40 Questions
What is the primary purpose of the two-tiered test in determining the relationship between the employer and employee?
To consider the totality of circumstances surrounding the relationship
What is one of the factors considered in determining the relationship between the employer and employee?
The extent of the worker's investment in equipment and facilities
What is the name of the court case cited in the text?
Francisco v. NLRC
What type of companies did Reach-All supply sales persons to?
Pharmaceutical companies
Who trained the sales persons in the art of selling?
Reach-All
Who taught the sales persons about the pharmacological qualities of the products?
The pharmaceutical companies
Who paid the salaries of the sales persons?
Reach-All
What is the question being asked in the bar question?
Can the sales persons demand to be absorbed as employees of the pharmaceutical firms?
Why did the Smarty Food Company engage the services of Jack Perez?
To avoid labor relations problems
What was Jack Perez's role in the arrangement with the Smarty Food Company?
He supplied workers to the company and paid their wages
Why did the Smarty Food Company terminate its service contract with Jack Perez?
Due to the labor union's request for recognition and collective bargaining negotiations
Who did the workers assigned by Jack Perez join after two years?
The United Restaurant Workers Union
What happened to the workers assigned by Jack Perez after the company terminated its service contract?
They were prevented from entering the company premises
How did the Smarty Food Company address its manpower needs after terminating its contract with Jack Perez?
It secured its manpower needs from another service agency
What was the arrangement between Jack Perez and the Smarty Food Company?
Economic arrangement involving a monthly fee
What was the main reason for the labor union's request to the Smarty Food Company?
To recognize the labor union and negotiate collective bargaining
What is the nature of a promotion in an employment relationship?
A gift or reward
What is the consequence of refusing a promotion according to the Labor Code?
No consequence
What is the main reason why Carding has no cause of action against LKG Garments Inc.?
The company has the right to change work schedules
According to the Labor Code, what is the basis of an overtime claim?
An employee's having been 'permitted to work' overtime
What is the maximum number of hours of overtime work that Carding can now expect according to the changed work schedule?
Four hours
What is the percentage of additional pay that LKG Garments Inc. pays to its employees for work rendered in excess of eight hours?
35% of their regular hourly wage
What is the reason why Carding complains about the change in work schedule?
He can only earn up to a maximum of four hours of overtime pay
What is the ruling of the Supreme Court in Manila Jockey Employees' Union v. Manila Jockey Club?
The basis of overtime claim is an employee's having been 'permitted to work'
What can be inferred about an employer who fails to report a worker as an employee to the SSS?
The employer is rewarded for neglecting their obligations.
What is required for a payroll to disprove the employment of a person?
A true and complete list of employees
In a controversy between a laborer and their master, how are doubts resolved?
In favor of the laborer
What is not considered control in the 'control test'?
The power to approve or reject organizational plans
What is necessary to prove the existence of an employer-employee relationship?
The worker must be subject to definite working hours
Why was there no employer-employee relationship in the case of Reyes v. Glaucoma Research Foundation, Inc.?
The worker performed their job at their own pleasure
What is the important factor to consider in the 'control test'?
Control over the method of work
What can be inferred about a worker who is compensated according to the result of their efforts?
An employer-employee relationship does not exist
What was the main purpose of the respondent's act of regularly updating petitioners?
To monitor the result of petitioners' work
What is the crucial element in determining an employer-employee relationship?
The power of control
What is the nature of the relationship between petitioners and respondent according to the Sales Agency Agreement?
Independent contractorship
What is the significance of the two-tiered test pronounced in the Francisco case?
It is a test to evaluate the power of control
What is the outcome of the respondent's actions in terms of the employer-employee relationship?
An independent contractorship is established
What is the primary evidence of the nature of the parties' relationship?
The Sales Agency Agreement
What is the intention of the parties at the time of signing the agreement?
To create an independent contractorship
What is the conclusion based on the evidence on record?
An independent contractorship exists
Study Notes
Distinctions between Transfer and Promotion
- An employee is not bound to accept a promotion, which is considered a gift or reward.
- Refusal to accept a promotion is a valid exercise of a right and cannot be considered insubordination or willful disobedience of a lawful order.
- An employee's refusal to accept a promotion cannot be the basis of dismissal from service.
Work Schedule and Overtime
- A change in work schedule is a management prerogative of the employer.
- An employee does not have a cause of action against the employer if a change in work schedule affects their overtime pay.
- Article 97 of the Labor Code does not guarantee an employee a certain number of hours of overtime work.
- The basis of overtime claim is an employee's having been "permitted to work".
Determining Employer-Employee Relationship
- The two-tiered test is used to determine the employer-employee relationship, considering the totality of circumstances.
- The test considers factors such as:
- The extent to which the services performed are an integral part of the employer's business.
- The extent of the worker's investment in equipment and facilities.
- The nature and degree of control exercised by the employer.
- The worker's opportunity for profit and loss.
- The amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise.
- The permanency and duration of the relationship between the worker and the employer.
- The degree of dependency of the worker upon the employer for their continued employment in that line of business.
Case Laws and Rulings
- In Francisco v. NLRC (2006), the Supreme Court ruled that the two-tiered test is used to determine the employer-employee relationship.
- In Manila Jockey Employees' Union v. Manila Jockey Club (2007), the Supreme Court held that the basis of overtime claim is an employee's having been "permitted to work".
- In Southeast International Rattan, Inc. v. Coming (2014), the Supreme Court ruled that the fact that a worker was not reported as an employee to the SSS is not conclusive proof of the absence of employer-employee relationship.
- In Reyes v. Glaucoma Research Foundation, Inc. (2015), the Supreme Court ruled that doubts reasonably arising from the evidence are resolved in favor of the laborer.
- In Skycable Corporation (2016), the Supreme Court ruled that where a person who works for another performs their job more or less at their own pleasure, not subject to definite hours or conditions of work, and is compensated according to the result of their efforts, no employer-employee relationship exists.
- In Valeroso v. Skycable Corporation (2016), the Supreme Court ruled that the presence of the power of control is indicative of an employment relationship, while the absence thereof is indicative of independent contractorship.
Understand the differences between transfers and promotions, and the rights of employees when it comes to refusing a promotion. Learn about the legal implications of refusing a promotion and how it affects employee-employer relationships.
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