CAONG JR. BEGUALOSG.R. No. 179428, January 26, 2011

FACTS:

Caong was hired by respondent in September 1998 and became a permanent driver sometime in 2000. In July 2001, he was assigned a brand-new jeepney for a boundary fee of P550.00 per day. He was suspended on October 9-15, 2001 for failure to remit the full amount of the boundary. Consequently, he filed a complaint for illegal suspension. Upon expiration of the suspension period, he was readmitted by respondent, but he was reassigned to an older jeepney for a boundary fee of P500.00 per day. He claimed that, on November 9, 2001, due to the scarcity of passengers, he was only able to remit P400.00 to respondent. On November 11, 2001, he returned to work after his rest day, but respondent barred him from driving because of the deficiency in the boundary payment. He pleaded with respondent but to no avail.

Tresquio was employed by respondent as driver in August 1996. He became a permanent driver in 1997. In 1998, he was assigned to drive a new jeepney for a boundary fee of P500.00 per day. On November 6, 2001, due to the scarcity of passengers, he was only able to remit P450.00. When he returned to work on November 8, 2001 after his rest day, he was barred by respondent because of the deficiency of P50.00. He pleaded with respondent but the latter was adamant.

On the other hand, Daluyon started working for respondent in March 1998. He became a permanent driver in July 1998. He was assigned to a relatively new jeepney for a boundary fee of P500.00 per day. On November 7, 2001, due to the scarcity of passengers, he was only able to pay P470.00 to respondent. The following day, respondent barred him from driving his jeepney. He pleaded but to no avail.

Petitioners averred that they were illegally dismissed by respondent without just cause. They maintained that respondent did not comply with due process requirements before terminating their employment, as they were not furnished notice apprising them of their infractions and another informing them of their dismissal. Petitioners claimed that respondent's offer during the mandatory conference to reinstate them was an insincere afterthought as shown by the warning given by respondent that, if they fail to remit the full amount of the boundary yet again, they will be barred from driving the jeepneys.

Petitioners questioned respondent's policy of automatically dismissing the drivers who fail to remit the full amount of the boundary as it allegedly (a) violates their right to due process; (b) does not constitute a just cause for

dismissal; (c) disregards the reality that there are days when they could not raise the full amount of the boundary because of the scarcity of passengers.

In his Position Paper, respondent alleged that petitioners were lessees of his vehicles and not his employees; hence, the Labor Arbiter had no jurisdiction. He claimed that he noticed that some of his lessees, including petitioners, were not fully paying the daily rental of his jeepneys. In a list which he attached to the Position Paper, it was shown that petitioners had actually incurred arrears since they started working. Respondent stressed that, during the mandatory conference, he manifested that he would renew his lease with petitioners if they would pay the arrears they incurred during the said dates.

According to the Labor Arbiter, an employer-employee relationship existed between respondent and petitioners. The latter were not dismissed considering that they could go back to work once they have paid their arrears. The Labor Arbiter opined that, as a disciplinary measure, it is proper to impose a reasonable sanction on drivers who cannot pay their boundary payments. He emphasized that respondent acquired the jeepneys on loan or installment basis and relied on the boundary payments to comply with his monthly amortizations.

Petitioners appealed the decision to the National Labor Relations Commission (NLRC). In its resolution dated March 31, 2004, the NLRC agreed with the Labor Arbiter and dismissed the appeal. It also denied petitioners' motion for reconsideration.

ISSUE:

Whether or not there was an existing employer-employee relationship and whether the petitioners were illegally dismissed.

HELD:

The petition is without merit.

It is already settled that the relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of employer-employee and not of lessor-lessee. The fact that the drivers do not receive fixed wages but only get the amount in excess of the so-called "boundary" that they pay to the owner/operator is not sufficient to negate the relationship between them as employer and employee.

