Encyclopedia Britannica, Inc vs. NLRC, G.R. No.

87098, November 4, 1996; 264

SCRA 1

(Labor Standards Inexistence of employer-employee relationship)

Facts: Private respondent was a sales division manager of private petitioner and was
in charge of selling the latters products through sales representatives. As
compensation, private respondent receive commissions from the products sold by
his agents. After resigning from office to pursue his private business, he filed a
complaint against the petitioner, claiming for non-payment of separation pay and
other benefits.

Petitioner alleged that complainant was not its employee but an independent dealer
authorized to promote and sell its products and in return, received commissions
there from. Petitioner did not have any salary and his income from petitioner was
dependent on the volume of sales accomplished. He had his own office, financed the
business expense, and maintained his own workforce. Thus petitioner argued that it
had no control and supervision over the complainant as to the manner and means he
conducted his business operations.

The Labor Arbiter ruled that complainant was an employee of the petitioner
company. Petioner had control over the complainant since the latter was required to
make periodic reports of his sales activities to the company.

Issue: Whether or not there exists an employer-employee relationship.

Held: No. Control of employees conduct is commonly regarded as the most crucial
and determinative indicator of the presence or absence of an employer-employee
relationship. Under this, an employer-employee relationship exists 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 that end.

The fact that petitioner issued memoranda to private respondent and to other
division sales managers did not prove that petitioner had actual control over them.
The different memoranda were merely guidelines on company policies which the
sales managers follow and impose on their respective agents.

1
 Association of Marine Officers and Seamen of Reyes and Lim Co. vs.
Laguesma, 239 SCRA 460

(Labor Standards Marine officers are managerial employees)

Facts: Petitioner union claims that the positions major patron, minor patron, chief
mate and chief engineer are not managerial employees but rank and file, and hence
these employees would be eligible to form part of the union and take part in the
certification election. Petitioner contends that the marine officers in question must
possess the power to lay down and formulate management policies aside from just
executing such policies. Said marine officers do not have this power because they
merely navigate the bay and rivers of Pasig and Bataan hauling LPGs.

Public respondent opined in an evaluation of the afore-mentioned job descriptions

that these are managerial positions based on Article 212 (m) of the Labor Code
which defines managerial employees as one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire, transfer ,
suspend, lay-off, recall, discharge, assign or discipline employees.

Issue: WON the positions of major patron, minor patron, chief mate and chief
engineer are managerial.

Held: Yes. The job description on record discloses that the major patrons duties
include taking complete charge and command of the ship and performing
responsibilities and duties of a ship captain; the minor patron also commands the
vessel, plying the limits of inland waterways, ports and estuaries; the chief mate
performs the functions of an executive officer next in command to the captain; and
the chief marine engineer takes over-all charge of the operations of the ships
mechanical and electrical equipment.

Thus the exercise of discretion and judgment in directing a ships course is as much
managerial in nature as decisions arrived at in the confines of the more conventional
board room or executive office.

2
Mercidar Fishing Corporation vs. NLRC, G.R. No. 112574. October 8, 1998; 297
SCRA 440

(Labor Standards Fishermen are not field personnels, Article 82)

Facts: Private respondent employed as a bodegero or ships quartermaster

complained of being constructively dismissed by petitioner corporation when the
latter refused him assignments aboard its boats after he had reported to work. The
Larbor Arbiter rendered a decision ordering petitioner corporation to reinstate
complainant with back wages, pay him his 13th month pay and incentive leave.
Petitioner claims that it cannot be held liable for service incentive leave pay by
fishermen in its employ as the latter supposedly are field personnel and thus not
entitled to such pay under the Labor Code.

Article 82 of the Labor Code provides among others that field personnel shall refer
to non-agricultural employees who regularly perform their duties away from the
principal place of business or branch of office of the employer and whose actual
hours of work in the field cannot be determined with reasonable certainty.

Issue: WON fishermen are considered field personnel.

Held: No. Although fishermen perform non-agricultural work away from their
employers business offices, the fact remains that throughout the duration of their
work they are under the effective control and supervision of the employer through the
vessels patron or master.

3
 PAUL V. SANTIAGO, petitioner, vs. CF SHARP CREW MANAGEMENT, INC.,
respondent. G.R. No. 162419 July 10, 2007

FACTS:

Petitioner had been working as a seafarer for Smith Bell Management, Inc.
(respondent) for about five(5) years. He signed a new contract of employment with
the duration of 9 months on Feb 3 1998 and he was to be deployed 10 days after.
This contract was approved by POEA. A week before the date of departure, the
respondent received a phone call from petitioners wife and some unknown callers
asking not to send the latter off because if allowed, he will jump ship in Canada.
Because of the said information, petitioner was told that he would not be leaving for
Canada anymore. This prompted him to file a complaint for illegal dismissal against
the respondent. The LA held the latter responsible. On appeal, the NLRC ruled that
there is no employer-employee relationship between petitioner and respondent,
hence, the claims should be dismissed. The CA agreed with the NLRCs finding that
since petitioner had not departed from the Port of Manila, no employer-employee
relationship between the parties arose and any claim for damages against the so-
called employer could have no leg to stand on.

