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03 Insular Life V NLRC
03 Insular Life V NLRC
NLRC
G.R. No. 84484 / NOV 15, 1989 / NARVASA, J. / LABOR Control Test / MEEMARCILLA Company: no employer-employee relationship with Basiao. Under the contract, Basiao was
NATURE Petition for Certiorari and Prohibition the master of his own time and selling methods, left to his judgment the time, place and
PETITIONERS Insular Life Assurance Co., Ltd. means of soliciting insurance, set no accomplishment quotas and compensated him on the
RESPONDENTS NLRC and Melecio Basiao basis of results obtained. He was not bound to observe any schedule of working hours or
report to any regular station; he could seek and work on his prospects anywhere and at any
SUMMARY. Basiao had a contract with Insular Life where he solicited applications for time he chose to, and was free to adopt the selling methods he deemed most effective.
insurance policies. This was terminated by the company so he sued them for unpaid
commissions. Insular alleged that Basiao was not their employee so the LA had no Basiao: the critical feature distinguishing an employee from an independent contractor is
jurisdiction. SC: Basiao was an independent contractor so he should have sued Insular in a control. Theres a provision in Basiaos contract obliging him to x x observe and conform to all
civil action. rules and regulations which the Company may from time to time prescribe x x, and theres the
fact that the Company prescribed the qualifications of applicants for insurance, processed
DOCTRINE. Not every form of control over the conduct of the party hired in relation to the their applications and determined the amounts of insurance cover to be issued.
service rendered establishes employer-employee relationship.
SC: Basiao was an independent contractor.
FACTS. Viana vs. Alejo Al-Lagadan: In determining the existence of employer-employee relationship,
July 2, 1968: Insular Life Assurance Co., Ltd. (hereinafter simply called the Company) and the following elements are generally considered, namely:
Melecio T. Basiao entered into a contract by which: (1) the selection and engagement of the employee;
o Basiao was authorized to solicit within the Philippines applications for (2) the payment of wages;
insurance policies and annuities in accordance with the existing rules and (3) the power of dismissal; and
regulations of the Company; (4) the power to control the employees conductalthough the latter is the most important
o he would receive compensation, in the form of commissions x x as provided in element
the Schedule of Commissions of the contract to constitute a part of the
consideration of x x (said) agreement; and Not every form of control that the hiring party reserves to himself over the conduct of the
o the rules in x x (the Companys) Rate Book and its Agents Manual, as well as party hired in relation to the services rendered may be accorded the effect of establishing
all its circulars x x and those which may from time to time be promulgated by an employer-employee relationship between them in the legal or technical sense of the
it, x x were made part of said contract. term. A line must be drawn somewhere.
April 1972: the parties entered into another contractan Agency Managers Contract
and to implement his end of it Basiao organized an agency or office to which he gave the LINE:
name M. Basiao and Associates, while concurrently fulfilling his commitments under the (1) Rules that merely serve as guidelines towards the achievement of the mutually
first contract with the Company desired result without dictating the means or methods to be employed in attaining
May, 1979: the Company terminated the Agency Managers Contract. After vainly it
seeking a reconsideration, Basiao sued the Company in a civil action a. aims only to promote the result, creates no employer-employee
o Basiao claimed that this prompted the termination of the first contract as well relationship
and to stop payment of his commissions starting April 1, 1980. (2) Rules that control or fix the methodology and bind or restrict the party hired to the
Basiao filed a complaint against the company and its president with the then Ministry of use of such means
Labor. a. addresses both the result and the means used to achieve it
o sought to recover commissions allegedly unpaid plus attorneys fees
The Company disputed the Ministrys jurisdiction over Basiaos claim, asserting that he The business of insurance is an enterprise affected with public interest. Rules and regulations
was not the Companys employee, but an independent contractor and that the Company governing the conduct of the business are provided for in the Insurance Code and enforced by
had no obligation to him for unpaid commissions under the terms and conditions of his the Insurance Commissioner. It is, therefore, usual and expected for an insurance company to
contract. promulgate a set of rules to guide its commission agents in selling its policies that they may
LA: in favour of Basiao not run afoul of the law and what it requires or prohibits. Of such a character are the rules
NLRC: affirmed which prescribe the qualifications of persons who may be insured, subject insurance
applications to processing and approval by the Company, and also reserve to the Company
ISSUES & RATIO. the determination of the premiums to be paid and the schedules of payment.
1. WON Basiao had become the Companys employee (thus placing his claim
within the jurisdiction of the Labor Arbiter under Sec. 21, LC). NO
None of these really invades the agents contractual prerogative to adopt his own selling
methods or to sell insurance at his own time and convenience, hence cannot justifiably be
said to establish an employer-employee relationship between him and the company.
There was no showing that any rules existed or were issued which effectively controlled
or restricted his choice of methodsor the methods themselvesof selling insurance.
Absent such showing, the Court will not speculate that any exceptions or qualifications were
imposed on the express provision of the contract leaving Basiao x x x free to exercise his own
judgment as to the time, place and means of soliciting insurance.
Thus, Basiao was not an employee of the Company, but a commission agent, an
independent contractor whose claim for unpaid commissions should have been litigated in
an ordinary civil action.
DECISION.
Appealed Resolution of the NLRC is set aside, and that complaint of Melecio T. Basiao in RAB
Case No. VI-0010-83 is dismissed.
NOTES.