Legend Hotel v.

Realuyo
G.R. No. 153511
July 18, 2012
FACTS:
Respondent Hernani Realuyo (Joey RoaStage name) was a pianist with petitioner
Legend Hotels Tanglaw Restaurant from September 1992 with an initial rate of 400
PHP/night performance. His rate increased to 750 PHP/night. During his performance,
he cannot choose the time of performance but rather fixed from 7pm to 10pm for 3 to 6
times/week. He alleged that petitioner Legend Hotel restaurant manager has required to
conform with the venues motif and subjected to the rules on employees representation
checks and chits, privilege granted to other employees. On July 1999, the management
notified him that as a cost-cutting measure his services would no longer be required
effective July 1999. He disputed such excuse and insisted that Petitioner had been
lucratively operating as of the filing of his complaint. Petitioner denied such allegations
stating that there was no employer-employee relationship. Respondent filed a complaint
for unfair labor practice, constructive illegal dismissal, and the
underpayment/nonpayment of his premium pay for holidays, separation pay, service
incentive leave pay and 13th month pay. The LA dismissed the complaint finding no
employer-employee relationship. The NLRC affirmed the LA decision. On appeal, the
CA reversed the decision finding that there was an employer-employee relationship
applying the 4-fold test.
ISSUE:
(1) Whether or not respondent was an employee of petitionerYES, there is
(2) If respondent was petitioners employee, whether he was validly terminatedNO
HELD:
(1) There is an employer-employee relationship. (1) Petitioner wielded the power of
selection at the time it entered into the service contract with respondent. This is true
despite petitioners insistence that it was only a negotiation. The power of selection was
evidence by the express written recommendation by the restaurants manager Velazco
for the increase of his remuneration. Petitioner cannot take refuge behind the service
contract entered with respondent for it is the law that governs an employment
relationship. Any stipulation in writing can be ignored when the employer utilizes the
stipulation to deprive the employee of his security of tenure (2) Petitioners argument
that they only gave respondent talent fees and is cannot be included as wage under the

definition of the labor code is untenable. Respondent was paid for 400PHP/3 hours of
performance from 7pm to 10pm/3 to 6 nights a week. The renumeration denominated as
talent fees was fixed on the basis of his talent and skill and the quality of music he
played during the hours of performance each nighttaking into account the prevailing
rate for similar talents in the entertainment industry. Respondents remuneration,
denominated as talent fees, is considered wage in the sense and context of the Labor
Code. According to Article 97(f) xxx wage paid to any employee shall mean the
remuneration or earnings, however designate, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, piece or commission basis, or
other method 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 Clearly, respondent received compensation for the
services he rendered as a pianist in petitioners hotelsuch cannot be circumvented by
using the service contract. There is no denying that whatever amounts he received or
his performance were wages. Under the Rules Implementing Labor Code, employer is
required to pay his employees by means of a payroll, which should show the rate of pay,
deductions, and amounts actually paidPetitioner failed to present such evidence.
Respondents rendering work for less than 8 hours a day was of no consequence. In
providing that the normal hours of work of any employee shall not exceed 8 hours a
day. Article 83 of the Labor Code only set a maximum of number of hours as normal
hours of work but did not prohibit work of less than eight hours. (3) The power of control
is present from the records and show that respondent performed his work as a pianist
under petitioners supervision and control. It is show when (a) he could not choose time
of performance only sticking to 7pm to 10pm (b) could not choose place of performance
(c) manager required him to perform only tagalong songs or music or wear barong (d)
subject to rules on employees representation check and chitsa privilege granted to
other employees. (4) There is power to dismiss respondent when respondent submitted
a memorandum informing respondent of the discontinuance of his service because of
the present business or financial condition of petitioner.
(2) NO valid dismissal since petitioner failed to present evidence that there was
retrenchment and respondents termination was necessary is order to offset the losses.
Separation pay/year of service until finality of decision and full back wages from time his
compensation was withheld until finality.