Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. 186621 March 12, 2014SOUTH EAST INTERNATIONAL RATTAN, INC. and/or ESTANISLAO1AGBAY,Petitioners,vs.JESUS J. COMING,Respondent.D E C I S I O NVILLARAMA, JR.,J.:Before the Court is a petition for review on certiorari under Rule 45 to reverse and set aside the Decision2dated February 21, 2008 and Resolution3dated February 9, 2009 of the Court of Appeals (CA) in CA-GR. CEB-SP No. 02113.Petitioner South East International Rattan, Inc. (SEIRI) is a domestic corporation engaged in the business of manufacturing and exporting furniture to various countries with principal place of business at Paknaan, Mandaue City, while petitioner Estanislao Agbay, as per records, is the President and General Manager of SEIRI.4On November 3, 2003, respondent Jesus J. Coming filed a complaint5for illegal dismissal, underpayment of wages, non-payment of holiday pay, 13th month pay and service incentive leave pay, with prayer for reinstatement, back wages, damages and attorneys fees.Respondent alleged that he was hired by petitioners as Sizing Machine Operator on March 17, 1984. His work schedule is from 8:00 a.m. to 5:00 p.m. Initially, his compensation was on "pakiao" basis but sometime in June 1984, it was fixed atP150.00 per day which was paid weekly. In 1990, without any apparent reason, his employment was interrupted as he was told by petitioners to resume work in two months time. Being an uneducated person, respondent was persuaded by the management as well as his brother not to complain, as otherwise petitioners might decide not to call him back for work. Fearing such consequence, respondent accepted his fate. Nonetheless, after two months he reported back to work upon order of management.6Despite being an employee for many years with his work performance never questioned by petitioners, respondent was dismissed on January 1, 2002 without lawful cause. He was told that he will be terminated because the company is not doing well financially and that he would be called back to work only if they need his services again. Respondent waited for almost a year but petitioners did not call him back to work. When he finally filed the complaint before the regional arbitration branch, his brother Vicente was used by management to persuade him to withdraw the case.7On their part, petitioners denied having hired respondent asserting that SEIRI was incorporated only in 1986, and that respondent actually worked for SEIRIs furniture suppliers because when the company started in 1987 it was engaged purely in buying and exporting furniture and its business operations were suspended from the last quarter of 1989 to August 1992. They stressed that respondent was not included in the list of employees submitted to the Social Security System (SSS). Moreover, respondents brother, Vicente Coming, executed an affidavit8in support of petitioners position while Allan Mayol and Faustino Apondar issued notarized certifications9that respondent worked for them instead.10With the denial of petitioners that respondent was their employee, the latter submitted an affidavit11signed by five former co-workers stating that respondent was one of the pioneer employees who worked in SEIRI for almost twenty years.In his Decision12dated April 30, 2004, Labor Arbiter Ernesto F. Carreon ruled that respondent is a regular employee of SEIRI and that the termination of his employment was illegal. The dispositive portion of the decision reads:WHEREFORE, premises considered, judgment is hereby rendered ordering the respondent South East (Intl.) Rattan, Inc. to pay complainant Jesus J. Coming the following:1. Separation payP114,400.00

