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G.R. No.

84484 November 15, 1989 any right to any commission on renewal of premiums
that may be paid after the termination of this agreement
INSULAR LIFE ASSURANCE CO., LTD., petitioner,
for any cause whatsoever, except when the termination
vs.
is due to disability or death in line of service. As to
NATIONAL LABOR RELATIONS COMMISSION and
commission corresponding to any balance of the first
MELECIO BASIAO, respondents.
year's premiums remaining unpaid at the termination of
Tirol & Tirol for petitioner. this agreement, the Agent shall be entitled to it if the
balance of the first year premium is paid, less actual cost
Enojas, Defensor & Teodosio Cabado Law Offices for of collection, unless the termination is due to a violation
private respondent. of this contract, involving criminal liability or breach of
trust.

NARVASA, J.: ---four years later, in April 1972, the parties entered into
another contract — an Agency Manager's Contract
On July 2, 1968, Insular Life Assurance Co., Ltd.
(hereinafter simply called the Company) and Melecio T. Basiao then organized an agency or office to which he
Basiao entered into a contract 1 by which: gave the name M. Basiao and Associates, while
concurrently fulfilling his commitments under the first
1. Basiao was "authorized to solicit within the Philippines contract with the Company.
applications for insurance policies and annuities in
accordance with the existing rules and regulations" of ---In May, 1979, the Company terminated the Agency
the Company; Manager's Contract.

2. he would receive "compensation, in the form of ---Subsequently, Basiao sued the Company in a civil
commissions ... as provided in the Schedule of action and this, he was later to claim, prompted the
Commissions" of the contract to "constitute a part of the latter to terminate also his engagement under the first
consideration of ... (said) agreement;" and contract and to stop payment of his commissions starting
April 1, 1980.
3. the "rules in ... (the Company's) Rate Book and its
Agent's Manual, as well as all its circulars ... and those ---Basiao thereafter filed with the then Ministry of Labor
which may from time to time be promulgated by it, ..." a complaint 4 against the Company and its president.
were made part of said contract. __ The respondents disputed the Ministry's jurisdiction
-The contract also contained, among others, over Basiao's claim, asserting that he was not the
Company's employee, but an independent contractor
1. provisions governing the relations of the parties and that the Company had no obligation to him for
2. the duties of the Agent unpaid commissions under the terms and conditions of
his contract. 5
3. the acts prohibited to him
The Labor Arbiter:
4. and the modes of termination of the agreement
Ruled in favor of Basiao. He ruled that the underwriting
RELATION WITH THE COMPANY. The Agent shall be free agreement had established an employer-employee
to exercise his own judgment as to time, place and relationship between him and the Company, and this
means of soliciting insurance. Nothing herein contained conferred jurisdiction on the Ministry of Labor to
shall therefore be construed to create the relationship of adjudicate his claim. Said official's decision directed
employee and employer between the Agent and the payment of his unpaid commissions
Company. However, the Agent shall observe and
conform to all rules and regulations which the Company NLRC:
may from time to time prescribe. Affirmed the Labor Arbiter’s Decision.
ILLEGAL AND UNETHICAL PRACTICES. The Agent is Hence, the present petition for certiorari and
prohibited from giving, directly or indirectly, rebates in prohibition.
any form, or from making any misrepresentation or over-
selling, and, in general, from doing or committing acts ISSUE:
prohibited in the Agent's Manual and in circulars of the WON there exists an employer-employee relationship
Office of the Insurance Commissioner. between Insular life Assurance Co.Ltd. and Basiao.
TERMINATION. The Company may terminate the Insular’s position/contention:
contract at will, without any previous notice to the
Agent, for or on account of ... (explicitly specified causes). that no employer-employee relation in the legal and
... generally accepted sense existed between it and Basiao,
is drawn from the terms of the contract they had entered
Either party may terminate this contract by giving to the into, which,
other notice in writing to that effect. It shall become ipso
facto cancelled if the Insurance Commissioner should 1. either expressly or by necessary implication,
revoke a Certificate of Authority previously issued or made Basiao the master of his own time and
should the Agent fail to renew his existing Certificate of selling methods,
Authority upon its expiration. The Agent shall not have
2. left to his judgment the time, place and means of determination of the premiums to be paid and the
soliciting insurance, schedules of payment. None of these really invades the
3. set no accomplishment quotas and agent's contractual prerogative to adopt his own selling
compensated him on the basis of results methods or to sell insurance at his own time and
obtained. He was not bound to observe any convenience, hence cannot justifiably be said to
schedule of working hours or report to any establish an employer-employee relationship between
regular station; him and the company.
4. he could seek and work on his prospects
The respondents limit themselves to pointing out that
anywhere and at anytime he chose to, and was
Basiao's contract with the Company bound him to
free to adopt the selling methods he deemed
observe and conform to such rules and regulations as the
most effective.
latter might from time to time prescribe.
The respondents Contention:
No showing has been made that any such rules or
Emphasizes the provisions of Basiao's contract obliging regulations were in fact promulgated, much less that any
him to "... rules existed or were issued which effectively controlled
or restricted his choice of methods — or the methods
1.observe and conform to all rules and regulations which
themselves — of selling insurance.
the Company may from time to time prescribe ...,"
Absent such showing, the Court will not speculate that
2. as well as to the fact that the Company prescribed the
any exceptions or qualifications were imposed on the
qualifications of applicants for insurance, processed their
express provision of the contract leaving Basiao "... free
applications and determined the amounts of insurance
to exercise his own judgment as to the time, place and
cover to be issued
means of soliciting insurance."
as indicative of the control, which made Basiao, in legal
The Court, therefore, rules that under the contract
contemplation, an employee of the Company. 9
invoked by him, Basiao was not an employee of the
Ruling and Explanation of the SC: petitioner, but a commission agent, an independent
contractor whose claim for unpaid commissions should
There is no Employer-employee relationship in this have been litigated in an ordinary civil action.
case.
The Labor Arbiter erred in taking cognizance of, and
The SC explained that; Logically, the line should be drawn adjudicating, said claim, being without jurisdiction to do
between so, as did the respondent NLRC in affirming the Arbiter's
1.rules that merely serve as guidelines towards the decision. This conclusion renders it unnecessary and
achievement of the mutually desired result without premature to consider Basiao's claim for commissions on
dictating the means or methods to be employed in its merits.
attaining it. WHEREFORE, the appealed Resolution of the National
---This type of “control” aims only to promote the result, Labor Relations Commission is set aside
create no employer-employee relationship. SO ORDERED.
However, ADDITIONAL NOTE: There is no dearth of authority
2.those that control or fix the methodology and bind or holding persons similarly placed as respondent Basiao to
restrict the party hired to the use of such means. be independent contractors, instead of employees of the
parties for whom they worked.
--- which address both the result and the means used to
achieve it.

