(Labor Standards – Inexistence of employer-employee relationship)
Facts: Private respondent was a sales division manager of private petitioner and was in charge of selling the latter’s products through sales representatives. As compensation, private respondent receive commissions from the products sold by his agents. After resigning from office to pursue his private business, he filed a complaint against the petitioner, claiming for non-payment of separation pay and other benefits.
Petitioner alleged that complainant was not its employee but an independent dealer authorized to promote and sell its products and in return, received commissions therefrom. Petitioner did not have any salary and his income from petitioner was dependent on the volume of sales accomplished. He had his own office, financed the business expense, and maintained his own workforce. Thus petitioner argued that it had no control and supervision over the complainant as to the manner and means he conducted his business operations.
The Labor Arbiter ruled that complainant was an employee of the petitioner company. Petioner had control over the complainant since the latter was required to make periodic reports of his sales activities to the company.
Issue: Whether or not there exists an employer-employee relationship.
Held: No. Control of employee’s conduct is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under this, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the manner and means to be used in reaching that end.
The fact that petitioner issued memoranda to private respondent and to other division sales managers did not prove that petitioner had actual control over them. The different memoranda were merely guidelines on company policies which the sales managers follow and impose on their respective agents.
CASE EATER 