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Michelle Josephine Eden M.

Silva
Topic: Employer- Employee Relationship Absent
Case #1:
Philippine Global Communications vs. De Vera
G.R. No. 157214. June 7, 2005
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 P4,000.00 per month. Later, De
Vera was informed by the petitioner that the retainership will be discontinued. Respondent filed a case for
illegal dismissal alleging that that he had been actually employed by Philcom as its company physician since
1981 and was dismissed without due process. He averred that he was designated as a company physician on
retainer basis for reasons allegedly known only to Philcom. He likewise professed that since he was not
conversant with labor laws, he did not give much attention to the designation as anyway he worked on a fulltime basis and was paid a basic monthly salary plus fringe benefits, like any other regular employees of
Philcom. On 21 December 1998, Labor Arbiter Ramon Valentin C. Reyes came out with a decision dismissing
De Veras complaint for lack of merit, on the rationale that as a retained physician under a valid contract
mutually agreed upon by the parties, De Vera was an independent contractor and that he was not
dismissed but rather his contract ended when said contract was not renewed after December 31, 1996.
Issue: Whether or not de Vera is an employee of PhilCom 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:
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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;
He was subjected by petitioner to the ten percent withholding tax for his professional fee, in
accordance with the NIRC, 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.
Finally, the element of control is absent. Respondent PHILCOM did not have control over the
schedule of the complainant as it [is] the complainant who is proposing his own schedule and
asking to be paid for the same. This is proof that the complainant understood that his relationship
with the respondent PHILCOM was a retained physician and not as an employee. If he were an
employee he could not negotiate as to his hours of work.

Case #2: Coca Cola Bottlers (Phils.), Inc vs. Dr. Dean N. Climaco
G.R. No. 146881
February 5, 2007

Facts:
Climaco is a medical doctor who was hired by petitioner Coca-Cola Bottlers Phils., Inc (Coca-Cola), by
virtue of a Retainer Agreement. The Retainer Agreement was renewed annually. The last one expired
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. It is noted that as early as September 1992, petitioner was already making
inquiries regarding his status with petitioner company. Petitioner company, however, did not take any action.
Respondent inquired from the management of petitioner company whether it was agreeable to recognize him
as a regular employee. The management refused to do so. Respondent filed a Complaint before the NLRC
seeking recognition as a regular employee of petitioner company and prayed for the payment of all benefits of
a regular employee. While the complaint was pending before the Labor Arbiter, respondent received a letter
from petitioner company concluding their retainership agreement effective 30 days from receipt thereof. This
prompted respondent to file a complaint for illegal dismissal against petitioner company. The Labor Arbiter
and NLRC declared that there is no employer-employee relationship existed between the parties. However,
the Court of Appeals declared that respondent should be classified as a regular employee having rendered 6
years of service as plant physician by virtue of several renewed retainer agreements.
Issue: Whether or not there exists an employer-employee relationship between the parties
Ruling:
No. The court, in determining the existence of an employer-employee relationship used the four-fold
test which includes the selection and engagement of the employee; the payment of wages; the power of
dismissal; and the power to control the employees conduct.
The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this
case show that no employer-employee relationship exist between the parties, they correctly found that
petitioner company 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 company, in each case.
In effect, through 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.
The NLRC affirmed the findings of the Labor Arbiter and stated that 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.
In addition, the Court finds that the schedule of work and the requirement to be on call for
emergency cases do not amount to such control, but are necessary incidents to the Retainership Agreement.
The Court agrees that there is nothing wrong with the employment of respondent as a retained physician of
petitioner company and upholds the validity of the Retainership Agreement which clearly stated that no
employe-employee relationship existed between the parties. Considering that there is no employer-employee
relationship between the parties, the termination of the Retainership Agreement , which is accordance with
the provisions of the Agreement, does not constitute illegal dismissal of respondent.

