Question I, Labor Law, 2017 Bar Exam

What are the accepted tests to determine the existence of an employer-employee relationship? (5%)

B.

Applying the tests to determine the existence of an employer-employee relationship, is a jeepney driver operating under the boundary system an employee of his jeepney operator or a mere lessee of the jeepney? Explain your answer. (3%)

Suggested Answer:

A. There are two accepted tests as follows:

1) The control test, which is also known as the four-fold test, is used to ascertain the existence of an employer-employee relationship, using these factors: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or the so-called “control test.” Of these four, the last one is the most important.

The so-called “control test” is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship.

2) Under this economic reality test, the economic realities prevailing within the activity or between the parties are examined, taking into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate when there is no written agreement or contract on which to base the relationship.

Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity, such as: (1)...

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