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195190

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RepublicofthePhilippines
SUPREMECOURT
Manila

SECONDDIVISION

G.R.No.195190July28,2014

ROYALEHOMESMARKETINGCORPORATION,Petitioner,
vs.
FIDELP.ALCANTARA[deceased],substitutedbyhisheirs,Respondent.

DECISION

DELCASTILLO,J.:

Not every form of control that a hiring party imposes on the hired party is indicative of employeeemployer
relationship.Rulesandregulationsthatmerelyserveasguidelinestowardstheachievementofamutuallydesired
result without dictating the means and methods of accomplishing it do not establish employeremployee
relationship.1

ThisPetitionforReviewonCertiorari2assailstheJune23,2010Decision3oftheCourtofAppeals(CA)inCAG.R.
SPNo.109998which(i)reversedandsetasidetheFebruary23,2009Decision4ofthe National LaborRelations
Commission (NLRC), (ii) ordered petitioner Royale Homes Marketing Corporation (Royale Homes) to pay
respondentFidelP.Alcantara(Alcantara)backwagesandseparationpay,and(iii)remandedthecasetotheLabor
Arbiterfortheproperdeterminationandcomputationofsaidmonetaryawards.

Also assailed in this Petition isthe January 18, 2011 Resolution5 of the CA denying Royale Homes Motion for
Reconsideration,6aswellasitsSupplemental7thereto.

FactualAntecedents

In 1994, Royale Homes, a corporation engaged in marketing real estates, appointed Alcantara asits Marketing
Directorforafixedperiodofoneyear.HisworkconsistedmainlyofmarketingRoyaleHomesrealestateinventories
onanexclusivebasis.RoyaleHomesreappointedhimforseveralconsecutiveyears,thelastofwhichcoveredthe
periodJanuary1toDecember31,2003whereheheldthepositionofDivision5VicePresidentSales.8

ProceedingsbeforetheLaborArbiter

OnDecember17,2003,AlcantarafiledaComplaintforIllegalDismissal9againstRoyaleHomesanditsPresident
Matilde Robles, Executive VicePresident for Administration and Finance Ma. Melinda Bernardino, and Executive
VicePresidentforSalesCarminaSotto.AlcantaraallegedthatheisaregularemployeeofRoyaleHomessincehe
isperformingtasksthatarenecessaryanddesirabletoitsbusinessthatin2003thecompanygavehimP1.2million
fortheservicesherenderedtoitthatinthefirstweekofNovember2003,however,theexecutiveofficersofRoyale
Homestoldhimthattheywerewonderingwhyhestillhadthegalltocometoofficeandsitathistable10andthat
the actsof the executive officers of Royale Homes amounted to his dismissal from work without any valid or just
cause and in gross disregard of the proper procedure for dismissing employees. Thus, he alsoimpleaded the
corporateofficerswho,heaverred,effectedhisdismissalinbadfaithandinanoppressivemanner.

Alcantaraprayedtobereinstatedtohisformerpositionwithoutlossofseniorityrightsandotherprivileges,aswellas
tobepaidbackwages,moralandexemplarydamages,andattorneysfees.Hefurthersoughtthattheownershipof
theMitsubishiAdventurewithPlateNo.WHD945betransferredtohisname.

RoyaleHomes,ontheotherhand,vehementlydeniedthatAlcantaraisitsemployee.Itarguedthattheappointment
paper of Alcantara isclear that it engaged his services as an independent sales contractorfor a fixed term of one
yearonly.Heneverreceivedanysalary,13thmonthpay,overtimepayorholidaypayfromRoyaleHomesashewas
paidpurelyoncommissionbasis.Inaddition,RoyaleHomeshadnocontrolonhowAlcantarawouldaccomplishhis
tasks and responsibilities as he was free to solicit sales at any time and by any manner which he may deem

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appropriateandnecessary.Heisevenfreetorecruithisownsalespersonneltoassisthiminpursuanceofhissales
target.

