G.R. No. 204944 -45, December 3, 2014
FUJI TELEVISION NETWORK, INC., Petitioner, vs. ARLENE S. ESPIRITU, Respondent.

FACTS

In 2005, Arlene S. Espiritu was engaged by Fuji Television Network, Inc. as a news correspondent/producer under a contract initially for one year, which was successively renewed yearly with salary adjustments. In January 2009, she was diagnosed with lung cancer and informed Fuji. The Chief of News Agency informed her that the company would have a problem renewing her contract due to her condition, though she insisted she was fit to work. After communications, the parties signed a “non-renewal contract” on May 5, 2009, stipulating that her contract would not be renewed after its expiration on May 31, 2009, and releasing each other from liabilities. Arlene acknowledged receipt of US$18,050.00 representing salary, bonuses, and separation pay but signed with “U.P.” (under protest). The next day, she filed a complaint for illegal dismissal, alleging she was forced to sign when Fuji withheld her salaries after learning of her illness. The Labor Arbiter dismissed the complaint, ruling she was an independent contractor. The National Labor Relations Commission reversed, holding she was a regular employee illegally dismissed and entitled to backwages. The Court of Appeals affirmed with modification, ordering reinstatement and payment of backwages, bonuses, leaves, moral and exemplary damages, attorney’s fees, and legal interest. Fuji filed this petition, arguing she was an independent contractor, there was no illegal dismissal as the contract expired, and she voluntarily agreed not to renew.

ISSUE

1. Whether Arlene S. Espiritu is a regular employee or an independent contractor.
2. Whether she was illegally dismissed.
3. Whether she is entitled to damages and attorney’s fees.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals with modifications. It held that Arlene was a regular employee, not an independent contractor. The four-fold test (selection and engagement, payment of wages, power of dismissal, and power of control) indicated an employer-employee relationship, with Fuji exercising control over her work as a news producer. Her yearly renewals for necessary and desirable work made her a regular employee. She was illegally dismissed as Fuji failed to prove a valid cause for termination under the Labor Code; her illness was not certified by a competent public health authority as incurable within six months. The non-renewal contract was not voluntary, as she signed under protest after Fuji withheld salaries. She is entitled to reinstatement without loss of seniority rights, full backwages, allowances, other benefits, moral and exemplary damages due to the discriminatory dismissal based on illness, and attorney’s fees. Legal interest is imposed at 6% per annum on all monetary awards from finality of judgment until full payment.