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FACTS:
Benjamin Limjoco was a Sales Division Manager of Encyclopaedia Britannica(EB)
and was in charge of selling petitioners products through some sales representatives. As
compensation, he received commissions from the products sold by his agents. He was
also allowed to use petitioners name, goodwill and logo. Mr. Limjoco agreed to deduct
the office expenses from the commissions. At the time he was connected with EB, he was
also a director and later became the president of the Farmers Rural Bank.
Mr. Limjoco decided to resign from EB to pursue other interests which requires his
personal attention. Some time later, he filed a complaint against EB for non-payment of
separation pay and other benefits as well as illegal deductions.
EB alleged that Limjoco was an independent dealer authorized to promote and sell its
products and in return, and that he did not have any salary, only commissions which were
dependent on his sales accomplishment. He maintained a separate office, financed the
business expenses, and had his own workforce such as a secretary, a utility man, and sales
representatives whose salaries were paid through Limjoco’s commissions. EB held that
they did not exercise control over Limjoco as to the means and manner of conducting his
work. Limjoco was not required to report to EB’s office, and he did not observe fixed
office hours.
EB gave memoranda containing the guidelines on company policies which the sales
managers follow and impose on their respective agents, as well as other instructions. He
was also required to make periodic reports of sales activity to the company. The prices of
the products were fixed by EB. EB’s selling of encyclopaedias and books were done
through dealership agreements. Independent authorized agents primarily conducted the
sales operations. They are not given regular salary, only commissions based on sales
volume. These independent agents hire and maintain their own staff and finance their own
office expenses.
Limjoco posited that he was hired by EB and assigned to the sales department,
earning an average of 4,000Php monthly as sales commissions and was under the
supervision of the EB’s officials who issued to him and his other personnel, memoranda,
guidelines on company policies, instructions and other orders.
ISSUE: Whether or not an employee-employer relationship exists between Limjoco and
EB