ISSUE:

When does the employer-employee relationship involving seafarers commence?

RULING:

A distinction must be made between the perfection of the employment contract and
the commencement of the employer-employee relationship. The perfection of the
contract, which in this case coincided with the date of execution thereof, occurred
when petitioner and respondent agreed on the object and the cause, as well as the
rest of the terms and conditions therein. The commencement of the employer-
employee relationship, as earlier discussed, would have taken place had petitioner
been actually deployed from the point of hire. Thus, even before the start of any
employer-employee relationship, contemporaneous with the perfection of the
employment contract was the birth of certain rights and obligations, the breach of
which may give rise to a cause of action against the erring party. Thus, if the reverse
had happened, that is the seafarer failed or refused to be deployed as agreed upon,
he would be liable for damages. Respondents act of preventing petitioner from
departing the port of Manila and boarding "MSV Seaspread" constitutes a breach of
contract, giving rise to petitioners cause of action. Respondent unilaterally and
unreasonably reneged on its obligation to deploy petitioner and must therefore
answer for the actual damages he suffered.

4
 SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner, vs. JOY C.
CABILES, Respondent.August 5, 2014 G.R. No. 170139

TOPIC: Section 10 of RA 8042 vis-a-vis Section 7 of RA 10022

FACTS:

Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and

placement agency.

Respondent Joy Cabiles was hired thus signed a one-year employment

contract for a monthly salary of NT$15,360.00. Joy was deployed to work for Taiwan
Wacoal, Co. Ltd. (Wacoal) on June 26, 1997. She alleged that in her employment
contract, she agreed to work as quality control for one year. In Taiwan, she was
asked to work as a cutter.

Sameer claims that on July 14, 1997, a certain Mr. Huwang from
Wacoal informed Joy, without prior notice, that she was terminated and that she
should immediately report to their office to get her salary and passport. She was
asked to prepare for immediate repatriation. Joy claims that she was told that from
June 26 to July 14, 1997, she only earned a total of NT$9,000.15 According to her,
Wacoal deducted NT$3,000 to cover her plane ticket to Manila.

On October 15, 1997, Joy filed a complaint for illegal dismissal with the
NLRC against petitioner and Wacoal. LAdismissed the complaint. NLRC reversed
LAs decision. CA affirmed the ruling of the National Labor Relations Commission
finding respondent illegally dismissed and awarding her three months worth of
salary, the reimbursement of the cost of her repatriation, and attorneys fees

ISSUE:

Whether or not Cabiles was entitled to the unexpired portion of her salary
due to illegal dismissal.

HELD:

YES. The Court held that the award of the three-month equivalent of
respondents salary should be increased to the amount equivalent to the unexpired
term of the employment contract.

In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co.,

Inc., this court ruled that the clause or for three (3) months for every year of the
unexpired term, whichever is less is unconstitutional for violating the equal
protection clause and substantive due process.

5
 A statute or provision which was declared unconstitutional is not a law. It
confers no rights; it imposesno duties; it affords no protection; it creates no office; it
is inoperative as if it has not been passed at all.

The Court said that they are aware that the clause or for three (3) months
for every year of the unexpired term, whichever is less was reinstated in Republic
Act No. 8042 upon promulgation of Republic Act No. 10022 in 2010.

Ruling on the constitutional issue

In the hierarchy of laws, the Constitution is supreme. No branch or office of

the government may exercise its powers in any manner inconsistent with the
Constitution, regardless of the existence of any law that supports such exercise. The
Constitution cannot be trumped by any other law. All laws must be read in light of the
Constitution. Any law that is inconsistent with it is a nullity.

Thus, when a law or a provision of law is null because it is

inconsistent with the Constitution, the nullity cannot be cured by
reincorporation or reenactment of the same or a similar law or provision. A law
or provision of law that was already declared unconstitutional remains as such
unless circumstances have so changed as to warrant a reverse conclusion.

The Court observed that the reinstated clause, this time as provided in
Republic Act. No. 10022, violates the constitutional rights to equal protection and
due process.96 Petitioner as well as the Solicitor General have failed to show any
compelling change in the circumstances that would warrant us to revisit the
precedent.

The Court declared, once again, the clause, or for three (3) months for
every year of the unexpired term, whichever is less in Section 7 of Republic Act No.
10022 amending Section 10 of Republic Act No. 8042 is declared unconstitutional
and, therefore, null and void.

6
 Jo vs. NLRC, G.R. No. 121605, February 2, 2000; 324 SCRA 437

(Labor Standards Existence of employer-employee relationship)

Facts: Private respondent working as a barber on piece-rate basis was designated

by petitioners as caretaker of their barbershop. Private respondents duties as
caretaker, in addition to his being a barber, were: 1) to report to the owners of the
barbershop whenever the aircondition units malfunction and/or whenever water or
electric power supply was interrupted; 2) to call the laundry woman to wash dirty
linen; 3) to recommend applicants for interview and hiring; 4) to attend to other
needs of the shop. For this additional job, he was given an honorarium equivalent
to1/3 of the net income of the shop.

