EMPLOYER-EMPLOYEE RELATIONSHIP

1. TABAS vs. CALIFORNIA MANUFACTURING

FACTS: Petitioners were the employees of Livi Manpower Services. They were assigned to the
respondent pursuant to a manpower supply agreement as “promotional merchandisers”. It was provided in
the agreement that California would have no control or supervision over the workers as to how they
perform or accomplish their works; Livi is an independent contractor and that it has the sole responsibility
of complying with all the existing as well as future laws rules and regulations pertinent to employment of
labor; the assignment to California was “seasonal and contractual”; and payrolls including COLA and
holiday pay shall be delivered Livi at California’s premises. Petitioners were made to sign 6 month
employment contracts which were renewed for the same period. Unlike regular employees of California,
they did not receive fringe & benefits and & bonuses and were paid only a daily allowance. Petitioners
contend that they have become regular employees of California. Subsequent to their claim for
regularization, California no longer rehired them. Livi on the other hand claims the workers as its
employees and that it is an independent contractor. Labor Arbiter found that no employer-employee
relationship existed, which the NLRC affirmed.

ISSUE: Is there an employer-employee relationship between California and the petitioners?

HELD: YES. The existence of an employer-employee relationship is a question of law and cannot be
made subject to agreement. The stipulations in the manpower supply agreement will not erase either
party’s obligations as an employer. Livi is a labor only contractor notwithstanding the provisions in the
agreement. The nature of one’s business is not determined by self-serving appellations but by test
provided by statute and the prevailing case law. California’s contention that the workers are not
performing activities which are directly related to its general business of manufacturing is untenable. The
promotion or sale of products including the task of occasional price tagging is an integral part of the
manufacturing & business. Livi as a placement agency had simply supplied the manpower necessary for
California to carry out its merchandising activities using the latter’s premises and equipment.
Merchandising is likewise not a specific project because it is an activity related to the day to day
operations of California. Based on Article 19 of the Labor Code, the labor only contractor is considered
merely an agent of the employer and liability must be shouldered by either one or by both. Petitioners are
ordered reinstated as regular employees.

2. SINGER SEWING MACHINE vs NLRC

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 company’s 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 employee’s 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.

3. MANILA GOLF & COUNTRY CLUB, INC. vs. INTERMEDIATE APPELLATE COURT, G.R.
No. 64948. September 27, 1994

FACTS: A petition of seventeen persons who styled themselves, Caddies of Manila Golf and Country
Club-PTCCEA was filed with Social Security Commission against Manila Golf and Country Club for
coverage and availment of benefits under the Social Security Act, as amended. It alleged in essence 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. The respondent Club filed answer alleging in
substance 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: Are persons rendering caddying services for members of golf clubs and their guests employees of
such clubs and therefore within the compulsory coverage of the SSS?

RULING: No employer-employee relationship exists between golf clubs and persons rendering caddying
services for the clubs’ members. As long as it is, the list made in the appealed decision detailing the
various matters of conduct, dress, language, etc. covered by the petitioner’s regulations, does not, in the
mind of the Court, so circumscribe the actions or judgment of the caddies concerned as to leave them
little or no freedom of choice whatsoever in the manner of carrying out their services. 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 as 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.

4. ENCYCLOPEDIA BRITANNICA (Philippines), INC. vs. NLRC

Facts: Limjoco was a Sales Divison of Encyclopaedia Britannica and was in charge of selling the products
through some sales representatives. As compensation, he would receive commissions from the products
sold by his agents. He was also allowed to use the petitioner’s name, goodwill and logo. It was agreed
that office expenses would be deducted from Limjoco’s commissions. In 1974, Limjoco resigned to
pursue his private business and filed a complaint against petitioner for alleged non-payment of separation
pay and other benefits and also illegal deduction from sales commissions. Petitioner alleged that Limjoco
was not an employee of the company but an independent dealer authorized to promote and sell its
products and in return, received commissions therein. Petitioner also claims that it had no control and
supervision over the complainant as to the manners and means he conducted his business operations.
Limjoco maintained otherwise. He alleged he was hired by the petitioner and was assigned in the sales
department. He was under the supervision of the petitioners officials who issued to him and his other
personnel, memoranda, guidelines on company policies, instructions and other orders. The Labor Arbiter
ruled that complainant was an employee of the petitioner company. Petioner had control over the
complainant since the latter was required to make periodic reports of his sales activities to the company.
NLRC also affirmed the decision and opined that there was no evidence supporting allegation that
Limjoco was an independent contractor or dealer.

ISSUE: Whether or not there exists an employer-employee relationship.

RULING: No. In determining the existence of an employer-employee relationship the following elements
must be present: 1) selection and engagement of the employee; 2) payment of wages; 3) power of
dismissal; and 4) the power to control the employees conduct. Of the above, control of employees conduct
is commonly regarded as the most crucial and determinative indicator of the presence or absence of an
employer-employee relationship. Under the control test, an employer-employee relationship exists where
the person for whom the services are performed reserves the right to control not only the end to be
achieved, but also the manner and means to be used in reaching that end. The fact that petitioner issued
memoranda to private respondents and to other division sales managers did not prove that petitioner had
actual control over them. The different memoranda were merely guidelines on company policies which
the sales managers follow and impose on their respective agents. Nevertheless, private respondent
Limjoco and the other agents were free to conduct and promote their sales operations. The periodic
reports to the petitioner by the agents were but necessary to update the company of the latters
performance and business income. Private respondent was not an employee of the petitioner company.
While it was true that the petitioner had fixed the prices of the products for reason of uniformity and
private respondent could not alter them, the latter, nevertheless, had free rein in the means and methods
for conducting the marketing operations. He selected his own personnel and the only reason why he had
to notify the petitioner about such appointments was for purpose of deducting the employees salaries from
his commissions. Private respondent was merely an agent or an independent dealer of the petitioner. He
was free to conduct his work and he was free to engage in other means of livelihood. 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, we should not find that the relationship of employer and employee
exists. In fine, there is nothing in the records to show or would indicate that complainant was under the
control of the petitioner in respect of the means and methods in the performance of complainants work.

5. CARUNGCONG vs. NLRC, ET. AL., G.R. No. 118086, December 15, 1997

Facts: Susan Carungcong began her career in the insurance industry in 1974 as an agent of Sun Life
Assurance Company of Canada. She signed an Agent Agreement with Sun Life. In virtue of which she
was designated the latter’s agent to solicit applications for its insurance and annuity policies. This
contract was superseded some five years later when she signed two (2) new agreements. The first,
denominated 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. The second was titled, Manager’s Supplementary Agreement. It
explicitly described as a “further agreement”. Carungcong and Sun Life executed another Agreement
named New Business Manager with the function generally to manage a New Business Office established.
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. Ms. Eleizer Sibayan, Manager of Sun Life’s Internal Audit Department, commenced an inquiry into
the special fund availments of Carungcong and other New Business Managers. Respondent Lance Kemp,
had been receiving reports of anomalies in relation thereto from unit managers and agents. Thereafter, on
January 1990, Carungcong was confronted with and asked to explain the discrepancies set out in
Sibayan’s report. She was given a letter signed by Metron V. Deveza, CLU, Director, Marketing, which
advised of the termination of her relationship with Sun Life. Carungcong promptly instituted proceedings
for vindication in the Arbitration Branch of the National Labor Relations Commissions on January 16,
1990. There she succeeded in obtaining a favorable judgment. Labor Arbiter found that there existed an
employer-employee relationship between her and Sun Life. On appeal, the National Labor Relations
Commission reversed the Arbiter’s judgment. It affirmed that no employment relationship existed
between Carungcong and Sun Life.

Issue: Whether or not there petitioner was an employee subject to control and supervision by Sun Life.

Ruling: Noteworthy is that this last agreement which emphasized, like the “Career Agent’s or Unit
Manager’s Agreement” first signed by her, that in performance of her duties defined herein. Carungcong
would 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. Carungcong is an independent contractor. It was indicated in the very face of the contract. The rules
and regulations of the company is not sufficient to establish an employer-employee relationship. It does
not necessarily create any employer-employee relationship where the employers’ controls have to
interfere in the methods and means by which employee would like employ to arrive at the desired results.
Carungcong admitted that she was free to work as she pleases, at the place and time she felt convenient
for her to do so. She was not paid to a fixed salary and was mainly paid by commissions depending on the
volume of her performance. She was not an employee of Sun Life Co.

6. Sonza v ABS-CBN, GR 138051, 10 Jun 2004

FACTS: Respondent signed an agreement with Management Development Corporation (MJMDC), as

represented by petitioner as its President and General Manager. MJMDC agreed to provide petitioner’s
services exclusively to ABS-CBN as talent for radio and television. 2 years after, however, petitioner
resigned and sent notice of rescission of said agreement. Thereafter, petitioner filed a complaint against
respondent with DOLE, complaining that respondent did not pay his salaries, separation pay, service
incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the
Employees Stock Option Plan (ESOP). Respondent filed a Motion to Dismiss on the ground that no
employer-employee relationship existed between the parties. Meanwhile, respondent continued to remit
petitioner’s monthly talent fees.

ISSUE: Is there an employer-employee relationship between the parties?

