ELEMENTS OF EMPLOYER-EMPLOYEE RELATIONSHIP

In determining the existence of an employer-employee relationship

the following elements must be present: 1) selection and engagement of
the employee; 2) payment of wages; 3) power of dismissal; and 4) the
power to control the employee's conduct. Of the above, control of
employee's conduct is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an employeremployee relationship. (Vallum Security Services vs. NLRC, G.R. Nos.
97320-27, July 30, 1993.) 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 to be achieved, but also the
manner and means to used in reaching that end. (Cosmopolitan Funeral
Homes, Inc. vs. Maalat, G.R. No. 86693, July 2, 1990.)
WHEN A PERSON WORKS MORE OR LESS AT HIS OWN PLEASURE
As stated earlier, "the element of control is absent; where a person who
works for another does so more or less at his own pleasure and is not
subject to definite hours or conditions of work, and in turn is compensated
according to the result of his efforts and not the amount thereof, we should
not find that the relationship of employer and employee exists. (Investment
Planning Corporation of the Philippines vs. Social Security System, No. L19124, November 18, 1967, 21 SCRA 924.) In fine, there is nothing in the
records to show or would "indicate that complainant was under the control
of the petitioner" in respect of the means and methods (supra) in the
performance of complainant's work.

NEGLECT OF DUTY MUST BE GROSS AND HABITUAL

Neglect of duty, to be a ground for dismissal under Article 282 of the
Labor Code, must be both gross and habitual. (Nissan Motor Phils., Inc. v.
Angelo, G.R. No. 164181, September 14, 2011, 657 SCRA 520, 530.)
Gross negligence implies want of care in the performance of ones duties.
Habitual neglect imparts repeated failure to perform ones duties for a

period of time, depending on the circumstances. (Valiao v. Court of

Appeals, 479 Phil. 459, 469 (2004), citing JGB & Associates, Inc. v. NLRC,
324 Phil. 747, 754 (1996).)
WHY SALESMEN ARE NOT ENTITLED TO HOLIDAY PAY
In San Miguel Brewery, Inc. v. Democratic Labor Organization (8 SCRA 613
[1963]), the Court had occasion to discuss the nature of the job of a
salesman. Citing the case of Jewel Tea Co. v. Williams, C.C.A. Okla., 118 F.
2d 202, the Court stated:
The reasons for excluding an outside salesman are fairly
apparent. Such a salesman, to a greater extent, works
individually. There are no restrictions respecting the time he
shall work and he can earn as much or as little, within the
range of his ability, as his ambition dictates. In lieu of
overtime he ordinarily receives commissions as extra
compensation. He works away from his employer's place of
business, is not subject to the personal supervision of his
employer, and his employer has no way of knowing the
number of hours he works per day.
While in that case the issue was whether or not salesmen were entitled to
overtime pay, the same rationale for their exclusion as field personnel from
holiday pay benefits also applies. (Union of Filipino Employees vs. Vivar,
Jr., et al. (G.R. No. 79255, January 20, 1992).)
EMPLOYER MAY TERMINATE EMPLOYMENT FOR GROSS AND
HABITUAL NEGLECT OF DUTY
ART. 282. An employer may terminate an employment for any of the
following causes:
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(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by
his employer or duly authorized representative;

WHAT CONSTITUTES GROSS AND HABITUAL NEGLECT OF DUTY

Article 282 of the Labor Code provides that one of the just causes for
terminating an employment is the employees gross and habitual neglect of
his duties. This cause includes gross inefficiency, negligence and
carelessness.(Challenge Socks Corp. v. Court of Appeals (Former First
Division), 511 Phil. 4, 10 (2005), citing Meralco v. NLRC, 331 Phil. 838, 847
(1996).)
GROSS NEGLIGENCE, DEFINED
"Gross negligence connotes want or absence of or failure to exercise
slight care or diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting any effort to avoid
them.
FRAUD AND WILLFUL NEGLECT OF DUTIES
Fraud and willful neglect of duties imply bad faith of the employee in
failing to perform his job, to the detriment of the employer and the latters
business. Habitual neglect, on the other hand, implies repeated failure to
perform one's duties for a period of time, depending upon the
circumstances." (Jumuad v. Hi-Flyer Food, Inc., G.R. No. 187887,
September 7, 2011, 657 SCRA 288, 300, citing St. Luke's Medical Center,
Inc. and Robert Kuan v. Estrelito Notario, G.R. No. 152166, October 20,
2010, 634 SCRA 67, 78.)
TOTALITY OF INFRACTIONS DOCTRINE
To our mind, such numerous infractions are sufficient to hold him
grossly and habitually negligent. His repeated negligence is not tolerable.
The totality of infractions or the number of violations he committed during
his employment merits his dismissal. Moreover, gross and habitual
negligence includes unauthorized absences and tardiness, (Challenge
Socks Corp. v. Court of Appeals (Former First Division, supra) as well as
gross inefficiency, negligence and carelessness. (supra) As pronounced in

