Job Con Table

LABOR STANDARDS (JOB-CONTRACTING)
Parties
&
Principal
Contractor Duties
case
no.
of Is
there Final disposition
the
independent
job
contracted
contracting
or
workers
labor
only?
Reason..
provide The Court
1. Alilin Petron
Romualdo
to
vs.
D.
Petron with that
Petron
Gindang
janitorial,
GR. NO.
(petioners
maintenanc contractor.
177592
hired
by e,
Gindang)
RDG
finds The prevailing rule on laboris
labor-only
tanker such,
a only contracting at the time

Petron and RDG entered into
it
As the Contract for Services in

is June
2000
receiving,
considered merely Department
packaging
as
and
an
agent
other Petron.
utility
services
is
Order
DOLE
No.
10,
of series of 1997, the pertinent

provision of which reads:
Consequently, the Section 4. x x x

in employer-employee x x x x
its
relationship which (f)
Mandaue
the Court finds to prohibited under this Rule is
Bulk Plant
exist in this case an

is
petitioners
employees
1
"Labor-only
arrangement
between contractor
as merely
or
recruits,
contracting"
where
the
subcontractor
supplies
or
and places workers to perform a

Petron
as
employer.
their job,
Petron principal
therefore,
the
work
or
service
and
the
for
following
being elements are present:

principal (i)
The
contractor
or
employer
and subcontractor does not have
RDG,
the substantial
being
labor-only
contractor,
capital
or
investment to actually perform

are the job, work or service under
solidarily liable for its
own
account
and
petitioners' illegal responsibility; and

dismissal
and (ii) The employees recruited,
monetary claims.
supplied or placed by such

contractor or subcontractor are
performing activities which are
directly related to the main
business of the principal.
Petron failed to discharge the
burden
proving
legitimate
of
that
RDG
is

contractor.
Hence,
the
presumption
that
RDG is a labor-only contractor

stands.
Here,
the
audited
financial
statements and other financial

documents
of
RDG
for
the
years 1999 to 2001 establish

that it does have sufficient
working capital to meet the
requirements
of
its
service
contract. In fact, the financial

evaluation conducted by Petron
of RDGs financial statements
for years 1998-2000 showed
RDG
to
have
maximum
financial capability of Php4.807

Million as of December 1998,
and Php1.611 Million as of
December 2000. Petron was
able
3
to
establish
RDGs

sufficient capitalization when it
entered
into
the
service
contract in 2000. The Court

stresses
though
that
this
determination of RDGs status

as an independent contractor is
only
with
financial
respect
capability
to
its
for
the
period covered by the financial

and
other
documents
presented. In other words, the

evidence
proves
financially
adduced
that
merely
RDG
qualified
was
as
legitimate contractor but only

with respect to its last service
contract with Petron in the year
2000.
2.
Garden
Victoriana
Cruz
Labor only.
Garden
of
Requio
averred that Requio was not a contracting where the person

4
There
is
"labor-only"

of
Memorie
Memori
es
supplying
is r of CRUZ) as a utility contractor
vs. engaged
NLRC
( Employe she worked licensed
in
Responde
the nt
GR. NO. business
on
160278
other
of
of had
Cruz, Garden
with
no substantial
equipment
work
situated
at
have
capital
or
and the
workers
recruited
and
premises, placed by such persons are
per day. As among others.
Garden of a
not
a the form of tool, premises, among others, and
worked at ofP115.00
park
an
or investment in equipment, machineries, work
salary
memorial the
does
to
of substantial capital investment in the form of tools,
the Memories
operating hand,
a
worker
and employer
workers
performing activities which are
utility
directly related to the principal
Memories
worker, she
business of such employer. In
Memorial
was
such
in
cases,
the
person
Calsadan Park as a charge,
intermediary
considered merely as an agent
Bago, utility
among
be
Pateros,
worker
others,
Metro-
from
the
responsible to the workers in
Manila
August
cleaning
the same manner and extent as
and
1991 until and
if
selling
her
employed by him.
of the employer who shall be
maintenanc
memorial terminatio
Plan and n
of
shall
or
of
the
latter
were
directly
the
in ground
The requirement of the law in

5

services.
February
facilities
of
determining the existence of
1998
the
independent contractorship is
memorial
that
park
undertake the work on his own
the
account,
contractor
under
should
his
own
responsibility, according to his

own manner and method, free
from the control and direction
of the employer except as to the
results thereof.21 In this case,
however, the Service Contract
Agreement
clearly
indicates
that Requio has no discretion

to determine the means and
manner by which the work is
performed. Rather, the work
should be in strict compliance
with,
and
subject
to,
all
requirements and standards of

Garden of Memories.

