G.R. No. 167622 (Gregorio V.
Tongko v. The Manufacturers Life Insurance Co. (Phils.), Inc. and Renato A.
Vergel de Dios)
Promulgated:
January 25, 2011
x-----------------------------------------------------------------------------------------x
D I S S E N T I N G O P I N I O N
VELASCO, JR., J.:
Labor
is prior to, and independent of, capital. Capital is only the fruit of labor,
and could never have existed if Labor had not first existed. Labor is superior
to capital, and deserves much the higher consideration.
––Abraham Lincoln
Prefatory Statement
At the outset, it has to be made
clear that the instant petition applies solely to petitioner Tongko with
respect to his relationship with Manulife as the latter’s Regional Manager of
Metro North Region and not to ordinary underwriters of different insurance
companies claiming to be totaling 45,000 in the
There is, therefore, no reason to
conclude that the November 7, 2008 Decision of this Court was meant to indiscriminately
classify all insurance agents as employees of their respective insurance
companies. Nowhere in the Decision was such a conclusion made or espoused. To
reiterate, it was specifically stated in the Decision that Tongko, given his administrative
duties as a manager of Manulife, and not any other insurance agent in the
In a Letter dated December 16, 2008,
the Joint Foreign Chambers of the Philippines implored this Court to reverse its
November 7, 2008 Decision on the stated ground that it is “a case of judicial
legislation that impairs the obligations of commercial contracts and interferes
with established business models and practices.” The Chambers conclusion, sad
to state, was based on the erroneous premise that the Decision was a blanket
declaration that all agents or underwriters are considered employees of the
insurance company.
The Philippine Life Insurance
Association, Inc., through its then President Gregorio D. Mercado, also wrote a
letter dated January 12, 2009 reiterating the concerns of the Joint Foreign
Chambers of the
Thus, with the recent Decision of the
Honorable Supreme Court, generalizing the code of conduct as an indication of
control over the means and method of an employee, PLIA is alarmed that the
floodgates would open to unscrupulous claimants and leave PLIA’s member
companies vulnerable to a multitude of law suits from agents who shall insist
on benefits that only employees enjoy. Such a scenario would certainly cripple
PLIA’s member insurance companies, as their time and resources would be devoted
to fending off unscrupulous claims instead of focusing on improving themselves to
serve the interests of the public.
Mercado
goes on to imply that the finality of the November 7, 2008 Decision would spell
the end of the insurance industry.
The
grim scenario depicted in Mercado’s letter and the unmistakable veiled threats implied
therein are uncalled for.
The November 7, 2008 Decision, to
reiterate, applies only to Tongko in light of the circumstances attendant in
his case. Certainly, his situation is unique from most other agents considering
that he was promoted initially to Unit Manager, then to Branch Manager and,
eventually, Regional Manager. By this fact alone, the Decision cannot be
applicable to all other agents in the
Additionally, in line with the
Court’s ruling in the November 7, 2008 Decision that Tongko became an employee
after his designation as a manager of Manulife, any backwages for illegal
dismissal should only correspond to his income, bonuses and other benefits that
were appurtenant to his designation as a manager. Under Tongko’s Career Agent’s
Agreement, he was entitled to commissions, production bonus and persistency
income. Thus, the basis for backwages would only be his management overrides
and other bonuses relative to his position as manager.
The Case
For
the consideration of the Court is the Motion for Reconsideration dated July 28,
2010, filed by petitioner Gregorio V. Tongko. Tongko seeks the reversal of our June
29, 2010 Resolution which dismissed the instant petition finding that Tongko
was not an employee of Manufacturers Life Insurance Co. (Phils.), Inc.
(Manulife). The Resolution reversed the Court’s November 17, 2008 Decision.
The Facts
For
clarity, the facts of the case are hereby reiterated:
Manufacturers Life Insurance Co.
(Phils.), Inc. (Manulife) is a domestic corporation engaged in life insurance
business. Renato A. Vergel De Dios (De Dios) was, during the period material,
its President and Chief Executive Officer. Gregorio V. Tongko started his
professional relationship with Manulife on July 1, 1977 by virtue of a Career
Agent’s Agreement[2]
(Agreement) he executed with Manulife.
In the Agreement, it is provided
that:
It is understood and agreed that the Agent is
an independent contractor and nothing contained herein shall be construed or
interpreted as creating an employer-employee relationship between the Company
and the Agent.
x x x x
a) The Agent shall canvass for applications
for Life Insurance, Annuities, Group policies and other products offered by the
Company, and collect, in exchange for provisional receipts issued by the Agent,
money due or to become due to the Company in respect of applications or
policies obtained by or through the Agent or from policyholders allotted by the
Company to the Agent for servicing, subject to subsequent confirmation of
receipt of payment by the Company as evidenced by an Official Receipt issued by
the Company directly to the policyholder.
x x x x
14. TERMINATION
The Company may terminate this Agreement for
any breach or violation of any of the provisions hereof by the Agent by giving
written notice to the Agent within fifteen (15) days from the time of the
discovery of the breach. No waiver, extinguishment, abandonment, withdrawal or
cancellation of the right to terminate this Agreement by the Company shall be
construed for any previous failure to exercise its right under any provision of
this Agreement.
Either of the parties hereto may likewise
terminate his Agreement at any time without cause, by giving to the other party
fifteen (15) days notice in writing. This Agreement shall similarly terminate
forthwith upon the death of the Agent.
In cases of termination, including the
Agent’s death, the Agent and/or his estate, executors or administrators, heirs,
assignees or successors-in-interest, as the case may be, shall remain liable to
the Company for all the Agent’s obligations and indebtedness due the Company
arising from law or this Agreement.
In 1983, Tongko was named as a Unit
Manager in Manulife’s Sales Agency Organization. In 1990, he became a Branch
Manager. He was thereafter promoted to Regional Manager. As the Court of
Appeals (CA) found, Tongko’s gross earnings from his work at Manulife as a
Regional Manager, consisting of commissions, persistency income, and management
overrides, may be summarized as follows:
January to December 10, 2002 - P
865,096.07
2001
- 6,214,737.11
2000 - 8,003,180.38
1999
- 6,797,814.05
1998
- 4,805,166.34
1997
- 2,822,620.00[3]
The problem started sometime in 2001,
when Manulife instituted manpower development programs in the regional sales
management level. Relative thereto, De Dios addressed a letter dated November
6, 2001[4] to
Tongko regarding an October 18, 2001 Metro North Sales Managers Meeting. In the
letter, De Dios stated:
The first step to transforming Manulife into
a big league player has been very clear - to increase the number of agents to
at least 1,000 strong for a start. This may seem diametrically opposed to the
way Manulife was run when you first joined the organization. Since then,
however, substantial changes have taken place in the organization, as these
have been influenced by developments both from within and without the company.
x x x x
The issues around agent recruiting are
central to the intended objectives hence the need for a Senior Managers’
meeting earlier last month when Kevin O’Connor, SVP - Agency, took to the floor
to determine from our senior agency leaders what more could be done to bolster
manpower development. At earlier meetings, Kevin had presented information
where evidently, your Region was the lowest performer (on a per Manager basis)
in terms of recruiting in 2000 and, as of today, continues to remain one of the
laggards in this area.
While discussions, in general, were positive
other than for certain comments from your end which were perceived to be
uncalled for, it became clear that a one-on-one meeting with you was necessary
to ensure that you and management, were on the same plane. As gleaned from some
of your previous comments in prior meetings (both in group and one-on-one), it
was not clear that we were proceeding in the same direction.
Kevin held subsequent series of meetings with
you as a result, one of which I joined briefly. In those subsequent meetings
you reiterated certain views, the validity of which we challenged and
subsequently found as having no basis.
With such views coming from you, I was a bit
concerned that the rest of the Metro North Managers may be a bit confused as to
the directions the company was taking. For this reason, I sought a meeting with
everyone in your management team, including you, to clear the air, so to speak.
This note is intended to confirm the items
that were discussed at the said Metro North Region’s Sales Managers meeting held
at the 7/F Conference room last 18 October.
x x x x
All of a sudden, Greg, I have become much
more worried about your ability to lead this group towards the new direction
that we have been discussing these past few weeks, i.e., Manulife’s goal to
become a major agency-led distribution company in the
x x x x
I cannot afford to see a major region fail to
deliver on its developmental goals next year and so, we are making the
following changes in the interim:
1. You will hire at your expense a competent
assistant who can unload you of much of the routine tasks which can be easily
delegated. This assistant should be so chosen as to complement your skills and
help you in the areas where you feel ‘may not be your cup of tea”.
You have stated, if not implied, that your
work as Regional Manager may be too taxing for you and for your health. The
above could solve this problem.
x x x x
2. Effective immediately, Kevin and the rest
of the Agency Operations will deal with the North Star Branch (NSB) in
autonomous fashion. x x x
I have decided to make this change so as to
reduce your span of control and allow you to concentrate more fully on
overseeing the remaining groups under Metro North, your Central Unit and the
rest of the Sales Managers in Metro North. I will hold you solely responsible
for meeting the objectives of these remaining groups.
x x x x
The above changes can end at this point and
they need not go any further. This, however, is entirely dependent upon you.
But you have to understand that meeting corporate objectives by everyone is
primary and will not be compromised. We are meeting tough challenges next year
and I would want everybody on board. Any resistance or holding back by anyone
will be dealt with accordingly.
Subsequently, De Dios wrote Tongko
another letter dated December 18, 2001,[5]
terminating Tongko’s services, thus:
It would appear, however, that despite the
series of meetings and communications, both one-on-one meetings between
yourself and SVP Kevin O’Connor, some of them with me, as well as group
meetings with your Sales Managers, all these efforts have failed in helping you
align your directions with Management’s avowed agency growth policy.
x x x x
On account thereof, Management is exercising
its prerogative under Section 14 of your Agents Contract as we are now issuing
this notice of termination of your Agency Agreement with us effective fifteen
days from the date of this letter.
Therefrom, Tongko filed a Complaint
dated November 25, 2002 with the National Labor Relations Commission (NLRC)
against Manulife for illegal dismissal. The case, docketed as NLRC NCR Case No.
11-10330-02, was raffled to Labor Arbiter Marita V. Padolina.
