ELEMENTS OF EMPLOYMENT RELATIONSHIP

Television and Production Exponents v. ServanÃÉa RESPONDENT:

Facts:
Respondent for his part insisted that he was a regular
 TAPE is a domestic corporation engaged in the employee having been engaged to perform an activity that is
production of television programs, such as the long- necessary and desirable to TAPE’s business for thirteen (13)
years.6
running variety program, "Eat Bulaga!".
 Respondent Roberto C. Servaña had served as a
LABOR ARBITER:
security guard for TAPE
 On 2 March 2000, respondent received a declared respondent to be a regular employee of TAPE. The
memorandum informing him of his impending dismissal Labor Arbiter also ruled that the termination was valid on the
on account of TAPE’s decision to contract the services ground of redundancy, and ordered the payment of
of a professional security agency. He claimed that the respondent’s separation pay
holiday pay, unpaid vacation and sick leave benefits
NLRC:
and other monetary considerations were withheld from
him. He further contended that his dismissal was National Labor Relations Commission (NLRC reversed the
undertaken without due process and violative of Labor Arbiter and considered respondent a mere program
existing labor laws employee
PETITIONER: CA:
 that it was agreed that complainant would render his Respondent filed a petition for certiorari with the Court of
services until such time that respondent company shall Appeal
have engaged the services of a professional security
agency the Court of Appeals found respondent to be a regular
 when his contract with RPN-9 expired, respondent was employee
retained as a talent and a member of the support ISSUE:
group, until such time that TAPE shall have engaged
the services of a professional security agency whether an employer-employee relationship exists between
 TAPE averred that respondent was an independent TAPE and respondent
contractor falling under the talent group category and RULING:
was working under a special arrangement which is
recognized in the industry YES.
the existence of employer-employee relationship, namely:
(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 with respect
to the means and method by which the work is to be
accomplished.16 The most important factor involves the control
test.
Under the control test, there is an employer-employee
relationship when the person for whom the services are
performed reserves the right to control not only the end
achieved but also the manner and means used to achieve that
end
First. The selection and hiring of petitioner was done by
private respondents. In fact, private respondents themselves
admitted having engaged the services of petitioner only in
1995 after TAPE severed its relations with RPN Channel 9
Second. Payment as admitted by private respondents was
given by them on a monthly basis at a rate of P5,444.44.
Third. The bundy cards representing the time petitioner had
reported for work are evident proofs of private respondents’
control over petitioner more particularly with the time he is
required to report for work during the noontime program of
"Eat Bulaga
More importantly, respondent had been continuously under the
employ of TAPE from 1995 until his termination in March 2000,
or for a span of 5 years. Regardless of whether or not
respondent had been performing work that is necessary or
desirable to the usual business of TAPE, respondent is still
considered a regular employee under Article 280 of the Labor
Code which provides
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.
As a regular employee, respondent cannot be terminated
except for just cause or when authorized by law.29 It is clear
from the tenor of the 2 March 2000 Memorandum that
respondent’s termination was due to redundancy
Article 283 of the Labor Code provides:
In case of termination due to the installation of labor
saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent
to at least his one (1) month pay or to at least one (1)
month pay for every year or service, whichever is
higher.
It bears stressing that although notice was served upon
petitioner through a Memorandum dated 2 March 2000, the
effectivity of his dismissal is fifteen days from the start of the
agency’s take over which was on 3 March 2000. Petitioner’s
services with private respondents were severed less than the
month requirement by the law.

ABS-CBN Broadcasting Corp. v. Nazareno, September 26,
2006
Facts:
 Petitioner ABS-CBN Broadcasting Corporation (ABS-
CBN) is engaged in the broadcasting business and
owns a network of television and radio stations
 Petitioner employed respondents Nazareno, Gerzon,
Deiparine, and Lerasan as pro. duction assistants
(PAs). They were assigned at the news and public
affairs, for various radio programs in the Cebu
Broadcasting Station, with a monthly compensation
of P4,000.00
 They were issued ABS-CBN employees’ identification
cards and were required to work for a minimum of eight
hours a day, including Sundays and holidays
 petitioner and the ABS-CBN Rank-and-File Employees
executed a Collective Bargaining Agreement (CBA) to
be effective during the period from December 11, 1996
to December 11, 1999. However, since petitioner
refused to recognize PAs as part of the bargaining unit,
respondents were not included to the CBA.
 respondents filed a Complaint for Recognition of
Regular Employment Status, Underpayment of
Overtime Pay, Holiday Pay, Premium Pay, Service
Incentive Pay, Sick Leave Pay, and 13th Month Pay
with Damages against the petitioner before the NLRC
RESPONDENT:
Complainants further pray of this Arbiter to declare them
regular and permanent employees of respondent ABS-CBN as
a condition precedent for their admission into the existing
union and collective bargaining unit of respondent company
where they may as such acquire or otherwise perform their
obligations thereto or enjoy the benefits due therefrom.
PETITIONER
They are considered in the industry as "program employees"
in that, as distinguished from regular or station employees,
they are basically engaged by the station for a particular or
specific program broadcasted by the radio station.
Petitioner also alleged that the Labor Arbiter had no
jurisdiction to involve the CBA and interpret the same,
especially since respondents were not covered by the
bargaining unit.
LABOR ARBITER:
1. Labor Arbiter rendered judgment in favor of the
respondents, and declared that they were regular
employees of petitioner and he ruled that the
complainants are entitled to 13th month pay, service
incentive leave pay and salary differential
However, the Labor Arbiter did not award money benefits as
provided in the CBA on his belief that he had no jurisdiction to
interpret and apply the agreement.
PETITIONER
Petitioner forthwith appealed the decision to the NLRC
petitioner alleged the following:
2. That the Labor Arbiter erred in depriving the
respondent of its Constitutional right to due process of
law
3. That the Labor Arbiter erred when he ruled that the
complainants are regular employees of the respondent;
4. That the Labor Arbiter erred when he ruled that the
complainants are entitled to 13th month pay, service
incentive leave pay and salary differential
NLRC
The NLRC ruled that respondents were entitled to the benefits
under the CBA because they were regular employees who
contributed to the profits of petitioner through their labor
CA
the appellate court stated that respondents are not mere
project employees, but regular employees
ISSUE:
Whether the RESPONDENTS are considered REGULAR
EMPLOYEES.
RULING:
Yes.
there are two kinds of regular employees under the law:
(1) those engaged to perform activities which are necessary or
desirable in the usual business or trade of the employer; and
(2) those casual employees who have rendered at least one
year of service, whether continuous or broken, with respect to
the activities in which they are employed.35
What determines whether a certain employment is regular or
otherwise is not the will or word of the employer, to which the
worker oftentimes acquiesces, much less the procedure of
hiring the employee or the manner of paying the salary or the
actual time spent at work. It is the character of the activities
performed in relation to the particular trade or business taking
into account all the circumstances, and in some cases the
length of time of its performance and its continued
existence.36 It is obvious that one year after they were
employed by petitioner, respondents became regular
employees by operation of law
In this case, it is undisputed that respondents had continuously
performed the same activities for an average of five years.
Their assigned tasks are necessary or desirable in the usual
business or trade of the petitioner. The persisting need for
their services is sufficient evidence of the necessity and
indispensability of such services to petitioner’s business or
trade
In the case at bar, however, the employer-employee
relationship between petitioner and respondents has been
proven.
First. In the selection and engagement of respondents, no
peculiar or unique skill, talent or celebrity status was required
from them because they were merely hired through petitioner’s
personnel department just like any ordinary employee.
Second. The so-called "talent fees" of respondents correspond
to wages given as a result of an employer-employee
relationship..
Third. Petitioner could always discharge respondents should it
find their work unsatisfactory, and respondents are highly
dependent on the petitioner for continued work.
constitute undue discrimination against non-members. A
collective bargaining agreement is binding on all employees of
the company. Therefore, whatever benefits are given to the
other employees of ABS-CBN must likewise be accorded to
private respondents who were regular employees of
petitioner.48
Besides, only talent-artists were excluded from the CBA and
not production assistants who are regular employees of the
respondents. Moreover, under Article 1702 of the New Civil
Code: "In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent
living of the laborer."

Fourth. The degree of control and supervision exercised by

petitioner over respondents through its supervisors negates
the allegation that respondents are independent contractors.

It follows then that respondents are entitled to the benefits

provided for in the existing CBA between petitioner and its
rank-and-file employees. As regular employees, respondents
are entitled to the benefits granted to all other regular
employees of petitioner under the CBA

NOTE:

A collective bargaining agreement is a contract entered into by

the union representing the employees and the employer.
However, even the non-member employees are entitled to the
benefits of the contract. To accord its benefits only to
members of the union without any valid reason would

