G.R. No. 86693 July 2, 1990 COSMOPOLITAN FUNERAL HOMES, INC., petitioner, vs. NOLI MAALAT !

" NATIONAL LA#OR RELATIONS COMMISSION, respondents. Castro, Enriquez, Carpio, Guillen & Associates for petitioner. Castro B. Dorado for private respondent.

GUTIERRE$, JR., J.: The nature of the work of a "funeraria" supervisor, whether employee or commission agent, is the issue raised in this petition. Sometime in 1962, petitioner osmopolitan !uneral "omes, #nc. engaged the services of private respondent $oli %aalat as a "supervisor" to handle the solicitation of mortuary arrangements, sales and collections. The funeral services which he sold refer to the taking of the corpse, em&alming, casketing, viewing and delivery. The private respondent was paid on a commission &asis of '.() of the amounts actually collected and remitted. *n +anuary 1(, 19,-, respondent %aalat was dismissed &y the petitioner for commission of the following violations despite previous warnings. /a0 1nderstatement of the reported contract price against the actual contract price charged to and paid &y the customers2 /&0 %isappropriation of funds or collections &y non3remittance of collections and non3issuance of *fficial 4eceipt2 /c0 harging customers additional amount and pocketing the same for the cost of medicines, linen, and security services without issuing *fficial 4eceipt2 /d0 $on3reporting of some em&alming and re3em&alming charges and pocketing the same and non3issuance of *fficial 4eceipt2 /e0 5ngaging in tom& making and inclusion of the price of the tom& in the package price without prior knowledge of the customers and the company. /6t p. 16, 4ecords0 %aalat filed a complaint for illegal dismissal and non3payment of commissions. *n the &asis of the parties7 position papers, 8a&or 6r&iter $ewton 4. Sancho rendered a decision declaring %aalat7s dismissal illegal and ordering the petitioner to pay separation pay, commission, interests and attorney7s fee in the total amount of 92:(,(-1.(2. #n an appeal from the decision, the $ational 8a&or 4elations ommission /$84 0, on %ay '1, 19,,, reversed the 6r&iter7s action and rendered a new decision, the dispositive portion of which reads.

;"545!*45, premises considered, the decision dated $ovem&er 2-, 19,-, is here&y SET ASIDEand VACATED and a $ew *ne E TE!ED, ordering as follows. 1. +udgment is here&y rendered declaring the dismissal of complainant $oli %aalat &y respondent3appellant as <ustified and with lawful cause. =y way of e>uita&le relief and in the interest of social and compassionate <ustice, ;e here&y order and direct respondent osmopolitan !uneral "omes, #nc. to pay complainant %aalat his separation pay e>uivalent to one3half /1?2)0 month average income for every year of service to appellant, computed on his last year of service immediately preceding his separation from respondent, su&<ect to allowa&le set3offs and deductions of the counter3claims of respondent company, after due notice and hearing. 2. The claims for accrued commissions &y complainant may &e admitted, su&<ect to proofs thereof, and allowa&le set3offs and deductions credited to the account of respondent3appellant &y way of counterclaims, after due notice and hearing. '. 6ll the evidence adduced &y the parties are here&y admitted, su&<ect to re&uttal and?or controvertion &y either party during the hearing and the hearings hereafter. @. The 6ttorney7s fee in favor of complainant7s counsel is here&y fiAed at two /2)0 percent, assessa&le over whatever final money award complainant may &e entitled on the aggregate sums thereof, after proper hearing on the same. 6ll other claims and counter3claims are here&y dismissed for lack of merit, eAcept those specified a&ove. !inally, this case is remanded to the 4egional 6r&itration =ranch of origin for further proceedings in accordance with the a&ove <udgment. $o findings as to costs. /6t pp. 6636-, !ollo0 The petitioner7s motion for reconsideration was denied, hence, this petition for review &efore this ourt. The issues raised in this petition are. #. ;hether or not the $84 &etween the parties2 and erred in ruling that an employment relationship eAisted

##. ;hether or not there was e>uita&le &asis for the award of 1?2 month separation pay for every year of service. # #n determining whether a person who performs work for another is the latter7s employee or an independent contractor, the prevailing test is the "right of control" test. 1nder this test, an employer3employee relationship eAists where the person for whom the services are performed reserves the right to control not only the end to &e achieved, &ut also the manner and means to &e used in reaching that end.

