Industrial partners versus employees

Dear PAO,

My husband and I have been serving as storekeeper and caretaker, respectively, at a private beach resort. For our services, we are paid certain amounts plus commissions on the harvest of the fishpond, rentals of the cottages, and sales of the store. A few years later, the owner said the business was losing money, so he intended to have the property leased and that our services were no longer required. Because of this, we filed a case for illegal dismissal. The owner insists that we are not employees but industrial partners in the businesses because we are receiving profits from the business and that he does not exercise control over us in how we perform our respective jobs. Is he right in asserting that we are industrial partners and not employees?

Emily

Dear Emily,

Please be informed of the Supreme Court's ruling in the case of Pedro D. Dusol and Maricel M. Dusol vs. Emmarck A. Lazo, as owner of Ralco Beach (GR 200555, Jan. 20, 2021, Ponente: Associate Justice Mario Lopez), where it was provided that the sharing in the income per se does not prove the existence of a partnership. According to the Supreme Court:

«On one hand, there is a partnership if two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves. A particular partnership may have for its object a particular undertaking. The existence of a partnership is established when it is shown that: (1) two or more persons bind themselves to contribute money, property, or industry to a common fund; and (2) they intend to divide the profits among themselves. Generally, it is not required that the agreement be in writing or in a public instrument. However, when immovable properties or real rights are contributed to the partnership, it is required that an inventory of the real properties or rights contributed be prepared and signed by the parties, and attached to the public instrument, otherwise, the agreement is void.

»Undoubtedly, the best evidence to prove the existence of a partnership is the contract or articles of partnership. Nevertheless, in its absence, its existence can be established by