View full case

ANGELITO L. LAZARO v. SOCIAL SECURITY COMMISSION

FACTS:

The case involves a petition for review assailing the decision of the Court of Appeals, which affirmed two rulings of the Social Security Commission (SSC). The petitioner, Angelito Lazaro, was the proprietor of Royal Star Marketing, a company engaged in selling home appliances. The private respondent, Rosalina Laudato, filed a petition before the SSC seeking social security coverage and remittance of unpaid monthly contributions from her three employers, including Lazaro. Laudato alleged that despite working as a sales supervisor for Royal Star from April 1979 to March 1986, Lazaro failed to report her for social security coverage or remit her contributions. Lazaro denied Laudato's employee status, claiming that she was a mere sales agent paid on a commission basis and not subject to definite hours and conditions of work. The SSC ruled in favor of Laudato, finding her to be an employee of Royal Star. The SSC ordered Royal Star to pay Laudato's unpaid contributions, penalties, and damages. Lazaro's motion for reconsideration was denied, prompting him to file a petition for review with the Court of Appeals. The appellate court affirmed the SSC's ruling, finding no substantial evidence to support Lazaro's arguments. Lazaro then filed a petition for review with the Supreme Court, reiterating his claims that Laudato was not an employee. The Supreme Court upheld the previous rulings, finding that there was substantial evidence supporting Laudato's employee status. The court emphasized that the determination of an employer-employee relationship depends on the specific factual circumstances of the case. Lazaro's arguments were considered a reiteration of those already presented and resolved by the lower courts. The court also cited precedents that commission-based compensation and irregular working hours do not preclude an employer-employee relationship. It noted that Laudato was a sales supervisor and subject to control by Royal Star. The court affirmed the SSC's finding of an employer-employee relationship and denied Lazaro's petition.

ISSUES:

  1. Whether or not Laudato is an employee of Royal Star Marketing.

  2. Whether or not the SSC and the Court of Appeals ruling that Laudato is an employee is supported by substantial evidence.

RULING:

  1. The Supreme Court upheld the ruling of the SSC and the Court of Appeals that Laudato is an employee of Royal Star Marketing. The Court applied the "control test" in determining the employer-employee relationship, and found that Royal Star had control over Laudato's activities as a sales supervisor.

  2. The Supreme Court ruled that the SSC's finding that Laudato is an employee of Royal Star is supported by substantial evidence. The Court considered the cash vouchers, calling cards, and certificates issued by Royal Star to Laudato, which indicated her role as a sales supervisor. On the other hand, Lazaro failed to present convincing contrary evidence and relied only on bare assertions.

PRINCIPLES:

  • The control test is applied in determining the employer-employee relationship. It examines whether the employer controls or has reserved the right to control the employee, not only in terms of the result of the work but also in the means and methods by which it is accomplished.

  • Payment of commissions does not preclude the existence of an employer-employee relationship. Even if compensation is based on commissions, an employer-employee relationship can still be established if the employer controls or has reserved the right to control the employee.

  • Observance of normal working hours is not a determining factor in establishing an employer-employee relationship. Even if a person does not observe normal hours of work, an employer-employee relationship can still exist if the compensation is measured by the number of sales made.

  • The determination of an employer-employee relationship depends on the factual circumstances of the professional interaction between the parties. The Supreme Court accords great weight to the factual findings of lower courts or agencies whose function is to resolve factual matters.