ROYALE HOMES MARKETING v ALCANTARA

PETITIONER: Royale Homes Marketing Corporation

RESPONDENT: Fidel P. Alcantara [deceased], substituted by his heirs
DOCKET NO.: G.R. No. 195190
DATE OF PROMULGATION: July 28, 2014
PONENTE: Del Castillo, J.

Control is the most important determinant of employer-employee relationship. Not every form of control
that a hiring party imposes on the hired party is indicative of employee-employer relationship. Rules and
regulations that merely serve as guidelines towards the achievement of a mutually desired result without
dictating the means and methods of accomplishing it do not establish employer-employee relationship.

FACTS:
Nature: Petition for Review on Certiorari
Fidel Alcantara worked as a Marketing Director (fixed period one year) for Royale homes, which
is a corporation engaged in marketing real estates.
He was reappointed for several consecutive years, the last of which covered the period January 1
to December 31, 2003 where he held the position of Division 5 Vice-President-Sales.
On December 17, 2003, Alcantara filed a Complaint for Illegal Dismissal9 against Royale Homes
and its President Matilde Robles, Executive Vice-President for Administration and Finance Ma.
Melinda Bernardino, and Executive Vice- President for Sales Carmina Sotto.
Alcantara alleged that:
o he is a regular employee of Royale Homes since he is performing tasks that are
necessary and desirable to its business;
o in 2003 the company gave him 1.2 million for the services he rendered to it;
o in the first week of November 2003, however, the executive officers of Royale Homes told
him that they were wondering why he still had the gall to come to office and sit at his
table;
o the acts of the executive officers of Royale Homes amounted to his dismissal from work
without any valid or just cause and in gross disregard of the proper procedure for
dismissing employees.
Alcantara prayed to be reinstated to his former position without loss of seniority rights and other
privileges, as well as to be paid back wages, moral and exemplary damages, and attorneys fees.
Royale Homes:
o Alcantara is not an employee but an independent contractor. He didnt receive salary
(commission basis only). Royale had no control on how Alcantara would accomplish his
tasks (he was free to solicit sales at any time and by any manner; even free to recruit his
own sales personnel)
o Alcantara decided to leave company to join his wife who formed her own brokerage
company that directly competed with its business. Even threw a despedida party in his
favor.
LA Alcantara is an employee
NLRC Alcantara is not an employee but an independent contractor so LA has no jurisdiction
CA reversed NLRC

ISSUE: Whether or not Alcantara was an independent contractor or an employee of Royale Homes.

HELD:
Alcantara is not an employee but a mere independent contractor.
While the existence of employer-employee relationship is a matter of law, the characterization
made by the parties in their contract as to the nature of their juridical relationship cannot be
simply ignored.
The contract, duly signed and not disputed by the parties conspicuously provides that no
employer-employee relationship exists between Royale Homes and Alcantara. It is clear that
 they did not want to be bound by employer-employee relationship at the time of the signing of the
contract.
o Contract states: It is understood, however that no employer-employee relationship exists
between us, that of your sales personnel/agents, and that you shall hold our company,
its officers and directors, free and harmless from any and all claims of liability and
damages arising from and/or incident to the marketing of our real estate inventories
Since the terms of the contract are clear and leave no doubt upon the intention of the contracting
parties, the literal meaning of its stipulations should control.
In determining the existence of an employer-employee relationship, this Court has generally
relied on the four-fold test, to wit:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the employers power to control the employee with respect to the means and methods by
which the work is to be accomplished.
Among the four, the most determinative factor in ascertaining the existence of employer-
employee relationship is the "right of control test".
o deemed to be such an important factor that the other requisites may even be
disregarded.
Not every form of control is indicative of employer-employee relationship.1
The Control Test proved that no ER-EE relationship exists.
The rules, regulations, code of ethics, and periodic evaluation of Royale do not involve control
over the means and methods by which Alcantara was to perform his job (e.g. no working hours,
no other tasks than soliciting sales, he had full control of how to accomplish tasks)
Other grounds considered in ruling that no ER-EE relationship exists:
o Repeated hiring does not prove existence. Only signifies renewal of contract and
highlights satisfactory services
o Exclusivity clause does not necessarily result in ER-EE relationship.
o Payment of wages Alcantara had no fixed monthly salary. On commission basis only.
WHEREFORE, the instant Petition is hereby GRANTED. The June 23, 2010 Decision of the
Court of Appeals in CA-G.R. SP No. 109998 is REVERSED and SET ASIDE. The February 23, 2009
Decision of the National Labor Relations Commission is REINSTATED and AFFIRMED.
METEORO v CREATIVE CREATURES
PETITIONERS: Victor Meteoro, Rey Caga, Jimmy Coronel, Cosme Tamor, Felixes Latonero, Enrique
Salazar, Mayla Laqui, Orly Banua, Bernardo Madrid, Ariel Reyes, Alfredo Reyes, Javier Timeresa,
Armando Maca, Jr., Rolando Falquera, Jose Benitez, Rodolfo Timeresa, Rolando Lucena, Noel
Subtiniente, Guillerma Quimado, Benigno Regalado, Randy Dela Cruz, Juvy Maca, Ambrosio Canaria,
Jr., Feliciano Pajaro, Peter Badiana, Danilo Jordan, Dennis Ediesca, Jogil Avila, Abraham Burce, Onofre
Vinas, Dennis Vitara, Ariel Galupo and Albert Austero
RESPONDENT: Creative Creatures, Inc.
DOCKET NO.: G.R. No. 171275
DATE OF PROMULGATION: July 13, 2009
PONENTE: Nachura, J.

