b. Economic Dependence Test

Economic Dependence (Two-Tiered Test)

This two-tiered test provides us with a framework of analysis, which would take into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in this case where there is no written agreement or terms of reference to base the relationship on and due to the complexity of the relationship based on the various positions and responsibilities given to the worker over the period of the latter’s employment. (Francisco v. NLRC, G.R. No. 170087, 31 Aug. 2006)

Proper Standard for Economic Dependence

The proper standard is whether the worker is dependent on the alleged Er for his continued employment in that line of business.

The determination of the nature of the relationship between Er and Ee depends upon the circumstances of the whole economic activity, such as:

• The extent to which the services performed are an integral part of the Er’s business;
• The extent of the worker’s investment in equipment and facilities;
• The nature and degree of control exercised by the Er;
• The worker’s opportunity for profit and loss;
• The amount of initiative, skill, judgment, or foresight required for the success of the claimed independent enterprise;
• The permanency and duration of the relationship between the worker and Er; and
• The degree of dependency of the worker upon the Er for his continued employment in that line of business.