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FRANCISCO VS. NLRC ET AL
FACTS: 1995, Petitioner was hired by Kasei Corporation during its incorporation stage.
She was designated as Accountant and Corporate Secretary and was assigned to handle
all the accounting needs of the company. She was also designated as Liaison Officer to
the City of Makati to secure business permits, construction permits and other licenses
for the initial operation of the company. Although she was designated as Corporate
Secretary, she was not entrusted with the corporate documents; neither did she attend
any board meeting nor required to do so. She never prepared any legal document and
never represented the company as its Corporate Secretary. 1996, petitioner was
designated Acting Manager. Petitioner was assigned to handle recruitment of all
employees and perform management administration functions; represent the company
in all dealings with government agencies, especially with the BIR, SSS and in the city
government of Makati; and to administer all other matters pertaining to the operation
of Kasei Restaurant which is owned and operated by Kasei Corporation.
January 2001, petitioner was replaced by a certain Liza R. Fuentes as Manager. Kasei
Corporation reduced her salary, she was not paid her mid-year bonus allegedly because
the company was not earning well. On October 2001, petitioner did not receive her
salary from the company. She made repeated follow-ups with the company cashier but
she was advised that the company was not earning well. Eventually she was informed
that she is no longer connected with the company. Since she was no longer paid her
salary, petitioner did not report for work and filed an action for constructive dismissal
before the labor arbiter. Private respondents averred that petitioner is not an employee
of Kasei Corporation. They alleged that petitioner was hired in 1995 as one of its
technical consultants on accounting matters and act concurrently as Corporate
Secretary. As technical consultant, petitioner performed her work at her own discretion
without control and supervision of Kasei Corporation. Petitioner had no daily time
record and she came to the office any time she wanted and that her services were only
temporary in nature and dependent on the needs of the corporation. The Labor Arbiter
found that petitioner was illegally dismissed, NLRC affirmed with modification the
Decision of the Labor Arbiter. On appeal, CA reversed the NLRC decision. CA denied
petitioner’s MR, hence, the present recourse.
ISSUES: WON there was an employer-employee relationship between petitioner and
private respondent; and if in the affirmative,
RULING: Generally, 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. In addition 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.
There are instances when, aside from the employer’s power to control the employee,
economic realities of the employment relations help provide a comprehensive analysis
of the true classification of the individual, whether as employee, independent
contractor, corporate officer or some other capacity.
It is better, therefore, to adopt a two-tiered test involving: (1) the employer’s power to
control; and (2) the economic realities of the activity or relationship.
The control test means that there is an employer-employee relationship when the
person for whom the services are performed reserves the right to control not only the
end achieved but also the manner and means used to achieve that end. There has to be
analysis of the totality of economic circumstances of the worker. Thus, 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 employer’s business; (2) the extent of the
worker’s investment in equipment and facilities; (3) the nature and degree of control
exercised by the employer; (4) the worker’s 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, it can be said that petitioner is an employee of Kasei
Corporation because she was under the direct control and supervision of Seiji Kamura,
the corporation’s Technical Consultant. She reported for work regularly and served in
various capacities as Accountant, Liaison Officer, Technical Consultant, Acting Manager
and Corporate Secretary, with substantially the same job functions, that is, rendering
accounting and tax services to the company and performing functions necessary and
desirable for the proper operation of the corporation such as securing business permits
and other licenses over an indefinite period of engagement. Respondent corporation
had the power to control petitioner with the means and methods by which the work is
to be accomplished. Under the economic reality test, the petitioner can also be said to
be an employee of respondent corporation because she had served the company for 6
yrs. before her dismissal, receiving check vouchers indicating her salaries/wages,
benefits, 13th month pay, bonuses and allowances, as well as deductions and Social
Security contributions from. When petitioner was designated General Manager,
respondent corporation made a report to the SSS. Petitioner’s membership in the SSS
evinces the existence of an employer-employee relationship between petitioner and
respondent corporation. The coverage of Social Security Law is predicated on the
existence of an employer-employee relationship.

SONZA vs. ABS-CBN
Facts: In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management
and Development Corporation (MJMDC). 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 Sonza’s 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 the said letter, Sonza filed with the Department of Labor and Employment
a complaint alleging that ABS-CBN did not pay his salaries, separation pay, service
incentive pay,13th month pay, signing bonus, travel allowance and amounts under the
Employees Stock Option Plan (ESOP). ABS-CBN contended that no employee-employer
relationship existed between the parties. However, ABS-CBN continued to remit Sonza’s
monthly talent fees but opened another account for the same purpose. The Labor
Arbiter dismissed the complaint and found that there is no employee-employer
relationship. NLRC affirmed the decision of the Labor Arbiter. CA also affirmed the
decision of NLRC.
Issue: Whether or not there was employer-employee relationship between the parties.
Ruling: Case law has consistently held that the elements of an employee-employer
relationship are selection and engagement of the employee, the payment of wages, the
power of dismissal and the employer’s 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.
Sonza’s services to co-host its television and radio programs are because of his peculiar
talents, skills and celebrity status. Independent contractors often 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. Applying the control test to the present case, we find that 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.
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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-CBN’s 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-CBN’s sole concern was
the quality of the shows and their standing in the ratings.
Clearly, ABS-CBN did not exercise control over the means and methods of performance
of Sonza’s work. A radio broadcast specialist who works under minimal supervision is an
independent contractor. Sonza’s 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.
BITOY JAVIER (DANILO P. JAVIER), Petitioner, v. FLY ACE CORPORATION and
FLORDELYN CASTILLO, Respondents.
FACTS: Javier an employee of Fly Ace performing various work for the latter filed a
complaint before the NLRC for underpayment of salaries and other labor standard
benefits. He alleged that he reported for work from Monday to Saturday from 7:00
oclock in the morning to 5:00 oclock in the afternoon; that during his employment, he
was not issued an identification card and pay slips by the company; that he reported for
work but he was no longer allowed to enter the company premises by the security
guard upon the instruction of Ruben Ong (Mr. Ong), his superior; that after several
minutes of begging to the guard to allow him to enter, he saw Ong whom he
approached and asked why he was being barred from entering the premises; that Ong
replied by saying, Tanunginmoanakmo;that he discovered that Ong had been courting
his daughter Annalyn after the two met at a fiesta celebration in Malabon City; that
Annalyn tried to talk to Ong and convince him to spare her father from trouble but he
refused to accede; that thereafter, Javier was terminated from his employment without
notice; and that he was neither given the opportunity to refute the cause/s of his
dismissal from work.

