FROM MANILA HOTEL TO LEGEND: THE MUSICIAN AND HIS STATUS IN THE PHILIPPINE ENTERTAINMENT INDUSTRY
Francis V. Sobreviñas*
Yehudi Menuhin, The Music of Man 1 (1979).**
The piano is a musical instrument having wire strings that sound when struck by felt-covered hammers operated from a keyboard. The modern standard piano contains 88 black and white keys.[1] The word piano is a shortened form of pianoforte, the Italian word for the instrument. The musical terms “piano” and “forte” mean “quiet” and “loud”, and in this context refers to the variations in volume of sound the instrument produces in response to a pianist’s touch on the keys: the greater a key press’s velocity, the greater the force of the hammer hitting the strings, and the louder the note produced.[2]
Only about three (3) months ago, our Supreme Court decided a case involving a pianist who filed a complaint for illegal dismissal and other money claims against a well-known hotel in Manila.[3] That case presented an opportunity for the court to reiterate the settled and established rule in determining the existence of an employer-employee relationship.
This paper will examine the aforementioned topic with particular emphasis on some cases involving musicians in our entertainment industry. To be sure, the test to determine the existence of employer-employee relationship presents a complicated process. There is no uniform test prescribed by law. Neither is there any particular form of proof required to prove its existence. There are, however, certain elements which may be used to determine the existence of employer-employee relationship and these were laid down for the first time by our Supreme Court in the precedent-setting case of Viaña v. Al-lagadan[4] in this manner:
The so-called four-fold test to determine the existence of an employer-employee relationship has since been adopted in subsequent jurisprudence.[5]
The most common standards to determine the existence of the employment relationship are the first three (3) tests: (1) the selection and engagement of the employee; (2) the payment of wages; and (3) the exercise of the power of dismissal over the employee. But it is the fourth test, i.e., the “control test,” which constitutes the most important index of the existence of the employer-employee relationship. This particular test will tell us whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. In fact, our Supreme Court has relied on this particular element as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship.[6] In other words, an employer-employee relationship is present where the person for whom the services are performed reserved the right to control not only the end to be achieved but also the means to be used in reaching such end.[7] Conversely, absent the power to control the employee with respect to the means and methods by which his work was to be accomplished, there is no employer-employee relationship between the parties.[8]
Having briefly reviewed the four-fold test, let us now take a look at some early cases on the subject that originated from the world of Philippine entertainment.
In the case of Josefa Vda. de Cruz v. The Manila Hotel,[9] it was held that one who is engaged to furnish music, according to his own manner and method, free from the control and direction of his employer in all matters connected with the performance of the service, except as to the result of the work, and for a certain price daily, is an independent contractor. In that case, the popular bandleader, Tirso Cruz, had a contract with the Manila Hotel whereby the former agreed to furnish the latter the services of his orchestra, consisting of 15 musicians “from 7:30 p.m. to closing time daily.” Mr. Cruz, who was later on substituted by his widow after his death, sought to recover separation gratuity from the Manila Hotel upon management’s advice that the hotel would be leased to Bay View Hotel. Cruz and his musicians claimed the gratuity but the Manila Hotel management denied their claim saying they were not its employees. Consequently, they filed a case with the trial court. The Manila Court of First Instance dismissed the case and the Supreme Court upheld its ruling for the reason that no employer-employee relationship existed between the hotel and Mr. Cruz.
The following findings of the Supreme Court are most instructive:
It will be observed that by Annex 1 the Manila Hotel contracted or engaged the ‘services of your orchestra’ (of Tirso Cruz) ‘composed of fifteen musicians including yourself plus Ric Cruz as vocalist’ at P250 per day, said orchestra to ‘play from 7:30 p.m. to closing time daily’. What pieces the orchestra shall play, and how the music shall be arranged or directed, the intervals and other details – such are left to the leader’s discretion. The musical instruments, the music papers and other paraphernalia are not furnished by the Hotel, they belong to the orchestra, which in turn belongs to Tirso Cruz – not to the Hotel. The individual musicians, and the instruments they handle have not been selected by the Hotel. It reserved no power to discharge any musician. How much salary is given to the individual members is left entirely to `the orchestra’ or the leader. Payment of such salary is not made by the Hotel to the individual musicians, but only a lump-sum compensation is given weekly to Tirso Cruz.
