Employer-Employee Relationship

A basic concept in labor law is that of “employer-employee relationship”. When is an employer-employee relationship deemed to exist? The Supreme Court had once again occasion to answer this question in the case of TELEVISION AND PRODUCTION EXPONENTS, INC. and/or ANTONIO P. TUVIERA versus ROBERTO C. SERVAÑA,   (G.R. No.  167648, January 28, 2008).

The case involves a complaint for illegal dismissal and nonpayment of benefits filed by Servana against TAPE.  Servana alleged that he was first connected with Agro-Commercial Security Agency but was later on absorbed by TAPE as a regular company guard.

On its part TAPE contended that Servana was merely a “talent” and/or independent contractor.

In resolving the issue of employer-employee relationship the Supreme Court made use of the four-fold test:

“Jurisprudence is abound [sic] with cases that recite the factors to be considered in determining the existence of employer-employee relationship, namely: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee with respect to the means and method by which the work is to be accomplished. The most important factor involves the control test. Under the control test, 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.

The Court further observed that these factors were present in the case.

First, as to the selection and engagement of the employee:

“Clearly, respondent was hired by TAPE. Respondent presented his identification card to prove that he is indeed an employee of TAPE. It has been in held that in a business establishment, an identification card is usually provided not just as a security measure but to mainly identify the holder thereof as a bona fide employee of the firm who issues it.

Second, as to the payment of wages:

“Respondent claims to have been receiving P5,444.44 as his monthly salary while TAPE prefers to designate such amount as talent fees.  Wages, as defined in the Labor Code, are remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for service rendered or to be rendered.  It is beyond dispute that respondent received a fixed amount as monthly compensation for the services he rendered to TAPE.”

Thirdly, as to the power of dismissal:

“The Memorandum informing respondent of the discontinuance of his service proves that TAPE had the power to dismiss respondent.”

And finally, as to the power of control, which is the most important test:

“Control is manifested in the bundy cards submitted by respondent in evidence.  He was required to report daily and observe definite work hours.”

What is significant are the concrete objects which for the Supreme Court served as evidences for the existence of an employer-employee relationship between the parties, namely:

(1) The identification card;

(2) The fixed amount as monthly compensation;

(3) The Memorandum of discontinuance; and

(4) The bundy cards.

Where these or similar evidences are present the conclusion is well-nigh inevitable that an employer-employee relationship exists

(This article was published in the Sept. 3, 2008 edition of the Negros Times, in my column “Law and Management”. Click here.)

4 thoughts on “Employer-Employee Relationship

  1. Dear Atty. Cortes,

    Where can I find documents that include the complete provisions and details about the Employer-Employee Relationship or the NO Employer-Employee Relationship? Does the same apply to government agencies?


  2. Dear Atty. Cortes,

    Where may I find a documentation of the four-fold test which I may cite as the legal basis for recognizing the existence of an employer-employee relationship?

    Please respond.

    Thank you.



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