Jose Y.

Sonza v ABS CBN Broadcasting Corporation

G.R. No. 138051
June 10, 2004
Carpio, J:

Case law has consistently held that the elements of an employer-employee

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 on the means and methods by which the work is accomplished. The last
element, the so-called control test, is the most important element.

Independent contractors often present themselves to possess unique skills,

expertise or talent to distinguish them from ordinary employees.

The control test is the most important test that courts apply in distinguishing
an employee from an independent contractor. This test is based on the extent of
control the hirer exercises over a worker. The greater the supervision and control the
hirer exercises, the more likely the worker is deemed an employee. The converse
holds true as well the less control the hirer exercises, the more likely the worker is
considered an independent contractor.

Not every form of control that a party reserves to himself over the conduct of
the other party in relation to the services being rendered may be accorded the effect
of establishing an employer-employee relationship. Moreover, one could still be an
independent contractor although the hirer reserved certain supervision to insure the
attainment of the desired result. The hirer, however, must not deprive the one hired
from performing his services according to his own initiative.

Lastly, even an independent contractor can validly provide his services

exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily
the same as control. The hiring of exclusive talents is a widespread and accepted
practice in the entertainment industry. This practice is not designed to control the
means and methods of work of the talent, but simply to protect the investment of the
broadcast station.

The right of labor to security of tenure as guaranteed in the Constitution arises only if
there is an employer-employee relationship under labor laws. Not every performance
of services for a fee creates an employer-employee relationship. To hold that every
person who renders services to another for a fee is an employee - to give meaning to
the security of tenure clause - will lead to absurd results.

Emperco B. Abante Jr. v Lamadrid Bearing and Parts Corp. and Jose Lamadrid
G.R. No. 159890
May 28, 2004
Ynares-Santiago, J:
 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.

Employer-employee relationship is notably absent in this case. The reports on sales,

collection, competitors, market strategies, price listings and new offers relayed by
petitioner during his conferences to Manila do not indicate that he was under the
control of respondent.

There could be no employer-employee relationship where 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, no
relationship of employer-employee exists.

Paz Martin Jo and Cesar Jo v National Labor Relations Commission and Peter
Mejila
G.R. No. 121605
February 2, 2000
Quisumbing, J:

The existence of an employer-employee relationship is ultimately a question

of fact and that the findings thereon by the labor arbiter and the NLRC shall be
accorded not only respect but even finality when supported by ample evidence.

In determining the existence of an employer-employee relationship, the

following elements are considered: (1) the selection and engagement of the workers;
(2) power of dismissal; (3) the payment of wages by whatever means; and (4) the
power to control the workers conduct, with the latter assuming primacy in the overall
consideration. The power of control refers to the existence of the power and not
necessarily to the actual exercise thereof. It is not essential for the employer to
actually supervise the performance of duties of the employee; it is enough that the
employer has the right to wield that power.

To constitute abandonment as a ground of valid dismissal, there must be

concurrence of the intention to abandon and some overt acts from which it may be
inferred that the employee concerned has no more interest in working. In other
words, there must be a clear, deliberate and unjustified refusal to resume
employment and a clear intention to sever the employer-employee relationship on
the part of the employee.

Filamer Christian Institute v Intermediate Appellate Court, Hon. Enrique P.

Suplico and Potenciano Kapunan,Sr.
G.R. No. 75112
August 17, 1992
Gutierrez, J:

The clause "within the scope of their assigned tasks" for purposes of raising
the presumption of liability of an employer, includes any act done by an employee, in
furtherance of the interests of the employer or for the account of the employer at the
time of the infliction of the injury or damage. Even if somehow, the employee driving
the vehicle derived some benefit from the act, the existence of a presumptive liability
of the employer is determined by answering the question of whether or not the
servant was at the time of the accident performing any act in furtherance of his
master's business.

The Court held that supervision includes the formulation of suitable rules and
regulations for the guidance of its employees and the issuance of proper instructions
intended for the protection of the public and persons with whom the employer has
relations through his employees. An employer is expected to impose upon its
employees the necessary discipline called for in the performance of any act
indispensable to the business and beneficial to their employer.

In the absence of evidence that the petitioner had exercised the diligence of a good
father of a family in the supervision of its employees, the law imposes upon it the
vicarious liability for acts or omissions of its employees. The liability of the employer
is, under Article 2180, primary and solidary. However, the employer shall have
recourse against the negligent employee for whatever damages are paid to the heirs
of the plaintiff.

For the purpose of recovering damages under the prevailing circumstances, it

is enough that the plaintiff and the private respondent heirs were able to establish
the existence of employer-employee relationship between Funtecha and petitioner
Filamer and the fact that Funtecha was engaged in an act not for an independent
purpose of his own but in furtherance of the business of his employer.

Angel Jardin et. al v National Labor Relations Commission and Goodman Taxi
G.R. No. 119268
February 23, 2000
Quisimbing, J:
 The phrase "grave abuse of discretion amounting to lack or excess of
jurisdiction" means such capricious and whimsical exercise of judgment by the
tribunal exercising judicial or quasi-judicial power as to amount to lack of power. In
labor cases, disregarding the rules it is bound to observe constitutes grave abuse of
discretion on the part of labor tribunal.

