature of the work, qualifications of the employee, and other relevant
circumstances.
For example, a prospective employee with a bachelor's degree cannot be

said to be on equal footing with a grocery bagger with a high school diploma.
Employees who qualify for jobs requiring special qualifications such as "
[having] a Master's degree" or "[having] passed the licensure exam" are
different from employees who qualify for jobs that require "[being a] high
school graduate; with pleasing personality." In these situations, it is clear that
those with special qualifications can bargain with the employer on equal
footing. Thus, the level of protection afforded to these employees should be
different.
Fuji's argument that Arlene was an independent contractor under a fixed-

term contract is contradictory. Employees under fixed-term contracts cannot be
independent contractors because in fixed-term contracts, an employer-
employee relationship exists. The test in this kind of contract is not the
necessity grid desirability of the employee's activities, "but the day certain
agreed upon by the parties for the commencement and termination of the
employment relationship." 179 For regular employees, the necessity and
desirability of their work in the usual course of the employer's business are the
determining factors. On the other hand, independent contractors do not have
employer-employee relationships with their principals.
Hence, before the status of employment can be determined, the

existence of an employer-employee relationship must be established.
The four-fold test 180 can be used in determining whether an employer-

employee relationship exists. The elements of the four-fold test are the
following: (1) the selection and engagement of the employee; (2) the payment
of wages; (3) the power of dismissal; and (4) the power of control, which is the
most important element. 181
The "power of control" was explained by this court in Corporal, Sr. v.

National Labor Relations Commission: 182 ETIDaH
The power to control refers to the existence of the power and not
necessarily to the actual exercise thereof, nor is it essential for the
employer to actually supervise the performance of duties of the
employee. It is enough that the employer has the right to wield that
power. 183 (Citation omitted)
Orozco v. Court of Appeals further elucidated the meaning of "power of

control" and stated the following:
Logically, the line should be drawn between rules that merely
serve as guidelines towards the achievement of the mutually desired
result without dictating the means or methods to be employed in
attaining it, and those that control or fix the methodology and bind or
restrict the party hired to the use of such means. The first, which aim
only to promote the result, create no employer-employee relationship
unlike the second, which address both the result and the means used
to achieve it. . . . 184 (Citation omitted)
I n Locsin, et al. v. Philippine Long Distance Telephone Company , 185 the

"power of control" was defined as "[the] right to control not only the end to be
achieved but also the means to be used in reaching such end." 186
Here, the Court of Appeals applied Sonza v. ABS-CBN and Dumpit-Murillo
v. Court of Appeals 187 in determining whether Arlene was an independent
contractor or a regular employee.
In deciding Sonza and Dumpit-Murillo, this court used the four-fold test.
Both cases involved newscasters and anchors. However, Sonza was held to be
an independent contractor, while Dumpit-Murillo was held to be a regular
employee.
Comparison of the Sonza and

Dumpit-Murillo cases using
the four-fold test
Sonza was engaged by ABS-CBN in view of his "unique skills, talent and
celebrity status not possessed by ordinary employees." 188 His work was for
radio and television programs. 189 On the other hand, Dumpit-Murillo was hired
by ABC as a newscaster and co-anchor. 190
Sonza's talent fee amounted to P317,000.00 per month, which this court
found to be a substantial amount that indicated he was an independent
contractor rather than a regular employee. 191 Meanwhile, Dumpit-Murillo's
monthly salary was P28,000.00, a very low amount compared to what Sonza
received. 192
Sonza was unable to prove that ABS-CBN could terminate his services
apart from breach of contract. There was no indication that he could be
terminated based on just or authorized causes under the Labor Code. In
addition, ABS-CBN continued to pay his talent fee under their agreement, even
though his programs were no longer broadcasted. 193 Dumpit-Murillo was found
to have been illegally dismissed by her employer when they did not renew her
contract on her fourth year with ABC. 194
I n Sonza, this court ruled that ABS-CBN did not control how Sonza
delivered his lines, how he appeared on television, or how he sounded on radio.
195 All that Sonza needed was his talent. 196 Further, "ABS-CBN could not
terminate or discipline SONZA even if the means and methods of performance

of his work . . . did not meet ABS-CBN's approval." 197 In Dumpit-Murillo, the
duties and responsibilities enumerated in her contract was a clear indication
that ABC had control over her work. 198
Application of the four-fold test
The Court of Appeals did not err when it relied on the ruling inDumpit-
Murillo and affirmed the ruling of the National Labor Relations Commission
finding that Arlene was a regular employee. Arlene was hired by Fuji as a news
producer, but there was no showing that she was hired because of unique skills
that would distinguish her from ordinary employees. Neither was there any
showing that she had a celebrity status. Her monthly salary amounting to
US$1,900.00 appears to be a substantial sum, especially if compared to her
salary when she was still connected with GMA. 199 Indeed, wages may indicate
whether one is an independent contractor. Wages may also indicate that an
employee is able to bargain with the employer for better pay. However, wages
should not be the conclusive factor in determining whether one is an employee
or an independent contractor.
Fuji had the power to dismiss Arlene, as provided for in paragraph 5 of her
professional employment contract. 200 Her contract also indicated that Fuji had
control over her work because she was required to work for eight (8) hours from
Monday to Friday, although on flexible time. 201 Sonza was not required to work
for eight (8) hours, while Dumpit-Murillo had to be in ABC to do both on-air and
off-air tasks.
On the power to control, Arlene alleged that Fuji gave her instructions on
what to report. 202 Even the mode of transportation in carrying out her
functions was controlled by Fuji. Paragraph 6 of her contract states:
6. During the travel to carry out work, if there is change of place or
change of place of work, the train, bus, or public transport shall
be used for the trip. If the Employee uses the private car during
the work and there is an accident the Employer shall not be
responsible for the damage, which may be caused to the
Employee. 203
Thus, the Court of Appeals did not err when it upheld the findings of the
National Labor Relations Commission that Arlene was not an independent
contractor.
Having established that an employer-employee relationship existed

between Fuji and Arlene, the next questions for resolution are the following: Did
the Court of Appeals correctly affirm the National Labor Relations Commission
that Arlene had become a regular employee? Was the nature of Arlene's work
necessary and desirable for Fuji's usual course of business?
Arlene was a regular employee

with a fixed-term contract
The test for determining regular employment is whether there is a

reasonable connection between the employee's activities and the usual
business of the employer. Article 280 provides that the nature of work must be
"necessary or desirable in the usual business or trade of the employer" as the
test for determining regular employment. As stated in ABS-CBN Broadcasting
Corporation v. Nazareno: 204
In determining whether an employment should be considered
regular or non-regular, the applicable test is the reasonable connection
between the particular activity performed by the employee in relation
to the usual business or trade of the employer. The standard, supplied
by the law itself, is whether the work undertaken is necessary or
desirable in the usual business or trade of the employer, a fact that
can be assessed by looking into the nature of the services rendered
and its relation to the general scheme under which the business or
trade is pursued in the usual course. It is distinguished from a specific
undertaking that is divorced from the normal activities required in
carrying on the particular business or trade. 205
However, there may be a situation where an employee's work is

necessary but is not always desirable in the usual course of business of the
employer. In this situation, there is no regular employment.
I n San Miguel Corporation v. National Labor Relations Commission, 206

