Moises De Leon v. NLRC and La Tondeña (G.R. No. 70705)


Petitioner De Leon was employed by respondent company La Tondeña as maintenance man whose work consisted mainly of painting company building and equipment, and other odd jobs relating to maintenance. After having worked for respondent for more than a year, petitioner requested that he be included in the payroll of regular employees, to which the former responded by dismissing petitioner from his employment. Petitioner having been refused reinstatement filed a complaint before the Labor Arbiter. Petitioner asserts that he is a regular employee performing similar functions as of a regular maintenance and was rehired by respondent company’s labor agency to perform the same tasks. Respondent company meanwhile claims petitioner was a casual worker hired only to paint a certain building in the premises and that his work as painter terminated upon completion of the job. The Labor Arbiter ruled in favor of petitioner but was reversed on appeal by the NLRC tribunal.


Whether or not petitioner De Leon is a regular employee of respondent.

Ruling: YES.

The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer.

It is not tenable to argue that the painting and maintenance work of petitioner are not necessary in respondent’s business of manufacturing liquors and wines, just as it cannot be said that only those who are directly involved in the process of producing wines and liquors may be considered as necessary employees. Otherwise, there would have been no need for the regular Maintenance Section of respondent company’s Engineering Department, manned by regular employees whom petitioner often worked with.

The law demands that the nature and entirety of the activities performed by the employee be considered. In the case of petitioner, the painting and maintenance work given him manifest a treatment consistent with a maintenance man and not just a painter, for if his job was truly only to paint a building there would have been no basis for giving him other work assignments in between painting activities.

Furthermore, the petitioner performed his work of painting and maintenance activities during his employment in respondent’s business which lasted for more than one year. Certainly, by this fact alone he is entitled by law to be considered a regular employee. And considering further that weeks after his dismissal, petitioner was rehired by the company through a labor agency and was returned to his post in the Maintenance Section and made to perform the same activities that he used to do, it cannot be denied that as activities as a regular painter and maintenance man still exist.

Pioneer Concrete Philippines Inc v. Antonio D. Todaro (G.R. No. 154830)


Pioneer International Limited (PIL), an Australian company engaged in the ready-mix concrete business, established herein petitioner PCPI to undertake its business in the Philippines. PIL contacted respondent Todaro and asked if the latter is available to join them in their intention to establish plant operations in the country to which the latter agreed. Subsequently, PIL and Todaro came to an agreement wherein the former consented to engage the services of the latter as consultant for 2-3 months, after which he would be employed as manager of concrete operations should PIL decide to invest in the Philippines. PIL started its operation however it refused to comply with its undertaking to employ Todaro on a permanent basis. Respondent thus filed a complaint for sum of money and damages against petitioner. Petitioner meanwhile contends that the case should fall with the NLRC as the damages arose from an alleged breach of employment contract. Both the trial court and CA ruled in favor of respondent.


Whether or not there is employer-employee relationship between PIL and respondent.

Ruling: NO.

In the present case, no employer-employee relationship exists between petitioners and respondent. In fact, in his complaint, private respondent is not seeking any relief under the Labor Code, but seeks payment of damages on account of petitioners’ alleged breach of their obligation under their agreement to employ him. It is settled that an action for breach of contractual obligation is intrinsically a civil dispute. In the alternative, respondent seeks redress on the basis of the provisions of Articles 19 and 21 of the Civil Code. Hence, it is clear that the present action is within the realm of civil law, and jurisdiction over it belongs to the regular courts.

This Court has consistently held that where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction.

South East International Rattan Inc v. Jesus J. Coming (G.R. No. 186621)


Petitioner South East International Rattan is a domestic corporation engaged in the business of manufacturing and exporting furniture to various countries. Respondent Coming was hired by petitioner as Sizing Machine Operator whose work is initially compensated on ‘pakiao basis’ but sometime was fixed per day and a work schedule of 8:00am to 5:00pm. Without any apparent reason, his employment was interrupted as he was told by petitioners to resume work in 2 months time but was never called back. Respondent thus filed a complaint before the regional arbitration branch. The Labor Arbiter ruled respondent as a regular employee of petitioner SEIRI but on appeal, was reversed by the NLRC. CA then reversed the NLRC decision and ruled that there existed an employer-employee relationship between petitioners and respondent.


Whether or not there is employer-employee relationship between petitioner and respondent.

Ruling: YES.

We affirm the CA.