The petitioner argues that %aalat was never its employee for he was only a commission agent whose work was not su&<ect to its control. iting Invest"ent #lannin$ Corporation of t%e #%ilippines v. Social Securit& S&ste" /21 S 46 92@ B196-C0, the petitioner states that the work of its agents approAimates that of an independent contractor since the agent is not under control &y the latter with respect to the means and methods employed in the performance of the work, &ut only as to the results. The $84 , after its perusal of the facts and evidence on record, stated that there eAists an employment relationship &etween the parties. The petitioner has failed to overcome this factual finding. The fact that the petitioner imposed and applied its rule prohi&iting superiors from engaging in other funeral &usiness which it considered inimical to company interests proves that it had the right of control and actuall& e'ercised its control over the private respondent. #n other words, %aalat worked eAclusively for the petitioner. %oreover, the private respondent was prohi&ited from engaging in part3time em&alming &usiness outside of the company and a violation thereof was cause for dismissal. #ncurring a&sences without leave was likewise su&<ect to disciplinary action. a reprimand for the first offense, one week suspension for the second offense, and dismissal for the third offense. The petitioner admits that these prohi&itive rules &ound the private respondent &ut states that these rules have no &earing on the means and methods ordinarily re>uired of a supervisor. The overall picture is one of employment. The petitioner failed to prove that the contract with private respondent was &ut a mere agency, which indicates that a "supervisor" is free to accomplish his work on his own terms and may engage in other means of livelihood. #n Invest"ent #lannin$ Corporation, supra, cited &y the petitioner, the ma<ority of the "commission agents" are regularly employed elsewhere. Such a circumstance is a&sent in %aalat7s case. %oreover, the private respondent7s <o& description states that ". . . he attends to the needs of the clientele and arranges the kind of casket and funeral services the customers would like to avail themselves of" and indicates that he must always &e on the <o& or at least most of time. 8ikewise, the private respondent was not allowed to issue his own receipts, nor was he allowed to directly deduct his commission as truly independent salesmen practice. ;orthy of note too are two other company rules which provide that "negotiation and making of contract with customers shall &e done inside the office" and "signing of contract should &e made immediately &efore the cadaver or deceased is place in the casket." /6nneA 1:3=, 9etitioner7s 9osition 9aper, 4ecords0 Said rules &elie the petitioner7s stand that it does not have control over the means and methods &y which the work is accomplished. The control test has &een satisfied. /Social Security System v. ourt of 6ppeals, 1(6 S 46 ',' B19,-C0 The finding &y the pu&lic respondent that the petitioner has reported private respondent to the Social Security System as a covered employee adds strength to the conclusion that %aalat is an employee. There is no reversi&le error in the findings of facts &y the $84 which are supported &y su&stantial evidence and which we, therefore, do not distur& on appeal. The payment of compensation &y way of commission does not militate against the conclusion that private respondent was an employee. 1nder 6rticle 9- of the 8a&or

ode, "wage" shall mean "the renumeration of earnings, however designated, capa&le of &eing eApressed in terms of money, whether fiAed or ascertained on a time, task, pace or co""ission (asis . . .". The non3o&servance of regular office hours does not sufficiently show that %aalat is a "supervisor on commission &asis" nor does the same indicate that he is an independent salesman. 6s a supervisor, although compensated on commission &asis, he is eAempt from the o&servance of normal hours of work for his compensation is measured &y the num&er of sales he makes. "e may not have had the usual fiAed time for starting and ending his work as in other types of employment &ut he had to spend most of his working hours at his <o&. 9eople die at all times of the day or night. 6ll considered, we rule that private respondent is an employee of petitioner corporation. ## The petitioner impugns the award of separation pay e>uivalent to one3half /1?20 month average income for every year of service to private respondent. The $84 ruled that. "owever, mindful of the fact the complainant $oli %aalat has served respondent company for the last twenty four /2@0 years, more or less, it is &ut proper to afford him some e>uita&le relief, consistent with the recent rulings of the Supreme ourt, due to his past services with no known previous record, and the ends of social and compassionate <ustice will thus &e served if he is paid a portion of his separation pay, e>uivalent to one3half /1?20 month every year of his service to said company. /See Soco v. %ercantile orporation, D.4. $o. (''6@36(, %arch 16, 19,-2 and !irestone, et al, v. 8ariosa et al., D.4. $o. -:@-9, !e&ruary 2-, 19,-0. ;e are not inclined to grant complainant his full month termination pay for every year of his service &ecause, unlike in the former Soco case, the misconduct of the employee merely involves infraction of company rules while in the latter )irestone case it involves misconduct of a rank3and3file employee, although similarly involving acts of dishonesty. /6t pp. 6(3 66, !ollo0 This ourt will not distur& the finding &y the $84 that private respondent %aalat was dishonest in the discharge of his functions. The finding is sufficiently supported &y the evidence on record. 6dditionally, the private respondent did not appeal from the $84 impliedly accepting the validity of his dismissal. decision, there&y

