Tests of Employment Relations | Philippine Labor Laws
Existence of employer-employee relationship; how proved - G.R. No The elements to determine the existence of an employment relationship It is a time- honored rule that in controversies between a laborer and Manuel J. Laserna Jr. Las Pinas City, Metro Manila, Philippines: MANUEL J. LASERNA JR. Republic of the Philippines free to solicit sales at any time and by any manner which he may deem appropriateand necessary. . While the existence of employer-employee relationship is a matter of law, the . These are management policy decisions that the labor law element of control cannot reach. SECTION 1. Pursuant to Article 5 of the Labor Code of the Philippines, as amended arrangements where employer-employee relationship exists. It shall also apply to within a definite period of time, i.e. administrative staff.
However, Espinosa also claims in addition thereto that there existed an employment contract between himself and petitioner Algon which, he insisted, hired him as a watchman to guard the heavy equipment parked in other leased house spaces in Libtong, Talacogon, Agusan del Sur.
The Court ruled therein that: No particular evidence is required to prove the existence of an employer-employee relationship. All that is necessary is to show that the employer is capable of exercising control over the employee.
In labor disputes, it suffices that there be a casual connection between the claim asserted and the employer-employee relations. The elements of an employer-employee relationship are: Control of the employees conduct is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. In the case at bar, there is no doubt that petitioner exercises control over Espinosas conduct, as shown by the fact that, rather than address the loss of batteries as a breach of the purported contract of lease, the memorandum instead emphasized the company rules and regulations and the fact that Espinosa was on duty at the time of the said loss.
Moreover, the petitioners act of transferring Espinosa to the day shift clearly shows its treatment of Espinosa as an employee, and not as a landlord. Thus, an employer-employee relationship exists where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such an end.
Even when faced with the contention that the relationship between two parties was in the nature of a lawyer-client relationship, the Court, in Equitable Banking Corporation v. National Labor Relations Commission,  still employed the control test, a strictly labor law concept, to determine the existence of an employer-employee relationship.
Sadac was engaged in as Equitables Vice-President for the legal department and as its General Counsel.
Innine 9 lawyers of the legal department issued a letter-petition to the chairperson of the board of the bank accusing private respondent of abusive conduct, inefficiency, mismanagement, ineffectiveness and indecisiveness.
Later, the lawyers threatened to resign en masse if Sadac was not relieved as the head of the legal department. After a formal investigation of the charges, Sadac was advised that he would be substituted as the banks legal counsel. Sadac charged the bank with illegal dismissal. The bank in turn denied the existence of an employer-employee relationship between it and Sadac. The Court stated in its Decision that: In determining the existence of an employer-employee relationship, the following elements are considered: The power of control refers to the existence of the power and not necessarily to the actual exercise thereof.
It is not essential, in other words, for the employer to actually supervise the performance of duties of the employee; it is enough that the former has the right to wield the power. Social Security Commission,  Rosalina M. Laudato claimed that the company failed to report her and remit her contributions as an employee, to the Social Security System SSS.
Denying that Laudato was a sales supervisor of Royal Star Marketing, Lazaro claimed that the former was only a sales agent earning on a commission basis. He added that Laudato did not maintain definite hours of work and therefore could not be considered as an employee of Royal Star Marketing. Right of control test is considered as the most important element in determining the existence of employment relation. Of the above-mentioned elements, the right of control test is considered as the most important element in determining the existence of employment relation.
Employer-Employee Relationship | Philippine Theo Law Gee
Al-Lagadan and Piga, where the court held that there is an employer-employee relationship when the person for whom the services are performed reserves the right to control not only the end achieved but also the manner and means used to achieve that end.
In applying this test, it is the existence of the right, and not the actual exercise thereof, that is important. Subsequently, another test has been devised to fill the gap, known as the economic reality test. Court of Appeals, the Court observed the need to consider the existing economic conditions prevailing between the parties, in addition to the standard of right-of-control, to give a clearer picture in determining the existence of an employer-employee relationship based on an analysis of the totality of economic circumstances of the worker.
Royale Homes, on the other hand, vehemently denied that Alcantara is its employee. It argued that the appointment paper of Alcantara isclear that it engaged his services as an independent sales contractorfor a fixed term of one year only. He never received any salary, 13th month pay, overtime pay or holiday pay from Royale Homes as hewas paid purely on commission basis.
In addition, Royale Homes had no control on how Alcantara would accomplish his tasks and responsibilities as he was free to solicit sales at any time and by any manner which he may deem appropriateand necessary.
He is even free to recruit his own sales personnel to assist him in pursuance of his sales target. According to Royale Homes, Alcantara decided to leave the company after his wife, who was once connectedwith it as a sales agent, had formed a brokerage company that directly competed with its business, and even recruited some of its sales agents.
In a special management committee meeting on October 8, however, Alcantara announced publicly and openly that he would leave the company by the end of October and that he would no longer finish the unexpired term of his contract. He has decided to join his wifeand pursue their own brokerage business. It then threw a despedidaparty in his honor and, subsequently, appointed a new independent contractor.
Two months after herelinquished his post, however, Alcantara appeared in Royale Homes and submitted a letter claiming that he was illegally dismissed. Ruling of the Labor Arbiter On September 7, ,the Labor Arbiter rendered a Decision 11 holding that Alcantara is an employee of Royale Homes with a fixed-term employment period from January 1 to December 31, and that the pre-termination of his contract was against the law.
Hence, Alcantara is entitled to an amount which he may have earned on the average for the unexpired portion of the contract. With regard to the impleaded corporate officers, the Labor Arbiter absolved them from any liability.
All other claims are dismissed for lack of merit. Royale Homes claimed that the Labor Arbiter grievously erred inruling that there exists an employer-employee relationship between the parties.
It insisted that the contract between them expressly statesthat Alcantara is an independent contractor and not an ordinary employee. Ithad no control over the means and methods by which he performed his work.