Private respondent left his job voluntarily because of his misunderstanding with his
co-worker and demanded separation pay and other monetary benefits. Petitioners
contends that respondent was not their employee but their partner in trade whose
compensation was based on a sharing arrangement per haircut or shaving job done.

Issue: Whether or not there exist an employer-employee relationship.

Held: Yes. In determining the existence of an employer-employee relationship, the

following elements are considered: 1) selection and engagement of worker; 2) power
of dismissal; 3) the payment of wages; and 4) the power to control the workers
conduct, with the latter assuming primacy in the overall consideration. 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.

7
 PAGUIO TRANSPORT CORPORATION (petitioner) Vs. NLRC and WILFREDO
MELCHOR (respondents) GR. NO. 119500 AUGUST 28, 1998

FACTS:

Complainant Melchor was hired by PTC as a taxi driver under the boundary
system. He was advised to stop working and have a rest after a car accident
involving the taxi unit he was driving. He was told by the PTC that his service was no
longer needed. Then the complaint for illegal dismissal was raised. The petitioner
concludes that he had no control over the number of hours private respondent had
to work and the routes he had to take; therefore no employer-employee relationship
exists.

ISSUE:

Whether or not employer-employee relationship exists.

FACTS:

Boundary system is that of employer-employee and not of lessor-lessee.

Under the boundary system the drivers do not receive fixed wages; all the excess
in the amount of boundary was considered his income but it is not sufficient to
withdraw the relationship between them from that of employer and employee. Private
respondents were employees because they had been engaged to perform activities
which were usually necessary or desirable in the usual trade or business of the
employer.

The petition was dismissed, the private respondent was entitled for the claim
of damages and illegal dismissal.

8
 RUGA V. NLRC

FACTS:

Petitioners were the fishermen-crew members of 7/B Sandyman II, one

of several fishing vessels owned and operated by private respondent De Guzman
Fishing Enterprises which is primarily engaged in the fishing business with port and
office at Camaligan, Camarines Sur. Petitioners rendered service aboard said fishing
vessel in various capacities, as follows: Alipio Ruga and Jose Parma patron/pilot;
Eladio Calderon, chief engineer; Laurente Bautu, second engineer; Jaime Barbin,
master fisherman; Nicanor Francisco, second fisherman; Philip Cervantes
and Eleuterio Barbin, fishermen. For services rendered in the conduct of private
respondent's regular business of "trawl" fishing, petitioners were paid on percentage
commission basis in cash by one Mrs. Pilar de Guzman, cashier of private
respondent. As agreed upon, they received thirteen percent (13%) of the proceeds
of the sale of the fish-catch if the total proceeds exceeded the cost of crude
oil consumed during the fishing trip, otherwise, they received ten percent
(10%) of the total proceeds of the sale. The patron/pilot, chief engineer and
master fisherman received a minimum income of P350.00 per week while the
assistant engineer, second fisherman, and fisherman- winch man received a
minimum income of P260.00 per week.

On September 11, 1983 upon arrival at the fishing port, petitioners were told
by Jorge de Guzman, president of private respondent, to proceed to the
police station at Camaligan, Camarines Sur, for investigation on the report that
they sold some of their fish-catch at midsea to the prejudice of private respondent.
Petitioners denied the charge claiming that the same was a countermove to their
having formed a labor union and becoming members of Defender of Industrial
Agricultural Labor Organizations and General Workers Union (DIALOGWU)
on September 3, 1983. During the investigation, no witnesses were presented to
prove the charge against petitioners, and no criminal charges were formally filed
against them.

Notwithstanding, private respondent refused to allow petitioners to return to

the fishing vessel to resume their work on the same day, September 11, 1983. On
September 22, 1983, petitioners individually filed their complaints for illegal dismissal
and non-payment of 13th month pay, emergency cost of living allowance and service
incentive pay, with the then Ministry (now Department) of Labor and Employment,
Regional Arbitration Branch No. V, Legaspi City, Albay. They uniformly
contended that they were arbitrarily dismissed without being given ample time
to look for a new job.

9
ISSUE/S:

Whether or not the fishermen-crew members of the trawl fishing vessel 7/B
Sandyman II are employees of its owner-operator, De Guzman Fishing Enterprises,
and if so, whether or not they were illegally dismissed from their employment.

HELD:

YES. We have consistently ruled that in determining the existence of an

employer-employee relationship, the elements that are generally considered are the
following (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employers power to control the
employee with respect to the means and methods by which the work is to be
accomplished. The employment relation arises from contract of hire, express or
implied. In the absence of hiring, no actual employer-employee relation could exist.
From the four (4) elements mentioned, We have generally relied on the so-called
right-of-control test where the person for whom the services are performed reserves
a right to control not only the end to be achieved but also the means to be used in
reaching such end. The test calls merely for the existence of the right to control the
manner of doing the work, not the actual exercise of the right.

