G.R. No. 246892 - Ditiangkin vs. Lazada E-Services Philippines, Inc.

February 2016: Riders engaged by Lazada under Independent Contractor Agreements
January 2017: Riders informed of removal from routes; no further assignments
November 3 2017: Labor Arbiter decision dismissing complaint for lack of employer-employee relationship
April 30 2018 & September 10 2018: NLRC resolutions affirming Arbiter
January 14 2019 & March 15 2019: Court of Appeals resolutions dismissing riders’ certiorari petition
September 21 2022: Supreme Court decision

1987 Philippine Constitution, Article XIII, Section 3 (full protection to labor; security of tenure)
Labor Code, Article 295 (regular employment) and Article 106 (contracting and subcontracting)
Civil Code, Article 1700 (employment contracts and public interest)
Jurisprudential tests: Four-fold test; economic dependence test

Riders filed NLRC complaint for illegal dismissal and unpaid benefits, claiming regular-employee status.
Labor Arbiter dismissed for lack of employer-employee relationship, relying on Contractor Agreements.
NLRC affirmed; petitioners’ motion for reconsideration denied.
Riders filed Rule 65 certiorari petition in CA; dismissed as improper remedy.
Supreme Court granted Rule 45 review of CA resolutions.

Each rider signed a one-year Independent Contractor Agreement, earning ₱1,200/day.
Riders used personal motorcycles and equipment.
Riders received no schedules after January 2017 and were effectively removed.
Riders sought pay for holidays, overtime, thirteenth-month pay, separation pay, moral and exemplary damages, and attorney’s fees.

Proper procedural vehicle (Rule 65 vs. Rule 43/Rule 45)
Existence of employer-employee relationship:
a. Whether riders are independent contractors
b. Application of four-fold test and economic dependence test
Entitlement to monetary awards

Rule 65 certiorari in CA was proper to review NLRC decisions for grave abuse of discretion; Rule 45 review in the Supreme Court is limited to questions of law, except where factual findings are unsupported or based on gross misapprehension.
Labor policy under the 1987 Constitution and Labor Code favors security of tenure and the subjection of employment contracts to public interest.
Classification cannot rest on labels or contractual stipulations alone; employer bears burden to prove independent-contractor status.

Four-fold Test

Selection and engagement: Lazada directly hired and paid riders.
Payment of wages: Riders received daily service fees from Lazada.
Power to dismiss: Lazada could terminate agreements for material breach.
Control over conduct: Agreement expressly vested Lazada with discretion and control over methods; riders complied with route sheets, incident reports, penalties, standardized tools, and schedules.

Economic Dependence Test

Delivery of goods is integral to Lazada’s business model.
Riders lacked significant investment beyond personal motorcycles.
Riders had fixed daily fees, no profit-and-loss opportunity, and could not freely offer services to others.
Riders depended on Lazada for continued employment

Petitioners filed a complaint before the National Labor Relations Commission (NLRC) alleging illegal dismissal and unpaid benefits against Lazada E-Services Philippines, Inc. and its officers
Labor Arbiter dismissed the complaint for lack of jurisdiction, ruling no employer-employee relationship existed
NLRC affirmed the Labor Arbiter’s decision
Petitioners elevated to the Court of Appeals (CA) via Rule 65 certiorari; CA dismissed the petition for using the wrong procedural remedy
Petitioners filed a Petition for Review under Rule 45 before the Supreme Court, challenging CA resolutions dated January 14 and March 15, 2019

In February 2016, five individuals (“riders”) were engaged by Lazada under Independent Contractor Agreements for one year
Riders tasked to pick up items from sellers and deliver them to Lazada’s warehouse using their own motorcycles
Service fee set at ₱1,200 per day
January 2017: riders informed by dispatcher they were removed from routes and received no new assignments over three days
Riders learned their routes were reassigned to others, prompting the filing of the NLRC complaint

Riders argued they were regular employees despite the “Independent Contractor” label in their Contracts
Mean and methods of work were controlled by Lazada (routes, schedules, working hours)
Cited Article 295 of the Labor Code: activities necessary or desirable in the employer’s business create regular employment
Applied the four-fold test: selection, payment, power to dismiss, control over conduct
Emphasized economic dependence: fixed daily fee, exclusive reliance on Lazada for income, no capacity to hire helpers
Sought backwages, separation pay, overtime pay, holiday pay, thirteenth month pay, service incentive leave pay, moral and exemplary damages, and attorney’s fees