GR NO.

87098 November 4, 1996

ENCYCLOPAEDIA BRITANICCA VS. NLRC
FACTS:
Benjamin Limjoco was a Sales Division Manager of Encyclopaedia Britanicca.
He was in charge of selling petitioner's products through some sales representatives.
As compensation, he receives commissions from the products sold by his agents.
On June 14, 1974, Limjoco resigned from office to pursue his private business.
Then on October 30, 1975, he filed a complaint against the petitioner with the DOLE, claiming
for non-payment of separation pay and other benefits, and also illegal deduction from his sales
commissions.
LABOR ARBITER
On its decision, Limjoco was an employee of the petitioner. The company had control over
Limjoco since the latter was requires to make periodic reports of his sales activities to the
company. All transactions were subject to the final approval of the petitioner company had
active control on the sales activities.
NLRC
Petitioner appealed to NLRC
On its decision, the NLRC affirmed to Labor Arbiter's decision. There was no evidence
supporting the allegation that Limjoco was an independent contractor or dealer.
ISSUE:
WoN there exists an employer-employee relationship between Encyclopaedia Britanicca and
Benjamin Limjoco?
RULING:
The petition has been granted.
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 employee's conduct.
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 to end to be achieved, but also
the manner and means to be used in reaching that end.
Limjoco was merely an agent or an independent dealer of the petitioner. Had he been an
employee of the company. He could not be employed elsewhere and he would be required to
devote full time for petitioner.
In the case at bar, 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 affording to the result of his efforts and not the amount thereof.

GR NO. 169510 August 8, 2011

ATOK BIG WEDGE COMPANY, INC. VS. JESUS P. GISON
FACTS:
Jesus P. Gison was engaged as part-time consultant on retainer basis to Atok Big Wedge
Company (Atok, for brevity).
As a consultant on retainer basis, he assisted Atok retained legal counsel with matters
pertaining to the prosecution of cases against illegal surface occupants within the area covered
by the company's mineral claims.
As payment, he receives 3,000 a month. This set-up continued for eleven years.
Since, Gison was getting old, he requested that Atok cause his registration with the SSS.
Such request has been denied. (Petitioner contends that he was only a retainer/consultant).
Gison filed a complaint with the SSS for Atok's refusal to cause his registration with the SSS.
On the same date, Mario Cera ( resident manager of Atok) issued a memorandum for Gison's
termination. (within 30 days upon receipt)
NLRC:
Gison filed a complaint with the NLRC for illegal dismissal, unfair labor practice, underpayment
of wages, non-payment of 13th month pay, vacation pay, and sick leave pay.
Decision of the Labor Arbiter: Ruling in favor of the petitioner. Finding that no employeremployee relationship between petitioner and respondent.
Gison filed an appeal.
Decision of the 2nd Division of the NLRC: Affirming the decision of the Labor Arbiter.
Gison filed a MR but then it was denied.
CA:
Gison filed a petition for review, questioning the decision and resolution of the NLRC.
Decision of the CA: In favor of the respondent.
The CA opined that the NLRC and Labor Arbiter may have overlooked Article 280 of the Labor
Code, or the provision which distinguishes two kinds of employees (regular and casual).
In the case at bar, Gison is deemed a regular employee of Atok after the lapse of one year
from his employment. Considering also that he had been performing services for the petitioner
for 11 years, thus, respondent is entitled to the rights and privileges of a regular employee.
ISSUE:
WoN there exists an employer-employee relationship between Atok and Gison?
SC:
The petition has been GRANTED, in favor with the petitioner. The resolutions issued by the
NLRC has been reinstated.
To ascertain the existence of an employer-employee relationship, jurisprudence has invariably
adhered to the four-fold test, to wit:
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 employee's conduct, or the so-called "control test".
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 aforementioned test, an employer-employee relationship is ABSENT.
Respondent was assigned tasks to perform but petitioner did not control the manner and
methods by which respondent performed those tasks.

