G.R. No. 91307 January 24, 1991]SINGER SEWING MACHINE COMPANY, petitioner vs. HON.

FRANKLIN
M. DRILON,MED-ARBITER FELIX B. CHAGUILE, JR., and SINGER MACHINE COLLECTORS UNIONBAGUIO (SIMACUB), respondents.
FACTS:
SIMACUB, respondent union, filed a petition for certification as the sole and exclusive bargaining agent
of all the collectors of the Singer Sewing Machine Company, Bagiuo City branch. The Company opposed
the petition saying that the union members were not employees but independent contractors as evidenced
by the collection agency agreement they signed.
ISSUE: Whether there exists an employee-employer relationship?
HELD:
The nature of the relationship between a collecting agent and the company depends on the circumstances
surrounding each case. In this case, the Agreement confirms the status of the collecting agent as an
independent contractor not only because he is explicitly described as such but because he is allowed by
the provisions of the agreement to perform collection services without being subject to the control of the
latter except only as to the result of his work. Hence, the requirement that receipt forms issued by the
company shall be submitted once a week is but a method to avoid co-mingling of personal funds of the
agent with the money of the company.
Likewise, the uses of standard report forms are only intended to facilitate order in the office. Even if the
report requirements are to be called control measures, any control is only with respect to the end result of
the collection since the requirements regulate the things to be done after the performance of the collection
job or the rendition of the service.
The respondents' contention that the union members are employees of the Company is based on selected
provisions of the Agreement but ignores the following circumstances which respondents never refuted
either in the trial proceedings before the labor officials nor in its pleadings filed before this Court.
1. The collection agents are not required to observe office hours or report to Singer's office everyday
except, naturally and necessarily, for the purpose of remitting their collections;
2. The collection agents do not have to devote their time exclusively for SINGER. There is no prohibition
on the part of the collection agents from working elsewhere. Nor are these agents required to account for
their time and submit a record of their activity.;
3. The manner and method of effecting collections are left solely to the discretion of the collection agents
without any interference on the part of Singer.;
4. The collection agents shoulder their transportation expenses incurred in the collections of the accounts
assigned to them.;
5. The collection agents are paid strictly on commission basis. The amounts paid to them are based solely
on the amounts of collection each of them make. They do not receive any commission if they do

not effect any collection even if they put a lot of effort in collecting. They are paid commission on the
basis of actual collections.;
6. The commissions earned by the collection agents are directly deducted by them from the amount of
collections they are able to effect. The net amount is what is then remitted to Singer." (Rollo, pp. 7-8)
If indeed the union members are controlled as to the manner by which they are supposed to perform their
collections, they should have explicitly said so in detail by specifically denying each of the facts asserted
by the petitioner. As there seems to be no objections on the part of the respondents, the Court finds that
they miserably failed to defend their position.
A thorough examination of the facts of the case leads us to the conclusion that the existence of an
employer-employee relationship between the Company and the collection agents cannot be sustained. The
last and most important element of the control test is not satisfied by the terms and conditions of the
contracts. There is nothing in the agreement which implies control by the Company not only over the end
to be achieved but also over the means and methods in achieving the end.
The Court finds the contention of the respondents that the union members are employees under Article
280 of the Labor Code to have no basis. The Court agrees with the petitioners argument that Article 280
is not the yardstick for determining the existence of an employment relationship because it merely
distinguishes between two kinds of employees. The Court finds that since private respondents are not
employees of the Company, they are not entitled to the constitutional right to join or form a labor
organization for purposes of collective bargaining. Accordingly, there is no constitutional and legal basis
for their "union" to be granted their petition for direct certification. Order of Med-Arbiter and DOLE
Secretary reversed and set aside.

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

and MELECIO BASIAO,
G R N o . 8 4 4 8 4 N o v e m b e r 1 5 , 1 9 8 9
FACTS :
Petitioner entered contract with Basiao for insurance policies and annuities in accordance with the
existing rules and regulations" of the Company; he would receive compensation, in the form of
commissions ... as provided in the Schedule of Commissions" of the contract to "constitute a part of the
consideration of ... (said) agreement;" and the "rules in ...(the Company's) Rate Book and its Agent's
Manual, as well as all its circulars ... and those which may from time to time be promulgated by it. Some
four years later, in April 1972, the parties entered into another contract an Agency Managers Contract
and to implement his end of it Basiao organized an agency or office to which he gave the name M.
Basiao and Associates, while concurrently fulfilling his commitments under the first contract with the
Company. In May, 1979, the Company terminated the Agency Manager's Contract. After vainly seeking
are consideration, Basiao sued the Company in a civil action and this, he was later to claim, prompted the
latter to terminate also his engagement under the first contract and to stop payment of his commissions
starting April 1, 1980.Basiao thereafter filed with the then Ministry of Labor a complaint against the
Company and its president. Without contesting the termination of the first contract, the complaint sought
to recover commissions allegedly unpaid there under, plus attorney's fees. The respondents disputed the
Ministry's jurisdiction over Basiao's claim, asserting that he was not the Companys employee, but an
independent contractor and that the Company had no obligation to him for unpaid commissions under the
terms and conditions of his contract. The Labor Arbiter to whom the case was assigned found for Basiao.
He ruled that the underwriting agreement had established an employer-employee relationship between
him and the Company, and this conferred jurisdiction on the Ministry of Labor to adjudicate his claim.
Said official's decision directed payment of his unpaid commissions "... equivalent to thebalance of the
first year's premium remaining unpaid, at the time of his termination, of all the insurance policies solicited
by ... (him) in favor of the respondent company ..." plus 10%attorney's fees. This decision was, on appeal
by the Company, affirmed by the National Labor Relations Commission. Hence, the present petition for
certiorari and prohibition
ISSUE:
Whether, as Basiao asserts, he had become the Company's employee by virtue of the contract invoked by
him, thereby placing his claim for unpaid commissions within the original and exclusive jurisdiction of
the Labor Arbiter under the provisions of Section 217 of the Labor Code, or, contrarily, as the Company
would have it, that under said contract Basiao's status was that of an independent contractor whose claim
was thus cognizable, not by the Labor Arbiter in a labor case, but by the regular courts in an ordinary civil
action.
HELD:
The Court, therefore, rules that under the contract invoked by him, Basiao was not an employee of the
petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions
should have been litigated in an ordinary civil action. The Labor Arbiter erred in taking cognizance of,
and adjudicating, said claim, being without jurisdiction to do so, as did the respondent NLRC in affirming
the Arbiter's decision. This conclusion renders it unnecessary and premature to consider Basiao's claim
for commissions on its merits.