2. BackwagesP 30,400.00

3. Wage differentialP 15,015.00

4. 13th month payP 5,958.00

5. Holiday payP 4,000.00

6. Service incentive leave payP 2,000.00

Total awardP171,773.00

The other claims and the case against respondent Estanislao Agbay are dismissed for lack of merit.SO ORDERED.13Petitioners appealed to the National Labor Relations Commission (NLRC)-Cebu City where they submitted the following additional evidence: (1) copies of SEIRIs payrolls and individual pay records of employees;14(2) affidavit15of SEIRIs Treasurer, Angelina Agbay; and (3) second affidavit16of Vicente Coming.On July 28, 2005, the NLRCs Fourth Division rendered its Decision,17the dispositive portion of which states:WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET ASIDE and VACATED and a new one entered DISMISSING the complaint.SO ORDERED.18The NLRC likewise denied respondents motion for reconsideration.19Respondent elevated the case to the CA via a petition for certiorari under Rule 65.By Decision dated February 21, 2008, the CA reversed the NLRC and ruled that there existed an employer-employee relationship between petitioners and respondent who was dismissed without just and valid cause.The CA thus decreed:WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The assailed Decision dated July 28, 2005 issued by the National Labor Relations Commission (NLRC), Fourth Division, Cebu City in NLRC Case No. V-000625-2004 is REVERSED and SET ASIDE. The Decision of the Labor Arbiter dated April 30, 2004 is REINSTATED with MODIFICATION on the computation of backwages which should be computed from the time of illegal termination until the finality of this decision.Further, the Labor Arbiter is directed to make the proper adjustment in the computation of the award of separation pay as well as the monetary awards of wage differential, 13th month pay, holiday pay and service incentive leave pay.SO ORDERED.20Petitioners filed a motion for reconsideration but the CA denied it under Resolution dated February 9, 2009.Hence, this petition raising the following issues:6.1WHETHER UNDER THE FACTS AND EVIDENCE ON RECORD, THE FINDING OF THE HONORABLE COURT OF APPEALS THAT THERE EXISTS EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN PETITIONERS AND RESPONDENT IS IN ACCORD WITH LAW AND APPLICABLE DECISIONS OF THIS HONORABLE COURT.6.2WHETHER THE HONORABLE COURT OF APPEALS CORRECTLY APPRECIATED IN ACCORDANCE WITH APPLICABLE LAW AND JURISPRUDENCE THE EVIDENCE PRESENTED BY BOTH PARTIES.6.3WHETHER UNDER THE FACTS AND EVIDENCE PRESENTED, THE FINDING OF THE HONORABLE COURT OF APPEALS THAT PETITIONERS ARE LIABLE FOR ILLEGAL DISMISSAL OF RESPONDENT IS IN ACCORD WITH APPLICABLE LAW AND JURISPRUDENCE.6.4WHETHER UNDER THE FACTS PRESENTED, THE RULING OF THE HONORABLE COURT OF APPEALS THAT THE BACKWAGES DUE THE RESPONDENT SHOULD BE COMPUTED FROM THE TIME OF ILLEGAL TERMINATION UNTIL THE FINALITY OF THE DECISION IS SUPPORTED BY PREVAILING JURISPRUDENCE.21Resolution of the first issue is paramount in view of petitioners denial of the existence of employer-employee relationship.The issue of whether or not an employer-employee relationship exists in a given case is essentially a question of fact. As a rule, this Court is not a trier of facts and this applies with greater force in labor cases.22Only errors of law are generally reviewed by this Court.23This rule is not absolute, however, and admits of exceptions. For one, the Court may look into factual issues in labor cases when the factual findings of the Labor Arbiter, the NLRC, and the CA are conflicting.24Here, the findings of the NLRC differed from those of the Labor Arbiter and the CA, which compels the Courts exercise of its authority to review and pass upon the evidence presented and to draw its own conclusions therefrom.25To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct, or the so-called "control test."26In resolving the issue of whether such relationship exists in a given case, substantial evidence that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion is sufficient. Although no particular form of evidence is required to prove the existence of the relationship, and any competent and relevant evidence to prove the relationship may be admitted, a finding that the relationship exists must nonetheless rest on substantial evidence.27In support of their claim that respondent was not their employee, petitioners presented Employment Reports to the SSS from 1987 to 2002, the Certifications issued by Mayol and Apondar, two affidavits of Vicente Coming, payroll sheets (1999-2000), individual pay envelopes and employee earnings records (1999-2000) and affidavit of Angelina Agbay (Treasurer and Human Resources Officer). The payroll and pay records did not include the name of respondent. The affidavit of Ms. Agbay stated that after SEIRI started its business in 1986 purely on export trading, it ceased operations in 1989 as evidenced by Certification dated January 18, 1994 from the Securities and Exchange Commission (SEC); that when business resumed in 1992, SEIRI undertook only a little of manufacturing; that the company never hired any workers for varnishing and pole sizing because it bought the same from various suppliers, including Faustino Apondar; respondent was never hired by SEIRI; and while it is true that Mr. Estanislao Agbay is the company President, he never dispensed the salaries of workers.28In his first affidavit, Vicente Coming averred that:6. [Jesus Coming] is a furniture factory worker. In 1982 to 1986, he was working with Ben Mayol as round core maker/splitter.7. Thereafter, we joined Okay Okay Yard owned by Amelito Montececillo. This is a rattan trader with business address near Cebu Rattan Factory on a "Pakiao" basis.8. However, Jesus and I did not stay long at Okay Okay Yard and instead we joined Eleuterio Agbay in Labogon, Cebu in 1989. In 1991, we went back to Okay Okay located near the residence of Atty. Vicente de la Serna in Mandaue City. We were on a "pakiao" basis. We stayed put until 1993 when we resigned and joined Dodoy Luna in Labogon, Mandaue City as classifier until 1995. In 1996[,] Jesus rested. It was only in 1997 that he worked back. He replaced me, as a classifier in Rattan Traders owned by Allan Mayol. But then, towards the end of the year, he left the factory and relaxed in our place of birth, in Sogod, Cebu.9. It was only towards the end of 1999 that Jesus was taken back by Allan Mayol as sizing machine operator. However, the work was off and on basis. Not regular in nature, he was harping a side line job with me knowing that I am now working with Faustino Apondar that supplies rattan furnitures [sic] to South East (Intl) Rattan, Inc. As a brother, I allowed Jesus to work with me and collect the proceeds of his services as part of my collectibles from Faustino Apondar since I was on a "pakiao" basis. He was working at his pleasure. Which means, he works if he likes to? That will be until 10:00 oclock in the evening.x x x x29The Certification dated January 20, 2004 of Allan Mayol reads:This is to certify that I personally know Jesus Coming, the brother of Vicente Coming. Jesus is a rattan factory worker and he was working with me as rattan pole sizing/classifier of my business from 1997 up to part of 1998 when he left my factory at will. I took him back towards the end of 1999, this time as a sizing machine operator. In all these years, his services are not regular. He works only if he likes to.30Faustino Apondar likewise issued a Certification which states:This is to certify that I am a maker/supplier of finished Rattan Furniture. As such, I have several rattan furniture workers under me, one of whom is Vicente Coming, the brother of Jesus Coming.That sometime in 1999, Vicente pleaded to me for a side line job of his brother, Jesus who was already connected with Allan Mayol. Having vouched for the integrity of his brother and knowing that the job is temporary in character, I allowed Jesus to work with his brother Vicente. However, the proceeds will be collected together with his brother Vicente since it was the latter who was working with me. He renders services to his brother work only after the regular working hours but off and on basis.31On the other hand, respondent submitted the affidavit executed by Eleoterio Brigoli, Pedro Brigoli, Napoleon Coming, Efren Coming and Gil Coming who all attested that respondent was their co-worker at SEIRI.Their affidavit reads:We, the undersigned, all of legal ages, Filipino, and resident[s] of Cebu, after having been duly sworn to in accordance with law, depose and say:That we are former employees of SOUTH EAST RATTAN which is owned by Estan Eslao Agbay;That we personally know JESUS COMING considering that we worked together in one company SOUTH EAST RATTANT [sic];That we together with JESUS COMING are all under the employ of ESTAN ESLAO AGBAY considering that the latter is the one directly paying us and holds the absolute control of all aspects of our employment;That it is not true that JESUS COMING is under the employ of one person other than ESTAN ESLAO AGBAY OF SOUTH EAST RATTAN;That Jesus Coming is one of the pioneer employees of SOUTH EAST RATTAN and had been employed therein for almost twenty years;That we executed this affidavit to attest to the truth of the foregoing facts and to deny any contrary allegation made by the company against his employment with SOUTH EAST RATTAN.32In his decision, Labor Arbiter Carreon found that respondents work as sizing machine operator is usually necessary and desirable to the rattan furniture business of petitioners and their failure to include respondent in the employment report to SSS is not conclusive proof that respondent is not their employee. As to the affidavit of Vicente Coming, Labor Arbiter Carreon did not give weight to his statement that respondent is not petitioners employee but that of one Faustino Apondar. Labor Arbiter Carreon was not convinced that Faustino Apondar is an independent contractor who has a contractual relationship with petitioners.In reversing the Labor Arbiter, the NLRC reasoned as follows:First complainant alleged that he worked continuously from March 17, 1984 up to January 21, 2002.1wphi1Records reveal however that South East (Intl.) Rattan, Inc. was incorporated only last July 18, 1986 (p. 55 records)[.] Moreover, when they started to actually operate in 1987, the company was engaged purely on "buying and exporting rattan furniture" hence no manufacturing employees were hired. Furthermore, from the last quarter of 1989 up to August of 1992, the company suspended operations due to economic reverses as per Certification issued by the Securities and Exchange Commission (p. 56 records)[.]Second, for all his insistence that he was a regular employee, complainant failed to present a single payslip, voucher or a copy of a company payroll showing that he rendered service during the period indicated therein. x x xFrom the above established facts we are inclined to give weight and credence to the Certifications of Allan Mayol and Faustino Apondar, both suppliers of finished Rattan Furniture (pp. 442-43, records). It appears that complainant first worked with Allan Mayol and later with Faustino Apondar upon the proddings of his brother Vicente. Vicentes affidavit as to complainants employment history was more detailed and forthright. x x xx x x xIn the case at bar, there is likewise substantial evidence to support our findings that complainant was not an employee of respondents. Thus:1. Complainants name does not appear in the list of employees reported to the SSS.2. His name does not also appear in the sample payrolls of respondents employees.3. The certification of Allan Mayol and Fasutino Apondar[,] supplier of finished rattan products[,] that complainant had at one time or another worked with them.4. The Affidavit of Vicente Coming, complainants full brother[,] attesting that complainant had never been an employee of respondent. The only connection was that their employer Faustino Apondar supplies finished rattan products to respondents.33On the other hand, the CA gave more credence to the declarations of the five former employees of petitioners that respondent was their co-worker in SEIRI. One of said affiants is Vicente Comings own son, Gil Coming. Vicente averred in his second affidavit that when he confronted his son, the latter explained that he was merely told by their Pastor to sign the affidavit as it will put an end to the controversy. Vicente insisted that his son did not know the contents and implications of the document he signed. As to the absence of respondents name in the payroll and SSS employment report, the CA observed that the payrolls submitted were only from January 1, 1999 to December 29, 2000 and not the entire period of eighteen years when respondent claimed he worked for SEIRI. It further noted that the names of the five affiants, whom petitioners admitted to be their former employees, likewise do not appear in the aforesaid documents. According to the CA, it is apparent that petitioners maintained a separate payroll for certain employees or willfully retained a portion of the payroll.x x x As to the "control test", the following facts indubitably reveal that respondents wielded control over the work performance of petitioner, to wit: (1) they required him to work within the company premises; (2) they obliged petitioner to report every day of the week and tasked him to usually perform the same job; (3) they enforced the observance of definite hours of work from 8 oclock in the morning to 5 oclock in the afternoon; (4) the mode of payment of petitioners salary was under their discretion, at first paying him on pakiao basis and thereafter, on daily basis; (5) they implemented company rules and regulations; (6) [Estanislao] Agbay directly paid petitioners salaries and controlled all aspects of his employment and (7) petitioner rendered work necessary and desirable in the business of the respondent company.34We affirm the CA.In Tan v. Lagrama,35the Court held that the fact that a worker was not reported as an employee to the SSS is not conclusive proof of the absence of employer-employee relationship. Otherwise, an employer would be rewarded for his failure or even neglect to perform his obligation.36Nor does the fact that respondents name does not appear in the payrolls and pay envelope records submitted by petitioners negate the existence of employer-employee relationship. For a payroll to be utilized to disprove the employment of a person, it must contain a true and complete list of the employee.37In this case, the exhibits offered by petitioners before the NLRC consisting of copies of payrolls and pay earnings records are only for the years 1999 and 2000; they do not cover the entire 18-year period during which respondent supposedly worked for SEIRI.In their comment to the petition filed by respondent in the CA, petitioners emphasized that in the certifications issued by Mayol and Apondar, it was shown that respondent was employed and working for them in those years he claimed to be working for SEIRI. However, a reading of the certification by Mayol would show that while the latter claims to have respondent under his employ in 1997, 1998 and 1999, respondents services were not regular and that he works only if he wants to. Apondars certification likewise stated that respondent worked for him since 1999 through his brother Vicente as "sideline" but only after regular working hours and "off and on" basis. Even assuming the truth of the foregoing statements, these do not foreclose respondents regular or full-time employment with SEIRI. In effect, petitioners suggest that respondent was employed by SEIRIs suppliers, Mayol and Apondar but no competent proof was presented as to the latters status as independent contractors.In the same comment, petitioners further admitted that the five affiants who attested to respondents employment with SEIRI are its former workers whom they describe as "disgruntled workers of SEIRI" with an axe to grind against petitioners, and that their execution of affidavit in support of respondents claim is "their very way of hitting back the management of SEIRI after disciplinary measures were meted against them."38This allegation though was not substantiated by petitioners. Instead, after the CA rendered its decision reversing the NLRCs ruling, petitioners subsequently changed their theory by denying the employment relationship with the five affiants in their motion for reconsideration, thus:x x x Since the five workers were occupying and working on a leased premises of the private respondent, they were called workers of SEIRI (private respondent). Such admission however, does not connote employment. For the truth of the matter, all of the five employees of the supplier assigned at the leased premises of the private respondent. Because of the recommendation of the private respondent with regards to the disciplinary measures meted on the five workers, they wanted to hit back against the private respondent. Their motive to implicate private respondent was to vindicate. Definitely, they have an axe to grind against the private respondent. Mention has to be made that despite the dismissal of these five (5) witnesses from their service, none of them ever went to the National Labor [Relations] Commission and invoked their rights, if any, against their employer or at the very least against the respondent. The reason is obvious, since they knew pretty well that they were not employees of SEIRI but rather under the employ of Allan Mayol and Faustino Apondar, working on a leased premise of respondent. x x x39Petitioners admission that the five affiants were their former employees is binding upon them. While they claim that respondent was the employee of their suppliers Mayol and Apondar, they did not submit proof that the latter were indeed independent contractors; clearly, petitioners failed to discharge their burden of proving their own affirmative allegation.40There is thus no showing that the five former employees of SEIRI were motivated by malice, bad faith or any ill-motive in executing their affidavit supporting the claims of respondent.In any controversy between a laborer and his master, doubts reasonably arising from the evidence are resolved in favor of the laborer.41As a regular employee, respondent enjoys the right to security of tenure under Article 27942of the Labor Code and may only be dismissed for a just43or authorized44cause, otherwise the dismissal becomes illegal.Respondent, whose employment was terminated without valid cause by petitioners, is entitled to reinstatement without loss of seniority rights and other privileges and to his full back wages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Where reinstatement is no longer viable as an option, back wages shall be computed from the time of the illegal termination up to the finality of the decision. Separation pay equivalent to one month salary for every year of service should likewise be awarded as an alternative in case reinstatement in not possible.45WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated February 21, 2008 and Resolution dated February 9, 2009 of the Court of Appeals in CA-G.R. No. CEB-SP No. 02113 are hereby AFFIRMED and UPHELD.Petitioners to pay the costs of suit.SO ORDERED.MARTIN S. VILLARAMA, JR.Associate JusticeWE CONCUR:SECOND DIVISIONG.R. No. 195190, July 28, 2014ROYALE HOMES MARKETING CORPORATION,Petitioner,v.FIDEL P. ALCANTARA [DECEASED], SUBSTITUTED BY HIS HEIRS,Respondent.D E C I S I O NDEL CASTILLO,J.:Not every form of control that a hiring party imposes on the hired party is indicative of employee-employer relationship. Rules and regulations that merely serve as guidelines towards the achievement of a mutually desired result without dictating the means and methods of accomplishing it do not establish employer-employee relationship.1cralawred

