G.R. No. 195190. July 28, 2014.

*
ROYALE HOMES MARKETING CORPORATION,
petitioner, vs. FIDEL P. ALCANTARA [deceased],
substituted by his heirs, respondent.

Labor Law; Employer-Employee Relationship; While the

existence of employer-employee relationship is a matter of law, the
characterization made by the parties in their contract as to the
nature of their juridical relationship cannot be simply ignored.—
The primary evidence of the nature of the parties’ relationship in
this case is the written contract that they signed and executed in
pursuance of their mutual agreement. While the existence of
employer-employee relationship is a matter of law, the
characterization made by the parties in their contract as to the
nature of their juridical relationship cannot be simply ignored,
particularly in this case where the parties’ written contract
unequivocally states their intention at the time they entered into
it. In Tongko v. The Manufacturers Life Insurance Co. (Phils.),
Inc., 622 SCRA 58 (2010), it was held that: To be sure, the
Agreement’s legal characterization of the nature of the
relationship cannot be conclusive and binding on the courts; x x x
the characterization of the juridical relationship the Agreement
embodied is a matter of law that is for the courts to determine. At
the same time, though, the characterization the parties gave to
their relationship in the Agreement cannot simply be brushed
aside because it embodies their intent at the time they entered
the Agreement, and they were governed by this understanding
throughout their relationship. At the very least, the provision on
the absence of employer-employee relationship between the
parties can be an aid in considering the Agreement and its
implementation, and in appreciating the other evidence on record.
Same; Same; In determining the existence of an employer-
employee relationship, the Supreme Court (SC) has generally
relied on the four-fold test, to wit: (1) the selection and engagement
of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the employer’s power to control the employee
with respect to the

_______________

* SECOND DIVISION.
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148 SUPREME COURT REPORTS ANNOTATED

Royale Homes Marketing Corporation vs. Alcantara

means and methods by which the work is to be accomplished.—In

determining the existence of an employer-employee relationship,
this Court has generally relied on the four-fold test, to wit: (1) the
selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the employer’s power to
control the employee with respect to the means and methods by
which the work is to be accomplished. Among the four, the most
determinative factor in ascertaining the existence of employer-
employee relationship is the “right of control test.” “It is deemed
to be such an important factor that the other requisites may even
be disregarded.” This holds true where the issues to be resolved is
whether a person who performs work for another is the latter’s
employee or is an independent contractor, as in this case. For
where the person for whom the 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, employer-employee
relationship is deemed to exist.
Same; Same; As long as the level of control does not interfere
with the means and methods of accomplishing the assigned tasks,
the rules imposed by the hiring party on the hired party do not
amount to the labor law concept of control that is indicative of
employer-employee relationship.—Not every form of control is
indicative of employer-employee relationship. A person who
performs work for another and is subjected to its rules,
regulations, and code of ethics does not necessarily become an
employee. As long as the level of control does not interfere with
the means and methods of accomplishing the assigned tasks, the
rules imposed by the hiring party on the hired party do not
amount to the labor law concept of control that is indicative of
employer-employee relationship. In Insular Life Assurance Co.,
Ltd. v. National Labor Relations Commission, 179 SCRA 459
(1989), it was pronounced that: Logically, the line should be
drawn between rules that merely serve as guidelines towards the
achievement of the mutually desired result without dictating the
means or methods to be employed in attaining it, and those that
control or fix the methodology and bind or restrict the party hired
to the use of such means. The first, which aim only to promote the
result, create no employer-employee relationship unlike the
second, which address both the result and the means used to
achieve it.
 Same; Same; Neither does the repeated hiring of Alcantara
prove the existence of employer-employee relationship; Nor does the

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exclusivity clause of contract establish the existence of the labor

