INSULAR LIFE ASSURANCE vs NLRC Case Digest [G.R. No.

84484 November 15, 1989] INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and MELECIO BASIAO, respondents. FACTS: Since 1968, respondent Basiao has been an agent for petitioner company, and is authorized to solicit within the Philippines applications for insurance policies and annuities in accordance with the existing rules and regulations of the company. In return, he would receive compensation, in the form of commissions. Some four years later, in April 1972, the parties entered into another contract an Agency Manager's Contract and to implement his end of it Basiao organized an agency or office to which he gave the name M. Basiao and Associates, while concurrently fulfilling his commitments under the first contract with the Company. In May, 1979, the Company terminated the Agency Manager's Contract. After vainly seeking a reconsideration, Basiao sued the Company in a civil action and this, he was later to claim, prompted the latter to terminate also his engagement under the first contract and to stop payment of his commissions starting April 1, 1980. Basiao thereafter filed with the then Ministry of Labor a complaint against the Company and its president. The complaint sought to recover commissions allegedly unpaid thereunder, plus attorney's fees. The respondents disputed the Ministry's jurisdiction over Basiao's claim, asserting that he was not the Company's employee, but an independent contractor. ISSUE: Whether or not there exist an employer-employee relationship between Basiao and Insular Life. HELD: The SC ruled in favor of Insular Life. 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 between them in the legal or technical sense of the term. A line must be drawn somewhere, if the recognized distinction between an employee and an individual contractor is not to vanish altogether. 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. The distinction acquires particular relevance in the case of an enterprise affected with public interest, as is the business of insurance, and is on that account subject to regulation by the State with respect, not only to the relations between insurer and insured but also to the internal affairs of the insurance company. Rules and regulations governing the conduct of the business are provided for in the Insurance Code and enforced by the Insurance Commissioner. It is, therefore, usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its

policies that they may not run afoul of the law and what it requires or prohibits. Of such a character are the rules which prescribe the qualifications of persons who may be insured, subject insurance applications to processing and approval by the Company, and also reserve to the Company the determination of the premiums to be paid and the schedules of payment. None of these really invades the agent's contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence cannot justifiably be said to establish an employeremployee relationship between him and the company. The respondents limit themselves to pointing out that Basiao's contract with the Company bound him to observe and conform to such rules and regulations as the latter might from time to time prescribe. No showing has been made that any such rules or regulations were in fact promulgated, much less that any rules existed or were issued which effectively controlled or restricted his choice of methods or the methods themselves of selling insurance. Absent such showing, the Court will not speculate that any exceptions or qualifications were imposed on the express provision of the contract leaving Basiao "... free to exercise his own judgment as to the time, place and means of soliciting insurance." The Court, therefore, rules that under the contract invoked by him, Basiao was not an employee of the petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions should have been litigated in an ordinary civil action. NLRC Decision set aside.

Singer Sewing Machine vs NLRC (91307) 193 SCRA 271 Facts: Singer Machine Collectors Union-Baguio filed a petition for direct certification as the sole and exclusive bargaining agent of all collectors of Singer Sewing Machine. The company opposed the petition mainly because the union members are not employees but independent contractors as evidenced by the collection agency agreement which they signed. Med-Arbiter ruled that there exists an employee-employer relationship and granted the certification election which was affirmed by Sec. Drilon. The company files the present petition on the determination of the relationship. The union insist that the provisions of the Collection Agreement belie the companys position that the union members are independent contractors. Issue: WON there exists an employer-employee relationship between the parties. Held: Respondents are not employees of the company. The present case calls for the application of the control test, which if not satisfied, would lead to the conclusion that no employee-employer relationship exists. If the union members are not employees, no right to organize for the purpose of bargaining or as a bargaining agent cannot be recognized.

The following elements are generally considered in the determination of the relationship: the selection and engagement of the employee, payment of wages, power of dismissal and the power to control the employees conduct which is the most important element. The nature of the relationship between a company and its collecting agents depends on the circumstances of each particular relationship. Not all collecting agents are employees and neither are all collecting agents independent contractors. The agreement confirms the status of the collecting agents as independent contractor. The requirement that collection agents utilize only receipt forms and report forms issued by the company and that reports shall be submitted at least once a week is not necessarily an indication of control over the means by which the job collection is to be performed. Even if report requirements are to be called control measures, any control is only with respect to the end result of the collection since the requirements regulate the things to be done after the performance of the collection job or the rendition of service. The plain language of the agreement reveals that the designation as collection agent does not create an employment relationship and that the applicant is to be considered at all times as an independent contractor. The court finds that since private respondents are not employees of the company, they are not entitled to the constitutional right to form or join a labor organization for the purposes of collective bargaining. There is no constitutional and legal basis for their union to be granted their petition for direct certification.

