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1 6 On Comprehensive Reviewer On LABOR LAW
1 6 On Comprehensive Reviewer On LABOR LAW
1 6 On Comprehensive Reviewer On LABOR LAW
It shall likewise include the following acts, whether committed by any persons, whether
a non-licensee, non-holder, licensee or holder of authority.
(a) To charge or accept directly or indirectly any amount greater than the specified in the
schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to
make a worker pay any amount greater than that actually received by him as a loan or
advance;
(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor
Code;
(d) To induce or attempt to induce a worker already employed to quit his employment in
order to offer him another unless the transfer is designed to liberate a worker from
oppressive terms and conditions of employment;
(e) To influence or attempt to influence any persons or entity not to employ any worker
who has not applied for employment through his agency;
(f) To engage in the recruitment of placement of workers in jobs harmful to public health
or morality or to dignity of the Republic of the Philippines;
(i) To substitute or alter to the prejudice of the worker, employment contracts approved
and verified by the Department of Labor and Employment from the time of actual
signing thereof by the parties up to and including the period of the expiration of the
same without the approval of the Department of Labor and Employment;
(k) To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations other than those authorized under the Labor Code
and its implementing rules and regulations;
(l) Failure to actually deploy without valid reasons as determined by the Department of
Labor and Employment; and
(m) Failure to reimburse expenses incurred by the workers in connection with his
documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker's fault. Illegal recruitment
when committed by a syndicate or in large scale shall be considered as offense
involving economic sabotage.
The persons criminally liable for the above offenses are the principals, accomplices and
accessories. In case of juridical persons, the officers having control, management or
direction of their business shall be liable
1. Concept
The tests on employer-employee relationship are designed to address the issue on
whether there is an employer-employee relationship between a complainant alleging
that he/she is an employee and the Company stating otherwise.
The dispute on the employment status of an individual arises due to several reasons,
such as misclassification, incorrect contract, and as a result of labor law violations.
2) Socio-economic test.
2. Four-fold test
To ascertain the existence of an employer-employee relationship jurisprudence has
invariably adhered to the four-fold test, to wit:
4) The power to control the employee’s conduct, or the so-called “control test.” (Atok
Big Wedge Company, Inc. v. Gison, G.R. No. 169510, 08 August 2011)
Of these four, the last one is the most important. The so-called ‘control test’ 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 achieved, but also the manner and means
to be used in reaching that end. (Ibid.)
Accordingly, the employer is the one who initiates the hiring and recruitment process,
such as sourcing candidates by making job posts or advertise vacancies, conduct
assessments and interviews for applicants, and eventually to signing them up as
employees via an employment contract.
While it may strange to point out the obvious, the reason that this test exists is because
this tends to be violated, particularly if there is a third-party involved, such as in the case
of contracting and sub-contracting.
There have been several labor cases where it was found that the Principal
influenced/controlled, and worse, in some cases made the final decision, as who should
be hired by the Contractor to be its workers. Note, even if the employment contract is
between the Contractor and the Contractor’s workers, if it is established that the
Principal exercised selection and engagement on the Contractor’s workers and along
with other indicators of employment such as control, the Principal may be later on
declared as the true and actual employer of these workers.
b. Payment of wages
It is the employer who pays an employee’s wages or salary.
Accordingly, the employer prepares a payment system such as a payroll or pay slip as
proof of payment to the employees. However, it should be pointed out that “the fact that
[the employee’s] name does not appear in the payrolls and pay envelope records
submitted by [the employer] negate the existence of employer-employee relationship.
For a payroll to be utilized to disprove the employment of a person, it must contain a
true and complete list of the employee.” (South East International Rattan, Inc. v.
Coming, G.R. No. 186621, 12 March 2014)
c. Power of dismissal
It is only the employer who can dismiss an employee.
Dismissal is one of the disciplinary actions that an employer may impose on an erring
employee for violations which constitute or amounts to a just cause.
d. Control
“Control” – refers to the active supervision and control over an individual who is doing
the job, work, or service, such as giving orders, directives, or instructions, as well as
determining or dictating the means and manner of doing the work, and even what tools
or instruments to use.
In an employment relationship, the employer has active supervision and control of their
employees who are doing the job, work, or service. This is a natural and logical
consequence considering that the employer is responsible and liable for the actions of
their employees in the performance of their work.
