WILHELMINA S. OROZCO, PETITIONER, VS. THE FIFTH DIVISION OF THE HONORABLE COURT OF APPEALS, PHILIPPINE DAILY INQUIRER, AND LETICIA JIMENEZ MAGSANOC, RESPONDENTS.

Orozco versus Fifth Division of the Court of Appeals

The Case

This is a labor case about a newspaper columnist. Wilhelmina Orozco wrote a weekly column for the Lifestyle section of the Philippine Daily Inquirer. When the newspaper stopped publishing her column, she filed a complaint for illegal dismissal, claiming she was an employee who had been unlawfully dismissed. The newspaper answered that she was never its employee but an independent contractor, a contributor paid for each piece published. The case matters because it raises a question the Supreme Court had never before decided in our jurisdiction: whether a newspaper columnist is an employee of the newspaper that publishes the column. The answer turns on the classic control test in labor law, and on where a court draws the line between guidelines that merely promote a result and rules that dictate the means and methods of the work.

Procedural History

Orozco filed a complaint for illegal dismissal, backwages, moral and exemplary damages, and other money claims before the National Labor Relations Commission. The Labor Arbiter ruled in her favor, finding her to be an employee of the Philippine Daily Inquirer and ordering her reinstatement with backwages, thirteenth month pay, and service incentive leave pay. The newspaper appealed to the National Labor Relations Commission, which dismissed the appeal and affirmed the Labor Arbiter. The Commission first noted that the appeal was not perfected because no cash or surety bond was filed, but it also resolved the appeal on the merits and sustained the finding of control.

The newspaper then filed a petition for review before the Supreme Court, which referred the case to the Court of Appeals. The Court of Appeals reversed and set aside the Commission's decision and dismissed Orozco's complaint, holding that the Commission had misappreciated the facts and that its ruling lacked substantial evidence. It found that Orozco had no employment contract, was not required to report to the office eight hours a day, and stayed in New York for six months without permission and without disciplinary consequence. On the control test, it held that the newspaper controlled only the result of the work, not the means by which the articles were written. Orozco's motion for reconsideration was denied, so she filed the present petition for review. The Supreme Court initially deferred giving due course and ordered the Labor Arbiter to clarify the amount of the award and the newspaper to post the requisite bond. The Labor Arbiter clarified the award, the newspaper posted the bond, and the case proceeded to the merits.

Facts

In March 1990, the Philippine Daily Inquirer engaged Orozco to write a weekly column for its Lifestyle section. She submitted her articles every week, except for a six-month stay in New York City, during which she still sent several articles by mail. She was paid 250 pesos for every column published, later increased to 300 pesos. Her column appeared for the last time on November 7, 1992.

Orozco claimed that her editor told her the editor in chief wanted to stop publishing her column for no reason at all, and that when she spoke to the editor in chief, she was told the chairperson had asked to stop publication, though the chairperson later gave a different reason. The newspaper claimed that in June 1991 its editor in chief met with the Lifestyle section editor to improve the section, and they agreed to cut down the number of columnists by keeping only those whose columns were well-written with regular feedback and following. In their judgment, Orozco's column failed to improve, remained superficially and poorly written, and failed to meet the newspaper's standards, so they decided to terminate it.

Aggrieved, Orozco filed her complaint. The Labor Arbiter found that the newspaper exercised full and complete control over the means and method of her work, manifested in its prerogative to reject any article she submitted, in the column title allotted to her, and in the length set for her articles. The Commission affirmed. The Court of Appeals reversed, and the case reached the Supreme Court.

Issues

• Whether or not the Court of Appeals erred in not dismissing outright the newspaper's petition for failure to post a cash or surety bond as required for the perfection of an appeal.
• Whether or not Orozco was an employee of the Philippine Daily Inquirer.
• Whether or not, if she was an employee, she was illegally dismissed.

Applicable Provisions

Article 223 of the Labor Code, as it governs the perfection of an appeal from the Labor Arbiter, provides:

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein.

The decision discusses this provision because the newspaper did not post an appeal bond, and the Court had to decide whether that omission barred its appeal.

