NOTES 1 : LABOR LAW AND SOCIAL LEGISLATION I. Fundamental Principles and Concepts A. Legal Basis 1. 1987 Constitution (State Policies, Bill of Rights and Social Justice) Sec. 9, Art. II – The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through polici es that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all. Sec. 10, Art. II – The State shall promote social justice in all phases of national development. Sec. 11, Art. II – The State values the dignity of every human person and guarantees full respect for human rights. Sec. 13, Art. II – The State recognizes the vital role of the yo uth in nation - building and shall promote and protect their physical, moral, spiritual, intellectual, and social well - being. It shall inculcate in the youth patriotism and nationalism and encourage their involvement in public and civic affairs. Sec. 14, Art . II – The State recognizes the role of women in nation - building and shall ensure the fundamental equality before the law of women and men. Sec. 18, Art. II – The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Sec. 20, Art. II – The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments. Sec. 1, Art. III – No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. “An erring seaman is given a written notice of the charge against him and is afforded an opportunity to explain or defend himself. Xxx” (Sec. 17, POEA - SE C; Skippers Pacific, Inc. v. Mira; Maersk - Filipinas Crewing, Inc. vs. Avestruz, G.R. No. 207010, February 18, 2015). Sec. 4, Art. III – No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peacea bly to assemble and petition the government for redress of grievances. Sec. 7, Art III – The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development shall be afforded the citizen, subject to such limitations as may be provided by law. Sec. 8, Art. III – The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. Sec 10, Art. III – No law impairing the obligation of contracts shall be passed. Sec. 16, Art. III – All persons shall have the right to a speedy disposition of their cases before all judicial, quasi - judicial, or administrative bodies. Sec. 18 (2), Art. III – No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall h ave been duly convicted. Sec. 1, Art. XIII – The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultura l inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. Sec. 2, Art. XIII – The promotion of social justice sha ll include the commitment to create economic opportunities based on freedom of initiative and self - reliance. Sec. 3, Art. XIII – The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self – organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision – making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth. Consis tent with the State’s avowed policy to afford full protection to labor as enshrined in the Constitution, the POEA - SEC was designed primarily for the protection and benefit of Filipino seafarers in the pursuit of their employment on board ocean - going vessel s. As such, it is a standing principle that its provisions are to be construed and applied fairly, reasonably, and liberally in their favor (Racelis vs. United Philippine Lines, Inc., G.R. No. 198408, November 12, 2014). Sec. 13, Art XIII – The State shall establish a special agency for disabled persons for their rehabilitation, self - development and self - reliance, and their integration into the mainstream of society. Sec. 14, Art. XIII – The State shall protect working women by providing safe and healthful wo rking conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation. NOTE 2: Civil Code (Article 1700, 1702) Art. 1700 – The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects. Art. 1701 – Neither capital nor labor shall act oppressively against the other or impair the interest or convenience of the public. The preferential treatment given by our law to labor, however, is not a license for abuse. It is not a signal to commit acts of unfairness that will unreasonably infringe on the property rights of the company. Both labor and employer have social utility, and the law is not so biased that it does not find a middle ground to give each their due (Milan, et al. vs. NLRC, G.R. No. 202961, February 4, 2015). Art. 1702 – In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. B. Construction in Favor of Labor How to construct labor laws? Art. 4. Construction in Favor of Labor. All doubts in the implementation and interpretation of the provisions of thi s Code, including its implementing rules and regulations, shall be resolved in favor of labor. If doubts exist between the evidence presented by the employer and that of the employee, the scales of justice must be tilted in favor of the latter (Hocheng Phi lippines Corporation vs. Farrales, G.R. No. 211497, March18, 2015). However, not all labor disputes should be resolved in favor of labor. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play (St. Luke’s Medical Center Employee’s Assoc. vs. NLRC, G.R. No. 162053, March 7, 2007). Reasons for Affording Greater Protection to Employees: 1. In accordance with the doctrine that those who have less in life should have more in law (Eastern Shipping Lines vs. POEA, G.R. No. L - 76633, October 18, 1988). 2. There is a greater supply and demand for labor; 3. In accordance with the doctrine that those who have less in life should have more in law; and 4. The need for employment by labor comes from vital, and even desperate necessity (Sanchez vs. Harry Lyons Construction Inc., G.R. No. L - 2779, October 18, 1950). Extent of Protection to Labor The protection to labor extends to an employee who is abused either by the employer or the union leadership of their respective representatives. C. Social Justice What is Social Justice? The aim and the reason and, therefore, the justification of labor laws is social justice (Azucena, 2015). Social Justice is neither communism, nor despotism, nor atomism nor anarchy, but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure economic stability of all the component elem ents of society through the maintenance of proper economic and social equilibrium in the interrelations of the members of the community, constitutionality, through the adoption of measures legally justifiable, or extra - constitutionality, through the exerci se of powers underlying the existence of all governments, on the time - honored principle of salus populi est supreme lex” (Calalang vs. Williams, 70 Phil. 726, 1940). In essence, social justice is both a juridical principle and a societal goal (Azucena, 201 5) NOTES 3: Management Prerogative Management Prerogati ve This refers to an employer's right to freely regulate all aspects of employment through the adoption of strategies or schemes geared toward attaining profit, subject, however, to limitations set by law, the CBA and the principles of fairness and justice and must be effected in good faith and not tainted by unfair labor practice. General Rule: It is the right of an Er (employer) to regulate, according to his own discretion and judgment, all aspects of employment, including: a. Discipline The Er has the pr erogative to instill discipline in his Ees (employees) and to impose reasonable penalties, including dismissal, on erring Ees pursuant to company rules and regulations. (San Miguel Corporation v. NLRC, G.R. No. 78277, May 12, 1989) b. Transfer of Employees In the pursuit of its legitimate business interests, especially during adverse business conditions, the management has the prerogative to transfer or assign Ees from one office or area of operation to another provided there is no demotion in rank or dimin ution of salary, benefits and other privileges and the action is not motivated by discrimination, bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of Ers to control and manage thei r enterprises effectively. c. Productivity Standard An Er is entitled to impose productivity standards for its workers, and in fact, non - compliance may be visited with a penalty even more severe than demotion. Failure to meet the sales quota assigned to e ach of them constitute a just cause of their dismissal, regardless of the permanent or probationary status of their employment. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute ju st cause for dismissal. (Leonardo vs. NLRC, G.R. No. 125303,June 16, 2000) d. Bonus It is an amount granted and paid to an Ee for his industry and loyalty which contributed to the success of the Ers business and made possible the realization of profits. General Rule: Bonus is not demandable as a matter of right. It is a management prerogative given in addition to what is ordinarily received by or strictly due to recipient. (Producers Bank of the Phil. v. NLRC, G.R. No. 100701, March 28, 2001) Exceptions: Given for a long period of time 1. Consistent and deliberate – Er continued giving benefit without any condition imposed for its payment; 2. Er knew he was not required to give benefit; 3. Nature of benefit is not dependent on profit; and 4. Made part of t he wage or compensation agreed and stated in the employment contract. e. Change of Working Hours The management retains the prerogative, whenever exigencies of the service so require, to change the working hours of its Ees. In the exercise of its managemen t prerogatives, may schedule a work shift consisting of less than eight hours. And following the principle of “a fair day’s wage for a fair day’s labor”, the Er is not obliged to pay an Ee, working for less than eight hours a day, the wages due for eight h ours. Nonetheless, if by voluntary practice or policy, the Ee for a considerable period of time has been paying his Ees wages due for eight hours work although the work shift less than eight hours (e.g. seven) it cannot later on increase the working hours without an increase in the pay of the employees affected. An Er is not allowed to withdraw a benefit which he has voluntarily given. f. Marriage between employees of competitor - employers The company policy prohibiting marriage between co - workers is valid i f there is a finding of a bona fide occupational qualification (BFOQ) to justify an Er’s No Spouse Rule. There must be a compelling business necessity for which no alternative exists other than the discriminating practice. (Star Paper vs. Simbol, G.R. No. 164774, April 12, 2006) Factors that the Er must prove in order to justify BFOQ : 1. That the employment qualification is reasonably related to the essential operation of the job involved; and 2. That there is a factual basis for believing that all or substa ntially all persons meeting the qualification would be unable to properly perform the duties of the job. (Star Paper et al. vs. vs. Simbol, G.R. No. 164774, April 12, 2006) g. Post - employment ban There is a distinction between restrictive covenants barring an Ee to accept a post - employment competitive employment or restraint on trade in employment contracts and restraints on post - retirement competitive employment in pension and retirement plans either incorporated in employment contracts or in collective b argaining agreements between the Er and the union of Ees, or separate from said contracts or collective bargaining agreements which provide that an Ee who accepts post retirement competitive employment will forfeit retirement and other benefits or will be obliged to restitute the same to the employer. The strong weight of authority is that forfeitures for engaging in subsequent competitive employment included in pension and retirement plans are valid even though unrestricted in time or geography. A post - ret irement competitive employment restriction is designed to protect the Er against competition by former Ee who may retire and obtain retirement or pension benefits and, at the same time, engage in competitive employment. (Rivera vs. Solidbank, G.R. No. 163269, April 19,2006) Note: So long as a company’s prerogatives are exercised in good faith for the advancement of the Er’s interest and not for the purpose of defeating or circumventing the rights of the Ees under special laws or under valid agreements, the Supreme Court will uphold them. Limitations on management prerogative : 1.) It must be exercised in good faith. 2.) It must not be tainted with unfair labor practice. 3.) The exercise of management prerogative must be within the limitations set by law. 4.) It must also be within the limitations set by the Collective Bargaining Agreement; and 5.) The exercise must be consistent with the principles of fair play and justice. NOTES 4 : Recruitment and Placement Recruitment and Placement is any act of canvassing, enlisting, transporting, contracting, hiring, utilizing, or procuring workers, and includes contract services, referrals, advertising or promising for em ployment, locally or abroad, whether for profit or not, provided, that any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. Recruitment includes the act of referral or the “act of passing along or forwarding of an applicant for employment after an initial interview of a selected applicant for employment to a selected employer, placement officer or bureau” (Rodolfo vs. People, G.R. No. 146964, August 10 , 2006). The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. The proviso merely created a presumption (People vs. Panis, G.R. No. L - 58674 - 77, July 11, 1990). A. Illegal Recruitment License vs. authority What is a license? It is issued by DOLE authorizing a person or entity to operate a private employment agency. What is an Authority? It is a document issued by the DOLE authorizing a person or association to engage in recruitment and placement a ctivities as a private recruitment entity. Who are the persons prohibited from engaging the business of recruiting migrant workers? 1. Unlawful for any official or employee of the: a. DOLE; b. POEA; c. Overseas Workers Welfare Administration (OWWA); d. DFA; and e. Other government agencies involved in the implementation of this Act 2. Their relatives within the 4th civil degree of consanguinity or affinity, to engage, directly or indirectly in the busine ss of recruiting migrant workers. (Sec. 8, R.A. 8042) Who is a non - licensee / non - holder of authority? Any person, corporation, or entity: 3. Which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor and Employment (SoLE); or 4. Whose license or authority has been suspended, revoked or cancelled by the POEA or the SoLE (Secretary of Labor and Employment). What are the grounds for revocation of license? 1. Incurring an accumulated 3 counts of susp ension by an agency based on final and executory orders within the period of validity of its license. 2. Violations of the conditions of license. 3. Engaging in acts of misrepresentation for the purpose of securing a license or renewal. 4. Engaging in the recruitment or placement of workers to jobs harmful to the public health or morality or to the dignity of the country (Sec. 3, Rule I, Book VI, Rules and Regulations Governing Overseas Employment). 