Concept of Activities Necessary and Desirable to the Employers Business

G.R. No. 186439 January 15, 2014

UNIVERSAL ROBINA SUGAR MILLING CORPORATION and RENE CABATI, Petitioners,
vs. FERDINAND ACIBO, et.al. Respondents.

The primary standard that determines regular employment is the reasonable connection
between the particular activity performed by the employee and the usual business or trade of the
employer; the emphasis is on the necessity or desirability of the employees activity. Thus, when
the employee performs activities considered necessary and desirable to the overall business
scheme of the employer, the law regards the employee as regular.
The following factual considerations from the records support this conclusion:
First, the respondents were made to perform various tasks that did not at all pertain to any
specific phase of URSUMCOs strict milling operations that would ultimately cease upon
completion of a particular phase in the milling of sugar; rather, they were tasked to perform duties
regularly and habitually needed in URSUMCOs operations during the milling season. The
respondents duties as loader operators, hookers, crane operators and drivers were necessary to
haul and transport the sugarcane from the plantation to the mill; laboratory attendants, workers
and laborers to mill the sugar; and welders, carpenters and utility workers to ensure the smooth
and continuous operation of the mill for the duration of the milling season, as distinguished from
the production of the sugarcane which involves the planting and raising of the sugarcane until it
ripens for milling. The production of sugarcane, it must be emphasized, requires a different set of
workers who are experienced in farm or agricultural work. Needless to say, they perform the
activities that are necessary and desirable in sugarcane production. As in the milling of
sugarcane, the plantation workers perform their duties only during the planting season.
Second, the respondents were regularly and repeatedly hired to perform the same tasks year
after year. This regular and repeated hiring of the same workers (two different sets) for two
separate seasons has put in place, principally through jurisprudence, the system of regular
seasonal employment in the sugar industry and other industries with a similar nature of
operations.
Under the system, the plantation workers or the mill employees do not work continuously for one
whole year but only for the duration of the growing of the sugarcane or the milling season. Their
seasonal work, however, does not detract from considering them in regular employment since in
a litany of cases, this Court has already settled that seasonal workers who are called to work from
time to time and are temporarily laid off during the off-season are not separated from the service
in said period, but are merely considered on leave until re-employment. Be this as it may, regular
seasonal employees, like the respondents in this case, should not be confused with the regular
employees of the sugar mill such as the administrative or office personnel who perform their tasks
for the entire year regardless of the season.
Third, while the petitioners assert that the respondents were free to work elsewhere during the
off-season, the records do not support this assertion. There is no evidence on record showing
that after the completion of their tasks at URSUMCO, the respondents sought and obtained
employment elsewhere.

G.R. No. 192514 April 18, 2012

D.M. CONSUNJI, INC. and/or DAVID
M. CONSUNJI,Petitioners,- versus -ESTELITO L. JAMIN, Respondent.

SC adopted CA Special Fourth Division decision as follows:

The pattern of Jamins rehiring and the recurring need for his services are sufficient
evidence of the necessity and indispensability of such services to DMCIs business or trade, a key
indicator of regular employment. It opined that although Jamin started as a project employee, the
circumstances of his employment made it regular or, at the very least,has ripened into a regular
employment.
G.R. NO. 159862, OCTOBER 17, 2006
LIGANZA V. RBL SHIPYARD CORPORATION

The Court held that assuming, without granting that the petitioner was initially hired for
specific projects or undertakings, the repeated re-hiring and continuing need for his services for
over eight (8) years have undeniably made him a regular employee .
348 PHIL. 580 (1998)
MARAGUINOT, JR. V. NLRC

The Court held that once a project or work pool employee has been: (1) continuously, as
opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks;
and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the
employer, then the employee must be deemed a regular employee.

G.R. No. 71664 February 28, 1992

BAGUIO COUNTRY CLUB CORPORATION, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION, ASSOCIATED LABOR UNION (ALU) and JIMMY
CALAMBA,respondents.

In the case at bar, the petitioner corporation, an "entertainment-service" establishment,

claims that private respondent was contracted for a fixed and specific period. However, the
records are that the private respondent was repeatedly re-hired to perform tasks ranging from
dishwashing and gardening, aside from performing maintenance work.
Such repeated rehiring and the continuing need for his service are sufficient evidence of
the necessity and indispensability of his service to the petitioner's business or trade.
The law demands that the nature and entirety of the activities performed by the employee be
considered. It is not tenable to argue that the aforementioned tasks of private respondent are not
necessary in petitioner's business as a recreational establishment, just as it cannot be said that
only those who are directly involved in providing entertainment service may be considered as
necessary employees. Otherwise, there would have been no need for the regular maintenance
section of Petitioner Corporation.

