III.
 EMPLOYER­EMPLOYEE RELATIONSHIP
 
A.   Four Fold Test
 
1.  Republic  of the Philippines vs SSS    GR No. 172101 November 23,
2007
Facts:
Asiapro, as a cooperative, is composed of owners­members. Under its by­
laws,   owners­members   are   of   two   categories,   (1)regular   member,   who   is
entitled to all the rights and privileges of membership ; and (2) associate
member, who has no right to vote and be voted upon and shall be entitled
only   to   such   rights   and   privileges   provided in   its   by­laws.   Its   primary
objectives are to provide savings and credit facilities and to develop other
livelihood services for its owners­members.
In the discharge of the aforesaid primary objectives, respondent cooperative
entered into several Service Contracts with Stanfilco ­ a division of DOLE
Philippines, Inc. and a company based in Bukidnon. The owners­members
do   not   receive   compensation   or   wages   from   the respondent
cooperative. Instead,   they   receive   a   share   in   the   service   surplus   which
Asiapro earns from different areas of trade it engages in, such as the income
derived from the said Service Contracts with Stanfilco. In order to enjoy the
benefits   under   the Social   Security   Law   of   1997,   the owners­members   of
Asiapro assigned to Stanfilco requested the services of the latter to register
them with SSS as self­employed and to remit their contributions as such.   Similarly, Section 1, Rule III of the 1997 SSS Revised Rules of Procedure
On   September   26,   2002,   petitioner   SSS   sent   a   letter   to   respondent
cooperative   informing the   latter   that   based   on   the   Service   Contracts   it
executed   with Stanfilco,   Asiapro   is   actually   manpower   contractor
 supplying employees to Stanfilco    and so,    it is an   employer of its owners­
members   working   with   Stanfilco. Thus, Asiapro   should   register   itself
with petitioner SSS as an employer and make the corresponding report
and remittance of premium contributions.  charge of the Department/Branch/Representative Office
Despite   letters   received,   respondent   cooperative   continuously   ignored   the
demand of petitioner SSS. 
Accordingly,   SSS   filed   a   petition   on   June   12,   2003   before   SSC   against
Asiapro   and   Stanfilco   praying   that   either   of   them   bedirected to register as an
employer and to report Asiapro‘s owners­members as covered employees under
the   compulsory   coverage   of SSS   and   to   remit   the   necessary
contributions. Respondent   cooperative   filed   its   answer   with   Motion   to
Dismiss alleging that no employer­employee relationship exists between it
and   its   owners­members,   thus,   petitioner   SSC   has   no   jurisdiction   over
therespondent cooperative.
Issues:
1. Whether or not there exists an employer­employee relationship between
Asiapro Cooperative and its owners­members.
2.Whether or not petitioner has jurisdiction over the petition­complaint filed
before it by SSS against the respondent cooperative.
 
SC Ruling:
1. YES. 
In   determining   the   existence   of   an   employer­employee
relationship,   the   following   elements   are   considered:   (1)   the
selection   and   engagement   of   the   workers;   (2)   the   payment   of
wages by whatever means; (3) the power of dismissal; and (4) the
power to control theworker‘s conduct, with the latter assuming primacy in the
overall consideration. The most important element is the employer‘s control. 
All the aforesaid elements are present in this case.
The existence of an employer­employee relationship cannot be negated
by   expressly   repudiating   it   in   a   contract,   when   the   terms   and
surroundingcircumstances   show   otherwise.  The   employment   status   of
a person is defined and prescribed by law and not by what the parties say
itshould be.
A  cooperative acquires juridical personality upon its registration with the
Cooperative Development Authority. It has its Board of Directors,which
directs and supervises its business; meaning its Board of Directors is the
one in charge in the conduct and management of itsaffairs. With that, a
cooperative can be likened to a corporation with a personality separate and
distinct from its  owners­members. Consequently, an owner­member  of  a
cooperative can be an employee of the latter and the employer­employee
relationship can exist between them.
 
