SC raps app abuses

A foreign tech firm that runs a ride-hailing app hired a manager in Manila. His contract called him a “contractor,” not an employee. It even said he could never claim otherwise. It also said a foreign law would govern the deal.

Months later, he was told to hand over his gear and leave without warning, hearing or any reason at all, Nosy Tarsee’s court snoop said.

He sued for illegal dismissal. The labor arbiter and the labor commission sided with the firm. To them, a contract is a contract. The Court of Appeals disagreed, and now the Supreme Court (SC) has backed the appeals court.

Its message is loud: labels do not matter, facts do.

Here is how the High Court saw it.

First, the foreign law. The firm said Dutch law applies, but whoever claims foreign law must prove it with proper papers. The firm did not, so Philippine law applies.

Second, the “contractor” tag. The law decides who is an employee, not the paper. The Court used the four-part test: who hired him, who paid him, who could fire him, and who controlled how he worked. The firm did all four: it hired him, paid him a monthly salary, and warned that it could end his job. It also set his hours and leaves, and told him to stay “on” even when on vacation.

Third, he was not the rare kind of contractor the law treats as free. He had no special skill that set him apart, and the firm hired six others for the same job.

Fourth, the firm gave no valid cause and no notice before the firing. It must pay back wages, separation pay, lawyer’s fees and the value of the stock benefits he would have earned. The bonanza comes through a 6-percent yearly interest on all of the worker’s entitlements.

Why does this matter? The same fight is brewing on the road. Many drivers on ride-hailing apps are called “partners,” not workers. Their contracts also say they are not employees. The apps say drivers choose their own hours and use their own cars.

This ruling does not settle the driver question because the man here was a manager. But it gives the test. If an app tells you how to work, pays you, can cut you off, and relies on your work for its core business, a paper label may not save it.

Which app is sweating? And how many other firms carry the same clause in their contracts?