Existing Allowed Engagements Under the Labor Code

G.R. No. 176240, October 17, 2008, 569 SCRA 670
Sasan, Sr. v. National Labor Relations Commission 4th Division

Permissible job contracting or subcontracting refers to an arrangement whereby

a principal agrees to put out or farm out to a contractor or subcontractor the performance
or completion of a specific job, work or service within a definite or predetermined period,
regardless of whether such job, work or service is to be performed or completed within or
outside the premises of the principal. A person is considered engaged in legitimate job
contracting or subcontracting if the following conditions concur:
(a) The contractor or subcontractor carries on a distinct and
independent business and undertakes to perform the job, work or
service on its own account and under its own responsibility according
to its own manner and method, and free from the control and
direction of the principal in all matters connected with the
performance of the work except as to the results thereof;
(b) The contractor or subcontractor has substantial capital or
investment;
and
(c) The agreement between the principal and contractor or
subcontractor assures the contractual employees entitlement to all
labor and occupational safety and health standards, free exercise of
the right to self-organization, security of tenure, and social and
welfare benefits.
The test of independent contractorship is whether one claiming to be an independent
contractor has contracted to do the work according to his own methods and without being subject
to the control of the employer, except only as to the results of the work. In San Miguel
Corporation v. Semillano, the Court laid down the criteria in determining the existence of an
independent and permissible contractor relationship, to wit:
x x x [W]hether or not the contractor is carrying on an independent business; the
nature and extent of the work; the skill required; the term and duration of the
relationship; the right to assign the performance of a specified piece of work; the
control and supervision of the work to another; the employers power with respect
to the hiring, firing and payment of the contractors workers; the control of the
premises; the duty to supply the premises, tools, appliances, materials, and
labor; and the mode, manner and terms of payment.
Simply put, the totality of the facts and the surrounding circumstances of the case are to be
considered. Each case must be determined by its own facts and all the features of the
relationship are to be considered.

Employer-Employee Relationship
RAUL G. LOCSIN and EDDIE B. TOMAQUIN v. PHILIPPINE LONG DISTANCE TELEPHONE CO. G.R. No.
185251, October 2, 2009, Velasco, Jr., J.

The power of control is the right to control not only the end to be
achieved but also the means to be used in reaching such end.

Facts: Philippine Long Distance Telephone Company (PLDT) and the Security and Safety
Corporation of the Philippines (SSCP) entered into a Security Services Agreement (Agreement)
whereby SSCP would provide armed security guards to PLDT to be assigned to its various
offices. Pursuant to such agreement, Raul Locsin and Eddie Tomaquin, among other security
guards, were posted at a PLDT office. PLDT issued a Letter terminating the Agreement effective
October 1, 2001. Despite the termination of the Agreement, however, petitioners continued to
secure the premises of their assigned office. They were allegedly directed to remain at their post
by representatives of respondent. In support of their contention, petitioners provided the Labor
Arbiter with copies of petitioner Locsins pay slips for the period of January to September 2002.
On September 30, 2002, petitioners services were terminated. They filed a complaint before the
Labor Arbiter for illegal dismissal and recovery of money claims.
Issue: Whether petitioners became employees of PLDT after the Agreement between SSCP and
PLDT was terminated
Ruling: Yes. Respondent must be considered as petitioners employer from the termination of the
Agreement onwards as this was the only time that any evidence of control was exhibited by
respondent over petitioners. Respondent, by directing petitioners to remain at their posts and
continue with their duties, exercised control over them. This is sufficient to establish the existence
of an employer-employee relationship. While respondent and SSCP no longer had any legal
relationship with the termination of the Agreement, petitioners remained at their post securing the
premises of respondent while receiving their salaries, allegedly from SSCP. With the behest and,
presumably, directive of respondent, petitioners continued with their services. Evidently, such are
indicia of control that respondent exercised over petitioners.

Labor Contracting/Labor-only contracting

G.R. No. 209418, December 07, 2015, Velasco, Jr., J.
W.M. MANUFACTURING, INC. v. RICHARD R. DALAG AND GOLDEN ROCK MANPOWER SERVICES