2.Petitioner SSC‘s jurisdiction is clearly stated in Section 5 of R.A. No. 8282 as well as in Section 1,
Rule III of the 1997 SSS   RevisedRules   of   Procedure.Sec.   5   of   R.A.   8282
provides:
―Sec. 5 Settlement of Disputes
 –(a) Any dispute arising under this Act with respect to coverage, benefits,
contributions and penaltiesthereon or any other matter related thereto, shall
be cognizable by the Commission
, xxx‖ (Emphasis Supplied)
states:
―Section 1.Jurisdiction – 
Any dispute arising under the Social Security Act with respect to coverage,
entitlement   of   benefits,collection   and   settlement   of   contributions   and
penalties thereon, or any other matter related thereto, shall be cognizable by
theCommission after the SSS through its President, Manager or Officer­in­
concerned had first taken action thereon in writing.‖ (Emphasis supplied)
It is clear then from the aforesaid provisions that any issue regarding
the compulsory coverage of the SSS is well within the exclusive domain
 of   the   petitioner   SSC.  It   is   important   to   note   that   the   mandatory
coverage   under   the   SSS   Law   is   premised   on   the   existence   of
anemployer­employee   relationship.  Consequently,   the   respondent
cooperative   being   the   employer   of   its   owners­members   must   registeras
employer and report its owners­members as covered members of the SSS
and remit the necessary premium contributions inaccordance with the Social
Security Law of 1997.Accordingly, based on the allegations in the petition­
complaint filed before the petitioner SSC, the case clearly falls within its
jurisdiction.
 
 
2.  Great Pacific Life Assurance Corp vs NLRC 187 SCRA 694 (1990)  
Doctrines 
Even if under the Insurance,, they are called “iinsurance agents””,, it does not
follow that they are not empl oyees . The Insurance Code may govern the
licensing requirements and other particular duties of insurance agents,, but it
does not bar the application of the Labor Code with regard to labor standards
and labor relations 
Summary 
Insurance agents were terminated by Grepalife because of misconduct.. LA
found just cause for dismissal but nevertheless ordered reinstatement.. NL RC
modified by changing reinstatement to payment of separation pay.. Grepalife
argues   that   there   is   no   Er   ­   Ee   relationship   because   they   are   agents..   SC
affirmed finding that Er ­ Ee relationship exists.. Even if under the Insurance,,
they   are   called   “iinsurance   agents””,,   it   does   not   follow   that   they   are   not
employees   of   Grepalife..   The   Insurance   Code   may   govern   the   licensing
requirement s and other particular duties of insurance agents,, but it does not
bar the application of the Labor Code with regard to labor standards and labor
relations   .   SC   clarified   that   separation   pay   is   actually   sanction   for   non   ­
compliance of Grepalife to notice requirement.. 
Facts  labor standards and labor relations..
o  T heir work at the time of their dismissal as zone supervisor and district
manager are necessary and desirable to the usual business of the insurance
company.. 
o  A   cursory   reading   of   their   respective   functions   as   enumerated   in   their
contracts reveals that the company practically dictates the manner by which
their jobs are to be carried out.. 
o Even if under the Insurance,, they are called “ insurance agents ” , it does
not follow that they are not employees of Grepalife.. The Insurance Code may
govern the licensing requir ements and other particular duties of insurance
agents,, but it does not bar the application of the Labor Code with regard to
 

  Brothers   Rodrigo   and   Ernesto   Ruiz   entered   into   individual   agency   Whether or not there was grave abuse of discretion on the part of public
agreements with Grepalife  respondent in ordering the award of separation pay to private respondents as
sanction for Grepalife's failure to accord them due process even though there
 Ernesto was designated as district manager under a 3 ­ year Agreement  was finding of just cause for their dismissal (NNO)) 

 H e was dismissed fr om service before the lapse of the period fixed in the o  the   monetary   award   fixed   by   public   respondent,,   although   erroneously

contract,, when upon audit he was found to have delayed the remittance of termed as "sseparation pay'',, was in fact a sanction for the employer's failure
premium collections in his possession and to have appropriated for his own to observe the procedural requirements of due process 
use  a certain amount by remitting  smaller  amounts of  premiums  than that
actually paid by policy holders  o  an indemnity,, not "sseparation pay"",, must be imposed on th e employer
for failure to observe the procedural requirements of notice and hearing prior
  Grepalife then designated Rodrigo as officer ­ in charge to take over the to the dismissal of an employee for just cause.. 
functions   of   district   manager   in   the   Butuan   district   ,   in   addition   to   his
responsibilities then as zone supervisor..  o Considering the circumstances of the case at bar,, petitioner must indemnify
private respondents in the amount of One T housand Pesos (PP1,000.00)) each
 Rodrigo i nstigated the other zone supervisors and debit agents of the Butuan
district not to submit their weekly reports of business and not to remit the Held 
premium collections 

