BEHIND THE LENS…
Behind the glamour, the excitement and the grandeur of ‘showbiz’ lies another reality confronting those who work in it. For the entertainment world is composed not just of the ‘talents’ you see on the screen or stage; there are also those who work out of sight, behind the scenes, helping to deliver quality entertainment. And although both this group of people and the celebrities we know and (sometimes!) love are part of the same show or project, they have varying rights and statuses under the law.
In the landmark case of Jose Y. Sonza vs. ABS-CBN Broadcasting Corporation, G.R. No. 138051. June 10, 2004, the Supreme Court declared that not every service rendered for a fee creates an employer-employee relationship. “To hold that every person who renders services to another for a fee is an employee – to give meaning to the security of tenure clause – will lead to absurd results.”
To determine whether a person rendering services to another is an employee the most common test is the so called “Four-fold Test”, to wit:
Right to hire or to the selection and engagement of the employee;
Payment of wages and salaries for services;
Power of dismissal or the power to impose disciplinary actions; and
Power to control the employee with respect to the means and methods by which the work is to be accomplished. This is known as the “Control test”.
The most compelling of the four in determining whether a talent is an employee or an independent contractor is the control test. “The more 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.”
In any event the method of selecting and engaging a talent or an individual does not conclusively determine his status. All the circumstances of the relationship, with the control test being the most important element, must be considered. The unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship.
Hence, a talent or a celebrity is an independent contractor offering not mere labor but his/her unique skills to entertain his audience.
THE TEAM BEHIND THE SCENES…
As to the members of the production team or those working behind the scenes, instructive is the case of ABS-CBN Broadcasting Corporation vs. Nazareno et. al. G.R. No. 164156., September 26, 2006. The High Court elucidated that “when the work done is an integral part of the regular business of the employer and when the worker, relative to the employer, does not furnish an independent business or professional service, such work is a regular employment of such employee and not an independent contractor.”
The said rule is likewise in conjunction with the four-fold test. In this case, the Honorable Supreme Court ruled that the employees were selected through ABS-CBN’s personnel department without regard to their special talent or unique skills; they were paid their wages and they did not have the power to bargain for a higher “talent fee”; their continued employment was subject to the will of their employer; and they were under the constant control of their supervisors. Thus, the presence of these factors taken together with the very definition of regular employees under the Labor Code, bolstered the status of Nazareno, et al. as regular employees.
The difference in the employment status of talents/celebrities from the people working behind the scenes is crucial in determining the law applicable to their situation.
The Law on Contracts particularly governs the relationship between the talent and the one engaging their services. The provisions of the engagement contracts shall as long as not contrary to law, morals, good customs, public policy, and public order shall be complied with. Any issue or dispute arising from such engagement shall be cognizable by the Regular Courts.
On the other hand, an employee’s relationship with their employer is governed by the Labor Code as amended, Implementing Rules issued by the Department of Labor and other pertinent government agencies, as well as special laws in relation to labor. Employees are also covered by the provisions of the Collective Bargaining Agreement (CBA) with employers. Any dispute in relation to the employee and employer relationship shall be cognizable by the Labor Arbiter, the National Labor Relations Commission (NLRC) and other quasi-judicial and quasi-administrative agencies.
THE CLOSING CREDITS…
In drafting the pertinent contracts, be it for an independent contractor or for a regular employee, the parties should be mindful of the applicable provisions of the law on Contracts, that“[t]he contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.” and the basic precept under the Constitution – “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 to investments, and to expansion and growth.”
Mc Antony M. Liggayu
Photography by Jakob Owens @ unsplash
Business can be conducted in many places outside of the usual office environment. Golf courses are, as we all know, very popular, particularly with men; the power lunch or dinner in a favourite restaurant can be a pleasant way to manage affairs; and for those of us who like the occasional tipple, a bar can be a very convivial place to discuss new ideas or cement a friendship with a new business acquaintance.
This last example was the idea behind MFBR’s recently announced ‘LEX SPEAKEASY’ gatherings, and the first event held just last week certainly proved its worth.
Despite the challenges of Manila’s fearsome Friday night traffic, attendance was very nearly 100%, and, having quickly (in the space of an hour!) turned our offices into an open bar, MFBR had the pleasure of welcoming representatives from both Filipino and foreign-owned companies, as well as clients and friends both old and new.
There were no speeches, no standing on ceremony, just a relaxed atmosphere where everyone could unwind and chat after a busy week. Discussions ranged across many subjects, from industrial relations to legal barriers and incentives, with raising finance and the problems faced by start-ups very much to the fore. Luckily the MFBR attorneys were on hand to offer advice, as well as soda. Introductions were also made between entrepreneurs, professionals, investors and attorneys, which will hopefully bear fruit in the future.
