LABOR W2-W3 REVIEWER

 EMPLOYER-EMPLOYEE RELATIONSHIP AND CLASSES OF

EMPLOYEES
 Employer-Employee Relationship
 Employment Relationship
 Legal notion widely used in countries around the world to refer to the
relationship between a person called an employee and an employer for
whom the employee performs work under certain conditions in return for
renumeration.
 Through this that reciprocal rights and obligations are created,
 Main vehicle through which the workers gain access to the rights and
benefits associated with employment in certain areas
 Nature and extent of employer’s rights and obligations towards workers.
 The existence of employment relationship is determined by law and not by
contract.
 Whether or not an employer-employee relationship exists between the
parties is a question of fact. The findings of the NLRC are accorded not
only respect but finality if supported by substantial evidence.
 Bond founded and governed by three constitutive elements which
without them the employment relationship will not take form.
o Economic
- produces and distributes incomes by operating within a
nexus of factor and product markets
o Legal/Governmental
- embodies a system of government in which managers
collectively exercise authority over the managed but are also
themselves involved in an intricate patter of political
relationships
- Affected and effected by law.
o Human/Social
- evolves from below out of face-to-face relations based on
shared interest, sentiments, and values among various
groups of employees.
 Business enterprise
o very heart of an economic system of private property and market
relationship. At once economic, political, and social institution.
o Main function is production of goods not governance of men.

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 o First concern is profitability and productivity, not welfare of its
members.
 Relationship of employer and employee is economic in character and purpose
because it involves creation or provision of goods and services that meet
material needs of people.
 Work – impersonal and objective.
 Working – done by a human being, a worker.
 “One cannot hire a hand; the worker always comes with it.”

 FOUR-FOLD TEST
1. Selection and engagement of the employee;
2. Payment of wages or salaries;
3. Exercise of the power of dismissal; or
4. Exercise of the power to control the employee (with respect to the means and
methods by which the work is to be accomplished)

 Azucena: The four-fold test is considered the traditional or conventional test of

employment, but it is not the sole test. There are other tests the Supreme Court
uses from time to time, such as the economic reality test and the economic
dependency test (Francisco v. NLRC)
 Control Test
o whether the employer controls or has reserved the right to control the
employee not only as to the result of the work to be done but also as to the
means and methods by which the same is to be accomplished.
o This last element is the most important index of the existence of the
relationship.
o Absent the power of control, there is no employer-employee relationship.
 Employment is determined by the right of control test and certain economic
parameters. Titles are weak indicators.
 Control test calls merely for the existence of right to control the manner of doing
the work not the actual exercise of the right.
 Employer – One who employs the services of others, one for whom employees
work and who pays their wages and salaries.
 Employee – one who is engaged in the service of another, who performs services
for another, who works for salary and wages. His work is subject to control of the
employer not only as to the result but the manner and the means of doing it.
 Note: There has been no uniform test to determine the existence of an employer-
employee relationship. Four-fold test may be regarded as the traditional or
conventional test of the employment question but it is not the sole test. There is
need to consider the existing conditions between the parties.
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 Two-tiered test
 Applies to cases where there are several parties alleged to be employers of one
individual.
1. The putative employer’s power to control employee with respect to the
means and methods by which the work is to be accomplished.
o employment relationship under the control test is determined under the
same concept, that is by asking whether “the person for whom the
services performed reserves the right to control not only the end to be
achieved but also the manner and means to be used in reaching such
end.
2. Underlying economic realities of the activity or relationship.
o Under the economic reality test, the proper standard of economic
dependence is whether the work is dependent on the alleged
employer for his continued employment in that line of business.
o The determinant factor is economic dependency of such individual.
The question to ask is – among the parties alleged to be the employer,
to whom is the individual economically dependent?

 KINDS OF EMPLOYEES :
 UNDER THE LABOR CODE:
1. Managerial - one who is vested with powers or prerogatives to lay down and
executes management policies and/or to hire transfer, suspend, layoff, recally,
discharge, assign or discipline an employee.
2. Supervisory – are those who, in the interest of employer, effectively recommend
such managerial actions if the exercise of such authority is not merely routinary
or clerical in nature but requires the use of independent judgment.
3. Rank and file – all employees not falling within any of the above definitions.

