Atok Big Wedge Company, Inc. v. Gison, G.R. No.

169510, 08 August 2011

FACTS:
In 1992, respondent Gison was engaged as part-time consultant on retainer basis by petitioner Atok Big
Wedge Company. 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 ₱3,000.00 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. The said arrangement continued for the
next eleven years.

Sometime thereafter, since respondent was getting old, he requested that petitioner cause his
registration with the SSS, but petitioner refused, considering that he was only a retainer/consultant.
Respondent filed a complaint with the SSS against petitioner due to such refusal. Meanwhile, the
resident manager of petitioner issued a Memorandum advising petitioner that within 30 days from
receipt thereof, petitioner is terminating his retainer contract with the company.

Respondent filed a complaint with the NLRC (for illegal dismissal, unfair labor practice, underpayment
of wages, non-payment of 13th month pay, vacation pay, and sick leave pay.)

LA decision: Labor arbiter ruled in favor of petitioner, there being no employer-employee relationship
between the parties. Respondent appealed to NLRC.

NLRC decision: Affirmed LA decision. Respondent appealed to CA.

CA decision: CA reversed the NLRC decision, and ordered petitioner to reinstate Gison. CA ruled that
under Art. 280 of the Labor Code, respondent is deemed a regular employee of the petitioner and is
entitled to the rights and privileges of a regular employee. The CA added that although there was an
agreement between the parties that respondent's employment would only be temporary, it clearly
appears that petitioner disregarded the same by repeatedly giving petitioner several tasks to perform.
Moreover, although respondent may have waived his right to attain a regular status of employment
when he agreed to perform these tasks on a temporary employment status, still, it was the law that
recognized and considered him a regular employee after his first year of rendering service to
petitioner.

Hence this petition. Petitioner argues that the finding of the CA that the respondent is entitled to regular
employment under Art. 280 is inapplicable because there was no EER.

ISSUE:
1) Was there an employer-employee relationship between Gison and Atok?
2) Can Art. 280 be used to determine the existence of an EER?

RULING:
1. There was no EER.
1) The four-fold test provides that, in order to ascertain the existence of an EER, the following
factors must be considered:
a. the selection and engagement of the employee;
b. the payment of wages;
c. the power of dismissal; and
d. the power to control the employee's conduct, or the so-called "control test."
2) The control test is considered the determinative indicator of EER. Under this test, an EER exists
where the person for whom the services are performed reserved the right to control not only
the end achieved, but also the manner and means to be used in reaching that end.
 3) Application:
a. Respondent was not required to report everyday during regular office hours
b. Retainer fees were paid to him at his residence
c. Atok did not prescribe the manner in which respondent would accomplish any of the
tasks given to him; respondent was left alone and given freedom to accomplish them
d. With the absence of the element of control on the part of Atok, it can be said that
respondent was not its employee.
4) Respondent knew at the outset that there was never going to be an EER. It was in their
agreement.
5) Contrary to the conclusion of the CA, the mere fact that respondent performed activities which
are desirable and necessary for the business of the employer does not mean that there is an
EER. 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.

2. No, Art. 280 is not a yardstick for determining the existence of an EER.
1) It merely distinguished regular vs. casual employees for purposes of determining their rights and
benefits.
2) Considering that there was not EER, the termination of the respondent after due notice did not
constitute illegal dismissal.