G.R. No. 91307 - Singer Sewing Machine Co. vs. Drilon

On February 15, 1989, the Singer Machine Collectors Union-Baguio (SIMACUB) filed a petition for direct certification as sole and exclusive bargaining agent of collectors employed by Singer Sewing Machine Company, Baguio City branch ("the Company").
The Company opposed the petition, asserting that the union members are not employees but independent contractors, as evidenced by the collection agency agreement signed by the collectors.

The Med-Arbiter Designate Felix B. Chaguile, Jr. found an employer-employee relationship existed between the union members and the Company and granted the petition for certification election.
Labor Secretary Franklin M. Drilon affirmed the Med-Arbiter’s order on appeal.
The Secretary denied the Company’s motion for reconsideration.
The Company filed the present petition for certiorari assailing the orders and resolution, alleging jurisdictional errors and grave abuse of discretion on the part of the public respondents.

DOLE lacks jurisdiction since the existence of an employer-employee relationship is in question.
The Company’s right to due process was violated as evidence showing union members are commission agents (independent contractors) was disregarded.
Public respondents erred in finding an employer-employee relationship existed.
They alleged the public respondents disregarded the rule that commission agents are independent contractors, not employees.

They contended that provisions in the Collection Agency Agreement indicate employer control, supporting the employment relationship.
Invoked Article 280 of the Labor Code, arguing union members perform necessary activities integral to the Company's business.
Noted that termination of their agreement by the Company was meant to frustrate their constitutional rights to self-organization and collective bargaining.
Relied on Section 8, Rule 8, Book III of the Omnibus Rules Implementing the Labor Code, arguing collectors do not qualify as independent contractors because they are not free from control and lack substantial capital or investment necessary in their business.

Designated collectors as “collecting agents” and explicitly described them as independent contractors, not employees.
Payment based only on commission of 6% of collections plus possible bonuses.
Required to post a cash bond as guarantee for faithful contract performance.
Agents have to use receipt and report forms furnished by the Company and submit regular reports on collections.
Agreement is effective for one year, renewable annually, and has termination clauses based on performance or contractual conditions.

Collectors are not required to observe office hours or daily reporting except for remitting collections.
No exclusive devotion of time required; allowed to work elsewhere.
Methods and manners of collection left to the discretion of collectors.
Collectors bear their own transportation expenses.
Payments strictly commission-based; no commission if no collections are made.
Collection agents deduct commissions directly from collections before remittance.

Whether the union members are employees of the Singer Sewing Machine Company or independent contractors under the Collection Agency Agreement.
Whether the Department of Labor and Employment (DOLE) has jurisdiction over the case.
Whether the petition for direct certification by the union as the sole bargaining agent should be granted.
Whether respondents’ constitutional right to self-organization and collective bargaining attaches in the absence of an employer-employee relationship.