Fulache v. ABS-CBN, January 21, 2010
Regularization and illegal dismissal case
Facts:
 petitioners filed two separate complaints for
regularization, unfair labor practice and several money
claims (regularization case) against ABS-CBN
 Petitioners were were drivers/cameramen, editors,
PA/Teleprompter Operator-Editing, a VTR man/editor
of ABS-CBN
PETITIONER:
petitioners alleged that on December 17, 1999, ABS-CBN and
the ABS-CBN Rank-and-File Employees Union (Union)
executed a collective bargaining agreement
they learned that they had been excluded from its coverage as
ABS-CBN considered them temporary and not regular
employees, in violation of the Labor Code.
They claimed they had already rendered more than a year of
service in the company and, therefore, should have been
recognized as regular employees entitled to security of tenure
and to the privileges and benefits enjoyed by regular
employees.
They asked that they be paid overtime, night shift differential,
holiday, rest day and service incentive leave pay.
RESPONDENT:
ABS-CBN claimed, too, that the production of programs per
se is not necessary or desirable in its business because it
could generate profits by selling airtime to block-timers or
through advertising
ABS-CBN pointed out that talents are paid a pre-arranged
consideration called "talent fee and alleged that the petitioners’
services were contracted on various dates by its Cebu station
as independent contractors/off camera talents, and they were
not entitled to regularization in these capacities.
LABOR ARBITER:
Labor Arbiter Rendoque rendered his decision5 holding that
the petitioners were regular employees of ABS-CBN, not
independent contractors, and are entitled to the benefits and
privileges of regular employees
ABS-CBN appealed the ruling to the National Labor Relations
Commission (NLRC)
ILLEGAL DISMISSAL CASE:
  While the appeal of the regularization case was
pending, ABS-CBN dismissed Fulache, Jabonero,
Castillo, Lagunzad and Atinen (all drivers) for their
refusal to sign up contracts of employment.
 The four drivers responded by filing a complaint for
illegal dismissal
RESPONDENT:
ABS-CBN alleged that even before the labor arbiter rendered
his decision of January 17, 2002 in the regularization case, it
had already undertaken a comprehensive review of its existing
organizational structure to address its operational
requirements. It then decided to course through legitimate
service contractors
they were dismissed because they belonged to a job category
that had already been contracted out
LABOR ARBITER:
The labor arbiter upheld the validity of ABS-CBN's contracting
out of certain work or services in its operations and found that
petitioners had been dismissed due to redundancy, an
authorized cause under the law.
NLRC:
The NLRC reversed the labor arbiter’s ruling in the illegal
dismissal case; it found that petitioners had been illegally
dismissed and awarded them backwages and separation pay
in lieu of reinstatement
CA:
CA ruled that the petitioners failed to prove their claim to CBA
benefits
drivers were not illegally dismissed as their separation from
the service was due to redundancy;
ISSUE:
1. whether the petitioners, as regular employees, are
members of the bargaining unit entitled to CBA benefits
2. whether petitioners Fulache, Jabonero, Castillo and
Lagunzad were illegally dismissed.
RULING:
1. YES. petitioners are members of the appropriate
bargaining unit because they are regular rank-and-file
employees and do not belong to any of the excluded
categories. Specifically, nothing in the records shows
that they are supervisory or confidential employees;
neither are they casual nor probationary employees.
Most importantly, the labor arbiter’s decision of January
17, 2002 – affirmed all the way up to the CA level –
ruled against ABS-CBN’s submission that they are
independent contractors. Thus, as regular rank-and-file
employees, they fall within CBA coverage under the
CBA’s express terms and are entitled to its benefits.
 ABS-CBN as the company exercised control over the
petitioners in the performance of their work; the
petitioners were regular employees because they were
engaged to perform activities usually necessary or
desirable in ABS-CBN's trade or business; they cannot
be considered contractual employees since they were
not paid for the result of their work, but on a monthly
basis and were required to do their work in accordance
with the company’s schedule
All these go to show that ABS-CBN acted with patent bad faith
By law,39 illegally dismissed employees are entitled to
reinstatement without loss of seniority rights and other
privileges and to full backwages, inclusive of allowances, and
to other benefits or their monetary equivalent from the time
their compensation was withheld from them up to the time of
their actual reinstatement. The four dismissed drivers deserve
no less.

2. Yes. ABS-CBN forgot labor law and its realities.

It forgot that by claiming redundancy as authorized cause for

dismissal, it impliedly admitted that the petitioners were regular
employees whose services, by law, can only be terminated for
the just and authorized causes defined under the Labor Code.

Likewise ABS-CBN forgot that it had an existing CBA with a

union, which agreement must be respected in any move
affecting the security of tenure of affected employees;
otherwise, it ran the risk of committing unfair labor practice –
both a criminal and an administrative offense. 33 It similarly
forgot that an exercise of management prerogative can be
valid only if it is undertaken in good faith and with no intent to
defeat or circumvent the rights of its employees under the laws
or under valid agreements.34

Lastly, it forgot that there was a standing labor arbiter’s

decision that, while not yet final because of its own pending
appeal, cannot simply be disregarded. By implementing the
dismissal action at the time the labor arbiter’s ruling was under
review, the company unilaterally negated the effects of the
labor arbiter’s ruling while at the same time appealling the
same ruling to the NLRC. This unilateral move is a direct
affront to the NLRC’s authority and an abuse of the appeal
process.

Dumpit-Murillo v. Court of Appeals, June 8, 2007
FACTS:
 private respondent Associated Broadcasting Company
(ABC) hired petitioner Thelma Dumpit-Murillo as a
newscaster and co-anchor for Balitang-Balita
 contract was for a period of three months. It was
renewed under Talent Contracts
 after four years of repeated renewals, petitioner’s talent
contract expired. Two weeks after the expiration of the
last contract, petitioner sent a letter to, Vice President
for News and Public Affairs of ABC, informing the latter
that she was still interested in renewing her contract
subject to a salary increase.
 Thereafter, petitioner stopped reporting for work, she
wrote Mr. Javier another letter. , should I not receive
any formal response from you until Monday, November
8, 1999, I will deem it as a constructive dismissal of my
services.
 A month later, petitioner sent a demand letter 7 to ABC,
demanding:
(a) reinstatement to her former position;
(b) payment of unpaid wages for services;
(c) payment of 13th month pay, vacation/sick/service
incentive leaves and other monetary benefits due to a
regular employee.
 ABC replied that a check covering petitioner’s talent
fees had been processed and prepared, but that the
other claims of petitioner had no basis in fact or in law.
 petitioner filed a complaint for illegal constructive
dismissal, nonpayment of salaries, overtime pay,
premium pay, separation pay, holiday pay, service
incentive leave pay, vacation/sick leaves and 13th
month pay in NLRC
LABOR ARBITER:
Labor Arbiter dismissed the complaint
NLRC:
The NLRC held that an employer-employee relationship
existed between petitioner and ABC; that the subject talent
contract was void; that the petitioner was a regular employee
illegally dismissed; and that she was entitled to reinstatement
and backwages or separation pay, aside from 13th month pay
and service incentive leave pay, moral and exemplary
damages and attorney’s fees.
CA:
According to the appellate court, petitioner was a fixed-term
employee and not a regular employee within the ambit of
Article 28014 of the Labor Code because her job, as anticipated
and agreed upon, was only for a specified time
PETITIONER:
Petitioner avers however that an employer-employee
relationship was created when the private respondents started
to merely renew the contracts repeatedly fifteen times or for
four consecutive years
ISSUE:
Whether that the Court of Appeals did not err when it upheld
the validity of the talent contracts voluntarily entered into by
petitioner
RULING:
No.
The duties of petitioner as enumerated in her employment
contract indicate that ABC had control over the work of
petitioner. Aside from control, ABC also dictated the work
assignments and payment of petitioner’s wages. ABC also had
power to dismiss her. All these being present, clearly, there
existed an employment relationship between petitioner and
ABC
Concerning regular employment, the law provides for two
kinds of employees, namely:
(1) those who are engaged to perform activities which are
usually necessary or desirable in the usual business or trade
of the employer; and
(2) those who have rendered at least one year of service,
whether continuous or broken, with respect to the activity in
which they are employed.30
In other words, regular status arises from either the nature of
work of the employee or the duration of his employment.31 
[T]he 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
The contention of the appellate court that the contract was
characterized by a valid fixed-period employment is untenable.
For such contract to be valid, it should be shown that the fixed
period was knowingly and voluntarily agreed upon by the
parties. There should have been no force, duress or improper
pressure brought to bear upon the employee; neither should
there be any other circumstance that vitiates the employee’s
consent.35 It should satisfactorily appear that the employer and
the employee dealt with each other on more or less equal
terms with no moral dominance being exercised by the
employer over the employee.
In the case at bar, it does not appear that the employer and
employee dealt with each other on equal terms.
Understandably, the petitioner could not object to the terms of
her employment contract because she did not want to lose the
job. Patently, the petitioner occupied a position of weakness
vis-à-vis the employer. Moreover, private respondents’
practice of repeatedly extending petitioner’s 3-month contract
for four years is a circumvention of the acquisition of regular
status. Hence, there was no valid fixed-term employment
between petitioner and private respondents
Fuji Television v. Espiritu, December 3, 2014
FACTS:
 Arlene S. Espiritu ("Arlene") was engaged by Fuji
Television Network, Inc. ("Fuji") asa
4 necessary and desirable to Fuji’s business
correspondent/producer  "tasked to report Philippine
news to Fuji through its Manila Bureau field
office."5 Arlene’s employment contract initially provided
for a term of one (1) year but was successively
renewed on a yearly basis with salary adjustment upon
every renewal
 Arlenewas diagnosed with lung cancer.7 She informed
Fuji about her condition. In turn, the Chief of News
Agency of Fuji, Yoshiki Aoki, informed Arlene "that the
company will have a problem renewing her
contract"8 since it would be difficult for her to perform
her job.9 She "insisted that she was still fit to work as
certified by her attending physician."10
 After several verbal and written
communications,  Arlene and Fuji signed a non-
11
renewal contract. Arlene affixed her signature on the
nonrenewal contract with the initials "U.P." for "under
protest."14
 she filed a complaint for illegal dismissal and attorney’s
fees with the National Capital Region Arbitration
Branch of the National Labor Relations Commission.
She alleged that she was forced to sign the
nonrenewal contract when Fuji came to know of her
illness and that Fuji withheld her salaries and other
benefits
 Labor Arbiter dismissed Arlene’s complaint
 Arlene appealed before the National Labor Relations
Commission. National Labor Relations Commission
reversed the Labor Arbiter’s decision. 21 It held that
Arlene was a regular employee with respect to the
activities for which she was employed since she
continuously rendered services that were deemed
news
 both parties filed separate petitions for
27
certiorari  before the Court of Appeals and Fuji
Television, Inc. is ORDERED to immediately
REINSTATE Arlene S. Espiritu to her position as News
Producer without loss of seniority rights and privileges
and to pay her backwages and 13th month pay. Court
 of Appeals held that Arlene was a regular employee
because she was engaged to perform work that was
necessary or desirable in the business of Fuji,31 and the
successive renewals of her fixed-term contract resulted
in regular employment.32 also held that Arlene was
illegally dismissed because Fuji failed to comply with
the requirements of substantive and procedural due
process
 Fuji points out that Arlene was hired as a stringer, and
it informed her that she would remain one.40 She was
hired as an independent contractor.41 Fuji had no
control over her work.42 The employment contracts
were executed and renewed annually upon Arlene’s
insistence to which Fuji relented because she had skills
that distinguished her from ordinary
employees.43 Arlene and Fuji dealt on equal terms
when they negotiated and entered into the employment
contracts.44 There was no illegal dismissal because she
freely agreed not to renew her fixed-term contract as
evidenced by her e-mail. Fuji "never controlled the
manner by which she performed her functions
ISSUE:
Whether the Court of Appeals correctly determined that no
grave abuse of discretion was committed by the National
Labor Relations Commission when it ruled that Arlene was a
regular employee, not an independent contractor, and that she
was illegally dismissed
RULING:
No.
Arlene was hired by Fuji as a news producer, but there was no
showing that she was hired because of unique skills that would
distinguish her from ordinary employees.. Her monthly salary
amounting to US$1,900.00 appears tobe a substantial sum,
especially if compared to her salary whenshe was still
connected with GMA.199 Indeed, wages may indicate whether
oneis an independent contractor. Wages may also indicate
that an employee is able to bargain with the employer for
better pay.
Fuji had the power to dismiss Arlene, as provided for in
paragraph 5 of her professional employment contract.200 Her
contract also indicated that Fuji had control over her work
because she was required to work for eight (8) hours from
Monday to Friday, although on flexible time..
On the power to control, Arlene alleged that Fuji gave her
instructions on what to report.202 Even the mode of
transportation in carrying out her functions was controlled by
Fuji
The test for determining regular employment is whether there
is a reasonable connection between the employee’s activities
and the usual business of the employer. Article 280 provides
that the nature of work must be "necessary or desirable in the
usual business or trade of the employer" as the test for
determining regular employment.
Court of Appeals explained that Fuji’s argument that no
employer-employee relationship existed in view of the fixed-
term contract does not persuade because fixed-term contracts
of employment are strictly construed.222 Further, the pieces of
equipment Arlene used were all owned by Fuji, showing that
she was a regular employee and not an independent
contractor.223
With regard to Fuji’s argument that Arlene’s contract was for a
fixed term, the Court of Appeals cited Philips Semiconductors,
Inc. v. Fadriquela226 and held that where an employee’s
contract "had been continuously extended or renewed to the
same position, with the same duties and remained in the
employ without any interruption,"227 then such employee is a
regular employee. The continuous renewal is a scheme to
prevent regularization. On this basis, the Court of Appeals
ruled in favor of Arlene.
Further, an employee can be a regular employee with a fixed-
term contract. The law does not preclude the possibility that a
regular employee may opt to have a fixed-term contract for
valid reasons. This was recognized in Brent: For as long as it
was the employee who requested, or bargained, that the
contract have a "definite date of termination," or that the fixed-
term contract be freely entered into by the employer and the
employee, then the validity of the fixed-term contract will be
upheld.
the National Labor Relations Commission’s finding of illegal
dismissal. We cannot subscribe to Fuji’s assertion that
Espiritu’s contract merely expired and that she voluntarily
agreed not to renew the same. Even a cursory perusal of the
subject Non-Renewal Contract readily shows that the same
was signed by Espiritu under protest
all activities related to news gathering. Although Fuji insists
that Arlene was a stringer, it alleges that her designation was
"News Talent/Reporter/Producer
Another classification of employees, i.e., employees with fixed-
term contracts
fixed term employment contracts, we emphasized in
Brentthat where from the circumstances it is apparent that the
periods have been imposed to preclude acquisition of tenurial
security by the employee
independent contractors- one who carries on a distinct and
independent business and undertakes to perform the job,
work, or service on its own account and under one’s own
responsibility according to one’s own manner and method, free
from the control and direction of the principal in all matters
connected with the performance of the work except as to the
results thereof
- individuals with unique skills and talents that set them
apart from ordinary employees