law concept of control.—Neither does the repeated hiring of
Alcantara prove the existence of employer-employee relationship.
As discussed above, the absence of control over the means and
methods disproves employer-employee relationship. The
continuous rehiring of Alcantara simply signifies the renewal of
his contract with Royale Homes, and highlights his satisfactory
services warranting the renewal of such contract. Nor does the
exclusivity clause of contract establish the existence of the labor
law concept of control. In Consulta v. Court of Appeals, 453 SCRA
732 (2005), it was held that exclusivity of contract does not
necessarily result in employer-employee relationship, viz.: x  x  x
However, the fact that the appointment required Consulta to
solicit business exclusively for Pamana did not mean that
Pamana exercised control over the means and methods of
Consulta’s work as the term control is understood in labor
jurisprudence. Neither did it make Consulta an employee of
Pamana. Pamana did not prohibit Consulta from engaging in any
other business, or from being connected with any other company,
for as long as the business [of the] company did not compete with
Pamana’s business. The same scenario obtains in this case.
Alcantara was not prohibited from engaging in any other business
as long as he does not sell projects of Royale Homes’ competitors.
He can engage in selling various other products or engage in
unrelated businesses.
Same; Same; Independent Contractors; The element of payment of
wages is also absent in this case. As provided in the contract,
Alcantara’s remunerations consist only of commission override of
0.5%, budget allocation, sales incentive and other forms of
company support. There is no proof that he received fixed monthly
salary. No payslip or payroll was ever presented and there is no
proof that Royale Homes deducted from his supposed salary
withholding tax or that it registered him with the Social Security
System (SSS), Philippine Health Insurance Corporation, or Pag-
Ibig Fund. In fact, his Complaint merely states a ballpark figure of
his alleged salary of P100,000.00, more or less. All of these
indicate an independent contractual relationship.—The element of
payment of wages is also absent in this case. As provided in the
contract, Alcantara’s remunerations consist only of commission
override of 0.5%, budget allocation, sales incentive and other
forms of company support. There is no proof that he received fixed
monthly salary. No payslip or payroll was ever presented and
there is no proof that Royale Homes de-

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150 SUPREME COURT REPORTS ANNOTATED

Royale Homes Marketing Corporation vs. Alcantara

ducted from his supposed salary withholding tax or that it

registered him with the Social Security System, Philippine Health
Insurance Corporation, or Pag-Ibig Fund. In fact, his Complaint
merely states a ballpark figure of his alleged salary of
P100,000.00, more or less. All of these indicate an independent
contractual relationship. Besides, if Alcantara indeed considered
himself an employee of Royale Homes, then he, an experienced
and professional broker, would have complained that he was
being denied statutorily mandated benefits. But for nine
consecutive years, he kept mum about it, signifying that he has
agreed, consented, and accepted the fact that he is not entitled to
those employee benefits because he is an independent contractor.
This Court is, therefore, convinced that Alcantara is not an
employee of Royale Homes, but a mere independent contractor.
The NLRC is, therefore, correct in concluding that the Labor
Arbiter has no jurisdiction over the case and that the same is
cognizable by the regular courts.

PETITION for review on certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.
Ines & Villacarlos Law Offices for petitioner.
Samson S. Alcantara for respondent.

DEL CASTILLO, J.:

Not every form of control that a hiring party imposes on
the hired party is indicative of employee-employer
relationship. Rules and regulations that merely serve as
guidelines towards the achievement of a mutually desired
result without dictating the means and methods of
accomplishing it do not establish employer-employee
relationship.[1]

_______________
[1] Insular Life Assurance Co., Ltd. v. National Labor Relations
Commission, 259 Phil. 65, 70-71; 179 SCRA 459, 464 (1989).
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        This Petition for Review on Certiorari[2] assails the

June 23, 2010 Decision[3] of the Court of Appeals (CA) in
C.A.-G.R. S.P. No. 109998 which (i) reversed and set aside
the February 23, 2009 Decision[4] of the National Labor
Relations Commission (NLRC), (ii) ordered petitioner
Royale Homes Marketing Corporation (Royale Homes) to
pay respondent Fidel P. Alcantara (Alcantara) backwages
and separation pay, and (iii) remanded the case to the
Labor Arbiter for the proper determination and
computation of said monetary awards.
Also assailed in this Petition is the January 18, 2011
Resolution[5] of the CA denying Royale Homes’ Motion for
Reconsideration,[6] as well as its Supplemental[7] thereto.
Factual Antecedents
In 1994, Royale Homes, a corporation engaged in
marketing real estates, appointed Alcantara as its
Marketing Director for a fixed period of one year. His work
consisted mainly of marketing Royale Homes’ real estate
inventories on an exclusive basis. Royale Homes
reappointed him for several consecutive years, the last of
which covered the period January 1 to December 31, 2003
where he held the position of Division 5 Vice President-
Sales.[8]

_______________
[2] Rollo, pp. 3-50.
[3]  CA Rollo, pp. 209-229; penned by Associate Justice Mariflor P.
Punzalan-Castillo and concurred in by Associate Justices Josefina
Guevara-Salonga and Franchito N. Diamante.
[4] Rollo, pp. 241-248; penned by Presiding Commissioner Gerardo C.
Nograles and concurred in by Commissioners Perlita B. Velasco and
Romeo L. Go.
[5] CA Rollo, pp. 288-294.
[6] Id., at pp. 231-256.
[7] Id., at pp. 258-275.
[8] See Contract dated January 24, 2003, id., at p. 36.