 Kinds of employees on the basis of tenure:

 Tenure – manner in which the office is held especially with regard to time.
a. Temporary - stays on the job for a defined or pre-agreed period.
b. Permanent - one appointed to a job for an undefined or indefinite period,
he is also called regular. May only be terminated upon a just/authorized
cause.

 General classifications/ nature of employment:

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 1. Regular – employees referring to those who have been “engaged to perform
activities in which are usually necessary or desirable in the usual business or
trade of the employer.
2. Project – employees referring to those “whose employment has been fixed for a
specific project or undertaking, the completion or termination of which has been
determined at the time of the engagement of the employee.
3. Seasonal – refer to those who work or perform services which are seasonal in
nature, and the employment is for the duration of the season.
4. Casual – referring to those who are not regular, project, or seasonal employees.
5. Fixed term – refer to employees whose term is freely and voluntarily determined
by the employer and employee. This is not provided in the labor code.

 Note: What is default employment?

o It is a regular employment. This means that, in the absence of specific
agreement to the contrary, the ER-EE relationship is deemed to be regular
in nature. In order to make employment some other kind of employment,
there must be a written contract of employment stipulating the specific
kind of employment.
o If there is no written employment contract, deemed regular . But if there is,
and it is only not clear that the parties have stipulated such other kinds of
employment, the employment relationship will still be considered regular.

 On the basis of entitlement to codal basic benefits:

 Statutory benefits – refer to those employment supplements granted under Title
I, Book III of this code and other labor and social laws. To these benefits, the
employees are entitled or not, depending on whether they are excluded by Article
82 or by the applicable law.

 On the basis of wage determination:

 Worker’s pay is determined by:
a. Time based- the wage corresponds to an amount of time spent on the job.
b. Non-time – pay is calculated based on the amount or kind of job done
regardless of the amount of time used.
 Note: basis of pay still not a test whether payee is employee or not.

 On the basis of salary component:

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  Daily paid – only the days worked. Maybe paid for instance, at the end of the
day or weekly perhaps every Friday.
 Monthly paid – all the days of month including the rest days and holidays.
Receive a salary that meets the legal minimum rate for each day of the month,
otherwise monthly paid is untrue.

 General right of employer over conditions of employment:

 Conditions of Employment
o laid down by law or by contract concluded individually with an employee or
collectively with a group
o may also arise from established practice in the enterprise.
 2 Kinds of Employment Conditions:
o Statutory – provided for by law
o Voluntary – initiated by the ER unilaterally or by contractual stipulation.
 An employer is free to regulate, according to his own discretion & judgment, all
aspects of EENT, including hiring, work assignments, working methods, time,
place and manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of EES, work supervision,
lay-off of workers and discipline, dismissal and recall of workers.
 Employers have the right to exercise management prerogatives to strengthen his
business competitiveness provided not unlawful/unjust/unfair; so long as they are
exercised in good faith for the advancement of his interest and not for the
purpose of defeating/circumventing the rights of the employees.
 May devise & implement new salary scales applicable only to future EES. (salary
distortion)

 Article 82, Labor Code: The provisions of this Title shall apply to employees in all
establishments and undertakings whether for profit or not, but not to government
employees, managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers, persons in the
personal service of another, and workers who are paid by results as determined by
the Secretary of Labor in appropriate regulations. GoMaFiMeDoPeWo

As used herein, "managerial employees" refer to those whose primary duty consists
of the management of the establishment in which they are employed or of a
department or subdivision thereof, and to other officers or members of the
managerial staff.

"Field personnel" shall refer to non-agricultural employees who regularly perform

their duties away from the principal place of business or branch office of the

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 employer and whose actual hours of work in the field cannot be determined with
reasonable certainty

 General rule: Title 1, Book III of the Labor Code dealing with hours of work,
weekly rest periods, holidays, service incentive leaves and service charges,
covers all employees in ALL establishments, whether for profit or not.
 Coverage:
o ALL employees in all establishments & undertakings whether for profit or
not
o Such standards apply only if there exists EER-EE relationship
 Exceptions: (GoMa-DoR-FiFa)
1. Government employees
2. Managerial employees including members of the managerial staff
3. Domestic helpers or persons in the personal service of another
4. Workers paid by Result
5. Field personnel
6. Members of the Family of the employer who are dependent on him for
support.
 Exclusion of certain categories of employees under Art. 82 cannot be applied to
employment benefits in general.
o For instance, manager is not entitled to overtime pay under Book III but
entitle to benefits under SSS.
o IN short, entitlement or non-entitlement of these benefits is a basis of
employees’ classification although entitlement depends on which benefit is
being claimed.

