Work Relationship

WORK RELATIONSHIP

6.01 Work Relationship

Definitions

Art. 97 Definition

(a)        "Person" means an individual, partnership, association, corporation, business trust, legal representative or any organized group of person.

(b)        "Employer" includes any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the Government and all its branches, subdivisions and instrumentalities, all government-owned or controlled corporations and institutions, as well as non-profit private institutions or organizations.

            "Employee" includes any individual employed by an employer.

Art. 167  Definition of Terms

(f)         "Employer" means any person, natural or juridical, employing the services of the employee.

           

(g)        "Employee" means any person compulsorily covered by the GSIS under Commonwealth Act numbered one hundred eighty-six, as amended, including members of the Armed Forces of the Philippines, and any person employed as casual, emergency, temporary, substitute or contractual; or any person compulsorily covered by the SSS under Republic Act numbered eleven hundred sixty-one, as amended.

Art. 212  Definitions

(e)        "Employer" includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer.

(f)         "Employee" includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless this Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.

Employee

United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma (98)

As can be seen from this description, a distinction exists between those who have the authority to devise, implement and control strategic and operational policies (top and middle managers) and those whose task is simply to ensure that such policies are carried out by the rank-and-file employees of an organization (first-level managers/supervisors). What distinguishes them from the rank-and-file employees is that they act in the interest of the employer in supervising such rank-and-file employees.

"Managerial employees" may therefore be said to fall into two distinct categories: the "managers" per se, who compose the former group described above, and the "supervisors" who form the latter group. Whether they belong to the first or the second category, managers, vis-a-vis employers, are, likewise, employees.

           

Employer-Employee Relationship

Factors

Chavez vs. NLRC (2005); Caurdanetaan Piece Workers Union v. Laguesma (98)

To determine the existence of an employer-employee relation, this Court has consistently applied the “four-fold” test which has the following elements: (1) the power to hire, (2) the payment of wages, (3) the power to dismiss, and (4) the power to control – the last being the most important element.

Lim v. NLRC (99)

The existence of an employer-employee relationship is principally determined by the following indicia: (1) selection and engagement of the employee; (2) payment of wages; (3) power of dismissal; and (4) employer’s power to control the employee with respect to the result to be done and to the means and methods by which the work is to be accomplished.

Control Test

Religious of the Virgin Mary v. NLRC (99)

The argument has no merit.  AS this Court has consistently ruled, the power of control is the most decisive factor in determining the existence of an employer – employee relationship.  In Encyclopedia Britannica (Phils.), Inc. v. NLRC, we held:

                       

In determining the existence of an employer-employee relationship the following elements must be present: (1) selection and engagement of the employee; (2) payment of wages; (3) power of dismissal; and (4) the power to control the employees’ conduct.  Of the above, control of employee’s conduct is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship.  Under the control test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the manner and means to be used in reaching that end.

                       

In this case, CDSPB reserved the right to control and supervise the operations of the Girls’ Department.  Although CDSPB “actually exercised minimal supervision over petitioner, [it]could exercise substantial supervision and control as it did when [it] preterminated the Agreement.”  There was, therefore, no basis in finding that petitioner had a “greater degree of autonomy ad independence in running the affairs” of the school.  The presence of the school director, whose vast powers have already been noted, negates any suggestions or semblance of autonomy.

Nor is there any merit in the claim that “actual and effective control” was exercised by petitioner since the designation of the parish priest as director was “a mere formality, as he did perform functions which are purely ministerial and figurative in nature.”  Time and again we have held that “the ‘control test’ only requires the existence of the right to control the manner of doing the work not necessarily the actual exercise of the power by him, which he can delegate.”  Indeed, although the letters of appointment were signed by the principal/representative of petitioner, they bore the name/letterhead of CDSPB and clearly indicated therein that the employees were hired as teachers/personnel by CDSPB, and not by RVM.  Moreover, CDSPB itself admits that its name – not petitioner’s – appears in the employees’ payroll ledger cards.

Proof

Domasig v NLRC (96)

It has long been established that in administrative and quasi-judicial proceedings, substantial evidence is sufficient as a basis for judgment on the existence of employer-employee relationship.  No particular form of evidence is required to prove the existence of such. 

Economic Test

Sevilla v. CA(88)

We have considered, in addition to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, in determining the existence of an employer-employee relationship.

Agreement

Tabas v. California Manufacturing Co. (90)

The existence of an employer-employees relation is a question of law and being such, it cannot be made the subject of agreement. 

Insular Life Assurance Co. Ltd. v. NLRC (98)

It is axiomatic that the existence of an employer-employee relationship cannot be negated by expressly repudiating it in the management contract and providing therein that the "employee" is an independent contractor when the terms of the agreement clearly show otherwise. For, the employment status of a person is defined and prescribed by law and not by what the parties say it should be. In determining the status of the management contract, the "four-fold test" on employment earlier mentioned has to be applied.

Effect of Relationship

Philippine Fuji Xerox Corp. v NLRC (96)

It is wrong to say that if a task is not directly related to the employer's business, or it falls under what may be considered "housekeeping activities," the one performing the task is a job contractor. The determination of the existence of an employer-employee relationship is defined by law according to the facts of each case, regardless of the nature of the activities involved. 

Nature/Character

Dunlop Slazenger (Phils.), Inc. v. Secretary, DOLE (98)

Determining the status of supervisory and rank-and-file employees is not a hard row to hoe in labor law.  The test of supervisory status as we have repeatedly ruled is whether an employee possesses authority to act in the interest of his employer, which authority should not be merely routinary or clerical in nature but requires the use of independent judgment.  Corollarily, what determines the nature of employment is not the employee’s title, but his job description.

Piercing the Corporate Veil

Pamplona Plantation Co., Inc v. Tinghil (2005)

The legal fiction of separate corporate entities cannot be invoked to further an end subversive of justice.

The principle requiring the piercing of the corporate veil mandates the courts to see through the protective shroud that distinguishes one corporation from seemingly separate one. xxx

In the present case, the corporations have basically the same incorporators and directors and are headed by the same official.  Both use only on office and one payroll and are under one management.  In their individual  affidavits, respondents allege that they worked under the supervision and control of petitioner Bondoc—the common managing director of both the petitioner-company and the leisure corporation.  Some of the laborers of the plantation also work in the golf course.  Thus, the attempt to make the two corporations appear as two separate entities, insofar as the workers are concerned, should be viewed as a devious but obvious mens o defeat the ends of the law.  Such a ploy should not be permitted to cloud the truth and perpetrate injustice.