MANILA -- Riders in food delivery and courier activities are covered by either the Labor Code of the Philippines or the contract or agreement with the digital platform company, depending on the existence of an employer-employee relationship.

The labor department issued an advisory in order to help set the standards in determining work relationships introduced by the booming delivery service sector.

In an advisory, Labor Secretary Silvestre Bello III said delivery riders who are considered employees of the digital platform company are entitled to the minimum benefits under the Labor Code of the Philippines.  

But those deemed as independent contractors or freelancers shall be governed by their respective contracts or agreements with the digital platform company, Bello said.  

He added that the existence of an employer-employee relationship between the delivery rider and the digital platform company may be determined using the principle of “primacy of facts” by applying the four-fold test, the economic reality test and independent contractor test, while taking into account the flexibility of work, including working time, control through technology, and use of the equipment and other inputs.

The four-fold test pertains to the selection and engagement of the employee, payment of wages, the power of dismissal, and the power of control over the employee’s conduct.

Citing jurisprudence, the advisory said the economic reality test is the determination of the employer-employee relationship depending on the extent to which the services performed by the worker as integral part of the employer’s business; the extent of the worker’s investment in equipment and facilities; the nature and degree of control exercised by the employer; the worker’s opportunity for profit and loss; the amount of initiative, skill, judgment or foresight required for the success of the enterprise; the permanency and duration of the relationship between the worker and the employer; and the degree of dependency of the worker upon the employer for his continued employment.  

The independent contractor test, on the other hand, means workers are deemed independent contractors because of their unique skills and talents and the employer’s lack of control over the means and methods in their work performance.

All delivery riders who are deemed employees of the digital platform company shall enjoy the minimum standards and benefits.

The benefits of employed riders are minimum wage, holiday pay, premium pay, overtime pay, night shift differential, service incentive leave, thirteenth-month pay, separation pay, and retirement pay. They are also entitled to get occupational safety and health (OSH) standards, including SSS, PhilHealth, and Pag-IBIG, and other benefits under existing laws.

Riders shall also enjoy the right to security of tenure, self-organization, and collective bargaining.

On the other hand, delivery riders deemed independent contractors or freelancers shall be governed by their respective contract or agreement with the digital platform company.

The contract or agreement shall stipulate the following provisions, including but not limited to the payment of fair and equitable compensation, which shall not be lower than the prevailing minimum wage rates and facilitation of registration and coverage under SSS, PhilHealth, and Pag-IBIG.

The contract or agreement shall also stipulate compliance with applicable OSH standards, such as but not limited to the use of standard protective helmet and personal protective equipment, and attendance to regular training and seminars on road and traffic rules and road safety to be arranged by the digital platform company in coordination with relevant government agencies.

There shall also be an arrangement with concerned local government units and/or merchants in setting up designated waiting areas for delivery riders.

The parties shall knowingly and voluntarily agree upon the contract or agreement without any force, coercion, improper pressure, or other circumstances impairing consent.

The Labor Advisory further states that any complaint or grievance of delivery riders or digital platform company shall be settled and resolved through conciliation, mediation, inspection, or arbitration, whichever is applicable, under existing rules and regulations. (DOLE)