Professional Documents
Culture Documents
84484 November 15, 1989 any right to any commission on renewal of premiums
that may be paid after the termination of this agreement
INSULAR LIFE ASSURANCE CO., LTD., petitioner,
for any cause whatsoever, except when the termination
vs.
is due to disability or death in line of service. As to
NATIONAL LABOR RELATIONS COMMISSION and
commission corresponding to any balance of the first
MELECIO BASIAO, respondents.
year's premiums remaining unpaid at the termination of
Tirol & Tirol for petitioner. this agreement, the Agent shall be entitled to it if the
balance of the first year premium is paid, less actual cost
Enojas, Defensor & Teodosio Cabado Law Offices for of collection, unless the termination is due to a violation
private respondent. of this contract, involving criminal liability or breach of
trust.
NARVASA, J.: ---four years later, in April 1972, the parties entered into
another contract — an Agency Manager's Contract
On July 2, 1968, Insular Life Assurance Co., Ltd.
(hereinafter simply called the Company) and Melecio T. Basiao then organized an agency or office to which he
Basiao entered into a contract 1 by which: gave the name M. Basiao and Associates, while
concurrently fulfilling his commitments under the first
1. Basiao was "authorized to solicit within the Philippines contract with the Company.
applications for insurance policies and annuities in
accordance with the existing rules and regulations" of ---In May, 1979, the Company terminated the Agency
the Company; Manager's Contract.
2. he would receive "compensation, in the form of ---Subsequently, Basiao sued the Company in a civil
commissions ... as provided in the Schedule of action and this, he was later to claim, prompted the
Commissions" of the contract to "constitute a part of the latter to terminate also his engagement under the first
consideration of ... (said) agreement;" and contract and to stop payment of his commissions starting
April 1, 1980.
3. the "rules in ... (the Company's) Rate Book and its
Agent's Manual, as well as all its circulars ... and those ---Basiao thereafter filed with the then Ministry of Labor
which may from time to time be promulgated by it, ..." a complaint 4 against the Company and its president.
were made part of said contract. __ The respondents disputed the Ministry's jurisdiction
-The contract also contained, among others, over Basiao's claim, asserting that he was not the
Company's employee, but an independent contractor
1. provisions governing the relations of the parties and that the Company had no obligation to him for
2. the duties of the Agent unpaid commissions under the terms and conditions of
his contract. 5
3. the acts prohibited to him
The Labor Arbiter:
4. and the modes of termination of the agreement
Ruled in favor of Basiao. He ruled that the underwriting
RELATION WITH THE COMPANY. The Agent shall be free agreement had established an employer-employee
to exercise his own judgment as to time, place and relationship between him and the Company, and this
means of soliciting insurance. Nothing herein contained conferred jurisdiction on the Ministry of Labor to
shall therefore be construed to create the relationship of adjudicate his claim. Said official's decision directed
employee and employer between the Agent and the payment of his unpaid commissions
Company. However, the Agent shall observe and
conform to all rules and regulations which the Company NLRC:
may from time to time prescribe. Affirmed the Labor Arbiter’s Decision.
ILLEGAL AND UNETHICAL PRACTICES. The Agent is Hence, the present petition for certiorari and
prohibited from giving, directly or indirectly, rebates in prohibition.
any form, or from making any misrepresentation or over-
selling, and, in general, from doing or committing acts ISSUE:
prohibited in the Agent's Manual and in circulars of the WON there exists an employer-employee relationship
Office of the Insurance Commissioner. between Insular life Assurance Co.Ltd. and Basiao.
TERMINATION. The Company may terminate the Insular’s position/contention:
contract at will, without any previous notice to the
Agent, for or on account of ... (explicitly specified causes). that no employer-employee relation in the legal and
... generally accepted sense existed between it and Basiao,
is drawn from the terms of the contract they had entered
Either party may terminate this contract by giving to the into, which,
other notice in writing to that effect. It shall become ipso
facto cancelled if the Insurance Commissioner should 1. either expressly or by necessary implication,
revoke a Certificate of Authority previously issued or made Basiao the master of his own time and
should the Agent fail to renew his existing Certificate of selling methods,
Authority upon its expiration. The Agent shall not have
2. left to his judgment the time, place and means of determination of the premiums to be paid and the
soliciting insurance, schedules of payment. None of these really invades the
3. set no accomplishment quotas and agent's contractual prerogative to adopt his own selling
compensated him on the basis of results methods or to sell insurance at his own time and
obtained. He was not bound to observe any convenience, hence cannot justifiably be said to
schedule of working hours or report to any establish an employer-employee relationship between
regular station; him and the company.