The distinction acquires particular relevance in the case


of an enterprise affected with public interest, as is the
business of insurance, and is on that account subject to
regulation by the State with respect, not only to the
relations between insurer and insured but also to the
internal affairs of the insurance company. 12

Rules and regulations governing the conduct of the


business are provided for in the Insurance Code and
enforced by the Insurance Commissioner.

It is, therefore, usual and expected for an insurance


company to promulgate a set of rules to guide its
commission agents in selling its policies that they may
not run afoul of the law and what it requires or prohibits.
Of such a character are the rules which prescribe the
qualifications of persons who may be insured, subject
insurance applications to processing and approval by the
Company, and also reserve to the Company the
G.R. No. 91307 January 24, 1991 The following elements are generally considered in the
determination of the employer-employee relationship;
SINGER SEWING MACHINE COMPANY, petitioner
"(1) the selection and engagement of the employee;
vs.
HON. FRANKLIN M. DRILON, MED-ARBITER FELIX B. (2) the payment of wages;
CHAGUILE, JR., and SINGER MACHINE COLLECTORS (3) the power of dismissal; and
UNION-BAGUIO (SIMACUB), respondents.
(4) the power to control the employee's conduct — although
Misa, Castro, Villanueva, Oposa, Narvasa & Pesigan for the latter is the most important element"
petitioner.
Domogan, Lockey, Orate & Dao-ayan Law Office for Ruling of The SC:
private respondent. There is no Employer-Employee Relationship.
GUTIERREZ, JR., J.: The SC explained that:
-On February 15, 1989, the respondent union filed a The nature of the relationship between a company and
petition for direct certification as the sole and exclusive its collecting agents depends on the circumstances of
bargaining agent of all collectors of the Singer Sewing each particular relationship. Not all collecting agents are
Machine Company, Baguio City branch. employees and neither are all collecting agents
The Petitioner’s Position/Contention: independent contractors. The collectors could fall under
either category depending on the facts of each case.
The Company opposed the petition mainly on the ground
that the union members are actually not employees but Here, The Agreement confirms the status of the
are independent contractors as evidenced by the collecting agent in this case as an independent
collection agency agreement which they signed. contractor not only because he is explicitly described as
such but also because the provisions permit him to
---The Respondent Med-Arbiter, finding that there exists perform collection services for the company without
an employer-employee relationship between the union being subject to the control of the latter except only as
members and the Company, granted the petition for to the result of his work. After a careful analysis of the
certification election. contents of the agreement, we rule in favor of the
petitioner.
Secretary of Labor Franklin Drilon:
The Respondent’s contention ignores the following
Affirmed the med-Arbiter’s decision.
circumstances:
Hence, this petition in which the Company alleges that
1. The collection agents are not required to observe office
public respondents acted in excess of jurisdiction and/or
hours or report to Singer's office everyday except, naturally
committed grave abuse of discretion and necessarily, for the purpose of remitting their collections.
ISSUE: WON there exists employer-employee 2. The collection agents do not have to devote their time
relationship between the Petitioner and the respondent exclusively for SINGER.
Union members collecting agents.
3. The manner and method of effecting collections are left
Respondents Position/Contention: solely to the discretion of the collection agents without any
interference on the part of Singer.
Here, respondents insist that the provisions of the Collection
Agency Agreement belie the Company's position that the 4. The collection agents shoulder their transportation
union members are independent contractors. expenses incurred in the collections of the accounts assigned
to them.
To prove that union members are employees, it is asserted
that they "perform the most desirable and necessary activities 5. The collection agents are paid strictly on commission basis.
for the continuous and effective operations of the business of
6. The commissions earned by the collection agents are
the petitioner Company" (citing Article 280 of the Labor Code).
directly deducted by them from the amount of collections they
They add that the termination of the agreement by the are able to effect. The net amount is what is then remitted to
petitioner pending the resolution of the case before the DOLE Singer."
"only shows the weakness of petitioner's stand" and was "for
A thorough examination of the facts of the case leads us to the
the purpose of frustrating the constitutionally mandated rights
conclusion that the existence of an employer-employee
of the members of private respondent union to self-
relationship between the Company and the collection agents
organization and collective organization."
cannot be sustained.
They also contend that under Section 8, Rule 8, Book No. III of
The Court finds that since private respondents are not
the Omnibus Rules Implementing the Labor Code, which
employees of the Company, they are not entitled to the
defines job-contracting, they cannot legally qualify as
constitutional right to join or form a labor organization for
independent contractors who must be free from control of the
purposes of collective bargaining. Accordingly, there is no
alleged employer, who carry independent businesses and who
constitutional and legal basis for their "union" to be granted
have substantial capital or investment in the form of
their petition for direct certification.
equipment, tools, and the like necessary in the conduct of the
business. WHEREFORE, the Order appealed from is reversed and set
aside. So Ordered.
The present case mainly calls for the application of the
control test, which if not satisfied, would lead us to
conclude that no employer-employee relationship exists.
G.R. No. 72409 December 29, 1986 minus 17) and 16 "No" votes, which is a tie. Since the
respondent union did not obtain a clear majority for the
MAMERTO S. BESA, doing business under the name and style
of BESA'S CUSTOMBUILT SHOES, petitioner, "Yes" votes as required under Rule IV Sec. 8(f) of the
vs. Omnibus Rules of the Labor Code, it necessarily follows
THE HONORABLE CRESENCIANO B. TRAJANO, DIRECTOR OF that the respondent union cannot be certified as the sole
THE BUREAU OF LABOR RELATIONS, MINISTRY OF LABOR and exclusive bargaining agent of the workers of Besa's.
AND EMPLOYMENT, AND KAISAHAN NG MANGGAGAWANG
PILIPINO (KAMPIL-KATIPUNAN), respondents. Ruling of The SC:

