The law generally defines an employer as any person acting in the interest of an employer, directly or indirectly.[1] It does not include a labor organization or any of its officers or agents unless they are acting as an employer.[2]

On the other hand, an employee is likewise broadly defined as any person in the employ of another.[3] The definition includes any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.[4] It is not limited to employees of a particular employer, except if so explicitly stated by law.[5]

To give context to the definitions given above, the four-fold test of employment is taken into consideration to establish whether there is an employer employee relationship. The elements to the test are: (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’s conduct. The most important element is the employer’s power of control of the employee’s conduct, the expected results of the work to be done, as well as the means and methods to accomplish it.[6]

Lirio v. Genovia
G.R. No. 169757, 27 November 2011

“Before a case for illegal dismissal can prosper, it must first be established that an employer-employee relationship existed between petitioner and respondent.

“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 of P7,000.00 (P3,500.00 every 15th of the month and another P3,500.00 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 of P7,000.00. 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.”

An employment relation is essentially contractual in nature. That is to say, the employer offered employment to the employee who accepted in exchange for remuneration. Thus, the employer and employee are prohibited from entering into an employment contract which practically amounts to involuntary servitude, under any guise whatsoever.[7] Being contractual in nature, an employment ends when consent on either the employer and employee to proceed is no longer existing and the law on termination is complied.

During employment, issues may arise related to employment. A labor dispute is any controversy affecting the terms and conditions of employment, as well as any issue on the association or representation for purposes of individual or collective bargaining  on these terms and conditions, irrespective of whether the parties stand in the proximate relation of employer and employee.[8]

Before any labor case may proceed, it is required first to establish the employer and employee relationship between the parties.[9] Hence, as indicated earlier, the four-fold test will be used to determine the existence of employment relationship.

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[1] LABOR CODE. Article 219 (e).

[2] Ibid.

[3] LABOR CODE. Article 219 (f).

[4] Ibid.

[5] Ibid.

[6] Ibid.

[7] CIVIL CODE. Article 1703.

[8] LABOR CODE. Article 219 (l).

[9] Cesar C. Lirio v. Wilmer D. Genovia, G.R. No. 169757, 27 November 2011.