4. he could seek and work on his prospects
The respondents limit themselves to pointing out that
anywhere and at anytime he chose to, and was
Basiao's contract with the Company bound him to
free to adopt the selling methods he deemed
observe and conform to such rules and regulations as the
most effective.
latter might from time to time prescribe.
The respondents Contention:
No showing has been made that any such rules or
Emphasizes the provisions of Basiao's contract obliging regulations were in fact promulgated, much less that any
him to "... rules existed or were issued which effectively controlled
or restricted his choice of methods — or the methods
1.observe and conform to all rules and regulations which
themselves — of selling insurance.
the Company may from time to time prescribe ...,"
Absent such showing, the Court will not speculate that
2. as well as to the fact that the Company prescribed the
any exceptions or qualifications were imposed on the
qualifications of applicants for insurance, processed their
express provision of the contract leaving Basiao "... free
applications and determined the amounts of insurance
to exercise his own judgment as to the time, place and
cover to be issued
means of soliciting insurance."
as indicative of the control, which made Basiao, in legal
The Court, therefore, rules that under the contract
contemplation, an employee of the Company. 9
invoked by him, Basiao was not an employee of the
Ruling and Explanation of the SC: petitioner, but a commission agent, an independent
contractor whose claim for unpaid commissions should
There is no Employer-employee relationship in this have been litigated in an ordinary civil action.
case.
The Labor Arbiter erred in taking cognizance of, and
The SC explained that; Logically, the line should be drawn adjudicating, said claim, being without jurisdiction to do
between so, as did the respondent NLRC in affirming the Arbiter's
1.rules that merely serve as guidelines towards the decision. This conclusion renders it unnecessary and
achievement of the mutually desired result without premature to consider Basiao's claim for commissions on
dictating the means or methods to be employed in its merits.
attaining it. WHEREFORE, the appealed Resolution of the National
---This type of “control” aims only to promote the result, Labor Relations Commission is set aside
create no employer-employee relationship. SO ORDERED.
However, ADDITIONAL NOTE: There is no dearth of authority
2.those that control or fix the methodology and bind or holding persons similarly placed as respondent Basiao to
restrict the party hired to the use of such means. be independent contractors, instead of employees of the
parties for whom they worked.
--- which address both the result and the means used to
achieve it.
De Asis and Hernando Law Office for petitioner. The present petition merits Our consideration. The
records of the case reveal that an employer-employee
Estebal M. Mendoza for private respondent. relationship does not exist between the 17 shoeshiners
PARAS, J.: and petitioner.
in January, 1985, private respondent Kaisahan ng The shoe shiner is distinct from a piece worker because
Mangagawang Pilipino (KAMPIL for short), a legitimate while the latter is paid for work accomplished, he does
labor union duly registered with the Ministry of Labor not, however, contribute anything to the capital of the
and Employment (MOLE, for short), filed a Petition for employer other than his service.
Certification Election, In NLRDivision of the NCR.
It is the employer of the piece worker who pays his
---This was opposed by the Petitioner. Alleging among wages, while the shoe shiner in this instance is paid
others that 1. There is no employer-employee directly by his customer. The piece worker is paid for
relationship between Besa's and the petitioners- work accomplished without regard or concern to the
signatories to the petition; profit as derived by his employer, but in the case of the
shoe shiners, the proceeds derived from the trade are
Med-Arbiter: always divided share and share alike with respondent
on June 27, 1985, issued an order declaring that there BESA. The shoe shiner can take his share of the proceeds
was an employer-employee relationship between the everyday if he wanted to or weekly as is the practice of
parties and directed that an election be conducted. qqqBesas The employer of the piece worker supervises
and controls his work, but in the case of the shoe shiner,
Aggrieved, Petitioner Appealed to the BLR, the BLR: respondent BESA does not exercise any degree of control
Upheld the Findings of the Med-Arbiter. or supervision over their person and their work.