work for the club to which they attach themselves on sufferance but, on the other hand, also without having to observe any working hours, free to leave anytime they please, to stay away for as long they like. It is not pretended that if found remiss in the observance of said rules, any discipline may be meted them beyond barring them from the premises which, it may be supposed, the Club may do in any case even absent any breach of the rules, and without violating any right to work on their part. All these considerations clash frontally with the concept of employment. The IAC would point to the fact that the Club suggests the rate of fees payable by the players to the caddies as still another indication of the latter's status as employees. It seems to the Court, however, that the intendment of such fact is to the contrary, showing that the Club has not the measure of control over the incidents of the caddies' work and compensation that an employer would possess. Court agree that the group rotation system so-called, is less a measure of employer control than an assurance that the work is fairly distributed, a caddy who is absent when his turn number is called simply losing his turn to serve and being assigned instead the last number for the day. Moreover, as pointed out by petitioner which was never refuted that: has no means of compelling the presence of a caddy. A caddy is not required to exercise his occupation in the premises of petitioner. He may work with any other golf club or he may seek employment a caddy or otherwise with any entity or individual without restriction by petitioner.

Encyclopaedia Britannica (Phil) Inc., vs NLRC (1996) G.R. 87098 Facts:

Manila Golf & Country Club, Inc., vs IAC and Fermin Llamar (1994) G.R. 64948 Facts: Respondents were caddies and employees of Manila Golf & Country Club who originally filed a petition with the Social Security Commission (SSC) for coverage and availment of benefits under the Social Security Act. They alleged that although the petitioners were employees of the Manila Golf and Country Club, a domestic corporation, the latter had not registered them as such with the SSS. In the case before the SSC, the respondent Club alleged that the petitioners, caddies by occupation, were allowed into the Club premises to render services as such to the individual members and guests playing the Club's golf course and who themselves paid for such services; that as such caddies, the petitioners were not subject to the direction and control of the Club as regards the manner in which they performed their work; and hence, they were not the Club's employees. Issue: WON there exist an employer-employee relationship between the cadies and the Golf Club? Held: No existence of employer-employee relationship. In the very nature of things, caddies must submit to some supervision of their conduct while enjoying the privilege of pursuing their occupation within the premises and grounds of whatever club they do their work in. For all that is made to appear, they

Private respondent Benjamin Limjoco was a Sales Division Manager of petitioner Encyclopaedia Britannica and was in charge of selling petitioners products through some sales representatives. As compensation, private respondent received commissions from the products sold by his agents. He was also allowed to use petitioners name, goodwill and logo. It was, however, agreed upon that office expenses would be deducted from private respondents commissions. Petitioner would also be informed about appointments, promotions, and transfers of employees in private respondents district. On June 1974, Limjoco resigned from office to pursue his private business. He then filed a complaint against petitioner Encyclopaedia Britannica with DOLE, claiming for non-payment of separation pay and other benefits, and also illegal deduction from his sales commissions. Petitioner alleged that Limjoco was not its employee but an independent dealer authorized to promote and sell its products and in return, received commissions there from. Limjoco did not have any salary and his income from the company was dependent on the volume of sales accomplished. He also had his own separate office, financed the business expenses, and maintained his own workforce. The salaries of his secretary, utility man, and sales representatives were chargeable to his commissions. Thus, petitioner argued that it had no control and supervision over the complainant as to the manner and means he conducted his business operations, moreover, the latter did not even report to the office of the petitioner and did not observe fixed office hours

Issue: WON there exist an employer-employee relationship and necessarily entitles Limjoco of his claims? Held: Private respondent was merely an agent or an independent dealer of the petitioner. In ascertaining whether the relationship is that of employer-employee or one of independent contractor, each case must be determined by its own facts and all features of the relationship are to be considered. Respondent was free to conduct his work and he was free to engage in other means of livelihood. At the time he was connected with the petitioner company, private respondent was also a director and later the president of the Farmers Rural Bank. Had he been an employee of the company, he could not be employed elsewhere and he would be required to devote full time for petitioner. If private respondent was indeed an employee, it was rather unusual for him to wait for more than a year from his separation from work before he decided to file his claims. As he pointed out in his resignation letter, Limjoco was aware of conflict with other interests which xxx have increasingly required my personal attention. At the very least, it would indicate that petitioner has no effective control over the personal activities of Limjoco, who as admitted by the latter had other conflict of interest requiring his personal attention. As pointed out the element of control is absent; where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to the result of his efforts and not the amount thereof.

policies and other products offered by or distributed through Sun Life and to perform such other duties in connection therewith as Sun Life may require from time to time." This latest Agreement stressed that the "New Business Manager in performance of his duties defined herein, shall be considered an independent contractor and not . . an employee of Sun Life," and that "under no circumstance shall the New Business Manager and/or his employees be considered employees of Sun Life." After receiving reports of anomalies in relation thereto from unit managers and agents by the companys VP, the Manager of Sun Life's Internal Audit Department, commenced an inquiry into the special fund availments of Carungcong and other New Business Managers which later prompted the petitioners termination. She then instituted proceedings for vindication in the Arbitration Branch of the National Labor Relations Commission where she succeeded in obtaining a favorable judgment finding that there existed an employer-employee relationship between her and Sun Life; ruled that she had been illegally dismissed, thus entitled to reinstatement without loss of seniority rights and other benefits. Issue: WON there existed an employer-employee relationship between Caruncong and Sunlife?