RULING: No. Applying the control test to the present case, the court found that petitioner is not an
employee but an independent contractor. First, petitioner contends that respondent exercised control over
the means and methods of his work. Petitioner’s argument is misplaced. Respondent engaged petitioner’s
services specifically to co-host the “Mel & Jay” programs. Respondent did not assign any other work to
petitioner. Petitioner had a free hand on what to say or discuss in his shows provided he did not attack
ABS-CBN or its interest. Respondent’s sole concern was the quality of the shows and their standing in
the ratings. Clearly, respondent did not exercise control over the means and methods of performance of
petitioner’s work. Petitioner claims, however, that respondent’s power not to broadcast his show proves
respondent’s power over the means and methods of the performance of his work. Although, respondent
did have the option not to broadcast petitioner’s show, respondent was still obliged to pay petitioner’s
talent fees. Moreover, respondent could not terminate or discipline petitioner even if the means and
methods of performance of his work did not meet respondent’s approval. Petitioner further contends that
respondent exercised control over his work by supplying all equipment and crew. However, the
equipment, crew and airtime are not the “tools and instrumentalities” petitioner needed to perform his job.
What petitioner principally needed were his talent or skills and the costumes necessary for his appearance.
Even though respondent provided petitioner with the place of work and the necessary equipment,
petitioner was still an independent contractor since respondent did not supervise and control his work.
Second, petitioner contends he is an employee of respondent because he is subjected to its rules and
standards of performance. However, the agreement did not require petitioner to comply with the rules and
standards of performance prescribed for employees of respondent. The code of conduct imposed on
petitioner under the agreement refers to the “Television and Radio Code of the Kapisanan ng mga
Broadcaster sa Pilipinas (KBP), which has been adopted by respondent as its Code of Ethics. Lastly,
petitioner insists that the “exclusivity clause” in the agreement is the most extreme form of control which
respondent exercised over him. However, being an exclusive talent does not by itself mean that petitioner
is an employee of respondent. Even independent contractors can validly provide his services exclusively
to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control.

7. Ramos v. Court of Appeals, G.R. No. 124354 December 29, 1999; Decision on MR, April 11, 2002
FACTS: Petitioner Erlinda Ramos was advised to undergo an operation for the removal of a stone in her
gall bladder. She was referred to Dr. Hosaka and the operation was scheduled for June 17, 1985 at 9:00 in
the morning at private respondent De Los Santos Medical Center (DLSMC). Since neither petitioner nor
her husband knew of any anesthesiologist, Dr. Hosaka recommended to them the services of Dr.
Gutierrez. Upon the request of petitioner Erlinda, her sister-in-law, Herminda Cruz, who was then Dean
of the College of Nursing at the Capitol Medical Center, was allowed to accompany her inside the
operating room. Dr. Hosaka was late and only arrived at the hospital at around 12:10 in the afternoon, or
more than three (3) hours after the scheduled operation. Cruz, while she held the hand of Erlinda, saw Dr.
Gutierrez trying to intubate the patient. Cruz heard Dr. Gutierrez utter: ang hirap ma-intubate nito, mali
yata ang pagkakapasok. O lumalaki ang tiyan. Cruz noticed a bluish discoloration of Erlindas nailbeds on
her left hand. She (Cruz) then heard Dr. Hosaka instruct someone to call Dr. Calderon, another
anesthesiologist. When he arrived, Dr. Calderon attempted to intubate the patient. The nailbeds of the
patient remained bluish, thus, she was placed in a trendelenburg position a position where the head of the
patient is placed in a position lower than her feet. At this point, Cruz went out of the operating room to
express her concern to petitioner Rogelio that Erlindas operation was not going well. Cruz quickly rushed
back to the operating room and saw that the patient was still in trendelenburg position. At almost 3:00 in
the afternoon, she saw Erlinda being wheeled to the ICU. The doctors explained to petitioner Rogelio that
his wife had bronchospasm. Erlinda stayed in the ICU for a month and was released from the hospital
only four months later.. Since the ill-fated operation, Erlinda remained in comatose condition until she
died on August 3, 1999.

Petitioners filed a civil case for damages and the SC held DLSMC, Dr. Orlino Hosaka and Dr. Perfecta
Gutierrez solidarily liable for the the damages awarded. Hence, this motion for reconsideration.

ISSUE: Are the Drs. Gutierrez and Hosaka employees of DLSMC such that the latter may be held liable
under Article 2180 of the Civil Code?

RULING: NO, there is no employer-employee relationship between DLSMC and Drs. Gutierrez and
Hosaka. As explained by respondent hospital, that the admission of a physician to membership in
DLSMCs medical staff as active or visiting consultant is first decided upon by the Credentials Committee
thereof. The latter then recommends to DLSMC's Medical Director or Hospital Administrator the
acceptance or rejection of the applicant physician, and said director or administrator validates the
committee's recommendation. Similarly, in cases where a disciplinary action is lodged against a
consultant, the same is initiated by the department to whom the consultant concerned belongs and filed
with the Ethics Committee consisting of the department specialty heads. The medical director/hospital
administrator merely acts as ex-officio member of said committee. Neither is there any showing that it is
DLSMC which pays any of its consultants for medical services rendered by the latter to their respective
patients. Moreover, the contract between the consultant in respondent hospital and his patient is separate
and distinct from the contract between respondent hospital and said patient. The first has for its object the
rendition of medical services by the consultant to the patient, while the second concerns the provision by
the hospital of facilities and services by its staff such as nurses and laboratory personnel necessary for the
proper treatment of the patient. Further, no evidence was adduced to show that the injury suffered by
petitioner Erlinda was due to a failure on the part of respondent DLSMC to provide for hospital facilities
and staff necessary for her treatment. For these reasons, we reverse the finding of liability on the part of
DLSMC for the injury suffered by petitioner Erlinda.
8. Lazaro vs. Social Security Commission, G.R. No. 138254. July 30, 2004.

Facts: Private respondent Laudato filed a petition before the SSC for social security coverage and
remittance of unpaid monthly social security contributions against her three (3) employers. Among the
respondents was Lazaro, proprietor of Royal Star, engaged in the business of selling home appliances,
which alleged that despite her employment as sales supervisor of the sales agents for Royal Star from
April of 1979 to March of 1986, Lazaro had failed during the said period, to report her to the SSC for
compulsory coverage or remit Laudatos social security contributions. Lazaro denied that Laudato was a
sales supervisor of Royal Star, averring instead that she was a mere sales agent whom he paid purely on
commission basis. And also maintained that Laudato was not subjected to definite hours and conditions of
work. As such, Laudato could not be deemed an employee of Royal Star.

Issue: Is there employee-employer relationship between Laudato and Lazaro?

Ruling: Yes. It is an accepted doctrine that for the purposes of coverage under the Social Security Act, the
determination of employer-employee relationship warrants the application of the control test, that is,
whether the employer controls or has reserved the right to control the employee, not only as to the result
of the work done, but also as to the means and methods by which the same is accomplished. The SSC, as
sustained by the Court of Appeals, applying the control test found that Laudato was an employee of Royal
Star. We find no reversible error.

Issue: Even if it is commission based?

Ruling: Yes. Lazaro's arguments may be dispensed with by applying precedents. Suffice it to say, the fact
that Laudato was paid by way of commission does not preclude the establishment of an employer-
employee relationship. In Grepalife v. Judico, the Court upheld the existence of an employer-employee
relationship between the insurance company and its agents, despite the fact that the compensation that the
agents on commission received was not paid by the company but by the investor or the person insured.
The relevant factor remains, as stated earlier, whether the „employer controls or has reserved the right to
control the „employee not only as to the result of the work to be done but also as to the means and
methods by which the same is to be accomplished. Neither does it follow that a person who does not
observe normal hours of work cannot be deemed an employee. In Cosmopolitan Funeral Homes, Inc. v.
Maalat, the employer similarly denied the existence of an employer-employee relationship, as the
claimant according to it, was a „supervisor on commission basis who did not observe normal hours of
work.

9. Philippine Global Communication vs De Vera, 459 SCRA 260

FACTS: Petitioner Philippine Global Communications, Inc. (PhilCom), is a corporation engaged in the
business of communication services and allied activities, while respondent Ricardo De Vera is a physician
by profession whom petitioner enlisted to attend to the medical needs of its employees. De Vera, via a
letter, offered his services to the petitioner, therein proposing his plan of works required of a practitioner
in industrial medicine. The parties agreed and formalized respondents proposal in a document
denominated as RETAINERSHIP CONTRACT. which will be for a period of one year subject to
renewal, it being made clear therein that respondent will cover the retainership the Company previously
had with Dr. K. Eulau and that respondents retainer fee will be at P4,000.00 a month. Said contract was
renewed yearly. Sometime in December 1996, Philcom, thru a letter bearing on the subject boldly written
as TERMINATION RETAINERSHIP CONTRACT, informed De Vera of its decision to discontinue the
latter’s retainers contract with the Company effective at the close of business hours of December 31,
1996. De Vera filed a complaint for illegal dismissal before the National Labor Relations Commission
(NLRC), alleging that that he had been actually employed by Philcom as its company physician since
1981 and was dismissed without due process.