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Royale Homes Marketing Corporation vs. Alcantara
Proceedings before the Labor Arbiter
On December 17, 2003, Alcantara filed a Complaint for
Illegal Dismissal[9] against Royale Homes and its President
Matilde Robles, Executive Vice President for
Administration and Finance Ma. Melinda Bernardino, and
Executive Vice President for Sales Carmina Sotto.
Alcantara alleged that he is a regular employee of Royale
Homes since he is performing tasks that are necessary and
desirable to its business; that in 2003 the company gave
him P1.2 million for the services he rendered to it; that in
the first week of November 2003, however, the executive
officers of Royale Homes told him that they were
wondering why he still had the gall to come to office and sit
at his table;[10] and that the acts of the executive officers of
Royale Homes amounted to his dismissal from work
without any valid or just cause and in gross disregard of
the proper procedure for dismissing employees. Thus, he
also impleaded the corporate officers who, he averred,
effected his dismissal in bad faith and in an oppressive
manner.
Alcantara prayed to be reinstated to his former position
without loss of seniority rights and other privileges, as well
as to be paid backwages, moral and exemplary damages,
and attorney’s fees. He further sought that the ownership
of the Mitsubishi Adventure with Plate No. WHD-945 be
transferred to his name.
Royale Homes, on the other hand, vehemently denied
that Alcantara is its employee. It argued that the
appointment paper of Alcantara is clear that it engaged his
services as an independent sales contractor for a fixed term
of one year only. He never received any salary, 13th month
pay, overtime pay or holiday pay from Royale Homes as he
was paid purely on commission basis. In addition, Royale
Homes had no control on how Alcantara would accomplish
his tasks and responsi-

_______________
 [9] Rollo, p. 271.
[10] See [Alcantara’s] Position Paper, id., at pp. 106-110.

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bilities as he was free to solicit sales at any time and by

any manner which he may deem appropriate and
necessary. He is even free to recruit his own sales
personnel to assist him in pursuance of his sales target.
According to Royale Homes, Alcantara decided to leave
the company after his wife, who was once connected with it
as a sales agent, had formed a brokerage company that
directly competed with its business, and even recruited
some of its sales agents. Although this was against the
exclusivity clause of the contract, Royale Homes still
offered to accept Alcantara’s wife back so she could
continue to engage in real estate brokerage, albeit
exclusively for Royale Homes. In a special management
committee meeting on October 8, 2003, however, Alcantara
announced publicly and openly that he would leave the
company by the end of October 2003 and that he would no
longer finish the unexpired term of his contract. He has
decided to join his wife and pursue their own brokerage
business. Royale Homes accepted Alcantara’s decision. It
then threw a despedida party in his honor and,
subsequently, appointed a new independent contractor.
Two months after he relinquished his post, however,
Alcantara appeared in Royale Homes and submitted a
letter claiming that he was illegally dismissed.
Ruling of the Labor Arbiter
On September 7, 2005, the Labor Arbiter rendered a
Decision[11] holding that Alcantara is an employee of
Royale Homes with a fixed-term employment period from
January 1 to December 31, 2003 and that the
pretermination of his contract was against the law. Hence,
Alcantara is entitled to an amount which he may have
earned on the average for the unexpired portion of the
contract. With regard to the im-

_______________
[11] Id., at pp. 208-219; penned by Labor Arbiter Dolores M. Peralta-
Beley.

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Royale Homes Marketing Corporation vs. Alcantara

pleaded corporate officers, the Labor Arbiter absolved them

from any liability.
The dispositive portion of the Labor Arbiter’s Decision
reads:

WHEREFORE, premises considered, judgment is hereby

rendered ordering the respondent Royale Homes Marketing Corp.
to pay the complainant the total amount of TWO HUNDRED
SEVENTY-SEVEN THOUSAND PESOS (P277,000.00)
representing his compensation/commission for the unexpired term
of his contract.
All other claims are dismissed for lack of merit.
SO ORDERED.[12]

    Both parties appealed the Labor Arbiter’s Decision to

the NLRC. Royale Homes claimed that the Labor Arbiter
grievously erred in ruling that there exists an employer-
employee relationship between the parties. It insisted that
the contract between them expressly states that Alcantara
is an independent contractor and not an ordinary
employee. It had no control over the means and methods by
which he performed his work. Royale Homes likewise
assailed the award of P277,000.00 for lack of basis as it did
not pre-terminate the contract. It was Alcantara who chose
not to finish the contract.
Alcantara, for his part, argued that the Labor Arbiter
erred in ruling that his employment was for a fixed-term
and that he is not entitled to backwages, reinstatement,
unpaid commissions, and damages.

