Right of control test: "where the person for whom the services are performed reserves a right to

control not only the end to be achieved but also the means to be used in reaching such end,
I.

Title: LVN Pictures Inc v. Phil. Musicians Guild (110 Phil. 725)
Petitioner: LVN Pictures Inc., Sampaguita Pictures, Inc. (petitioner-appellant)
Respondent: PHILIPPINE MUSICIANS Guild (FFW) and COURT OF
INDUSTRIAL RELATIONS
Ponente: Concepcion, J

II.

Facts: Respondent Philippine Musicians Guild (FFW) is a duly registered legitimate

labor organization. LVN Pictures, Inc., Sampaguita Pictures, Inc., and Premiere
Productions, Inc. are corporations, duly organized under the Philippine laws, engaged
in the making of motion pictures and in the processing and distribution thereof.
Petitioner companies employ musicians for the purpose of making music recordings
for title music, background music, musical numbers, finale music and other incidental
music, without which a motion picture is incomplete. Ninety-five( 95%) percent of all
the musicians playing for the musical recordings of said companies are members of
the Guild. The Guild has no knowledge of the existence of any other legitimate labor
organization representing musicians in said companies. Premised upon these
allegations, the Guild prayed that it be certified as the sole and exclusive bargaining
agency for all musicians working in the aforementioned companies. In the
irrespective answers, the latter denied that they have any musicians as employees, and
alleged that the musical numbers in the filing of the companies are furnished by
independent contractors. The lower court sustained the Guilds theory. Are
consideration of the order complained of having been denied by the Court enbanc,
LVN Pictures, inc., and Sampaguita Pictures, Inc., filed these petitions for review for
certiorari
Issue: Whether the musicians in question(Guild members) are employees of the
petitioner film companies.
Ruling: The Court agreed with the lower courts decision, to wit: Lower court
resorted to apply R.A. 875 and US Laws and jurisprudence from which said Act was
patterned after. (Since statutes are to be construed in the light of purposes achieved
and the evils sought to be remedied). It ruled that the work of the musical director and
musicians is a functional and integral part of the enterprise performed at the same
studio substantially under the direction and control of the company. In other words, to
determine whether a person who performs work for another is the latter's employee or
an independent contractor, the National Labor Relations relies on 'the right to control'
test . Under this test an employer-employee relationship exist where the person for
whom the services are performed reserves the right to control not only the end to be
achieved, but also the manner and means to be used in reaching the end. (United
Insurance Company, 108, NLRB No. 115.).Notwithstanding that the employees are
called independent contractors', the Board will hold them to be employees under the
Act where the extent of the employers control over them indicates that the
relationship is in reality one of employment.(John Hancock Insurance Co., 2375-D,

III.
IV.

1940, Teller, Labor Dispute Collective Bargaining, Vol.). The right of control of the
film company over the musicians is shown (1) by calling the musicians through 'call
slips' in 'the name of the company; (2) by arranging schedules in its studio for
recording sessions; (3) by furnishing transportation and meals to musicians; and(4) by
supervising and directing in detail, through the motion picture director, the
performance of the musicians before the camera, in order to suit the music they are
playing to the picture which is being flashed on the screen. The musical directors
have no such control over the musicians involved in the present case. Said musical
directors control neither the music to be played, nor the musicians playing it. The
Premier Production did not appeal the decision of the Court en banc (thats why its
not one of the petitioners in the case) film companies summon the musicians to work,
through the musical directors. The film companies, through the musical directors, fix
the date, the time and the place of work. The film companies, not the musical
directors, provide the transportation to and from the studio. The film companies
furnish meal at dinner time. It is well settled that "an employer-employee relationship
exists . . .where the person for whom the services are performed reserves a right to
control not only the end to be achieved but also the means to be used in reaching such
end . . . ." The decisive nature of said control over the "means to be used", is
illustrated in the case of Gilchrist Timber Co., et al., in which, by reason of said
control, the employer-employee relationship was held to exist between the
management and the workers, notwithstanding the intervention of an alleged
independent contractor, who had, and exercise, the power to hire and fire said
workers. The aforementioned control over the means to be used" in reading the
desired end is possessed and exercised by the film companies over the musicians in
the cases before us. WHEREFORE, the order appealed from is hereby affirmed, with
costs against petitioners herein. It is so ordered

I.
II.

III.
IV.

Title: Dy Keh Beng v. International Labor

Ponente: De Castro, J
FACTS: A charge of unfair labor practice was filed against Dy Keh Beng, a proprietor
of a basket factory, by dismissing Solano and Tudla for their union activities. Dy Keh
Beng contended that he did not know Tudla and Solano was not his employee because
the latter came to the establishment only when there was work which he did on
pakiaw basis. Dy Keh Beng countered with a special defense of simple extortion
committed by the head of the labor union.
ISSUE: W/N there existed an employee-employer relation between petitioner and
respondents
HELD:
Yes. Evidence showed that the work of Solano and Tudla was continuous except in
the event of illness, although their services were compensated on piece basis. The
control test calls for the existence of the right to control the manner of doing the
work, not the actual exercise of the right considering that Dy Keh Beng is engaged in
the manufacture of baskets known as kaing, those working under Dy would be

