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G.R. No. 91307 January 24, 1991]SINGER SEWING MACHINE COMPANY, petitioner vs. HON. FRANKLINM. DRILON,MED-ARBITER FELIX B. CHAGUILE, JR., and SINGER MACHINE COLLECTORS UNION-

BAGUIO (SIMACUB), respondents.

FACTS:

SIMACUB, respondent union, filed a petition for certification as the sole and exclusive bargaining agentof all the collectors of the Singer Sewing Machine Company, Bagiuo City branch. The Company opposedthe petition saying that the union members were not employees but independent contractors as evidenced

by the collection agency agreement they signed.

ISSUE: Whether there exists an employee-employer relationship?

HELD:

The nature of the relationship between a collecting agent and the company depends on the circumstances

surrounding each case. In this case, the Agreement confirms the status of the collecting agent as an

independent contractor not only because he is explicitly described as such but because he is allowed by

the provisions of the agreement to perform collection services without being subject to the control of the

latter except only as to the result of his work. Hence, the requirement that receipt forms issued by the

company shall be submitted once a week is but a method to avoid co-mingling of personal funds of the

agent with the money of the company.

Likewise, the uses of standard report forms are only intended to facilitate order in the office. Even if the

report requirements are to be called control measures, any control is only with respect to the end result of

the collection since the requirements regulate the things to be done after the performance of the collection

job or the rendition of the service.

The respondents' contention that the union members are employees of the Company is based on selected

provisions of the Agreement but ignores the following circumstances which respondents never refuted

either in the trial proceedings before the labor officials nor in its pleadings filed before this Court.

1. The collection agents are not required to observe office hours or report to Singer's office everyday

except, naturally and necessarily, for the purpose of remitting their collections;

2. The collection agents do not have to devote their time exclusively for SINGER. There is no prohibition

on the part of the collection agents from working elsewhere. Nor are these agents required to account for

their time and submit a record of their activity.;

3. The manner and method of effecting collections are left solely to the discretion of the collection agents

without any interference on the part of Singer.;

4. The collection agents shoulder their transportation expenses incurred in the collections of the accounts

assigned to them.;

5. The collection agents are paid strictly on commission basis. The amounts paid to them are based solely

on the amounts of collection each of them make. They do not receive any commission if they do

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not effect any collection even if they put a lot of effort in collecting. They are paid commission on the

basis of actual collections.;

6. The commissions earned by the collection agents are directly deducted by them from the amount of

collections they are able to effect. The net amount is what is then remitted to Singer." (Rollo, pp. 7-8)

If indeed the union members are controlled as to the manner by which they are supposed to perform their

collections, they should have explicitly said so in detail by specifically denying each of the facts asserted

by the petitioner. As there seems to be no objections on the part of the respondents, the Court finds that

they miserably failed to defend their position.

A thorough examination of the facts of the case leads us to the conclusion that the existence of an

employer-employee relationship between the Company and the collection agents cannot be sustained. The

last and most important element of the control test is not satisfied by the terms and conditions of the

contracts. There is nothing in the agreement which implies control by the Company not only over the end

to be achieved but also over the means and methods in achieving the end.

The Court finds the contention of the respondents that the union members are employees under Article280 of the Labor Code to have no basis. The Court agrees with the petitioners argumentthat Article 280

is not the yardstick for determining the existence of an employment relationship because it merely

distinguishes between two kinds of employees. The Court finds that since private respondents are not

employees of the Company, they are not entitled to the constitutional right to join or form a labor

organization for purposes of collective bargaining. Accordingly, there is no constitutional and legal basis

for their "union" to be granted their petition for direct certification. Order of Med-Arbiter and DOLE

Secretary reversed and set aside.

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INSULAR LIFE ASSURANCE CO., LTD.vs.NATIONAL LABOR RELATIONS COMMISSION

and MELECIO BASIAO,

G R N o . 8 4 4 8 4 N o v e m b e r 1 5 , 1 9 8 9

FACTS:

Petitioner entered contract with Basiao for insurance policies and annuities in accordance with theexisting rules and regulations" of the Company; he would receive compensation, in the form ofcommissions ... as provided in the Schedule of Commissions" of the contract to "constitute a part of theconsideration of ... (said) agreement;" and the "rules in ...(the Company's) Rate Book and its Agent'sManual, as well as all its circulars ... and those which may from time to time be promulgated by it. Somefour years later, in April 1972, the parties entered into another contractan Agency ManagersContract

and to implement his end of it Basiao organized an agency or office to which he gave the name M.Basiao and Associates, while concurrently fulfilling his commitments under the first contract with the

Company. In May, 1979, the Company terminated the Agency Manager's Contract. After vainly seekingare consideration, Basiao sued the Company in a civil action and this, he was later to claim, prompted the

latter to terminate also his engagement under the first contract and to stop payment of his commissionsstarting April 1, 1980.Basiao thereafter filed with the then Ministry of Labor a complaint against the

Company and its president. Without contesting the termination of the first contract, the complaint soughtto recover commissions allegedly unpaid there under, plus attorney's fees. The respondents disputed theMinistry's jurisdiction over Basiao's claim, asserting that he was not the Companys employee, but an

independent contractor and that the Company had no obligation to him for unpaid commissions under theterms and conditions of his contract. The Labor Arbiter to whom the case was assigned found for Basiao.He ruled that the underwriting agreement had established an employer-employee relationship between

him and the Company, and this conferred jurisdiction on the Ministry of Labor to adjudicate his claim.Said official's decision directed payment of his unpaid commissions "... equivalent to thebalance of the

first year's premium remaining unpaid, at the time of his termination, of all the insurance policies solicitedby ... (him) in favor of the respondent company ..." plus 10%attorney's fees. This decision was, on appealby the Company, affirmed by the National Labor Relations Commission. Hence, the present petition for

certiorari and prohibition

ISSUE:

Whether, as Basiao asserts, he had become the Company's employee by virtue of the contract invoked by

him, thereby placing his claim for unpaid commissions within the original and exclusive jurisdiction ofthe Labor Arbiter under the provisions of Section 217 of the Labor Code, or, contrarily, as the Companywould have it, that under said contract Basiao's status was that of an independent contractor whose claimwas thus cognizable, not by the Labor Arbiter in a labor case, but by the regular courts in an ordinary civilaction.

HELD:

The Court, therefore, rules that under the contract invoked by him, Basiao was not an employee of thepetitioner, but a commission agent, an independent contractor whose claim for unpaid commissionsshould have been litigated in an ordinary civil action. The Labor Arbiter erred in taking cognizance of,and adjudicating, said claim, being without jurisdiction to do so, as did the respondent NLRC in affirming

the Arbiter's decision. This conclusion renders it unnecessary and premature to consider Basiao's claimfor commissions on its merits.