SAN BEDA UNIVERSITY COLLEGE OF LAW

Labor Law 1 & Agrarian Law and Social Legislation

Maraguinot, Jr. vs. NLRC

FACTS:
● Viva Films is the trade name of Viva Productions, Inc. It is primarily engaged in the distribution and exhibition of
movies. Vic del Rosario is an executive producer, ​i.e.​, the financier who invests a certain sum of money for the
production of movies distributed and exhibited by Viva Films.
● Alejandro Maraguinot was employed by Viva Films through Vic del Rosario on July 18, 1989 as part of the filming
crew with a salary of P375 per week. He was promoted to the rank of Electrician with a weekly salary of ​P​475.00,
which was increased to ​P​593.00 in September 1991.
● Paulino Enero was employed by Viva Films in June 1990 as a member of the shooting crew with a weekly salary
of ​P​375.00, which was increased to ​P​425.00, then to P​ ​475.00 on 21 December 1991.
● Maraguinot, Jr. and Enero’s tasks consisted of loading, unloading and arranging movie equipment in the
shooting area as instructed by the cameraman, returning the equipment to Viva Films warehouse, assisting in
the fixing of the lighting system, and performing other tasks that the cameraman and/or director may assign.
● In June 1992, their supervisor informed them that Mr. del Rosario would agree to increase their salary only if
they signed a blank employment contract. As the two refused to sign, del Rosario forced Enero to go on leave,
then refused to take him back when he reported for work. Meanwhile, Maraguinot was dropped from the
company payroll from 8 to 21 June 1992, but was returned on 22 June 1992. He was again asked to sign a blank
employment contract, and when he still refused, Viva Films terminated his services. Maraguinot, Jr. and Enero
thus sued for illegal dismissal.
● Viva Films assert that they contract persons called producers -- also referred to as associate producers-- to
produce or make movies for them; and contend that Maraguinot, Jr. and Enero are project employees of the
associate producers who, in turn, act as independent contractors. As such, there is no employer-employee
relationship between petitioners and private respondents. They further contend that it was the associate
producer of the film ​Mahirap Maging Pogi,​ who hired Maraguinot, and it was only then that Maraguinot was
released upon payment of his last salary, as his services were no longer needed. Anent Enero, he was hired for
the movie entitled ​Sigaw ng Puso​, later re-titled ​Narito ang Puso.​ He went on vacation, and by the time he
reported for work, shooting for the movie had already been completed.
● Labor Arbiter: Petitioners were illegally dismissed
● NLRC: Petitioners were not illegally dismissed and were mere project employees

ISSUE/S:
1) W/N there was an employer-employee relationship between Viva Films and the petitioners
2) W/N petitioners are regular employees who were illegally dismissed.

HELD:​ GRANTED. The assailed decision of the National Labor Relations Commission as well as its
Resolution, are hereby ANNULLED and SET ASIDE for having been rendered with grave abuse of discretion,
and the decision of the Labor Arbiter is REINSTATED

1) Yes​. The employer-employee relationship between petitioners and VIVA can further be established by the
control test. While four elements are usually considered in determining the existence of an employment
relationship, namely: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the employers power to control the employees conduct, the most important
element is the employers control of the employees conduct, not only as to the result of the work to be done but
also as to the means and methods to accomplish the same. These four elements are present here as[T]he
 SAN BEDA UNIVERSITY COLLEGE OF LAW
Labor Law 1 & Agrarian Law and Social Legislation
Atty. Mercader
PRODUCER has to ​work within the limits of the budget he is given by the company, for as long as the ultimate
finish[ed] product is acceptable to the company​...​To ensure that quality films are produced​ by the PRODUCER
who is an independent contractor, the company likewise employs a Supervising PRODUCER, a Project
accountant and a Shooting unit supervisor. The Companys Supervising PRODUCER is Mr. Eric Cuatico, the Project
accountant varies from time to time, and the Shooting Unit Supervisor is Ms. Alejandria Cesario.The Supervising
PRODUCER acts as the eyes and ears of the company and of the Executive Producer​ to monitor the progress of
the PRODUCERs work accomplishment​. He is there usually in the field doing the rounds of inspection ​to see if
there is any problem that the PRODUCER is encountering and to assist in threshing out the same so that the film
project will be finished on schedule​. He supervises about 3 to 7 movie projects simultaneously [at] any given
time by coordinating with each film PRODUCER. The Project Accountant on the other hand assists the
PRODUCER in monitoring the actual expenses incurred because ​the company wants to insure that any additional
budget requested by the PRODUCER is really justified and warranted especially when there is a change of
original plans​ ​to suit the tast[e] of the company on how a certain scene must be presented​ to make the film
more interesting and more commercially viable. (emphasis ours)

VIVAs control is evident in its mandate that the end result must be a quality film acceptable to the company. The means
and methods to accomplish the result are likewise controlled by VIVA, viz., the movie project must be finished
within schedule without exceeding the budget, and additional expenses must be justified; certain scenes are
subject to change to suit the taste of the company; and the Supervising Producer, the eyes and ears of VIVA and
del Rosario, intervenes in the movie-making process by assisting the associate producer in solving problems
encountered in making the film. It may not be validly argued then that petitioners are actually subject to the
movie directors control, and not VIVAs direction. The director merely instructs petitioners on how to better
comply with VIVAs requirements to ensure that a quality film is completed within schedule and without
exceeding the budget. At bottom, the director is akin to a supervisor who merely oversees the activities of
rank-and-file employees with control ultimately resting on the employer.

Moreover, appointment slips issued to all crew members state:

2) Yes. ​The evidence on record shows that petitioner Enero was employed for a total of two (2) years and engaged
in at least eighteen (18) projects, while petitioner Maraguinot was employed for some three (3) years and
worked on at least twenty-three (23) projects. Moreover, as petitioners tasks involved, among other chores, the
loading, unloading and arranging of movie equipment in the shooting area as instructed by the cameramen,
returning the equipment to the Viva Films warehouse, and assisting in the fixing of the lighting system, it may
not be gainsaid that these tasks were ​vital, necessary and indispensable to the usual business or trade of the
employer​. As regards the underscored phrase, it has been held that this is ascertained by considering the nature
of the work performed and its relation to the scheme of the particular business or trade in its entirety.

NOTES:

Labor-only contracting is prohibited.

As labor-only contracting is prohibited, the law considers the person or entity engaged in the same a mere agent or
intermediary of the direct employer. But even by the preceding standards, the associate producers of VIVA cannot be
considered labor-only contractors as they did not supply, recruit nor hire the workers. In the instant case, it was Juanita
Cesario, Shooting Unit Supervisor and an employee of VIVA, who recruited crew members from an available group of
 SAN BEDA UNIVERSITY COLLEGE OF LAW
Labor Law 1 & Agrarian Law and Social Legislation
Atty. Mercader
free-lance workers which includes the complainants Maraguinot and Enero. And in their Memorandum, private
respondents declared that the associate producer ​hires​ the services of... 6) camera crew which includes (a) cameraman;
(b) the utility crew; (c) the technical staff; (d) generator man and electrician; (e) clapper; etc...This clearly showed that
the associate producers did not supply the workers required by the movie project.

When a project employee acquire the status of a regular employee

A project employee or a member of a work pool may acquire the status of a regular employee when the following
concur:
1) There is a continuous rehiring of project employees even after cessation of a project; and
2) The tasks performed by the alleged project employee are vital, necessary and indispensable to the usual business or
trade of the employer.