We have no reason to deviate from such findings. Indeed, petitioners' suspension cannot be categorized as dismissal, considering that there was no intent on the part of respondent to sever the employer-employee relationship

between him and petitioners. In fact, it was made clear that petitioners could put an end to the suspension if they only pay their recent arrears. As it was, the suspension dragged on for years because of petitioners' stubborn refusal to pay. It would have been different if petitioners complied with the condition and respondent still refused to readmit them to work. Then there would have been a clear act of dismissal. But such was not the case. Instead of paying, petitioners even filed a complaint for illegal dismissal against respondent.

It is acknowledged that an employer has free rein and enjoys wide latitude of discretion to regulate all aspects of employment, including the prerogative to instill discipline on his employees and to impose penalties, including dismissal, if warranted, upon erring employees. This is a management prerogative. Indeed, the manner in which management conducts its own affairs to achieve its purpose is within the management's discretion. The only limitation on the exercise of management prerogative is that the policies, rules, and regulations on work-related activities of the employees must always be fair and reasonable, and the corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of the infraction.

Under a boundary scheme, the driver remits the "boundary," which is a fixed amount, to the owner/operator and gets to earn the amount in excess thereof. Thus, on a day when there are many passengers along the route, it is the driver who actually benefits from it. It would be unfair then if, during the times when passengers are scarce, the owner/operator will be made to suffer by not getting the full amount of the boundary. Unless clearly shown or explained by an event that irregularly and negatively affected the usual number of passengers within the route, the scarcity of passengers should not excuse the driver from paying the full amount of the boundary.

ATOK BIG WEDGE COMPANY VS. GISONG.R. No. 169510, August 8, 2011

FACTS:

Sometime in February 1992, respondent Jesus P. Gison was engaged as part-time consultant on retainer basis by petitioner Atok Big Wedge Company, Inc. through its then Asst. Vice-President and Acting Resident Manager, Rutillo A. Torres. As a consultant on retainer basis, respondent assisted petitioner's retained legal counsel with matters pertaining to the prosecution of cases against illegal surface occupants within the area covered by the company's mineral claims. Respondent was likewise tasked to perform liaison work with several government agencies, which he said was his expertise.

Sometime thereafter, since respondent was getting old, he requested that petitioner cause his registration with the Social Security System (SSS),

but petitioner did not accede to his request. He later reiterated his request but it was ignored by respondent considering that he was only a retainer/consultant. On February 4, 2003, 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, Mario D. Cera, in his capacity as resident manager of petitioner, issued a Memorandum advising respondent that within 30 days from receipt thereof, petitioner is terminating his retainer contract with the company since his services are no longer necessary.

On September 26, 2003, after the parties have submitted their respective pleadings, Labor Arbiter Rolando D. Gambito rendered a decision ruling in favor of the petitioner. Finding no employer-employee relationship between petitioner and respondent, the Labor Arbiter dismissed the complaint for lack of merit.

On July 30, 2004, the NLRC, Second Division, issued a Resolution affirming the decision of the Labor Arbiter. Respondent filed a Motion for Reconsideration, but it was denied in the Resolution dated September 30, 2004.

ISSUE:

Whether or not there was an employer-employee relationship.

HELD:

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." Of these four, the last one is the most important. The 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 method. Respondent was assigned tasks to perform, but petitioner did not control the manner and methods by which respondent performed these tasks. Verily, 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.

Contrary to the conclusion of the CA, respondent is not an employee, much more a regular employee of petitioner. The appellate court's premise that regular employees are those who perform activities which are desirable and necessary for the business of the employer is not determinative in this case. In fact, any agreement may provide that one party shall render services for and in behalf of another, no matter how necessary for the latter's business, even without being hired as an employee. Hence, respondent's length of service and petitioner's repeated act of assigning respondent some tasks to be performed did not result to respondent's entitlement to the rights and privileges of a regular employee.

Furthermore, despite the fact that petitioner made use of the services of respondent for eleven years, he still cannot be considered as a regular employee of petitioner. Article 280 of the Labor Code, in which the lower court used to buttress its findings that respondent became a regular employee of the petitioner, is not applicable in the case at bar. Indeed, the Court has ruled that said provision 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 the right of an employee to certain benefits, to join or form a union, or to security of tenure; it does not apply where the existence of an employment relationship is in dispute. It is, therefore, erroneous on the part of the Court of Appeals to rely on Article 280 in determining whether an employer-employee relationship exists between respondent and the petitioner.

