Principles

 Sufficiency of Control Test

 Determination of relationship in consideration of the whole economic activity
 Constructive Dismissal
 Proofs of Employment

First Division
G.R. No. 170087; August 31, 2006
ANGELINA FRANCISCO vs NLRC
YNARES-SANTIAGO, J.:

Petitioner Francisco was hired by Kasei Corporation as Accountant and Corporate Secretary and
was assigned to handle all the accounting needs of the company and was also its liaison officer in Makati
City for permits and other licenses. And although her title was a “Corporate Secretary,” she didn’t attend
board meetings nor did she handle corporate documents. On some occasions, however, she was
allowed to sign documents on behalf of the company. Through the years, she was designated as an
Acting Manager assigned in recruiting employees, managing administration functions and representing
the company in all dealings with government agencies.
At her 5th year as Acting Manager, petitioner was replaced – but was assured that she would
continue to be part of the company as technical assistant to the Seiji Kamura, the company’s technical
consultant. Thereafter, her salary was reduced. That same year, she did not receive her mid-year bonus.
She also stopped receiving salary from the company starting the month of October.
When petitioner confronted the company treasurer, the latter simply stated that petitioner is no
longer affiliated with the company. This prompted her to file an action for constructive dismissal before
the labor arbiter.
The Labor Arbiter ruled in favor of the petitioner which NLRC affirmed but with modification.
However, on appeal to CA, the CA reversed the NLRC’s decision dismissing the petitioner’s complaint.

 Sufficiency of Control Test

Q. What is the two-tiered test in further determining the employer-employee relationship?

In cases when the four-fold test is insufficient to give a complete picture of the relationship between the
parties The better approach would therefore be to adopt a two-tiered test involving: (1) the putative
employer’s power to control the employee with respect to the means and methods by which the work is
to be accomplished; and (2) the underlying economic realities of the activity or relationship.

This two-tiered test would provide us with a framework of analysis, which would take into consideration
the totality of circumstances surrounding the true nature of the relationship between the parties. This is
especially appropriate in this case where there is no written agreement or terms of reference to base
the relationship on; and due to the complexity of the relationship based on the various positions and
responsibilities given to the worker over the period of the latter’s employment.
  Determination of relationship in consideration of the whole economic activity

Q. How do you determine economic dependence in an employer-employee relationship?

The proper standard of economic dependence is whether the worker is dependent on the alleged
employer for his continued employment in that line of business.

 Constructive Dismissal

Q. What constitutes Constructive Dismissal

Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when

continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank
or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to an employee.

 Proofs of Employment

Q. What may be considered as proofs of employment?

In Domasig v. National Labor Relations Commission, we held that in a business establishment, an

identification card is provided not only as a security measure but mainly to identify the holder thereof as
a bona fide employee of the firm that issues it. Together with the cash vouchers covering petitioner’s
salaries for the months stated therein, these matters constitute substantial evidence adequate to
support a conclusion that petitioner was an employee of private respondent.

We likewise ruled in Flores v. Nuestro that a corporation who registers its workers with the SSS is proof
that the latter were the former’s employees. The coverage of Social Security Law is predicated on the
existence of an employer-employee relationship.