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FRANCISCOvs.

NLRC
[GR. No.170087Aug. 31, 2006]
Facts:
Angelina Francisco
has held
Kasei Corporation, to wit: (1)

several positions in
Accountant and

Corporate Secretary; (2) Liaison Officer to the City of Makati; (3) Corporate Secretary;
and (4)Acting
Manager.
She performed the work of Acting Manager for five years but later she was replaced
by Liza R.
Fuentes as Manager.
her mid-year

Then, Kasei Corporation reduced her salary and was not paid

bonus allegedly because the company was not earning well. She made repeated followups with the
company cashier but she was advised that the company was not earning well.
Ultimately, she did not
report forwork and filed an action for constructivedismissal before the labor arbiter.
Issue:
WasFrancisco an employee of Kasei Corporation?
Held:
In certain cases where the control test is not sufficient to give a complete picture of the
relationship
between the parties, owing to the complexity of such a relationship where several
positions have
been held by the worker. There are instances when, aside from the employers power to
control the
employee with respect to the means and methods by which the work is to be
accomplished,
economic realities of the employment relations help provide a comprehensive analysis
of the true
classification of the individual, whether as employee, independent contractor,
corporate officer or
some other capacity.

The better approach wouldtherefore be to adopt atwo-tiered test involving:


(1) the putative employerspower to control the employee with respect to the
meansand methods
by whichthe work isto be accomplished; and
(2) the underlying economic realitiesofthe activityorrelationship.
This two-tiered test would provide us with a framework of analysis, which
take into

would

consideration the totality of circumstances surrounding the true nature of the


relationship between
the parties. Thisisespecially appropriate in thiscase where there isno written agreement
or termsof
reference to base the relationship on; and due to the complexity of the relationship
based on the
variouspositionsand responsibilitiesgiven to the workerover the period of the
lattersemployment.
Thus, the determination of the relationship between
depends upon the

employer and employee

circumstancesof the whole economic activity, such as:


1. the extent to which the servicesperformed are an integral partof the
employersbusiness;
2. the extent of the workersinvestment in equipment and facilities;
3. the nature anddegree of control exercised by the employer;
4. the workersopportunity for profit andloss;

5. the amount of initiative, skill, judgment or foresight required for the success of
the claimed
independent enterprise;
6. the permanency anddurationof the relationship between the worker and the
employer; and
7. the degree of dependency of the worker upon the employer for his continued
employment in
that lineof business.
The proper standard of economic dependence is whether the worker is dependent on
the alleged
employer for hiscontinued employment in that lineof business.
By applying the control test, there is no doubt that petitioner is an employee of Kasei
Corporation
because she was under the direct control and supervision of Seiji Kamura, the
corporations
Technical Consultant. She reported for work regularly and served in various
capacities, with
substantially the same job functions, that is, rendering accounting and tax services to
the company
and performing functions necessary and desirable for the proper operation of the
corporation such
assecuring businesspermitsand otherlicensesover an indefinite periodof engagement.
There can be no other conclusion that she is an employee of respondent Kasei
Corporation. She was
selected and engaged by the company for compensation, and is economically
dependent upon
respondent for her continued employment in that line of business. Her main job
function involved
accounting and tax services rendered to the corporation on a regular basis over an
indefinite period
of engagement. The corporation hired and engaged her for compensation, with the
power to dismiss
for cause. More importantly, the corporation had the power to control her with the
means and
methodsby which thework isto be accomplished.

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