G.R. No. L-55764, 16 February 1982

FACTS:

Before the Social Security Commission, the petitioners filed a petition seeking the declaration of the individual petitioners as employees of respondent and not as independent contractors under a peddling agreement on softdrinks executed by the parties for the purpose of making respondent pay the employer’s share of premium contributions for and in behalf of the delivery helpers as employees of the corporation, plus penalties thereon for late remittance of premium contributions.

After hearing, a resolution was rendered in their favor holding that an employer-employee relationship existed between the respondent and the peddler. On appeal, this resolution was affirmed but upon a motion for reconsideration, the appellate court set aside its previous decision and reversed the resolution of the Social Security Commission holding this time that the peddlers were independent contractors. Hence this present action.

ISSUE:

Whether the peddler is an independent contractor?

RULING:

Yes. We hold that conformably to Mafinco, the peddling contract involved in the instant petition makes the peddler an independent contractor

On Agency vs. Independent Contract

On the other hand, an independent contractor is ‘one who exercises independent employment and contracts to do a piece of work according to his own methods and without being subject to control of his employer except as to the result of the work’ (Mansal v. P.P. Gocheco Lumber Co., 96 Phil. 941).

Among the factors to be considered are whether the contractor is carrying on an independent business; whether the work is part of the employer’s general business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of the work to another; the power to terminate the relationship; the existence of a contract for the performance of a specified piece of work; the control and supervision of the work; the employer’s powers and duties with respect to the hiring, firing, and payment of the contractor’s servants; the control of the premises; the duty to supply the premises, tools, appliances, material and labor; and the mode, manner, and terms of payment’ (56 C.J.S. 46).

Those tests to determine the existence of an employer-employee relationship or whether the person doing a particular work for another is an independent contractor cannot be satisfactorily applied in the instant case. It should be obvious by now that the instant case is a penumbral, sui generis case lying on the shadowy borderline that separates an employee from an independent contractor.

In determining whether the relationship is that of employer and employee or whether one is an independent contractor, ‘each case must be determined on its own facts and all the features of the relationship are to be considered’ (56 C.J.S. 45). We are convinced that on the basis of the peddling contract, no employer-employee relationship was created.” (At pp. 161-163, Emphasis supplied.).

The Supreme Court, following the almost identical case of Mafinco Trading Corporation v. Ople, Et. Al. No. L-37790, March 25, 1976, ruled that on the basis of the peddling contract, no employer-employee relationship was created and individual peddlers must be considered as independent contractors and not employees of the respondent for they were distributors of the soft drinks with their own capital and employees; with a formal contract of employment; made responsible for any damage to property, death or injuries to persons caused by their own acts or that of their drivers and helpers; and answerable for all expenses that may be incurred in the sale of the manufacturer’s products covered by the contract.

Judgment affirmed.

*Case digest by Nikki P. Ebillo, JD-4, Andres Bonifacio Law School, SY 2019-2020