_______________
[12] Id., at pp. 218-219.

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Ruling of the National Labor Relations Commission

On February 23, 2009, the NLRC rendered its Decision,
[13] ruling that Alcantara is not an employee but a mere
independent contractor of Royale Homes. It based its ruling
mainly on the contract which does not require Alcantara to
observe regular working hours. He was also free to adopt
the selling methods he deemed most effective and can even
recruit sales agents to assist him in marketing the
inventories of Royale Homes. The NLRC also considered
the fact that Alcantara was not receiving monthly salary,
but was being paid on commission basis as stipulated in
the contract. Being an independent contractor, the NLRC
concluded that Alcantara’s Complaint is cognizable by the
regular courts.
The fallo of the NLRC Decision reads:
 WHEREFORE, premises considered, the Decision of Labor
Arbiter Dolores Peralta-Beley dated September 5, 2005 is
REVERSED and SET ASIDE and a NEW ONE rendered
dismissing the complaint for lack of jurisdiction.
SO ORDERED.[14]

        Alcantara moved for reconsideration.[15] In a

Resolution[16] dated May 29, 2009, however, the NLRC
denied his motion.
Alcantara thus filed a Petition for Certiorari[17] with the
CA imputing grave abuse of discretion on the part of the
NLRC in ruling that he is not an employee of Royale
Homes and that it is the regular courts which have
jurisdiction over the issue of whether the pretermination of
the contract is valid.

_______________
[13] Id., at pp. 241-248.
[14] Id., at pp. 247-248.
[15] See Motion for Reconsideration, id., at pp. 249-251.
[16] Id., at pp. 260-261.
[17] CA Rollo, pp. 3-13.

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Royale Homes Marketing Corporation vs. Alcantara

Ruling of the Court of Appeals

On June 23, 2010, the CA promulgated its Decision[18]
granting Alcantara’s Petition and reversing the NLRC’s
Decision. Applying the four-fold and economic reality tests,
it held that Alcantara is an employee of Royale Homes.
Royale Homes exercised some degree of control over
Alcantara since his job, as observed by the CA, is subject to
company rules, regulations, and periodic evaluations. He
was also bound by the company code of ethics. Moreover,
the exclusivity clause of the contract has made Alcantara
economically dependent on Royale Homes, supporting the
theory that he is an employee of said company.
The CA further held that Alcantara’s termination from
employment was without any valid or just cause, and it
was carried out in violation of his right to procedural due
process. Thus, the CA ruled that he is entitled to
backwages and separation pay, in lieu of reinstatement.
Considering, however, that the CA was not satisfied with
the proof adduced to establish the amount of Alcantara’s
annual salary, it remanded the case to the Labor Arbiter to
determine the same and the monetary award he is entitled
to. With regard to the corporate officers, the CA absolved
them from any liability for want of clear proof that they
assented to the patently unlawful acts or that they are
guilty of bad faith or gross negligence. Thus:

WHEREFORE, in view of the foregoing, the instant PETITION

is GRANTED. The assailed decision of the National Labor
Relations Commission in NLRC NCR CASE NO. 00-12-14311-03
NLRC CA NO. 046104-05 dated February 23, 2009 as well as the
Resolution dated May 29, 2009 are hereby SET ASIDE and a new
one is entered ordering the respondent company to pay petitioner
backwages which shall be computed from the time of his illegal
termination in October 2003 up to the final-

_______________
[18] Id., at pp. 209-229.

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ity of this decision, plus separation pay equivalent to one month

salary for every year of service. This case is REMANDED to the
Labor Arbiter for the proper determination and computation of
backwages, separation pay and other monetary benefits that
petitioner is entitled to.
SO ORDERED.[19]

  Royale Homes filed a Motion for Reconsideration[20]

and a Supplemental Motion for Reconsideration.[21] In a
Resolution[22] dated January 18, 2011, however, the CA
denied said motions.
Issues
Hence, this Petition where Royale Homes submits before
this Court the following issues for resolution: 

