18. AFP MUTUAL BENEFIT ASSOCIATION, INC.

, petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION and
EUTIUIO BUSTAMANTE
PATULOT, !ERRAEMIE NI""A CIPRES
Topi#$ Legitimate Job Contracting
Fa#ts$
1975 - Private respondent Eutiquio Bustamante had
been an insurance underwriter o petitioner !"P #utua$
Beneit !ssociation% &nc'
(he )a$es !greement provided that*
1' +uties and ,b$igations
-' +uring the $ietime o this !greement% the )!LE)
!.E/( 0private respondent1 sha$$ so$icit e2c$usive$3
or !"P#B!& 0petitioner1% and sha$$ be bound b3 the
$atter4s po$icies% memo circu$ars% ru$es and
regu$ations which it ma3 rom time to time% revise%
modi3 or cance$ to serve its business interests'
5' 6e is ree to so$icit in the area or which he7she is
$icensed and as authori8ed% provided however% that
!"P#B!& ma3 rom time to time% assign him a
speciic area o responsibi$it3 and a production quota
on a case to case basis'
9' Commission
5' )!LE) !.E/( sha$$ be entit$ed to the commission
due or a$$ premiums actua$$3 due and received b3
!"P#B!& out o $ie insurance po$icies so$icited and
obtained b3 the )!LE) !.E/(
:' .enera$ Provisions
7' (here sha$$ be no emp$o3er-emp$o3ee re$ationship
between the parties% the )!LE) !.E/( being hereb3
deemed an independent contractor'
19;9-Petitioner dismissed private respondent or
misrepresentation and or simu$taneous$3 se$$ing
insurance or another $ie insurance compan3 in vio$ation
o said agreement'
Private respondent wrote petitioner see<ing the re$ease o
his commissions or said -9 months'
Petitioner% through #ar<eting #anager Juan Concepcion%
rep$ied that he was entit$ed to on$3 P75%==='== to
P1==%==='==' 6ence% be$ieving Concepcion4s
computations% private respondent signed a quitc$aim in
avor o petitioner'
>espondent in co$$ecting his chec<% he discovered rom a
document 0account summar31 attached to said chec< that
his tota$ commissions or the -9 months actua$$3
amounted to P559%79:'=9'
Private respondent% however% was paid on$3 the amount o
P55%==='=='
Private respondent i$ed a comp$aint with the ,ice o the
&nsurance Commissioner
pra3ing or the pa3ment o the correct amount o his
commission'
!tt3' .erman C' !$e?andria% Chie o the Pub$ic !ssistance
and &normation +ivision% ,ice o the &nsurance
Commissioner% advised private respondent that it was the
+epartment o Labor and Emp$o3ment that had ?urisdiction
over his comp$aint'
/L>C- dec$aring the dismissa$ o the comp$ainant as ?ust
and va$id% and consequent$3% his c$aim or separation pa3
is denied' !$$ other c$aims o the comp$ainant are
dismissed or want o merit'
(he $abor arbiter re$ied on the )a$es !gent4s !greement
proviso that petitioner cou$d assign private respondent a
speciic area o responsibi$it3 and a production quota% and
read it as signa$$ing the e2istence o emp$o3er-emp$o3ee
re$ationship between petitioner and private respondent'
,n appea$% (he )econd +ivision o the Commission
airmed the decision o the court'
Iss%es$
1' @hether or not% there is an emp$o3er-emp$o3ee
re$ationship' /,
-' @hether or not% the commission grave$3 abused its
discretion when it he$d that the $abor arbiter had
?urisdiction over the case' AE)
Ratio$
0"irst &ssue1
(he Court has app$ied the Bour-o$dB test in
determining the e2istence o emp$o3er-emp$o3ee
re$ationship' (his test considers the o$$owing
e$ements* 011 the power to hireC 0-1 the pa3ment o
wagesC 051 the power to dismissC and 091 the power to
contro$% the $ast being the most important e$ement'
6owever% in the present case the power to contro$ is
questionab$e because there is a certain #emo #emo
Circu$ars /o'--;1 and --;5 which stated that
insurance agents are barred rom serving more than
one insurance compan3% in order to protect the pub$ic
and to enab$e insurance companies to e2ercise
e2c$usive supervision over their agents in their
so$icitation wor<' (hus% the e2c$usivit3 restriction
c$ear$3 springs rom a regu$ation issued b3 the
&nsurance Commission% and not rom an intention b3
petitioner to estab$ish contro$ over the method and
manner b3 which private respondent sha$$ accomp$ish
his wor<' (here is /, emp$o3er D emp$o3ee
re$ationship
0)econd &ssue1
(he ?urisdiction o $abor arbiters and respondent
Commission is set orth in !rtic$e -17 o the Labor
Code' @ithout emp$o3ment re$ationship% the $abor
arbiter and respondent Commission can never
acquire ?urisdiction over a dispute' &t was serious
error on the part o the $abor arbiter and respondent
Commission to have assumed ?urisdiction and
ad?udicated the c$aim'