G.R. No.

167622 January 25, 2011

GREGORIO V. TONGKO, Petitioner,

RESOLUTION

BRION, J.:

We resolve petitioner Gregorio V. Tongko’s bid, through his Motion for Reconsideration,1 to set aside our June 29, 2010 Resolution that
reversed our Decision of November 7, 2008.2 With the reversal, the assailed June 29, 2010 Resolution effectively affirmed the Court of
Appeals’ ruling3 in CA-G.R. SP No. 88253 that the petitioner was an insurance agent, not the employee, of the respondent The
Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife).

In his Motion for Reconsideration, petitioner reiterates the arguments he had belabored in his petition and various other submissions.
He argues that for 19 years, he performed administrative functions and exercised supervisory authority over employees and agents of
Manulife, in addition to his insurance agent functions.4 In these 19 years, he was designated as a Unit Manager, a Branch Manager and
a Regional Sales Manager, and now posits that he was not only an insurance agent for Manulife but was its employee as well.

We find no basis or any error to merit the reconsideration of our June 29, 2010 Resolution.

A. Labor Law Control = Employment Relationship

Control over the performance of the task of one providing service – both with respect to the means and manner, and the results of the
service – is the primary element in determining whether an employment relationship exists. We resolve the petitioner’s Motion against
his favor since he failed to show that the control Manulife exercised over him was the control required to exist in an employer-employee
relationship; Manulife’s control fell short of this norm and carried only the characteristic of the relationship between an insurance
company and its agents, as defined by the Insurance Code and by the law of agency under the Civil Code.

The petitioner asserts in his Motion that Manulife’s labor law control over him was demonstrated (1) when it set the objectives and sales
targets regarding production, recruitment and training programs; and (2) when it prescribed the Code of Conduct for Agents and the
Manulife Financial Code of Conduct to govern his activities.5 We find no merit in these contentions.

In our June 29, 2010 Resolution, we noted that there are built-in elements of control specific to an insurance agency, which do not
amount to the elements of control that characterize an employment relationship governed by the Labor Code. The Insurance Code
provides definite parameters in the way an agent negotiates for the sale of the company’s insurance products, his collection activities
and his delivery of the insurance contract or policy.6 In addition, the Civil Code defines an agent as a person who binds himself to do
something in behalf of another, with the consent or authority of the latter.7 Article 1887 of the Civil Code also provides that in the
execution of the agency, the agent shall act in accordance with the instructions of the principal.

All these, read without any clear understanding of fine legal distinctions, appear to speak of control by the insurance company over its
agents. They are, however, controls aimed only at specific results in undertaking an insurance agency, and are, in fact, parameters set
by law in defining an insurance agency and the attendant duties and responsibilities an insurance agent must observe and undertake.
They do not reach the level of control into the means and manner of doing an assigned task that invariably characterizes an
employment relationship as defined by labor law. From this perspective, the petitioner’s contentions cannot prevail.

To reiterate, guidelines indicative of labor law "control" do not merely relate to the mutually desirable result intended by the contractual
relationship; they must have the nature of dictating the means and methods to be employed in attaining the result.8 Tested by this norm,
Manulife’s instructions regarding the objectives and sales targets, in connection with the training and engagement of other agents, are
among the directives that the principal may impose on the agent to achieve the assigned tasks. They are targeted results that Manulife
wishes to attain through its agents. Manulife’s codes of conduct, likewise, do not necessarily intrude into the insurance agents’ means
and manner of conducting their sales. Codes of conduct are norms or standards of behavior rather than employer directives into how
specific tasks are to be done. These codes, as well as insurance industry rules and regulations, are not per se indicative of labor law
control under our jurisprudence.9

The duties10 that the petitioner enumerated in his Motion are not supported by evidence and, therefore, deserve scant consideration.
Even assuming their existence, however, they mostly pertain to the duties of an insurance agent such as remitting insurance fees to
Manulife, delivering policies to the insured, and after-sale services. For agents leading other agents, these include the task of
overseeing other insurance agents, the recruitment of other insurance agents engaged by Manulife as principal, and ensuring that
these other agents comply with the paperwork necessary in selling insurance. That Manulife exercises the power to assign and remove
agents under the petitioner’s supervision is in keeping with its role as a principal in an agency relationship; they are Manulife agents in
the same manner that the petitioner had all along been a Manulife agent.