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. To establish the four elements of employer-employee
relationship, any competent and relevant evidence may be considered including but not limited to:
Identification Cards; Cash Vouchers; Social Security Registration; Appointment Letters; Employment
Contracts; Payrolls; Organization Charts; and Personnel List.

FACTS:
Nature: petition for review on certiorari
 Creative Creatures, Inc. is a domestic corporation engaged in the business of producing,
providing, or procuring the production of set designs and set construction services for television
exhibitions, concerts, theatrical performances, motion pictures and the like.
o caters to the production design requirements of ABS-CBN Broadcasting Corporation.
On the other hand, petitioners were hired by respondent on various dates as artists, carpenters
and welders who were tasked to design, create, assemble, set-up and dismantle props, and
provide sound effects to respondents various TV programs and movies.
In February and March 1999, petitioners filed their respective complaints for non-payment of
night shift differential pay, overtime pay, holiday pay, 13th month pay, premium pay for Sundays
and/or rest days, service incentive leave pay, paternity leave pay, educational assistance, rice
benefits, and illegal and/or unauthorized deductions from salaries against respondent, before
DOLE-NCR.
An inspection was conducted at CCIs premises and it was noted that "the records were not made
available at the time of the inspection;" that respondent claimed that petitioners were contractual
employees and/or independent talent workers; and that petitioners were required to punch their
cards.
In its position paper, respondent argued that petitioners were free-lance individuals, performing
special services with skills and expertise inherently exclusive to them like actors, actresses,
directors, producers, and script writers, such that they were treated as special types of workers.
Petitioners, on the other hand, averred that they were employees of respondent, as the elements
of an employer-employee relationship existed.
On April 12, 1999, petitioners filed a complaint for illegal dismissal against petitioner, with
prayer for payment of overtime pay, premium pay for holiday and rest day, holiday pay, service
incentive leave pay, 13th month pay and attorneys fees before the NLRC.
DOLE-NCR Regional Director: ruled in favor of petitioners sustained ER-EE relationship.
DOLE Secretary: affirmed findings and rulings of the Regional Director.
CA: ruled in favor of respondent.

ISSUE: Whether or not employer-employee relationship exists between petitioners and respondent.

HELD:
To determine whether there exists an employer-employee relationship, evidentiary matters need
to be examined.
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 employers power to control the employees 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.
o 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 workmens
compensation, social security, medicare, termination pay, and unionism.
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.
 Indeed, the contracts of independent services, as well as the check vouchers, were kept and
maintained in or about the premises of the workplace and were, therefore, verifiable in the course
of inspection.
However, petitioners were not precluded from working outside the service contracts they had
entered into with it (respondent); and that there were instances when petitioners abandoned their
service contracts with the respondent, because they had to work on another project with a
different company.
WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals
Decision dated May 31, 2005 and its Resolution dated January 27, 2006 in CA-G.R. SP No. 76942, are
AFFIRMED.