EMMA B. Concepcion was initially hired as a sales agent by Century Properties, Inc. (CPI) and was eventually promoted as project director on Sept. 1, 2007.
As such, she signed an employment agreement, denominated as “Contract of Agency for Project Director” which provided, among others, that she would directly report to Edwin J. Babiano and receive a monthly subsidy of P60,000.00, 0.5 percent commission, and cash incentives. On March 31, 2008, she executed a similar contract anew with CPI in which she would receive a monthly subsidy of P50,000.00, 0.5 percent commission, and cash incentives as per company policy. It was stipulated in both contracts that no employer-employee relationship exists between her and CPI.
She resigned as CPI’s project director through a letter dated Feb. 23, 2009, effective immediately. On Aug. 8, 2011, she and Babiano filed a complaint before the NLRC for non-payment of commissions and damages against CPI and its executive vice president claiming that their repeated demands for their payment remained unheeded.
CPI invoked the defense that the NLRC had no jurisdiction to hear the complaint because there was no employer-employee relations between them, and thus, she should have litigated the same in an ordinary civil action. Does this defense find merit?
Anent the nature of Concepcion’s engagement, based on case law, the presence of the following elements evince the existence of an employer-employee relationship: (a) the power to hire, i.e., 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, or the so called “control test.” The control test is commonly regarded as the most important indicator of the presence or absence of an employer-employee relationship. 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 achieved, but also the manner and means to be used in reaching that end.
Guided by these parameters, the Court finds that Concepcion was an employee of CPI considering that: (a) CPI continuously hired and promoted Concepcion from October 2002 until her resignation on February 23, 2009, thus, showing that CPI exercised the power of selection and engagement over her person and that she performed functions that were necessary and desirable to the business of CPI; (b) the monthly “subsidy” and cash incentives that Concepcion was receiving from CPI are actually remuneration in the concept of wages as it was regularly given to her on a monthly basis without any qualification, save for the “complete submission of documents on what is a sale policy”; (c) CPI had the power to discipline or even dismiss Concepcion as her engagement contract with CPI expressly conferred upon the latter “the right to discontinue her service anytime during the period of engagement should she fail to meet the performance standards,” among others, and that CPI actually exercised such power to dismiss when it accepted and approved Concepcion’ s resignation letter; and most importantly, (d) as aptly pointed out by the CA, CPI possessed the power of control over Concepcion because in the performance of her duties as Project Director - particularly in the conduct of recruitment activities, training sessions, and skills development of Sales Directors - she did not exercise independent discretion thereon, but was still subject to the direct supervision of CPI, acting through Babiano.
Besides, while the employment agreement of Concepcion was denominated as a “Contract of Agency for Project Director,” it should be stressed that the existence of employer-employee relations could not be negated by the mere expedient of repudiating it in a contract. (Perlas-Bernabe, J.; SC 1st Division, Century Properties, Inc. vs. Edwin J. Babiano, et. al., G.R. No. 220978, July 5, 2016).
Published in the Sun.Star Cebu newspaper on February 18, 2017.
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