By: Atty. Gregorio B. Austral, CPA
The four-fold test and the economic dependence test
in determining employment relation
A Complaint for illegal dismissal with money claims dated August 14, 2014 was filed by Flordivina Gaspar against M.I.Y. Real Estate Corp. and Melissa Yu. Flordivina alleged (1) that she was a regular employee of M.I.Y.; (2) 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 and Yu maintained a separate residence; (3) as FM&S personnel, her duty was to monitor and maintain the orderliness and cleanliness of every floor of the building, including its establishments such as a spa, massage parlor, salon, bar, transient rooms, and agency (yaya.com); (3) that she cleaned, mopped the floor, washed the glass windows of every floor, changed the bedsheets, pillows, and curtains of the transient rooms, and cleaned all the transient rooms; (4) that she also maintained the things used in the spa and massage parlor, like changing the towels used, checking the provisions for face towels, uniforms, and accessories, and monitored the staff; and (5) that she was also assigned to handle, monitor, and clean the penthouse where Yu’s office was located. In other words, Flordivina performed her tasks as FM&S staff for M.I.Y. and Yu.
According to Flordivina, M.I.Y. and Yu crafted a policy to force her to end the contract with them every six months. She 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. She also complained and reported to respondents that, by the negligence of another employee, her eyes were hit by a hot blower sprayed by the steamer in the spa, and that she did not receive any medication or medical help.
Flordivina returned to work on December 13, 2013 until the termination of her services on July 2, 2014. In the morning of July 2, 2014, she 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, she 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 her that she would not receive her last salary if she did not sign the document. She also alleged that Yu sent her hurtful and threatening text messages warning her not to file any labor case.
M.I.Y. countered that it was a small realty and development company with only four employees, and that Flordivina was not one of the four employees. M.I.Y. presented the payment receipts it made to the Social Security System, Home Development Mutual Fund, and Philippine Health Corporation, which did not include Flordivina’s name. Finally, M.I.Y. alleged that Flordivina was a domestic worker or a kasambahay of Yu, who is a director of M.I.Y. and a resident of the penthouse in the same building that M.I.Y. held its office.
Yu claimed that Flordivina was originally hired by her mother in April 2013 so that she could help in Yu’s household needs in her Pasig City residence located at No. 604 Manila Luxury Condominium, Pearl Drive Street, Ortigas, Pasig City. However, frequently frequently fought with other domestic workers in her Pasig City residence which prompted Yu to transfer Flordivina to her penthouse located at Goldrich Mansion in Makati City. In Yu’s Makati City residence, Flordivina was assigned with the task of cleaning and maintaining its orderliness from time to time for which she was paid PHP4,000.00 per month. Yu further alleged that Flordivina behaved and acted in a way that caused the ire of herself and everyone else. Yu finally alleged that petitioner left her household on July 1, 2014.
Is Flordivina an employee of M.I.Y.?
The Court scrutinized the relationship between petitioner and M.I.Y., and found that there is no employer-employee relationship between them.
In the recent case of Ditiangkin, this 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.
This 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.
We agree 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.I.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.I.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. 95 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. ||| (Gaspar v. M.I.Y. Real Estate Corp., G.R. No. 239385, [April 17, 2024])