For its part p, Fly Ace denied the existence of employer-employee relationship between
them and Javier as the latter was only called roughly 5 to 6 times only in a month
whenever the vehicle of its contracted hauler, Milmar Hauling Services, was not
available. Labor Arbiter dismissed the complaint ruling that respondent Fly Ace is not
engaged in trucking business but in the importation and sales of groceries. Since there is
a regular hauler to deliver its products, we give credence to Respondents claim that
complainant was contracted on pakiao basis.
On appeal, NLRC reversed the decisin of the LA. It was of the view that a pakyaw-basis
arrangement did not preclude the existence of employer-employee relationship.
Payment by result x xx is a method of compensation and does not define the essence of
the relation. It is a mere method of computing compensation, not a basis for
determining the existence or absence of an employer-employee relationship. The NLRC
further averred that it did not follow that a worker was a job contractor and not an
employee, just because the work he was doing was not directly related to the employers
trade or business or the work may be considered as extra helper as in this case; and that
the relationship of an employer and an employee was determined by law and the same
would prevail whatever the parties may call it. Finding Javier to be a regular employee,
the NLRC ruled that he was entitled to a security of tenure. For failing to present proof
of a valid cause for his termination, Fly Ace was found to be liable for illegal dismissal of
Javier who was likewise entitled to backwages and separation pay in lieu of
reinstatement. However, on appeal, CA reversed the ruling of NLRC
The CA ruled that Javiers failure to present salary vouchers, payslips, or other pieces of
evidence to bolster his contention, pointed to the inescapable conclusion that he was
not an employee of Fly Ace. Further, it found that Javiers work was not necessary and
desirable to the business or trade of the company, as it was only when there were
scheduled deliveries, which a regular hauling service could not deliver, that Fly Ace
would contract the services of Javier as an extra helper. Lastly, the CA declared that the
facts alleged by Javier did not pass the control test. He contracted work outside the
company premises; he was not required to observe definite hours of work; he was not
required to report daily; and he was free to accept other work elsewhere as there was
no exclusivity of his contracted service to the company, the same being co-terminous
with the trip only. Since no substantial evidence was presented to establish an
employer-employee relationship, the case for illegal dismissal could not prosper. Hence,
this appeal.
ISSUE: Does an employer-employee relationship exist between Javier and Fly Ace,
thereby holding the latter guilty of illegal dismissal?
HELD: As the records bear out, the LA and the CA found Javiers claim of employment
with Fly Ace as wanting and deficient. The Court is constrained to agree. Labor officials
are enjoined to use reasonable means to ascertain the facts speedily and objectively
with little regard to technicalities or formalities but nowhere in the rules are they
provided a license to completely discount evidence, or the lack of it. The quantum of
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proof required, however, must still be satisfied. Hence, when confronted with
conflicting versions on factual matters, it is for them in the exercise of discretion to
determine which party deserves credence on the basis of evidence received, subject
only to the requirement that their decision must be supported by substantial
evidence.Accordingly, the petitioner needs to show by substantial evidence that he was
indeed an employee of the company against which he claims illegal dismissal.
In sum, the rule of thumb remains: the onus probandi falls on petitioner to establish or
substantiate such claim by the requisite quantum of evidence. Whoever claims
entitlement to the benefits provided by law should establish his or her right thereto x
xx. Sadly, Javier failed to adduce substantial evidence as basis for the grant of relief.
By way of evidence on this point, all that Javier presented were his self-serving
statements purportedly showing his activities as an employee of Fly Ace.
Clearly, Javier failed to pass the substantiality requirement to support his claim. Hence,
the Court sees no reason to depart from the findings of the CA. While Javier remains
firm in his position that as an employed stevedore of Fly Ace, he was made to work in
the company premises during weekdays arranging and cleaning grocery items for
delivery to clients, no other proof was submitted to fortify his claim. The lone affidavit
executed by one Bengie Valenzuela was unsuccessful in strengthening Javiers cause.
The Court is of the considerable view that on Javier lies the burden to pass the well-
settled tests to determine the existence of an employer-employee relationship, viz: (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. Of these
elements, the most important criterion is whether the employer controls or has
reserved the right to control the employee not only as to the result of the work but also
as to the means and methods by which the result is to be accomplished.
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO vs. BERSAMIRA
FACTS: San Miguel Corporation entered into contracts for merchandising services with
Lipercon and D’Rite companies, both independent contractors duly licensed by DOLE, to
maintain its competitive position, and in keeping with the imperatives of efficiency,
business expansion and diversity of operation. In the contracts, it was expressly agreed
that the workers employed by the contractors were not to be deemed employees or
agents of San Miguel. Thus, no employer-employee relationship. Later on, San Miguel
executed a CBA which specifically provides that “temporary, probationary, or contract
employees and workers are excluded from the bargaining unit and therefore, outside
the scope of this Agreement.” The Union, petitioner, advised San Miguel that some of
the workers of Lipercon and D’Rite had signed up for union membership and sought
regularization. The Union alleged that some the workers have been continuously
working for San Miguel for a period ranging from 6 months to 15 years, and that the
nature of their work is neither casual nor seasonal. Strikes were held and a series of
pickets were held for the reason that the Union failed to receive any favourable
response from San Miguel. Thereafter, San Miguel filed a complaint for Injunction and

Damages before the RTC of Pasig to enjoin the Union to prevent the peaceful and
normal operations of the former. The Union filed a Motion to Dismiss but was
subsequently denied by the RTC reasoning that the absence of employer-employee
relationship negates the existence of labor dispute. Thus, the RTC issued Orders
enjoining the Union from commiting acts that disrupt the operations of San Miguel.
ISSUE: Whether or not there is a labor dispute between San Miguel and the Union?
HELD: A labor dispute includes any controvery or matter concerning terms and
conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing, or arranging the terms and conditions or
employment, regardless of whether the disputants stand in the proximate relation of
employer and employee.