Logically, the line should be drawn between rules that merely serve as guidelines
towards the achievement of the mutually desired result without dictating the means or
methods to be employed in attaining it, and those that control or fix the methodology
and bind or restrict the party hired to the use of such means. The first, which aim only to
promote the result, create no employer-employee relationship unlike the second, which
address both the result and the means used to achieve it. (Insular Life Assurance Co.,
Ltd v. National Labor Relations Commission, 259 Phil. 65, 70-71 (1989))
From jurisprudence, an important lesson that the first Insular Life case teaches us is
that a commitment to abide by the rules and regulations of an insurance company does
not ipso facto make the insurance agent an employee. Neither do guidelines somehow
restrictive of the insurance agent’s conduct necessarily indicate ‘control’ as this term is
defined in jurisprudence. Guidelines indicative of labor law ‘control,’ as the first Insular
Life case tells us, should not merely relate to the mutually desirable result intended by
the contractual relationship; they must have the nature of dictating the means or
methods to be employed in attaining the result, or of fixing the methodology and of
binding or restricting the party hired to the use of these means. In fact, results-wise, the
principal can impose production quotas and can determine how many agents, with
specific territories, ought to be employed to achieve the company’s objectives. These
are management policy decisions that the labor law element of control cannot reach.
Our ruling in these respects in the first Insular Life case was practically reiterated in
Carungcong. Thus, as will be shown more fully below, Manulife’s codes of conduct, all
of which do not intrude into the insurance agents’ means and manner of conducting
their sales and only control them as to the desired results and Insurance Code norms,
cannot be used as basis for a finding that the labor law concept of control existed
between Manulife and Tongko. (Tongko v. The Manufacturers Life Insurance Co.
(Phils.), G.R. No. 167622, 29 June 29, 2010)
“Neither does the repeated hiring of (the complainant) prove the existence of employer-
employee relationship… The continuous rehiring of (the complainant) simply signifies
the renewal of his contract with (the Company), and highlights his satisfactory services
warranting the renewal of such contract. (Ibid.)
Nor does the exclusivity clause of contract establish the existence of the labor law
concept of control… (the complainant) was not prohibited from engaging in any other
business as long as he does not sell projects of (the Company’s) competitors. He can
engage in selling various other products or engage in unrelated businesses. (Ibid.)
[T]he fact that the appointment required (the complainant) to solicit business exclusively
for (the Company) did not mean that (the Company) exercised control over the means
and methods of (the complainant’s) work as the term control is understood in labor
jurisprudence. Neither did it make (the complainant) an employee of (the Company).
(The Company) did not prohibit (the complainant) from engaging in any other business,
or from being connected with any other company, for as long as the business (of the)
company did not compete with (the Company’s) business.” (Consulta v. Court of
Appeals, 493 Phil. 842, 848 (2005))
# Case Law: Reyes v. Glaucoma Research Foundation, Inc., G.R. No. 189255, 17
June 2015
In the instant case, as shown by the resume of (the complainant), he concurrently held
consultancy positions with the Manila International Airport Authority (from 04 March
2001 to September 2003 and from 01 November 2004 up to the present) and the Anti-
Terrorist Task Force for Aviation and Air Transportation Sector (from 16 April 2004 to 30
June 2004) during his stint with the Eye Referral Center (from 01 August 2003 to 29
April 2005). Accordingly, it cannot be said that the (complainant) was wholly dependent
on (respondent) company.
[I]n certain cases(,) the control test is not sufficient to give a complete picture of the
relationship between the parties, owing to the complexity of such a relationship where
several positions have been held by the worker. There are instances when, aside from
the employer’s power to control the employee with respect to the means and methods
by which the work is to be accomplished, economic realities of the employment relations
help provide a comprehensive analysis of the true classification of the individual,
whether as employee, independent contractor, corporate officer or some other capacity.
The better approach would therefore be to adopt a two-tiered test involving: (1) the
putative employer’s power to control the employee with respect to the means and
methods by which the work is to be accomplished; and (2) the underlying economic
realities of the activity or relationship. #
Thus, the determination of the relationship between employer and employee depends
upon the circumstances of the whole economic activity, such as: (1) the extent to which
the services performed are an integral part of the employer’s business; (2) the extent of
the worker’s investment in equipment and facilities; (3) the nature and degree of control
exercised by the employer; (4) the worker’s opportunity for profit and loss; (5) the
amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise; (6) the permanency and duration of the relationship between
the worker and the employer; and (7) the degree of dependency of the worker upon the
employer for his continued employment in that line of business. (Ibid.)