3.
Allied
Marilag
Assigned at Job contracting
As to the employer's power of
Abing
Banking
Business
its
selection and engagement, it
vs.
Corporati and
department
NLRC
on (Allied Industrial
G.R.
Bank)
legal
Applying the four- was
FGSI
which
the
the fold test used in petitioner and assigned him to
Manageme petitioner
determining
No.
nt
was
employer-employee Employment
185345
Services,
progressivel relationship,
Inc.
(Marilag)
various
an work at Allied Bank. In his

Agreement
and
Manifestation dated September
assigned which are: (1) the 1, 2002, the petitioner explicitly

selection
and acknowledged
tasks such engagement

Facilitator
hired
as
that
he
was
of hired by FGSI, and in his
employee; (2) the position paper he also admitted
s General messenger,
payment of wages; that
it
was
FGSI
which
Services,
skip tracer, (3) the power of instructed him to report to
Inc.
checker and dismissal; and (4) Allied Bank.
(FGSI).
verifier
of the
power
to
Ronnie L. properties,
control
the As to the payment of wages, the
Abing
and
employee's
petitioner collected his pay and
employee
receiving
conduct,21 the
benefits from FGSI.
of marilag clerk/vault
LA, the NLRC and
later
the CA are all in As to the power of dismissal, by
FGSI
to keeper.
agreement
7
that signing
the
quitclaim,
the

these elements are petitioner acknowledged that it
possessed by FGSI was FGSI which hired him and
had the power to terminate his
services.
As to the power of control or
supervision over the petitioner,
FGSI
Officer
through
its
Marysol
Personnel
Gongona
regularly visited Allied Bank's

premises for this very purpose
4.
Fly Ace
extra
Independent
Javier
contracted helper
on contracting.
vs.
by
Fly
Javier was
The
Court
considerable
its a pakyaw b
is
view
of
that
the
on
Javier lies the burden to pass
Ace.
employee,
asis at an Javier's
function the
G.R.
Mr. Ong,
agreed rate as
determine the existence of an
No.
of
employer-employee
192558
per trip,
P300.00 a pahinante was

not
directly relationship, viz:
related
necessary
8
well-settled
tests
(1)
to
the
or selection and engagement of

to
its the employee; (2) the payment

principal business of wages; (3) the power of
of importation and dismissal; and (4) the power to
sales of groceries. control
Even
the
without conduct. Of
Javier,
employee's
these
elements,
the the most important criterion is
business
could whether the employer controls
operate its usual or has reserved the right to

course as it did control the employee not only
not
involve
the as to the result of the work but
business of inland also as to the means and

transportation.
Lastly,
methods by which the result is

the to be accomplished.[35]
acknowledgment
receipts
bearing In this case, Javier was not
Javier's signature able to persuade the Court that

and
words the above elements exist in his
"pakiao rate,"
referring
to
case. He
could
not
submit
his competent proof that Fly Ace
earned salaries on engaged
his
services
as
a per trip basis, regular employee; that Fly Ace

have
9
evidentiary paid his wages as an employee,

weight that the LA or that Fly Ace could dictate
correctly
what his conduct should be
considered
arriving
in while at work. In other words,
at
conclusion
the Javier's
allegations
did
not
that establish that his relationship
Javier was not an with Fly Ace had the attributes

employee
company.
of
the of
an
employer-employee
relationship on the basis of the

above-mentioned four-fold test.
Worse, Javier was not able to
refute Fly Ace's assertion that it
had
an
agreement
with
hauling company to undertake

the delivery of its goods. It was
also baffling to realize that
Javier did not dispute Fly Ace's
denial
of
his
services'
exclusivity to the company. In

short, all that Javier laid down
were bare allegations without
corroborative proof.
10