1. Elements What are the elements of Illegal Recruitment? 1. Offender is a non - licensee or non - holder of authority to lawfully engage in the recruitment/placement of workers 2. Offender undertakes: a. Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and include s referrals, contact services, promising or advertising for employment, locally or abroad, whether for profit or not (Art. 13[b]); or b. Any of prohibited practices under Art.34 2. Prohibited Acts What are prohibited practices in recruitment/placement? (Ar t. 34.) 1. Furnishing or publishing any false notice/information/document related t o recruitment/ employment. 2. Failure to file reports required by DOLE. 3. Inducing or attempting to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions. 4. Recruitment/placement of workers in jobs harmful t o public health or morality or to the dignity of the country; 5. Engaging directly or indirectly in the management of a travel agency; 6. Substituting or altering employment contracts without approval of DOLE; 7. Charging or accepting any amount greater th an that specified by DOLE or make a worker pay any amount greater than actually received by him; 8. Committing any act of misrepresentation to secure a license or authority; 9. Influencing or attempting to influence any person/entity not to employ any work er who has not applied of employment through his agency; 10. Obstructing or attempting to obstruct inspection by Secretary of Labor and Employment or by his representatives; 11. Withholding or denying travel documents from applicant workers before departur e for monetary considerations other than authorized by law; 12. Granting a loan to an OFW which will be used for payment of legal and allowable placement fees; 13. Refusing to condone or renegotiate a loan incurred by an OFW after his employment contract h as been prematurely terminated through no fault of his or her own; 14. For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers’ applications; and 15. For a recruitment/manning age ncy or a foreign principal/ Er to pass on the OFW or deduct from his or her salary the payment of the cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker’s insurance coverage 16. Imposing a compulsory and exclusive arrangement whereby an OFW is required to: a. Avail a loan only from specifically designated institutions, entities, or persons; b. To undergo health examinations only from specifically designated medical, entities or persons, except seafarers whose medical examination cost is shouldered by the shipowner; and c. To undergo training of any kind only from designated institutions, entities, or persons, except for recommendatory trainings mandated by principals/shipowners (Sec. 6, R.A.1002 2). 3. Types of Illegal Recruitment Simple illegal recruitment It is considered simple illegal recruitment when it involves less than three (3) victims or recruiters. Illegal recruitment in large scale It is committed against 3 or more persons individuall y or as a group. Illegal recruitment as economic sabotage When is illegal recruitment considered as economic sabotage? When it is committed: 1. By a syndicate – carried out by 3 or more persons conspiring/confederating with one another , or 2. In large scale – committed against 3 or more persons individually or as a group. (Sec. 6,10022) 4. Illegal Recruitment versus estafa Illegal recruitment is a malum prohibitum, whereas estafa is malum in se, meaning the criminal intent is NOT necessary for conviction in the former, but it is necessary in the latter. It is not required that it be shown that the recruiter wrongfully represented himself as a licensed recruiter. NOTE : It is enough that the victims were deceived as they relied on the misrepresentation and sche me that caused them to entrust their money in exchange of what they later discovered was a vain hope of obtaining employment abroad. Accused defrauded another by abuse of confidence, or by means of deceit. NOTE: It is essential that the false statement or fraudulent representation constitutes the very cause or the only motive which induces the complainant to part with the thing of value Illegal recruitment and estafa cases may be filed simultaneously or separately. The filing of charges for illegal recruitm ent does not bar the filing of estafa, and vice versa. Double jeopardy will not set. 5. Liability of Local Recruitment agency versus Foreign Employment a. Solidary Liability What is the liability of the private employment agency and the principal or foreig n - based employer? - They are jointly and severally liable for any violation of the recruitment agreement and the contracts of employment. Note: This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him. If the recruitment/placement agency is a juridical being, th e corporate officers and directors and partners, shall themselves be jointly and solidarily liable with the corporation or partnership for the claims and damages (Becmen Service Exporter and Promotion