1.) MARTICIO SEMBLANTE and DUBRICK PILAR vs.

COURT OF APPEALS

G.R. No. 196426 August 15, 2011

FACTS:

Petitioners Marticio Semblante (Semblante) and Dubrick Pilar (Pilar) assert that they
were hired by respondents-spouses Vicente and Maria Luisa Loot, the owners of
Gallera de Mandaue (the cockpit), as the official masiador and sentenciador,
respectively, of the cockpit sometime in 1993. As the masiador, Semblante calls and
takes the bets from the gamecock owners and other bettors and orders the start of the
cockfight. He also distributes the winnings after deducting the arriba, or the
commission for the cockpit. Meanwhile, as the sentenciador, Pilar oversees the proper
gaffing of fighting cocks, determines the fighting cocks’ physical condition and
capabilities to continue the cockfight, and eventually declares the result of the cockfight.

On November 14, 2003, however, petitioners were denied entry into the cockpit upon
the instructions of respondents, and were informed of the termination of their services
effective that date. This prompted petitioners to file a complaint for illegal dismissal
against respondents.

Respondents denied that petitioners were their employees and alleged that they were
associates of respondents’ independent contractor. They claimed that petitioners have
no regular working time or day and they are free to decide for themselves whether to
report for work or not. Lastly, petitioners, so respondents assert, were only issued
identification cards to indicate that they were free from the normal entrance fee and to
differentiate them from the general public.

The Labor Arbiter Julie C. Rendoque found petitioners to be regular employees of

respondents as they performed work that was necessary and indispensable to the usual
trade or business of respondents for a number of years.

On appeal, the National Labor Relations Commission at first denied the appeal for the
belated filing of an appeal bond. Subsquently, it issued a Resoluiton held that there was
no employer-employee relationship between petitioners and respondents, respondents
having no part in the selection and engagement of petitioners, and that no separate
individual contract with respondents was ever executed by petitioners.

On appeal to the Court of Appeals, the appellate court found for respondent. It found
that petitioners are akin to independent contractors who possess unique skills,
expertise, and talent to distinguish them from ordinary employees.

Petitioners' motion for reconsideration having been denied, they filed a petition to the
Supreme Court.

ISSUE:

Whether the petitioners are employees of the private respondents.

HELD:
No. Petitioners are not employees of the private respondents.

It has been repeatedly mentioned in countless decisions that an emplyer-employee

relationship exists when: (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, which is the most important element.

As found by both the NLRC and the CA, respondents had no part in petitioners’
selection and management; petitioners’ compensation was paid out of the arriba (which
is a percentage deducted from the total bets), not by petitioners; and petitioners
performed their functions as masiador and sentenciador free from the direction and
control of respondents. In the conduct of their work, petitioners relied mainly on their
“expertise that is characteristic of the cockfight gambling,” and were never given by
respondents any tool needed for the performance of their work. Respondents, not being
petitioners’ employers, could never have dismissed, legally or illegally, petitioners,
since respondents were without power or prerogative to do so in the first place. The
rule on the posting of an appeal bond cannot defeat the substantive rights of
respondents to be free from an unwarranted burden of answering for an illegal
dismissal for which they were never responsible.
 2.) CALAMBA MEDICA CENTER INC. VS NLRC

FACTS:

Calamba Medical Center, a privately-owned hospital, engaged the services of medical

doctors-spouses Ronaldo Lanzanas and Merceditha Lanzanas as part of its team of
resident physicians.

Reporting at the hospital twice-a-week on twenty-four-hour shifts, respondents were

paid a monthly "retainer" of P4,800.00 each. It appears that resident physicians were
also given a percentage share out of fees charged for out-patient treatments, operating
room assistance and discharge billings, in addition to their fixed monthly retainer

The work schedules of the members of the team of resident physicians were fixed by
petitioner's medical director Dr. Raul Desipeda and they were issued identification
cards by petitioner and were enrolled in the Social Security System (SSS). Income taxes
were withheld from them.

Dr. Meluz Trinidad, also a resident physician at the hospital, inadvertently overheard a
telephone conversation of respondent Dr. Lanzanas with a fellow employee, Diosdado
Miscala. Dr. Trinidad, also a resident physician at the hospital, inadvertently overheard
a telephone conversation of respondent Dr. Lanzanas with a fellow employee, Diosdado
Miscala as regards the low census or admission in the hospital.

Dr. Desipeda Dr. Desipeda issued to Dr. Lanzanas a Memorandum stating that he has
have committed acts inimical to the interest of the hospital. He was directed to explain
why no disciplinary action should be taken against him. He was also placed under 30-
days preventive suspension. Petitioner did not give respondent Dr. Merceditha, who
was not involved in the said incident, any work schedule after sending her husband Dr.
Lanzanas the memorandum, nor inform her the reason therefor, albeit she was later
informed by the Human Resource Department officer that that was part of petitioner's
cost-cutting measures.

On March 14, 1998, the rank-and-file employees union of petitioner went on strike due
to unresolved grievances over terms and conditions of employment.

Dr. Lanzanas filed a complaint for illegal suspension before the National Labor
Relations Commission (NLRC)-Regional Arbitration Board (RAB) IV. Dr. Merceditha
subsequently filed a complaint for illegal dismissal.

Sec. Cresenciano Trajano of the Department of Labor and Employment certified the
labor dispute to the NLRC for compulsory arbitration and issued on April 21,1998
return-to-work Order to the striking union officers and employees of petitioner pending
resolution of the labor dispute.

Petitioner later sent Dr. Lanzanas a notice of termination which he received on April 25,
1998, indicating as grounds therefor his failure to report back to work despite the DOLE
order and his supposed role in the striking union and for unlawfully participating as
member in the rank-and-file union's concerted activities despite knowledge that his
position in the hospital is managerial in nature.
Dr. Lanzanas thus amended his original complaint to include illegal dismissal.

Petitioner argues that there is no employer-employee relationship between petitioner

and the spouses-respondents because of the twice-a-week reporting arrangement with
respondents who are free to practice their profession elsewhere the rest of the week.
And it invites attention to the uncontroverted allegation that respondents, aside from
their monthly retainers, were entitled to one-half of all suturing, admitting,
consultation, medico-legal and operating room assistance fees.

ISSUES:
Whether or not there is an employer-employee relationship.
Whether or not Dr. Lanzanas is a managerial employee.

RULING:

First issue -Yes, there is an employer-employee relationship.

Under the "control test," an employment relationship exists between a physician and a
hospital if the hospital controls both the means and the details of the process by which
the physician is to accomplish his task.

Private respondents maintained specific work-schedules, as determined by petitioner

through its medical director, which consisted of 24-hour shifts totaling forty-eight hours
each week and which were strictly to be observed under pain of administrative
sanctions. That petitioner exercised control over respondents gains light from the
undisputed fact that in the emergency room, the operating room, or any department or
ward for that matter, respondents' work is monitored through its nursing supervisors,
charge nurses and orderlies. Without the approval or consent of petitioner or its
medical director, no operations can be undertaken in those areas. For control test to
apply, it is not essential for the employer to actually supervise the performance of
duties of the employee, it being enough that it has the right to wield the power.

