FIRST DIVISION
EFREN P. PAGUIO,
Petitioner,
G.R.
No.
147816
May 9, 2003
-versus-
NATIONAL
LABOR
RELATIONS
COMMISSION,METROMEDIA TIMES
CORPORATION, ROBINAY. GOKONGWEI,
LIBERATO
GOMEZ, JR.,YOLANDA E. ARAGON,
FREDERICK D. GOAND ALDA IGLESIA,
Respondents. |
D E C I S I
O N
VITUG,
J.:chanroblesvirtuallawlibrary
On 22 June 1992, respondent
Metromedia Times Corporation entered, for the fifth time, into an
agreement
with petitioner Efren P. Paguio, appointing the latter to be an account
executive of the firm.[1]
Again, petitioner was to solicit advertisements for "The Manila Times,"
a newspaper of general circulation, published by respondent
company.
Petitioner, for his efforts, was to receive compensation consisting of
a 15% commission on direct advertisements less withholding tax and a
10%
commission on agency advertisements based on gross revenues less agency
commission and the corresponding withholding tax. The
commissions,
released every fifteen days of each month, were to be given to
petitioner
only after the clients would have paid for the advertisements.
Apart
from commissions, petitioner was also entitled to a monthly allowance
of
P2,000.00 as long as he met the P30,000.00-monthly quota.
Basically,
the contentious points raised by the parties had something to do with
the
following stipulations of the agreement; viz:
"12. You
are
not an employee of the Metromedia Times Corporation nor does the
company
have any obligations towards anyone you may employ, nor any
responsibility
for your operating expenses or for any liability you may incur.
The
only rights and obligations between us are those set forth in this
agreement.
This agreement cannot be amended or modified in any way except with the
duly authorized consent in writing of both parties.
"13. Either party
may
terminate this agreement at any time by giving written notice to the
other,
thirty (30) days prior to effectivity of termination."[2]
On 15 August 1992,
barely
two months after the renewal of his contract, petitioner received the
following
notice from respondent firm -
"Dear Mr.
Paguio,
"Please be advised
of
our decision to terminate your services as Account Executive of Manila
Times effective September 30, 1992.
"This is in
accordance
with our contract signed last July 1, 1992."[3]
Apart from vague
allegations
of misconduct on which he was not given the opportunity to defend
himself,
i.e., pirating clients from his co-executives and failing to produce
results,
no definite cause for petitioner’s termination was given.
Aggrieved,
petitioner filed a case before the labor arbiter, asking that his
dismissal
be declared unlawful and that his reinstatement, with entitlement to
backwages
without loss of seniority rights, be ordered. Petitioner also
prayed
that respondent company officials be held accountable for acts of
unfair
labor practice, for P500,000.00 moral damages and for P200,000.00
exemplary
damages.
In their defense, respondent
Metromedia Times Corporation asserted that it did not enter into any
agreement
with petitioner outside of the contract of services under Articles 1642
and 1644 of the Civil Code of the Philippines.[4]
Asserting their right to terminate the contract with petitioner,
respondents
pointed to the last provision thereof stating that both parties could
opt
to end the contract provided that either party would serve, thirty days
prior to the intended date of termination, the corresponding notice to
the other.cralaw:red
The labor arbiter found
for petitioner and declared his dismissal illegal. The arbiter
ordered
respondent Metromedia Times Corporation and its officers to reinstate
petitioner
to his former position, without loss of seniority rights, and to pay
him
his commissions and other remuneration accruing from the date of
dismissal
on 15 August 1992 up until his reinstatement. He likewise
adjudged
that Liberato I. Gomez, general manager of respondent corporation, be
held
liable to petitioner for moral damages in the amount of P20,000.00.cralaw:red
On appeal, the National
Labor Relations Commission (NLRC) reversed the ruling of the labor
arbiter
and declared the contractual relationship between the parties as being
for a fixed-term employment. The NLRC declared a fixed-term
employment
to be lawful as long as "it was agreed upon knowingly and voluntarily
by
the parties, without any force, duress or improper pressure being
brought
to bear upon the worker and absent any other circumstances vitiating
his
consent."[5]
The finding of the NLRC was primarily hinged on the assumption that
petitioner,
on account of his educated stature, having indeed personally prepared
his
pleadings without the aid of counsel, was an unlikely victim of a
lopsided
contract. Rejecting the assertion of petitioner that he was a
regular
employee, the NLRC held: "The decisive determinant would not be the
activities
that the employee (was) called upon to perform but rather, 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
(would) necessarily come, although it (might) not be known when."[6]
Petitioner appealed
the ruling of the NLRC before the Court of Appeals which upheld in toto
the findings of the commission. In his petition for review on
certiorari,
petitioner raised the following issues for resolution:
"WHETHER OR NOT
PETITIONER'S
CONTRACT WITH PRIVATE RESPONDENT’S COMPANY IS FOR A FIXED PERIOD.