Considering the above features of the relationship, in connection with the tests indicated by numerous authorities, it is our opinion that Tirso Cruz was not an employee of the Manila Hotel, but one engaged to furnish music to said hotel for the price of P250.00 daily, in other words, an independent contractor within the meaning of the law of master and servant.
‘An independent contractor is one who in rendering services, exercises an independent employment or occupation and represents the will of his employer only as to the results of his work and not as to the means whereby it is accomplished; one who exercising an independent employment, contracts to do a piece of work according to his own methods, without being subject to the control of his employer except as to the result of his work; and who engages to perform a certain service for another, according to his own manner and method, free from the control and direction of his employer in all matters connected with the performance of the service, except as to the result of the work.’ (56 C.J.S. pp. 41-43.) ‘Among the factors to be considered are whether the contractor is carrying on an independent business; whether the work is part of the employer’s general business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of the work to another; the power to terminate the relationship; the existence of a contract for the performance of a specified piece of work; the control and supervision of the work the employer’s powers and duties with respect to the hiring, firing, and payment of the contractor’s servants; the control of the premises; the duty to supply the premises, tools, appliances, material and labor; and the mode, manner, and terms of payment.” (56 C.J.S. p. 46). (Italics ours.)
Not being employees of the Manila Hotel, the plaintiffs have no cause of action against the latter under Annex A. The order of dismissal is therefore affirmed, with costs against them. So ordered.”[10]
A different decision, however, was arrived at in the case of LVN Pictures, Inc. v. Philippine Musicians Guild[11] involving a group of musicians hired by a motion picture company for the purpose of making music recordings for title music, background music, musical numbers, finale music and other incidental music. The musicians claimed that they are employees who formed a union that sought to be recognized as the exclusive bargaining agent of all musicians working with the said company. On the other hand, LVN Pictures denied that they have any musicians as employees and alleged that the musical numbers in the films of the company are furnished by independent contractors. The lower court rejected this pretense and sustained the theory of the union that the company exercised control over the musicians and that without the music, the motion picture would be incomplete.
In support of its position that there was no employer-employee relationship, LVN invoked the case of Vda de Cruz v. The Manila Hotel.[12] This was, however, rejected by the Supreme Court which found the Cruz case inapplicable.
According to the High Tribunal:
This is not the situation obtaining in the cases at bar. The musical directors above referred to have no such control over the musicians involved in the present case. Said musical directors control neither the music to be played, nor the musicians playing it. The film companies summon the musicians to work, through the musical directors. The film companies, through the musical directors, fix the date, the time and the place of work. The film companies, not the musical directors, provide the transportation to and from the studio. The film companies furnish meal at dinner time.
What is more — in the language of the order appealed from — “during the recording sessions, the motion picture director who is an employee of the company” — not the musical director — “supervises the recording of the musicians and tells them what to do in every detail”. The motion picture director — not the musical director — “solely directs the performance of the musicians before the camera“. The motion picture director “supervises the performance of all the actors, including the musicians who appear in the scenes, so that in the actual performance to be shown in the screen, the musical director’s intervention has stopped.” Or, as testified to in the lower court, “the movie director tells the musical director what to do; tells the music to be cut or tells additional music in this part or he eliminates the entire music he does not (want) or he may want more drums or more violin or piano, as the case may be”. The movie director “directly controls the activities of the musicians.” He “says he wants more drums and the drummer plays more” or “if he wants more violin or he does not like that.”