classifies regular employees into two kinds: (1) those

"engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer"; and
(2) casual employees who have "rendered at least one year of
service, whether such service is continuous or broken."

Based on the record, Fuji’s Manila Bureau Office is a small

unit213 and has a few employees.214 As such, Arlene had to do

Begino v. ABS-CBN, April 20, 2015
FACTS:
Respondent ABS-CBN Corporation (formerly ABS-CBN
Broadcasting Corporation) is a television and radio
broadcasting corporation which, for its Regional Network
Group in Naga City, employed respondents as Manage and
reporters. With their services engaged by respondents thru
Talent Contracts which, though regularly renewed over the
years, provided terms ranging from three (3) months to one (1)
year. Petitioners were tasked with coverage of news items for
subsequent daily airings in respondents’ TV Patrol Bicol
Program.
Claiming that they were regular employees of ABS-CBN,
petitioners filed against respondents the complaint5 before
NLRC, in support of their claims for regularization,
underpayment of overtime pay, holiday pay, 13th month pay,
service incentive leave pay, damages and attorney's fees,
petitioners alleged that they performed functions necessary
and desirable in ABS-CBN's business.
Respondents insisted that, pursuant to their Talent Contracts
and/or Project Assignment Forms, petitioners were hired as
talents, to act as reporters and/or cameramen for TV Patrol
Bicol for designated periods and rates.
Having been terminated during the pendency of the case,
Petitioners filed a second complaint against respondents, for
regularization, payment of labor standard benefits, illegal
dismissal andunfair labor practice, which was dismissed based
on forum shopping.
Labor Arbiter resolved in favor of petitioners who, having
rendered services necessary and related to ABS-CBN’s
business for more than a year, were determined to be its
regular employees.
NLRC rendered a Decision, affirmied Labor Arbiter’s appealed
decision by the respondent finding latter’s control over
petitioners. CA rendered the herein assailed decision,
reversing the findings of the Labor Arbiter and the NLRC.
ISSUE:
Whether employer-employee relationship exist between the
petitioners and respondent,
Ruling:
Yes.
To determine the existence of said relation,case law has
consistently applied the four-fold test, to wit:
(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 on the
means and methods by which the work is accomplished.
Of these criteria, the so-called “control test” Under this test, an
employer-employee relationship is said to exist where the
person for whom the services are performed reserves the right
to control not only the end result but also the manner and
means utilized to achieve the same.
As cameramen/editors and reporters, it also appears that
petitioners were subject to the control and supervision of
respondents which, first and foremost, provided them with the
equipments essential for the discharge of their functions.
Prepared at the instance of respondents, petitioners’ Talent
Contracts tellingly provided that ABS-CBN retained “all
creative, administrative, financial and legal control” of the
program to which they were assigned. Aside from having the
right to require petitioners “to attend and participate in all
promotional or merchandising campaigns, activities or events
for the Program,” ABS-CBN required the former to perform
their functions “
In finding that petitioners were regular employees, the NLRC
further ruled that the exclusivity clause and prohibitions in their
Talent Contracts and/or Project Assignment Forms were
likewise indicative of respondents’ control over them.
This conclusion is borne out by the ineluctable showing that
petitioners perform functions necessary and essential to the
business of ABS-CBN which repeatedly employed them for a
long-running news program of its Regional Network Group in
Naga City.
NOTE:
four kinds of employees, namely:
(a) 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;
(b) 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;
(c) seasonal employees or those who work or perform services
which are seasonal in nature, and the employment is for the
duration of the season; and
(d) casual employees or those who are not regular, project, or
seasonal employees.
To the foregoing classification of employee, jurisprudence has
added that of contractual or fixed term employee which, if not
for the fixed term, would fall under the category of regular
employment in view of the nature of the employee’s
engagement, which is to perform activity usually necessary or
desirable in the employer’s business
In the same manner that the practice of having fixed-term
contracts in the industry does not automatically make all talent
contracts valid and compliant with labor law, it has,
consequently, been ruled that the assertion that a talent Complainants Bernarte and Guevarra) aver that they were
contract exists does not necessarily prevent a regular invited to join the PBA as referees and , they were made to
employment status. sign contracts on a year-to-year basis.

Complainant Bernarte, for instance, Bernarte received a letter

from the Office of the Commissioner advising him that his
contract would not be renewed citing his unsatisfactory
performance on and off the court. It was a total shock for
Bernarte who was awarded Referee of the year in 2003.

Guevarra alleges that he was invited to join the PBA pool of

referees he signed a contract as trainee. Then, he signed a
yearly contract as Regular Class C referee., respondent
Martinez issued a memorandum to Guevarra expressing
dissatisfaction over his questioning on the assignment of
referees officiating out-of-town games and was no longer
made to sign a contract

Respondents aver, on the other hand, that complainants

entered into two contracts of retainer with the PBA.
Complainants were not illegally dismissed because they were
not employees of the PBA. Their respective contracts of
retainer were simply not renewed. PBA had the prerogative of
whether or not to renew their contracts, which they knew were
fixed

Labor Arbiter6 declared petitioner an employee whose

dismissal by respondents was illegal. Accordingly, the Labor
Arbiter ordered the reinstatement of petitioner and the
Bernante v. PBA, September 14, 2011 payment of backwages, moral and exemplary damages and
attorney’s fees
FACTS:
Respondents filed a petition for certiorari with the Court of
Appeals, which overturned the decisions of the NLRC and
Labor Arbiter
Petitioner asserts that he is an employee of respondents since
the latter exercise control over the performance of his work.
Petitioner cites the following stipulations in the retainer
contract which evidence control: (1) respondents classify or
rate a referee; (2) respondents require referees to attend all
basketball games organized or authorized by the PBA, at least
one hour before the start of the first game of each day; (3)
respondents assign petitioner to officiate ballgames, or to act
as alternate referee or substitute; (4) referee agrees to
observe and comply with all the requirements of the PBA
governing the conduct of the referees whether on or off the
court; (5) referee agrees (a) to keep himself in good physical,
mental, and emotional condition during the life of the contract;
(b) to give always his best effort and service, and loyalty to the
PBA, and not to officiate as referee in any basketball game
outside of the PBA, without written prior consent of the
Commissioner; (c) always to conduct himself on and off the
court according to the highest standards of honesty or
morality; and (6) imposition of various sanctions for violation of
the terms and conditions of the contract
ISSUE:
whether petitioner is an employee of respondents, which in
turn determines whether petitioner was illegally dismissed.
RULING:
To determine the existence of an employer-employee
relationship, case law has consistently applied the four-fold
test, to wit: (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 on the means
and methods by which the work is accomplished. The so-
called "control test" is the most important indicator of the
presence or absence of an employer-employee relationship
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.22
We agree with respondents that once in the playing court, the
referees exercise their own independent judgment, based on
the rules of the game, as to when and how a call or decision is
to be made. The referees decide whether an infraction was
committed, and the PBA cannot overrule them once the
decision is made on the playing court. The referees are the
only, absolute, and final authority on the playing court.
Respondents or any of the PBA officers cannot and do not
determine which calls to make or not to make and cannot
control the referee when he blows the whistle because such
authority exclusively belongs to the referees. The very nature
of petitioner’s job of officiating a professional basketball game
undoubtedly calls for freedom of control by respondents.
In addition, the fact that PBA repeatedly hired petitioner does
not by itself prove that petitioner is an employee of the former.
For a hired party to be considered an employee, the hiring
party must have control over the means and methods by which
the hired party is to perform his work, which is absent in this
case. The continuous rehiring by PBA of petitioner simply
signifies the renewal of the contract between PBA and
petitioner, and highlights the satisfactory services rendered by
petitioner warranting such contract renewal
Semblante and Pilar v. CA, 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.