In the Complaint, Tongko, in a bid to
establish an employer-employee relationship, alleged that De Dios gave him
specific directives on how to manage his area of responsibility in the latter’s
letter dated November 6, 2001. He further claimed that Manulife exercised
control over him as follows:
Such control was certainly exercised by
respondents over the herein complainant. It was Manulife who hired, promoted
and gave various assignments to him. It was the company who set objectives as
regards productions, recruitment, training programs and all activities
pertaining to its business. Manulife prescribed a Code of Conduct which would govern
in minute detail all aspects of the work to be undertaken by employees,
including the sales process, the underwriting process, signatures, handling of
money, policyholder service, confidentiality, legal and regulatory requirements
and grounds for termination of employment. The letter of Mr. De Dios dated 06
November 2001 left no doubt as to who was in control. The subsequent
termination letter dated 18 December 2001 again established in no uncertain
terms the authority of the herein respondents to control the employees of
Manulife. Plainly, the respondents wielded control not only as to the ends to
be achieved but the ways and means of attaining such ends.[6]
Tongko bolstered his argument by
citing Insular Life Assurance Co., Ltd. v. NLRC (4th Division)[7]
and Great Pacific Life Assurance Corporation v. NLRC,[8]
which Tongko claimed to be similar to the instant case.
Tongko further claimed that his
dismissal was without basis and that he was not afforded due process. He also
cited the Manulife Code of Conduct by which his actions were controlled by the
company.
Manulife then filed a Position Paper
with Motion to Dismiss dated February 27, 2003,[9] in
which it alleged that Tongko is not its employee, and that it did not exercise “control”
over him. Thus, Manulife claimed that the NLRC has no jurisdiction over the
case.
In a Decision dated April 15, 2004,
Labor Arbiter Marita V. Padolina dismissed the complaint for lack of an
employer-employee relationship. Padolina found that applying the four-fold test
in determining the existence of an employer-employee relationship, none was
found in the instant case. The dispositive portion thereof states:
WHEREFORE, premises considered, judgment is
hereby rendered DISMISSING the instant complaint for lack of jurisdiction,
there being no employer-employee relationship between the parties.
SO ORDERED.
Tongko appealed the arbiter’s
Decision to the NLRC which reversed the same and rendered a Decision dated
September 27, 2004 finding Tongko to have been illegally dismissed.
The NLRC’s First Division, while
finding an employer-employee relationship between Manulife and Tongko applying
the four-fold test, held Manulife liable for illegal dismissal. It further
stated that Manulife exercised control over Tongko as evidenced by the letter
dated November 6, 2001 of De Dios and wrote:
The above-mentioned letter shows the extent
to which respondents controlled complainant’s manner and means of doing his
work and achieving the goals set by respondents. The letter shows how respondents
concerned themselves with the manner complainant managed the Metro North Region
as Regional Sales Manager, to the point that respondents even had a say on how
complainant interacted with other individuals in the Metro North Region. The
letter is in fact replete with comments and criticisms on how complainant
carried out his functions as Regional Sales Manager.
More importantly, the letter contains an
abundance of directives or orders that are intended to directly affect
complainant’s authority and manner of carrying out his functions as Regional
Sales Manager.[10]
Additionally, the NLRC also ruled
that:
Further evidence of [respondents’] control
over complainant can be found in the records of the case. [These] are the
different codes of conduct such as the Agent Code of Conduct, the Manulife
Financial Code of Conduct, and the Manulife Financial Code of Conduct
Agreement, which serve as the foundations of the power of control wielded by
respondents over complainant that is further manifested in the different
administrative and other tasks that he is required to perform. These codes of
conduct corroborate and reinforce the display of respondents’ power of control
in their 06 November 2001 Letter to complainant.[11]
The fallo of the September 27,
2004 NLRC Decision reads:
WHEREFORE, premises considered, the appealed
Decision is hereby reversed and set aside. We find complainant to be a regular
employee of respondent Manulife and that he was illegally dismissed from
employment by respondents.
In lieu of reinstatement, respondent Manulife
is hereby ordered to pay complainant separation pay as above set forth.
Respondent Manulife is further ordered to pay complainant backwages from the
time he was dismissed on 02 January 2002 up to the finality of this decision also
as indicated above.
x x x x
All other claims are hereby dismissed for
utter lack of merit.
From this Decision, Manulife filed a
motion for reconsideration which was denied by the NLRC First Division in a
Resolution dated December 16, 2004.[12]
Thus, Manulife filed an appeal with
the CA docketed as CA-G.R. SP No. 88253. Thereafter, the CA issued the assailed
Decision dated March 29, 2005, finding the absence of an employer-employee
relationship between the parties and deeming the NLRC with no jurisdiction over
the case. The CA arrived at this conclusion while again applying the four-fold
test. The CA found that Manulife did not exercise control over Tongko that
would render the latter an employee of Manulife. The dispositive portion reads:
WHEREFORE, premises considered, the present
petition is hereby GRANTED and the writ prayed for accordingly GRANTED. The
assailed Decision dated September 27, 2004 and Resolution dated December 16,
2004 of the National Labor Relations Commission in NLRC NCR Case No. 00-11-10330-2002
(NLRC NCR CA No. 040220-04) are hereby ANNULLED and SET ASIDE. The Decision
dated April 15, 2004 of Labor Arbiter Marita V. Padolina is hereby REINSTATED.
Hence, Tongko filed a petition with
this Court raising the following issues: (1) whether Tongko was an employee of
Manulife; and (2) whether Tongko was illegally dismissed.
In
the November 17, 2010 Decision, this Court ruled that Tongko was an employee of
Manulife and was illegally dismissed. Applying the four-fold test, the Court
found sufficient indicia of employment to conclude that Manulife and Tongko had
an employer-employee relationship. Thus, the Court further ruled that because
there was no just or valid cause for the termination of Tongko’s employment, he
was therefore illegally dismissed.
Manulife
appealed such Decision to the Court en
banc which reversed the same in a June 29, 2010 Resolution. In the
Resolution, the Court used the intent of the parties as well as the established
insurance industry practices to conclude that the control required by the labor
code to be present to establish an employer-employee relationship between
Manulife and Tongko was not present. It was further ruled that there was no
other concrete evidence to establish that Tongko was an employee of Manulife.
Thereafter,
Tongko filed the instant motion for reconsideration of the Resolution.
The
motion for reconsideration must be granted.
Labor laws, not the Insurance Code
or the Corporation Code, shall prevail in the
instant case
Manufacturers Life Insurance Co.
(Phils.), Inc. is part of a Canada-based multinational financial company
claiming to be the largest life insurance company in
The controversy in this case arose from the fact that,
initially, Tongko executed a Career Agent’s Agreement whereby he became an
agent of Manulife. As such agent, Manulife did not control the means and
methods for accomplishing his assigned objective of canvassing life insurance
applications. It is, therefore submitted that when he was exclusively an agent
of Manulife, he was not the latter’s employee.
The evidence, however, will reveal that he was later on
promoted to the positions of unit, branch and regional manager. The evidence will
also show that he, similar to his colleagues, was assigned other duties and
responsibilities aside from those enumerated under the Agreement.
And there lies the crux of the problem. There is now an
ambiguity as to the true relationship between Manulife and Tongko. Moreover, it
is now unclear as to what law, labor laws, corporation code, insurance code or
civil code, should be applied to the two parties.
Jurisprudence teaches that, given the doubt as to the
applicable law in the instant case, labor law shall govern.
The Constitution acknowledges the
reality that capital and labor often do not deal on equal grounds, requiring
the state to protect labor from abuse. To level the playing field, the framers
of the Constitution incorporated two (2) provisions therein to safeguard the
employee’s right to security of tenure and enhance protection to employees’
rights and welfare:
ARTICLE II
DECLARATION OF PRINCIPLES
AND STATE POLICIES PRINCIPLES
STATE POLICIES
Section 18. The State affirms labor as a
primary social economic force. It shall
protect the rights of workers and promote their welfare.
ARTICLE XIII
SOCIAL JUSTICE AND HUMAN RIGHTS
LABOR
Section 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and equality
of employment opportunities for all.
It shall guarantee the rights of all workers
to self-organization, collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law. (Emphasis supplied.)
In the Civil Code, it is provided in
Articles 1700 and 1702 thereof that:
Art. 1700. The relations between capital and
labor are not merely contractual. They
are so impressed with public interest that labor contracts must yield to the
common good. Therefore, such contracts are subject to the special laws on
labor unions, collective bargaining, strikes and lockouts, closed shop, wages,
working conditions, hours of labor and similar subjects.
Article 1702. In case of doubt, all labor
legislation and all labor contracts
shall be construed in favor of the safety and decent living for the laborer. (Emphasis
supplied.)
Verily,
the mandate of this Court is to ensure that the provisions of the Constitution
are carried out. The Court has the responsibility to ensure that the rights of
labor, as guaranteed by the Constitution, are actually enjoyed by the workers.
Thus, in several cases, the Court has repeatedly resolved doubts as to the
relationship between parties as that of employment, that which is most
favorable to labor.
The Court, in a slew of cases, has
consistently ruled that when there is doubt as to the law to be applied in a
case with an allegation of an employer-employee relationship, labor laws and
jurisprudence shall apply. Consider:
1. In Social Security System v. Court of Appeals,[16]
the Court was faced with the conflicting claims of the workers and the
proprietor on the issue of whether an employer-employee relationship exists. Romeo
Carreon and Quality Tobacco Corporation (QTC) entered into an agreement whereby
Carreon would allegedly purchase and sell QTC’s products. Carreon claims that
he was an employee of QTC while QTC claims that Carreon is an independent
contractor. In the agreement, Carreon was referred to as a vendee of QTC’s products.
Their relationship would therefore be covered by the Civil Code provisions on
sales.[17]
However, in view of the complaint of Carreon praying for SSS benefits on the
claim that he is an employee of QTC, there arose the question as to which law
should apply––the Civil Code or the Labor Code and jurisprudence. The Court
applied the jurisprudence in labor cases and used the four-fold test to
determine the existence of an employer-employee relationship. The Court stated:
The
issue raised by the petitioner before this Court is the very same issue
resolved by the Court of Appeals-that is, whether or not Romeo Carreon is an
employee or an independent contractor under the contract aforequoted. Corollary
thereto the question as to whether or not the Mafinco case is applicable to
this case was raised by the parties.
