2016 Labor Law, Q13

Matibay Shoe and Repair Store, as added service to its customers, devoted a portion of its store to a shoe shine stand. The shoe shine boys were tested for their skill before being allowed to work and given ID cards. They were told to be present from the opening of the store up to closing time and were· required to follow the company rules on cleanliness and decorum. They bought their own shoe shine boxes, polish, and rags. The boys were paid by their customers for their services but the payment is coursed through the store’s cashier, who pays them before closing time. They were not supervised in their work by any managerial employee of the store but for a valid complaint by a customer or for violation of any company rule, they can be refused admission to the store. Were the boys employees of the store? Explain. (5%)

Quick check

Which element is considered the most critical factor in determining the existence of an employer-employee relationship under the four-fold test?

How is the element of payment of wages satisfied when workers receive service fees directly paid by customers?

What does the control test specifically evaluate regarding an worker's performance?

Why were the shoe shine boys deemed employees despite buying their own polish, rags, and shoe boxes?

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Under labor jurisprudence, what power demonstrates the third element of the four-fold test?

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1. Four-Fold Test
The four-fold test is the traditional legal standard used to determine the existence of an employer-employee relationship. Under Philippine labor jurisprudence, the elements are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer's power to control the employee's conduct. Among these four elements, the control test is universally recognized as the most crucial factor in establishing an employment status under the law.

2. Control Test
The control test focuses on whether the employer controls or has reserved the right to control the employee, not only as to the result of the work to be done but also as to the means and methods by which the work is to be accomplished. It does not require actual supervision over every detail of performance; the mere existence or reservation of the right to control conduct, working hours, and workplace rules is sufficient to establish an employer-employee relationship.

3. Payment of Wages
The payment of wages element is satisfied regardless of the specific form, mode, or direct source of compensation. In labor jurisprudence, even if workers are paid directly by customers or on a commission or piece-rate basis, the element of payment of wages exists if the earnings are coursed through the employer's cashier or accounting system. The employer's act of collecting, accounting for, and disbursing the funds to the workers confirms control over the wage payment process.

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