What the Union seeks is to regularize the status of the employees contracted by
Liparcon and D’Rite and that they be absorbed into the working unit of San Miguel. In
this wise, the matter dwells on the working relationship between the said employees
and San Miguel. Terms, tenure and conditions of their employment and the
arrangement of those terms are thus involved bringing the matter within the purview of
a labor dispute. Further, the Union also seeks to represent the workers, who have
signed for union membership, for the purpose of collecting bargaining. Obvious then is
that representation and association, for the purpose of negotiating the conditions of
employment are also involved. In fact, the injunction sought by San Miguel was precisely
also to prevent such representation. Again, the matter of representation falls squarely
within the ambit of a labor dispute. As the case is indisputably linked with a labor
dispute, jurisdiction belongs to labor tribunals. The Writ of Certiorari is GRANTED.
Locsin v PLDT
Facts: On November 1, 1990, respondent Philippine Long Distance Telephone Company
(PLDT) andthe Security and Safety Corporation of the Philippines (SSCP) entered into a
Security Services Agreement (Agreement) whereby SSCP would provide armed security
guards to PLDT to beassigned to its various offices. Pursuant to such agreement,
petitioners Raul Locsin and EddieTomaquin, among other security guards, were posted
at a PLDT office. On August 30, 2001, respondent issued a Letter dated August 30, 2001
terminating the Agreement effective October 1, 2001. Despite the termination of the
Agreement, however,petitioners continued to secure the premises of their assigned
office. They were allegedlydirected to remain at their post by representatives of
respondent. In support of their contention, petitioners provided the Labor Arbiter with
copies of petitioner Locsin’s pay slips for the period of January to September 2002.
Then, on September 30, 2002, petitioners’ services were terminated.
Thus, petitioners filed a complaint before the Labor Arbiter for illegal dismissal and
recovery of money claims such asovertime pay, holiday pay, premium pay for holiday
and rest day, service incentive leave pay,Emergency Cost of Living Allowance, and moral
and exemplary damages against PLDT. The Labor Arbiter rendered a Decision finding
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PLDT liable for illegal dismissal. It was explainedin the Decision that petitioners were
found to be employees of PLDT and not of SSCP. Suchconclusion was arrived at with the
factual finding that petitioners continued to serve as guards of PLDT’s offices. As such
employees, petitioners were entitled to substantive and procedural due process before
termination of employment.
Issue: Is there employer-employee relationship?
Ruling: Yes. From the foregoing circumstances, reason dictates that we conclude that
petitionersremained at their post under the instructions of respondent. We can further
conclude thatrespondent dictated upon petitioners that the latter perform their regular
duties to secure thepremises during operating hours. This, to our mind and under the
circumstances, is sufficient toestablish the existence of an employer-employee
relationship.
To reiterate, while respondent and SSCP no longer had any legal relationship with
thetermination of the Agreement, petitioners remained at their post securing the
premises ofrespondent while receiving their salaries, allegedly from SSCP. Clearly, such a
situation makesno sense, and the denials proffered by respondent do not shed any light
to the situation. It is butreasonable to conclude that, with the behest and, presumably,
directive of respondent,petitioners continued with their services. Evidently, such are
indicia of control that respondentexercised over petitioners. Evidently, respondent
having the power of control over petitioners must be considered as petitioners’
employer––from the termination of the Agreement onwards ––as this was the onlytime
that any evidence of control was exhibited by respondent over petitioners and in light of
ourruling in Abella. Thus, as aptly declared by the NLRC, petitioners were entitled to the
rights andbenefits of employees of respondent, including due process requirements in
the termination oftheir services. Both the Labor Arbiter and NLRC found that
respondent did not observe such due processrequirements. Having failed to do so,
respondent is guilty of illegal dismissal.
People’s Broadcasting Service vs Sec of Labor
FACTS: The instant petition for certiorari under Rule 65 assails the decision and the
resolution of the Court of Appeals. The petition traces its origins to a complaint filed by
Jandeleon Juezan (respondent) against People’s Broadcasting Service, Inc. (Bombo
Radyo Phils., Inc) (petitioner) for illegal deduction, non-payment of service incentive
leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of
benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG and Philhealth
(non-diminution of benefits in the amount allegedly 6K) before the Department of Labor
and Employment (DOLE) Regional Office No. VII, Cebu City.2 On the basis of the
complaint, the DOLE conducted a plant level inspection on 23 September 2003. Labor
Inspector wrote under the heading “Findings/Recommendations” “non-diminution of
benefits” and “Note: Respondent deny employer-employee relationship with the
complainant- see Notice of Inspection results.”

PETITIONER’S POSITION: Management representative informed that complainant is a
drama talent hired on a per drama ” participation basis” hence no employer-
employeeship [sic] existed between them. As proof of this, management presented
photocopies of cash vouchers, billing statement, employments of specific undertaking (a
contract between the talent director & the complainant), summary of billing of drama
production etc. They (mgt.) has [sic] not control of the talent if he ventures into another
contract w/ other broadcasting industries.
ISSUE: WON the Secretary of Labor have the power to determine the existence of an
employer-employee relationship.
HELD: No To resolve this pivotal issue, one must look into the extent of the visitorial and
enforcement power of the DOLE found in Article 128 (b) of the Labor Code, as amended
by Republic Act 7730. Of course, a person’s entitlement to labor standard benefits
under the labor laws presupposes the existence of employer-employee relationship in
the first place.The clause signifies that the employer-employee relationship must have
existed even before the emergence of the controversy.
Necessarily, the DOLE’s power does not apply in two instances, namely: (a) where the
employer-employee relationship has ceased; and (b) where no such relationship has
ever existed. The first situation is categorically covered by Sec. 3, Rule 11 of the Rules on
the Disposition of Labor Standards Cases15 issued by the DOLE Secretary.
Clearly the law accords a prerogative to the NLRC over the claim when the employer-
employee relationship has terminated or such relationship has not arisen at all. The
reason is obvious. In the second situation especially, the existence of an employer-
employee relationship is a matter which is not easily determinable from an ordinary
inspection, necessarily so, because the elements of such a relationship are not verifiable
from a mere ocular examination. The determination of which should be comprehensive
and intensive and therefore best left to the specialized quasi-judicial body that is the
NLRC. It can be assumed that the DOLE in the exercise of its visitorial and enforcement
power somehow has to make a determination of the existence of an employer-
employee relationship. Such prerogatival determination, however, cannot be
coextensive with the visitorial and enforcement power itself. Indeed, such
determination is merely preliminary, incidental and collateral to the DOLE’s primary
function of enforcing labor standards provisions. The determination of the existence of
employer-employee relationship is still primarily lodged with the NLRC.