It is well settled that “an employer-employee relationship exists . . .where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end . . . .” (Alabama Highway Express Co., Express Co., v. Local 612, 108S. 2d. 350.) The decisive nature of said control over the “means to be used”, is illustrated in the case of Gilchrist Timber Co., et al., Local No. 2530 (73 NLRB No. 210, pp. 1197, 1199-1201), in which, by reason of said control, the employer-employee relationship was held to exist between the management and the workers, notwithstanding the intervention of an alleged independent contractor, who had, and exercise (sic), the power to hire and fire said workers. The aforementioned control over the means to be used” in reaching the desired end is possessed and exercised by the film companies over the musicians in the cases before us.[13]
The next case of Torillo v. Leogardo[14] centers on Valentino Torillo, alias “Lady Valerie”, who was an entertainer in the 1970’s and 1980’s. Petitioner Torillo was employed as an organist by the private respondent Aberdeen Court with a daily compensation of P115.00 for five hour work a day. On July 2, 1978, he invited his co-employees for a night out in his hometown in Rosario, Cavite in celebration of his birthday. Private respondent objected to such activity, requesting its employees, if possible, to refrain from attending the affair because the following day was a working day. Despite private respondent’s objections, petitioner pushed through with his birthday party.
Petitioner reported for work the next day, July 3. On July 4, 1978, private respondent, through its Floor Manager, informed petitioner that he was being dismissed from his employment effective that same day for having defied private respondent’s order. Petitioner thereafter filed a complaint for illegal dismissal that, after 13 years, was resolved in favor of Lady Valerie by the Court which ordered the payment of separation pay, backwages and other monetary benefits. Unlike the bandleader Tirso Cruz, Lady Valerie was found to be an employee of Aberdeen Court primarily because the evidence adduced met the requirements of the four-fold test, most specially in respect of the power of dismissal.
The respondent in Legend Hotel, Hernani Realuyo, also known as Joey Roa, averred that he had worked as a pianist at the Legend Hotel’s Tanglaw Restaurant from September 1992 with an initial rate of P400.00/night that was given to him after each night’s performance; that his rate had increased to P750.00/night; and that during his employment, he could not choose the time of performance, which had been fixed from 7:00 pm to 10:00 pm for three to six times a week. He added that the Legend Hotel’s restaurant manager had required him to conform with the venue’s motif; that he had been subjected to the rules on employees’ representation checks and chits, a privilege granted to other employees; that on July 9, 1999, the management had notified him that as a cost-cutting measure his services as a pianist would no longer be required effective July 30, 1999; that he disputed the excuse, insisting that Legend Hotel had been lucratively operating as of the filing of his complaint; and that the loss of his employment made him bring his complaint.
In its defense, petitioner hotel denied the existence of an employer- employee relationship with respondent, insisting that he had been only a talent engaged to provide live music at Legend Hotel’s Madison Coffee Shop for three hours a day on two days each week; and stated that the economic crisis that had hit the country constrained management to dispense with his services.
On December 29, 1999, the Labor Arbiter (LA) dismissed the complaint for lack of merit upon finding that the parties had no employer-employee relationship. The LA explained:
x x x
Even if we grant the initial non-existence of the service contract, as complainant suggests in his reply (third paragraph, page 4), the picture would not change because of the admission by complainant in his letter dated October 8, 1996 (Annex “C”) that what he was receiving was talent fee and not salary.
This is reinforced by the undisputed fact that complainant received his talent fee nightly, unlike the regular employees of the hotel who are paid by monthly xxx.
x x x
And thus, absent the power to control with respect to the means and methods by which his work was to be accomplished, there is no employer-employee relationship between the parties xxx.
x x x
WHEREFORE, this case must be, as it is hereby, DISMISSED for lack of merit.”
Respondent appealed, but the National Labor Relations Commission (NLRC) affirmed the LA on May 31, 2001.
Respondent assailed the decision of the NLRC in the Court of Appeals (CA) on certiorari.
On February 11, 2002, the CA set aside the decision of the NLRC. According to the second highest court of the land:
The answer to this question is in the affirmative. x x x Well settled is the rule that of the four (4) elements of employer- employee relationship, it is the power of control that is more decisive.
In this regard, public respondent failed to take into consideration that in petitioner’s line of work, he was supervised and controlled by respondent’s restaurant manager who at certain times would require him to perform only tagalog songs or music, or wear barong tagalog to conform with Filipiniana motif of the place and the time of his performance is fixed by the respondents from 7:00 pm to 10:00 pm, three to six times a week. Petitioner could not choose the time of his performance. xxx.
