G.R. No.

169757: Nov 2011

CESAR C. LIRIO, doing business under the name and style of CELKOR AD SONICMIX, Petitioner, v.
WILMER D. GENOVIA, Respondent.

FACTS:

Respondent was allegedly hired on Aug 2001 as studio manager by petitioner Lirio, owner of Celkor Ad
Sonicmix Recording Studio (Celkor). A few days after working as a studio manager, petitioner approached
him and told him about his project to produce an album for his 15-year-old daughter. Petitioner asked
respondent to compose and arrange songs for Celine and promised that he (Lirio) would draft a contract
to assure respondent of his compensation for such services. Additional services that respondent would
render included composing and arranging musical scores only, while the technical aspect would be
performed by respondent in his capacity as studio manager for which he was paid on a monthly basis.

Respondent reminded petitioner about his compensation as composer and arranger of the album.
Petitioner verbally assured him that he would be duly compensated. By mid-Nov 2001, respondent finally
finished the compositions and musical arrangements of the songs to be included in the album.

On Feb 26, 2002, respondent again reminded petitioner about the contract on his compensation as
composer and arranger of the album. Petitioner told respondent that since he was practically a nobody
and had proven nothing yet in the music industry, respondent did not deserve a high compensation, and
he should be thankful that he was given a job to feed his family. Petitioner informed respondent that he
was entitled only to 20% of the net profit, and not of the gross sales of the album, and that the salaries
he received and would continue to receive as studio manager of Celkor would be deducted from the said
20% net profit share. Respondent objected and insisted that he be properly compensated. On March 14,
2002, petitioner verbally terminated respondent's services, and he was instructed not to report for work.
On July 9, 2002, respondent Wilmer D. Genovia filed a complaint against petitioner for illegal dismissal,
non-payment of commission and award of moral and exemplary damages.

Petitioner
Petitioner asserted that from the aforesaid terms and conditions, his relationship with respondent is one
of an informal partnership under Art 1767 of New Civil Code, since they agreed to contribute money,
property or industry to a common fund with the intention of dividing the profits among themselves.
Petitioner had no control over the time and manner by which respondent composed or arranged the
songs, except on the result thereof.

CA reversed NLRC reso; reinstated LA decision with modification, finding that respondent is an employee
of petitioner, and that respondent was illegally dismissed and entitled to the payment of backwages and
separation pay in lieu of reinstatement.

HELD:
The elements to determine the existence of an employment relationship are:
(a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal;
and (d) the employer's power to control the employee's conduct. The most important element is the
employer's control of the employee's conduct, not only as to the result of the work to be done, but also
as to the means and methods to accomplish it.
 No particular form of evidence is required to prove the existence of an employer-employee
relationship. Any competent and relevant evidence to prove the relationship may be admitted.
Documentary evidence presented by respondent to prove that he was an employee of petitioner are
payroll and petty cash vouchers. In this case, the documentary evidence presented by
respondent to prove that he was an employee of petitioner are as follows: (a) a
document denominated as "payroll" (dated July 31, 2001 to March 15,
2002) certified correct by petitioner,[31] which showed that respondent received a
monthly salary of P7,000.00 (P3,500.00 every 15th of the month and
another P3,500.00 every 30th of the month) with the corresponding deductions due
to absences incurred by respondent; and (2) copies of petty cash
vouchers,[32] showing the amounts he received and signed for in the payrolls.

The said documents showed that petitioner hired respondent as an employee

and he was paid monthly wages of P7,000.00. Petitioner wielded the power to
dismiss as respondent stated that he was verbally dismissed by petitioner, and
respondent, thereafter, filed an action for illegal dismissal against petitioner. The
power of control refers merely to the existence of the power.[33] It is not essential for
the employer to actually supervise the performance of duties of the employee, as it
is sufficient that the former has a right to wield the power.[34]Nevertheless, petitioner
stated in his Position Paper that it was agreed that he would help and teach
respondent how to use the studio equipment. In such case, petitioner certainly had
the power to check on the progress and work of respondent.

Marticio Semblante and Dubrick Pilar v CA, Gallera de Mandaue/Spouses Loot | 2011 | Velasco, Jr.

Facts:

1993: Semblante and Pilar were hired by Spouses Loot (owners of Gallera de Mandaue cockpit)
as masiador and sentenciador, respectively.

As masiador, Semblante calls and takes the bets from the gamecock owners and other bettors
and orders the start of the cockfight. He also distributes the winnings after deducting the arriba, or the
commission for the cockpit. Meanwhile, as the sentenciador, Pilar oversees the proper gaffing of fighting
cocks, determines the fighting cocks’ physical condition and capabilities to continue the cockfight, and
eventually declares the result of the cockfight.