With respect to respondents' sharing in some hospital fees, this scheme does not sever
the employment tie between them and petitioner as this merely mirrors additional form
or another form of compensation or incentive. More importantly, petitioner itself
provided incontrovertible proof of the employment status of respondents, namely, the
identification cards it issued them, the payslips and BIR W-2 (now 2316)Forms which
reflect their status as employees, and the classification as "salary" of their remuneration.
Moreover, it enrolled respondents in the SSS and Medicare (Philhealth) program.

Second issue - Dr. Lanzanas was neither a managerial nor supervisory employee but
part of the rank-and-file. Their job is merely routinary in nature and consequently, they
cannot be considered supervisory employees. They are not therefore barred from
membership in the union of rank and file. As for the case of Dr. Merceditha her
dismissal was worse, it having been effected without any just or authorized cause and
without observance of due process. petitioner never proferred any valid cause for her
dismissal except its view that "her marriage to Dr. Lanzanas has given rise to the
presumption that her sympathy is with her husband. Mere suspicion or belief, no
matter how strong, cannot substitute for factual findings carefully established through
orderly procedure.
 3.) GREGORIO V. TONGKO vs. THE MANUFACTURERS LIFE INSURANCE CO.
(PHILS.), INC. and RENATO A. VERGEL DE DIOS

G.R. NO. 167622, November 7, 2008

FACTS
This case involves respondents Manulife who is engaged in life insurance business.
Petitioner Gregorio V. Tongko started his professional relationship with Manulife on
July 1, 1977 by virtue of a Career Agent's Agreement he executed with Manulife. The
agreement stated that Tongko is an Agent and an independent contractor and nothing
shall be construed as creating an employer-employee relationship between the
Company and the Agent.

In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency

Organization. In 1990, he became a Branch Manager. The problem started sometime in
2001, when Manulife instituted manpower development programs in the regional sales
management level. De Dios addressed a letter to Tongko regarding their Metro North
Sales Managers Meeting. In their meeting they stated the poor performance of Tongko’s
region in terms of recruiting and his ability to lead the group. That the management
was disappointed with Tongko and how he has not been proactive all these years when
it comes to agency growth. In order to address such, the company directed Tongko to:
(1) To hire at his expense a competent assistant who can unload him of the routine tasks
which can be easily delegated; (2) Effective immediately, Kevin and the rest of the
Agency Operation will deal with the North Star Branch (NSB) in autonomous fashion.

Subsequently, De Dios wrote a termination letter to Tongko on December 18, 2001 due
to the fact that he failed to help align his directions with the Management’s desire for
agency growth. On account of such, the Management exercised its prerogative under
Section 14 of the Agents Contract to terminate the agent by giving him a written notice
within 15 days from the time of discovery of the breach in the contract. Tongko filed a
complaint with the NLRC against Manulife for illegal dismissal which the Labor Arbiter
dismissed for lack of employer-employee relationship. Upon appeal, the NLRC found
that there was an existing employer-employee relationship between Manulife and
Tongko applying the four-fold test and held Manulife liable for illegal dismissal. On MR
to the Court of Appeals, it found that there was no employer-employee relationship
between the parties and deemed that the NLRC has no jurisdiction over the case.

ISSUE

Whether or not there is an employer-employee relationship between Manulife and

Tongko.

RULING

Yes, the Court applied the four-fold test to determine the existence of the elements of
such relationship. In Pacific Consultants International Asia, Inc. v. Schonfeld, the Court
set out the elements of an employer-employee relationship, thus: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and
(d) the employer's power to control the employee's conduct. It is the so-called "control
test" which constitutes the most important index of the existence of the employer-
employee relationship that is, whether the employer controls or has reserved the right
to control the employee not only as to the result of the work to be done but also as to the
means and methods by which the same is to be accomplished. In concluding differently,
the CA and NLRC reached an impasse on the sole issue of control over an employee's
conduct. It bears clarifying that such control not only applies to the work or goal to be
done but also to the means and methods to accomplish it.

Further, not every form of control that a party reserves to himself over the conduct of
the other party in relation to the services being rendered may be accorded the effect of
establishing an employer-employee relationship. The facts of this case fall squarely
with the case of Insular Life Assurance Co., Ltd. vs. NLRC. In said case, we held that:

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

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 determination of the premiums to be paid and the schedules of payment.
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 employer-employee relationship between him and the
company.

Hence, we ruled in Insular that no employer-employee relationship existed therein.

However, such ruling was tempered with the qualification that had there been evidence
that the company promulgated rules or regulations that effectively controlled or
restricted an insurance agent's choice of methods or the methods themselves in selling
insurance, an employer-employee relationship would have existed. In other words, the
Court in Insular in no way definitively held that insurance agents are not employees of
insurance companies, but rather made the same a case-to-case basis. We held:

The respondents limit themselves to pointing out that Basiao's contract with the
Company bound him to observe and conform to such rules and regulations as the latter
might from time to time prescribe. No showing has been made that any such rules or
regulations were in fact promulgated, much less that any rules existed or were issued
which effectively controlled or restricted his choice of methods or the methods
themselves of selling insurance. Absent such showing, the Court will not speculate
that any exceptions or qualifications were imposed on the express provision of the
contract leaving Basiao "... free to exercise his own judgment as to the time, place and
means of soliciting insurance."19 (Emphasis supplied.)

There is no conflict between our rulings in Insular and in Great Pacific Life Assurance
Corporation. We said in the latter case:

[I]t cannot be gainsaid that Grepalife had control over private respondents' performance
as well as the result of their efforts. 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. For instance, the District Manager
must properly account, record and document the company's funds spot-check and
audit the work of the zone supervisors, conserve the company's business in the district
through `reinstatements', follow up the submission of weekly remittance reports of the
debit agents and zone supervisors, preserve company property in good condition, train
understudies for the position of district manager, and maintain his quota of sales (the
failure of which is a ground for termination). On the other hand, a zone supervisor must
direct and supervise the sales activities of the debit agents under him, conserve
company property through "reinstatements", undertake and discharge the functions of
absentee debit agents, spot-check the records of debit agents, and insure proper
documentation of sales and collections by the debit agents.

Based on the foregoing cases, if the specific rules and regulations that are enforced
against insurance agents or managers are such that would directly affect the means and
methods by which such agents or managers would achieve the objectives set by the
insurance company, they are employees of the insurance company.

Manulife had the power of control over Tongko that would make him its employee.
Several factors contribute to this conclusion are: (1)The Agreement dated July 1, 1977
executed between Tongko and Manulife, the provisions of which states that the Agent
must comply with all regulations and requirements of the Company (2) maintenance of
a level of knowledge of the company products that is satisfactory to the company; and
(3) compliance with a quota of new businesses. Among the company regulations of
Manulife are the different codes of conduct such as the Agent Code of Conduct,
Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct
Agreement, which demonstrate the power of control exercised by the company over
Tongko. Thus, with the company regulations and requirements alone, the fact that
Tongko was an employee of Manulife may already be established. Certainly, these
requirements controlled the means and methods by which Tongko was to achieve the
company's goals. More importantly, Manulife's evidence establishes the fact that
Tongko was tasked to perform administrative duties that establishes his employment
with Manulife.

