G.R. No. 167622

SECOND DIVISION

G.R. No. 167622 – GREGORIO V. TONGKO, petitioner versus THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. AND RENATO A. VERGEL DE DIOS, respondents.

Promulgated:

November 7, 2008

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DISSENTING OPINION

QUISUMBING, J.:

With due respect, I cannot concur in the majority opinion. I vote to deny the petition and affirm the decision of the Court of Appeals holding that the National Labor Relations Commission had no jurisdiction over this case due to the absence of an employer-employee relationship between petitioner Gregorio V. Tongko and respondent Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife).

The majority opinion states that Manulife had the power of control over petitioner that would make him its employee. It advances several reasons that do not persuade me.

In my view, two points require stressing: (1) Manulife has no power of control over petitioner in the pursuit of his own business; and (2) petitioner is compensated through sales agency commissions and not through fixed wages or salary.

Time and again, the Court has indeed applied the “four-fold” test in determining the existence of an employer-employee relationship. This test considers the following elements: (1) the power to hire; (2) the payment of wages; (3) the power to dismiss; and (4) the power to control, the last being the most important element.[1]

The difficulty lies in correctly assessing if certain factors or elements properly indicate the presence of control.[2] The company’s codes of conduct such as the Agent Code of Conduct, Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct Agreement cannot be justifiably said to establish an employer-employee relationship. These merely served as general guidelines for agents in selling Manulife policies in keeping with ethical principles governing the insurance business and in accordance with the rules promulgated by the Insurance Commissioner for proper regulation of the industry. None of these rules and regulations negated petitioner’s contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience.[3] Nor did it overturn company or industry practices. Petitioner made his own strategy on how to generate more insurance sales. In fact, he derived his income from the agents under him through their sales volume. He was not bound to observe any work schedule or any working hours. He had freedom to adopt his own methods in selling insurance policies, so long as he and his recruited agents meet their quotas.

So too, petitioner’s administrative functions are not indicative of control. Such functions which consisted of recruitment of new agents, training, and supervision were exercised over other sales agents and not employees of Manulife. Such functions relate to the insurance agents’ work in pursuit of their agency’s contractual obligations.

Neither can the Letter dated November 6, 2001[4] addressed by Renato A. Vergel De Dios, Manulife’s President and Chief Executive Officer, to petitioner regarding greater agency recruitment be considered as control. While the letter reminded petitioner that his Region was the lowest performer in terms of agency recruitment, it did not dictate how petitioner would achieve this goal. Contrary to the finding of the main opinion,[5] the letter did not contain “an abundance of directives or orders” other than suggesting to petitioner to hire a competent assistant to whom he could unload routine tasks. It is obvious that said assistant would be paid by petitioner as part of his agency’s staff, not of the company’s office personnel.

Clearly, following industry practice, petitioner had never been an employee of Manulife. He is an independent contractor as stated in the Career Agent’s Agreement. Although he was eventually promoted as Regional Sales Manager, the Agreement subsisted since he still received commissions from insurance he directly sold to third persons aside from the override commissions he received from his own recruited agents’ sales. The Agreement was never changed or altered by the parties.

Anent petitioner’s compensation, he was paid through commissions from premium payments instead of fixed wages or salary. Petitioner’s commissions varied, based on the computed premiums paid in full and actually received on policies obtained through his agency. His summary of commission, persistency, and management overrides constituted the income earned from business activities, not traditional office employment by Manulife, as follows:

2001 - P6,214,737.11

2000 - P8,003,180.38

1999 - P6,797,814.05

1998 - P4,805,166.34

1997 - P2,822,620.00[6]

Indeed, petitioner’s earnings by way of commissions varied, depending on the clientele or those who availed of the insurance policies he procured. As also noted by the Labor Arbiter, his annual income was duly reflected in petitioner’s income tax returns as agency earnings from which were deducted operating expenses and taxes withheld at source by Manulife. His returns did not reflect regular wages or salaries paid by the company.

Since no employer-employee relationship existed between petitioner and Manulife, there is no basis to award backwages and separation pay to petitioner. There is no reason to apply Songco v. National Labor Relations Commission[7] which considered commission as part of the employee’s salary in the computation of separation pay. Here, there exists no employer-employee relationship. A contrary ruling will reverse an industry practice long accepted in the insurance business. Such reversal could prove detrimental to the insurance public.

To reiterate, the present case does not involve an employer-employee relationship which warrants the application of the Labor Code provisions; rather, it calls for the implementation of the Career Agent’s Agreement that should be construed in an ordinary civil action.

I vote to DENY the petition.

LEONARDO A. QUISUMBING

Associate Justice

[1] AFP Mutual Benefit Association, Inc. v. NLRC, G.R. No. 102199, January 28, 1997, 267 SCRA 47, 57.

[3] Insular Life Assurance Co., Ltd. v. NLRC, G.R. No. 84484, November 15, 1989, 179 SCRA 459, 465.

[7] G.R. Nos. 50999-51000, March 23, 1990, 183 SCRA 610.