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Sonza vs ABS-CBN, GR No 138051, June 10, 2004 Facts: Mel and Jay Management and Development Corporation (MJMDC) signed an agreement with ABS-CBN in May 1994. The ABS-CBN was represented by its corporate officers while MJMDC was represented by Sonza, as President and general manager, and Tiangco as its EVP and treasurer. Referred to in the agreement as agent, MJMDC agreed to provide Sonzas services exclusively to ABS -CBN as talent for radio and television. ABS-CBN agreed to pay Sonza a monthly talent fee of P310, 000 for the first year and P317, 000 for the second and third year. On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent events concerning his program and career. After that, Sonza filed with the Department of Labor and Employment a complaint alleging that he wasnt paid by ABS-CBN of his salaries, separation pay, service incentive pay, 13th month pay, signing bonus, travel allowance and amounts under the Employees Stock Option Plan (ESOP). On the other hand ABS-CBN contended that there was no employee-employer relationship that existed between the parties. Nevertheless, ABS-CBN continued to remit Sonzas monthly talent fees but opened another account for the same purpose. The Labor Arbiter dismissed the complaint and found that there is no employeeemployer relationship. NLRC affirmed the decision of the Labor Arbiter. CA also affirmed the decision of NLRC. Issue: Whether or not employee-employer relationship existed Ruling: Based on the different cases already presented the elements of an employee-employer relationship include selection and engagement of the employee, the payment of wages, the power of dismissal and the employers 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. Sonzas services to co-host its television and radio programs are because of his unusual talents, skills and celebrity status. Oftentimes independent contractors present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. For violation of any provision of the Agreement, either party may terminate their relationship. Thus in this case the control test which is basic element is not present; SONZA is not an employee but an independent contractor. The control test is the most important test our 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. To perform his work, SONZA only needed his skills and talent. How SONZA delivered his lines, appeared on television, and sounded on radio were outside ABS-CBNs control. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the right to modify the program format and airtime schedule "for more effective programming." ABS-CBNs sole concern was the quality of the shows and their standing in the ratings. Evidently, ABS-CBN did not exercise control over the means and methods of performance of Sonzas work. A radio broadcast specialist who works under minimal supervision is an independent contractor. Sonzas work as television and radio program host required special skills and talent, which SONZA admittedly possesses. ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like Sonza as independent contractors. 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. Individuals with special skills, expertise or talent enjoy the freedom to offer their services as independent contractors. The right to life and livelihood

guarantees this freedom to contract as independent contractors. The right of labor to security of tenure cannot operate to deprive an individual, possessed with special skills, expertise and talent, of his right to contract as an independent contractor.

2. Encyclopedia Britanica vs NLRC, 264 SCRA 4 Facts: In this case Limjoco was a Sales Divison of Encyclopaedia Britannica and was in charge of selling the products through some sales representatives. He would receive commissions from the products sold by his agents, as compensation. He was then allowed to use the petitioners name, goodwill and logo. There was also an agreement that the office expenses be deducted from his commission. In the year 1974, Limjoco resigned to have his private business and filed a complaint against petitioner for non-payment of separation pay and other benefits which includes illegal deduction from sales commissions. Petitioner by then alleged that Limjoco was not an employee but an independent dealer authorized to promote and sell its products and in return, received commissions. Petitioner also claims that it had no control and supervision over the complainant as to the manners and means he conducted his business operations. Limjoco alleged he was hired by the petitioner and was assigned in the sales department. The Labor Arbiter ruled that Limjoco was an employee of the company. NLRC also affirmed the decision and opined that there was no evidence supporting allegation that Limjoco was an independent contractor or dealer. Issue: Whether or not employee-employer relationship exists Ruling: There was no employee-employer relationship. In determining the relationship, the following elements must be present: selection and engagement of the employee, payment of wages, power of dismissal and power to control the employees conduct. The power of control is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employee-employer relationship. Under the control test, an employee-employer relationship exists where the person for whom the services are performed reserves a right to control not only the end to be achieved, but also the manner and means to be employed in reaching that end. The issuance of guidelines by the petitioner was merely guidelines on company policies which sales managers follow and impose on their respective agents. Limjoco was not an employee of the company since he had the free rein in the means and methods for conducting the marketing operations. He was merely an agent or an independent dealer of the petitioner. He was free to conduct his work and he was free to engage in other means of livelihood. In ascertaining the employee-employer relationship, the factual circumstances must be considered. 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 in according to the result of his efforts and not the amount thereof. Hence, there was no employee-employer relationship. 3. Singer Sewing Machine vs NLRC, 193 SCRA 271