Thus, before the DOLE may exercise its powers under Article 128, two important
questions must be resolved: (1) Does the employer-employee relationship still exist, or
alternatively, was there ever an employer-employee relationship to speak of; and (2)
Are there violations of the Labor Code or of any labor law? A mere assertion of absence
of employer-employee relationship does not deprive the DOLE of jurisdiction over the
claim under Article 128 of the Labor Code. At least a prima facie showing of such
absence of relationship, as in this case, is needed to preclude the DOLE from the
exercise of its power. Without a doubt, petitioner, since the inception of this case had
been consistent in maintaining that respondent is not its employee.
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Certainly, a preliminary determination, based on the evidence offered, and noted by the
Labor Inspector during the inspection as well as submitted during the proceedings
before the Regional Director puts in genuine doubt the existence of employer-employee
relationship. From that point on, the prudent recourse on the part of the DOLE should
have been to refer respondent to the NLRC for the proper dispensation of his
claims.Furthermore, as discussed earlier, even the evidence relied on by the Regional
Director in his order are mere self-serving declarations of respondent, and hence cannot
be relied upon as proof of employer-employee relationship.
Ymbong vs. ABSCBN
Facts: Petitioner Ernesto G. Ymbong started working for ABS-CBN in 1993 at its regional
station in Cebu as a television talent, co-anchoring Hoy Gising and TV Patrol Cebu. His
stint in ABS-CBN later extended to radio when ABS-CBN Cebu launched its AM station in
1995. Like Ymbong, Leandro Patalinghug also worked for ABS-CBN Cebu. Starting 1995,
he worked as talent, director and scriptwriter for various radio programs aired. On
January 1, 1996, the ABS-CBN Head Office in Manila issued “Policy on Employees
Seeking Public Office.” The pertinent portions read:
1. Any employee who intends to run for any public office position, must file his/her
letter of resignation, 2. Any employee who intends to join a political group/party or
even with no political affiliation but who intends to openly and aggressively campaign
for a candidate or group of candidates must file a request for leave of absence subject
to management’s approval.
Because of the 1998 elections and based on his immediate recollection of the policy Mr.
Dante Luzon, Assistant Station Manager issued a memorandum stating “any
employee/talent who wants to run for any position in the coming election will have to
file a leave of absence the moment he/she files his/her certificate of candidacy.” And
added further that “The services rendered by the concerned employee/talent to this
company will then be temporarily suspended for the entire campaign/election period.”
Luzon, however, admitted that upon double-checking of the exact text of the policy he
saw that the policy actually required suspension for those who intend to campaign for a
political party or candidate and resignation for those who will actually run in the
elections.
After the issuance of the Memorandum, Ymbong got in touch with Luzon. Luzon claims
that Ymbong approached him and told him that he would leave radio for a couple of
months because he will campaign for the administration ticket. It was only after the
elections that they found out that Ymbong actually ran for public office himself at the
eleventh hour. Ymbong, on the other hand, claims that in accordance with the
Memorandum, he informed Luzon through a letter that he would take a few months
leave of absence because he was running for councilor of Lapu-Lapu City.

As regards Patalinghug, Patalinghug approached Luzon and advised him that he will run
as councilor for Naga. According to Luzon, he clarified to Patalinghug that he will be
considered resigned and not just on leave once he files a certificate of candidacy. Thus,
Patalinghug wrote Luzon his resignation letter. Unfortunately, both Ymbong and
Patalinghug lost in the May 1998 elections. Later, Ymbong and Patalinghug both tried to
come back to ABS-CBN Cebu. According to Luzon, he informed them that they cannot
work there anymore because of company policy. ABS-CBN, however, agreed out of pure
liberality to give them a chance to wind up their participation in the radio drama since it
was rating well and to avoid an abrupt ending. The agreed winding-up, however,
dragged on for so long prompting Luzon to issue to Ymbong a memorandum stating that
his involvement as narrator of the drama continues until its director wraps it up one
week upon receipt of a separate memo.
Ymbong in contrast contended that after the expiration of his leave of absence, he
reported back to work as a regular talent and in fact continued to receive his salary. On
he received a memorandum stating that his services are being terminated immediately,
much to his surprise. Thus, he filed an illegal dismissal. He argued that the ground cited
by ABS-CBN for his dismissal was not among those enumerated in the Labor Code. And
even granting without admitting the existence of the company policy supposed to have
been violated, Ymbong averred that it was necessary that the company policy meet
certain requirements before willful disobedience of the policy may constitute a just
cause for termination.
Ymbong further argued that the company policy violates his constitutional right to
suffrage. Patalinghug likewise filed an illegal dismissal complaint against ABS-CBN. ABS-
CBN prayed for the dismissal of the complaints arguing that there is no employer-
employee relationship between the company and Ymbong and Patalinghug. The Labor
Arbiter found that there exists an employer-employee relationship between ABS-CBN
and Ymbong and Patalinghug considering the stipulations in their appointment
letters/talent contracts. In its memorandum of appeal before the National Labor
Relations Commission (NLRC), ABS-CBN contended that the Labor Arbiter has no
jurisdiction over the case because there is no employer-employee relationship between
the company and Ymbong and Patalinghug. In its Supplemental Appeal, ABS-CBN
insisted that Ymbong and Patalinghug were engaged as radio talents and their contract
is one between a selfemployed contractor and the hiring party which is a standard
practice in the broadcasting industry. The NLRC dismissed ABS-CBN’s Supplemental
Appeal for being filed out of time. As to the issue of whether they were illegally
dismissed, the NLRC treated their cases differently. In the case of Patalinghug, it found
that he voluntarily resigned from employment when he submitted his resignation letter.
As to Ymbong, however, the NLRC ruled otherwise. It ruled that the Memorandum
merely states that an employee who seeks any elected position in the government will
only merit the temporary suspension of his services. It held that under the principle of
social justice, the Memorandum shall prevail and ABS-CBN is estopped from enforcing
the other memorandum issued to Ymbong stating that his services had been
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automatically terminated when he ran for an elective position. ABS-CBN moved to
reconsider the NLRC decision, but the same was denied in a Resolution. ABS-CBN then
filed a petition for certiorari before the CA. CA rendered the assailed decision. The CA
declared Ymbong resigned from employment and not to have been illegally dismissed.
Issues: 1) Whether Ymbong, by seeking an elective post, is deemed to have resigned and
not dismissed by ABS-CBN. 2) Whether such policy is valid.
