Is there such a thing as Independent Contractors in the Philippines?

There is such a thing as hiring independent contractors in the Philippines.
If you want to hire an independent contractor, make sure that no employer-employee relationship exists between you and your potential employees. In determining the existence of an employer-employee relationship, the following elements must be present: 1) selection and engagement of the employee; 2) payment of wages; 3) power of dismissal; and 4) the power to control the employee's conduct. Of the above, control of employee's conduct is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under the control test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the manner and means to used in reaching that end.

Providing guidelines on company policies does not necessarily mean that the employer has the power to control employee’s conduct. In this regard, an independent contractorship agreement may still prosper if issuance of company policies are merely done to apprise the contractor of company policies and procedures, as long as the contractor is given the freedom to conduct its own operations. The periodic reports that may be required by the company may only be necessary to update the company of the contractor’s performance and business income.

Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating 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. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it.

In other words, in determining whether a person who performs work for another is the latter's employee or an independent contractor, the prevailing test is the "right of control" test.


References:

ENCYCLOPAEDIA BRITANNICA (PHILIPPINES), INC., vs. NLRC, G.R. No. 87098 November 4, 1996.

INSULAR LIFE ASSURANCE COMPANY LTD., vs. NLRC et al., GR No. 84484, November 15, 1989.

COSMOPOLITAN FUNERAL HOMES, INC., vs. NOLI MAALAT and NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 86693 July 2, 1990.