G.R. No. 202015 . July 13, 2016.
ANTONIO VALEROSO AND ALLAN LEGATONA, PETITIONERS, VS. SKYCABLE CORPORATION, RESPONDENT.

FACTS

Petitioners Antonio Valeroso and Allan Legatona worked as account executives soliciting cable subscriptions for Skycable Corporation since 1998. They received monthly commissions and allowances, with payslips and certifications issued by a company manager. In 2007, they were transferred to a manpower agency, Skill Plus (later Armada), without their consent. In February 2009, after protesting a reduction in commissions and notifying management of their intent to file a labor case, they were allegedly dropped from the roster of account executives. They filed a complaint for illegal dismissal and monetary claims against Skycable.
Skycable denied an employer-employee relationship, asserting petitioners were independent contractors under Sales Agency Agreements until 2007, after which they became employees of Armada, an independent contractor. Skycable presented affidavits stating the certifications were mere accommodations for loan applications and that Armada controlled petitioners’ work. The Labor Arbiter dismissed the complaint, finding no substantial evidence of employment with Skycable. The NLRC reversed, ruling petitioners were regular employees based on the duration and necessity of their work, their lack of substantial investment, and the control exercised by Skycable’s supervisors.

ISSUE

Whether an employer-employee relationship existed between petitioners and Skycable, making their dismissal illegal.

RULING

The Supreme Court ruled in the negative, finding no employer-employee relationship. The Court reinstated the Court of Appeals’ decision which had reversed the NLRC. The fundamental test of employment is the “control test,” which examines whether the employer controls both the end achieved and the manner and means by which the work is accomplished. The Court found that petitioners failed to substantiate their claim of control by Skycable with clear and convincing evidence. The certifications and payslips they presented were insufficient to establish the element of control, as these documents did not demonstrate that Skycable directed the methods and details of their sales work.
The Court emphasized that the existence of a Sales Agency Agreement, which designated petitioners as independent agents, created a presumption of a contractor relationship. Petitioners did not successfully overturn this presumption. Their allegations of control—such as being monitored, informed of promotions, and penalized for missing quotas—were deemed general and did not conclusively prove that Skycable controlled the means and methods of their sales solicitation. The power to set sales quotas and monitor results pertains to control over the output, not the manner of performing the work, which is consistent with independent contractorship. Consequently, as independent contractors, petitioners had no cause of action for illegal dismissal against Skycable.