The case of Pajarillo vs. SSS, supra, invoked by the public respondent as
authority for the ruling that a joint fishing venture existed between private
respondent and petitioners is not applicable in the instant case. There is neither right
of control nor actual exercise of such right on the part of the boat-owners in the
Pajarillo case, where the Court found that the pilots therein are not under the orders
of the boat-owners as regards their employment; that they go out to sea not upon
directions of the boat-owners, but upon their own volition as to when, how long and
where to go fishing; that the boat-owners do not in any way control the crew-
members with whom the former have no relationship whatsoever; that they simply
join every trip for which the pilots allow them, without any reference to the owners of
the vessel; and that they only share in their own catch produced by their own efforts.

WHEREFORE, in view of the foregoing, the petition is GRANTED. The questioned

resolution of the National Labor Relations Commission dated May 30, 1985 is hereby
REVERSED and SET ASIDE. Private respondent is ordered to reinstate petitioners
to their former positions or any equivalent positions with 3-year back wages and
other monetary benefits under the law. No pronouncement as to costs

10
 Besa v. Trajano (G.R. No. 72409 December 29, 1986)

Facts:

January, 1985, private respondent Kaisahan ng Mangagawang Pilipino, a

legitimate labor union duly registered with the Ministry of Labor and Employment,
iled a Petition for Certification Election in the National Labor Relations Division of the
National Capital Region. Petitioner opposed it alleging that 1. There is no employer-
employee relationship between Besa's and the petitioners-signatories to the petition;
2. The subject of the present petition had previously been decided by the defunct
Court of Industrial Relations, and is therefore barred under the principle of res
judicata; 3. The petition fails to comply with the mandatory formal requirements
under Sec. 2, Book V, of the Omnibus Rules Implementing the Labor Code; and 4.
This Hon. Commission has no jurisdiction over the subject matter and parties to the
petition.

Acting on the Petition, the Opposition thereto, and the Reply to the
Opposition, the Med-Arbiter on June 27, 1985, issued an order declaring that there
was an employer-employee relationship between the parties and directed that an
election be conducted. Petitioner appealed the order to the Director of BLR, but it
was dismissed. Thus the Petition of the Union (KAMPIL) before the Med-Arbiter for
the holding of the certification election was granted.

Issue:

Whether or not there is employer-employee relationship between Besa and the

petitioner-signatories to the petition.

Ruling:

No. The records of the case reveal that an employer-employee relationship does not
exist between the 17 shoeshiners and petitioner. The shoe shiner is distinct from a
piece worker because while the latter is paid for work accomplished, he does not,
however, contribute anything to the capital of the employer other than his service. It
is the employer of the piece worker who pays his wages, while the shoe shiner in this
instance is paid directly by his customer. The piece worker is paid for work
accomplished without regard or concern to the profit as derived by his employer, but
in the case of the shoe shiners, the proceeds derived from the trade are always
divided share and share alike with respondent BESA. The shoe shiner can take his
share of the proceeds everyday if he wanted to or weekly as is the practice of
qqqBesas The employer of the piece worker supervises and controls his work, but in
the case of the shoe shiner, respondent BESA does not exercise any degree of
control or supervision over their person and their work. All these are not obtaining in
the case of a piece worker as he is in fact an employee in contemplation of law,
distinct from the shoe shiner.

11
 Entitlement of the minimum requirements of the law particularly on wages and
allowances presupposes the existence of employer-employee relationship which is
determined by the concurrence of the following conditions: 1. right to hire; 2.
payment of wages; 3. right to fire; and 4. control and supervision. The most important
condition to be considered is the exercise of control and supervision over the
employees. these shoe shiners are not employees of the company, but are partners
instead. This is due to the fact that the owner/manager does not exercise control and
supervision over the shoe shiners. That the shiners have their own customers from
whom they charge the fee and divide the proceeds equally with the owner, which
make the owner categorized them as on purely commission basis.

12
 Insular Life v. NLRC (Nov. 15, 1989)

FACTS:

Insular Life (company) and Basiao entered into a contract by which Basiao was
authorized to solicit forinsurance in accordance with the rules of the company. He
would also receive compensation, in the form of commissions. The contract also
contained the relations of the parties, duties of the agent and the acts prohibited
tohim including the modes of termination.After 4 years, the parties entered into
another contract an Agency Managers Contact and to implementhis end of it,
Basiao organized an agency while concurrently fulfilling his commitment under the
first contract. The company terminated the Agency Managers Contract. Basiao sued
the company in a civil action. Thus,the company terminated Basiaos engagement
under the first contract and stopped payment of his commissions.