De Asis and Hernando Law Office for petitioner. The present petition merits Our consideration. The
records of the case reveal that an employer-employee
Estebal M. Mendoza for private respondent. relationship does not exist between the 17 shoeshiners
PARAS, J.: and petitioner.

in January, 1985, private respondent Kaisahan ng The shoe shiner is distinct from a piece worker because
Mangagawang Pilipino (KAMPIL for short), a legitimate while the latter is paid for work accomplished, he does
labor union duly registered with the Ministry of Labor not, however, contribute anything to the capital of the
and Employment (MOLE, for short), filed a Petition for employer other than his service.
Certification Election, In NLRDivision of the NCR.
It is the employer of the piece worker who pays his
---This was opposed by the Petitioner. Alleging among wages, while the shoe shiner in this instance is paid
others that 1. There is no employer-employee directly by his customer. The piece worker is paid for
relationship between Besa's and the petitioners- work accomplished without regard or concern to the
signatories to the petition; profit as derived by his employer, but in the case of the
shoe shiners, the proceeds derived from the trade are
Med-Arbiter: always divided share and share alike with respondent
on June 27, 1985, issued an order declaring that there BESA. The shoe shiner can take his share of the proceeds
was an employer-employee relationship between the everyday if he wanted to or weekly as is the practice of
parties and directed that an election be conducted. qqqBesas The employer of the piece worker supervises
and controls his work, but in the case of the shoe shiner,
Aggrieved, Petitioner Appealed to the BLR, the BLR: respondent BESA does not exercise any degree of control
Upheld the Findings of the Med-Arbiter. or supervision over their person and their work.

Meanwhile, the Petition of the Union (KAMPIL) before The circumstances of this case cannot pass the four fold
the Med-Arbiter for the holding of the certification test. 1. The selection 2. The payment of wages 3. The
election was granted. power to dismiss 4. The power to control the conduct of
an employee
While the pre-election conference was in progress,
petitioner herein BESAS filed with Us with petition for Consequently, employer-employee relationship between
certiorari with Prohibition and simultaneously filed with members of the Petitioning union and respondent
the Med-Arbiter a motion to suspend the pre-election MAMERTO B. BESA being absent the latter could not be
conference. The petition filed before Us was dismissed held guilty of the unfair labor practice acts imputed
for lack of merit but was reconsidered upon Motion of against him.
petitioner. WHEREFORE, judgment is hereby rendered giving due
ISSUE: WON employer-employee relationship exists course to the Petition and declaring VOID the decision of
between petitioner Besas and 17 members of KAMPIL the Director of the Bureau of Labor Relations dated
who are designated as Shoeshiners. September 27, 1985. The Petition in BLR Case No. A-8-
165-85 (NCR-LRD-M1-044-85) is therefore hereby
The question of employer-employee relationship became a DISMISSED.
primodial consideration in resolving whether or not the subject
shoeshiners have the juridical personality and standing to SO ORDERED.
present a petition for certification election as well as to vote i
therein. Feria (Chairman), Fernan, Alampay, Gutierrez, Jr., JJ.,
concur.
Petitioner’s Contention:

if the shoeshiners are not considered as employees of


Besa's the basic petition for certification election must
necessarily be dismissed for failure to comply with the
mandatory requirements of the Labor Code, as
amended, that at least thirty (30%) percent of the
employees must support the petition for certification
election and that in order to be certified as the sole and
exclusive bargaining agent, the union must be obtained
a majority of the valid votes cast by eligible voters. In the
instant case, if the 17 shoeshiners are declared ineligible
and their votes are consequently nullified the result of
the certification election would be 16 "Yes" votes (33
[G.R. No. 138051. June 10, 2004] Labor Arbiter: denied the motion to dismiss and
directed the parties to file their respective position
JOSE Y. SONZA, petitioner, vs. ABS-CBN
papers. But later on, it Dismissed the complaint for lack
BROADCASTING CORPORATION, respondent.
of Jurisdiction.
CARPIO, J.:
The labor Arbiter reasoned that Sonza should not be
---In May 1994, respondent ABS-CBN Broadcasting considered as an employee of abs-cbn by reason of the
Corporation (ABS-CBN) signed an Agreement peculiar circumstances surrounding the engagement of
(Agreement) with the Mel and Jay Management and his services. Unlike an ordinary employee, he was free to
Development Corporation (MJMDC). ABS-CBN was perform the services he undertook to render in
represented by its corporate officers while MJMDC was accordance with his own style.
represented by SONZA, as President and General
Whatever benefits complainant enjoyed arose from
Manager, and Carmela Tiangco (TIANGCO), as EVP and
specific agreement by the parties and not by reason of
Treasurer. Referred to in the Agreement as AGENT,
employer-employee relationship. As correctly put by
MJMDC agreed to provide SONZAs services exclusively to
the respondent, All these benefits are merely talent fees
ABS-CBN as talent for radio and television. The
and other contractual benefits and should not be
Agreement listed the services SONZA would render to
deemed as salaries, wages and/or other remuneration
ABS-CBN, as follows:
accorded to an employee, notwithstanding the
a. Co-host for Mel & Jay radio program, 8:00 to 10:00 nomenclature appended to these benefits.
a.m., Mondays to Fridays;
Aggrieved, Sonza Appealed to the NLRC.
b. Co-host for Mel & Jay television program, 5:30 to 7:00
NLRC: the NLRC rendered a Decision affirming the Labor
p.m., Sundays.[3]
Arbiters’ decision.
---ABS-CBN agreed to pay for SONZAs services a monthly
Sonza Filed a special civil action for certiorari Before the
talent fee of P310,000 for the first year and P317,000 for
CA.
the second and third year of the Agreement. ABS-CBN
would pay the talent fees on the 10th and 25th days of the CA: Dismissed the case.
month.
Hence, this case.
---On 1 April 1996, SONZA wrote a letter to ABS-CBNs
ISSUE: WON there Exists an Employer-Employee
President, Eugenio Lopez III, which reads:
relationship between Sonza and ABS-CBN.
We would like to call your attention to the Agreement
Ruling:
dated May 1994 entered into by your goodself on behalf
of ABS-CBN with our company relative to our talent JOSE The SC said there is none. It affirmed the assailed
Y. SONZA. decision.
As you are well aware, Mr. Sonza irrevocably resigned in The SC explained that there is No convincing reason
view of recent events concerning his programs and exists to warrant a reversal of the decision of the Court
career. We consider these acts of the station violative of of Appeals affirming the NLRC ruling which upheld the
the Agreement and the station as in breach thereof. In Labor Arbiters dismissal of the case for lack of
this connection, we hereby serve notice of rescission of jurisdiction.
said Agreement at our instance effective as of date.
The present controversy is one of first
Mr. Sonza informed us that he is waiving and renouncing impression. Although Philippine labor laws and
recovery of the remaining amount stipulated in jurisprudence define clearly the elements of an
paragraph 7 of the Agreement but reserves the right to employer-employee relationship, this is the first time
seek recovery of the other benefits under said that the Court will resolve the nature of the relationship
Agreement. between a television and radio station and one of its
talents. There is no case law stating that a radio and
Thank you for your attention.
television program host is an employee of the broadcast
Sgd. By mr. JOSE Y. SONZA station.

---On 30 April 1996, SONZA filed a complaint against ABS- ---Applying the control test to the present case, we find
CBN before the Department of Labor and Employment, that SONZA is not an employee but an independent
National Capital Region in Quezon City. SONZA contractor. The control test is the most important test
complained that ABS-CBN did not pay his salaries, our courts apply in distinguishing an employee from an
separation pay, service incentive leave pay, 13th month independent contractor.[29] This test is based on the
pay, signing bonus, travel allowance and amounts due extent of control the hirer exercises over a worker. The
under the Employees Stock Option Plan (ESOP). greater the supervision and control the hirer exercises,
the more likely the worker is deemed an employee. The
Defense/Answer of ABS-CBN
converse holds true as well the less control the hirer
---On 10 July 1996, ABS-CBN filed a Motion to Dismiss on exercises, the more likely the worker is considered an
the ground that no employer-employee relationship independent contractor.[30]
existed between the parties.
THE Petitioner’s CONTENTIONS vis a vis the Explanation argues that if such practice exists, it is void for violating
of The Court’s Ruling: the right of labor to security of tenure.

