Celso was hired by Onyx Pharma Company (Onyx) as a rider primarily tasked with picking up items from sellers and delivering them to Onyx’s…

Explanation

The key to determining whether Celso is a regular employee or an independent contractor lies in the four-fold test, especially the control test, which examines whether Onyx Pharma Company controls not only the result of Celso's work but also the manner and means by which he performs his tasks. The facts show that Celso was required to accomplish a route sheet tracking his arrival, departure, and unloading times, submit trip tickets and incidental reports, and that Onyx reserved the right to immediately terminate the Agreement for breach of material provisions. These indicate a significant degree of control by Onyx over Celso's work.

Moreover, Article 295 of the Labor Code provides that employment is deemed regular when the employee performs activities necessary or desirable in the usual business of the employer. However, the question does not establish whether Celso's employment was fixed for a specific project or undertaking, or was seasonal in nature. Without this fact, it cannot be categorically concluded that Celso is a regular employee, although the available facts suggest his work was integral to Onyx's business operations.

The Supreme Court in Ditiangkin v. Lazada clarified that even if the parties label the relationship as independent contractor, the actual circumstances and control exercised determine the true nature of the relationship. The Court found that requiring route sheets, trip tickets, and the power to terminate for breach are signs of control, thus establishing an employer-employee relationship.

Similarly, in G.R. No. 235315, the Court emphasized that modest wages and control over work schedules and methods support the existence of an employer-employee relationship. Regular employees enjoy security of tenure and can only be terminated for just or authorized causes with due process.

Application to the facts

Celso was hired under an Independent Contractor Agreement but was paid a daily service fee, required to accomplish route sheets, submit reports, and was subject to immediate termination for breach of material provisions. These facts show that Onyx controlled not only the result but also the manner of Celso's work, satisfying the control test. The delivery of items is a necessary and desirable activity in Onyx's business, making Celso's work integral and not incidental.

Onyx's reservation of the right to terminate the Agreement immediately upon breach indicates the power of dismissal, another element of the four-fold test. Celso was paid wages, selected and engaged by Onyx, and controlled in his work conduct. Therefore, the four-fold test for employer-employee relationship is met.

Given that Celso performed activities necessary to Onyx's business and the facts do not show that he was hired for a specific project or seasonal work, the available evidence supports that he should be considered a regular employee under Article 295 of the Labor Code, unless it is later established that his employment was project-based or seasonal.

The Labor Arbiter erred in dismissing Celso's illegal dismissal case on the ground that he was not a regular employee, as the evidence shows an employer-employee relationship and regular employment status.