Insular Life v. NLRC (Nov.

15, 1989)

FACTS:
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. After 4 years, the parties entered
into another contract – an Agency Manager’s 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 Manager’s Contract. Basiao sued
the company in a civil action. Thus, the company terminated Basiao’s engagement
under the first contract and stopped payment of his commissions.

ISSUE:
W/N Basiao had become the company’s employee by virtue of the contract, thereby
placing his claim for unpaid commissions

HELD:
No. Rules and regulations governing the conduct of the business are provided for in the
Insurance Code. These rules merely serve as guidelines towards the
achievement of the mutually desired result without dictating the m e a n s o r
methods to be employed in attaining it. Its aim is only to promote the
r e s u l t , t h e r e b y c r e a t i n g n o employer-employee relationship. It is usual and
expected for an insurance company to promulgate a set of rules to guide its commission
agents in selling its policies which prescribe the qualifications of persons who may
be insured. 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 justifiable be said to establish an employer-employee
relationship between Basiao and the company. The respondents limit themselves to pointing
out that Basiao’s contract with the company bound him
too b s e r v e a n d c o n f o r m t o s u c h r u l e s . N o s h o w i n g t h a t s u c h r u l e s w e r
e i n f a c t p r o m u l g a t e d w h i c h e f f e c t i v e l y controlled or restricted his choice of
methods of selling insurance. Therefore, Basiao was not an employee of the petitioner,
but a commission agent, an independent contract whose claim for unpaid commissions
should have been litigated in an ordinary civil action. Wherefore, the complain of Basiao is
dismissed.