Parties

and Case
No.
Petitioner:
Paz Martin
Jo, Cesar Jo
Responden
t: Peter
Mejila, NLRC
G.R. No.
121605

The
The work
Is there Employerbusiness
of the
Employee
of the
complainan
relationship?
company
t
Barber Shop Barber
Yes
In determining the
existence
of
an
employer-employee
relationship,
the
following
elements
are considered: (1)
the
selection
and
engagement of the
workers; (2) power of
dismissal;
(3)
the
payment of wages by
whatever means; and
(4) the power to
control the worker's
conduct,
with
the
latter
assuming
primacy in the overall
consideration.
The
power
of
control
refers
to
the
existence
of
the
power
and
not
necessarily to the
actual
exercise
thereof. It is not
essential
for
the
employer to actually
supervise
the
performance of duties
of the employee; it is
enough
that
the
employer has the
right to wield that
power.

What happened in the

case
Private
respondent
working as a barber on
piece-rate
basis
was
designated by petitioners
as caretaker of their
barbershop.
Private
respondents duties as
caretaker, in addition to
his being a barber, were:
1) to report to the owners
of
the
barbershop
whenever
the
air
condition
units
malfunction
and/or
whenever
water
or
electric power supply was
interrupted;
2) to call the laundry
woman to wash dirty
linen;
3)
to
recommend
applicants for interview
and hiring;
4) to attend to other
needs of the shop. For
this additional job, he
was given an honorarium
equivalent to1/3 of the
net income of the shop.
Private respondent left
his
job
voluntarily
because
of
his
misunderstanding
with
his
co-worker
and
demanded
separation
pay and other monetary
benefits.
Petitioners
contends that respondent
was not their employee
but their partner in

trade
whose
compensation was based
on
a
sharing
arrangement per haircut
or shaving job done.
Petitioner:
Restituto
Palomado

Rice Mill

Truck Driver

The
labor
arbiter
found
that
the
documentary
evidence
presented
by said respondent
overwhelmingly
negated petitioner's
allegations that he
had been employed
by Tan, who it turned
out was himself but
an
employee
of
Marling Rice Mill, and
who
subsequently
became proprietor of
his own business (R.
S. Ricemill), which
started operations in
1986, and which was
never impleaded by
petitioner as partyrespondent in the
case. Thus,
the
arbiter
ruled
that
there
existed
no
employer-employee
relationship between
the herein petitioner
and
respondent
Rolando O. Tan, and
dismissed
the
petitioner's claims for
lack of merit.

Responden
ts: Marling
Rice Mill, Ma
rio
Tan
Ten Kuan
and Rolando
Tan
G.R. No.
96520

Petitioner:
Insular Life
Assurance
Co. Ltd.
Responden
t: Pantaleon
de los Reyes

No.

Insurance
Company

Insurance
Agent

YES
It determined that
respondent De los
Reyes was under the
effective control of
petitioner
in
the
critical
and
most

The petition is hereby

DISMISSED for lack of
merit and the Resolution
of the public respondent
NLRC dated November
29, 1990 is AFFIRMED in
toto.

Petition of Insular Life

Assurance Co. is denied
and the Decision of the
NLRC finding that there
exists ER-EE relationship
is affirmed.

important aspects of
his work as Unit
Manager.
This
conclusion
was
derived
from
the
provisions
in
the
contract
which
appointed
private
respondent as Acting
Unit Manager, to wit:

G.R. No.
119930

(a) De los Reyes was

to serve exclusively
the
company,
therefore, he was not
an
independent
contractor;
(b) he was required to
meet
certain
manpower
and
production
quota;
and,
(c)
petitioner
controlled
the
assignment to and
removal of soliciting
agents from his unit.
Petitioner:
Insular Life
Co.
Responden
t: Melecio
Basiao
G.R. No.
84484

Insurance
Company

Insurance
Agent

No
Rules and regulations
governing
the
conduct
of
the
business are provided
for in the Insurance
Code and enforced by
the
Insurance
Commissioner.

Insular Life (company)

and Basiao entered into a
contract by which Basiao
was authorized to solicit
for
insurance
in
accordance with the rules
of the company. He would
also
receive
compensation,
in
the
form of commissions. The
contract also contained
the relations of the
parties, duties of the
agent
and
the
acts
prohibited
to
him
including the modes of
termination.

