REVIEWER

LABOR STANDARD - refers to that part of labor law which prescribes the minimum terms and
conditions of employment which the employer is required to grant to its employees.

EMPLOYER is any person can be natural or juridical, such as sole proprietors, partnerships, or
corporations, and include anyone acting on behalf of an employer that operates a trade,
business, or industry in the Philippines and hires another person to work under their orders,
excluding the government and its instrumentalities.

EMPLOYEE is any person who provides services, using mental or physical effort, for an
employer and receives compensation. It also includes the individuals whose work has ceased
due to a labor dispute or unfair labor practice, as long as they haven't secured equivalent
employment elsewhere.

EMPLOYER-EMPLOYEE RELATIONSHIP is determined by law and not by contract. The

existence of an employer-employee relationship depends upon the facts of each case. There
are a two types of test to determine Er and Ee relationship.

FOUR-FOLD TEST
a. Selection and engagement of the employee; (Whether the employer selected and
hired the worker.)
b. Payment of wages; (Whether the employer directly pays the worker’s wages.)
c. Power of dismissal; and (Whether the employer has the authority to terminate the
worker’s employment.
d. Power of control, or the Control Test. (Whether the employer has control over the
means and methods by which the worker performs their work / Er gives Ee the
means, manner, or method about the job.)

KINDS OF CONTROL EXCERCISED BY AN ER

Not all forms of control establish an employer-employee (Er-Ee) relationship. The distinction will
depend on these rules:

a. Rules that merely serve as guidelines, which aims ONLY to promote the result. (Do not
establish an Er-Ee relationship, as they do not control how the work is done)

b. Rules that dictate both the result and the specific means or methods to be used in
achieving it imply an Er-Ee relationship, as they restrict the worker’s freedom in
choosing how to perform the work.)

However, if the control test alone may be insufficient, and a two-tiered test is a better approach
to fully understand the relationship.

TWO-TIERED TEST offers a comprehensive framework to analyze the true nature of a work
relationship, particularly when no written agreement exists and the worker's roles have evolved
over time. It consists of two main elements:
1) The employer’s control over the means and methods of work (Four-fold Test) and;
2) The economic realities of the relationship.
PROPER STANDARD FOR ECONOMIC DEPENDENCE examines whether the worker
depends on the employer to maintain their employment in that specific line of business. This
means assessing if the worker’s livelihood and continuity of work rely largely on the employer’s
business. To determine this, there are several factors are being considered:

a. The extent to which the services performed are an integral part of the Er’s
business;
b. The extent of the worker’s investment in equipment and facilities;
c. The nature and degree of control exercised by the Er;
d. The worker’s opportunity for profit and loss;
e. The amount of initiative, skill, judgment, or foresight required for the success of
the claimed independent enterprise;
f. The permanency and duration of the relationship between the worker and Er; and
g. The degree of dependency of the worker upon the Er for his continued
employment in that line of business.

EVIDENCE OF EMPLOYMENT
To prove an employment relationship, any relevant evidence—such as an ID, Voucher, SSS
Registration, or Memorandum—may be presented; no specific form is required.

ABSENCE OF NAME IN THE PAYROLL

In Opulencia Ice Plant v. NLRC, the Supreme Court ruled that the absence of a worker’s name
on the payroll does not automatically disapprove their employee status. Relying solely on
documentary proof would allow dishonest employers to evade responsibility, so testimonial
evidence can be enough to prove Er-Ee relationship.

MODE OF COMPENSATION: Not Determinative of Er- Ee Relationship

It explains how an employee is compensated doesn’t necessarily determine if they are in an
employer-employee (Er-Ee) relationship. Payment could be labeled as a wage, salary,
commission, or something else, and it might be based on the hours worked, the quality or
amount of work completed, or other factors like skills, seniority, or performance, it does not
define the nature of the working relationship. The payment type isn’t a deciding factor in
identifying an Er-Ee relationship.

APPLICATION OF THE FOUR-FOLD TEST AND TWO-TIERED TEST

The Philippine law recognized two test to determine the existence of an employer-employee
relationship. The first tier is four-fold test and the second tier is economics of the relationship
test or (two-tiered test) which is only used if the strict application of the four-fold test would result
in an unfair or harsh outcome.

