GANITUEN, ANGELA B.

ATOK BIG WEDGE COMPANY v. JESUS P. GISON, GR No. 169510, 2011-08-08

Facts:
Respondent Jesus P. Gison was engaged as part-time consultant on retainer basis by petitioner Atok Big
Wedge Company, Inc.
As a consultant on retainer basis, respondent assisted petitioner's retained legal counsel with matters
pertaining to the prosecution of cases against illegal surface occupants within the area covered by the
company's mineral claims.
Respondent was likewise tasked to perform liaison work with several government agencies, which he said
was his expertise.
Petitioner did not require respondent to report to its office on a regular basis, except when occasionally
requested by the management to discuss matters needing his expertise as a consultant.
As payment for his services, respondent received a retainer fee of P3,000.00 a month,[3] which was
delivered to him either at his residence or in a local restaurant. The parties executed a retainer agreement,
but such agreement was misplaced and can no longer be found.
The said arrangement continued for the next eleven years.
since respondent was getting old, he requested that petitioner cause his registration with the Social
Security System (SSS), but petitioner did not accede to his request. He later reiterated his request but it
was ignored by respondent considering that... he was only a retainer/consultant.
respondent filed a Complaint [4] with the SSS against petitioner for the latter's refusal to cause his
registration with the SSS.
Mario D. Cera, in his capacity as resident manager of petitioner, issued a Memorandum [5] advising
respondent that within 30 days from receipt thereof, petitioner is terminating his retainer contract with the
company since his services are no longer necessary.
respondent filed a Complaint [6] for illegal dismissal, unfair labor practice, underpayment of wages, non-
payment of 13th month pays, vacation pay, and sick leave pay with the National Labor Relations
Commission
(NLRC) against petitioner, Mario D. Cera
Respondent alleged that:
It was also agreed upon by him and Torres that his participation in resolving the... problem was temporary
and there will be no employer-employee relationship between him and Atok. It was also agreed upon that
his compensation, allowances and other expenses will be paid through disbursement vouchers.
Labor Arbiter rendered a Decision [8] ruling in favor of the petitioner.
Finding no employer-employee relationship between petitioner and respondent, the
Labor Arbiter dismissed the complaint for lack of merit.
the NLRC issued a Resolution [9] affirming the decision of the Labor Arbiter.
the CA rendered the assailed Decision annulling and setting aside the decision of the NLRC
In ruling in favor of the respondent, the CA opined that both the Labor Arbiter and the NLRC may have
overlooked Article 280 of the Labor Code,[13] or the provision which distinguishes between two kinds
of employees, i.e., regular and casual employees. Applying the provision to the respondent's case, he is
deemed a regular employee of the petitioner after the lapse of one year from his employment. Considering
also that respondent had been performing services for the petitioner for eleven years, respondent is
entitled to the rights and privileges of a regular employee.
Petitioner, posits that the CA erred in applying Article 280 of the Labor Code in determining whether
there was an employer-employee relationship between the petitioner and the respondent. Petitioner
contends that where the existence of an employer-employee relationship is in dispute, Article 280 of the
Labor Code is inapplicable. The said article only set the distinction between a casual employee from a
regular employee for purposes of determining the rights of an employee to be entitled to certain benefits.
Issues:
respondent is not a regular employee and not entitled to reinstatement.
respondent maintains that he is an employee of the petitioner whether or not an employer-employee
relationship exists between petitioner and respondent.
Ruling:
The petition is meritorious.
the existence of an employer-employee relationship is ultimately a question of fact and that the findings
thereon by the Labor Arbiter and the NLRC shall be accorded not only respect but even finality when
supported by substantial evidence.
To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to
the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the power to control the employee's conduct, or the so-called "control
test." Of these four, the last one is the most important.[19] 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.
Applying the aforementioned test, an employer-employee relationship is apparently absent in the case at
bar.