v. Cuaresma, G.R. Nos. 182978 - 79, April 7, 2009). b. Th eory of imputed knowledge What is the theory of imputed knowledge? - A rule in insurance law that any information material to the transaction, either possessed by the agent at the time of the transaction or acquired by him before its completion, is deemed to be the knowledge of the principal, at least so far as the transaction is concerned, even though in fact the knowledge is not communicated to the principal at all. (Leonor v. Filipinas Compania, 48OG 243) 6. Termination of contract of migrant worker withou t just or valid cause What are the effects of termination of overseas employment without just, valid, or authorized cause? - The worker shall be entitled to the full reimbursement if his placement fee and the deductions made with interest at twelve percent ( 12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less (Sec. 7, RA 10022) 7. Direct Hiring What is Direct hiring? - It is when an employer hires a Filipino worker for overseas employment without going through the POEA or entities authorized by the Secretary of Labor. What is the ban on direct hiring? General Rule: An employer may only hire Filipino worker for overseas employment through POEA or enti ties authorized by DOLE. Exception: Direct hiring by: 1. International organizations; 2. Name hires; 3. Members of the diplomatic organizations; and 4. Other Employers as may be allowed by DOLE. Why is direct - hiring prohibited? 1. To ensure the best possib le terms and conditions of employment for the worker; 2. To assure the foreign employer that he hires only qualified Filipino workers; and 3. To ensure full regulation of employment in order to avoid exploitation. B. Regulation of Recruitment and Placement Activities Suspension or cancellation of license or authority (Art. 35, Labor Code) What are the grounds for suspension or cancellation of li cense? 1. Prohibited acts under Art. 34; 2. Publishing job announcements w/o POEA’s approval; 3. Charging a fee which may be in excess of the authorized amount before a worker is employed; 4. Deploying workers w/o processing through POEA; and 5. Recruitmen t in places outside its authorized area (Sec. 4, Rule II, Book IV, POEA Rules). Regulatory and visitorial powers of the DOLE secretary What are the regulatory powers of the Secretary of Labor and Employment (SOLE)? 1. Restrict and regulate the recruitment and placement activities of all agencies; and 2. Issue orders and promulgate rules and Regulations. What constitute visitorial power? 1. Access to employer’s records and premises at any time of the day or night, whenever work is being undertaken; 2. To cop y from said records; and 3. Question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of the Labor Code and of any labor law, wage order, or rules and regulation i ssued pursuant thereto. Give 4 instances where the visitorial power of the SLE may be exercised under the Labor Code. Power to: 1. Inspect books of accounts and records of any person or entity engaged in recruitment and placement; require it to submit repo rts regularly on prescribed forms and act in violations of any provisions of the LC on recruitment and placement. (Art. 37) 2. Have access to employer’s records and premises to determine violations of any provisions of the LC on recruitment and placement. (Art. 128) 3. Conduct industrial safety inspections of establishments. (Art. 165) 4. Inquire into the financial activities of legitimate labor organizations (LLO) and examine their books of accounts upon the filing of the complaint under oath and duly supported by the written consent of at least 20% of the total membership of the LO concer ned. Can SOLE issue search warrants or warrants of arrest? No. Only a judge may issue search and arrest warrants. Art 38 © of the Labor Code is unconstitutional inasmuch as it gives the SLE the power to issue search or arrest warrants. The labor authoritie s must go through the judicial process. Remittance of foreign exchange earnings What is the rule on remittance of foreign exchange earnings? General Rule: It shall be mandatory for all OFWs to remit a portion of their foreign exchange earnings to their fam ilies, dependents, and/or beneficiaries ranging from 50% - 80% depending on the worker’s kind of job. (Rule VIII, Book III,POEA Rules) Exceptions: 1. The worker’s immediate family members, beneficiaries and dependents are residing with him abroad; 2. Immigra nts and Filipino professionals and employees working with the UN agencies or specialized bodies; and 3. Filipino servicemen working in U.S. military installations (Resolution No. 1 - 83, Inter - Agency Committee for Implementation of E.O.857). What is the effe ct of failure to remit? 