Ruling

On the procedural issue, the Court held that the matter had already been settled by its earlier resolution. While the posting of a cash or surety bond is jurisdictional and is a condition sine qua non to the perfection of an appeal, jurisprudence recognizes exceptional instances in which the bond requirement is relaxed. Here the Labor Arbiter's decision merely stated that Orozco was entitled to backwages, thirteenth month pay, and service incentive leave pay without including a computation of the amounts. The newspaper therefore had no basis for determining the amount of the bond to be posted. The Court reiterated that technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties, but it also required compliance with the law before giving due course. Since the newspaper posted the bond as directed, the issue was laid to rest.

On the main issue, the Court ruled for the respondents and held that Orozco was not an employee of the Philippine Daily Inquirer but an independent contractor. The existence of an employer-employee relationship is essentially a question of fact, and although the findings of quasi-judicial agencies are generally accorded respect, the Court made its own examination because the Court of Appeals' findings directly conflicted with those of the Labor Arbiter and the Commission. The Court applied the four-fold test: the selection and engagement of the employee, the payment of wages, the power of dismissal, and the employer's power to control the employee's conduct. Of these, the power of control is the most crucial and most determinative, so important that the other elements may even be disregarded. The test is whether the employer controls or has reserved the right to control the employee not only as to the work done but also as to the means and methods by which it is accomplished.

The Court held that Orozco misconstrued the control test, as did the Labor Arbiter and the Commission. Not all rules imposed by the hiring party on the hired party indicate that the latter is an employee. Rules which serve as general guidelines towards the achievement of the mutually desired result are not indicative of the power of control. The Court explained the distinction:

Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it.

The Court examined the factors Orozco enumerated, namely control over the contents of her column, time control through deadlines, control of space, and discipline, and found that these are inherent conditions in running a newspaper, dictated by the very nature of the newspaper business itself. The newspaper controlled only the end result, the submitted articles, and had no control over the means or method she used in preparing them. She was free to write in the manner and style she was accustomed to and to use whatever research method she deemed suitable. The limitation that she write only on subjects befitting the Lifestyle section was a logical consequence of where her column appeared. The column title was of her own choosing. The newspaper's power to approve or reject publication of a specific article cannot be the control contemplated in the control test, because one who commissions another to do a piece of work should have the right to accept or reject the product. The important factor is control over how the work itself is done, not just the end result. The Court contrasted her situation with that of a regular reporter, who is assigned to specific beats, cannot switch beats without permission, must inform the editor of the story being worked on, must submit at a specified time, and can be pulled from one beat to another.

The Court also applied the economic reality test, examining the totality of circumstances and the economic dependence of the worker on the employer. Orozco's main occupation was not as a columnist but as a women's rights advocate working in various women's organizations, and she herself admitted that she also contributed articles to other publications. Thus, she was not dependent on the newspaper for her continued employment in its line of business. The Court concluded that she was an independent contractor, one who carries on a distinct and independent business and undertakes to perform the job on one's own account and under one's own responsibility according to one's own manner and method, free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. Since no employer-employee relationship existed, the question of illegal dismissal did not arise.

Doctrine

An employer-employee relationship is determined by the four-fold test: the selection and engagement of the employee, the payment of wages, the power of dismissal, and the employer's power to control the employee's conduct. The power of control is the most crucial and most determinative factor, and the other elements may even be disregarded. The control test asks whether the employer controls or has reserved the right to control the employee not only as to the work done but also as to the means and methods by which it is accomplished. Not every form of control reserved by the hiring party establishes an employer-employee relationship. Rules that merely serve as guidelines towards the achievement of a mutually desired result, without dictating the means or methods to be employed, create no employer-employee relationship; only rules that control or fix the methodology and bind the party hired to the use of such means do. A newspaper columnist who writes at her own pleasure, in the manner she sees fit, not subject to definite hours or conditions of work, and compensated according to the result of her efforts, is an independent contractor, not an employee. The economic reality test, which examines the totality of circumstances and the worker's economic dependence on the employer, may also be applied, especially where there is no written contract.

Disposition

The Court denied the petition and ruled for the respondents, holding that Orozco was not an employee of the Philippine Daily Inquirer but an independent contractor, so she was not illegally dismissed.

Remember This

Memorize this line: the control test asks whether the employer controls not just the result of the work but also the means and methods by which it is accomplished, and guidelines that merely promote a result do not create an employer-employee relationship. Examiners use this case to test the four-fold test, the control test, and the distinction between an employee and an independent contractor, especially in the context of newspaper columnists and other creative contributors.