As to the status of petitioner, he is considered a regular employee of private respondents since the job of the petitioner was in furtherance of the restaurant business of respondent hotel. Granting that petitioner was initially a contractual employee, by the sheer length of service he had rendered for private respondents, he had been converted into a regular employee xxx.
x x x
xxx In other words, the dismissal was due to retrenchment in order to avoid or minimize business losses, which is recognized by law under Article 283 of the Labor Code, xxx.
x x x WHEREFORE, foregoing premises considered, this petition is GRANTED. xxx.”
Before the Supreme Court, one of the issues raised was whether or not respondent was an employee of petitioner. And anterior to announcing its adjudication, the Court had this to say:
“The issue of whether or not an employer-employee relationship existed between petitioner and respondent is essentially a question of fact. The factors that determine the issue include who has the power to select the employee, who pays the employee’s wages, who has the power to dismiss the employee, and who exercises control of the methods and results by which the work of the employee is accomplished. Although no particular form of evidence is required to prove the existence of the relationship, and any competent and relevant evidence to prove the relationship may be admitted, a finding that the relationship exists must nonetheless rest on substantial evidence, which is that amount of relevant evidence that a reasonable mind might accept as adequate to justify a conclusion.”
Thereafter, it declared that respondent was undeniably employed as a pianist in petitioner’s coffee shop/restaurant from September 1992 until his services were terminated on July 9, 1999. This ruling was based on a review of the following facts and circumstances: first of all, petitioner actually wielded the power of selection at the time it entered into the service contract dated September 1, 1992 with respondent. This is true, notwithstanding petitioner’s insistence that respondent had only offered his services to provide live music at petitioner’s Tanglaw Restaurant, and despite petitioner’s position that what had really transpired was a negotiation of his rate and time of availability. The power of selection was firmly evidenced by, among others, the express written recommendation dated January 12, 1998 by petitioner’s restaurant manager for the increase of his remuneration.
The Court stated further that petitioner could not seek refuge behind the service contract entered into with respondent. It is the law that defines and governs an employment relationship, whose terms are not restricted to those fixed in the written contract, for other factors, like the nature of the 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 its spirit and intent. Any stipulation in writing can be ignored when the employer utilizes the stipulation to deprive the employee of his security of tenure. The inequality that characterizes employer-employee relations generally tips the scales in favor of the employer, such that the employee is often scarcely provided real and better options.
The Tribunal likewise disregarded petitioner’s claim that because respondent received talent fees—and not wages—for his services, the latter was not an employee. Making short shrift of this argument, the Court declared that the remuneration denominated as talent fees was fixed on the basis of his talent and skill and the quality of the music he played during the hours of performance each night, taking into account the prevailing rate for similar talents in the entertainment industry. Citing Article 97 (f) of the Labor Code[15], it clarified that respondent’s remuneration, even though denominated as talent fees, “was still considered as included in the term wage in the sense and context of the Labor Code, regardless of how petitioner chose to designate the remuneration.”
The Court then proceeded to analyze the following factors relied upon by petitioner to prove that it did not exercise the power of control over respondent:
(a) respondent could beg off from his nightly performances in the restaurant for other engagements; (b) he had the sole prerogative to play and perform any musical arrangements that he wished; (c) although petitioner, through its manager, required him to play at certain times a particular music or song, the music, songs, or arrangements, including the beat or tempo, were under his discretion, control and direction; (d) the requirement for him to wear barong Tagalog to conform with the Filipiniana motif of the venue whenever he performed was by no means evidence of control; (e) petitioner could not require him to do any other work in the restaurant or to play the piano in any other places, areas, or establishments, whether or not owned or operated by petitioner, during the three hour period from 7:00 pm to 10:00 pm, three to six times a week; and (f) respondent could not be required to sing, dance or play another musical instrument.
But the Court was not persuaded as a review of the records indicated that respondent did perform his work as a pianist under petitioner’s supervision and control. Specifically, petitioner’s control of both the end achieved and the manner and means used to achieve that end was demonstrated by the following:
a. He could not choose the time of his performance, which petitioners had fixed from 7:00 pm to 10:00 pm, three to six times a week;
b. He could not choose the place of his performance;
c. The restaurant’s manager required him at certain times to perform only Tagalog songs or music, or to wear barong Tagalog to conform to the Filipiniana motif; and
d. He was subjected to the rules on employees’ representation check and chits, a privilege granted to other employees.