Held: Carungcong was an independent contractor and not an employee of Sun Life. The contracts she had willingly and knowingly signed with Sun Life repeatedly and clearly provided that said agreements were terminable by either party by written notice with or without cause. Noteworthy is that this last agreement, it was emphasized, like the "Career Agent's (or Unit Manager's) Agreement" first signed by her, that in the performance of her duties defined herein. Carungcong would be considered an independent contractor and not . . an employee of Sun Life," and that "(u)nder no circumstance shall the New Business Manager and/or his employees be considered employees of Sun Life."

Carungcong vs NLRC, Sun Life Assurance Co. of Canada (1997) G.R. 118086 Facts: Susan Carungcong began as an agent of Sun Life in 1974, she signed an Agents Agreement and was designated to solicit applications for insurance and annuity services. The contract set out in detail the terms and conditions particularly those concerning the commissions payable to her under which her relationship with the company would be governed. Five years later, said contract was superseded by 2 new agreements: first, is the "Career Agent's (or Unit Manager's) Agreement," dealt with such matters as the agent's commissions, his obligations, limitations on his authority, and termination of the agreement by death, or by written notice "with or without cause." It declared that the "Agent shall be an independent contractor and none of the terms of agreement shall be construed as creating an employer-employee relationship; second, was titled, "MANAGER'S Supplementary Agreement." Making explicit reference to the first agreement "which became effective on the 1st day of July, 1979" said second contract explicitly described as a "further agreement" contained provisions regarding remuneration (overriding commissions in accordance with a fixed schedule), limitation of authority, and termination of the agreement inter alia by written notice "without cause." Subsequently, Carungcong and Sun Life executed another Agreement - by which the former was named New Business Manager with the function generally "to manage a New Business Office established by her and to obtain applications for life insurance

Ramos vs Court of Appeals (124354) 380 SCRA 467 Facts: Petitioner Erlinda Ramos was advised to undergo an operation for the removal of her stone in the gall bladder. She was referred to Dr. Hosaka, a surgeon, who agreed to do the operation. The operation was scheduled on June 17, 1985 in the De los Santos Medical Center. Erlinda was admitted to the medical center the day before the operation. On the following day, she was ready for operation as early as 7:30 am. Around 9:30, Dr. Hosaka has not yet arrived. By 10 am, Rogelio wanted to pull out his wife from the operating room. Dr. Hosaka finally arrived at 12:10 pm more than 3 hours of the scheduled operation. Dr. Guiterres tried to intubate Erlinda. The nail beds of Erlinda were bluish discoloration in her left hand. At 3 pm, Erlinda was being wheeled to the Intensive care Unit and stayed there for a month. Since the ill-fated operation, Erlinda remained in comatose condition until she died. The family of Ramos sued them for damages.

Issue: WON there was an employee-employer relationship that existed between the Medical Center and Drs. Hosaka and Guiterrez. Held: No employer-employee between the doctors and hospital. Private Hospitals hire, fire and exercise real control over their attending and visiting consultant staff. While consultants are not technically employees, the control exercised, the hiring and the right to terminate consultants fulfill the hallmarks of an employer-employee relationship with the exception of payment of wages. The control test is determining. In applying the four fold test, DLSMC cannot be considered an employer of the respondent doctors. It has been consistently held that in determining whether an employer-employee relationship exists between the parties, the following elements must be present: (1) selection and engagement of services; (2) payment of wages; (3) the power to hire and fire; and (4) the power to control not only the end to be achieved, but the means to be used in reaching such an end. The hospital does not hire consultants but it accredits and grants him the privilege of maintaining a clinic and/or admitting patients. It is the patient who pays the consultants. The hospital cannot dismiss the consultant but he may lose his privileges granted by the hospital. The hospitals obligation is limited to providing the patient with the preferred room accommodation and other things that will ensure that the doctors orders are carried out. The court finds that there is no employer-employee relationship between the doctors and the hospital. Nogales et al., vs Capitol Medical Center (2006) G.R. 142625