Considering that there is no employer-employee relationship between the parties, the termination of respondent's services by the petitioner after due notice did not constitute illegal dismissal warranting his reinstatement and the payment of full backwages, allowances and other benefits.

SEMBLANTE ET AL., VS COURT OF APPEALS, ET AL.G.R. No. 196426, August 15, 2011

FACTS:

Petitioners Marticio Semblante (Semblante) and Dubrick Pilar (Pilar) assert that they were hired by respondents-spouses Vicente and Maria Luisa

Loot, the owners of Gallera de Mandaue (the cockpit), as the official masiador and sentenciador, respectively, of the cockpit sometime in 1993.

As the masiador, Semblante calls and takes the bets from the gamecock owners and other bettors and orders the start of the cockfight. He also distributes the winnings after deducting the arriba, or the commission for the cockpit. Meanwhile, as the sentenciador, Pilar oversees the proper gaffing of fighting cocks, determines the fighting cocks' physical condition and capabilities to continue the cockfight, and eventually declares the result of the cockfight.

They work every Tuesday, Wednesday, Saturday, and Sunday every week, excluding monthly derbies and cockfights held on special holidays. Their working days start at 1:00 p.m. and last until 12:00 midnight, or until the early hours of the morning depending on the needs of the cockpit. Petitioners had both been issued employees' identification cards that they wear every time they report for duty. They alleged never having incurred any infraction and/or violation of the cockpit rules and regulations.

On November 14, 2003, however, petitioners were denied entry into the cockpit upon the instructions of respondents, and were informed of the termination of their services effective that date. This prompted petitioners to file a complaint for illegal dismissal against respondents.

Labor Arbiter Julie C. Rendoque found petitioners to be regular employees of respondents as they performed work that was necessary and indispensable to the usual trade or business of respondents for a number of years. The Labor Arbiter also ruled that petitioners were illegally dismissed, and so ordered respondents to pay petitioners their backwages and separation pay.

The respondents filed an Appeal during the 10-day appeal period but was unable to post a cash or surety bond. Thus for an unperfected appeal the NLRC dismissed the same. It was only on October 11, 2006 they were able to post bond dated October 6, 2006. The NLRC ruled on the Motion for Reconsideration although there was belated filing of the cash or surety bond. The NLRC held in its Resolution of October 18, 2006 that there was no employer-employee relationship between petitioners and respondents, respondents having no part in the selection and engagement of petitioners, and that no separate individual contract with respondents was ever executed by petitioners.

ISSUES:

1. Whether or not the Appeal has been perfected even after a belated filing of the cash or surety bond.

2. Whether or not there was an employer-employee relationship between the petitioner and respondent.

HELD:

Time and again, however, this Court, considering the substantial merits of the case, has relaxed this rule on, and excused the late posting of, the appeal bond when there are strong and compelling reasons for the liberality, such as the prevention of miscarriage of justice extant in the case or the special circumstances in the case combined with its legal merits or the amount and the issue involved. After all, technical rules cannot prevent courts from exercising their duties to determine and settle, equitably and completely, the rights and obligations of the parties. This is one case where the exception to the general rule lies.

While respondents had failed to post their bond within the 10-day period provided above, it is evident, on the other hand, that petitioners are NOT employees of respondents, since their relationship fails to pass muster the four-fold test of employment We have repeatedly mentioned in countless decisions: (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, which is the most important element.

As found by both the NLRC and the CA, respondents had no part in petitioners' selection and management; petitioners' compensation was paid out of the arriba (which is a percentage deducted from the total bets), not by petitioners; and petitioners performed their functions as masiador and sentenciador free from the direction and control of respondents. In the conduct of their work, petitioners relied mainly on their "expertise that is characteristic of the cockfight gambling," and were never given by respondents any tool needed for the performance of their work.Respondents, therefore, could never have been illegally dismissed since they are not employees of the respondents.