AccordingtoRoyaleHomes,Alcantaradecidedtoleavethecompanyafterhiswife,whowasonceconnectedwithit
as a sales agent
agent, had formed a brokerage company that directly competed with its business, and even recruited
someofitssalesagents.Althoughthiswasagainsttheexclusivityclauseofthecontract,RoyaleHomesstilloffered
agent
to accept Alcantaras wife back so she could continue to engage in real estate brokerage, albeit exclusively for
Royale Homes. In a special management committee meeting on October 8,2003, however, Alcantara announced
publiclyandopenlythathewouldleavethecompanybytheendofOctober2003andthathewouldnolongerfinish
theunexpiredtermofhiscontract.Hehasdecidedtojoinhiswifeandpursuetheirownbrokeragebusiness.Royale
HomesacceptedAlcantarasdecision.Itthenthrewadespedidapartyinhishonorand,subsequently,appointeda
new independent contractor. Two months after herelinquished his post, however, Alcantara appeared in Royale
Homesandsubmittedaletterclaimingthathewasillegallydismissed.

RulingoftheLaborArbiter

On September 7, 2005,the Labor Arbiter rendered a Decision11 holding that Alcantara is an employee of Royale
HomeswithafixedtermemploymentperiodfromJanuary1toDecember31,2003andthatthepreterminationof
his contract was against the law.Hence, Alcantara is entitled to an amount which he may have earned on the
averagefortheunexpiredportionofthecontract.Withregardtotheimpleadedcorporateofficers,theLaborArbiter
absolvedthemfromanyliability.

ThedispositiveportionoftheLaborArbitersDecisionreads:

WHEREFORE, premises considered, judgment is hereby rendered ordering the respondent Royale Homes
Marketing Corp. to pay the complainant the total amount of TWO HUNDRED SEVENTY SEVEN THOUSAND
PESOS(P277,000.00)representinghiscompensation/commissionfortheunexpiredtermofhiscontract.

Allotherclaimsaredismissedforlackofmerit.

SOORDERED.12

Both parties appealed the Labor Arbiters Decision to the NLRC. Royale Homes claimed that the Labor Arbiter
grievouslyerredinrulingthatthereexistsanemployeremployeerelationshipbetweentheparties.Itinsistedthatthe
contractbetweenthemexpresslystatesthatAlcantaraisanindependentcontractorandnotanordinaryemployee.
Ithadnocontroloverthemeansandmethodsbywhichheperformedhiswork.RoyaleHomeslikewiseassailedthe
awardofP277,000.00forlackofbasisasitdidnotpreterminatethecontract.ItwasAlcantarawhochosenotto
finishthecontract.

Alcantara,forhispart,arguedthattheLaborArbitererredinrulingthathisemploymentwasforafixedtermandthat
heisnotentitledtobackwages,reinstatement,unpaidcommissions,anddamages.

RulingoftheNationalLaborRelationsCommission

On February 23, 2009, the NLRC rendered its Decision,13 ruling that Alcantara is not an employee but a mere
independentcontractorofRoyaleHomes.ItbaseditsrulingmainlyonthecontractwhichdoesnotrequireAlcantara
toobserveregularworkinghours.Hewasalsofreetoadoptthesellingmethodshedeemedmosteffectiveandcan
evenrecruitsalesagentstoassisthiminmarketingtheinventoriesofRoyaleHomes.TheNLRCalsoconsidered
agent
thefactthatAlcantarawasnotreceivingmonthlysalary,butwasbeingpaidoncommissionbasisasstipulatedin
thecontract.Beinganindependentcontractor,theNLRCconcludedthatAlcantarasComplaintiscognizablebythe
regularcourts.

ThefallooftheNLRCDecisionreads:

WHEREFORE,premisesconsidered,theDecisionofLaborArbiterDoloresPeraltaBeleydatedSeptember5,2005
isREVERSEDandSETASIDEandaNEWONErendereddismissingthecomplaintforlackofjurisdiction.