Francisco de Guzman was hired to repair furnaces at San Miguel Corporation's
Manila glass plant. He had a separate contract for every furnace that he
repaired. He filed a complaint for illegal dismissal three (3) years after the end
of his last contract. 207 In ruling that de Guzman did not attain the status of a
regular employee, this court explained: DaIACS
Note that the plant where private respondent was employed for
only seven months is engaged in the manufacture of glass, an integral
component of the packaging and manufacturing business of petitioner.
The process of manufacturing glass requires a furnace, which has a
limited operating life. Petitioner resorted to hiring project or fixed term
employees in having said furnaces repaired since said activity is not
regularly performed. Said furnaces are to be repaired or overhauled
only in case of need and after being used continuously for a varying
period of five (5) to ten (10) years.
In 1990, one of the furnaces of petitioner required repair and
upgrading. This was an undertaking distinct and separate from
petitioner's business of manufacturing glass. For this purpose,
petitioner must hire workers to undertake the said repair and
upgrading. . . .
xxx xxx xxx
Clearly, private respondent was hired for a specific project that
was not within the regular business of the corporation. For petitioner is
not engaged in the business of repairing furnaces. Although the activity
was necessary to enable petitioner to continue manufacturing glass,
the necessity therefor arose only when a particular furnace reached
the end of its life or operating cycle. Or, as in the second undertaking,
when a particular furnace required an emergency repair. In other
words, the undertakings where private respondent was hired primarily
as helper/bricklayer have specified goals and purposes which are
fulfilled once the designated work was completed. Moreover, such
undertakings were also identifiably separate and distinct from the
usual, ordinary or regular business operations of petitioner, which is
glass manufacturing. These undertakings, the duration and scope of
which had been determined and made known to private respondent at
the time of his employment, clearly indicated the nature of his
employment as a project employee. 208
Fuji is engaged in the business of broadcasting, 209 including news

programming. 210 It is based in Japan 211 and has overseas offices to cover
international news. 212
Based on the record, Fuji's Manila Bureau Office is a small unit 213 and has
a few employees. 214 As such, Arlene had to do all activities related to news
gathering. Although Fuji insists that Arlene was a stringer, it alleges that her
designation was "News Talent/Reporter/Producer." 215
A news producer "plans and supervises newscast . . . [and] work[s] with
reporters in the field planning and gathering information. . . ." 216 Arlene's tasks
included "[m]onitoring and [g]etting [n]ews [s]tories, [r]eporting interviewing
subjects in front of a video camera," 217 "the timely submission of news and
current events reports pertaining to the Philippines[,] and traveling [sic] to
[Fuji's] regional office in Thailand." 218 She also had to report for work in Fuji's
office in Manila from Mondays to Fridays, eight (8) hours per day. 219 She had
no equipment and had to use the facilities of Fuji to accomplish her tasks.
The Court of Appeals affirmed the finding of the National Labor Relations
Commission that the successive renewals of Arlene's contract indicated the
necessity and desirability of her work in the usual course of Fuji's business.
Because of this, Arlene had become a regular employee with the right to
security of tenure. 220 The Court of Appeals ruled that:
Here, Espiritu was engaged by Fuji as a stinger [sic] or news
producer for its Manila Bureau. She was hired for the primary purpose
of news gathering and reporting to the television network's
headquarters. Espiritu was not contracted on account of any peculiar
ability or special talent and skill that she may possess which the
network desires to make use of. Parenthetically, if it were true that
Espiritu is an independent contractor, as claimed by Fuji, the fact that
everything that she uses to perform her job is owned by the company
including the laptop computer and mini camera discounts the idea of
job contracting. 221
Moreover, the Court of Appeals explained that Fuji's argument that no
employer-employee relationship existed in view of the fixed-term contract does
not persuade because fixed-term contracts of employment are strictly
construed. 222 Further, the pieces of equipment Arlene used were all owned by
Fuji, showing that she was a regular employee and not an independent
contractor. 223
The Court of Appeals likewise cited Dumpit-Murillo, which involved fixed-

term contracts that were successively renewed for four (4) years. 224 This court
held that "[t]his repeated engagement under contract of hire is indicative of the
necessity and desirability of the petitioner's work in private respondent ABC's
business." 225
With regard to Fuji's argument that Arlene's contract was for a fixed term,
the Court of Appeals cited Philips Semiconductors, Inc. v. Fadriquela 226 and
held that where an employee's contract "had been continuously extended or
renewed to the same position, with the same duties and remained in the
employ without any interruption," 227 then such employee is a regular
employee. The continuous renewal is a scheme to prevent regularization. On
this basis, the Court of Appeals ruled in favor of Arlene.
As stated in Price, et al. v. Innodata Corp., et al.: 228
The employment status of a person is defined and prescribed by

law and not by what the parties say it should be. Equally important to
consider is that a contract of employment is impressed with public
interest such that labor contracts must yield to the common good.
Thus, provisions of applicable statutes are deemed written into the
contract, and the parties are not at liberty to insulate themselves and
their relationships from the impact of labor laws and regulations by
simply contracting with each other. 229 (Citations omitted)
Arlene's contract indicating a fixed term did not automatically mean that
she could never be a regular employee. This is precisely what Article 280 seeks
to avoid. The ruling in Brent remains as the exception rather than the general
rule.
Further, an employee can be a regular employee with a fixed-term

contract. The law does not preclude the possibility that a regular employee may
opt to have a fixed-term contract for valid reasons. This was recognized in
Brent: For as long as it was the employee who requested, or bargained, that
the contract have a "definite date of termination," or that the fixed-term
contract be freely entered into by the employer and the employee, then the
validity of the fixed-term contract will be upheld. 230
V
Whether the Court of Appeals correctly affirmed
the National Labor Relations Commission's finding of illegal
dismissal
Fuji argues that the Court of Appeals erred when it held that Arlene was
illegally dismissed, in view of the non-renewal contract voluntarily executed by
the parties. Fuji also argues that Arlene's contract merely expired; hence, she
was not illegally dismissed. 231
Arlene alleges that she had no choice but to sign the non-renewal
contract because Fuji withheld her salary and benefits.
With regard to this issue, the Court of Appeals held:

We cannot subscribe to Fuji's assertion that Espiritu's contract
merely expired and that she voluntarily agreed not to renew the same.
Even a cursory perusal of the subject Non-Renewal Contract readily
shows that the same was signed by Espiritu under protest. What is
apparent is that the Non-Renewal Contract was crafted merely as a
subterfuge to secure Fuji's position that it was Espiritu's choice not to
renew her contract. 232
As a regular employee, Arlene was entitled to security of tenure and could

be dismissed only for just or authorized causes and after the observance of due
process.
The right to security of tenure is guaranteed under Article XIII, Section 3

of the 1987 Constitution:
ARTICLE XIII. SOCIAL JUSTICE AND HUMAN RIGHTS. —
xxx xxx xxx

LABOR
xxx xxx xxx
It shall guarantee the rights of all workers to self-organization,

collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law. They
shall be entitled to security of tenure, humane conditions of work,
and a living wage. They shall also participate in policy and decision-
making processes affecting their rights and benefits as may be
provided by law.
Article 279 of the Labor Code also provides for the right to security of
tenure and states the following:
Art. 279. Security of tenure . — In cases of regular
employment, the employer shall not terminate the services of an
employee except for a just cause of when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and
to his full backwages, inclusive of allowances, and to his other benefits
or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement.
Thus, on the right to security of tenure, no employee shall be dismissed,

unless there are just or authorized causes and only after compliance with
procedural and substantive due process is conducted.

Even probationary employees are entitled to the right to security of
tenure. This was explained in Philippine Daily Inquirer, Inc. v. Magtibay, Jr. 233
Within the limited legal six-month probationary period,
probationary employees are still entitled to security of tenure. It is
expressly provided in the afore-quoted Article 281 that a probationary
employee may be terminated only on two grounds: (a) for just cause,
or (b) when he fails to qualify as a regular employee in accordance
with reasonable standards made known by the employer to the
employee at the time of his engagement. 234 (Citation omitted) aSCHcA
The expiration of Arlene's contract does not negate the finding of illegal
dismissal by Fuji. The manner by which Fuji informed Arlene that her contract
would no longer be renewed is tantamount to constructive dismissal. To make
matters worse, Arlene was asked to sign a letter of resignation prepared by
Fuji. 235 The existence of a fixed-term contract should not mean that there can
be no illegal dismissal. Due process must still be observed in the pre-
termination of fixed-term contracts of employment.
In addition, the Court of Appeals and the National Labor Relations

Commission found that Arlene was dismissed because of her health condition.
In the non-renewal agreement executed by Fuji and Arlene, it is stated that:
WHEREAS, the SECOND PARTY i s undergoing chemotherapy
which prevents her from continuing to effectively perform her
functions under the said Contract such as the timely submission of
news and current events reports pertaining to the Philippines and
travelling [sic] to the FIRST PARTY's regional office in Thailand. 236
(Emphasis supplied)
Disease as a ground for termination is recognized under Article 284 of the

Labor Code:
Art. 284. Disease as ground for termination . — An employer
may terminate the services of an employee who has been found to be
suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health
of his co-employees: Provided, That he is paid separation pay
equivalent to at least one (1) month salary or to one-half (1/2) month
salary for every year of service, whichever is greater, a fraction of at
least six (6) months being considered as one (1) whole year.
Book VI, Rule 1, Section 8 of the Omnibus Rules Implementing the Labor
Code provides:
Sec. 8. Disease as a ground for dismissal. — Where the employee
suffers from a disease and his continued employment is prohibited by
law or prejudicial to his health or to the health of his co-employees, the
employer shall not terminate his employment unless there is a
certification by a competent public health authority that the disease is
of such nature or at such a stage that it cannot be cured within a
period of six (6) months even with proper medical treatment. If the
disease or ailment can be cured within the period, the employer shall
not terminate the employee but shall ask the employee to take a leave.
The employer shall reinstate such employee to his former position
immediately upon the restoration of his normal health.
For dismissal under Article 284 to be valid, two requirements must be

complied with: (1) the employee's disease cannot be cured within six (6)
months and his "continued employment is prohibited by law or prejudicial to his
health as well as to the health of his co-employees"; and (2) certification issued
by a competent public health authority that even with proper medical
treatment, the disease cannot be cured within six (6) months. 237 The burden of
proving compliance with these requisites is on the employer. 238 Non-
compliance leads to the conclusion that the dismissal was illegal. 239
There is no evidence showing that Arlene was accorded due process. After
informing her employer of her lung cancer, she was not given the chance to
present medical certificates. Fuji immediately concluded that Arlene could no
longer perform her duties because of chemotherapy. It did not ask her how her
condition would affect her work. Neither did it suggest for her to take a leave,
even though she was entitled to sick leaves. Worse, it did not present any
certificate from a competent public health authority. What Fuji did was to
inform her that her contract would no longer be renewed, and when she did not
agree, her salary was withheld. Thus, the Court of Appeals correctly upheld the
finding of the National Labor Relations Commission that for failure of Fuji to
comply with due process, Arlene was illegally dismissed. 240
VI
Whether the Court of Appeals properly modified
the National Labor Relations Commission's decision
when it awarded reinstatement, damages, and attorney's fees
The National Labor Relations Commission awarded separation pay in lieu

of reinstatement, on the ground that the filing of the complaint for illegal
dismissal may have seriously strained relations between the parties.
Backwages were also awarded, to be computed from date of dismissal until the
finality of the National Labor Relations Commission's decision. However, only
backwages were included in the dispositive portion because the National Labor
Relations Commission recognized that Arlene had received separation pay in
the amount of US$7,600.00.
The Court of Appeals affirmed the National Labor Relations Commission's

decision but modified it by awarding moral and exemplary damages and
attorney's fees, and all other benefits Arlene was entitled to under her contract
with Fuji. The Court of Appeals also ordered reinstatement, reasoning that the
grounds when separation pay was awarded in lieu of reinstatement were not
proven. 241
Article 279 of the Labor Code provides:

Art. 279. Security of tenure . — In cases of regular
employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and
to his full backwages, inclusive of allowances, and to his other benefits
or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement. (Emphasis supplied)
The Court of Appeals' modification of the National Labor Relations
Commission's decision was proper because the law itself provides that illegally
dismissed employees are entitled to reinstatement, backwages including
allowances, and all other benefits.
On reinstatement, the National Labor Relations Commission ordered

payment of separation pay in lieu of reinstatement, reasoning "that the filing of
the instant suit may have seriously abraded the relationship of the parties so as
to render reinstatement impractical." 242 The Court of Appeals reversed this
and ordered reinstatement on the ground that separation pay in lieu of
reinstatement is allowed only in several instances such as (1) when the
employer has ceased operations; (2) when the employee's position is no longer
available; (3) strained relations; and (4) a substantial period has lapsed from
date of filing to date of finality. 243
On this matter, Quijano v. Mercury Drug Corp. 244 is instructive:

Well-entrenched is the rule that an illegally dismissed employee
is entitled to reinstatement as a matter of right. . . .
To protect labor's security of tenure, we emphasize that the
doctrine of "strained relations" should be strictly applied so as not to
deprive an illegally dismissed employee of his right to reinstatement.
Every labor dispute almost always results in "strained relations" and
the phrase cannot be given an overarching interpretation, otherwise,
an unjustly dismissed employee can never be reinstated. 245 (Citations
omitted)
The Court of Appeals reasoned that strained relations are a question of

fact that must be supported by evidence. 246 No evidence was presented by
Fuji to prove that reinstatement was no longer feasible. Fuji did not allege that
it ceased operations or that Arlene's position, was no longer available. Nothing
in the records shows that Arlene's reinstatement would cause an atmosphere of
antagonism in the workplace. Arlene filed her complaint in 2009. Five (5) years
are not yet a substantial period 247 to bar reinstatement.
On the award of damages, Fuji argues that Arlene is not entitled to the
award of damages and attorney's fees because the non-renewal agreement
contained a quitclaim, which Arlene signed.
Quitclaims in labor cases do not bar illegally dismissed employees from

filing labor complaints and money claim. As explained by Arlene, she signed
the non-renewal agreement out of necessity. In Land and Housing Development
Corporation v. Esquillo, 248 this court explained: TADaES
We have heretofore explained that the reason why quitclaims are

commonly frowned upon as contrary to public policy, and why they are
held to be ineffective to bar claims for the full measure of the workers'
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. Because, out of a
job, he had to face the harsh necessities of life. He thus found himself
in no position to resist money proffered. His, then, is a case of
adherence, not of choice. 249
With regard to the Court of Appeals' award of moral and exemplary

damages and attorney's fees, this court has recognized in several cases that
moral damages are awarded "when the dismissal is attended by bad faith or
fraud or constitutes an act oppressive to labor, or is done in a manner contrary
to good morals, good customs or public policy." 250 On the other hand,
exemplary damages may be awarded when the dismissal was effected "in a
wanton, oppressive or malevolent manner." 251
The Court of Appeals and National Labor Relations Commission found that
after Arlene had informed Fuji of her cancer, she was informed that there would
be problems in renewing her contract on account of her condition. This
information caused Arlene mental anguish, serious anxiety, and wounded
feelings that can be gleaned from the tenor of her email dated March 11, 2009.
A portion of her email reads:
I WAS SO SURPRISED . . . that at a time when I am at my lowest,
being sick and very weak, you suddenly came to deliver to me the
NEWS that you will no longer renew my contract. I knew this will come
but I never thought that you will be so 'heartless' and insensitive to
deliver that news just a month after I informed you that I am sick. I was
asking for patience and understanding and your response was not to
RENEW my contract. 252
Apart from Arlene's illegal dismissal, the manner of her dismissal was
effected in an oppressive approach with her salary and other benefits being
withheld until May 5, 2009, when she had no other choice but to sign the non-
renewal contract. Thus, there was legal basis for the Court of Appeals to modify
the National Labor Relations Commission's decision.
However, Arlene received her salary for May 2009. 253 Considering that
the date of her illegal dismissal was May 5, 2009, 254 this amount may be
subtracted from the total monetary award.
With regard to the award of attorney's fees, Article 111 of the Labor Code
states that "[i]n cases of unlawful withholding of wages, the culpable party may
be assessed attorney's fees equivalent to ten percent of the amount of wages
recovered." Likewise, this court has recognized that "in actions for recovery of
wages or where an employee was forced to litigate and, thus, incur expenses to
protect his rights and interest, the award of attorney's fees is legally and
morally justifiable." 255 Due to her illegal dismissal, Arlene was forced to
litigate.
In the dispositive portion of its decision, the Court of Appeals awarded

legal interest at the rate of 12% per annum. 256 In view of this court's ruling in
Nacar v. Gallery Frames , 257 the legal interest shall be reduced to a rate of 6%
per annum.
WHEREFORE, the petition is DENIED. The assailed Court of Appeals

decision dated June 25, 2012 is AFFIRMED with the modification that
backwages shall be computed from June 2009. Legal interest shall be computed
at the rate of 6% per annum of the total monetary award from date of finality of
this decision until full satisfaction.
SO ORDERED.
Carpio, Del Castillo, Villarama, Jr. * and Mendoza, JJ., concur.
Footnotes
* Designated Acting Member per Special Order No. 1888 dated November 28,
2014.
1. Rollo , pp. 16-97.
2. Id. at 111-126. The decision was penned by Associate Justice Edwin D. Sorongon
and concurred in by Associate Justices Noel G. Tijam (Chair) and Romeo F.
Barza.
3. Id. at 202-220.
4. The National Labor Relations Commission's decision (rollo, p. 204) referred to

Arlene as a "news correspondent" and "journalist/news producer" while the
Court of Appeals' decision (rollo, p. 112) referred to Arlene as a "news
correspondent/producer." In the "Certification of Employment and
Compensation" (rollo, p. 429), Fuji indicated that Arlene holds the position of
"news producer." Photocopies of Arlene's IDs also indicate that she is
connected with Fuji Television Network, Inc. with the position of "news
producer" (rollo, p. 431).
5. Rollo , p. 112.
6. Id. at 112 and 204.
7. Id. at 27 and 722.
8. Id. at 113.
9. Id. at 112-113.
10. Id. at 113.
11. The records show that Arlene and Fuji, through Mr. Yoshiki Aoki, had several e-
mail exchanges. The parties also admitted that they communicated with
each other verbally.
12. Rollo , p. 113.