BERNARTE VS. PHIL. BASKETBALL ASSOCIATION ET AL.G.R. No. 192084, September 14, 2011

FACTS:

Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as referees. During the term of Commissioner Eala, however, changes were made on the terms of their employment. 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 to August 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 his unsatisfactory performance on and off the court.

On the other hand, complainant Guevarra alleges that he was invited to join the PBA pool of referees in February 2001, and signed a contract as a trainee on March 1, 2001. Beginning 2002, he signed a yearly contract as Regular Class C referee. On May 6, 2003, respondent Martinez issued a memorandum to Guevarra expressing dissatisfaction over his questioning on the assignment of referees officiating out-of-town games. Beginning February 2004, he was no longer made to sign a contract.

Respondents aver that complainants were not illegally dismissed because they were not employees of the PBA.

31 March 2005 Decision, the Labor Arbiter declared petitioner an employee whose dismissal by respondents was illegal, ordering reinstatement of petitioner and the payment of backwages, moral and exemplary damages, and attorney’s fees.

28 January 2008 Decision, the NLRC affirmed the Labor Arbiter's judgment. The Court of Appeals found petitioner an independent contractor since respondents did not exercise any form of control over the means and methods by which petitioner performed his work as a basketball referee.

ISSUES:

1. Whether petitioner is an employee of respondents, which in turn determines whether petitioner was illegally dismissed;

2. Whether the Labor Arbiter's decision has become final and executory for failure of respondents to appeal with the NLRC within the reglementary period

HELD:

SC affirmed CA’s decision.Petitioner failed to present any concrete proof as to how, when and to

whom the delivery and receipt of the three notices issued by the post office was made. The issuance of the notices by the post office is not equivalent to delivery to and receipt by the addressee of the registered mail. There is no conclusive evidence showing that the post office notices were actually received by respondents, negating petitioner's claim of constructive service of the Labor Arbiter's decision on respondents. The Postmaster's Certification does not sufficiently prove that the three notices were delivered to and

received by respondents; it only indicates that the post office issued the three notices. The ends of justice will be better served if we resolve the instant case on the merits rather than allowing the substantial issue of whether petitioner is an independent contractor or an employee linger and remain unsettled due to procedural technicalities.

We agree with respondents that once in the playing court, the referees exercise their own independent judgment, based on the rules of the game, as to when and how a call or decision is to be made. Respondents or any of the PBA officers cannot and do not determine which calls to make or not to make and cannot control the referee when he blows the whistle because such authority exclusively belongs to the referees. 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 Social Security 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 respondents. For a hired party to be considered an employee, the hiring party must have control over the means and methods by which the hired party is to perform his work, which is absent in this case. The continuous rehiring by PBA of petitioner simply signifies the renewal of the contract between PBA and petitioner, and highlights the satisfactory services rendered by petitioner warranting such contract renewal. The non-renewal of the contract between the parties does not constitute illegal dismissal of petitioner by respondents.

LIRIO VS. GENOVIAG.R. No. 169757, November 23, 2011

FACTS:

July 9, 2002, respondent Wilmer D. Genovia filed a complaint against petitioner Cesar Lirio and/or Celkor Ad Sonicmix Recording Studio for illegal dismissal, non-payment of commission and award of moral and exemplary damages. He was employed to manage and operate Celkor and to promote and sell the recording studio's services to music enthusiasts and other prospective clients. He received a monthly salary of P7,000.00. They also agreed that he was entitled to an additional commission of P100.00 per hour as recording technician whenever a client uses the studio for recording, editing or any related work. He was made to report for work from Monday to Friday from 9:00 a.m. to 6 p.m. On Saturdays, he was required to work half-day only, but most of the time, he still rendered eight hours of work or more.

Respondent stated that a few days after he started working as a studio manager, petitioner approached him and told him about his project to produce an album for his 15-year-old daughter. Petitioner asked respondent to compose and arrange songs for Celine and promised that he (Lirio) would

draft a contract to assure respondent of his compensation for such services. Petitioner later informed respondent that he was only entitled to the 20% of the net profit and that the salaries he received would be deducted from the said 20% net profit share. Respondent objected then petitioner verbally terminated the former’s services and instructed the same not to report for work.