Facts: Singer Machine Collectors Union of Baguio filed a petition for direct certification as the sole and exclusive bargaining agent of all collectors of Singer Sewing Machine. However the company opposed

the petition primarily because the union members are not employees but independent contractors as evidenced by the collection agency agreement which they signed. Med-Arbiter ruled that there exists an employee-employer relationship and granted the certification election which was affirmed by Sec. Drilon. The company files the present petition on the determination of the relationship. The union insists that the provisions of the Collection Agreement belie the companys position that the union members are independent contractors. Issue: Whether or not employee-employer relationship exist Ruling: The application of the control test is relevant in this case at bar. For one reason when the union members are not employees there is no right to organize a bargaining. The following elements are generally considered in the determination of the relationship: the selection and engagement of the employee, payment of wages, power of dismissal and the power to control the employees conduct which is the most important element. The nature of the relationship between a company and its collecting agents depends on the circumstances of each particular relationship. Not all collecting agents are employees and neither are all collecting agents independent contractors. The agreement confirms the status of the collecting agents as independent contractor. The requirement that collection agents utilize only receipt forms and report forms issued by the company and that reports shall be submitted at least once a week is not necessarily an indication of control over the means by which the job collection is to be performed. Even if report requirements are to be called control measures, any control is only with respect to the end result of the collection since the requirements regulate the things to be done after the performance of the collection job or the rendition of service. The plain language of the agreement reveals that the designation as collection agent does not create an employment relationship and that the applicant is to be considered at all times as an independent contractor. The court finds that since private respondents are not employees of the company, they are not entitled to the constitutional right to form or join a labor organization for the purposes of collective bargaining. There is no constitutional and legal basis for their union to be granted their petition for direct certification. 4. Abante vs Lamadrid Bearing & Parts , GR No. 159890, May 28, 2004 Facts: In June 1985, Abante was employed by the company Lamarid Bearing and Part Corporation as a salesman earning a commission of 3% of the total paid up sales covering the whole area of Mindanao. He was also tasked to collect payments from his various customers together with the selling of the merchandise. Seldom is he required by the respondent Corporation to go to Manila to attend conferences regarding product competition, and other marketing strategies. Thus the corporation had complete control over his work. By the year 1998, the petitioner encountered customers with bad accounts. The president of the company warned him that if he will not issue his own check to cover the bad accounts his commission will not be released and will lose his job. For such financial difficulties, Abante inquired about his membership with the Social Security System in order to apply for a salary loan. To his disappointment, he learned that he was not covered by the SSS and not entitled to the benefit. When he brought the matter of his SSS coverage to his employer, the latter berated and hurled invectives at him and, contrary to their agreement, deposited the remaining checks which were dishonored by the drawee bank due to "Account Closed. Abante sent another letter to Lamarid informing them that he may file charges against the company. While still covering his work as a commission salesman, Abante was given

