Singer Sewing Machine vs NLRC (1991) 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.

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 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:
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 employeremployee 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.

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 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. The record thus appears to establish adequate cause for
Sun Life to terminate its relationship with Susan Carungcong. Her
attention was drawn to the perfidious nature of her claims for

reimbursement; she was accorded an opportunity to explain the

same; she refused to do so.
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."
Complainants theory of the case appears to be limited to
pointing out that respondent company issued rules and
regulations to which she should conform. However, no showing
has been made that such rules and
regulations effectively and actually controlled or restricted her
choice of methods in performing her duties as New Business
Manager. Without such proof, there can be no plausible reason to
believe that her contractual declaration that she was an
independent contractor has been qualified.

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 employeremployee relationship are:
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.
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 employeremployee contract.
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 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.
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 preand 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.