In Ramos v. Court of Appeals, Court had the occasion to determine the relationship between a hospital and a consultant or visiting physician and the liability of such hospital for that physician's negligence: While "consultants" are not, technically employees, a point which respondent hospital asserts in denying all responsibility for the patient's condition, the control exercised, the hiring, and the right to terminate consultants all fulfill the important hallmarks of an employer-employee relationship, with the exception of the payment of wages. In assessing whether such a relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing, we rule that for the purpose of allocating responsibility in medical negligence cases, an employer-employee relationship in effect exists between hospitals and their attending and visiting physicians. While the Court in Ramos did not expound on the control test, such test essentially determines whether an employment relationship exists between a physician and a hospital based on the exercise of control over the physician as to details. Specifically, the employer (or the hospital) must have the right to control both the means and the details of the process by which the employee (or the physician) is to accomplish his task In the present case, the Court finds no single evidence pointing to CMC's exercise of control over Dr. Estrada's treatment and management of Corazon's condition. It is undisputed that throughout Corazon's pregnancy, she was under the exclusive prenatal care of Dr. Estrada. At the time of Corazon's admission at CMC and during her delivery, it was Dr. Estrada, assisted by Dr. Villaflor, who attended to Corazon. There was no showing that CMC had a part in diagnosing Corazon's condition. While Dr. Estrada enjoyed staff privileges at CMC, such fact alone did not make him an employee of CMC. CMC merely allowed Dr. Estrada to use its facilities when Corazon was about to give birth, which CMC considered an emergency. Considering these circumstances, Dr. Estrada is not an employee of CMC, but an independent contractor. In general, a hospital is not liable for the negligence of an independent contractorphysician. There is, however, an exception to this principle. The hospital may be liable if the physician is the "ostensible" agent of the hospital. This exception is also known as the "doctrine of apparent authority." In Gilbert v. Sycamore Municipal Hospital, the Illinois Supreme Court explained the doctrine of apparent authority in this wise: Under the doctrine of apparent authority a hospital can be held vicariously liable for the negligent acts of a physician providing care at the hospital, regardless of whether the physician is an independent contractor, unless the patient knows, or should have known, that the physician is an independent contractor. The elements of the action have been set out as follows: "For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that: (1) the hospital, or its agent, acted in a manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital; (2) where the acts of the agent create the appearance of authority, the plaintiff must also prove that the hospital had knowledge of and acquiesced in them; and

Facts: Corazon was under the exclusive care of Dr Oscar Estrada beginning the fourth month of her pregnancy. While on her last trimester of pregnancy, Dr Estrada noted an increase of her blood pressure and development of leg edema indicating preeclampsia which is a dangerous complication of pregnancy. Around midnight of 25 May 1976, Corazon started to experience mild labor pains prompting Spouses Nogales to see Dr. Estrada at his home. After examining Corazon, Dr. Estrada advised her immediate admission to the Capitol Medical Center. Eventually, Corazon died after giving birth to the child, which prompted the petitioners to file a complaint for damages against CMC, Dr. Estrada and other physicians and a certain nurse for Corazons death. Petitioners mainly contended that defendant physicians and CMC personnel were negligent in the treatment and management of Corazon's condition. Petitioners charged CMC with negligence in the selection and supervision of defendant physicians and hospital staff. Issue: WON CMC is vicariously liable for the negligence of Dr. Estrada? Held: CMC is vicariously liable.

(3) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence." The element of "holding out" on the part of the hospital does not require an express representation by the hospital that the person alleged to be negligent is an employee. Rather, the element is satisfied if the hospital holds itself out as a provider of emergency room care without informing the patient that the care is provided by independent contractors. The doctrine of apparent authority essentially involves two factors to determine the liability of an independent-contractor physician. The first factor focuses on the hospital's manifestations and is sometimes described as an inquiry whether the hospital acted in a manner which would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital. In this regard, the hospital need not make express representations to the patient that the treating physician is an employee of the hospital; rather a representation may be general and implied. In the instant case, CMC impliedly held out Dr. Estrada as a member of its medical staff. Through CMC's acts, CMC clothed Dr. Estrada with apparent authority thereby leading the Spouses Nogales to believe that Dr. Estrada was an employee or agent of CMC. CMC cannot now repudiate such authority. The second factor focuses on the patient's reliance. It is sometimes characterized as an inquiry on whether the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence. The records show that the Spouses Nogales relied upon a perceived employment relationship with CMC in accepting Dr. Estrada's services. Rogelio testified that he and his wife specifically chose Dr. Estrada to handle Corazon's delivery not only because of their friend's recommendation, but more importantly because of Dr. Estrada's "connection with a reputable hospital, the [CMC]." In other words, Dr. Estrada's relationship with CMC played a significant role in the Spouses Nogales' decision in accepting Dr. Estrada's services as the obstetrician-gynecologist for Corazon's delivery. Moreover, as earlier stated, there is no showing that before and during Corazon's confinement at CMC, the Spouses Nogales knew or should have known that Dr. Estrada was not an employee of CMC. Even simple negligence is not subject to blanket release in favor of establishments like hospitals but may only mitigate liability depending on the circumstances. When a person needing urgent medical attention rushes to a hospital, he cannot bargain on equal footing with the hospital on the terms of admission and operation. Such a person is literally at the mercy of the hospital. There can be no clearer example of a contract of adhesion than one arising from such a dire situation. Thus, the release forms of CMC cannot relieve CMC from liability for the negligent medical treatment of Corazon.

