AFP MUTUAL BENEFIT ASSOCIATION, INC. VS, NLRCGR NO. 102199, JANUARY 28, 1997 FACTS1.

Eutiquio Bustam ante had b een a n insurance underwriter of AFP Mutual Benefit Association, Inc.. The Sales Agent's Agreement between them includes:a.Bustam ante shall solicit exclusivel y for A FPMBAI and shall be boun d bypolicies, memo circulars, rules and regulations which it may revise, modify orcancel to serve interests and assign him on other areas on a case to casebasis.b.There shall be no em ployer -em ployee relationshi p be t ween the parties, theSALES AGENT being hereby deemed an independent contractor."2.AFPMBAI dism issed Bustam ante for m isreprese ntation a nd for si m ultaneously selling insurance for another life insurance company in violation of said agreement.3.At the tim e of dism issal, Bustam ante was enti tled to accrued comm issions equivalent to P438,835. AFPMBAI Manager said he is only entitled to P75,000. Relying on thecomputation he signed a quitclaim in favor of Petioner. Upon release of the check,Bustamante noticed he is legally entitled to P354,769 of commissions. He filed forthe recovery of the correct amount in the Office of the Insurance Commissioner butwas advised that the DOLE has jurisdiction over his case. Bustamante filed underthe DOLE.4.In decision of the case, B ustam antes dism issal was considered vali d thus noseparation pay to be awarded. However, it granted the recovery of his unpaidcommissions.5.The Labor arbiter relied on the pro vision that AFPMBAI m ay assign Bustam ante in other areas and impose quotas which is an existence of employeremployeerelationship. The decision was affirmed on appeal. Hence the present petition.ISSUE Whether or not there exist an employer-employee relationship thus vesting jurisdiction over the case to DOLE. HELDThe existence of an employer-employee relationship is ultimately a question of fact and thatthe findings thereon by the labor arbiter and the National Labor Relations Commissionsshall be accorded not only repect but even finality when supported by substantial evidence.The Court has applied the "four-fold" test in determining the existence of employer-employee relationship. This tst considers the following elements: (1) the power to dismiss;and (4) the power to control, the last being the most important element.The fact that private respondent was required to solicit business exclusively for petitionercould hardly be considered as control in labor jurisprudence. Thus, the exclusivity restrictionclearly springs from a regulation issued by the Insurance Commission, and not from anintention by petitioner to establish control over the method and manner by which privaterespondent shall accomplish his work. This feature is not meant to change the nature of therelationship between the parties, nor does it necessarily imbue such relationship with thequality of control envisioned by the law. NORTH DAVAO MINING CORPORATION V. NLRC254 SCRA 721J. PANGANIBAN FACTS1.Petitioner was incorporat ed in 19 74 as a 100% privat ely owned com pany, but was co-owned by PNB later as a result of a conversion into equity of a portion of loansobtained by petitioner from said bank. PNB later transferred all its loans to and equityin North Davao in favor of the national government.2.Respondent W ilfredo Guillem a is one am ong several em ployees of petition er who were separated by reason of the companys closure, and who were thecomplainants.3.On May 31, 199 2, petitione r com pletely ceased o perations due to serious business reverses. From 1988 until its closure in 1992, North Davao suffered net lossesaveraging P 3 billion per year each of the five years prior to its closure.4.W hen it ceased operations, its rem aining em ployees we re separated and given the equivalent of 12.5 days pay for every year of service, computed on their basicmonthly pay, in addition to the commutation to cash of their unused vacation and sickleaves.5.However, it appe ars that, durin g the life of the petitioner corporati on, from the beginning of operations in 1981 until its closure in 1992, it had been payingseparation pay equivalent to 30 days pay for every year of service.6.The NLRC rule d affirm ing the La bor Arbit ers decision that the separati on pay equivalent to 30 days pay for every year of service has ripened into an obligation anddepriving respondents would be discriminatory.ISSUE Whether or not an employer whose business operations ceased due to serious business losses or financial reverses is obliged to pay separation pay to its employees separated by reason of such closure. HELDNO. the companys practice of giving one moths pay for every year of service could nolonger be continued precisely because the company could not afford it anymore. It wasforced to close down on account of accumulated losses of over P20 billion. The fact thatless separation benefits were granted when the company finally met its business deathcannot be characterized as discrimination. Such action was dictated not by a discriminatorymanagement option but by its complete inability to continue its business life due toaccumulated losses. Indeed, one cannot squeeze blood out of a dry stone. To require it tocontinue being generous when it is no longer in a position to do so would certainly be undulyoppressive, unfair and most revolting to the conscience.