SOORDERED.14

Alcantara moved for reconsideration.15 In a Resolution16 dated May 29, 2009, however, the NLRC denied his
motion.

AlcantarathusfiledaPetitionforCertiorari17withtheCAimputinggraveabuseofdiscretiononthepartoftheNLRC
inrulingthatheisnotanemployeeofRoyaleHomesandthatitistheregularcourtswhichhavejurisdictionoverthe
issueofwhetherthepreterminationofthecontractisvalid.

RulingoftheCourtofAppeals

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18
On June 23, 2010, the CA promulgated its Decision granting Alcantaras Petition and reversing the NLRCs
Decision.Applyingthefourfoldandeconomicrealitytests,itheldthatAlcantaraisanemployeeofRoyaleHomes.
RoyaleHomesexercisedsomedegreeofcontroloverAlcantarasincehisjob,asobservedbytheCA,issubjectto
companyrules,regulations,andperiodicevaluations.Hewasalsoboundbythecompanycodeofethics.Moreover,
theexclusivityclauseofthecontracthasmadeAlcantaraeconomicallydependentonRoyaleHomes,supportingthe
theorythatheisanemployeeofsaidcompany.

TheCAfurtherheldthatAlcantarasterminationfromemploymentwaswithoutanyvalidorjustcause,anditwas
carriedoutinviolationofhisrighttoproceduraldueprocess.Thus,theCAruledthatheisentitledtobackwagesand
separationpay,inlieuofreinstatement.Considering,however,thattheCAwasnotsatisfiedwiththeproofadduced
to establish the amount of Alcantaras annual salary, it remanded the caseto the Labor Arbiter to determine the
sameandthemonetaryawardheisentitledto.Withregardtothecorporateofficers,theCAabsolvedthemfrom
anyliabilityforwantofclearproofthattheyassentedtothepatentlyunlawfulactsorthattheyareguiltyofbadfaith
orgrossnegligence.Thus:

WHEREFORE,inviewoftheforegoing,theinstantPETITIONisGRANTED.TheassaileddecisionoftheNational
LaborRelationsCommissioninNLRCNCRCASENO.00121431103NLRCCANO.04610405datedFebruary
23,2009aswellastheResolutiondatedMay29,2009areherebySETASIDEandanewoneisenteredordering
the respondent company to pay petitioner backwages which shall be computed from the time of his illegal
terminationinOctober2003uptothefinalityofthisdecision,plusseparationpayequivalenttoonemonthsalaryfor
everyyearofservice.ThiscaseisREMANDEDtotheLaborArbiterfortheproperdeterminationandcomputationof
backwages,separationpayandothermonetarybenefitsthatpetitionerisentitledto.

SOORDERED.19

Royale Homes filed a Motion for Reconsideration20 and a Supplemental Motion for Reconsideration.21 In a
Resolution22datedJanuary18,2011,however,theCAdeniedsaidmotions.

Issues

Hence,thisPetitionwhereRoyaleHomessubmitsbeforethisCourtthefollowingissuesforresolution:

A.

WHETHERTHECOURTOFAPPEALSHASDECIDEDTHEINSTANTCASENOTINACCORDWITHLAW
ANDAPPLICABLEDECISIONSOFTHESUPREMECOURTWHENITREVERSEDTHERULINGOFTHE
NLRC DISMISSING THE COMPLAINT OF RESPONDENT FOR LACK OF JURISDICTION AND
CONSEQUENTLY,INFINDINGTHATRESPONDENTWASILLEGALLYDISMISSED[.]

B.

WHETHER THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN DISREGARDING

THEENBANCRULINGOFTHISHONORABLECOURTINTHECASEOFTONGKOVS.MANULIFE,AND
INBRUSHINGASIDETHEAPPLICABLERULINGSOFSONZAVS.ABSCBNANDCONSULTAV.CA[.]

C.

