Employer (Section 8 [c])

Any person, natural or juridical, domestic or foreign, who carries

on in the Philippines any trade, business, industry, undertaking, or
activity of any kind and uses the services of another person who is
under his orders as regards the employment, except the
Government and any of its political subdivisions, branches or
instrumentalities, including corporations owned or controlled by
the Government: Provided, That a self-employed person shall be
both employee and employer at the same time.
SSC , et al vs. Alba
Apolonio Lamboso alleged that he worked in Hda.
La Roca (owned by Far Alba) from 1960 to 1973 as cabo,
in Hda. Alibasao from 1973 to 1979 as overseer and
in Hda. Kamandag from 1979 to 1984; that the latter two (2)
haciendas are both owned by Ramon S. Benedicto. When he
filed a claim for retirement pension benefit with the SSS,
however, the same was denied on the ground that he had 39
monthly contributions to his credit.
Lamboso averred that he received from Far Alba a
monthly salary of P45.00 from 1960 to 1965 and P180.00 from
1965 to 1973 and from employer Ramon S. Benedicto, a
monthly salary of P500.00 from 1973 to 1984; and that he was
reported to the SSS for coverage in 1973 and only a total of 39
monthly contributions were remitted in his name.

In its Position Paper, public respondent SSS avers that Apolonio Lamboso was
reported for SS coverage, effective April 1, 1970 by employer Far Alba (ID No. 07-
0869300) on December 11, 1972; that he was, likewise, reported for [SSS] coverage
effective May 1, 1980, by employer Kamandag Agri & Dev. Corp. (ID No. 07-2024250-4)
on September 1, 1980; and that Apolonio Lamboso has only 39 monthly contributions
(remitted in his favor by Far Alba) for the period January 1970 to March 1973, but
none under Kamandag Agri[.] Dev. Corp.
In the testimonial evidence for the petitioner presented on March 17 and June
15, 1999 and August 10, 2000, witnesses collectively corroborated the petitioners
employment with Far Alba from 1960 to April 1973 in Hda. La Roca and with employer
Ramon Benedicto inHdas. Alibasao and Kamandag from 1973 to 1984.
The failure on the part of respondent Far Alba to file his responsive pleading to
the petition filed by petitioner Apolonio Lamboso strongly indicates lack or absence of
evidence, by way of rebuttal, to the positive assertion of the petitioner regarding his
employment with the former from 1960 to April 1973. Besides, defrauding
respondent Far Alba reported Apolonio Lamboso to the SSS for coverage
effective April 1, 1970 and this act of reporting is already an incontrovertible proof of
employment.
Social Security Commission ruled in favor of Lamboso.
Court of Appeals:

The Court of Appeals reversed and set aside both the resolution and the order of the
Commission. It held that Far Alba cannot be considered as an employer of Lamboso prior to
1970 because as administrator of the family-owned hacienda, he is not an employer under
Section 8(c) of the Social Security Act of 1954 who carries on a trade or business, industry,
undertaking or activity of any kind and uses the services of another person who is under his
orders as regards the employment, unlike under Article 212(e) of the Labor Code which
defines an employer as, among others, any person acting directly or indirectly in the
interest of the employer. As such, the appellate court declared, Far Alba had no obligation
to remit to SSS the monthly contributions of Lamboso prior to 1970. It also held that
inasmuch as Far Alba had duly remitted Lambosos monthly contributions to the SSS for the
period of January 1970 to March 1973, which totaled 39 contributions, he
as Lambosos employer should be absolved from the adjudged liability.
Far Alba stresses that he was not Lambosos employer prior to 1970 and that he
neither had been the administrator of the hacienda because in 1960, he was
in Manila studying law and was in fact admitted into the practice of the law the following
year.
[18]
He agrees with the ruling of the Court of Appeals that the claim for the payment of
SS contributions should have been filed before the estate proceedings of Arturo Alba, Sr .

Evidently, Far Alba had indeed served
as Lambosos employer from 1965 to 1970 or, at
the very least, he had served as
the haciendas administrator before 1970. Now,
the question is whether an administrator could
be considered an employer within the scope of
the Social Security Act of 1954.
SC answered in the affirmative.

First, the Court observes that Far Alba was no ordinary
administrator. He was no less than the son of the haciendas owner
and as such he was an owner-in-waiting prior to his fathers death. He
was a member of the owners family assigned to actively manage the
operations of the hacienda. As he stood to benefit from
the haciendas successful operation, he ineluctably took his job and his
fathers wishes to heart. As emphasized by the Commission his and
the owners interests in the business were plainly and inextricably
linked by filial bond. He more than just acted in the interests of his
father as employer, and could himself pass off as the employer, the
one carrying on the undertaking.
Second, nomenclature aside, Far Alba was not merely an
administrator of the hacienda. Applying the control test
which is used to determine the existence of employer-employee
relationship for purposes of compulsory coverage under the SSS law,
Far Alba is technically Lambosos employer.