a letter from the company warning them not to deal with Abante since it no longer recognized him as a commission salesman. Thus, petitioner filed a complaint for illegal dismissal with money claims against respondent company. By defense, the company countered that the petitioner was not his employee but a freelance salesman on commission basis. Labor Arbiter rendered decision in favor of Abante. On Appeal, NLRC reversed the decision. Petitioner challenged the decision of NLRC where it denied the petition. The petitioner challenged the statement of the CA where it states that "petitioner, who was contracted a 3% of the total gross sales as his commission, was tasked to sell private respondents merchandise in the Mindanao area and to collect payments of his sales from the customers." Issue: Whether or not the petitioner as a commission salesman is an employee of the corporation Ruling: Well-entrenched is the doctrine that the existence of an employer-employee relationship is ultimately a question of fact and that the findings thereon by the Labor Arbiter and the National Labor Relations Commission shall be accorded not only respect but even finality when supported by substantial evidence. The decisive factor in such finality is the presence of substantial evidence to support said finding, otherwise, such factual findings cannot be accorded finality by this Court. 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. Applying the abovementioned test, an employer-employee relationship is markedly absent in this case. Abante was receiving a commission but no quota was imposed upon him. He was not required to report to office at any time or submit periodic report on his performance on sales. He pursued his selling activities without interference from respondent company. Although he was occasionally required to go to Manila, it was not intended to control the manner and means to be used in reaching the desired end, but to serve as a guide to upgrade his skills for a more efficient marketing performance. He was also free to offer services to other companies engaged in similar or related marketing activities 5. Phil. Global Communication vs De Vera GR No 157214 June7,2005

Facts: Ricardo de Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees in the Philippine Global Communications Inc., a corporation engaged in the business of communication services and related activities. The issue came about when the petitioner terminated his engagement. Dr. de Vera offered his services to petitioner in 1981. The parties agreed and formalized the respondents proposal in a document denominated as retainership contract which will be for a period of one year, subject to renewal and clearly stated that respondent will cover the retainership the company previously with Dr. Eulau. The agreement continued until 1994. In the years 1995-1996, it was renewed verbally. The revolving point of the parties relationship was when petitioner, thru a letter bearing the subject TERMINATION RETAINERSHIP CONTRACT, informed Dr. de Vera of its

decision to discontinue the retainer contract for the reason that the management has decided that it would be more practical to provide medical services to the employees in the accredited hospitals near the premises of the company. De Vera filed a complaint on January 1997 for illegal dismissal alleging that he was employed as the physician of the company. Issue: Whether De Vera was an independent contractor or a regular employee of Philcom Ruling: There are certain elements needed to be able to claim for the employee-employer relationship. In the record it shows that respondent had to bill petitioner for his monthly professional fees. Hence it runs beside the grain of common experience to imagine that an ordinary employee has yet to bill his employer to receive his salary. To terminate the parties relationship both parties are vested this right. Either may terminate the arrangement at will, with or without cause. Extremely absent is the element of control whereby the employer has reserved the right to control the employee not only as to the result of the work done but also as to the means and methods by which the same is to be accomplished. It is evident that petitioner had no control over the means and methods by which respondent went about performing his work at the company premises. Indeed, the parties themselves basically agreed on every terms and conditions of the engagement, which thereby negates the element of control in their relationship. 6. Manila Golf Club vs IAC , 237 SCRA 207

Facts: In the very beginning this case is filed with the Social Security Commission (SSC) via petition of 17 persons who styled themselves as Caddies of Manila Golf and Country Club -PTCCEA for the coverage and availment of benefits of the Social Security Act as amended, PTCCEA (Philippine Technical, Clerical, Commercial Employees Association) a labor organization where which they claim for membership. There were other proceeding filed which include the certification election case filed by PTCCEA on behalf of the same caddies of Manila Golf and Country club which was in favor of the caddies and compulsory arbitration case involving PTCCEA and Manila Golf and Country Club which was dismissed and ruled that there was no employer-employee relationship between the caddies and the club. Issue: Whether or not rendering caddying services for members of golf clubs and their guests in said clubs courses or premises are considered employees of such clubs and therefore within the compulsory coverage of the Social Security System (SSS). Ruling: The Court does not agree to the employer-employee relationship. In the very nature of things, caddies must submit to some supervision of their conduct while enjoying the privilege of pursuing their occupation within the premises and grounds of whatever club they do work in. They work for the club to which they attach themselves on sufferance but, on the other hand, also without having to observe any working hours, free to leave anytime they please, to stay away for as long they like. These considerations clash frontally with the concept of employment. It can happen that a caddy who has rendered services to a player on one day may still find sufficient time to work elsewhere. Under such circumstances, the caddy may leave the premises and to go to such other place of work that he wishes. These are things beyond the