"WHETHER OR NOT
PETITIONER'S
DISMISSAL IS LEGAL.
"WHETHER OR NOT
PETITIONER
IS ENTITLED TO BACKWAGES AND MORAL DAMAGES."[7]
The crux of the matter
would entail the determination of the nature of contractual
relationship
between petitioner and respondent company - was it or was it not one of
regular employment?
A "regular employment,"
whether it is one or not, is aptly gauged from the concurrence, or the
non-concurrence, of the following factors - a) the manner of selection
and engagement of the putative employee, b) the mode of payment of
wages,
c) the presence or absence of the power of dismissal; and d) the
presence
or absence of the power to control the conduct of the putative employee
or the power to control the employee with respect to the means or
methods
by which his work is to be accomplished.[8]
The "control test" assumes primacy in the overall consideration.
Under this test, an employment relation obtains where work is performed
or services are rendered under the control and supervision of the party
contracting for the service, not only as to the result of the work but
also as to the manner and details of the performance desired.[9]
An indicum of regular
employment, rightly taken into account by the labor arbiter, was the
reservation
by respondent Metromedia Times Corporation not only of the right to
control
the results to be achieved but likewise the manner and the means used
in
reaching that end.[10]
Metromedia Times Corporation exercised such control by requiring
petitioner,
among other things, to submit a daily sales activity report and also a
monthly sales report as well. Various solicitation letters would
indeed show that Robina Gokongwei, company president, Alda Iglesia, the
advertising manager, and Frederick Go, the advertising director,
directed
and monitored the sales activities of petitioner.cralaw:red
The Labor Code, in Article
280 thereof, provides:
"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 proceeding
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 exists."
Thus defined, a regular
employee is one who is engaged to perform activities which are
necessary
and desirable in the usual business or trade of the employer as against
those which are undertaken for a specific project or are
seasonal.
Even in these latter cases, where such person has rendered at least one
year of service, regardless of the nature of the activity performed or
of whether it is continuous or intermittent, the employment is
considered
regular as long as the activity exists, it not being indispensable that
he be first issued a regular appointment or be formally declared as
such
before acquiring a regular status.[11]
That petitioner performed
activities which were necessary and desirable to the business of the
employer,
and that the same went on for more than a year, could hardly be
denied.
Petitioner was an account executive in soliciting advertisements,
clearly
necessary and desirable, for the survival and continued operation of
the
business of respondent corporation. Robina Gokongwei, its
President,
herself admitted that the income generated from paid advertisements was
the lifeblood of the newspaper's existence. Implicitly,
respondent
corporation recognized petitioner’s invaluable contribution to the
business
when it renewed, not just once but five times, its contract with
petitioner.cralaw:red
Respondent company cannot
seek refuge under the terms of the agreement it has entered into with
petitioner.
The law, in defining their contractual relationship, does so, not
necessarily
or exclusively upon the terms of their written or oral contract, but
also
on the basis of the nature of the work petitioner has been called upon
to perform.[12]
The law affords protection to an employee, and it will not countenance
any attempt to subvert its spirit and intent. A stipulation in an
agreement can be ignored as and when it is utilized to deprive the
employee
of his security of tenure.[13]
The sheer inequality that characterizes employer-employee relations,
where
the scales generally tip against the employee, often scarcely provides
him real and better options.
The real question that
should thus be posed is whether or not petitioner has been justly
dismissed
from service. A lawful dismissal must meet both substantive and
procedural
requirements; in fine, the dismissal must be for a just or authorized
cause
and must comply with the rudimentary due process of notice and
hearing.
It is not shown that respondent company has fully bothered itself with
either of these requirements in terminating the services of
petitioner.
The notice of termination recites no valid or just cause for the
dismissal
of petitioner nor does it appear that he has been given an opportunity
to be heard in his defense.cralaw:red
The evidence, however,
found by the appellate court is wanting that would indicate bad faith
or
malice on the part of respondents, particularly by respondent Liberato
I. Gomez, and the award of moral damages must thus be deleted.cralaw:red
WHEREFORE, the instant
petition is GRANTED. The decision of the Court of Appeals in C.A.
