LEGEND HOTEL (MANILA), OLWNED BY TITANIUM CORPORATION ANDIOR, NELSON NAPUD, IN HIS CAPACITY AS THE PRESIDENT OF PETITIONER CORPORATION, PETITIONER, VS. HERNANI S. REALUYO, ALSO KNOWN AS JOEY ROA, RESPONDENT. G.R. No, 153511, uy 18, 2012 FACTS: This labor case fo ilegal dismissal involves a pianist employed to perform in the restaurant of a hotel August 9, 1999: Reauyo. whose stage name was Joey R. Rea. filed a complaint for alleged unfair labor practice, constuctve illegal dismissal, and the underpaymentinenpayment of his premium pay fer holidays, separation pay. service incentive leave pay, and 13 month pay. He prayed for attorney's fees, moral damages of 100,000.00 and exemplary damages for P100,000.00 Roa averted that he had worked as a pianist at the Legend Hotel's Tanglaw Restaurant from September 1992 with an inital rate of P400,00/night: and that it iad increased to P750.00/night. During his employment. ne coud net choose the tine of performance, whic had been fixed from 7:00PM to 10:00pm for three to six tmes a week ‘July 9, 1999: the management had notfied him that as @ cost-cutting measure, Nis services as a pianist would no longer be requited effective July 30, 1999, In its defense, petttoner denied the ex'stence of an employer-enployee relationship with Rea. insisting that he had boon only a talent engaged to provide live music at Legend Hotel's Madison Cotfee Shop for three hoursiday on two days 6c” wesk: and stated that t1e economic cvsis that had hit the county constrained management to dispense with his services. December 23,1999: tne Labor Avbiter (LA) dismissed the complaint for lack of merit upon finding tnat the partis had nc empieyer-omployee reiationship, because Roa was receiving talent fee and not salary. whicn was reinforced by the fact that Roa rece'ved his talent fee night, unlike the regular employees of the hotel whe are paid monty. NLRC affirmed the LA's decision on May 31, 2001 CA sot aside the decision of tne NLRC. saying CA faled to take Into consideration that in Roa’s line of work, he was supervised and controlled by the hotel's restaurant manager who at certain mes would require him to perform only tagalong songs or music. or wear bareng tagalong to conform with tne Flipinana motif of the piace ‘and the tme of nis performance is fixed. As to tne status of Roa, he is considered a regular employee of the note since his job was in furtherance of the restaurant business of the hotel. Granting that Roa was initally a contractual employee, by the sheer length of service ne iad rendered for the company, ne had been converted into a regular employes. CA held thatthe dismissal was due to retrenchment in order to avoid or minimize business losses. which is, recognized by law under Art. 283 ofthe Labor Code, Issues: WON there was empioyer-employee relationship between the two. and if so, WON Roa was validly te-minated RULING: ‘YES. Employer-employee relationship existed between the parties. © Roa was undeniably empoyed as a pianist of the restaurant. The note! wielded the power of selection at the time it entered into te service contract dated Sept. 1, 1992 witi Roa. The hotel could not seek refuge behind the service contract entered into witn Roa. It's the law that defines and governs an employment relationship, wiose terms are not restricted to these fixed in the written contract. for other factors. ike the: nature of tie work the employee has been called upon to perform, are also considered ©The law affords protection to an employee, and does not countenance any attempt to subvert is spirt and intent. Any stipulation in writing can be Ignored when the employer utilzes the stipulation to deprive tie ‘employes of his security of tenure. The inequality that characterizes employer-employee relationship generally tips the scales in favor of the employer, such that the employee is often scarcely provided real and better options. © The argument that Roa was receiving talent foo and net salary is baseless. Thore is no denying that the remuneration denominated as talent fees was fixed on the basis of ris talent. skl, and the qualty of ‘music he played during the hours of his performance. Roa’s remuneration, albeit denominated as talent foes, was stil considered as included inthe torm wage in the sense and context of the Labor Code, regardless of how pettioner crose to designate tie remuneration, as per Article 97(f) of the Labor Code. ©The power of tie employer to control the work of the employee 's considered the most significant dote:minant of the ox’stonce of an employer-employee relationship. This is the so-called control test, ‘and 's promised on wnether the person for whem the services are performed reserves the right to conto! both tte ord acrieved and t1e manner and means used to achieve that end,Lastly, potifoner claims that it had no power to aism'ss respondent due te his not being even subject to its Code of Discipline. and that the power to terminate the working relationship was mutually vested in tie Panties, In that eitver party might terminate at wil, with or witout cause. This c'alm 's contrary to te records. Indeed, the memorandum informing respondent of tne discount nuance of his service because of the financ’al condition of petitioner snowed the latter had the power to dismiss him from employment NO. Roa was not validly terminated Potton denied “Tho conclusion that Roa’s termination was by reason of retrenchment due to an authorized cause under the labor Code's inevitable, Retrenchment is one of tne authorized causes for the dismissal of employees recognized by the Labor Code. It's a management prerogative resorted to by empioyers to avoid ro to minimize business losses. On tis mater. Arte 285 ofthe Labor Code states: Artc’e 283, Closure of establishment and reduction of persone’. - The employer may also terminate the employment of any employee due to the instalation of labor-saving devices, redundancy, retvenchment to prevent losses or the closing or cessation of operation of tie establisnment or undertaking unless tne closing is for the purpese of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment atleast one (1) month before the intended date thereof. xxx. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to ene (1) mont pay oat least one-haif (1/2) month pay for every year of service. whichever is, higner. A fraction of at least six (6) months shall be considered one (1) whole year. Justficatons for retrenchment a. Tho expected losses should be substantial and not merely de minimis in extent; The substantial icsses apprehended must be reasonably imminent; ©. The retrenciment must be reasonably necessary and Ikely to effectively prevent the expected losses; and 1d. The aiaged losses, f aready incurred, and the expected imminent losses sought to be forestalled must be proved by suffciont and convincing evidence. In termination cases. the burden of proving that the dismissal was for a valid or authorized cause rests ‘upon the employer. Hore, petitioner did not submit evidence of the icsses to its business operations and the economic havoc it would thereby imminently sustain, It only claimed that Roa’s termination was due to its “present businoss/fnancial condition." This bare statement fel short of tne norn to snow a valid retrenchment. Hence, there was no valid cause for the retrenchment of respondent. Since tie lapse fof time since the retrenchment might have rendered Roa’s reinstatement to his former jab no longer feasibe, Legend Hote) should pay him separation pay at te rate of one month pay for every year of sevice computed from September 1992 unt! the finaly of this dec'sion. and ful backwages from tie t me nis compensation was witiheld until te finaly of tis decision.