5.
Grandsp
Joaquin
employed
Grand
an
Narag
as
span
Develop
doing
scale
develop
ment
business
monitors by supplying workers perform
ment
Corporati under the petitioner
vs.
on,
name
There
is
truck only
labor- The Court of Appeals found
contracting that
J.
Narag
where the person assigned

to
an
& with a daily does
Construction
respondents
to
activitiesdirectly
employer related to the main business of

not
have petitioner.
They
worked
in
RICARD
style of J. salary
substantial capital petitioners premises, using its
Narag
or investment in equipment,
BERNA
Constructi each.
the form of tools, supplies.
RDO
on."
equipment,
of P104.00
Eventually,
G.R.
they
No.
assigned at premises,
141464
and
J.
Constructions
Narag
payroll
were machineries, work worksheets covering the period

Truck others,
among from December 21, 1990 to
Employed
its
Ricardo
Scale
Bernardo,
Section
Antonino
the
such person are manager
Ceidoza
Warehouse
performing
and
the July 31, 1991 show that the
workers recruited payment of their salaries was

of and
and Edgar /Materials

Del Prado
materials
placed
activities
by approved
by
and
petitioners
which Department
petitioner.
supervisor
The
of
Warehouse
supervised
the
Department are directly related manner and results of their

.
to
the
principal work. It was petitioner who
business of such terminated their services after

11

employer.
finding them guilty of using

profane or offensive language in
violation of Article VI (2) (a) of
the
companys
Rules
Regulations.
The
Court
concluded
these
then
and
Appellate
circumstances
that
confirm
the existence of an employeremployee relationship between

petitioner and respondents.
6.
Polyfoam
Precilla A. "all-around"
Polyfoa
-RGC
Gramaje,
factory
vs. Internati
Employed
worker
Gramaje has no substantial

capital
or
investment.
There is labor-only presumption
PCION
Corporati O
the
G.R.
on
CONCEPC
supplying workers the burden of proving that it
ION
to
does
is
that
onal
172349
contracting where contractor
is
The
CONCE
No.
EDGARD
Labor only
labor-only
person contractor unless he overcomes

an
employer has
not
substantial
capital,
have investment, tools, and the like.
substantial capital
or investment in Gramaje did not carry on an
12

the form of tools, independent
equipment,
business
or
undertake the performance of
machineries, work its service contract according to

premises,
others,
among its own manner and method,
and
the free
from
workers recruited supervision

and
placed
by Polyfoam,
the
of
its
control
its
and
principal,
apparent
role
such person are having been merely to recruit

performing
activities
persons
to
which Polyfoam.50 It
work
is
for
undisputed
are directly related that respondent had performed

to
the
principal his task of packing Polyfoams
business of such foam products in Polyfoams

employer. In such premises
cases, the person
or
intermediary
shall
be
considered merely
as an agent of the
employer
shall
13
who
be

responsible to the
workers
in
the
same manner and

extent as if the
latter were directly
employed by him.
7. SMC San
Sunflower
Messengeri
VS.
Miguel
Multi-
al,
ABALL
Corporati Purpose
Janitorial,
Labor only,
Sunflower, during the existence

of its service contract with
What
appears respondent SMC, did not own a
A. G.R. on
Cooperativ Shrimp
is that
No.
harvesting
doesnot
149011
and
substantial
Sanitation
capitalization
(SMC),
Sunflower single machinery,equipment, or

have working
tool
processing
used
in
the
plant. Everything
or was owned and provided by
investment in the respondent SMC.The lot, the

form
of
equipment,
tools, building, and working facilities

are
owned
machineries, work SMC.And
by respondent
from
the
job
premises andother description provided by SMC

materials
to itself, the work assigned to
qualify it as an private
14
respondents
was

independent
contractor.
directly
It
relatedto
is the aquaculture operations of
gathered that the SMC. Undoubtedly, the nature

lot,
building, of the
machineries
allother
tools
work
and by private
respondents
working inshrimp harvesting, receiving
utilized
private
respondents
by and packing formed an integral

part of the shrimp processing
in operations
of
carrying out their janitorial
and
tasks were owned services,
that
and
SMC.
performed
SMC. Asfor
messengerial
they
are
provided by considered directly related to

the
principal
business
theemployer
has
jurisprudentially
of
been
recognized.
Furthermore, Sunflower did not

carry
on
businessor
performance
an
independent
undertake
of
its
the
service
contract according to its own

manner and method, free from
15

the controland supervision of
its principal, SMC, its apparent
role
having
been
merely
to
recruit persons to work for

