Case Summary (G.R. No. 195190)
Petitioner
Royale Homes Marketing Corporation
Respondent
Fidel P. Alcantara (substituted by his heirs)
Key Dates
• Appointment period: January 1 to December 31, 2003
• Complaint filed before Labor Arbiter: December 17, 2003
• Labor Arbiter decision: September 7, 2005
• NLRC decision: February 23, 2009 (Resolution denying reconsideration: May 29, 2009)
• Court of Appeals decision: June 23, 2010 (Reconsideration denied: January 18, 2011)
• Supreme Court decision: July 28, 2014
Applicable Law
1987 Philippine Constitution; Civil Code on contract interpretation; Labor jurisprudence applying the four-fold test and the “control” test (Insular Life; Tongko v. Manulife; Consulta v. CA).
Factual Background
Alcantara’s written engagement entitled him to commission-based compensation, budget allocations, incentives, and support. It expressly disclaimed any employer-employee relationship, allowed him free choice of sales methods, and imposed only that he observe company rules of general applicability (price, terms, ethics, periodic briefings). His contract contained an exclusivity clause limiting him to Royale Homes’ properties.
Labor Arbiter Decision
The Labor Arbiter characterized Alcantara as an employee under a fixed‐term contract and found that Royale Homes had pre-terminated his appointment without just cause. Backwages totalling ₱277,000 were awarded for the unexpired portion of 2003; all other claims were dismissed for lack of merit.
NLRC Decision
The National Labor Relations Commission reversed and set aside the Labor Arbiter, holding that Alcantara was an independent contractor. Citing the absence of fixed working hours, payment of salary, and control over methods of work, the NLRC dismissed the complaint for lack of jurisdiction.
Court of Appeals Decision
The Court of Appeals granted Alcantara’s petition, applied both the four-fold and the economic reality tests, and concluded that Royale Homes exercised sufficient control over Alcantara (through rules, evaluations, code of ethics, exclusivity) to establish an employer-employee relationship. It awarded backwages and separation pay, remanding computation to the Labor Arbiter.
Issues Presented
A. Whether the CA erred in reversing the NLRC’s dismissal for lack of jurisdiction and in finding that Alcantara was illegally dismissed.
B. Whether the CA disregarded controlling Supreme Court en banc rulings (Tongko v. Manulife; Sonza v. ABS-CBN; Consulta v. CA).
C. Whether the CA improperly denied petitioner’s motions for reconsideration.
Supreme Court’s Analysis of Contractual Characterization
The SC emphasized that a written contract’s stipulation characterizing the relationship (“no employer-employee relationship exists”) is a primary but not conclusive indication of parties’ intent. Here, the unambiguous language and Alcantara’s failure to challenge it over nine years confirm their mutual understanding that he would serve as an independent contractor.
Supreme Court’s Application of Control Test
Under the four-fold test, the control element is determinative. The SC held that compliance with general guidelines (price, terms, ethics, periodic performance evaluation) does not equate to the labor-law “control” over means and methods of work. Relying on Insular Life and Tongko v. Manulife, the Court ruled that a principal’s imposition
...continue readingCase Syllabus (G.R. No. 195190)
Facts of the Case
- In 1994, Royale Homes Marketing Corporation (“Royale Homes”) appointed Fidel P. Alcantara as Marketing Director under a one-year contract, subsequently reappointing him annually through December 31, 2003, when he served as Division 5 Vice-President-Sales.
- Alcantara’s principal duties consisted of marketing Royale Homes’s real estate inventories on an exclusive basis; he was free to solicit sales “at any time and by any manner” and to recruit and train his own sales agents, subject only to company rules, regulations and code of ethics.
- He was compensated solely on a commission basis (0.5 % override on option sales, budget allocations, incentives and support), with no fixed salary, 13th month pay, overtime or holiday pay.
- In early November 2003, Alcantara announced publicly in a management committee meeting that he would not finish the unexpired term of his contract and intended to join his wife’s competing brokerage business; Royale Homes accepted his resignation, held a despedida party, and appointed a new contractor.
- On December 17, 2003, Alcantara filed a Complaint for Illegal Dismissal against Royale Homes and its corporate officers, alleging he was a regular employee unlawfully dismissed without cause or due process, seeking reinstatement, backwages, damages, attorney’s fees, and the transfer of a company-provided vehicle.
Procedural History
- September 7, 2005: Labor Arbiter Dolores M. Peralta-Beley rendered a Decision awarding Alcantara ₱277,000 for unexpired contract term, ruling him a fixed-term employee and dismissing other claims.
- February 23, 2009: NLRC Decision reversed the Labor Arbiter, held Alcantara was an independent contractor, and dismissed the complaint for lack of jurisdiction; May 29, 2009 NLRC Resolution denied Alcantara’s motion for reconsideration.
- CA-G.R. SP No. 109998 Decision dated June 23, 2010: Court of Appeals granted Alcantara’s certiorari petition, reversed NLRC, found employer-employee relationship, declared termination illegal, awarded backwages and separation pay in lieu of reinstatement, and remanded computation to the Labor Arbiter; January 18, 2011 CA Resolution denied Royale Homes’s motions for reconsideration.
- July 28, 2014: Supreme Court promulgated Resolution in G.R. No. 195190 on petition for review on certiorari.
Issues
- Whether the Court of Appeals erred as a matter of law in reversing the NLRC’s dismissal for lack of jurisdiction and finding that Alcantara was illegally dismissed.
- Whether the CA disregarded binding Supreme Court en banc rulings (Tongko v. Manulife, Sonza v. ABS-CBN, Consulta v. CA) in its analysis of control and economic r