542 SCRA 578 Labor Law Labor Standards Regular Employee Employer-employee

relationship Four Fold Test

Servaa started out as a security for the Agro-Commercial Security Agency (ACSA) since
1987. The agency had a contract with TV network RPN 9.
On the other hand, Television and Production Exponents, Inc (TAPE). is a company in
charge of TV programming and was handling shows like Eat Bulaga! Eat Bulaga! was then
with RPN 9.
In 1995, RPN 9 severed its relations with ACSA. TAPE retained the services of Servaa as
a security guard and absorbed him.
In 2000, TAPE contracted the services of Sun Shield Security Agency. It then notified
Servaa that he is being terminated because he is now a redundant employee.
Servaa then filed a case for illegal Dismissal. The Labor Arbiter ruled that Servaas
dismissal is valid on the ground of redundancy but though he was not illegally dismissed he
is still entitled to be paid a separation pay which is amounting to one month pay for every
year of service which totals to P78,000.00.
TAPE appealed and argued that Servaa is not entitled to receive separation pay for he is
considered as a talent and not as a regular employee; that as such, there is no employeeemployer relationship between TAPE and Servaa. The National Labor Relations
Commission ruled in favor of TAPE. It ruled that Servaa is a program employee. Servaa
appealed before the Court of Appeals.
The Court of Appeals reversed the NLRC and affirmed the LA. The CA further ruled that
TAPE and its president Tuviera should pay for nominal damages amounting to P10,000.00.
ISSUE: Whether or not there is an employee-employer relationship existing between TAPE
and Servaa.
HELD: Yes. Servaa is a regular employee.
In determining Servaas nature of employment, the Supreme Court employed the Four
Fold Test:

1. Whether or not employer conducted the selection and engagement of the

employee.
Servaa was selected and engaged by TAPE when he was absorbed as a talent in 1995.
He is not really a talent, as termed by TAPE, because he performs an activity which is
necessary and desirable to TAPEs business and that is being a security guard. Further, the
primary evidence of him being engaged as an employee is his employee identification card.
An identification card is usually provided not just as a security measure but to mainly
identify the holder thereof as a bona fideemployee of the firm who issues it.
2. Whether or not there is payment of wages to the employee by the employer.
Servaa is definitely receiving a fixed amount as monthly compensation. Hes receiving
P6,000.00 a month.
3. Whether or not employer has the power to dismiss employee.
The Memorandum of Discontinuance issued to Servaa to notify him that he is a redundant
employee evidenced TAPEs power to dismiss Servaa.
4. Whether or not the employer has the power of control over the employee.
The bundy cards which showed that Servaa was required to report to work at fixed hours
of the day manifested the fact that TAPE does have control over him. Otherwise, Servaa
could have reported at any time during the day as he may wish.
Therefore, Servaa is entitled to receive a separation pay.
On the other hand, the Supreme Court ruled that Tuviera, as president of TAPE, should not
be held liable for nominal damages as there was no showing he acted in bad faith in
terminating Servaa.
Regular Employee Defined:
One having been engaged to perform an activity that is necessary and desirable to a
companys business.