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

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

They work every Tuesday, Wednesday, Saturday, and Sunday

every week, excluding monthly derbies and cockfights held on
special holidays. Their working days start at 1:00 p.m. and last
until 12:00 midnight, or until the early hours of the morning
depending on the needs of the cockpit

petitioners were denied entry into the cockpit upon the

instructions of respondents, and were informed of the
termination of their services effective. This prompted
petitioners to file a complaint for illegal dismissal against
respondents.
In answer, respondents denied that petitioners were their
employees and alleged that they were associates of
respondents’ independent contractor, Tomas Vega.
Respondents 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 on any cockfighting day. In times
when there are few cockfights in Gallera de Mandaue,
petitioners go to other cockpits in the vicinity. 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
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. The Labor
Arbiter also ruled that petitioners were illegally dismissed
NLRC ruled that there was no employer-employee relationship
between petitioners and respondents
Petitioners went to the CA, ruled the same with NLRC. The
appellate court found for respondents, noting that referees and
bet-takers in a cockfight need to have the kind of expertise that
is characteristic of the game to interpret messages conveyed
by mere gestures. Hence, petitioners are akin to independent
contractors who possess unique skills, expertise, and talent to
distinguish them from ordinary employees. Further,
respondents did not supply petitioners with the tools and
instrumentalities they needed to perform work. Petitioners only
needed their unique skills and talents to perform
ISSUE:
W/n there is an employer-employee relationship in the case at
hand
RULING:
No.
the four-fold test of employment We have repeatedly
mentioned in countless decisions: (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.18 1avvphi1
respondents had no part in petitioners’ selection and
management;19 petitioners’ compensation was paid out of the
arriba (which is a percentage deducted from the total bets), not
by petitioners;20 and petitioners performed their functions as
masiador and sentenciador free from the direction and control
of respondents.21 In the conduct of their work, petitioners relied
mainly on their "expertise that is characteristic of the cockfight
gambling,"22 and were never given by respondents any tool
needed for the performance of their work.23
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
Abella v. PLDT, June 8, 2005
Facts:

Respondent PSI entered into an agreement with the PLDT to

provide the latter with such number armed security guards.
Under the agreement, it was expressly provided that there
shall be no employer-employee relationship between the
PLDT and the security guards, which may be supplied to it by
PSI, and that the latter shall have the entire charge, control
and supervision over the work and services of the supplied
security guards. It was likewise stipulated therein that PSI shall
also have the exclusive authority to select, engage, and
discharge its security guards, with full control over their wages,
salaries or compensation.lawphil.net

PLDT’s Security Division interviewed these security guards

and asked them to fill out personal data sheets. Those who did
not meet the height requirements were sent back by PLDT to
PSI.

(65) security guards supplied by respondent PSI filed a

Complaint5 for regularization against the PLDT with the Labor
Arbiter. The Complaint alleged inter alia that petitioner security
guards have been employed by the company through the
years and that all of them served PLDT directly for more than
1 year.. Petitioners likewise alleged that PSI acted as the
middleman in the payment of the minimum pay to the security
guards, but no premium for work rendered beyond eight hours
was paid to them nor were they paid their 13th month pay. In
sum, the Complaint states that inasmuch as the complainants
are under the direct control and supervision of PLDT, they
should be considered as regular employees by the latter with
compensation and benefits equivalent to ordinary rank-and-file
employees of the same job grade.
Labor Arbiter dismissed the complaint for lack of merit. On
appeal, the NLRC affirmed in toto the Labor Arbiter’s decision.
The Court of Appeals, in turn, affirmed the NLRC’s
disquisition.6 According to the Court of Appeals, evidence
demonstrates that it is respondent PSI which is petitioners’
employer, not the PLDT inasmuch as the power of selection
over the guards lies with the former. The Court of Appeals also
took cognizance of the fact that petitioners have collected their
wages from PSI.7
ISSUE:
whether or not an employer-employee relationship exists
between petitioners and respondent PLDT.
RULING:
No.
Testimonies during the trial reveal that interviews and
evaluation were conducted by PLDT to ensure that the
standards it set are met by the security guards. In fact, PLDT
rarely failed to accept security guards referred to by PSI but on
account of height deficiency. The referral is nothing but for
possible assignment in a designated client which has the
inherent prerogative to accept and reject the assignee for
justifiable grounds or even arbitrarily. We are thus convinced
that the employer-employee relationship is deemed perfected
even before the posting of the complainants with the PLDT, as
assignment only comes after employment
we considered the following factors in considering the
existence of an employer-employee relationship: (1) the
selection and engagement of the employee; (2) the payment of
wages; (3) the power to dismiss; and (4) the power to control
the employee’s conduct.
1. It is not disputed that complainants applied for work
with PSI, submitted the necessary employment
documentary requirement with PSI and executed
employment contracts with PSI. security guards which
PSI had assigned to PLDT are already the former’s
employees prior to assignment and if the assigned
guards to PLDT are rejected by PLDT for reasons
germane to the security agreement, then the rejected
or terminated guard may still be assigned to other
clients of PSI
2. it is PSI that determined and paid the petitioners’
wages, salaries, and compensation
3. third and fourth factors, . As already adverted to earlier,
termination of services from PLDT did not ipso
facto mean dismissal from PSI inasmuch as some of
those pulled out from PLDT were merely detailed at the
other clients of PSI.
said delinquency reports merely served as justifiable,
not arbitrary, basis for PLDT to demand replacement of
 guards found to have committed infractions while on
their tours of duty at PLDT’s premises

NOTE:
In fine, while the Constitution is committed to the policy of
social justice and the protection of the working class, it should
not be supposed that every labor dispute will be automatically
decided in favor of labor. The partiality for labor has not in any
way diminished our belief that justice is in every case for the
deserving, to be dispensed in the light of the established facts
and the applicable law and doctrine

