THE FOUR Fold Test

THE FOUR-FOLD TEST IN LABOR LAW
In determining the existence of employer-employee relationship, the

elements that are generally considered comprises the so-called "four
fold test" namely: (a) the selection and engagement of the employee;
(b) the payment of wages; (c) the power of dismissal; and (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.
[1] It is important to determine whether an employment relationship exists

because this has an effect on the applicability of the Labor Code.
[2] Generally, if there is employer-employee relationship, the Labor Code applies.
Hence, labor courts have jurisdiction. Also generally, if there is no employment
relationship, the Labor Code does not apply and labor courts have no jurisdiction.
[3] Selection and engagement refers to the "choice" of the employer to hire the
services of a worker and his commitment to keep the latter as his employee.
[4] "Payment" refers to the compensation that an employee gets for work
performed.
[5] "Dismissal" is a component of the employer's power to move or organize
employees. It is a management prerogative whom to hire and/or fire. "Dismissal"
is a an act of labor force movement done by the employer that results in the
termination of employment relationship. However, it must be noted that, for
purposes of the Labor Code, simply because the disputants stand not in the
proximate relations of employer and employee does not mean that there is no
labor dispute. In fact, a worker dismissed from employment is still an employee
under the law until and unless his dismissal is declared valid and final by proper
authority.
[6] "Control" refers to the employer's power to regulate how the work is done.
This is the most important aspect of the four-fold test.
Absent the power to control the employee with respect to the means
and methods of accomplishing his work, there is no employer-
employee relationship between the parties.
[1] If there is only control by the employer over the end-result of the work, there
is no employment relationship.
The fact that one had been designated "branch manager" does not
make such person an employee. Employment is determined by the
right-of-control test and certain economic parameters. Titles are
weak indicators.
[1] Titles are weak indicators. Hence, even if an employee is called a "non-
employee" by the employer, if the juridical tie does exist, the latter cannot deny
employment relationship.
[2] Employment relations are a question of law. Contracts cannot stipulate that
there is or there is no employer-employee relationship if the opposite is true.
[W]here a person who works for another does so more or less at his
own pleasure and is not subject to definite hours or conditions of
work, and in turn is compensated according to the result of his efforts
and not the amount thereof, we should not find that the relationship
of employer and employee exists. In fine, there is nothing in the
records to show or would "indicate that complainant was under the
control of the petitioner" in respect of the means and methods in the
performance of complainant’s work. Consequently, [the complainant]
is not entitled to the benefits prayed for.
[1] Mode of compensation is not an indicator of employment relationship.
[2] Neither is the nature of the work performed, whether core or non-core.
[3] Although certain matters can be considered as hallmarks of employer-
employee relationship, such as registration with the SSS and PhilHealth as
employee, these are not absolute indicators.
[4] The Supreme Court has recognized that the question as to whether such a
relationship exists has always bedeviled the courts. Nevertheless, it is not
advisable to put an airtight definition on what constitutes employer-employee
relationship because this would allow employers to escape from their legal
obligations and would result in a violation of the constitutional policy on
protection to labor.
[5] In one case (NLU v. Dinglasan), the Supreme Court ruled that there is
employer-employee relationship despite the vague application of the four-fold
test, not only to protect the employee but also to protect public policy.
Similarly, in Manila Golf & Country Club vs. IAC, 237 SCRA 207, the
Supreme Court held that the caddies are not employees of the golf
club.
"As long as it is, the list made in the appealed decision detailing the various matters of
conduct, dress, language, etc. covered by the petitioner’s regulations, does not, in the
mind of the Court, so circumscribe the actions or judgment of the caddies concerned as
to leave them little or no freedom of choice whatsoever in the manner of carrying out
their services. In the very nature of things, caddies must submit to some supervision of
their conduct while enjoying the privilege of pursuing their occupation within the
premises and grounds of whatever club they do their work in. For all that is made to
appear, they work for the club to which they attach themselves on sufferance but, on the
other hand, also without having to observe any working hours, free to leave anytime
they please, to stay away for as long as they like. It is not pretended that if found remiss
in the observance of said rules, any discipline may be meted them beyond barring them
from the premises which, it may be supposed, the Club may do in any case even absent
any breach of the rules, and without violating any right to work on their part. All these
considerations clash frontally with the concept of employment."
[But] it should be borne in mind that the control test calls merely for
the existence of the right to control the manner of doing the work, not
the actual exercise of the right. For instance, considering the finding
by the Hearing Examiner that the establishment of Dy Keh Beng is
‘engaged in the manufacture of baskets known as kaing,’ it is natural
to expect that those working under Dy would have to observe, among
others, Dy’s requirements of size and quality of the kaing. Some
control would necessarily be exercised by Dy as the making of the
kaing would be subject to Dy’s specifications. Parenthetically, since
the work on the baskets is done at Dy’s establishment, it can be
inferred that proprietor Dy could easily exercise control on the men
he employed. (Dy Keh Beng vs. International Labor and Marine Union
of the Phils., et al., No. L-32245, May 25, 1979; Zanotte Shoes vs.
NLRC, G.R. No. 100665, February 13, 1995.)
[1] The existence of control should be proved. However, circumstances