Tabas et al VS. California Manufacturing Company G.R. No. L-80680 January 26, 1989

Facts:

Petitioners filed a petition in the NLRC for reinstatement and payment of various benefits against California Manufacturing Company. The respondent company then denied the existence of an employer-employee relationship between the company and the petitioners.

Pursuant to a manpower supply agreement, it appears that the petitioners prior their involvement with California Manufacturing Company were employees of Livi Manpower service, an independent contractor, which assigned them to work as "promotional merchandisers." The agreement provides that:

California "has no control or supervisions whatsoever over [Livi's] workers with respect to how they accomplish their work or perform [Californias] obligation" It was further expressly stipulated that the assignment of workers to California shall be on a "seasonal and contractual basis"; that "[c]ost of living allowance and the 10 legal holidays will be charged directly to [California] at cost "; and that "[p]ayroll for the preceeding [sic] week [shall] be delivered by [Livi] at [California's] premises."

Issue: Whether the petitioners are California's or Livi's employees?

Held:

There is no doubt that in the case at bar, Livi performs "manpower services", meaning to say, it contracts out labor in favor of clients. We hold that it is one notwithstanding its vehement claims to the contrary, and notwithstanding the provision of the contract that it is "an independent contractor." The nature of one's business is not determined by self-serving appellations one attaches thereto but by the tests provided by statute and prevailing case law. The bare fact that Livi maintains a separate line of business does not extinguish the equal fact that it has provided California with workers to pursue the latter's own business. In this connection, we do not agree that the petitioners had been made to perform activities 'which are not directly related to the general business of manufacturing," California's purported "principal operation activity. " The petitioner's had been charged with "merchandizing [sic] promotion or sale of the products of [California] in the different sales outlets in Metro Manila including task and occational [sic] price tagging," an activity that is doubtless, an integral part of the manufacturing business. It is not, then, as if Livi had served as its (California's) promotions or sales arm or agent, or otherwise, rendered a piece of work it (California) could not have itself done; Livi, as a placement agency, had simply supplied it with the manpower necessary to carry out its (California's) merchandising activities, using its (California's) premises and equipment.

Neither Livi nor California can therefore escape liability, that is, assuming one exists.

Insular Life v. NLRC (Nov. 15, 1989)FA CTS: Insular Life (com pan y) a nd Basiao entered into a cont ract by which Basiao was authorized to solicit forinsurance in accord ance wit h the rul es of the com pany. He would also receive com pensation, in the form of commissions. The contract also contained the relations of the parties, duties of the agent and the acts prohibited tohim including the modes of termination.After 4 years, the parties entered into another contract an Agency Managers Contact and to implementhis end of it, Basiao organized an agency while concurrently fulfilling his commitment under the first contract. The company terminated the Agency Managers Contract. Basiao sued the company in a civil action. Thus,the company terminated Basiaos engagement under the first contract and stopped payment of his commissions.

