Employer Employee Relationship Issue in a Labor Dispute
While the Labor Arbiter (LA) has no jurisdiction over dispute that does not arise from employer-employee relationship, the determination of whether such relationship exists lies with the LA also.
In the case of Atok Big Wedge Company, Inc. vs. Gison (G.R. No. 169510, August 8, 2011), the Supreme Court (SC) held that well-entrenched is the doctrine that the existence of an employer-employee relationship is ultimately a question of fact and that the findings thereon by the Labor Arbiter and the NLRC shall be accorded not only respect but even finality when supported by substantial evidence. Being a question of fact, the determination whether such a relationship exists between petitioner and respondent was well within the province of the Labor Arbiter and the NLRC.
To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or the so-called “control test.”
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.
In a case where, among other things, the individual was not required to report everyday during regular
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office hours of the company, there can be no control. The employee’s monthly retainer fees were paid to him either at his residence or a local restaurant. Atok Big Wedge Company, Inc. vs. Gison (G.R. No. 169510, August 8, 2011)
More importantly, the company did not prescribe the manner in which the complainant would accomplish any of the tasks in which his expertise as a liaison officer was needed; he was left alone and given the freedom to accomplish the tasks using his own means and method.
The individual was assigned tasks to perform, but the company did not control the manner and methods by which he performed these tasks. Verily, the absence of the element of control on the part of the company engenders a conclusion that he is not an employee of the company.
Applying the aforementioned test, an employer-employee relationship is apparently absent in such case according to the SC.
Moreover, the absence of the parties’ retainership agreement notwithstanding, the complainant clearly admitted that the company hired him in a limited capacity only and that there will be no employer-employee relationship between them.
Complainant was well aware of the agreement that he was hired merely as a liaison or consultant of the company and he agreed to perform tasks for the company on a temporary employment status only. However, he anchored his claim that he became a regular employee of the company based on his contention that the “temporary” aspect of his job and its “limited” nature could not have lasted for eleven years unless some time during that period, he became a regular employee of the company by continually performing services for it.
The premise that regular employees are those who perform activities which are desirable and necessary for the business of the employer is not determinative in this case. In fact, any agreement may provide that one party shall render services for and in behalf of another, no matter how necessary for the latter’s business, even without being hired as an employee.
Hence, the individual’s length of service and the company’s repeated act of assigning him some tasks to be performed did not result in his entitlement to the rights and privileges of a regular employee.
Furthermore, despite the fact that the company made use of the services of respondent for eleven years, he still cannot be considered as a regular employee of petitioner.
Article 280 [now 295] of the Labor Code, in which the lower court used to buttress its findings that respondent became a regular employee of the petitioner, is not applicable in the case at bar. Indeed, the Court has ruled that said provision is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees, i.e., regular employees and casual employees, for purposes of determining the right of an employee to certain benefits, to join or form a union, or to security of tenure; it does not apply where the existence of an employment relationship is in dispute.
It is, therefore, erroneous to rely on Article 295 in determining whether an employer-employee relationship exists between the individual and the company.
Considering that there is no employer-employee relationship between the parties, the termination of complainant’s services by the company after due notice did not constitute illegal dismissal warranting his reinstatement and the payment of full backwages, allowances and other benefits.
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