PHILIPPINE GLOBAL COMMUNICATIONS, INC., petitioner, vs.

RICARDO DE
VERA, respondent.
Facts:

Respondent Ricardo De Vera is a physician who entered into a retainership contract by way of
proposition letter with petitioner Philippine Global Communications, Inc for a period of one year.
Said contract was renewed yearly. It went on from 1981 to 1994. On 1995 and 1996, the
renewal was made only verbally. However, on December 1996, respondent received a letter
from petitioner terminating the retainership contract effective December 31, 1996. De Vera filed
a complaint for illegal dismissal without due process before the NLRC but such was dismissed
for lack of merit on the ground that he was not dismissed, but that his contract with the company
merely ended. On appeal, the NLRC reversed its decision and ordered respondents
reinstatement. PhilCon filed a motion for reconsideration but was denied by NLRC. When it
reached the CA, the appellate court only modified the awards granted to De Vera.

Issue:

Whether or not an employer-employee relationship exists between PhilCon and De Vera to

warrant petitioners claim of illegal dismissal without due process.

Held:

The Court, in determining the existence of an employer-employee relationship, has invariably

adhered to 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 power to control the employees
conduct, or the so-called control test, considered to be the most important element.
Applying the four-fold test to this case, we initially find that it was respondent himself who
sets the parameters of what his duties would be in offering his services to petitioner. This is
borne by no less than his 15 May 1981 letter[16] which, in full, reads:
The labor arbiter added the indicia, not disputed by respondent, that from the time he
started to work with petitioner, he never was included in its payroll; was never deducted any
contribution for remittance to the Social Security System (SSS); and was in fact subjected by
petitioner to the ten (10%) percent withholding tax for his professional fee, in accordance with
the National Internal Revenue Code, matters which are simply inconsistent with an employer-
employee relationship. In the precise words of the labor arbiter:
Clearly, the elements of an employer-employee relationship are wanting in this case.

We note, too, that the power to terminate the parties relationship was mutually vested on both.
Either may terminate the arrangement at will, with or without cause.

SECOND DIVISION

CAPITOL WIRELESS, INC. G.R. No. 169016

Petitioner,
 Present:

QUISUMBING, J., Chairperson,

CARPIO,
- versus - CARPIO MORALES,
TINGA, and
VELASCO, Jr., JJ.
Promulgated:
January 31, 2007
CARLOS ANTONIO BALAGOT,
Respondent.

Facts:

Respondent Balagot is an employee of petitioner Capitol Wireless, Inc since 1987 assigned as a
collector requiring field work for which he was provided with a motorcycle. On May 9,2000, at
around 3:35 pm, he was seen at China Banking Corporation with which Capwire had no
business relations. It was found out that concurrent with his employment at Capwire is his
employment with CBC as a messenger. An administrative hearing was conducted and Balagot
was found guilty of grave misconduct, and was dismissed. Respondent filed before the NLRC a
complaint for illegal dismissal. The NLRC ruled in his favour, but the decision was reversed on
Capwires appeal.

Issue:

Whether or not there was a valid ground for respondents dismissal.

Held:

There is no denying that taking on double job [sic] per se is not illegal as extra income
would go a long way for an ordinary worker like herein complainant. The only
limitation iswhere one job overlaps with the other in terms of time and/or poses a
clear case of conflict of interest as to the nature of business of complainants two
employers.

In the case at bar, the conflict of interest scenario is out of the question since respondent
Capitol Wireless (Capwire) business is very different from Contractual Concepts
Incorporated. The problem, however, is as to time and performance of duty. With respondent
CAPWIRE complainant works as a collector from 8:00 A.M. to 5:00 P.M. On the other hand, his
job at Contractual Concept is as a messenger assigned at China Bank. As a messenger, we do
not believe that hell be performing his task after 5:00 P.M. as by then all private offices are
closed.

In Pepsi-Cola Distributors of the Philippines, Inc. v. NLRC, it was held that [An employee]
cannot serve himself and [his employer] at the same time all at the expense of the latter. It
would be unfair to compensate private respondent who does not devote his time and effort to
his employer. Unauthorized use of company time is a valid ground for dismissal.