The
Court took cognizance of the fact that the question of whether or not an
employer-employee relationship exists in a certain situation continues to
bedevil the courts. Some businessmen with the aid of lawyers have tried to
avoid the bringing about of an employer-employee relationship in some of their
enterprises because that juridical relation spawns obligations connected with
workmen’s compensation, social security, medicare, minimum wage, termination
pay and unionism.
For this reason, in order to put the
issue at rest, this Court has laid down in a formidable line of decisions the
elements to be generally considered in determining the existence of an
employer-employee relationship, as follows: a) selection and engagement of the
employee; b) the payment of wages; c) the power of dismissal; and d) the
employer’s power to control the employee with respect to the means and method
by-which the work is to be accomplished. The last which is the so-called “control
test” is the most important element (Brotherhood Labor Unity Movement of the
Phils. vs. Zamora, 147 SCRA 49 [1987]; Dy Ke Beng vs. International Labor and
Marine Union of the Phil., 90 SCRA 162 [1979]; Mafinco Trading Corp. vs. Ople,
70 SCRA 141 [1976]; Social Security System vs. Court of Appeals, 37 SCRA 579
[1971]).
Applying
the control test, that is, whether the employer controls or has reserved the
right to control the employee not only as to the result of the work to be done
but also as to the means and method by which the same is to be accomplished,
the question of whether or not there is an employer-employee relationship for
purposes of the Social Security Act has been settled in this jurisdiction in
the case of Investment Planning Corp. vs. SSS, 21 SCRA 924 (1967). In other
words, where the element of control is absent; where a person who works for
another does so more or less at his own pleasure and is not subject to definite
hours or conditions of work, and in turn is compensated according to the result
of his effort, the relationship of employer-employee does not exist. (SSS vs.
Court of Appeals, 30 SCRA 210 [1969]). (Emphasis supplied.)
2. In Cosmopolitan Funeral Homes, Inc. v. Maalat,[18] Cosmopolitan
Funeral Homes, Inc. engaged the services of Noli Maalat as a “supervisor” to
handle the solicitation of mortuary arrangements, sales and collections. Maalat
was dimissed after having committed violations of the company’s policies. He
filed a complaint for illegal dismissal and nonpayment of commissions.
Cosmopolitan argues that there is no employer-employee relationship between it
and Maalat, the latter being an independent contractor. The Court ruled that:
In determining whether a person who
performs work for another is the latter's employee or an independent
contractor, the prevailing test is the “right of control” test. Under
this test, an employer-employee relationship exists where the person for whom
the services are performed reserves the right to control not only the end to be
achieved, but also the manner and means to be used in reaching that end.
The Court did not consider
the provisions of the Civil Code on a Contract for a Piece of Work[19]
in determining the relationship between the parties. Instead, it used the labor
law concept, the control test, to determine such relationship.
3. The Court in Algon Engineering Construction Corporation
v. National Labor Relations Commission[20] did
not consider the Civil Code provisions on lease when it ruled upon the
existence of an employer-employee relationship. In that case, from March 1,
1983 to May 10, 1985, Algon was in the process of completing the Lucena
Talacogon Project in Del Monte, Talacogon, Agusan del Sur. Jose Espinosa’s
house is located near that project site. Thus, throughout that same period of
time, Espinosa allowed petitioner Algon to use his house and the grounds
adjacent thereto as a parking and storage place for the latter’s heavy
equipment. However, Espinosa also claims in addition thereto that there existed
an employment contract between himself and petitioner Algon which, he insisted,
hired him as a watchman to guard the heavy equipment parked in other leased
house spaces in Libtong, Talacogon, Agusan del Sur. The Court ruled therein
that:
No
particular evidence is required to prove the existence of an employer-employee
relationship. All that is necessary is to show that the employer is capable of
exercising control over the employee. In labor disputes, it suffices that there
be a casual connection between the claim asserted and the employer-employee
relations.
The
elements of an employer-employee relationship are: (1) selection and engagement
of the employee; (2) payment of wages; (3) power of dismissal; and (4)
employer’s own power to control employee’s conduct. Control of the employee’s conduct is commonly regarded as the most
crucial and determinative indicator of the presence or absence of an
employer-employee relationship. In the case at bar, there is no doubt that
petitioner exercises control over Espinosa’s conduct, as shown by the fact
that, rather than address the loss of batteries as a breach of the purported
contract of lease, the memorandum instead emphasized the company rules and
regulations and the fact that Espinosa was “on duty” at the time of the said
loss. Moreover, the petitioner’s act of transferring Espinosa to the day shift
clearly shows its treatment of Espinosa as an employee, and not as a landlord.
Thus, an employer-employee relationship exists where the person for whom the
services are performed reserves a right to control not only the end to be
achieved but also the means to be used in reaching such an end. (Emphasis
supplied.)
4. Even when
faced with the contention that the relationship between two parties was in the
nature of a lawyer-client relationship, the Court, in Equitable Banking Corporation v. National Labor Relations Commission,[21] still
employed the control test, a strictly labor law concept, to determine the
existence of an employer-employee relationship. There, Ricardo L. Sadac was
engaged in 1981 as Equitable’s Vice-President for the legal department and as
its General Counsel. In 1989, nine (9) lawyers of the legal department issued a
letter-petition to the chairperson of the board of the bank accusing private
respondent of abusive conduct, inefficiency, mismanagement, ineffectiveness and
indecisiveness. Later, the lawyers threatened to resign en masse if Sadac was
not relieved as the head of the legal department. After a formal investigation
of the charges, Sadac was advised that he would be substituted as the bank’s legal
counsel. Sadac charged the bank with illegal dismissal. The bank in turn denied
the existence of an employer-employee relationship between it and Sadac. The
Court stated in its Decision that:
In determining the existence of an
employer-employee relationship, the following elements are considered: (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 employee's conduct, with
the control test generally assuming primacy in the overall consideration. The
power of control refers to the existence of the power and not necessarily to
the actual exercise thereof. It is not
essential, in other words, for the employer to actually supervise the performance
of duties of the employee; it is enough that the former has the right to wield
the power. (Emphasis supplied.)
5. In Lazaro v. Social Security Commission,[22] Rosalina
M. Laudato was a sales supervisor of Royal Star Marketing, the proprietor of
which was Angelito L. Lazaro. Laudato claimed that the company failed to report
her and remit her contributions as an employee, to the Social Security System
(SSS). Denying that Laudato was a sales supervisor of Royal Star Marketing,
Lazaro claimed that the former was only a sales agent earning on a commission
basis. He added that Laudato did not maintain definite hours of work and
therefore could not be considered as an employee of Royal Star Marketing. The
Court, in determining the true relationship of the parties, did not apply the
provisions of the Civil Code on agency. Rather, the labor law concept of the
control test was applied to determine the relationship of the parties. The
Court ruled therein that:
Lazaro’s arguments may be dispensed with by
applying precedents. Suffice it to say,
the fact that Laudato was paid by way of commission does not preclude the
establishment of an employer-employee relationship. In Grepalife v. Judico, the Court upheld
the existence of an employer-employee relationship between the insurance
company and its agents, despite the fact that the compensation that the agents
on commission received was not paid by the company but by the investor or the
person insured. The relevant factor remains, as stated earlier, whether the “employer”
controls or has reserved the right to control the “employee” not only as to the
result of the work to be done but also as to the means and methods by which the
same is to be accomplished.
Neither does it follow that a person who does
not observe normal hours of work cannot be deemed an employee. In Cosmopolitan
Funeral Homes, Inc. v. Maalat, the employer similarly denied the existence
of an employer-employee relationship, as the claimant according to it, was a
“supervisor on commission basis” who did not observe normal hours of work. This
Court declared that there was an employer-employee relationship, noting that
“[the] supervisor, although compensated on commission basis, [is] exempt from
the observance of normal hours of work for his compensation is measured by the
number of sales he makes.”
It
should also be emphasized that the SSC, also as upheld by the Court of Appeals,
found that Laudato was a sales supervisor and not a mere agent. As such,
Laudato oversaw and supervised the sales agents of the company, and thus was
subject to the control of management as to how she implements its policies and
its end results. x x x (Emphasis supplied.)
6. While in Dealco Farms, Inc. v. National Labor
Relations Commission (5th Division),[23] the
Court declared the workers as employees of Dealco farms and not independent
contractors. There, Albert Caban and Chiquito Bastida were hired by Dealco as
escorts or “comboys” for the transit of live cattle from
Regrettably,
upon an evaluation of the merits of the petition, we do not find cause to
disturb the findings of the Labor Arbiter, affirmed by the NLRC, which are
supported by substantial evidence.
The
well-entrenched rule is that factual findings of administrative or
quasi-judicial bodies, which are deemed to have acquired expertise in matters
within their respective jurisdictions, are generally accorded not only respect
but even finality, and bind the Court when supported by substantial evidence.
Section 5, Rule 133 defines substantial evidence as “that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a
conclusion.”
Consistent
therewith is the doctrine that this Court is not a trier of facts, and this is
strictly adhered to in labor cases. We may take cognizance of and resolve
factual issues only when the findings of fact and conclusions of law of the
Labor Arbiter are inconsistent with those of the NLRC and the CA.
In the
case at bench, both the Labor Arbiter and the NLRC were one in their conclusion
that respondents were not independent contractors, but employees of petitioner.
In determining the existence of an
employer-employee relationship between the parties, both the Labor Arbiter and
the NLRC examined and weighed the circumstances against the four-fold test
which has 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 employees’
conduct, or the so-called “control test.” Of the four, the power of control
is the most important element. More importantly, the control test merely calls
for the existence of the right to control, and not necessarily the exercise
thereof.
x
x x x
We
reject petitioner’s self-serving contention. Having failed to substantiate its
allegation on the relationship between the parties, we stick to the settled
rule in controversies between a laborer and his master that doubts reasonably
arising from the evidence should be resolved in the former’s favor. The policy
is reflected in no less than the Constitution, Labor Code and Civil Code. (Emphasis
supplied.)
7. Similarly, in South Davao Development Company, Inc. v. Gamo,[24] the
Court refused to apply the provisions of the Civil Code on Contract for a Piece
of Work to a copra maker contractor and instead used the control test to
determine the worker’s relationship with the company. South Davao Development
Company was the operator of a coconut and mango farm in
In
this case, it was in the exercise of its power of control when petitioner corporation
transferred the copra workers from their previous assignments to work as
copraceros. It was also in the exercise of the same power that petitioner
corporation put Gamo in charge of the copra workers although under a different
payment scheme. Thus, it is clear that an employer-employee
relationship has existed between petitioner corporation and respondents since
the beginning and such relationship did not cease despite their reassignments
and the change of payment scheme. (Emphasis supplied.)
