EMPLOYMENT TEST - LABOR LAW

Credits to the owner of the image.

FOUR FOLD TEST
a) the selection and engagement of the employee;
b) the payment of wages;
c) the power of dismissal;
d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. It is the so-called "control test" that is the most important element.

-Absent the power to control the employee with respect to the means and methods by which his work was to be accomplished, there is no employer-employee  relationship between the parties.
(Philippine Global Communications, Inc. vs De Vera, GR No. 157214, June 7, 2005)

TWO-TIERED APPROACH; THE ECONOMIC DEPENDENCE TEST
1) the 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.

Economic Realities Test
When a worker possesses one attribute of an employee and others of an independent contractor, which make him fall within an intermediate area, he may be classified under the category of an employee when the economic facts of the relation make it more nearly one of the employment than one of the independent business enterprise with respect to the ends sought to be accomplished. (Sunripe Coconut Products Co., Inc. vs CIR, etc., GR No. L-2009, April 30, 1949)

Broader Economic Reality Test
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 and 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;
7) the degree of dependency of the worker upon the employer for his continued employment in that line of business
(The Labor Code with Comments and Cases Book I by CA Azucena, 2010 ed.)