ISSUE:

W/N Basiao had become the companys employee by virtue of the contract, thereby
placing his claim forunpaid commissions

HELD:

No.Rules and regulations governing the conduct of the business are provided for in
the Insurance Code. Theserules merely serve as guidelines towards the
achievement of the mutually desired result without dictating themeans or methods to
be employed in attaining it. Its aim is only to promote the result, thereby creating
noemployer-employee relationship. It is usual and expected for an insurance
company to promulgate a set of rules toguide its commission agents in selling its
policies which prescribe the qualifications of persons who may be insured.None of
these really invades the agents contractual prerogative to adopt his own selling
methods or to sellinsurance at his own time and convenience, hence cannot
justifiable be said to establish an employer-employeerelationship between Basiao
and the company. The respondents limit themselves to pointing out that Basiaos
contract with the company bound him toobserve and conform to such rules. No
showing that such rules were in fact promulgated which effectivelycontrolled or
restricted his choice of methods of selling insurance. Therefore, Basiao was not an
employee of the petitioner, but a commission agent, an independent contractwhose
claim for unpaid commissions should have been litigated in an ordinary civil
action.Wherefore, the complain of Basiao is dismissed.

13
 EMPERMACO B. ABANTE, JR., petitioner, vs. LAMADRID BEARING & PARTS
CORP. and JOSE LAMADRID, President, respondents. [G.R. No. 159890 May
28, 2004]

FACTS: Petitioner was a salesman of respondent company earning a commission of

3% of the total paid up sales covering the whole area of Mindanao. Aside from
selling, he was also tasked with collection. Respondent corporation through its
president, often required Abante to report to a particular area and occasionally
required him to go to Manila to attend conferences.

Later on, bad blood ensued between the parties due to some bad accounts that
Lamadrid forced petitioner to cover. Later petitioner found out that respondent had
informed his customers not to deal with petitioner since it no longer recognized him
as a commission salesman. Petitioner filed a complaint for illegal dismissal with
money claims against respondent company and its president, Jose Lamadrid.

By way of defense, respondents countered that petitioner was not its employee but a
freelance salesman on commission basis.

ISSUE: Whether or not petitioner, as a commission salesman, is an employee of

respondent corporation.

HELD: To determine the existence of an employee-employer relationship, the SC

applied the four fold test: 1) the manner of selection and engagement; (2) the
payment of wages; (3) the presence or absence of the power of dismissal; and (4)
the presence or absence of the power of control.

Applying the aforementioned test, an employer-employee relationship is notably

absent in this case. It is true that he was paid in commission yet no quota was
imposed therefore a dismal performance would not warrant a ground for dismissal.
There was no specific office hours he was required to observe. He was not
designated to conduct services at a particular area or time. He pursued his selling
without interference or supervision from the company. The company did not
prescribe the manner of selling merchandise. While he was sometimes required to
report to Manila, these were only intended to guide him. Moreover, petitioner was
free to offer his services to other companies.

Art. 280 is not a crucial factor because it only determines two kinds of employees. It
doesnt apply where there is no employer-employee relationship. While the term
commission under Article 96 of the LC was construed as being included in the term
wage, there is no categorical pronouncement that the payment of commission is
conclusive proof of the existence of an employee-employer relationship.

14
 USHIO MARKETING vs. NATIONAL LABOR RELATIONS COMMISSION

[G.R. No. 124551. August 28, 1998]

Facts:

Petitioner urges us to annul the decision of the National Labor Relations Commission
(NLRC) which reversed the Labor Arbiter's decision which denied petitioners motion
for reconsideration. Private respondent Severino Antonio was an electrician who
worked within the premises of petitioner Ushios car accessory shop in Banawe,
Quezon City. On August 22, 1994, private respondent filed a complaint for illegal
dismissal, non-payment of overtime pay, holiday pay, and other benefits against
petitioner Ushio Marketing which was docketed as NLRC NCR Case No. 08-06147-
94 and assigned to Labor Arbiter Facundo L. Leda. In Petitioners Motion to Dismiss,
she alleged that it was a single proprietorship engaged in the business of selling
automobile spare parts and accessories. Petitioner claimed that private respondent
was not among her employees but a free lance operator who wait[ed] on the shops
customers should the latter require his services.

On January 13, 1995, Labor Arbiter Facundo L. Leda premising on the allegations
contained in the Motion to Dismiss submitted by the petitioner Company, issued an
order dismissing the complaint of private respondent Severino Antonio against
petitioner Ushio Marketing Corp. On February 28, 1995, private respondent assisted
by the Public Attorneys Office, appealed the order of the Honorable Labor Arbiter to
the Commission. In his memorandum, private respondent alleged that Ushio
Marketing hired his services on 15 November 1981 until July 3, 1994 as an
electrician with a daily salary of one hundred thirty two pesos (P132.00) per day.

Issue: Whether or not there was an employee-employer relationship.

