Employer-Employee Relationship


It is popular knowledge in students of Labor Law that the determination of the existence of employer-employee relationship in employment agreements continues to bedevil the courts. This is why standards and doctrines have been laid down by the Supreme Court to guide lower courts, lawyers, law students and the public in determining whether said relationship exists.

THE POPULAR FOUR-FOLD TEST

[1] Selection and engagement of the employee;
[2] Payment of wages or salaries;
[3] Exercise of the power of dismissal; or
[4] Exercise of the power to control the employee’s conduct.

These tests, however, are not fool-proof as they admit of exceptions.

REMEMBER THAT THE CONTROL TEST IS THE CONTROLLING TEST

The “control test” is the controlling test. It addresses the issue of whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished.2

TAKE NOTE OF THE FOLLOWING PRINCIPLES LAID DOWN BY THE HIGHEST TRIBUNAL

[1] There is no uniform test prescribed by law or jurisprudence to determine the existence of employer-employee relationship.
[2] The existence of the employer-employee relationship is essential in that it comprises as the jurisdictional basis for recovery under the law. Only cases arising from said relationship are cognizable by the labor courts.
[3] The relationship of employer and employee is contractual in nature. It may be an oral or written contract. A written contract is not necessary for the creation and validity of the relationship.
[4] Stipulation in a contract is not controlling in determining existence of the relationship. The employment status of a person is defined and prescribed by law and not by what the parties say it should be.
[5] The mode of paying the salary or compensation of a worker does not preclude existence of employer-employee relationship. Thus, payment by commission or on a piece-rate basis or on a “no work, no pay” basis does not affect existence of employment relationship.
[6] Retainer fee arrangement does not give rise to employment relationship. SUPREME COURT DECISIONS REGARDING THE EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP IN CERTAIN CIRCUMSTANCES

Following the right-of-control test, the Supreme Court has found that employment relationship exists in the following cases:

[1] Dispatchers of a transportation company.
[2] Persons paid on “boundary system” basis in relation to the transport operator such as jeepney drivers and conductors, taxi drivers, auto-calesa driver, and bus driver. Under the “boundary system,” the relationship between the driver and conductor of a bus and the owner thereof is not that of lessee and lessor but that of employee and employer.
[3] Musicians employed by a company producing motion pictures for purposes of making music recordings for title music, background music, musical numbers, finale music and other forms of music without which a motion picture is not complete.
[4] Fishermen-crew who rendered services in various capacities (patron/pilot, master fisherman, second fisherman, chief engineer, and fisherman) aboard the fishing vessels of a company engaged in “trawl” fishing and whose compensation was paid in cash on percent commission basis.
[5] Stevedores, although supplied to the company by the labor organization composed of various labor unions, are employees of the company.
[6] Resident physicians. - There is employer-employee relationship between resident physicians and the training hospitals unless:

There is a training agreement between them; and
The training program is duly accredited or approved by the appropriate government agency.

[7] Employees of cooperatives, but not its members unless the members are also employees thereof.
[8] Insurance agent.

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