The essential 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 power of
control with regard to the means and methods by which the work is
to be accomplished, with the power of control being the most
determinative factor.
Lamboso testified that he was selected and his services were
engaged by Far Alba himself. Corollarily, Far Alba held the prerogative
of terminating Lambosos employment. Lamboso also testified in a
direct manner that he had been paid his wages by Far Alba. This
testimony was seconded by Lambosos co-worker, Rodolfo Sales. Anent
the power of control with regard to the work of the employee, the
element refers merely to the existence of the power and not the actual
exercise thereof. It is not essential for the employer to actually
supervise the performance of duties of the employee; it is sufficient
that the former has a right to wield the power.

Third, not to be forgotten is the definition of an employer under Article
167(f) of the Labor Code which deals with employees compensation and
state insurance fund. The said provision of the law defines an employer as
any person, natural or juridical, employing the services of the employee. It
also defines a person as any individual, partnership, firm, association, trust,
corporation or legal representative thereof. Plainly, Far Alba, as the hacienda
administrator, acts as the legal representative of the employer and is thus an
employer within the meaning of the law liable to pay the SS contributions.
Finally, the Court believes that Section 8(c) of the Social Security Act of
1954 is broad enough to include those persons acting directly or indirectly in
the interest of the employer. As pointed out by the Court of Appeals, that the
said provision does not contain the definitive phrase contained in Article
212(e) of the Labor Code should not be taken to mean that administrators
such as Far Alba, whose interests are closely linked with his father-employer,
do not come within the purview of the law. If under Article 212(e), persons
acting in the interest of the employer, directly or indirectly, are obliged to
follow the government labor relations policy, it could be reasonably
concluded that such persons may likewise be held liable for the remittance of
SS contributions which is an obligation created by law and an is employees
right protected by law.


Employee (Section 8 [d])
Any person who performs services for an employer in which
either or both mental or physical efforts are used and who
receives compensation for such services, where there is an
employer-employee relationship: Provided, That a self-
employed person shall be both employee and employer at
the same time.
SSS vs. CA, et al.
In a petition before the Social Security Commission, Margarita Tana,
widow of the late Ignacio Tana, Sr., alleged that her husband was, before his
demise, an employee of Conchita Ayalde as a farmhand in the two (2)
sugarcane plantations she owned (known as Hda. No. Audit B-70 located in
Pontevedra, La Carlota City) and leased from the University of the Philippines
(known as Hda. Audit B-15-M situated in La Granja, La Carlota City). She
further alleged that Tana worked continuously six (6) days a week, four (4)
weeks a month, and for twelve (12) months every year between January 1961
to April 1979. For his labor, Tana allegedly received a regular salary according
to the minimum wage prevailing at the time. She further alleged that
throughout the given period, social security contributions, as well as
medicare and employees compensation premiums were deducted from
Tanas wages. It was only after his death that Margarita discovered that Tana
was never reported for coverage, nor were his contributions/premiums
remitted to the Social Security System (SSS). Consequently, she was deprived
of the burial grant and pension benefits accruing to the heirs of Tana had he
been reported for coverage.

The SSS, in a petition-in-intervention, revealed that neither Hda. B-
70 nor respondents Ayalde and Maghari were registered members-
employers of the SSS, and consequently, Ignacio Tana, Sr. was never
registered as a member-employee.
Respondent Ayalde belied the allegation that Ignacio Tana, Sr. was
never her employee, admitting only that he was hired intermittently as
an independent contractor to plow, harrow, or burrow Hda. No. Audit
B-15-M. Tana used his own carabao and other implements, and he
followed his own schedule of work hours. Ayalde further alleged that
she never exercised control over the manner by which Tana performed
his work as an independent contractor. Moreover, Ayalde averred that
way back in 1971, the University of the Philippines had already
terminated the lease over Hda. B-15-M and she had since surrendered
possession thereof to the University of the Philippines. Consequently,
Ignacio Tana, Sr. was no longer hired to work thereon starting in crop
year 1971-72, while he was never contracted to work in Hda. No. Audit
B-70.
Commission finds that the late Ignacio Tana was employed by
respondent Conchita Ayalde from January 1961 to March 1979.
The pivotal issue to be resolved in this petition is whether
or not an agricultural laborer who was hired on pakyaw
basis can be considered an employee entitled to compulsory
coverage and corresponding benefits under the Social Security
Law.
Petitioner, Social Security System, argues that the
deceased Ignacio Tana, Sr., who was hired by Conchita Ayalde
on pakyaw basis to perform specific tasks in her sugarcane
plantations, should be considered an employee.
The Court of Appeals, however, ruled otherwise, reversing
the ruling of the Social Security Commission and declaring
that the late Ignacio Tana, Sr. was an independent contractor,
and in the absence of an employer-employee relationship
between Tana and Ayalde, the latter cannot be compelled to
pay to his heirs the burial and pension benefits under the SS
Law.