1. Workers – Shall be suspended or removed from the list of eligible workers for overseas employment; and 2. Employers – Will be excluded from the overseas employment program. Private employment agencies shall face cancellation or r evocation of their licenses or authority to recruit. (Sec. 9, E.O. 857) C. Employment of Non - resident Aliens Alien Employment Permit (AEP) is required for entry into the country for employment purposes and is issued after determination of the non - availabil ity of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired. All foreign nationals who intended to engage in gainful employment in the Philippines shall apply for A EP (Department Order No. 97 - 09, Sec. 1) Who is required to acquire AEP? 1. All foreign nationals seeking admission to the Philippines for the purpose of employment; 2. All non - resident foreign nationals already working in the Philippines; 3. Non - resident foreign nationals admitted to the Philippines on non - working visas and who wish to seek employment; and 4. Missionaries or religious workers who intend to engage in gainful employment. Validity/Renewal AEP shall be valid for one (1) year unles s the employment contract, consultancy services, or other modes of engagement provides otherwise, which in no case shall exceed five (5) years. An application for renewal shall be filed before its expiration. Application with expired AEP shall be considere d new application (D.O. No. 75 - 06, May 31, 2006). NOTE: Employment permit should be secured regardless of the source of compensation and duration of the employment, whether the employment is part - time or temporary (Revised Guidelines for issuance of Alien Employment Permit, Secs. 2 and 3) An AEP is issued based on the following: 1. Compliance by the applicant employer or the foreign national with the substantive and documentary requirements; 2. Determination of the DOLE Secretary that there is no available Filipino national who is competent, able and willing to do the job for the employer; and 3. Assessment of the DOLE Secretary that the employment of the foreign national will redound to national benefit. Note: D.O. No. 12 and the accompanying DOLE Primer st ate that the Understudy Training Program is no longer a requirement in the issuance of AEP and the employer has now the option to implement transfer technology. NOTES 5 : Employer - Employee Relationship Employer - Employee Relationship It is determined by law and not by contract. Whether or not an Er - Ee relationship exists between the parties is a question of fact. 1. Tests to Determine employer - employee relationship 1.1 Four Fold Test The elements or circumstances relating to the following matters shall be examined and considered: 1. selection and engagement of the employees; 2. payment of wages; 3. power of dismissal; and 4. power to control the employees’ conduct. NOTE: The “control test” is the most crucial and determinative indication of the presence or absence of an employer - employee relationship. The greater the supervision and control of the employer over a worker, the more likely the worker is deemed an employee. Absenc e of such despite the presence of the other three elements will not suffice for the relationship to exist. Not every form of control will have the effect of establishing an employer - employee relationship. A line should be drawn between: 1. Rules that merely s erves as guidelines , which only promote the result. In such case, no employer - employee relationship exists; and 2. Rules that fix the methodology and bind or restrict the party hired to the use of such means of methods. This address both the result and means employed to achieve it and hence, employer - employee relationship exists. 1.2 Control Test The person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching suc h end. Note: However, in certain cases the control test is not sufficient to give a complete picture of the relationship between the parties, owing to the complexity of such a relationship where several positions have been held by the worker. The better ap proach is to adopt the two - tiered test (Francisco vs. NLRC, G.R. No. 170087, Aug. 31, 2006). 1.3 Two - tiered Test 1. The putative Er’s power to control the Ee with respect to the means and methods by which the work is to be accomplished; and 2. The underlying economic realities of the activity or relationship. Note: This two - tiered test would provide us with a framework of analysis, which would take into consideration the totality of circumstances surrounding the true nature of the re lationship between the parties. This is especially appropriate in this case where there is no written agreement or terms of reference to base the relationship on and due to the complexity of the relationship based on the various positions and responsibilit ies given to the worker over the period of the latter’s employment (Francisco vs. NLRC, G.R. No. 170087, Aug. 31, 2006). 1.4 Economic Dependence or Economic Reality Test The proper standard is whether the worker is dependent on the alleged employer for h is continued employment in that line of business. 