A comparison of the above functions and those contained in the Agreement with those
cited in Great Pacific Life Assurance Corporation reveals a striking similarity that
would more than support a similar finding as in that case. Thus, there was an
employer-employee relationship between the parties. Additionally, it must be pointed
out that the fact that Tongko was tasked with recruiting a certain number of agents, in
addition to his other administrative functions, leads to no other conclusion that he was
an employee of Manulife.

In his letter dated November 6, 2001, De Dios harped on the direction of Manulife of
becoming a major agency-led distribution company whereby greater agency
recruitment is required of the managers, including Tongko. De Dios made it clear that
agent recruitment has become the primary means by which Manulife intends to sell
more policies. More importantly, it is Tongko's alleged failure to follow this principle of
recruitment that led to the termination of his employment with Manulife. With this, it is
inescapable that Tongko was an employee of Manulife.

4.) GREGORIO V. TONGKO vs. THE MANUFACTURERS LIFE INSURANCE CO.

(PHILS.), INC.
 G.R. No. 167622               June 29, 2010
EN BANC BRION, J.:

FACTS:

Tongko and Manulife had two basic phases The contractual relationship between. The
first or initial phase began on July 1, 1977, under a Career Agent’s Agreement
(Agreement) that provided that he is an Agent, considered independent contractor and
that there was no employer-employee relationship between them. It also stated that the
company or the agent may terminate for any breach or violations of provisions by
giving fifteen (15) days’ notice in writing. Tongko additionally agreed (1) to comply
with all regulations and requirements of Manulife, and (2) to maintain a standard of
knowledge and competency in the sale of Manulife’s products, satisfactory to Manulife
and sufficient to meet the volume of the new business, required by his Production Club
membership

The second phase started in 1983 when Tongko was named Unit Manager in Manulife’s
Sales Agency Organization. In 1990, he became a Branch Manager. Six years later (or in
1996), Tongko became a Regional Sales Manager. Tongko’s gross earnings consisted of
commissions, persistency income, and management overrides.

In 2001, Manulife instituted manpower development programs at the regional sales

management level. Respondent Renato Vergel de Dios wrote Tongko a letter dated
November 6, 2001 on concerns that were brought up during the October 18, 2001 Metro
North Sales Managers Meeting. Subsequently, de Dios wrote Tongko another letter,
dated December 18, 2001, terminating Tongko’s services. Stating that all these efforts
have failed in helping him align your directions with Management’s avowed agency
growth policy. It stated also that the Management is exercising its prerogative under
Section 14 of your Agents Contract as we are now issuing this notice of termination of
your Agency Agreement with us effective fifteen days from the date of this letter.

Tongko responded by filing an illegal dismissal complaint with the National Labor
Relations Commission (NLRC) Arbitration Branch. He essentially alleged – despite the
clear terms of the letter terminating his Agency Agreement – that he was Manulife’s
employee before he was illegally dismissed.

The labor arbiter decreed that no employer-employee relationship existed between the
parties. However, the NLRC reversed the labor arbiter’s decision on appeal; it found the
existence of an employer-employee relationship and concluded that Tongko had been
illegally dismissed. In the petition for certiorari with the Court of Appeals (CA), the
appellate court found that the NLRC gravely abused its discretion in its ruling and
reverted to the labor arbiter’s decision that no employer-employee relationship existed
between Tongko and Manulife.

ISSUE:

Whether there exist and employer-employee relationship between Tongko and

Manulife.

HELD:

The Supreme Court ruled that there was no employer-employee relationship.

The primary evidence in the present case is the July 1, 1977 Agreement that governed
and defined the parties’ relations until the Agreement’s termination in 2001. This
Agreement stood for more than two decades and, based on the records of the case, was
never modified or novated. It assumes primacy because it directly dealt with the nature
of the parties’ relationship up to the very end; moreover, both parties never disputed its
authenticity or the accuracy of its terms.

By the Agreement’s express terms, Tongko served as an "insurance agent" for Manulife,
not as an employee. To be sure, the Agreement’s legal characterization of the nature of
the relationship cannot be conclusive and binding on the courts; the characterization of
the juridical relationship the Agreement embodied is a matter of law that is for the
courts to determine. At the same time, though, the characterization the parties gave to
their relationship in the Agreement cannot simply be brushed aside because it embodies
their intent at the time they entered the Agreement, and they were governed by this
understanding throughout their relationship. At the very least, the provision on the
absence of employer-employee relationship between the parties can be an aid in
considering the Agreement and its implementation, and in appreciating the other
evidence on record.

Tongko’s was the granted of an expanded sales agency role that recognized him as
leader amongst agents in an area that Manulife defined. 

The absence of evidence showing Manulife’s control over Tongko’s contractual duties
points to the absence of any employer-employee relationship between Tongko and
Manulife. In the context of the established evidence, Tongko remained an agent all
along; although his subsequent duties made him a lead agent with leadership role, he
was nevertheless only an agent whose basic contract yields no evidence of means-and-
manner control.

The sufficiency of Tongko’s failure to comply with the guidelines of de Dios’ letter, as a
ground for termination of Tongko’s agency, is a matter that the labor tribunals cannot
rule upon in the absence of an employer-employee relationship. Jurisdiction over the
matter belongs to the courts applying the laws of insurance, agency and contracts.
 5.) JOSEFINA BENARES vs. JAIME PANCHO, RODOLFO PANCHO, JR.,
G. R. No. 151827 April 29, 2005

FACTS:

A Petition for Review on Certiorari is the Decision of the Court of Appeals which
affirmed the National Labor Relations Commission’s (NLRC) decision. The NLRC
reversed the Labor Arbiter’s decision finding that respondents failed to lay down the
facts and circumstances surrounding their dismissal and to prove their entitlement to
monetary benefits. Complainants alleged to have started working as sugar farm
workers. Respondents Had. Maasin II is a sugar cane plantation located in Murcia,
Negros Occidental with an area of 12-24 has. planted, owned and managed by Josefina
Banares, individual co-respondent.

Complaints thru counsel wrote the Regional Director of the Department of Labor and
Employment, Bacolod City for intercession particularly in the matter of wages and
other benefits mandated by law.

A routine inspection was conducted by personnel of the Bacolod District Office of the
Department of Labor and Employment. A report and recommendation was made,
hence the endorsement by the Regional Director of the instant case to the Regional
Arbitration Branch, NLRC, Bacolod City for proper hearing and disposition.

Complainants alleged to have been terminated without being paid termination benefits
by respondent in retaliation to what they have done in reporting to the Department of
Labor and Employment their working conditions viz-a-viz (sic) wages and other
mandatory benefits. A formal complaint was filed for illegal dismissal with money
claims.

Labor Arbiter a quo issued the assailed decision dismissing the complaint for lack of
merit. On June 26, 1998, complainants are not satisfied with the aforecited ruling
interposed the instant appeal. The NLRC held that respondents attained the status of
regular seasonal workers of Hda. Ma. Hence, respondents were illegally dismissed and
should be awarded their money claims. Petitioner’s motion for reconsideration dated
May 12, 1999 was denied in the resolution dated October 29, 1999.