This Petition for Review onCertiorari2assails the June 23, 2010 Decision3of the Court of Appeals (CA) in CA-G.R. SP No. 109998 which (i) reversed and set aside the February 23, 2009 Decision4of the National Labor Relations Commission (NLRC), (ii) ordered petitioner Royale Homes Marketing Corporation (Royale Homes) to pay respondent Fidel P. Alcantara (Alcantara) backwages and separation pay, and (iii) remanded the case to the Labor Arbiter for the proper determination and computation of said monetary awards.

Also assailed in this Petition is the January 18, 2011 Resolution5of the CA denying Royale Homes Motion for Reconsideration,6as well as its Supplemental7thereto.

Factual Antecedents

In 1994, Royale Homes, a corporation engaged in marketing real estates, appointed Alcantara as its Marketing Director for a fixed period of one year. His work consisted mainly of marketing Royale Homes real estate inventories on an exclusive basis. Royale Homes reappointed him for several consecutive years, the last of which covered the period January 1 to December 31, 2003 where he held the position of Division 5 Vice-President-Sales.8cralawred

Proceedings before the Labor Arbiter

On December 17, 2003, Alcantara filed a Complaint for Illegal Dismissal9against Royale Homes and its President Matilde Robles, Executive Vice-President for Administration and Finance Ma. Melinda Bernardino, and Executive Vice- President for Sales Carmina Sotto. Alcantara alleged that he is a regular employee of Royale Homes since he is performing tasks that are necessary and desirable to its business; that in 2003 the company gave him P1.2 million for the services he rendered to it; that in the first week of November 2003, however, the executive officers of Royale Homes told him that they were wondering why he still had the gall to come to office and sit at his table;10and that the acts of the executive officers of Royale Homes amounted to his dismissal from work without any valid or just cause and in gross disregard of the proper procedure for dismissing employees. Thus, he also impleaded the corporate officers who, he averred, effected his dismissal in bad faith and in an oppressive manner.

Alcantara prayed to be reinstated to his former position without loss of seniority rights and other privileges, as well as to be paid backwages, moral and exemplary damages, and attorneys fees. He further sought that the ownership of the Mitsubishi Adventure with Plate No. WHD-945 be transferred to his name.

Royale Homes, on the other hand, vehemently denied that Alcantara is its employee. It argued that the appointment paper of Alcantara is clear that it engaged his services as an independent sales contractor for a fixed term of one year only. He never received any salary, 13th month pay, overtime pay or holiday pay from Royale Homes as he was paid purely on commission basis. In addition, Royale Homes had no control on how Alcantara would accomplish his tasks and responsibilities as he was free to solicit sales at any time and by any manner which he may deem appropriate and necessary. He is even free to recruit his own sales personnel to assist him in pursuance of his sales target.

According to Royale Homes, Alcantara decided to leave the company after his wife, who was once connected with it as a sales agent, had formed a brokerage company that directly competed with its business, and even recruited some of its sales agents. Although this was against the exclusivity clause of the contract, Royale Homes still offered to accept Alcantaras wife back so she could continue to engage in real estate brokerage, albeit exclusively for Royale Homes. In a special management committee meeting on October 8, 2003, however, Alcantara announced publicly and openly that he would leave the company by the end of October 2003 and that he would no longer finish the unexpired term of his contract. He has decided to join his wife and pursue their own brokerage business. Royale Homes accepted Alcantaras decision. It then threw adespedidaparty in his honor and, subsequently, appointed a new independent contractor.

Two months after he relinquished his post, however, Alcantara appeared in Royale Homes and submitted a letter claiming that he was illegally dismissed.

Ruling of the Labor Arbiter

On September 7, 2005, the Labor Arbiter rendered a Decision11holding that Alcantara is an employee of Royale Homes with a fixed-term employment period from January 1 to December 31, 2003 and that the pre-termination of his contract was against the law. Hence, Alcantara is entitled to an amount which he may have earned on the average for the unexpired portion of the contract. With regard to the impleaded corporate officers, the Labor Arbiter absolved them from any liability.

The dispositive portion of the Labor Arbiters Decision reads:chanRoblesvirtualLawlibraryWHEREFORE, premises considered, judgment is hereby rendered ordering the respondent Royale Homes Marketing Corp. to pay the complainant the total amount of TWO HUNDRED SEVENTY SEVEN THOUSAND PESOS (P277,000.00) representing his compensation/commission for the unexpired term of his contract.

All other claims are dismissed for lack of merit.

SO ORDERED.12chanrobleslaw

Both parties appealed the Labor Arbiters Decision to the NLRC. Royale Homes claimed that the Labor Arbiter grievously erred in ruling that there exists an employer-employee relationship between the parties. It insisted that the contract between them expressly states that Alcantara is an independent contractor and not an ordinary employee. It had no control over the means and methods by which he performed his work. Royale Homes likewise assailed the award of P277,000.00 for lack of basis as it did not pre-terminate the contract. It was Alcantara who chose not to finish the contract.

Alcantara, for his part, argued that the Labor Arbiter erred in ruling that his employment was for a fixed-term and that he is not entitled to backwages, reinstatement, unpaid commissions, and damages.

Ruling of the National Labor Relations Commission

On February 23, 2009, the NLRC rendered its Decision,13ruling that Alcantara is not an employee but a mere independent contractor of Royale Homes. It based its ruling mainly on the contract which does not require Alcantara to observe regular working hours. He was also free to adopt the selling methods he deemed most effective and can even recruit sales agents to assist him in marketing the inventories of Royale Homes. The NLRC also considered the fact that Alcantara was not receiving monthly salary, but was being paid on commission basis as stipulated in the contract. Being an independent contractor, the NLRC concluded that Alcantaras Complaint is cognizable by the regular courts.

Thefalloof the NLRC Decision reads:chanRoblesvirtualLawlibraryWHEREFORE, premises considered, the Decision of Labor Arbiter Dolores Peralta-Beley dated September 5, 2005 is REVERSED and SET ASIDE and a NEW ONE rendered dismissing the complaint for lack of jurisdiction.

SO ORDERED.14

Alcantara moved for reconsideration.15 In a Resolution16dated May 29, 2009, however, the NLRC denied his motion.

Alcantara thus filed a Petition forCertiorari17with the CA imputing grave abuse of discretion on the part of the NLRC in ruling that he is not an employee of Royale Homes and that it is the regular courts which have jurisdiction over the issue of whether the pre-termination of the contract is valid.