D   ecision   of   the   NLRC   is   hereby   MODIFIED   insofar   as   the   award   of

  This prompted Grepalife to terminate his employment effective March 5,, "sseparation   pay""   is   concerned..   In   lieu   of   "sseparation   pay""   pet   itioner
1984 in a letter dated March 8,, 198 4  Grepalife is hereby ordered to indemnify private respondents Rodrigo Ruiz
and Ernesto Ruiz the amount of One Thousand Pesos (PP1,000.00)) each 
 The brothers filed illegal dismissal cases 

 LA:: labor arbiter ordered their reinstatement without backwages   

o  LA found that Rodrigo and Ernesto:: (11)) were employees of Grepalife;;  B.     Economic Reality Test
(22))   committed   acts   inimical   to   Grepalife's   business;;   and   (33))   were 1.    Orozco vs CA and Philippine Daily Inquirer  GR No. 155207 (2008),
dismissed without first being afforded due process by way of a notice in wri 562 SCRA 36 (2008)
ting of the grounds for their dismissal..  FACTS:

 NLRC affirm but awarded separation pay for Grepalife ’ s failure to observe In March 1990, Wilhelmina Orozco was hired as a writer by the Philippine
due process prior to their termination from employment..  Daily Inquirer (PDI). She was the columnist of “Feminist Reflections” under
the Lifestyle section of the publication. She writes on a weekly basis and on
Ratio//IIssues  a per article basis (P250­300/article).

In   1991,   Leticia   Magsanoc   as   the   editor­in­chief   sought   to   improve   the

  Whether or not there was grave abuse of discretion on the part of public
respondent in holding that Ernesto and Rodrigo are employees of Grepalife
(NNO)) 
Lifestyle section of the paper. She said there were too many Lifestyle writers
and that it was time to reduce the number of writers. Orozco’s column was
eventually dropped.

o Argument of Grepali fe:: they are agents..  Orozco filed for  a case  for Illegal  Dismissal  against PDI  and Magsanoc.

o SC:: Er ­ Ee relationship exists . 4 ­ fold test (bbut ponencia did not discuss
all,, focused on control)) 
Orozco won in the Labor Arbiter where the arbiter ruled that there exists an
employer­employee relationship between PDI and Orozco.
The case eventually reached the Court of Appeals where the CA ruled that
there is no such relationship.
Orozco insists that by applying the four­fold test, it can be seen that she is an
employee of PDI; Orozco insists that PDI had been exercising the power of
control over her because:
a) PDI provides the guidelines as to what her article content should be;
b) PDI sets deadlines as to when Orozco must submit her article/s;
c) PDI controls the number of articles to be submitted by Orozco;
d) PDI requires a certain discipline from their writers so as to maintain
their readership.
ISSUE: 
Whether  or  not  a newspaper  columnist  is an employee  of  the  newspaper
which publishes the column.
RULING:  — although the latter is the most important element.
No.  The type of control being argued by Orozco is not the type of control
contemplated   under   the   four   fold   test   principle   in   labor   law. The   main
determinant to test control is whether the rules set by the employer are meant
to control not just the results of the work but also the means and method to
be used by the hired party in order to achieve such results.
In   this   case,   the “control” exercised   by   PDI   over   Orozco,   as   mentioned
earlier, is not that “control” contemplated under the four fold test. In fact,
such standards set by PDI is merely incidental or inherent in the newspaper
business and is not an exercise of control over Orozco.
Orozco has not shown that PDI, acting through its editors, dictated how she
was to write or produce her articles each week. There were no restraints on
her creativity; Orozco was free to write her column in the manner and style
she was accustomed to and to use whatever research method she deemed
suitable for her purpose. The apparent limitation that she had to write only on
subjects that befitted the Lifestyle section did not translate to control, but
was simply a logical consequence of the fact that her column appeared in
that section and therefore had to cater to the preference of the readers of that
section
 