Held: We have consistently held that so long as a company’s management prerogatives
are exercised in good faith for the advancement of the employer’s interest and not for
the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements, this Court will uphold them. In the instant case, ABS-
CBN validly justified the implementation of the Policy. It is well within its rights to
ensure that it maintains its objectivity and credibility and freeing itself from any
appearance of impartiality. We find no merit in Ymbong’s argument that “[his]
automatic termination x x x was a blatant [disregard] of [his] right to due process” as he
was “never asked to explain why he did not tender his resignation before he ran for
public office as mandated by [the subject company policy].” Ymbong’s overt act of
running for councilor of is tantamount to resignation on his part. He was separated from
ABS-CBN not because he was dismissed but because he resigned. Since there was no
termination to speak of, the requirement of due process in dismissal cases cannot be
applied to Ymbong. Thus, ABS-CBN is not duty-bound to ask him to explain why he did
not tender his resignation before he ran for public office as mandated by the subject
company policy.
Professional Services v CA
Facts: Natividad Agana was admitted at the Medical City General Hospital (Medical City)
because of difficulty of bowel movement and bloody anal discharge. Dr. Ampil
diagnosed her to be suffering from "cancer of the sigmoid." Dr. Ampil,... assisted by the
medical staff[1] of Medical City, performed an anterior resection surgery upon her. He
found that the malignancy in her sigmoid area had spread to her left ovary,
necessitating the removal of certain portions of it. Obtained the consent of Atty. Enrique
Agana, Natividad's husband, to permit Dr. Juan Fuentes, respondent in G.R. No. 126467,
to perform hysterectomy upon Natividad. Dr. Fuentes performed and completed the
hysterectomy. Afterwards, Dr. Ampil took over, completed the operation and closed the
incision. However, the operation appeared to be flawed. sponge count lacking 2
After a couple of days, Natividad complained of excruciating pain in her anal region. She
consulted both Dr. Ampil and Dr. Fuentes about it. They told her that the pain was the
natural consequence of the surgical operation performed upon her. Dr. Ampil
recommended that Natividad... consult an oncologist. Natividad, accompanied by her
husband, went to the United States to seek further treatment.

After four (4) months of consultations and laboratory examinations, Natividad was told
that she was free of cancer. Natividad flew back to the Philippines, still suffering from
pains. Two (2) weeks thereafter, her daughter found a piece of gauze protruding from
her vagina. Dr. Ampil was immediately informed. He proceeded to Natividad's house
where he managed to extract by... hand a piece of gauze measuring 1.5 inches in width.
The pains intensified, prompting Natividad to seek treatment at the Polymedic General
Hospital. While confined thereat, Dr. Ramon Gutierrez detected the presence of a
foreign object in her vagina -- a foul-smelling gauze measuring 1.5 inches in... width. The
gauze had badly infected her vaginal vault... forced stool to excrete through the vagina.
Natividad underwent another... surgery. Natividad and her husband filed with the
Regional Trial Court, Branch 96, Quezon City a complaint for damages against PSI (owner
of Medical City), Dr. Ampil and Dr. Fuentes. On February 16, 1986, pending the outcome
of the above case, Natividad died. The trial court rendered judgment in favor of spouses
Agana... the Court of Appeals, in its Decision dated September 6, 1996, affirmed the
assailed judgment... the complaint against Dr. Fuentes was dismissed. Petitions for
review on certiorari. The Court, through its First Division, rendered a Decision holding
that PSI is jointly and severally liable with Dr. Ampil... employer-employee relationship
between Medical City and Dr. Ampil. PSI's act of publicly displaying in the lobby of the
Medical City the names and specializations of its accredited... physicians, including Dr.
Ampil, estopped it from denying the existence of an employer-employee relationship
between them under the doctrine of ostensible agency or agency by estoppel. PSI's
failure to supervise Dr. Ampil and its resident... physicians and nurses and to take an
active step in order to remedy their negligence rendered it directly liable under the
doctrine of corporate negligence. Motion for reconsideration, PSI contends that the
Court erred in finding it liable under Article 2180 of the Civil Code, there being no
employer-employee relationship
Issues: Is there an employer-employee relationship?
Ruling: Yes. "an employer-employee relationship in effect exists between hospitals and
their attending and visiting physicians for the purpose of apportioning responsibility"...
the doctrine of ostensible agency or agency by estoppel cannot apply because spouses
Agana failed to establish one requisite of the doctrine, i.e., that Natividad relied on the
representation of the hospital in engaging the services of Dr. Ampil.
that the doctrine of corporate negligence is misplaced because the proximate cause of
Natividad's injury was Dr. Ampil's negligence... whether or not respondent hospital is
solidarily liable with respondent doctors for petitioner's condition. an employer-
employee relationship "in effect" exists between the Medical City and Dr. Ampil.
Consequently, both are jointly and severally liable to the Aganas. The unique practice
(among private hospitals) of filling up specialist staff with attending and visiting
"consultants," who are allegedly not hospital employees, presents problems in...
apportioning responsibility for negligence in medical malpractice cases.
7
However, the difficulty is only more apparent than real. hospitals exercise significant
control in the hiring and firing of consultants and in the conduct of their work within the
hospital premises. Doctors who apply for "consultant" slots, visiting or attending, are
required to submit proof of... completion of residency, their educational qualifications
These requirements are carefully scrutinized by members of the hospital administration
or... by a review committee set up by the hospital who either accept or reject the
application. This is particularly true with respondent hospital. In other words, private
hospitals hire, fire and exercise real control over their attending and visiting
"consultant" staff. he is normally required to attend clinico-pathological conferences,
conduct bedside rounds for clerks, interns and residents, moderate grand rounds and
patient audits and perform other tasks and... responsibilities, for the privilege of being
able to maintain a clinic in the hospital, and/or for the privilege of admitting patients
into the hospital... the physician's performance as a specialist is generally evaluated by a
peer review... committee on the basis of mortality and morbidity statistics, and
feedback from patients, nurses, interns and residents... remiss in his duties, or a
consultant who regularly falls short of the minimum standards acceptable to the
hospital or its peer review committee,... is normally politely terminated.
The basis for holding an employer solidarily responsible for the negligence of its
employee is found in Article 2180 of the Civil Code which considers a person
accountable not only for his own acts but also for those of others based on the former's
responsibility under a... relationship of partia ptetas. "consultants" are not, technically
employees, a point which respondent hospital asserts in denying all responsibility for
the patient's... condition, the control exercised, the hiring, and the right to terminate
consultants all fulfill the important hallmarks of an employer-employee relationship,
with the exception of the payment of wages... the control test is... determining.