A.
WHETHER THE COURT OF APPEALS HAS DECIDED THE
INSTANT CASE NOT IN ACCORD WITH LAW AND
APPLICABLE DECISIONS OF THE SUPREME COURT WHEN
IT REVERSED THE RULING OF THE NLRC DISMISSING
THE COMPLAINT OF RESPONDENT FOR LACK OF
JURISDICTION AND CONSEQUENTLY, IN FINDING THAT
RESPONDENT WAS ILLEGALLY DISMISSED[.]
B.
WHETHER THE COURT OF APPEALS COMMITTED A
SERIOUS ERROR OF LAW IN DISREGARDING THE EN BANC
RULING OF THIS HONORABLE COURT IN THE CASE OF
TONGKO VS. MANULIFE, AND IN BRUSHING ASIDE THE
APPLICABLE RULINGS OF SONZA VS. ABS-CBN AND
CONSULTA VS. CA[.]
 

_______________
[19] Id., at p. 228.
[20] Id., at pp. 231-256.
[21] Id., at pp. 258-275.
[22] Id., at pp. 288-294.

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Royale Homes Marketing Corporation vs. Alcantara

C.
WHETHER THE COURT OF APPEALS COMMITTED A
SERIOUS ERROR OF LAW IN DENYING THE MOTION FOR
RECONSIDERATION OF PETITIONER AND IN REFUSING TO
CORRECT ITSELF[.][23]

      Royale Homes contends that its contract with

Alcantara is clear and unambiguous — it engaged his
services as an independent contractor. This can be readily
seen from the contract stating that no employer-employee
relationship exists between the parties; that Alcantara was
free to solicit sales at any time and by any manner he may
deem appropriate; that he may recruit sales personnel to
assist him in marketing Royale Homes’ inventories; and,
that his remunerations are dependent on his sales
performance.
Royale Homes likewise argues that the CA grievously
erred in ruling that it exercised control over Alcantara
based on a shallow ground that his performance is subject
to company rules and regulations, code of ethics, periodic
evaluation, and exclusivity clause of contract. Royale
Homes maintains that it is expected to exercise some
degree of control over its independent contractors, but that
does not automatically result in the existence of employer-
employee relationship. For control to be considered as a
proof tending to establish employer-employee relationship,
the same must pertain to the means and method of
performing the work; not on the relationship of the
independent contractors among themselves or their
persons or their source of living.
Royale Homes further asserts that it neither hired nor
wielded the power to dismiss Alcantara. It was Alcantara
who openly and publicly declared that he was pre-
terminating his fixed-term contract.

_______________
[23] Rollo, p. 376.

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The pivotal issue to be resolved in this case is whether

Alcantara was an independent contractor or an employee of
Royale Homes.
Our Ruling
The Petition is impressed with merit.
The determination of whether a party who renders
services to another is an employee or an independent
contractor involves an evaluation of factual matters which,
ordinarily, is not within the province of this Court. In view
of the conflicting findings of the tribunals below, however,
this Court is constrained to go over the factual matters
involved in this case.[24]
The juridical relationship of the parties
based on their written contract
The primary evidence of the nature of the parties’
relationship in this case is the written contract that they
signed and executed in pursuance of their mutual
agreement. While the existence of employer-employee
relationship is a matter of law, the characterization made
by the parties in their contract as to the nature of their
juridical relationship cannot be simply ignored,
particularly in this case where the parties’ written contract
unequivocally states their intention at the time they
entered into it. In Tongko v. The Manufacturers Life
Insurance Co. (Phils.), Inc.,[25] it was held that:

To be sure, the Agreement’s legal characterization of the nature of

the relationship cannot be conclusive and binding on the courts;
x  x  x the characterization of the juridical relationship the
Agreement embodied is a matter of

_______________
 [24] Bernarte v. Philippine Basketball Association (PBA), G.R. No. 192084,
September 14, 2011, 657 SCRA 745, 754.
[25] G.R. No. 167622, June 29, 2010, 622 SCRA 58.