 C.      Other forms of    relationship
1.    Independent Contractor /Job Contractors  
a.    DO No. 174
b.    Insular   Life   Assurance   Co   Ltd   vs   NLRC   GR   No.
84484  [TC4] (1989);  179 SCRA 459 (1989)
2.      Facts:
Petitioner Insular Life entered into a contract with respondent Basiao
where the latter is authorized to solicit for insurance policies. Sometime
later,   the   parties   entered   into   another   contract   which   caused   Basiao   to
organize   an   agency   in   order   to   fulfill   its   terms.   The   contract   being
subsequently terminated by petitioner, Basiao sued the latter which prompted
also for the termination of their engagement under the first contract. Basiao
thus filed before the Ministry of Labor seeking to recover alleged unpaid
commissions.   Petitioner   contends   that   Basiao   is   not   an   employee   but   an
independent   contractor   for   which   they   have   no   obligation   to   pay   said
commissions. The Labor Arbiter found for Basiao ruling that there exists
employer­employee   relationship   between   him   and   petitioner.   NLRC
affirmed.
Issue:Whether   or   not   employer­employee   relationship   existed   between
petitioner and Basiao.
Ruling: NO.  In   determining   the   existence   of   employer­employee
relationship, the following elements are generally considered, namely: (1)
the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the power to control the employees’ conduct
 
It should, however, be obvious that not every form of control that the
hiring party reserves to himself over the conduct of the party hired in
relation   to   the   services   rendered   may   be   accorded   the   effect   of
establishing   an   employer­employee   relationship   between   them   in   the
legal or technical sense of the term.  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. None of these really invades the agent’s contractual
prerogative to adopt his own selling methods or to sell insurance at his own
time   and   convenience,   hence   cannot   justifiably   be   said   to   establish   an
employer­employee relationship between him and the company. 
The Court, therefore, rules that under the contract invoked by him, Basiao
was   not   an   employee   of   the   petitioner,   but   a   commission   agent,   an
independent contractor  whose  claim  for  unpaid commissions  should have
been litigated in an ordinary civil action.
a. Singer Sewing Machine vs Drilon 193 SCRA270 (1991)
Facts: Singer Machine Collectors Union­Baguio filed a petition for direct
certification as the sole and exclusive bargaining agent of all collectors of
Singer   Sewing   Machine.  The   company   opposed   the   petition   mainly
because   the   union   members   are   not   employees   but   independent
contractors as evidenced by the collection agency agreement which they
signed. 
Med­Arbiter ruled that there exists an employee­employer relationship and
granted the certification election which was affirmed by Sec. Drilon. The
company files the present petition on the determination of the relationship.
The union insists that the provisions of the Collection Agreement belie the
company’s position that the union members are independent contractors. 
 
