SINGER SEWING MACHINE vs.

NLRC
January 24, 1991, 193 SCRA 271

Facts:
Private respondent Singer Machine Collectors Union-Baguio (SIMACUB) filed a petition for direct
certification as the sole and exclusive bargaining agent of all collectors of the Singer Sewing
Machine Company (Singer). Singer opposed the petition claiming that the collectors are not
employees but are independent contractors as evidenced by the Collection Agency Agreement
(Agreement) between them. The Med-Arbiter granted the petition. Aggrieved, Singer appealed to
the Secretary of Labor. The Secretary of Labor affirmed the Med-Arbiter’s Decision and denied
Singer’s motion for reconsideration. Hence, this petition for certiorari to review the order and
resolution of the Secretary of Labor and Employment.

Singer alleges that the collectors are not employees but independent contractors. It supported its
allegation by stating the following stipulations in the Agreement: (a) a collector is designated as a
‘collecting agent’ who is to be considered at all times as an independent contractor and not
employee of Singer, (b) collection are to be made monthly or oftener, (c) an agent is paid a
commission of 6% of all collections plus a bonus, xxx , (d) an agent is required to post a cash
bond of three thousand pesos (P3,000.00) to assure the faithful performance and observance of
the terms and conditions under the agreement; (e) he is subject to all the terms and conditions in
the agreement; (f) the agreement is effective for one year from the date of its execution and
renewable on a yearly basis; and (g) his services shall be terminated in case of failure to satisfy
the required performance required.

Private respondent, on the other hand, relies on other features of the same Agreement. Among
which are that an agent shall utilize only receipt forms authorized and issued by Singer; an agent
has to submit and deliver at least once a week or as often as required a report of all collections
made using report forms furnished by Singer; and the monthly collection quota, which quota they
deemed as a control measure over the means by which an agent is to perform his services. They
also rely on Art. 280 of the Labor Code and on Sec. 8 Rule 8, Book No. III of the Omnibus Rules
defining job-contracting.

Issue: Whether or not collectors of Singer are employees and therefore are constitutionally
granted the right to join or form labor organization for purposes of collective bargaining.

Ruing:
No, collectors of Singer are not employees. Hence, they are not entitled to the constitutional right
to join or form labor organization for purposes of collective bargaining. The Supreme Court mainly
applied the control test where the existence of employer-employee relationship is determined by
the following elements: (a) selection and engagement of the employee, (b) payment of wages, (c)
power of dismissal and (d) power to control the employee’s conduct although the latter is the most
important element. In that regard, it was ruled that the element on the power to control the
employee’s conduct – the most important element – was absent. The forms, schedule of delivery
and quota were controls used only for the result of the job, if they were really controls. There were
also other circumstances uncontroverted in the pleadings that made the Supreme Court rule that
they are independent contractors like: (1) collectors are not required to observe office hours nor
report everyday; (2) they do not have to devote their time exclusively for Singer; (3) the manner
and method of effecting collections are left to their discretion xxx (5) they are paid strictly on
commission basis. This circumstances negate that Singer had any control as to the manner by
which collectors perform collections.

Art. 280 is not instructive because it only deals with casual and regular employees while the
provision in the Omnibus Rules was only relevant in ascertaining whether the employer is
solidarily liable with the contractor or subcontractor.