ISSUE: Whether an employer-employee relationship exists between the petitioner and respondent

RULING: No. The Court, in determining the existence of an employer-employee relationship, has
invariably adhered to the four-fold test, to wit: [1] the selection and engagement of the employee; [2] the
payment of wages; [3] the power of dismissal; and [4] the power to control the employee’s conduct, or the
so-called control test, considered to be the most important element. Applying the four-fold test to this
case, the Court initially finds that it was respondent himself who sets the parameters of what his duties
would be in offering his services to petitioner. The tenor of this letter indicates that the complainant was
proposing to extend his time with the respondent and seeking additional compensation for said extension.
This shows that the 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.
The labor arbiter added the indicia, not disputed by respondent, that 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 (SSS); and was in fact subjected by petitioner to the 10% percent withholding tax
for his professional fee, in accordance with the National Internal Revenue Code, matters which are simply
inconsistent with an employer-employee relationship. Clearly, the elements of an employer-employee
relationship are wanting in this case. 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. Also, that the
power to terminate the parties’ relationship was mutually vested on both. Either may terminate the
arrangement at will, with or without cause. Finally, remarkably absent from the parties’ arrangement is
the element of control, whereby the employer has reserved the right to control the employee not only as to
the result of the work done but also as to the means and methods by which the same is to be
accomplished. Here, petitioner had no control over the means and methods by which respondent went
about performing his work at the company premises. He could even embark in the private practice of his
profession, not to mention the fact that respondent’s work hours and the additional compensation therefor
were negotiated upon by the parties. In fine, the parties themselves practically agreed on every terms and
conditions of respondent’s engagement, which thereby negates the element of control in their relationship.
For sure, respondent has never cited even a single instance when petitioner interfered with his work.

10. ABS-CBN BROADCASTING CORPORATION vs MARLYN NAZARENO, G.R. No. 164156,

September 26, 2006.

Facts: Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production
assistants (PAs) on different dates and were assigned at the news and public affairs, for various radio
programs in the Cebu Broadcasting Station. They were issued ABS-CBN employees’ identification cards
and were required to work for a minimum of eight hours a day, including Sundays and holidays. The PAs
were under the control and supervision of Assistant Station Manager Dante J. Luzon, and News Manager
Leo Lastimosa. Petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining
Agreement (CBA) to be effective during the period from December 11, 1996 to December 11, 1999.
However, since petitioner refused to recognize PAs as part of the bargaining unit, respondents were not
included to the CBA. Petitioner, through Dante Luzon, issued a Memorandum informing the PAs that
they would be assigned to non-drama programs, and that the DYAB studio operations would be handled
by the studio technician. Thus, their schedule and other assignments were revised. Respondents filed a
Complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay,
Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the
petitioner before the NLRC. Respondents insisted that they belonged to a "work pool" from which
petitioner chose persons to be given specific assignments at its discretion, and were thus under its direct
supervision and control regardless of nomenclature. While, Petitioner alleged that respondents were PAs
who basically assist in the conduct of a particular program ran by an anchor or talent. Among their duties
include monitoring and receiving incoming calls from listeners and field reporters and calls of news
sources; generally, they perform leg work for the anchors during a program or a particular production.
They are considered in the industry as "program employees" in that, as distinguished from regular or
station employees, they are basically engaged by the station for a particular or specific program
broadcasted by the radio station. The Labor Arbiter; NLRC and CA ruled that respondents were regular
employees of petitioner.

Issue: Whether or not Respondents are Regular Employees

Ruling: Yes. We agree with respondents’ contention that where a person has rendered at least one year of
service, regardless of the nature of the activity performed, or where the work is continuous or intermittent,
the employment is considered regular as long as the activity exists, the reason being that a customary
appointment is not indispensable before one may be formally declared as having attained regular status.
Thus, there are two kinds of regular employees under the law: (1) those engaged to perform activities
which are necessary or desirable in the usual business or trade of the employer ( whether the work
undertaken is necessary or desirable in the usual business or trade of the employer even if the
performance is not continuous or is merely intermittent, the law deems the repeated and continuing need
for its performance as being sufficient to indicate the necessity or desirability of that activity to the
business or trade of the employer. The employment of such person is also then deemed to be regular with
respect to such activity and while such activity exists.); and (2) those casual employees who have
rendered at least one year of service, whether continuous or broken, with respect to the activities in which
they are employed (Article 280 of the Labor Code). In this case, it is undisputed that respondents had
continuously performed the same activities for an average of five years. Their assigned tasks are
necessary or desirable in the usual business or trade of the petitioner. The persisting need for their
services is sufficient evidence of the necessity and indispensability of such services to petitioner’s
business or trade. While length of time may not be a sole controlling test for project employment, it can
be a strong factor to determine whether the employee was hired for a specific undertaking or in fact
tasked to perform functions which are vital, necessary and indispensable to the usual trade or business of
the employer. We note further that petitioner did not report the termination of respondents’ employment
in the particular "project" to the Department of Labor and Employment Regional Office having
jurisdiction over the workplace within 30 days following the date of their separation from work, using the
prescribed form on employees’ termination/ dismissals/suspensions. Being regular employees,
respondents must be accorded with the benefits of the CBA.

11. Angelica Francisco vs NLRC, et. al. G.R. No. 170087 August 31, 2006

Facts: In 1995, petitioner was hired by Kasei Corporation during its incorporation stage. She was
designated as Accountant and Corporate Secretary and was assigned to handle all the accounting needs of
the company. She was also designated as Liaison Officer to the City of Makati to secure business permits,
construction permits and other licenses for the initial operation of the company. In 1996, petitioner was
designated Acting Manager. The corporation also hired Gerry Nino as accountant in lieu of petitioner. For
five years, petitioner performed the duties of Acting Manager. In January 2001, petitioner was replaced
by Liza R. Fuentes as Manager. Petitioner alleged that she was required to sign a prepared resolution for
her replacement but she was assured that she would still be connected with Kasei Corporation. Thereafter,
Kasei Corporation reduced her salary by P2,500.00 a month beginning January up to September 2001 for
a total reduction of P22,500.00 as of September 2001. On October 2001, petitioner did not receive her
salary from the company. She made repeated follow-ups with the company cashier but she was advised
that the company was not earning well. On October 15, 2001, petitioner asked for her salary from Acedo
and the rest of the officers but she was informed that she is no longer connected with the company.

Issue:

1.Whether there was an employer-employee relationship between petitioner and private respondent Kasei
Corporation? (main issue)

2.If so, whether petitioner was illegally dismissed?

Ruling:

1.Yes. The control test initially found application in the case of Viaa v. Al-Lagadan and Piga, and lately
in Leonardo v. Court of Appeals, where we held that there is an employer-employee relationship when the
person for whom the services are performed reserves the right to control not only the end achieved but
also the manner and means used to achieve that end. In Sevilla v. Court of Appeals, we observed the need
to consider the existing economic conditions prevailing between the parties, in addition to the standard of
right-of-control like the inclusion of the employee in the payrolls, to give a clearer picture in determining
the existence of an employer-employee relationship based on an analysis of the totality of economic
circumstances of the worker. Thus, 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 and 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
for his continued employment in that line of business. By applying the control test, there is no doubt that
petitioner is an employee of Kasei Corporation because she was under the direct control and supervision
of Seiji Kamura, the corporations Technical Consultant. She reported for work regularly and served in
various capacities as Accountant, Liaison Officer, Technical Consultant, Acting Manager and Corporate
Secretary, with substantially the same job functions, that is, rendering accounting and tax services to the
company and performing functions necessary and desirable for the proper operation of the corporation
such as securing business permits and other licenses over an indefinite period of engagement.

2.Yes. The corporation constructively dismissed petitioner when it reduced her salary by P2,500 a month
from January to September 2001. This amounts to an illegal termination of employment, where the
petitioner is entitled to full backwages. Since the position of petitioner as accountant is one of trust and
confidence, and under the principle of strained relations, petitioner is further entitled to separation pay, in
lieu of reinstatement. A diminution of pay is prejudicial to the employee and amounts to constructive
dismissal. Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to
when continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in
rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to an employee.

12. NOGALES vs. CAPITOL MEDICAL CENTER

FACTS: Pregnant with her fourth child, Corazon Nogales (“Corazon”) was under the exclusive prenatal
care of Dr. Oscar Estrada. While Corazon was on her last trimester of pregnancy, Dr. Estrada noted an
increase in her blood pressure and development of leg edema indicating preeclampsia, which is a
dangerous complication of pregnancy. Sometime, at around midnight, Corazon started to experience mild
labor pains prompting spouses Nogales to see Dr. Estrada at his home. After examining Corazon, Dr.
Estrada advised her immediate admission to the Capitol Medical Center. The following day, Corazon was
admitted and Rogelio Nogales (husband) executed and signed the “Consent on Admission and
Agreement” and “Admission Agreement.” Corazon was then brought to the labor room of the CMC.
Corazon subsequently died of “hemorrhage, post partum.” Petitioners filed a complaint for damages with
the Regional Trial Court of Manila against CMC, Dr. Estrada, and the rest of CMC medical staff for the
death of Corazon. In their defense, CMC pointed out that Dr. Estrada was a consultant to be considered as
an independent-contractor, and that no employer-employee relationship existed between the former and
the latter. After more than 11 years of trial, the trial court rendered judgment finding Dr. Estrada solely
liable for damages. Petitioners appealed the trial court’s decision. Petitioners claimed that aside from Dr.
Estrada, the remaining respondents should be held equally liable for negligence. Petitioners pointed out
the extent of each respondent’s alleged liability. On appeal, the Court of Appeals affirmed the trial court’s
ruling and applied the “borrowed servant doctrine” to release the liability of other medical staff.

