GREGORIO V. TONGKO v.
THE MANUFACTURERS LIFE revocable agency by pointing out that the latter exercised control
INSURANCE CO. (PHILS.), INC. and RENATO A. VERGEL DE
DIOS, January 25, 2011
Doctrine: Labor law "control" do not merely relate to the
mutually desirable result intended by the contractual relationship;
they must have the nature of dictating the means and methods to
be employed in attaining the result.
FACTS:
Taking from the November 2008 decision, the facts are as
follows:
Manufacturers Life Insurance, Co. is a domestic corporation
engaged in life insurance business. De Dios was its President and
Chief Executive Officer. Petitioner Tongko started his relationship
with Manulife in 1977 by virtue of a Career Agent's Agreement.
Pertinent provisions of the agreement state that the agent is an
independent contractor and nothing in the agreement shall be
construed or interpreted as creating an employer-employee
relationship between the company and the agent.
Sometime in 2001, De Dios addressed a letter to Tongko, then one
of the Metro North Managers, regarding meetings wherein De Dios
found Tongko's views and comments to be unaligned with the
directions the company was taking. De Dios also expressed his
concern regarding the Metro North Managers' interpretation of the
company's goals. He maintains that Tongko's allegations are
unfounded. Some allegations state that some Managers are
unhappy with their earnings, that they're earning less than what
they deserve and that these are the reasons why Tongko's division
is unable to meet agency development objectives. However, not a
single Manager came forth to confirm these allegations. Finally, De
Dios related his worries about Tongko's inability to push for
company development and growth.
De Dios subsequently sent Tongko a letter of termination in
accordance with Tongko's Agents Contract. Tongko filed a complaint
with the NLRC against Manulife for illegal dismissal, alleging that he
had an employer-employee relationship with De Dios instead of a
over him through directives regarding how to manage his area of
responsibility and setting objectives for him relating to the business.
Tongko also claimed that his dismissal was without basis and he was
not afforded due process. The NLRC ruled that there was an
employer-employee relationship as evidenced by De Dios's letter
which contained the manner and means by which Tongko should do
his work. The NLRC ruled in favor of Tongko, affirming the existence
of the employer-employee relationship.
The Court of Appeals, however, set aside the NLRC's ruling. It
applied the four-fold test for determining control and found the
elements in this case to be lacking, basing its decision on the same
facts used by the NLRC. It found that Manulife did not exert control
over Tongko, there was no employer-employee relationship and
thus the NLRC did not have jurisdiction over the case.
The Supreme Court reversed the ruling of the Court of Appeals and
ruled in favor of Tongko. However, the Supreme Court issued
another Resolution dated June 29, 2010, reversing its decision.
Tongko filed a motion for reconsideration, which is now the subject
of the instant case.
ISSUE:
Whether or not Supreme Court err in issuing the June 29, 2010
resolution, reversing its 2008 decision that there is employer-
employee.
HELD:
No. Supreme Court finds no basis to reverse the June 29, 2010
resolution setting aside the 2008 decision that an employer-
employee relationship existed.
Control over the performance of the task of one providing service
both with respect to the means and manner, and the results of the
service is the primary element in determining whether an
employment relationship exists. The Supreme Court ruled
petitioners Motion against his favor since he failed to show that the
control Manulife exercised over him was the control required to exist
in an employer-employee relationship; Manulifes control fell short
of this norm and carried only the characteristic of the relationship
between an insurance company and its agents, as defined by the
Insurance Code and by the law of agency under the Civil Code.

In the Supreme Courts June 29, 2010 Resolution, they noted that
there are built-in elements of control specific to an insurance
agency, which do not amount to the elements of control that
characterize an employment relationship governed by the Labor
Code. The Insurance Code provides definite parameters in the way
an agent negotiates for the sale of the companys insurance
products, his collection activities and his delivery of the insurance
contract or policy. They do not reach the level of control into the
means and manner of doing an assigned task that invariably
characterizes an employment relationship as defined by labor law.

The guidelines indicative of labor law "control" do not merely relate

to the mutually desirable result intended by the contractual
relationship; they must have the nature of dictating the means and
methods to be employed in attaining the result. Tested by this norm,
Manulifes instructions regarding the objectives and sales targets, in
connection with the training and engagement of other agents, are
among the directives that the principal may impose on the agent to
achieve the assigned tasks. They are targeted results that Manulife
wishes to attain through its agents. Manulifes codes of conduct,
likewise, do not necessarily intrude into the insurance agents
means and manner of conducting their sales. Codes of conduct are
norms or standards of behavior rather than employer directives into
how specific tasks are to be done.

In sum, the Supreme Court found absolutely no evidence of labor

law control.