subject to Dys specifications such as the size and quality of the kaing. And since
the laborers are done at Dys establishments, it could be inferred that Dy could easily
exercise control upon them. As to the contention that Solano was not an employee
because he worked on piece basis, the court ruled that it should be determined that if
indeed payment by piece is just a method of compensation and does not define the
essence of the relation. Payment cannot be construed by piece where work is done in
such establishment so as to put the worker completely at liberty to turn him out and
take it another at pleasure Justice Perfecto also contended that pakyaw system is a
labor contract between employers and employees between capitalists and laborers.
Wherefore, the award of backwages is modified to an award of backwages for 3 years
at the rated of compensation the employees were receiving at the time of dismissal.
CORPORAL SR. VS. NLRC
341 SCRA 658
[G.R. No. 129315. October 2, 2000]
Facts: 5 male barbers and 2 female manicurists (Petitioners) worked at New Look Barbershop, a
sole proprietorship owned and managed by Vicente Lao which in 1982 was taken over by Lao
Enteng Co., Inc., (respondent corporation) a corporation formed by Vicente Laos children. The
petitioners were allowed to work there until April 1985 when they were told that the barbershop
building was sold and their services are no longer needed.
Petitioners filed with the Arbitration branch of NLRC a complaint for illegal dismissal, illegal
deduction, separation pay, non-payment of 13th month pay and salary differential. Also they seek
for refund of P1.00 collected from each of them daily as salary of the barbershops sweeper.
Respondent Corporation alleged that petitioners were Joint Venture (JV) partners receiving 50%
commission (Petitioners admitted in receiving 50-60%), therefore no employer-employee
relationship existed. And assuming arguendo that employer-employee relationship existed,
petitioners were not entitled to separation pay since cessation of the business was due to serious
business losses. Also, they allege that the barbershop had always been a JV partnership with the
operation and management left entirely to petitioners and that the former had no control over the
latter who could freely come and go as they wish. Lastly, they allege that some of the petitioners
were allowed to register in SSS only as an act of accommodation.
The Labor Arbiter dismissed the complaint and found that there was a JV and no employeremployee relationship. Also that the business was closed due to serious business losses or
financial reverses and the law does not compel the establishment to pay separation pay to
whoever were its employees. On appeal, NLRC affirmed the decision but held that petitioners
were considered independent contractors and not employees. The MR was also denied by NLRC,
hence, this petition on certiorari.
Issue: WON there was an employer-employee relationship.

Held: YES. Petitioners are employees of Respondent Corporation and shall be accorded the
benefits given in Art. 283 of the Labor Code granting separation pay equivalent to 1 month pay
for every year of service and also to 13th month pay. The other claims of petitioners are found to
be without basis.

No documentary evidence of the existence of JV other than the self-serving affidavit of

the company president.
The power of control in the 4-fold test (employer-employee relationship) refers to the
EXISTENCE and NOT THE EXERCISE of such power the following elements must be
present for an employer-employee relationship to exist: (1) the selection and engagement
of the workers; (2) power of dismissal; (3) the payment of wages by whatever means; and
(4) the power to control the worker's conduct, with the latter assuming primacy in the
overall consideration.
The records show that Vicente Lao engaged the petitioners to work for the barbershop
and retained them after it was taken over by the respondent corporation who continuously
paid their wages. Also, the fact that the petitioners worked in the barbershop owned and
operated by respondents, and that they were required to report daily, observing definite
hours of work, they were not free to accept employment elsewhere and devoted their full
time working in the barbershop proves the existence of the power of control.

The petitioners are not independent contractors. An independent contractor is one who
undertakes "job contracting", i.e., a person who (a) carries on an independent business
and undertakes the contract work on his own account under his own responsibility
according to his own manner and method, free from the control and direction of his
employer or principal in all matters connected with the performance of the work except
as to the results thereof, and (b) has substantial capital or investment in the form of tools,
equipment, machineries, work premises, and other materials which are necessary in the
conduct of the business. Petitioners have neither of the above since the tools used such as
scissors, razors, nail cutters, polishes, etc. cannot be considered substantial capital or
investment.

While it is no longer true that membership to SSS is predicated on the existence of an

employee-employer relationship since the policy is now to encourage even the selfemployed dressmakers, manicurists and jeepney drivers to become SSS members, we
could not agree with private respondents that petitioners were registered with the Social
Security System as their employees only as an accommodation. As we have earlier
mentioned private respondent showed no proof to their claim that petitioners were the
ones who solely paid all SSS contributions. It is unlikely that respondents would report
certain persons as their workers, pay their SSS premium as well as their wages if it were
not true that they were indeed their employee.

Alejandro Maraguinot and Paulino Enero v. NLRC, GR No. 120969, 22 January 1998,
Davide, First Division
Facts
Maraguinot and Enero were both hired by Vic del Rosario to work for his projects under Viva
films;
Sometime in 1992, they asked for their salary to be adjusted according to the minimum wage;
It is to be noted that at the time, Maraguinot was having a salary of only 475 per week (this was
in 1991);
Both Maraguinot and Enero asked their supervisors for their wage to be adjusted according to the
minimum wage however, they were told that their concern is to be aired to the owner of Viva;
They were told that their wage will be adjusted but they have to sign a blank employment
contract; Enero did not accept and so he was fired;
Maraguinot was fired but was asked to return few days after;
He was once again asked to sign a blank employment contract in exchange of the adjustment of
his salary according to the minimum wage; this, he did not accede to, hence, he was fired;
A case was filed by the two against Viva but NLRC ruled in favour of Viva saying that there was
really no employer-employee relationship between them;
Issue
1. Whether there was employer-employee relationship between Viva and the complainants
that would merit a filing of an illegal dismissal case?
Held
1. Yes, the complainants are employees of Viva. In fact in most cases, it was Viva that paid
the complainants. Further, the argument of Viva that they are contractual employees is
untenable for the reason that the complainants are employed on long-term basis.