Ruling of the Court of Appeals

On June 23, 2010, the CA promulgated its Decision18granting Alcantaras Petition and reversing the NLRCs Decision. Applying the four-fold and economic reality tests, it held that Alcantara is an employee of Royale Homes. Royale Homes exercised some degree of control over Alcantara since his job, as observed by the CA, is subject to company rules, regulations, and periodic evaluations. He was also bound by the company code of ethics. Moreover, the exclusivity clause of the contract has made Alcantara economically dependent on Royale Homes, supporting the theory that he is an employee of said company.

The CA further held that Alcantaras termination from employment was without any valid or just cause, and it was carried out in violation of his right to procedural due process. Thus, the CA ruled that he is entitled to backwages and separation pay, in lieu of reinstatement. Considering, however, that the CA was not satisfied with the proof adduced to establish the amount of Alcantaras annual salary, it remanded the case to the Labor Arbiter to determine the same and the monetary award he is entitled to. With regard to the corporate officers, the CA absolved them from any liability for want of clear proof that they assented to the patently unlawful acts or that they are guilty of bad faith or gross negligence. Thus:chanRoblesvirtualLawlibraryWHEREFORE, in view of the foregoing, the instant PETITION is GRANTED. The assailed decision of the National Labor Relations Commission in NLRC NCR CASE NO. 00-12-14311-03 NLRC CA NO. 046104-05 dated February 23, 2009 as well as the Resolution dated May 29, 2009 are hereby SET ASIDE and a new one is entered ordering the respondent company to pay petitioner backwages which shall be computed from the time of his illegal termination in October 2003 up to the finality of this decision, plus separation pay equivalent to one month salary for every year of service. This case is REMANDED to the Labor Arbiter for the proper determination and computation of back wages, separation pay and other monetary benefits that petitioner is entitled to.

SO ORDERED.19chanrobleslaw

Royale Homes filed a Motion for Reconsideration20and a Supplemental Motion for Reconsideration.21 In a Resolution22dated January 18, 2011, however, the CA denied said motions.Issues

Hence, this Petition where Royale Homes submits before this Court the following issues for resolution:chanRoblesvirtualLawlibraryA.

WHETHER THE COURT OF APPEALS HAS DECIDED THE INSTANT CASE NOT IN ACCORD WITH LAW AND APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT REVERSED THE RULING OF THE NLRC DISMISSING THE COMPLAINT OF RESPONDENT FOR LACK OF JURISDICTION AND CONSEQUENTLY, IN FINDING THAT RESPONDENT WAS ILLEGALLY DISMISSED[.]B.

WHETHER THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN DISREGARDING THE EN BANC RULING OF THIS HONORABLE COURT IN THE CASE OF TONGKO VS. MANULIFE, AND IN BRUSHING ASIDE THE APPLICABLE RULINGS OF SONZA VS. ABS CBN AND CONSULTA V. CA[.]C.

WHETHER THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN DENYING THE MOTION FOR RECONSIDERATION OF PETITIONER AND IN REFUSING TO CORRECT ITSELF[.]23

Royale Homes contends that its contract with Alcantara is clear and unambiguous - it engaged his services as an independent contractor. This can be readily seen from the contract stating that no employer-employee relationship exists between the parties; that Alcantara was free to solicit sales at any time and by any manner he may deem appropriate; that he may recruit sales personnel to assist him in marketing Royale Homes inventories; and, that his remunerations are dependent on his sales performance.

Royale Homes likewise argues that the CA grievously erred in ruling that it exercised control over Alcantara based on a shallow ground that his performance is subject to company rules and regulations, code of ethics, periodic evaluation, and exclusivity clause of contract. Royale Homes maintains that it is expected to exercise some degree of control over its independent contractors, but that does not automatically result in the existence of employer-employee relationship. For control to be considered as a proof tending to establish employer-employee relationship, the same must pertain to the means and method of performing the work; not on the relationship of the independent contractors among themselves or their persons or their source of living.

Royale Homes further asserts that it neither hired nor wielded the power to dismiss Alcantara. It was Alcantara who openly and publicly declared that he was pre-terminating his fixed-term contract.

The pivotal issue to be resolved in this case is whether Alcantara was an independent contractor or an employee of Royale Homes.Our Ruling

The Petition is impressed with merit.

The determination of whether a party who renders services to another is an employee or an independent contractor involves an evaluation of factual matters which, ordinarily, is not within the province of this Court. In view of the conflicting findings of the tribunals below, however, this Court is constrained to go over the factual matters involved in this case.24cralawred

The juridical relationship of the partiesbased on their written contract

The primary evidence of the nature of the parties relationship in this case is the written contract that they signed and executed in pursuance of their mutual agreement. While the existence of employer-employee relationship is a matter of law, the characterization made by the parties in their contract as to the nature of their juridical relationship cannot be simply ignored, particularly in this case where the parties written contract unequivocally states their intention at the time they entered into it. InTongko v. The Manufacturers Life Insurance Co. (Phils.), Inc.,25it was held that:chanRoblesvirtualLawlibraryTo be sure, the Agreements legal characterization of the nature of the relationship cannot be conclusive and binding on the courts; x x x the characterization of the juridical relationship the Agreement embodied is a matter of law that is for the courts to determine. At the same time, though, the characterization the parties gave to their relationship in the Agreement cannot simply be brushed aside because it embodies their intent at the time they entered the Agreement, and they were governed by this understanding throughout their relationship. At the very least, the provision on the absence of employer-employee relationship between the parties can be an aid in considering the Agreement and its implementation, and in appreciating the other evidence on record.26

In this case, the contract,27duly signed and not disputed by the parties, conspicuously provides that no employer-employee relationship exists between Royale Homes and Alcantara, as well as his sales agents. It is clear that they did not want to be bound by employer-employee relationship at the time of the signing of the contract. Thus:chanRoblesvirtualLawlibraryJanuary 24, 2003

MR. FIDEL P. ALCANTARA13 Rancho IMarikina City

Dear Mr. Alcantara,

This will confirm your appointment as Division 5 VICE[-]PRESIDENT-SALES of ROYALE HOMES MARKETING CORPORATION effective January 1, 2003 to December 31, 2003.

Your appointment entails marketing our real estate inventories on an EXCLUSIVE BASIS under such price, terms and condition to be provided to you from time to time.

As such, you can solicit sales at any time and by any manner which you deem appropriate and necessary to market our real estate inventories subject to rules, regulations and code of ethics promulgated by the company. Further, you are free to recruit sales personnel/agents to assist you in marketing of our inventories provided that your personnel/agents shall first attend the required seminars and briefing to be conducted by us from time to time for the purpose of familiarizing them of terms and conditions of sale, the nature of property sold, etc., attendance of which shall be a condition precedent for their accreditation by us.

That as such Division 5 VICE[-]PRESIDENT-SALES you shall be entitled to:chanRoblesvirtualLawlibrary1. Commission override of 0.5% for all option sales beginning January 1, 2003 booked by your sales agents.

2. Budget allocation depending on your divisions sale performance as per our budget guidelines.

3. Sales incentive and other forms of company support which may be granted from time to time.

It is understood, however, that no employer-employee relationship exists between us, that of your sales personnel/agents, and that you shall hold our company x x x, its officers and directors, free and harmless from any and all claims of liability and damages arising from and/or incident to the marketing of our real estate inventories.

We reserve, however, our right to terminate this agreement in case of violation of any company rules and regulations, policies and code of ethics upon notice for justifiable reason.

Your performance shall be subject to periodic evaluation based on factors which shall be determined by the management.

If you are amenable to the foregoing terms and conditions, please indicate your conformity by signing on the space provided below and return [to] us a duplicate copy of this letter, duly accomplished, to constitute as our agreement on the matter. (Emphasis ours)

Since the terms of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations should control.28 No construction is even needed as they already expressly state their intention. Also, this Court adopts the observation of the NLRC that it is rather strange on the part of Alcantara, an educated man and a veteran sales broker who claimed to be receiving P1.2 million as his annual salary, not to have contested the portion of the contract expressly indicating that he is not an employee of Royale Homes if their true intention were otherwise.

The juridical relationship of theparties based on Control Test

In determining the existence of an employer-employee relationship, this Court has generally relied on the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employers power to control the employee with respect to the means and methods by which the work is to be accomplished.29 Among the four, the most determinative factor in ascertaining the existence of employer-employee relationship is the right of control test.30 It is deemed to be such an important factor that the other requisites may even be disregarded.31 This holds true where the issues to be resolved is whether a person who performs work for another is the latters employee or is an independent contractor,32as in this case. For where the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the means by which such end is reached, employer-employee relationship is deemed to exist.33cralawred

In concluding that Alcantara is an employee of Royale Homes, the CA ratiocinated that since the performance of his tasks is subject to company rules, regulations, code of ethics, and periodic evaluation, the element of control is present.