Michelle Josephine Eden M. Silva


Topic: Employer- Employee Relationship Present
Case #1: Legend Hotel Manila vs Hernani S. Realuyo, also known as Joey Roa
GR No. 153511

July 18, 2012

Facts:
Respondent Realuyo, whose stage name was Joey R. Roa, was employed in September 1992 at the Legend Hotel
Manilas Tinglaw Restaurant, which belonged to the petitioner Titanium Corp. He was paid per nights performance,
which had been fixed from 7 p.m. to 10 p.m. for three to six times a week. He was required to conform with the venues
motif and had been subjected to rules on employees representation checks and chits. On July 9, 1999, the management
of Legend Hotel Manila notified him that as a cost-cutting measure, his services would no longer be required.
Subsequently, respondent filed a complaint for constructive illegal dismissal and several money claims. Petitioner
invoked the defense of lack of employer-employee relationship with respondent.
Issue: Whether or not there exists an employer-employee relationship.
Ruling:
Yes. A review of the circumstances reveals that respondent was, indeed, the petitioners employee. He was
undeniably employed as a pianist in petitioners Madison Coffee Shop/Tanglaw Restaurant from September 1992 until
his services were terminated on July 9, 1999. 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. This is the so-called
control test, and 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.
A review of the records shows, however, that respondent performed his work as a pianist under petitioners
supervision and control. Specifically, petitioners control of both the end achieved and the manner and means used to
achieve that end was demonstrated by the following, to wit:
a. He could not choose the time of his performance, which petitioners had fixed from 7:00 pm to 10:00 pm,
three to six times a week;
b. He could not choose the place of his performance;
c. The restaurants manager required him at certain times to perform only Tagalog songs or music, or to wear
barong Tagalog to conform to the Filipiniana motif; and
d. He was subjected to the rules on employees representation check and chits, a privilege granted to other
employees.
Relevantly, it is worth remembering that the employer need not actually supervise the performance of duties by
the employee, for it sufficed that the employer has the right to wield that power.

Case #2: Angelina Francisco vs NLRC


G.R. No. 170087 August 31, 2006
Facts:
Petitioner was designated as Accountant and Corporate Secretary of Kasei Corporation and was assigned to handle all the
accounting needs of the company, however 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, but she was prevailed upon to sign documentation for the company. She was also designated as Liason Officer to secure
business permits, construction permits and other licenses for the initial operation of the company.
In 1996, petitioner was designated Acting Manager, she was assigned to handle recruitment of all employees and perform
management administration functions. For 5 years, petitioner performed the duties of Acting Manager.
In January 2001, petitioner was replaced by Liza R. Fuentes as Manager and the petitioner was assured that she would still
be connected with Kasei Corporation as Technical Assistant to Seiji Kamura and in charge of all BIR matters. Petitioner did not
receive her salary from the company and was informed that she is no longer connected with the company. Petitioner filed an ction
for constructive dismissal before the labor arbiter.
Private respondents averred that petitioner is not an employee of Kasei Corporation. They alleged that as technical
consultant, petitioner performed her work at her own discretion without control and supervision of Kasei Corporation. She 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. The petitioner did not go through the
usual procedure of selection of employees and her designation as technical consuktant 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.
Issue: Whether or not there was an employer-employee relationship between the parties.
Ruling:
In certain cases the control test is not sufficient to give a complete picture of the relationship between the parties, owing to
the complexity of such a relationship where several positions have been held by the worker. There are instances when, aside from
the employers power to control the employee with respect to the means and methods by which the work is to be accomplished,
economic realities of the employment relations help provide a comprehensive analysis of the true classification of the individual,
whether as employee, independent contractor, corporate officer or some other capacity.
The better approach would therefore be to adopt a two-tiered test involving: 1) 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. This two-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 latters
employment.
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 or 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 of 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. Based on the foregoing, there can be no other conclusion that petitioner is an
employee of respondent Kasei Corporations. 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.