ABANTE vs LAMADRID BEARING & PARTS CO. Case Digest 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, we apply 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 doen;t 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.

ABS-CBN agreed to pay SONZAs talent fees as long as "AGENT and Jay Sonza shall faithfully and completely perform each condition of this Agreement." Even if it suffered severe business losses, ABS-CBN could not retrench SONZA because ABS-CBN remained obligated to pay SONZAs talent fees during the life of the Agreement. (d) The employers power to control the employee on the means and methods by which the work is accomplished - The control test is the most important test. This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises, the more likely the worker is considered an independent contractor. First, ABS-CBN engaged SONZAs services specifically to co-host the "Mel & Jay" programs. ABS-CBN did not assign any other work to SONZA. To perform his work, SONZA only needed his skills and talent. How SONZA delivered his lines, appeared on television, and sounded on radio were outside ABS-CBNs control. SONZA did not have to render eight hours of work per day. The Agreement required SONZA to attend only rehearsals and tapings of the shows, as well as pre- and post-production staff meetings. ABS-CBN could not dictate the contents of SONZAs script. However, the Agreement prohibited SONZA from criticizing in his shows ABS-CBN or its interests. The clear implication is that SONZA had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. Second, The Agreement stipulates that SONZA shall abide with the rules and standards of performance "covering talents" of ABS-CBN. The Agreement does not require SONZA to comply with the rules and standards of performance prescribed for employees of ABS-CBN. The code of conduct imposed on SONZA under the Agreement refers to the "Television and Radio Code of the Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which has been adopted by the COMPANY (ABS-CBN) as its Code of Ethics." The KBP code applies to broadcasters, not to employees of radio and television stations. Broadcasters are not necessarily employees of radio and television stations. Clearly, the rules and standards of performance referred to in the Agreement are those applicable to talents and not to employees of ABS-CBN. Lastly, being an exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control. The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry. This practice is not designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station. The broadcast station normally spends substantial amounts of money, time and effort "in building up its talents as well as the programs they appear in and thus expects that said talents remain exclusive with the station for a commensurate period of time." Normally, a much higher fee is paid to talents who agree to work exclusively for a particular radio or television station. In short, the huge talent fees partially compensates for exclusivity.

The decision of the CA is affirmed. Sonza vs ABS-CBN (2004) G.R. 138051 Facts: In May 1994, ABS-CBN signed an agreement with Mel & Jay Management and Development Corp for a radio and television program. ABS-CBN agreed to pay for SONZAs services a monthly talent fee of P310,000 for the first year and P317,000 for the second and third year of the Agreement. ABS-CBN would pay the talent fees on the 10th and 25th days of the month. On April 1996, Sonza wrote a letter to ABS-CBN President Eugenio Lopez III about a recent event concerning his programs and career, and that the said violation of the company has breached the agreement, thus, the notice of rescission of Agreement was sent. At the end of the same month, Sonza filed a complaint against ABS-CBN before the DOLE for non-payment of salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan (ESOP) which was opposed by ABS-CBN on the ground there was no employer-employee relationship existed between the parties. Issue: WON Sonza was an employee or independent contractor? Held: There was no employer-employee relationship that existed, but that of an independent contractor. Case law has consistently held that the elements of an employer-employee relationship are: (a) The selection and engagement of the employee - ABS-CBN engaged SONZAs services to co-host its television and radio programs because of SONZAs peculiar skills, talent and celebrity status. The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. (b) The payment of wages - ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to MJMDC. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. If SONZA were ABS-CBNs employee, there would be no need for the parties to stipulate on benefits such as "SSS, Medicare, x x x and 13th month pay" which the law automatically incorporates into every employer-employee contract. (c) The power of dismissal - For violation of any provision of the Agreement, either party may terminate their relationship. During the life of the Agreement,

ABS-CBN vs Nazareno (2006) G.R. 164156

Where a person has rendered at least one year of service, regardless of the nature of the activity performed, or where the work is continuous or intermittent, the employment is considered regular as long as the activity exists. The reason being that a customary appointment is not indispensable before one may be formally declared as having attained regular status. Article 280 of the Labor Code provides: REGULAR AND CASUAL EMPLOYMENT.The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.

