Frances Claire R. Caceres Case No.

25
Labor I - Block A

INSULAR LIFE ASSURANCE, CO., LTD. vs. NLRC

G.R. No. 119930 March 12, 1998

FACTS:

Private respondent Pantaleon de los Reyes filed a complaint against petitioner Insular
Life Assurance Co., Ltd., (INSULAR LIFE) for illegal dismissal and nonpayment of salaries and
back wages. This was dismissed by the Labor Arbiter for lack of jurisdiction after finding that
there was no employer-employee relationship between the two parties. The order was later on
reversed by the NLRC on appeal by the private respondent. Petitioner now seeks for the
annulment of the decision of NLRC stating that the latter erred in acting without jurisdiction
and/or with grave abuse of discretion when it reversed the decision of the Labor Arbiter.

Petitioner contents that they never had any employer-employee relationship for this was
an express agreement between them in the agency contracts and there was a stipulation therein
the de los Reyes was allowed discretion to devise ways and means to fulfill his obligations as
agent and would be paid commission fees based on his actual output. It further insists that the
nature of this work status had already been resolved in the earlier case of INSULAR LIFE vs.
NLRC and Basiao where the Court declared Basiao to be an independent contractor and not an
employee of the petitioner; therefore, there should be no reason that the same ruling must be
applied.

ISSUE:

Did the NLRC err in ruling that there was an employer-employee relationship between
INSULAR LIFE and de los Reyes?

RULING:

No. The existence of an employer-employee relationship cannot be negated by expressly

removing it in the management contract and providing therein that the employee is an
independent contractor when the terms of agreement clearly show otherwise. The employment
status of a person is defined and prescribed by law and not by what the parties say it should be.
In determining the status of the management contract, the four-fold test on employment has to
be applied.

One of the terms under the management contract, it was stated that de los Reyes is
obliged to work exclusively for petitioner in life insurance solicitation and was imposed
premium production quotas. He was proscribed from accepting a managerial or supervisory
position in any other office including the government without the written consent of the
petitioner and he could only be promoted to a higher level if he met certain requirements
including the recommendation for promotion by the petitioners. As found by the NLRC, he
exercised administrative functions which were necessary and beneficial to the business of
INSULAR LIFE. This obtaining, there is no escaping the conclusion that private respondent
Pantaleon de los Reyes was an employee of herein petitioner.