If a real estate agent’s performance is subject to company rules, regulations, code of ethics, and periodic evaluation, does this mean that it has passed the control test for determining the existence of employer-employee relationship?
The Supreme Court in a case said no. “Not every form of control is indicative of employer-employee relationship. A person who performs work for another and is subjected to its rules, regulations, and code of ethics does not necessarily become an employee.”
In this case, it was found that the said rules, regulations, code of ethics, and periodic evaluation were found to not involve any control over the means and methods by which the real estate agent was to perform his job. In other words, the real estate company’s acts of:
- Fixing prices;
- Imposing requirements on prospective buyers;
- Laying down the terms and conditions of the sale, including the mode of payment, which the independent contractors must follow;
- Allocating inventories among its independent contractors;
- Determining who has priority in selling the same;
- Granting commission or allowance based on predetermined criteria; and
- Regularly monitoring the result of their marketing and sales efforts
do not pertain to the means and methods of how the said real estate agent was to perform and accomplish his task of soliciting sales. Neither do they dictate upon him the details of how he would solicit sales or the manner as to how he would transact business with prospective clients.
Furthermore, it was likewise found that the said agent did not even cite specific rules, regulations or codes of ethics that supposedly imposed control on his means and methods of soliciting sales and dealing with prospective clients. Except for soliciting sales, the real estate company did not assign other tasks to him. He had full control over the means and methods of accomplishing his tasks as he can “solicit sales at any time and by any manner which deem appropriate and necessary.” He performed his tasks on his own account free from the control and direction of real estate company in all matters connected therewith, except as to the results thereof.
The Court in declaring the absence of employer-employee relationship between them concluded: “As long as the level of control does not interfere with the means and methods of accomplishing the assigned tasks, the rules imposed by the hiring party on the hired party do not amount to the labor law concept of control that is indicative of employer-employee relationship.”
Further reading:
- Royale Homes Marketing Corporation v. Fidel P. Alcantara, G.R. No. 195190, July 28, 2014.