Held:

The factors to be considered in determining the existence of an employer- employee

relationship are: (1) the selection and engagement of the employee; (2) the payment
of wages; (3) the power of dismissal; and (4) the power to control the employees
conduct. The so-called "control test" is commonly regarded as 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.
The conduct of private respondent was not subject to the control and supervision of
petitioner or any of its personnel. There was no allegation of this, nor was evidence
presented to prove it other than the bare allegation of private respondent that he
could not leave the work premises without permission from petitioner. Private
respondent himself decided how he would render electrical services to customers. If
it is true that private respondent was hired as [an] electrician, petitioner would have

15
exercised supervision and control over the means and manner he performed his
electrical services for, otherwise, if private respondents work was unsatisfactory, it
would reflect on the business of petitioner.

Private respondent was free to offer his services to other stores along
Banaue, Quezon City, as evidenced by the affidavit of Caroline Tan To, Assistant
Manager of Share Motor Sales (Annex B, Reply to Private Respondents Comment
dated August 5, 1996) and private respondents own admission. But although
private respondent admits that he rendered electrical services to the customers of
other stores, he claims that petitioner allowed him to do so. If private respondent
was an employee of petitioner, it was unthinkable for petitioner to allow private
respondent to render electrical services to three other stores selling automobile
spare parts and accessories who were its competitors. It is clear that petitioner did
not have the power to control private respondent [w]ith respect to the means and
methods by which his work was to be accomplished (Continental Marble
Corporation, et al. vs. National Labor Relations Commission, 161 SCRA 151, 158
[1988]). Private respondent allowed petitioner to collect service fees from his
customers. He received said fees on a weekly basis. This arrangement, albeit
peculiar, does not prove the existence of an employer-employee relationship. In
Besa vs. Trajano, 146 SCRA 501, 506 [1986], the shoe shiner rendering services in
the premises of Besa, received from Besa the payments for his services on a weekly
basis. Yet the shoe shiner was not considered an employee of Besa. This is the
same arrangement between petitioner and private respondent.

WHEREFORE, judgment is hereby rendered GRANTING the petition,

REVERSING the challenged decision and resolution of the National Labor Relations
Commission in NLRC-NCR CA No. 008495-95 and REINSTATING the Order of 13
January 1995 of the Labor Arbiter in NLRC-NCR Case No. 08-06147-94.

16
 FILIPINAS BROADCASTING NETWORK, INC. vs. NATIONAL LABOR
RELATIONS COMMISION D E C I S I O N [G.R. No. 118892. March 11, 1998]

As a rule, factual findings of the NLRC are binding on his Court. However, when the
findings of the NLRC and the labor arbiter are contradictory, this Court may review
questions of facts. Where the evidence clearly shows the absence of an employer-
employee relationship, a claim for unpaid wages, thirteenth month pay, holiday and
rest pay and other employment benefits must necessarily fail.

Facts: Before us is a petition for certiorari assailing Decision of the National Labor
Relations Commission, Simeon M. Mapa Jr., v. DZRC Radio Station. Petitioner and
private respondent submitted different versions of the facts. The facts as viewed by
private respondent are as follows: The complainant (herein private respondent)
began to work for the respondent as a radio reporter starting March 11, 1990. On
May 14, 1990, upon being informed by then respondents Station Manager, Mr.
Plaridel Brocales, that complainants employment with respondent is being blocked
by Ms. Brenda Bayona of DZGB, complainants previous employer, the said
complainant took a leave of absence. In the first week of June, 1990, the respondent
thru Mr. Antonio Llarena, then an employee of the respondent, asked the
complainant to return to work even as he was assured that his salaries will be paid to
him already. Thus, the complainant continued to work for the respondent since then.
On September 5, 1991, again the complainant took a leave of absence because of
his desperation over the failure of respondent to make good its promise of payment
of salaries. He was reinstated on January 16, 1992 and resigned on February 27,
1992 when he decided to run for an elective office in the town of Daraga, albay.
Unfortunately, the respondent paid salary to the complainant only for the period from
January 16, 1992 up to February 27, 1992. Respondent did not pay the complainant
for all the services rendered by the latter from March 11, 1990 up to January 16,
1992.

As may be gleaned from its memorandum, petitioners version of the facts is

as follows:

1. On or before April 1990, Mapa was dismissed from his employment with
PBN-DZGB Legaspi. At the time, Mapa filed a case for illegal dismissal against PBN-
DZGB Legaspi docketed as RAV V. Case No. 05-04-00120-90 entitled Simeon
Mapa, Jr. v. Peoples Broadcasting Network-DZGB Legaspi, Jorge Bayona and
Arturo Osia.

2. On or about May 1990, Mapa sought employment from DZRC as a radio

reporter. However, DZRC required of private respondent the submission of a
clearance from his former employer. Otherwise, his apllication would not be acted
upon;

3. On May 14, 1990, Mapa was informed by DZRC's then station manager,
Mr. Plaridel Larry Brocales, that his application for employment was being blocked

17
by Ms. Brenda Bayona of DZGB, Mapas former employer. This fact is supported by
Mapa s position paper before the Honorable Labor Arbiter xxx;

4. Taking pity on Mapa and pending the issuance of the clearance from
PBN-DZGB Legaspi, Mr. Larry Brocales granted the request of Mapa to be
accomodated only as a volunteer reporter of DZRC on a part-time basis.