8. While
in Abante v. Lamadrid Bearing & Parts
Corp.,[25] despite
the allegation that the worker was a commission salesman, the Court still used
the four-fold test to determine the existence of an employer-employee
relationship. The worker, Empermaco B. Abante, Jr., was employed by respondent
company Lamadrid Bearing and Parts Corporation sometime in June 1985 as a
salesman earning a commission of 3% of the total paid-up sales covering the
whole area of
We are called upon to resolve the issue of
whether or not petitioner, as a commission salesman, is an employee of
respondent corporation. To ascertain the
existence of an employer-employee relationship, jurisprudence has invariably
applied the four-fold test, namely: (1) the manner of selection and engagement;
(2) the payment of wages; (3) the presence or absence of the power of
dismissal; and (4) the presence or absence of the power of control. Of these
four, the last one is the most important. The so-called “control test” is
commonly regarded as the most crucial and determinative indicator of the
presence or absence of an employer-employee relationship. Under the control
test, an employer-employee relationship exists where the person for whom the
services are performed reserves the right to control not only the end achieved,
but also the manner and means to be used in reaching that end. (Emphasis
supplied.)
Verily, based on the above-mentioned
sample of numerous cases, the Court has invariably applied labor laws and
doctrines, particularly the four-fold and control test, over Civil Code
provisions, to determine the relationship of parties where an employer-employee
relationship is alleged, without regard to the industry or otherwise alleged
relationship of the parties. The Court cannot now deviate from established
precedents. The four-fold test must be used to determine whether Tongko was an
employee of Manulife or not, and not the Insurance Code or Civil Code as
claimed by Manulife.
Using the Four-Fold Test, Manulife exercised control over Tongko
As a matter of long and settled
jurisprudence, the following are the elements, constituting the four-fold test,
usually considered in determining the existence of an employer-employee
relationship: (a) the selection of the employee; (b) the payment of wages; (c)
the power of dismissal; and (d) the power to control the employee’s conduct,
with the “control test” being the most crucial[26] or generally assuming primacy in the
overall consideration.[27]
In Meteoro v. Creative Creatures, Inc.,[28]
the Court stated that in the determination of the existence of an
employer-employee relationship, any competent and relevant evidence may be
considered, to wit:
To resolve the issue raised by respondent,
that is, the existence of an employer-employee relationship, there is need to
examine evidentiary matters. The following elements constitute the reliable
yardstick to determine such relationship: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer’s power to control the employee’s conduct. There is no hard and fast rule designed to establish the aforesaid
elements. Any competent and relevant evidence to prove the relationship may be
admitted. Identification cards, cash vouchers, social security
registration, appointment letters or employment contracts, payrolls,
organization charts, and personnel lists, serve as evidence of employee status.
These pieces of evidence are readily available, as they are in the possession
of either the employee or the employer; and they may easily be looked into by
the labor inspector (in the course of inspection) when confronted with the
question of the existence or absence of an employer-employee relationship.
Some businessmen, however, try to avoid an
employer-employee relationship from arising in their enterprises, because that
juridical relation spawns obligations connected with workmen’s compensation,
social security, medicare, termination pay, and unionism. Thus, in addition to the above-mentioned documents, other pieces of
evidence are considered in ascertaining the true nature of the parties’
relationship. This is especially true in determining the element of “control.”
The most important index of an employer-employee relationship is the so-called “control
test,” that is, whether the employer controls or has reserved the right to
control the employee, not only as to the result of the work to be done, but
also as to the means and methods by which the same is to be accomplished.
(Emphasis supplied.)
The NLRC, taking stock of the affidavits of
petitioner’s fellow insurance managers therein detailing their duties, had
concluded that petitioner was an employee of Manulife. Indeed, the duties,
responsibilities and undertakings of these insurance managers are strikingly
similar to those of Ernesto and Rodrigo Ruiz, as set forth in the Decision in
Great Pacific Life Assurance Corporation v. NLRC.[29] There, the Court decreed that the brothers
Ruiz were employees of Grepalife. The reasons behind the declaration need no
belaboring. Suffice it to state that vis-à-vis the Ruizes in Grepalife,
Manulife had control of the means and methods employed by the petitioner in the
performance of his work as a manager of Manulife. Following the stare
decisis rule, there seems to be no rhyme or reason to withhold from herein
petitioner the benefits accruing from an employer-employee relationship.
Thus, in the Court’s November 7, 2008
Decision, finding that Tongko was Manulife’s employee, it was ruled that:
More importantly, Manulife’s evidence
establishes the fact that Tongko was tasked to perform administrative duties
that establishes his employment with Manulife.
In its Comment (Re: Petition for Review dated
15 April 2005) dated August 5, 2005, Manulife attached affidavits of its agents
purportedly to support its claim that Tongko, as a Regional Sales Manager, did
not perform any administrative functions. An examination of these affidavits
would, however, prove the opposite.
In an Affidavit dated April 28, 2003, John D.
Chua, a Regional Sales Manager of Manulife, stated:
4. On September 1, 1996, my services were
engaged by Manulife as an Agency Regional Sales Manager (RSM) for Metro South
Region pursuant to an Agency Contract. As such RSM, I have the following
functions:
1. Refer and recommend prospective agents to
Manulife
2.
Coach agents to become productive
3.
Regularly meet with, and coordinate activities of agents affiliated to my
region.
While Amada Toledo, a Branch Manager of
Manulife, stated in her Affidavit dated April 29, 2003 that:
3. In
January 1997, I was assigned as a Branch Manager (BM) of Manulife for the Metro
North Sector;
4. As such BM, I render the following
services:
a. Refer and recommend prospective agents to
Manulife;
b.
Train and coordinate activities of other commission agents;
c. Coordinate activities of Agency Managers
who, in turn, train and coordinate activities of other commission agents;
d.
Achieve agreed production objectives in terms of Net Annualized Commissions and
Case Count and recruitment goals; and
e.
Sell the various products of Manulife to my personal clients.
While Ma. Lourdes Samson, a Unit Manager of
Manulife, stated in her Affidavit dated April 28, 2003 that:
3. In 1977, I was assigned as a Unit Manager
(UM) of North Peaks Unit, North Star Branch, Metro North Region;
4. As such UM, I render the following
services:
a. To render or recommend prospective agents
to be licensed, trained and contracted to sell Manulife products and who will
be part of my Unit;
b.
To coordinate activities of the agents under my Unit in their daily, weekly and
monthly selling activities, making sure
that their respective sales targets are
met;
c.
To conduct periodic training sessions for my agents to further enhance their
sales skills.
d.
To assist my agents with their sales activities by way of joint fieldwork,
consultations and one-on-one evaluation and analysis of particular accounts.
e. To provide opportunities to motivate my
agents to succeed like conducting promos to increase sales activities and
encouraging them to be involved in company and industry activities.
f. To provide opportunities for professional
growth to my agents by encouraging them to be a member of the LUCAP (Life
Underwriters Association of the
A comparison of the above functions and those
contained in the Agreement with those cited in Great Pacific Life Assurance
Corporation reveals a striking similarity that would more than support a
similar finding as in that case. Thus, there was an employer-employee
relationship between the parties. (Emphasis supplied.)
In comparison, in Great Pacific Life Corporation v. NLRC (Grepalife),[30] the Court stated:
Furthermore, it cannot be gainsaid that
Grepalife had control over private respondents’ performance as well as the
result of their efforts. A cursory reading of their respective functions as
enumerated in their contracts reveals that the company practically dictates the
manner by which their jobs are to be carried out. For instance, the District
Manager must properly account, record and document the company’s funds
spot-check and audit the work of the
zone supervisors, conserve the company’s business in the district through ‘reinstatements’,
follow up the submission of weekly
remittance reports of the debit agents and zone supervisors, preserve
company property in good condition, train understudies for the position of
district manager, and maintain his quota of sales (the failure of which is a
ground for termination). On the other hand, a zone supervisor must direct and supervise the sales activities
of the debit agents under him, conserve company property through “reinstatements”,
undertake and discharge the functions of absentee debit agents, spot-check the records of debit agents, and
insure proper documentation of sales and collections by the debit agents.
(Emphasis supplied.)
A close scrutiny of the duties and
responsibilities of the Manulife managers with those of the Ruizes would show a
striking similarity that cannot be denied. More so, taking the aggregate of the
evidence presented in this case, a just and objective mind cannot but conclude
that, as in Grepalife, the Manulife
managers are also employees of Manulife.
In Equitable Banking Corporation,[31]
the Court ruled:
The NLRC, in the instant case, based its
finding that there existed an employer-employee relationship between petitioner
bank and private respondent on these factual settings:
“It was complainant’s understanding with
respondent Morales that he would be appointed and assigned to the Legal
Department as vice President with the same salary, privileges and benefits
granted by the respondent bank to its ranking senior officers. He was not hired
as lawyer on a retainership basis but as an officer of the bank.
“Thus, the complainant was given an
appointment as Vice President, Legal Department, effective August 1, 1981, with
a monthly salary of P8,000.00, monthly allowance of P4,500.00, and the usual
two months Christmas bonus based on basic salary likewise enjoyed by the other
officers of the bank.
“Then, as part of the ongoing organization of
the Legal Department, the position of General Counsel of the bank was created
and extended to the complainant. In addition to his duties as Vice President of
the bank, the complainant’s duties and responsibilities were so defined as to
prove that he was a bank officer working under the supervision of the President
and the Board of Directors of the respondent bank.
“In his more than eight years employment with
the respondent bank, the complainant was given the usual payslips to evidence
his monthly gross compensation. The respondent bank, as employer, withheld
taxes due to the Bureau of Internal Revenue from the complainant’s salary as
employee. Moreover, the bank enrolled the complainant as its employee under the
Social Security System and Medicare programs. The complainant contributed to
the bank Employees’ Provident Fund.