 Government Employees
 Refer to employees of government agencies, instrumentalities, or political
subdivisions and of government corporations that are not incorporated under the
corporation code. (i.e those which have original charters)
 The terms and conditions of their employment are governed by Civil Service Law,
rules and regulations.

 MANAGERIAL EMPLOYEES
 Refer to those whose primary duty consists of the management of the
establishment in which they are employed or of a department or subdivision
thereof and to other members of the managerial staff.
 Not covered by this title because they are employed by the reason of their
special training, experience, or knowledge. Therefore the the value of their work
cannot be measured in terms of hours.

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  Note: Definition only applies to the 8-hour Labor Law.
 They customarily and regularly the direct the work of two or more employees
herein.
 They have the authority to hire or fire other employees of lower rank, or their
suggestions and recommendations as to the hiring and firing and as to the
promotion or any other change of status of other employees are given particular
weight.
 Under the direct supervision of the EER, and assist in the planning, organizing,
staffing, directing controlling, communicating and in making decisions in
attaining the company’s set goals & objectives
 Includes supervisors (only as regards Art 82) – likewise responsible for the
effective & efficient operation of their respective depts
 Three types of managerial employees as follows:
o First line managers – also called direct operating employees only and do not
supervise other managers
o Middle managers – direct the activities of other managers and sometimes also
those of operating employees
o Top managers – responsible for the overall management of the organization end
establishes operating policies and guides the organization’s interactions with it
environment.

Managerial Employees (Labor Managerial employees (Labor

standards) Article 82. relations) Art. 219.

Used only for the poses of Book III. Used only for purposed of Book V
(working conditions, rest periods, (forming and joining unions, certification
entitlement to benefits) elections, collective bargaining.)

As to duties As to duties

One whose primary duty consists of the
management of the establishment in
which they are employed or of a
department or subdivision thereof and to
other members of the managerial staff.
(Art. 82)
One whose is vested with powers or
prerogatives to lay down and execute
management policies, and/or to hire,
transfer, suspend, layoff, recall discharge
assign, or discipline employees. (Art. 212)

As to inclusion Of supervisors

Supervisors are deemed members of the Supervisors are not members of the

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 managerial staff. managerial staff.

 Domestic helpers or persons in the personal service of another

 They are those who:
1. Perform services in the employer’s home which are usually necessary and
desirable for the maintenance and enjoyment thereof.
2. Minister to the personal comfort, convenience, or safety of the employer, as
well as the members of the employer’s household.
 They are not covered by this title because the terms and conditions of
employment are governed by the provisions of R 10361 (Batas Kasambahay)
 However, house personnel hired by a ranking company official, a foreigner, but
paid for by the company itself, to maintain a staff house provided for the official,
not the latter’s domestic helpers but regular employees of the company.

 Workers paid by result

 They are those whose work is not measured in accordance with the time they
spent to complete the work. The time element is not a material consideration.
 Such work is measured either
a. By piece
b. By task (Azucena p. 224)
 Laborer with no fixed salary, wage, or renumeration but receiving a compensation
from his employer an uncertain & variable amount depending upon the work done
or the result of said work (piece work), irrespective of the time employed.

 Field personnel
 They are non-agricultural employees:
a. Who regularly perform their duties away from the principal place of business
or branch office of the employer and
b. Whose actual hours of work in the field cannot be determined with
reasonable certainty.
 those whose performance of their job/service is not supervised by the ER or his
rep, the workplace being away from the principal office and whose hours & days
of work cannot be determined w reasonable certainty; hence they are paid
specific amount for rendering specific service or performing specific work.
 drivers that are required to be at specific places at specific times are not field
personnel
 in case of fishermen although performing non-agricultural work away from the
office, the fact that they have no choice but to remain on board the vessel, they
are still under constant supervision by the ER thru the vessel’s patron/master

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 Family Members dependent on the employer for support