13. Id.
14. Id. at 209.

15. Id. at 113.
16. Id.
17. Id. at 225-235.
18. Id. at 235.
19. G.R. No. 138051, June 10, 2004, 431 SCRA 583 [Per J. Carpio, First Division].
20. Rollo , pp. 228-232.

21. Id. at 219.
22. Id. at 213-216.
23. Id. at 219.

24. Id.
25. Id. at 222.
26. Id. at 222-224.

27. Id. at 112 and 130-188.
28. Id. at 116.
29. Id. at 125-126.

30. Id.
31. Id. at 121.
32. Id. at 119.
33. Id. at 119-120.

34. Id. at 120.
35. Id. at 122.
36. Id. at 122-123.

37. Id. at 127-129.
38. Id. at 128.
39. Id. at 36-37.

40. Id. at 23.
41. Id. at 39.
42. Id. at 24.
43. Id. at 23.

44. Id. at 39.
45. Id. at 30.
46. Id. at 40.

47. Id.
48. Id. at 22.

49. Id. at 24.
50. Id. at 22-23.
51. Id. at 94.

52. Id. at 32-33.
53. Id. at 33.
54. Id. at 26-29.

55. Id. at 26.
56. Id. at 30-31.
57. Id. at 31.

58. Id.
59. Id.
60. Id. at 32.
61. Id. at 36.

62. Id. at 37.
63. Id.
64. Id.
65. Id. at 16.
66. Id. at 689-694.
67. Id. at 691.

68. Id. at 695-705.
69. Id. at 695-696.
70. Id. at 718.
71. Id.
72. Id. at 719.
73. Id.
74. RULES OF CIVIL PROCEDURE (1997).

75. Uy v. Landbank, 391 Phil. 303 (2000) [Per J. Kapunan, First Division].
76. Id. at 312.
77. 404 Phil. 981 (2001) [Per J. Melo, Third Division].

78. Id. at 995.
79. 315 Phil. 529 (1995) [Per J. Davide, Jr., En Banc]. Note that this case involved
an electoral protest for barangay elections.
80. Id. at 532.
81. Id. at 537-538.
82. 515 Phil. 768 (2006) [Per J. Carpio Morales, Third Division].
83. Id. at 772-773.
84. Id. at 773.
85. Id. at 776-778.
86. 423 Phil. 509 (2001) [Per J. Kapunan, First Division].

87. 442 Phil. 425 (2002) [Per J. Vitug, First Division].
88. Havtor Management Phils., Inc. v. National Labor Relations Commission, 423
Phil. 509, 512 (2001) [Per J. Kapunan, First Division]; General Milling
Corporation v. National Labor Relations Commission, 442 Phil. 425, 426
(2002) [Per J. Vitug, First Division].
91. 594 Phil. 246 (2008) [Per J. Carpio Morales, En Banc].

92. Id. at 261-262.
93. Chinese Young Men's Christian Association of the Philippine Islands, doing
business under the name of Manila Downtown YMCA v. Remington Steel
Corporation, 573 Phil. 320 (2008) [Per J. Austria-Martinez, Third Division].
94. Rollo , pp. 102-103.
95. Id. at 102.

96. Id. at 101.
97. Id. at 100.
98. Id. at 98.

99. Id. at 102-103.
100. Id. at 100.
101. Id.
102. Id. at 695-705.
103. Id. at 696.
104. Id. at 102.
105. Id.
106. Id.
107. Id. at 102-103.

108. 568 Phil. 572 (2008) [Per J. Velasco, Jr., Second Division].
109. The ponencia cited the cases of Mactan-Cebu International Airport Authority v.
CA, 399 Phil. 695 (2000) [Per J. Gonzaga-Reyes, Third Division]; Pfizer, Inc. v.
Galan , 410 Phil. 483 (2001) [Per J. Davide, Jr., First Division]; Novelty
Philippines, Inc. v. CA, 458 Phil. 36 (2003) [Per J. Panganiban, Third Division];
Lepanto Consolidated Mining Company v. WMC Resources International Pty.
Ltd., 458 Phil. 701 (2003) [Per J. Carpio Morales, Third Division].
110. Cagayan Valley Drug Corporation v. CIR, 568 Phil. 572, 581-582 (2008) [Per J.
Velasco, Jr., Second Division].
111. Rollo , pp. 602-603.

112. Id.
113. Id.
114. Id. at 697.

115. Pres. Decree No. 442, as amended.
116. 356 Phil. 811 (1998) [Per J. Regalado, En Banc].
117. San Miguel Corporation v. Secretary of Labor, 159-A Phil. 346 (1975) [Per J.
Aquino, Second Division]; Scott v. Inciong, et al., 160-A Phil. 1107 (1975) [Per
J. Fernando, Second Division]; Bordeos v. National Labor Relations
Commission , 330 Phil. 1003 (1996) [Per J. Panganiban, Third Division].
118. St. Martin Funeral Home v. National Labor Relations Commission, 356 Phil.
811, 816 (1998) [Per J. Regalado, En Banc].
119. J. Brion, dissenting opinion in Abott Laboratories, Philippines v. Alcaraz, G.R.

No. 192571, July 23, 2013, 701 SCRA 682, 723-724 [Per J. Perlas-Bernabe, En
Banc].
120. G.R. No. 147420, June 10, 2004, 431 SCRA 633 [Per J. Carpio, First Division].
121. Id. at 639.
122. Id.
123. Id. at 640.
124. Id.
125. 572 Phil. 94 (2008) [Per J. Chico-Nazario, Third Division].
126. Id. at 117.

127. G.R. No. 172086, December 3, 2012, 686 SCRA 676 [Per J. Brion, Second
Division].
128. 613 Phil. 696 (2009) [Per J. Brion, Second Division].
129. Career Philippines v. Serna , G.R. No. 172086, December 3, 2012, 686 SCRA
676, 683-684 [Per J. Brion, Second Division], citing Montoya v. Transmed
Manila Corporation, 613 Phil. 696, 706-707 (2009) [Per J. Brion, Second
Division].
130. G.R. No. 192571, July 23, 2013, 701 SCRA 682 [Per J. Perlas-Bernabe, En
Banc].
131. J. Brion, dissenting opinion in Abott Laboratories, Philippines v. Alcaraz, G.R.