To ascertain the existence of employer-employee relationship jurisprudence has invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or the so-called “control test.”

x x x As to the “control test”, the following facts indubitably reveal that respondents wielded control over the work performance of petitioner, to wit: (1) they required him to work within the company premises; (2) they obliged petitioner to report every day of the week and tasked him to usually perform the same job; (3) they enforced the observance of definite hours of work from 8 o’clock in the morning to 5 o’clock in the afternoon; (4) the mode of payment of petitioner’s salary was under their discretion, at first paying him on pakiao basis and thereafter, on daily basis; (5) they implemented company rules and regulations; (6) [Estanislao] Agbay directly paid petitioner’s salaries and controlled all aspects of his employment and (7) petitioner rendered work necessary and desirable in the business of the respondent company.

Almeda v. Asahi Glass Philippines (G.R. No. 177785)


Respondent Asahi Glass Philippines entered into a service contract with San Sebastian Allied Services whereby the latter undertook to provide the former with the necessary manpower for its glass manufacturing business. Pursuant to the contract, SSASI hired herein petitioners as glass cutters and quality controllers all assigned to work for respondent. Sometime after, respondent terminated its service contract with SSASI which in turn terminated the employment of petitioners. Petitioners then filed complaints before the Labor Arbiter asserting they should be considered regular employees of the respondent as they are performing functions which are directly related to its business. Respondent contends that petitioners were employees of SSASI a legitimate job contractor. The Labor Arbiter dismissed the complaint but on appeal was reversed by the NLRC tribunal declaring SSASI a labor-only contractor. CA reversed said decision and denied reconsideration.


Whether or not SSASI is a labor-only contractor.

Ruling: YES.

An important element of legitimate job contracting is that the contractor has substantial capital or investment, which respondent failed to prove. The Court did not find a single financial statement or record to attest to the economic status and financial capacity of SSASI to venture into and sustain its own business independent from petitioner.

Furthermore, the Court is unconvinced by respondent’s argument that petitioners were performing jobs that were not directly related to respondent’s main line of business. Respondent is engaged in glass manufacturing. One of the petitioners served as a quality controller, while the rest were glass cutters. Petitioners supplemented the regular workforce when the latter could not comply with the market’s demand; necessarily, therefore, petitioners performed the same functions as the regular workforce. The indispensability of petitioners’ services was fortified by the length and continuity of their performance, lasting for periods ranging from three to 11 years.

More importantly, the Court finds that the crucial element of control over petitioners rested in respondent. In the instant case, petitioners worked at the respondent’s premises, and nowhere else. Petitioners followed the work schedule prepared by respondent. They were required to observe all rules and regulations of the respondent pertaining to, among other things, the quality of job performance, regularity of job output, and the manner and method of accomplishing the jobs.

SSASI is a labor-only contractor; hence, it is considered as the agent of respondent. Respondent is deemed by law as the employer of petitioners.

PAL v. Ligan (G.R. No. 146408)


Petitioner Philippine Airlines and Synergy Services Corporation as Contractor, entered into an Agreement whereby Synergy undertook to provide loading and delivery services by furnishing all the necessary capital, workers, materials, supplies and equipment for the performance and execution of said work. Herein respondents who appear to have been assigned to work for petitioner filed complaints before the NLRC for the payment of their labor standard benefits and regularization of employment status claiming that they are performing duties directly connected with petitioner’s business. The Labor Arbiter’s decision found Synergy an independent contractor but was vacated on appeal. The NLRC tribunal declared Synergy to be a labor-only contractor and was affirmed by the CA. Petitioner moved for reconsideration but was denied.


Whether or not there is labor-only contracting.

Ruling: YES.

For labor-only contracting to exist, Section 5 of D.O. No. 18-02 which requires any of two elements to be present is, for convenience, re-quoted:

(i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal, OR

(ii) The contractor does not exercise the right to control over the performance of the work of the contractual employee.

Even if only one of the two elements is present then, there is labor-only contracting.

From the records of the case, it is gathered that the work performed by almost all of the respondents – loading and unloading of baggage and cargo of passengers – is directly related to the main business of petitioner. And the equipment used by respondents as station loaders, such as trailers and conveyors, are owned by petitioner.

Petitioner PAL, and not Synergy, exercises control and supervision over the respondent workers’ methods of doing the work, as reflected in their Agreement: (1) Contractor (Synergy) shall require all its workers, employees, suppliers and visitors to comply with OWNER’S (PAL) rules, regulations, procedures and directives relative to the safety and security of OWNER’S premises, properties and operations (2) xxx shall furnish its employees and workers identification cards to be countersigned by OWNER and uniforms to be approved by OWNER. (3) OWNER may require CONTRACTOR to dismiss immediately and prohibit entry into OWNER’S premises of any person employed therein by CONTRACTOR who in OWNER’S opinion is incompetent or misconducts himself or does not comply with OWNER’S reasonable instructions xxx

Petitioner in fact admitted that it fixes the work schedule of respondents as their work was dependent on the frequency of plane arrivals. And as the NLRC found, petitioner’s managers and supervisors approved respondents’ weekly work assignments and respondents and other regular PAL employees were all referred to as “station attendants” of the cargo operation and airfreight services of petitioner.

