Employer-Employee Relationship

Existence and the Correlative Rights and Obligations of the Employer and the Employee

I have been rendering services as a secretary in a company for more than a year now. My employment contract states that no employer-employee relationship shall exist between me and the company, thereby depriving me of some of the benefits and allowances to which other employees are entitled.

Is this arrangement legal?

Situation

Is this arrangement legal?

NO. This arrangement is illegal.

Things to consider:

Is there an employee-employer (EER) relationship between us?

Why is EER important to me?

What are our rights and obligations as an employer and an employee?

When does an EER exist?

An EER exist if ALL these ELEMENTS are present: (X as employer and Y as employee)

1. X selects and engages Y;

2. X pays the wages or salaries of Y;

3. X has the power to dismiss Y; and

4. X has the power to control how Y conducts his work.

NOTE: Of these four, the control test is the most important. X controls not only the end achieved, but also the manner and means to be used in reaching that end.

Can the EER be denied through agreement by the parties?

NO.

The EER’s existence cannot be denied through the parties’ agreement.

It is a question of law. If the elements of an EER are present, the employee can enjoy the benefits.

Why is EER important?

1. EER determines what laws govern the rights and liabilities between the parties, and what tribunal or court will have jurisdiction over their cases.

2. The employee acquires the right to continue his employment (property right). His employment may only be terminated based on just or authorized causes stated in the Labor Code.

3. EER affords greater protection to employee.

What are the employer’s rights?

MANAGEMENT PREROGATIVE

Although the Constitution promotes social justice and protects the working class, labor cases will not be automatically decided in favor of labor. Management also has its own rights which are entitled to respect in the interest of simple fair play.

Labor laws do not interfere with the employer’s judgment in the conduct of its business. The employers may hire, fire, transfer, demote, and promote its employees (subject to limitations found in the law, a collective bargaining agreement, or in general principles of fair play and justice).

What is covered by management prerogatives?

RIGHTS (MANAGEMENT PREROGATIVES)

Hiring

Working regulations

Time, place, and manner of work

Working methods

Processes to be followed

Tools to be used

Work assignments

Supervision of workers

Supervision of work Transfer of employee/s Lay-off of workers

Discipline

Dismissal

Recall of workers

What are the employer’s obligations?

OBLIGATIONS

Limitations of management prerogative: 1. law 2. Stipulations in the collective

bargaining agreement 3. General principles of fair play

and justice

The exercise of management prerogative, however, is not absolute as it must be exercised in good faith and with due regard to the rights of labor.

What are the employee’s rights?

GUARANTEED BASIC RIGHTS OF WORKERS

1. Security of tenure 2. Receive a living wage 3. Humane working conditions 4. Share in the fruits of production 5. Organize themselves 6. Conduct collective bargaining or negotiation with

management 7. Engage in peaceful concerted activities including strike 8. Participate in policy and decision making processes

Who are entitled to the rights and benefits under the Labor Code?

ALL WORKERS, whether agricultural or non-agricultural.

EXCEPTIONS:

1. Government employees

2. Employees of government corporations created by special or original charter

3. Foreign governments

4. International agencies

5. Corporate officers/intra-corporate disputes

6. Local water district except where NLRC’s jurisdiction is invoked

7. As may otherwise be provided by the Labor Code

Other Related Information

CONSTITUTIONAL MANDATES ON LABOR LAWS

(Article II, 1987 Philippine Constitution)

Section 9. 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 policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all. Section 10. The State shall promote social justice in all phases of national development. Section 11. The State values the dignity of every human person and guarantees full respect for human rights. Section 13. The State recognizes the vital role of the youth 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. Section 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men. Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments.

CONSTITUTIONAL MANDATES ON LABOR LAWS

(Article III, 1987 Philippine Constitution)

Section 1. 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. Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances. Section 8. 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.

Other Related Information

OTHER RELATED LAWS TO LABOR

1. Article 1700, Civil Code of the Philippines—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.

2. Article 1701, Civil Code of the Philippines—Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public. (Principle of Non-Oppression)

3. Article 1702, Civil Code of the Philippines—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.

4. Article 1703, Civil Code of the Philippines—No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid.

OTHER RELATED LAWS TO LABOR

5. Article 289, Revised Penal Code—Formation, maintenance and prohibition of combination of capital or labor through violence or threats. — The penalty of arresto mayor and a fine not exceeding 300 pesos shall be imposed upon any person who, for the purpose of organizing, maintaining or preventing coalitions or capital or labor, strike of laborers or lock-out of employees, shall employ violence or threats in such a degree as to compel or force the laborers or employers in the free and legal exercise of their industry or work, if the act shall not constitute a more serious offense in accordance with the provisions of this Code.

6. Special Laws • GSIS Law • 13th Month Pay Law • Retirement Pay Law • SSS Law • Paternity Leave Act • Anti-Child Labor Act • Anti-Sexual Harassment Act • Magna Carta for Public Health Workers • National Health Insurance Act as amended

by Republic Act 9241 • Migrant Workers and Overseas Filipinos Act

of 1995 as amended by Republic Act 10022 • Home Development Mutual Fund Law of

2009 • The Magna Carta of Women • Comprehensive Agrarian Reform Law as

amended by R.A. 9700 • The Kasambahay Law

Sources

█ 1987 Philippine Constitution.

█ Presidential Decree 442 otherwise known as “Labor Code of the Philippines.”

█ Implementing Rules and Regulations of the Labor Code.

█ Department of Labor and Employment Order No. 40-03, Series of 2003.

█ Azucena, Cesario Jr. The Labor Code with Comments and Cases, Volume II, 6th Edition 2007. (Quezon City: Rex Printing Company, Inc.)

█ Alcantara, Samson. Reviewer in Labor and Social Legislation. (Quezon City: The Philippines Labor Relations Journal)

█ 2011 UST-Law Academics Committee. 2011 Golden Notes. (University of Santo Tomas, Faculty of Civil Law, Manila)

[Uploaded on 16 October 2015]]

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