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167622 January 25, 2011


Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged in
life insurance business. Petitioner started as a manager in a certain region by virtue of a Career Agent's
Agreement which he executed with Manulife. In the course of his work with respondent, the latter,
through a letter, directed Tongko to exercise particular administrative activities to improve their
operations in the region where the latter was assigned. This is due to the data collected by Manulife that
the region that petitioner is handling is the lowest performer in terms of recruiting in 2000 and, as of
today, continues to remain one of the laggards in this area. A few months passed, Manulife was still
dissatisfied with the petitioner’s performance despite the letters sent to the latter. This urged Manulife
to terminate Tongko effective 15 days from the receipt of such notice. Tongko then filed a case with the
labor arbiter for illegal dismissal which was denied by the motion of Manulife arguing that no ER-EE
relationship exists based on the agreement contract they entered from the time Tongko was engaged.
Raised to the NLRC, and decided in favor of Tongko. Manulife appealed to CA, which reversed the
decision of NLRC. Hence the case at bar.

WON there existed an ER-EE relationship between Tongko and Manulife, which would lead to
illegal dismissal by the latter.


YES. The NLRC, for its part, applied the four-fold test and found the existence of all the elements and
declared Tongko an employee of Manulife. The CA, on the other hand, found that the element of control
as an indicator of the existence of an employer-employee relationship was lacking in this case. The NLRC
and the CA based their rulings on the same findings of facts but differed on the ruling. NLRC arrived at its
conclusion, first, on the basis of the letter dated November 6, 2001 addressed by De Dios to Tongko.
According to the NLRC, the letter contained "an abundance of directives or orders that are intended to
directly affect complainant's authority and manner of carrying out his functions as Regional Sales
Manager." The NLRC further ruled that the different codes of conduct that were applicable to Tongko
served as the foundations of the power of control wielded by Manulife over Tongko that is further
manifested in the different administrative and other tasks that he was required to perform. It also found
that Tongko was required to render exclusive service to Manulife, further bolstering the existence of an
ER-EE relationship. Finally, the NLRC ruled that Tongko was integrated into a management structure
over which Manulife exercised control, including the actions of its officers. The NLRC held that such
integration added to the fact that Tongko did not have his own agency belied Manulife's claim that
Tongko was an independent contractor.

SC said that in the instant case, Manulife had the power of control over Tongko that would make
him its employee. Several factors contribute to this conclusion. In an agreement executed by Tongko
and Manulife:

The Agent hereby agrees to comply with all regulations and requirements of the Company as herein
provided as well as maintain a standard of knowledge and competency in the sale of the Company's
products which satisfies those set by the Company and sufficiently meets the volume of new business
required of Production Club membership.

Among the company regulations of Manulife are the different codes of conduct such as the
Agent Code of Conduct, Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct
Agreement, which demonstrate the power of control exercised by the company over Tongko. Thus, with
the company regulations and requirements alone, the fact that Tongko was an employee of Manulife
may already be established. Certainly, these requirements controlled the means and methods by which
Tongko was to achieve the company's goals. More importantly, Manulife's evidence establishes the fact
that Tongko was tasked to perform administrative duties that establishes his employment with
Manulife. Additionally, it must be pointed out that the fact that Tongko was tasked with recruiting a
certain number of agents, in addition to his other administrative functions, leads to no other conclusion
that he was an employee of Manulife.

And so, due to the findings of the SC regarding the existence of ER-EE relationship between
Tongko and Manulife, the latter is liable to the former for illegal dismissal.