Section 1: Parties and Need for Remedy
Chapter 2: Employer
1. Determination of the Existence of Employer Status under the Labor Standards Act
1.2 Determination of the Existence of Employer Status Based on the Substantive Employment Relation
| Supreme Court Decision on December 7, 2006, Case 2006Do300 | |||||
| * Appellant: Defendant
* Defendant: A 1. Facts: a. Employees of the Agricultural Cooperative were predominantly responsible for determining the complainants' work start dates, pay amounts, and payment methods, as well as managing their attendance and leave. b. The complainants performed tasks such as stocking and inventory checks of all products supplied to the cooperative, major cleaning, warehouse organization, and assisting sales at external direct sales markets, all under the directives of the cooperative's staff, including for products not exclusively supplied by the vendor paying their wages. 2. Court Judgment: a. Determination of Employee Status under the Labor Standards Act The determination of whether a person qualifies as an employee under the Labor Standards Act should be based on the substance of the relationship rather than the form of the contract. The key consideration is whether the individual provides labor to an employer in a subordinate relationship in exchange for wages. Several factors must be taken into account to make this determination: The extent to which the nature of the work is defined by the employer. Whether the employee is subject to rules and regulations such as employment policies, service regulation ns, and personnel rules. Whether the employee receives specific and direct supervision from the employer during the performance of duties. Whether the employee's working hours and location are designated by the employer and whether the employee is bound by these designations. Ownership of equipment, raw materials, and work tools used in the job. Whether the compensation is characteristic of remuneration for labor itself, whether basic or fixed wages are determined, and whether income tax on wages is withheld. The continuity and exclusivity of the employment relationship. Whether the individual is recognized as an employee under other laws, such as social security legislation. The economic and social conditions of both parties. Similarly, determining who bears the obligations prescribed in Articles 32 and 36 of the Labor Standards Act should be based on the substantive employment relationship, considering the same factors. b. Upon reviewing the Case in light of the above legal principles, even if the complainants did not enter into an explicit employment contract with the aforementioned association, they are, in substance, considered employees of the association, being subject to its direction and supervision. Therefore, the defendant, as the representative of the association, is deemed an employer who bears the obligations prescribed under Articles 32 and 36 of the Labor Standards Act with respect to the complainants. The money paid by the suppliers to the complainants should not be regarded as wages paid by an employer, but rather as costs incurred under an agreement with the association for product display and other necessary expenses.. c. Those who received compensation from suppliers to manage all the products delivered to the large discount store operated by the association are, in substance, considered employees of the association. |
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