Court of Appeals affirmed the NLRC’s ruling, with the modification that the backwages
and other monetary benefits. Whether respondents are regular employees of Hacienda
Maasin and thus entitled to their monetary claims. Related to this is the issue of
whether respondents were illegally terminated.

ISSUES:

Whether respondents are regular employees of Hacienda Maasin and thus entitled to
their monetary claims. Related to this is the issue of whether respondents were illegally
terminated.
HELD:

The NLRC held that respondents attained the status of regular seasonal workers of
Hacienda Maasin II having worked therein from 1964 – 1985. It found that petitioner
failed to discharge the burden of proving that the termination of respondents was for a
just or authorized cause. Hence, respondents were illegally dismissed and should be
awarded their money claims.
The Court of Appeals affirmed the NLRC's ruling, with the modification that the
backwages and other monetary benefits shall be computed from the time compensation
was withheld in accordance with Article 279 of the Labor Code, as amended by
Republic Act No. 6715.
This case presents a good opportunity to reiterate the Court’s ruling on the subject of
seasonal employment. The Labor Code defines regular and casual employment, viz:

Art. 280. REGULAR AND CASUAL EMPLOYMENT. The provisions of written

agreement to the contrary notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee
with respect to the activity in which he is employed and his employment shall continue
while such activity exists.

The law provides for three kinds of employees: (1) regular employees or those who
have been engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer; (2) project employees or those whose
employment has been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of the engagement of the
employee or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season; and (3) casual employees or those who
are neither regular nor project employees.
In Mercado v. NLRC, the Court ruled that seasonal workers do not become regular
employees by the mere fact that they have rendered at least one year of service, whether
continuous or broken, because the proviso in the second paragraph of Article 280
demarcates as "casual" employees, all other employees who do not fall under the
definition of the preceding paragraph. It deems as regular employees those "casual"
employees who have rendered at least one year of service regardless of the fact that
such service may be continuous or broken.
The factual circumstances obtaining in the Mercado case, however, are peculiar. In that
case, the workers were engaged to do a particular phase of agricultural work necessary
for rice and/or sugarcane production, after which they would be free to render services
to other farm workers who need their services.

In contrast, in the case of Hacienda Fatima v. National Federation of Sugarcane

Workers-Food and General Trade, respondents performed the same tasks for
petitioners every season for several years. Thus, they were considered the latter's
regular employees for their respective tasks. The fact that they do not work
continuously for one whole year but only for the duration of the season does not detract
from considering them in regular employment since in a litany of cases this Court has
already settled that seasonal workers who are called to work from time to time and are
temporarily laid off during off-season are not separated from service in that period, but
merely considered on leave until re-employed.

Citing jurisprudence, the Court, in Hacienda Fatima, condensed the rule that the
primary standard for determining regular employment is the reasonable connection
between the particular activity performed by the employee vis - à-vis the usual trade
or business of the employer. This connection can be determined by considering the
nature of the work performed and its relation to the scheme of the particular business or
trade in its entirety. If the employee has been performing the job for at least a year, even
if the performance is not continuous and merely intermittent, the law deems repeated
and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is considered
regular, but only with respect to such activity and while such activity exists.

In this case, petitioner argues that respondents were not her regular employees as they
were merely "pakiao" workers who did not work continuously in the sugar plantation.
They performed such tasks as weeding, cutting and loading canes, planting cane points,
fertilizing, cleaning the drainage, etc. These functions allegedly do not require
respondents' daily presence in the sugarcane field as it is not everyday that one weeds,
cuts canes or applies fertilizer. In support of her allegations, petitioner submitted
"cultivo" and milling payrolls.
The probative value of petitioner's evidence, however, has been passed upon by the
labor arbiter, the NLRC and the Court of Appeals. Although the labor arbiter dismissed
respondents' complaint because their "position paper is completely devoid of any
discussion about their alleged dismissal, much less of the probative facts thereof," the
ground for the dismissal of the complaint implies a finding that respondents are regular
employees.

The NLRC was more unequivocal when it pronounced that respondents have acquired
the status of regular seasonal employees having worked for more than one year,
whether continuous or broken in petitioner's hacienda.

According to petitioner, however, the NLRC's conclusion is highly suspect considering

its own admission that there are "gray areas which requires (sic) clarification." She
alleges that despite these gray areas, the NLRC "chose not to remand the case to the
Labor Arbiter' as this would unduly prolong the agony of the complainants in
particular."  Petitioner perhaps wittingly omitted mention that the NLRC "opted to
appreciate the merits of the instant case based on available documents/pleadings." That
the NLRC chose not to remand the case to the labor arbiter for clarificatory proceedings
and instead decided the case on the basis of the evidence then available to it is a
judgment call this Court shall not interfere with in the absence of any showing that the
NLRC abused its discretion in so doing.

The Court of Appeals, in fact, found no such grave abuse of discretion on the part of the
NLRC. Accordingly, it dismissed the petition for certiorari and affirmed with
modification the findings of the NLRC. It is well to note at this point that in quasi-
judicial proceedings, the quantum of evidence required to support the findings of the
NLRC is only substantial evidence or that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.

The issue, therefore, of whether respondents were regular employees of petitioner has
been adequately dealt with. The labor arbiter, the NLRC and the Court of Appeals have
similarly held that respondents were regular employees of petitioner. Since it is a settled
rule that the factual findings of quasi-judicial agencies which have acquired expertise in
the matters entrusted to their jurisdiction are accorded by this Court not only respect
but even finality, we shall no longer disturb this finding. Petitioner next underscores the
NLRC decision's mention of the "payroll" she presented despite the fact that she
allegedly presented 235 sets of payroll, not just one payroll. This circumstance does not
in itself evince any grave abuse of discretion on the part of the NLRC as it could well
have been just an innocuous typographical error.

Verily, the NLRC's decision, affirmed as it was by the Court of Appeals, appears to have
been arrived at after due consideration of the evidence presented by both parties.

We also find no reason to disturb the finding that respondents were illegally
terminated. When there is no showing of clear, valid and legal cause for the termination
of employment, the law considers the matter a case of illegal dismissal and the burden
is on the employer to prove that the termination was for a just or authorized cause.  In
this case, as found both by the NLRC and the Court of Appeals, petitioner failed to
prove any such cause for the dismissal of respondents.

WHEREFORE, the instant petition is DENIED. The assailed Decision and

Resolution of the Court of Appeals respectively dated June 29, 2001 and November 28,
2001 are hereby AFFIRMED. Costs against petitioner.
6.) ANGELINA FRANCISCO vs. NATIONAL LABOR RELATIONS COMMISSION,
et al.

G.R. No. 170087, August 31, 2006.