Semblante receives 2k per week or 8k per month while Pilar gets 3.5k per week or 14k per
month. They work Tuesday, Wednesday, Saturday and Sunday every week excluding monthly derbies
and cockfights on special holidays. Their work is at 1pm until 12 midnight or until the early hours of the
morning. Petitioners were issued employee IDs that they wear every time they report for duty. They
alleged never incurring violations of the cockpit rules and regulations.

Nov. 14, 2003, petitioners were denied entry per instructions of respondents and were informed
of termination of their services. Petitioners then filed for illegal dismissal.

Respondents, in answer, said petitioner were not employees and alleged they were associates
of respondents’ independent contractor, Vega. Respondent have no regular working time and are free
to decide whether to report or not. In times when there are a few cockfights in their cockpit, petitioners
would go to other cockpits in the vicinity. Lastly, petitioners were given IDs to indicate they were free
from the entrance fee and to differentiate them from the public.

The LA found petitioners to be regular employees since what they performed was necessary and
indispensible to the usual trade or business of the respondents for a number of years. There was illegal
dismissal so respondents ordered to pay backwages and separation pay.

Respondents filed the appeal within the 10 day appeal period but failed to post a cash or surety
bond on equivalent to the monetary award granted by the LA within the same time. Hence, NLRC denied
the appeal.

Subsequently, however, NLRC reversed itself saying that the appeal was meritorious and the
belated filing of the bond is a substantial compliance with the rules. NLRC then found no employer-
employee relationship saying that respondents had no part in the selection and engagement of
petitioner, and that no separate individual contract with respondents was ever executed by petitioners.

CA agreed with NLRC. It said that that referees and bet-takers in a cockfight need to have the
kind of expertise that is characteristic of the game to interpret messages conveyed by mere gestures.
Hence, petitioners are akin to independent contractors who possess unique skills, expertise, and talent
to distinguish them from ordinary employees. Further, respondents did not supply petitioners with the
tools and instrumentalities they needed to perform work. Petitioners only needed their unique skills and
talents to perform their job asmasiador and sentenciador.

Issue:

W/N NLRC and CA correct in allowing the MFR although the appeal bond was belatedly posted. YES.

- Time and again, however, this Court, considering the substantial merits of the case, has relaxed the
rule on, and excused the late posting of, the appeal bond when there are strong and compelling
reasons for the liberality;
- After all, technical rules cannot prevent courts from exercising their duties to determine and settle,
equitably and completely, the rights and obligations of the parties;
- This is one case where the exception to the general rule lies.
W/N there was employer-employee relationship. No.

Relationship between the parties fails to pass muster the four-fold test of employment:

1. The selection and engagement of the employee;

2. The payment of wages;
3. The power of dismissal; and
4. The power to control the employee’s conduct, which is the most important element.

At case:

- Both NLRC and CA found that:

o Respondents had no part in petitioners’ selection and management;
o Petitioners’ compensation was paid out of the arriba (which is a percentage deducted from the
total bets), not by petitioners; and
o Petitioners performed their functions as masiador and sentenciador free from the
direction and control of respondents.
- In the conduct of their work, petitioners relied mainly on their expertise that is characteristic of the
cockfight gambling, and were never given by respondents any tool needed for the performance of
their work;
- No illegal dismissal since petitioners were not employees;
- The rule on the posting of an appeal bond cannot defeat the substantive rights of respondents to be
free from an unwarranted burden of answering for an illegal dismissal for which they were never
responsible.

CA AFFIRMED.

San Miguel Brewery Sales Force

Union(PTGWO) vs. Hon. Blas Ople G.R. No.
L-53515, February 8, 1989
FACTS:

For 3 years, a collective bargaining agreement was being implemented by San Miguel Co
rporation Sales Force Union (PTGWO), and San Miguel Corporation. Section 1, of Articl
e IV of which provided “Employees within the appropriate bargaining unit shall be entitl
ed to a basic monthly compensation plus commission based on their respective sales.” T
hen, the company introduced a marketing scheme known as “Complementary Distributi
on System”(CDS) whereby its beer products were offered for sale directly to wholesalers
through San Miguel’s Sales Offices. The union alleged that the new marketing scheme vi
olates Sec 1, Art IV f the CBA because the introduction of the CDS would reduce the take
home pay of the salesmen.
ISSUE:

Whether or not the new marketing scheme should be upheld considering that the act wa
s unilaterally made by the employer.

RULING:

Yes, because it is a valid exercise of managerial prerogative. So long as a company’s man

agement prerogatives are exercised in good faith for the advancement of the employer’s i
nterest and not for the purpose of defeating or circumventing the rights of the employee
s under special laws or under valid agreements, this Court will uphold them. San Miguel
Corporation’s offer to compensate the members of its sales force who will be adversely af
fected by the implementation of the CDS by paying them a so-
called “back adjustment commission” to make up for the commissions they might lose a
s a result of the CDS proves the company’s good faith and lack of intention to bust their
union.