Among other things, respondent was not required to report every day during regular office hours of
petitioner. Respondent's monthly retainer fees were paid to him either at his residence or a local
restaurant. More importantly, petitioner did not prescribe the manner in which respondent would
accomplish any of the tasks in which his expertise as a liaison officer was needed; respondent was left
alone and given the freedom to accomplish the tasks using his own means and method.
Verily, the absence of the element of control on the part of the petitioner engenders a conclusion that he is
not an employee of the petitioner. Moreover, the absence of the parties' retainership agreement
notwithstanding, respondent clearly admitted that petitioner hired him in a limited capacity only and that
there will be no employer-employee relationship between them.
Contrary to the conclusion of the CA, respondent is not an employee, much more a regular employee of
petitioner. any agreement may provide that one party shall render services for and in behalf of another, no
matter how necessary for the latter's business, even without being hired as an employee.[23] Hence,
respondent's... length of service and petitioner's repeated act of assigning respondent some tasks to be
performed did not result to respondent's entitlement to the rights and privileges of a regular employee.
Furthermore, despite the fact that petitioner made use of the services of respondent for eleven years, he
still cannot be considered as a regular employee of petitioner.
Article 280 of the Labor Code is not applicable in the case at bar.
said provision is not the yardstick for determining the existence of an employment relationship because it
merely distinguishes between two kinds of employees, i.e., regular employees and casual employees, for
purposes of determining the right of an employee to certain benefits, to join or form a union, or to security
of tenure; it does not apply where the existence of an employment relationship is in dispute.
Considering that there is no employer-employee relationship between the parties, the termination of
respondent's services by the petitioner after due notice did not constitute illegal dismissal warranting his
reinstatement and the payment of full back wages, allowances and other benefits.
WHEREFORE, premises considered, the petition is GRANTED.

ROYALE HOMES MARKETING CORPORATION v. FIDEL P. ALCANTARA, GR No. 195190,

2014-07-28
Facts:
In 1994, Royale Homes, a corporation engaged in marketing real estates, appointed Alcantara as its
Marketing Director for a fixed period of one year. His work consisted mainly of marketing Royale
Homes' real estate inventories on an exclusive basis. Royale Homes... reappointed him for several
consecutive years, the last of which covered the period January 1 to December 31, 2003 where he held the
position of Division 5 Vice-President-Sales.
On December 17, 2003, Alcantara filed a Complaint for Illegal Dismissal [9] against Royale Homes
Alcantara alleged that he is a regular employee of Royale Homes since he is performing tasks that are
necessary and desirable to its business; that in 2003 the company gave him P1.2 million for the services
he rendered to it; that in the first week of November 2003, however, the executive officers of Royale
Homes told him that they were wondering why he still had the gall to come to office and sit at his table;
[10] and that the acts of the executive officers of Royale Homes amounted to his dismissal from work
without any valid or just cause and in gross disregard of the proper procedure for dismissing employees.
Thus, he also impleaded the corporate officers who, he averred, effected his dismissal in bad faith and in
an oppressive manner.
Royale Homes, on the other hand, vehemently denied that Alcantara is its employee. It argued that the
appointment paper of Alcantara is clear that it engaged his services as an independent sales contractor for
a fixed term of one year only. He never received any salary 13th month pay, overtime pay or holiday pay
from Royale Homes as he was paid purely on commission basis. In addition, Royale Homes had no
control on how Alcantara would accomplish his tasks and responsibilities as he was free to solicit sales at
any time and by any manner which he may deem appropriate and necessary. He is even free to recruit his
own sales personnel to assist him in pursuance of his sales target.
Issues:
whether Alcantara was an independent contractor or an employee of Royale Homes.
Ruling:
The Petition is impressed with merit.
The primary evidence of the nature of the parties' relationship in this case is the written contract that they
signed and executed in pursuance of their mutual agreement. While the existence of employer-employee
relationship is a matter of law, the characterization made by the parties in their contract as to the nature of
their juridical relationship cannot be simply ignored, particularly in this case where the parties' written
contract unequivocally states their intention at the time, they entered into it.