First, SONZA contends that ABS-CBN exercised control The right of labor to security of tenure as guaranteed in
over the means and methods of his work. the Constitution[53] arises only if there is an employer-
employee relationship under labor laws. Not every
---SONZAs argument is misplaced. ABS-CBN engaged
performance of services for a fee creates an employer-
SONZAs services specifically to co-host the Mel & Jay
employee relationship. To hold that every person who
programs. ABS-CBN did not assign any other work to
renders services to another for a fee is an employee - to
SONZA. To perform his work, SONZA only needed his
give meaning to the security of tenure clause - will lead
skills and talent. How SONZA delivered his lines,
to absurd results.
appeared on television, and sounded on radio were
outside ABS-CBNs control. SONZA did not have to render Individuals with special skills, expertise or talent enjoy
eight hours of work per day. The Agreement required the freedom to offer their services as independent
SONZA to attend only rehearsals and tapings of the contractors. The right to life and livelihood guarantees
shows, as well as pre- and post-production staff this freedom to contract as independent
meetings.[31] ABS-CBN could not dictate the contents of contractors. The right of labor to security of tenure
SONZAs script. However, the Agreement prohibited cannot operate to deprive an individual, possessed with
SONZA from criticizing in his shows ABS-CBN or its special skills, expertise and talent, of his right to contract
interests.[32] The clear implication is that SONZA had a as an independent contractor. An individual like an artist
free hand on what to say or discuss in his shows provided or talent has a right to render his services without any
he did not attack ABS-CBN or its interests. one controlling the means and methods by which he
performs his art or craft. This Court will not interpret the
Second, SONZA urges us to rule that he was ABS-CBNs
right of labor to security of tenure to compel artists and
employee because ABS-CBN subjected him to its rules
talents to render their services only as employees. If
and standards of performance. SONZA claims that this
radio and television program hosts can render their
indicates ABS-CBNs control not only [over] his manner of
services only as employees, the station owners and
work but also the quality of his work.
managers can dictate to the radio and television hosts
---The Agreement stipulates that SONZA shall abide with what they say in their shows. This is not conducive to
the rules and standards of performance covering freedom of the press.
talents[41] of ABS-CBN. The Agreement does not require
Different Tax Treatment of Talents and Broadcasters
SONZA to comply with the rules and standards of
performance prescribed for employees of ABS-CBN. The The National Internal Revenue Code (NIRC)[54] in relation
code of conduct imposed on SONZA under the to Republic Act No. 7716,[55] as amended by Republic Act
Agreement refers to the Television and Radio Code of the No. 8241,[56] treats talents, television and radio
Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which broadcasters differently. Under the NIRC, these
has been adopted by the COMPANY (ABS-CBN) as its professionals are subject to the 10% value-added tax
Code of Ethics. (VAT) on services they render. Exempted from the VAT
are those under an employer-employee
In any event, not all rules imposed by the hiring party on [57]
relationship. This different tax treatment accorded to
the hired party indicate that the latter is an employee of
talents and broadcasters bolters our conclusion that they
the former.
are independent contractors, provided all the basic
In this case, SONZA failed to show that these rules elements of a contractual relationship are present as in
controlled his performance. We find that these general this case.
rules are merely guidelines towards the achievement of
Clearly, the present case does not call for an application
the mutually desired result, which are top-rating
of the Labor Code provisions but an interpretation and
television and radio programs that comply with
implementation of the May 1994 Agreement. In effect,
standards of the industry.
SONZAs cause of action is for breach of contract which
Lastly, SONZA insists that the exclusivity clause in the is intrinsically a civil dispute cognizable by the regular
Agreement is the most extreme form of control which courts.[58]
ABS-CBN exercised over him.
WHEREFORE, we DENY the petition. The assailed
---This argument is futile. Being an exclusive talent does Decision of the Court of Appeals dated 26 March 1999 in
not by itself mean that SONZA is an employee of ABS- CA-G.R. SP No. 49190 is AFFIRMED. Costs against
CBN. Even an independent contractor can validly provide petitioner.
his services exclusively to the hiring party. In the
SO ORDERED.
broadcast industry, exclusivity is not necessarily the
same as control. Davide, Jr., C.J., (Chairman), Panganiban, Ynares-
Santiago, and Azcuna, JJ., concur.