# Case Law: Francisco v. NLRC, Kasei Corporation, G.R. No. 170087, 31 August 2006
By applying the control test, there is no doubt that petitioner is an employee of Kasei
Corporation because she was under the direct control and supervision of Seiji Kamura,
the corporation’s Technical Consultant. She reported for work regularly and served in
various capacities as Accountant, Liaison Officer, Technical Consultant, Acting Manager
and Corporate Secretary, with substantially the same job functions, that is, rendering
accounting and tax services to the company and performing functions necessary and
desirable for the proper operation of the corporation such as securing business permits
and other licenses over an indefinite period of engagement.
Under the broader economic reality test, the petitioner can likewise be said to be an
employee of respondent corporation because she had served the company for six years
before her dismissal, receiving check vouchers indicating her salaries/wages, benefits,
13th month pay, bonuses and allowances, as well as deductions and Social Security
contributions from August 1, 1999 to December 18, 2000. When petitioner was
designated General Manager, respondent corporation made a report to the SSS signed
by Irene Ballesteros. Petitioner’s membership in the SSS as manifested by a copy of the
SSS specimen signature card which was signed by the President of Kasei Corporation
and the inclusion of her name in the on-line inquiry system of the SSS evinces the
existence of an employer-employee relationship between petitioner and respondent
corporation.
In the Philippines, the following are the recognized types of employment: (1) regular; (2)
casual; (3) project; (4) seasonal; (5) fixed-term; and (6) probationary.
Regular and Casual Employment
Pursuant to Article 280 of the Labor Code of the Philippines (“Labor Code”), the primary
standard that determines regular employment is the reasonable connection between the
particular activity performed by the employee and the usual business or trade of the
employer; the emphasis is on the necessity or desirability of the employee’s activity.
Thus, when the employee performs activities considered necessary and desirable to the
overall business scheme of the employer, the law regards the employee as regular.
In addition, the Labor Code also considers as regular employment a casual
arrangement when the casual employee’s engagement has lasted for at least one year,
regardless of the engagement’s continuity. The controlling test in this arrangement is
the length of time during which the employee is engaged. (See Universal Robina v.
Acibo, G.R. No. 186439, 15 January 2014)
Project Employment
Project employment contemplates an arrangement whereby “the employment has been
fixed for a specific project or undertaking whose completion or termination has been
determined at the time of the engagement of the employee.” (Article 280, Labor Code of
the Philippines)
Since the employee’s services are coterminous with the project, the services of the
project employees are legally and automatically terminated upon the end or completion
of the project.
Seasonal Employment
Seasonal employment applies “where the work or service to be performed is seasonal
in nature and the employment is for the duration of the season.” (Article 280, Labor
Code of the Philippines)
Season employees may also be considered regular employees, thus: “[f]arm workers
generally fall under the definition of seasonal employees. We have consistently held
that seasonal employees may be considered as regular employees. Regular seasonal
employees are those called to work from time to time. The nature of their relationship
with the employer is such that during the off-season, they are temporarily laid off; but
reemployed during the summer season or when their services may be needed. They
are in regular employment because of the nature of their job,and not because of the
length of time they have worked.” (Gapayao v. Fulo, et al., G.R. No. 193493, 13 June
2013)
Fixed-Term Employment
Fixed-term employment is valid when: (a) the fixed period of employment was knowingly
and voluntarily agreed upon by the employer and employee without any force, duress,
or improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent; or (b) it satisfactorily appears that the employer and
the employee dealt with each other on more or less equal terms with no moral
dominance exercised by the former or the latter. (See Caparoso, et al. v. Court of
Appeals, G.R. No. 155505, 15 February 2007)
Probationary Employment
Probationary employment exists when the employee, upon his engagement is made to
undergo a trial period where the employee determines his fitness to qualify for regular
employment, based on reasonable standards made known to him at the time of
engagement. The employer shall make known to the employee the standards under
which he will qualify as a regular employee at the time of his engagement. Where no
standards are made known to the employee at that time, he shall be deemed a regular
employee. (See Section 6(d), Implementing Rules of Book VI, Rule VII-A of the Labor
Code)
Generally, probationary employment shall not exceed six (6) months from the date the
employee started working. (See Article 281, Labor Code)
HELD:
The employment contract between Brent School, Inc. and Alegre was executed on
July18, 1971, at a time when the Labor Code of the Philippines (P.D. 442) had not yet
been promulgated. Indeed, the Code did not come into effect until November 1, 1974,
some three years after the perfection of the employment contract, and rights and
obligations thereunder had arisen and been mutually observed and enforced.