G.R. SP No. 527773 and that of the National Labor Relations Commission
are hereby SET ASIDE and that of the Labor Arbiter is REINSTATED except
with respect to the P20,000.00 moral damages adjudged against
respondent
Liberato I. Gomez which award is deleted.cralaw:red
SO ORDERED.cralaw:red
Davide, Jr., C.J., (Chairman),
Ynares-Santiago, Carpio, and Azcuna, JJ.,
concur.
____________________________
Endnotes:
[1]
The letter contract dated 22 June 1992 read -
Dear
Mr. Paguio:chanroblesvirtuallawlibrary
This
letter is to appoint you as Account Executive for The Manila Times for
a period of twelve (12) months effective July 1, 1992 to June 30, 1993,
and to set forth the terms and conditions of your contract.
1.
As account executive, you will use your best efforts to obtain
advertisements
exclusively for us and for such projects that The Manila Times may
decide
to do from time to time.
2.
You are authorized to solicit advertisements and quote advertising
rates
in accordance with and subject to all the terms and conditions in our
rate
cards.
3.
All advertisements are subject to acceptance by us and we reserve the
right
in our absolute discretion to reject or omit any advertisements.
4.
You will be paid fifteen (15) percent commission on direct
advertisements
less corresponding withholding tax.
5.
You will be paid ten (10) percent commission on agency advertisements
based
on gross ad revenues less agency commission and corresponding
withholding
tax.
6.
Walk-in advertisements, not solicited by the Advertising staff, are not
commissionable.
7.
All payments must be paid direct to Metromedia Times Corporation.
In no case, however, will commission be paid until and unless the
advertisements,
whether agency or direct, have been paid for, subject to the
corresponding
withholding taxes authorized by law.
8.
Commissions earned on paid advertisements covering the period from the
first (1st) to the fifteenth (15) of every month shall be payable at
the
end of the same month; commissions earned on paid advertisements
covering the period from the sixteenth (16th ) to the end of the month
shall be payable on the fifteenth (15) of the succeeding month.
9.
You will be entitled to a monthly allowance of P2,000.00 provided that
you meet a monthly quota of P30,000.00 in advertising lineage.
But
should you fail to meet your quota, your allowance shall be charged
against
your future account.
10
For all ex-deal arrangements, the barter agreement and your commission
will be subject to the written approval of the President and Treasurer
on a case-to-case basis.
11.
You will be paid your approved commission only after the payment for
the
liquidation (sold and/or consumed) of the goods received from the
advertiser
has been completed.
12.
You are not an employee of Metromedia Times Corporation nor does the
Company
have any obligations towards anyone you may employ, nor any
responsibility
for your operating expenses or for any liability you may incur.
The
only rights and obligations between us are those set forth in this
agreement.
This agreement cannot be amended or modified in any way except with the
duly authorized consent in writing of both parties.
13.
Either party may terminate this agreement at any time by giving written
notice to the other thirty (30) days prior to the effectivity of
termination.
If
these terms and conditions are acceptable to you, please indicate your
conformity by signing below. (Rollo, pp. 41-42.)
[2]
Rollo, p. 42.
[3]
Rollo, p. 43.
[4]
Article 1642 of the Civil Code provides: "The contract of lease may be
of things, or of work and service."
Article
1644 provides: "In the lease of work or service, one of the parties
binds
himself to execute a piece of work or to render to the other some
service
for a price certain, but the relation of principal and agent does not
exist
between them."
[5]
Rollo, NLRC Decision dated 15 December 1998, p. 82.
[6]
Rollo, p. 85.
[7]
Rollo, p. 18.
[8]
Hijos de F. Escano, Inc., vs. NLRC G.R. No. 59229, 22 August 1991, 201
SCRA 63; Ecal vs. NLRC, G.R. Nos. 92777-78, 13 March 1991, 195 SCRA 224.
[9]
Iloilo Chinese Commercial School vs. Fabrigar, L-16600, 27 December
1961,
3 SCRA 712.
[10]
Cosmopolitan Funeral Homes, Inc., vs. Maalat, G.R. No. 86693, 02 July
1990,
187 SCRA 108.
[11]
Article 280, Labor Code.
[12]
A.M. Oreta and Co., Inc., vs. NLRC, et al., G.R. No. 74004, 10 August
1989,
176 SCRA 218.
[13]
Cielo vs. NLRC, G.R. No. 78693, 28 January 1991, 193 SCRA 410. |