The line should be

drawn between rules
that merely serve as
guidelines
towards
the achievement of
the mutually desired
result
without
dictating the means After 4 years, the parties
or methods to be entered
into
another
employed in attaining contract an Agency

it, and those that

control or fix the
methodology
and
bind or restrict the
party hired to the use
of such means. The
first, which aim only
to promote the result,
create no employeremployee
relationship
unlike
the second, which
address
both
the
result and the means
used to achieve it.
The
distinction
acquires
particular
relevance in the case
of
an
enterprise
affected with public
interest, as is the
business
of
insurance, and is on
that account subject
to regulation by the
State with respect,
not
only
to
the
relations
between
insurer and insured
but
also
to
the
internal affairs of the
insurance company.

Petitioner:
Purificacion
Tabang
Responden
t: Pamana
Golden Care
Medical
Center
Foundation,

Hospital

Medical
Director &
Hospital
Administrato
r

Managers Contact and

to implement his end of
it, Basiao organized an
agency
while
concurrently fulfilling his
commitment under the
first contract.
The company terminated
the Agency Managers
Contract. Basiao sued the
company in a civil action.
Thus,
the
company
terminated
Basiaos
engagement under the
first contract and stopped
payment
of
his
commissions.

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
Purificacion
was
a
founding
member,
a
In the case at bar, member of the Board of
considering
that Trustees,
and
the
herein
petitioner, corporate secretary of
unlike an ordinary pamana
Golden
Care
employee,
was Medical
Center
appointed
by Foundation, a non-stock
respondent
corporation engaged in
corporations Board of extending medical and

Inc.
G.R. No.
121143

Petitioner:
AFP Mutual
Benefit
Association
Responden
t: Eutiquio
Bustamante
G.R. 102199

Insurance
Company

Insurance
Underwriter

Trustees
in
its
memorandum
of
October 30, 1990,
she is deemed an
officer
of
the
corporation. Perforce,
Section
5(c)
of
Presidential
Decree
No.
902-A,
which
provides that the SEC
exercises
exclusive
jurisdiction
over
controversies in the
election
or
appointment
of
directors,
trustees,
officers or managers
of
corporations,
partnerships
or
associations, applies
in
the
present
dispute. Accordingly,
jurisdiction over the
same is vested in the
SEC, and not in the
Labor Arbiter or the
NLRC.

surgical
services.
In
1990,
the
Board
of
Trustees
issued
a
memorandum appointing
Purificacion as Medical
Director
and
Hospital
Administrator
of
the
foundations
medical
center.
A
medical
director and aa hospital
administrator
are
considered as corporate
officers
under
the
foundations
by-laws.
When
the
Board
of
Trustees
relieved
Purificacion
of
her
position
as
Medical
Director
and
Hospital
Administrator, she filed a
complaint
for
illegal
dismissal
and
nonpayment of wages before
the Labor Arbiter.

No.

Eutiquio Bustamante had

been
an
insurance
underwriter
of
AFP
Mutual
Benefit
Association, Inc. since
1975. The Sales Agent's
Agreement
between
them provided:
Bustamante shall solicit
exclusively for AFP and
shall be bound by the
latter's policies, memo
circulars,
rules
and
regulations which it may
from time to time, revise,
modify or cancel to serve
its business interests.

The Court has applied

the "four-fold" test in
determining
the
existence
of
employer-employee
relationship. This test
considers
the
following
elements:
(1) the power to hire;
(2) the payment of
wages; (3) the power
to dismiss; and (4)
the power to control,
the last being the
most
important
element.
The
fact
that
Bustamante
was
required
to solicit
business exclusively

AFP
dismissed
Bustamante
for
misrepresentation and for
simultaneously
selling
insurance for another life

for AFP could hardly

be
considered
as
control
in
labor
jurisprudence. Under
2
Memo
Circulars
issued
by
the
Insurance
Commissioner,
insurance agents are
barred from serving
more
than
one
insurance company,
in order to protect the
public and to enable
insurance companies
to exercise exclusive
supervision over their
agents
in
their
solicitation
work.
Thus, the exclusivity
restriction
clearly
springs
from
a
regulation issued by
the
Insurance
Commission, and not
from an intention by
AFP
to
establish
control
over
the
method and manner
by
which
private
respondent
shall
accomplish his work.
The
fact
that
Bustamante
was
bound by company
policies,
memo/circulars, rules
and
regulations
issued from time to
time is also not
indicative of control.
The
policies,
memo/circulars, and
rules and regulations
referred
to
are
required
in
accordance with the
rules promulgated by
the
Insurance
Commission. So, in

insurance company in
violation
of
said
agreement.
A disagreement ensued
as to the entitlement of
Bustamante
over
his
salaries.
This
prompted
Bustamante to file a
complaint with the Office
of
the
Insurance
Commissioner
who
advised Bustamante that
it was the DOLE that had
jurisdiction
over
his
complaint.
Bustamante
filed
his
complaint
with
the
Department of Labor.
The jurisdiction of the
DOLE was questioned on
the ground of lack of EER
between Bustamante and
AFP.