No. 192571, July 23, 2013, 701 SCRA 682, 723-724 [Per J. Perlas-Bernabe, En
Banc].
132. Id. at 723, citing Montoya v. Transmed Manila Corporation, 613 Phil. 696, 707
(2009) [Per J. Brion, Second Division].
133. Id. at 724-725.
134. Consulta v. Court of Appeals, 493 Phil. 842, 847 (2005) [Per J. Carpio, First
Division].
135. Tenazas v. R. Villegas Taxi Transport, G.R. No. 192998, April 2, 2014
<http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2014/april2014/192998.pdf> [Per J. Reyes, First Division],
citing Meteoro v. Creative Creatures, Inc., 610 Phil. 150, 161 (2009) [Per J.
Nachura, Third Division].
136. Tenazas v. R. Villegas Taxi Transport, G.R. No. 192998, April 2, 2014
<http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2014/april2014/192998.pdf> [Per J. Reyes, First Division].
137. Id.
138. MZR Industries v. Colambot , G.R. No. 179001, August 28, 2013, 704 SCRA
150, 157 [Per J. Peralta, Third Division]. See also Exodus International
Construction Corporation v. Biscocho, G.R. No. 166109, February 23, 2011,
644 SCRA 76, 86 [Per J. Del Castillo, First Division].
139. LABOR CODE, art. 277 (b). See also Samar-Med Distribution v. National Labor
Relations Commission, G.R. No. 162385, July 15, 2013, 701 SCRA 148, 160
[Per J. Bersamin, First Division].
140. Rollo , p. 80.
141. Id. at 83.

142. Id. at 726 and 728.
143. Id. at 729.
144. Id. at 733.

145. Id. at 719 and 725.
146. Id. at 719.
147. Id. at 752.

148. Id. at 736.
149. Id. at 768.
150. 260 Phil. 747 (1990) [Per J. Narvasa, En Banc].

151. Id. at 757, citing CIVIL CODE, art. 1193, par. 3.
152. Id. at 761.
153. Id.
154. G.R. No. 176419, November 27, 2013, 710 SCRA 690 [Per J. Leonardo-de
Castro, First Division].
155. Id. at 709-710.
156. 527 Phil. 67 (2006) [Per J. Corona, Second Division].
157. Id. at 72-73.

158. 544 Phil. 721 (2007) [Per J. Carpio, Second Division].
159. Id. at 724.
160. Id. at 728.

161. Orozco v. Fifth Division, Court of Appeals, 584 Phil. 35, 54 (2008) [Per J.
Nachura, Third Division], citing Chavez v. National Labor Relations
Commission , 489 Phil. 444, 457-458 [Per J. Callejo, Sr., Second Division].
162. DOLE Dept. Order No. 18-A (2011), secs. 3 (m) and 5.
163. 584 Phil. 35 (2008) [Per J. Nachura, Third Division].
164. Id. at 56.

165. Id.
166. G.R. No. 196426, August 15, 2011, 655 SCRA 444 [Per J. Velasco, Jr., Third
Division].
167. Id. at 446. Semblante v. Court of Appeals defined "masiador" as the person
who "calls and takes the bets from the gamecock owners and other bettors
and orders the start of the cockfight. He also distributes the winnings after
deducting the arriba, or the commission for the cockpit."
168. Id. A "sentenciador" is defined as the person who "oversees the proper gaffing
of fighting cocks, determines the fighting cocks' physical condition and
capabilities to continue the cockfight, and eventually declares the result of
the cockfight."
169. Id. at 452.

170. Id.
171. G.R. No. 192084, September 14, 2011, 657 SCRA 745 [Per J. Carpio, Second
Division].
172. Id. at 757.

173. DOLE Dept. Order No. 18-A (2011), sec. 5 (b). See also Sonza v. ABS-CBN
Broadcasting Corporation, G.R. No. 138051, June 10, 2004, 431 SCRA 583,
592 [Per J. Carpio, First Division].
174. CIVIL CODE, art. 1305.

175. CIVIL CODE, art. 1306.
176. In Jaculbe v. Silliman University, 547 Phil. 352, 359 (2007) [Per J. Corona, First
Division], citing Mercury Drug Co., Inc. v. CIR, 155 Phil. 636 (1974), [Per J.
Makasiar, En Banc], this court stated that: "it is axiomatic that employer and
employee do not stand on equal footing, a situation which often causes an
employee to act out of need instead of any genuine acquiescence to the
employer." In Philippine Association of Service Exporters, Inc. v. Hon. Drilon,
246 Phil. 393, 405 (1988) [Per J. Sarmiento, En Banc], this court stated that:
"'Protection to labor' does not signify the promotion of employment alone.
What concerns the Constitution more paramountly is that such an
employment may be above all, decent, just, and humane."
177. GMA Network, Inc. v. Pabriga , G.R. No. 176419, November 27, 2013, 710
SCRA 690, 710 [Per J. Leonardo-de Castro, First Division].
178. Id.
179. Id. at 709.

180. The case of Consulta v. Court of Appeals, 493 Phil. 842, 847 (2005) [Per J.
Carpio, First Division] cited Viaña v. Al-Lagadan , 99 Phil. 408, 411-412 (1956)
[Per J. Concepcion, En Banc] as the case where the four-fold test was first
applied. Viaña held: "In determining the existence of employer-employee
relationship, the following elements are generally considered, namely: (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 employees' conduct
— although the latter is the most important element."
181. Cesar C. Lirio, doing business under the name and style of Celkor Ad Sonicmix
v. Wilmer D. Genovia, G.R. No. 169757, November 23, 2011, 661 SCRA 126,
139 [Per J. Peralta, Third Division].
182. 395 Phil. 890 (2000) [Per J. Quisumbing, Second Division].
183. Id. at 900.
184. Orozco v. Fifth Division, Court of Appeals, 584 Phil. 35, 49 (2008) [Per J.
Nachura, Third Division].
185. 617 Phil. 955 (2009) [Per J. Velasco, Jr., Third Division].
186. Id. at 964.
187. 551 Phil. 725 (2007) [Per J. Quisumbing, Second Division].
188. Sonza v. ABS-CBN Broadcasting Corporation, G.R. No. 138051, June 10, 2004,
431 SCRA 583, 595 [Per J. Carpio, First Division].
189. Id.
190. Dumpit-Murillo v. Court of Appeals , 551 Phil. 725, 730 (2007) [Per J.
Quisumbing, Second Division].
194. Dumpit-Murillo v. Court of Appeals , 551 Phil. 725, 730, and 740 (2007) [Per J.
196. Id. at 600.
197. Id. at 601.
198. Dumpit-Murillo v. Court of Appeals , 551 Phil. 725, 737-738 (2007) [Per J.
199. Rollo , p. 722.