Issue: Whether   or   not   there   exists   an   employer­employee   relationship
between the parties. 
   RULING: No. The records of the case reveal that an employer­employee
Ruling: The present case calls for the application of the control test, which if relationship does not exist between the 17 shoeshiners and petitioner. The
not   satisfied,   would   lead   to   the   conclusion   that   no   employee­employer shoe shiner is distinct from a piece worker because while the latter is paid for
relationship   exists.   If   the   union   members   are   not   employees,   no   right   to work accomplished, he does not, however, contribute anything to the capital
organize for the purpose of bargaining or as a bargaining agent cannot be of the employer other than his service. 
recognized. 
 It is the employer of the piece worker who pays his wages, while
The following elements are generally considered in the determination of the the shoe shiner in this instance is paid directly by his customer. 
relationship:   the   selection   and   engagement   of   the   employee,   payment   of  The piece worker is paid for work accomplished without regard or
wages, power of dismissal and the power to control the employee’s conduct concern to the profit as derived by his employer, but in the case of
which is the most important element.  the shoe shiners, the proceeds derived from the trade are always
divided share and share alike with respondent BESA. 
The   nature  of   the   relationship   between   a  company   and   its  collecting  The shoe shiner can take his share of the proceeds everyday if he
agents depends on the circumstances of each particular relationship. Not wanted to or weekly as is the practice of Besas The employer of
all   collecting   agents   are   employees   and   neither   are   all   collecting   agents the piece worker supervises and controls his work, but in the case
independent contractors.  of the shoe shiner, respondent BESA does not exercise any degree
of   control   or   supervision   over   their   person   and   their   work.   All
The agreement confirms the status of the collecting agents as independent these are not obtaining in the case of a piece worker as he is in fact
contractor.  The   requirement   that   collection   agents   utilize   only   receipt an employee in contemplation of law, distinct from the shoe shiner.
forms and report forms issued by the company and that reports shall be
submitted at least once a week is not necessarily an indication of control Entitlement   of   the   minimum   requirements   of   the   law   particularly   on
over the means by which the job collection is to be performed.  Even if wages and   allowances  presupposes  the  existence  of   employer­employee
report requirements are to be called control measures, any control is only relationship  which   is   determined   by   the   concurrence   of   the   following
with respect to the end result of the collection since the requirements regulate conditions: 1. right to hire; 2. payment of wages; 3. right to fire; and 4. control
the   things   to   be   done   after   the   performance   of   the   collection   job   or   the and supervision. The most important condition to be considered is the exercise
 rendition of service.   of control and supervision over the employees. 

The   plain   language   of   the   agreement   reveals   that   the   designation   as These shoe shiners are not employees of the company, but are partners
collection  agent  does not  create  an employment  relationship  and that  the instead.  This  is  due   to  the   fact that  the  owner/manager  does not  exercise
applicant is to be considered at all times as an independent contractor.  control and supervision over the shoe shiners. That the shiners have their own
customers from whom they charge the fee and divide the proceeds equally
The   court   finds   that   since   private   respondents   are   not   employees   of   the with   the   owner,   which   make   the   owner   categorized   them   as   on   purely
company, they are not entitled to the constitutional right to form or join a commission basis.
labor   organization   for   the   purposes   of   collective   bargaining.   There   is   no
constitutional and legal basis for their union to be granted their petition for
c.    Sonza vs ABS CBN   GR No. 138051 (2004)   431 SCRA  583 (2004)
direct certification.
  Facts:
b.    Besa vs Trajano 146 SCRA 501 (1986)