There is "labor-only" contracting where the person supplying workers to an

employer does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers recruited and placed by such
person are performing activities which are directly related to the principal business of
such employer. In such cases, the person or intermediary shall be considered merely as
an agent of the employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.
Facts: Golden Rock contracted a Service Agreement with WM MFG. WM MFG engaged the
services of Dalag as a factory worker assigned at its factory thus creating a five-month
Employment Contract between them. Dalag later on filed a complaint for illegal dismissal as he
was not allowed to work and that he was denied due process as to why he is not allowed. He
further claimed that he was assigned as a side seal machine operator which was necessary and
desirable for WM MFGs plastic manufacturing business making him a regular employee. He
alleged that Golden Rock and WM MFG engaged in labor-only contracting because all equipment
for the job were furnished by WM MFG and all jobs were to be done in the vicinity of WM MFG
and he was under the control by the supervisors of WM MFG. WM MFG alleged in their position
paper that Dalag abandoned his work and was not illegally dismissed. He was sent memos for
several faults he has done but never received them and did not report for work anymore. The
Labor Arbiter dismissed the complaint of Dalag. The NLRC reversed the decision of the Labor
Arbiter agreeing to the fact that WM MFG and Golden Rock engaged in labor-only contracting. A
Motion for Reconsideration was later granted and setting aside the previous NLRC decision. The

CA ultimately reversed the decision and ruled in favor of Dalag stating that Golden Rock was not
able to prove that it was an independent contractor as they were not able to show proof that they
had substantial capital and exercise control over Dalag.
Issue: Whether WM MFG and Golden Rock engaged in labor-only contracting
Ruling:
Yes. It may be that the DOLE Regional Director for the National Capital Region was satisfied by
Golden Rock's capitalization as reflected on its financial documents, but the basis for determining
the substantiality of a company's "capital" rests not only thereon but also on the tools and
equipment it owns in relation to the job, work, or service it provides. DO 18-02 defines
"substantial capital or investment" in the context of labor-only contracting as referring not only to a
contractor's financial capability, but also encompasses the tools, equipment, implements,
machineries and work premises, actually and directly used by the contractor or subcontractor in
the performance or completion of the job, work or service contracted out. Notwithstanding the
contract stipulation leaving Golden Rock the exclusive right to control the working warm bodies it
provides WM MFG, evidence shows that it was WM MFG who exercised supervision over Dalag's
work performance. Dalag was supervised by WM MFG's employees. WM MFG even furnished
Dalag with not less than seven memos directing him to explain within twenty-four hours his
alleged work infractions. The company took pains in issuing investigation reports detailing its
findings on Dalag's culpability. Clearly, WM MFG disciplined Dalag for violation of company rules,
regulations, and policies, validating the presence of the right to control.

G.R. No. 205300, March 18, 2015, Velasco, Jr., J.

FONTERRA BRANDS PHILS., INC. v. LEONARDO LARGADO AND TEOTIMO ESTRELLADO

Respondents, by accepting the conditions of the contract, cannot now argue that they were illegally
dismissed when their contracts were not renewed after expiration.
Facts: Fonterra contracted the services of Zytron for the marketing of its dairy products. Pursuant
to the contract, Zytron provided Fonterra with trade merchandising representatives (TMRs),
including herein respondents. Subsequently, Fonterra sent Zytron a letter terminating its
promotions contract and it soon entered into an agreement for manpower supply with A.C. Sicat
Marketing and Promotional Services. Respondents submitted their job applications with A.C.
Sicat, which hired them for a term of five months. When respondents 5-month contracts with A.C.
Sicat were about to expire, they allegedly sought renewal thereof, but were allegedly refused.
Respondents filed complaints for illegal dismissal, regularization, nonpayment of service incentive
leave and 13th month pay, and actual and moral damages, against Zytron and A.C. Sicat.
Issues: 1. Whether Zytron and A.C. Sicat are labor-only contractors
2. Whether respondents were illegally dismissed
Ruling:
1. Yes. A person is considered engaged in legitimate job contracting or subcontracting if the
Following conditions concur:
The contractor or subcontractor carries on a distinct and independent business and
undertakes to perform the job, work or service on its own account and under its own
responsibility according to its own manner and method, and free from the control and
direction of the principal in all matters connected with the performance of the work except
as to the results thereof;
The contractor or subcontractor has substantial capital or investment; and

The agreement between the principal and contractor or subcontractor assures the
contractual employees entitlement to all labor and occupational safety and health
standards, free exercise of the right to self-organization, security of tenure, and social
and welfare benefits.
2. No. The termination of respondents employment with the latter was simply brought about by
the expiration of their employment contracts. Respondents were employed by A.C. Sicat as
project employees. In their employment contract with the latter, it is clearly stated that [A.C. Sicat
is] temporarily employing [respondents] as TMR[s] effective June 6, 2006 under the following
terms and conditions: The need for your service being only for a specific project, your temporary
employment will be for the duration only of said project of our client, namely to promote
FONTERRA BRANDS products xxx which is expected to be finished on or before Nov. 06, 2006.
Non-renewal of their contracts by A.C. Sicat is a management prerogative, and failure of
respondents to prove that such was done in bad faith militates against their contention that they
were illegally dismissed. The expiration of their contract with A.C. Sicat simply caused the natural
cessation of their fixed-term employment thereat.