FACTS:

Petitioner Francisco was hired by Kasei Corporation during its incorporation stage. She
assumed various positions. She was designated as Accountant and Corporate Secretary
and was assigned to handle all the accounting needs of the company. She was also
designated as Liaison Officer and later on, as Acting Manager. Subsequently, the
corporation hired an accountant in lieu of petitioner. For five years, petitioner
performed the duties of Acting Manager. Her salary was P27,500.00 plus P3,000.00
housing allowance and a 10% share in the profit of Kasei Corporation. Thereafter,
petitioner was replaced, she alleged that she was required to sign a prepared resolution
for her replacement but she was assured that she would still be connected with Kasei
Corporation as Technical Assistant to Seiji Kamura and in charge of all BIR matters.
Kasei Corporation reduced her salary and was not paid her mid-year bonus allegedly
because the company was not earning well. Later on, petitioner did not receive her
salary from the company. She made repeated follow-ups with the company but she was
informed that she is no longer connected with the company. Since she was no longer
paid her salary, petitioner did not report for work and filed an action for constructive
dismissal before the labor arbiter. LA ruled in favor of petitioner which was affirmed by
NRLC, but the decision was reversed by the CA. Hence, this petition.

ISSUES:

(1) Whether there was an employer-employee relationship between petitioner and

private respondent Kasei Corporation; and if in the affirmative,

(2) Whether petitioner was illegally dismissed.

RULING:

Petition granted.

(1) YES. Generally, courts have relied on the so-called right of control test where the
person for whom the services are performed reserves a right to control not only the
end to be achieved but also the means to be used in reaching such end. However, in
certain cases the control test is not sufficient to give a complete picture of the
relationship between the parties, owing to the complexity of such a relationship
where several positions have been held by the worker.

The better approach would therefore be to adopt a two-tiered test involving: (1) the
putative employer’s power to control the employee with respect to the means and
methods by which the work is to be accomplished; and (2) the underlying economic
realities of the activity or relationship. This two-tiered test would provide us with a
framework of analysis, which would take into consideration the totality of
circumstances surrounding the true nature of the relationship between the parties. This
is especially appropriate in this case where there is no written agreement or terms of
reference to base the relationship on; and due to the complexity of the relationship
based on the various positions and responsibilities given to the worker over the period
of the latter’s employment. Thus, the determination of the relationship between
employer and employee depends upon the circumstances of the whole economic
activity such as: (1) the extent to which the services performed are an integral part of the
employer’s business; (2) the extent of the worker’s investment in equipment and
facilities; (3) the nature and degree of control exercised by the employer; (4) the
worker’s opportunity for profit and loss; (5) the amount of initiative, skill, judgment or
foresight required for the success of the claimed independent enterprise; (6) the
permanency and duration of the relationship between the worker and the employer;
and (7) the degree of dependency of the worker upon the employer for his continued
employment in that line of business.

By applying the control test, there is no doubt that petitioner is an employee of Kasei
Corporation because she was under the direct control and supervision of Seiji Kamura,
the corporation’s Technical Consultant. She reported for work regularly and served in
various capacities as Accountant, Liaison Officer, Technical Consultant, Acting
Manager and Corporate Secretary, with substantially the same job functions, that is,
rendering accounting and tax services to the company and performing functions
necessary and desirable for the proper operation of the corporation such as securing
business permits and other licenses over an indefinite period of engagement. Under the
broader economic reality test, the petitioner can likewise be said to be an employee of
respondent corporation because she had served the company for six years before her
dismissal, receiving check vouchers indicating her salaries/wages, benefits, 13th month
pay, bonuses and allowances, as well as deductions and Social Security contributions.
Petitioner’s membership in the SSS as manifested by a copy of the SSS specimen
signature card which was signed by the President of Kasei Corporation and the
inclusion of her name in the on-line inquiry system of the SSS evinces the existence of
an employer-employee relationship between petitioner and respondent Corporation.

Based on the foregoing, there can be no other conclusion that petitioner is an employee
of respondent Kasei Corporation. She was selected and engaged by the company for
compensation, and is economically dependent upon respondent for her continued
employment in that line of business. Her main job function involved accounting and tax
services rendered to respondent corporation on a regular basis over an indefinite period
of engagement. Respondent corporation hired and engaged petitioner for
compensation, with the power to dismiss her for cause. More importantly, respondent
corporation had the power to control petitioner with the means and methods by which
the work is to be accomplished.

(2) YES. A diminution of pay is prejudicial to the employee and amounts to

constructive dismissal.

Constructive dismissal is an involuntary resignation resulting in cessation of work

resorted to when continued employment becomes impossible, unreasonable or unlikely;
when there is a demotion in rank or a diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to an
employee. In Globe Telecom, Inc. v. Florendo-Flores, the court ruled that where an
employee ceases to work due to a demotion of rank or a diminution of pay, an
unreasonable situation arises which creates an adverse working environment rendering
it impossible for such employee to continue working for her employer. Hence, her
severance from the company was not of her own making and therefore amounted to an
illegal termination of employment.

In this case, the corporation constructively dismissed petitioner when it reduced her
salary by P2,500 a month from January to September 2001. This amounts to an illegal
termination of employment, where the petitioner is entitled to full backwages. Since the
position of petitioner as accountant is one of trust and confidence, and under the
principle of strained relations, petitioner is further entitled to separation pay, in lieu of
reinstatement.
 8.) JARDIN VS. NLRC

FACTS:

Petitioners were drivers of private respondent, Philjama International Inc., They used to
drive private respondent’s taxicabs every other day on a 24-hour work schedule under
the boundary system. Under this arrangement, the petitioners earned an average of
P400.00 daily. Nevertheless, private respondent admittedly regularly deducts from
petitioner’s daily earnings the amount of P30.00 supposedly for the washing of the taxi
units. Believing that the deduction is illegal, petitioners decided to form a labor union to
protect their rights and interests.

Upon learning about the plan of petitioners, private respondent refused to let
petitioners drive their taxicabs when they reported for work on August 6, 1991, and on
succeeding days. Petitioners suspected that they were singled out because they were the
leaders and active members of the proposed union. Aggrieved, petitioners filed with
the labor arbiter a complaint against private respondent for unfair labor practice, illegal
dismissal and illegal deduction of washing fees.

The labor arbiter dismissed said complaint for lack of merit. On appeal, the NLRC,
reversed and set aside the judgment of the labor arbiter. NLRC declared that petitioners
are employees of private respondent, and, as such, their dismissal must be for just cause
and after due process. Private respondents first motion for reconsideration was denied.
Remaining hopeful, private respondent filed another motion for reconsideration which
was granted. NLRC ruled that it lacks jurisdiction over the case as petitioners and
private respondent have no employer-employee relationship. It held that the
relationship of the parties is leasehold which is covered by the Civil Code.  Petitioners
sought reconsideration of NLRC latest decision which was denied. Hence, the instant
petition.

ISSUE:

1. Whether or not NLRC has no jurisdiction to entertain respondent’s second motion

for reconsideration which is admittedly a pleading prohibited in NLRC rules, and to
grants the same on grounds not even invoked therein.
2. Whether or not petitioners-taxi drivers are employees of respondent tax company.

RULING:

1. Yes. The Supreme Court held that the second motion for reconsideration filed by
private respondent is indubitably a prohibited pleading should have not been
entertained at all.

Rule 7, Section 14 of its New Rules of Procedure provides that “Motions for
reconsideration of any order, resolution or decision of the Commission shall not be
entertained except when based on palpable or patent errors, provided that the
motion is under oath and filed within ten (10) calendar days from receipt of the
 order, resolution or decision with proof of service that a copy of the same has been
furnished within the reglementary period the adverse party and provided further,
that only one such motion from the same party shall be entertained."
NLRC gravely abused its discretion in taking cognizance and granting private
respondents second motion for reconsideration as it wrecks the orderly procedure in
seeking reliefs in labor cases.

