STERLING PRODUCTS INTERNATIONAL, INC. AND V. SAN PEDRO, PETITIONERS, VS. LORETA C. SOL AND COURT OF INDUSTRIAL RELATIONS, RESPONDENTS.

This is a petition to review on certiorari the resolution of the Court of
Industrial Relations, dated June 23, 1961 in Case No. 2292-ULP, ordering the
herein petitioner to reinstate complainant-respondent Loreta C. Sol, with back
wages from the date of her dismissal until her reinstatement.

Loreta C. Sol charged the herein petitioners Sterling Products International
and its Radio Director V. San Pedro with having committed an unfair labor
practice act. In her complaint she alleged among others that she has been a
regular Radio Monitor of respondents-petitioners; that on January 8, 1960, she
filed a complaint against the said firm for underpayment, money equivalent of
her vacation leave from 1952 to 1959, and Christmas bonus for 1959, equivalent
to one month salary. The complaint resulted in her dismissal, without just
cause, on December 16, 1960.

In their answer petitioners herein denied the charges and by way of
affirmative defenses, alleged that complainant is an independent contractor
whose services were restrained by petitioners to submit reports of radio
monitoring work performed outside of their (petitioner’s) office; that
petitioners no longer required complainant’s services and therefore, it gave her
notice of termination, as it did in fact terminate her services, as an
independent contractor; that petitioners terminated the services of
complainant-respondent for good and justifiable reasons and in accordance with
business requirements; that the complaint states no cause of action and that
petitioners did not and are not engaged in unfair labor practice acts against
the complainant within the meaning of Sec 4 (a), subsection o of the Industrial
Peace Act.

Judge Tabigne of the Court of Industrial Relations in a decision dated
October 8, 1960 held that the complainant is not an employee of the respondent
firm but only an independent contractor and that respondent firm was justified
in dismissing the complainant due to economic reasons.

Complainant filed a motion to reconsider that decision, raising the question
as to whether she is an employee or an independent contractor. The lower court
reversed the decision of Judge Tabigne, ruling that complainant was an employee
and not an independent contractor, and ordered her reinstatement with back
wages. The lower Court further ruled that respondent firm was guilty of unfair
labor practice. In arriving at this ruling it considered the following
circumstances: (1) Complainant was given an identification card stating that
“Bearer Loreta C. Sol is a bonafide employee of this Company;” (2) when she
applied for purchase of a lot from the PHHC, she was given a certificate to show
that she was indeed an employee of the respondent company for the last five
years or six years; and (3) as such employee, she enjoyed the privilege of
borrowing money from the Employees Loan Association of the firm.

The court further found that the company’s control over respondent’s work is
shown by the fact that she can not listen to broadcasts other than those that
were contained in the schedule given to her by the company. Supervision and
control of her work could be done by checking or verifying the contents of her
reports on said broadcasts, said the court.

Further discussing the question the court states:

“In the case at bar, the company not only hired and fired Mrs. Sol, without
third party intervention, but also reserved to itself possessed and exercised
its right to control ‘the end to be achieved and the means’ to be used in
reaching such end, namely, the schedule and other instructions by which the
monitor shall be guided, and this reports with specifications by which the
company observes and verifies the performance of her work.”

In consequence the court held that the respondent was an employee. It also
found that the petitioners herein are guilty of unfair labor practice, so it
orders petitioners to reinstate respondent Loreta C. Sol, with back wages from
the date of her dismissal until her reinstatement. Two judges dissented to this
decision.

In the petition now brought to Us by certiorari it is urged that respondent
Sol was an independent contractor because in the performance of her work, the
elements of control and direction are lacking, hence no relationship of employer
and employee must have existed, citing in support of this contention Section 3,
35 Am. Jur. 445-446; and that since respondent was employed to work according to
her own methods and without being subject to control except as to its final
result, she may not be considered as an employee. (Ibid.) We cannot accept this
argument. Respondent Sol was directed to listen to certain broadcasts, directing
her, in the instructions given her, when to listen and what to listen,
petitioners herein naming the stations to be listened to, the hours of
broadcasts, and the days when listening was to be done. Respondent Sol had to
follow these directions. The mere fact that while performing the duties assigned
to her she was not under the supervision of the petitioners does not render her
a contractor, because what she has to do, the hours that she has to work and the
report that she has to submit—all these are according to instructions given by
the employer. It is not correct to say, therefore, that she was an independent
contractor, for an independent contractor is one who does not receive
instructions as to what to do, how to do, without specific instructions.

Finally, the very act of respondent Sol in demanding vacation leave,
Christmas bonus and additional wages shows that she considered herself an
employee. A contractor is not entitled to a vacation leave or to a bonus nor to
a minimum wage. This act of hers in demanding these privileges are inconsistent
with the claim that she was an independent contractor.

The next point at issue is whether or not the petitioners herein are guilty
of unfair labor practice. Petitioners claim that under the decision rendered by
Us in the case of Royal Interocean Lines, et al. vs. Court of Industrial
Relations, et al. G. R. No. L-11745, Oct. 31, 1960, as respondent Sol was merely
an employee and was not connected with any labor union, the company cannot be
considered as having committed acts constituting unfair labor practice as
defined in the Industrial Peace Act, Rep. Act 875. We find this contention to be
well-founded. The term unfair labor practice has been defined as any of those
acts listed in Sec. 4 of the Act. The respondent Sol has never been found to
commit any of the acts mentioned in paragraph (a) of Sec. 4. Respondent Sol was
not connected with any labor organization, nor has she ever attempted to join a
labor organization, or to assist, or contribute to a labor organization. The
company, cannot therefore, be considered as having committed an unfair labor
practice.

The court below found that there is an employment contract (Exhibit “3”)
between petitioners and respondent Sol in which it was expressly agreed that Sol
could be dismissed upon fifteen days’ advance notice, if petitioners herein
desire. Respondent Sol was dismissed on January 13, 1959 and therefore the
dismissal should be governed by the provisions of Republic Act 1787, which took
effect on June 21, 1957. Section 1 of this Act provides:

“SECTION 1. In cases of employment, without a definite period, in a
commercial, industrial, or agricultural establishment or enterprise, the
employer or the employee may terminate at any time the employment with just
cause; or without just cause in the case of an employee by serving written
notice on the employer at least one month in advance, or in tne case of an
employer, by serving such notice to the employee at least one month in advance
or one-half for every year of service of the employee, whichever is longer, a
fraction of at least six months being considered as one whole year.

“The employer, upon whom no such notice was served in case of termination of
employment without just cause may hold the employee liable for damages.

“The following are just causes for terminating an employment without a
definite period:

“1. By the employer—

“a. The closing or cessation of operation of the establishment or enterprise,
unless the closing is for the purpose of defeating the intention of this
law.”

The contract between the petitioners and the respondent Sol providing that
the respondent Sol can be dismissed upon fifteen days’ notice is therefore null
and void. Inasmuch as respondent Sol was employed since the year 1952 and was in
the employment of the petitioners from that time up to 1959, or a period of
seven years, she is entitled to three and one-half months pay in accordance with
the above quoted section 1 of the Act.

Wherefore, that portion of the decision finding the petitioners herein guilty
of unfair labor practice and sentencing petitioners to reinstate respondent Sol
in her former work is hereby set aside, and the petitioners are sentenced to
pay, as separation pay, three and one-half months’ pay to respondent Sol. In all
other respects the decision is affirmed. No costs.

Bengzon, C. J., Padilla, Bautista Angelo, Concepcion, Reyes J. B. L.,
Barrera, Paredes, Dizon, Regala and Makalintal, J.J., concur.