ISSUE: Whether CMC can be held liable

HELD: In general, a hospital is not liable for the negligence of an independent contractor-physician.
There is, however, an exception to this principle. The hospital may be liable if the physician is the
“ostensible” agent of the hospital. This exception is also known as the “doctrine of apparent authority.”
xxx The doctrine of apparent authority essentially involves two factors to determine the liability of an
independent-contractor physician. The first factor focuses on the hospital’s manifestations and is
sometimes described as an inquiry whether the hospital acted in a manner which would lead a reasonable
person to conclude that the individual who was alleged to be negligent was an employee or agent of the
hospital. In this regard, the hospital need not make express representations to the patient that the treating
physician is an employee of the hospital; rather a representation may be general and implied. xxx The
second factor focuses on the patient’s reliance. It is sometimes characterized as an inquiry on whether the
plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and
prudence. For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that:
(1) the hospital, or its agent, acted in a manner that would lead a reasonable person to conclude that the
individual who was alleged to be negligent was an employee or agent of the hospital; (2) where the acts of
the agent create the appearance of authority, the plaintiff must also prove that the hospital had knowledge
of and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its
agent, consistent with ordinary care and prudence. In the instant case, CMC impliedly held out Dr.
Estrada as a member of its medical staff. Through CMC's acts, CMC clothed Dr. Estrada with apparent
authority thereby leading the Spouses Nogales to believe that Dr. Estrada was an employee or agent of
CMC. In the instant case, CMC impliedly held out Dr. Estrada as a member of its medical staff. Through
CMC’s acts, CMC clothed Dr. Estrada with apparent authority thereby leading the Spouses Nogales to
believe that Dr. Estrada was an employee or agent of CMC. CMC cannot now repudiate such authority.
The records show that the Spouses Nogales relied upon a perceived employment relationship with CMC
in accepting Dr. Estrada’s services. Rogelio testified that he and his wife specifically chose Dr. Estrada to
handle Corazon’s delivery not only because of their friend’s recommendation, but more importantly
because of Dr. Estrada’s “connection with a reputable hospital, the [CMC].” In other words, Dr. Estrada’s
relationship with CMC played a significant role in the Spouses Nogales’ decision in accepting Dr.
Estrada’s services as the obstetrician-gynecologist for Corazon’s delivery. Moreover, as earlier stated,
there is no showing that before and during Corazon’s confinement at CMC, the Spouses Nogales knew or
should have known that Dr. Estrada was not an employee of CMC. xxx CMC’s defense that all it did was
“to extend to [Corazon] its facilities” is untenable. The Court cannot close its eyes to the reality that
hospitals, such as CMC, are in the business of treatment.

13. Coca-Cola Bottlers Phils vs Dr. Climaco

Facts:

Dr. Dean Climaco is a medical doctor who was hired by petitioner Coca-Cola Bottlers Phils., Inc. by
virtue of a Retainer Agreement for a period of 1 year with a monthly salary of Three Thousand Eight
Hundred (P3,800.00).

The Retainer Agreement, which began on January 1, 1988, was renewed annually. The last one expired
on 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 effective 30 days from receipt thereof.

Petitioner was already making inquiries regarding his status with the company. First, he wrote a letter
addressed to Dr. Willie Sy, the Acting President and Chairperson of the Committee on Membership,
Philippine College of Occupational Medicine. In response, Dr. Sy wrote a letter to the Personnel Officer
of Coca-Cola Bottlers Phils., Bacolod City, stating that respondent should be considered as a regular part-
time physician, having served the company continuously for four (4) years. He likewise stated that
respondent must receive all the benefits and privileges of an employee under Article 157 (b) of the Labor
Code.

Issue: WON there exists an employer-employee relationship between Coca-Cola and Dr. Climaco?
Held: No employer-employee relationship exists between the parties. The Court, in determining the
existence of an employer-employee relationship, has invariably adhered to the four-fold test: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4)
the power to control the employee’s conduct, or the so-called "control test," considered to be the most
important element. The Labor Arbiter and the NLRC correctly found that Coca-Cola 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 respondent’s 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 Coca-Cola, in each case." 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. 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. Complainant does not dispute the fact that outside of the
two (2) hours that he is required to be at respondent company’s premises, he is not at all further required
to just sit around in the premises and wait for an emergency to occur so as to enable him from using such
hours for his own benefit and advantage. In fact, complainant maintains his own private clinic attending
to his private practice in the city, where he services his patients, bills them accordingly -- and if it is an
employee of respondent company who is attended to by him for special treatment that needs
hospitalization or operation, this is subject to a special billing. More often than not, an employee is
required to stay in the employer’s workplace or proximately close thereto that he cannot utilize his time
effectively and gainfully for his own purpose.

14. LOLITA LOPEZ vs. BODEGA CITY G.R. No. 155731. September 3, 2007

FACTS: Petitioner was the lady keeper of Bodega City tasked with manning its ladies’ comfort room. In
a letter signed by Yap, the manager of Bodega, petitioner was made to explain why the concessionaire
agreement between her and respondents should not be terminated or suspended in view of an incident
wherein petitioner was seen to have acted in a hostile manner against a lady customer of Bodega City who
informed the management that she saw petitioner sleeping while on duty. Petitioner was subsequently
informed that because of the incident, respondents had decided to terminate the concessionaire agreement
between them. Petitioner filed with the Arbitration Branch of the NLRC a complaint for illegal dismissal
against respondents. In their answer, respondents contended that no employer-employee relationship ever
existed between them and petitioner.

ISSUE: Was there employer-employee relationship between the petitioner and the respondents?

RULING: NO. There has been no employer- employee relationship between respondents and petitioner.
To ascertain the existence of an employer-employee relationship, jurisprudence has invariably applied the
four-fold test, namely: (1) the manner of selection and engagement; (2) the payment of wages; (3) the
presence or absence of the power of dismissal; and (4) the presence or absence of the power of control. Of
these four, the last one is the most important. The so-called control test is commonly regarded as the most
crucial and determinative indicator of the presence or absence of an employer-employee relationship.
Under the control test, an employer-employee relationship exists where the person for whom the services
are performed reserves the right to control not only the end achieved, but also the manner and means to be
used in reaching that end. As applied in this case, a solitary petty cash voucher did not prove that
petitioner had been receiving salary from respondents or that she had been respondents employee for 10
years. Similarly, as to the ID card, while it is true that the words while it is true that the “EMPLOYEE’S
NAME” appear printed below petitioners name, the latter failed to dispute respondents’ evidence the
other contractors of Bodega City such as the singers and band performers, were also issued the same ID
cards for the purpose of enabling them to enter the premises of Bodega City. Their contractual
relationship was governed by the concessionaire agreement. The petitioner was terminated in accordance
with the provisions of the agreement in case of violation of its terms and conditions.

15. Calamba Medical Center, Inc. vs National Labor Relations Commission

FACTS: The Calamba Medical Center (petitioner), a privately-owned hospital, engaged the services of
medical doctors-spouses Ronaldo Lanzanas and Merceditha Lanzanas), as part of its team of resident
physicians. Subsequently, CMC’s medical director issued a Memorandum to Dr. Ronaldo after a resident
physician overheard Dr. Ronaldo and a fellow employee discussing the low admission in the hospital.
After the incident involving her husband, Dr. Merceditha was no longer given any work assignments.
Afterwards, the rank and file employees union of Calamba Medical Center went on a strike. Dr. Ronaldo
and Dr. Merceditha meanwhile filed a complaint for illegal suspension and illegal dismissal, respectively
before the National Labor Relations Commission Regional Arbitration Board (NLRC-RAB).
Consequently, the Department of Labor and Employment (DOLE) issued a return to work order. Dr.
Ronaldo, on the other hand, received a notice of termination indicating his failure to return for work
despite the DOLE order and his supposed role in the striking union. Dr. Ronaldo thus amended his
complaint to illegal dismissal. The Labor Arbiter dismissed the spouses complaints for want of
jurisdiction upon a finding that there was no employer-employee relationship between the parties, the
fourth requisite or the control test in the determination of an employment bond being absent. The National
Labor Relations Commission as well as the Court of Appeals reversed the LA.