Dumpit- Murillo v CA
FACTS:
On October 2, 1995, under Talent Contract No. NT95-1805, Associated Broadcasting Company
(ABC) hired petitioner Thelma Dumpit-Murillo as a newscaster and co-anchor for BalitangBalita, an early evening news program.
The contract was for a period of three months. Which was later renewed. In addition, petitioners
services were engaged for the program Live on Five.
On September 30, 1999, after four years of repeated renewals, petitioners talent
contract expired. Two weeks after the expiration of the last contract, petitioner sent a letter to
Mr. Jose Javier, Vice President for News and Public Affairs of ABC, informing the latter that she
was still interested in renewing her contract subject to a salary increase. Thereafter, petitioner
stopped reporting for work. She wrote Mr. Javier another letter saying "should I not receive any
formal response from you until Monday, November 8, 1999, I will deem it as a constructive
dismissal of my services."
A month later, petitioner sent a demand letter
(a) reinstatement to her former position
(b) payment of unpaid wages for services rendered from September 1 to October 20, 1999 and
full backwages
(c) payment of 13th benefits due to a regular employee starting March 31, 1996
On December 20, 1999, petitioner filed a complaint Edward Tan, for illegal constructive
dismissal, nonpayment of salaries, overtime pay, premium pay, separation pay, holiday pay,
service incentive leave pay, vacation/sick leaves and 13 th pay. She likewise demanded payment
for moral, exemplary and actual damages, as well as for attorneys fees.
Labor Arbiter dismissed the complaint.
On appeal, The National Labor Relations Commission reversed the LA. The Court of Appeals
reversed the NLRC and ruled that as per the contract between ABC and Dumpit, Dumpit is a
fixed term employee.
ISSUE: Whether or not Dumpit is a regular employee.
HELD: Yes. Dumpit was a regular employee under contemplation of law. The practice of having
fixed-term contracts in the industry does not automatically make all talent contracts valid and
compliant with labor law. The assertion that a talent contract exists does not necessarily prevent
a regular employment status.The duties of Dumpit as enumerated in her employment contract
indicate that ABC had control over the work of Dumpit. Aside from control, ABC also dictated
the work assignments and payment of petitioners wages. ABC also had power to dismiss her.

All these being present, clearly, there existed an employment relationship between Dumpit and
ABC.
In addition, her work was continuous for a period of four years. This repeated engagement
under contract of hire is indicative of the necessity and desirability of the Dumpits work in ABCs
business. The primary standard for determining regular employment is the reasonable
connection private respondent to ABC, demanding: 13th month pay, vacation/sick/service
incentive leaves and other monetary against ABC.
The particular activity performed by the employee vis--vis the usual trade or business of the
employer. This connection can be determined by considering the nature of the work performed
and its relation to the scheme of the particular business or trade in its entirety. 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.

JOSE MEL BERNARTEvs. PBA

FACTS:
Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the
PBA as referees. During the leadership Bernardino, they were made to sign contracts on a yearto-year basis. During the term of Commissioner Eala, however,changes were made on the
terms of their employment.
On January 15, 2004, Bernarte received a letter from the Office of the Commissioner advising
him that his contract would not be renewed citing hisunsatisfactory performance on and off the
court. It was a total shock for Bernarte who was awarded Referee of the year in 2003. He felt
that thedismissal was caused by his refusal to fix a game upon order of Ernie De Leon.
On the other hand, complainant Guevarra alleges that he was invited to join the PBA pool of
referees in February 2001. On March 1, 2001, he signeda contract as trainee. Beginning 2002,
he signed a yearly contract as Regular Class C referee. On May 6, 2003, respondent Martinez
issued amemorandum to Guevarra expressing dissatisfaction over his questioning on the
assignment of referees officiating out-of-town games.
Beginning February 2004, he was no longer made to sign a contract. Respondents aver, on the
other hand, that complainants entered into two contracts of retainer with the PBA in the year
2003. The first contract wasfor the period January 1, 2003 to July 15, 2003; and the second was
for September 1 to December 2003. After the lapse of the latter period, PBA decided not to
renew their contracts.Complainants were not illegally dismissed because they were not
employees of the PBA.
Labor Arbiter declared petitioner an employee whose dismissal by respondents was illegal.
Accordingly, the Labor Arbiter ordered the reinstatement . The NLRC affirmed the Labor
Arbiter's judgment. Respondents filed a petition for certiorari with the Court of Appeals, which
overturned the decisions of the NLRC and Labor Arbiter.
ISSUE:
Whether petitioner is an employee of respondents, which in turn determines whether petitioner
was illegally dismissed
HELD:
NO, Petitioner is not an employee of the respondents. The SC DENIED the petition and
AFFIRMED the assailed decision of the Court of Appeals. To determine the existence of an
employer-employee relationship, case law has consistently applied the four-fold test, to wit: (a)
the selection andengagement of the employee;
(b) the payment of wages;
(c) the power of dismissal; and
(d) the employers power to control the employee on themeans and methods by which the
work is accomplished.