SMC.
8.
Shangril
Dr. Pepito, to work in Job contracting.
Escasin a Mactan employed

as
VS.
her clinic at
Escasinas. respondent
the Court
holds that
Dr. Pepito is a legitimate indepe

The
existence
an
independent la provides the clinic premises
shangri
Shangri-
la
Las Mactan and
mactan
Island
contractor
G.R.
Resort
relationship
of ndent contractor. ThatShangri-
permissible and medical supplies for use of

its employees and guests do not
is necessarilyprove
No.
generally
respondent
178827
established
by substantial
considering
that
doctor
lacks
capital
and
investment.
Besides,
the
thefollowing
maintenance
of
determinants:
andprovision
whether
16
clinic
medical
the services to its employees is
contractor
carrying
of
is required under Art. 157, which

on
an are not
directly
related
to

independent
Shangri-
business;
the las
nature and extent principal business

of
thework;
the
skill required; the
operation
of
hotels
term and duration restaurants. As

of
the of wages,
relationship;
the one who
Dr.
and
to payment
Pepito
is the
underwrites
right to assign the the following:
salaries,
SSS
performance of a contributions and otherbenefits

specifiedpiece
of of the staff; group life, group
work; the control personal
accident
and supervision of and life/death

the
work
insurance
insurance
for
to the staff with minimum
another;
the benefit payable at 12 times the
employer's
power employees last drawn salary, as
with respect to the well as value added taxes a

hiring,firing
and nd withholding taxes,sourced
payment
the from her P60,000.00 monthly
of
contractor's
workers;
17
retainer fee and 70% share of

the the
service
charges
from

control
of
the Shangri-
premises; the duty las guests

to
supply
the who avail of the clinic services.
premises,
It is unlikely that Dr. Pepito
tools,appliances,
would report Escasinas and
materials
and Singco
labor;
the theirSSS premium as well as
and
mode,
Coca-
Dr.
Dean Company
Coca-
Cola
N. Climaco Physician
Cola
Bottlers
pay
of indeed her employees.
payment
Job contracting
The Court, in determining the

existence
The Labor Arbiter employee
VS. Dr. Phils.,
and
Climaco Inc.
correctly
that
G.R.
workers,
manner their wages if they were not
and terms
9.
as
the
an
employer-
relationship,
has
NLRC invariably adhered to the fourfound fold test: (1) the selection and
petitioner engagement of the employee; (2)
No.
company
146881
the
control
of
lacked the payment of wages; (3) the
power
of power of dismissal; and (4) the
over
the power to control the employee's
performance
by conduct,
or
the
so-called
respondent of his "control test," considered to be

18

duties. The Labor the most important element.
Arbiter
reasoned
that
the In effect, the Labor Arbiter held
Comprehensive
Medical
the
contains Medical
and
duties that
company,
Comprehensive
Plan,
respondent's guidelines
objectives,
the
provided
merely
end
to
ensure
result
was
obligations, achieved, but did not control
does
not
respondent
to
petitioner
Plan, through
which
the
that
tell the means and methods by

"how which
conduct
his his
respondent
performed
assigned
tasks.
physical
examination, how The NLRC affirmed the findings
to
immunize,
or of the Labor Arbiter and stated
how to diagnose that it is precisely because the

and
treat
patients,
his company lacks the power of

control
that
the
contract
employees
of provides that respondent shall
[petitioner]
be directly responsible to the
company, in each employee concerned and their