ISSUE: Whether or not there is an employer-employee relationship

RULING:Yes. Under the control test, an employment relationship exists between a physician and a
hospital if the hospital controls both the means and the details of the process by which the physician is to
accomplish his task. 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 is compensated according to the result of his
efforts and not the amount thereof, the element of control is absent. As priorly stated, private respondents
maintained specific work-schedules, as determined by petitioner through its medical director, which
consisted of 24-hour shifts totaling forty-eight hours each week and which were strictly to be observed
under pain of administrative sanctions. That petitioner exercised control over respondents gains light from
the undisputed fact that in the emergency room, the operating room, or any department or ward for that
matter, respondents work is monitored through its nursing supervisors, charge nurses and orderlies.
Without the approval or consent of petitioner or its medical director, no operations can be undertaken in
those areas. For control test to apply, it is not essential for the employer to actually supervise the
performance of duties of the employee, it being enough that it has the right to wield the power. With
respect to respondents sharing in some hospital fees, this scheme does not sever the employment tie
between them and petitioner as this merely mirrors additional form or another form of compensation or
incentive similar to what commission-based employees receive as contemplated in Article 97 (f) of the
Labor Code. Respondents were in fact made subject to petitioner-hospitals Code of Ethics, the provisions
of which cover administrative and disciplinary measures on negligence of duties, personnel conduct and
behavior, and offenses against persons, property and the hospitals interest. More importantly, petitioner
itself provided incontrovertible proof of the employment status of respondents, namely, the identification
cards it issued them, the payslips and BIR W-2 (now 2316) Forms which reflect their status as employees,
and the classification as salary of their remuneration. Moreover, it enrolled respondents in the SSS and
Medicare (Philhealth) program. It bears noting at this juncture that mandatory coverage under the SSS
Laws premised on the existence of an employer-employee relationship, except in cases of compulsory
coverage of the self-employed. It would be preposterous for an employer to report certain persons as
employees and pay their SSS premiums as well as their wages if they are not its employee. Finally, under
Section 15, Rule X of Book III of the Implementing Rules of the Labor Code, an employer-employee
relationship exists between the resident physicians and the training hospitals, unless there is a training
agreement between them, and the training program is duly accredited or approved by the appropriate
government agency. In respondents case, they were not undergoing any specialization training. They were
considered non-training general practitioners, assigned at the emergency rooms and ward sections.

16. SEMBLANTE, ET. AL. vs COURT OF APPEALS, G.R. No. 196426, August 8, 2011

Facts: Petitioners Marticio Semblante and Dubrick Pilar worked in the Gallera de Mandaue owned by the
respondents-spouses Vicente and Maria Luisa Loot. The petitioners rendered their services as the official
massiador and sentenciador in 1993. As the masiador, Semblante calls and takes the bets from the
gamecock owners and other bettors and orders the start of the cockfight. He also distributes the winnings
after deducting the arriba, or the commission for the cockpit. Meanwhile, as the sentenciador, Pilar
oversees the proper gaffing of fighting cocks, determines the fighting cocks' physical condition and
capabilities to continue the cockfight, and eventually declares the result of the cockfight. As masiador and
sentenciador, Semblante receives PhP2,000 per week or a total of PhP8,000 per month, while Pilar gets
PhP3,500 a week or PhP14,000 per month. They work every Tuesday, Wednesday, Saturday, and Sunday
every week, excluding monthly derbies and cockfights held on special holidays. Their working days start
at 1:00 p.m. and last until 12:00 midnight, or until the early hours of the morning depending on the needs
of the cockpit. Petitioners had both been issued employees' identification cards that they wear every time
they report for duty. However on November 14,1993, petitioners were denied entry into the cockpit upon
the instructions of respondents and were informed of the termination of their employment effective that
date. Respondents denied that petitioners were their employees and alleged that they were associates of
respondents’ independent contractor, Tomas Vega. They claimed that petitioners have no regular working
time or day and they are free to decide for themselves whether to report for work or not on any
cockfighting day. And the identification card issued was only to free them from the normal entrance fees
and to differentiate them from the general public. The Labor Arbiter found that there exist an employer-
employee relationship between the petitioner and the respondents because the latter performed the works
necessary and indispensable to the usual trade or business of the respondents for a number of years. It has
ruled that petitioners were illegally dismissed and are entitled to their backwages and separation pay.
However, the NLRC reversed the Labor Arbiter’s decision. It held that respondents having no power on
the selection and engagement of petitioners and that no separate individual contract with respondents was
ever executed by petitioners. In its appeal to the CA, the latter ruled in favor for the respondents and held
that referees and bet-takers in a cockfight need to have the kind of expertise that is characteristic of the
game to interpret messages conveyed by mere gestures. Hence, petitioners are akin to independent
contractors who possess unique skills , expertise and talent to distinguish them from ordinary employees.
Further, petitioners were not provided by tools and instrumentalities they needed to perform their work.
They only need their unique skills and talents in the performance of their job as masiador and
sentenciador.

Issue: Whether or not the dismissal of the petitioners is illegal on the ground that that they are regular
employees of the respondents?

Ruling: Respondents had no part in petitioners' selection and management; petitioners' compensation was
paid out of the arriba (which is a percentage deducted from the total bets), not by petitioners; and
petitioners performed their functions as masiador and sentenciador free from the direction and control of
respondents. In the conduct of their work, petitioners relied mainly on their "expertise that is
characteristic of the cockfight gambling," and were never given by respondents any tool needed for the
performance of their work. Respondents, not being petitioners' employers, could never have dismissed,
legally or illegally, petitioners, since respondents were without power or prerogative to do so in the first
place. The rule on the posting of an appeal bond cannot defeat the substantive rights of respondents to be
free from an unwarranted burden of answering for an illegal dismissal for which they were never
responsible.

17. Escasinas v Shangri-la’s Mactan Island Resort, GR 178827, 4 Mar 2009

FACTS: Petitioners were engaged by respondent Dr. Jessica Pepito to work in her clinic at respondent
resort where she was retained as physician. Petitioners filed a complaint for regularization, underpayment
of wages, non-payment of holiday pay, night shift differential and 13th month pay differential against
respondents, claiming that they are regular employees of the resort. Respondent resort argues that
petitioners are employees of Dr. Pepito via MOA, while Dr. Pepito argues that petitioners were already
working for the previous retained physicians of the resort and that she maintained their services upon
request. Moreover, Petitioners insist that under Art 157 of the Labor Code, Shagri-la is required to hire a
full-time registered nurse, apart from a physician, hence, their engagement should be deemed as regular
employment, and that the MOA is contrary to public policy as it circumvents tenurial security.

ISSUE: Are petitioners employees of Shangri-la?

RULING: NO. Art 157 does not require the engagement of full-time nurses as regular emploees of a
company employing not less than 50 workers. In Philippine Global Communications v De Vera, the
court stated that nothing is there in the law which says that medical practitioners so engaged by actually
hired as employees. The term “full-time” in Art 157 cannot be construed as referring to the type of
employment of the person engaged to provide the services, for Art 157 must not be read alongside Art.
280 in order to vest employer-employee relationship on the employer and the person so engaged. Art. 280
of the Labor Code is not the yardstick for determining the existence of an employment relationship. The
phrase “service of a full-time registered nurse” should thus be taken to refer to the kind of services that
the nurse will render in the company’s premises and to its employees, not the manner of his engagement.
On the other hand, existence of an employer- employee relationship is established by the presence of the
following determinants: (1) the selection and engagement of the workers; (2) power of dismissal; (3) the
payment of wages by whatever means; and (4) the pwer to control the worker’s conduct, with the latter
assuming primacy in the overall consideration. As to payment of wages, respondent doctor is the one who
underwrites the following: salaries, SSS contributions and other benefits of the staff;13 group life, group
personal accident insurance and life/death insurance14 for the staff with minimum benefit payable at 12
times the employee’s last drawn salary, as well as value added taxes and withholding taxes, sourced from
her P60,000.00 monthly retainer fee and 70% share of the service charges from Shangri-la’s guests who
avail of the clinic services. With respect to the supervision and control of the nurses and clinic staff, it is
not disputed that a document, “Clinic Policies and Employee Manual” claimed to have been prepared by
respondent doctor exists, to which petitioners gave their conformity and in which they acknowledged
their co-terminus employment status. It is thus presumed that said document, and not the employee
manual being followed by Shangri-la’s regular workers, governs how they perform their respective tasks
and responsibilities.

18. TONGKO v. THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC.; MR

FACTS: (no facts; cannot find the previous decision which may have it.) This case is about the Motion
for Reconsideration of petitioner Gregorio V. Tongkos to set aside the June 29, 2010 Resolution that
reversed the SC Decision of November 7, 2008. With the reversal, the assailed June 29, 2010 Resolution
effectively affirmed the Court of Appeals ruling that the petitioner was an insurance agent, not the
employee, of the respondent The Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife). Petitioner
reiterates and argues that for 19 years, he performed administrative functions and exercised supervisory
authority over employees and agents of Manulife, in addition to his insurance agent functions. In these 19
years, he was designated as a Unit Manager, a Branch Manager and a Regional Sales Manager, and now
posits that he was not only an insurance agent for Manulife but was its employee as well.

ISSUE: Should the previous decision finding Tongko, not an employee but an insurance agent of
Manulife be modified?

