G.R. No. 200434, December 06, 2021
Carmela C. Tiangco, Petitioner, vs. ABS-CBN Broadcasting Corporation, Respondent.

FACTS

Petitioner Carmela C. Tiangco was initially engaged by respondent ABS-CBN as a Talent Newscaster on an exclusive basis in 1986 under a series of contracts. The last contract was the May 1994 Agreement between ABS-CBN and Mel & Jay Management and Development Corporation (MJMDC), wherein MJMDC committed to provide petitioner’s exclusive services as a talent for radio and television for three years. The Agreement stipulated her specific programs, exclusivity, benefits (SSS, Medicare, healthcare, insurance, 13th-month pay), and required her to abide by company rules and standards. On February 8, 1995, ABS-CBN issued a Memorandum prohibiting on-air talents from appearing in commercial advertisements. Petitioner allegedly violated this by appearing in a Tide commercial in December 1995. Consequently, ABS-CBN suspended her for three months without pay on January 16, 1996. Petitioner filed a complaint for illegal dismissal, illegal suspension, and monetary claims. The Labor Arbiter ruled in her favor. ABS-CBN appealed to the NLRC, invoking the Supreme Court’s ruling in Sonza v. ABS-CBN Broadcasting Corporation, which held that broadcast talents are independent contractors, not employees. The NLRC reversed the Labor Arbiter’s decision and dismissed the case for lack of jurisdiction, applying the Sonza ruling. Petitioner elevated the case to the Court of Appeals via a Petition for Certiorari. During the proceedings, the parties executed a Partial Settlement Agreement, resolving all issues except the question of whether an employer-employee relationship existed, which they agreed to submit for judicial determination. The CA approved the settlement and declared the remaining issue moot and academic. Petitioner filed the present Petition for Review on Certiorari.

ISSUE

Whether the Court of Appeals erred in declaring the issue of the existence of an employer-employee relationship moot and academic despite the parties’ Partial Settlement Agreement expressly reserving that specific issue for judicial determination.

RULING

Yes. The Court of Appeals erred. The Supreme Court held that the issue of the existence of an employer-employee relationship was not rendered moot by the Partial Settlement Agreement. The Agreement explicitly stated that the parties “AGREE to submit for judicial determination the issue of whether or not an employer-employee relationship existed between them.” This stipulation was a compromise on the other aspects of the case but specifically reserved a defined question of law for the court to resolve. A compromise agreement has the force of law between the parties, and its terms must be respected. Therefore, the CA should not have declared the issue moot but should have proceeded to resolve it as stipulated by the parties. The Supreme Court proceeded to rule on the reserved issue. Applying the four-fold test and the ruling in Sonza, which involved an identical contract (the May 1994 Agreement), the Court found that no employer-employee relationship existed between petitioner and ABS-CBN. Petitioner possessed unique skills and talent, was not under the control of ABS-CBN as to the means and methods of her work, was compensated by talent fees rather than salaries, and her engagement was for a specific period and show. The provision requiring her to follow company rules and standards pertained to the results of her work and the protection of the network’s broadcast standards, not to the control of her performance. Thus, petitioner was an independent contractor. The Petition was denied for lack of merit.