WHETHER THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN DENYING THE
MOTIONFORRECONSIDERATIONOFPETITIONERANDINREFUSINGTOCORRECTITSELF[.]23

RoyaleHomescontendsthatitscontractwithAlcantaraisclearandunambiguousitengagedhisservicesasan
independentcontractor.Thiscanbereadilyseenfromthecontractstatingthatnoemployeremployeerelationship
exists between the parties that Alcantara was free to solicit sales at any time and by any manner he may deem
appropriatethathemayrecruitsalespersonneltoassisthiminmarketingRoyaleHomesinventoriesand,thathis
remunerationsaredependentonhissalesperformance.

RoyaleHomeslikewisearguesthattheCAgrievouslyerredinrulingthatitexercisedcontroloverAlcantarabased
on a shallow ground that his performance is subject to company rules and regulations, code of ethics, periodic
evaluation,andexclusivityclauseofcontract.RoyaleHomesmaintainsthatitisexpectedtoexercisesomedegree
of control over its independent contractors,but that does not automatically result in the existence ofemployer
employeerelationship.Forcontroltobeconsideredasaprooftendingtoestablishemployeremployeerelationship,
thesamemustpertaintothemeansandmethodofperformingtheworknotontherelationshipoftheindependent
contractorsamongthemselvesortheirpersonsortheirsourceofliving.

RoyaleHomesfurtherassertsthatitneitherhirednorwieldedthepowertodismissAlcantara.ItwasAlcantarawho
openlyandpubliclydeclaredthathewaspreterminatinghisfixedtermcontract.

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ThepivotalissuetoberesolvedinthiscaseiswhetherAlcantarawasanindependentcontractororanemployeeof
RoyaleHomes.

OurRuling

ThePetitionisimpressedwithmerit.

Thedeterminationofwhetherapartywhorendersservicestoanotherisanemployeeoranindependentcontractor
involves an evaluation of factual matters which, ordinarily, is not within the province of this Court. In view of the
conflictingfindingsofthetribunalsbelow,however,thisCourtisconstrainedtogooverthefactualmattersinvolved
inthiscase.24

Thejuridicalrelationshipofthepartiesbasedontheirwrittencontract

Theprimaryevidenceofthenatureofthepartiesrelationshipinthiscaseisthewrittencontractthattheysigned
andexecutedinpursuanceoftheirmutualagreement.Whiletheexistenceofemployeremployeerelationshipisa
matteroflaw,thecharacterizationmadebythepartiesintheircontractastothenatureoftheirjuridicalrelationship
cannot be simply ignored, particularly in this case where the parties written contractunequivocally states their
intention at the time they entered into it. In Tongko v. The Manufacturers LifeInsurance Co. (Phils.), Inc.,25 it was
heldthat:

Tobesure,theAgreementslegalcharacterizationofthenatureoftherelationshipcannotbeconclusiveandbinding
onthecourtsxxxthecharacterizationofthejuridicalrelationshiptheAgreementembodiedisamatteroflawthat
isforthecourtstodetermine.Atthesametime,though,thecharacterizationthepartiesgavetotheirrelationshipin
the Agreement cannot simply be brushed aside because it embodiestheir intent at the time they entered the
Agreement, and they were governed by this understanding throughout their relationship. At the very least, the
provisionontheabsenceofemployeremployeerelationshipbetweenthepartiescanbeanaidinconsideringthe
Agreementanditsimplementation,andinappreciatingtheotherevidenceonrecord.26

Inthiscase,thecontract,27dulysignedandnotdisputedbytheparties,conspicuouslyprovidesthat"noemployer
employeerelationshipexistsbetween"RoyaleHomesandAlcantara,aswellashissalesagents.Itisclearthatthey
agent
didnotwanttobeboundbyemployeremployeerelationshipatthetimeofthesigningofthecontract.Thus:

January24,2003

MR.FIDELP.ALCANTARA

13RanchoI

MarikinaCity

DearMr.Alcantara,

This will confirm yourappointment as Division 5 VICE[]PRESIDENTSALES of ROYALE HOMES

MARKETINGCORPORATIONeffectiveJanuary1,2003toDecember31,2003.