the same manner,

there
was
no
intention to control
rather, there was only
an
intention
to
comply with the rules
issued
by
the
Insurance
Commission.
According to the AFP,
insurance
solicitors
are never affected or
covered by the rules
and
regulations
concerning employee
conduct
and
penalties
for
violations thereof.
Petitioners Hotel and
: Jeromie
Resort
Escasinas
and Evan
Rigor Singco
Responden
t: Dr.
Jessica
Joyce R.
Pepito and
Shangri-las
Mactan
Island
Resort
G.R. No.
178827

Nurses

No
The Court holds that
respondent doctor is
a
legitimate
independent
contractor. That
Shangri-la
provides
the clinic premises
and medical supplies
for
use
of
its
employees
and
guests
does
not
necessarily
prove
that
respondent
doctor
lacks
substantial
capital
and
investment. Besides,
the maintenance of a
clinic and provision of
medical services to
its
employees
is
required under Art.
157, which are not
directly related to
Shangri-las principal
business operation of
hotels
and
restaurants.

Jeromie D. Escasinas and

Evan Rigor Singco were
registered
nurses,
engaged by respondent
Dr. Jessica Joyce R. Pepito
to work in her clinic at
respondent Shangri-Las
Mactan
Island
Resort
(Shangri-La).
Escasinas
and Singco filed with the
National Labor Relations
Commission (NLRC) a
complaint
for
regularization,
underpayment of wages,
non-payment of holiday
pay,
night
shift
differential
and
13th
month
pay
against
Shangrila et al., claiming
that they are regular
employees of ShangriLa.
Shangri-la claimed that
Escasinas and Singco
were not its employees
but of Dr. Pepito, whom it
retained
via
Memorandum
of
Agreement
(MOA)
pursuant to Article 157 of

the Labor Code. Dr.

Pepito
for
her
part
claimed that Escasinas
and Singco were already
working for the previous
retained physicians of
Shangri-la before she was
retained. Escasinas and
Singco, however, insist
that under Article 157 of
the Labor Code, Shangrila is required to hire fulltime registered nurse,
hence their engagement
should be deemed as
regular
employment.
They maintain that Dr.
Pepito is a labor-only
contractor for she has no
license
or
business
permit and no business
name
registration
as
mandated by Sec. 19 and
20 of the Implementing
Rules and Regulations of
the Labor Code.
Petitioner:
Jay Sonza

Broadcastin TV and
g&
Radio Host
Entertainme
Responden nt
t:
Company
ABS-CBN
Broadcastin
g
Corporation
G.R. No.
138051

NO
NO.
All the elements to
show EER are present
here.
Selection
and
Engagement
of
Employee:
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.

In May 1994, the Mel &

Jay
Management
and
Development Corporation
(MJMDC) entered into an
agreement with ABS CBN
whereby
the
former
agreed to provide Jose
Sonzas (SONZA) services
exclusively to the latter
as television and radio
talent.
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.
In 1996, Sonza resigned
and complained before
the DOLE-NCR that ABSCBN did not pay his
salaries, separation pay,

Payment of Wages:
All the talent fees and
benefits
paid
to
SONZA
were
the
result of negotiations
that
led
to
the
Agreement.
If SONZA were ABSCBNs
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.
Whatever
benefits
SONZA enjoyed arose
from contract and not
because
of
an
employer-employee
relationship.

service incentive leave

pay, 13th month pay,
signing
bonus,
travel
allowance and amounts
due under the Employees
Stock Option Plan.
The labor arbiter ruled
out
an
employeremployee relationship as
it was decided that ABS
CBN contracted Sonzas
services by reason of his
peculiar skills and talents
and that he was free to
perform the services he
undertook to render in
accordance with his own
style.