The Court disagrees.

Not every form of control is indicative of employer-employee relationship. A person who performs work for another and is subjected to its rules, regulations, and code of ethics does not necessarily become an employee.34 As long as the level of control does not interfere with the means and methods of accomplishing the assigned tasks, the rules imposed by the hiring party on the hired party do not amount to the labor law concept of control that is indicative of employer-employee relationship. InInsular Life Assurance Co., Ltd. v. National Labor Relations Commission35it was pronounced that:chanRoblesvirtualLawlibraryLogically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. x x x36

In this case, the Court agrees with Royale Homes that the rules, regulations, code of ethics, and periodic evaluation alluded to by Alcantara do not involve control over the means and methods by which he was to perform his job. Understandably, Royale Homes has to fix the price, impose requirements on prospective buyers, and lay down the terms and conditions of the sale, including the mode of payment, which the independent contractors must follow. It is also necessary for Royale Homes to allocate its inventories among its independent contractors, determine who has priority in selling the same, grant commission or allowance based on predetermined criteria, and regularly monitor the result of their marketing and sales efforts. But to the mind of this Court, these do not pertain to the means and methods of how Alcantara was to perform and accomplish his task of soliciting sales. They do not dictate upon him the details of how he would solicit sales or the manner as to how he would transact business with prospective clients. InTongko, this Court held that guidelines or rules and regulations that do not pertain to the means or methods to be employed in attaining the result are not indicative of control as understood in labor law. Thus:chanRoblesvirtualLawlibraryFrom jurisprudence, an important lesson that thefirst Insular Lifecase teaches us is that a commitment to abide by the rules and regulations of an insurance company does notipso factomake the insurance agent an employee. Neither do guidelines somehow restrictive of the insurance agents conduct necessarily indicate control as this term is defined in jurisprudence.Guidelines indicative of labor law control, as thefirst Insular Lifecase tells us, should not merely relate to the mutually desirable result intended by the contractual relationship; they must have the nature of dictating the means or methods to be employed in attaining the result, or of fixing the methodology and of binding or restricting the party hired to the use of these means. In fact, results-wise, the principal can impose production quotas and can determine how many agents, with specific territories, ought to be employed to achieve the companys objectives. These are management policy decisions that the labor law element of control cannot reach. Our ruling in these respects in thefirst Insular Lifecase was practically reiterated inCarungcong. Thus, as will be shown more fully below, Manulifes codes of conduct, all of which do not intrude into the insurance agents means and manner of conducting their sales and only control them as to the desired results and Insurance Code norms, cannot be used as basis for a finding that the labor law concept of control existed between Manulife and Tongko.37 (Emphases in the original)

As the party claiming the existence of employer-employee relationship, it behoved upon Alcantara to prove the elements thereof, particularly Royale Homes power of control over the means and methods of accomplishing the work.38 He, however, failed to cite specific rules, regulations or codes of ethics that supposedly imposed control on his means and methods of soliciting sales and dealing with prospective clients. On the other hand, this case is replete with instances that negate the element of control and the existence of employer-employee relationship. Notably, Alcantara was not required to observe definite working hours.39 Except for soliciting sales, Royale Homes did not assign other tasks to him. He had full control over the means and methods of accomplishing his tasks as he can solicit sales at any time and by any manner which [he may] deem appropriate and necessary. He performed his tasks on his own account free from the control and direction of Royale Homes in all matters connected therewith, except as to the results thereof.40cralawred

Neither does the repeated hiring of Alcantara prove the existence of employer-employee relationship.41 As discussed above, the absence of control over the means and methods disproves employer-employee relationship. The continuous rehiring of Alcantara simply signifies the renewal of his contract with Royale Homes, and highlights his satisfactory services warranting the renewal of such contract. Nor does the exclusivity clause of contract establish the existence of the labor law concept of control. InConsulta v. Court of Appeals,42it was held that exclusivity of contract does not necessarily result in employer-employee relationship,viz:chanRoblesvirtualLawlibraryx x x However, the fact that the appointment required Consulta to solicit business exclusively for Pamana did not mean that Pamana exercised control over the means and methods of Consultas work as the term control is understood in labor jurisprudence. Neither did it make Consulta an employee of Pamana. Pamana did not prohibit Consulta from engaging in any other business, or from being connected with any other company, for as long as the business [of the] company did not compete with Pamanas business.43

The same scenario obtains in this case. Alcantara was not prohibited from engaging in any other business as long as he does not sell projects of Royale Homes competitors. He can engage in selling various other products or engage in unrelated businesses.

Payment of Wages

The element of payment of wages is also absent in this case. As provided in the contract, Alcantaras remunerations consist only of commission override of 0.5%, budget allocation, sales incentive and other forms of company support. There is no proof that he received fixed monthly salary. No payslip or payroll was ever presented and there is no proof that Royale Homes deducted from his supposed salary withholding tax or that it registered him with the Social Security System, Philippine Health Insurance Corporation, or Pag-Ibig Fund. In fact, his Complaint merely states a ballpark figure of his alleged salary of P100,000.00, more or less. All of these indicate an independent contractual relationship.44 Besides, if Alcantara indeed considered himself an employee of Royale Homes, then he, an experienced and professional broker, would have complained that he was being denied statutorily mandated benefits. But for nine consecutive years, he kept mum about it, signifying that he has agreed, consented, and accepted the fact that he is not entitled to those employee benefits because he is an independent contractor.

This Court is, therefore, convinced that Alcantara is not an employee of Royale Homes, but a mere independent contractor. The NLRC is, therefore, correct in concluding that the Labor Arbiter has no jurisdiction over the case and that the same is cognizable by the regular courts.

WHEREFORE, the instant Petition is herebyGRANTED. The June 23, 2010 Decision of the Court of Appeals in CA-G.R. SP No. 109998 isREVERSED and SET ASIDE. The February 23, 2009 Decision of the National Labor Relations Commission isREINSTATED and AFFIRMED.

SO ORDERED.

SECOND DIVISIONG.R. No. 195466, July 02, 2014ARIEL L. DAVID, DOING BUSINESS UNDER THE NAME AND STYLE YIELS HOG DEALER, PETITIONER, VS. JOHN G. MACASIO,Respondent.D E C I S I O NBRION,J.:We resolve in this petition for review oncertiorari1the challenge to the November 22, 2010 decision2and the January 31, 2011 resolution3of the Court of Appeals(CA)in CA-G.R. SP No. 116003. The CA decision annulled and set aside the May 26, 2010 decision4of the National Labor Relations Commission(NLRC)5which, in turn, affirmed the April 30, 2009 decision6of the Labor Arbiter(LA). The LAs decision dismissed respondent John G. Macasios monetary claims.The Factual Antecedents

In January 2009, Macasio filed before the LA a complaint7against petitioner Ariel L. David, doing business under the name and style Yiels Hog Dealer, for non-payment ofovertime pay, holiday payand13thmonth pay. He also claimed payment formoral and exemplary damagesandattorneys fees. Macasio also claimed payment forservice incentive leave(SIL).8

Macasio alleged9before the LA that he had been working as a butcher for David since January 6, 1995. Macasio claimed that David exercised effective control and supervision over his work, pointing out that David: (1) set the work day, reporting time and hogs to be chopped, as well as the manner by which he was to perform his work; (2) daily paid his salary of P700.00, which was increased from P600.00 in 2007, P500.00 in 2006 and P400.00 in 2005; and (3) approved and disapproved his leaves. Macasio added that David owned the hogs delivered for chopping, as well as the work tools and implements; the latter also rented the workplace. Macasio further claimed that David employs about twenty-five (25) butchers and delivery drivers.

In his defense,10David claimed that he started his hog dealer business in 2005 and that he only has ten employees. He alleged that he hired Macasio as a butcher or chopper on pakyaw or task basis who is, therefore, not entitled to overtime pay, holiday pay and 13thmonth pay pursuant to the provisions of the Implementing Rules and Regulations(IRR)of the Labor Code. David pointed out that Macasio: (1) usually starts his work at 10:00 p.m. and ends at 2:00 a.m. of the following day or earlier, depending on the volume of the delivered hogs; (2) received the fixed amount of P700.00 per engagement, regardless of the actual number of hours that he spent chopping the delivered hogs; and (3) was not engaged to report for work and, accordingly, did not receive any fee when no hogs were delivered.

Macasio disputed Davids allegations.11 He argued that,first,David did not start his business only in 2005. He pointed to the Certificate of Employment12that David issued in his favor which placed the date of his employment, albeit erroneously, in January 2000.Second,he reported for work every day which the payroll or time record could have easily proved had David submitted them in evidence.