control of the petitioner. The caddy (LLamar) is not an employee of petitioner Manila Golf and Country Club and the petitioner is under no obligation to report him for compulsory coverage of SSS. 7. Consulta vs CA GR No 145443, March 18,2005 Facts: Raquel Consulta was a managing associate of Pamana, engaged in health care business. As such it is her responsibility to organize, develop, manage and maintain a sales division and a full complement of agencies and Health Consultants and to submit such number of enrollments and revenue attainments as may be required of her position in accordance with policies of the company. It was also stated that there is a non-employee-employer relationship in accordance with company guidelines. Pamana issued this certification to Consultaans was authorize to negotiate in behalf of PAMANA with the Federation of Filipino Civilian Employees Association. The entitlements of benefits are by way of commissions, overrides and other benefits which are executed in full force by virtue of the said certification. On March 1988, Pamana and US Naval Supply Depot signed FFCEA account. Consulta filed a complaint for unpaid wages claiming that Pamana did not pay her commission on the FFCEA account. Issue: Whether or not Consulta was an employee of Panama Ruling: The court laid down the four fold test to determine the existence of employer-employee relationship. The four elements are the power to hire, payment of wages, power to dismiss and the power to control. The power to control is the most important of the four elements. Consulta was not an employee of Panama. Based on the case of Insular Life Assurance Co., Ltd. vs. NLRC, the court explained the scope of the power to control. It should, however, be obvious 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. A line must be drawn somewhere, if the recognized distinction between an employee and an individual contractor is not to vanish altogether. Realistically, it would be a rare contract of service that gives untrammelled freedom to the party hired and eschews any intervention whatsoever in his performance of the engagement. Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. In the case at bar, the power to control is missing. Consulta was tasked to organize, develop, manage and maintain sales division and other functions. The manner to pursue these activities was not subject to the control of Pamana. The means and methods of recruiting and training her sales associates, as well as the development, management and maintenance of her sales division were left to her sound discretion. Thus, aside from commissions, bonuses and other benefits that depended solely on actual sales, Pamana did not pay Consulta any compensation in the management of her sales division. Therefore there was no employer-employee relationship that existed.

8. Ramos vs CA GR No. 124354, April 11, 2002 Facts:

Erlinda Ramos, petitioner was advised to undertake an operation for the removal of her stone in the gall bladder. She was referred to Dr. Hosaka, a surgeon, who arranged to do the operation. The schedule for the operation was on June 17, 1985 in the De los Santos Medical Center. Erlinda Before the day of the operation she was confined there. On the following day, she was ready for operation as early as 7:30 am but around 9:30, Dr. Hosaka has not yet arrived. So by 10 am the husband wanted her wife to move out from the operating room. Dr. Hosaka finally arrived at 12:10 pm more than 3 hours of the scheduled operation. Dr. Guiterres tried to incubate Erlinda. The nail beds of Erlinda were bluish discoloration in her left hand. At 3 pm, Erlinda was being wheeled to the Intensive Care Unit and stayed there for a month. Since the ill-fated operation, Erlinda remained in comatose condition until she died.The family of Ramos sued for damages. Issue: Whether or not an employee-employer relationship existed between the medical center and Drs. Hosaka and Guiterrez