Talents as Independent Contractors

ABS-CBN claims that there exists a prevailing practice in


the broadcast and entertainment industries to treat
talents like SONZA as independent contractors. SONZA
[G.R. No. 124551. August 28, 1998] respondents bare allegation that he could not leave the
premises without petitioners permission, it was not
USHIO MARKETING, petitioner, vs. NATIONAL LABOR
established that private respondent was under the
RELATIONS COMMISSION and SEVERINO
control and supervision of petitioner or of its personnel;
ANTONIO, respondents.
private respondent's admission that Mrs. Caroline Tan To
DAVIDE, JR., J.: referred jobs directly to him supports the notion that
private respondent was not an employee, otherwise,
Private respondent Severino Antonio was an electrician Mrs. Tan To would have coursed the job orders for
who worked within the premises of petitioner Ushios car private respondent through petitioner; and the
accessory shop in Banawe, Quezon City. arrangement that petitioner would receive the service
On August 22, 1994, private respondent filed a complaint fees of private respondent from customers was not
for illegal dismissal, non-payment of overtime pay, adequate to establish an employer-employee
holiday pay, and other benefits against petitioner Ushio relationship.
Marketing ISSUE: WON there exists an employer-employee
---Ushio Filed a motion to Dismiss. she alleged that it was relationship between Ushio and Sevirino Antonio.
a single proprietorship engaged in the business of selling Ruling: The SC said none. The SC explained thatIt is not
automobilespare parts and accessories. Petitioner disputed that on 13 October 1994, Labor Arbiter Leda
claimed that private respondent was not among her directed the parties to file their respective position
employees but a free lance operator who wait[ed] on the papers within a non-extendible period of 25 days. Private
shops customers should the latter require his services. respondent, however, failed to comply with this
Labor Arbiter: Dismissed the Complaint against Ushio. order. As to him then, there was no evidence extant on
record to substantiate his allegations.
Defense of private respondent Severino:
---We hasten to add, however, that even if the NLRC had
---On February 28, 1995, private respondent assisted by taken into account the various pleadings filed before it,
the Public Attorneys Office, appealed the order of the as the same malady characterized those filed by private
Honorable Labor Arbiter to the Commission. In his respondent, the conclusion would still be inevitable that
memorandum, private respondent alleged that Ushio the existence of an employer-employee relationship
Marketing hired his services on 15 November 1981 until between the parties here was not proven by substantial
July 3, 1994 as an electrician with a daily salary of one evidence.
hundred thirty two pesos (P132.00) per day. He further
alleged that: ---The factors to be considered in determining the
existence of an employer-employee relationship are: (1)
During the employ of herein complainant with the the selection and engagement of the employee; (2) the
respondents, he performed his job religiously and payment of wages; (3) the power of dismissal; and (4) the
faithfully, in fact he was the most trusted employee in power to control the employees conduct.
the company.
--Under the control test, an employer-employee
Attached to the private respondents Memorandum of relationship exists where the person for whom the
Appeal were affidavits of his co-electricians who worked services are performed reserves the right to control not
with Ushio Marketing namely: Roberto Lopez and only the end achieved, but also the manner and means
Narcing Pascua, corroborating the allegation that Mr. to be used in reaching that end.[11]
Severino Antonio worked with the petitioner Company
as an electrician for the past four years when they have ---We agree with the Office of the Solicitor General that
been working with the same Company; they were here, the power to control the employees conduct, i.e.,
receiving One Hundred Thirty Two (P132.00) per day the conduct of private respondent, is absent,
from Mrs. Tan, that they cannot be absent from work First, private respondent contends that he worked as an
without the permission of Mrs. Tan electrician and personal assistant at petitioners store. As
NLRC: held that an employer-employee relationship [an] electrician, private respondent may be presumed to
exists between Ushio and Severino and that the latter have used equipment or tools in rendering electrical
was illegally dismissed. services. If it is true that private respondent was an
employee of petitioner, he would have used equipment
NOTE: or tools supplied and owned by his employer.However,
The OSG’s view private respondent failed to allege and present proof
that petitioner supplied him equipment and tools.
the Office of the Solicitor General (OSG) supports the
stand of petitioner and recommends the reversal of the Second, the conduct of private respondent was not
challenged decision. The OSG asserts that there was no subject to the control and supervision of petitioner or
employer-employee relationship between the parties any of its personnel.There was no allegation of this, nor
because the control test, being the most important was evidence presented to prove it other than the bare
element of an employer-employee relationship, was allegation of private respondent that he could not leave
absent. The OSG then points out that there was no the work premises without permission from
showing that petitioner supplied private respondent petitioner. Private respondent himself decided how he
with equipment and tools; apart from private would render electrical services to customers. If it is true
that private respondent was hired as [an] electrician,
petitioner would have exercised supervision and control Categories and Classification of employment
over the means and manner he performed his electrical
Regular Employement. Art. 280:
services for, otherwise, if private respondents work was
unsatisfactory, it would reflect on the business of Experience however abundantly indicate that
petitioner. employees, whenever they institute complaints against
their employers, find it difficult to prove the terms and
Third, private respondent was free to offer his services to
conditions of their employment, or even the
other stores along Banaue, Quezon City, as evidenced by
employeremployee relations itself, as employers
the affidavit of Caroline Tan To, Assistant Manager of
invariably fail, by design or omission, to furnish the
Share Motor Sales (Annex B, Reply to Private
employees copies of the employment contracts. Under
Respondents Comment dated August 5, 1996) and
Article 280 of the Labor Code, the employer is authorized
private respondents own admission. But although
to engage the services of an employee under either a
private respondent admits that he rendered electrical
written or oral contract by providing thus:
services to the customers of other stores, he claims that
petitioner allowed him to do so. If private respondent 280. Regular and Casual Employment. - The provisions
was an employee of petitioner, it was unthinkable for of written agreement to the contrary notwithstanding
petitioner to allow private respondent to render and regardless of the oral agreement of the parties, an
electrical services to three other stores selling employment shall be deemed to be regular where the
automobile spare parts and accessories who were its employee has been engaged to perform activities which
competitors. are usually necessary or desirable in the usual business
or trade of the employer, except where the employment
Fourth, private respondent admits that [i]t was Mrs. Tan
has been fixed for a specific project or undertaking the
who refers electrical and other jobs to private
completion or termination of which has been
respondent (p. 6, Private Respondents Comment dated
determined at the time of the engagement of the
August 5, 1996). If private respondent was an employee
employee or where the work or service to be performed
of petitioner, Tan could not have referred electrical work
is seasonal in nature and the employment is for the
directly to him. She would have to course job orders to
duration of the season. An employment shall be deemed
petitioner. The fact that she dealt directly with private
to be casual if it is not covered by the preceding
respondent means that she did not consider private
paragraph: Provided, That any employee who has
respondent an employee of petitioner.
rendered at least one year of service, whether such
It is clear that petitioner did not have the power to service is continuous or broken, shall be considered a
control private respondent [w]ith respect to the means regular employee with respect to the activity in which he
and methods by which his work was to be accomplished is employed and his employment shall continue while
(Continental Marble Corporation, et al. vs. National such activity exists."
Labor Relations Commission, 161 SCRA 151, 158 [1988]).
This Bill seeks to require the employers to furnish the
Lastly, private respondent allowed petitioner to collect employees copies of the employment contracts in cases
service fees from his customers. He received said fees on where employment engagement are reduced into writing
a weekly basis.This arrangement, albeit peculiar, does and to make a sworn declaration to this effect.
not prove the existence of an employer-employee
relationship. In Besa vs. Trajano, 146 SCRA 501, 506
[1986], the shoe shiner rendering services in the
premises of Besa, received from Besa the payments for
his services on a weekly basis. Yet the shoe shiner was
not considered an employee of Besa. This is the same
arrangement between petitioner and private
respondent.[12]