Respondent   ABS­CBN   signed   an   Agreement   with   the   Mel   and   Jay

FACTS:  January,   1985,   private   respondent   Kaisahan   ng   Mangagawang
Pilipino, a legitimate labor union duly registered with the Ministry of Labor Management Development Corporation where the latter agreed to provide
and Employment, filed a Petition for Certification Election in the National petitioner Sonza’s services exclusively to ABS­CBN as talent for radio and
Labor Relations Division of the National Capital Region.  television. Later, Sonza tendered a letter rescinding their agreement and filed
a complaint before the DOLE for payment of his labor standard benefits.
Petitioner   opposed   it   alleging   that   1.   There   is   no   employer­employee
relationship between Besa's and the petitioners­signatories to the petition; 2. ABS­CBN contends on the ground that no employer­employee relationship
The subject of the present petition had previously been decided by the defunct existed between the parties. The Labor Arbiter found for respondent citing
Court of Industrial Relations, and is therefore barred under the principle of res
that Sonza as a ‘talent’ cannot be considered an employee of petitioner. Both
judicata;   3.   The   petition   fails   to   comply   with   the   mandatory   formal
requirements under Sec. 2, Book V, of the Omnibus Rules Implementing the NLRC and CA affirmed.
Labor Code; and 4. This Hon. Commission has no jurisdiction over the subject
matter and parties to the petition.
Issue:
Acting   on   the   Petition,   the   Opposition   thereto,   and   the   Reply   to   the
Opposition, the Med­Arbiter on June 27, 1985, issued an order declaring that
there was an employer­employee relationship between the parties and directed Whether or not employer­employee relationship existed between petitioner
that an election be conducted. Petitioner appealed the order to the Director of and ABS­CBN.
BLR, but it was dismissed. Thus the Petition of the Union (KAMPIL) before
the Med­Arbiter for the holding of the certification election was granted.
Ruling: NO.
ISSUE:  Whether   or   not   there   is   employer­employee   relationship   between
Besa and the petitioner­signatories to the petition.
Applying the control test to the present case, we find that SONZA is not an
employee   but   an  independent   contractor.  The   control   test   is   the most
important test   our   courts   apply   in   distinguishing   an   employee   from   an
independent Contractor. This test is based on the extent of control the hirer
exercises over a worker. The greater the supervision and control the hirer
exercises, the more likely the worker is deemed an employee. The converse
holds true as well – the less control the hirer exercises, the more likely the
worker is considered an independent contractor.
We find that ABS­CBN was not involved in the actual performance that
produced   the   finished   product   of   SONZA’s   work.  ABS­CBN   did   not
instruct SONZA  how  to perform  his job. ABS­CBN  merely reserved the
right to modify the program format and airtime schedule “for more effective
programming.” ABS­CBN’s sole concern was the quality of the shows and
their standing in the ratings. Clearly, ABS­CBN did not exercise control over
the means and methods of performance of SONZA’s work.
In any event, not all rules imposed by the hiring party on the hired party
indicate that the latter is an employee of the former. In this case, SONZA
failed to show that these rules controlled his performance. We find that these
general rules are merely guidelines towards the achievement of the mutually
desired   result,   which   are   top­rating   television   and   radio   programs   that
comply with standards of the industry.
Being   an   exclusive   talent   does  not   by   itself   mean   that   SONZA   is   an
employee   of   ABS­CBN.  Even   an   independent   contractor   can   validly
provide   his   services  exclusively   to   the   hiring   party.  In   the   broadcast
 industry,   exclusivity is not necessarily the same as control.
*Not every performance of services for a fee creates an employer­employee
relationship. To hold that every person who renders services to another for
a fee is an employee – to give meaning to the security of tenure clause –
will lead to absurd results.
 
d.    Ushio Marketing vs NLRC GR No. 124551, August 28, 1998
 
Facts:
Petitioner  urges us to annul the decision of the National Labor  Relations
Commission   (NLRC)   which   reversed   the   Labor   Arbiter's   decision   which
denied petitioner’s motion for reconsideration.
Private respondent Severino Antonio was an electrician who worked within
the premises of petitioner Ushio’s car accessory shop in Banawe, Quezon
City.   On August 22, 1994, private respondent filed a complaint for illegal
dismissal,   non­payment   of   overtime   pay,   holiday   pay,   and   other   benefits
against petitioner Ushio Marketing which was docketed as NLRC NCR Case
No. 08­06147­94 and assigned to Labor Arbiter Facundo L. Leda.
In   Petitioner’s   Motion   to   Dismiss,   she   alleged   that   it   was   a   single
proprietorship engaged in the business of selling automobile  spare parts and
accessories.   Petitioner claimed that private respondent was not among her
employees but a free lance operator who wait[ed] on the shop’s customers
should the latter require his services.
On   January   13,   1995,   Labor   Arbiter   Facundo   L.   Leda   premising   on   the
allegations contained in the Motion to Dismiss submitted by the petitioner
Company, issued an order dismissing the complaint of private respondent
Severino Antonio against petitioner Ushio Marketing Corp.
On February 28, 1995, private respondent assisted by the Public Attorney’s
Office,   appealed   the   order   of   the   Honorable   Labor   Arbiter   to   the
Commission.   In  his   memorandum,  private  respondent  alleged  that  Ushio
Marketing hired his services on 15 November 1981 until July 3, 1994 as an
electrician with a daily salary of one hundred thirty two pesos (P132.00) per
day.  
Issue: Whether or not there was an employee­employer relationship.
Held:
The factors to be considered in determining the existence of an
employer­employee relationship are: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
power   to   control   the   employee’s   conduct.   The   so­called   "control   test"   is
commonly regarded as the most crucial and determinative indicator of the
presence   or   absence   of   an   employer­employee   relationship.   Under   the
control test, an employer­employee relationship exists where the person for
whom the services are  performed reserves the right to control not only the
end achieved, but also the manner and means to be used in reaching that end.
The   conduct   of   private   respondent   was   not   subject   to   the   control   and
supervision of petitioner or any of its personnel.  There was no allegation of
this, nor was evidence presented to prove it other than the bare allegation of
private   respondent   that   he   could   not   leave   the   work   premises   without
permission   from   petitioner.   Private   respondent   himself   decided   how   he
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   over   the   means   and   manner   he   performed   his
electrical   services   for,   otherwise,   if   private   respondent’s   work   was
unsatisfactory, it would reflect on the business of petitioner.
Private   respondent   was   free   to   offer   his   services   to   other   stores   along
Banaue, Quezon City,  as evidenced by the  affidavit of  Caroline  Tan To,
Assistant   Manager   of   Share   Motor   Sales   (Annex   B,   Reply   to   Private
Respondent’s Comment dated August 5, 1996) and private respondent’s own
admission.   But   although   private   respondent   admits   that   he   rendered
electrical services to the customers of other stores, he claims that petitioner
allowed him to do so.  If private respondent was an employee of petitioner, it
was unthinkable for petitioner to allow private respondent to render electrical
services to three other stores selling automobile spare parts and accessories
who were its competitors.
It is clear that petitioner did not have the power to control private respondent
“[w]ith   respect to the means and methods by which his work was to be
accomplished” (Continental Marble Corporation, et al. vs. National Labor
Relations Commission, 161 SCRA 151, 158 [1988]).
Private   respondent   allowed   petitioner   to   collect   service   fees   from   his
customers.   He   received   said   fees   on   a   weekly   basis.   This   arrangement,
albeit   peculiar,   does   not   prove   the   existence   of   an   employer­employee
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.
WHEREFORE,   judgment   is   hereby   rendered   GRANTING   the   petition,
REVERSING the challenged decision and resolution of the National Labor
Relations   Commission   in   NLRC­NCR   CA   No.   008495­95   and
REINSTATING   the   Order   of   13   January   1995   of   the   Labor   Arbiter   in
NLRC­NCR Case No. 08­06147­94.