Facts:

ABS-CBN employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs) on different dates. 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. 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. They were made to: a) Prepare, arrange airing of commercial broadcasting based on the daily operations log and digicart of respondent ABS-CBN; b) Coordinate, arrange personalities for air interviews; c) Coordinate, prepare schedule of reporters for scheduled news reporting and lead-in or incoming reports; d) Facilitate, prepare and arrange airtime schedule for public service announcement and complaints; e) Assist, anchor program interview, etc; and f) Record, log clerical reports, man based control radio.

Petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA) to be effective during the period from Dec 11, 1996 to Dec 11, 1999. However, since petitioner refused to recognize PAs as part of the bargaining unit, respondents were not included to the CBA.

Any employee who has rendered at least one year of service, whether continuous or intermittent, is deemed regular with respect to the activity performed and while such activity actually exists. The fact that respondents received pre-agreed talent fees instead of salaries, that they did not observe the required office hours, and that they were permitted to join other productions during their free time are not conclusive of the nature of their employment. They are regular employees who perform several different duties under the control and direction of ABS-CBN executives and supervisors.

Due to a memorandum assigning PAs to non-drama programs, and that the DYAB studio operations would be handled by the studio technician. There was a revision of the schedule and assignments and that respondent Gerzon was assigned as the fulltime PA of the TV News Department reporting directly to Leo Lastimosa.

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.

On Oct 12, 2000, 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.

What determines whether a certain employment is regular or otherwise 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.

Issue: WON the respondents are regular employees?

The employer-employee relationship between petitioner and respondents has been proven by the ff:

Held: Respondents are considered regular employees of ABS-CBN and are entitled to the benefits granted to all regular employees.

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 petitioners personnel department just like any ordinary employee.

Issue: WON there was an employer-employee relationship. Held: Petitioner is an employee of Kasei Corporation. The court held that in this jurisdiction, there has been no uniform test to determine the existence of an employer-employee relation. Generally, courts have relied on the so-called right of control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In addition to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, can help in determining the existence of an employer-employee relationship. The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employers 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. In Sevilla v. Court of Appeals, the court observed the need to consider the existing economic conditions prevailing between the parties, in addition to the standard of right-of-control like the inclusion of the employee in the payrolls, to give a clearer picture in determining the existence of an employer-employee relationship based on an analysis of the totality of economic circumstances of the worker.

Second. The so-called talent fees of respondents correspond to wages given as a result of an employer-employee relationship. Respondents did not have the power to bargain for huge talent fees, a circumstance negating independent contractual relationship.

Third. Petitioner could always discharge respondents should it find their work unsatisfactory, and respondents are highly dependent on the petitioner for continued work.

Fourth. The degree of control and supervision exercised by petitioner over respondents through its supervisors negates the allegation that respondents are independent contractors.

The presumption is that when the work done is an integral part of the regular business of the employer and when the worker, relative to the employer, does not furnish an independent business or professional service, such work is a regular employment of such employee and not an independent contractor.

Francisco vs NLRC (2006) 500 SCRA 690

Facts: Petitoner was hired by Kasei Corporation during the incorporation stage. She was designated as accountant and corporate secretary and was assigned to handle all the accounting needs of the company. She was also designated as Liason Officer to the City of Manila to secure permits for the operation of the company. In 1996, Petitioner was designated as Acting Manager. She was assigned to handle recruitment of all employees and perform management administration functions. In 2001, she was replaced by Liza Fuentes as Manager. Kasei Corporation reduced her salary to P2,500 per month which was until September. She asked for her salary but was informed that she was no longer connected to the company. She did not anymore report to work since she was not paid for her salary. She filed an action for constructive dismissal with the Labor Arbiter. The Labor Arbiter found that the petitioner was illegally dismissed. NLRC affirmed the decision while CA reversed it.

Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity, such as: (1) the extent to which the services performed are an integral part of the employers business; (2) the extent of the workers investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the workers opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and (7) the degree of dependency of the worker upon the employer for his continued employment in that line of business. The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of business. By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji Kamura, the corporations Technical Consultant. It is therefore apparent that petitioner is economically dependent on respondent corporation for her continued employment in the latters line of business. There can be no other conclusion that petitioner is an employee of respondent Kasei Corporation. She was selected and engaged by the company for compensation, and is economically dependent upon respondent for her continued employment in that line of business. Her main job function involved accounting and tax services rendered to Respondent Corporation on a regular basis over an indefinite period of engagement. Respondent Corporation hired and engaged petitioner for compensation, with the power to dismiss her for cause. More importantly, Respondent Corporation had the power to control petitioner with the means and methods by which the work is to be accomplished.