Ruling: Private Hospitals hire fire and exercise real control over their attending and visiting consultant staff. While consultants are not technically employees, the control exercised, the hiring and the right to terminate consultants fulfill the hallmarks of an employer-employee relationship with the exception of payment of wages. The control test is determining. In applying the four fold test, DLSMC cannot be considered an employer of the respondent doctors. It has been consistently held that in determining whether an employer-employee relationship exists between the parties, the following elements must be present: (1) selection and engagement of services; (2) payment of wages; (3) the power to hire and fire; and (4) the power to control not only the end to be achieved, but the means to be used in reaching such an end. The hospital does not hire consultants but it accredits and grants him the privilege of maintaining a clinic and/or admitting patients. It is the patient who pays the consultants. The hospital cannot dismiss the consultant but he may lose his privileges granted by the hospital. The hospitals obligation is limited to providing the patient with the preferred room accommodation and other things that will ensure that the doctors orders are carried out. The court finds that there is no employer-employee relationship between the doctors and the hospital. 9. Carungcong vs Sunlife , GR No. 118086 December 15, 1997

Facts: In 1974, Susan Carungcong began her career in the insurance industry as an agent of Sun Life Assurance Company of Canada. She signed an Agent Agreement with Sun Life. She was designated the latters agent to solicit applications for its insurance and annuity policies. She then signed new contracts for the new agreement five years later. One consisted of Career Agents or Unit Managers Agreement, which dealt with agents commissions, his obligations, limitations on his authority, and termination of the agreement by death, or by written notice with or without cause. Two was titled, Managers Supplementary Agreement. It explicitly described as a further agreement. Carungcong and Sun Life executed another Agreement named New Business Manager with the function generally to manage a New Business Office established. The latest stressed that the New Business Manager in performance of his duties shall be considered an independent contractor and not an employee of Sun Life, and that under no circumstance shall the New Business Manager and/or his employees be considered employees of Sun Life. Ms. Eleizer Sibayan, Manager of Sun Lifes Internal Audit Department, commenced an inquiry into the special fund availments of Carungcong and other New Business Managers. Respondent Lance Kemp had been getting reports of anomalies in relation thereto from unit managers and agents. Subsequently, on

January 1990, Carungcong was confronted with and asked to explain the discrepancies set out in Sibayans report. She was given a letter signed by Metron V. Deveza, CLU, Director, Marketing, which advised of the termination of her relationship with Sun Life. Carungcong quickly instituted proceedings for justification in the Arbitration Branch of the National Labor Relations Commissions on January 16, 1990. There she succeeded in obtaining a favorable judgment. Labor Arbiter found that there is an employer-employee relationship between her and Sun Life. On appeal, the National Labor Relations Commission reversed the Arbiters judgment. It affirmed that no employment relationship existed between Carungcong and Sun Life. She contented that she was an employee subject to control and supervision by Sun Life. Issue: Whether or not Carungcong was an employee of Sun Life Co. Ruling: Worth mentioning is that the last agreement which emphasized, like the Career Agents or Unit Managers Agreement first signed by her, that in performance of her duties, Carungcong would be considered an independent contractor and not an employee of Sun Life, and that under no circumstance shall the New Business Manager and/or his employees be considered employees of Sun Life. Hence, Carungcong is an independent contractor. It was indicated in the very face of the contract. The rules and regulations of the company are not sufficient to establish an employer-employee relationship. It does not necessarily create any employer-employee relationship where the employers controls have to interfere in the methods and means by which employee would like employ to arrive at the desired results. Carungcong admitted that she was free to work as she pleases, at the place and time she felt convenient for her to do so. She was not paid to a fixed salary and was mainly paid by commissions depending on the volume of her performance. Therefore, she was not an employee of Sun Life Co. 10. Coca-Cola Bottlers Phils. Vs Dr. Climaco, GR No 146881, February 15,2007