Accordingly, on the basis of the foregoing, we rule that for the purpose of allocating
responsibility in medical negligence cases, an employer-employee relationship in effect
exists between hospitals and their attending and visiting physicians.
the Court did not reverse its ruling in Ramos. What it clarified was that the De Los
Santos Medical Clinic did not exercise control over its consultant, hence, there is no
employer-employee relationship between them. the doctrine in Ramos stays, i.e., for
the purpose of allocating responsibility in medical negligence cases, an employer-
employee relationship exists between hospitals and their... consultants. Even assuming
that Dr. Ampil is not an employee of Medical City, but an... independent contractor, still
the said hospital is liable to the Aganas. Atty. Agana categorically testified that one of
the reasons why he chose Dr. Ampil was that he knew him to be a staff member of
Medical City, a prominent and known hospital. Clearly, PSI is estopped from passing the
blame solely to Dr. Ampil. Its act of displaying his name and those of the other
physicians in the public directory at the lobby of the hospital amounts to holding out to
the public that it offers quality medical service through the... listed physicians. This
justifies Atty. Agana's belief that Dr. Ampil was a member of the hospital's staff.

Unfortunately, PSI had been remiss in its duty. It did not conduct an immediate
investigation on the reported missing gauzes to the great prejudice and agony of its
patient. Dr. Jocson's lack of concern for the patients. Such conduct is reflective of the
hospital's manner of supervision. Not only did PSI breach its duty to oversee or
supervise all persons who practice medicine within its walls,... it also failed to take an
active step in fixing the negligence committed. There is merit in the trial court's finding
that the failure of PSI to conduct an investigation "established PSI's part in the dark
conspiracy of silence and concealment about the gauzes."
SOUTH EAST INTERNATIONAL RATTAN INC V. JESUS J. COMING (G.R. NO. 186621)
Facts: Petitioner South East International Rattan is a domestic corporation engaged in
the business of manufacturing and exporting furniture to various countries. Respondent
Coming was hired by petitioner as Sizing Machine Operator whose work is initially
compensated on ‘pakiao basis’ but sometime was fixed per day and a work schedule of
8:00am to 5:00pm. Without any apparent reason, his employment was interrupted as
he was told by petitioners to resume work in 2 months time but was never called back.
Respondent thus filed a complaint before the regional arbitration branch. The Labor
Arbiter ruled respondent as a regular employee of petitioner SEIRI but on appeal, was
reversed by the NLRC. CA then reversed the NLRC decision and ruled that there existed
an employer-employee relationship between petitioners and respondent.
Issue: Whether or not there is employer-employee relationship between petitioner and
respondent.
Ruling: YES. We affirm the CA. To ascertain the existence of 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.”
x xx As to the “control test”, the following facts indubitably reveal that respondents
wielded control over the work performance of petitioner, to wit: (1) they required him
to work within the company premises; (2) they obliged petitioner to report every day of
the week and tasked him to usually perform the same job; (3) they enforced the
observance of definite hours of work from 8 o’clock in the morning to 5 o’clock in the
afternoon; (4) the mode of payment of petitioner’s salary was under their discretion, at
first paying him on pakiao basis and thereafter, on daily basis; (5) they implemented
company rules and regulations; (6) [Estanislao] Agbay directly paid petitioner’s salaries
and controlled all aspects of his employment and (7) petitioner rendered work
necessary and desirable in the business of the respondent company.
8
BERNARD A. TENAZAS vs. R. VILLEGAS TAXI TRANSPORT
FACTS Bernard A. Tenazas (Tenazas), Jaime M. Francisco (Francisco), and Isidro G.
Endraca (Endraca) filed a complaint for illegal dismissal against R. Villegas Taxi Transport
and/or Romualdo Villegas (Romualdo) and Andy Villegas (Andy) (respondents).
Respondents admitted that Tenazas and Endraca were employees of the company, the
former being a regular driver and the latter a spare driver. Respondents claim that Isidro
Endraca was only an extra driver who stopped reporting to queue for available taxi units
which he could drive. Respondents offered Tenazas and Edraco reinstatement but both
refused. The respondents, however, denied that Francisco was an employee of the
company or that he was able to drive one of the company’s units at any point in time.
The Labor Arbiter held that there could be no illegal dismissal since there was no overt
act of dismissal committed by the respondents. There was no formal investigations, no
show cause memos, suspension memos or termination memos were never issued.
Otherwise stated, there is no proof of overt act of dismissal committed by herein
respondents.
On appeal, the NLRC reversed the ruling of the LA and ruled that the petitioners were all
employees of the company.
The Court of Appeals affirmed with modification the decision of the NLRC, holding that
there was indeed an illegal dismissal on the part of Tenazas and Endraca but not with
respect to Francisco who failed to present substantial evidence, proving that he was an
employee of the respondents. It also deleted the NLRC’s award of separation pay and
instead ordered that Tenazas and Endraca be reinstated.
ISSUES: WON Tenazaz and Edraca are entitled to separation pay. WON or not Francisco
is an employee of respondent.
RULING: No, they are not entitled to separation pay. An illegally dismissed employee is
entitled to two reliefs: back wages and reinstatement. In instances where reinstatement
is no longer feasible because of strained relations between the employee and the
employer, separation pay is granted. In effect, an illegally dismissed employee is entitled
to either reinstatement, if viable, or separation pay if reinstatement is no longer viable,
and back wages. Clearly, it is only when reinstatement is no longer feasible that the
payment of separation pay is ordered in lieu thereof. "It bears to stress that
reinstatement is the rule and, for the exception of strained relations to apply, it should
be proved that it is likely that if reinstated, an atmosphere of antipathy and antagonism
would be generated as to adversely affect the efficiency and productivity of the
employee concerned. Although litigation may also engender a certain degree of
hostility, the understandable strain in the parties’ relation would not necessarily rule out
reinstatement which would, otherwise, become the rule rather the exception in illegal
dismissal cases. Thus, it was a prudent call for the CA to delete the award of separation
pay and order for reinstatement instead

There was no employer-employee relationship. Francisco was claiming to be an
employee of the respondents, it is incumbent upon him to proffer evidence to prove the
existence of said relationship. Any competent and relevant evidence to prove the
relationship may be admitted. Identification cards, cash vouchers, social security
registration, appointment letters or employment contracts, payrolls, organization
charts, and personnel lists, serve as evidence of employee status.In this case, however,
Francisco failed to present any proof substantial enough to establish his relationship
with the respondents. Francisco simply relied on his allegation that he was an employee
of the company without any other evidence supporting his claim. Unfortunately for him,
a mere allegation in the position paper is not tantamount to evidence. Bereft of any
evidence, the CA correctly ruled that Francisco could not be considered an employee of
the respondents.
