Labor Standards 2020

EMPLOYER-EMPLOYEE RELATIONSHIP

Atty. Paciano F. Fallar Jr.

SSCR-CL

Bar Questions:

1. Ador is a student working on his master's degree in horticulture. To make ends meet, he
takes on jobs to come up with flower arrangements for friends. His neighbor, Nico, is about to
get married to Lucia and needs a floral arranger. Ador offers his services and Nico agrees. They
shake hands on it, agreeing that Nico will pay Ador P20,000.00 for his services but that Ador will
take care of everything. As Ador sets about to decorate the venue, Nico changes all ofAdor's
plans and ends up designing the arrangements himself with Ador simply executing Nico's
instructions.(a) Is there an employer-employee relationship between Nico and Ador? (b) Will
Nico need to register Ador with the Social Security System (SSS)?

a. The employer of the RSC is PizCorp. The four-fold test in determining employer-employee
relationship is as follows: (1) The selection and engagement of the employees; (2) The payment
of wages; (3) The power of dismissal; and (4) The power of control the employee‘s conduct. Of
the above, the power of control over the employees‘ conduct is the most crucial and
determinative indicator of the presence or absence of an employeremployee relationship.
Applying the Control Test, PizCorp is the employer of RSC members because ―if PizCorp is
materially prejudices by any act of the delivery crew that violated PizCorp‘s directives and
orders, Piz Corp can directly impose disciplinary sanctions on, including the power to dismiss,
the erring RSC member/s.― clearly, PizCorop controls the RSC members‘ conduct not only as to
the end to be achived but also as to the means of achieving the ends (Manaya v. Alabang
Country Club, G.R. No. 168988, June 19, 2007).

b. Since RSC is a ―labor-Only‖ contractor and, therefore, considered a mere agent of PizCorp.
PizCorp, as the real employer, has the legal obligation to report the RSC members as its
employees for membership with the SSS and remit its premium. Labor-Only Contractor; Work

"if an employer has the right to control and direct the work of an individual, not only as to the result to
be achieved, but also as to details by which the result is achieved, an employer/employee
relationship is likely to exist."

2. Pandoy, an electronics technician, worked within the premises of Perfect Triangle, an auto
accessory shop. He filed a complaint for illegal dismissal, overtime pay and other benefits
against Perfect Triangle, which refused to pay his claims on the ground that Pandoy was not its
employee but was an independent contractor. It was common practice for shops like Perfect
Triangle to collect the service fees from customers and pay the same to the independent
contractors at the end of each week. The auto shop explained that Pandoy was like a partner
who worked within its premises, using parts provided by the shop, but otherwise Pandoy was
free to render service in the other auto shops. On the other hand, Pandoy insisted that he still
was entitled to the benefits because he was loyal to Perfect Triangle, it being a fact that he did
not perform work for anyone else. Is Pandoy correct? Explain briefly.

Yes, pandoy is an employee of the Perfect triangle. Article 1767 of the Civil Code states that in a
contract of partnership two or more persons bind themselves to contribute money, property or
industry to a common funs, with the intention of dividing the profits among themselves. Not
one of these circumstances is present in this case. No written agreement exists to prove the
partnership between the parties. PANDOY did not contribute money, property or industry for
the purpose of engaging in the supposed business. There iS no proof that he was receiving a
share in the profits as a matter of course. Neither is there any proof that he had actively
participated in the management, administration and adoption of policies of the business (Sy, et
al v. Court of Appeals, G.R. No. 142293, February 27, 2003).

3. Lionel, an American citizen whose parents migrated to the U.S. from the Philippines, was
hired by JP Morgan in New York as a call center specialist. Hearing about the phenomenal
growth of the call center industry in his parents’ native land, Lionel sought and was granted a
transfer as a call center manager for JP Morgan’s operations in Taguig City. Lionel’s
employment contract did not specify a period for his stay in the Philippines. After three years of
working in the Philippines, Lionel was advised that he was being recalled to New York and being
promoted to the position of director of international call center operations. However, because
of certain "family reasons," Lionel advised the company of his preference to stay in the
Philippines. He was dismissed by the company. Lionel now seeks your legal advice on: (a)
whether he has a cause of action; (b) whether he can file a case in the Philippines; (c) what
are his chances of winning

a.

4.Matibay Shoe and Repair Store, as added service to its customers, devoted a portion of its
store to a shoeshine stand. The shoeshine boys were tested for their skill before being allowed
to work and given ID cards. They were told to be present from the opening of the store up to
closing time and were· required to follow the company rules on cleanliness and decorum. They
bought their own shoeshine boxes, polish, and rags. The boys were paid by their customers for
their services but the payment is coursed through the store’s cashier, who pays them before
closing time. They were not supervised in their work by any managerial employee of the store
but for a valid complaint by a customer or for violation of any company rule, they can be
refused admission to the store. Were the boys employees of the store? Explain. (5%)
5. Jim is the holder of a certificate of public convenience for a jeepney. He entered into a
contract of lease with Nick, whereby they agreed that the lease period is for one (1) year unless
sooner terminated by Jim for any of the causes laid down in the contract. The rental is thirty
thousand pesos (P30,000.00) monthly. All the expenses for the repair of the jeepney, together
with expenses for diesel, oil and service, shall be for the account of Nick. Nick is required to
make a deposit of three (3) months to answer for the restoration of the vehicle to its good
operating condition when the contract ends. It is stipulated that Nick is not an employee of Jim
and he holds the latter free and harmless from all suits or claims which may arise from the
implementation of the contract. Nick has the right to use the jeepney at any hour of the day
provided it is operated on the approved line of operation.

After five (5) months of the lease and payment of the rentals, Nick became delinquent in the
payment of the rentals for two (2) months. Jim, as authorized by the contract, sent a letter of
demand rescinding the contract and asked for the arrearages. Nick responded by filing a
complaint with the NLRC for illegal dismissal, claiming that the contract is illegal and he was just
forced by Jim to sign it so he can drive. He claims he is really a driver of Jim on a boundary
system and the reason he was removed is because he failed to pay the complete daily
boundary, of one thousand (P1,000.00) for 2 months due to the increase in the number of
tricycles.

[a] Jim files a motion to dismiss the NLRC case on the ground that the regular court has
jurisdiction since the agreement is a lease contract. Rule on the motion and explain.

Subtopics

 Importance on cause if action & jurisdiction

 Legal tests
o 4-fold test
o Economic dependency test
 Burden of proof
 Quantum of evidence
 Commencement
 Form
 Evidence
 Nomenclature
 Disputed Categories
o Independent contractor
o Partner
o Corporate officer
o Lessee
 Determination by courts /DOLE agencies
 Rights of an employee
 Prescription of employee claims
Cases

 Negros Slashers vs Teng, GR No. 187122, 22 February 2012

 Bernabe vs PBA, G.R. No. 192084, 14 September 2011
 Villamaria vs CA, GR No. 172101, 21 November 2006
 Tenazas vs R Villegas Transport, G.R. No. GR No. 192998, 02 April 2014
 Francisco vs NLRC, GR No. 170087, 31 August 2006
 Sonza vs ABS-CBN, GR No. 138051, 10 June 20045
 Republic vs AsiaPro Coop ( GR No. 172101, 23 November 2007)
 Sagun vs ANZ Global Services, GR No. 220399, 22 August 2016
 Casumpang vs Cortejo, G.R. No. 17228, 171228, 11 March 2015
 Gilles vs CA, GR No. 149273, 05 June 2009

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