FACTS:

The petitioner, Gregorio V. Tongko, filed a Motion for Reconsideration to set aside the court's previous decision that affirmed the ruling of the Court of Appeals. The Court of Appeals ruled that Tongko was an insurance agent, not an employee, of The Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife). Tongko argued that he performed administrative functions and had supervisory authority over employees and agents of Manulife for 19 years. He claimed that he held various positions such as Unit Manager, Branch Manager, and Regional Sales Manager, which made him both an insurance agent and an employee of Manulife. However, the court found no basis or error to merit reconsideration. The court emphasized that control over the performance of tasks is the primary element in determining an employment relationship. While Manulife exercised control over Tongko, it did not reach the level required for an employer-employee relationship. The court noted that the control exerted by Manulife was characteristic of the relationship between an insurance company and its agents, as defined by the Insurance Code and the law of agency under the Civil Code. The court also held that the guidelines and directives imposed by Manulife, such as objectives, sales targets, and codes of conduct, were merely aimed at achieving specific results and did not dictate the means and methods to be employed in performing tasks. The court further stated that the duties enumerated by Tongko were mostly related to the duties of an insurance agent and that the power of Manulife to assign and remove agents under Tongko's supervision was in line with their principal-agent relationship. Tongko also questioned Manulife's act of investing him with different titles and positions but not being rewarded for it.

The petitioner was a career agent for Manulife, an insurance company, from 1977 until the termination of their agreement. Over the years, the petitioner was given guiding authority over other agents and shared in their commissions. He was also provided with greater reimbursements for expenses and used Manulife's facilities. His designation changed from unit manager to branch manager and then to regional sales manager as he recruited and guided more agents.

The court concluded that these arrangements did not change the petitioner's status from an insurance agent. He simply progressed from an individual agent to being a lead agent who used other agents to sell insurance and share in their earnings. The court found no evidence of labor law control in this case.

The records showed that the petitioner was well-paid for his services as an insurance agent, with substantial earnings each year. He failed to prove that he earned these sums as an employee and therefore, the court concluded that he was not entitled to backwages and separation pay.

The dissent argued that the relationship between the petitioner and Manulife should be interpreted as one of employment under labor laws, citing the disparity in the status of the parties. However, the court held that there was no evidence to support an employment relationship and that the petitioner's failure to present evidence on the nature of his successive appointments weakened his case. The court could not simply create an employment relationship when there was none, despite the petitioner's weaker position compared to a large corporation.

The dissent also invoked equity and constitutional principles, but the court held that these principles were not applicable in this case. The court emphasized that its duty was to decide based on the facts and the law presented.

Finally, the court noted that the petitioner himself declared his earnings as agent's commissions in his income tax returns. It would be unfair to allow him to now claim that he was an employee after declaring himself as an agent for years.

The petitioner in this case is Mariano P. Tongko, who worked as a manager and insurance agent for Philam Life, an insurance company. Tongko was terminated from his position in 1985 and subsequently filed a complaint for illegal dismissal, claiming that he was an employee of the company.

The Labor Arbiter initially ruled in favor of Tongko, declaring him an employee and ordering his reinstatement. The National Labor Relations Commission (NLRC) affirmed this decision, but the Court of Appeals reversed it and held that Tongko was an independent contractor and not an employee.

Tongko then filed a petition for review with the Supreme Court. The main issue in this case is the determination of Tongko's employment status - whether he was an employee or an independent contractor. The Supreme Court noted that Tongko had consistently presented himself as an independent self-employed insurance agent, as evidenced by his tax declarations and returns. The Court highlighted the fact that Tongko had availed himself of the privilege of deducting business expenses, which supported his claim of being an independent contractor. The Court also mentioned that Tongko's assertion of employee status contradicted his previous representations.

This case also acknowledged the dissenting opinion, which proposed that Tongko should be considered part employee (as a manager) and part insurance agent, resulting in a modification of the original decision to only pertain to the termination of his employment as a manager. However, the majority of the Court did not agree with this proposition.

ISSUES:

1. Whether the petitioner's earnings were agent's commissions or employee wages.

2. Whether the compromise solution of declaring the petitioner both an employee and an agent is legally realistic and valid.

3. Can the labor tribunals decide an issue that is inextricably linked with a relationship that is outside the loop of their jurisdiction?

