G.R. No. 170087 August 31, 2006
ANGELINA FRANCISCO, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, KASEI CORPORATION, SEIICHIRO TAKAHASHI, TIMOTEO ACEDO, DELFIN LIZA, IRENE BALLESTEROS, TRINIDAD LIZA and RAMON ESCUETA, Respondents.

FACTS

Petitioner Angelina Francisco was hired by Kasei Corporation in 1995, initially as Accountant and Corporate Secretary, and later designated as Acting Manager in 1996. For five years, she performed extensive managerial duties, including recruitment, liaison with government agencies, and administration of a restaurant. Her compensation included a monthly salary, housing allowance, and a profit share. In January 2001, she was replaced as Manager but was assured continued employment as a Technical Assistant. Subsequently, her salary was unilaterally reduced, her mid-year bonus was withheld, and by October 2001, she was no longer paid. Upon inquiry, she was informed she was no longer connected with the company, prompting her to cease reporting and file a complaint for constructive dismissal.
Respondents contended that Francisco was not an employee but an independent technical consultant. They argued she worked at her own discretion without company control, was paid professional fees subject to withholding tax, and was not listed in BIR or SSS records as an employee. The Labor Arbiter and the NLRC ruled in favor of Francisco, finding her an employee who was constructively dismissed. The Court of Appeals reversed, holding she was an independent contractor, thus dismissing her complaint.

ISSUE

Whether an employer-employee relationship existed between Francisco and Kasei Corporation.

RULING

Yes. The Supreme Court reinstated the NLRC decision, finding Francisco to be a regular employee. The Court applied the four-fold test for employment: the selection and engagement of the employee; payment of wages; power of dismissal; and the employer’s power to control the employee’s means and methods. The element of control is the most determinative. The evidence demonstrated that Kasei Corporation exercised control over Francisco’s performance. She was assigned specific duties (e.g., handling BIR matters, recruitment, administration), reported to company officers, and her work was integral to the company’s daily operations. Her titles (Accountant, Acting Manager) and the nature of her long-term, exclusive services negated the claim of independent consultancy. The unilateral reductions in her compensation and the cessation of payment were acts of dismissal. The failure to report her to SSS and BIR as an employee, while indicative, is not conclusive proof of the relationship, which is determined by the factual circumstances of control and economic dependence. Thus, she was illegally constructively dismissed.