Valeroso vs. Skycable Corporation

G.R. No. 202015. July 13, 2016.

FACTS:

Valeroso and Legatona, from being direct hires of Skycable were transferred to Skill Plus Manpower Services. They were also informed that their commissions would be reduced due to the introduction of prepaid cards sold to cable subscribers resulting in lower monthly cable subscriptions. Dismayed,  the petitioners informed Pasta, manager, of their intention to file a labor case with the NLRC. Pasta then informed them that they will be dropped from the roster of its account executives, which act, petitioners claimed, constitutes unfair labor practice.

Petitioners filed a complaint for illegal dismissal, nonpayment of 13th month pay, separation pay and illegal deduction against Skycable before Labor Arbiter.

Respondent claimed that it did not terminate the services of petitioners for there was never an employer-employee relationship to begin with. It averred that in 1998, it engaged petitioners as independent contractors under a Sales Agency Agreement. In 2007, it decided to streamline its operations, as a result petitioners’ contracts were terminated but they were employed by Armada Agency, an independent contractor.

The Labor Arbiter dismissed the Complaint since petitioners failed to establish by substantial evidence that respondent was their employer.

The NLRC reversed the Labor Arbiter’s ruling. It found that petitioners are regular employees of respondent having performed their job as account executives for more than one year, even if not continuous and merely intermittent, and considering the indispensability and continuing need of petitioners’ tasks to the business.

The CA reversed the NLRC Decision and sustained the LA finding.

ISSUE:

WON the petitioners were employees of Skycable.

HELD:

NO, employer-employee relationship is absent in this case. To prove the claim of an employer-employee relationship, the following should be established by competent evidence: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished. Among the four, the most determinative factor in ascertaining the existence of employer-employee relationship is the “right of control test.” Under this control test, the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the means by which such end is reached

The Sales Agency Agreement, which served as the primary evidence of the nature of the parties’ relationship provided that petitioners’ services were to be engaged on an agency basis as sales account executives and that no employer-employee relationship is created but an independent contractorship. It is therefore clear that the intention at the time of the signing of the agreement is not to be bound by an employer-employee relationship.

“The presence of [the] power of control is indicative of an employment relationship while the absence thereof is indicative of independent contractorship.”

Petitioners’ contention that they are considered regular employees of respondent for they perform functions necessary and desirable to the business operation of respondent in consonance with Article 280 of the Labor Code. We have held that “Article 280 is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees, i.e., regular employees and casual employees, for purposes of determining [their rights] to certain benefits, [such as] to join or form a union, or to security of tenure. Article 280 does not apply where the existence of an employment relationship is in dispute,” as in this case.

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