19

case.
dependents
for
harm
damage
or
any
through
injury,
caused
professional
negligence,
incompetence
or
other valid causes of action.
10. PAL
Stellar
in
Industrial
business of contracting
the service agreement, other
STELLA Airlines
Services,
job
pieces of evidence support the
Inc.
contracting
VS.
Philippi
ne
G.R. (PAL),
No.
125792
Inc.
the In dependent job Aside from these stipulations in
an
employee- conclusion that STELLAR, not
(STELLAR, janitorial
employer
relation PAL, was the employer of the
for
existed
between individual private respondents.
brevity),
services
the
individual A
private
contract
of
employment 14 existed between
respondents
and STELLAR and the individual
STELLAR,
not private
PAL.
The that it was said corporation
respondents,
proving
provisions of the which hired them. It was also

agreement
demonstrate
STELLAR
20
STELLAR
that them,
which
as
Complainant
dismissed
evidenced
by
Parenas'

possessed
earmarks
these termination letter, which was

of
an signed by Carlos P. Callanga,
employer: (1) the vice president for operations

power of selection and
and
comptroller
of
engagement STELLAR. 15 Likewise,
they
of
employees worked under STELLAR's own
(Stipulation
Nos. supervisors,
Rodel
1, 4, 7 and 8), (2) Pagsulingan,
Napoleon
the
payment
of Parungao
and
Renato
wages (Stipulation Topacio. 16 STELLAR even had

Nos. 5, 6, 7 and its own collective bargaining
8), (3) the power of agreement with its employees,
dismissal, and (4) including the individual private
the
power
control
to respondents. 17 Moreover, PAL

the had no power of control and
employee's
dismissal over them.
conduct
In fact, STELLAR claims that it

falls under the definition of an
independent
job
contractor.
Thus, it alleges that it has

sufficient capital in the form of
21

tools
and
equipment,
like
vacuum cleaners and polishers,

and substantial capitalization
as
proven
by
its
financial
statements. 18 Further,
STELLAR
has
clients
other
than petitioner, like San Miguel

Corporation,
Shanghai
Hongkong
Bank,
Benguet
and
Eveready,
Management
Corporation
and
Japan
Airlines. 19
All
these
circumstances
establish
that
STELLAR
undertook said contract on its

account,
under
its
own
responsibility, according to its

own manner and method, and
free
from
direction
Where
22
the
of
the
control
the
control
and
petitioner.
of
the

principal is limited only to the
result of the work, independent
job contracting exists. 20 The
janitorial
between
service
agreement
petitioner
and
STELLAR is definitely a case of

permissible job contracting
11.
JANG
EX- Cotabato
ARANET
LIM VS. A
NLRC
Timberlan
hired
perform
to INDEPENDENT
JOB
M& S d Co. Inc. milling and CONTRACTING
We, however, find persuasive

support on record showing that
CTCI exercised the power of
Company ("CTCI" for pilling
control over the employees. As
, a sister brevity)
correctly found by the labor
G.R.
company
arbiter, the work activities and
No.
of CTCI.
schedules of petitioners were
124630
set
by
EX-
CTCI. 13 Evidence
ARANET
absolute
supervision over the manner
was
closed
and
of
control
CTCI's
and
and conduct of work of the

the
petitioners can be established

23

sawmill
from
operation
manning/shifting schedules of
of M & S
the petitioners were entirely
Company
prepared
was
CTCI; and (2) photocopies of
transferr
the
ed
cards not only bear the name of
to
the
following:
and
approved
company
issuing
(1)
the
by
identification
private
the
company
as
responde
"COTABATO
nt
CO., INC.", but were likewise
TIMEX.
countersigned
SAWMIL
Personnel
L,
Navales 14. Also, the fact that
TIMBERLAND
by
CTCI's
Officer
Teofilo
on June 17, 1994, petitioners

herein were advised that "the
management of CTCI has been
dissatisfied
performance
output
indicate
with
and
results",
CTCI's
their
work
production
undoubtedly
power
to
regulate and direct the means

24

and methods to be utilized in
12.
Burlinga
Garil
regular
LIKHA
me
Manpower
rank-and-
VS.
Corporati Services
BURLIN on
LIKHA-
GAME
PMPB
file
promo
employees
petitioners' work.
The contractual
LABOR ONLY
stipulations
between Burlington and F.