4. Did Manulife exercise control over the petitioner as an employer?

5. Can the cited cases by the dissent be relied upon as authoritative in the present case?

6. Can the affidavits executed by other Manulife agents prove that the petitioner was an employee?

7. Can the letter written by respondent Renato Vergel de Dios prove that Manulife exercised control over the petitioner?

8. Does the Agreement between the petitioner and Manulife indicate the legal relationship between them?

9. Whether the engagement between the publishing firm and the account executive constitutes an employer-employee relationship.

10. Whether labor laws and jurisprudence should prevail over other laws such as the Civil Code or the Insurance Code in determining the legal relationship between the parties.

RULING:

1. The petitioner's earnings were considered agent's commissions based on his declarations in his income tax returns and his classification as an independent self-employed insurance agent. Therefore, the petitioner cannot claim that he was merely an employee after previously declaring himself as an agent.

2. The compromise solution of declaring the petitioner both an employee and an agent is legally unrealistic, unwieldy, and legally infirm. It goes against established jurisprudential standards and creates more questions than answers. The court cannot establish a part-employee/part-agent status without a legal basis, as that would amount to judicial legislation. Furthermore, the court cannot separate the petitioner's roles as manager and agent as they are inseparable under the existing contractual relationships.

3. No, the labor tribunals cannot decide an issue that is inextricably linked with a relationship that is outside the loop of their jurisdiction. The dominant relationship in this case is agency.

4. No, Manulife did not exercise control over the petitioner as an employer. The petitioner remained an independent insurance agent subject to the Agreement between him and Manulife.

5. No, the cited cases by the dissent cannot be relied upon as authoritative in the present case because they involved subsequent management contracts, while the present case does not show any change in the nature of the petitioner's employment.

6. No, the affidavits executed by other Manulife agents only affirm their status as independent agents, not as employees.

7. No, the letter written by respondent Renato Vergel de Dios does not prove that Manulife exercised control over the petitioner. The letter merely provided operational guidelines for the petitioner as a manager.

8. Yes, the Agreement between the petitioner and Manulife indicates the legal relationship between them. The petitioner failed to provide evidence that their relationship changed and that Manulife controlled the means and method of his work.

9. The Court held that the repeated engagement between the publishing firm and the account executive does not indicate an employer-employee relationship. In the insurance industry, the law permits an insurance company to exercise control over its agents within the limits prescribed by law, and to engage independent agents for several transactions and within an unlimited period of time without the relationship amounting to employment. Thus, the engagement between the parties does not establish an employer-employee relationship.

10. The Court ruled that labor laws and jurisprudence should be reconciled with other laws such as the Civil Code or the Insurance Code. In cases where the law mandates a company to exercise control over its agents, the complainant in an illegal dismissal case cannot rely on these legally prescribed control devices as indicators of an employer-employee relationship. The Court emphasized that the consideration of Civil Code and Insurance Code provisions does not negate the application of labor laws and jurisprudence. Ultimately, the petition was dismissed due to the failure to comply with the control test.

PRINCIPLES:

• The determination of an employment relationship is based on the facts of the case and established jurisprudential standards.

• Courts are bound to say what the law is and must uphold the stare decisis principle.

• Legal relationships exist as a matter of law based on the legally defined underlying facts and legal consequences.

• Contractual relationships cannot be separated if they are inseparable under the existing circumstances.

• Split jurisdiction creates legal obstacles and is not a valid approach to resolving intertwined relationships.

• Cases are decided based on their unique facts and cannot be simply lifted and applied to another case with notable differences.

• Changes in company-agent relationships in subsequent contracts can affect the legal characterization of the employment relationship.

• Affidavits describing duties as independent agents do not prove employment status.

• Operational guidelines provided by the principal do not necessarily indicate control over the means and method of work.

• The Agreement between the parties governs their relationship unless evidence is provided to show a change in the nature of the employment.

• In the insurance industry, repeated engagement between parties does not automatically establish an employer-employee relationship.

• Labor laws and jurisprudence should be reconciled with other laws to determine the legal relationship between parties.

• Compliance with the control test is crucial in determining the existence of an employer-employee relationship.

• The consideration of other laws, such as the Civil Code or the Insurance Code, does not negate the application of labor laws and jurisprudence.