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The petitioner also questions Manulife’s act of investing him with different titles and positions in the course of their relationship, given
the respondents’ position that he simply functioned as an insurance agent.11 He also considers it an unjust and inequitable situation that
he would be unrewarded for the years he spent as a unit manager, a branch manager, and a regional sales manager.12

Based on the evidence on record, the petitioner’s occupation was to sell Manulife’s insurance policies and products from 1977 until the
termination of the Career Agent’s Agreement (Agreement). The evidence also shows that through the years, Manulife permitted him to
exercise guiding authority over other agents who operate under their own agency agreements with Manulife and whose commissions
he shared.13 Under this scheme – an arrangement that pervades the insurance industry – petitioner in effect became a "lead agent" and
his own commissions increased as they included his share in the commissions of the other agents;14 he also received greater
reimbursements for expenses and was allowed to use Manulife’s facilities. His designation also changed from unit manager to branch
manager and then to regional sales manager, to reflect the increase in the number of agents he recruited and guided, as well as the
increase in the area where these agents operated.

As our assailed Resolution concluded and as we now similarly conclude, these arrangements, and the titles and positions the petitioner
was invested with, did not change his status from the insurance agent that he had always been (as evidenced by the Agreement that
governed his relationship with Manulife from the start to its disagreeable end). The petitioner simply progressed from his individual
agency to being a lead agent who could use other agents in selling insurance and share in the earnings of these other agents.

In sum, we find absolutely no evidence of labor law control, as extensively discussed in our Resolution of June 29, 2010, granting
Manulife’s motion for reconsideration. The Dissent, unfortunately, misses this point.

B. No Resulting Inequity

We also do not agree that our assailed Resolution has the effect of fostering an inequitable or unjust situation. The records show that
the petitioner was very amply paid for his services as an insurance agent, who also shared in the commissions of the other agents
under his guidance. In 1997, his income was ₱2,822,620; in 1998, ₱4,805,166.34; in 1999, ₱6,797,814.05; in 2001, ₱6,214,737.11; and
in 2002, ₱8,003,180.38. All these he earned as an insurance agent, as he failed to ever prove that he earned these sums as an
employee. In technical terms, he could not have earned all these as an employee because he failed to provide the substantial evidence
required in administrative cases to support the finding that he was a Manulife employee. No inequity results under this legal situation;
what would be unjust is an award of backwages and separation pay – amounts that are not due him because he was never an
employee.

The Dissent’s discussion on this aspect of the case begins with the wide disparity in the status of the parties – that Manulife is a big
Canadian insurance company while Tongko is but a single agent of Manulife. The Dissent then went on to say that "[i]f is but just, it is
but right, that the Court interprets the relationship between Tongko and Manulife as one of employment under labor laws and to uphold
his constitutionally protected right, as an employee, to security of tenure and entitlement to monetary award should such right be
infringed."15 We cannot simply invoke the magical formula by creating an employment relationship even when there is none because of
the unavoidable and inherently weak position of an individual over a giant corporation.

The Dissent likewise alluded to an ambiguity in the true relationship of the parties after Tongko’s successive appointments. We already
pointed out that the legal significance of these appointments had not been sufficiently explained and that it did not help that Tongko
never bothered to present evidence on this point. The Dissent recognized this but tried to excuse Tongko from this failure in the
subsequent discussion, as follows:

[o]ther evidence was adduced to show such duties and responsibilities. For one, in his letter of November 6, 2001, respondent De Dios
addressed petitioner as sales manager. And as I wrote in my Dissent to the June 29, 2010 Resolution, it is difficult to imagine that
Manulife did not issue promotional appointments to petitioner as unit manager, branch manager, and, eventually, regional sales
manager. Sound management practice simply requires an appointment for any upward personnel movement, particularly when
additional functions and the corresponding increase in compensation are involved. Then, too, the adverted affidavits of the managers of
Manulife as to the duties and responsibilities of a unit manager, such as petitioner, point to the conclusion that these managers were
employees of Manulife, applying the "four-fold" test.16

This Court (and all adjudicators for that matter) cannot and should not fill in the evidentiary gaps in a party’s case that the party failed to
support; we cannot and should not take the cudgels for any party. Tongko failed to support his cause and we should simply view him
and his case as they are; our duty is to sit as a judge in the case that he and the respondent presented.