Meanwhile, the Petition of the Union (KAMPIL) before The circumstances of this case cannot pass the four fold
the Med-Arbiter for the holding of the certification test. 1. The selection 2. The payment of wages 3. The
election was granted. power to dismiss 4. The power to control the conduct of
an employee
While the pre-election conference was in progress,
petitioner herein BESAS filed with Us with petition for Consequently, employer-employee relationship between
certiorari with Prohibition and simultaneously filed with members of the Petitioning union and respondent
the Med-Arbiter a motion to suspend the pre-election MAMERTO B. BESA being absent the latter could not be
conference. The petition filed before Us was dismissed held guilty of the unfair labor practice acts imputed
for lack of merit but was reconsidered upon Motion of against him.
petitioner. WHEREFORE, judgment is hereby rendered giving due
ISSUE: WON employer-employee relationship exists course to the Petition and declaring VOID the decision of
between petitioner Besas and 17 members of KAMPIL the Director of the Bureau of Labor Relations dated
who are designated as Shoeshiners. September 27, 1985. The Petition in BLR Case No. A-8-
165-85 (NCR-LRD-M1-044-85) is therefore hereby
The question of employer-employee relationship became a DISMISSED.
primodial consideration in resolving whether or not the subject
shoeshiners have the juridical personality and standing to SO ORDERED.
present a petition for certification election as well as to vote i
therein. Feria (Chairman), Fernan, Alampay, Gutierrez, Jr., JJ.,
concur.
Petitioner’s Contention:
---On 30 April 1996, SONZA filed a complaint against ABS- ---Applying the control test to the present case, we find
CBN before the Department of Labor and Employment, that SONZA is not an employee but an independent
National Capital Region in Quezon City. SONZA contractor. The control test is the most important test
complained that ABS-CBN did not pay his salaries, our courts apply in distinguishing an employee from an
separation pay, service incentive leave pay, 13th month independent contractor.[29] This test is based on the
pay, signing bonus, travel allowance and amounts due extent of control the hirer exercises over a worker. The
under the Employees Stock Option Plan (ESOP). greater the supervision and control the hirer exercises,
the more likely the worker is deemed an employee. The
Defense/Answer of ABS-CBN
converse holds true as well the less control the hirer
---On 10 July 1996, ABS-CBN filed a Motion to Dismiss on exercises, the more likely the worker is considered an
the ground that no employer-employee relationship independent contractor.[30]
existed between the parties.
THE Petitioner’s CONTENTIONS vis a vis the Explanation argues that if such practice exists, it is void for violating
of The Court’s Ruling: the right of labor to security of tenure.
First, SONZA contends that ABS-CBN exercised control The right of labor to security of tenure as guaranteed in
over the means and methods of his work. the Constitution[53] arises only if there is an employer-
employee relationship under labor laws. Not every
---SONZAs argument is misplaced. ABS-CBN engaged
performance of services for a fee creates an employer-
SONZAs services specifically to co-host the Mel & Jay
employee relationship. To hold that every person who
programs. ABS-CBN did not assign any other work to
renders services to another for a fee is an employee - to
SONZA. To perform his work, SONZA only needed his
give meaning to the security of tenure clause - will lead
skills and talent. How SONZA delivered his lines,
to absurd results.
appeared on television, and sounded on radio were
outside ABS-CBNs control. SONZA did not have to render Individuals with special skills, expertise or talent enjoy
eight hours of work per day. The Agreement required the freedom to offer their services as independent
SONZA to attend only rehearsals and tapings of the contractors. The right to life and livelihood guarantees
shows, as well as pre- and post-production staff this freedom to contract as independent
meetings.[31] ABS-CBN could not dictate the contents of contractors. The right of labor to security of tenure
SONZAs script. However, the Agreement prohibited cannot operate to deprive an individual, possessed with
SONZA from criticizing in his shows ABS-CBN or its special skills, expertise and talent, of his right to contract
interests.[32] The clear implication is that SONZA had a as an independent contractor. An individual like an artist
free hand on what to say or discuss in his shows provided or talent has a right to render his services without any
he did not attack ABS-CBN or its interests. one controlling the means and methods by which he
performs his art or craft. This Court will not interpret the
Second, SONZA urges us to rule that he was ABS-CBNs
right of labor to security of tenure to compel artists and
employee because ABS-CBN subjected him to its rules
talents to render their services only as employees. If
and standards of performance. SONZA claims that this
radio and television program hosts can render their
indicates ABS-CBNs control not only [over] his manner of
services only as employees, the station owners and
work but also the quality of his work.
managers can dictate to the radio and television hosts
---The Agreement stipulates that SONZA shall abide with what they say in their shows. This is not conducive to
the rules and standards of performance covering freedom of the press.
talents[41] of ABS-CBN. The Agreement does not require
Different Tax Treatment of Talents and Broadcasters
SONZA to comply with the rules and standards of
performance prescribed for employees of ABS-CBN. The The National Internal Revenue Code (NIRC)[54] in relation
code of conduct imposed on SONZA under the to Republic Act No. 7716,[55] as amended by Republic Act
Agreement refers to the Television and Radio Code of the No. 8241,[56] treats talents, television and radio
Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which broadcasters differently. Under the NIRC, these
has been adopted by the COMPANY (ABS-CBN) as its professionals are subject to the 10% value-added tax
Code of Ethics. (VAT) on services they render. Exempted from the VAT
are those under an employer-employee
In any event, not all rules imposed by the hiring party on [57]
relationship. This different tax treatment accorded to
the hired party indicate that the latter is an employee of
talents and broadcasters bolters our conclusion that they
the former.
