PHP Nested JSON from flat JSON

I have the following utility class to do exactly what you need.

class NestingUtil
{
    /**
     * Nesting an array of records using a parent and id property to match and create a valid Tree
     *
     * Convert this:
     * [
     *   'id' => 1,
     *   'parent'=> null
     * ],
     * [
     *   'id' => 2,
     *   'parent'=> 1
     * ]
     *
     * Into this:
     * [
     *   'id' => 1,
     *   'parent'=> null
     *   'children' => [
     *     'id' => 2
     *     'parent' => 1,
     *     'children' => []
     *    ]
     * ]
     *
     * @param array  $records      array of records to apply the nesting
     * @param string $recordPropId property to read the current record_id, e.g. 'id'
     * @param string $parentPropId property to read the related parent_id, e.g. 'parent_id'
     * @param string $childWrapper name of the property to place children, e.g. 'children'
     * @param string $parentId     optional filter to filter by parent
     *
     * @return array
     */
    public static function nest(&$records, $recordPropId = 'id', $parentPropId = 'parent_id', $childWrapper = 'children', $parentId = null)
    {
        $nestedRecords = [];
        foreach ($records as $index => $children) {
            if (isset($children[$parentPropId]) && $children[$parentPropId] == $parentId) {
                unset($records[$index]);
                $children[$childWrapper] = self::nest($records, $recordPropId, $parentPropId, $childWrapper, $children[$recordPropId]);
                $nestedRecords[] = $children;
            }
        }

        return $nestedRecords;
    }
}

Usage with your code:

$employees = json_decode($flat_employees_json, true);
$managers = NestingUtil::nest($employees, 'EmployeeID', 'ManagerEmployeeID', 'employees');
print_r(json_encode($managers));

Output:

[
  {
    "FirstName": "Tom",
    "LastName": "Jones",
    "EmployeeID": "123",
    "ManagerEmployeeID": "",
    "Manager Name": "",
    "employees": [
      {
        "FirstName": "Alice",
        "LastName": "Wong",
        "EmployeeID": "456",
        "ManagerEmployeeID": "123",
        "Manager Name": "Tom Jones",
        "employees": []
      },
      {
        "FirstName": "Tommy",
        "LastName": "J.",
        "EmployeeID": "654",
        "ManagerEmployeeID": "123",
        "Manager Name": "Tom Jones",
        "employees": []
      }
    ]
  },
  {
    "FirstName": "Billy",
    "LastName": "Bob",
    "EmployeeID": "777",
    "ManagerEmployeeID": "",
    "Manager Name": "",
    "employees": [
      {
        "FirstName": "Rik",
        "LastName": "A.",
        "EmployeeID": "622",
        "ManagerEmployeeID": "777",
        "Manager Name": "Billy Bob",
        "employees": [
          {
            "FirstName": "Bob",
            "LastName": "Small",
            "EmployeeID": "111",
            "ManagerEmployeeID": "622",
            "Manager Name": "Rik A.",
            "employees": []
          },
          {
            "FirstName": "Small",
            "LastName": "Jones",
            "EmployeeID": "098",
            "ManagerEmployeeID": "622",
            "Manager Name": "Rik A",
            "employees": []
          }
        ]
      },
      {
        "FirstName": "Eric",
        "LastName": "C.",
        "EmployeeID": "222",
        "ManagerEmployeeID": "777",
        "Manager Name": "Billy Bob",
        "employees": []
      }
    ]
  }
]

Edit1 : Fix to avoid ignoring some employees

If the last item is a employee with valid manager but the manager is not in the list, then is ignored, because where should be located?, it's not a root but does not have a valid manager.

To avoid this add the following lines just before the return statement in the utility.

if (!$parentId) {
    //merge residual records with the nested array
    $nestedRecords = array_merge($nestedRecords, $records);
}

return $nestedRecords;

Edit2: Updating the utility to PHP5.6

After some tests in PHP7 the utility works fine in php7.0 but not in php5.6, I'm not sure why, but is something in the array reference and the unset. I update the utility code to work with php5.6 and your use case.

 public static function nest($records, $recordPropId = 'id', $parentPropId = 'parent_id', $childWrapper = 'children', $parentId = null)
    {
        $nestedRecords = [];
        foreach ($records as $index => $children) {
            if (isset($children[$parentPropId]) && $children[$parentPropId] == $parentId) {
                $children[$childWrapper] = self::nest($records, $recordPropId, $parentPropId, $childWrapper, $children[$recordPropId]);
                $nestedRecords[] = $children;
            }
        }

        if (!$parentId) {
            $employeesIds = array_column($records, $recordPropId);
            $managers = array_column($records, $parentPropId);
            $missingManagerIds = array_filter(array_diff($managers, $employeesIds));
            foreach ($records as $record) {
                if (in_array($record[$parentPropId], $missingManagerIds)) {
                    $nestedRecords[] = $record;
                }
            }
        }

        return $nestedRecords;
    }