Tipping the scales of justice in favor of labor

What is the test to determine whether there is an employer and employee relationship? This is answered in this case of Dado, Waldo and Carlo working in a rubber plantation owned by the spouses Manuel and Martha.

Dado, Waldo and Cardo are rubber tree tappers collecting rubber lumps from small containers attached to the trunk of rubber trees and transferring them to another container.

Later on, Dado, Waldo, Cardo were ordered by the spouses to stop tapping their rubber tress.

So, Waldo, Cardo and Dado filed before the Labor Arbiter a complaint for illegal dismissal, reinstatement or separation pay, under payment of wages, labor standards benefit, damages and attorney’s fees.

The Labor Arbiter dismissed the complaint on the ground that the relationship between the parties was that of a landlord and tenant and not of employer and employee. This ruling was reversed and set aside by the National Labor Relation Commission (NLRC) which remanded the case to the Executive Labor Arbiter for hearing on the merits.

Waldo et.al. thus filed a Petition for Certiorari before the Court of Appeals (CA). The CA, however, decided the case on the merits instead of ruling on the procedural aspect raised by Waldo et.al.

It found that Waldo et.al failed to overcome the burden of proving the existence of employee-employer relationship so they could not have been illegally dismissed from employment.

The Supreme Court (SC), however, ruled that while the CA correctly delved into the merits of the case, it erroneously ruled that the parties did not have an employer-employee relationships.

There are four tests determining the existence of the employer-employee relationship: (1) the power to hire; (2) the payment of wages; (3) the power to dismiss; (4) the power to control, which is the most important element.

Waldo et.al submitted sufficient collaborating testimonies of their colleagues that (1) they were required to work at set hour and per day; (2) they were paid a set rate per day of work; (3) they worked under the spouse’s constant supervision and (4) they could be dismissed for violating the work standards set by the spouses.

The better approach would therefore be to adopt this two-tiered test, involving (1) the 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 relationship.

Applying this two-tiered test, in this case, the spouses indeed exercised control over Waldo et.al.

Besides, when the evidence of employer and employee are of equal weight, the scales must tip in favor of labor (PNB vs. Bulatao G.R 200972 Dec. 11, 2019). This is consistent with the social justice supposition underlying labor laws to afford greater protection to labor.

The CA decision is therefore reversed and set aside and Waldo et.al should be reinstated, paid back wages and labor standards benefits from the time of their dismissal, until finality of judgment (Wahing et.al vs.spouse Daguio G.R 219755, April 18, 2022).