Diane Moralidad Abolucion LLB 2A

July 12, 2016

GREGORIO V. TONGKO, petitioner, vs. THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.),
INC. and RENATO A. VERGEL DE DIOS, respondents.
Facts:
Petitioner Tongko started his relationship with Manulife in 1977 by virtue of a Career Agent's
Agreement. 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. The contractual relationship had two basic phases. The first or initial phase began on July 1,
1977. The second phase started in 1983 when Tongko was named Unit Manager in Manulife's Sales Agency
Organization. In 1990, he became a Branch Manager. Six years later (or in 1996), Tongko became a Regional
Sales Manager. Since the beginning, Tongko consistently declared himself self-employed in his income tax
returns. Thus, under oath, he declared his gross business income and deducted his business expenses to arrive at
his taxable business income. Sometime in 2001, De Dios addressed a letter to Tongko, then one of the Metro
North Managers, regarding meetings wherein De Dios found Tongko's views and comments to be unaligned
with the directions the company was taking. De Dios also expressed his concern regarding the Metro North
Managers' interpretation of the company's goals. He maintains that Tongko's allegations are unfounded. Some
allegations state that some Managers are unhappy with their earnings, that they're earning less than what they
deserve and that these are the reasons why Tonko's division is unable to meet agency development objectives.
However, not a single Manager came forth to confirm these allegations. Finally, De Dios related his worries
about Tongko's inability to push for company development and growth. De Dios subsequently sent Tongko a
letter of termination in accordance with Tongko's Agents Contract. Tongko responded by filing an illegal
dismissal complaint with the National Labor Relations Commission (NLRC) Arbitration Branch. The labor
arbiter decreed that no employer-employee relationship existed between the parties. However, the NLRC
reversed the labor arbiter's decision on appeal. In the petition for certiorari with the Court of Appeals (CA), the
appellate court found that the NLRC gravely abused its discretion in its ruling and reverted to the labor arbiter's
decision that no employer-employee relationship existed between Tongko and Manulife. The Supreme Courts
Decision of November 7, 2008 reversed the CA ruling and found that an employment relationship existed
between Tongko and Manulife.
Issue :
Whether or not an employer employee relationship exists.
Ruling:
Generally, the determinative element is the control exercised over the one rendering service. The
employer controls the employee both in the results and in the means and manner of achieving this result. The
primary evidence in the present case is the July 1, 1977 Agreement that governed and defined the parties'
relations until the Agreement's termination in 2001. This Agreement stood for more than two decades and, based
on the records of the case, was never modified or novated. By the Agreement's express terms, Tongko served as
an "insurance agent" for Manulife, not as an employee. By its express terms, is in accordance with the Insurance
Code model when it provided for a principal-agent relationship, and thus cannot lightly be set aside nor simply
be considered as an agreement that does not reflect the parties' true intent. Significantly, evidence shows that
Tongko's role as an insurance agent never changed during his relationship with Manulife. For want of a better
term, Tongko perhaps could be labeled as a "lead agent" who guided under his wing other Manulife agents
similarly tasked with the selling of Manulife insurance. Jurisdiction over the matter belongs to the courts
applying the laws of insurance, agency and contracts. Hand in hand with the concept of admission against
interest in considering the tax returns, the concept of estoppel a legal and equitable concept 28 necessarily
must come into play. Tongkos petition is hereby dismissed.