200. Id. at 205-206. The National Labor Relations Commission's decision quoted
paragraph 5 of Arlene's "Professional Employment Contract," stating the
following:
5. It shall be lawful for the Employer to dismiss the Employee or terminate the
contract without notice and any compensation which may occur including but
not limit (sic) to the severance pay, for the acts of misconduct:
5.1 performing duties dishonestly or intentionally committing a criminal act;
5.2 intentionally causing damage to the Employee;

5.3 causing serious damage to the Employer as the result of negligence;
5.4 violating work rules or regulations or orders of the Employer which are
lawful and just after warning has been given by the Employer, except in a
serious case, for which the Employer is not required to give warning. Such
written warning shall be valid for not more than one year from the date the
Employee committed the offense;
5.5 neglecting duties without justifiable reason for three consecutive working
days regardless of whether there is holiday in between or not;
5.6 being imprisoned by a final judgment of imprisonment with the exception of

a penalty for negligence or petty offence.
In this regard, the Employee shall receive wages of the last day of work (by
calculating the work per day).
201. Id. at 205.
202. Id. at 728.
203. Id. at 206.

204. 534 Phil. 306 (2006) [Per J. Callejo, Sr., First Division].

205. Id. at 330-331, citing Magsalin v. National Organization of Working Men, 451
Phil. 254, 261 (2003) [Per J. Vitug, First Division].
206. 357 Phil. 954 (1998) [Per J. Quisumbing, First Division].
207. Id. at 958.
208. Id. at 963-964.

209. Rollo , p. 259.
210. Fuji Television Network, Inc.'s official website
<http://www.fujitv.co.jp/en/greeting.html> (visited January 5, 2015).
211. Rollo , p. 21.

212. Fuji Television Network, Inc.'s official website
<http://www.fujitv.co.jp/en/overseas_offices.html> (visited January 5, 2015).
213. Rollo , p. 24. Fuji's Manila Bureau Office is in Diamond Hotel, Manila.
214. In the records of this case, the only employees mentioned by Fuji and Arlene
are Ms. Corazon Acerden and Mr. Yoshiki Aoki.
215. Rollo , p. 59.

216. University of Wisconsin-Eau Claire, Glossary of Broadcasting/Broadcast News
Terms <http://www.uwec.edu/kapferja/02-
Fall08/335/GlossaryofBroadcastNewsTerms.htm> (visited January 5, 2015).
217. Rollo , p. 59.
218. Id. at 208.
219. Id. at 205.

220. Id. at 119.
221. Id. at 120.
222. Id. at 118-119.

223. Id. at 120.
224. Id.
226. 471 Phil. 355 (2004) [Per J. Callejo, Sr., Second Division].
227. Rollo , p. 119.
228. 588 Phil. 568 (2008) [Per J. Chico-Nazario, Third Division].
229. Id. at 580.

230. Brent School, Inc. v. Zamora, 260 Phil. 747, 760-762 (1990) [Per J. Narvasa,
En Banc].
231. Rollo , p. 81.
232. Id. at 122-123.
233. 555 Phil. 326 (2007) [Per J. Garcia, First Division].
234. Id. at 334.

235. Rollo , p. 27.
236. Id. at 208.
237. Solis v. National Labor Relations Commission, 331 Phil. 928, 933-934 (1996)
[Per J. Francisco, Third Division]; Manly Express, Inc. v. Payong, Jr., 510 Phil.
818, 823-824 (2005) [Per J. Ynares-Santiago, First Division].
238. Crayons Processing, Inc. v. Pula, 555 Phil. 527, 537 (2007) [Per J. Tinga,
Second Division].
239. Id.
240. Rollo , p. 122.
241. Id. at 123-124. The Court of Appeals decision states: "By law, separation pay
in lieu of reinstatement is proper only under the following circumstances: 1)
When company operations have ceased; 2) When the employee's position or
an equivalent thereof is no longer available; 3) When the illegal dismissal
case has engendered strained relations between the parties, in cases of just
causes and usually when the position involved requires the trust and
confidence of the employer; and, 4) When a substantial amount of years
have lapsed from the filing of the case to its finality. In this case, it was not
amply shown that reinstatement is no longer possible as none of the
situations contemplated by law obtains."
242. Id. at 219.
243. Id. at 124.

244. 354 Phil. 112 (1998) [Per J. Puno, Second Division].
245. Id. at 121-122.
246. Rollo , p. 123.
247. In Association of Independent Unions in the Philippines v. National Labor