The Court ruled that the relationship between jeepney owners/operators on

one hand and jeepney drivers on the other under the boundary system is that of
employer-employee and not of lessor-lessee. In case of lease of chattels, the lessor
loses complete control over the chattel leased although the lessee cannot be
reckless in the use thereof, otherwise he would be responsible for the damages to
the lessor. In the case of jeepney owners/operators and jeepney drivers, the former
exercise supervision and control over the latter. The management of the business is
in the owners hands. The owner as holder of the certificate of public convenience
must see to it that the driver follows the route prescribed by the franchising authority
and the rules promulgated as regards its operation. The fact that the drivers do not
receive fixed wages but get only that in excess of the so-called "boundary" they pay
to the owner/operator is not sufficient to withdraw the relationship between them
from that of employer and employee. The same doctrine is applied by analogy to the
relationships between bus owner/operator and bus conductor, auto-calesa
owner/operator and driver, and recently between taxi owners/operators and taxi
drivers.

Andres Villavilla and Ester Gadiente Villavilla v Court of Appeals

G.R. No. 79664
August 11, 1992
Bellosillo, J:

An employee is defined as a person who performs services for an employer in

which either or both mental and physical efforts are used and who receives
compensation for such services, where there is an employer-employee relationship.
In the present case, neither the pilots nor the crew-members receive compensation
from boat-owners. They only share in their own catch produced by their own efforts.
The boat-owners obviously are not responsible for the wage, salary, or fee of the
pilot and crew-members. Their sole participation in the venture is the furnishing or
delivery of the equipment used for fishing, after which, they merely wait for the boat's
return and receive their share in the catch, if there is any. A person who joins the
outfit is entitled to a share or participation in the fruit of the fishing trip. If it gives no
return, the men get nothing. It appears that the undertaking is in the nature of a joint
venture, with the boat-owner supplying the boat and its equipment, and the pilot and
crew-members contributing the necessary labor, and the parties getting specific
shares for their respective contributions.

Charlie Jao v BCC Products Sales Inc. and Terrance Ty

G.R. No. 163700
April 18, 2012
Bersamin, J:
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 power of control is an important factor that
other requisites may even be disregarded. The control test, under which the person
for whom the services are rendered reserves the right to direct not only the end to be
achieved but also the means for reaching such end, is generally relied on by the
courts.

Lolita Lopez v Bodega City and Andres C. Torres –Yap

G.R. No. 155731
September 3, 2007
Austria-Martinez, J:

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.

To prove the element of payment of wages, the Court ruled that a solitary
petty cash voucher did not prove that petitioner had been receiving salary from
respondents or that she had been respondent’s employee.

The Court ruled that petitioner's I.D. Card is incompetent proof of an alleged
employer-employee relationship between the parties. As viewed in the context of the
case, the card is at best a passport from management assuring the holder thereof of
his unmolested access to the premises of Bodega City.

The Court held that not every form of control that the hiring party reserves to
himself over the conduct of the party hired in relation to the services rendered may
be accorded the effect of establishing an employer-employee relationship between
them in the legal or technical sense of the term.

South East International Rattan, Inc and Estanislao Agbay v Jesus J. Coming
G.R. No. 186621
March 12, 2014
Villarama, Jr. J:
 To ascertain the existence of an employer–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.” In resolving the issue of whether such relationship exists in a given
case, substantial evidence – that amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion – is sufficient. Although no
particular form of evidence is required to prove the existence of the relationship, and
any competent and relevant evidence to prove the relationship may be admitted, a
finding that the relationship exists must nonetheless rest on substantial evidence.

The Court held that the fact that a worker was not reported as an employee to
the SSS is not conclusive proof of the absence of employer–employee relationship.
Otherwise, an employer would be rewarded for his failure or even neglect to perform
his obligation. Nor does the fact that respondent’s name does not appear in the
payrolls and pay envelope records submitted by petitioners negate the existence of
employer–employee relationship.

Royale Homes Marketing Corporation v Fidel P. Alcantara

G.R. No. 195190
July 28, 2014
Del Castillo, J:

The primary evidence of the nature of the parties’ relationship is the written
contract that they signed and executed in pursuance of their mutual agreement.
While the existence of employer-employee relationship is a matter of law, the
characterization made by the parties in their contract as to the nature of their juridical
relationship cannot be simply ignored, particularly in the case where the parties’
written contract unequivocally states their intention at the time they entered into it.

Not every form of control that a hiring party imposes on the hired party is
indicative of employee-employer relationship. As long as the level of control does not
interfere with the means and methods of accomplishing the assigned tasks, the rules
imposed by the hiring party on the hired party do not amount to the labor law concept
of control that is indicative of employer-employee relationship. Rules and regulations
that merely serve as guidelines towards the achievement of a mutually desired result
without dictating the means and methods of accomplishing it do not establish
employer-employee relationship.

Moreover, the Court held that a commitment to abide by the rules and
regulations of an insurance company does not ipso facto make the insurance agent
an employee. Neither do guidelines somehow restrictive of the insurance agent’s
conduct necessarily indicate “control” as this term is defined in jurisprudence.
Guidelines indicative of labor law “control” should not merely relate to the mutually
desirable result intended by the contractual relationship; they must have the nature
of dictating the means or methods to be employed in attaining the result, or of fixing
the methodology and of binding or restricting the party hired to the use of these
means. In fact, results-wise, the principal can impose production quotas and can
determine how many agents, with specific territories, ought to be employed to
achieve the company’s objectives. These are management policy decisions that the
labor law element of control cannot reach.