Supreme Court:

The mandatory coverage under the SSS Law (Republic Act No. 1161, as amended by
PD 1202 and PD 1636) is premised on the existence of an employer-employee relationship,
and Section 8(d) defines an employee as any 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. The
essential 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 power of control with regard to the means and methods by which the work is to
be accomplished, with the power of control being the most determinative factor.
There is no question that Tana was selected and his services engaged by either Ayalde
herself, or by Antero Maghari, her overseer. Corollarily, they also held the prerogative of
dismissing or terminating Tanas employment. The dispute is in the question of payment
of wages. Claimant Margarita Tana and her corroborating witnesses testified that her
husband was paid daily wages per quincena as well as on pakyaw basis. Ayalde, on the
other hand, insists that Tana was paid solely on pakyaw basis. To support her claim, she
presented payrolls covering the period January of 1974 to January of 1976;

and November
of 1978 to May of 1979.

A careful perusal of the records readily show that the exhibits
offered are not complete, and are but a mere sampling of
payrolls. While the names of the supposed laborers appear therein,
their signatures are nowhere to be found. And while they cover the
years 1975, 1976 and portions of 1978 and 1979, they do not cover the
18-year period during which Tana was supposed to have worked in
Ayaldes plantations.
These documents are not only sadly lacking, they are also
unworthy of credence.
In contrast to Ayaldes evidence, or lack thereof, is Margarita Tanas
positive testimony, corroborated by two (2) other witnesses. These
witnesses did not waver in their assertion that while Tana was hired by
Ayalde as an arador on pakyaw basis, he was also paid a daily
wage which Ayaldes overseer disbursed every fifteen (15) days. It is
also undisputed that they were made to acknowledge receipt of their
wages by signing on sheets of ruled paper, which are different from
those presented by Ayalde as documentary evidence.



Petitioners further argue that complainant miserably failed to
present any documentary evidence to prove his employment. There
was no timesheet, pay slip and/or payroll/cash voucher to speak
of. Absence of these material documents are necessarily fatal to
complainants cause.
No particular form of evidence is required to prove the existence
of an employer-employee relationship. Any competent and relevant
evidence to prove the relationship may be admitted. For, if only
documentary evidence would be required to show that relationship,
no scheming employer would ever be brought before the bar of
justice, as no employer would wish to come out with any trace of the
illegality he has authored considering that it should take much
weightier proof to invalidate a written instrument.
The argument is raised that Tana is an independenent contractor
because he was hired and paid wages on pakyaw basis. SC finds this
assertion to be specious for several reasons.

First, while Tana was sometimes hired as an arador or
plower for intermittent periods, he was hired to do other
tasks in Ayaldes plantations. It is indubitable, therefore, that
Tana worked continuously for Ayalde, not only as arador on
pakyaw basis, but as a regular farmhand, doing
backbreaking jobs for Ayaldes business. There is no shred of
evidence to show that Tana was only a seasonal worker, much
less a migrant worker. All witnesses, including Ayalde herself,
testified that Tana and his family resided in the plantation. If
he was a mere pakyaw worker or independent contractor,
then there would be no reason for Ayalde to allow them to
live inside her property for free. The only logical explanation
is that he was working for most part of the year exclusively for
Ayalde, in return for which the latter gratuitously allowed
Tana and his family to reside in her property.
Secondly, Ayalde made much ado of her claim that Tana could not be her
employee because she exercised no control over his work hours and method of
performing his task as arador. It is also an admitted fact that Tana, Jr. used his
own carabao and tools. Thus, she contends that, applying the control test, Tana
was not an employee but an independent contractor.
Be that as it may, the power of control refers merely to the existence of the
power. It is not essential for the employer to actually supervise the performance
of duties of the employee; it is sufficient that the former has a right to wield the
power.

Certainly, Ayalde, on her own or through her overseer, wielded the power
to hire or dismiss, to check on the work, be it in progress or quality, of the
laborers. As the owner/lessee of the plantations, she possessed the power to
control everyone working therein and everything taking place therein.
When a worker possesses some attributes of an employee and others of an
independent contractor, which make him fall within an intermediate area, he may
be classified under the category of an employee when the economic facts of the
relations make it more nearly one of employment than one of independent
business enterprise with respect to the ends sought to be accomplished.