ISSUE: W/N Basiao had become the companys employee by virtue of the contract, thereby placing his claim forunpaid commissions HELD: No.Rules and regulations governing the conduct of the business are provided for in the Insurance Code. Theserules m erely serve as gui deli nes to wa rds the achievem ent of the m utually desi red result without dictating the m e a n s o r methods to be employed in attaining it. Its aim is only to promote the result, thereby creating n o employer-employee relationship. It is usual and expected for an insurance company to promulgate a set of rules toguide its commission agents in selling its policies which prescribe the qualifications of persons who may be insured.None of these reall y inva des the ag ents contractual pre ro gative to adopt his own selling m ethods or to sellinsurance at his own time and convenience, hence cannot justifiable be said to establish an employer-employeerelationship between Basiao and the company. The respondents limit themselves to pointing out that Basiaos contract with the company bound him too b s e r v e a n d c o n f o r m t o s u c h r u l e s . N o s h o w i n g t h a t s u c h r u l e s w e r e i n f a c t p r o m u l g a t e d w h i c h e f f e c t i v e l y controlled or restricted his choice of methods of selling insurance. Therefore, Basiao was not an employee of the petitioner, but a commission agent, an independent contractwhose claim for unpaid commissions should have been litigated in an ordinary civil action.Wherefore, the complain of Basiao is dismissed Makati Haberdashery vs NLRC, 179 SCRA 449 (89) Penned by Justice FernanNature:Petition for certiorari to review the decision of the NLRC whichaffirmed the decision of the Labor Arbiter who jointly heard anddecided t wo cases filed by the Uni on in behalf of the private respondentsFacts: P r i v a t e c o m p l a i n a n t s a r e w o r k i n g f o r M a k a t i Haberdashery Inc as tailors, seamst r e s s , s e w e r s , basters, and plantsadoras and are paid on a piecerateb a s i s ( e x c e p t t w o p e t i t i o n e r s w h o a r e p a i d o n a monthly basis) and in addition, they are given a dailyallowance of P 3.00 provided they report before 9:30a.m. Work sked: 9:30-6 or 7 p.m., Mondays to Saturdays andeven on Sundays and holidays during peak periods. Unions first case was on: underpayment of basic wage living allowance non-payment of holiday pay service incentive pay 13 th month pay benefits provided for under Wage Orders 1-5 While the first case was pending decision, Pelobello leftan open package containing a jusi barong tagalong withsalesman Rivera. He was caught and confronted aboutthis and he explained that this was ordered by Zapata,also a worke r, for his (pe rsonal ) custom er. Zapataall egedly adm itted that he copied the design of thecompany but later denied ownership of the same. They were m ade to e xplai n why n o action shoul d be taken against them for accepting a job order which isprejudicial and in direct competition with the business.However they did not submit and went on AWOL untilthe period given for them to explain expired hence thedismissal. Illegal dism issal com plaint on the second case filedbefore the LA Diosana. LA declared petitioners guilty of illegal dismissal andordered to reinstate Pelobell o and Zapata and foundpetitioners violating decrees of COLA, service incentiveand 13 th month pay. Commission analyst was directedto com pute the m onetary awards which retroac ts tothree years prior to filing of case. NLRC affirmed but limited backwages to one year.Issue: WON employees paid on piece-rate basis are entitled toservice incentive pay (relevant to title)Held: NO, fall und er e xc e ptions set forth in the im plem enting rulesRatio: As to the service incentive l eave pa y: as piece-ratework ers being paid at a fi xed am ount for perform ing work irrespective of time consumed in the performancethereof, they fall under the excepti ons sta ted in Sec 1(d), Rule V, IRR, Book III, Labor Code.Service Incentive LeaveS E C T I O N 1 . C o v e r a g e . T h i s r u l e s h a l l a p p l y t o a l l employees

except:( d ) F i e l d p e r s o n n e l a n d o t h e r e m p l o y e e s w h o s e perform ance is unsupervised b y t he em ploye r includi ngthose who a re en gag ed on task or contract basis, purelycom m ission basis, or t h o s e w h o a r e p a i d a f i x e d amount for performing work irrespective of the timeconsumed in the performance thereof Investment Planning v. SSSFA S: CT Petitioner is a dom estic corporatio n eng aged in business m anagem ent and sale of securities. It has 2 classes of agents selling investment plans: 1) salaried employees who have fixed hours of work under the control of the company; 2) registered representatives are on commission basis.Petitioner applied to SSS for exemption of coverage of these registered representatives. However, it wasdenied on the ground that these registered employees are employees of the petitioner. ISSUE: W/N petitioners registered representatives are employees HELD: No. These re presentatives are in reality com m ission agents. They are not required to report for workanytime. They shoulder their own selling expenses as well as transportation and they are paid with commissionbased on a certain percentage of their sales.Where there is no element of control and where a person who works for another is not subject to definitehours of work and in turn compensated according to the result of his efforts and not the amount thereof, there is noemployeremployee relationship

