GR 161366; (June, 2009) (Digest)
G.R. No. 161366; June 16, 2009
SYCIP, GORRES, VELAYO & COMPANY, Petitioner, vs. CAROL DE RAEDT, Respondent.
FACTS
Respondent Carol De Raedt was engaged as a Sociologist for the Central Cordillera Agricultural Programme (CECAP), a project funded by the Commission for European Communities and implemented by the Department of Agriculture (DA). The DA contracted Travers Morgan International Ltd. (TMI) for technical assistance, and TMI subsequently entered into a Sub-Consultancy Agreement with petitioner Sycip, Gorres, Velayo & Company (SGV). De Raedt’s nomination for the position was approved by the DA and the Commission, and she signed a consultancy contract with SGV. During the project, TMI received complaints about De Raedt’s performance and working relations. After an investigation, TMI directed SGV to withdraw De Raedt from the project, which SGV complied with.
De Raedt filed an illegal dismissal case against SGV. The Labor Arbiter ruled in her favor, finding an employer-employee relationship and illegal dismissal. The National Labor Relations Commission (NLRC) reversed this, holding no such relationship existed. The Court of Appeals then reinstated the Labor Arbiter’s decision, prompting SGV’s petition to the Supreme Court.
ISSUE
Whether an employer-employee relationship existed between SGV and De Raedt, thereby making her dismissal a case for illegal termination under labor laws.
RULING
The Supreme Court ruled that no employer-employee relationship existed. The Court emphasized the four-fold test for employment: selection and engagement, payment of wages, power of dismissal, and power of control, with control being the most determinative factor. Here, SGV did not select De Raedt; her engagement was upon the unanimous approval of TMI, the DA, and the Commission, and was merely coursed through SGV. Payment of her fees, though processed by SGV, originated from TMI funds as per billings.
Crucially, SGV did not exercise control over the means and methods of De Raedt’s work. The Sub-Consultancy Agreement required her to work under the direction and supervision of TMI’s Team Leader and Project Coordinator. SGV’s role was limited to administrative monitoring, such as validating time records and reports to ensure compliance with its contract with TMI. The terms of her engagement specified the results to be achieved but not the manner of achieving them, characteristic of an independent contractor. Furthermore, her contract explicitly stated she was an independent contractor. Therefore, her disengagement upon TMI’s instruction did not constitute illegal dismissal but the termination of a consultancy contract. The NLRC decision was reinstated.