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Royale Homes Marketing Corporation vs. Alcantara

law that is for the courts to determine. At the same time, though,
the characterization the parties gave to their relationship in the
Agreement cannot simply be brushed aside because it embodies
their intent at the time they entered the Agreement, and they
were governed by this understanding throughout their
relationship. At the very least, the provision on the absence of
employer-employee relationship between the parties can be an aid
in considering the Agreement and its implementation, and in
appreciating the other evidence on record.[26]

      In this case, the contract,[27] duly signed and not

disputed by the parties, conspicuously provides that “no
employer-employee relationship exists between” Royale
Homes and Alcantara, as well as his sales agents. It is
clear that they did not want to be bound by employer-
employee relationship at the time of the signing of the
contract. Thus:

January 24, 2003

MR. FIDEL P. ALCANTARA
13 Rancho I
Marikina City
Dear Mr. Alcantara,
This will confirm your appointment as Division 5
VICE[-]PRESIDENT-SALES of ROYALE HOMES MARKETING
CORPORATION effective January 1, 2003 to December 31, 2003.
Your appointment entails marketing our real estate
inventories on an EXCLUSIVE BASIS under such price, terms
and condition to be provided to you from time to time.
As such, you can solicit sales at any time and by any manner
which you deem appropriate and necessary to market our real
estate inventories subject to rules,

_______________
[26] Id., at p. 80.
[27] CA Rollo, p. 36.

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regulations and code of ethics promulgated by the company.

Further, you are free to recruit sales personnel/agents to assist
you in marketing of our inventories provided that your
personnel/agents shall first attend the required seminars and
briefing to be conducted by us from time to time for the purpose of
familiarizing them of terms and conditions of sale, the nature of
property sold, etc., attendance of which shall be a condition
precedent for their accreditation by us.
That as such Division 5 VICE[-]PRESIDENT-SALES you shall
be entitled to:
1. Commission override of 0.5% for all
option sales beginning January 1, 2003 booked
by your sales agents.
2. Budget allocation depending on your
division’s sale performance as per our budget
guidelines.
3. Sales incentive and other forms of
company support which may be granted from
time to time.
It is understood, however, that no employer-employee
relationship exists between us, that of your sales
personnel/agents, and that you shall hold our company x x x, its
officers and directors, free and harmless from any and all claims
of liability and damages arising from and/or incident to the
marketing of our real estate inventories.
We reserve, however, our right to terminate this agreement in
case of violation of any company rules and regulations, policies
and code of ethics upon notice for justifiable reason.
Your performance shall be subject to periodic evaluation based
on factors which shall be determined by the management.
If you are amenable to the foregoing terms and conditions,
please indicate your conformity by signing on the space provided
below and return [to] us a duplicate

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Royale Homes Marketing Corporation vs. Alcantara

copy of this letter, duly accomplished, to constitute as our

agreement on the matter. (Emphasis ours)

     Since “the terms of the contract are clear and leave
no doubt upon the intention of the contracting parties, the
literal meaning of its stipulations should control.”[28] No
construction is even needed as they already expressly state
their intention. Also, this Court adopts the observation of
the NLRC that it is rather strange on the part of
Alcantara, an educated man and a veteran sales broker
who claimed to be receiving P1.2 million as his annual
salary, not to have contested the portion of the contract
expressly indicating that he is not an employee of Royale
Homes if their true intention were otherwise.
The juridical relationship of the parties based on
Control Test
In determining the existence of an employer-employee
relationship, this Court has generally relied on the four-
fold test, to wit: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the employer’s power to control the
employee with respect to the means and methods by which
the work is to be accomplished.[29] Among the four, the
most determinative factor in ascertaining the existence of
employer-employee relationship is the “right of control
test.”[30] “It is deemed to be such an important factor that
the other requisites may even be disregarded.”[31] This
holds true where the issues to be resolved is whether a
person who performs work for another is the lat-

_______________
[28] CIVIL CODE OF THE PHILIPPINES, Article 1370.
[29] Supra note 24; Sandigan Savings and Loan Bank, Inc. v. National
Labor Relations Commission, 324 Phil. 348, 358; 254 SCRA 126, 133
(1996); Sonza v. ABS-CBN Broadcasting Corporation, G.R. No. 138051,
June 10, 2004, 431 SCRA 583, 594-595.
[30] Id.
[31] Sandigan Savings and Loan Bank, Inc. v. National Labor
Relations Commission, supra.

163

VOL. 731, JULY 28, 2014 163

Royale Homes Marketing Corporation vs. Alcantara

ter’s employee or is an independent contractor,[32] as in

this case. For where the person for whom the 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, employer-employee relationship is deemed to
exist.[33]
In concluding that Alcantara is an employee of Royale
Homes, the CA ratiocinated that since the performance of
his tasks is subject to company rules, regulations, code of
ethics, and periodic evaluation, the element of control is
present.
The Court disagrees.
Not every form of control is indicative of employer-
employee relationship. A person who performs work for
another and is subjected to its rules, regulations, and code
of ethics does not necessarily become an employee.