Jomar U.

Lozada MPA
5:30-8:30 TTHS

May 27, 2015

Prof. Victorino D.Villaganas, Ph.D.,

REACTION PAPER
In

Personnel Administration and Supervision

The determination of whether employer-employee relation exists between the parties is

very important. For one, entitlement to labor standards benefits such as minimum
wages, hours of work, overtime pay, etc., or to social benefits under laws such as social
security law, workmens compensation law, etc., or to termination pay, or to unionism
and other labor relations provisions under the Labor Code, are largely dependent on the
existence of employer-employee relationship between the parties.
Another thing is that the existence of employer-employee relationship between the
parties will determine whether the controversy should fall within the exclusive
jurisdiction of labor agencies or not. If for example the parties are not employeremployee of each other, respectively, but perhaps partners or associates, then any
dispute between them will be not be covered by the jurisdiction of labor agencies but by
regular courts.
Four-fold test elements

The usual test used to determine the existence of employer-employer relationship is the
so-called four-fold test. In applying this test, the following elements are generally
considered:
1.

Right to hire or to the selection and engagement of the employee.

2.

Payment of wages and salaries for services.

3.

Power of dismissal or the power to impose disciplinary actions.

4.

Power to control the employee with respect to the means and methods by which
the work is to be accomplished. This is known as the right-of-control test.

Existence of employer-employee relationship; how proved - G.R. No. 169757

G.R. No. 169757
Before a case for illegal dismissal can prosper, it must first be established that an
employer-employee relationship existed between petitioner and respondent.
The elements to determine the existence of an employment relationship are: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employers power to control the employees conduct. The most
important element is the employers control of the employees conduct, not only as to
the result of the work to be done, but also as to the means and methods to accomplish
it.

It is settled that no particular form of evidence is required to prove the existence of an

employer-employee relationship. Any competent and relevant evidence to prove the
relationship may be admitted.
In this case, the documentary evidence presented by respondent to prove that he was
an employee of petitioner are as follows: (a) a document denominated as "payroll"
(dated July 31, 2001 to March 15, 2002) certified correct by petitioner, which showed
that respondent received a monthly salary ofP7,000.00 (P3,500.00 every 15th of the
month and anotherP3,500.00 every 30th of the month) with the corresponding
deductions due to absences incurred by respondent; and (2)copies of petty cash
vouchers, showing the amounts he received and signed for in the payrolls.
The said documents showed that petitioner hired respondent as an employee and he
was paid monthly wages ofP7, 000.00. Petitioner wielded the power to dismiss as
respondent stated that he was verbally dismissed by petitioner, and respondent,
thereafter, filed an action for illegal dismissal against petitioner. The power of control
refers merely to the existence of the power. It is not essential for the employer to
actually supervise the performance of duties of the employee, as it is sufficient that the
former has a right to wield the power. Nevertheless, petitioner stated in his Position
Paper that it was agreed that he would help and teach respondent how to use the studio
equipment. In such case, petitioner certainly had the power to check on the progress
and work of respondent.
On the other hand, petitioner failed to prove that his relationship with respondent was
one of partnership. Such claim was not supported by any written agreement. The Court
notes that in the payroll dated July 31, 2001 to March 15, 2002, there were deductions

from the wages of respondent for his absence from work, which negates petitioners
claim that the wages paid were advances for respondents work in the partnership. In
Nicario v. National Labor Relations Commission, the Court held:
It is a well-settled doctrine, that if doubts exist between the evidence presented by the
employer and the employee, the scales of justice must be tilted in favor of the latter. It is
a time-honored rule that in controversies between a laborer and his master, doubts
reasonably arising from the evidence, or in the interpretation of agreements and writing
should be resolved in the formers favor. The policy is to extend the doctrine to a greater
number of employees who can avail of the benefits under the law, which is in
consonance with the avowed policy of the State to give maximum aid and protection of
labor. This rule should be applied in the case at bar, especially since the evidence
presented by the private respondent company is not convincing.
Based on the foregoing, the Court agrees with the Court of Appeals that the evidence
presented by the parties showed that an employer-employee relationship existed
between petitioner and respondent.
In termination cases, the burden is upon the employer to show by substantial evidence
that the termination was for lawful cause and validly made. Article 277 (b) of the Labor
Code puts the burden of proving that the dismissal of an employee was for a valid or
authorized cause on the employer, without distinction whether the employer admits or
does not admit the dismissal. For an employees dismissal to be valid, (a) the dismissal
must be for a valid cause, and (b) the employee must be afforded due process.
Procedural due process requires the employer to furnish an employee with two written
notices before the latter is dismissed: (1) the notice to apprise the employee of the

particular acts or omissions for which his dismissal is sought, which is the equivalent of
a charge; and (2) the notice informing the employee of his dismissal, to be issued after
the employee has been given reasonable opportunity to answer and to be heard on his
defense. Petitioner failed to comply with these legal requirements; hence, the Court of
Appeals correctly affirmed the Labor Arbiters finding that respondent was illegally
dismissed, and entitled to the payment of back wages, and separation pay in lieu of
reinstatement.
Right of control test is considered as the most important element in determining the
existence of employment relation. Of the above-mentioned elements, the right of control
test is considered as the most important element in determining the existence of
employment relation. The control test initially found application in the case of Viaa vs.
Al-Lagadan and Piga, where the court held that there is an employer-employee
relationship when the person for whom the services are performed reserves the right to
control not only the end achieved but also the manner and means used to achieve that
end.
Control test thus refers to the employers power to control the employees conduct not
only as to the result of the work to be done but also with respect to the means and
methods by which the work is to be accomplished.
In applying this test, it is the existence of the right, and not the actual exercise thereof,
that is important.
Requirements