The so-called control test is the most important indicator of the presence or absence of
anemployer-employee relationship. In this case, PBA admits repeatedly engaging petitioners
services, as shown in the retainer contracts. PBA pays petitioner a retainer fee, exclusive of per
diem or allowances, as stipulated in the retainer contract. PBA can terminate the retainer
contract for petitioners violation of its terms and conditions. However, respondents argue that
the all-important element of control is lacking in this case, making petitioner an independent
contractor and not an employee of respondents. The contractual stipulations do not pertain to,
much less dictate, how and when petitioner will blow the whistle and make calls. On the
contrary, they merely serve as rules of conduct or guidelines in order to maintain the integrity of
the professional basketball league.
We agree with respondents that once in the playing court, the referees exercise their own
independent judgment, based on the rules of the game, as towhen and how a call or decision is
to be made. The referees are the only, absolute, and final authority on the playing court. The
very nature of petitioners job of officiating a professional basketball game undoubtedly calls for
freedom of control by respondents. Moreover, unlike regular employees who ordinarily report for
work eight hours per day for five days a week, petitioner is required to report for work only when
PBA games are scheduled or three times a week at two hours per game.
In addition, there are no deductions for contributions to the SocialSecurity System, Philhealth or
Pag-Ibig, which are the usual deductions from employees salaries. These undisputed
circumstances buttress the factthat petitioner is an independent contractor, and not an
employee of respondents.

Jardin vs. National Labor Relations Commission

Facts:
Petitioners were drivers of private respondent, Philjama International, Inc. a domestic
corporation engaged in the operation of Goodman Taxi. Petitioners used to drive private
respondents taxicabs every other day on a 24-hour work schedule under the boundary system.
Under this arrangement, the petitioners earned an average of P400.00 daily. Nevertheless,
private respondent admittedly, regularly deducts from petitioners daily earnings the amount of
P30.00 supposedly for the washing of the taxi units. Believing that the deduction is illegal,
petitioners decided to form a labor union to protect their rights and interests.
Upon learning about the plan of petitioners, private respondent refused to let petitioners drive
their taxicabs when they reported for work on August 6, 1991, and on succeeding days.
Petitioners suspected that they were singled out because they were the leaders and active
members of the proposed union. Aggrieved, petitioners filed with the labor arbiter a complaint
against private respondent for unfair labor practice, illegal dismissal and illegal deduction of
washing fees. The labor arbiter dismissed said complaint for lack of merit. On appeal, the NLRC
reversed the decision of the labor arbiter. Private Respondent then filed a motion for
reconsideration but was denied. Private Respondent filed another motion for reconsideration
which eventually was granted dismissing the complaint of the petitioners for lack of jurisdiction
on the ground that there was no employer-employee relationship. Petitioners
sought reconsideration of the labor tribunals latest decision which was denied.
ISSUE: Whether or not employer-employee relationship exist.
HELD: Yes. In the number of cases decided by the court, it ruled that the relationship between
operators and drivers under the boundary system is that of employer-employee and not of
lessor-lessee as argued by the NLRC. The court already explained that in the lease of chattels,
the lessor loses complete control over the chattel leased although the lessee cannot be reckless
in the use thereof, otherwise he would be responsible for the damages to the lessor.
In the case of jeepney owners/operators and jeepney operators and drivers, the former exercise
supervision and control over the latter. The management of the business is in the owners hand.
The owner as holder of the certificate of public convenience must see to it that the drivers follow
the route prescribed by the franchising authority and the rules promulgated as regards its
operation.
The fact that the drivers do not receive a fixed salary but get only that excess of the boundary is
not sufficient to withdraw the relationship between that of the employer- employee. This is
based in the four fold test provided to determine the relationship, to wit: (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 employee's conduct, or the so-called "control test." 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 if 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.
Otherwise, no such relationship exists.