2. Yes. The Supreme Court held that petitioners are undoubtedly employees of private
respondent because as taxi drivers they perform activities which are usually
necessary or desirable in the usual business or trade of their employer. In a number
of cases decided, the Court ruled that the relationship between jeepney
owners/operators on one hand and jeepney drivers on the other under the boundary
system is that of employer-employee and not of lessor-lessee.

The Court explained that in the lease of chattels, the lessor loses complete control
over the chattel leased although the lessee cannot be reckless in the use thereof,
otherwise he would be responsible for the damages to the lessor. In the case of
jeepney owners/operators and jeepney drivers, the former exercise supervision and
control over the latter. The management of the business is in the owner’s hands. The
owner as holder of the certificate of public convenience must see to it that the driver
follows the route prescribed by the franchising authority and the rules promulgated
as regards its operation. The fact that the drivers do not receive fixed wages but get
only that in excess of the so-called "boundary" they pay to the owner/operator is not
sufficient to withdraw the relationship between them from that of employer and
employee.
 9.) NELLY ACTA MARTINEZ, Petitioner, v. NATIONAL LABOR RELATIONS
COMMISSION, DOMINADOR CORRO, PASTOR CORRO, CELESTINO CORRO,
LUIS CORRO, EREBERTO CORRO, JAIME CRUZ, WENCESLAO DELVO,
GREGORIO DELVO, HERMEJIAS COLIBAO, JOSE OGANA and ALONSO
ALBAO, Respondents.

[G.R. No. 117495. May 29, 1997.]

FACTS:

Petitioner was the mother and sole heir of Raul Martinez, then the operator of two (2)
taxicab units under the business name of PAMPA TX and additional two (2) under the
name of P.J. Tiger TX where the private respondents worked as drivers when the latter
died on 18 March 1992.

On 14 July 1992, private respondents filed a complaint against Raul Martinez and
Petitioner since after the death of the former she took over the management and
operation of said business, before the Labor Arbiter for violation of P.D. 851 and illegal
dismissal. Alleging, that they were regular drivers since October 1989 and earning less
than Php 400.00 per day driving 24 hours every other day.

According to petitioner the claim for 13th month pay was personal. Hence it did not
survive the death of her son. In addition, private respondents were not entitled to it in
the first place as Sec. 3, par. (e), of the Rules and Regulations Implementing P. D. 851 is
explicit that employers of those who are paid on purely boundary basis are not covered
therein. The relationship between her son and private respondents was not that of
employer-employee but of lessor-lessee.

On 30 August 1993, the Labor Arbiter dismissed the complaint on the following
grounds: (a) private respondents’ claims being personal were extinguished upon the
death of Raul Martinez; (b) petitioner was a mere housewife who did not possess the
required competence to manage the business; and, (c) private respondents were not
entitled to 13th month pay because the existence of employer-employee relationship
was doubtful on account of the boundary system adopted by the parties.

On appeal, the National Labor Relation Commission (NLRC) ruled that the private
respondents are regular drivers ; a) private respondents were regular drivers because
payment of wages, which is one of the essential requisites for the existence of
employment relation, may either be fixed, on commission, boundary, piece-rate or task
basis; (b) the management of the business passed on to petitioner who even replaced
private respondents with a new set of drivers; and, (c) the claims of private respondents
survived the death of Raul Martinez considering that the business did not cease
operation outright but continued presumably, in the absence of proof of sale, up to the
moment. While the NLRC, upheld the petitioner's contention that based on the express
provision of P. D. 851 as reiterated in the revised guidelines on the implementation
thereof.

On 28 January 1994 respondent NLRC thus set aside the appealed decision, and as
alternative to reinstatement, ordered petitioner to grant respondents separation pay
equivalent to one (1) month salary for every year of service a fraction of six (6) months
being considered as one (1) whole year. On 30 September 1994 the motion for
reconsideration was denied. Hence, this recourse of petitioner.

On 11 October 1995 the Court issued a temporary restraining order enjoining the
execution of the assailed decision of respondent NLRC.

Hence, this petition imputing that the NLRC acted with grave abuse of discretion in
reversing the Labor Arbiter decision.

ISSUE:

WON, private respondents were regular employees and has been illegally dismissed?
(2) WON, the private respondents claim over 13th month pay were personal. Hence, did
not survive the death of Raul Martinez?

HELD:

(1) YES. As early as March 1956 the court ruled in NLRC vs. Dinglasan, that the
relationship between jeepney owners/operators on one hand and jeepney drivers on
the other under the boundary system is that of employer-employee and not of lessor-
lessee. Therein we explained that in the lease of chattels the lessor loses complete
control over the chattel leased although the lessee cannot be reckless in the use thereof,
otherwise he would be responsible for the damages to the lessor. In the case of jeepney
owners/operators and jeepney drivers, the former exercise supervision and control
over the latter. The fact that the drivers do not receive fixed wages but get only that in
excess of the so-called "boundary" they pay to the owner/operator is not sufficient to
withdraw the relationship between them from that of employer and employee. The
doctrine is applicable by analogy to the present case. Thus, private respondents were
employees of Raul Martinez because they had been engaged to perform activities which
were usually necessary or desirable in the usual business or trade of the employer. The
records show that private respondents had been employed since 20 October 1989 except
for Ogana, the Delvos, Albao and Colibao who were employed on later dates.

Also, in the case of Opulencia Ice Plant and Storage v. NLRC, that no particular form of
evidence is required to prove the existence of an employer-employee relationship. Any
competent and relevant evidence to prove the relationship may be admitted. In the
present case, however, private respondents simply assumed the continuance of an
employer-employee relationship between them and petitioner, when she took over the
operation of the business after the death of her son Raul Martinez, without any
supporting evidence. Consequently, the court cannot sustain for lack of basis the factual
finding of respondent NLRC on the existence of employer-employee relationship
between petitioner and private respondents. Clearly, such finding emanates from grave
abuse of discretion. With this conclusion, consideration of the issue on illegal dismissal
becomes futile and irrelevant.