“When the respondent bank changed its payroll
accounting system in September 1988 by appointing SGV & Co. to handle it
and Far East Bank & Trust Company to pay the salaries and other benefits of
Equitable Banking Corporation officers, the complainant was included as one of
corporate officers. Specifically, that there were eleven Far East Bank and
Trust Company credit memos starting October 13, 1988 up to September 13, 1989
received by the complainant from FBTC crediting his salary and Christmas bonus
to his account with FBTC per instruction of the respondent bank.
“In as much as the complainant and the
lawyers in the Legal Department were receiving salaries and other benefits as
other bank officers and employees, the attorney’s fees, documentary and
notarial fees earned in the exercise of their profession as in-house lawyers
were not given to or even shared with them, instead all were credited to the
income of the bank. In 1987 and 1988, the complainant and his subordinate
lawyers were able to generate by way of attorney’s fees, documentary and
notarial fees a total income of P973,028.00 for the bank(’s) benefit. In turn,
the respondent bank shouldered the professional tax and Integrated Bar of the
“(1)
Complainant’s monthly attendance, like those of other bank officers, was
recorded by the Chief Security Officer and reported to the Office of the
President with copy of the report furnished to the bank Personnel and HRD
Department.
“(2)
Complainant was authorized by the President to sign for and in behalf of the
bank contracts covering legal services of lawyers to be retained by the
respondent bank for its branches on periodical retainership basis.
“(3)
Complainant participated as part of management in annual Management Planning
Conferences which started in 1986 on objective-setting and long-range planning
in response to the requirement of the rapidly changing environment.
“(4)
Respondent bank extended to complainant the benefit (of) a car plan like any
other qualified senior officer of the bank.
“(5)
Respondent bank since 1982 continuously reported and included the complainant
as one of its senior officers in its statements of financial condition holding
the position of Vice President. These bank statements have been distributed and
circularized to the public, including bank clients and government entities.
“(6)
Complainant, like other bank officers, prepared his biographical data for
submission to the Central Bank after his assumption of duties in 1981.
Thereafter, and pursuant to the regulations of the Central Bank, he has been
required to update annually his biographical data."
It would virtually be foolhardy to so
challenge the NLRC as having committed grave abuse of discretion in coming up
with its above findings. Just to the
contrary, NLRC appears to have been rather exhaustive in its examination of
this particular question (existence or absence of an employer-employee
relationship between the parties).
Substantial evidence, which is the quantum of evidence required to
establish a fact in cases before administrative and quasi-judicial bodies,
connotes merely that amount of relevant evidence which a reasonable mind might
accept to be adequate in justifying a conclusion. (Emphasis supplied.)
Here, by virtue of designating Tongko
initially as a Unit Manager and later on as a Regional Manager, Manulife must
be deemed as having considered Tongko as an officer of the company.
Furthermore, Tongko has been involved in Manulife’s manpower development
programs. Thus, just as in Equitable
Banking Corporation, Tongko must be considered as an employee of Manulife.
While in Aboitiz Haulers, Inc. v. Damapatoi,[32]
Dimapatoi and several other individuals worked as checkers in Mega Warehouse,
which Aboitiz Haulers, Inc. owned. Aboitiz claimed that the complaining workers
are not its employees, but rather, of Grigio Security Agency and General
Services (Grigio), a manpower agency that supplies security guards, checkers
and stuffers. It allegedly entered into
a Written Contract of Service with Grigio in 1994. The workers’ services were
terminated by Aboitiz on the pretext that its contract with Grigio had already
expired. In this case, the Court found that Aboitiz was the employer of the
workers exercising control over them:
Petitioner’s allegation that Grigio retained
control over the respondents by providing supervisors to monitor the
performance of the respondents cannot be given much weight. Instead
of exercising their own discretion or referring the matter to the officers of
Grigio, Grigio’s supervisors were obligated to refer to petitioner’s
supervisors any discrepancy in the performance of the respondents with their
specified duties. The Written
Contract of Services provided that:
5.c.
That the GRIGIO personnel, particularly the supervisors, shall perform
the following:
The Supervisor for the warehouse operation
shall monitor the performance and productivity of all the checkers,
jacklifters, stuffers/strippers, forklift operators, drivers, and helpers. He shall coordinate with AHI’s supervisors
regarding the operations at the Warehouse to ensure safety at the place of
work.
He shall see to it that the cargoes are not
overlanded, shortlanded, delivered at a wrong destination, or misdelivered to
consignee’s port of destination. Any
discrepancy shall be reported immediately to AHI’s Logistic Manager, Mr. Andy
Valeroso.
The
control exercised by petitioner’s supervisors over the performance of
respondents was to such extent that petitioner’s Warehouse Supervisor, Roger
Borromeo, confidently gave an evaluation of the performance of respondent
Monaorai Dimapatoi, who likewise felt obliged to obtain such Certification from
Borromeo.
Petitioner’s control over the respondents is
evident. And it is this right to control
the employee, not only as to the result of the work to be done, but also as to
the means and methods by which the same is to be accomplished, that constitutes
the most important index of the existence of the employer-employee
relationship. (Emphasis supplied.)
With this case, it becomes apparent
that supervision and monitoring is sufficient to establish control that is
evidence of an employer-employee relationship. Such control would, therefore,
be even more evident in the instant case considering that Tongko himself was
tasked to supervise and monitor the activities of Manulife agents. Moreover, it
may be gleaned from the records of the case that Tongko reported to Manulife
with regard the performance of his agents. It was not, as if, Tongko was left
alone to supervise, and perhaps, discipline such agents. Tongko must be deemed
as an employee of Manulife.
In fact, in Lazaro,[33] the
Court ruled that a Sales Supervisor was considered an employee as she “oversaw
and supervised the sales agents of the company”:
Lazaro’s arguments may be dispensed with by
applying precedents. Suffice it to say,
the fact that Laudato was paid by way of commission does not preclude the
establishment of an employer-employee relationship. In Grepalife
v. Judico, the Court upheld the existence of an employer-employee
relationship between the insurance company and its agents, despite the fact
that the compensation that the agents on commission received was not paid by
the company but by the investor or the person insured. The relevant factor
remains, as stated earlier, whether the “employer” controls or has reserved the
right to control the “employee” not only as to the result of the work to be
done but also as to the means and methods by which the same is to be
accomplished.
Neither does it follow that a person who does
not observe normal hours of work cannot be deemed an employee. In Cosmopolitan
Funeral Homes, Inc. v. Maalat, the employer similarly denied the existence
of an employer-employee relationship, as the claimant according to it, was a
“supervisor on commission basis” who did not observe normal hours of work. This
Court declared that there was an employer-employee relationship, noting that
“[the] supervisor, although compensated on commission basis, [is] exempt from
the observance of normal hours of work for his compensation is measured by the
number of sales he makes.”
It should also be emphasized that the SSC,
also as upheld by the Court of Appeals, found that Laudato was a sales
supervisor and not a mere agent. As such, Laudato oversaw and supervised the
sales agents of the company, and thus was subject to the control of management
as to how she implements its policies and its end results. x x x
The finding of the SSC that Laudato was an
employee of Royal
Star is supported by substantial evidence. The SSC examined the cash vouchers issued by
Royal Star to Laudato, calling cards of Royal Star denominating Laudato as a
“Sales Supervisor” of the company, and Certificates of Appreciation issued by
Royal Star to Laudato in recognition of her unselfish and loyal efforts in
promoting the company. On the other
hand, Lazaro has failed to present any convincing contrary evidence, relying
instead on his bare assertions. The Court of Appeals correctly ruled that
petitioner has not sufficiently shown that the SSC’s ruling was not supported
by substantial evidence.
A
piece of documentary evidence appreciated by the SSC is Memorandum dated 3 May
1980 of Teresita Lazaro, General Manager of Royal Star, directing that no
commissions were to be given on all “main office” sales from walk-in customers
and enjoining salesmen and sales supervisors to observe this new policy. The
Memorandum evinces the fact that, contrary to Lazaro’s claim, Royal Star
exercised control over its sales supervisors or agents such as Laudato as to
the means and methods through which these personnel performed their work.
(Emphasis supplied.)
Tongko was held out as an officer of
Manulife by Manulife itself, being tagged as its Manager. He was tasked to
supervise the insurance agents of Manulife. Clearly, the Lazaro case must apply to Tongko and he must be considered an
employee of Manulife.
Furthermore, the letter of De Dios
itself also contained several indicia of control. To reiterate, it was stated
in the letter that:
All of a sudden, Greg, I have become much
more worried about your ability to lead this group towards the new direction
that we have been discussing these past few weeks, i.e., Manulife’s goal to
become a major agency-led distribution company in the
x x x x
I cannot afford to see a major region fail to
deliver on its developmental goals next year and so, we are making the
following changes in the interim:
1. You
will hire at your expense a competent assistant who can unload you of much of
the routine tasks which can be easily delegated. This assistant should be
so chosen as to complement your skills and help you in the areas where you feel
“may not be your cup of tea”.
You have stated, if not implied, that your
work as Regional Manager may be too taxing for you and for your health. The
above could solve this problem.
x x x x
2. Effective immediately, Kevin and the rest
of the Agency Operations will deal with the North Star Branch (NSB) in
autonomous fashion. x x x
I
have decided to make this change so as to reduce your span of control and allow
you to concentrate more fully on overseeing the remaining groups under Metro
North, your Central Unit and the rest of the Sales Managers in Metro North. I
will hold you solely responsible for meeting the objectives of these remaining
groups. (Emphasis supplied.)
The goal of Manulife was to become an
agency-driven insurance company. If Tongko were indeed not an employee of
Manulife, the company would not set the means and methods to achieve such goal.
As long as Tongko was able to recruit the set number of agents, there would be
no reason for Manulife to terminate his services as an independent contractor.
However, that is not the case here. It may be gleaned from the letter that De
Dios is directing Tongko to clamor more actively his peers and his agents to
recruit other agents. It was not sufficient that Tongko, by himself, recruit
agents. This directive certainly shows that Manulife sought to prescribe the
means and methods to achieve its goal.
De Dios further ordered Tongko to
hire at his expense an assistant on whom he “can unload you of much of the
routine tasks which can be easily delegated.” There is no other way to classify
this order but as an intrusion into the means and methods of achieving the
company’s goals.
