Facts:
Petitioner was hired by
Kasei Corporation during its incorporation stage. She was designated as
Accountant and Corporate Secretary and was assigned to handle all the
accounting needs of the company, however she was not entrusted with the
corporate documents; neither did she attend any board meeting nor required to
do so. She never prepared any legal document and never represented the company
as its Corporate Secretary, but she was prevailed upon to sign documentation
for the company. She was also designated as Liason Officer to secure business
permits, construction permits and other licenses for the initial operation of
the company.
In
1996, petitioner was designated Acting Manager, she was assigned to handle
recruitment of all employees and perform management administration functions.
For 5 years, petitioner performed the duties of Acting Manager.
In
January 2001, petitioner was replaced by Liza R. Fuentes as Manager and the
petitioner was assured that she would still be connected with Kasei Corporation
as Technical Assistant to Seiji Kamura and in charge of all BIR matters.
Petitioner did not receive her salary from the company and was informed that
she is no longer connected with the company. Petitioner filed an ction for
constructive dismissal before the labor arbiter.
Private
respondents averred that petitioner is not an employee of Kasei Corporation.
They alleged that as technical consultant, petitioner performed her work at her
own discretion without control and supervision of Kasei Corporation. She had no
daily time record and she came to the office any time she wanted. The company
never interfered with her work except that from time to time, the management
would ask her opinion on matters relating to her profession. The petitioner did
not go through the usual procedure of selection of employees and her
designation as technical consuktant depended solely upon the will of
management. As such, her consultancy may be terminated any time considering
that her services were only temporary in nature and dependent on the needs of
the corporation.
Issue:
Won there was an employer-employee relationship between the parties.
Ruling:
In
certain cases the control test is not sufficient to give a complete picture of
the relationship between the parties, owing to the complexity of such a
relationship where several positions have been held by the worker. There are
instances when, aside from the employer’s power to control the employee with
respect to the means and methods by which the work is to be accomplished,
economic realities of the employment relations help provide a comprehensive
analysis of the true classification of the individual, whether as employee,
independent contractor, corporate officer or some other capacity.
The
better approach would therefore be to adopt a two-tiered test involving: 1)
putative employer’s power to control the employee with respect to the means and
methods by which the work is to be accomplished; and 2) the underlying economic
realities of the activity or relationship. This two-tiered test would provide
us with a framework of analysis, which would take into consideration the
totality of circumstances surrounding the true nature of the relationship
between the parties. This is especially appropriate in this case where there is
no written agreement or terms of reference to base the relationship on; and due
to the complexity of the relationship based on the various positions and
responsibilities given to the worker over the period of the latter’s
employment.
The
determination of the relationship between employer and employee depends upon
the circumstances of the whole economic activity, such as: 1) the extent to
which the services performed are an integral part of the employer’s business;
2) the extent of the worker’s investment in equipment and facilities; 3) the
nature and degree of control exercised by the employer; 4) the worker’s
opportunity for profit or loss; 5) the amount of initiative, skill, judgment or
foresight required for the success of the claimed independent enterprise; 6)
the permanency and duration of the relationship between the worker and the
employer; and 7) the degree of dependency of the worker upon the employer of
his continued employment in that line of business.
The
proper standard of economic dependence is whether the worker is dependent on
the alleged employer for his continued employment in that line of business.
Based on the foregoing, there can be no other conclusion that petitioner is an
employee of respondent Kasei Corporations. She was selected and engaged by the
company for compensation, and is economically dependent upon respondent for her
continued employment in that line of business. Her main job function involved
accounting and tax services rendered to respondent corporation on a regular
basis over an indefinite period of engagement. Respondent corporation hired and
engaged petitioner for compensation, with the power to dismiss her for cause.
More importantly, respondent corporation had the power to control petitioner
with the means and methods by which the work is to be accomplished.
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