(2) YES. Labor contracts are not enforceable against the transferee of an enterprise. The
claim for 13th month pay pertains to the personal obligation of Raul Martinez which
did not survive his death. The reason for the rule is that labor contracts are in personam,
and that claims for backwages earned from the former employer cannot be filed against
the new owners of an enterprise. Nor is the new operator of a business liable for claims
for retirement pay of employees. Thus the claim of private respondents should have
been filed instead in the intestate proceedings involving the estate of Raul Martinez in
accordance with Sec. 5, Rule 86, of the Rules of Court which provides in part —

Sec. 5. Claims which must be filed under the notice. If not filed, barred; exceptions. —
All claims for money against the decedent, arising from contract, express or implied,
whether the same be due, not due, or contingent, all claims for funeral expenses and
expenses for the last sickness of the decedent, and judgment for money against the
decedent, must be filed within the time limited in the notice; otherwise they are barred
forever, except that they may be set forth as counterclaims in any action that the
executor or administrator may bring against the claimants . . .Conformably with Art.
110 of the Labor Code, money claims of laborers enjoy preference over claims of other
creditors in case of bankruptcy or liquidation of the employer’s business. Under this
rule, upon the death of the defendant, a testate or intestate proceeding shall be
instituted in the proper court wherein all his creditors must appear and file their claims
which shall be paid proportionately out of the property left by the deceased. The
objective is to avoid duplicity of procedures.
 10.) CENTURY PROPERTIES v. EDWIN J. BABIANO & EMMA B. CONCEPCION,

GR No. 220978, 2016-07-05

FACTS:

Babiano was hired by CPI as Director of Sales, and was eventually[6] appointed as Vice
President for Sales

His employment contract[7] also contained a "Confidentiality of Documents and Non-Compete

Clause"[8] which, among others, barred him from disclosing confidential information, and from
working in any business enterprise that is in direct competition with CPI "while [he is] employed
and for a period of one year from date of resignation or termination from [CPI]."

During the same period, Concepcion was initially hired as Sales Agent by CPI and was
eventually[10] promoted as Project Director

As such, she signed an employment agreement, denominated as "Contract of Agency for Project
Director"

Notably, it was stipulated in both contracts that no employer-employee relationship exists

between Concepcion and CPI

After receiving reports that Babiano provided a competitor with information regarding CPFs
marketing strategies, spread false information regarding CPI and its projects, recruited CPI's
personnel to join the competitor, and for being absent without official leave (AWOL) for five (5)
days, CPI, through its Executive Vice President for Marketing and Development, Jose Marco R.
Antonio (Antonio), sent Babiano a Notice to Explain

On February 25, 2009, Babiano tendered[18] his resignation and revealed that he had been
accepted as Vice President of First Global BYO Development Corporation (First Global), a
competitor of CPI

Babiano was served a Notice of Termination[20] for: (a) incurring AWOL; (b) violating the
"Confidentiality of Documents and Non-Compete Clause" when he joined a competitor
enterprise while still working for CPI and provided such competitor enterprise information
regarding CPFs marketing strategies; and (c) recruiting CPI personnel to join a competitor.[21]

On the other hand, Concepcion resigned as CPFs Project Director through a letter... respondents
filed a complaint[23] for non-payment of commissions and damages against CPI and Antonio
before the NLRC,... For its part, CPI maintained[25] that Babiano is merely its agent tasked with
selling its projects. Nonetheless, he was afforded due process in the termination of his
employment which was based on just causes.[26] It also claimed to have validly withheld
Babiano's commissions, considering that they were deemed forfeited for violating the
"Confidentiality of Documents and Non-Compete Clause."... the Labor Arbiter (LA) ruled in
CPI's favor and, accordingly, dismissed the complaint for lack of merit.[30]... he NLRC reversed
and set aside the LA ruling, and entered a new one ordering CPI to pay Babiano and Concepcion

While the NLRC initially concurred with the LA that Babiano's acts constituted just cause which
would warrant the termination of his employment from CPI, it, however, ruled that the forfeiture
of all earned commissions of Babiano under the "Confidentiality of Documents and Non-
Compete Clause" is confiscatory and unreasonable and hence, contrary to law and public policy.
In this light, the NLRC held that CPI could not invoke such clause to avoid the payment of
Babiano's commissions since he had already earned those monetary benefits and, thus, should
have been released to him.

Meanwhile, contrary to the LA's finding, the NLRC ruled that Concepcion was CPI's employee,
considering that CPI: (a) repeatedly hired and promoted her since 2002; (b) paid her wages
despite referring to it as "subsidy"; and (c) exercised the power of dismissal and control over he...
the CA affirmed the NLRC ruling with modification increasing the award of unpaid
commissions to Babiano and Concepcion

The CA held that Babiano properly instituted his claim for unpaid commissions before the labor
tribunals as it is a money claim arising from an employer-employee relationship with CPI. In this
relation, the CA opined that CPI cannot withhold such unpaid commissions on the ground of
Babiano's alleged breach of the "Confidentiality of Documents and Non-Compete Clause"

The petition is partly meritorious.

ISSUES:

The core issue for the Court's resolution is whether or not the CA erred in denying CPI's petition
for certiorari, thereby holding it liable for the unpaid commissions of respondents.

RULING:

Thus, in the interpretation of contracts, the Court must first determine whether a provision or
stipulation therein is ambiguous. Absent any ambiguity, the provision on its face will be read as
it is written and treated as the binding law of the parties to the contract.[54]In the case at bar, CPI
primarily invoked the "Confidentiality of Documents and Non-Compete Clause" found in
Babiano's employment contract[55] to justify the forfeiture of his commissions,
viz.:Confidentiality of Documents and Non-Compete Clause

Finally, if undersigned breaches any terms of this contract, forms of compensation including
commissions and incentives will be forfeited.[56] (Emphases and underscoring supplied)

Verily, the foregoing clause is not only clear and unambiguous in stating that Babiano is barred
to "work for whatsoever capacity x x x with any person whose business is in direct competition
with [CPI] while [he is] employed and for a period of one year from date of [his] resignation or
termination from the company," it also expressly provided in no uncertain terms that should
Babiano "[breach] any term of [the employment contract], forms of compensation including
commissions and incentives will be forfeited."

Indubitably, obligations arising from contracts, including employment contracts, have the force
of law between the contracting parties and should be complied with in good faith.[59] Corollary
thereto, parties are bound by the stipulations, clauses, terms, and conditions they have agreed to,
provided that these stipulations, clauses, terms, and conditions are not contrary to law, morals,
public order or public policy,[60] as in this case.

Therefore, the CA erred in limiting the "Confidentiality of Documents and Non-Compete

Clause" only to acts done after the cessation of the employer-employee relationship or to the
"post-employment" relations of the parties. As clearly stipulated, the parties wanted to apply said
clause during the pendency of Babiano's employmen
From the foregoing, it is evidently clear that when he sought and eventually accepted the said
position with First Global, he was still employed by CPI as he has not formally resigned at that
time. Irrefragably, this is a glaring violation of the "Confidentiality of Documents and Non-
Compete Clause" in his employment contract with CPI, thus, justifying the forfeiture of his
unpaid commissions.

Guided by these parameters, the Court finds that Concepcion was an employee of CPI
considering that: (a) CPI continuously hired and promoted Concepcion from October 2002 until
her resignation on February 23, 2009,[64] thus, showing that CPI exercised the power of
selection and engagement over her person and that she performed functions that were necessary
and desirable to the business of CPI; (b) the monthly "subsidy" and cash incentives that
Concepcion was receiving from CPI are actually remuneration in the concept of wages as it was
regularly given to her on a monthly basis without any qualification, save for the "complete
submission of documents on what is a sale policy";[65] (c) CPI had the power to discipline or
even dismiss Concepcion as her engagement contract with CPI expressly conferred upon the
latter "the right to discontinue [her] service anytime during the period of engagement should
[she] fail to meet the performance standards,"[66] among others, and that CPI actually exercised
such power to dismiss when it accepted and approved Concepcion's resignation letter; and most
importantly, (d) as aptly pointed out by the CA, CPI possessed the power of control over
Concepcion because in the performance of her duties as Project Director - particularly in the
conduct of recruitment activities, training sessions, and skills development of Sales Directors -
she did not exercise independent discretion thereon, but was still subject to the direct supervision
of CPI, acting through Babiano.[67]

Therefore, the CA correctly ruled that since there exists an employer-employee relationship
between Concepcion and CPI, the labor tribunals correctly assumed jurisdiction over her money
claims.