Tongko v Manulife
FACTS: This case involves respondent Manulife who is engaged in life insurance
business. Petitioner Gregorio V. Tongko started his professional relationship with
Manulife on July 1, 1977 by virtue of a Career Agent’s Agreement he executed with
Manlike. The agreement stated that Tongko is an Agent and an independent contractor
and nothing shall be construed as creating an employer-employee relationship between
the Company and the Agent. In 1983, Tongko was named as Unit Manager in Manulife’s
Sales Agency Organization and eventually he became a Branch Manager. A problem
started in 2001, when Manulife instituted manpower development programs in the
regional sales management level. De Dios, the President and CEO, addressed a letter to
Tongko regarding their Metro North Sales Managers Meeting. In their meeting they
stated the poor performance of Tongko’s Region in terms of recruiting and his ability to
lead the group. That the management was disappointed with Tongko and how he has
not been proactive all these years when it comes to agency growth. In order to address
such the company directed Tongko to: (1) to hire at his expense a competent assistant
who can unload him of the routine tasks which can be easily delegated (2) Effective
immediately, Kevin and the rest of the Agency Operation will deal with the North Star
Branch (NSB) in autonomous fashion. Subsequently De Dios wrote a termination letter
to Tongko on December 2001 due to the fact that he failed to help align his directions
with the Management’s desire for agency growth.
On account of such, the Management exercised its prerogative under Section 14 of the
Agents Contract to terminate the agent by giving him a written notice within 15 says
from the time of the discovery of the breach in the contract. Tongko filed a complaint
with the NLRC against Manulife for illegal dismissal which the Labor Arbiter dismissed
the complaint for lack of employer-employee relationship. Upon appeal, the NLRC found
that there was an existing employer-employee relationship between Manulife and
Tongko applying the 4-fold test and held Manulife liable for illegal dismissal. On an MR
to the CA, it found that there was no employer-employee relationship between the
parties and deemed that the NLRC has no jurisdiction over the case.
9
ISSUE: (1) Whether or not there is an employer-employee relationship between
Manulife and Tongko—YES, there is
(2) If yes, whether Manulife is guilty of illegal dismissal—YES
HELD:
(1) YES, the court applied the 4-fold test to determine the existence of the elements of
such relationship. In Pacific Consultants International v. Schonfeld, the court set out the
elements of an employer-employee relationship: (1) the selection and engagement of
the employee (2) the payment of wages; (c) the power of dismissal; and (d) the
employer’s power to control the employee’s conduct. The “control test” is that which
constitutes the most important index of the existence of the employer-employee
relationship—whether the employer controls or has reserved the right to control the
employee not only as to the result of the work to be sone but also as to the means and
methods by which the same is to be accomplished. In concluding differently, the CA and
NLRC reached an impasse on the sole issue of control over an employee’s conduct. It
bears clarifying that such control not only applies to the work or goal to be done but
also to the means and methods to accomplish it. Not every form of control affect an
employer-employee relationship. The line should be drawn between the rules that
merely serves as guidelines towards the achievement of the mutually desired result
without dictating the means or methods to be employed in attaining it—in this case no
employer-employee relationship is created—and the that control or fix the
methodology and bind or restrict the party hired to use such means which establishes
the employer-employee relationship. In this case, if the specific rules and regulations
that are enforced against insurance agents or managers are such that would directly
affect the means and methods by which such agents or managers would achieve the
objectives set by the insurance company, they are employees of the insurance company.
In this case, Manulife has the power of control over Tongko that would make him its
employee. The factors that contribute to this conclusion are:
(1) The agreement dated July 1, 1977 executed between Tongko and Manulife the
provisions of which state that an agent of Manlike must comply with 3 requirements (1)
compliance with the regulations and requirement of the company (2) maintenance of a
level of knowledge of the company products that is satisfactory to the company (3)
compliance with a quota of new businesses. Among the company regulations of Manlike
are codes 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. Thus, with the company regulations and
requirements alone, the fact that Tongko was an employee of Manulife may already be
established. These requirements controlled the means and methods by which Tongko
was to achieve the company’s goals. Manulife’s evidence established that Tongko was
tasked to perform administrative duties that establishes his employment with Manulife.

In examining the affidavits of the Regional Sales Manager and Branch Manager and Unit
Manager we can find that they exercise administrative duties similar to the case of
Great Pacific Life Assurance Corporation. Additionally it must be pointed out that
Tongko was tasked with recruiting a certain number of agents in addition to his other
administrative functions, that leads to no other conclusion that he was an employee of
Manulife. More importantly, it is Tongko’s alleged failure to follow this principle of
recruitment that led to the termination of his employment—that is the director of
Manulife of becoming a major agency-led distribution company whereby greater agency
recruitment is required of the managers including Tongko.
TAPE vs. Servana
FACTS: Servaña started out as a security for the Agro-Commercial Security Agency
(ACSA) since 1987. The agency had a contract with TV network RPN 9. On the other
hand, Television and Production Exponents, Inc (TAPE). is a company in charge of TV
programming and was handling shows like Eat Bulaga! Eat Bulaga! was then with RPN 9.
In 1995, RPN 9 severed its relations with ACSA. TAPE retained the services of Servaña as
a security guard and absorbed him. In 2000, TAPE contracted the services of Sun Shield
Security Agency. It then notified Servaña that he is being terminated because he is now
a redundant employee. Servaña then filed a case for illegal Dismissal. The Labor Arbiter
ruled that Servaña’s dismissal is valid on the ground of redundancy but though he was
not illegally dismissed he is still entitled to be paid a separation pay which is amounting
to one month pay for every year of service which totals to P78,000.00. TAPE appealed
and argued that Servaña is not entitled to receive separation pay for he is considered as
a talent and not as a regular employee; that as such, there is no employee-employer
relationship between TAPE and Servaña. The National Labor Relations Commission ruled
in favor of TAPE. It ruled that Servaña is a program employee. Servaña appealed before
the Court of Appeals. The Court of Appeals reversed the NLRC and affirmed the LA. The
CA further ruled that TAPE and its president Tuviera should pay for nominal damages
amounting to P10,000.00.
