G.R. No. 195190 July 28, 2014
Facts: Royale Homes, a corporation engaged in marketing real estates, appointed Alcantara as its Marketing Director for a fixed period of one year. His work consisted mainly of marketing Royale Homes' real estate inventories on an exclusive basis. Royale Homes reappointed him for several consecutive years.
On
December 17, 2003, Alcantara filed a Complaint for Illegal Dismissal against
Royale Homes alleging that he was dismissed from work without any valid or just
cause and in gross disregard of the proper procedure for dismissing employees.
He prayed to be reinstated to his former position without loss of seniority
rights and other privileges, as well as to be paid backwages, moral and
exemplary damages, and attorney's fees.
Royale Homes denied that Alcantara is its employee because:
(1)
it engaged his services as an independent sales contract for one year only;
(2)
he never received any salary, 13th month pay, overtime pay or holiday pay;
(3) he was paid on commission basis;
(4) it had no control on how Alcantara
would accomplish his tasks
Labor Arbiter rendered a Decision holding that Alcantara is an employee of Royale Homes. NLRC rendered its Decision ruling that Alcantara is not an employee but a mere independent contractor of Royale Homes. It based its ruling mainly on the contract. CA promulgated its Decision reversing the NLRC's Decision pointing out that Royale Homes exercised some degree of control over Alcantara since his jobis subject to company rules, regulations, and periodic evaluations.
Issue: Whether or not Alcantara was an independent contractor or an employee of Royale Homes
Ruling: Alcantara is not an employee of Royal Home but a mere independent contractor.
The juridical relationship of the parties based on their written contract:
The
primary evidence of the nature of the parties' relationship in this case is the
written contract that they signed. While the existence of employer-employee
relationship is a matter of law, the characterization made by the parties in
their contract as to the nature of their juridical relationship cannot be
simply ignored, particularly in this case where the parties' written contract
unequivocally states their intention at the time they entered into it. In this
case, the contract duly signed and not disputed by the parties, conspicuously
provides that "no employer-employee relationship exists between"
Royale Homes and Alcantara, as well as his sales agents. It is clear that they
did not want to be bound by employer-employee relationship at the time of the
signing of the contract. The stipulation of the contract is clear and no
construction is needed, as per SC.
The juridical relationship of the parties based on Control Test:
The
Supreme Court noted that the four-fold test is wanting in this case.
The CA ratiocinated that since the performance of his tasks is subject to company rules, regulations, code of ethics, and periodic evaluation, the element of control is present. The court disagrees. Not every form of control is indicative of employer-employee relationship. A person who performs work for another and is subjected to its rules, regulations, and code of ethics does not necessarily become an employee. As long as the level of control does not interfere with the means and methods of accomplishing the assigned tasks, the rules imposed by the hiring party on the hired party do not amount to the labor law concept of control that is indicative of employer-employee relationship.
Payment of Wages:
The
element of payment of wages is also absent in this case. Alcantara's
remunerations consist only of commission override of 0.5%, budget allocation,
sales incentive and other forms of company support. There is no proof that he
received fixed monthly salary. No payslip or payroll was ever presented and
there is no proof that Royale Homes deducted from his supposed salary
withholding tax or that it registered him with the Social Security System,
Philippine Health Insurance Corporation, or Pag-Ibig Fund.