Lazaro v. Social Security Commission
REITERATIONFacts
The Antecedents: Private respondent Rosalina M. Laudato filed a petition before the Social Security Commission (SSC) seeking social security coverage and remittance of unpaid contributions from three employers, including petitioner Angelito L. Lazaro, proprietor of Royal Star Marketing. Laudato alleged she was employed as a sales supervisor from April 1979 to March 1986, but Lazaro failed to report her for coverage or remit contributions. Lazaro denied Laudato was a sales supervisor, claiming she was a mere sales agent paid purely on commission, not subject to definite hours and conditions of work, and thus not an employee. Procedural History: The SSC, applying the 'control test,' ruled in favor of Laudato, finding her to be an employee of Royal Star. It ordered Royal Star to pay unremitted contributions, penalties, and damages to the SSC. Lazaro's motion for reconsideration was denied. The Court of Appeals affirmed the SSC's ruling, noting that Lazaro's arguments were repetitive and lacked specifics to show the ruling was unsupported by substantial evidence. The Petition: Before the Supreme Court, Lazaro reiterated that Laudato was not an employee due to her commission-based income and lack of control over her activities, arguing she did not qualify for social security coverage under the 'control test.'
Issue(s)
Whether Rosalina M. Laudato was an employee of Angelito L. Lazaro, proprietor of Royal Star Marketing, for purposes of social security coverage. Whether the 'control test' was correctly applied by the Social Security Commission and the Court of Appeals.
Ruling
The Petition is DENIED and the Decision of the Court of Appeals dated 20 November 1998 is AFFIRMED. Costs against petitioner.
Ratio Decidendi
On whether Rosalina M. Laudato was an employee of Angelito L. Lazaro, proprietor of Royal Star Marketing, for purposes of social security coverage: The Court affirmed the findings of the SSC and the Court of Appeals that Laudato was an employee. The determination of an employer-employee relationship hinges on the 'control test,' which examines whether the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the means and methods by which it is accomplished. The SSC and the Court of Appeals correctly applied this test and found substantial evidence supporting Laudato's employment. Lazaro's arguments were merely reiterations of those already rejected by the lower bodies and did not present new factual or legal grounds for reversal. The Court emphasized that it is not a trier of facts and accords great weight to the factual findings of agencies whose function is to resolve such matters. The evidence, including cash vouchers, calling cards identifying Laudato as 'Sales Supervisor,' Certificates of Appreciation, and a Memorandum regarding commission policies, all supported the existence of an employer-employee relationship and the exercise of control by Royal Star over Laudato's work. The Court found no reversible error in the appellate court's affirmation of the SSC's ruling. On whether the 'control test' was correctly applied by the Social Security Commission and the Court of Appeals: The Court reiterated that the 'control test' is the accepted doctrine for determining employer-employee relationships under the Social Security Act. The SSC and the Court of Appeals correctly applied this test. The fact that Laudato was paid by commission does not preclude an employer-employee relationship, as established in Grepalife v. Judico. Similarly, the absence of normal working hours does not disqualify an individual as an employee, as demonstrated in Cosmopolitan Funeral Homes, Inc. v. Maalat, where a commission-based supervisor was found to be an employee. The Court also noted that the SSC found Laudato to be a sales supervisor, not a mere agent, and her role involved overseeing sales agents and implementing company policies, thus subjecting her to management control. The Memorandum regarding commission policies further evidenced Royal Star's control over the means and methods of work for its sales personnel. The Court found no reason to deviate from the concurrent findings of the SSC and the Court of Appeals.
Main Doctrine
The 'control test' is determinative of an employer-employee relationship for purposes of social security coverage. The fact that an individual is paid on a commission basis or does not observe normal working hours does not preclude the existence of such a relationship, provided the employer controls or has reserved the right to control the means and methods by which the work is accomplished.