In the letter, Tongko was also
informed that his area of responsibility was going to be reduced. In Megascope General Services v. National Labor
Relations Commission,[34] between
February 15, 1977 and January 1, 1989, petitioner contracted the services of several
individuals as gardeners, helpers and maintenance workers. These workers were
deployed at the National Power Corporation in Bagac,
Private
respondents were selected and hired by petitioner which assigned them to the
NPC housing village in Bagac and in Km. 168, Morong,
In South Davao Development Company, Inc.,[35] the
Court ruled that the workers must be considered as employees of the company as
the latter exercised control over the means and methods employed by the workers
to achieve their objective, as evidenced by its power to transfer the copra
workers as its employees to that of Gamo:
In this case, it was in the exercise of its
power of control when petitioner corporation transferred the copra workers from
their previous assignments to work as copraceros. It was also in the exercise
of the same power that petitioner corporation put Gamo in charge of the copra
workers although under a different payment scheme. Thus, it is clear that an
employer-employee relationship has existed between petitioner corporation and
respondents since the beginning and such relationship did not cease despite
their reassignments and the change of payment scheme.
Similarly, in the instant case, by
limiting the area of responsibility of Tongko, this is akin to a transfer or
reassignment, an exercise of control by Manulife over Tongko that must
necessarily determine the existence of an employer-employee relationship.
On the same issue, Justice Carpio-Morales
added in her Dissenting Opinion to the June 29, 2010 Resolution that:
More
significantly, in the succeeding Insular Life case, the Court found the
following indicators material in finding the presence of control in cases
involving insurance managers:
Exclusivity of service, control of
assignments and removal of agents under private respondent’s unit, collection
of premiums, furnishing of company facilities and materials as well as capital
described as Unit Development Fund are but hallmarks of the management system
in which herein private respondent worked. This obtaining, there is no escaping
the conclusion that private respondent Pantaleon de los Reyes was an employee
of herein petitioner. x x x
The ponencia concludes that “[a]ll these are
obviously absent” in petitioner’s case. The facts show otherwise, however. On
top of the exclusive service rendered to respondent, which AFP Mutual Benefit Association, Inc. v. NLRC instructs to be not
controlling, other factors were present. Petitioner established no agency of
his own as the Metro North Region to which he was assigned remained intact even
after his ties with respondent were severed. Respondent provided and furnished
company facilities, equipments and materials for petitioner at respondent’s
Such an arrangement leads to no other
conclusion than that respondent exercised the type of control of an employer,
thereby wiping away the perception that petitioner was only a “lead agent” as
viewed by the ponencia. Even respondent sees otherwise when it rebuked
petitioner that “[y]ou (petitioner) may have excelled in the past as an agent
but, to this date, you still carry the mindset of a senior agent.” Insofar as
his management functions were concerned, petitioner was no longer considered a
senior agent.
Furthermore, while this Court has
already ruled that Article 280 of the Labor Code may not be used to prove the
existence of an employer-employee relationship when the same is denied,[36]
the fact that the work of the alleged independent contractor is usually
necessary or desirable in the usual business or trade of the employer would
establish a management structure that would mean that Tongko was Manulife’s
employee.
Such element of control, however, was
only present in the administrative duties imposed upon Tongko when he was a
manager of Manulife. The Agreement, as well as other the evidence presented, does
not show the control necessary to establish an employer-employee relationship
while Tongko was just an agent of Manulife. Hence, it is emphasized that it was
only upon the imposition of such administrative duties that Tongko was an
employee of Manulife and only the consequent change in his remunerations should
be considered as his salary. This would consist of his persistency income and
management overrides only and not his commissions as an agent.
The majority would seem to suggest
that the notion of “control” as understood in the Labor Code and as applied in
labor relations cases differs from the concept of “control” that governs the
relationship between an insurance company and its agents. In Grepalife
and in the earlier Insular life Assurance Co. Ltd. v. NLRC (4th
Division) (Insular Life),[37] it was distinctly noted that the
Court did not posit the dichotomy presently parlayed by the majority. Consider
the following excerpts from Insular Life:
Exclusivity of service, control of assignments and removal of agents under private respondent’s unit, collection of premiums, furnishing of company facilities and materials as well as capital described as Unit Development Fund are but hallmarks of the management system in which herein private respondent worked. This obtaining, there is no escaping the conclusion that private respondent Pantaleon de los Reyes was an employee of herein petitioner.
Similarly, Justice Carpio-Morales, in
the same Dissenting Opinion, wrote:
The Insurance Code may govern the licensing
requirements and other particular duties of insurance agents, but it does
not bar the application of the Labor Code with regard to labor standards and
labor relations.
It bears pointing out that Tongko
cannot be considered as an independent contractor of Manulife. There is no
evidence to establish such a scenario. In Television
and Production Exponents, Inc. v. Servaña,[38]
the Court enumerates the requirements for a worker to be considered an
independent contractor:
Aside from possessing substantial capital or
investment, a legitimate job contractor or subcontractor carries on a distinct
and independent business and undertakes to perform the job, work or service on
its own account and under its own responsibility according to its own manner
and method, and free from the control and direction of the principal in all
matters connected with the performance of the work except as to the results
thereof. TAPE failed to establish that respondent is an independent contractor.
As found by the Court of Appeals:
We find the annexes submitted by the private
respondents insufficient to prove that herein petitioner is indeed an
independent contractor. None of the above conditions exist in the case at bar.
Private respondents failed to show that petitioner has substantial capital or
investment to be qualified as an independent contractor. They likewise failed
to present a written contract which specifies the performance of a specified
piece of work, the nature and extent of the work and the term and duration of
the relationship between herein petitioner and private respondent TAPE.
Here, the records are bereft of any
evidence to establish that Tongko had substantial capital or investment to be
qualified as an independent contractor.
Tongko being allowed the privilege to
canvas
insurance applications is not contrary
to his employment status
The majority described petitioner as
a lead insurance agent, at best, the change in his designation––from unit
manager to branch manager and then to regional sales manager––being merely
reflective of the increase in the number of agents under his guidance as well
as the increase in the area of operation. Tongko, so the majority suggests,
never rose to the level of Manulife’s employee, as he did not even present
copies of his managerial appointment to prove the fact that his agency
relationship changed in the sense that Manulife controlled the means and
methods of his work. The majority posits that even though the other managers of
Manulife admitted to having duties and responsibilities other than those
contained in a Career Agents Agreement, Tongko could not have been anything
other than an agent.
With due respect, I beg to disagree
with this posture.
It may be stated, as a general proposition,
that an insurance agent––who usually sells insurance at his convenience
following his own selling methods and who, for the most part, is governed by a
set of rules[39] the company promulgates to guide its
commission agents in selling its policies that they may not run afoul of the
law––is not an employee. But as explained for reasons stated in my Dissent to
the June 29, 2010 Resolution, Manulife, upon
the petitioner’s appointment as manager, exercised effective control not
only over the results of his work, but also over the means and methods by which
it is to be accomplished. For sure, petitioner, while acting as Manulife’s unit
or branch manager, was allowed to sell insurance policies. And there is nothing absurd, let alone novel
about an employee of an insurance company being given the privilege to solicit
insurance.
In two (2) cases, the Court has
already ruled that an individual may be an employee of an insurance agency
while concurrently being allowed to sell insurance policies for the same
company. In the Insular Life case,[40] Insular
Assurance Co., Ltd. (Insular) entered into an agency contract with Pantaleon de
los Reyes authorizing the latter to solicit within the Philippines applications
for life insurance and annuities for which he would be paid compensation in the
form of commissions. Later, on March 1, 1993, the same parties entered into
another contract where de los Reyes was appointed as Acting Unit Manager. The
duties and responsibilities of de los Reyes included the recruitment, training,
organization and development within his designated territory of a sufficient
number of qualified, competent and trustworthy underwriters, and to supervise
and coordinate the sales efforts of the underwriters in the active solicitation
of new business and in the furtherance of the agency’s assigned goals. We also
stated that:
“Aside
from soliciting insurance, De los Reyes was also expressly obliged to
participate in the company’s conservation program, i.e., preservation and
maintenance of existing insurance policies, and to accept moneys duly receipted
on agent’s receipts provided the same were turned over to the company. As long
as he was unit manager in an acting capacity, De los Reyes was prohibited from
working for other life insurance companies or with the government. He could not
also accept a managerial or supervisory position in any firm doing business in
the
“Private
respondent worked concurrently as agent and Acting Unit Manager until he was
notified by petitioner on 18 November 1993 that his services were
terminated effective 18 December 1993. On 7 March 1994 he filed a complaint
before the Labor Arbiter on the ground that he was illegally dismissed and that
he was not paid his salaries and separation pay.” (Emphasis supplied.)
The fact
that de los Reyes concurrently acted as an agent, selling insurance for
Insular, and as an acting Unit Manager, did not prevent the Court from ruling
that de los Reyes was Insular’s employee.
Similarly, in
the Grepalife case,[41]
the brothers Rodrigo and Ernesto Ruiz entered into agency agreements with Great
Pacific Life Assurance Corporation (Grepalife) for the former to sell the
latter’s insurance policies. They started out as trainee agents and later
promoted to Zone Supervisor and District Manager, respectively. Describing the
brother’s duties, the Court ruled:
x x x [T]heir work at the time of their
dismissal as zone supervisor and district manager are necessary and desirable
to the usual business of the insurance company. They were entrusted with
supervisory, sales and other
functions to guard Grepalife’s business interests and to bring in more clients
to the company, and even with administrative functions to ensure that all
collections, reports and data are faithfully brought to the company.
Upon the
foregoing factual setting, the Court ruled that the brothers Ruiz are employees
of Grepalife, the latter exercising control over the means and methods employed
by them to reach their objective.
Clearly,
the fact that an individual acts as an agent of an insurance company is
irrelevant to the issue of whether the individual is an employee of the
company. The Court has already recognized the reality that an employee of an
insurance company may, at the same time, be an agent and allowed to act as such.
It may be,
as asserted, that petitioner was unable to adduce in evidence copies of his
management contracts specifying his overall duties and responsibilities as
manager. But then, a management contract, for purposes of determining the
relationship between the worker and the employer, is simply evidence to support
a conclusion either way. Such document, or the absence thereof, would not
influence the conclusion on the issue of employment. The presence of a management contract would
merely simplify the issue as to the duties and responsibilities of the employee
concerned as they would then be clearly defined. Moreover, other evidence, like
the letter of De Dios, may be considered to support the contention that he was
an employee of Manulife and prove his duties and responsibilities as such.