2a.Kinds of employment

Art. 219 Labor Code

ART. 219. [212] Definitions. (a) "Commission" means the National Labor Relations
Commission or any of its divisions, as the case may be, as provided under this Code.
(b) "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions
in the regional offices established under Presidential Decree No. 1, in the Department of
Labor.
(c) "Board" means the National Conciliation and Mediation Board established under
Executive Order No. 126.
(d) "Council" means the Tripartite Voluntary Arbitration Advisory Council established
under Executive Order No. 126, as amended.
(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 the 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.
(g) "Labor organization" means any union or association of employees which exists in
whole or in part for the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment.
(h) "Legitimate labor organization" means any labor organization duly registered with
the Department of Labor and Employment, and includes any branch or local thereof.

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(i) "Company union" means any labor organization whose formation, function or
administration has been assisted by any act defined as unfair labor practice by this
Code.
(j) "Bargaining representative" means a legitimate labor organization or any officer or
agent of such organization whether or not employed by the employer.
(k) "Unfair labor practice" means any unfair labor practice as expressly defined by this
Code.
(l) "Labor dispute" includes any controversy or matter concerning terms and conditions
of employment or the association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of employment, regardless
of whether the disputants stand in the proximate relation of employer and employee.
(m) "Managerial employee" is one who is vested with the powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise
of such authority is not merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.
(n) "Voluntary Arbitrator" means any person accredited by the Board as such, or any
person named or designated in the Collective Bargaining Agreement by the parties to
act as their Voluntary Arbitrator, or one chosen with or without the assistance of the
National Conciliation and Mediation Board, pursuant to a selection procedure agreed
upon in the Collective Bargaining Agreement, or any official that may be authorized by
the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written
request an(o) "Strike" means any temporary stoppage of work by the concerted action
of employees as a result of an industrial or labor dispute.
(p) "Lockout" means any temporary refusal of an employer to furnish work as a result
of an industrial or labor dispute.
(q) "Internal union dispute" includes all disputes or grievances arising from any
violation of or disagreement over any provision of the constitution and by laws of a
union, including any violation of the rights and conditions of union membership provided
for in this Code.
(r) "Strike-breaker" means any person who obstructs, impedes, or interferes with by
force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages,
hours or conditions of work or in the exercise of the right of self-organization or
collective bargaining.
(s) "Strike area" means the establishment, warehouses, depots, plants or offices,
including the sites or premises used as runaway shops, of the employer struck against,
as well as the immediate vicinity actually used by picketing strikers in moving to and fro

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before all points of entrance to and exit from said establishment agreement of the
parties to a labor dispute.

(Managerial, Sup, Rank and File)

2b. Nature of Employment

Art. 295

IRR, Book 6, Rule 1, Section 6

 Probationary employment
 6 months is neither the minimum or maximum period of probationary
employment. It is mentioned in the law for purposes of setting the standard.
Probationary period may be for a day, a week, a month or several months,
depending on the reasonable discretion of management.
 6-month probationary period should be reckoned from “the date of appointment
up to the same calendar date of the 6month following.”
 Probationary period may be extended, but only upon the mutual agreement in
writing by the employer and the probationary employee.
 IF the probationary employee is allowed to work beyond the probationary period,
the effect is the e is considered as a regular employee.
 If there is no written contract providing for probationary employment, employee is
considered regular from day one. And even if there is one, he is deemed regular
if there is no stipulation on probationary period.

 Ground to terminate probationary employment (art. 281):

1. Just cause
2. Authorized cause
3. When the probationary employee fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the
employee at the start of the employment.
 Note: procedural due process is required in termination of probationary
employment only in the case of numbers 1 and 2 above. It is not required if the
3rd ground above is invoked. Except when the employer prescribes its company
rules, a procedure for such termination, in which case it should be followed in
accordance with the Abbot Laboratories Doctrine (Contractual Due process)
 Termination of probationary employee must be valid and must be done prior to
the lapse of probationary period. Termination a few days after the lapse of

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 probationary period cannot be done without due process as he has already
become a regular employee by that time.