Refuting Macasios submissions,13David claims that Macasio was not his employee as he hired the latter on pakyawor task basis. He also claimed that he issued the Certificate of Employment, upon Macasios request, only for overseas employment purposes. He pointed to the Pinagsamang Sinumpaang Salaysay,14executed by Presbitero Solano and Christopher (Antonio Macasios co-butchers), to corroborate his claims.

In the April 30, 2009 decision,15the LA dismissed Macasios complaint for lack of merit. The LA gave credence to Davids claim that he engaged Macasio on pakyaw or task basis. The LA noted the following facts to support this finding: (1) Macasio received the fixed amount of P700.00 for every work done, regardless of the number of hours that he spent in completing the task and of the volume or number of hogs that he had to chop per engagement; (2) Macasio usually worked for only four hours, beginning from 10:00 p.m. up to 2:00 a.m. of the following day; and (3) the P700.00 fixed wage far exceeds the then prevailing daily minimum wage of P382.00. The LA added that the nature of Davids business as hog dealer supports this pakyawor task basis arrangement.

The LA concluded that as Macasio was engaged on pakyaw or task basis, he is not entitled to overtime, holiday, SIL and 13thmonth pay.

The NLRCs Ruling

In its May 26, 2010 decision,16the NLRC affirmed the LA ruling.17The NLRC observed that David did not require Macasio to observe an eight-hour work schedule to earn the fixed P700.00 wage; and that Macasio had been performing a non-time work, pointing out that Macasio was paid a fixed amount for the completion of the assigned task, irrespective of the time consumed in its performance. Since Macasio was paid by result and not in terms of the time that he spent in the workplace, Macasio is not covered by the Labor Standards laws on overtime, SIL and holiday pay, and 13thmonth pay under the Rules and Regulations Implementing the 13th month pay law.18

Macasio moved for reconsideration19but the NLRC denied his motion in its August 11, 2010 resolution,20prompting Macasio to elevate his case to the CAviaa petition forcertiorari.21

The CAs Ruling

In its November 22, 2010 decision,22the CA partly granted Macasioscertioraripetition and reversed the NLRCs ruling for having been rendered with grave abuse of discretion.

While the CA agreed with the LA and the NLRC that Macasio was a task basis employee, it nevertheless found Macasio entitled to his monetary claims following the doctrine laid down inSerrano v. Severino Santos Transit.23The CA explained that as a task basis employee, Macasio is excluded from the coverage of holiday, SIL and 13thmonth payonly ifhe is likewise a field personnel. As defined by the Labor Code, a field personnel is one who performs the work away from the office or place of work and whose regular work hours cannot be determined with reasonable certainty. In Macasios case, the elements that characterize a field personnel are evidently lacking as he had been working as a butcher at Davids Yiels Hog Dealer business in Sta. Mesa, Manila under Davids supervision and control, and for a fixed working schedule that starts at 10:00 p.m.

Accordingly, the CA awarded Macasios claim for holiday, SIL and 13thmonth pay for three years, with 10% attorneys fees on the total monetary award. The CA, however, denied Macasios claim for moral and exemplary damages for lack of basis.

David filed the present petition after the CA denied his motion for reconsideration24in the CAs January 31, 2011 resolution.25The Petition

In this petition,26David maintains that Macasios engagement was on a pakyaw or task basis. Hence, the latter is excluded from the coverage of holiday, SIL and 13thmonth pay.

David reiterates his submissions before the lower tribunals27and adds that he never had any control over the manner by which Macasio performed his work and he simply looked on to the end-result. He also contends that he never compelled Macasio to report for work and that under their arrangement, Macasio was at liberty to choose whether to report for work or not as other butchers could carry out his tasks. He points out that Solano and Antonio had, in fact, attested to their (David and Macasios) established pakyawan arrangement that rendered a written contract unnecessary. In as much as Macasio is a task basis employee who is paid the fixed amount of P700.00 per engagement regardless of the time consumed in the performance David argues that Macasio is not entitled to the benefits he claims. Also, he posits that because he engaged Macasio on pakyaw or task basis then no employer-employee relationship exists between them.

Finally, David argues that factual findings of the LA, when affirmed by the NLRC, attain finality especially when, as in this case, they are supported by substantial evidence. Hence, David posits that the CA erred in reversing the labor tribunals findings and granting the prayed monetary claims.The Case for the Respondent

Macasio counters that he was not a task basis employee or a field personnel as David would have this Court believe.28He reiterates his arguments before the lower tribunals and adds that, contrary to Davids position, the P700.00 fee that he was paid for each day that he reported for work does not indicate a pakyaw or task basis employment as this amount was paid daily, regardless of the number or pieces of hogs that he had to chop. Rather, it indicates a daily-wage method of payment and affirms his regular employment status. He points out that David did not allege or present any evidence as regards the quota or number of hogs that he had to chop as basis for the pakyaw or task basis payment; neither did David present the time record or payroll to prove that he worked for less than eight hours each day. Moreover, David did not present any contract to prove that his employment was on task basis. As David failed to prove the alleged task basis or pakyawan agreement, Macasio concludes that he was Davids employee.

Procedurally, Macasio points out that Davids submissions in the present petition raise purely factual issues that are not proper for a petition for review oncertiorari. These issues whether he (Macasio) was paid by result or on pakyaw basis; whether he was a field personnel; whether an employer-employee relationship existed between him and David; and whether David exercised control and supervision over his work are all factual in nature and are, therefore, proscribed in a Rule 45 petition. He argues that the CAs factual findings bind this Court, absent a showing that such findings are not supported by the evidence or the CAs judgment was based on a misapprehension of facts. He adds that the issue of whether an employer-employee relationship existed between him and David had already been settled by the LA29and the NLRC30(as well as by the CA per Macasios manifestation before this Court dated November 15, 2012),31in his favor, in the separate illegal case that he filed against David.The Issue

The issue revolves around the proper application and interpretation of the labor law provisions on holiday, SIL and 13thmonth pay to a worker engaged on pakyaw or task basis. In the context of the Rule 65 petition before the CA, the issue is whether the CA correctly found the NLRC in grave abuse of discretion in ruling that Macasio is entitled to these labor standards benefits.The Courts Ruling

Wepartially grantthe petition.

Preliminary considerations: theMontoya ruling and the factual-issue-bar rule

In this Rule 45 petition for review oncertiorariof the CAs decision rendered under a Rule 65 proceeding, this Courts power of review is limited to resolving matters pertaining to any perceived legal errors that the CA may have committed in issuing the assailed decision. This is in contrast with the review for jurisdictional errors, which we undertake in an originalcertiorariaction. In reviewing the legal correctness of the CA decision, we examine the CA decision based on how it determined the presence or absence of grave abuse of discretion in the NLRC decision before it and not on the basis of whether the NLRC decision on the merits of the case was correct.32 In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it.33

Moreover, the Courts power in a Rule 45 petition limits us to a review of questions of law raised against the assailed CA decision.34

In this petition, David essentially asks the question whether Macasio is entitled to holiday, SIL and 13thmonth pay. This one is a question of law. The determination of this question of law however is intertwined with the largely factual issue of whether Macasio falls within the rule on entitlement to these claims or within the exception. In either case, the resolution of this factual issue presupposes another factual matter, that is, the presence of an employer-employee relationship between David and Macasio.

In insisting before this Court that Macasio was not his employee, David argues that he engaged the latter on pakyaw or task basis. Very noticeably, David confuses engagement on pakyaw or task basis with the lack of employment relationship. Impliedly, David asserts that their pakyawan or task basis arrangement negates the existence of employment relationship.

At the outset, we reject this assertion of the petitioner. Engagement on pakyaw or task basis does not characterize the relationship that may exist between the parties,i.e.,whether one of employment or independent contractorship. Article 97(6) of the Labor Code defines wages as xxx theremuneration or earnings, however designated, capable of being expressed in terms of money,whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which ispayable by an employer to an employeeunder a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered[.]35 In relation to Article 97(6), Article 10136of the Labor Code speaks of workers paid by results or those whose pay is calculated in terms of the quantity or quality of their work output which includes pakyaw work and other non-time work.

More importantly, by implicitly arguing that his engagement of Macasio on pakyaw or task basis negates employer-employee relationship, David would want the Court to engage on a factual appellate review of the entire case to determine the presence or existence of that relationship. This approach however is not authorized under a Rule 45 petition for review of the CA decision rendered under a Rule 65 proceeding.

First, the LA and the NLRC denied Macasios claimnotbecause of the absence of an employer-employee but because of its finding that since Macasio is paid onpakyawor task basis, then he is not entitled to SIL, holiday and 13thmonth pay.Second, we consider it crucial, that in the separate illegal dismissal case Macasio filed with the LA, the LA, the NLRC and the CA uniformly found the existence of an employer-employee relationship.37

In other words, aside from being factual in nature, the existence of an employer-employee relationship is in fact a non-issue in this case. To reiterate, in deciding a Rule 45 petition for review of a labor decision rendered by the CA under 65, the narrow scope of inquiry is whether the CA correctly determined the presence or absence of grave abuse of discretion on the part of the NLRC. In concrete question form, did the NLRC gravely abuse its discretion in denying Macasios claims simply because he is paid on a non-time basis?