The contractual Garil
stipulation
shows
of any personnel
between
inefficient,
Burlingame
uncooperative,
G.R.
andpersonnel
observing
No.
provided
162833
Garil
by
on
F. regulations
that
found
to
be
troublesome,
and
the
set
not
rulesand
forth
by
the Burlingame shall be reported
nonexistence
to F. Garil and may be replaced
of employer-
upon request. This
employee
circumstance
relationship has
Burlingame
no legal
andsupervision
shows
has
that
control
over
workers
effectbecause it is supplied by F. Garil. There is

contrary
morals,
customs,
publicorder
25
to law, alsoan implied provision on the

good replacement
personnelcarried
of
upon
the
or request by Burlingame is the

public
policy. power
F.Garil was engage Garil is
tofire
personnel. F.
not an
independent
only in labor-only contractorsince it did not carry

contracting
and a distinct business free from
considered merely thecontrol and supervision of

as
an Burlingame.
agent of Burlinga
13.
me.
a manpower Job contracting
Stanfilco Asiapro,
ASIA
as
a contractor
PRO
division
cooperativ
an
employee-employer
relationship
The
VS. SSS of DOLE e,
employees
important element cooperative
G.R.
Philippin
to Stanfilco
is the employers members. The four elements in
No.
es, Inc.
control
of
the the
employees
the
exists
supplying
172101
most between
actually
and
four-fold
existence
respondent
of
conduct, not only relationship
its
test
an
ownersfor
the
employment
have
been
as to the result of complied with. The respondent

the
work
to
be cooperative
must
not
be
done, but also as allowed to deny its employment

to the means and relationship with its ownersmethods
26
to members
by
invoking
the

accomplish. The
questionable Service Contracts
power of control provision, when in actuality, it

refers
to
existence
power
the does exist. The existence of an
of
the employer-employee relationship
and
not cannot be negated by expressly
necessarily to the repudiating it in a contract,

actual
exercise when
the
thereof. It is not surrounding

essential for
employer
the show
terms
and
circumstances
otherwise.
The
to employment status of a person
actually supervise is defined and prescribed by

the
performance law and not by what the parties
of duties of the say it should be.

employee;
it
is
enough that the

employer has the
right to wield that
power
27

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LABOR STANDARDS (JOB-CONTRACTING)

there Final disposition

Petron with that

finds The prevailing rule on laboris

a only contracting at the time

As the Contract for Services in

considered merely Department

of series of 1997, the pertinent

Consequently, the Section 4. x x x

relationship which (f)

the Court finds to prohibited under this Rule is

exist in this case an

and places workers to perform a

LABOR STANDARDS (JOB-CONTRACTING)

being elements are present:

and subcontractor does not have

investment to actually perform

solidarily liable for its

petitioners' illegal responsibility; and

and (ii) The employees recruited,

supplied or placed by such

LABOR STANDARDS (JOB-CONTRACTING)

RDG is a labor-only contractor

statements and other financial

years 1999 to 2001 establish

contract. In fact, the financial

financial capability of Php4.807

LABOR STANDARDS (JOB-CONTRACTING)

contract in 2000. The Court

determination of RDGs status

period covered by the financial

presented. In other words, the

legitimate contractor but only

averred that Requio was not a contracting where the person

LABOR STANDARDS (JOB-CONTRACTING)

is r of CRUZ) as a utility contractor

( Employe she worked licensed

GR. NO. business

premises, placed by such persons are

per day. As among others.

a the form of tool, premises, among others, and

or investment in equipment, machineries, work

of substantial capital investment in the form of tools,

performing activities which are

directly related to the principal

business of such employer. In

Calsadan Park as a charge,

considered merely as an agent

responsible to the workers in

the same manner and extent as

1991 until and

of the employer who shall be

The requirement of the law in

LABOR STANDARDS (JOB-CONTRACTING)

determining the existence of

undertake the work on his own

responsibility, according to his

that Requio has no discretion

requirements and standards of

LABOR STANDARDS (JOB-CONTRACTING)

Assigned at Job contracting

As to the employer's power of

selection and engagement, it