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Valeroso v Skycable Corporation (2016)

Distinctions from other contracts – Lease of services/employment

Del Castillo, J.


 Petitioners Valeroso and Legatona alleged that they started working on Nov 1, 1998 and July 13, 1999,
respectively, as account executives tasked to solicit cable subscriptions for Skycable Corporation.
 From the years 2001-2006, their payslips showed that they received commissions ranging from Php 15k to
Php 530k each upon reaching a specific quota every month with an allowance up to Php 7k.
 From being direct hires, they were transferred to Skill Plus Manpower Services without any agreement. In
2009, they were informed that their commissions would be reduced due to the introduction of prepaid cards
sold to cable subscribers resulting in lower monthly cable subscriptions.
 They filed a labor case with the NLRC after which they were dropped from the roster of account executives
which they alleged constituted unfair labor practice. They also claimed that they did not receive 13 th month
pay and underpayment as well.
 Skycable: claimed that it did not terminate the services for there was never an E-E relationship to begin with
o It averred that it engaged petitioners as independent contractors under a Sales Agency Agreement.
In 2007, due to streamlining its operations, engaged the services of an independent contractor
(Armada Resources) under a Sales Agency Agreement.
o As a result, petitioners’ contracts were terminated but they were transferred as employees of
Armada. By entering into a Sales Agency Agreement and engaging the Armada as an independent
contractor, it engaged in legitimate contracting without any E-E relationship.
 Petitioners: they were employees of Armada – they were directly hired, paid, and dismissed by Skycable
o Officers of respondent supervise their area of work, monitor them daily, inform them of meetings
and penalize them for non-attendance, monitor their quota
o Their supervisors delegate to them the authority to investigate unlawful cable connections
o It gives trophies to award them for their outstanding performance
 LA: dismissed complaint – petitioners failed to establish that an E-E relationship existed
 NLRC: reversed LA
o Petitioners are regular employees; job as account executives for more than a year even if not
continuous and considering the importance of their tasks to the business
o Pay slips and certifications presented by petitioners constitute substantial evidence of an E-E
o Upon the termination of the Sales Agency Agreement with Armada in 2009, petitioners were
considered dismissed without just cause and due process
 CA: reversed NLRC – sustained LA’s finding that there was no evidence to substantiate the bare allegation
of E-E relationship hence this appeal


 WoN petitioners were employees of respondent Skycable: NO

o To prove the claim of an E-E relationship the so-called “four-fold test” should be established: 1) the
selection and engagement of the employee; 2) payment of wages; 3) power of dismissal; 4)
employer’s power to control the employee with respect to the means and methods of the work
o The evidence presented by the petitioners did not prove their claim – the certifications issued
merely certified that Skycable had engaged ther services of petitioners without specifying the true
nature of the engagement.
 These were only issued to accommodate their request for loan applications.
o As for the pay slips, none were presented from the years 2007-2009 which are material to the case
since they were transferred to Armada in 2007.
o While Skycable regularly monitors the result of their work, they in no way dictate upon them the
manner in which they should perform their duties.
o The Sales Agency Agreement, which served as the primary evidence of the nature of the parties'
relationship. In this duly executed and signed agreement, petitioners and respondent unequivocally
agreed that petitioners' services were to be engaged on an agency basis as sales account
executives and that no employer-employee relationship is created but an independent
contractorship. It is therefore clear that the intention at the time of the signing of the agreement is
not to be bound by an employer-employee relationship.
o Legatona, in a Release and Quitclaim he signed, acknowledged that he was performing sales
activities as sales agent/independent contractor and not an employee of respondent.

HELD: Petition DENIED. Appealed decision and resolution are AFFIRMED.