WHEREFORE, judgment is hereby rendered GRANTING


the petition, REVERSING the challenged decision and
resolution of the National Labor Relations Commission in
NLRC-NCR CA No. 008495-95 and REINSTATING the
Order of 13 January 1995 of the Labor Arbiter in NLRC-
NCR Case No. 08-06147-94.

No pronouncement as to costs.

SO ORDERED.
SUPREME COURT THIRD DIVISION MOISES DE LEON, perform activities which are usually necessary or
Petitioner, -versus- G.R. No. 70705 August 21, 1989 desirable in the usual business or trade of the employer,
NATIONAL LABOR RELATIONS COMMISSION and LA except where 1.) the employment has been fixed for a
TONDEÑA, INC., Respondents. x-------------------------------- specific project or undertaking the completion or
-------------------x termination of which has been determined at the time of
the engagement of the employee or where the work or
FERNAN, C.J.:
services to be performed is seasonal in nature and the
It appears that petitioner was employed by private employment is for the duration of the season.
respondent La Tondeña, Inc. on December 11, 1981, at
“An employment shall be deemed to be casual if it is not
the Maintenance Section of its Engineering Department
covered by the preceding paragraph: Provided, That any
in Tondo, Manila.
employee who has rendered at least one year of service,
His work consisted mainly of painting company building whether such service is continuous or broken, shall be
and equipment, and other odd jobs relating to considered a regular employee with respect to the
maintenance. He was paid on a daily basis through petty activity in which he is employed and his employment shall
cash vouchers. continue while such actually exists.”

In the early part of January, 1983, after a service of more -This provision reinforces the Constitutional mandate to
than one (1) year, petitioner requested from respondent protect the interest of labor. Its language evidently manifests
the intent to safeguard the tenurial interest of the worker who
company that he be included in the payroll of regular
may be denied the rights and benefits due a regular employee
workers, instead of being paid through petty cash
by virtue of lopsided agreements with the economically
vouchers
powerful employer who can maneuver to keep an employee
Private respondent’s response to this request was to on a casual status for as long as convenient. Thus, contrary
agreements notwithstanding, an employment is deemed
dismiss petitioner from his employment on January 16,
regular when the activities performed by the employee are
1983.
usually necessary or desirable in the usual business or trade of
---petitioner filed a complaint for illegal dismissal, the employer.
reinstatement and payment of backwages before the The primary standard, therefore, of determining a
Office of the Labor Arbiter. regular employment is the reasonable connection
Defense of Respondent: between the particular activity performed by the
employee in relation to the usual business or trade of the
private respondent claimed that petitioner was not a employer. The test is
regular employee but only a casual worker hired
allegedly only to paint a certain building in the company 1.) whether the former is usually necessary or desirable
in the usual business or trade of the employer. The
premises, and that his work as a painter terminated upon
connection can be determined by considering the
the completion of the painting job.
nature of the work performed and its relation to the
Labor Abiter: scheme of the particular business or trade in its
entirety. Also,
Rendered a Decision[3] finding the complaint 2.) if the employee has been performing the job for at
meritorious and the dismissal illegal; and ordering the least one year, even if the performance is not
respondent company to reinstate petitioner with full continuous or merely intermittent, the law deems the
backwages and other benefits. repeated and continuing need for its performance as
sufficient evidence of the necessity if not
NLRC: indispensability of that activity to the business.

