Sandigan Savings and Loan Bank v. Javier
REITERATIONFacts
The Antecedents: Private respondent Anita M. Javier was initially hired as a realty sales agent for petitioner Sandigan Realty Development Corporation (Sandigan Realty) from November 2, 1982, to November 30, 1986. Her compensation was a 5% commission on sales, with a P500.00 monthly allowance if no sale was made. On December 1, 1986, she was hired as a marketing collector for petitioner Sandigan Savings and Loan Bank (Sandigan Bank), receiving a monthly salary and allowance. She continued to work as a realty sales agent for Sandigan Realty on the side, without the P500.00 allowance. On April 20, 1990, Javier was verbally dismissed by Angel Andan, the president of both companies. She filed a complaint for illegal dismissal, reinstatement, backwages, moral, and exemplary damages. Procedural History: The Labor Arbiter ruled in favor of Javier, ordering reinstatement, backwages, attorney's fees, and damages. The National Labor Relations Commission (NLRC) affirmed the decision but deleted the damages and attorney's fees, modifying the monetary award. The NLRC denied motions for reconsideration from both parties. The Petition: Petitioners Sandigan Savings and Loan Bank, Inc., and Sandigan Realty Development Corporation filed a petition for certiorari, assailing the NLRC's findings that Javier was a regular employee of both entities and entitled to backwages and separation pay from both, and questioning the computation of the monetary award.
Issue(s)
Whether respondent NLRC gravely abused its discretion in holding that private respondent was a regular employee of petitioner Sandigan Realty and entitled to backwages and separation pay. Whether the computation of the monetary award by the NLRC was attended with serious errors in fact and in law.
Ruling
The petition is GRANTED. The assailed resolutions of the National Labor Relations Commission are modified. It is found that private respondent was not a regular employee of Sandigan Realty Development Corporation but of Sandigan Savings and Loan Bank, Inc. The petitioner Sandigan Savings and Loan Bank, Inc. is ordered to reinstate private respondent Anita Javier and to pay her backwages from April 20, 1990, up to the date of her actual reinstatement, less earnings derived elsewhere, if any.
Ratio Decidendi
On whether Javier was a regular employee of Sandigan Realty: The Court held that Javier was not a regular employee of Sandigan Realty. The 'right of control test' is the most determinative factor in establishing an employer-employee relationship. In Javier's case with Sandigan Realty, she sold houses and lots according to her own chosen methods and time, and the Realty had no control over the details of how the sale was achieved. Her obligation was merely to turn over the proceeds of sales, and she was paid by the job (commission), not by the hour. The P500.00 monthly allowance ceased when she became a regular employee of Sandigan Bank, indicating a different relationship. Selling houses and lots was merely her sideline. Therefore, Sandigan Realty had no control over her conduct as a realty sales agent, and she could not be entitled to security of tenure, backwages, or separation pay from Sandigan Realty. Her legal relation with Sandigan Realty was that of an independent contractor. On the monetary award and reinstatement against Sandigan Bank: The Court agreed with the private respondent that reinstatement should be ordered as a matter of course, as there was no showing that reinstatement was impossible. Article 279 of the Labor Code mandates reinstatement without loss of seniority rights and other privileges, and full backwages from the time compensation was withheld up to actual reinstatement. The NLRC applied the old 'Mercury Drug Rule' in its computation; the Court clarified that under Article 279, as amended by Republic Act No. 6715, backwages should be computed from the date of dismissal up to actual reinstatement. The petitioner bank is liable for backwages based on her latest monthly salary and allowance totaling P2,350.00, with deductions for earnings derived elsewhere from the date of dismissal up to reinstatement. The NLRC's computation of P2,400.00 per month was without basis.
Main Doctrine
The 'right of control test' is the most determinative factor in establishing an employer-employee relationship. Where the person for whom services are performed reserves the right to control not only the end to be achieved but also the means by which such end is reached, the relationship is deemed to exist. An independent contractor is distinguished from an employee by the fact that the control of the contracting party is only with respect to the result of the work, not the details and manner of performance.