On October 31, 2003, Labor Arbiter Renaldo O. Hernandez rendered a decision, finding that an employer-employee relationship existed between petitioner and respondent, and that respondent was illegally dismissed.In a Resolution dated October 14, 2004, the NLRC reversed and set aside the decision of the Labor Arbiter. NLRC held that respondent failed to proved with substantial evidence that he was selected and engaged by petitioner, that petitioner had the power to dismiss him, and that they had the power to control him not only as to the result of his work, but also as to the means and methods of accomplishing his work.

On August 4, 2005, the Court of Appeals rendered a decision reversing and setting aside the resolution of the NLRC, and reinstating the decision of the Labor Arbiter, with modification in regard to the award of commission and damages. The Court of Appeals deleted the award of commission and moral and exemplary damages as the same were not substantiated.

ISSUE:

Whether there existed an employer-employee relationship between petitioner and respondent, and whether dismissal of respondent is illegal.

HELD:

SC affirmed CA’s decision.

It is settled that no particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. In this case, the documentary evidence presented by respondent to prove that he was an employee of petitioner are as follows: (a) a document denominated as "payroll" (dated July 31, 2001 to March 15, 2002) certified correct by petitioner, which showed that respondent received a monthly salary of P7,000.00 (P3,500.00 every 15th of the month and another P3,500.00 every 30th of the month) with the corresponding deductions due to absences incurred by respondent; and (2) copies of petty cash vouchers, showing the amounts he received and signed for in the payrolls.

Petitioner failed to prove that his relationship with respondent was one of partnership. Such claim was not supported by any written agreement.

The Court agrees with the Court of Appeals that the evidence presented by the parties showed that an employer-employee relationship existed between petitioner and respondent.

In termination cases, the burden is upon the employer to show by substantial evidence that the termination was for lawful cause and validly made. Article 277 (b) of the Labor Code puts the burden of proving that the dismissal of an employee was for a valid or authorized cause on the employer, without distinction whether the employer admits or does not admit the dismissal. For an employee's dismissal to be valid, (a) the dismissal must be for a valid cause, and (b) the employee must be afforded due process. Procedural due process requires the employer to furnish an employee with two written notices before the latter is dismissed: (1) the notice to apprise the employee of the particular acts or omissions for which his dismissal is sought, which is the equivalent of a charge; and (2) the notice informing the employee of his dismissal, to be issued after the employee has been given reasonable opportunity to answer and to be heard on his defense.

Petitioner failed to comply with these legal requirements; hence, the Court of Appeals correctly affirmed the Labor Arbiter's finding that respondent was illegally dismissed.

JAO VS. BBC PRODUCTS SALES INC.G.R. No. 163700, April 18, 2012

FACTS:

Petitioner offered the following: (a) BCC Identification Card (ID) issued to him stating his name and his position as “comptroller,” and bearing his picture, his signature, and the signature of Ty; (b) a payroll of BCC for the period of October 1-15, 1996 that petitioner approved as comptroller; (c) various bills and receipts related to expenditures of BCC bearing the signature of petitioner; (d) various checks carrying the signatures of petitioner and Ty, and, in some checks, the signature of petitioner alone; (e) a court order showing that the issuing court considered petitioner’s ID as proof of his employment with BCC; (f) a letter of petitioner dated March 1, 1997 to the Department of Justice on his filing of a criminal case for estafa against Ty for non-payment of wages; (g) affidavits of some employees of BCC attesting that petitioner was their co-employee in BCC; and (h) a notice of raffle dated December 5, 1995 showing that petitioner, being an employee of BCC, received the notice of raffle in behalf of BCC.

But respondent countered the evidences presented by the petitioner by proving that Charlie Jao is not their employee, as SFC had installed petitioner as its comptroller in BCC to oversee and supervise SFC’s collections

and the account of BCC to protect SFC’s interest; that their issuance of the ID to petitioner was only for the purpose of facilitating his entry into the BCC premises in relation to his work of overseeing the financial operations of BCC for SFC; that the ID should not be considered as evidence of petitioner’s employment in BCC; that petitioner executed an affidavit in March 1996, stating, among others, that he is a CPA presently employed at SFC.