To support its arguments on equity, the Dissent uses the Constitution and the Civil Code, using provisions and principles that are all
motherhood statements. The mandate of the Court, of course, is to decide cases based on the facts and the law, and not to base its
conclusions on fundamental precepts that are far removed from the particular case presented before it. When there is no room for their
application, of capacity of principles, reliance on the application of these fundamental principles is misplaced.

C. Earnings were Commissions

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That his earnings were agent’s commissions arising from his work as an insurance agent is a matter that the petitioner cannot deny, as
these are the declarations and representations he stated in his income tax returns through the years. It would be doubly unjust,
particularly to the government, if he would be allowed at this late point to turn around and successfully claim that he was merely an
employee after he declared himself, through the years, as an independent self-employed insurance agent with the privilege of
deducting business expenses. This aspect of the case alone – considered together with the probative value of income tax declarations
and returns filed prior to the present controversy — should be enough to clinch the present case against the petitioner’s favor.

D. The Dissent’s Solution:

The Dissent proposes that Tongko should be considered as part employee (as manager) and part insurance agent; hence, the original
decision should be modified to pertain only to the termination of his employment as a manager and not as an insurance agent.
Accordingly, the backwages component of the original award to him should not include the insurance sales commissions. This solution,
according to the line taken by the Dissent then, was justified on the view that this was made on a case-to-case basis.

Decisions of the Supreme Court, as the Civil Code provides, form part of the law of the land. When the Court states that the
determination of the existence of an employment relationship should be on a case-to-case basis, this does not mean that there will be
as many laws on the issue as there are cases. In the context of this case, the four-fold test is the established standard for determining
employer-employee relationship and the existence of these elements, most notably control, is the basis upon which a conclusion on the
absence of employment relationship was anchored. This simply means that a conclusion on whether employment relationship exists in
a particular case largely depends on the facts and, in no small measure, on the parties’ evidence vis-à-vis the clearly defined
jurisprudential standards. Given that the parties control what and how the facts will be established in a particular case and/or how a
particular suit is to be litigated, deciding the issues on a case-to-case basis becomes an imperative.

Another legal reality, a more important one, is that the duty of a court is to say what the law is.17 This is the same duty of the Supreme
Court that underlies the stare decisis principle. This is how the public, in general and the insurance industry in particular, views the role
of this Court and courts in general in deciding cases. The lower courts and the bar, most specially, look up to the rulings of this Court for
guidance. Unless extremely unavoidable, the Court must, as a matter of sound judicial policy, resist the temptation of branding its ruling
pro hac vice.

The compromise solution of declaring Tongko both an employee and an agent is legally unrealistic, unwieldy and is, in fact, legally
infirm, as it goes against the above basic principles of judicial operation. Likewise, it does not and cannot realistically solve the
problem/issue in this case; it actually leaves more questions than answers.

As already pointed out, there is no legal basis (be it statutory or jurisprudential) for the part-employee/part-insurance agent status under
an essentially principal-agent contractual relation which the Dissent proposes to accord to Tongko. If the Dissent intends to establish
one, this is highly objectionable for this would amount to judicial legislation. A legal relationship, be it one of employment or one based
on a contract other than employment, exists as a matter of law pursuant to the facts, incidents and legal consequences of the
relationship; it cannot exist devoid of these legally defined underlying facts and legal consequences unless the law itself creates the
relationship – an act that is beyond the authority of this Court to do.

Additionally, the Dissent’s conclusion completely ignores an unavoidable legal reality – that the parties are bound by a contract of
agency that clearly subsists notwithstanding the successive designation of Tongko as a unit manager, a branch manager and a regional
sales manager. (As already explained in our Resolution granting Manulife’s motion for reconsideration, no evidence on record exists to
provide the Court with clues as to the precise impact of all these designations on the contractual agency relationship.) The Dissent, it
must be pointed out, concludes that Tongko’s employment as manager was illegally terminated; thus, he should be accordingly afforded
relief therefor. But, can Tongko be given the remedies incidental to his dismissal as manager separately from his status as an insurance
agent? In other words, since the respondents terminated all relationships with Tongko through the termination letter, can we simply rule
that his role as a manager was illegally terminated without touching on the consequences of this ruling on his status as an insurance
agent? Expressed in these terms, the inseparability of his contract as agent with any other relationship that springs therefrom can thus
be seen as an insurmountable legal obstacle.