Further,
whatever
benefits SONZA enjoyed
arose
from
specific
agreement by the parties
and not by reason of
employer-employee
relationship.
The
CA
upheld
the
SONZAs talent fees decision rendered by the
are so huge and out labor arbiter and the
of the ordinary that NLRC.
they indicate more an
independent
contractual
relationship
rather
than an employeremployee
relationship.
Power of Dismissal:
SONZA failed to show
that ABS-CBN could
terminate his services
on
grounds
other
than
breach
of
contract,
such
as
retrenchment
to
prevent
losses
as
provided under labor
laws.
Even if it suffered
severe
business

losses,
ABS-CBN
could not retrench
SONZA because ABSCBN
remained
obligated
to
pay
SONZAs talent fees
during the life of the
Agreement.
This
circumstance
indicates
an
independent
contractual
relationship between
SONZA and ABS-CBN.
Power
of
Control:
ABS-CBN
was
not
involved in the actual
performance
that
produced the finished
product of SONZAs
work.
ABS-CBNs
control
was limited only to
the result of SONZAs
work,
whether
to
broadcast the final
product or not.
In
any event, ABS-CBN
must
still
pay
SONZAs talent fees
in full until the expiry
of the Agreement.
A radio broadcast
specialist who works
under
minimal
supervision
is
an
independent
contractor.
SONZAs
work
as
television and radio
program
host
required special skills
and
talent,
which
SONZA
admittedly
possesses.
The
records do not show
that
ABS-CBN
exercised
any
supervision
and

control
over
how
SONZA utilized his
skills and talent in his
shows.
The
Agreement
between SONZA and
ABS CBN stipulates
that
SONZA
shall
abide with the rules
and
standards
of
performance
covering talents of
ABS-CBN but these
were
merely
guidelines for the
achievement
of
a
mutually-desired
result of top ratings.
Petitioner:
Wilhelmina
S. Orozco
Responden
t: Philippine
Daily
Inquirer and
Leticia
Jimenez
Magsanoc
G.R. No.
155207

Publication

Columnist

NO

Wilhelmina Orozco was

hired as a writer by the
Philippine Daily Inquirer
(PDI) in 1990. She was
the
columnist
of
Feminist
Reflections
under
the
Lifestyle
section
of
the
publication. She writes on
a weekly basis and on a
per article basis (P250300/article).

The existence of an
employer-employee
relationship
is
essentially
a
questions
of
fact.
Factual findings of
quasi-judicial
agencies
like
the
NLRC are generally
accorded respect and
finality if supported
by
substantial In 1991, Magsanoc as the
evidence.
editor-in-chief sought to
improve
the
Lifestyle
This
Court
has section of the paper. She
constantly adhered to said there were too many
the FOUR-FOLD TEST Lifestyle writers and that
to determine whether it was time to reduce the
there
exists
an number
of
writers.
employee-employer
Orozcos
column
was
relationship between eventually dropped.
parties.
The
four
elements
of
an Orozco filed for a case for
employee
Illegal Dismissal against
relationship are the
PDI
and
Magsanoc.
selection
and
engagement of the Orozco won in the Labor
employee;
the Arbiter. The LA ruled that
payment of wages; there exists an employerthe
power
of employee
relationship

dismissal; and the between PDI and Orozco

employer's power to hence Orozco is entitled
control
the to receive backwages,
employee's conduct.
reinstatement,
and
Of
these
four 13th month pay.
elements, it is the
power
of
control
which is most crucial
and
most
determinative factor,
so important in fact
the
the
other
elements may even
be disregarded. In
other words, the test
is
whether
the
employer controls or
has
reserved
the
right to control the
employee, not only as
to the work done, but
also as to the means
and
methods
by
which the same is
accomplished.
Orozco
has
misconstrued
the
CONTROL TEST as did
the Labor Arbiter and
the NLRC.
Petitioner:
Coca-Cola
Bottlers
Philippines
Responden
t: Dr. Dean
N. Climaco
G.R. No.
146881

Beverage
Production

Medical
Doctor

No
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

Respondent Dr. Dean N.

Climaco is a medical
doctor who was hired by
petitioner
Coca-Cola
Bottlers Phils., Inc (CocaCola), by virtue of a
Retainer Agreement. The
Retainer
Agreement,
which began on January
1, 1988, was renewed
annually. The last one
expired December 31,
1993. Despite the nonrenewal of the Retainer
Agreement, respondent
continued to perform his
functions as company
doctor to Coca-Cola until

Arbiter reasoned that

the
Comprehensive
Medical Plan, which
contains
the
respondents objecti
ves,
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, the Labor
Arbiter
held
that
petitioner company,
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

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.
Respondent contend. 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

other valid causes of classified as a regular

action.
employee
having
rendered 6 years of
service as plant physician
by virtue of several
renewed
retainer
agreements.