FACTS:

Benjamin Limjoco, the private respondent, was a Sales Division Manager of petitioner Encyclopaedia Britannica and was in charge of selling petitioner's products through sales representatives. He received commissions from the products sold by his agents and was allowed to use petitioner's name, goodwill, and logo. However, office expenses were deducted from his commissions, and petitioner needed to be informed about appointments, promotions, and transfers of employees in private respondent's area. Limjoco resigned from office to pursue his private business and later filed a complaint against petitioner for non-payment of separation pay, other benefits, and illegal deduction from his sales commissions. Petitioner argued that Limjoco was not an employee but an independent dealer, highlighting that he had his own office, financed his own expenses, and had his own workforce. Limjoco claimed that he was hired by the petitioner, earned commissions, was under the supervision of petitioner officials, and was entitled to termination pay and other benefits. The Labor Arbiter ruled that Limjoco was an employee and ordered petitioner to pay various amounts. The decision was affirmed by the National Labor Relations Commission. Petitioner now seeks certiorari to annul the resolutions.

ISSUES:

1. Whether or not Benjamin Limjoco was an employee of Encyclopaedia Britannica (petitioner).

RULING:

1. The Supreme Court upheld the ruling of the National Labor Relations Commission (NLRC) that Benjamin Limjoco was an employee of Encyclopaedia Britannica. The Court agreed with the NLRC's findings that there was an employer-employee relationship based on the control and supervision exercised by the petitioner over Limjoco's sales activities. The Court also considered the fact that Limjoco passed the costs of office expenses to the petitioner, which indicated a lack of independent contractor status. Consequently, the Court affirmed the decision of the NLRC and ordered petitioner to pay the separation pay, unpaid benefits, and amounts illegally deducted from Limjoco's commissions.

PRINCIPLES:

• The presence of control and supervision over the manner and means of accomplishing work is indicative of an employer-employee relationship.

• Passing the costs of office expenses to the principal indicates a lack of independent contractor status.

• Independent contractors are expected to have substantial capital or investment.