Lazaro vs Social Security Commission (2004) G.R. 138254 Facts: Rosalina Laudato filed a petition before the SSC for social security coverage and remittance of unpaid monthly social security contributions against her three (3) employers. Among them was Angelito Lazaro, proprietor of Royal Star, which is engaged in the business of selling home appliances. Laudato alleged that despite her employment as sales supervisor of the sales agents for Royal Star from April of 1979 to March of 1986, Lazaro had failed during the said period, to report her to the SSC for compulsory coverage or remit Laudatos social security contributions. Lazaro denied that Laudato was a sales supervisor of Royal Star, averring instead that she was a mere sales agent whom he paid purely on commission basis. Lazaro also maintained that Laudato was not subjected to definite hours and conditions of work. As such, she could not be deemed an employee of Royal Star. Issue: WON Laudato is considered employee of Royal Star Marketing? Held: Laudato is an employee of Royal Star and as such is entitled to the coverage of Social Security Law. It is an accepted doctrine that for the purposes of coverage under the Social Security Act, the determination of employer-employee relationship warrants the application of the control test, that is, whether the employer controls or has reserved the right to control the employee, not only as to the result of the work done, but also as to the means and methods by which the same is accomplished. The fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee relationship. In Grepalife v. Judico, the Court upheld the existence of an employer-employee relationship between the insurance company and its agents, despite the fact that the compensation that the agents on commission received was not paid by the company but by the investor or the person insured. The relevant factor remains, as stated earlier, 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. It should also be emphasized that the SSC, also as upheld by the Court of Appeals, found that Laudato was a sales supervisor and not a mere agent. As such, Laudato oversaw and supervised the sales agents of the company, and thus was subject to the control of management as to how she implements its policies and its end results. The finding of the SSC that Laudato was an employee of Royal Star is supported by substantial evidence. The SSC examined the cash vouchers issued by Royal Star to Laudato, calling cards of Royal Star denominating Laudato as a Sales Supervisor of the company, and Certificates of Appreciation issued by Royal Star to Laudato in recognition of her unselfish and loyal efforts in promoting the company.

The Memorandum evinces the fact that Royal Star exercised control over its sales supervisors or agents such as Laudato as to the means and methods through which these personnel performed their work. [G.R. No. 157214. June 7, 2005] PHILIPPINE GLOBAL COMMUNICATIONS, RICARDO DE VERA, respondent. INC., petitioner, vs.

FACTS

De Vera and petitioner company entered into a contract where respondent was to attend to the medical needs of petitioners employees while being paid a retainer fee of P4,000 per month. Later, De Vera was informed y petitioner that the retainership will be discontinued. Respondent filed a case for illegal dismissal.

ISSUE

Whether or not de Vera is an employee of PhilComm or an independent contractor.

HELD

Applying the four fold test, de Vera is not an employee. There are several indicators apart from the fact that the power to terminate the arrangement lay on both parties: from the time he started to work with petitioner, he never was included in its payroll; was never deducted any contribution for remittance to the Social Security System (SSS); he was subjected by petitioner to the ten (10%) percent withholding tax for his professional fee, in accordance with the National Internal Revenue Code, matters which are simply inconsistent with an employer-employee relationship; the records are replete with evidence showing that respondent had to bill petitioner for his monthly professional fees. It simply runs against the grain of common experience to imagine that an ordinary employee has yet to bill his employer to receive his salary.

A piece of documentary evidence appreciated by the SSC is Memorandum dated 3 May 1980 of Teresita Lazaro, General Manager of Royal Star, directing that no commissions were to be given on all main office sales from walk-in customers and enjoining salesmen and sales supervisors to observe this new policy.

Finally, the element of control s absent.

Petition granted.

Coca-Cola Bottlers Phils., vs Dr. Climaco (2007) G.R. 146881

Facts: Dr. Dean Climaco is a medical doctor who was hired by petitioner Coca-Cola Bottlers Phils., Inc. by virtue of a Retainer Agreement for a period of 1 year with a monthly salary of Three Thousand Eight Hundred (P3,800.00). The Retainer Agreement, which began on January 1, 1988, was renewed annually. The last one expired on December 31, 1993. Despite the non-renewal of the Retainer Agreement, respondent continued to perform his functions as company doctor to Coca-Cola until he received a letter from petitioner company concluding their retainership agreement effective 30 days from receipt thereof. Petitioner was already making inquiries regarding his status with the company. First, he wrote a letter addressed to Dr. Willie Sy, the Acting President and Chairperson of the Committee on Membership, Philippine College of Occupational Medicine. In response, Dr. Sy wrote a letter to the 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 under Article 157 (b) of the Labor Code. Issue: WON there exists an employer-employee relationship between Coca-Cola and Dr. Climaco? Held: No employer-employee relationship exists between the parties. 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 employees conduct, or the so-called "control test," considered to be the most important element. The Labor Arbiter and the NLRC correctly found that Coca-Cola 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 respondents 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 Coca-Cola, in each case." The Comprehensive Medical Plan, provided guidelines merely to ensure that the end result was achieved, but did not control the means and methods by which respondent performed his assigned tasks. It is precisely because the company lacks the power of control that the contract provides that respondent shall be directly responsible to the employee concerned and their dependents for any injury, harm or damage caused through professional negligence, incompetence or other valid causes of action. Complainant does not dispute the fact that outside of the two (2) hours that he is required to be at respondent companys premises, he is not at all further required to just sit around in the premises and wait for an emergency to occur so as to enable him from using such hours for his own benefit and advantage. In fact, complainant maintains his own private clinic attending to his private practice in the city, where he

