Written contract of employment not mandatory

Dear PAO,
Is it necessary to have a written contract of employment to be considered employed?
Ruth

Dear Ruth,
A written contract of employment is a written agreement entered into between the employer and the employee wherein the former hires the latter for the performance of a service or a job for a stipulated wage or salary. A contract of employment also sets forth the different terms and conditions that shall be observed during the period of employment. However, a written contract of employment is not a mandatory requirement for one to be considered employed. At the most, it shall only be treated as one of the best evidence to prove one’s employment considering that it is in writing and signed by both the employer and the employee.

In a long line of cases, the Supreme Court of the Philippines has set forth the elements that are generally considered in determining the existence of employer-employee relationship. These are the following: (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 (Brotherhood Labor Unity Movement of the Philippines vs. Zamora, GR No. L-48645, January 07, 1987; People’s Broadcasting Service vs. Secretary of Labor, GR No. 179652, March 06, 2012; Tiu vs. NLRC, GR No. 95845, February 21, 1996). Among the four tests, the control test is considered as the most important element. However, not all kinds of control exerted over another have the effect of establishing employer-employee relationship. A distinction should be made between the form of control or rules that merely serve as guidelines towards the achievement of the mutually desired result without indicating the means or methods to be employed in attaining it and those that control or fix the methodology and bind or restrict the party hired to the use of such means in attaining the desired result. The first form does not create employer-employee relationship since it only aims to promote the result. On the other hand, the second form creates employer-employee relationship because it addresses both the result and the means to achieve it (Insular Life Assurance Co., Ltd. vs. NLRC, GR No. 84484, November 15, 1989.)

Based on the foregoing, a written contract of employment is not necessary for one to be considered employed. A person shall be considered as an employee of another if the aforementioned elements are present even if there is no written contract of employment.

source:  Manila Times' Column by Atty. Persida Acosta