Consulta v . CA, March 18, 2005

FACTS:
Pamana Philippines, Inc. ("Pamana") is engaged in health
care business. Raquel P. Consulta ("Consulta") was a
Managing Associate of Pamana. Part of her principal
responsibility is to organize, develop, manage, and maintain a
sales division and a full complement of agencies and Health
Consultants.
This appointment is on a non-employer-employee relationship
basis, and shall be in accordance with the Company
Guidelines on Appointment, Reclassification and Transfer of
Sales Associates
Consulta negotiated with the Federation of Filipino Civilian
Employees Association ("FFCEA") working at the United
States Subic Naval Base for a Health Care Plan for the
FFCEA members. Pamana issued Consulta a Certification.
Upon such negotiation and eventual execution of the contract
agreements, entitlements of all benefits due the Emerald
Group in it’s [sic] entirely including it’s [sic] Supervising
Consultants and Health Consultants, by of commissions, over-
rides and other package of benefits is hereby affirmed
Pamana and the U.S. Naval Supply Depot signed the FFCEA
account. Consulta, claiming that Pamana did not pay her
commission for the FFCEA account, filed a complaint for
unpaid wages or commission against Pamana.
Labor Arbiter, respondent is hereby ordered to pay
complainant her unpaid commission to be computed as
against actual transactions between respondent PAMANA and
the contracting Department of U.S. Naval Supply Depot upon
presentation of pertinent document.
appellate court reversed the NLRC Decision. The appellate
court ruled that Consulta was a commission agent, not an
employee of Pamana. The appellate court also ruled that
Consulta should have litigated her claim for unpaid
commission in an ordinary civil action.
ISSUE:
Whether Consulta was an employee of Pamana.
RULING:
We affirm the Decision of the appellate court. Consulta was an
independent agent and not an employee of Pamana.
The Four-Fold Test
In Viaña v. Al-Lagadan,9 the Court first laid down the four-fold
test to determine the existence of an employer-employee
relationship. The four elements of an employer-employee
relationship, which have since been adopted in subsequent
jurisprudence,10 are (1) the power to hire; (2) the payment of
wages; (3) the power to dismiss; and (4) the power to control.
The power to control is the most important of the four
elements.
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 employer-employee relationship.
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.
In the present case, the power to control is missing. Pamana
tasked Consulta to organize, develop, manage, and maintain a
sales division, submit a number of enrollments and revenue
attainments in accordance with company policies and
guidelines, and to recruit, train and direct her Supervising
Associates and Health Consultants.12 However, the manner in
which Consulta was to pursue these activities was not subject
to the control of Pamana. Consulta failed to show that she had
to report for work at definite hours. The amount of time she
devoted to soliciting clients was left entirely to her discretion.
The means and methods of recruiting and training her sales
associates, as well as the development, management and
maintenance of her sales division, were left to her sound
judgment.
Managing Associates had to ask the Management of Pamana
to shoulder half of the advertisement cost for their recruitment
campaign. They shelled out their own resources to bolster
their recruitment. They shared in the payment of the salaries of
their secretaries. They gave cash incentives to their sales
associates from their own pocket. These circumstances show
that the Managing Associates were independent contractors,
not employees, of Pamana.
Finally, Pamana paid Consulta not for labor she performed but
only for the results of her labor.16 Without results, Consulta’s
labor was her own burden and loss. Her right to compensation,
or to commission, depended on the tangible results of her
work17 - whether she brought in paying recruits
Villamaria v. CA, April 19, 2006
FACTS:
Petitioner Oscar Villamaria, Jr. was the owner of Villamaria
Motors, engaged in assembling passenger jeepneys with a
public utility franchise to operate along the Baclaran-Sucat,
Villamaria stopped assembling jeepneys and retained only
nine, four of which he operated by employing drivers on a
"boundary basis." One of those drivers was respondent
Bustamante.
Villamaria verbally agreed to sell the jeepney to Bustamante
under the "boundary-hulog scheme," where Bustamante would
remit to Villarama P550.00 a day for a period of four years;
Bustamante would then become the owner of the vehicle and
continue to drive the same under Villamaria’s franchise.
Villamaria executed a contract entitled "Kasunduan ng Bilihan
ng Sasakyan sa Pamamagitan ng Boundary-Hulog"
The parties agreed that if Bustamante failed to pay the
boundary-hulog for three days, Villamaria Motors would hold
on to the vehicle until Bustamante paid his arrears, including a
penalty of P50.00 a day; in case Bustamante failed to remit the
daily boundary-hulog for a period of one week, the Kasunduan
would cease to have legal effect and Bustamante would have
to return the vehicle to Villamaria Motors.
Bustamante was authorized to operate the vehicle to transport
passengers only and not for other purposes. He was also
required to display an identification card in front of the
windshield of the vehicle; in case of failure to do so, any fine
that may be imposed by government authorities would be
charged against his account.
Bustamante and other drivers who also had the same
arrangement with Villamaria Motors failed to pay their
respective boundary-hulog
Villamaria took back the jeepney driven by Bustamante and
barred the latter from driving the vehicle.
, Bustamante filed a Complaint 7 for Illegal Dismissal against
Villamaria.  Bustamante alleged that he was employed by
Villamaria in July 1996 under the boundary system, where he
was required to remit P450.00 a day. After one year of
continuously working for them.
the spouses Villamaria argued that Bustamante was not
illegally dismissed since the Kasunduan executed on August
7, 1997 transformed the employer-employee relationship into
that of vendor-vendee.
Labor Arbiter rendered judgment17 in favor of the spouses
Villamaria and ordered the complaint dismissed
Bustamante appealed the decision to the NLRC, 19 insisting
that the Kasunduan did not extinguish the employer-employee
relationship between him and Villamaria. NLRC ruled that
under the Kasunduan, the juridical relationship between
Bustamante and Villamaria was that of vendor and vendee,
hence, the Labor Arbiter had no jurisdiction over the complaint
Bustamante elevated the matter to the CA which reversed and
set aside the NLRC decision. ruled that the Labor Arbiter had
jurisdiction over Bustamante’s complaint. Under the
Kasunduan, the relationship between him and Villamaria was
dual: that of vendor-vendee and employer-employee
ISSUE:
Whether the Kasunduan between parties transformed the
employer-employee relationship into that of vendor-vendee
Ruling:
No.
We agree with the ruling of the CA that, under the boundary-
hulog scheme incorporated in the Kasunduan, a dual juridical
relationship was created between petitioner and respondent:
that of employer-employee and vendor-vendee. The
Kasunduan did not extinguish the employer-employee
relationship of the parties extant before the execution of said
deed.
Under this system, the owner/operator exercises control and
supervision over the driver. It is unlike in lease of chattels
where the lessor loses complete control over the chattel
leased but the lessee is still ultimately responsible for the
consequences of its use. The management of the business is
still in the hands of the owner/operator, who, being the holder
of the certificate of public convenience, must see to it that the
driver follows the route prescribed by the franchising and
regulatory authority, and the rules promulgated with regard to
the business operations. The fact that the driver does not
receive fixed wages but only the excess of the "boundary"
given to the owner/operator is not sufficient to change the
relationship between them. Indubitably, the driver performs
activities which are usually necessary or desirable in the usual
business or trade of the owner/operator.
Respondent was entitled to keep the excess of his daily
earnings as his daily wage. Thus, the daily remittances also
had a dual purpose: that of petitioner’s boundary and
respondent’s partial payment (hulog) for the vehicle. This dual
purpose was expressly stated in the Kasunduan.
Republic of the Philippines/SSC/SSS vs. Asiapro
Cooperative[G.R. No. 172101 November 23, 2007]
Facts:
Asiapro, as a cooperative, is composed of owners-members.
Under its by-laws, owners-members are of twocategories, (1)
regular member, who is entitled to all the rights and privileges
of membership; and (2) associatemember, who has no right to
vote and be voted upon and shall be entitled only to such
rights and privilegesprovided in its by-laws. Its primary
objectives are to provide savings and credit facilities and to
develop otherlivelihood services for its owners-members. In
the discharge of the aforesaid primary objectives,
respondentcooperative entered into several Service Contracts
with Stanfilco– a division of DOLE Philippines, Inc. and a
company based in Bukidnon. The owners-members do not
receivecompensation or wages from the respondent
cooperative. Instead, they receive a share in the service
surpluswhich Asiapro earns from different areas of trade it
engages in, such as the income derived from the
saidServiceContracts with Stanfilco. In order to enjoy the
benefits under the Social Security Law of 1997, the owners-
members of Asiapro assigned to Stanfilco requested the
services of the latter to register them with SSS as self-
employed and to remit their contributions as such. On
September 26, 2002, petitioner SSS sent a letter torespondent
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 makethe corresponding report and
remittance of premium contributions. Despite letters received,
respondentcooperative continuously ignored the demand of
petitioner SSS. Accordingly, SSS filed a petition on June 12,
2003before SSC against Asiapro and Stanfilco praying that
either of them be directed to register as an employer and to
report Asiapro‘s owners-members 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 employer-
employee relationship exists between it and its owners-
members, thus, petitioner SSC has no jurisdiction over the
respondent cooperative.
ISSUE:
Whether or not there exists an employer-employee
relationship between Asiapro Cooperative and its owners-
member
RULING:
YES.
In determining the existence of an employer-employee
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 the worker’s conduct, with the latter
assuming primacy in the overall consideration. 25 The most
important element is the employer’s control of the employee’s
conduct, not only as to the result of the work to be done, but also
as to the means and methods to accomplish. 26 The power of
control refers to the existence of the power and not necessarily to
the actual exercise thereof. It is not essential for the employer to
actually supervise the performance of duties of the employee; it is
enough that the employer has the right to wield that power. 27 All
the aforesaid elements are present in this case.
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 owners-members as well as its
team leaders who will be assigned at Stanfilco.28 Second. Wages
are defined as "remuneration or earnings, however designated,
capable of being expressed in terms of money, whether fixed or
ascertained, on a time, task, piece or commission basis, or other
method of calculating the same, which is payable by an employer
to an employee under a written or unwritten contract of
employment for work done or to be done, or for service rendered
or to be rendered."29 In this case, the weekly stipends or the so-
called shares in the service surplus given by the respondent
cooperative to its owners-members were in reality wages, as the
same were equivalent to an amount not lower than that
prescribed by existing labor laws, rules and regulations, including
the wage order applicable to the area and industry; or the same
shall not be lower than the prevailing rates of wages. 30 It cannot
be doubted then that those stipends or shares in the service
surplus are indeed wages, because these are given to the
owners-members as compensation in rendering services to
respondent cooperative’s client, Stanfilco. Third. It is also stated
in the above-mentioned Service Contracts that it is the
respondent cooperative which has the power to investigate,
discipline and remove the owners-members and its team leaders
who were rendering services at Stanfilco. 31 Fourth. As earlier
opined, of the four elements of the employer-employee
relationship, the "control test" is the most important. In the case at
bar, it is the respondent cooperative which has the sole control
over the manner and means of performing the services under the
Service Contracts with Stanfilco as well as the means and
methods of work.32 Also, the respondent cooperative is solely and
entirely responsible for its owners-members, team leaders and
other representatives at Stanfilco. 33 All these clearly prove that,
indeed, there is an employer-employee relationship between the
respondent cooperative and its owners-members.
Phil. Global Communications v. De Vera, June 7, 200
FACTS:
Petitioner Philippine Global Communications, Inc.
(PhilCom), is a corporation engaged in the business of
communication services and allied activities, while
respondent Ricardo De Vera is a physician by profession
whom petitioner enlisted to attend to the medical needs
of its employees
De Vera, via a letter offered his services to the petitioner,
therein proposing his plan of works required of a
practitioner in industrial medicine
The parties agreed and formalized respondent's proposal
in a document denominated as RETAINERSHIP
4
CONTRACT  which will be for a period of one year
subject to renewal
Said contract was renewed yearly.5 The retainership
arrangement went on from 1981 to 1994 with changes in
the retainer's fee. However, for the years 1995 and
1996, renewal of the contract was only made verbally.
Philcom, thru a letter6 bearing on the subject boldly
written as "TERMINATION - RETAINERSHIP CONTRACT",
informed De Vera of its decision to discontinue the
latter's "retainer's contract
De Vera filed a complaint for illegal dismissal before the
National Labor Relations Commission (NLRC), alleging
that that he had been actually employed by Philcom as
its company physician since 1981 and was dismissed
without due process
Labor Arbiter7 dismissing De Vera's complaint. NLRC,
reversed that of the Labor Arbiter, on a finding that De
Vera is Philcom's "regular employee" and accordingly
directed the company. Philcom then went to the Court of
Appeals on a Petition. Court of Appeals rendered a
decision,10 modifying that of the NLRC, and ordering
payment of separation pay to De Vera in lieu of
reinstatement
ISSUE:
whether an employer-employee relationship exists
between petitioner and respondent
RULING:
No.
the Court, in determining the existence of an employer-
employee relationship, has invariably adhered to 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 power to control the
employee's conduct, or the so-called "control test",
considered to be the most important element.
The tenor of this letter indicates that the complainant
was proposing to extend his time with the respondent
and seeking additional compensation for said extension.
This shows that the respondent PHILCOM did not have
control over the schedule of the complainant as it [is] the
complainant who is proposing his own schedule and
asking to be paid for the same. This is proof that the
complainant understood that his relationship with the
respondent PHILCOM was a retained physician and not as
an employee. If he were an employee he could not
negotiate as to his hours of work.
Here, petitioner had no control over the means and
methods by which respondent went about performing his
work at the company premises. He could even embark in
the private practice of his profession, not to mention the
fact that respondent's work hours and the additional
compensation therefor were negotiated upon by the
parties.22 In fine, the parties themselves practically
agreed on every terms and conditions of respondent's
engagement, which thereby negates the element of
control in their relationship. For sure, respondent has
never cited even a single instance when petitioner
interfered with his work.

Applying the four-fold test to this case, we initially find

that it was respondent himself who sets the parameters
of what his duties would be in offering his services to
petitioner

The fact that the complainant was not considered an

employee was recognized by the complainant himself in a
signed letter.
Coca Cola Bottlers v. Climaco, February 5, 2007

FACTS:

Respondent Dr. Dean N. Climaco is a medical doctor who was

hired by petitioner Coca-Cola Bottlers Phils., Inc. by virtue of a
Retainer Agreement

petitioner was already making inquiries regarding his status with

petitioner company. Personnel Officer of Coca-Cola Bottlers
Phils., Bacolod City, stating that respondent should be considered
as a regular part-time physician, having served the company
continuously for four (4) years. He likewise stated that respondent
must receive all the benefits and privileges of an employee

Respondent inquired from the management of petitioner company

whether it was agreeable to recognizing him as a regular
employee. The management refused to do so.

respondent filed a Complaint9 before the NLRC, seeking

recognition as a regular employee of petitioner company and
prayed for the payment of all benefits of a regular employee.
While the complaint was pending before the Labor Arbiter,
respondent received a letter from petitioner company concluding
their retainership agreement effective thirty (30) days from receipt
thereof. This prompted respondent to file a complaint for illegal
dismissal against petitioner company with the NLRC.

Labor Arbiter found that petitioner company lacked the power of

control over respondent’s performance of his duties, and
recognized as valid the Retainer Agreement between the parties.
Respondent’s motion for reconsideration was denied by the
NLRC. Respondent filed a petition for review with the Court of
Appeals.

