Concept of Activities Necessary and Desirable to the Employer’s Business

G.R. No. 186439 January 15, 2014
vs. FERDINAND ACIBO, 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 employee’s 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 URSUMCO’s 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 URSUMCO’s 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
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.

No. V.respondents. No.versus -ESTELITO L. Otherwise. petitioner. NLRC The Court held that once a project or work pool employee has been: (1) continuously. an "entertainment-service" establishment.Petitioners.R. CONSUNJI. RBL SHIPYARD CORPORATION The Court held that assuming. then the employee must be deemed a regular employee. OCTOBER 17. It is not tenable to argue that the aforementioned tasks of private respondent are not necessary in petitioner's business as a recreational establishment. G. 1992 BAGUIO COUNTRY CLUB CORPORATION. at the very least. 2012 D. The law demands that the nature and entirety of the activities performed by the employee be considered. It opined that although Jamin started as a project employee. the records are that the private respondent was repeatedly re-hired to perform tasks ranging from dishwashing and gardening. vs. 192514 April 18. and (2) these tasks are vital. 71664 February 28. without granting that the petitioner was initially hired for specific projects or undertakings. and/or DAVID M. . NO. rehired by the same employer for the same tasks or nature of tasks. 2006 LIGANZA V. necessary and indispensable to the usual business or trade of the employer. JR. G. Respondent. However. aside from performing maintenance work. claims that private respondent was contracted for a fixed and specific period. CONSUNJI. 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. the repeated re-hiring and continuing need for his services for over eight (8) years have undeniably made him a regular employee . as opposed to intermittently. 159862. JAMIN.has ripened into a regular employment. the petitioner corporation. the circumstances of his employment made it regular or. just as it cannot be said that only those who are directly involved in providing entertainment service may be considered as necessary employees. there would have been no need for the regular maintenance section of Petitioner Corporation. NATIONAL LABOR RELATIONS COMMISSION. In the case at bar. 348 PHIL.M. INC.. a key indicator of regular employment. 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. 580 (1998) MARAGUINOT.G. ASSOCIATED LABOR UNION (ALU) and JIMMY CALAMBA.R.R.

J. and the mode. and labor. the Court laid down the criteria in determining the existence of an independent and permissible contractor relationship. free exercise of the right to self-organization. Simply put. No. 2009. except only as to the results of the work. Jr. LOCSIN and EDDIE B. . 185251. work or service within a definite or predetermined period. October 2. Employer-Employee Relationship RAUL G. regardless of whether such job. the employers power with respect to the hiring. Velasco. 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. the control of the premises.. to wit: x x x [W]hether or not the contractor is carrying on an independent business. manner and terms of payment. appliances. Semillano. No. 569 SCRA 670 Sasan. 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. the duty to supply the premises. security of tenure. the skill required. v. the totality of the facts and the surrounding circumstances of the case are to be considered. TOMAQUIN v. tools. the term and duration of the relationship. In San Miguel Corporation v. (b) The contractor or subcontractor has substantial capital or investment.R. work or service is to be performed or completed within or outside the premises of the principal. 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. 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.R. and social and welfare benefits.Existing Allowed Engagements Under the Labor Code G. the control and supervision of the work to another. October 17. PHILIPPINE LONG DISTANCE TELEPHONE CO. 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. the nature and extent of the work. G. work or service on its own account and under its own responsibility according to its own manner and method. Each case must be determined by its own facts and all the features of the relationship are to be considered. firing and payment of the contractors workers. 2008. materials. 176240. the right to assign the performance of a specified piece of work. Sr. 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.