YourappointmententailsmarketingourrealestateinventoriesonanEXCLUSIVEBASISundersuch
price,termsandconditiontobeprovidedtoyoufromtimetotime.

As such, you can solicit sales at any time and by any manner which you deem appropriate and
necessary to market our real estate inventories subject to rules, regulations and code of ethics
promulgated by the company. Further, you are free to recruit sales personnel/agents
agent to assist you in
marketing of our inventories provided that your personnel/agents
agent shall first attend the required
seminarsandbriefingtobeconductedbyusfromtimetotimeforthepurposeoffamiliarizingthemof
termsandconditionsofsale,thenatureofpropertysold,etc.,attendanceofwhichshallbeacondition
precedentfortheiraccreditationbyus.

ThatassuchDivision5VICE[]PRESIDENTSALESyoushallbeentitledto:

1.Commissionoverrideof0.5%foralloptionsalesbeginningJanuary1,2003bookedbyyour
salesagents.
agent

2.Budgetallocationdependingonyourdivisionssaleperformanceasperourbudgetguidelines.

3.Salesincentiveandotherformsofcompanysupportwhichmaybegrantedfromtimetotime.
It is understood, however, that no employeremployee relationship exists between us, that of
yoursalespersonnel/agents,andthatyoushallholdourcompanyxxx,itsofficersanddirectors,
agent

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freeandharmlessfromanyandallclaimsofliabilityanddamagesarisingfromand/orincidentto
themarketingofourrealestateinventories.

Wereserve,however,ourrighttoterminatethisagreementincaseofviolationofanycompanyrules
andregulations,policiesandcodeofethicsuponnoticeforjustifiablereason.

Yourperformanceshallbesubjecttoperiodicevaluationbasedonfactorswhichshallbedeterminedby
themanagement.

Ifyouareamenabletotheforegoingtermsandconditions,pleaseindicateyourconformitybysigning
on the space provided below and return [to] us a duplicate copy of this letter, duly accomplished, to
constituteasouragreementonthematter.(Emphasisours)

Since"thetermsofthecontractareclearandleavenodoubtupontheintentionofthecontractingparties,theliteral
meaning of itsstipulations should control."28 No construction is even needed asthey already expressly state their
intention.Also,thisCourtadoptstheobservationoftheNLRCthatitisratherstrangeonthepartofAlcantara,an
educatedmanandaveteransalesbrokerwhoclaimedtobereceivingP1.2millionashisannualsalary,nottohave
contestedtheportionofthecontractexpresslyindicatingthatheisnotanemployeeofRoyaleHomesiftheirtrue
intentionwereotherwise.

ThejuridicalrelationshipofthepartiesbasedonControlTest

Indeterminingtheexistenceofanemployeremployeerelationship,thisCourthasgenerallyreliedonthefourfold
test,towit:(1)theselectionandengagementoftheemployee(2)thepaymentofwages(3)thepowerofdismissal
and(4)theemployerspowertocontroltheemployeewithrespecttothemeansandmethodsbywhichtheworkis
to be accomplished.29 Among the four, the most determinative factor in ascertaining the existence of
employeremployeerelationshipisthe"rightofcontroltest".30"Itisdeemedtobesuchanimportantfactorthatthe
otherrequisitesmayevenbedisregarded."31 This holds true where the issues to be resolved iswhether a person
whoperformsworkforanotheristhelattersemployeeorisanindependentcontractor,32asinthiscase.Forwhere
thepersonforwhomtheservicesareperformedreservestherighttocontrolnotonlytheendtobeachieved,but
alsothemeansbywhichsuchendisreached,employeremployeerelationshipisdeemedtoexist.33

InconcludingthatAlcantaraisanemployeeofRoyaleHomes,theCAratiocinatedthatsincetheperformanceofhis
tasks is subject to company rules, regulations, code of ethics, and periodic evaluation, the element of control is
present.