surrounding the relationship may be resorted to in order to infer such existence.
An employer is one who employs the services of others; one for whom
employees work and who pays their wages or salaries.
[1] If there another person or entity pays the worker, there is a huge doubt
regarding the existence of employer-employee relationship.
[2] However, this has not prevented the Supreme Court to declare otherwise (i.e.,
there is employer-employee relationship) in the case of Corporal v. NLRC.
An employee is one who is engaged in the service of another; who

performs services for another; who works for salary or wages. His
work is subject to control of the employer not only as to the result but
the manner and means of doing it.
[1] Control over the means and manner of doing the work is an important
indicator of employment relationship.
[2] The employer, being the owner of the enterprise, has the prerogative as to
how the work should be done. He decides not only the means but also the
methods. This differentiates the employer from the mere buyer/contractor of
products and services.
[3] A buyer/contractor wants the results and only the results. He typically does
not care how the job is done as long as the result is to his liking.
For instance, a lawyer, like any other professional, may very well be
an employee of a private corporation or even of the government. It is
not unusual for a big corporation to hire a staff of lawyers as its in-
house counsel, and pay them regular salaries, rank them in its table of
organization, and otherwise treat them like its other officers and
employees. At the same time, it may also contract with a law firm to
act as outside counsel on a retainer basis. The two classes of lawyers
often work closely together, but one group is made up of employees
while the other is not. A similar arrangement may exist as to doctors,
nurses, dentists, public relations practitioners and other
professionals.
[1] The same job may be done by an employee or a mere worker. Therefore,
whether or not core or non-core jobs are done, the finding of employment
relationship, or the lack thereof, will be the same.
Exclusivity of service for the company, control of assignments and

removal of agents, collection of premiums, furnishing of facilities and
materials as well as capital described as unit development fund are
hallmarks of a management system where there can be no escaping
the conclusion that one is an employee of the insurance company.
"Independent contractors" can employ others to work and

accomplish contemplated result without consent of contractee, while
"employee" cannot substitute another in his place without consent of
his employer.
[1] Subcontracting is allowed by law. "Sub-employment" or an employee hiring

another employee to do the job is not recognized under our system of labor law.
[2] An employee goes through the hiring process and he is selected by reason of
his qualifications and other personal traits. He cannot hire another to do the job
instead.
The discussion above is based on an outline by Azucena (2013). His books are
available in fine bookstores nationwide. SOURCE: Azucena, C. A. (2013). The
Labor Code: with Comments and Cases (Vol. 1). National Book Store.
https://www.rexestore.com/labor-standards/981-the-labor-code-with-
comments-and-cases-volume-i-revised-edition.html

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THE FOUR-FOLD TEST IN LABOR LAW

In determining the existence of employer-employee relationship, the

[1] It is important to determine whether an employment relationship exists

[1] The existence of control should be proved. However, circumstances

An employee is one who is engaged in the service of another; who

Exclusivity of service for the company, control of assignments and

"Independent contractors" can employ others to work and

[1] Subcontracting is allowed by law. "Sub-employment" or an employee hiring

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