Degamo v. Citihomes
REITERATIONFacts
The Antecedents: Edita Santos Degamo (petitioner) filed a complaint for non-payment of commission fees against My Citihomes (Citihomes), a domestic corporation engaged in real estate development, and its owners, John and Rosie Wang (respondents). Petitioner alleged that she was hired by Citihomes on March 1, 2015, as a sales agent and later promoted to sales manager. Her duties included soliciting clients, advising on property matters, supervising consultants, manning booths, and reporting to Citihomes. She claimed to have successfully sold 18 real properties but Citihomes refused to pay her commission fees. Citihomes, in defense, argued that petitioner was not their employee but a sales agent of Ms. Evelyn Abapo, a licensed broker, who had the power to hire and terminate petitioner. Citihomes further contended that they did not pay petitioner's wages directly, as sales agents' fees were allocated by Ms. Abapo from commissions paid to her. They also asserted that they did not control the means and methods by which petitioner performed her job, and therefore, no employer-employee relationship existed, divesting the Labor Arbiter of jurisdiction. Procedural History: The Labor Arbiter ruled in favor of the petitioner, finding that Ms. Abapo was a labor-only contractor and that Citihomes was the actual employer. Citihomes was ordered to pay petitioner P117,121.21 in unpaid commission fees for 10 properties sold, though the claim for damages was denied. Both parties appealed to the National Labor Relations Commission (NLRC). The NLRC reversed the Labor Arbiter's decision, finding no employer-employee relationship. The NLRC reasoned that petitioner failed to present any contract with Citihomes, that Ms. Abapo, as an independent broker, secured her own sales representatives and financed her own expenses, and that Citihomes did not exercise control over the means and methods of petitioner's work. Petitioner's motion for reconsideration was denied. Subsequently, petitioner filed a Petition for Certiorari with the Court of Appeals (CA), seeking to reinstate the Labor Arbiter's decision. The CA dismissed the petition, affirming the NLRC's ruling that no employer-employee relationship existed. The Petition: Petitioner filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the CA's decision. Petitioner argues that the CA erred in holding that no employer-employee relationship existed between her and Citihomes. She contends that the four-fold test for employer-employee relationship was met: Citihomes selected and engaged her through Ms. Abapo, paid her commission fees, had the power to dismiss her, and exercised control over her job's means and methods. Petitioner further asserts that Ms. Abapo was a labor-only contractor, and Citihomes failed to prove otherwise, thus making Citihomes the de facto employer. The core of petitioner's argument is that the NLRC and CA gravely abused their discretion in reversing the Labor Arbiter's finding of an employer-employee relationship.
Issue(s)
Whether there was an employer-employee relationship between Citihomes and petitioner. Whether the NLRC and CA erred in dismissing petitioner's complaint for lack of jurisdiction.
Ruling
The petition is DENIED for lack of merit. The Decision dated October 1, 2019, of the Court of Appeals in CA-G.R. SP No. 160961 is AFFIRMED.
Ratio Decidendi
On the existence of an employer-employee relationship: The Court affirmed the NLRC and CA's finding that no employer-employee relationship existed between Citihomes and petitioner. The determination of such a relationship hinges on the four-fold test: (1) selection and engagement; (2) payment of wages; (3) power of dismissal; and (4) power to control the employee's conduct. The "control test" is considered the most significant determinant, focusing on whether the employer reserves the right to control both the end achieved and the manner and means used to achieve that end. The burden of proof rests on the party asserting the existence of the relationship, which in this case was petitioner. However, petitioner failed to present substantial evidence to prove the elements of an employer-employee relationship. Her allegations were not substantiated by competent proof beyond her claim for unpaid commission fees. Notably, she admitted that Ms. Abapo engaged her services and that she resigned to Ms. Abapo, which supports Citihomes' claim that Ms. Abapo, as an independent contractor, selected and controlled her own sales agents. The Court found that Citihomes exercised no control over the means and methods of petitioner's work. While petitioner alleged that Citihomes required a monthly sales quota of P5,000,000.00 and monitored her work three times a week, these actions do not constitute the control contemplated by law for an employer-employee relationship. The Court reiterated that sales agents are typically left free to devise their own methods for soliciting sales, and setting a quota or monitoring performance primarily aims to achieve a production level and is not control over the means and methods of the work. The purported rules and regulations cited by petitioner did not pertain to how she was to perform her job but rather to the desired outcome. Furthermore, petitioner's failure to claim statutory benefits for two years and her focus solely on commission fees indicated her understanding of being an independent contractor, not an employee entitled to such benefits. On jurisdiction of labor tribunals: The Court reiterated the settled rule that the jurisdiction of the Labor Arbiter and the NLRC pertains to cases arising from or in connection with an employer-employee relationship. Without the critical element of an employment relationship, these labor tribunals cannot acquire jurisdiction over a dispute. Since the Court found no employer-employee relationship between petitioner and Citihomes, petitioner's claim for unpaid commission fees should be litigated in an ordinary civil action, not before the labor tribunals. The absence of an employer-employee relationship was the primary basis for the dismissal of the complaint by the NLRC and the CA.
Main Doctrine
The existence of an employer-employee relationship is determined by the four-fold test, with the control test being the most significant determinant. Absent substantial evidence proving the elements of this relationship, labor tribunals lack jurisdiction over a claim for money claims.