RULING: NO. Control over the performance of the task of one providing service both with respect to the
means and manner, and the results of the service is the primary element in determining whether an
employment relationship exists. We resolve the petitioners Motion against his favor since he failed to
show that the control Manulife exercised over him was the control required to exist in an employer-
employee relationship; Manulifes control fell short of this norm and carried only the characteristic of the
relationship between an insurance company and its agents, as defined by the Insurance Code and by the
law of agency under the Civil Code. There are built-in elements of control specific to an insurance
agency, which do not amount to the elements of control that characterize an employment relationship
governed by the Labor Code. The Insurance Code provides definite parameters in the way an agent
negotiates for the sale of the companys insurance products, his collection activities and his delivery of the
insurance contract or policy. In addition, the Civil Code defines an agent as a person who binds himself to
do something in behalf of another, with the consent or authority of the latter. Article 1887 of the Civil
Code also provides that in the execution of the agency, the agent shall act in accordance with the
instructions of the principal. They are controls, aimed only at specific results in undertaking an insurance
agency, and are, in fact, parameters set by law in defining an insurance agency and the attendant duties
and responsibilities an insurance agent must observe and undertake. They do not reach the level of control
into the means and manner of doing an assigned task that invariably characterizes an employment
relationship as defined by labor law.
19. Caong, Jr. v. Begualos, G.R. No. 179428, January 26, 2011

Facts: Petitioners Primo E. Caong, Jr. (Caong), Alexander J. Tresquio (Tresquio), and Loriano D.
Daluyon (Daluyon) were employed by respondent Avelino Regualos under a boundary agreement, as
drivers of his jeepneys. In November 2001, they filed separate complaints for illegal dismissal against
respondent who barred them from driving the vehicles due to deficiencies in their boundary payments.

Issue: Whether or not the policy of suspending drivers pending payment of arrears in their boundary
obligations is reasonable.

Ruling: It is already settled that the relationship between jeepney owners/operators and jeepney drivers
under the boundary system is that of employer-employee and not of lessor-lessee. The fact that the drivers
do not receive fixed wages but only get the amount in excess of the so-called “boundary” that they pay to
the owner/operator is not sufficient to negate the relationship between them as employer and employee.
Petitioners’ suspension cannot be categorized as dismissal, considering that there was no intent on the part
of respondent to sever the employer-employee relationship between him and petitioners. In fact, it was
made clear that petitioners could put an end to the suspension if they only pay their recent arrears. As it
was, the suspension dragged on for years because of petitioners’ stubborn refusal to pay. It would have
been different if petitioners complied with the condition and respondent still refused to readmit them to
work. Then there would have been a clear act of dismissal. But such was not the case. Instead of paying,
petitioners even filed a complaint for illegal dismissal against respondent. Respondent’s policy of
suspending drivers who fail to remit the full amount of the boundary was fair and reasonable under the
circumstances. Respondent explained that he noticed that his drivers were getting lax in remitting their
boundary payments and, in fact, herein petitioners had already incurred a considerable amount of arrears.
He had to put a stop to it as he also relied on these boundary payments to raise the full amount of his
monthly amortizations on the jeepneys. Demonstrating their obstinacy, petitioners, on the days
immediately following the implementation of the policy, incurred deficiencies in their boundary
remittances. It is acknowledged that an employer has free rein and enjoys a wide latitude of discretion to
regulate all aspects of employment, including the prerogative to instill discipline on his employees and to
impose penalties, including dismissal, if warranted, upon erring employees. This is a management
prerogative. Indeed, the manner in which management conducts its own affairs to achieve its purpose is
within the management’s discretion. The only limitation on the exercise of management prerogative is
that the policies, rules, and regulations on work-related activities of the employees must always be fair
and reasonable, and the corresponding penalties, when prescribed, commensurate to the offense involved
and to the degree of the infraction. A company policy must be implemented in such manner as will accord
social justice and compassion to the employee. In case of noncompliance with the company policy, the
employer must consider the surrounding circumstances and the reasons why the employee failed to
comply. When the circumstances merit the relaxation of the application of the policy, then its
noncompliance must be excused. In the present case, petitioners merely alleged that there were only few
passengers during the dates in question. Such excuse is not acceptable without any proof or, at least, an
explanation as to why passengers were scarce at that time. It is simply a bare allegation, not worthy of
belief. We also find the excuse unbelievable considering that petitioners incurred the shortages on
separate days, and it appears that only petitioners failed to remit the full boundary payment on said dates.

20. ATOK BIG WEDGE CO., INC vs JESUS GISON, G.R. 169510, August 8, 2011
FACTS: Respondent Jesus P. Gison was engaged as part-time consultant on retainer basis by petitioner
Atok Big Wedge Company, Inc. As a consultant on retainer basis, respondent assisted petitioner's retained
legal counsel with matters pertaining to the prosecution of cases against illegal surface occupants within
the area covered by the company's mineral claims. Respondent was likewise tasked to perform liaison
work with several government agencies, which he said was his expertise. Petitioner did not require
respondent to report to its office on a regular basis, except when occasionally requested by the
management to discuss matters needing his expertise as a consultant. As payment for his services,
respondent received a retainer fee of P3,000.00 a month, which was delivered to him either at his
residence or in a local restaurant. The parties executed a retainer agreement, but such agreement was
misplaced and can no longer be found. Respondent requested that petitioner cause his registration with the
Social Security System (SSS), but petitioner did not accede to his request. He later reiterated his request
but it was ignored by respondent considering that he was only a retainer/consultant. Thereafter,
respondent filed a Complaint with the SSS against petitioner for the latter's refusal to cause his
registration with the SSS. On the same date, Mario D. Cera, in his capacity as resident manager of
petitioner, issued a Memorandum advising respondent that within 30 days from receipt thereof, petitioner
is terminating his retainer contract with the company since his services are no longer necessary.
Respondent filed a Complaint for illegal dismissal, unfair labor practice, underpayment of wages, non-
payment of 13th month pay, vacation pay, and sick leave pay with the National Labor Relations
Commission (NLRC).

ISSUE: Whether or not an employer-employee relationship exists between petitioner and respondent?

RULING: To ascertain the existence of anemployer-employee relationship jurisprudence has invariably

adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the employee's conduct, or the so-called
"control test." Of these four, the last one is the most important. The so-called control test is commonly
regarded as the most crucial and determinative indicator of the presence or absence of an employer-
employee relationship. Under the control test, an employer-employee relationship exists where the person
for whom the services are performed reserves the right to control not only the end achieved, but also the
manner and means to be used in reaching that end. Applying the aforementioned test, an employer-
employee relationship is apparently absent in the case at bar. Among other things, respondent was not
required to report everyday during regular office hours of petitioner. Respondent's monthly retainer fees
were paid to him either at his residence or a local restaurant. More importantly, petitioner did not
prescribe the manner in which respondent would accomplish any of the tasks in which his expertise as a
liaison officer was needed; respondent was left alone and given the freedom to accomplish the tasks using
his own means and method. Respondent was assigned tasks to perform, but petitioner did not control the
manner and methods by which respondent performed these tasks. Verily, the absence of the element of
control on the part of the petitioner engenders a conclusion that he is not an employee of the petitioner.
Contrary to the conclusion of the CA, respondent is not an employee, much more a regular employee of
petitioner. The appellate court's premise that regular employees are those who perform activities which
are desirable and necessary for the business of the employer is not determinative in this case. In fact, any
agreement may provide that one party shall render services for and in behalf of another, no matter how
necessary for the latter's business, even without being hired as an employee. Hence, respondent's length of
service and petitioner's repeated act of assigning respondent some tasks to be performed did not result to
respondent's entitlement to the rights and privileges of a regular employee. Furthermore, despite the fact
that petitioner made use of the services of respondent for eleven years, he still cannot be considered as a
regular employee of petitioner. Article 280 of the Labor Code, in which the lower court used to buttress
its findings that respondent became a regular employee of the petitioner, is not applicable in the case at
bar. Indeed, the Court has ruled that said provision is not the yardstick for determining the existence of an
employment relationship because it merely distinguishes between two kinds of employees, i.e., regular
employees and casual employees, for purposes of determining the right of an employee to certain
benefits, to join or form a union, or to security of tenure; it does not apply where the existence of an
employment relationship is in dispute. Considering that there is no employer-employee relationship
between the parties, the termination of respondent's services by the petitioner after due notice did not
constitute illegal dismissal warranting his reinstatement and the payment of full backwages, allowances
and other benefits. Moreover, the absence of the parties' retainership agreement notwithstanding,
respondent clearly admitted that petitioner hired him in a limited capacity only and that there will be no
employer-employee relationship between them.

21. MEL BERNARTE vs PBA, G.R. No. 192084, September 14, 2011.

Facts: Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA
as referees. During the leadership of Commissioner Emilio Bernardino, they were made to sign contracts
on a year-to-year basis. During the term of Commissioner Eala, however, changes were made on the
terms of their employment. Complainant Bernarte, for instance, was not made to sign a contract during
the first conference of the All-Filipino Cup which was from February 23, 2003 to June 2003. It was only
during the second conference when he was made to sign a one and a half month contract for the period
July 1 to August 5, 2003. On January 15, 2004, Bernarte received a letter from the Office of the
Commissioner advising him that his contract would not be renewed citing his unsatisfactory performance
on and off the court. It was a total shock for Bernarte who was awarded Referee of the year in 2003. He
felt that the dismissal was caused by his refusal to fix a game upon order of Ernie De Leon. Respondents
aver, on the other hand, that complainants entered into two contracts of retainer with the PBA in the year
2003. The first contract was for the period January 1, 2003 to July 15, 2003; and the second was for
September 1 to December 2003. After the lapse of the latter period, PBA decided not to renew their
contracts. Complainants were not illegally dismissed because they were not employees of the PBA. Their
respective contracts of retainer were simply not renewed. PBA had the prerogative of whether or not to
renew their contracts, which they knew were fixed. The Labor Arbiter and NLRC ruled that the dismissal
was illegal, the Court of Appeals, on the other hand, ruled, otherwise, stating that petitioner an
independent contractor since respondents did not exercise any form of control over the means and
methods by which petitioner performed his work as a basketball referee.