The Dissent’s compromise approach would also sanction split jurisdiction. The labor tribunals shall have jurisdiction over Tongko’s
employment as manager while another entity shall decide the issues/cases arising from the agency relationship. If the managerial
employment is anchored on the agency, how will the labor tribunals decide an issue that is inextricably linked with a relationship that is
outside the loop of their jurisdiction? As already mentioned in the Resolution granting Manulife’s reconsideration, the DOMINANT
relationship in this case is agency and no other.

E. The Dissent’s Cited Cases

The Dissent cites the cases of Great Pacific Life Assurance Corporation v. National Labor Relations Commission18and Insular Life
Assurance Co., Ltd. v. National Labor Relations Commission19 to support the allegation that Manulife exercised control over the
petitioner as an employer.

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In considering these rulings, a reality that cannot but be recognized is that cases turn and are decided on the basis of their own unique
facts; the ruling in one case cannot simply be bodily lifted and applied to another, particularly when notable differences exist between
the cited cases and the case under consideration; their respective facts must be strictly examined to ensure that the ruling in one
applies to another. This is particularly true in a comparison of the cited cases with the present case. Specifically, care should be taken in
reading the cited cases and applying their rulings to the present case as the cited cases all dealt with the proper legal characterization
of subsequent management contracts that superseded the original agency contract between the insurance company and the agent.

In Great Pacific Life, the Ruiz brothers were appointed to positions different from their original positions as insurance agents, whose
duties were clearly defined in a subsequent contract. Similarly, in Insular, de los Reyes, a former insurance agent, was appointed as
acting unit manager based on a subsequent contract. In both cases, the Court anchored its findings of labor control on the stipulations
of these subsequent contracts.

In contrast, the present case is remarkable for the absence of evidence of any change in the nature of the petitioner’s employment with
Manulife. As previously stated above and in our assailed Resolution, the petitioner had always been governed by the Agreement from
the start until the end of his relationship with Manulife. His agency status never changed except to the extent of being a lead agent.
Thus, the cited cases – where changes in company-agent relationship expressly changed and where the subsequent contracts were
the ones passed upon by the Court – cannot be totally relied upon as authoritative.

We cannot give credit as well to the petitioner’s claim of employment based on the affidavits executed by other Manulife agents
describing their duties, because these same affidavits only affirm their status as independent agents, not as employees. To quote these
various claims:20

1.a. I have no fixed wages or salary since my services are compensated by way of commissions based on the computed
premiums paid in full on the policies obtained thereat;

1.b. I have no fixed working hours and employ my own method in soliciting insurance at a time and place I see fit;

1.c. I have my own assistant and messenger who handle my daily work load;

1.d. I use my own facilities, tools, materials and supplies in carrying out my business of selling insurance;

xxxx

6. I have my own staff that handles day to day operations of my office;

7. My staff are my own employees and received salaries from me;

xxxx

9. My commission and incentives are all reported to the Bureau of Internal Revenue (BIR) as income by a self-employed individual or
professional with a ten (10) percent creditable withholding tax. I also remit monthly for professionals.

The petitioner cannot also rely on the letter written by respondent Renato Vergel de Dios to prove that Manulife exercised control over
him. As we already explained in the assailed Resolution:

Even de Dios’ letter is not determinative of control as it indicates the least amount of intrusion into Tongko’s exercise of his role as
manager in guiding the sales agents. Strictly viewed, de Dios’ directives are merely operational guidelines on how Tongko could align
his operations with Manulife’s re-directed goal of being a "big league player." The method is to expand coverage through the use of
more agents. This requirement for the recruitment of more agents is not a means-and-method control as it relates, more than anything
else, and is directly relevant, to Manulife’s objective of expanded business operations through the use of a bigger sales force whose
members are all on a principal-agent relationship. An important point to note here is that Tongko was not supervising regular full-time
employees of Manulife engaged in the running of the insurance business; Tongko was effectively guiding his corps of sales agents, who
are bound to Manulife through the same agreement that he had with manulife, all the while sharing in these agents’ commissions
through his overrides.21

Lastly, in assailing the Agreement between him and Manulife, the petitioner cites Paguio v. National Labor Relations Commission22 on
the claim that the agreement that the parties signed did not conclusively indicate the legal relationship between them.