MAM Realty Devt Corporation v. NLRCFA CTS: Balbastro filed a complaint against petitioners, MAM realty and its Vice Pres Centeno, for wage differentials,overtime pay and others. Balbastro alleged that he was employed by MAM as a pump operator and performed suchwork at its Rancho Estate. He earned a monthly salary who worked seven days a week.Petitioner alleged that Balbastro had previously been employed by Francisco Cancho Inc., the developer of Rancho Estates. His services were contracted by petitioner for the operation of the Rancho Estates water pump.Under the agreement, Balbastro was made to open and close daily the water supply system. He worked foronl y a m axim um of 3 hours a da y a nd used his free tim es by offering plum bing services to the residents of thesubdivision. ISSUE: W/N there exists an ER-EE relationship between petitioner and Balbastro HELD: Ys epeatedly, the issue of the existence of ER-EE relationship is determined by the following factors:1.selection and engagem ent of the e . R em ployees 2 . p a y m e n t o f w a g e s 3 . p o w e r o f d i s m i s s a l 4.em ployers power to control the em ployee with respect to the result to be done and to the m eans and methods by which the work is to be accomplished. The power of control refers merely to the existence of the power and not to the actual exercise thereof. It isnot essential for the employer to actually supervise the performance of duties of the employee; it is enough thatthe former has a right to wield the power.With regards to the liability of Centeno, Vice Pres of MAM, he is not jointly and severally liable with MAM. Acorporation, being a juridical entity, may act only through its directors, officers, employees. Obligations incurred bythem, are not theirs but the direct accountabilities of the corporation they represent. Solidary liability may at timesbe incurred but only when exceptional circumstances warrant, such as:1.W hen directors and trustees or the officers of a corporation:a. vote for or assent to patently unla wf ul acts of the corporat ionb.act in bad faith or with gross negli gencec . g u i l t y o f c o n f l i c t o f i n t e r e s t 2.When a director or officer has consented to the issuance of watered stocks or who, having knowledgethereof, did not file his written objection thereto3.When a director, trustee or officer has agreed to hold himself personally and solidarily liable withcorporation4.When a director, trustee or officer is made personally liable for his corporate action.In the case at bench, there is nothing substantial that can justify Centenos solidary liability withcorporation That in all things, God may be glorified. D I G S L A B S T A N R D S L W 9 4. Continental Marble v. NLRC CONTINENTAL MARBLE V. NLRC161 SCRA 151PADILLA, J. FACTS1.Rodito Nasaya o claim ed that som etim e in May 1974, he was appoi nted pl ant manager of Continental Marble with an alleged compensation of P3,000.00 a monthor 25% of the monthly net income of the company, whichever is greater.2.W hen the com pany failed to pa y his salary for the m onths of May, June and July 1974, Nasayao filed a complaint with NLRC.3.Contine ntal Ma rbl e deni ed that Rodi to Nasayao was its em ployee. They claim edthat the undertaking agreed by the parties was a joint venture, a sort of partnership,wherein Nasayao was to keep the machinery in good working condition and in return,he would get the contracts from end-users for the installation of marble products, inwhich the company would not interfere.4.In additio n, Nasayao was to receive an am ount equivalent to 25% of the net profits that the petitioner corporation would realize, should there be any. Since there hadbeen no profits during said period, private respondent was not entitled to anyamount.ISSUE Whether or not the private respondent Nasayao was employed as plant manager of petitioner Continental Marble Corporation. HELDNO. There was nothing in the record which would support the claim of Rodito Nasayao thathe was an employee of the petitioner corporation. He was not included in the companypayroll nor in the list of company employees furnished by the Social Security System.Most of all the element of control is lacking.It appears that the petitioner had no control over the conduct of Rodito Nasayao in theperformance of his work. He decided for himself on what was to be done and worked at hisown pleasure. He was not subject to indefinite hours or conditions of work and in turn wascompensated according to the results of his on effort. He has a free C E O D S S R A A B T

hand in running thecompany and its business, so much so, that the petitioner did not know until very later thatNasayao collected old accounts receivables, not covered by their agreement, which heconverted to his personal use