;e take eAception, therefore, to the grant of separation pay to private respondent. #n #%ilippine *on$ Distance Telep%one Co"pan& +#*DT, v. *!C, /16@ S 46 6-1 B19,,C0, this ourt re3eAamined, the doctrine in the aforecited )irestone and Soco cases and other previous cases that employees dismissed for cause are nevertheless entitled to separation pay on the ground of social and compassionate <ustice. #n a&andoning this doctrine, the ourt held, and we >uote. . . . ;e hold that henceforth separation pay shall &e allowed as a measure of social <ustice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. ;here the reason for the valid dismissal is, for eAample, ha&itual intoAication or an offense involving moral turpitude, like theft or illicit seAual relations with a fellow worker, the

employer may not &e re>uired to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social <ustice. 6 contrary rule would, as the petitioner correctly argues, have the effect of rewarding rather than punishing the erring employee for his offense. . . . The policy of social <ustice is not intended to countenance wrongdoing simply &ecause it is committed &y the underprivileged. 6t &est it may mitigate the penalty &ut it certainly will not condone the offense. ompassion for the poor is an imperative of every humane society &ut only when the recipient is not a rascal claiming an undeserved privilege. . . . Su&se>uent decisions have a&ided &y this pronouncement. /See 9hilippine $ational onstruction orporation v. $ational 8a&or 4elations ommission, 1-: S 46 2:B19,9C2 5astern 9aper %ills, #nc. v. $ational 8a&or 4elations ommission, 1-: S 46 (9B19,9C2 *sias 6cademy v. $ational 8a&or 4elations ommission, D.4. $o. ,'2'@, 6pril 1,, 19,92 and $asipit 8um&er o., #nc. v. $ational 8a&or 4elations ommission, D.4. $o. (@@2@, 6ugust '1, 19,9.0 onforma&ly with the a&ove cited #*DT ruling, this ourt pronounces that the grant of separation pay to private respondent %aalat, who was validly terminated for dishonesty, is not <ustified. 9arenthetically, it may &e mentioned that the 8a&or 6r&iter, apparently unaware of the petition for review pending &efore this ourt, conducted further proceedings to compute private respondent7s separation pay, unclaimed commission and 2) attorney7s fees, in compliance with the $84 decision of %ay '1, 19,,. 6fter hearing, the 8a&or 6r&iter rendered a decision on %ay 1:, 19,9, the pertinent portion of which reads. #n sum, the sustaina&le claims of complainant are as follows. /10 Separation 9ay . 9 -6,:6@.@: /20 1npaid ommissions . '9,'@@.,: EEEEEE Su&3total . 9 11(,@:9.2: /'0 2- 6ttorney7s !ees . 2,':,.1, EEEEEE 9 11-, -1-.', ;"545!*45, <udgment is here&y rendered ordering respondent osmopolitan !uneral "omes, #nc., to pay complainant $oli %aalat his claims a&ove set forth in the total amount of #../,/./.01 only. $either party appealed from said decision. !or &eing in conflict with our holding that the private respondent is not entitled to separation pay, this ourt sets aside the 8a&or 6r&iter7s computation of separation pay. "owever, we uphold his computation of unclaimed commissions amounting to 9'9,'@@.,:. The amount of attorney7s fee should conse>uently &e recomputed at 2) of 9'9,'@@.,: or 9-,6.,9. ;"545!*45, the <udgment of the $ational 8a&or 4elations ommission is 6!!#4%5F eAcept for the grant of separation pay which is here&y disallowed. 9rivate respondent

%aalat is entitled to unclaimed commissions of 9'9,'@@.,: and 2) attorney7s fees of 9-,6.,9, said amounts &eing considered final. S* *4F545F.