The evidentiary situation in the present case, however, shows that despite the petitioner’s insistence that the Agreement was no longer
binding between him and Manulife, no evidence was ever adduced to show that their relationship changed so that Manulife at some
point controlled the means and method of the petitioner’s work. In fact, his evidence only further supports the conclusion that he

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remained an independent insurance agent – a status he admits, subject only to the qualification that he is at the same time an
employee. Thus, we can only conclude that the Agreement governed his relations with Manulife.

Additionally, it is not lost on us that Paguio is a ruling based on a different factual setting; it involves a publishing firm and an account
executive, whose repeated engagement was considered as an indication of employment. Our ruling in the present case is specific to
the insurance industry, where the law permits an insurance company to exercise control over its agents within the limits prescribed by
law, and to engage independent agents for several transactions and within an unlimited period of time without the relationship
amounting to employment. In light of these realities, the petitioner’s arguments on his last argument must also fail.

The dissent also erroneously cites eight other cases — Social Security System v. Court of Appeals,23 Cosmopolitan Funeral Homes,
Inc. v. Maalat,24 Algon Engineering Construction Corporation v. National Labor Relations Commission,25 Equitable Banking Corporation
v. National Labor Relations Commission,26 Lazaro v. Social Security Commission,27 Dealco Farms, Inc. v. National Labor Relations
Commission,28 South Davao Development Company, Inc. v. Gamo,29 and Abante, Jr. v. Lamadrid Bearing & Parts Corporation.30 The
dissent cited these cases to support its allegation that labor laws and jurisprudence should be applied in cases, to the exclusion of other
laws such as the Civil Code or the Insurance Code, even when the latter are also applicable.

In Social Security System, Cosmopolitan Funeral Homes, Dealco Farms, and South Davao Development, the issue that repeats itself is
whether complainants were employees or independent contractors; the legal relationships involved are both labor law concepts and
make no reference to the Civil Code (or even the Insurance Code). The provisions cited in the Dissent — Articles 1458-1637 of the Civil
Code31 and Articles 1713-1720 of the Civil Code 32— do not even appear in the decisions cited.

In Algon, the issue was whether the lease contract should dictate the legal relationship between the parties, when there was proof of an
employer-employee relationship. In the cited case, the lease provisions on termination were thus considered irrelevant because of a
substantial evidence of an employment relationship. The cited case lacks the complexity of the present case; Civil Code provisions on
lease do not prescribe that lessees exercise control over their lessors in the way that the Insurance Code and the Civil provide that
insurance companies and principals exercised control over their agents.

The issue in Equitable, on the other hand, is whether a lawyer-client relationship or an employment relationship governs the legal
relation between parties. Again, this case is inapplicable as it does not illustrate the predominance of labor laws and jurisprudence over
other laws, in general, and the Insurance Code and Civil Code, in particular. It merely weighed the evidence in favor of an employment
relationship over that of a lawyer-client relationship. Similarly in Lazaro, the Court found ample proof of control determinative of an
employer-employee relationship.1âwphi1Both cases are not applicable to the present case, which is attended by totally different factual
considerations as the petitioner had not offered any evidence of the company’s control in the means and manner of the performance of
his work.

On the other hand, we find it strange that the dissent cites Abante as a precedent, since the Court, in this case, held that an employee-
employer relationship is notably absent in this case as the complainant was a sales agent. This case better supports the majority’s
position that a sales agent, who fails to show control in the concept of labor law, cannot be considered an employee, even if the
company exercised control in the concept of a sales agent.33

It bears stressing that our ruling in this case is not about which law has primacy over the other, but that we should be able to reconcile
these laws. We are merely saying that where the law makes it mandatory for a company to exercise control over its agents, the
complainant in an illegal dismissal case cannot rely on these legally prescribed control devices as indicators of an employer-employee
relationship. As shown in our discussion, our consideration of the Insurance Code and Civil Code provisions does not negate the
application of labor laws and jurisprudence; ultimately, we dismissed the petition because of its failure to comply with the control test.

WHEREFORE, premises considered, we hereby DENY the Motion for Reconsideration WITH FINALITY for lack of merit. No further
pleadings shall be entertained. Let entry of judgment proceed in due course.

SO ORDERED.