HRM200 - Four Fold Test

CALIMPONG, MARY ROGEILYN S.
SECTION A
CASE TITLE: ROMEO ALBA vs. CONRADO G. ESPINOSA, G.R. No. 227734, August 09,
2017
FACTS OF THE CASE:

It was alleged by the respondents that on various dates, Alba hired them as construction workers
for his projects in several residential villages within Metro Manila and nearby provinces. The
respondents were Alba’s regular employees who were paid different wage rates that ranged from
P350.00 to P500.00 a day, but were deprived of some statutorily-mandated benefits such as their
overtime pay, 13th month pay, holiday pay, and service incentive leave (SIL) pay. On different
dates in 2013, some of the respondents confronted Alba regarding their benefits, but such action
eventually resulted in their dismissal.
For his defense, Alba argued that the respondents could not be deemed his regular employees. He
claimed to be a mere taker of small-scale construction projects for house repairs and renovations.
In the construction industry, he was deemed a mere mamamakyaw, who would pool a team of
skilled and semi-skilled carpenters and masons for specific projects that usually lasted from one
to two weeks. The respondents were paid daily wages ranging from P600.00 to P1,000.00,
depending on their skill, and could take on projects with their own clients after Alba’s projects
had terminated. For succeeding projects, Alba would only take in construction workers who were
still available for the duration of the new work.
As he denied any liability for the respondents claims, Alba likewise presented certifications from
clients indicating that the latter directly paid the salaries of the workers provided by Alba for the
projects. He also argued that the respondents used their own tools at work, and received
instructions from either the architect or foreman engaged by the project owner.
The LA dismissed the complaints via a Decision dated July 31, 2015. For the LA, no
employer-employee relationship existed between Alba and the respondents. The supposed gate
passes issued by village representatives did not qualify as substantial evidence to show that Alba
was indeed a contractor.
The respondents appeal was partly granted by the NLRC. The NLRC rejected the LA’s finding
on the lack of employer-employee relationship. The association between Alba and the
respondents was established after Alba readily proclaimed that the respondents were part of his
pool of workers. Alba had the power to determine who would remain in or be terminated from
his projects. The four-fold test in determining the existence of an employer-employee
relationship was duly satisfied.
The CA rendered its Decision dismissing Alba’s petition on July 14, 2016. The CA reiterated the
satisfaction of the four-fold test that is considered in finding employer- employee relationship.
ISSUE OF THE CASE: Was there an employer-employee relationship between petitioner and
respondent?
RULING OF THE COURT:
The petition is DENIED.
The respondents were regular employees of Alba. The existence of an employer-employee

relationship between him and the respondents was sufficiently established.
To ascertain the existence of an employer-employee relationship[,] jurisprudence has invariably

adhered to the four-fold test, to wit: (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 employees
conduct, or the so-called “control test.” In resolving the issue of whether such relationship exists
in a given case, substantial evidence - that amount of relevant evidence which a reasonable mind
might accept as adequate to justify a conclusion - is sufficient.
Alba’s relationship with the respondents satisfies the four-fold test.
The Court has explained Alba’s exercise of control over the respondents. For a worker to be
deemed an independent contractor, it is further necessary to establish several indicators. In
Television and Production Exponents, Inc. and/or Tuviera v. Servaña, the Court explained:
Aside from possessing substantial capital or investment, a legitimate job contractor or

subcontractor carries on a distinct and independent business and undertakes to perform the job,
work or service on its own account and under its own responsibility according to its manner and
method, and free from the control and direction of the principal in all matters connected with the
performance of the work except as to the results thereof. x x x. (Citation omitted)
“It is the burden of the employer to prove that a person whose services it pays for is an
independent contractor rather than a regular employee with or without a fixed term.”
Undeniably, Alba failed to discharge this burden.
CASE TITLE: ATOK BIG WEDGE COMPANY, INC. vs. JESUS P. GISON, G.R. No. 169510,
August 8, 2011
FACTS OF THE CASE:

Sometime in February 1992, respondent Jesus P. Gison was engaged as part-time consultant on
retainer basis by petitioner Atok Big Wedge Company, Inc. through its then Asst. Vice-President
and Acting Resident Manager, Rutillo A. Torres. Petitioner did not require respondent to report
to its office on a regular basis, except when occasionally requested by the management to discuss
matters needing his expertise as a consultant. As payment for his services, the respondent
received a retainer fee of ₱3,000.00 a month, which was delivered to him either at his residence
or in a local restaurant. The said arrangement continued for the next eleven years.
Sometime thereafter, since respondent was getting old, he requested that petitioner cause his
registration with the Social Security System (SSS), but petitioner did not accede to his request.
On February 4, 2003, respondent filed a Complaint with the SSS against petitioner for the latter’s
refusal to cause his registration with the SSS.
On September 26, 2003, after the parties have submitted their respective pleadings, Labor
Arbiter Rolando D. Gambito rendered a Decision 8 ruling in favor of the petitioner. Finding no
employer- employee relationship between petitioner and respondent, the Labor Arbiter dismissed
the complaint for lack of merit.
In ruling in favor of the respondent, the CA opined, among other things, that both the Labor
Arbiter and the NLRC may have overlooked Article 280 of the Labor Code, 13 or the provision
which distinguishes between two kinds of employees, i.e., regular and casual employees.
Applying the provision to the respondent’s case, he is deemed a regular employee of the
petitioner after the lapse of one year from his employment. Considering also that respondent had
been performing services for the petitioner for eleven years, respondent is entitled to the rights
and privileges of a regular employee.
ISSUE OF THE CASE: Whether or not an employer-employee relationship exists between

petitioner and respondent.