Respondents having performed tasks which are usually necessary and desirable in the air transportation business of petitioner, they should be deemed its regular employees and Synergy as a labor-only contractor.

Republic v. Asiapro Cooperative (G.R. No. 172101)


Respondent Asiapro Cooperative is composed of owners-members with primary objectives of providing them savings and credit facilities and livelihood services. In discharge of said objectives, Asiapro entered into several service contracts with Stanfilco. Sometime later, the cooperative owners-members requested Stanfilco’s help in registering them with SSS and remitting their contributions. Petitioner SSS informed Asiapro that being actually a manpower contractor supplying employees to Stanfilco, it must be the one to register itself with SSS as an employer and remit the contributions. Respondent continuously ignoring the demand of SSS the latter filed before the SSC. Asiapro alleges that there exists no employer-employee relationship between it and its owners-members. SSC ruled in favor of SSS. On appeal, CA reversed the decision.


Whether or not there is employer-employee relationship between Asiapro and its owners-members.

Ruling: YES.

In determining the existence of an employer-employee relationship, the following elements are considered: (1) the selection and engagement of the workers; (2) the payment of wages by whatever means; (3) the power of dismissal; and (4) the power to control the worker‘s conduct, with the latter assuming primacy in the overall consideration. All the aforesaid elements are present in this case.

First. It is expressly provided in the Service Contracts that it is the respondent cooperative which has the exclusive discretion in the selection and engagement of the owners-members as well as its team leaders who will be assigned at Stanfilco.

Second. It cannot be doubted then that those stipends or shares in the service surplus are indeed wages, because these are given to the owners-members as compensation in rendering services to respondent cooperative‘s client, Stanfilco.

Third. It is also stated in the above-mentioned Service Contracts that it is the respondent cooperative which has the power to investigate, discipline and remove the owners-members and its team leaders who were rendering services at Stanfilco.

Fourth. In the case at bar, it is the respondent cooperative which has the sole control over the manner and means of performing the services under the Service Contracts with Stanfilco as well as the means and methods of work. Also, the respondent cooperative is solely and entirely responsible for its owners-members, team leaders and other representatives at Stanfilco. All these clearly prove that, indeed, there is an employer-employee relationship between the respondent cooperative and its owners-members.

LIKHA-PMPB v. Burlingame Corporation (G.R. No. 162833)


Petitioner LIKHA-PMPB filed a petition for certification election before the DOLE as it sought to represent all 70 rank-and-file promo employees of respondent Burlingame Corporation. Respondent opposed arguing that there exists no employer-employee relationship between them since petitioner’s members are actually employees of F. Garil Manpower Services, a duly licensed local employment agency. The Med-Arbiter found for respondent finding no employer-employee relationship existed, but was reversed on appeal to the DOLE. CA reversed the decision holding F. Garil to be an independent contractor.


(1) Whether or not F. Garil is an independent contractor; and

(2) Whether or not petitioner are employees of Burlingame Corporation.


(1) NO. We agree with the Secretary that F. Garil is not an independent contractor. First, F. Garil does not have substantial capitalization or investment in the form of tools, equipment, machineries, work premises, and other materials, to qualify as an independent contractor. No proof was adduced to show F. Garil‘s capitalization. Second, the work of the promo-girls was directly related to the principal business or operation of Burlingame. Marketing and selling of products is an essential activity to the main business of the principal. Lastly, F. Garil did not carry on an independent business or undertake the performance of its service contract according to its own manner and method, free from the control and supervision of its principal, Burlingame.

(2) YES. The “four-fold test” will show that respondent is the employer of petitioner‘s members. The involvement of F. Garil in the hiring process was only with respect to the recruitment aspect because the actual hiring itself was done through the deployment of personnel to establishments by Burlingame. Burlingame would pay the workers through F. Garil a certain sum per worker on the basis of eight-hour work every 15th and 30th of each calendar month which evinces the fact that F. Garil merely served as conduit in the payment of wages to the deployed personnel. Burlingame upon request to F. Garil may replace any personnel found to be inefficient, troublesome, uncooperative and not observing the rules and regulations set forth by it.

There is no doubt that F. Garil was engaged in labor-only contracting, and as such, is considered merely an agent of Burlingame. Since F. Garil is a labor-only contractor, the workers it supplied should be considered as employees of Burlingame in the eyes of the law.