CONDITIONS OF EMPLOYMENT refer to the rules, policies, and guidelines that both the
employee and employer agree to follow while the employee is working for the company. It is
applicable to all employees across establishments, regardless of profit or not. However, certain
groups are excluded from these conditions:

 Government Employees - Their employment term is governed by Civil Service Law.

 Field Personnel - Exempt due to working away from the main office and lack of
supervision on hours worked.
 Managerial Employees - Managers make decisions independently, their work is judged
on results, not hours.
  Officers and members of the managerial staff – These workers, like project
engineers, also have authority and make independent decisions. Their work isn’t closely
reviewed by other executives, so they are considered managers.
 Members of the family of the Er - Family members financially dependent on the
employer are excluded.
 Workers Paid by Results - Payment is based on output, not hours.
 Persons in the Personal Service of Another - Those providing services in the
employer's home or for personal comfort.
 Domestic Helpers – Their employment is governed by the Batas Kasambahay Law
(R.A. No. 10361).

HOURS OF WORK shall include:

a) All time during which an employee is required to be on duty or to be at a prescribed
workplace; AND
b) All time during which an employee is suffered or permitted to work

All time an employee is required to be available for the employer counts as hours worked, even
if it’s not spent on active or productive tasks.

NORMAL HOURS OF WORK is limited to eight hours per day; any time worked beyond that is
considered overtime and qualifies for additional pay for eligible employees.

Exception to 8-Hour Law:

a) Health personnel
b) Compressed workweek

HOURS WORKED includes both active working time and any time the employee is required to
be at the workplace, even if they aren’t actively working.

When Hours Worked Are Compensable

a. Ee is required to be on duty or to be at a prescribed workplace;
b. Ee is suffered or permitted to work;
c. Rest periods of short duration during working hours which shall not be more than
20 minutes; and
d. Meal periods of less than 20 minutes. (Sec. 7, Rule I, Book III, IRR).

NOTE: Travel time, when beneficial to the Er, is compensable.

PRINCIPLES IN DETERMINING HOURS WORKED

a. Any time an employee is required to give to the employer counts as work hours,
regardless of productivity or effort.
b. Rest periods are not considered work time if the employee stops working and
can rest, even if they stay at the workplace.
c. Time spent on work is considered hours worked if the work was necessary,
benefited the employer, couldn’t be left due to lack of replacement, and was done
with the employer’s knowledge.
d. Time spent inactive because of unavoidable work interruptions is considered
work time if the employee needs to stay at the workplace or if the break is too
short for personal use.
RULES ON HOURS WORKED
 A. Waiting Time - Time spent waiting is considered working time if it is an essential part of
the job, required by the employer, or if the employee cannot use the time freely for
personal purposes.

B. Preliminary and Post-Preliminary Activities - Activities performed before or after work

count as work hours if they are required by the employer and benefit the employer.

C. Travel Away from Home – Travel that requires an overnight stay is counted as work
time if it overlaps with the employee’s regular working hours, including corresponding
hours on non-working days. However, travel outside these hours is not considered work
time..

D. Sleeping Time – Sleep may count as work time if:

a) Working time if:
1. it is subject to serious interruption; or
2. takes place under conditions substantially less desirable than would be likely
to exist at the employee’s home.
b) Not working time if there is an opportunity for comparatively uninterrupted sleep
under fairly desirable conditions.

E. Power Interruptions – Short interruptions (up to 20 minutes) are considered work time,
but longer interruptions may not count if employees can use the time freely.

F. Lectures, Meetings, and Training – Attendance is not work time if it’s outside regular
hours, voluntary, and no productive work is done.

MEALS PERIOD are generally not paid and do not count as work hours. Employers must allow
at least a 60-minute break for employees to rest and eat, which they can use freely inside or
outside the workplace. However, meal periods become compensable if they are:

1. Is predominantly spent for the Er’s benefit; or

2. When it is less than 60 minutes.

Compensability of Meal Periods during overtime work

During overtime, meal breaks are paid because the work period is shorter, and the break would
diminish overtime pay.

Where Meal Periods Are Shortened: Compensable or Not Compensable

1. Compensable – Upon employer’s request.

2. Not Compensable - Shortened meal breaks upon the employees’ request to shortened.