Finally, CPI contends that Concepcion's failure to assail the NLRC ruling awarding her the
amount of P470,754.62 representing unpaid commissions rendered the same final and binding
upon her. As such, the CA erred in increasing her monetary award to P591,953.05.[70]

As a general rule, a party who has not appealed cannot obtain any affirmative relief other than
the one granted in the appealed decision. However, jurisprudence admits an exception to the said
rule, such as when strict adherence thereto shall result in the impairment of the substantive rights
of the parties concerned. In Global Resource for Outsourced Workers, Inc. v. Velasco:
[71]Indeed, a party who has failed to appeal from a judgment is deemed to have acquiesced to it
and can no longer obtain from the appellate court any affirmative relief other than what was
already granted under said judgment. However, when strict adherence to such technical rule will
impair a substantive right, such as that of an illegally dismissed employee to monetary
compensation as provided by law, then equity dictates that the Court set aside the rule to pave the
way for a full and just adjudication of the case.[72

In the present case, the CA aptly pointed out that the NLRC failed to account for all the unpaid
commissions due to Concepcion for the period of August 9, 2008 to August 8, 2011.[73] Indeed,
Concepcion's right to her earned commissions is a substantive right which cannot be impaired by
an erroneous computation of what she really is entitled to

In sum, the Court thus holds that the commissions of Babiano were properly forfeited for
violating the "Confidentiality of Documents and Non-Compete Clause." On.the other hand, CPI
remains liable for the unpaid commissions of Concepcion in the sum of P591,953.05.
 11.) ROYALE HOMES MARKETING CORPORATION vs FIDEL P. ALCANTARA

G.R. No. 195190               July 28, 2014

Facts: Royale Homes, a corportaion engaged in marketing real estates, appointed

Alcantara as its Marketing Director for a fixed period of one year. He was reappointed
for several consecutive years, the last of which covered the period January 1 to
December 31, 2003 where he held the position of Division 5 Vice-President-Sales. On
December 17, 2003, Alcantara filed a complaint for illegal dismissal against Royale
Homes and its executive officers alleging that he is a regular employee of Royale Homes
since he is performing tasks that are necessary and desirable to its business; that in 2003
the company gave him ₱1.2 million for the services he rendered to it; that in the first
week of November 2003, however, the executive officers of Royale Homes told him that
they were wondering why he still had the gall to come to office and sit at his table; and
that the actsof the executive officers of Royale Homes amounted to his dismissal from
work without any valid or just cause and in gross disregard of the proper procedure for
dismissing employees. Thus, he also impleaded the corporate officers who, he averred,
effected his dismissal in bad faith and in an oppressive manner. Royale Homes, on the
other hand, vehemently denied that Alcantara is its employee. It argued that the
appointment paper of Alcantara is clear that it engaged his services as an independent
sales contractor for a fixed term of one year only. He never received any salary, 13th
month pay, overtime pay or holiday pay from Royale Homes as hewas paid purely on
commission basis. In addition, Royale Homes had no control on how Alcantara would
accomplish his tasks and responsibilities as he was free to solicit sales at any time and
by any manner which he may deem appropriateand necessary. He is even free to recruit
his own sales personnel to assist him in pursuance of his sales target.

According to Royale Homes, Alcantara decided to leave the company after his wife,
who was once connectedwith it as a sales agent, had formed a brokerage company that
directly competed with its business, and even recruited some of its sales agents.
Although this was against the exclusivity clause of the contract, Royale Homes still
offered to accept Alcantara’s wife back so she could continue to engage in real estate
brokerage, albeit exclusively for Royale Homes. In a special management committee
meeting on October 8,2003, however, Alcantara announced publicly and openly that he
would leave the company by the end of October 2003 and that he would no longer
finish the unexpired term of his contract. He has decided to join his wifeand pursue
their own brokerage business. Royale Homes accepted Alcantara’s decision. It then
threw a despedidaparty in his honor and, subsequently, appointed a new independent
contractor. Two months after herelinquished his post, however, Alcantara appeared in
Royale Homes and submitted a letter claiming that he was illegally dismissed.

The Labor Arbiter rendered a Decision holding Alcantara is an employee of Royale

Homes with a fixed-term employment period from January 1 to December 31, 2003 and
that the pre-termination of his contract was against the law. On appeal, NLRC ruled
that Alcantara is not an employee but a mere independent contractor of Royale Homes
anchored mainly on the contract which does not require Alcanatara to observe regular
working hours, free to adopt the selling method he deemed most effective and not
receiving monthly salary, but was being paid on commission basis as stipulated in the
contract. CA reversed NLRC Decision holding Alcantara as an employee of Royal
Home wherein Royale Homes exercised some degree of control over Alcantara since his
job, as observed by the CA, is subject to company rules, regulations, and periodic
evaluations. He was also bound by the company code of ethics. Moreover, the
exclusivity clause of the contract has made Alcantara economically dependent on
Royale Homes, supporting the theory that he is an employee of said company.

Issue: Whether or not Alcantara was an independent contractor or anemployee of

Royale Homes.

Held: In determining the existence of an employer-employee relationship, this Court

has generally relied on the four-fold test, to wit: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer’s
power to control the employee with respect to the means and methods by which the
work is to be accomplished. Among the four, the most determinative factor in
ascertaining the existence of employer-employee relationship is the “right of control
test.” “It is deemed to be such an important factor that the other requisites may even be
disregarded.” This holds true where the issues to be resolved is whether a person who
performs work for another is the latter’s employee or is an independent contractor, as in
this case. For where the person for whom the services are performed reserves the right
to control not only the end to be achieved, but also the means by which such end is
reached, employer-employee relationship is deemed to exist. However, not every form
of control is indicative of employer-employee relationship. A person who performs
work for another and is subjected to its rules, regulations, and code of ethics does not
necessarily become an employee. As long as the level of control does not interfere with
the means and methods of accomplishing the assigned tasks, the rules imposed by the
hiring party on the hired party do not amount to the labor law concept of control that is
indicative of employer-employee relationship. In this case neither does the repeated
hiring of Alcantara prove the existence of employer-employee relationship; nor does the
exclusivity clause of contract establish the existence of the labor law concept of control.
The element of payment of wages is also absent in this case. As provided in the contract,
Alcantara’s remunerations consist only of commission override of 0.5%, budget
allocation, sales incentive and other forms of company support. There is no proof that
he received fixed monthly salary. No payslip or payroll was ever presented and there is
no proof that Royale Homes deducted from his supposed salary withholding tax or that
it registered him with the Social Security System (SSS), Philippine Health Insurance
Corporation, or Pag-Ibig Fund. In fact, his Complaint merely states a ballpark figure of
his alleged salary of P100,000.00, more or less. All of these indicate an independent
contractual relationship.