Valiao v. Court of Appeals, (479 Phil. 459, 470-471 (2004).) "fitness for
continued employment cannot be compartmentalized into tight little
cubicles of aspects of character, conduct, and ability separate and
independent of each other."
In Gustilo v. Wyeth Philippines, Inc., (483 Phil. 69, 78 (2004), citing
Piedad v. Lanao del Norte Electric Cooperative, Inc., 237 Phil. 481, 488
(1987).) we held that a series of irregularities when put together may
constitute serious misconduct. We also held that gross neglect of duty
becomes serious in character due to frequency of instances. (Divina Luz P.
Aquino-Simbulan v. Nicasio Bartolome, AM No. MTJ-05-1588, June 5,
2009.)
SERIOUS MISCONDUCT, DEFINED
Serious misconduct is said to be a transgression of some established
and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and indicative of wrongful intent and not mere error of judgment.
(Philippine Long Distance Company v. The Late Romeo F. Bolso, G.R. No.
159701, August 17, 2007, 530 SCRA 550, 560.) Oddly, petitioner never
advanced any valid reason to justify his absences.
Besides, even assuming that the ground for petitioners dismissal is
gross and habitual neglect of duty, still, he is not entitled to severance pay.
In Central Philippines Bandag Retreaders, Inc. v. Diasnes, (G.R. No.
163607, July 14, 2008, 558 SCRA 194.) we discussed the parameters of
awarding separation pay to dismissed employees as a measure of financial
assistance, viz:

To reiterate our ruling in Toyota, labor adjudicatory officials

and the CA must demur the award of separation pay based
on social justice when an employees dismissal is based on
serious misconduct or willful disobedience; gross and
habitual neglect of duty; fraud or willful breach of trust; or
commission of a crime against the person of the employer or

his immediate family - grounds under Art. 282 of the Labor

Code that sanction dismissals of employees. They must be
most judicious and circumspect in awarding separation pay
or financial assistance as the constitutional policy to provide
full protection to labor is not meant to be an instrument to
oppress the employers. The commitment of the Court to the
cause of labor should not embarrass us from sustaining the
employers when they are right, as here. In fine, we should be
more cautious in awarding financial assistance to the
undeserving and those who are unworthy of the liberality of
the law.(supra) (Emphasis supplied.)

POWER OF CONTROL
The power of control refers to the authority of the employer to control the
employee not only with regard to the result of work to be done but also to
the means and methods by which the work is to be accomplished. (Zanotte
Shoes vs. NLRC, 241 SCRA 261 (1995); Tiu vs. NLRC, 254 SCRA 1
(1996);) It should be borne in mind, that the "control test" calls merely for
the existence of the right to control the manner of doing the work, and not
necessarily to the actual exercise of the right. (supra)
LACK OF DUE PROCESS SHOULD NOT NULLIFY THE DISMISSAL
Given these findings, we find apropos our ruling in Agabon v. NLRC, (G.R.
No. 158693, November 17, 2004, 442 SCRA 573, 616-617.) in which this
Court made the following pronouncement:
Where the dismissal is for a just cause, as in the instant case, the lack of
statutory due process should not nullify the dismissal or render it illegal, or
ineffectual. However, the employer should indemnify the employee for the
violation of his statutory rights x x x. The indemnity to be imposed should
be stiffer to discourage the abhorrent practice of "dismiss now, pay later" x
x x.

Under the Civil Code, nominal damages are adjudicated in order that a
right of the plaintiff, which has been violated or invaded by the defendant,
may be vindicated or recognized, and not for the purpose of indemnifying
the plaintiff for any loss suffered by him.
xxxx
The violation of the petitioners right to statutory due process by the private
respondent warrants the payment of indemnity in the form of nominal
damages. The amount of such damages is addressed to the sound
discretion of the court, taking into account the relevant circumstances. x x
x.
Applying this principle in the light of the circumstances surrounding the
case at bench, we deem it appropriate to fix the amount of nominal
damages at P30,000.00. We likewise note as proper the petitioners
entitlement to the money equivalent of the five-day service incentive leave
for the one year period of his employment, as found by the LA.