Court of Appeals ruled that an employer-employee relationship

existed between petitioner company and respondent after
applying the four-fold test: (1) the power to hire 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.
Petitioner company filed a motion for reconsideration of the
Decision of the Court of Appeals.
ISSUE:
The main issue in this case is whether or not there exists an
employer-employee relationship between the parties
RULING:
No.
The Court, in determining the existence of an employer-employee
relationship, has invariably adhered to the four-fold test: (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, or the so-called "control test,"
considered to be the most important element. 18
The Court agrees with the finding of the Labor Arbiter and the
NLRC that the circumstances of this case show that no employer-
employee relationship exists between the parties. The Labor
Arbiter and the NLRC correctly found that petitioner company
lacked the power of control over the performance by respondent
of his duties. The Labor Arbiter reasoned that the Comprehensive
Medical Plan, which contains the respondent’s objectives, duties
and obligations, does not tell respondent "how to conduct his
physical examination, how to immunize, or how to diagnose and
treat his patients, employees of [petitioner] company, in each
case."
Considering that there is no employer-employee relationship
between the parties, the termination of the Retainership
Agreement, which is in accordance with the provisions of the
Agreement, does not constitute illegal dismissal of respondent.
Chavez v. NLRC, January 17, 2005
FACTS:
respondent company, Supreme Packaging, Inc., is in the
business of manufacturing cartons and other packaging materials
for export and distribution. It engaged the services of the
petitioner, Pedro Chavez, as truck driver
petitioner was tasked to deliver the respondent company’s
products from its factory in Mariveles, Bataan, to its various
customers, mostly in Metro Manila. The respondent company
furnished the petitioner with a truck. Most of the petitioner’s
delivery trips were made at nighttime, he deliveries were made in
accordance with the routing slips issued by respondent company
indicating the order, time and urgency of delivery. Initially, the
petitioner was paid the sum of ₱350.00 per trip. This was later
adjusted to ₱480.00 per trip and, at the time of his alleged
dismissal, the petitioner was receiving ₱900.00 per trip.
petitioner filed a complaint for regularization with the Regional
Arbitration Before the case could be heard, respondent company
terminated the services of the petitioner. Petitioner filed an
amended complaint against the respondents for illegal dismissal,
unfair labor practice and non-payment of overtime pay, nightshift
differential pay, 13th month pay, among others.
The respondents, for their part, denied the existence of an
employer-employee relationship between the respondent
company and the petitioner. They averred that the petitioner was
an independent contractor as evidenced by the contract of
service which he and the respondent company entered into.
Labor Arbiter rendered the Decision dated February 3, 1997,
finding the respondents guilty of illegal dismissal. The
respondents seasonably interposed an appeal with the NLRC.
However, the appeal was dismissed by the NLRC in its Decision 4,
however was reversed later on holding that  no employer-
employee relationship existed between the respondent company
and the petitioner. petitioner sought reconsideration He then filed
with this Court a petition. CA ruled that the petitioner was a
regular employee of the respondent company because as its
truck driver, he performed a service that was indispensable to the
latter’s business. However, on motion for reconsideration by the
respondents, the CA made a complete turn around.
ISSUE
whether there existed an employer-employee relationship
between the respondent company and the petitioner.
RULING:
Yes.
The elements to determine the existence of an employment
relationship are: (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’s
conduct.11 The most important element is the employer’s control
of the employee’s conduct, not only as to the result of the work to
be done, but also as to the means and methods to accomplish
it.12 All the four elements are present in this case.
First. Undeniably, it was the respondents who engaged the
services of the petitioner without the intervention of a third party.
Second. Wages are defined as "remuneration or earnings,
however designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, piece or
commission basis, or other method of calculating the same, which
is payable by an employer to an employee under a written or
unwritten contract of employment for work done or to be done, or
for service rendered or to be rendered
That the petitioner was paid on a per trip basis is not significant.
This is merely a method of computing compensation and not a
basis for determining the existence or absence of employer-
employee relationship. One may be paid on the basis of results or
time expended on the work, and may or may not acquire an
employment status, depending on whether the elements of an
employer-employee relationship are present or not. 14 In this case,
it cannot be gainsaid that the petitioner received compensation
from the respondent company for the services that he rendered to
the latter.
Third. The respondents’ power to dismiss the petitioner was
inherent in the fact that they engaged the services of the
petitioner as truck driver. They exercised this power by
terminating the petitioner’s services albeit in the guise of
"severance of contractual relation" due allegedly to the latter’s
breach of his contractual obligation.
Fourth. As earlier opined, of the four elements of the employer-
employee relationship, the "control test" is the most important.
Compared to an employee, an independent contractor is one who
carries on a distinct and independent business and undertakes to
perform the job, work, or service on its own account and under its
own responsibility according to its own manner and method, free
from the control and direction of the principal in all matters
connected with the performance of the work except as to the
results thereof.17  employee is subject to the employer’s power to
control the means and methods by which the employee’s work is
to be performed and accomplished.18
Although the respondents denied that they exercised control over
the manner and methods by which the petitioner accomplished
his work, a careful review of the records shows that the latter
performed his work as truck driver under the respondents’
supervision and control.
1. The truck driven by the petitioner belonged to
respondent company;
2. There was an express instruction from the respondents
that the truck shall be used exclusively to deliver
respondent company’s goods; 19
3. Respondents directed the petitioner, after completion of
each delivery, to park the truck in either of two specific
places only, to wit: at its office in Metro Manila at 2320
Osmeña Street, Makati City or at BEPZ, Mariveles,
Bataan;20 and
4. Respondents determined how, where and when the petitioner
would perform his task by issuing to him gate passes and routing
slips.
Angelina Francisco v. NLRC, August 31, 2006
FACTS:
petitioner was hired by Kasei Corporation during its incorporation
stage. She was designated as Accountant and Corporate
Secretary and was assigned to handle all the accounting needs of
the company. petitioner was designated Acting Manager for 5yrs.
petitioner was replaced by Liza R. Fuentes as Manager.
Petitioner 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.
petitioner was still connected with Kasei Corporation as Technical
Assistant to Seiji Kamura and in charge of all BIR matters. 
Thereafter, Kasei Corporation reduced her salary by P2,500.00.
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.
Private respondents averred that petitioner is not an employee of
Kasei Corporation. As technical consultant, petitioner performed
her work at her own discretion without control and supervision of
Kasei Corporation. Petitioner had no daily time record and she
came to the office any time she wanted. The company never
interfered with her work except that from time to time, the
management would ask her opinion on matters relating to her
profession. Petitioner did not go through the usual procedure of
selection of employees, but her services were engaged through a
Board Resolution designating her as technical consultant. The
money received by petitioner from the corporation was her
professional fee subject to the 10% expanded withholding tax on
professionals, and that she was not one of those reported.
ISSUE:
(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:
1 Yes,
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.
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.
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 from August 1, 1999 to
December 18, 2000. 26 When petitioner was designated General
Manager, respondent corporation made a report to the SSS
signed by Irene Ballesteros. 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. 27
It is therefore apparent that petitioner is economically dependent
on respondent corporation for her continued employment in the
latter’s line of business
2 The corporation constructively dismissed petitioner when it
reduced her salary by P2,500 a month.
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

the broader economic reality test, the petitioner can likewise be

said to be an employee of respondent corporation because she
Orozco v. CA, August 13, 2008

FACTS:

Philippine Daily Inquirer (PDI), PDI engaged the services of

petitioner to write a weekly column for its Lifestyle section. Magsanoc
met with the Lifestyle section editor to discuss how to improve said
section. They agreed to cut down the number of columnists by
keeping only those whose columns were well-written, with regular
feedback and following. In their judgment, petitioner’s column failed
to improve, continued to be superficially and poorly written, and
failed to meet the high standards of the newspaper. Hence, they
decided to terminate petitioner’s column

Aggrieved by the newspaper’s action, petitioner filed a complaint for

illegal dismissal, backwages, moral and exemplary damages, and
other money claims before the NLRC. Labor Arbiter Arthur Amansec
rendered a Decision in favor of petitioner. PDI appealed the Decision
to the NLRC. affirming the Labor Arbiter’s Decision.

PDI then filed a Petition for Review 12 before this Court of Appeals
seeking the reversal of the NLRC Decision. The CA rendered its
assailed Decision on June 11, 2002. It set aside the NLRC Decision
and dismissed petitioner’s Complaint.

ISSUE:

whether petitioner is an employee of PD

RULING:
NO. the test is whether the employer controls or has reserved the
right to control the employee, not only as to the work done, but also
as to the means and methods by which the same is accomplished.
The main determinant therefore 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
Petitioner believes that respondents’ acts are meant to control how
she executes her work. We do not agree. A careful examination
reveals that the factors enumerated by the petitioner are inherent
conditions in running a newspaper. In other words, the so-called
control as to time, space, and discipline are dictated by the very
nature of the newspaper business itself
Petitioner has not shown that PDI, acting through its editors, dictated
how she was to write or produce her articles each week. Aside from
the constraints presented by the space allocation of her column,
there were no restraints on her creativity; petitioner 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.
totality of circumstances surrounding the true nature of the
relationship between the parties
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.
independent contractor is one who carries on a distinct and
independent business and undertakes to perform the job, work, or
service on one’s own account and under one’s own responsibility
according to one’s own manner and method, free from the control
and direction of the principal in all matters connected with the
performance of the work except as to the results thereof.

The newspaper’s power to approve or reject publication of any

specific article she wrote for her column cannot be the control
contemplated in the "control test," as it is but logical that one who
commissions another to do a piece of work should have the right to
accept or reject the product. The important factor to consider in the
"control test" is still the element of control over how the work itself is
done, not just the end result thereof.

Aside from the control test, this Court has also used the economic
reality test. The economic realities prevailing within the activity or
between the parties are examined, taking into consideration the
Matling Industrial v. Coros, October 13, 2010

FACTS:

After his dismissal by Matling the respondent filed a complaint for

illegal suspension and illegal dismissal against Matling and some
of its corporate officers (petitioners) in the NLRC

The petitioners moved to dismiss the complaint, 4 raising the

ground, among others, that the complaint pertained to the
jurisdiction of the Securities and Exchange Commission (SEC)
due to the controversy being intra-corporate inasmuch as the
respondent was a member of Matling’s Board of Directors aside
from being its Vice-President for Finance and Administration prior
to his termination.

