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Under Presidential Decree No. 442, otherwise known as the “Labor Code of the Philippines”, a regular employee is either an employee who has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer or have rendered at least one (1) year of service, whether continuous or broken, with respect to the activity in which they are employed. 

By this definition, it can be deemed that there shall be an employer-employee relationship if the person is subject to the control where the person for whom the services are performed reserves the right to control not only the results of the work, but also the manner and means to be used in the performance of the work. Consequently, said relationship, including the payment of government mandated benefits and entitlement to leaves, is strictly governed by the Labor Code.

In contrast, while the Labor Code does not explicitly define independent contractor, jurisprudence describes it as an individual who was hired because of his or her unique skills and talents and enjoys independence and freedom from the control and supervision of his principal. Therefore, an independent contractor is not considered an employee, and their relationship with the principal is primarily governed by the Civil Code or other applicable laws, rather than the Labor Code.

Understanding these differences is crucial for both employers and workers to ensure compliance with Philippine laws and regulations with regard to the chosen working arrangements.

Disclaimer: This article is for informational purposes only and should not be considered legal advice. For specific guidance in cases involving the difference between an independent contractor from a regular employee, consult with a legal professional.

Padin & Partners Law Offices is a full-service law firm based in Cebu City, Cebu Philippines, that offers legal services such as filing of civil case involving an independent contractor or labor case involving an employee in Cebu City, Cebu, Philippines. For consultations: book an appointment or reach us at +63 (32) 316-1540 or +63 917 188 0361.

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