Issue: whether petitioner is an employee of respondents, which in turn determines whether petitioner was
illegally dismissed

Ruling: Petitioners are not employee of respondents, they are rather an Independent Contractor. As a
general rule, factual issues are beyond the province of this Court. However, this rule admits of exceptions,
one of which is where there are conflicting findings of fact between the Court of Appeals, on one hand,
and the NLRC and Labor Arbiter, on the other, such as in the present case. To determine the existence of
an employer-employee relationship, case law has consistently applied the four-fold test, to wit: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d)
the employers power to control the employee on the means and methods by which the work is
accomplished. The so-called control test is the most important indicator of the presence or absence of an
employer-employee relationship. Petitioner asserts that he is an employee of respondents since the latter
exercise control over the performance of his work. Petitioner cites the following stipulations in the
retainer contract which evidence control: (1) respondents classify or rate a referee; (2) respondents require
referees to attend all basketball games organized or authorized by the PBA, at least one hour before the
start of the first game of each day; (3) respondents assign petitioner to officiate ballgames, or to act as
alternate referee or substitute; etc.

The foregoing stipulations hardly demonstrate control over the means and methods by which petitioner
performs his work as a referee officiating a PBA basketball game. The contractual stipulations do not
pertain to, much less dictate, how and when petitioner will blow the whistle and make calls. On the
contrary, they merely serve as rules of conduct or guidelines in order to maintain the integrity of the
professional basketball league. As correctly observed by the Court of Appeals, how could a skilled referee
perform his job without blowing a whistle and making calls? x x x [H]ow can the PBA control the
performance of work of a referee without controlling his acts of blowing the whistle and making calls?
The referees decide whether an infraction was committed, and the PBA cannot overrule them once the
decision is made on the playing court. The referees are the only, absolute, and final authority on the
playing court. Respondents or any of the PBA officers cannot and do not determine which calls to make
or not to make and cannot control the referee when he blows the whistle because such authority
exclusively belongs to the referees. The very nature of petitioners job of officiating a professional
basketball game undoubtedly calls for freedom of control by respondents. Moreover, the following
circumstances indicate that petitioner is an independent contractor: (1) the referees are required to report
for work only when PBA games are scheduled, which is three times a week spread over an average of
only 105 playing days a year, and they officiate games at an average of two hours per game; and (2) the
only deductions from the fees received by the referees are withholding taxes. In other words, unlike
regular employees who ordinarily report for work eight hours per day for five days a week, petitioner is
required to report for work only when PBA games are scheduled or three times a week at two hours per
game. In addition, there are no deductions for contributions to the Social Security System, Philhealth or
Pag-Ibig, which are the usual deductions from employees salaries. These undisputed circumstances
buttress the fact that petitioner is an independent contractor, and not an employee of respondents.
Furthermore, applicable foreign case law declares that a referee is an independent contractor, whose
special skills and independent judgment are required specifically for such position and cannot possibly be
controlled by the hiring party. In addition, the fact that PBA repeatedly hired petitioner does not by itself
prove that petitioner is an employee of the former. For a hired party to be considered an employee, the
hiring party must have control over the means and methods by which the hired party is to perform his
work, which is absent in this case. The continuous rehiring by PBA of petitioner simply signifies the
renewal of the contract between PBA and petitioner, and highlights the satisfactory services rendered by
petitioner warranting such contract renewal. Conversely, if PBA decides to discontinue petitioners
services at the end of the term fixed in the contract, whether for unsatisfactory services, or violation of the
terms and conditions of the contract, or for whatever other reason, the same merely results in the non-
renewal of the contract, as in the present case. The non-renewal of the contract between the parties does
not constitute illegal dismissal of petitioner by respondents.

22. Lirio V. Genovia

Respondent Genovia was hired as studio manager by petitioner Lirio, owner of Celkor Ad Sonicmix
Recording Studio (Celkor) particularly, to manage and operate Celkor and to promote and sell the
recording studio's services to music enthusiasts and other prospective clients. He was to receive a monthly
salary of P7,000 and an additional commission of P100.00 per hour as recording technician. His work was
from Monday to Friday, 9am-6pm. A few days after he started working as a studio manager, petitioner
approached him and told him about his project to produce an album for his 15-year-old daughter, Celine
Mei Lirio, a former talent of ABS-CBN Star Records. Petitioner asked respondent to compose and
arrange songs for Celine and promised that he (Lirio) would draft a contract to assure respondent of his
compensation for such services. The album was completed and the carrier single Genovia composed and
arranged was finally aired but he was denied his compensation by Lirio despite several demands. Lirio
told Genovia that he was practically a nobody and had proven nothing yet in the music industry,
respondent did not deserve a high compensation, and he should be thankful that he was given a job to feed
his family. Genovia was entitled only to 20% of the net profit, and not of the gross sales of the album, and
that the salaries he received and would continue to receive as studio manager of Celkor would be
deducted from the said 20% net profit share. Lirio then verbally dismissed Genovia from work. Genovia
filed a complaint for illegal dismissal and prayed for his reinstatement without loss of seniority rights, or,
in the alternative, that he be paid separation pay, backwages and overtime pay; and that he be awarded
unpaid commission in the amount of P2,000.00 for services rendered as a studio technician as well as
moral and exemplary damages. Lirio’s defense is that Respondent could not have been hired as a studio
manager, since the recording studio has no personnel except petitioner. Respondent verbally agreed with
petitioner to co-produce the album based on the following terms and conditions: (1) petitioner shall
provide all the financing, equipment and recording studio; (2) Celine Mei Lirio shall sing all the songs;
(3) respondent shall act as composer and arranger of all the lyrics and the music of the five songs he
already composed and the revival songs; (4) petitioner shall have exclusive right to market the album; (5)
petitioner was entitled to 60% of the net profit, while respondent and Celine Mei Lirio were each entitled
to 20% of the net profit; and (6) respondent shall be entitled to draw advances of P7,000.00 a month,
which shall be deductible from his share of the net profits and only until such time that the album has
been produced. Accordingly, their relationship was an informal partnership under Article 1767 of the
Civil Code because They agreed to contribute money, property or industry to a common fund with the
intention of dividing the profits among themselves Petitioner had no control over the time and manner by
which respondent composed or arranged the songs, except on the result thereof. Labor Arbiter ruled that
there was an employee-employer relationship and not partnership and that Genovia was illegally
dismissed. NLRC reversed: Genovia failed to prove with substantial evidence that he was selected and
engaged by petitioner, that petitioner had the power to dismiss him, and that they had the power to control
him not only as to the result of his work, but also as to the means and methods of accomplishing his work.
CA set aside the ruling of the NLRC.

ISSUE: Whether or not the relationship between Lirio and Genovia was an informal partnership.

HELD: No. It was not partnership but an employer-employee relationship. CA decision affirmed. The
elements to determine the existence of an employment relationship are: (a) the selection and engagement
of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to
control the employee's conduct. The most important element is the employer's control of the employee's
conduct, not only as to the result of the work to be done, but also as to the means and methods to
accomplish it.
• All the aforesaid elements are present and was proven by Genovia through documentary
evidence:

o (a) a document denominated as "payroll" (dated July 31, 2001 to March 15, 2002) certified
correct by petitioner which showed that respondent received a monthly salary of P7,000.00 (P3,500.00
every 15th of the month and another P3,500.00 every 30th of the month) with the corresponding
deductions due to absences incurred by respondent; and (2) copies of petty cash vouchers, showing the
amounts he received and signed for in the payrolls.

o Petitioner wielded the power to dismiss as respondent stated that he was verbally dismissed by
petitioner, and respondent, thereafter, filed an action for illegal dismissal against petitioner.

o Petitioner certainly had the power to check on the progress and work of respondent as stated in
his Position Paper and that it was agreed that he would help and teach respondent how to use the studio
equipment.

• Lirio failed to prove that his relationship with respondent was one of partnership. Such claim was
not supported by any written agreement:

o In the payroll dated July 31, 2001 to March 15, 2002, there were deductions from the wages of
respondent for his absence from work, which negates petitioner's claim that the wages paid were advances
for respondent’s work in the partnership.

• It is a well-settled doctrine, that if doubts exist between the evidence presented by the employer
and the employee, the scales of justice must be tilted in favor of the latter. It is a time-honored rule that in
controversies between a laborer and his master, doubts reasonably arising from the evidence or in the
interpretation of agreements and writing should be resolved in the former’s favor.