Our Supreme Court has taken judicial notice of the fact that the question as to whether an employer-employee relationship exists in a certain situation continues to bedevil the courts.[16] Happily, there is a useful set of criteria, namely, the four-fold test on which we can rely. This paper has attempted to discuss the fascinating subject of employer-employee relationship with particular emphasis on cases involving musicians in our entertainment industry. The ruling in Legend Hotel, insofar as it reiterates and reaffirms the four-fold test that was applied in the earlier cases of Vda. de Cruz,[17] LVN Pictures, Inc.[18] and Torillo,[19] indicates that the Supreme Court has consistently adhered to what it had stated with clarity as far back as 56 years ago in the case of Viaña v. Al-lagadan.[20] The later decisions have been more emphatic, demonstrating fealty and fidelity to the four-fold test that has been so unequivocally set forth.
Oliver Wendell Holmes, Jr. once defined “law” as a prediction of what the court will do. The prediction is based on precedents. The governing principle, which has given consistency and stability to the law, is the principle of stare decisis (following precedents and not disturbing what has been settled). In this connection, it is very propitious and encouraging that in her keynote speech at a testimonial dinner tendered in her honor by the University of the Philippines Law Alumni Association last September 14, 2012, Madam Chief Justice Maria Lourdes A. Sereno assured our countrymen that she would strive to promote judicial stability for the next 18 years. She also said that another top priority will be to improve the quality of judicial actions, particularly regarding speed, predictability and rationality of decisions. This certainly augurs well for us and we have reason to anticipate jurisprudential tranquility.
* Managing Partner, Sobreviñas Hayudini Navarro & San Juan; B.S., Ateneo de Manila University; LL.B, University of the Philippines; LL.M, Northwestern. The author is past president of the Philippine Association on Voluntary Arbitration, a practicing lawyer and professorial lecturer in the UP College of Law.
** Yehudi Menuhin (1916-1999) astonished the music world when he first appeared on the concert stage at the age of seven. Since then he has become a legend in his own time, not only as a brilliant musician but also as a writer, historian and humanitarian. Born in the United Sates in 1916 of Russian—Jewish parentage, he first faced the critical musical elite of Europe at the age of ten in Paris, and when, at twelve, he played with Bruno Walter in Berlin. As violin virtuoso and conductor, who has performed on the concert stages of the world, Menuhin’s work has been recorded more than any other artist’s of the twentieth century. Well aware of the problems facing the child prodigy, Mr. Menuhin founded a school that combines academic education with the best in musical instruction for the gifted young musicians.
[1] IX The New Encyclopaedia Britannica 417 (15th ed.).
[2] wikipedia.org/wiki/Piano
[3] Legend Hotel (Manila) v. Titanium Corp., G.R. No. 153511, July 18, 2012.
[4] 99 Phil. 408, 411-412 (1956).
[5] Sonza v. ABS-CBN Broadcasting Corp., 431 SCRA 583 (2004); Orozco v. Fifth Division of the Court of Appeals, 562 SCRA 36 (2008); see also Atok Big Wedge Co., Inc. v. Gison, 655 SCRA 193 (2011).
[6] Chavez v. NLRC, 448 SCRA 478 (2005).
[7] Aurora Land Projects Corp. v. NLRC, 266 SCRA 48 (1997).
[8] Almirez v. Infinite Loop Technology Corp., 481 SCRA 364 (2006).
[9] 101 Phil. 358 (1957).
[10] At 361-363, underlining supplied.
[11] 1 SCRA 132 (1961).
[12] Note 9, supra.
[13] Note 11, supra., at 142-144.
[14] 197 SCRA 471, 473 (1991).
[15] Under this provision, “wage” paid to any employee “shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered, and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee.”
[16] Note 7, supra., at 54.
[17] Note 9, supra.
[18] Note 11, supra.
[19] Note 14, supra.
[20] Note 4, supra.