At any rate, even if we indulge the petitioner, we find his claim that no employer-employee relationship exists baseless. Employing the control test,38we find that such a relationship exist in the present case.

Even a factual review shows thatMacasio is Davids employee

To determine the existence of an employer-employee relationship, four elements generally need to be considered, namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct. These elements or indicators comprise the so-called four-fold test of employment relationship. Macasios relationship with David satisfies this test.

First, David engaged the services of Macasio, thus satisfying the element of selection and engagement of the employee. David categorically confirmed this fact when, in his Sinumpaang Salaysay, he stated that nag apply po siya sa akin at kinuha ko siya na chopper[.]39 Also, Solano and Antonio stated in their Pinagsamang Sinumpaang Salaysay40that [k]ami po ay nagtratrabaho sa Yielsxxx na pag-aari ni Ariel David bilang butcher and kilala namin si xxx Macasio na isa ring butcher xxx ni xxx David atkasama namin siya sa aming trabaho.

Second, David paid Macasios wages. Both David and Macasio categorically stated in their respective pleadings before the lower tribunals and even before this Court that the former had been paying the latter P700.00 each day after the latter had finished the days task. Solano and Antonio also confirmed this fact of wage payment in their Pinagsamang Sinumpaang Salaysay.41This satisfies the element of payment of wages.

Third, David had been setting the day and time when Macasio should report for work. This power to determine the work schedule obviously implies power of control. By having the power to control Macasios work schedule, David could regulate Macasios work and could even refuse to give him any assignment, thereby effectively dismissing him.

Andfourth, David had the right and power to control and supervise Macasios work as to the means and methods of performing it. In addition to setting the day and time when Macasio should report for work, the established facts show that David rents the place where Macasio had been performing his tasks. Moreover, Macasio would leave the workplace only after he had finished chopping all of the hog meats given to him for the days task. Also, David would still engage Macasios services and have him report for work even during the days when only few hogs were delivered for butchering.

Under this overall setup, all those working for David, including Macasio, could naturally be expected to observe certain rules and requirements and David would necessarily exercise some degree of control as the chopping of the hog meats would be subject to his specifications. Also, since Macasio performed his tasks at Davids workplace, David could easily exercise control and supervision over the former. Accordingly, whether or not David actually exercised this right or power to control is beside the point as the law simply requires the existence of this power to control4243or, as in this case, the existence of the right and opportunity to control and supervise Macasio.44

In sum, the totality of the surrounding circumstances of the present case sufficiently points to an employer-employee relationship existing between David and Macasio.

Macasio is engaged on pakyaw or task basis

At this point, we note that all three tribunals the LA, the NLRC and the CA found that Macasio was engaged or paid on pakyaw or task basis. This factual finding binds the Court under the rule that factual findings of labor tribunals when supported by the established facts and in accord with the laws, especially when affirmed by the CA, is binding on this Court.

A distinguishing characteristic of pakyaw or task basis engagement, as opposed to straight-hour wage payment, is the non-consideration of the time spent in working. In a task-basis work, the emphasis is on the task itself, in the sense that payment is reckoned in terms of completion of the work, not in terms of the number of time spent in the completion of work.45Once the work or task is completed, the worker receives a fixed amount as wage, without regard to the standard measurements of time generally used in pay computation.

In Macasios case, the established facts show that he would usually start his work at 10:00 p.m. Thereafter, regardless of the total hours that he spent at the workplace or of the total number of the hogs assigned to him for chopping, Macasio would receive the fixed amount of P700.00 once he had completed his task. Clearly, these circumstances show a pakyaw or task basis engagement that all three tribunals uniformly found.

In sum, the existence of employment relationship between the parties is determined by applying the four-fold test; engagement on pakyaw or task basis does not determine the parties relationship as it is simply a method of pay computation. Accordingly, Macasio is Davids employee, albeit engaged on pakyaw or task basis.

As an employee of David paid onpakyawor task basis, we now go to the core issue of whether Macasio is entitled to holiday, 13th month, and SIL pay.

On the issue of Macasiosentitlement to holiday, SILand 13th month pay

The LA dismissed Macasios claims pursuant to Article 94 of the Labor Code in relation to Section 1, Rule IV of the IRR of the Labor Code, and Article 95 of the Labor Code, as well as Presidential Decree (PD) No. 851. The NLRC, on the other hand, relied on Article 82 of the Labor Code and the Rules and Regulations Implementing PD No. 851. Uniformly, these provisions exempt workers paid on pakyaw or task basis from the coverage of holiday, SIL and 13th month pay.

In reversing the labor tribunals rulings, the CA similarly relied on these provisions, as well as on Section 1, Rule V of the IRR of the Labor Code and the Courts ruling inSerrano v. Severino Santos Transit.46 These labor law provisions, when read together with the Serrano ruling, exempt those engaged on pakyaw or task basis only if they qualify as field personnel.

In other words, what we have before us is largely a question of law regarding the correct interpretation of these labor code provisions and the implementing rules; although, to conclude that the worker is exempted or covered depends on the facts and in this sense, is a question of fact: first, whether Macasio is a field personnel; andsecond, whether those engaged on pakyaw or task basis, but who are not field personnel, are exempted from the coverage of holiday, SIL and 13th month pay.

To put our discussion within the perspective of a Rule 45 petition for review of a CA decision rendered under Rule 65 and framed in question form, the legal question is whether the CA correctly ruled that it was grave abuse of discretion on the part of the NLRC to deny Macasios monetary claims simply because he is paid on a non-time basis without determining whether he is a field personnel or not.

To resolve these issues, we need to re-visit the provisions involved.

Provisions governing SIL and holiday pay

Article 82 of the Labor Code provides theexclusions from the coverageof Title I, Book III of the Labor Code - provisions governing working conditions and rest periods.Art. 82. Coverage. The provisions of [Title I] shall applyto employees in all establishments and undertakingswhether for profit or not,but not togovernment employees, managerial employees,field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another,and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.xxxx

Field personnel shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. [emphases and underscores ours]

Among the Title I provisions are the provisions on holiday pay (under Article 94 of the Labor Code) and SIL pay (under Article 95 of the Labor Code). Under Article 82, field personnel on one hand and workers who are paid by results on the other hand,are not coveredby the Title I provisions. The wordings of Article 82 of the Labor Code additionally categorize workers paid by results and field personnel as separate and distinct types of employees who are exempted from the Title I provisions of the Labor Code.

The pertinent portion of Article 94 of the Labor Code and its corresponding provision in the IRR47reads:chanroblesvirtuallawlibraryArt. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than (10) workers[.] [emphasis ours]xxxx

SECTION 1. Coverage. This Rule shall apply to all employees except:xxxx

(e)Field personnel and other employees whose time and performance is unsupervised by the employerincludingthose who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. [emphases ours]

On the other hand, Article 95 of the Labor Code and its corresponding provision in the IRR48pertinently provides:chanroblesvirtuallawlibraryArt. 95. Right to service incentive. (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.

(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of such establishment. [emphases ours]xxxx

Section 1. Coverage. This rule shall apply to all employees except:xxxx

(e)Field personnelandother employees whose performance is unsupervised by the employerincludingthose who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. [emphasis ours]

Under these provisions,the general ruleis that holiday and SIL pay provisions cover all employees. To be excluded from their coverage, an employee must be one of those that these provisions expressly exempt, strictly in accordance with the exemption.

Under the IRR, exemption from the coverage of holiday and SIL pay refer to field personnelandother employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis[.] Note thatunlike Article 82 of the Labor Code, the IRR on holiday and SIL pay do not exclude employees engaged on task basis as a separate and distinct category from employees classified as field personnel. Rather, these employees are altogether merged into one classification of exempted employees.

Because of this difference, it may be argued that the Labor Code may be interpreted to mean that those who are engaged on task basis, per se, are excluded from the SIL and holiday payment since this is what the Labor Code provisions, in contrast with the IRR, strongly suggest. The arguable interpretation of this rule may be conceded to be within the discretion granted to the LA and NLRC as the quasi-judicial bodies with expertise on labor matters.

However, as early as 1987 in the case ofCebu Institute of Technology v. Ople49the phrase those who are engaged on task or contract basis in the rule has already been interpreted to mean as follows:chanroblesvirtuallawlibrary[the phrase] should however, be related with "field personnel" applying the rule onejusdem generisthat general and unlimited terms are restrained and limited by the particular terms that they follow xxx Clearly, petitioner's teaching personnel cannot be deemed field personnel which refers "to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. [Par. 3, Article 82, Labor Code of the Philippines]. Petitioner's claim that private respondents are not entitled to the service incentive leave benefit cannot therefore be sustained.

