Employer-employee relationship

Dear Atty. Kathy,

My mother is a real estate agent. Despite achieving the monthly sales quota, she was not paid her sales commissions for the past year, so she filed a labor case in NLRC against the real estate company for payment of her sales commission.

The real estate company says that my mother is not its employee but the broker. However, it is the real estate company that gave the rule on the monthly sales quota.

Is the real estate company not the employer of my mother?

Sea

***

Dear Sea,

The four-fold test to check if there is an employer-employee relationship is as follows: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct or the so-called "control test."

The significant factor in determining employer-employee relationship is the presence or absence of supervisory authority to control the method the details of the performance of the service being rendered and the degree to which the alleged employer may intervene to exercise such control. The presence of such power of control is indicative of an employment relationship, while the absence thereof is indicative of independent contractorship. 

Based solely on your narration, only the rule on the monthly sales quota was mentioned as basis for the alleged employer-employee relationship with the real estate company. That the real estate company required a monthly sales quota does not indicate that it had control over the means and methods on your mother's work. As decided by the Supreme Court, by the nature of the business of soliciting sales on behalf of a real estate company, sales agents are normally left free to devise ways and means of persuading people to buy properties.

Stated another way, the purported rule on the monthly sales quota does not pertain outright to the means and methods of accomplishing the task of your mother as a sales agent as would satisfy the control test to determine employer-employee relationship.

Thus, subject to other proof that would indicate employer-employee relationship, it does not appear that the real estate company is the employer of your mother.

In addition, if your mother is not an employee of the real estate company but an independent contractor, then her claims for the unpaid sales commission should be litigated in an ordinary civil action, since the jurisdiction of the Labor Arbiter and the NLRC pertains to cases or disputes arising out of or in connection with an employer-employee relationship.

Without the critical element of employment relationship, the labor tribunals can never acquire jurisdiction over a dispute as in your mother's case.

(Edita Santos Degamo versus My Citihomes, et al., G.R. No. 249737, 15 September 2021)

Atty. Kathy Larios