services his patients, bills them accordingly -- and if it is an employee of respondent company who is attended to by him for special treatment that needs hospitalization or operation, this is subject to a special billing. More often than not, an employee is required to stay in the employers workplace or proximately close thereto that he cannot utilize his time effectively and gainfully for his own purpose.

[G.R. No. 160854 March 3, 2006] BIG AA MANUFACTURER, Petitioner, vs. EUTIQUIO ANTONIO, JAY ANTONIO, FELICISIMO ANTONIO, and LEONARDO ANTONIO, SR., Respondents.

FACTS

Petitioner is a sole proprietorship registered in the name of its proprietor, Enrico E. Alejo. Respondents Eutiquio Antonio,Jay Antonio, Felicisimo Antonio, Leonardo Antonio, Sr. and Roberto Fabian filed a complaint for illegal lay-off and illegal deductions before the NLRCs Regional Arbitration Branch No. III. They claimed that they were dismissed on January 11, 2000 and sought separation pay from petitioner.

The respondents alleged that as regular employees, they worked from 8:00 a.m. to 5:00 p.m. at petitioners premises using petitioners tools and equipment and they received P250 per day. Eutiquio was employed as carpenter-foreman from 1991-1999; Jay as carpenter from 1993-1999; Felicisimo as carpenter from 1994-1999; and Leonardo, Sr. also as carpenter from 1997-1999. According to respondents, they were dismissed without just cause and due process; hence, their prayer for reinstatement and full backwages. They also impleaded one Hermie Alejo, a relative of the petitioners owner, as co-respondent in their complaint.

On the other hand, petitioner Big AA Manufacturer, affirmed it is a sole proprietorship registered in the name of Enrico Alejo and engaged in manufacturing office furniture, but it denied that respondents were its regular employees. Instead, petitioner claimed that Eutiquio Antonio was one of its independent contractors who used the services of the other respondents. According to petitioner, its independent contractors were paid by results and were responsible for the salaries of their own workers. Allegedly, there was no employer-employee relationship between petitioner and respondents. However, petitioner stated it allowed respondents to use its facilities to meet job orders. Petitioner also denied that respondents were laid-off by Big AA Manufacturer, since they were project employees only. It added that since Eutiquio Antonio had refused a job order of office tables, their contractual relationship ended. Petitioner surmised that Eutiquio resented the January 10, 2000 Implementing Guidelines it issued to improve efficiency and performance.

ISSUE

Whether or not respondents are regular employees of petitioner Big AA.

HELD

The SC held that considering the submission of the parties, it is constrained to agree with the unanimous ruling of the Court of Appeals, NLRC and Labor Arbiter that respondents are petitioners regular employees. Respondents were employed for more than one year and their work as carpenters was necessary or desirable in petitioners usual trade or business of manufacturing office furniture. Under Article 280 of the Labor Code, the applicable test to determine whether an employment should be considered regular or non-regular is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer.

True, certain forms of employment require the performance of usual or desirable functions and exceed one year but do not necessarily result to regular employment under Article 280 of the Labor Code.21Some specific exceptions include project or seasonal employment. Yet, in this case, respondents cannot be considered project employees. Petitioner had neither shown that respondents were hired for a specific project the duration of which was determined at the time of their hiring nor identified the specific project or phase thereof for which respondents were hired.

It also agreed that Eutiquio was not an independent contractor for he does not carry a distinct and independent business, and he does not possess substantial capital or investment in tools, equipment, machinery or work premises.He works within petitioners premises using the latters tools and materials, as admitted by petitioner. Eutiquio is also under petitioners control and supervision. Attesting to this is petitioners admission that it allowed respondents to use its facilities for the "proper implementation" of job orders. Moreover, the Implementing Guidelines regulating attendance, overtime, deadlines, penalties; providing petitioners right to fi re employees or "contractors"; requiring the carpentry division to join petitioners exercise program; and providing rules on machine maintenance, all reflect control and supervision over respondents.

Petition is denied.