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The evidentiary situation, at the very least, brings to the fore the
dictum we stated in Prangan v. NLRC32 and in Nicario v. NLRC33
that “if doubts exist between the evidence presented by the
employer and the employee, the scales of justice must be tilted in
favor of the latter. It is a time-honored rule in controversies
between a laborer and his master, doubts reasonably arising from
the evidence, or in the interpretation of agreements and writing
should be resolved in the former’s favor
TONGKO vs MANUFACTURERS LIFE engagement of the employee; (b) the payment of wages; (c)
the power of dismissal; and (d) the employer's power to
control the employee's conduct. It is the so-called "control
Petitioner: Gregorio V. Tongko test" which constitutes the most important index of the
Respondents: The Manufacturers Life Insurance Co. Inc, existence of the employer-employee relationship that is,
(Manulife) Renato Vergel De Dios whether the employer controls or has reserved the right to
Citation: GR No. 167622 control the employee not only as to the result of the work to
Date of Promulgation: November 7, 2008 be done but also as to the means and methods by which
Ponente: Velasco the same is to be accomplished. Stated otherwise, an
employer-employee relationship exists where the person
FACTS: for whom the services are performed reserves the right to
Petition for Review on Certiorari: seeking the reversal control not only the end to be achieved but also the means
of March 29, 2005 decision of CA, which set aside he to be used in reaching such end.
Decision dated Sept. 27, 2004 and Resolution dated
Dec. 16, 2004 rendered by NLRC The NLRC, for its part, applied the four-fold test and found the
Manulife: engaged in the life insurance business. existence of all the elements and declared Tongko an employee
Renato Vergel de Dios was the President and CEO of Manulife. The CA, on the other hand, found that the element of
Gregorio Tongko: started his professional relationship control as an indicator of the existence of an employer-employee
with Manulife on July 1, 1977 by a Career Agent’s relationship was lacking in this case. The NLRC and the CA based
Agreement (Please see yung naka-green sa next their rulings on the same findings of fact but differed in their
case. Ayun yung content nung Agreement. Same interpretations.
lang kasi)
1983: Tongko was named as Unit Manager in Manulife’s The NLRC arrived at its conclusion, first, on the basis of the letter
Sales Agency dated November 6, 2001 addressed by De Dios to Tongko.
1990: He became Branch Manager According to the NLRC, the letter contained "an abundance of
Tongko’s gross earnings from his work, consisted of directives or orders that are intended to directly affect
commission, persisteny income and management complainant's authority and manner of carrying out his functions
override as Regional Sales Manager
2001: The problem started when Manulife instituted
development programs in the Regional Sales The NLRC further ruled that the different codes of conduct that
Management Level. De Dios then sent Tongko a letter were applicable to Tongko served as the foundations of the power
dated Nov. 6, 2001 stating his concerns over the latter’s of control wielded by Manulife over Tongko that is further
ability to lead his group (Please see the whole case for manifested in the different administrative and other tasks that he
the letter. Medyo mahaba eh, di ko na sinama) was required to perform.
Dec. 18, 2001: De Dios terminated Tongko’s
The NLRC also found that Tongko was required to render
employment through a letter
exclusive service to Manulife, further bolstering the existence of
Tongko then filed a Complaint for Illegal Dismissal at
an employer-employee relationship.
NLRC. Such was raffled to LA Marita V. Padolina.
Allegations of Tongko Finally, the NLRC ruled that Tongko was integrated into a
- In a bid to establish an E-E relationship, he management structure over which Manulife exercised control,
alleged that De Dios gave him specific including the actions of its officers. The NLRC held that such
directives on how to manage his area of integration added to the fact that Tongko did not have his own
responsibility in the latter’s letter dated Nov. 6, agency belied Manulife's claim that Tongko was an independent
2001 contractor.
- Manulife exercised control over him
- He cited Insular Life Assurance Co Ltd v The CA, however, considered the finding of the existence of an
NLRAC and Great Pacific Life Insurance which employer-employee relationship by the NLRC as far too sweeping
he claimed to be similar to his case having as its only basis the letter dated November 6, 2001 of De
- His dismissal was without basis and he was not Dios. The CA did not concur with the NLRC's ruling that the
afforded with due process elements of control as pointed out by the NLRC are "sufficient
- His actions were said to be controlled by indicia of control that negates independent contractorship and
Manulife Code of Conduct conclusively establish an employer-employee relationship
Manulife filed a Position Paper with Motion to between"15 Tongko and Manulife. The CA ruled that there is no
Dismiss. It alleged that Tongko is not its employee and employer-employee relationship between Tongko and Manulife.
that it did not exercise control over him, and NLRC has An impasse appears to have been reached between the CA and
no jurisdiction the NLRC on the sole issue of control over an employee's conduct.
DECISION dated April 15, 2004 by LA Padolina: no E- It bears clarifying that such control not only applies to the work or
E relationship. The 4-fold test cant be applied goal to be done but also to the means and methods to accomplish
NLRC: reversed LA’s decision. The NLRC’s First it.
Division, while finding an E-E relationship applying the 4-
fold test held Manulife liable for illegal dismissal. Further,
Manulife has control over Tongko as evidenced by a In the instant case, Manulife had the power of control over Tongko
letter dated Nov. 6, 2001 that would make him its employee. Several factors contribute to
this conclusion.
MR to NLRC by Manulife: denied
CA: no E-E relationship
In the Agreement dated July 1, 1977 executed between Tongko
ISSUE: and Manulife, it is provided that:
1. W/N there exist E-E relationship between the parties The Agent hereby agrees to comply with all regulations
2. W/N Tongko was illegally dismissed and requirements of the Company as herein provided as
well as maintain a standard of knowledge and
HELD: competency in the sale of the Company's products which
satisfies those set by the Company and sufficiently
1. Yes. In the determination of whether an employer-employee meets the volume of new business required of
relationship exists between two parties, this Court applies the four- Production Club membership.21
fold test to determine the existence of the elements of such
relationship. In Pacific Consultants International Asia, Inc. v.
Under this provision, an agent of Manulife must comply with three
Schonfeld, the Court set out the elements of an employer-
(3) requirements: (1) compliance with the regulations and
employee relationship, thus:
requirements of the company; (2) maintenance of a level of
knowledge of the company's products that is satisfactory to the
Jurisprudence is firmly settled that whenever the existence
company; and (3) compliance with a quota of new businesses.
of an employment relationship is in dispute, four elements
constitute the reliable yardstick: (a) the selection and
Among the company regulations of Manulife are the different
codes of conduct such as the Agent Code of Conduct, Manulife
Financial Code of Conduct, and Manulife Financial Code of
Conduct Agreement, which demonstrate the power of control
exercised by the company over Tongko. The fact that Tongko was
obliged to obey and comply with the codes of conduct was not
disowned by respondents.
xxxx
(2) Separation pay of one (1) month salary for every year of
service from 1977 up to 2001 amounting to PhP 12,435,474.24;