Facts: By virtue of the retainer agreement Dr. Climaco was hired by the petitioner. It also states that there is no employer-employee relationship between the parties. Such agreement was renewed annually. The last one expired on Dec. 31, 1993. Despite the non-renewal of the agreement, respondent continued to perform his functions as company doctor until he received a letter in March 1995 concluding their retainer agreement. Respondent filed a complaint before the NLRC seeking recognition as a regular employee of the petitioner company and prayed for the payment of all benefits of a regular employee. In the decision of the Labor Arbiter, the company lacked control over the respondents performance of his duties. Respondent appealed where it rendered that no employer-employee relationship existed between the parties. Issue: Whether there exists an employer-employee relationship Ruling: In determining the existence of an employer-employee relationship, the court has invariably adhered to the four-fold test: (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 employees conduct, or the so -called control test, considered to be the most important element. Thus the Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this case show that no employer-employee relationship exists between the parties. The Comprehensive

Medical Plan, provided guidelines merely to ensure that the end result was achieved, but did not control the means and methods by which respondent performed his assigned tasks. In addition, the Court finds that the schedule of work and the requirement to be on call for emergency cases do not amount to such control, but are necessary incidents to the Retainership Agreement. Taking into account that there is no employer-employee relationship between the parties, the termination of the Retainership Agreement, which is in accordance with the provisions of the Agreement, does not constitute illegal dismissal of respondent. 11. Francisco vs NLRC GR No 170087 August 31, 2006

Facts: Kasei Corporation hired the petitioner during the incorporation stage. She was chosen as accountant and corporate secretary and was assigned to handle all the accounting needs of the company. She was also selected as Liason Officer to the City of Manila to secure permits for the operation of the company. Petitioner was designated as Acting Manager in 1996. She was assigned to handle recruitment of all employees and perform management administration functions. In 2001, she was replaced by Liza Fuentes as Manager. The said corporation reduced her salary to P2,500 per month which was until September. So ahe asked for salary but was answered that she is no longer part of the company. Thus she filed an action for constructive dismissal with the Labor Arbiter. The Labor Arbiter found that the petitioner was illegally dismissed. NLRC affirmed the decision while CA reversed it. Issue: Whether there was an employer-employee relationship Ruling: There are certain elements to determine the existence of an employer-employee relation. In general, courts have relied on the so-called right of control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. Adding up to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, can help in determining the existence of an employer-employee relationship. The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employers power to control the employee with respect to the means and methods by which the work is to be accomplished; and (2) the underlying economic realities of the activity or relationship. Thus in the case of Sevilla v. Court of Appeals, the court observed the need to consider the existing economic conditions prevailing between the parties, in addition to the standard of right-of-control like the inclusion of the employee in the payrolls, to give a clearer picture in determining the existence of an employer-employee relationship based on an analysis of the totality of economic circumstances of the worker. Consequently, the determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity, such as: (1) the extent to which the services performed are an integral part of the employers business; (2) the extent of the workers investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the workers opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and (7) the degree of dependency of the worker upon the employer for his continued employment in that line of business. The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of business.

By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji Kamura, the corporations Technical Consultant. It is therefore apparent that petitioner is economically dependent on respondent corporation for her continued employment in the latters line of business. There can be no other conclusion that petitioner is an employee of respondent Kasei Corporation. She was selected and engaged by the company for compensation, and is economically dependent upon respondent for her continued employment in that line of business. Her main job function involved accounting and tax services rendered to Respondent Corporation on a regular basis over an indefinite period of engagement. Respondent Corporation hired and engaged petitioner for compensation, with the power to dismiss her for cause. More importantly, Respondent Corporation had the power to control petitioner with the means and methods by which the work is to be accomplished. 12. ABS-CBN vs Nazareno, GR No 164156, September 6, 2006 Facts: The petitioner here is ABS-CBN Broadcasting Corporation (ABS-CBN) engaged in the propagation production and owns a system of television and radio stations, whose operations revolve around the broadcast, transmission, and pass on of telecommunication signals. It sells and deals in or otherwise utilizes the airtime it generates from its radio and television operations. It also has a franchise as a broadcasting company, and was likewise issued a license and authority to operate by the National Telecommunications Commission. Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs) on different dates. They were assigned at the news and public affairs, for various radio programs in the Cebu Broadcasting Station. On December 19, 1996, petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA) to be effective during the period from December 11, 1996 to December 11, 1999. Nevertheless, petitioner refused to recognize PAs as part of the bargaining unit. Respondents filed a complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before the NLRC on October 12, 2000. Issue: Whether the respondents were considered regular employees of ABS-CBN Ruling: It was held that the respondents are regular employees of ABS-CBN, where a person has rendered at least one year of service, despite of the nature of the activity performed, or where the work is continuous or intermittent, the employment is considered regular as long as the activity exists, the basis being that a customary appointment is not indispensable before one may be formally declared as having attained regular status. In the case of Universal Robina Corporation v. Catapang, the Court states that the primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists. In addition, respondents cannot be considered as project or program employees because no evidence was presented to show that the duration and scope of the project were determined or specified at the time of their engagement. In this instance, however, the

