Case Digest: Republic of the Phil., et al. v. Asiapro Cooperative, G.R. No. 172101, November 23, 2007

  • Asiapro Cooperative entered service contracts with Stanfilco, providing services, and generating income from these contracts. Asiapro's owners-members sought Social Security System (SSS) coverage as self-employed individuals due to their cooperative status.
  • SSS, however, claimed Asiapro was an employer supplying workers to Stanfilco, demanding Asiapro to register as an employer and cover its owners-members under SSS.
  • Asiapro asserted no employer-employee relationship existed. It claimed that the rights and obligations of its owners-members are derived from their Membership Agreements, By-Laws, and Cooperative Code, not from an employment relationship.

WoN employer-employee relationship existed between Asiapro and its owners-members. YES

The Supreme Court applying the four-fold test declared that employer-employee relationship exists between the cooperative and its shareholder members. 

The cooperative had exclusive discretion in selecting and engaging its owners-members and team leaders for assignments at Stanfilco. The stipends or shares in the service surplus given to owners-members were considered wages. These payments constituted compensation for services rendered to Stanfilco, making them equivalent to wages. The cooperative held the authority to investigate, discipline, and remove owners-members and their team leaders working at Stanfilco. The cooperative exercised sole control over the manner and methods of performing services under the Service Contracts with Stanfilco. Furthermore, it bore complete responsibility for its owners-members, team leaders, and other representatives at Stanfilco.

The existence of an employer-employee relationship cannot be negated by expressly repudiating it in a contract, when the terms and surrounding circumstances show otherwise. In other words, the cooperative can be a contractor, and, where it qualifies as a legitimate contractor, it can be the employer of the workers, hence, can be compelled to register with the SSS. 


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