TheCourtdisagrees.

Noteveryformofcontrolisindicativeofemployeremployeerelationship. Apersonwhoperformsworkforanother
1wphi1

andissubjectedtoitsrules,regulations,andcodeofethicsdoesnotnecessarilybecomeanemployee.34Aslongas
thelevelofcontroldoesnotinterferewiththemeansandmethodsofaccomplishingtheassignedtasks,therules
imposedbythehiringpartyonthehiredpartydonotamounttothelaborlawconceptofcontrolthatisindicativeof
employeremployeerelationship.InInsularLifeAssuranceCo.,Ltd.v.NationalLaborRelationsCommission35itwas
pronouncedthat:

Logically,thelineshouldbedrawnbetweenrulesthatmerelyserveasguidelinestowardstheachievementofthe
mutuallydesiredresultwithoutdictatingthemeansormethodstobeemployedinattainingit,andthosethatcontrol
or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to
promotetheresult,createnoemployeremployeerelationshipunlikethesecond,whichaddressboththeresultand
themeansusedtoachieveit.xxx36

Inthiscase,theCourtagreeswithRoyaleHomesthattherules,regulations,codeofethics,andperiodicevaluation
alluded to byAlcantara do not involve control over the means and methods by which he was to performhis job.
Understandably,RoyaleHomeshastofixtheprice,imposerequirementsonprospectivebuyers,andlaydownthe
termsandconditionsofthesale,includingthemodeofpayment,whichtheindependentcontractorsmustfollow.Itis
alsonecessaryforRoyaleHomestoallocateitsinventoriesamongitsindependentcontractors,determinewhohas
priorityinsellingthesame,grantcommissionorallowancebasedonpredeterminedcriteria,andregularlymonitor
theresultoftheirmarketingandsalesefforts.ButtothemindofthisCourt,thesedonotpertaintothemeansand
methodsofhowAlcantarawastoperformandaccomplishhistaskofsolicitingsales.Theydonotdictateuponhim
the details of how he would solicit sales or the manner as to how he would transact business with prospective
clients. In Tongko, this Court held that guidelines or rules and regulations that do notpertain to the means or
methodstobeemployedinattainingtheresultarenotindicativeofcontrolasunderstoodinlaborlaw.Thus:

Fromjurisprudence,animportantlessonthatthefirstInsularLifecaseteachesusisthatacommitmenttoabideby
the rules and regulations of an insurance company does not ipso factomake the insurance agent agent an employee.
Neither do guidelines somehow restrictive of the insurance agent
agents conduct necessarily indicate "control" as this
term is defined in jurisprudence. Guidelines indicative of labor law "control," as the first Insular Lifecase tells us,
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shouldnotmerelyrelatetothemutuallydesirableresultintendedbythecontractualrelationshiptheymusthavethe
natureofdictatingthemeansormethodstobeemployedinattainingtheresult,oroffixingthemethodologyandof
binding or restricting the party hired to the use of these means.In fact, resultswise, the principal can impose
productionquotasandcandeterminehowmanyagents,withspecificterritories,oughttobeemployedtoachieve
agent
the companys objectives. These are management policy decisions that the labor law element of control cannot
reach.OurrulingintheserespectsinthefirstInsularLifecasewaspracticallyreiteratedinCarungcong.Thus,aswill
be shown more fully below, Manulifes codes of conduct, all of which do not intrude into the insurance agents
agent
meansandmannerofconductingtheirsalesandonlycontrolthemastothedesiredresultsandInsuranceCode
norms, cannot be used as basis for a finding that the labor law concept of control existed between Manulife and
Tongko.37(Emphasesintheoriginal)

