SECOND DIVISION [ G.R. No. 204944-45, December 03, 2014 ] FUJI TELEVISION NETWORK, INC., PETITIONER, VS. ARLENE S. ESPIRITU, RESPONDENT.
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]
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]
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.
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:
Whether or not Espiritu is a regular employee or a fixed-term contractual employee;
Whether or not Espiritu was illegally dismissed; and
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]
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:
Backwages at the rate of $1,900.00 per month computed from May 5, 2009 (the date of dismissal), until reinstated;
13th Month Pay at the rate of $1,900.00 per annum from the date of dismissal, until reinstated;
One and a half (1½) months pay or $2,850.00 as midyear bonus per year from the date of dismissal, until reinstated;
One and a half (1½) months pay or $2,850.00 as year-end bonus per year from the date of dismissal, until reinstated;
Sick leave of 30 days with pay or $1,900.00 per year from the date of dismissal, until reinstated; and
Vacation leave with pay equivalent to 14 days or $1,425.00 per annum from date of dismissal, until reinstated.
Attorney’s fees equivalent to 10% of the total monetary awards herein stated; and
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.
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]
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.[45] 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:
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;
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
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.
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.
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.
In 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]
In 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] and 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:
- 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 verifcation, 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.” 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;
(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: The possibility of amicable settlement or of submission to alternative mode of dispute resolution; The simplification of the issue; The necessity or desirability of amendments to the pleadings; The possibility of obtaining stipulation or admission of facts and documents; and 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;
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.
In 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]
In 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 Abott Laboratories, PhiIippines v. AIcaraz[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 Iaw.”[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:
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]
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:
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:
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
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.
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