Angelica Francisco vs. NLRC, Kasei Corp. Et. Al.

CASE TITLE: Angelica Francisco vs. NLRC, Kasei Corp. et. al.
G.R. NO.: 170087
Doctrine:
Two-tiered test involving: (1) the putative employer’s power to control the employee with
respect to the means and methods by which the work is to be accomplished; and (2) the underlying
economic realities of the activity or relationship. This two-tiered test would provide us with a
framework of analysis, which would take into consideration the totality of circumstances
surrounding the true nature of the relationship between the parties. This is especially appropriate
in this case where there is no written agreement or terms of reference to base the relationship on;
and due to the complexity of the relationship based on the various positions and responsibilities
given to the worker over the period of the latter’s employment.
Facts:
Petitioner, Angelica Francisco, was employed by Kasei Corporation in 1995 when it was
still a startup. She was assigned to take care of all the company's accounting requirements and was
given the positions of Accountant and Corporate Secretary. In order to get business licenses,
building permits, and other permissions for the company's initial operation, she was also chosen
as Liaison Officer to the City of Makati.
Despite being named corporate secretary, she was not given access to the company's
documentation and was not required to attend any board meetings. She didn't prepare any legal
documents and didn't act as the corporation's corporate secretary. Petitioner was appointed Acting
Manager in 1996. The petitioner was tasked with handling all employee hiring and management
administration tasks, representing the business in interactions with government bodies, particularly
the BIR, SSS, and Makati's city government, as well as managing all other aspects of the Kasei
Restaurant's operation, which is owned and run by Kasei Corporation.
For five years, petitioner performed the duties of Acting Manager. In January 2001, a
certain Liza R. Fuentes took over as Manager in place of the petitioner. Because the company was
allegedly not making enough money, Kasei Corporation allegedly decreased her income and failed
to pay her mid-year bonus. The petitioner did not receive her wage from the business in October
2001. She followed up with the company cashier several times, but she was told that business
wasn't doing well. She eventually received word that her relationship with the corporation had
ended.
Petitioner did not report to work because she was no longer receiving salary, therefore she
filed a claim for constructive dismissal with the labor arbitrator. Private respondents claimed that
the petitioner is not a Kasei Corporation employee. They claimed that the petitioner was hired in
1995 to serve as both the company's corporate secretary and one of its technical advisers on
accounting issues. As a technical consultant, the petitioner worked independently of Kasei
Corporation and under her own direction. Petitioner claimed that she did not keep a daily time log,
that she was free to visit the office whenever she pleased, and that the nature of her temporary
services depended on the demands of the organization.
The Labor Arbiter found that petitioner was illegally dismissed, NLRC affirmed with
modification the Decision of the Labor Arbiter. On appeal, CA reversed the NLRC decision.
CA denied petitioner’s MR, hence, the present recourse.
Issues:
1. Whether or not there was an employer-employee relationship between petitioner and

private respondent Kasei Corporation.
2. Whether or not the petitioner was illegally dismissed.
Rulings:
1. The so-called "right of control test," which states that the person for whom the services are
performed retains the right to control both the end to be attained and the methods to achieve
it, has typically been utilized by courts. In addition to the right-of-control test, the parties'
current economic circumstances, such as the inclusion of the employee on payrolls, can be
used to determine if an employer-employee relationship exists.
There are instances when, aside from the employer’s power to control the
employee, economic realities of the employment relations help provide a comprehensive
analysis of the true classification of the individual, whether as employee, independent
contractor, corporate officer or some other capacity.
It is better, therefore, to adopt a two-tiered test involving: (1) the employer’s power
to control; and (2) the economic realities of the activity or relationship. The control test
means that there is an employer-employee relationship when the person for whom the
services are performed reserves the right to control not only the end achieved but also the
manner and means used to achieve that end.
By applying the control test, it can be said that petitioner is an employee of Kasei
Corporation because she was under the direct control and supervision of Seiji Kamura, the
corporation’s Technical Consultant. She reported for work regularly and served in various
capacities as Accountant, Liaison Officer, Technical Consultant, Acting Manager and
Corporate Secretary, with substantially the same job functions, that is, rendering
accounting and tax services to the company and performing functions necessary and
desirable for the proper operation of the corporation such as securing business permits and
other licenses over an indefinite period of engagement. Respondent corporation had the
power to control petitioner with the means and methods by which the work is to be
accomplished.
Under the economic reality test, the petitioner can also be said to be an employee
of respondent corporation because she had served the company for 6 yrs. before her
dismissal, receiving check vouchers indicating her salaries/wages, benefits, 13th month
pay, bonuses and allowances, as well as deductions and Social Security contributions from.
When petitioner was designated General Manager, respondent corporation made a report
to the SSS. Petitioner’s membership in the SSS evinces the existence of an employer-
employee relationship between petitioner and respondent corporation. The coverage of
Social Security Law is predicated on the existence of an employer-employee relationship.
2. The corporation constructively dismissed petitioner when it reduced her. This amounts to
an illegal termination of employment, where the petitioner is entitled to full back wages.
A diminution of pay is prejudicial to the employee and amounts to constructive

dismissal. Constructive dismissal is an involuntary resignation resulting in cessation of
work resorted to when continued employment becomes impossible, unreasonable or
unlikely; when there is a demotion in rank or a diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to an
employee. Petition is GRANTED.

Angelica Francisco vs. NLRC, Kasei Corp. Et. Al.

Uploaded by

Copyright:

Available Formats

Angelica Francisco vs. NLRC, Kasei Corp. Et. Al.

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Angelica Francisco vs. NLRC, Kasei Corp. Et. Al.

Uploaded by

Copyright:

Available Formats

CASE TITLE: Angelica Francisco vs. NLRC, Kasei Corp. et. al.

G.R. NO.: 170087

1. Whether or not there was an employer-employee relationship between petitioner and

2. Whether or not the petitioner was illegally dismissed.

A diminution of pay is prejudicial to the employee and amounts to constructive

You might also like