ISSUE:

WON there exist an employee-employer relationship between the petitioner and respondent.

HELD:

The Supreme Court held that there exist no employee-employer relationship between the two based on the affidavits made by the petitioner that he is an employee of SFC to oversee and supervise SFC's collection.

Moreover, in determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the following incidents, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) 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.

It can be deduced from the March 1996 affidavit of petitioner that respondents challenged his authority to deliver some 158 checks to SFC. Considering that he contested respondents’ challenge by pointing to the existing arrangements between BCC and SFC, it should be clear that respondents did not exercise the power of control over him, because he thereby acted for the benefit and in the interest of SFC more than of BCC.

In addition, petitioner presented no document setting forth the terms of his employment by BCC. The failure to present such agreement on terms of employment may be understandable and expected if he was a common or ordinary laborer who would not jeopardize his employment by demanding such document from the employer, but may not square well with his actual status as a highly educated professional.

LEGEND HOTEL (MANILA) VS. REALUYOG.R. No. 153511, July 18, 2012

FACTS:

Legend Hotel’s Tanglaw Restaurant hired Realuyo as a pianist. His initial rate was increased, and hotel had fixed his time of performance, outfit, songs to be played, was informed that he too is subject to the employee’s representation checks and chits. That on July 9 1999, management notified him that his services are no longer needed due to cost-cutting issues and effective July 30, 1999.

Petitioner contends that no employer-employee existed for he was only required to workf or three (3) hours in two days and had only been a talent to provide music for the hotel. that whatever remuneration was given to Realuyo aka Joey Roa, were only his talent fees that were not included in the definition of wage under the Labor Code, and such fees were but the consideration for the service contract entered into between them.

ISSUE:

Whether or not there exists an employer-employee relationship.

HELD:

SC ruled that there indeed was an employer-employee relationship.

There are four (4) requisites in determining as to the existence of an employer-employee relationship as stated in the Labor Code namely, (1) the power to select and engagement of employees, (2) payment of wages, (3) power to dismiss and (4) control over employee’s conduct and over the means and manner by which the work is to be done. A review of the circumstances revealed that there was, indeed, employed as a pianist from the date of hiring to his termination date.

The power of selection was firmly evidenced by the express written recommendation by the restaurant manager for the increase of his remuneration.Article 97(f) of the Labor Code clearly states: "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee. "Fair and reasonable value" shall not include any profit to the employer, or to any person affiliated with the employer. Cleary, Roa received compensation for services rendered.

Control over the employee as to how the work is to be done is the pivotal determinant of the existence of employer-employee relationship. Review of records show Roa performed his work as a pianist under supervision and control by the hotel.Lastly, the Legend Hotel says it has no power to dismiss. It was evidenced that the memorandum, informing respondent of the discontinuance of his services showed that petitioner had the power to dismiss Roa from employment.

THE NEW PHILIPPINE SKYLANDERS, INC., VS. DAKILAG.R. No. 199547, September 24, 2012

FACTS:

On April 30, 1997, Francisco N. Dakila was hired as a Consultant for The New Philippines Skylanders, Inc. Thereafter, in a letter dated April 19, 2007, Dakila informed petitioners of his compulsory retirement effective May 2, 2007 and sought for the payment of his retirement benefits pursuant to the Collective Bargaining Agreement. His request, however, was not acted upon. Instead, he was terminated from service effective May 1, 2007. Consequently, Dakila filed a complaint for constructive illegal dismissal, non-payment of retirement benefits, under/non-payment of wages and other benefits of a regular employee, and damages against petitioners before the NLRC. There was control over him and supported documents that would establish such relationship.

Petitioner asserted that Dakila was a consultant and not their regular employee for was not included in the payroll and paid a fixed amount under the consultancy contract; was not required to observe regular working hours, and was free to adopt means and methods to accomplish his task except as to the results of the work required of him. Hence, no employer-employee relationship existed between them. Moreover, respondent Dakila terminated his contract in a letter dated April 19, 2007, thus, negating his dismissal.