As the party claiming the existence of employeremployee relationship, it behoved upon Alcantara to prove the
elementsthereof,particularlyRoyaleHomespowerofcontroloverthe meansandmethodsofaccomplishingthe
work.38He,however,failedtocitespecificrules,regulationsorcodesofethicsthatsupposedlyimposedcontrolon
his means and methods of soliciting sales and dealing with prospective clients. On the other hand, this case is
replete with instances that negate the element of control and the existence of employeremployee relationship.
Notably,Alcantarawasnotrequiredtoobservedefiniteworkinghours.39Exceptforsolicitingsales,RoyaleHomes
didnotassignothertaskstohim.Hehadfullcontroloverthemeansandmethodsofaccomplishinghistasksashe
can"solicitsalesatanytimeandbyanymannerwhich[hemay]deemappropriateandnecessary."Heperformed
histasksonhisownaccountfreefromthecontrolanddirectionofRoyaleHomesinallmattersconnectedtherewith,
exceptastotheresultsthereof.40

Neither does the repeated hiring of Alcantara prove the existence of employeremployee relationship.41 As
discussed above, the absence of control over the means and methodsdisproves employeremployee relationship.
ThecontinuousrehiringofAlcantarasimplysignifiestherenewalofhiscontractwithRoyaleHomes,andhighlights
his satisfactory services warranting the renewal of such contract. Nor does the exclusivity clause of contract
establish the existence of the labor law concept of control. In Consulta v. Court of Appeals,42 it was held that
exclusivityofcontractdoesnotnecessarilyresultinemployeremployeerelationship,viz:

xxxHowever,thefactthattheappointmentrequiredConsultatosolicitbusinessexclusivelyforPamanadidnot
mean that Pamana exercised control over the means and methods of Consultas work as the term control is
understoodinlaborjurisprudence.NeitherdiditmakeConsultaanemployeeofPamana.Pamanadidnotprohibit
Consultafromengaginginanyotherbusiness,orfrombeingconnectedwithanyothercompany,foraslongasthe
business[ofthe]companydidnotcompetewithPamanasbusiness.43

Thesamescenarioobtainsinthiscase.Alcantarawasnotprohibitedfromengaginginanyotherbusinessaslong
as he does not sell projects of Royale Homes competitors. He can engage in selling various other products or
engageinunrelatedbusinesses.

PaymentofWages

Theelementofpaymentofwagesisalsoabsentinthiscase.Asprovidedinthecontract,Alcantarasremunerations
consistonlyofcommissionoverrideof0.5%,budgetallocation,salesincentiveandotherformsofcompanysupport.
Thereisnoproofthathereceivedfixedmonthlysalary.Nopaysliporpayrollwaseverpresentedandthereisno
proofthatRoyaleHomesdeductedfromhissupposedsalarywithholdingtaxorthatitregisteredhimwiththeSocial
SecuritySystem,PhilippineHealthInsuranceCorporation,orPagIbigFund.Infact,hisComplaintmerelystatesa
ballparkfigureofhisallegedsalaryofP100,000.00,moreorless.Alloftheseindicateanindependentcontractual
relationship.44 Besides, if Alcantara indeed consideredhimself an employee of Royale Homes, then he, an
experienced and professional broker, would have complained that he was being denied statutorily mandated
benefits. But for nine consecutive years, he kept mum about it, signifying that he has agreed, consented, and
acceptedthefactthatheisnotentitledtothoseemployeebenefitsbecauseheisanindependentcontractor.

This Court is, therefore,convinced that Alcantara is not an employee of Royale Homes, but a mere independent
contractor.TheNLRCis,therefore,correctinconcludingthattheLaborArbiterhasnojurisdictionoverthecaseand
thatthesameiscognizablebytheregularcourts.

WHEREFORE,theinstantPetitionisherebyGRANTED.TheJune23,2010DecisionoftheCourtofAppealsinCA
G.R. SP No. 109998 is REVERSED and SET ASIDE. The February 23, 2009 Decision of the National Labor
RelationsCommissionisREINSTATEDandAFFIRMED.SOORDERED.