are independent contractors, provided all the basic
In this case, SONZA failed to show that these rules elements of a contractual relationship are present as in
controlled his performance. We find that these general this case.
rules are merely guidelines towards the achievement of
Clearly, the present case does not call for an application
the mutually desired result, which are top-rating
of the Labor Code provisions but an interpretation and
television and radio programs that comply with
implementation of the May 1994 Agreement. In effect,
standards of the industry.
SONZAs cause of action is for breach of contract which
Lastly, SONZA insists that the exclusivity clause in the is intrinsically a civil dispute cognizable by the regular
Agreement is the most extreme form of control which courts.[58]
ABS-CBN exercised over him.
WHEREFORE, we DENY the petition. The assailed
---This argument is futile. Being an exclusive talent does Decision of the Court of Appeals dated 26 March 1999 in
not by itself mean that SONZA is an employee of ABS- CA-G.R. SP No. 49190 is AFFIRMED. Costs against
CBN. Even an independent contractor can validly provide petitioner.
his services exclusively to the hiring party. In the
SO ORDERED.
broadcast industry, exclusivity is not necessarily the
same as control. Davide, Jr., C.J., (Chairman), Panganiban, Ynares-
Santiago, and Azcuna, JJ., concur.
No pronouncement as to costs.
SO ORDERED.
SUPREME COURT THIRD DIVISION MOISES DE LEON, perform activities which are usually necessary or
Petitioner, -versus- G.R. No. 70705 August 21, 1989 desirable in the usual business or trade of the employer,
NATIONAL LABOR RELATIONS COMMISSION and LA except where 1.) the employment has been fixed for a
TONDEÑA, INC., Respondents. x-------------------------------- specific project or undertaking the completion or
-------------------x termination of which has been determined at the time of
the engagement of the employee or where the work or
FERNAN, C.J.:
services to be performed is seasonal in nature and the
It appears that petitioner was employed by private employment is for the duration of the season.
respondent La Tondeña, Inc. on December 11, 1981, at
“An employment shall be deemed to be casual if it is not
the Maintenance Section of its Engineering Department
covered by the preceding paragraph: Provided, That any
in Tondo, Manila.
employee who has rendered at least one year of service,
His work consisted mainly of painting company building whether such service is continuous or broken, shall be
and equipment, and other odd jobs relating to considered a regular employee with respect to the
maintenance. He was paid on a daily basis through petty activity in which he is employed and his employment shall
cash vouchers. continue while such actually exists.”
In the early part of January, 1983, after a service of more -This provision reinforces the Constitutional mandate to
than one (1) year, petitioner requested from respondent protect the interest of labor. Its language evidently manifests
the intent to safeguard the tenurial interest of the worker who
company that he be included in the payroll of regular
may be denied the rights and benefits due a regular employee
workers, instead of being paid through petty cash
by virtue of lopsided agreements with the economically
vouchers
powerful employer who can maneuver to keep an employee
Private respondent’s response to this request was to on a casual status for as long as convenient. Thus, contrary
agreements notwithstanding, an employment is deemed
dismiss petitioner from his employment on January 16,
regular when the activities performed by the employee are
1983.
usually necessary or desirable in the usual business or trade of
---petitioner filed a complaint for illegal dismissal, the employer.
reinstatement and payment of backwages before the The primary standard, therefore, of determining a
Office of the Labor Arbiter. regular employment is the reasonable connection
Defense of Respondent: between the particular activity performed by the
employee in relation to the usual business or trade of the
private respondent claimed that petitioner was not a employer. The test is
regular employee but only a casual worker hired
allegedly only to paint a certain building in the company 1.) whether the former is usually necessary or desirable
in the usual business or trade of the employer. The
premises, and that his work as a painter terminated upon
connection can be determined by considering the
the completion of the painting job.
nature of the work performed and its relation to the
Labor Abiter: scheme of the particular business or trade in its
entirety. Also,
Rendered a Decision[3] finding the complaint 2.) if the employee has been performing the job for at
meritorious and the dismissal illegal; and ordering the least one year, even if the performance is not
respondent company to reinstate petitioner with full continuous or merely intermittent, the law deems the
backwages and other benefits. repeated and continuing need for its performance as
sufficient evidence of the necessity if not
NLRC: indispensability of that activity to the business.
