Issues on SC ruling on Lazada case


The recent ruling of the Supreme Court on the employment status of five Lazada riders has called attention to a work process brought about by the flourishing online selling and delivery business.

Citing a decades-old test in determining employer-employee relationship, the court said those riders should be considered regular employees of Lazada E-Services Phils., Inc. and therefore entitled to all the rights that go with it.

At the outset, the court’s action should not be looked at as a one-size-fits-all decision, or is applicable to all workers engaged in a similar task in private companies.

The court’s regularization order is based on the nature of Lazada’s business which, per its website, is “general merchandise, mail order, online service providers.”

As a logistics company, it is essential that it maintain a corps of workers or riders who can efficiently pick up the goods or products of its client-companies and deliver them to their customers.

Since the engagement of those riders is beneficial and advantageous to Lazada’s business, it is fitting and proper that they be treated as regular employees. Their status cannot be watered down by the simple expedient of stating in their contracts that they shall be considered as independent contractors.

But that principle cannot apply to businesses that, from time to time, engage the services of riders to deliver their merchandise or goods to customers who prefer their purchases to be brought to them rather than personally picking them up.

If, for example, some riders make their services available on their chosen time and day to several food stalls in a mall and are paid certain sums of money as compensation for their deliveries, it is a big question mark if the employment criteria laid down in the Lazada case would apply to them.

Since those riders can decide when they want to work and cannot be compelled by the food stalls to follow a work schedule, they can be reasonably considered as independent contractors.

Applying the employment test used in the Lazada case to them would result in their being considered regular employees of the food stalls that engage their services which, to say the least, would be absurd.

With that employment status, they would, strictly speaking, have to be registered with and obliged to pay premium contributions to the Social Security System, Philippine Health Insurance Corp. and Pag-IBIG Fund.

In light of the meager pay they receive for their services, there is no way they will agree to be made members of those government offices and make premium payments.

The bottom line is, the determination of employer-employee relationship in today’s economy would have to be done on a case-to-case basis depending on the attending circumstances of the business involved.

The Lazada decision may be used as a guide in deciding employment status issues, but it cannot be invoked if the facts and figures of a labor case are not similar to it.

In fact, since the test used in that case was laid down six decades ago when “work from home” and online selling and delivery were unheard of, it may be time for the court to take a second look at it and adapt it to the present times.

Incidentally, the grant of regular employment status to the Lazada riders could come with the condition that, for safety reasons, they cannot “moonlight” or provide delivery services to other companies during their rest days.

That would not pose any problems if the employer pays wages that would enable them to meet the financial demands of daily living.

But considering the highly competitive logistics business that often compels its operators to slash their service fees to the barest minimum possible, it is doubtful if they can pay their riders that kind of wage.

Thus, some riders may prefer to be “freelancers,” meaning, they are not tied down to one employer since they will be able to earn more from other kinds of deliveries that come with respectable tips, such as food delivery, and, most importantly, can make adjustments in their work schedule depending on their personal requirements. INQFor comments, please send your email

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