Because it’s the long term that interests us here. The Speakeasy will, we hope, be a forum where discussions continue from one month to the next, and where the seeds of ideas will germinate, grow and blossom over time.
And if a good single malt whisky or a white wine help speed up that process, then who are we to argue?
The attorneys and staff of MFBR would like to thank all those who came to celebrate our 10th Anniversary with us recently. It was a pleasure to see so many friends of the firm, and we particularly appreciate the effort everyone made in braving the Friday night traffic to be with us. Thank you all, and here’s to the next 10 years!
A bar in a law office? Well, yes, that’s the plan. Having taken the bar, the attorneys of MFBR are now opening one!
There won’t, of course, be a sign outside. And it won’t be for profit. In fact, the drinks and canapés will all be free. But if you are now frantically writing down our address in order to hurry round and be a part of this grand giveaway, we should warn you there’s a catch: it’s all by invitation only.
The brainchild of MFBR managing partner, Rob Mallari, Lex Speakeasy (‘lex’ is the Latin word for ‘law’) will be an informal gathering of business leaders, entrepreneurs, investors and friends of the firm, who will get together once a month to unwind, chat, exchange ideas… It will be an opportunity to meet other members of the business community in a relaxed atmosphere, where Rob and his colleagues will be on hand to make introductions, and possibly engage in a little entrepreneur-type matchmaking.
‘The idea came to me during our law firm’s 10th anniversary celebrations,’ explains Attorney Rob. ‘After dinner our guests gathered together in the ‘bar’ we’d mocked up in our office suite, and it fascinated me how people from different areas of the business community quickly found common ground, and how ideas were hatched and business relationships formed. I believe one or two very interesting new start ups might appear as a result of that celebration! The next day I was speaking with a colleague and we both thought it would be good to repeat the experience – hence the speakeasy. It will all be very low-key and friendly. That’s the way we like to do things. Though that’s not to say there won’t be one or two surprises!’
With speakeasies becoming ever more popular these days, MFBR are certainly in tune with the times. And they might just have come up with the strangest one yet!
Whether you are an employer or employee, when it comes to termination of employment it’s important to know your rights and obligations under the law. Let’s take a close look.
The right to security of tenure of an employee is granted under the 1987 Philippine Constitution and the Labor Code of the Philippines (both of which you can find in the Resources section on our Homepage). An employer cannot terminate an employee except for what are termed ‘Just Causes’ or ‘Authorized Causes’.
Article 297 of the Labor Code of the Philippines enumerates the Just Causes for terminating an employee as follows:
Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
Gross and habitual neglect by the employee of his duties;
Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and
Other causes analogous to the foregoing.
Article 298 of the Labor Code of the Philippines, meanwhile, enumerates the Authorized Causes for terminating an employee as follows:
Installation of labor-saving devices;
Retrenchment to prevent losses; and
Closure or cessation of operation of the establishment.
An employer may also terminate 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 pursuant to Article 299 of the Labor Code of the Philippines.
Before terminating an employee, the employer must observe procedural due process. This varies depending on whether an employee is being terminated on the ground of just causes or on the ground of authorized causes.
The case of Unilever Philippines Inc. vs. Maria Ruby Rivera, G.R. No. 201701, 03 June 2013, provides the procedural due process to be observed before termination of an employee based on a just cause thus:
First written notice to the employee containing the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint.
A hearing or conference during which the employee concerned, with the assistance of counsel if employee so desires, is given opportunity to respond to the charge, present his evidence or rebut evidence presented against him or her; and
A written notice of termination served on the employee indicating upon due consideration of all circumstance, grounds has been established to justify his or her termination.
However, it must be noted that a hearing or conference is not mandatory so long as the employee has been given ample opportunity to be heard. In the case of Felix B. Perez vs. Philippine Telegraph and Telephone Company, G.R. No. 152048, 07 April 2009, the Court held that, “A hearing means that a party should be given a chance to adduce his evidence to support his side of the case and that the evidence should be taken into account in the adjudication of the controversy. “To be heard” does not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written explanations, submissions or pleadings. Therefore, while the phrase “ample opportunity to be heard” may in fact include an actual hearing, it is not limited to a formal hearing only. In other words, the existence of an actual, formal “trial-type” hearing, although preferred, is not absolutely necessary to satisfy the employee’s right to be heard.”
The procedural due process of terminating an employee based on authorized cause is provided in Article 298 of the Labor Code of the Philippines, to wit:
Written Notice to the employee at least one (1) month before the intended date of termination; and
Written Notice to the Department of Labor and Employment at least one (1) month before the intended date of termination;