The respondent opposed the petitioners’ motion to

dismiss,5 insisting that his status as a member of Matling’s Board
of Directors was doubtful, considering that he had not been
formally elected as such; that he did not own a single share of
stock in Matling,

On October 16, 2000, the LA granted the petitioners’ motion to

dismiss. The respondent appealed to the NLRC. The NLRC set
aside the dismissal, concluding that the respondent’s complaint
for illegal dismissal was properly cognizable by the LA, not by the
SEC, because he was not a corporate officer by virtue of his
position in Matling, albeit high ranking and managerial, not being
among the positions listed in Matling’s Constitution and By-Laws

petitioners elevated the issue to the CA. CA dismissed the

petition
ISSUE:
whether the respondent was a corporate officer of Matling or not
RULING:
No.
An "office" is created by the charter of the corporation and the
officer is elected by the directors or stockholders. On the other
hand, an employee occupies no office and generally is employed
not by the action of the directors or stockholders but by the
managing officer of the corporation who also determines the
compensation to be paid to such employee.
In this case, respondent was appointed vice president for
nationwide expansion by Malonzo, petitioner’'s general manager,
not by the board of directors of petitioner. It was also Malonzo
who determined the compensation package of respondent. Thus,
respondent was an employee, not a "corporate officer." The CA
was therefore correct in ruling that jurisdiction over the case was
properly with the NLRC, not the SEC.
Cosare v. Broadcom Asia, February 5, 2014
FACTS:
Petitioner Renato Real was the Manager of respondent
corporation Sangu Philippines, Inc., a corporation
engaged in the business of providing manpower for
general services, like janitors, janitresses and other
maintenance personnel, petitioner, together with 29
others who were employed by respondent corporation,
filed their respective Complaints 2  for illegal dismissal
cralaw
against the latter and respondent Kiichi Abe, the
corporation's Vice-President and General Manager.
With regard to petitioner, he was removed from his
position as Manager through Board Resolution 2001-
033  adopted by respondent corporation's Board of
cralaw
Directors. Petitioner complained that he was neither
notified of the Board Meeting during which said board
resolution was passed nor formally charged with any
infraction. He just received from respondents a letter 4  
cralaw
Respondents, on the other hand, refuted petitioner's
claim of illegal dismissal by alleging that after petitioner
was appointed Manager, he committed gross acts of
misconduct detrimental to the company
Labor Arbiter in a Decision5  dated June 5, 2003 declared
cralaw
petitioner and his co-complainants as having been
illegally dismissed and ordered respondents to reinstate
complainants to their former positions
Respondents thus appealed to the National Labor
Relations Commission (NLRC). The NLRC found such
contention of respondents to be meritorious. Aside from
petitioner's own admission in the pleadings that he is a
stockholder and at the same time occupying a
managerial position, the NLRC also gave weight to the
corporation's General Information Sheet6  (GIS) dated
cralaw
October 27, 1999 listing petitioner as one of its
stockholders, consequently his termination had to be
effected through a board resolution.
Before the CA, petitioner imputed upon the NLRC grave
abuse of discretion amounting to lack or excess of
jurisdiction. CA sided with respondents and affirmed the
NLRC's finding that aside from being a stockholder of
respondent corporation, petitioner is also a corporate
officer thereof and consequently, his complaint is an
intra-corporate controversy over which the labor arbiter
has no jurisdiction.
Petitioner continues to insist that he is not a corporate
officer. He argues that a corporate officer is one who
holds an elective position as provided in the Articles of
Incorporation or one who is appointed to such other
positions by the Board of Directors as specifically
authorized by its By-Laws. And, since he was neither
elected nor is there any showing that he was appointed
by the Board of Directors to his position as Manager,
petitioner maintains that he is not a corporate officer
contrary to the findings of the NLRC and the CA.
ISSUE:
whether petitioner's complaint for illegal dismissal
constitutes an intra-corporate controversy and thus,
beyond the jurisdiction of the Labor Arbiter.
RULING:
No.
While respondents repeatedly claim that petitioner was
appointed as Manager pursuant to the corporation's By-
Laws, the above-quoted inconsistencies in their
allegations as to how petitioner was placed in said
position, coupled by the fact that they failed to produce
any documentary evidence to prove that petitioner was
appointed thereto by action or with approval of the
board, only leads this Court to believe otherwise.
It has been consistently held that "[a]n 'office' is created
by the charter of the corporation and the officer is
elected (or appointed) by the directors or
stockholders."27  Clearly here, respondents failed to prove
cralaw
that petitioner was appointed by the board of directors.
Thus, we cannot subscribe to their claim that petitioner is
a corporate officer. Having said this, we find that there is
no intra-corporate relationship between the parties
insofar as petitioner's complaint for illegal dismissal is
concerned and that same does not satisfy the
relationship test.
As earlier stated, complainant-appellee Renato Real
was hired as the manager of respondent-appellant
Sangu. As such, his position was reposed with full trust
and confidence.
Loreche-Amit v. Cagayan de Oro Medical Center, June 3,
2019

FACTS:

Dr. Mary Jean P. Loreche-Amit (petitioner) started

working with Cagayan De Oro Medical Center, Inc., when
she was engaged by the late Dr. Jose N. Gaerlan (Dr.
Gaerlan Upon the demise of Dr. Gaerlan, CDMC's Board
of Directors formally appointed petitioner as Chief
Pathologist for five years or until May 15, 2011. 4

Board of Directors passed a resolution, recalling

petitioner's appointment as Chief Pathologist. This
prompted petitioner to file a complaint for illegal
dismissal, contending that she was dismissed by CDMC
from her work without just cause and due process.5

For their part, Dr. Emano, Dr. Oh, and CDMC (collectively
referred to as respondents) averred that petitioner was
not hired by them as she merely assisted Dr. Gaerlan in
operating the hospital's laboratory. Respondents
maintained that petitioner worked at the same time as
pathologist in Capitol College Hospital and J.R. Borja
Memorial Hospital as she was not prohibited to do so.

The Labor Arbiter found that petitioner is a corporate

officer of the hospital because of her appointment by the
Board of Directors through a resolution.
On appeal, the NLRC in a Resolution 12 dated March 31,
2009, affirmed the ruling of the Labor Arbiter and
reiterated that petitioner is a corporate officer and that
there was no employer-employee relationship between
CDMC and her. As it is, the issue is an intra-corporate
matter, the jurisdiction of which belongs to the regular
courts
Petitioner argues that she is not a corporate officer
because her position as Pathologist is not among those
included in the by-laws of CDMC.
ISSUE:
Whether or not the labor tribunals have jurisdiction over
the complaint for illegal dismissal filed by petitioner.
RULING:
NO.
To be considered as a corporate officer, the designation
must be either provided by the Corporation Code or the
by-laws of the corporation, to wit:
cralawred
Corporate officers are given such character either by the
Corporation Code or by the corporation's by-laws. Under
Section 25 of the Corporation Code, the corporate
officers are the president, secretary, treasurer and such
other officers as may be provided in the by-laws. Other
officers are sometimes created by the charter or by-laws
of a corporation, or the board of directors may be
empowered under the by-laws of a corporation to create
additional offices as may be necessary.17 (Citation
omitted)
In this case, nowhere in the records could the by-laws of
CDMC be found. An appointment through the issuance of
a resolution by the Board of Directors does not make the
appointee a corporate officer. It is necessary that the
position is provided in the Corporation Code or in the by-
laws. In the absence of the by-laws of CDMC, there is no
reason to conclude that petitioner, as Pathologist, is
considered as a corporate officer.
However, this is not an automatic declaration that
petitioner is an employee of CDMC. The four-fold test, to
wit: 1) the selection and engagement of the employees;
2) the payment of wages; 3) the power of dismissal; and
4) the power to control the employee's conduct, must be
applied to determine the existence of an employer-
employee relationship.21
In this case, it is apparent that CDMC, through the Board
of Directors, exercised the power to select and supervise
petitioner as the Pathologist. It must be emphasized that
petitioner was appointed as Pathologist with a term of
five years from May 2006 to May 2011. She was likewise
paid compensation which is at 4% of the gross receipts
of the Clinical Section of the laboratory.
However, based on the records, CDMC does not exercise
the power of control over petitioner.
The power to control the work of the employee is
considered the most significant determinant of the
existence of an employer-employee relationship. This
test is premised on whether the person for whom the
services are performed reserves the right to control both
the end achieved and the manner and means used to
achieve that end.
petitioner was working for two other hospitals aside from
CDMC, not to mention those other hospitals which she
caters to when her services are needed. Such fact
evinces that petitioner controls her working hours. On
this note, relevant is the economic reality test which this
Court has adopted in determining the existence of Intel Technology v. NLRC & Cabiles, February 5, 2014
employer-employee relationship. Under this test, the
economic realities prevailing within the activity or
FACTS:
between the parties are examined, taking into
consideration the totality of circumstances surrounding
Cabiles was initially hired by Intel Phil. on April 16, 1997 as an
the true nature of the relationship between the parties
Inventory Analyst. He was subsequently promoted several times
over the years and was also assigned at Intel Arizona and Intel
Thus, the fact that petitioner continued to work for other Chengdu. He later applied for a position at Intel Semiconductor
hospitals strengthens the proposition that petitioner was Limited Hong Kong (Intel HK).
not wholly dependent on CDMC.
In a letter,  dated December 12, 2006, Cabiles was offered the
5

position of Finance Manager by Intel HK. Before accepting the

offer, he inquired from Intel Phil., through an email, the
consequences of accepting the newly presented opportunity in
Hong Kong. He asked that if will be moving to Hong Kong as a
local hire starting February 1, would I still be entitled to retirement
benefits?? Do we roundup the years of service if its close enough
to 10 years

Intel Phil., , replied as follows:

Jerry – you are not eligible to receive your retirement benefit

given that you have not reached 10 years of service at the time
you moved to Hong Kong. We do not round up the years of
service.