Relations Commission (364 Phil. 697, 713 (1999) [Per J. Purisima, Third
Division]), this court considered "more than eight (8) years" as substantial. In
San Miguel Properties Philippines, Inc. v. Gucaban (G.R. No. 153982, July 18,
2011, 654 SCRA 18, 34 [Per J. Peralta, Third Division]), more than 10 years
had lapsed. In G & S Transport Corporation v. Infante (559 Phil. 701, 716
(2007) [Per J. Tinga, Second Division]), 17 years had lapsed from the time of
illegal dismissal. In these cases, this court deemed it proper to award
separation pay in lieu of reinstatement.
248. 508 Phil. 478 (2005) [Per J. Panganiban, Third Division].
249. Id. at 487, citing Marcos v. National Labor Relations Commission, G.R. No.
111744, September 8, 1995, 248 SCRA 146, 152 [Per J. Regalado, Second
Division].
250. Quadra v. Court of Appeals, 529 Phil. 218, 223 (2006) [Per J. Puno, Second
Division]. See also San Miguel Properties Philippines, Inc. v. Gucaban, G.R.
No. 153982, July 18, 2011, 654 SCRA 18, 33 [Per J. Peralta, Third Division];
Culili v. Eastern Telecommunications Philippines, Inc., G.R. No. 165381,
February 9, 2011, 642 SCRA 338, 365 [Per J. Leonardo-de Castro, First
Division].
251. Quadra v. Court of Appeals, 529 Phil. 218, 223-224 (2006) [Per J. Puno,
Second Division]. See also Culili v. Eastern Telecommunications Philippines,
Inc., G.R. No. 165381, February 9, 2011, 642 SCRA 338, 365 [Per J. Leonardo-
de Castro, First Division].
252. Rollo , p. 27.
253. Id. at 208 and 779. The National Labor Relations Commission's decision
quoted the entire non-renewal agreement, where it is shown that Arlene
received US$1,900.00 as salary for May 2009. In the comment, Arlene
attached a copy of the non-renewal agreement as Annex "E-27," showing
that she received US$1,900.00 as salary for May 2009.
254. Id. at 208-209. The first paragraph of the non-renewal agreement, executed
on May 5, 2009, states:
1. RELEASE FROM CONTRACTUAL OBLIGATION
The FIRST PARTY hereby releases the SECOND PARTY from all of her
employment responsibilities under the Contract upon the execution of this
Agreement. Likewise, the SECOND PARTY hereby releases the FIRST PARTY
from all its responsibilities as an employer. Upon the execution of this
Agreement, the SECOND PARTY shall no longer be connected, in whatever
nature or capacity, with the FIRST PARTY.
255. Aliling v. Feliciano , G.R. No. 185829, April 25, 2012, 671 SCRA 186, 220 [Per J.
Velasco, Jr., Third Division], citing Rutaquio v. National Labor Relations
Commission , 375 Phil. 405, 418 (1999) [Per J. Purisima, Third Division].
256. Rollo , p. 126.
257. G.R. No. 189871, August 13, 2013, 703 SCRA 439, 457-458 [Per J. Peralta, En
Banc]. In Nacar, this court held:
To recapitulate and for future guidance, the guidelines laid down in the case of
Eastern Shipping Lines are accordingly modified to embody BSP-MB Circular
No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-
contracts, delicts or quasi-delicts is breached, the contravenor can be held
liable for damages. The provisions under Title XVIII on "Damages" of the Civil
Code govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due
shall itself earn legal interest from the time it is judicially demanded. In the
absence of stipulation, the rate of interest shall be 6% per annum to be
computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is
breached, an interest on the amount of damages awarded may be imposed
at the discretion of the court at the rate of 6% per annum . No interest,
however, shall be adjudged on unliquidated claims or damages, except when
or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so
reasonably established at the time the demand is made, the interest shall
begin to run only from the date the judgment of the court is made (at which
time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in
any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph
1 or paragraph 2, above, shall be 6% per annum from such finality until its
satisfaction, this interim period being deemed to be by then an equivalent to
a forbearance of credit.
And, in addition to the above, judgments that have become final and executory
prior to July 1, 2013, shall not be disturbed and shall continue to be
implemented applying the rate of interest fixed therein.

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SECOND DIVISION

[G.R. Nos. 204944-45. December 3, 2014.]

FUJI TELEVISION NETWORK, INC., petitioner, vs. ARLENE S.

It is the burden of the employer to prove that a person whose services it

We decide this petition for review 1 on certiorari ﬁled by Fuji Television

In 2005, Arlene S. Espiritu ("Arlene") was engaged by Fuji Television

In consideration of the non-renewal contract, Arlene "acknowledged

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In the decision 17 dated September 10, 2009, Labor Arbiter Corazon C.

2) Whether or not Espiritu was illegally dismissed; and

Fuji Television, Inc. is hereby ORDERED to immediately

1. Backwages at the rate of $1,900.00 per month

3. One and a half (1 1/2) months pay or $2,850.00 as

4. One and a half (1 1/2) months pay or $2,850.00 as year-

5. Sick leave of 30 days with pay or $1,900.00 per year

6. Vacation leave with pay equivalent to 14 days or

7. The amount of P100,000.00 as moral damages;

The Labor Arbiter is hereby DIRECTED to make another re-

According to the Court of Appeals, Sonza does not apply in order to

Based on the arguments of the parties, there are procedural and

I. Whether the petition for review should be dismissed as Corazon

The petition should be dismissed. HSTAcI

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In its comment on Arlene's manifestation, Fuji alleges that Corazon was

A pleading is verified by an affidavit that the affiant has read the

SEC. 5. Certiﬁcation against forum shopping. — The

Failure to comply with the foregoing requirements shall not be

Section 4 (e) of Rule 45 74 requires that petitions for review should

Shipside Incorporated v. Court of Appeals 77 cited the discussion in Uy and

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Havtor Management Phils., Inc. v. National Labor Relations Commission 86

Altres v. Empleo 91 summarized the rules on veriﬁcation and certiﬁcation

5) The certiﬁcation against forum shopping must be signed by all the

There was substantial compliance

Shuji Yano executed a special power of attorney appointing Ms. Ma.

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On the issue of whether Shuji Yano validly delegated his authority to

(1) When he was not given the power to appoint one;

All acts of the substitute appointed against the prohibition of the

While the above cases 109 do not provide a complete listing of

As the oﬃce manager for 23 years, Corazon can be considered as having

Thus, Fuji substantially complied with the requirements of veriﬁcation and

I n St. Martin Funeral Home v. National Labor Relations Commission, 116

On the other hand, a petition for review on certiorari under Rule 45 is a

I n Odango v. National Labor Relations Commission , 120 this court

Career Philippines v. Serna, 127 citing Montoya v. Transmed , 128 is

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Justice Brion's dissenting opinion in Abbott Laboratories, Philippines v.

These parameters shall be used in resolving the substantive issues in this

In labor cases, the quantum of proof required is substantial evidence. 136

Fuji alleges that Arlene was an independent contractor, citing Sonza v.

An employment shall be deemed to be casual if it is not covered

This provision classiﬁes employees into regular, project, seasonal, and

GMA Network, Inc. v. Pabriga 154 expounded the doctrine on ﬁxed-term

Cognizant of the possibility of abuse in the utilization of ﬁxed-

2) It satisfactorily appears that the employer and the

These indications, which must be read together, make the Brent

Caparoso v. Court of Appeals 158 upheld the validity of the ﬁxed-term

On the other hand, an independent contractor is defined as:

In view of the "distinct and independent business" of independent