employer-employee relationship between petitioner and respondents has been proven. In the selection and engagement of respondents, no peculiar or unique skill, talent or celebrity status was required from them because they were merely hired through petitioners personnel department just like any ordinary employee. Respondents did not have the power to bargain for huge talent fees, a circumstance negating independent contractual relationship. Respondents are highly dependent on the petitioner for continued work. The degree of control and supervision exercised by petitioner over respondents through its supervisors negates the allegation that respondents are independent contractors. The presupposition is that when the work done is an integral part of the regular business of the employer and when the worker, relative to the employer, does not furnish an independent business or professional service, such work is a regular employment of such employee and not an independent contractor. As regular employees, respondents are entitled to the benefits granted to all other regular employees of petitioner under the CBA. Besides, only talent-artists were excluded from the CBA and not production assistants who are regular employees of the respondents. Moreover, under Article 1702 of the New Civil Code: In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living of the laborer. 13. Big AA Manufacturer vs Antonio GR No 160854, March 3, 2006 Facts: On January 13, 2000, respondents Eutiquio Antonio, Jay Antonio, Felicisimo Antonio, Leonardo Antonio, Sr. and Roberto Fabian filed a complaint for illegal lay-off and illegal deductions before the NLRCs Regional Arbitration Branch No. III. They alleged that as regular employees, they worked from 8:00 a.m. to 5:00 p.m. at petitioners premises using petitioners tools and equipment and they received P250 per day. Big AA Manufacturer denied that respondents are regular employees of the company. They contended that the respondents are independent contractors of the company. Both parties appealed to NLRC. NLRC modified the decision of the Labor Arbiter thus granted respondents reinstatement. Issue: Whether or not the respondents are employees of the company Ruling: Respondents here were employees of the company. They were employed for more than one year and their work as carpenters were essential or desirable in petitioners usual trade or business of manufacturing office furniture. The court also have the same opinion that Eutiquio was not an independent contractor for he does not carry a distinct and independent business, and he does not possess substantial capital or investment in tools, equipment, machinery or work premises. He works with petitioners premises using the latters tools and materials, as admitted by petitioner, and is also under petitioners control and supervision. Attesting to this is petitioners admission that it allowed respondents to use its facilities for the proper implementation of job orders. In addition, the Implementing Guidelines regulating attendance, overtime, deadlines, penalties; providing petitioners right to fire employees or contractors; requiring the carpentry division to join petitioners exercise program; and providing rules on machine maintenance, all reflect control and supervision over respondents.