MARIANOC.DELCASTILLO
AssociateJustice

WECONCUR:

ANTONIOT.CARPIO
AssociateJustice
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Chairperson

ARTUROD.BRION JOSEPORTUGALPEREZ
AssociateJustice AssociateJustice

ESTELAM.PERLASBERNABE
AssociateJustice

ATTESTATION

IattestthattheconclusionsintheaboveDecisionhadbeenreachedinconsultationbeforethecasewasassigned
tothewriteroftheopinionoftheCourt'sDivision.

ANTONIOT.CARPIO
AssociateJustice
Chairperson

CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitutionandtheDivisionChairperson'sAttestation,Icertifythatthe
conclusionsintheaboveDecisionhadbeenreachedinconsultationbeforethecasewasassignedtothewriterof
theopinionoftheCourt'sDivision.

MARIALOURDESP.A.SERENO
ChiefJustice

Footnotes
1
InsularLifeAssuranceCo.,Ltdv.NationalLaborRelationsCommission,259Phil.65,7071(1989).
2
Rollo,pp.350.
3
CA rollo, pp. 209229 penned by Associate Justice Maritlor P. Punzalan Castillo and concurred in by
AssociateJusticesJosefinaGuevaraSalongaandFranchitoN.Diamante.
4
Rollo, pp. 241248 penned by Presiding Commissioner Gerardo C. Nograles and concurred in by
CommissionersPerlitaB.VelascoandRomeoL.Go.
5
CArollo,pp.288294.
6
Id.at231256.
7
Id.at258275.
8
SeeContractdatedJanuary24,2003,id.at36.
9
Rollo,p.271.
10
See[Alcantaras]PositionPaper,id.at106110.
11
Id.at208219pennedbyLaborArbiterDoloresM.PeraltaBeley
12
Id.at218219.
13
Id.at241248.
14
Id.at247248.
15
SeeMotionforReconsideration,id.at249251.
16
Id.at260261.
17
CArollo,pp.313.
18
Id.at209229.
19
Id.at228.
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20
Id.at231256.
21
Id.at258275.
22
Id.at288294.
23
Rollo,p.376.
24
Bernarte v. Philippine Basketball Association (PBA), G.R. No. 192084, September 14, 2011, 657 SCRA
745,754.
25
G.R.No.167622,June29,2010,622SCRA58.
26
Id.at80.
27
CArollo,p.36.
28
CIVILCODEOFTHEPHILIPPINES,Article1370.
29
Bernartev.PhilippineBasketballAssociation(PBA),supranote24SandiganSavingsandLoanBank,Inc.
v. National Labor Relations Commission, 324 Phil. 348, 358 (1996) Sonza v. ABSCBN Broadcasting
Corporation,G.R.No.138051,June10,2004,431SCRA583,594595.
30
Id.
31
SandiganSavingsandLoanBank,Inc.v.NationalLaborRelationsCommission,supranote29.
32
CosmopolitanFuneralHomes,Inc.v.Maalat,G.R.No.86693,July2,1990,187SCRA108,112.
33
Id.at112113.
34
Tongko v. The Manufacturers Life Insurance Co. (Phils.), Inc., supra note 25 at 85 Sonza v. ABSCBN
BroadcastingCorporation,supranote29at603.
35
Supranote1.
36
Id.at71.
37
Supranote25at8687.
38
Javierv.FlyAceCorporation,G.R.No.192558,February15,2012,666SCRA382,397398.
39
SeeConsultav.CourtofAppeals,493Phil.842,848(2005)Sonzav.ABSCBNBroadcastingCorporation,
supranote29at600.
40
SeeChavezv.NationalLaborRelationsCommission,489Phil.444,457458(2005).
41
Bernartev.PhilippineBasketballAssociation(PBA),supranote24at759.
42
Supranote39.
43
Id.at852.
44
Bernarte v. Philippine Basketball Association (PBA), supra note 24 at 757 Consulta v. Court of Appeals,
supranote39at851.

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