 [TC1]: (1) the selection andengagement of the workers; (2) the payment of
wages by whatever means; (3) the power of dismissal; and (4) the power
to control theworker‘s conduct, with the latter assuming primacy in the overall consideration

 [TC2]The SC highlighted the importance of control test. In this case the
court saw that the company practically dictates on how the agents will do
their work. 

Being an insurance agent does not necessarily mean that ER­EE relationship
does not exist.

 [TC3]The main determinant to test control is whether the rules set by the
employer are meant to control not just the results of the work but also the
means and method to be used by the hired party in order to achieve such
results.

The economic realities prevailing within the activity or between the parties
are   examined,   taking   into   consideration   the   totality   of   circumstances
surrounding the true nature of the relationship between the parties. 37 This is
especially appropriate when, as in this case, there is no written agreement or
contract on which to base the relationship. In our jurisdiction, the benchmark
of   economic   reality   in   analyzing   possible   employment   relationships   for
purposes of applying the Labor Code ought to be the economic dependence
of the worker on his employer.38

Petitioner’s main occupation is not as a columnist for respondent but as a
women’s   rights   advocate   working   in   various   women’s
organizations.39 Likewise, she herself admits that she also contributes articles
to other publications.40 Thus, it cannot be said that petitioner was dependent
on respondent PDI  for her continued employment in respondent’s line  of
business.41

The   inevitable   conclusion   is   that   petitioner   was   not   respondent   PDI’s

employee but an independent contractor, engaged to do independent work.

 [TC4] independent contractor where said agent and others similarly placed
were:   (a)   paid   compensation   in   the   form   of   commissions   based   on
percentages of their sales, any balance of commissions earned being payable
to their legal representatives in the event of death or registration; (b) required
to put up performance bonds; (c) subject to a set of rules and regulations
governing   the   performance   of   their   duties   under   the   agreement   with   the
company and termination of their services for certain causes; (d) not required
to   report   for   work   at   any   time,   nor   to   devote   their   time   exclusively   to
working for the company nor to submit a record of their activities, and who,
finally, shouldered their own selling and transportation expenses.