542 SCRA 578 – Labor Law – Labor Standards – Regular Employee – Employer-employee relationship – Four Fold Test
Servaña started out as a security for the Agro-Commercial Security Agency (ACSA) since 1987. The agency had a contract with TV network RPN 9.
On the other hand, Television and Production Exponents, Inc (TAPE). is a company in charge of TV programming and was handling shows like Eat Bulaga! Eat Bulaga! was then with RPN 9.
In 1995, RPN 9 severed its relations with ACSA. TAPE retained the services of Servaña as a security guard and absorbed him.
In 2000, TAPE contracted the services of Sun Shield Security Agency. It then notified Servaña that he is being terminated because he is now a redundant employee.
Servaña then filed a case for illegal Dismissal. The Labor Arbiter ruled that Servaña’s dismissal is valid on the ground of redundancy but though he was not illegally dismissed he is still entitled to be paid a separation pay which is amounting to one month pay for every year of service which totals to P78,000.00.
TAPE appealed and argued that Servaña is not entitled to receive separation pay for he is considered as a talent and not as a regular employee; that as such, there is no employee-employer relationship between TAPE and Servaña. The National Labor Relations Commission ruled in favor of TAPE. It ruled that Servaña is a program employee. Servaña appealed before the Court of Appeals.
The Court of Appeals reversed the NLRC and affirmed the LA. The CA further ruled that TAPE and its president Tuviera should pay for nominal damages amounting to P10,000.00.
ISSUE: Whether or not there is an employee-employer relationship existing between TAPE and Servaña.
HELD: Yes. Servaña is a regular employee.
In determining Servaña’s nature of employment, the Supreme Court employed the Four Fold Test:
1. Whether or not employer conducted the selection and engagement of the employee.
Servaña was selected and engaged by TAPE when he was absorbed as a “talent” in 1995. He is not really a talent, as termed by TAPE, because he performs an activity which is necessary and desirable to TAPE’s business and that is being a security guard. Further, the primary evidence of him being engaged as an employee is his employee identification card. An identification card is usually provided not just as a security measure but to mainly identify the holder thereof as a bona fide employee of the firm who issues it.
2. Whether or not there is payment of wages to the employee by the employer.
Servaña is definitely receiving a fixed amount as monthly compensation. He’s receiving P6,000.00 a month.
3. Whether or not employer has the power to dismiss employee.
The Memorandum of Discontinuance issued to Servaña to notify him that he is a redundant employee evidenced TAPE’s power to dismiss Servaña.
4. Whether or not the employer has the power of control over the employee.
The bundy cards which showed that Servaña was required to report to work at fixed hours of the day manifested the fact that TAPE does have control over him. Otherwise, Servaña could have reported at any time during the day as he may wish.
Therefore, Servaña is entitled to receive a separation pay.
On the other hand, the Supreme Court ruled that Tuviera, as president of TAPE, should not be held liable for nominal damages as there was no showing he acted in bad faith in terminating Servaña.
Regular Employee Defined:
One having been engaged to perform an activity that is necessary and desirable to a company’s business.
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