2. Kinds of Employment 2.1 Probationary Employment Probationary employment exists where the employee, upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of his engagement (Art 282, LC). The employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his e ngagement. If no standards are made known at the time of his engagement, he should be regarded as regular employee. (Section 6(d) Rule 1 Book VI of the Implementing Rules of the Labor Code) Characteristics of probationary employment 1. It is an employment f or a trial period; 2. It is a temporary employment status prior to regular employment; 3. It arises through a contract with the following elements: 4. The employee (Ee) must learn and work at a particular type of work 5. Such work calls for certain qualifications 6. The probation is fixed 7. The Er reserves the power to terminate during or at the end of the trial period 8. if the Ee has learned the job to the satisfaction of the Er, he becomes a regular Ee. Period of probationary employment General Rule : It shall not exce ed 6 months. Exceptions: 1. Covered by an apprenticeship agreement stipulating a different period; 2. Voluntary agreement of parties (especially when the nature of work requires a longer period); 3. The Er gives the Ee a second chance to pass the standards set. (Ma riwasa Manufacturing, Inc. v. Leogardo, Jr., G.R. No. 74246, Jan. 26, 1989); 4. When the same is required by the nature of the work, g., the probationary period set for professors, instructors and teachers is 3 consecutive years of satisfactory service pursua nt to DOLE Manual of Regulations for Private Schools. 5. When the same is established by company policy. Note: After the lapse of the probationary period (6 months), Ee becomes regular. Probationary Ees may be dismissed before end of the probationary period. Double or Successive Probation Double or Successive Probation is not allowed in order to discourage scheming employers from using the system of to circumvent the mandate of the law on regularization and make it easier for them to dismiss thei r employees. (Holiday Inn Manila v. NLRC, G.R. No. 109114, Sep. 14, 2003) Grounds for Termination of Probationary Employment: 1. Just/authorized causes; or 2. Fail ure to qualify as a regular Ee in accordance with reasonable standards made known by the employer (Er) to the Ee at the time of his engagement (ICMC v. NLRC, G.R. No.72222, Jan. 30, 1989) Limitations on the employer’s powers to terminate a probationary e mployment contract 1. The power must be exercised in accordance with the specific requirements of the contract; 2. If a particular time is prescribed, the termination must be within such time and if formal notice is required, then that form must be used; 3. The Er’ s dissatisfaction must be real and in good faith, not feigned so as to circumvent the contract or the law; and 4. There must be no unlawful discrimination in the dismissal 2.2 Regular Employment An employee is deemed to be regular when: 1. he has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, the provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties (Art. 280, LC); 2. he has rend ered at least one year of service, whether such service is continuous or broken, with respect to the activity in which he is employed; or 3. he has been allowed to work after the probationary period. Test to determine regular employment 1. the reason able connection between the particular activity performed by the employee (Ee) to the usual trade or business of the employer - The test is whether the former is usually necessary or desirable in the usual business or trade of the Er (De Leon v. NLRC, G.R. No. 70705, Aug. 21, 1989). 2. the performance of a job for at least a year is sufficient evidence of the job’s necessity if not indispensability to the business. This is the rule even if its performance is not continuous and merely intermittent. The employment is considered regular, but only with respect to such activity and whil e such activity exists (Universal Robina Corp. v. Catapang, G.R. No. 164736, Oct.14, 2005). 2.3 Project Employment It is where the 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 (Art. 286, Labor Code). A "project" has reference to a particular job or undertaking that may or may not be within the regular or usual business of the Er. In either case, the project must be distinct, separa te and identifiable from the main business of the Er, and its duration must be determined or determinable (PAL v. NLRC, G.R. No. 125792, Nov. 9, 1998). Indicators of Project Employment 1. The duration of the specific/identified undertaking for which the wor ker is engaged is reasonably determinable; 2. Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of hiring. 3. The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged; 4. The employee, while not employed and awaiting engagement, is free to offer his services to any other employer; 5. The termination of his employment in the particular project/undertaki ng is reported to the Department of Labor and Employment Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on employees’ termination or dismissal or suspensions; and 6. An undertak