 REGULAR
 Under the labor code, regular employment may be attained in either of the three
ways, namely:
1. By nature of work. – deemed regular when the employee has been engaged
to perform activities which are reasonably necessary or desirable in the usual
business or trade of it employer.
2. By period of service. – the employment is reckoned as regular when the
employee has rendered at least one year of service, whether such service is
continuous or broken, with respect to the activity in which he is employed and
his employment shall continue while such activity exists.
3. By probationary employment – the employment is considered regular when
the employee is allowed to work after a probationary period.
 Note: Manner and method of payment of wage or salary is immaterial to the
issue of whether an employee is regular or not.

 PROJECT EMPLOYMENT
 Litmus test of project employment: whether or not the project employees
were assigned to carry out a specific project or undertaking, the duration and
scope of which were specified at the time the employees were engaged for that
project.
 A true project employee should be assigned to a project which begins and ends
at determined or determinable times and be informed thereof at the time of the
hiring.

 6 indicators of project employment:

1. duration of the specific/identified undertaking for which the worker is
engaged is reasonably determinable.
2. Such duration, as well as the specific work/service to be performed are
defined in an employment agreement and is made clear to the employee at
the time of the hiring.
3. The work or service performed is in connection with the particular project or
undertaking for which he is engaged.
4. Employee, while not employed and awaiting engagement, is free to offer his
services to any other employer.
5. A report of the termination of employment in the particular project.
undertaking is submitted to the dole regional office having jurisdiction over

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 the workplace, within 30 days following the date of his separation from
work.
6. An undertaking in the employment contract by the employer to pay
completion bonus to the project employee as practiced by most construction
companies.
 Length of service is not a controlling determinant of employment tenure.

 Principles of project employment:

a. Project employees should be informed of their status as such at inception of the
employment relationship
b. there must be a written contract of project employment stating the duration of the
project employment as well as the particular work or service to be performed. A
written project employment contract is an indispensable requirement.
c. intervals in employment contracts indicate project employment.
d. continuous, as opposed to intermittent, re hiring shows that employee is regular.
e. project to project basis of employment is valid

 On termination of project employment:

1. project employees enjoy security of tenure only during the term of their project
employment.
2. project employees have presumably become regular employees if they are
allowed to work beyond the completion of the project or any phase thereof to
which they were assigned or after the “day certain” which they and their employer
have mutually agreed for its completion. Having become regular employees, they
can no longer be terminated on the basis of the completion of the project or any
phase thereof to which they were deployed.

 SEASONAL
 A seasonal employee can become a regular seasonal employee provided the
following requisites are complied with:
1. the seasonal employee should perform work or services that are seasonal in
nature
2. they must have also been employed for more than one season
 A regular seasonal worker can file an illegal dismissal case in the event he is not
hired for the next season. the reason is, being a regular seasonal employee, the
employer should rehire him in the next season. during offseason, his employment
is deemed suspended and he is considered as being on leave of absence
without pay.

 CASUAL

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  the most important distinguishing feature of casual employment is that the work
or job for which he was hired is merely incidental to the principal business of the
employer and such work or job is for a definite period made known to the
employee at the time of the engagement.
 A casual employee becomes regular after one year of service by operation of
law. the one-year period should be reckoned from the hiring date. Repeatedly
hiring of a casual employee makes them a regular employee.

 FIXED TERM
 the two requisites are criteria for the validity of a fixed term contract of
employment are as follows:
1. the fixed period of employment was knowingly and voluntarily agreed upon by
the parties, without any force, duress or improper pressure being brought to
bear upon the employee and absent any other circumstances vitiating his
consent.
2. it satisfactorily appears that the employer and employee dealt with each other
on more or less equal terms with no moral dominance whatever being
exercised by the former on the latter.
 fix term employment is valid even if the job is directly related to the principal
business of the employer. the reason is that, fixed term employment is the only
exception to the rule that one becomes a regular if he is made to perform
activities directly related to the principal business of the employer. (regularity by
virtue of nature of work)
 a fixed term employee becomes regular when:
1. he is allowed to work beyond the agreed fixed term
2. there are successive renewals of fixed period contracts
 Note: the practice of hiring employees on a uniformly fixed 5-month basis and
replacing them upon the expiration of their contracts with other workers with the
same employment status circumvents their right of security of tenure.

3. Job contracting

a. Article 106 to Article 109 of the Labor Code

b. Department Circular No. 174

c. Effects of Labor-Only Contracting

d. Trilateral relationship in job contracting

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