ISSUE: Whether or not there is an employee-employer relationship existing between
TAPE and Servaña.
HELD: Yes. Servaña is a regular employee.
In determining Servaña’s nature of employment, the Supreme Court employed the Four
Fold Test:
1. Whether or not employer conducted the selection and engagement of the
employee.
Servaña was selected and engaged by TAPE when he was absorbed as a “talent” in 1995.
He is not really a talent, as termed by TAPE, because he performs an activity which is
10
necessary and desirable to TAPE’s business and that is being a security guard. Further,
the primary evidence of him being engaged as an employee is his employee
identification card. An identification card is usually provided not just as a security
measure but to mainly identify the holder thereof as a bona fide employee of the firm
who issues it.
2. Whether or not there is payment of wages to the employee by the employer.
Servaña is definitely receiving a fixed amount as monthly compensation. He’s receiving
P6,000.00 a month.
3. Whether or not employer has the power to dismiss employee.
The Memorandum of Discontinuance issued to Servaña to notify him that he is a
redundant employee evidenced TAPE’s power to dismiss Servaña.
4. Whether or not the employer has the power of control over the employee.
The bundy cards which showed that Servaña was required to report to work at fixed
hours of the day manifested the fact that TAPE does have control over him. Otherwise,
Servaña could have reported at any time during the day as he may wish.
Therefore, Servaña is entitled to receive a separation pay.
On the other hand, the Supreme Court ruled that Tuviera, as president of TAPE, should
not be held liable for nominal damages as there was no showing he acted in bad faith in
terminating Servaña.
Regular Employee Defined:One having been engaged to perform an activity that is
necessary and desirable to a company’s business.
ENCYCLOPEDIA BRITANNICA (Philippines), INC. vs. NLRC
264 SCRA 4
Facts: Limjoco was a Sales Divison of Encyclopaedia Britannica and was in charge of
selling the products through some sales representatives. As compensation, he would
receive commissions from the products sold by his agents. He was also allowed to use
the petitioner’s name, goodwill and logo. It was agreed that office expenses would be
deducted from Limjoco’s commissions. In 1974, Limjoco resigned to pursue his private
business and filed a complaint against petitioner for alleged non-payment of separation
pay and other benefits and also illegal deduction from sales commissions. Petitioner
alleged that Limjoco was not an employee of the company but an independent dealer
authorized to promote and sell its products and in return, received commissions therein.
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 maintained otherwise. He 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 there was an employee-employer relationship between the
parties.
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 employee’s 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.
Atok Big-Wedge Company Inc vs Gison
Facts: Jesus P. Gison was engaged as part-time consultant on retainer basis by the
petitioner Atok. Petitioner did not require respondent to its office on a regular basis,
except when occasionally requested by the management to discuss matters needing his
expertise as a consultant. As payment for his services, respondent received a retainer
fee of P3,000.00 which was delivered to him at his residence or in a local restaurant. The
said arrangement continued for the next eleven years. Since the respondent was getting
old he requested that petitioner cause his registration with the SSS but petitioner did
not accede his request. Respondent filed a complaint with the SSS against petitioner for
the latter’s refusal to cause his registration with the SSS. On the same date the
petitioner issued a memo advising the termination of the respondent’s retainer
contract. Thus he filed for illegal dismissal.
11
Issue: Whether employer-employee relationship exists?
Held: No. 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
commonly 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 apparently
absent in the case at bar. Among other things, respondent was not required to report
everyday during regular office hours of petitioner. Respondent’s monthly retainer fees
were paid to him either at his residence or a local restaurant. More importantly,
petitioner did not prescribe the manner in which respondent would accomplish any of
the tasks in which his expertise as a liaison officer was needed; respondent was left
alone and given the freedom to accomplish the tasks using his own means and methods.
Respondent was assigned tasks to perform, but petitioner did not control the manner
and methods by which respondent performed these tasks. The absence of the element
of control on the part of the petitioner engenders a conclusion that he is not an
employee of the petitioner.
Dumpit Murillo vs. CA
FACTS: Thelma Dumpit-Murillo was hired by ABC as a newscaster in 1995. Her contract
with the TV station was repeatedly renewed until 1999. She then wrote Jose Javier (VP
for News and Public Affairs of ABC) advising him of her intention to renew the contract.
Javier did not respond. Dumpit then demanded reinstatement as well as her backwages,
service incentive leave pays and other monetary benefits. ABC said they could only pay
her backwages but her other claims had no basis as she was not entitled thereto
because she is considered as a talent and not a regular employee. Dumpit sued ABC. The
Labor Arbiter ruled against Dumpit. 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
 12

petitioner’s 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 Dumpit’s work in
ABC’s business.
Bernarte vs. PBA
FACTS: Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were
invited to join the PBA as referees. During the leadership of Commissioner Emilio
Bernardino, they were made to sign contracts on a year-to-year basis. During the term
of Commissioner Eala, however,changes were made on the terms of their
employment. Complainant Bernarte, for instance, was not made to sign a contract
during the first conference of the All-Filipino Cup which was from February 23,2003 to
June 2003. It was only during the second conference when he was made to sign a one
and a half month contract for the period July 1 toAugust 5, 2003. 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. BeginningFebruary 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, PBAdecided not to renew their
contracts.Complainants were not illegally dismissed because they were not employees
of the PBA. Their respective contracts of retainer were simply notrenewed. PBA had the
prerogative of whether or not to renew their contracts, which they knew were fixed.In
her 31 March 2005 Decision, the Labor Arbiter declared petitioner an employee whose
dismissal by respondents was illegal. Accordingly, theLabor Arbiter ordered the
reinstatement of petitioner and the payment of backwages, moral and exemplary
damages and attorney’s fees. The NLRCaffirmed 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.
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 employer’s 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 an
employer-employee relationship.19 In this case, PBA admits repeatedly engaging
petitioner’s 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 petitioner’s violation of its terms
andconditions.However, respondents argue that the all-important element of control is
lacking in this case, making petitioner an independent contractor and not anemployee
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. 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 fact that petitioner is an independent
contractor, and not an employee of respondent.

ISSUE: Whether petitioner is an employee of respondents, which in turn determines

whether petitioner was illegally dismissed
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