23. Jao vs. BCC Products

Facts: Petitioner maintained that respondent BCC Product Sales Inc. and its President, respondent
Terrance Ty, employed him as comptroller starting with a monthly salary of P20,000.00 to handle the
financial aspect of BCCs business; the security guards of BCC, acting upon the instruction of Ty, barred
him from entering the premises of BCC where he then worked; that his attempts to report to work in were
frustrated because he continued to be barred from entering the premises of BCC; and that he filed a
complaint dated December 28, 1995 for illegal dismissal, reinstatement with full backwages, non-
payment of wages, damages and attorney’s fees. Respondents countered that petitioner was not their
employee but the employee of Sobien Food, the major creditor and supplier of BCC; and that SFC had
posted him as its comptroller in BCC to oversee BCCs finances and business operations and to look after
SFCs interests or investments in BCC.

ISSUE: Whether petitioner was respondents employee or not

RULING: No. The statements of So really supported respondents position in that petitioners association
with SFC prior to his supposed employment by BCC went beyond mere acquaintance with So. That So,
who had earlier merely retained petitioner as his accountant, thereafter employed petitioner as a retained
accountant after his supposed illegal dismissal by BCC raised a doubt as to his employment by BCC, and
rather confirmed respondents assertion of petitioner being an employee of SFC while he worked at BCC.
Moreover, in determining the presence or absence of an employer-employee relationship, the Court has
consistently looked for the following incidents, to wit: (a) the selection and engagement of the employee;
(b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the
employee on the means and methods by which the work is accomplished. The last element, the so-called
control test, is the most important element. The court have carefully examined the evidence submitted by
the private respondent in the formal offer of evidence and unfortunately, other than the bare assertions of
the private respondent which he miserably failed to substantiate, we find nothing therein that would
decisively indicate that the petitioner BCC exercised the fundamental power of control over the private
respondent in relation to his employment- not even the ID issued to the private respondent and the
affidavits executed by Bertito Jemilla and Rogelio Santias. At best, these pieces of documents merely
suggest the existence of employer-employee relationship as intimated by the NLRC. Employer-Employee
Relationship; The existence of an employer-employee relationship is a question of fact. Generally, a re-
examination of factual findings cannot be done by the Court acting on a petition for review on certiorari
because the Court is not a trier of facts but reviews only questions of law.

24. Legend Hotel vs Realuyo

Legend Hotel (Manila) vs Realuyo AKA Roa G.R. No. 153511 July 18, 2012

Facts: Respondent averred that he had worked as a pianist at the Legend Hotel’s Tanglaw Restaurant from
September 1992 with an initial rate of P400.00/night that was given to him after each night’s
performance; that his rate had increased to P750.00/night; and that during his employment, he could not
choose the time of performance, which had been fixed from 7:00 pm to 10:00 pm for three to six
times/week. He added that the Legend Hotel’s restaurant manager had required him to conform with the
venue’s motif; that he had been subjected to the rules on employees’ representation checks and chits, a
privilege granted to other employees; that on July 9, 1999, the management had notified him that as a
cost-cutting measure his services as a pianist would no longer be required effective July 30, 1999; that he
disputed the excuse, insisting that Legend Hotel had been lucratively operating as of the filing of his
complaint; and that the loss of his employment made him bring his complaint.

ISSUE: Whether or not there is ER-EE relationship?

YES. Petitioner actually wielded the power of selection at the time it entered into the service contract
dated September 1, 1992 with respondent. This is true, notwithstanding petitioner’s insistence that
respondent had only offered his services to provide live music at petitioner’s Tanglaw Restaurant, and
despite petitioner’s position that what had really transpired was a negotiation of his rate and time of
availability. The power of selection was firmly evidenced by, among others, the express written
recommendation dated January 12, 1998 by Christine Velazco, petitioner’s restaurant manager, for the
increase of his remuneration. Respondent’s remuneration, albeit denominated as talent fees, was still
considered as included in the term wage in the sense and context of the Labor Code, regardless of how
petitioner chose to designate the remuneration. Anent this, Article 97(f) of the Labor Code clearly states:

xxx wage paid to any employee shall mean the remuneration or earnings, however designated, capable of
being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission
basis, or other method of calculating the same, which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or to be done, or for services rendered or to
be rendered, and includes the fair and reasonable value, as determined by the Secretary of Labor, of
board, lodging, or other facilities customarily furnished by the employer to the employee.

That respondent worked for less than eight hours/day was of no consequence and did not detract from the
CA’s finding on the existence of the employer-employee relationship. In providing that the “normal hours
of work of any employee shall not exceed eight (8) hours a day,” Article 83 of the Labor Code only set a
maximum of number of hours as “normal hours of work” but did not prohibit work of less than eight
hours. 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 petitioner’s supervision and control.
Specifically, petitioner’s 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 restaurant’s 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.

25. JACK C. VALENCIA, vs. CLASSIQUE VINYL, G.R. No. 206390. January 30, 2017

FACTS: Valencia filed with the Labor Arbiter a Complaint for Underpayment of Salary and Overtime
Pay; Non-Payment of Holiday Pay, Service Incentive Leave Pay, 13th Month Pay and Regularization.
The complaint was later on amended to include illegal dismissal. Valencia alleged that he applied for
work with Classique Vinyl but was told by the latter’s personnel office to proceed to CMS, a local
manpower agency, and therein submit the requirements for employment. Upon submission thereof, CMS
made him sign a contract of employment. He then proceeded to Classique Vinyl for interview and
thereafter started working for the company. Valencia alleged that he was neither paid his holiday pay,
service incentive leave pay, and 13th month pay. Worse, premiums for Philhealth and Pag-IBIG Fund
were not paid and his monthly deductions for Social Security System premiums were not properly
remitted. Valencia further averred that his salary was paid on a weekly basis but his pay slips neither bore
the name of Classique Vinyl nor of CMS. Classique Vinyl, for its part, denied having hired Valencia and
instead pointed to CMS as the one who actually selected engaged, and contracted out Valencia’s services.

ISSUE: Whether there exists an employer- employee relationship between Classique Vinyl and Valencia.

RULING: No. The burden to prove the element of an employer-employee relationship, viz.: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4)
the power of control, lies upon Valencia. In this case, however, Valencia failed to present competent
evidence, documentary or otherwise, to support his claimed employer-employee relationship between him
and Classique Vinyl. All he advanced were mere tactual assertions unsupported by proof. Valencia’s
selection and engagement was undertaken by CMS and conversely, this negates the existence of such
element insofar as Classique Vinyl is concerned. Aside from the aforementioned
inconsistent allegations of Valencia, his claim that his work was supervised by Classique Vinyl does not
hold water. Again, the Court finds the same as a self-serving assertion unworthy of credence. On the other
hand, the employment contract which Valencia signed with CMS categorically states that the latter
possessed not only the power of control but also of dismissal over him.

26. SUMIFRU CORP. v. NAGKAHIUSANG MAMUMUO SA SUYAPA FARM1 (NAMASUFA-

NAFLU-KMU)

FACTS: The private respondent NAMASUF A-NAFLU-KMU, a legitimate labor organization, filed a
Petition for Certification Election before the DOLE, Regional Office. NAMASUFA sought to represent
all rank-and-file employees, numbering around 140, of packing plant 90 of Fresh Banana Agricultural
Corporation (FBAC). NAMASUFA claimed that there was no existing union in the aforementioned
establishment. FBAC filed an Opposition to the Petition. It argued that there exists no employer-
employee relationship and that members of NAMASUFA are actually employees of A2Y Contracting
Services (A2Y), a duly licensed independent contractor. Pending resolution of the petition, FBAC was
merged with SUMIFRU, the latter being the surviving corporation. DOLE Med-Arbiter granted the
petition which was affirmed by both the DOLE Secretary and the CA. Thus, this Petition for Review on
Certiorari under Rule 45 was filed.

ISSUE: Does the finding of Employer-Employee relationship by the CA binding unto this court (SC)?

RULING: YES. It was supported by substancial evidence and the petition raises only question of facts.
Here, the Med-Arbiter found, based on documents submitted by the parties, that Sumifru gave
instructions to the workers on how to go about their work, what time they were supposed to report for
work, required monitoring sheets as they went about their jobs, and provided the materials used in the
packing plant. In affirming the Med-Arbiter, the DOLE Secretary relied on the documents submitted by
the parties and ascertained that Sumifru indeed exercised control over the workers in PP 90. The DOLE
Secretary found that the element of control was present because Sumifru required monitoring sheets and
imposed disciplinary actions for non-compliance with "No Helmet - No Entry" "No ID - No Entry"
policies. In turn, the CA, even as it recognized that the findings of facts of the DOLE Secretary and the
Med-Arbiter were binding on it because they were supported by substantial evidence, even went further
and itself reviewed the records - to arrive, as it did arrive, at the same conclusion reached by the DOLE
Secretary and Med-Arbiter: that is, that Sumifru exercised control over the workers in PP 90. 27. In light
of the foregoing, the Court cannot re-calibrate the factual bases of the Med-Arbiter, DOLE Secretary, and
the CA, contrary to the provisions of Rule 45, especially where, as here, the Petition fails to show any
whimsicality or capriciousness in the exercise of judgment of the Med-Arbiter or the DOLE Secretary in
finding the existence of an employer-employee relationship.