EMPLOYER-EMPLOYEE RELATIONSHIP DOES NOT EXIST WHERE THE SUPPOSED EMPLOYEE IS NOT SUBJECT TO A SET OF RULES AND REGULATIONS GOVERNING THE PERFORMANCE OF HIS DUTIES AND IS NOT REQUIRED TO REPORT FOR WORK AT ANY TIME, NOR TO DEVOTE HIS TIME EXCLUSIVELY TO WORKING FOR THE COMPANY

Employer-employee relationship is a requisite for the labor arbiter to acquire jurisdiction over the complaint.

The Court once again had the opportunity to rule on the elements of employer-employee relationship in this case.

Jesus G. Reyes vs. Glaucoma Research Foundation, Inc., Eye Referral Center and Manuel B. Agulto
G.R. No. 189255, June 17, 2015

Facts:

Reyes alleged that he was hired by Glaucoma Research corporation as administrator of the latter’s Eye Referral Center (ERC). He allegedly performed his duties as administrator and continuously received his monthly salary of P20,000.00 until the end of January 2005. Beginning February 2005, Glaucoma Research withheld Reyes’s salary without notice but he still continued to report for work.

On April 11, 2005, Reyes wrote a letter to Glaucoma Research Manuel Agulto (Agulto), who is the Executive Director of Glaucoma Research corporation, informing the latter that he has not been receiving his salaries since February 2005 as well as his 14th month pay for 2004. Reyes did not receive any response from Agulto. Subsequently, Reyes was informed by the Assistant to the Executive Director as well as the Assistant Administrative Officer, that he is no longer the Administrator of the ERC.

Thereafter, Reyes’s office was padlocked and closed without notice. He still continued to report for work but on April 29, 2005 he was no longer allowed by the security guard on duty to enter the premises of the ERC.

On their part, Glaucoma Researchs contended that upon Reyes’s representation that he is an expert in corporate organizational structure and management affairs, they engaged his services as a consultant or adviser in the formulation of an updated organizational set-up and employees’ manual which is compatible with their present condition. Based on his claim that there is a need for an administrator for the ERC, he later designated himself as such on a trial basis.

Glaucoma Researchs maintain that there is no employer-employee relationship between them because Glaucoma Researchs had no control over Reyes in terms of working hours as he reports for work at anytime of the day and leaves as he pleases. Glaucoma Researchs also had no control as to the manner in which he performs his alleged duties as consultant.

Reyes became overbearing and his relationship with the employees and officers of the company soured leading to the filing of three complaints against him. Likewise, Reyes was not dismissed as he was the one who voluntarily severed his relations with Glaucoma Researchs.

LA Ruling:

The LA dismissed the complaint.

The LA held, among others, that Reyes failed to establish that the elements of an employer-employee relationship existed between him and Glaucoma Researchs because he was unable to show that he was, in fact, appointed as administrator of the ERC and received salaries as such.

He also failed to deny that during his stint with Glaucoma Researchs, he was, at the same time, a consultant of various government agencies such as the Manila International Airport Authority, Manila Intercontinental Port Authority, Anti-Terrorist Task Force for Aviation and Air Transportation Sector. His actions were neither supervised nor controlled by the management of the ERC.

Reyes, likewise, did not observe working hours by reporting for work and leaving therefrom as he pleased; and, he was receiving allowances, not salaries, as a consultant.

NLRC Ruling:

The NLRC reversed and set aside the Decision of the LA. The NLRC declared Reyes as Glaucoma Researchs’ employee, that he was illegally dismissed and ordered Glaucoma Researchs to reinstate him to his former position without loss of seniority rights and privileges with full backwages.

The NLRC held that the basis upon which the conclusion of the LA was drawn lacked support; that it was incumbent for Glaucoma Researchs to discharge the burden of proving that Reyes’s dismissal was for cause and effected after due process was observed; and, that Glaucoma Researchs failed to discharge this burden.

Glaucoma Researchs filed a motion for reconsideration, but it was denied by the NLRC.

CA Ruling:

The CA annulled and set aside the judgment of the NLRC and reinstated the Decision of the LA. The CA held that the LA was correct in ruling that, under the control test and the economic reality test, no employer-employee relationship existed between Glaucoma Researchs and Reyes.

Reyes filed a motion for reconsideration, but the CA denied it.

Issue/s:

Whether or not an individual who was issued ID, assigned as administrator, required to submit the agreed result of organizational structure but who was concurrently consultant with other firms, has employer-employee relationship with the company.

SC Ruling:

The SC did not find merit in the petition.

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The SC held that it is a basic rule of evidence that each party must prove his affirmative allegation. If he claims a right granted by law, he must prove his claim by competent evidence, relying on the strength of his own evidence and not upon the weakness of that of his opponent.

In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an employee was for a valid cause. However, before a case for illegal dismissal can prosper, an employer-employee relationship must first be established. Thus, in filing a complaint before the LA for illegal dismissal, based on the premise that he was an employee of Glaucoma Researchs, it is incumbent upon Reyes to prove the employer-employee relationship by substantial evidence.

Citing the decision of the CA, the SC ratiocinated that Glaucoma Researchs’ power to approve or reject the organizational plans drawn by Reyes cannot be the control contemplated in the “control test.” It is but logical that one who commissions another to do a piece of work should have the right to accept or reject the product.

The important factor to consider in the “control test” is still the element of control over how the work itself is done, not just the end result thereof. Well settled is the rule that where a person who works for another performs his job more or less at his own pleasure, in the manner he sees fit, not subject to definite hours or conditions of work, and is compensated according to the result of his efforts and not the amount thereof, no employer-employee relationship exists.

What was glaring in the present case is the undisputed fact that Reyes was never subject to definite working hours. He never denied that he goes to work and leaves therefrom as he pleases. In fact, on December 1-31, 2004, he went on leave without seeking approval from the officers of Glaucoma Research company. On the contrary, his letter simply informed Glaucoma Researchs that he will be away for a month and even advised them that they have the option of appointing his replacement during his absence

The SC has held that there is no employer-employee relationship where the supposed employee is not subject to a set of rules and regulations governing the performance of his duties under the agreement with the company and is not required to report for work at any time, nor to devote his time exclusively to working for the company.

Reyes does not dispute the findings of the CA that there are no deductions for SSS and withholding tax from his compensation, which are the usual deductions from employees’ salaries. Thus, the alleged pay slips may not be treated as competent evidence of Reyes’s claim that he is Glaucoma Researchs’ employee.

The designation of the payments to Reyes as salaries, is not determinative of the existence of an employer-employee relationship. Salary is a general term defined as a remuneration for services given.

The Court does not agree with Reyes’s insistence that his being hired as Glaucoma Research corporation’s administrator and his designation as such in intra-company correspondence proves that he is an employee of the corporation. The fact alone that Reyes was designated as an administrator does not necessarily mean that he is an employee of Glaucoma Researchs. Mere title or designation in a corporation will not, by itself, determine the existence of an employer-employee relationship.

Even the identification card which was issued to Reyes is not an adequate proof of Reyes’s claim that he is Glaucoma Researchs’ employee. In addition, Reyes’s designation as an administrator neither disproves Glaucoma Researchs’ contention that he was engaged only as a consultant.