Labor Contracting/Labor-only contracting G. He further claimed that he was assigned as a side seal machine operator which was necessary and desirable for WM MFG’s plastic manufacturing business making him a regular employee. 2015.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. such are indicia of control that respondent exercised over petitioners. Facts: Golden Rock contracted a “Service Agreement” with WM MFG. 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. directive of respondent. No. On September 30. They filed a complaint before the Labor Arbiter for illegal dismissal and recovery of money claims. and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In support of their contention. INC. 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. WM MFG alleged in their position paper that Dalag abandoned his work and was not illegally dismissed. In such cases. Respondent. Raul Locsin and Eddie Tomaquin. equipment. among others. v. among other security guards. 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. petitioners continued to secure the premises of their assigned office. 209418. exercised control over them. 2001. allegedly from SSCP. W. WM MFG engaged the services of Dalag as a factory worker assigned at its factory thus creating a five-month Employment Contract between them. The Labor Arbiter dismissed the complaint of Dalag. RICHARD R. With the behest and. petitioners provided the Labor Arbiter with copies of petitioner Locsin’s pay slips for the period of January to September 2002. The . 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. Velasco.M. petitioners’ services were terminated.R. This is sufficient to establish the existence of an employer-employee relationship. He was sent memos for several faults he has done but never received them and did not report for work anymore. were posted at a PLDT office. Issue: Whether petitioners became employees of PLDT after the Agreement between SSCP and PLDT was terminated Ruling: Yes. A Motion for Reconsideration was later granted and setting aside the previous NLRC decision. Pursuant to such agreement. however. The NLRC reversed the decision of the Labor Arbiter agreeing to the fact that WM MFG and Golden Rock engaged in labor-only contracting. by directing petitioners to remain at their posts and continue with their duties. J. PLDT issued a Letter terminating the Agreement effective October 1. Jr. Despite the termination of the Agreement. machineries.. MANUFACTURING. They were allegedly directed to remain at their post by representatives of respondent. 2002. petitioners remained at their post securing the premises of respondent while receiving their salaries. work premises. Evidently. December 07. presumably. 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. While respondent and SSCP no longer had any legal relationship with the termination of the Agreement. petitioners continued with their services.

Jr. and . including herein respondents.C. The contractor or subcontractor has substantial capital or investment. The company took pains in issuing investigation reports detailing its findings on Dalag's culpability. Sicat were about to expire. and actual and moral damages. 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. evidence shows that it was WM MFG who exercised supervision over Dalag's work performance. 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. Dalag was supervised by WM MFG's employees.C. LEONARDO LARGADO AND TEOTIMO ESTRELLADO Respondents. but also encompasses the tools. cannot now argue that they were illegally dismissed when their contracts were not renewed after expiration. against Zytron and A. Respondents filed complaints for illegal dismissal. by accepting the conditions of the contract.C. J.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. actually and directly used by the contractor or subcontractor in the performance or completion of the job. 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. G. equipment.. WM MFG even furnished Dalag with not less than seven memos directing him to explain within twenty-four hours his alleged work infractions. Facts: Fonterra contracted the services of Zytron for the marketing of its dairy products. 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 contracted out. Sicat. Zytron provided Fonterra with trade merchandising representatives (TMRs). WM MFG disciplined Dalag for violation of company rules. Subsequently. Pursuant to the contract. FONTERRA BRANDS PHILS. Velasco. work or service on its own account and under its own responsibility according to its own manner and method. or service it provides. No. Issue: Whether WM MFG and Golden Rock engaged in labor-only contracting Ruling: Yes. Respondents submitted their job applications with A. 2015.C. INC. 205300. When respondents’ 5-month contracts with A. Clearly. Issues: 1. Notwithstanding the contract stipulation leaving Golden Rock the exclusive right to control the working warm bodies it provides WM MFG. Fonterra sent Zytron a letter terminating its promotions contract and it soon entered into an agreement for manpower supply with A. Sicat are labor-only contractors 2. Sicat Marketing and Promotional Services. Yes. work. machineries and work premises. which hired them for a term of five months. they allegedly sought renewal thereof. validating the presence of the right to control. nonpayment of service incentive leave and 13th month pay. v. 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. implements.C. and policies. but were allegedly refused. regularization. Sicat. Whether Zytron and A.R.. Whether respondents were illegally dismissed Ruling: 1. regulations. March 18.

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