In this case, the contract,[27] duly signed and not disputed by the parties, conspicuously provides that "no
employer-employee relationship exists between" Royale Homes and Alcantara, as well as his sales
agents. It is clear that they did not want to be bound by employer-employee relationship at the time of the
signing of the contract.
Since "the terms of the contract are clear and leave no doubt upon the intention of the contracting parties,
the literal meaning of its stipulations should control."[28] No construction is even needed as they already
expressly state their intention. Also, this Court adopts the observation of the NLRC that it is rather strange
on the part of Alcantara, an educated man and a veteran sales broker who claimed to be receiving P1.2
million as his annual salary, not to have contested the portion of the contract expressly indicating that he
is not an employee of Royale Homes if their true intention were otherwise.
Not every form of control is indicative of employer-employee relationship. A person who performs work
for another and is subjected to its rules, regulations, and code of ethics does not necessarily become an
employee.[34] As long as the level of control does not interfere with the means and methods of
accomplishing the assigned tasks, the rules imposed by the hiring party on the hired party do not amount
to the labor law concept of control that is indicative of employer-employee relationship.
In this case, the Court agrees with Royale Homes that the rules, regulations, code of ethics, and periodic
evaluation alluded to by Alcantara do not involve control over the means and methods by which he was to
perform his job. Understandably, Royale Homes has to fix the price, impose requirements on prospective
buyers, and lay down the terms and conditions of the sale, including the mode of payment, which the
independent contractors must follow. It is also necessary for Royale Homes to allocate its inventories
among its independent contractors, determine who has priority in selling the same, grant commission or
allowance based on predetermined criteria, and regularly monitor the result of their marketing and sales
efforts. But to the mind of this Court, these do not pertain to the means and methods of how Alcantara
was to perform and accomplish his task of soliciting sales. They do not dictate upon him the details of
how he would solicit sales or the manner as to how he would transact business with prospective clients. In
Tongko, this Court held that guidelines or rules and regulations that do not pertain to the means or
methods to be employed in attaining the result are not indicative of control as understood in labor law.
Guideline’s indicative of labor law "control," as the first Insular Life case tells us, should not merely
relate to the mutually desirable result intended by the contractual relationship; they must have the nature
of dictating the means or methods to be employed in attaining the result, or of fixing the methodology and
of binding or restricting the party hired to the use of these means.
As the party claiming the existence of employer-employee relationship, it behaved upon Alcantara to
prove the elements thereof, particularly Royale Homes' power of control over the means and methods of
accomplishing the work.[38] He, however, failed to cite specific rules, regulations or codes of ethics that
supposedly imposed control on his means and methods of soliciting sales and dealing with prospective
clients. On the other hand, this case is replete with instances that negate the element of control and the
existence of employer-employee relationship. Notably, Alcantara was not required to observe definite
working hours.[39] Except for soliciting sales, Royale Homes did not assign other tasks to him. He had
full control over the means and methods of accomplishing his tasks as he can "solicit sales at any time
and by any manner which [he may] deem appropriate and necessary." He performed his tasks on his own
account free from the control and direction of Royale Homes in all matters connected therewith, except as
to the results thereof.[40]
Neither does the repeated hiring of Alcantara prove the existence of employer-employee relationship.[41]
As discussed above, the absence of control over the means and methods disproves employer-employee
relationship. The continuous rehiring of
Alcantara simply signifies the renewal of his contract with Royale Homes, and highlights his satisfactory
services warranting the renewal of such contract. Nor does the exclusivity clause of contract establish the
existence of the labor law concept of control.
The element of payment of wages is also absent in this case. As provided in the contract, Alcantara's
remunerations consist only of commission override of 0.5%, budget allocation, sales incentive and other
forms of company support. There is no proof that he received fixed monthly salary. No pay slip or
payroll was ever presented and there is no proof that Royale Homes deducted from his supposed salary
withholding tax or that it registered him with the Social Security System, Philippine Health Insurance
Corporation, or Pag-Ibig Fund.