Intel Phil. issued Cabiles his "Intel Final Pay Separation Voucher"
Cabiles executed a Release, Waiver and Quitclaim (Waiver)  in 9

favor of Intel Phil. acknowledging receipt of ₱165,857.62 as full

and complete settlement of all benefits due him by reason of his
separation from Intel Phil
About two years thereafter, or on August 18, 2009, Cabiles filed a
complaint for non-payment of retirement benefits and for moral
and exemplary damages with the NLRC Regional Arbitration. He
insisted that he was employed by Intel for 10 years and 5 months
a period which included his seven (7) month stint with Intel HK.
Thus, he believed he was qualified to avail of the benefits under
the company’s retirement policy allowing an employee who
served for 10 years or more to receive retirement benefits.
LA ordered Intel Phil., to pay equivalent as retirement pay. On
appeal, the NLRC affirmed with modification the LA decision.
Aggrieved, Intel Phil. elevated the case to the CA but it was
denied.
ISSUE:
Whether Cabiles employment with Intel HK as a continuation of
his service with Intel Phil
RULING:
No.
Resignation is the formal relinquishment of an office,  the overt
24
act of which is coupled with an intent to renounce. This intent
could be inferred from the acts of the employee before and after
the alleged resignation.
The continuity, existence or termination of an employer-employee
relationship in a typical secondment contract or any employment
contract for that matter is measured by the following yardsticks:
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’s
conduct. 28
As applied, all of the above benchmarks ceased upon Cabiles’
assumption of duties with Intel HK on February 1, 2007. Intel HK
became the new employer. It provided Cabiles his compensation.
Cabiles then became subject to Hong Kong labor laws, and
necessarily, the rights appurtenant thereto, including the right of
Intel HK to fire him on available grounds. Lastly, Intel HK had
control and supervision over him as its new Finance Manager.
Evidently, Intel Phil. no longer had any control over him.
Although in various instances, his move to Hong Kong was
referred to as an "assignment," it bears stressing that it was
categorized as a "permanent transfer." In Sta. Maria v.
Lopez,  the Court held that "no permanent transfer can take place
29
unless the officer or employee is first removed from the position
held, and then appointed to another position." Undoubtedly,
Cabiles’ decision to move to Hong Kong required the
abandonment of his permanent position with Intel Phil. in order for
him to assume a position in an entirely different company.
Clearly, the "transfer" was more than just an assignment. It
constituted a severance of Cabiles’ relationship with Intel Phil., for
the assumption of a position with a different employer, rank,
compensation and benefits.
What distinguishes Intel Chengdu and Intel Arizona from Intel HK
is the lack of intervention of Intel Phil. on the matter. In the two
previous transfers, Intel Phil. remained as the principal employer
while Cabiles was on a temporary assignment. By virtue of which,
it still assumed responsibility for the payment of compensation
and benefits due him. The assignment to Intel HK, on the other
hand, was a permanent transfer and Intel Phil. never participated
in any way in the process of his employment there. It was Cabiles
himself who took the opportunity and the risk. If it were indeed
similar to Intel Arizona and Intel Chengdu assignments, Intel
Philippines would have had a say in it.
Royale Homes v. Alcantara, July 28, 2014

FACTS:

Royale Homes, a corporation engaged in marketing real estates,

appointed Alcantara asits Marketing Director for a fixed period of
one year. His work consisted mainly of marketing Royale Homes’
realestate inventories on an exclusive basis. Royale Homes
reappointed him for several consecutive years, the last of which
covered he held the position of Division 5 Vice-President-Sales. 8

Alcantara filed a Complaint for Illegal Dismissal  against Royale

9

Homes. He alleged 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
10

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

Royale Homes, on the other hand, vehemently denied that

Alcantara is its employee. It argued that the appointment paper of
Alcantara isclear that it engaged his services as an independent
sales contractorfor 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.
Labor Arbiter rendered a Decision  holding that Alcantara is an
11
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.
Both parties appealed the Labor Arbiter’s Decision to the NLRC
whih reversed and set aside the ruling of LA. Alcantara thus filed
a Petition for Certiorari  with the CA imputing grave abuse of
17
discretion on the partof the NLRC in ruling that he is not an
employee of Royale Homes
CA promulgated its Decision  granting Alcantara’s Petition and
18
reversing the NLRC’s Decision. Applying the four-fold and
economic reality tests, it held thatAlcantara is an employee of
Royale Homes. 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.
ISSUE:
whether Alcantara was an independent contractor or anemployee
of Royale Homes.
RULING:
Alcantara is an independent contractor.
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
29
ascertaining the existence of employer-employee relationship is
the "right of control test.
Not every form of control is indicative of employer-employee
relationship.  A person who performs work for another and is
1âwphi1
subjected to its rules, regulations, and code of ethics does not
necessarily become an employee.  As long as the level of control
34
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.
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
employeremployee relationship unlike the second, which address
both the result and the means used to achieve.
In this case, the Court agrees with Royale Homes that the rules,
regulations, code of ethics, and periodic evaluation alluded to
byAlcantara do not involve control over the means and methods
by which he was to performhis job. Understandably, Royale
Homes has to fix the price, impose requirements on prospective
buyers, and lay down the terms and conditionsof the sale,
including the mode of payment, which the independent
contractors must follow. It is also necessary for Royale Homes to
allocateits inventories among its independent contractors,
determine who has priority in selling the same, grant commission
or allowance based on predetermined criteria, and regularly
monitor the result of their marketing and sales efforts. But tothe
mind of this Court, these do not pertain to the means and
methods of how Alcantara was to perform and accomplish his
task of soliciting sales. They do not dictate upon him the details of
how he would solicit sales or the manner as to how he would
transact business with prospective clients
The element of payment of wages is also absent in thiscase. 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, Philippine Health
Insurance Corporation, or Pag-Ibig Fund.
Bazar v. Ruizol, October 19, 2016
FACTS:
Respondent Carlos A. Ruizol was a mechanic at Norkis
Distributors and assigned at the Surigao City branch. He
was terminated. Respondent added that he was
dismissed by petitioner because the latter wanted to
appoint his protege as a mechanic. Respondent filed a
complaint before Regional Arbitration for illegal dismissal
and other monetary claims.
Petitioner, on the other hand, alleged that NDI is a
corporation engaged in the sale, wholesale and retail of
Yamaha motorcycle units. Petitioner countered that
respondent is not an employee but a franchised
mechanic of NDI pursuant to a retainership agreement.
Executive Labor Arbiter ruled in favor of respondent
declaring him a regular employee of NDI and that he was
illegally dismissed.
On appeal, petitioner reiterated that there is no
employer-employee relationship between NDI and
respondent because the latter is only a retainer mechanic
of NDI. Finding merit in the appeal, the NLRC reversed
the ruling of the Labor Arbiter and dismissed the case for
lack of cause of action. The NLRC also ruled that NDI had
no power of control and supervision over the means and
method by which respondent performed job as mechanic
Respondent filed a petition before the Court of Appeals,
Court of Appeals:granted the petition. The Court of
Appeals found that there was employer-employee
relationship between respondent and NDI and that
respondent was unlawfully dismissed
ISSUE:
Whether here was an employer-employee relationship
between the parties
RULING:
YES.
The four-fold test used in determining the, existence of
employer employee relationship are: (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 with respect to
the means and. method by which the work is to be
accomplished.
The control test is the most crucial and determinative
indicator of the presence or absence of an employer-
employee relationship. Under the control test, an
employer-employee 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.
It was shown that respondent had to abide by the
standards sets by NDI in conducting repair work on
Yamaha motorbikes done in NDI's service shop. As a
matter of fact, on allegations that respondent failed to
live up to the demands of the work, he was sent several
memoranda14 by NDI
Atienza v. Saluta, June 17, 2019
FACTS:
Respondent alleged that he was hired as a company
driver by CRV Corporatio hile driving along North Luzon
Expressway, respondent hit the rear portion of the
vehicle in front of him. Thus, he was made to pay the
amount of P15,000.00 to answer for the damages caused
to the said vehicle. The amount was first advanced by
the company, but will be deducted from his monthly
salary. On the said occasion, the authorities confiscated
his driver's license
respondent told the petitioner that he needed to absent
himself from work because he had to claim his driver's
license petitioner refused to excuse him from work
because she had appointments lined up that day. As it
was illegal for him to drive without a license, he was
constrained to get his license the following day,
December 24, 2014; thus, he failed to report for work.
However, before going on leave, he first requested
another company driver to drive for the petitioner. When
petitioner learned that he was not around, she
immediately called him up saying, "kung hindi ka
makakapag-drive ngayon, mabuti pa maghiwalay na
tayo." Upon hearing such words, respondent concluded
that he had been verbally terminated.
When respondent went to CRV Corporation at around
3:00 p.m. on the same day, Rodolfo Reyes (Reyes), the
General Manager of the company, confirmed that he was
already terminated from work. As it was Christmas Eve,
he requested that he be given his last salary, but this
was refused on the ground that he has yet to reimburse
the company the P15,000.00 it had advanced.6
spondent filed a complaint against CRV Corporation and
the petitioner for illegal dismissal, non-payment of
wages, overtime pay, holiday pay, premium pay for work
on holidays and rest day, illegal deduction, and issuance
of a certificate of employment.
For her part, petitioner contended that respondent was
not dismissed from work, rather he abandoned his job
when he refused to report for work and took a leave of
absence without permission. Petitioner claimed that
respondent was not an employee of CRV Corporation, but
was hired by the petitioner as her personal/family driver
Labor Arbiter dismissed respondent's complaint except
insofar as his claim for illegal deduction and request for
the issuance of a certificate of employment are
concerned.
The Labor Arbiter held that respondent failed to prove by
substantial evidence that he was an employee of CRV
Corporation. On appeal, the NLRC reversed and set aside
the decision of the Labor Arbiter. , petitioner elevated the
case before the CA.
ISSUE:
Whether the respondent is a company driver of CRV CORP
RULING:
No.
To ascertain the existence of an employer-employee
relationship, jurisprudence has invariably adhered to 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 power to control the
employee's conduct, or the so-called "control test." 21 
In this case, a scrutiny of the records will bear out that
the respondent failed to substantiate his claim that he
was a company driver of CRV Corporation.
Apart from his staunch insistence that he was a company
driver of CRV Corporation, respondent did not proffer any
competent evidence, documentary or otherwise, as
would prove his claimed employment with the company.
In the case at bench, the respondent did not present his
employment contract, company identification card,
company pay slip or such other document showing his
inclusion in the company payroll that would show that his
services had been engaged by CRV Corporation. His
contention that he received his salaries through the ATM
like the other employees of the company, even if true,
does not sufficiently show that his salaries were paid by
the company as its employee. Respondent also failed to
present any proof showing how the company wielded the
power of dismissal and control over him. Evidence is
wanting that the company monitored the respondent in
his work.  It had not been shown that respondent was
required by the company to clock in to enable it to check
his work hours and keep track of his absences. On the
other hand, the records showed that petitioner had a say
on how he performed his work. It is the petitioner who
decides when she needed the services of the respondent.
As a matter of fact, the respondent had to secure
permission from the petitioner before he can take a leave
of absence from work. That petitioner also enjoyed the
power of dismissal is beyond question given that
respondent himself believed that the petitioner verbally
terminated him.23 Because the respondent failed to
establish his employment with CRV Corporation, the
Court must necessarily agree with the Labor Arbiter that
respondent was the personal/family driver of the
petitioner.