MANILA ELECTRIC COMPANY vs. ROGELIO BENAMIRA, et al., ARMED SECURITY & DETECTIVE AGENCY, INC., (ASDAI) and ADVANCE FORCES

SECURITY & INVESTIGATION SERVICES, INC., (AFSISI); G.R. No. 145271. July 14, 2005. Facts: The individual respondents are licensed security guards formerly employed by People's Security, Inc. (PSI) and deployed as such at MERALCO's head office. Thereafter, the security service agreement between PSI and MERALCO was terminated wherein fifty-six of PSI's security guards, including herein eight individual respondents, filed a complaint for unpaid monetary benefits against PSI and MERALCO. Meanwhile, the security service agreement between respondent Armed Security & Detective Agency, Inc., (ASDAI) and MERALCO took effect. In the agreement, ASDAI was designated as the AGENCY while MERALCO was designated as the COMPANY. Issues: 1. Whether or not employer-employee relationship exists between petitioner MERALCO and individual respondents. 2. Whether or not MERALCO is guilty of illegal dismissal. 3. Whether or not MERALCO is entitled to reimbursement from respondent ASDAI for the monetary claims petitioner paid to individual respondents pursuant to the security service agreement Ruling: 1. No, the respondents are not employees of MERALCO but of ASDAI. 2. No, MERALCO is not guilty of illegal dismissal. 3. Yes, MERALCO as an indirect employer, is entitled to reimbursement from ASDAI for the monetary claims it paid to individual respondents pursuant to the security service agreement. In this case, the terms and conditions embodied in the security service agreement between MERALCO and ASDAI expressly recognized ASDAI as the employer of individual respondents. Under the security service agreement, it was ASDAI which (a) selected, engaged or hired and discharged the security guards; (b) assigned them to MERALCO according to the number agreed upon; (c) provided the uniform, firearms and ammunition, nightsticks, flashlights, raincoats and other paraphernalia of the security guards; (d) paid them salaries or wages; and, (e) disciplined and supervised them or principally controlled their conduct. The agreement even explicitly provided that "[n]othing herein contained shall be understood to make the security guards under this Agreement, employees of the COMPANY, it being clearly understood that such security guards shall be considered as they are, employees of the AGENCY alone." Clearly, the individual respondents are the employees of ASDAI. Moreover, ASDAI and AFSISI are not "labor-only" contractors. There is "labor only" contract when the person acting as contractor is considered merely as an agent or intermediary of the

principal who is responsible to the workers in the same manner and to the same extent as if they had been directly employed by him. On the other hand, "job (independent) contracting" is present if the following conditions are met: (a) the contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except to the result thereof; and (b) the contractor has substantial capital or investments in the form of tools, equipment, machineries, work premises and other materials which are necessary in the conduct of his business. Given the above distinction and the provisions of the security service agreements entered into by petitioner with ASDAI and AFSISI, we are convinced that ASDAI and AFSISI were engaged in job contracting. The individual respondents can not be considered as regular employees of the MERALCO for, although security services are necessary and desirable to the business of MERALCO, it is not directly related to its principal business and may even be considered unnecessary in the conduct of MERALCO's principal business, which is the distribution of electricity. Furthermore, the fact that the individual respondents filed their claim for unpaid monetary benefits against ASDAI is a clear indication that the individual respondents acknowledge that ASDAI is their employer. The fact that there is no actual and direct employer-employee relationship between MERALCO and the individual respondents does not exonerate MERALCO from liability as to the monetary claims of the individual respondents. When MERALCO contracted for security services with ASDAI as the security agency that hired individual respondents to work as guards for it, MERALCO became an indirect employer of individual respondents pursuant to Article 107 of the Labor Code, which reads: ART. 107. Indirect employer The provisions of the immediately preceding Article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project. When ASDAI as contractor failed to pay the individual respondents, MERALCO as principal becomes jointly and severally liable for the individual respondents' wages, under Articles 106 and 109 of the Labor Code, which provide: ART. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for the performance of the former['s] work, the employees of the contractor and of the latter['s] subcontractor, if any, shall be paid in accordance with the provisions of this Code. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. . . .

ART. 109. Solidary liability The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purpose of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers. ASDAI is held liable by virtue of its status as direct employer, while MERALCO is deemed the indirect employer of the individual respondents for the purpose of paying their wages in the event of failure of ASDAI to pay them. This statutory scheme gives the workers the ample protection consonant with labor and social justice provisions of the 1987 Constitution.

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