Reversed the decision of the Labor Arbiter. Respondent’s Contention:

The OSG recommended that the petition be given due In the case at bar, the respondent company, which is
Course. He further recommends that the questioned engaged in the business of manufacture and distillery of
decision and resolution of respondent Commission be wines and liquors, claims that petitioner was contracted
on a casual basis specifically to paint a certain company
annulled and the Order of the Labor Arbiter directing the
building and that its completion rendered petitioner’s
reinstatement of petitioner with payment of backwages
employment terminated.
and other benefits be upheld.
This may have been true at the beginning, and had it been
ISSUE: WON there exists an employer-employee shown that petitioner’s activity was exclusively limited to
relationship between De Leon and the Private painting that certain building, respondent company’s
respondent. theory of casual employment would have been worthy of
consideration. However, during petitioner’s period of
Ruling: The SC said Yes. employment, the records reveal that the tasks assigned to
The law on the matter is Article 281 of the Labor Code him included not only painting of company buildings,
equipment and tools but also cleaning and oiling
which defines regular and casual employment as follows:
machines, even operating a drilling machine, and other
“Art. 281. Regular and casual employment. — The odd jobs assigned to him when he had no painting job. A
provisions of a written agreement to the contrary regular employee of respondent company, Emiliano
notwithstanding and regardless of the oral agreements Tanque, Jr., attested in his affidavit that petitioner worked
with him as a maintenance man when there was no
of the parties, an employment shall be deemed to be
painting job. Petition GRANTED!
regular where the employee has been engaged to
[G. R. No. 148492. May 9, 2003] loading and unloading softdrink products of
petitioner company to its various delivery points.
Magsalin vs. national organization of working men,
Rodolfo melgar, et al. Even while the language of law might have been
VITUG, J.: more definitive, the clarity of its spirit and
intent, i.e., to ensure a regular workers security of
Coca-Cola Bottlers Phils., Inc., herein petitioner, tenure, however, can hardly be doubted. In
engaged the services of respondent workers as sales determining whether an employment should be
route helpers for a limited period of five considered regular or non-regular, the applicable
months. After five months, respondent workers test is the reasonable connection between the
were employed by petitioner company on a day-to- particular activity performed by the employee in
day basis. relation to the usual business or trade of the
According to petitioner company, respondent employer. The standard, supplied by the law itself, is
workers were hired to substitute for regular sales whether the work undertaken is necessary or
route helpers whenever the latter would be desirable in the usual business or trade of the
unavailable or when there would be an unexpected employer, a fact that can be assessed by looking into
shortage of manpower in any of its work places or an the nature of the services rendered and its relation
unusually high volume of work. --->The practice was to the general scheme under which the business or
for the workers to wait every morning outside the trade is pursued in the usual course.
gates of the sales office of petitioner company. If although the work to be performed is only for a
thus hired, the workers would then be paid their specific project or seasonal, where a person thus
wages at the end of the day. engaged has been performing the job for at least one
Ultimately, respondent workers asked petitioner year, even if the performance is not continuous or is
company to extend to them regular merely intermittent, the law deems the repeated
appointments. Petitioner company refused. and continuing need for its performance as being
sufficient to indicate the necessity or desirability of
---On 07 November 1997, twenty-three (23) of the that activity to the business or trade of the
temporary workers (herein respondents) filed with employer. The employment of such person is also
the National Labor Relations Commission (NLRC) a then deemed to be regular with respect to such
complaint for the regularization of their employment activity and while such activity exists.
with petitioner company. The complaint was
amended a number of times to include other The repeated rehiring of respondent workers and
complainants that ultimately totaled fifty-eight (58) the continuing need for their services clearly attest
workers. Claiming that petitioner company to the necessity or desirability of their services in the
meanwhile terminated their services, respondent regular conduct of the business or trade of petitioner
workers filed a notice of strike and a complaint for company. The Court of Appeals has found each of
illegal dismissal and unfair labor practice with the respondents to have worked for at least one year
NLRC. with petitioner company.

-On 01 April 1998, the parties agreed to submit the (as to those 36 who received and accepted the
controversy, including the issue raised in the amount granted by the voluntary arbitrator, The
complaint for regularization of employment, for receipt of the amount awarded by the voluntary
voluntary arbitration. arbitrator, as well as the execution of a release,
waiver and quitclaim, is, in effect, an acceptance of
Voluntary Arbitrator: Dismissed the Complaint said decision.)
Respondent workers went to the CA and filed a Wherefore CA decision is Affirmed. So ordered.
petition for review under Rule 43.

CA: Reversed and set aside the ruling of the


arbitrator.

Hence, this case.

ISSUE: WON the nature of work of the respondents


is such that it is to be deemed necessary and
desirable in the usual business or trade of the
Petitioner that could qualify them to be regular
employees.

Ruling: Yes! The SC explained that Coca-Cola Bottlers


Phils., Inc., is one of the leading and largest
manufacturers of softdrinks in the
country. Respondent workers have long been in the
service of petitioner company. Respondent workers,
when hired, would go with route salesmen on board
delivery trucks and undertake the laborious task of