G.R. No. 222455 , September 18, 2019.
GERRY S. MOJICA, PETITIONER, VS GENERALI PILIPINAS LIFE ASSURANCE COMPANY, INC., RESPONDENT.

FACTS

Respondent Generali Pilipinas Life Assurance Company, Inc. filed a complaint for collection of sum of money and damages against petitioner Gerry S. Mojica, a former Unit Manager and Associate Branch Manager, to collect P514,639.17 representing unpaid monthly drawing allowances, unpaid Health Maintenance Insurance dues, group insurance premium, and other liabilities. Respondent alleged that under a Unit Manager’s Agreement, an Associate Branch Manager’s Agreement, and a Memorandum of Agreement, petitioner was hired as an agent and independent contractor, not as an employee. The monthly drawing allowance was an advance against future override commission earnings, subject to meeting validation requirements and performance standards, and was to be repaid over eighteen months by applying his override commission earnings. Respondent claimed petitioner failed to meet production and manpower targets, resigned on March 1, 2003, and left an unpaid balance after drawing a total of P660,000 and repaying only P151,368.95. Petitioner asserted he was an employee, that the drawing allowances were his salary, and that he had no obligation to repay them. He also questioned the trial court’s jurisdiction, claiming the National Labor Relations Commission had jurisdiction due to an alleged employer-employee relationship. The trial court denied his motion to dismiss, a ruling affirmed by the Court of Appeals.

ISSUE

Whether the Court of Appeals erred in ruling that petitioner is an independent contractor and in ordering him to refund the monthly drawing allowances he received.

RULING

The Supreme Court affirmed the ruling of the Court of Appeals with modification. The Court held that petitioner is an independent contractor, not an employee, as expressly stipulated in the Unit Manager’s Agreement and Associate Branch Manager’s Agreement, which stated he was “considered an independent contractor and not an employee.” His remuneration was based on commissions, not a fixed salary. As an independent contractor, he was obligated to repay the monthly drawing allowances advanced to him under the terms of the Memorandum of Agreement, which were subject to meeting validation requirements. The Court found petitioner failed to liquidate the allowances, leaving an unpaid balance. The Court modified the interest computation: the principal obligation of P514,639.17 shall earn interest at 6% per annum from the date of extrajudicial demand on March 6, 2003, until finality of the decision. Thereafter, interest at 6% per annum shall be imposed on the total judgment award until fully satisfied. The award of attorney’s fees was deleted.