2S LABSTAN Case Digests

TOPIC Employer-employee relationship AUTHOR Balisong

CASE TITLE Republic v. Asiapro Cooperative GR NO 172191

TICKLER SSS; Cooperative DATE November 23, 2007

DOCTRINE

FACTS Asiapro is a cooperative composed of owners-members. Its primary objectives are to provide savings
and credit facilities and to develop other livelihood services for its owners-members. In the discharge
of this objectives, Asiapro entered into several service contracts with Satanfilco. These service
contracts emphasize that there is no employer-employee relationship between the cooperative and
its owners-members. The owners-members do not receive compensation or wages, instead, they
receive a share in the service surplus which the cooperative earns. The owners-members of the
cooperative who were assigned to Stanfilco requested the services of the latter to register them with
SSS as self-employed and to remit their contributions as such. SSS sent a letter to Asiapro informing
the latter that based on their service contracts with Stanfilco providing manpower to the latter, the
cooperative is considered to be an employer and its owners-members are considered as employees.
Thus, the cooperative should register itself as an employer and make the corresponding report and
remittance of premium contributions in accordance with the Social Security Law of 1997. However,
the demand was left unheeded.

SSS filed a petition before the Social Security Commission (SSC) against the cooperative and Stanfilco
praying that the cooperative be directed to register as an employer. In its answer, the respondent
cooperative insists that there is no employer-employee relationship, thus, SSC has no jurisdiction over
the cooperative.
ISSUE/S Whether or not there is an employer-employee relationship.

RULING/S Yes, there is an employer-employee relationship between the cooperative and its owners-members.
In determining the existence of an employer-employee, 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
4. The power to control the worker’s conduct as to the result of the work to be done and as to the means
and methods to accomplish it– most important element; refers to the existence of the power and not
necessarily to the actual exercise thereof

All the aforesaid elements are present in the case at bar. First, it is expressly provided in the Service Contracts
that it is the respondent cooperative which has the exclusive discretion in the selection and engagement of
the onwers-members as well as its team leaders who will be assigned at Satanfilco. Second, wages are defined
as remuneration or earnings which is payable by an employer to an employee under a written or unwritten
contract. In the case, the weekly stipend or the shares in the service surplus given by the respondent
cooperative to its owners-members were, in reality, wages. Third, it is the cooperative which has the power
to investigate, discipline, and remove the owners-members and its team leaders who were rendering services
at Stanfilco. Fourth, the cooperative has the sole control over the manner and measn of performing the
services under the Service Contracts. While it is true that the contracts specify that there shall be no employer-

2S [AY 2020-2021]
San Beda University – College of Law
 2S LABSTAN Case Digests
employee relationship between the cooperative and its owners-members, the provision cannot be given force
and effect. The existence of such relationship cannot be negated by expressly repudiating it in a contract. The
employment status of a person is defined and prescribed by law and not by what the parties say it should be.
Thus, there is an employer-employee relationship in the case.
NOTES

2S [AY 2020-2021]
San Beda University – College of Law