The OSG recommended that the petition be given due In the case at bar, the respondent company, which is
Course. He further recommends that the questioned engaged in the business of manufacture and distillery of
decision and resolution of respondent Commission be wines and liquors, claims that petitioner was contracted
on a casual basis specifically to paint a certain company
annulled and the Order of the Labor Arbiter directing the
building and that its completion rendered petitioner’s
reinstatement of petitioner with payment of backwages
employment terminated.
and other benefits be upheld.
This may have been true at the beginning, and had it been
ISSUE: WON there exists an employer-employee shown that petitioner’s activity was exclusively limited to
relationship between De Leon and the Private painting that certain building, respondent company’s
respondent. theory of casual employment would have been worthy of
consideration. However, during petitioner’s period of
Ruling: The SC said Yes. employment, the records reveal that the tasks assigned to
The law on the matter is Article 281 of the Labor Code him included not only painting of company buildings,
equipment and tools but also cleaning and oiling
which defines regular and casual employment as follows:
machines, even operating a drilling machine, and other
“Art. 281. Regular and casual employment. — The odd jobs assigned to him when he had no painting job. A
provisions of a written agreement to the contrary regular employee of respondent company, Emiliano
notwithstanding and regardless of the oral agreements Tanque, Jr., attested in his affidavit that petitioner worked
with him as a maintenance man when there was no
of the parties, an employment shall be deemed to be
painting job. Petition GRANTED!
regular where the employee has been engaged to
[G. R. No. 148492. May 9, 2003] loading and unloading softdrink products of
petitioner company to its various delivery points.
Magsalin vs. national organization of working men,
Rodolfo melgar, et al. Even while the language of law might have been
VITUG, J.: more definitive, the clarity of its spirit and
intent, i.e., to ensure a regular workers security of
Coca-Cola Bottlers Phils., Inc., herein petitioner, tenure, however, can hardly be doubted. In
engaged the services of respondent workers as sales determining whether an employment should be
route helpers for a limited period of five considered regular or non-regular, the applicable
months. After five months, respondent workers test is the reasonable connection between the
were employed by petitioner company on a day-to- particular activity performed by the employee in
day basis. relation to the usual business or trade of the
According to petitioner company, respondent employer. The standard, supplied by the law itself, is
workers were hired to substitute for regular sales whether the work undertaken is necessary or
route helpers whenever the latter would be desirable in the usual business or trade of the
unavailable or when there would be an unexpected employer, a fact that can be assessed by looking into
shortage of manpower in any of its work places or an the nature of the services rendered and its relation
unusually high volume of work. --->The practice was to the general scheme under which the business or
for the workers to wait every morning outside the trade is pursued in the usual course.
gates of the sales office of petitioner company. If although the work to be performed is only for a
thus hired, the workers would then be paid their specific project or seasonal, where a person thus
wages at the end of the day. engaged has been performing the job for at least one
Ultimately, respondent workers asked petitioner year, even if the performance is not continuous or is
company to extend to them regular merely intermittent, the law deems the repeated
appointments. Petitioner company refused. and continuing need for its performance as being
sufficient to indicate the necessity or desirability of
---On 07 November 1997, twenty-three (23) of the that activity to the business or trade of the
temporary workers (herein respondents) filed with employer. The employment of such person is also
the National Labor Relations Commission (NLRC) a then deemed to be regular with respect to such
complaint for the regularization of their employment activity and while such activity exists.
with petitioner company. The complaint was
amended a number of times to include other The repeated rehiring of respondent workers and
complainants that ultimately totaled fifty-eight (58) the continuing need for their services clearly attest
workers. Claiming that petitioner company to the necessity or desirability of their services in the
meanwhile terminated their services, respondent regular conduct of the business or trade of petitioner
workers filed a notice of strike and a complaint for company. The Court of Appeals has found each of
illegal dismissal and unfair labor practice with the respondents to have worked for at least one year
NLRC. with petitioner company.
-On 01 April 1998, the parties agreed to submit the (as to those 36 who received and accepted the
controversy, including the issue raised in the amount granted by the voluntary arbitrator, The
complaint for regularization of employment, for receipt of the amount awarded by the voluntary
voluntary arbitration. arbitrator, as well as the execution of a release,
waiver and quitclaim, is, in effect, an acceptance of
Voluntary Arbitrator: Dismissed the Complaint said decision.)
Respondent workers went to the CA and filed a Wherefore CA decision is Affirmed. So ordered.
petition for review under Rule 43.