It may not be remiss to point out
that Tongko was dismissed from his employment with Manulife for his failure to
recruit sufficient numbers of agents. As was explained in the November 7, 2008
Decision:
The problem started sometime in 2001, when
Manulife instituted manpower development programs in the regional sales
management level. Relative thereto, De Dios addressed a letter dated November
6, 2001 to Tongko regarding an October 18, 2001 Metro North Sales Managers
Meeting. In the letter, De Dios stated:
The first step to transforming Manulife into
a big league player has been very clear to increase the number of agents to at
least 1,000 strong for a start. This may seem diametrically opposed to the way
Manulife was run when you first joined the organization. Since then, however,
substantial changes have taken place in the organization, as these have been
influenced by developments both from within and without the company.
Subsequently, De Dios wrote Tongko another
letter dated December 18, 2001, terminating Tongko’s services, thus:
It would appear, however, that despite the
series of meetings and communications, both one-on-one meetings between
yourself and SVP Kevin O’ Connor, some of them with me, as well as group
meetings with your Sales Managers, all these efforts have failed in helping you
align your directions with Managements’ avowed agency growth policy.
x x x x
On account thereof, Management is exercising
its prerogative under Section 14 of your Agents Contract as we are now issuing
this notice of termination of your Agency Agreement with us effective fifteen
days from the date of this letter.
And yet, the recruitment of agents is
not among the duties and responsibilities that were designated to Tongko in the
Agreement. And while there may not have been another contract to supersede the
Agreement that was presented as evidence, the facts of the case bear out that
Tongko was assigned various other duties and responsibilities that were not
included therein.
Manulife’s decision not to execute a
management contract with petitioner was well within its prerogative. However, the bare fact of Manulife and
petitioner not having executed a management contract, if this were the case,
did not reduce the petitioner to a mere “lead agent.” While there was perhaps
no written management contract whence petitioner’s duties and undertaking as
unit/branch manager may easily be fleshed out prefatory to determining if an
employer-employee relationship with Manulife did exist, other evidence was
adduced to show such duties and responsibilities. For one, in his letter[42] of November 6, 2001, respondent De
Dios addressed petitioner as sales manager. And as I wrote in my Dissent to the
June 29, 2010 Resolution, it is difficult to imagine that Manulife did not
issue promotional appointments to petitioner as unit manager, branch manager,
and eventually regional sales manager. Sound management practice simply
requires an appointment for any upward personnel movement, particularly when
additional functions and the corresponding increase in compensation are
involved. Then, too, the adverted
affidavits of the managers of Manulife as to the duties and responsibilities of
a unit manager, such as petitioner, point to the conclusion that these managers
were employees of Manulife, applying the “four-fold” test.
Any lingering doubt that petitioner
was, by virtue of the management appointment, under Manulife’s employ should be
laid to rest by its virtual admission made in its Motion for Reconsideration
dated December 3, 2008 that petitioner was dismissed for a just and lawful
cause: gross and habitual neglect of duties, inefficiency and willful
disobedience of the lawful orders of Manulife, to wit:
5.4. And yet, until the November 7 Decision,
Respondents never thought for one moment that Petitioner was Manulife’s
employee. All the agreements executed with him, his flexible hours, his
unsupervised choice of clients and method of selling the products, his ability
to take leave anytime, his separate business expenses, his own declarations in
his tax return, Respondent Manulife’s non-contribution of SSS premiums for him,
his non-existence in the company plantilla, Respondent Manulife’s withholding
from him of creditable income tax, all consistently showed that Respondent
Manulife’s belief was singular in the existence of independent contractorship.
x x x x.
5.7. And yet, respondent Manulife did indeed
substantially comply with the requirements for lawful dismissal of a regular
employee, assuming arguendo that petitioner is one. He was dismissed for a just
and lawful cause – for gross disobedience of the lawful orders of Respondent
Manulife. Respondents presented an abundance of evidence demonstrating how
termination happened only after failure to meet company goals, after all
remedial efforts to correct the inefficiency of Petitioner failed and after
Petitioner, as found by the CA, created dissension in Respondent Manulife when
he refused to accept the need for improvement in his area and continued to
spread the bile of discontent and rebellion that he had generated among the
other agents.
Notably, in the termination letter of
Manulife that was addressed to Tongko, no mention is made of any valid cause
for the termination of his services. No mention was made of any particular rule
that Tongko violated leading to his separation. Evidently, Tongko’s termination
of employment was without cause. In an apparent about face, Manulife now claims
that it had a valid cause for the termination of Tongko’s services.
While the Court allows the
presentation of inconsistent defenses, Manulife’s argumentation on this point
would destroy its position that Tongko is not its employee. Manulife is
essentially pointing out the facts that would show that it abided by the
requirements of the Labor Code on the dismissal of an employee. Article 282,
paragraphs (a) and (b), of the Labor Code requires the presence of valid
grounds for the legal dismissal of an employee:
Article 282. Termination by employer. – An
employer may terminate an employment for any of the following just causes:
(a)
Serious
misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
(b) Gross
and habitual neglect by the employee of his duties;
Stated differently, such requirements
are only required of employers with regard to their employees. Manulife had no
reason to comply with this provision of law if it did not consider Tongko as an
employee. Therefore, the question is begged as to why Manulife deemed it
necessary to comply with such provision of law. There is an implied admission
that Tongko was Manulife’s employee.
The following excerpts appearing in
my Dissent to the June 29, 2010 Resolution are self-explanatory:
At this juncture, the Court notes that
Manulife has changed its stance on the issue of illegal dismissal. In its Position Paper with Motion to Dismiss
filed before the Labor Arbiter, in its
Motion for Reconsideration (Re: Decision dated 27 September 2004) dated
October 11, 2004 filed before the NLRC, and in its Comment dated August 5, 2006 filed before the Court, Manulife had
consistently assumed the posture that the dismissal of petitioner was a proper
exercise of termination proviso under the Career Agent’s Agreement. In this
motion, however, Manulife, in a virtual acknowledgment of petitioner being its
employee, contends that the petitioner was “dismissed for a just and lawful
cause – for gross and habitual neglect of duties, inefficiency and willful
disobedience of the lawful orders.” Manulife adds that:
Respondents presented an abundance of
evidence demonstrating how termination happened only after failure to meet
company goals, after all remedial efforts to correct the inefficiency of
Petitioner failed and after Petitioner, as found by the CA, created dissension
in Respondent Manulife when he refused to accept the need for improvement in
his area and continued to spread the bile of discontent and rebellion that he
had generated among the other agents.
In all, I submit that petitioner’s
peculiar circumstances as unit manager, branch manager and ultimately regional
sales manager of Manulife, with the exclusivity feature of his engagement and
his duties as such manager, indicate, at the very least, a prima facie
existence of an employer-employee relationship, following the control test. And
given the bias of the Constitution,[43]
Labor Code[44] and Civil Code[45]
in favor of labor, any doubt as to the existence of such relationship
occasioned by the lack of evidence should be resolved in favor of petitioner
and of employment. In this regard, I
hark back anew to what the Court emphatically said in Dealco Farms, Inc. v.
National Labor Relations Commission:
Having failed to substantiate its allegations
on the relationship between the parties, we stick to the settled rule in controversies
between a laborer and his master that doubts reasonably arising from the
evidence should be resolved in the former’s favor.[46]
As in Dealco Farms, the
sympathies of the Court in this case should be easy and clear. The flip-flopping
of the lower tribunals and the change in the Court’s own stand lucidly show the
ambiguity and doubt in the application of the labor laws to the instant case.
As such, the Court is duty-bound to resolve such doubts in favor of the
employee, Tongko.
Tongko was illegally dismissed
Having established that Tongko was
indeed an employee of Manulife when he was a manager thereof, the next question
is whether the dismissal was illegal.
This must be answered in the
affirmative.
In the NLRC and the CA, Manulife
alleged that Tongko was validly dismissed for gross and habitual neglect of
duties, inefficiency, as well as willful disobedience of the lawful orders of
Manulife. Evidently, such dismissal was due to Tongko’s failure to recruit the
required number of agents from his area of responsibility.
To reiterate, two (2) of the alleged
grounds for the dismissal of Tongko fall under Art. 282, paragraphs (a) and (b)
of the Labor Code:
Article 282. Termination by employer. – An
employer may terminate an employment for any of the following just causes:
(b)
Serious
misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
(c)
Gross
and habitual neglect by the employee of his duties;
On the other hand, inefficiency as a
ground for termination of employment is equated with gross and habitual
neglect, as the Court explained in St.
Luke’s
Gross inefficiency is closely related to
gross neglect, for both involve specific acts of omission on the part of the
employee resulting in damage to the employer or to his business. As a just
cause for an employee’s dismissal, inefficiency or neglect of duty must not
only be gross but also habitual. Thus, a single or isolated act of negligence
does not constitute a just cause for the dismissal of the employee. (Emphasis
supplied.)
In cases of termination of employment
for just causes, the Court has repeatedly held that the burden rests on the
employer to justify such dismissal. Art. 277, paragraph (b) of the Labor Code
states:
Article. 277. Miscellaneous provisions. – x x
x
(b) Subject to the constitutional right of
workers to security of tenure and their right to be protected against dismissal
except for a just and authorized cause and without prejudice to the requirement
of notice under Article 283 of this Code, the employer shall furnish the worker
whose employment is sought to be terminated a written notice containing a
statement of the causes for termination and shall afford the latter ample
opportunity to be heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules and
regulations promulgated pursuant to guidelines set by the Department of Labor
and Employment. Any decision taken by the employer shall be without prejudice
to the right of the worker to contest the validity or legality of his dismissal
by filing a complaint with the regional branch of the National Labor Relations
Commission. The burden of proving that
the termination was for a valid or authorized cause shall rest on the employer.
The Secretary of the Department of Labor and Employment may suspend the effects
of the termination pending resolution of the dispute in the event of a prima
facie finding by the appropriate official of the Department of Labor and
Employment before whom such dispute is pending that the termination may cause a
serious labor dispute or is in implementation of a mass lay-off. (Emphasis
supplied.)
Thus, the Court has ruled in Caltex (
In termination cases, the burden of proof
rests on the employer to show that the dismissal is for just cause. When there
is no showing of a clear, valid, and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and the
burden is on the employer to prove that the termination was for a valid or
authorized cause.