All of these indicate an independent contractual relationship.
This Court is, therefore, convinced that Alcantara is not an employee of Royale Homes, but a mere
independent contractor.
Principles:
Not every form of control that a hiring party imposes on the hired party is indicative of employee-
employer relationship. Rules and regulations that merely serve as guidelines towards the achievement of a
mutually desired result without dictating the means and methods of accomplishing it do not establish
employer-employee relationship.
To be sure, the Agreement's legal characterization of the nature of the relationship cannot be conclusive
and binding on the courts; x x x the characterization of the juridical relationship the Agreement embodied
is a matter of law that is for the courts to determine. At the same time, though, the characterization the
parties gave to their relationship in the Agreement cannot simply be brushed aside because it embodies
their intent at the time they entered the Agreement, and they were governed by this understanding
throughout their relationship. At the very least, the provision on the absence of employer-employee
relationship between the parties can be an aid in considering the Agreement and its implementation, and
in appreciating the other evidence on record.
Guideline’s indicative of labor law "control," as the first Insular Life case tells us, should not merely
relate to the mutually desirable result intended by the contractual relationship; they must have the nature
of dictating the means or methods to be employed in attaining the result, or of fixing the methodology and
of binding or restricting the party hired to the use of these means.

INSULAR LIFE ASSURANCE CO. v. NLRC, GR No. 84484, 1989-11-15

Facts:
On July 2, 1968, Insular Life Assurance Co., Ltd. (hereinafter simply called the Company) and Melecio
T. Basiao entered into a contract Some four years later 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 a 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
Basiao thereafter filed with the then Ministry of Labor a complaint [4] against the Company and its
president. Without contesting the termination of the first contract, 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 and that the Company had no obligation to him for unpaid commissions under the terms and
conditions of his contract.
The Labor Arbiter to whom the case was assigned found for Basiao. He ruled that the underwriting
agreement had established an employer-employee relationship between him and the Company, and this
conferred jurisdiction on the Ministry of Labor to adjudicate his claim. Said official's decision directed
payment of his unpaid commissions This decision was, on appeal by the Company, affirmed by the
National Labor Relations Commission.[7] Hence, the present petition for certiorari and prohibition.
Issues:
The chief issue here is one of jurisdiction: whether, as Basiao asserts, he had become the Company's
employee by virtue of the contract invoked by him, thereby placing his claim for unpaid commissions
within the original and exclusive, jurisdiction of the Labor Arbiter under the provisions of Section 217 of
the Labor Code [8] or, contrarily, as the Company would have it, that under said contract Basiao's status
was that of an independent contractor whose claim was thus cognizable, not by the Labor Arbiter in a
labor case, but by the regular courts in an ordinary civil action.
Ruling:
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 which aim only to promote the result, create
no employer-employee relationship
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 employer-employee
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.
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.
JESUS G. REYES v. GLAUCOMA RESEARCH FOUNDATION, GR No. 189255, 2015-06-17
Facts:
Petitioner alleged that: on August 1, 2003, he was hired by respondent corporation as administrator of the
latter's Eye
Referral Center (ERC); he performed his duties as administrator and continuously received his monthly
salary beginning February 2005, respondent withheld petitioner's salary without notice but he still
continued to report for work; petitioner wrote a letter to respondent
Agulto, who is the Executive Director of respondent corporation, informing the latter that he has not
been receiving his salaries since February 2005 as well as his 14th month pay for 2004 petitioner did
not receive any response from Agulto. petitioner was informed that he is no longer the Administrator of
the ERC; subsequently, petitioner's office was padlocked and closed without notice he still continued to
report for work but he was no longer allowed by the security guard on duty to enter the premises of the
ERC.
respondents contended that they engaged his services as a consultant or adviser in the formulation of an
updated organizational set-up and employees' manual which is compatible with their present condition;
based on his claim that there is a need for an administrator for the ERC, he later designated himself as
such on a trial basis there is no employer-employee relationship between them because respondents had
no control over petitioner in terms of working hours respondents also had no control as to the manner in
which he performs his alleged duties as consultant; petitioner was not dismissed as he was the one who
voluntarily severed his relations with respondents.