ISSUE:

Whether or not Dakila was illegally dismissed

HELD:

SC ruled that there really was employer-employee relationship existed. Dakila was illegally dismissed.

After careful consideration of the factual evidences and argument of both parties, SC finds no merits as to the petition. The elements of an employer-employee relationship are wanting in this case. Documentary evidence showed that he was under the petitioners' direct control and supervision and performed tasks that were either incidental or usually desirable and necessary in the trade or business of corporation for a period of ten years.

Article 279 of the Labor Code, an employee who is unjustly dismissed from work is entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages computed from the time he was illegally dismissed. However, considering that respondent Dakila was terminated on May 1, 2007, or one (1) day prior to his compulsory retirement on May 2, 2007, his reinstatement is no longer feasible.

Dakila to have been illegally dismissed and ordered his reinstatement with full backwages computed from the time of his dismissal on May 1, 2007 and was found to be a regular employee on the basis of the unrebutted documentary evidence showing that he was under the petitioners' direct control and supervision and performed tasks that were either incidental or usually desirable and necessary in the trade or business of petitioner corporation for a period of ten years.

TESORO ET AL., VS. METRO MANILA RETREADERS INC., ET AL.G.R. No. 171482, March 12, 2014

FACTS:

Petitioners Ashmor M. Tesoro, Pedro Ang, and Gregorio Sharp used to work as salesmen for respondents Metro Manila Retreaders, Inc., Northern Luzon Retreaders, Inc., or Power Tire and Rubber Corporation, apparently sister companies, collectively called "Bandag." Bandag offered repair and retread services for used tires. In 1998, however, Bandag developed a franchising scheme that would enable others to operate tire and retreading businesses using its trade name and service system. Petitioners quit their jobs as salesmen and entered into separate Service Franchise Agreements (SFAs) with Bandag for the operation of their respective franchises. Under the SFAs, Bandag would provide funding support to the petitioners subject to a regular or periodic liquidation of their revolving funds. The expenses out of these funds would be deducted from petitioners' sales to determine their incomes. After a length of time, however, they began to default on their obligations to submit periodic liquidations of their operational expenses in relation to the revolving funds Bandag provided them. Consequently, Bandag terminated their respective SFA.

Petitioners filed a complaint for constructive dismissal, non-payment of wages, incentive pay, 13th month pay and damages against Bandag with the National Labor Relations Commission (NLRC). Petitioners contend that, notwithstanding the execution of the SFAs, they remained to be Bandag's employees, the SFAs being but a circumvention of their status as regular employees.

ISSUE:

Whether or not petitioners remained to be Bandag's salesmen under the franchise scheme it entered into with them.

HELD:

The tests for determining employer-employee relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. The last is called the "control test," the most important element.

When petitioners agreed to operate Bandag's franchise branches in different parts of the country, they knew that this substantially changed their former relationships. They were to cease working as Bandag's salesmen, the positions they occupied before they ventured into running separate Bandag branches. They were to cease receiving salaries or commissions. Their incomes were to depend on the profits they made.It was pointed out that Bandag: (a) retained the right to adjust the price rates of products and services; (b) imposed minimum processed tire requirement (MPR); (c) reviewed and regulated credit applications; and (d) retained the power to suspend petitioners' services for failure to meet service standards.

But uniformity in prices, quality of services, and good business practices are the essence of all franchises. A franchisee will damage the franchisor's business if he sells at different prices, renders different or inferior services, or engages in bad business practices.

This is not the "control" contemplated in employer-employee relationships. Control in such relationships addresses the details of day to day work like assigning the particular task that has to be done, monitoring the way tasks are done and their results, and determining the time during which the employee must report for work or accomplish his assigned task.

Franchising involves the use of an established business expertise, trademark, knowledge, and training. As such, the franchisee is required to follow a certain established system. Accordingly, the franchisors may impose guidelines that somehow restrict the petitioners' conduct which do not

necessarily indicate "control." The important factor to consider is still the element of control over how the work itself is done, not just its end result.