The case of Flordivina M. Gaspar vs. M.I.Y Real Estate Corp., and Melissa Ilagan Yu (G.R. No. 239385. April 17, 2024)
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AT A GLANCE:
The petitioner did not establish with substantial evidence her employment with M.I.Y. The Supreme Court ruled that the existence of an employer-employee relationship is determined by employing a two-tiered test: the four-fold test and the economic dependence test. The petitioner failed to establish the four-factors in the four-fold test. Subsequently, the Court Court only applies the economic dependence test when the control test is insufficient.
When is there employer-employee relationship? The Supreme Court answered this question in the case of Flordivina M. Gaspar vs. M.I.Y Real Estate Corp., and Melissa Ilagan Yu (G.R. No. 239385. April 17, 2024) when it ruled that the existence of an employer-employee relationship is determined by employing a two-tiered test: the four-fold test and the economic dependence test.
The often-cited four-fold test requires the concurrence of the following factors: (1) the employer’s selection and engagement of the employee; (2) the payment of wages; (3) the power to dismiss; and (4) the power to control the employee’s conduct. The Court has held that the power to control is the most significant among the four factors.
The Supreme Court only applies the economic dependence test when the control test is insufficient. In the economic dependence test, the economic realities of the employment, such as, among others, the extent to which the services performed are an integral part of the employer’s business, or the extent of the worker’s investment in equipment and facilities, are considered to get a comprehensive assessment of the true classification of the worker.
The facts of the case are as follows:
A Complaint for illegal dismissal with money claims dated August 14, 2014 was filed by petitioner Flordivina Gaspar against M.I.Y. and Yu. Petitioner alleged that she was a regular employee of M.I.Y and that she was hired on April 10, 2013 as Facilities Maintenance and Services (FM&S) personnel at the Goldrich Mansion, where M.I.Y conducted its business. Among her duties was to monitor and maintain the orderliness and cleanliness of the building and to handle, monitor, and clean the penthouse where Yu’s office was located. The petitioner performed her tasks as FM&S staff for M.I.Y and Yu.
Petitioner further alleged that respondents crafted a policy to force her to end the contract with them every six months. Petitioner was allegedly instructed to make a copy of a resignation letter given to her, then affix her name and signature. Furthermore, she was instructed to take a two-week vacation, then return to work thereafter.
Petitioner returned to work on December 13, 2013 until the termination of her services on July 2, 2014. In the morning of July 2, 2014, petitioner tried to enter the building to report for work, but a certain Ms. Josephine, her supervisor, advised her not to report for work anymore. Unrelenting, petitioner went back to the office to clarify on the reason for her termination. However, she was instead forced to sign an end-of-contract statement again or a notice of termination dated July 11, 2014, which was unsigned by the HR & T Supervisor. When she refused to sign the document, a certain Mr. Jason, the assistant of the HR & T Supervisor, informed petitioner that she would not receive her last salary if she did not sign the document. Petitioner also alleged that Yu sent her hurtful and threatening text messages warning her not to file any labor case.
In all, petitioner alleged that the facts stated above clearly established that she was a regular employee of M.I.Y. by operation of law. Petitioner also claimed that: (1) the duration of her employment lasted for almost 15 months or one year and three months; (2) her work was considered necessary and desirable in the usual business or trade of the company, and that she was directly hired by M.I.Y; and (3) M.l.Y. imposed a scheme to prevent her from attaining the status of a regular employee within the company.
Ruling of the Labor Arbiter
On November 12, 2014, the Labor Arbiter (LA) ruled that petitioner was not an employee of M.I.Y. The Complaint was therefore dismissed for lack of merit and jurisdiction.
Applying the four-fold test to the case, the arbiter found no employer-employee relationship between petitioner and M.I.Y. The arbiter instead held that petitioner was a domestic worker who rendered household work for Yu , and was under the control of Yu.
Ruling of the National Labor Relations Commission
On March 31, 2015, the NLRC dismissed the appeal of petitioner for lack of merit, and affirmed the LA Decision with respect to the dismissal of the Complaint. The NLRC ruled that petitioner had the burden to prove that she was an employee of M.I.Y. and Yu through substantial evidence. However, the pieces of evidence submitted by petitioner were insufficient to prove an employer-employee relationship between her and M.I.Y.
Ruling of the Court of Appeals
On April 26, 2017, the appellate court dismissed the appeal. The appellate court found that the NLRC did not commit grave abuse of discretion when it declared as follows: (1) that petitioner was not an employee of M.I.Y.; (2) that she was only engaged as a domestic worker of Yu; and, (3) that these findings and conclusions were supported by substantial evidence.
The issue before the Supreme Court is whether or not the petitioner is an employee of M.I.Y.
The court ruled in the negative.
Petitioner did not establish with substantial evidence her employment with M.I.Y.
In the recent case of Ditiangkin, the Supreme Court ruled that the existence of an employer-employee relationship is determined by employing a two-tiered test: the four-fold test and the economic dependence test.
The often-cited four-fold test requires the concurrence of the following factors: (1) the employer’s selection and engagement of the employee; (2) the payment of wages; (3) the power to dismiss; and (4) the power to control the employee’s conduct. The Court has held that the power to control is the most significant among the four factors. Under this test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end.
In Ditiangkin, the Court elaborated that the power to control extends not only over the work done but over the means and methods by which the employee must accomplish the work. Moreover, it is sufficient that the employer “has a right to wield the power [of control]” even without actually exercising such power.
The Supreme Court only applies the economic dependence test when the control test is insufficient. In the economic dependence test, the economic realities of the employment, such as, among others, the extent to which the services performed are an integral part of the employer’s business, or the extent of the worker’s investment in equipment and facilities, are considered to get a comprehensive assessment of the true classification of the worker.
The Supreme Court agrees with the appellate court’s application of the four-fold test in the case at bar and its finding that there is an absence of an employer-employee relationship between petitioner and M.I.Y.
First, there is no evidence to prove that M.I.Y. selected petitioner and engaged her to work as FM&S staff in the company. She merely presented clearances from a certain “Asian Group of Companies,” which do not prove that she was hired by M.I.Y.
Second, there is no evidence to prove that M.I.Y. paid her wages. Although petitioner presented petty cash vouchers and an unauthenticated and unverified copy of an ATM Card, these pieces of evidence cannot be considered as evidence of an employment relationship between the parties. Based on the records, the petty cash vouchers were signed only by petitioner while the portion for “approved for payment” was unsigned. The petty cash vouchers were also the standard petty cash vouchers available at bookstores and other shops, which can easily be manufactured by any person. On the other hand, it cannot be identified that M.l.Y. is the payor of the ATM Card.
Third, M.I. Y. does not have the power to dismiss petitioner. The Notice of Termination presented by petitioner was not signed by an employee of M.l.Y. Based on the records, the Notice of Termination designated a certain Jerickson Anonuevo as the HR & T Supervisor but the Notice of Termination remained unsigned. It was not proven that Jerickson Anonuevo is in any way connected to M.I.Y.
Finally, M.I.Y. does not have the power to control petitioner’s conduct. M.I.Y. did not control the means and methods by which petitioner performed her tasks as FM&S staff. The clear absence of the power of control leads to the conclusion that petitioner is not an employee of M.I.Y.
Here, the control test is sufficient to determine the absence of an employer-employee relationship between petitioner and M.I.Y. Thus, the economic realities of the employment under the economic dependence test will not be discussed.
Source:
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