LA
LA held that petitioner failed to establish that the elements of an employer-employee relationship existed
between him and respondents because he was unable to show that he was, in fact, appointed as
administrator of the ERC and received salaries as such; he also failed to deny that during his stint with
respondents, he was, at the same time, a consultant of various government agencies
NLRC
NLRC reversed and set aside the Decision of the LA.
CA
CA annulled and set aside the judgment of the NLRC and reinstated the Decision of the LA.
The CA held that the LA was correct in ruling that, under the control test and the economic reality test, no
employer-employee relationship existed between respondents and petitioner.
Issues:
NO
COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION IN RULING THAT NO
EMPLOYER-EMPLOYEE RELATIONSHIP EXISTS BETWEEN RESPONDENTS AND
PETITIONER.
Ruling:
CONTROL TEST
Indeed, the power of the employer to control the work of the employee is considered the most significant
determinant of the existence of an employer-employee relationship.[28] This test is premised on whether
the person for whom the services are performed reserves the right to control both the end achieved and
the manner and means used to achieve that end.
In the present case, petitioner contends that, as evidence of respondents' supposed control over him, the
organizational plans he has drawn were subject to the approval of respondent corporation's Board of
Trustees.
[Respondents'] power to approve or reject the organizational plans drawn by [petitioner] cannot be the
control contemplated in the "control test." It is but logical that one who commissions another to do a piece
of work should have the right to accept or reject the product. The important factor to consider in the
"control test" is still the element of control over how the work itself is done, not just the end result
thereof.
Well, settled is the rule that where a person who works for another performs his job more or less at his
own pleasure, in the manner he sees fit, not subject to definite hours or conditions of work, and is
compensated according to the result of his efforts and not the amount thereof, no employer-employee
relationship exists.
petitioner was never subject to definite working hours. He never denied that he goes to work and leaves
therefrom as he pleases.
In fact, he went on leave without seeking approval from the officers of respondent company.
ECONOMIC REALITY TEST
Court has also used the economic reality test in determining whether an employer-employee relationship
exists between the parties. Under this test, the economic realities prevailing within the activity or between
the parties are examined, taking into consideration the totality of circumstances surrounding the true
nature of the relationship between the parties.
In our jurisdiction, the benchmark of economic reality in analyzing possible employment relationships for
purposes of applying the Labor Code ought to be the economic dependence of the worker on his
employer.
In the instant case, as shown by the resume of [petitioner], he concurrently held consultancy positions
with the Manila International Airport Authority and the Anti-Terrorist Task Force for
Aviation and Air Transportation Sector during his stint with the Eye Referral Center
Accordingly, it cannot be said that the [petitioner] was wholly dependent on [respondent] company.[34]
In bolstering his contention that there was an employer-employee relationship, petitioner draws attention
to the pay slips he supposedly received from respondent corporation. However, he does not dispute the
findings of the CA that there are no deductions for SSS and withholding tax from his compensation,
which are the usual deductions from employees' salaries. Thus, the alleged pay slips may not be treated as
competent evidence of petitioner's claim that he is respondents' employee.

ANGELINA FRANCISCO v. NLRC, GR NO. 170087, 2006-08-31

Facts:
In 1995, petitioner was hired by Kasei Corporation during its incorporation stage. She was designated as
Accountant and Corporate Secretary and as Liaison Officer to the City of Makati to secure business
permits, construction permits and other licenses for the initial operation of the company.
Although she was designated as Corporate Secretary, she was not entrusted with the corporate documents;
neither did she attend any board meeting nor required to do so. She never prepared any legal document
and never represented the company as its Corporate Secretary. However, on some occasions, she was
prevailed upon to sign documentation for the company.
