Sonza v.

ABS-CBN
FACTS
In May 1994, ABS-CBN signed an agreement with Mel and Jay Management and Development Corporation
(MJMDC). ABS was represented by its corporate officers, while MHMDC was represented by SONZA, as President
and General Manager, and Carmela Tiangco (EVP and Treasurer). Referred to in the Agreement as “AGENT”,
MHMDC agreed to provide SONZA’s services exclusively to ABS-CBN as talent for radio and television. SONZA
would co-host for Mel and Jay radio, receiving a talent fee.

SONZA then wrote a letter to ABS’ President, Lopez III concerning a violation committed by the company wherein it
inevitably breached the agreement, thus sending a notice of recission.

Sonza then filed a complaint against ABS before the DOLE. He complied that ABS-CBN did not pay his salaries,
separation pay, service inventive leave pay, 13 th month pay, signing bonus, travel allowance, and amounts due
under the Employees Stock Option Plan (ESOP)

ABS filed a MTD on the ground that there was no established employer-employee relationship between the
parties. Sonza then filed an opposition

ISSUE
Whether or not Sonza was an employee or an independent contractor.

RULING
He was an independent contractor. According to the control test:

First, Sonza claims that ABS exercised control over the means and methods of his work. This is wrong. ABS engaged
Sonza’s services in order to co-host the Mel & Jay programs. They did not assign other things to Sonza. Sonza only
needed his skills and talent to accomplish his work. However method Sonza was to deliver his lines, the way he
appeared on television, and the way he sounded on radio was outside ABS control.

Sonza did not have to do a full 8 hour work day. The agreement was that Sonza would only attend rehearsals and
tapons of shows, pre and post production staff meetings. ABS did not dictate Sonza’s script. But, the agreement
prohibited Sonza from criticizing ABS or its interest. Sonza had a free hand on what to say or discuss in his shows
provided it did not attack ABS or its interests.

Sonza also argues against the LA’s finding that he is a talent of MJMDC, which contracted out his services to ABS.
The LA ruled that as a talent of MJMDC, Sonza is not an employee of ABS. Sonza claims that MHMDC is a “labor-
only” contractor and ABS is his employer.

For Labor-only contracts, there are three parties:

1. Labor-only contractor
2. Employee who is ostensibly under the employ of the labor-only contractor
3. The principal who is deemed the real employer.

The labor-only contract is the agent of the principal. The Law makes the principal responsible to the employees of
the “labor-only contractor” as if the principal itself directly hired or employes the employees. These are not in this
case.

There are only 2 parties in the agreement, Sonza and ABS. MJMDC was Sonza’s agent. The agreement named
MJMDC as “AGENT”. The records do not show that MJMDC acted as ABS agent. MJMDC is a corporation organized
and owned by Sonza and Tiangco. The President is Sonza himself. It is absurd to hold that MJMDC, owned,
controlled, headed and managed by Sonza, acted as agent of ABS in entering into an agreement with Sonza, who
himself is represented by MHMDC. That would make MJMDC the agent of both ABS and Sonza.