The quantum of proof which the employer must
discharge is substantial evidence. An employee’s dismissal due to serious
misconduct and loss of trust and confidence must be supported by substantial
evidence. Substantial evidence is that amount of relevant evidence as a
reasonable mind might accept as adequate to support a conclusion, even if other
minds, equally reasonable, might conceivably opine otherwise.
While in Lima Land, Inc. v. Cuevas,[49]
the Court ruled:
Well-settled is the rule that the essence of
due process is simply an opportunity to be heard or, as applied to
administrative proceedings, an opportunity to explain one’s side or an
opportunity to seek a reconsideration of the action or ruling complained of.
Moreover, in dismissing an employee, the
employer has the burden of proving that the former worker has been served two
notices: (1) one to apprise him of the particular acts or omissions for which
his dismissal is sought, and (2) the other to inform him of his employer’s
decision to dismiss him. The first notice must state that dismissal is sought
for the act or omission charged against the employee, otherwise, the notice
cannot be considered sufficient compliance with the rules.
The first written notice to be served on the
employees should contain the specific causes or grounds for termination against
them, and a directive that the employees are given the opportunity to submit
their written explanation within a reasonable period. “Reasonable opportunity”
under the Omnibus Rules means every kind of assistance that management must
accord to the employees to enable them to prepare adequately for their defense.
This should be construed as a period of at least five (5) calendar days from
receipt of the notice to give the employees an opportunity to study the
accusation against them, consult a union official or lawyer, gather data and
evidence, and decide on the defenses they will raise against the complaint.
Moreover, in order to enable the employees to intelligently prepare their
explanation and defenses, the notice should contain a detailed narration of the
facts and circumstances that will serve as basis for the charge against the
employees. A general description of the charge will not suffice. Lastly, the
notice should specifically mention which company rules, if any, were violated
and/or which among the grounds under Article 282 is being charged against the employees.
Manulife has failed to overcome such
burden. Willful disobedience, to justify termination from employment, must
comply with the following requirements, as enunciated in Areno v. SkyCable PCC-Baguio,[50]
to wit:
As a just cause for dismissal of an employee
under Article 282 of the Labor Code, willful disobedience of the employer’s
lawful orders requires the concurrence of two elements: (1) the employee’s
assailed conduct must have been willful, i.e., characterized by a wrongful and
perverse attitude; and (2) the order violated must have been reasonable,
lawful, made known to the employee, and must pertain to the duties which he had
been engaged to discharge.
Neglect of duty, to be a valid ground
for termination of employment must also conform to the following requirements,
as stated in Benjamin v. Amellar
Corporation:[51]
It bears stressing in dismissing an employee
for gross and habitual neglect of duties, the negligence should not merely be
gross. It should also be habitual. There being nothing in the records to
identify what specific duties Anabel violated and whether the violations were
gross and habitual, any discussion herein is an exercise in futility.
Here, Manulife has failed to identify
the rule and the standards by which Tongko’s acts were considered unsatisfactory.
There were no set criteria for determining the sufficiency of Tongko’s
recruitment efforts. Moreover, Tongko’s acts were not proved to be willful or
gross and habitual as defined by the above-cited jurisprudence. Absent proof
establishing such factors, Manulife cannot be considered to have discharged the
burden required to prove that the just cause for termination of employment was
indeed present. In fact, at the time Tongko’s services were terminated, his
area was not the last in agent recruitment. As such, Tongko’s dismissal smacks
of arbitrariness.
Informal communications violate the principle of sub judice
On a final note, the Court received
and set for agenda four (4) letters in relation to the instant case: (1) Letter
of Tongko dated November 30, 2005;[52] (2)
the aforementioned letter of the Joint Foreign Chambers of the Philippines dated
December 16, 2008;[53] (3)
Letter of Gregorio Mercado, President of the Philippine Life Insurance
Association, Inc. dated January 12, 2009;[54]
and (4) Letter of Tongko dated March 25, 2009,[55] propounding
their positions on the case. At that point in time, the case had not yet become
final and executory, hence, sub judice.
In Romero v. Estrada,[56] the Court expounded on this
principle, to wit:
The sub
judice rule restricts comments and disclosures pertaining to judicial
proceedings to avoid prejudging the issue, influencing the court, or
obstructing the administration of justice. A violation of the sub judice rule
may render one liable for indirect contempt under Sec. 3(d), Rule 71 of the
Rules of Court. The rationale for the rule adverted to is set out in Nestle Philippines v. Sanchez:
[I]t is a traditional conviction of civilized
society everywhere that courts and juries, in the decision of issues of fact
and law should be immune from every extraneous influence; that facts should be
decided upon evidence produced in court; and that the determination of such
facts should be uninfluenced by bias, prejudice or sympathies.
The principle of sub judice is a two-way street. Inasmuch as the parties and other
interested individuals should refrain from trying to influence the courts, the
court itself should also be on guard against such attempts. The Court should,
therefore, be wary from accepting and putting on record, papers and documents
not officially filed with it. Such submissions have the appearance of
influencing the Court despite the latter’s determined objectivity and must be
avoided. To illustrate, the November 7, 2008 Decision of this Court was decided
in favor of Tongko with only one (1) dissent. However, in the July 29, 2010
Resolution, the original Decision was reversed in favor of Manulife by the
Court en banc, with only two (2) dissents. The above-mentioned letters were
received by the Court after November 7, 2008 but before July 29, 2010. While
the letters themselves may not have actually swayed the members of the Court,
the appearance of impropriety should be avoided. To reiterate, when the parties
submitted the aforementioned letters, the case had not yet become final and
executory, they had sufficient remedies under the Rules of Court for redress.
There was no reason for the parties to have submitted such letters and for this
Court to have taken cognizance thereof and to set the same for agenda.
To reiterate, the declaration that
Tongko is an employee of Manulife, having performed administrative functions as
its manager, cannot be applied to insurance agents in general. Any finding of
an employer-employee relationship shall always be on a case-to-case basis. The
instant case is no exception. Any fear that the grant of Tongko’s motion for
reconsideration shall render all insurance agents in the country as employees
of insurance companies is badly misplaced.
WHEREFORE, I
vote to grant Tongko’s Motion for Reconsideration dated July 28, 2010, to annul
and set aside the June 29, 2010, and to reinstate the November 7, 2008 Decision
with modification on the amount of backwages to which Tongko shall be entitled.
As thus modified and subject to the qualifications defined in the Dissenting
Opinion to the June 29, 2010, petitioner should be awarded backwages, to be
computed as the monthly average of his management overrides, as well as other bonuses
and benefits, corresponding to the period he was serving Manulife as unit,
branch and eventually regional sales manager.
PRESBITERO
J. VELASCO, JR.
Associate Justice
[1] Philippine Fuji Xerox Corporation v. National Labor Relations Commission (First Division), G.R. No. 111501, March 5, 1996, 254 SCRA 294; Associated Anglo-American Tobacco Corporation v. Clave, G.R. No. 50915, August 30, 1990, 189 SCRA 127; Tabas v. California Manufacturing Company, Inc., No. L-80680, January 26, 1989, 169 SCRA 497.
[2] Rollo, pp. 451-453.
[3]
[4]
[5]
[6]
[7] G.R. No. 119930, March 12, 1998, 287 SCRA 476.
[8] G.R. Nos. 80750-51, July 23, 1990, 187 SCRA 694.
[9] Rollo, pp. 430-450.
[10]
[11]
[12]
[13]
Manulife Financial. “Global Presence.” October 20, 2010. <https://hermes.manulife.com/
Canada/wmHomepagesPub.nsf/public/strength_presence>.
[14] Traders Royal Bank v. National Labor Relations Commission, G.R. No. 127864, December 22, 1999, 321 SCRA 467.
[15] Lazaro v. Social Security Commission, G.R. No. 138254, July 30, 2004, 435 SCRA 472.
[16] No. L-46058, December 14, 1987, 156 SCRA 383, 388-389.
[17] Arts. 1458-1637.
[18] G.R. No. 86693, July 2, 1990, 187 SCRA 108, 112-113.
[19] Arts. 1713-1720.
[20] G.R. No. 83402, October 6, 1997, 280 SCRA 188, 197-198.
[21] G.R. No. 102467, June 13, 1997, 273 SCRA 352, 371.
[22] G.R. No. 138254, July 30, 2004, 435 SCRA 472, 476-477.
[23] G.R. No. 153192, January 30, 2009, 577 SCRA 280, 292-293, 295-296.
[24] G.R. No. 171814, May 8, 2009, 587 SCRA 524, 534.
[25] G.R. No. 159890, May 28, 2004, 430 SCRA 368, 379.
[26]
[27] Traders Royal Bank v. NLRC, supra note 14.
[28] G.R. No. 171275, July 13, 2009, 592 SCRA 481, 492-493.
[29] G.R. Nos. 80750-51, July 23, 1990, 187 SCRA 694.
[30]
[31] Supra note 21, at 331-334.
[32] G. R. No. 148619, September 19, 2006, 502 SCRA 271, 288-289.
[33] Supra note 22, at 476-478.
[34] G.R. No. 109224, June 19, 1997, 274 SCRA 146, 154.
[35] Supra note 24, at 534.
[36] Purefoods Corporation (now San Miguel Purefoods Company, Inc.) v. National Labor Relations Commission, G.R. No. 172241, November 20, 2008, 571 SCRA 406.
[37] G.R. No. 119930, March 12, 1998, 287 SCRA 476, 489.
[38] G.R. No. 167648, January 28, 2008, 542 SCRA 578, 588.
[39] Usually the Codes of Conduct.
[40] Supra note 7, at 481.
[41] Supra note 8, at 698.
[42] Rollo, p. 53.
[43] Art. II, Section 8; and Art. XIII, Sec. 3.
[44] Art. 4.
[45] Arts. 1700 and 1702.
[46] Supra note 23, at 295.
[47] G.R. No. 185933, November 25, 2009, 605 SCRA 728, 736.
[48] G.R. No. 162017, April 23, 2010.
[49] G.R. No. 169523, June 16, 2010.
[50] G.R. No. 180302, February 5, 2010.
[51] G.R. No. 183383, April 5, 2010.
[52] Rollo, p. 680.
[53]
[54]
[55]
[56] G.R.
No. 174105, April 2, 2009, 583 SCRA 396, 403.