The petition is GRANTED.
To ascertain the existence of an employer-employee relationship jurisprudence has invariably

adhered to the four-fold test to wit: (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”. The commonly so called control test is commonly
regarded as the most crucial and determinative indicator of the presence or absence of an
employer-employee relationship.
Applying the aforementioned test, an employer-employee relationship is apparently absent in the

case at bar. Among other things, respondent was not required to report everyday during regular
office hours of petitioner. Respondent’s monthly retainer fees were paid to him either at his
residence or a local restaurant. More importantly, petitioner did not prescribe the manner in
which respondent would accomplish any of the tasks in which his expertise as a liaison officer
was needed; respondent was left alone and given the freedom to accomplish the tasks using his
own means and methods. Respondent was assigned tasks to perform, but petitioner did not
control the manner and methods by which respondent performed these tasks. The absence of the
element of control on the part of the petitioner engenders a conclusion that he is not an employee
of the petitioner.
CASE TITLE: MARIO N. FELICILDA vs. MANCHESTEVE H. UY, G.R. No. 221241,
September 14, 2016
FACTS OF THE CASE:

Petitioner alleged that on October 29, 2010, respondent Manchesteve H. Uy (respondent) hired
him as a truck driver for the latter’s trucking service under the business name “Gold Pillars
Trucking” (GPT). On December 9, 2011, petitioner took a nap at the work station while waiting
for his truck to be loaded with cargoes, all of which were delivered to respondent’s clients on
schedule. The next day, or on December 10, 2011, respondent’s helper told petitioner that his
employment was already terminated due to his act of sleeping while on the job. Claiming that he
was dismissed without just cause and due process, and that his act of taking a nap did not
prejudice respondent’s business, petitioner filed a complaint for illegal dismissal with money
claims against respondent, before the NLRC, docketed as NLRC NCR Case No. 12-18409-11.
In a Decision dated June 29, 2012, the Labor Arbiter (LA) ruled in petitioner’s favor and,
accordingly, ordered respondent to pay the aggregate sum of P80,145.52 representing his
backwages and separation pay.
The NLRC affirmed the LA ruling. It ruled that an employer-employee relationship existed
between the parties.
The CA set aside the NLRC ruling and, instead, dismissed petitioner’s complaint for illegal
dismissal with money claims for lack of
merit.
ISSUE OF THE CASE: Was there an employer-employee relationship between petitioner and
respondent when petitioner was hired by respondent on October 29, 2010 and was later
dismissed on December 10, 2011 for sleeping on the job?

The petition is GRANTED.
To ascertain the existence of an employer-employee relationship, jurisprudence has invariably

adhered to the four-fold test, to wit: (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”. Verily, the power of the employer to control the work of
the employee is considered the most significant determinant of the existence of an
employer-employee relationship. This is the so-called “control test” and is premised on whether
the person for whom the services are performed reserves the right to control both the end
achieved and the manner and means used to achieve that end. It must, however, be stressed that
the “control test” merely calls for the existence of the right to control, and not necessarily the
exercise thereof. To be clear, the test does not require that the employer actually supervises the
performance of duties by the employee. Contrary to respondent’s submission, which was upheld
by the CA, the Court agrees with the labor tribunals that all the four (4) elements are present in
this case.
Having established that an employer-employee relationship exists between the parties, it is now
incumbent for the Court to determine whether or not respondent validly terminated petitioner’s
employment.
For a dismissal to be valid, the rule is that the employer must comply with both the substantive
and procedural due process requirements. Substantive due process requires that the dismissal
must be pursuant to either a just or an authorized cause under Articles 297, 298, and 299
(formerly Articles 282, 283 or 284) [38] of the Labor Code, as amended.
In this case, suffice it to say that aside from respondent’s averment that petitioner committed
“serious transgressions and misconduct” resulting in the former’s loss of trust and confidence, no
other evidence was shown to substantiate the same. Such averment should be properly deemed as
a self-serving assertion that deserves no weight in law. Neither was petitioner accorded
procedural due process as he was merely informed by respondent’s helper that he was already
terminated from his job. Clearly, respondent illegally dismissed petitioner, and as such, the latter
is entitled to backwages and separation pay in lieu of reinstatement, as correctly ruled by the
labor tribunals.

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CALIMPONG, MARY ROGEILYN S.

FACTS OF THE CASE:

The respondents were regular employees of Alba. The existence of an employer-employee

To ascertain the existence of an employer-employee relationship[,] jurisprudence has invariably

Alba’s relationship with the respondents satisfies the four-fold test.

Aside from possessing substantial capital or investment, a legitimate job contractor or

FACTS OF THE CASE:

ISSUE OF THE CASE: Whether or not an employer-employee relationship exists between

RULING OF THE COURT:

To ascertain the existence of an employer-employee relationship jurisprudence has invariably

Applying the aforementioned test, an employer-employee relationship is apparently absent in the

FACTS OF THE CASE:

RULING OF THE COURT:

To ascertain the existence of an employer-employee relationship, jurisprudence has invariably

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