In 1996, petitioner was designated Acting Manager. was assigned to handle recruitment of all employees
and perform management administration functions for five years, petitioner performed the duties of
Acting Manager. As of December 31, 2000 her salary was P27,500.00 plus P3,000.00 housing allowance
and a 10% share in the profit of Kasei Corporation. In petitioner was replaced by Liza R. Fuentes as
Manager. Petitioner alleged that she was required to sign a prepared resolution for her replacement but
she was assured that she would still be connected with Kasei Corporation. Thereafter, Kasei Corporation
reduced her salary by P2,500.00 a month beginning January up to September 2001 for a total reduction of
P22,500.00 as of September 2001. the officers but she was informed that she is no longer connected with
the company.
Since she was no longer paid her salary, petitioner did not report for work and filed an action for
constructive dismissal before the labor arbiter.
Private respondents averred that petitioner is not an employee of Kasei Corporation.
They alleged that petitioner was hired in 1995 as one of its technical consultants petitioner performed her
work at her own discretion without control and supervision of Kasei Corporation. Petitioner had no daily
time record and she came to the office any time she wanted. The company never interfered with her work
except that from time to time, the management would ask... her opinion on matters relating to her
profession. Petitioner did not go through the usual procedure of selection of employees, but her services
were engaged through a Board Resolution designating her as technical consultant. The money received by
petitioner from the corporation... was her professional fee subject to the 10% expanded withholding tax
on professionals, and that she was not one of those reported to the BIR or SSS as one of the company's
employees.
Petitioner's designation as technical consultant depended solely upon the will of management. As such,
her consultancy may be terminated any time considering that her services were only temporary in nature
and dependent on the needs of the corporation. Private respondents submitted a list of employees for the
years 1999 and 2000 duly received by the BIR showing that petitioner was not among the employees
reported to the BIR The Labor Arbiter found that petitioner was illegally dismissed the NLRC affirmed
On appeal, the Court of Appeals reversed the NLRC decision rendered dismissing the complaint filed by
private respondent against Kasei
Corporation, et al. for constructive dismissal.
The appellate court denied petitioner's motion for reconsideration, hence, the present recourse.
Issues:
whether there was an employer-employee relationship between petitioner and private respondent Kasei
Corporation; and if in the affirmative, (2) whether petitioner was illegally dismissed.
Ruling:
The better approach would be to adopt a two-tiered test involving: (1) the putative employer's power to
control the employee with respect to the means and methods by which the work is to be accomplished;
and (2) the underlying economic realities of the activity or relationship.
wo-tiered test would provide us with a framework of analysis, which would take into consideration the
totality of circumstances surrounding the true nature of the relationship between the parties.
This is especially appropriate in this case where there is no written agreement or terms of reference to
base the relationship on; and due to the complexity of the relationship based on the various positions and
responsibilities given to the worker over the period of the latter's employment.
By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because
she was under the direct control and supervision of Seiji Kamura, the corporation's Technical Consultant.
She reported for work regularly and served in various capacities as Accountant, Liaison Officer,
Technical Consultant, Acting Manager and Corporate Secretary rendering
Under the broader economic reality test, the petitioner can be said to be an employee of respondent
corporation because she had served the company for six years before her dismissal, receiving check
vouchers indicating her salaries/wages, benefits, 13th month pay, bonuses and allowances, as well as
deductions and Social Security contributions.
When petitioner was designated General Manager, respondent corporation made a report to the SSS
It is therefore apparent that petitioner is economically dependent on respondent corporation for her
continued employment in the latter's line of business.
Based on the foregoing, 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.
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.
The corporation constructively dismissed petitioner when it reduced her salary by P2,500 a month from
January to September 2001. This amounts to an illegal termination of employment, where the petitioner is
entitled to full back wages. Since the position of petitioner as accountant is one of trust and confidence,
and under the principle of strained relations, petitioner is further entitled to separation pay, in lieu of
reinstatement. A diminution of pay is prejudicial to the employee and amounts to constructive dismissal.
Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when
continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank
or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to an employee.