Under the gavel
Jay Sonza files a complaint against ABS-CBN
By Ryan Herman H. Molina
Institute for Labor Studies

Issue Date: April - June 2004

Can the National Labor Relations Commission (NLRC) validly assume jurisdiction over a case involving television and radio stations and their talents? Is there any employer-employee relationship between them? These are the issues illuminated by the Supreme Court in the landmark case of Sonza vs. ABS-CBN.

Facts:

ABS-CBN agreed to pay Sonza a monthly talent fee of P310,000 for the first year and P317,000 for the second and third year of the Agreement.  ABS-CBN would pay the talent fees on the 10^th and 25^th days of the month. 

On 1 April 1996, in view of recent events concerning his career and program, Sonza wrote a letter to ABS-CBN president Eugenio Lopez III, rescinding the abovementioned agreement. 

Subsequently, Sonza filed a complaint against ABS-CBN before the National Labor Relations Commission, protesting that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay, 13^th month pay, signing bonus, travel allowance, and amounts due under the Employees Stock Option Plan.

ABS-CBN filed a motion to dismiss on the ground that no employer-employee relationship existed between the parties. Consequently, Sonza filed an opposition to the motion.

On 11 March 1997, Sonza filed a motion to expunge respondent’s Annex 4 and 5 from the records which contained the affidavits of ABS-CBN’s witnesses testifying that the prevailing practice in the television and broadcast industry is to treat talents like Sonza as independent contractors.

The Labor Arbiter dismissed the complaint for lack of jurisdiction. Sonza filed a motion for reconsideration, which the NLRC denied. On 26 March 1999, the Court of Appeals affirmed the decision of the NLRC. 

Ruling:

Although Philippine labor laws and jurisprudence clearly define the elements of an employer-employee relationship, this was the first time that the Supreme Court resolved the nature of the relationship between a television and radio station and one of its “talents.”  There is no law that states that a radio and television program host is an employee of the broadcast station. 

The Supreme Court agreed with the findings of the Labor Arbiter and the Court of Appeals that Sonza’s claims are all based on the May 1994 Agreement and stock option plan, and not on the Labor Code. Clearly, the present case does not call for an application of the Labor Code provisions but an interpretation and implementation of the May 1994 Agreement. In effect, Sonza’s cause of action is for breach of contract which is intrinsically a civil dispute cognizable by the regular courts.

Applying the control test to the present case, the Supreme Court found that Sonza was not an employee but an independent contractor. 

The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. This test is based on the extent of control the hirer exercises over a worker.  The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well—the less control the hirer exercises, the more likely the worker is considered an independent contractor.

ABS-CBN was not involved in the actual performance that produced the finished product of Sonza’s work. ABS-CBN did not instruct Sonza how to perform his job.  It merely reserved the right to modify the program format and airtime schedule “for more effective programming.” Its sole concern was the quality of the shows and their standing in the ratings.  Clearly, ABS-CBN did not exercise control over the means and methods of performance of Sonza’s work.

Sonza claimed that ABS-CBN’s power not to broadcast his shows proved its control over the means and methods of the performance of his work.  Although ABS-CBN did have the option not to broadcast Sonza’s show, the network was still obligated to pay Sonza’s talent fees...   

Thus, even if ABS-CBN was completely dissatisfied with the means and methods of Sonza’s performance of his work, or even with the quality or product of his work, it could not dismiss or even discipline Sonza.  All that ABS-CBN could do is not to broadcast Sonza’s show but it must still pay his talent fees in full. 

Clearly, ABS-CBN’s right not to broadcast Sonza’s show, burdened by the obligation to continue paying in full Sonza’s talent fees, did not amount to control over the means and methods of the performance of Sonza’s work.

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