GR 87098; (November, 1996) (Digest)
G.R. No. 87098 November 4, 1996
ENCYCLOPAEDIA BRITANNICA (PHILIPPINES), INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER TEODORICO L. ROGELIO and BENJAMIN LIMJOCO, respondents.
FACTS
Private respondent Benjamin Limjoco worked for petitioner Encyclopaedia Britannica as a Sales Division Manager, receiving commissions from sales made by his agents and being allowed to use the company’s name and logo. Office expenses were deducted from his commissions, and he was required to inform the company about employee movements in his district. He resigned in 1974. Later, he filed a complaint for non-payment of separation pay, benefits, and illegal deductions from his commissions. Petitioner contended Limjoco was an independent dealer, not an employee, as he had no salary, financed his own office and workforce, and was not subject to company control regarding work methods or hours. Limjoco asserted he was an employee hired in 1970, under the supervision of company officials who issued memoranda and guidelines, and was entitled to termination pay and benefits upon his dismissal following the expiration of the Laurel-Langley Agreement.
ISSUE
Whether an employer-employee relationship existed between petitioner and private respondent.
RULING
No. The Supreme Court reversed the NLRC and found no employer-employee relationship. The Court applied the four-fold test, emphasizing the “control test” as the most determinative factor. The records failed to establish that petitioner exercised control over the means and methods by which Limjoco performed his work. Limjoco operated with his own office and staff, financed his business expenses, and his income was solely commission-based, dependent on sales results. His resignation letter citing “conflict with other interests” requiring his personal attention indicated a lack of effective control by the petitioner over his activities. Furthermore, his concurrent role as a bank director and the delay in filing his claims were inconsistent with a typical employment relationship. Since the crucial element of control was absent, Limjoco was deemed an independent contractor, not an employee, and was thus not entitled to the claimed monetary benefits.