VI.

POST-EMPLOYMENT
A. Employer-employee relationship
1. Tests to determine existence of E-E relationship
a. Four Fold test to determine employment relationship
i. Selection and engagement of the employee
ii. Payment of wages
iii. Power of dismissal
iv. Power to control the employee (with respect to the means and methods by which the work is to be
accomplished)
MENDIOLA vs. CA - G.R. No. 159333
It should be borne in mind that the power of control refers merely to the existence of power and
not to the actual exercise thereof. It is not essential for the employer to actually supervise the performance
of duties of the employee, it is enough that the former has a right to wield the power.
SEVILLA vs. CA - GR 44182-3
Titles are weak indicators because employment relationship is determined by the control test .
In addition to this test, the inclusion of the employee in the payrolls is one indicium that employment
relationship exists.
San Miguel Corporation vs. MAERC Integrated Services
In deciding the question of control \, the language of the contract is not determinative of the parties’
relationship; rather, it is the totality of the facts and surrounding circumstances of each case .

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 shows
otherwise. (Insular Life v. NLRC, 287 SCRA 476)

Aurora Land vs. NLRC, 266 SCRA 48

Dagui was hired by Aurora Tanjangco to take charge of the maintenance and repair of
the Tanjangco apartments and residential buildings. He was to perform carpentry,
plumbing, electrical and masonry work. Upon the death of Aurora , Teresita took over the
administration of all the properties. When Dagui’s services was terminated , he filed a
complaint for illegal dismissal with the LA. Petitioners insist that Dagui had never been
their employee. Since the establishment of Aurora Plaza, Dagui served therein only as a
job contractor. Dagui had control and supervision of whoever he would take to perform a
contracted job. On occasion, Dagui was hired only as a “tubero” or plumber as the need
arises in order to unclog sewerage pipes. Every time his services were needed, he was
paid accordingly. It was understood that his job was limited to the specific undertaking of
unclogging the pipes. In effect, petitioners would like the Court to believe that Dagui was
an independent contractor, particularly a job contractor, and not an employee of Aurora
Plaza. The court held that an employer-employee relationship exists. Section 8, RuleVIII,
Book III of the Implementing Rules and Regulations of the Labor Code provide the
essential requisites before one is considered a job contractor. 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 means to be used in reaching
such end.
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 AFP Mutual Benefit v. NLRC, 267 SCRA 47

The mere fact that an employee is subject to company rules is not indicative of control if it
is not shown that it relates to the means and methods of service rendered and not merely
to the end result. The significant factor in determining the relationship of parties is the
presence or absence of supervisory authority to control the method and details of
performance of the service being rendered, and to the degree to which the principal may
intervene to exercise such control. Not every form of control that a party reserves to himself
over the conduct of the other party in relation to the services being rendered may be
accorded the effect of establishing an ‘ee-’er relationship.

Phil. Fuji Xerox v. NLRC, 254 SCRA 294

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.
Not substantial capital or investment alone which makes one a job contractor, but also
presence of four-fold test in relation to contractor and employee.

DY Keh Beng vs. Intl Labor and Marine Union of the Philippines

A worker who worked on a piece rate basis is deemed an employee because circumstances
must be construed to determine indeed if payment by piece is just a method of
compensation which does not define the essence of the relation.

Investment Planning Corporation vs SSS

An insurance company may have two classes of agents who sell its insurance policies: (1)
salaried employees who keep definite hours and work under the control and supervision of
the company (2) Registered representatives who work on commission basis. In this case,
the insurance agent was entrusted with the work of collection and assigned a definite place
of work to on. His contract of services with the insurance company is neither for a piece of
work nor a definite period. He was controlled by the company , not only as to the kind of
work , the amount of results , and the kind of performance, but most importantly , on its
power of disposal over such agent .

Zamudio vs. NLRC

The nature of employment i.e., pakyaw , does not make petitioners independent
contractors. Pakyaw workers are considered employees as long as the employer exercise
control over the means by which such workers are to perform their works.

Great Pacific Life Assurance Corp. vs, Judico

The SC upheld the existence of an EE relationship between insurance comp. and its agents
despite the fact that the compensation that the agents on commission received was not
paid by the company but by the investor or the person insured.

b. Two Tiered Test

- involves control test and economic reality test. (Francisco vs. NLRC GR 170087)
- appropriate in cases where there is no written agreement
 Control Test – the putative employer’s power to control the employee with respect to the means and
method by which the work is to be accomplished

Economic Reality Test – the underlying economic realities of the activity or relationship

Sevilla vs CA GR L-41182
Existing economic conditions prevailing between parties in addition to the standard of
right of control like the inclusion of the employee in the payrolls, to give a clearer picture in
determining the existence of EE relationship based on an analysis of the totality of economic
circumstances of the worker should be observed.

2. Kinds of employment
a. Regular Employment
b. Casual
c. Probationary
d. Project
e. Seasonal
f. Fixed-term
g. Floating status
3. Legitimate Subcontracting vs. Labor-only contracting
a. Elements
b. Trilateral relationship
i. Parties Involved in a Trilateral Relationship
ii. Contracts Involved in a Trilateral Relationship
c. Permissible or Legitimate Job Contracting/Subcontracting Arrangement
d. Principal distinctions between Legitimate Job Contracting and Labor-only contracting
e. Solidary liability
f. Substantial Capital
g. Effects of labor-only contracting
h. Department Order No. 18-A
i. Department Circular No. 01-12