As a volunteer reporter, Mapa was not to be paid wages as an employee of DZRC

but he was permitted to find sponsors whose business establishments will be
advertised every time he goes on the air. Most importantly, Mapas only work
consisted of occasional news bits or on-the spot reporting of consisted of occasional
news bits or on-the spot reporting of incidents or newsworthy occurances, which was
very seldom. On

October 13, 1993, Labor Arbiter Emeterio Ranola dismissed the complaint for
lack of merit, finding that no employer-employee relationship existed between Mapa
and DZRC during the period March 11, 1990 to February 16, 1992.

In holding that there was an employer-employee relationship, the NLRC set

aside the labor arbiters findings: In his appeal, complainant insists that there was an
employer-employee relationship between him and the respondent. In support of his
contention, he cites the payroll for February 16 to 29, 1992, the ID card issued to him
as employee and regular reporter by the respondent: [sic] the program schedules of
DZRC showing the regular program of the station indicating his name: [sic] the
affidavit of Antonio Llarena, program supervisor of DZRCM, stating that he [was] a
regular reporter underhis supervision and the list of reporting gadgets issued to
regular reporter.

The existence of employer employee relationship is determined by the

following elements, namely:

1) Selection and engagement of the employee; 2) The payment of wages; 3)

The power of dismissal; and 4) The power to control employees conduct although
the latter is the most important element. (Rosario Brothers, Inc. vs. Ople, 131 SCRA
72)

Considering the totality of the evidence adduced by the parties, we are of the
opinion that the complainant is a regular reporter of the respondent. Firstly, the work
of the complainant is being supervised by the program supervisor of the respondent;
secondly, the complainant uses the reporting gadgets of the respondent. Thirdly, he
has no reporting gadgets of his own; Fourthly, the program schedule is prepared by
the respondent; and Lastly, he was paid salary for the period for the period from
February 16 to 29, 1992 and covered under the Social Security System. There is no
showing in the record that his work from February 16, 1992 was different from his
work before the said period. The NLRC subsequently denied petitioners motion for
reconsideration.

18
Issue: The issue in this case is whether private respondent was an employee of
petitioner for the period March 11, 1990 to January 15, 1992.

Held: The petition is meritorious. As a rule, the NLRCs findings are accorded great
respect, even finality, by this Court. This rule, however, is not without qualification.
This Court held in Jimenez v. NLRC: The review of labor cases elevated to us on
certiorari is confined to questions of jurisdiction or grave abuse of discretion. As a
rule, this Court does not review supposed errors in the decision of the NLRC which
raise factual issues, because factual finding of agencies exercising quasi-judicial
functions are accorded not only respect but even finality, aside from the
consideration that the Court is essentially not a trier of facts. However, in the case at
bar, a review of the records thereof with an assessment of the facts is necessary
since the factual findings of the NLRC and the labor arbiter are at odds with each
other. In the present case, a review of the factual findings of the public respondent is
in order, for said findings differ from those of the labor arbiter. Worse the facts
alleged by the private respondent and relied upon by the public respondent do not
prove an employer-employee relationship. In this light, we will review and
overrule the findings of the NLRC. The following are generally considered in the
determination of the existence of an employer-employee relationship: (1) the manner
of selection and engagement, (2) the payment of wages, (3) the presence or
absence of the power of dismissal, and (4) the presence or absence of the power of
control; of these four, the last one is the most important. There is no indication that
these two circumstances were made under duress. Indeed, private respondent
himself did not dispute their voluntariness or veracity. It is clear that he rendered
services knowing that he was not an employee. Aware that he would not be paid
wages, he described himself as a volunteer reporter who was, as evident from his
letter, hoping for the chance to be recognized as a regular reporter. In fact,
petitioner acted favorably on this letter and accepted his application as an employee
effective on January 16, 1992. Indeed, DZRC, the petitioners radio station,
exercised no editorial rights over his reports. He had no fixed day or time for making
his reports; in fact, he was not required to report anything at all. Whether he would
air anything depended entirely on him and his convenience. In sum, the evidence,
which Public Respondent NLRC relies upon, does not justify the reversal of the labor
arbiters ruling which, in turn, we find amply supported by the records. Clearly,
private respondent was not an employee during the period in question.

WHEREFORE, the petition is hereby GRANTED and the assailed Decision and
Resolution are hereby SET ASIDE. The Order of the Labor Arbiter dated October 13,
1993 dismissing the case for lack of merit is hereby REINSTATED. No costs. SO
ORDERED.