Applying the foregoing parameters to the case herein obtaining, it is clear that the respondent
does not pay the drivers, the complainants herein, their wages. Instead, the drivers pay a
certain fee for the use of the vehicle. On the matter of control, the drivers, once they are out
plying their trade and are beyond the physical control of the owner/operator, they themselves
determine the amount of revenue they would want to earn in a days driving and,
more significantly, aside from the fact that they pay for the gasoline they consume, they likewise
shoulder the cost of repairs on damages sustained by the vehicles they are driving.
As consistently held by the Supreme Court, termination of employment must be effected in
accordance with law. The just and authorized causes for termination of employment are
enumerated under articles 282, 283 and 284 of the Labor Code. The requirement of notice and
hearing is set-out in Article 277 (b) of the said code. Hence, petitioners being employees of
private respondent can be dismissed only for just and authorized cause, and after affording
them notice and hearing prior to termination. In the instant case, private respondent had no valid
cause to terminate the employment of the petitioners. Neither were there two written notices
sent by private respondent informing each of the petitioners that they had been dismissed from
work. This lack of valid cause and failure on the part of private respondent to comply with the
twin-notice requirement underscored the illegality surrounding petitioners dismissal.
In the issue of the washing fee, the court held that it was a valid deduction. It is incumbent upon
the driver to restore the unit he has driven to the same clean condition when he took it out.
Private respondent is directed to reinstate petitioners to their positions held at the time of the
complained dismissal. Private respondent is likewise ordered to pay petitioners their full
backwages, to be computed for the date of the dismissal until their actual reinstatement.
However, the order of public respondent that petitioners be reimbursed the amount paid as
washing charges is deleted.

Professional Sertvices, Inc., petitioner v The Court of Appeals and Natividad and Enrique
Agana, respondents
Facts:
Natividad Agana was admitted at the Medical City General Hospital because of difficulty of
bowel movement and bloody anal discharge. Dr. Ampil diagnosed her to be suffering from
cancer of the sigmoid. Dr. Ampil performed an anterior resection surgery upon her, and found
that the malignancy in her sigmoid area had spread to her left ovary, necessitating the removal
of certain portions of it. Upon the consent of Atty. Enrique Agana, Natividads husband, a
hypersectomy was performed upon Natividad by Dr. Fuentes. Afterwards, Dr. Ampil took over,
completed the operation and closed the incision. In the Record of Operation, the attending
nurse entered these remarks: sponge count lacking 2; announced to surgeon searched done
but to no avail.
After a couple of days, Natividad complained of pain in her anal region and consulted both Dr.
Ampil and Dr. Fuentes. The doctors told her that the pain was the natural consequence of the
surgical operation performed upon her. Dr. Ampil recommended that she consult an oncologist
to treat the cancerous nodes which were not removed during the operation. After four months of
consultations and examinations in the US, she was told that she was free of cancer.
Two weeks after returning to the Philippines, her daughter found a piece of gauze (1.5 in)
protruding from her vagina. Dr. Ampil was immediately informed. Dr. Ampil extracted by hand
the piece of gauze and assured Natividad that the pains would soon vanish. However, the pains
intensified prompting Natividad to seek treatment at the Polymedic General Hospital, where
another Dr. Gutierrez detected the presence of a foreign object in her vagina. Natividad
underwent another surgery.
Spouses Agana filed with the Regional Trial Court a complaint for damages against
Professional Services, Inc. (owner of Medical City), Dr. Ampil and Dr. Fuentes. Pending the
outcome of the case, Natividad died. The RTC found PSI, Dr. Ampil and Dr. Fuentes jointly and
severally liable. On appeal, the Court of Appeals affirmed the assailed judgment with
modification that the complaint against Dr. Fuentes was dismissed.
Issue:
Whether or not there was an employer-employee relationship between the Medical City and Dr.
Ampil?
Ruling:
Yes, there exists an employer-employee relationship between the Medical City and Dr. Ampil.
The Court, relying on Ramos v Court of Appeals, held that for the purpose of apportioning
responsibility in medical negligence cases, an employer-employee relationship in effect exists
between hospitals and their attending and visiting physicians. Hospitals exercise significant
control in the hiring and firing of consultants and in the conduct of their work within the hospital
premises. Furthermore, PSIs act of publicly displaying in the lobby of the Medical City the
names and specializations of its accredited physicians estopped it from denying the existence of
an employer-employee relationship between them under the doctrine of ostensible agency or
agency by estoppel.