ANGELITO L. LAZARO, Proprietor of Royal Star Marketing, petitioner, vs. SOCIAL SECURITY COMMISSION, ROSALINA LAUDATO, SOCIAL SECURITY SYSTEM and THE HONORABLE COURT OF APPEALS, respondents.
G.R. No. 138254 July 30, 2004
Facts:
Rosalina M. Laudato (respondent) filed a petition before the SSC for social security coverage and remittance of unpaid monthly social security contributions against Angelito L. Lazaro (petitioner), proprietor of Royal Star Marketing, which is engaged in the business of selling home appliances. Laudato alleged that despite her employment as sales supervisor of the sales agents for Royal Star from April of 1979 to March of 1986, Lazaro failed to report her to the SSC for compulsory coverage or remit her social security contributions.
Lazaro denied that Laudato was a sales supervisor of Royal Star, averring instead that she was a mere sales agent whom he paid purely on commission basis. Lazaro also maintained that Laudato was not subjected to definite hours and conditions of work. As such, Laudato could not be deemed an employee of Royal Star.
The SSC ruled in favor of Laudato. Applying the control test, it held that Laudato was an employee of Royal Star and ordered petitioner to pay the unremitted social security contributions of Laudato plus damages. The CA affirmed SSC’s ruling.
Issue:
Whether or not respondent is an employee, which entitles her to be under the coverage of the Social Security Act.
Ruling:
The Supreme Court held that Laudato is an employee of Royal Star Marketing. The fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee relationship. Neither does it follow that a person who does not observe normal hours of work cannot be deemed an employee.
The relevant factor remains whether the "employer" controls or has reserved the right to control the "employee" not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. As emphasized by SSC, Laudato was a sales supervisor and not a mere agent. As such, Laudato oversaw and supervised the sales agents of the company, and thus was subject to the control of management as to how she implements its policies and its end results.
The finding of the SSC that Laudato was an employee of Royal Star is supported by substantial evidence such as the cash vouchers issued by Royal Star to Laudato, calling cards of Royal Star denominating Laudato as a "Sales Supervisor" of the company, and Certificates of Appreciation issued by Royal Star to Laudato in recognition of her unselfish and loyal efforts in promoting the company. On the other hand, Lazaro has failed to present any convincing contrary evidence, relying instead on his bare assertions. Hence, the Supreme Court denied the petition and affirmed the decision of CA.