Fuji Television Network, Inc. v. Espiritu

In 2005 Fuji Television Network engaged Arlene Espiritu as a news correspondent/producer for its Manila Bureau. Her one-year contract was renewed every year with salary adjustments. In January 2009 she was diagnosed with lung cancer and informed Fuji. Fuji's Chief of News Agency told her the company would have a problem renewing her contract, although her physician certified that she was fit to work. On May 5, 2009, she and Fuji signed a non-renewal contract with a mutual release, under which she received US$18,050.00 in salaries, bonuses and separation pay. She signed it with the initials "U.P." (under protest). The next day she filed an illegal dismissal complaint, alleging that Fuji had withheld her salaries until she signed. The Labor Arbiter, citing Sonza v. ABS-CBN, held that she was an independent contractor. The NLRC reversed, finding her a regular employee, and awarded backwages. The Court of Appeals affirmed with modifications: reinstatement, backwages, benefits, moral and exemplary damages, attorney's fees, and 12% interest.

1. 1Whether the petition should be dismissed because the signatory of the verification and certification against forum shopping lacked authority to sign for Fuji.
2. 2Whether the Court of Appeals correctly found no grave abuse of discretion in the NLRC ruling that Arlene was a regular employee, not an independent contractor, and that she was illegally dismissed.
3. 3Whether the Court of Appeals properly modified the NLRC decision by awarding reinstatement, damages and attorney's fees.

The petition was denied. Fuji had substantially complied with the verification and certification requirements. The Court reviewed only whether the CA correctly found no grave abuse of discretion. The employer must prove that a worker is an independent contractor, and a fixed-term employee cannot be one, because a fixed-term contract presupposes employment. Under the four-fold test, Arlene was an employee: Fuji could dismiss her under her contract, controlled her work (eight-hour weekdays; mode of transport), and owned the equipment she used. Unlike Sonza, she was not hired for unique skills or celebrity status. Under Art. 280 [now Art. 295], her work was necessary and desirable to Fuji's broadcasting business, and her contract was renewed yearly; she was a regular employee with a fixed-term contract. The Brent School exception applies only where the parties deal on equal footing. She thus had security of tenure under Art. 279 [now Art. 294]. The way Fuji told her that her contract would not be renewed was "tantamount to constructive dismissal," and she was even asked to sign a resignation letter Fuji had prepared. She was in effect dismissed for her illness, yet Art. 284 [now Art. 299] and its implementing rule require a competent public health authority's certification that the disease cannot be cured within six months even with proper treatment; Fuji presented none. Reinstatement was proper since strained relations were not proved; the quitclaim did not bar her claims; her oppressive treatment justified damages. Her May 2009 salary may be deducted. The CA decision was affirmed, modified so that backwages run from June 2009 and legal interest is 6% per annum on the total monetary awards from May 5, 2009 until full satisfaction.