19
GREAT PACIFIC LIFE ASSURANCE CORPORATION (GREPALIFE) VS. JUDICO
HONORATO (GR NO. 73887 DECEMEBER 21, 1989)

FACTS:

Petition for certiorari to review the decision NLRC dated September 9, 1985

Ordering petitioner Grepalife to recognize private respondent HonoratoJudico,

as its regular employee as defined under Art. 281 of the Labor Code.
Remanding the case to its origin for the determination of private respondent
Judico's money claims.

HonoratoJudico filed a complaint for illegal dismissal against Grepalife, a duly

organized insurance firm.

Said complaint prayed for award of money claims consisting of:

Separation pay,
Unpaid salary and 13th month pay,
Refund of cash bond,
Moral and exemplary damages and attorney's fees.

Grepalife admits that Judico entered into an agreement of agency with them to
become a debit agent attached in Cebu City.

Grepalife defines a debit agent as "an insurance agent selling/servicing industrial life
plans and policy holders.

As a debit agent, Judico had definite work assignments including but not limited to
collection of premiums from policyholders and selling insurance to prospective
clients.

Public respondent NLRC also found out that complainant was initially paid P 200. 00
as allowance for thirteen (13) weeks regardless of production and later a certain
percentage denominated as sales reserve of his total collections but not lesser than
P 200.00.

Judicowas promoted to the position of Zone Supervisor and was given additional
(supervisor's) allowance fixed at P110.00 per week.

During the third week of November 1981, he was reverted to his former position as
debit agent but, for unknown reasons, not paid so-called weekly sales reserve of at
least P 200.00.

Finally on June 28, 1982, complainant was dismissed by way of termination of his

20
agency contract.

Petitioner assails and argues that the respondent is not an employee and that his
compensation was not based on any fixed number of hours he was required to
devote to the service of company but rather it was the production or result of his
efforts or his work that was being compensated

That the so-called allowance for the first thirteen weeks that Judico worked as debit
agent, cannot be construed as salary but as a subsidy or a way of assistance for
transportation and meal expenses of a new debit agent during the initial period of his
training which was fixed for thirteen (13) weeks.

Said contentions of petitioner were strongly rejected by respondent he maintains that

he received a definite amount as his wage known as "sales reserve" the failure to
maintain the same would bring him back to a beginner's employment with a fixed
weekly wage of P 200.00 regardless of production.

He was assigned a definite place in the office to work on when he is not in the field
and in addition to canvassing and making regular reports.

He was burdened with the job of collection and to make regular weekly report thereto
for which an anemic performance would mean dismissal.

He earned out of his faithful and productive service, a promotion to Zone Supervisor
with additional supervisor's allowance, (a definite or fixed amount of P110.00) that he
was dismissed primarily because of anemic performance and not because of the
termination of the contract of agency substantiate the fact that he was indeed an
employee of the petitioner and not an insurance agent in the ordinary meaning of the
term.

Both parties appealed to the NLRC and decision was rendered by the Labor Arbiter
dismissing the complaint on the ground that:

The employer-employee relations did not exist between the parties.

But ordered Grepalife to pay complainant the sum of Pl,000.00 by reason of
Christian Charity.

On appeal, decision was reversed by the NLRC ruling that:

Complainant is a regular employee as defined under Art. 281 of the Labor

Code.
Declaring the appeal of Grepalife questioning the legality of the payment of
Pl,000.00 to complainant moot and academic.

Petitioner company moved to reconsider, which was denied, hence this petition.

21
ISSUE:

Whether or not employer-employee relationship existed between petitioner

and private respondent.

HELD:

That Judico was an agent of the petitioner is unquestionable.

As held in (Investment Planning Corp. vs. SSS, 21 SCRA 294), an insurance

company may have two classes of agents who sell its insurance policies:

Salaried employees who keep definite hours and work under the control and
supervision of the company.

Registered representatives who work on commission basis.

The test therefore is whether the "employer" controls or has reserved the right to
control the "employee" not only as to the result of the work to be done but also as to
the means and methods by which the same is to be accomplished.

Applying the test to the case at bar, We can readily see that the element of control
by the petitioner on Judico was very much present.

The record shows that:

Petitioner Judico received a definite minimum amount per week as his wage known
as "sales reserve".

He was assigned a definite place in the office to work on when he is not in the field.

In addition to his canvassing work he was burdened with the job of collection.

Both cases he was required to make regular report to the company regarding these
duties, and for which an anemic performance would mean a dismissal.

Conversely faithful and productive service earned him a promotion and additional
supervisor's allowance, a definite amount of P110.00 aside from the regular P
200.00 weekly "allowance".

His contract of services with petitioner is not for a piece of work nor for a definite
period.

22
In the instant case the facts show that:

He was controlled by petitioner insurance company not only as to the kind of

work.
The amount of results, the kind of performance but also the power of
dismissal.

Ratio:

Undoubtedly, private respondent, by nature of his position and work, had been a
regular employee of petitioner and is therefore entitled to the protection of the law
and could not just be terminated without valid and justifiable cause.

Premises considered, the appealed decision is hereby AFFIRMED.

23
24