SUN TZU NOTES
Al L. Beronque
includes any individual employed by an employer[art 97c]
one who works for an employer, a person workingfor salary or wages; any person in the service of another under a contract for hire, express orimplied, oral or written [alcantara].
always a natural person [may include Filipinocitizens and foreigners]
it is in personam, involves the rendition of personal service by the employee, and partakesof master and servant relationship.
contractual in character, it arises from theagreement of the parties.
1.The selection and engagement of the employee.2.The payment of wages or salaries for services.3.The power of dismissal or to impose disciplinaryactions.
The employer’s power to control the employeewith respect to the means and methods by whichthe work is to be accomplished. This is alsoknown as the “control test”.Control Test
the most important element
that is, whether the employer controls or hasreserved the right to control the employee notonly as to the result of the work to be done butalso as to the means and methods by which thesame is to be accomplished [investment planningcorp v. sss 11/18/67]
Why is it important to determine whether therelationship between the parties is that of employerand employee or that of principal and independentcontractor or of principal-agent?
To determine what laws will govern the rightsand liabilities of the parties, and what tribunal orcourt will have jurisdiction over their disputes.
Employer-EmployeeLabor lawsLabor tribunalPrincipal-IndependentContractorobligationsand Contracts[CC]Regular courtsPrincipal-AgentCivil CodeRegular courts
Employer-Employee vs. Principal-Agent
Employer-Employee relationship is governed by the LaborCode whereas Principal-Agent relationship is by Civil Code.
Principal-Agent RelationshipArt 1868 CC:
By the contract of agency, a person bindshimself to render some service or to do something inrepresentation or on behalf of another, with the consent orauthority of the latter.
It is the principal who selects the agent
An agent is compensated under the contract of agency forservices rendered.
An agent is disciplined by the principal because former isunder the authority of the latter.
The principal controls the means and methods of the workof an agent.[Relate above to the four-fold test]
There is only one party in a principal-agent relationship,the agent is merely an extension of the principal. They areregarded as one. So if there is a contractor relationship, itis not between 3 parties but is between the principal orthe agent as an extension of the principal and the otherparty.
To make a distinction between a principal-agentrelationship and that of an employer-employee relationship,the four-fold test will not be used because the 1) agent isselected by the principal 2) compensated by the principal 3)and most oftentimes, the principal also substitutes his own judgment for that of the agent.
Employer-Employee vs. Principal-ContractorContractor:
carries on a distinct and independent business andundertakes to perform the job, work or service on its ownaccount and under its own responsibility, according to itsown manner and method, and free from the control anddirection of the principal in all matters connected with theperformance of the work except as to the results thereof [DO 9].
Maybe an individual, corporate or juridical contractor
principal selects the contractor
contractor is compensated for services rendered.
The contractor is
under the discipline of the principal.
the contractor is
under the control of the principal.The definition says that aside from engaging in a businessseparately distinct from the principal, to perform job, workor service, according to his own means and methods, freefrom control and direction of the principal except as to theresults thereof.[relate above with four-fold test]
this relationship exists also in situations under art 106-109 LC.
If you know your enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle – SUN TZU
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