Torio-Sese, Alyssa Joy

TORIO-SESE, ALYSSA JOY
CONTRACTING OUT
1.) Yes. TMRs are employees of Empire.

From the time Empire contracted the services of Style, both engaged in labor-
only contracting. As per jurisprudence it was ruled that where any of the following
elements is present, there is labor-only contracting.

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. The contractor does not
exercise the right to control over the performance of the work of the contractual
employee. The first element is present herein, as Style has no substantial capital or
investment in engaging in the supply of services contracted out by Empire which is
directly related to the marketing and promotion of its clothing line. The second element
is present as it is inevitable for Empire to direct the activities of the TMRs to properly
market and promote its product line.
The subsequent contract of Empire with Wave did not affect the regular
employment of the TMRs with Empire as, through the Marketing Director of Empire, the
TMRs were under the control of Empire. Thus, the five-month employment contract
entered by the TMRs with Wave did not divest them of their regular employment status
with Empire. In addition, such scheme undermined the security of tenure of the TMRs
which is constitutionally guaranteed, hence, the contract of the TMRs with Wave is void
ab initio.
2.) Yes. People Plus is a labor-only-contractor because it is not substantially capitalized.

Neither does it carry on an independent business in which it uses its own investment in
the form of tools, equipment, machineries, or work premises. Hence, it is just an agent
or recruiter of workers who perform work directly related to the trade of Star Crafts.
Since both the essential element and the conforming element of labor-only contracting
are present, Star Crafts becomes the employer of the supplied worker.
As principal, Star Crafts will always be an employer in relation to the workers

supplied by its contractor. Its status as employer is either direct or indirect depending on
whether the contractor is legitimate or not. Thus, even if People Plus were a legitimate
job contractor, still Star Crafts will be treated as a statutory employer for purposes of
paying the workers’ unpaid wages and benefits.
3.) Constant and Able should be held solidarily liable for the unpaid wages and benefits,
as well as backwages and separation pay, based on Article 109 of the Labor Code
which provides that "every employer or indirect employer shall be held responsible with
his contractor or subcontractor for any violation of any provision of this Code." and
should be held solidarily liable for the unpaid wages and benefits, and should order
Constant, as the workers' direct employer, to be solely liable for the backwages and
separation pay.
It should be held solidarily liable for the unpaid wages and benefits and the backwages
since these pertain to labor standard benefits for which the employer and contractor are
liable under the law, while Constant alone – as the actual employer - should be ordered
to pay the separation pay.
Lastly Constant and Able should be held solidarily liable for the unpaid wages and
benefits, and Constant should be held liable for their backwages and separation pay
unless Able is shown to have participated with malice or bad faith in the workers'
dismissal, in which case both should be held solidarily liable.
** in cases of I.D, Job contractor cannot be held liable for back wages and SP. B and
SP in this cases are not causes of action but instead relief granted for illegal dismissal.
They are not money claims
4.) Yes, since Reach-All does does not qualify as independent contractor employer, its
clients being the source of the employees’ salaries.
The mere presence of within the premises of a supervisor from the contractor does not
necessarily mean that it has control over its members and that it is an independent
contractor.
5.) Yes, their demand is valid. Since Tower Placement Agency supplies manpower to
Lucas Candy Factory to do work usually necessary for work done at its factory,
hence labor only contracting. The employees employment period had already
exceeded
the 1 year period threshold and performs work that are necessary and desirable to the
business of the employer hence should be declared regular employees.
6.) A.) The Service Agreement is valid. The law, Art. 106, does not invalidate an
Independent Contractors Agreement because the Independent Contractor has only one
(1) client, or that the employer of the independent contractor is one of the major owners
of the employing establishment. MMSI, is an independent business, adequately
capitalized , registered with the DOLE, and assumed all the responsibilities of a
legitimate Independent Contractor.
B.) The employers can file their claims against Jolli- Mac pursuant to Art. 106 of the
Labor Code which reads: “Contractor or subcontractor, in the event that the contractor
or subcontractor fails to pay the wages of his employees in accordance with this Code,
the employer shall be jointly and severally liable with his contractor or subcontractor to
such employees to the extent of the work performed under the contract, in the same
manner and extent, that he is liable to employee directly employed by him.
7.) A.) Yes, the stipulation of no employer-employee relationship is binding on labor

officials so long as the stipulation is unambiguous and clearly expressed.
B.) RSC member’s employer is the RSC Cooperative. As per the 4-fold test the
elements of such are all exercised by the Cooperative such as the payment of wages of
the members which and it can be assumed that since they pay the wages, they should
also have the power to control them and dismiss the members as well.
C.) It is not enough to show substantial capitalization or investment in the form of

tools,
equipment, machinery, and work premises. In addition, the following factors have to be
considered: (a) whether the contractor is carrying on an independent business; (b) the
nature and extent of the work; (c) the skill required; (d) the term and duration of the
relationship; (e) the right to assign the performance of specified pieces of work; (f) the
control and supervision of the workers; (g) the power of employer with respect to the
hiring, firing and payment of workers of the contractor; (h) the control and supervision of
the workers; (g) the power of employer with respect to the hiring, firing and payment of
workers of the contractor; (h) the control of the premises; (j) the mode, manner and
terms of payment.
8.) a.) As a rule, the security guards of a private security guard agency are the
employees
of the latter and not of the establishment that has entered a contract with the private
security guard agency for security services. But under the facts in the question, Baron
Hotel appear to have hired the security guards, to have paid their wages, to have the
power to promote, suspend or dismiss the security guards and the power of control over
them, namely, the security guards were under orders of Baron Hotel as regard their
employment. Because of the above-mentioned circumstances, Baron Hotel is the
employer of the security guards.
b.) It is lawful for a private security guard agency to place its security guard on a
“floating status” if it has no assignment to give to said security guards. But if the security
guards are placed on a “floating status” for more than six (6) months, the security
guards may consider themselves as having been dismissed.
c.) Yes, the Labor Arbiter may entertain the third-party complaint so long as it is filed
within the period provided for by law.

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1.) Yes. TMRs are employees of Empire.

2.) Yes. People Plus is a labor-only-contractor because it is not substantially capitalized.

As principal, Star Crafts will always be an employer in relation to the workers

7.) A.) Yes, the stipulation of no employer-employee relationship is binding on labor

C.) It is not enough to show substantial capitalization or investment in the form of

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