In short, the payment of an employee on task orpakyawbasis alone is insufficient to exclude one from the coverage of SIL and holiday pay. They are exempted from the coverage of Title I (including the holiday and SIL pay) only if they qualify as field personnel. The IRR therefore validly qualifies and limits the general exclusion of workers paid by results found in Article 82 from the coverage of holiday and SIL pay. This is the only reasonable interpretation since the determination of excluded workers who are paid by results from the coverage of Title I is determined by the Secretary of Labor in appropriate regulations.

TheCebu Institute Technologyruling was reiterated in 2005 inAuto Bus Transport Systems, Inc., v. Bautista:chanroblesvirtuallawlibraryA careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been delimited by the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly excluded by Section 1 of Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply to employees classified as field personnel.The phrase other employees whose performance is unsupervised by the employer must not be understood as a separate classification of employees to which service incentive leave shall not be granted. Rather, it serves as an amplification of the interpretation of the definition of field personnel under the Labor Code as those whose actual hours of work in the field cannot be determined with reasonable certainty.

The same is true with respect to the phrase those who are engaged on task or contract basis, purely commission basis. Said phrase should be related with field personnel, applying the rule onejusdem generisthat general and unlimited terms are restrained and limited by the particular terms that they follow.

TheAutobusruling was in turn the basis ofSerrano v. Santos Transitwhich the CA cited in support of granting Macasios petition.

InSerrano, the Court, applying the rule onejusdem generis50declared thatemployees engaged on task or contract basis xxx are not automatically exempted from the grant of service incentive leave,unless, they fall under the classification of field personnel.51 The Court explained that the phrase including those who are engaged on task or contract basis, purely commission basis found in Section 1(d), Rule V of Book III of the IRR should not be understood as a separate classification of employees to which SIL shall not be granted. Rather, as with its preceding phrase - other employeeswhose performance is unsupervised by the employer - the phrase including those who are engaged on task or contract basis serves to amplify the interpretation of the Labor Code definition of field personnel as those whose actual hours of work in the field cannot be determined with reasonable certainty.

In contrast and in clear departure from settled case law, the LA and the NLRC still interpreted the Labor Code provisions and the IRR as exempting an employee from the coverage of Title I of the Labor Code based simply and solely on the mode of payment of an employee.The NLRCs utter disregard of this consistent jurisprudential ruling is a clear act of grave abuse of discretion.52In other words, by dismissing Macasios complaint without considering whether Macasio was a field personnel or not, theNLRC proceeded based on a significantly incomplete consideration of the case. This action clearly smacks of grave abuse of discretion.

Entitlement to holiday pay

Evidently, theSerranoruling speaks only of SIL pay. However, if the LA and the NLRC had only taken counsel from Serrano and earlier cases, they would have correctly reached a similar conclusion regarding the payment of holiday pay since the rule exempting field personnel from the grant of holiday pay is identically worded with the rule exempting field personnel from the grant of SIL pay. To be clear, the phrase employees engaged on task or contract basis found in the IRR on both SIL pay and holiday pay should be read together with the exemption of field personnel.

In short, in determining whether workers engaged on pakyaw or task basis is entitled to holiday and SIL pay, the presence (or absence) of employer supervision as regards the workers time and performance is the key: if the worker is simply engaged onpakyawor task basis, then thegeneral ruleis that he is entitled to a holiday pay and SIL pay unless exempted from the exceptions specifically provided under Article 94 (holiday pay) and Article 95 (SIL pay) of the Labor Code. However, if the worker engaged onpakyawor task basis also falls within the meaning of field personnel under the law, then he is not entitled to these monetary benefits.

Macasio does not fall under theclassification of field personnel

Based on the definition of field personnel under Article 82, we agree with the CA that Macasio does not fall under the definition of field personnel. The CAs finding in this regard is supported by the established facts of this case:first, Macasio regularly performed his duties at Davids principal place of business;second, his actual hours of work could be determined with reasonable certainty; and,third, David supervised his time and performance of duties. Since Macasio cannot be considered a field personnel, then he is not exempted from the grant of holiday, SIL pay even as he was engaged on pakyaw or task basis.

Not being a field personnel, we find the CA to be legally correct when it reversed the NLRCs ruling dismissing Macasios complaint for holiday and SIL pay for having been rendered with grave abuse of discretion.

Entitlement to 13thmonth pay

With respect to the payment of 13thmonth pay however, we find that the CA legally erred in finding that the NLRC gravely abused its discretion in denying this benefit to Macasio.

The governing law on 13thmonth pay is PD No. 851.53As with holiday and SIL pay, 13thmonth pay benefits generally cover all employees; an employee must be one of those expressly enumerated to be exempted. Section 3 of the Rules and Regulations Implementing P.D. No. 85154enumerates the exemptions from the coverage of 13thmonth pay benefits. Under Section 3(e), employers of those who arepaid on xxx task basis, and those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the performancethereof55are exempted.

Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations Implementing PD No. 851 exempts employees paid on task basis without any reference to field personnel. This could only mean that insofar as payment of the 13th month pay is concerned, the law did not intend to qualify the exemption from its coverage with the requirement that the task worker be a field personnel at the same time.

WHEREFORE, in light of these considerations, we herebyPARTIALLY GRANTthe petition insofar as the payment of 13thmonth pay to respondent is concerned. In all other aspects, weAFFIRMthe decision dated November 22, 2010 and the resolution dated January 31, 2011 of the Court of Appeals in CA-G.R. SP No. 116003.

SO ORDERED.

Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. 198534 July 3, 2013JENNY F. PECKSON,Petitioner,vs.ROBINSONS SUPERMARKET CORPORATION, JODY GADIA, ROENA SARTE, and RUBY ALEX,Respondents.D E C I S I O NREYES,J.:For resolution is the Petition for Review on Certiorari1of the Decision2dated June 8, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 109604 affirming the Decision3dated February 25, 2009 of the National Labor Relations Commission (NLRC) in NLRC NCR Case No. 00-11-09316-06/NLRC LAC No. 002020-07, which upheld the Dismissal4by the Labor Arbiter (LA) on May 30, 2007 of Jenny F. Peckson's (petitioner) complaint for constructive dismissal.Antecedent Facts and ProceedingsThe petitioner first joined the Robinsons Supermarket Corporation (RSC) as a Sales Clerk on November 3, 1987. On October 26, 2006, she was holding the position of Category Buyer when respondent Roena Sarte (Sarte), RSCs Assistant Vice-President for Merchandising, reassigned her to the position of Provincial Coordinator, effective November 1, 2006. Claiming that her new assignment was a demotion because it was non-supervisory and clerical in nature, the petitioner refused to turn over her responsibilities to the new Category Buyer, or to accept her new responsibilities as Provincial Coordinator. Jody Gadia (Gadia) and Ruby Alex (Alex) were impleaded because they were corporate officers of the RSC.In a memorandum to the petitioner dated November 13, 2006,6the RSC, through Sarte, demanded an explanation from her within 48 hours for her refusal to accept her new assignment despite written and verbal demands. Sarte cited a company rule, Offenses Subject to Disciplinary Action No. 4.07, which provided that "[d]isobedience, refusal or failure to do assigned task or to obey superiors/officials orders/instructions, or to follow established procedures or practices without valid reason" would be meted the penalty of suspension.The petitioner ignored the 48-hour deadline to explain imposed by Sarte. On November 23, 2006, Sarte issued her another memorandum,7reiterating her demand to explain in writing within 48 hours why she persistently refused to assume her new position, and warning her that this could be her final chance to present her side or be deemed to have waived her right to be heard.In her one-paragraph reply submitted on November 27, 2006,8the petitioner stated that she could not accept the position of Provincial Coordinator since she saw it as a demotion. As it turned out, however, on November 9, 2006, the petitioner had already filed a complaint for constructive dismissal9against RSC, Sarte, Gadia and Alex (respondents).On November 30, 2006, Sarte issued an instruction to the petitioner to report to RSCs Metroeast Depot to help prepare all shipping manifests for Cagayan de Oro and Bacolod, but as witnessed by RSC employees Raquel Torrechua and Alex, she did not obey as instructed.10Again on December 8, 2006, Sarte issued a similar instruction, citing the need for certain tasks from the petitioner in preparation for the coming Christmas holidays, but the petitioner again refused to heed.11As culled from the assailed appellate court decision,12the petitioner argued before the LA that the true organizational chart of the RSC showed that the position of Category Buyer was one level above that of the Provincial Coordinator, and that moreover, the job description of a Provincial Coordinator was largely clerical and did not require her to analyze stock levels and order points, or source new local and international suppliers, or monitor stoc