The Supreme Court has ruled that workers performing tasks essential to a company’s operations are considered regular employees, regardless of intermittent engagement. This decision emphasizes that the continuous need for a worker’s services indicates their importance to the business, entitling them to the rights and protections afforded to regular employees under Philippine labor laws. This ruling clarifies the criteria for establishing an employer-employee relationship, particularly concerning workers whose employment patterns might be perceived as casual or temporary. It underscores the judiciary’s commitment to preventing the circumvention of labor laws designed to protect workers’ security of tenure.

From ‘Extra’ Hands to Essential Help: Unpacking the Regular Employment Status of Fish Tub Haulers

This case revolves around a group of fish tub haulers, known as batillos, who sought recognition as regular employees of St. Joseph Fish Brokerage, Inc. They filed a complaint for underpayment of wages and 13th-month pay, which prompted a dispute over their employment status. The core legal question is whether the batillos, despite being hired on an intermittent basis, perform activities necessary and desirable to St. Joseph’s business, thus qualifying them as regular employees under Article 295 (formerly Article 280) of the Labor Code.

The Department of Labor and Employment (DOLE) initially sided with the batillos, recognizing them as employees based on evidence such as identification cards, payrolls, and the company’s control over their work. However, the Court of Appeals (CA) reversed this decision, finding insufficient evidence to prove an employer-employee relationship based on the traditional four-fold test: selection and engagement, payment of wages, power of dismissal, and control over the employee’s conduct. The Supreme Court, faced with conflicting findings, reassessed the evidence and legal arguments to determine the true nature of the working relationship.

In its analysis, the Supreme Court emphasized the significance of the workers’ role in the company’s operations. The court highlighted that the batillos‘ work—hauling and unloading fish—was undeniably necessary and desirable for a fish brokerage business. The court referenced Article 295 of the Labor Code, which defines regular employment, stating:

ART. 295. [280] Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.

The Court considered the duration of the workers’ engagement, noting the DOLE’s finding that they had worked for St. Joseph for 10 to 30 years. This long-term engagement, even if intermittent, demonstrated the continuous need for their services and solidified their claim to regular employment status. Furthermore, the Supreme Court cited Magsalin v. National Organization of Working Men, emphasizing the reasonable connection between the worker’s activity and the employer’s usual business:

In determining whether an employment should be considered regular or non-regular, the applicable test is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The standard, supplied by the law itself, is whether the work undertaken is necessary or desirable in the usual business or trade of the employer…

The court also addressed the Court of Appeals’ concerns about the lack of direct evidence linking the supervisor, Regalado, to St. Joseph. It noted that the absence of such evidence did not negate the fact that the workers were performing essential tasks that required supervision, implying that someone from the company must have been overseeing their work. The court also noted the inconsistency in the CA’s reasoning, highlighting that it would be unsound business practice if the respondent did not supervise the batillos’ work. By not providing supervision, the extra batillos would be hauling and loading tubs of fish intended for the respondent to the other fish producers or brokers.

The Supreme Court distinguished this case from situations where workers are hired for a specific project or seasonal work. The batillos were engaged in an ongoing activity that was integral to St. Joseph’s fish brokerage business, regardless of the fluctuating volume of fish. Citing Philips Semiconductors (Phils.), Inc. v. Fadriquela, the Court underscored the purpose of Article 295 of the Labor Code:

Article [295] of the Labor Code of the Philippines was emplaced in our statute books to prevent the circumvention by unscrupulous employers of the employee’s right to be secure in his tenure by indiscriminately and completely ruling out all written and oral agreements inconsistent with the concept of regular employment defined therein…

The ruling reaffirms the importance of protecting workers’ rights and preventing employers from exploiting loopholes in labor laws. The court effectively highlighted how the continuous engagement of the batillos is a tell-tale sign of how necessary their labor is for the business of St. Joseph. The court held that petitioners were regular employees of the respondent. The Court of Appeals decision was set aside, reinstating the DOLE’s decision which recognized the employer-employee relationship and ordered payment of the appropriate wages.

FAQs

What was the key issue in this case?	The primary issue was whether an employer-employee relationship existed between the fish tub haulers (batillos) and St. Joseph Fish Brokerage, Inc., entitling the haulers to regular employment benefits. The determination hinged on whether their work was necessary and desirable to the brokerage’s business.
What is the four-fold test?	The four-fold test is used to determine the existence of an employer-employee relationship. It considers (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer’s power to control the employee’s conduct.
What does Article 295 (formerly Article 280) of the Labor Code state?	Article 295 defines regular and casual employment. It states that an employee engaged to perform activities necessary or desirable in the employer’s usual business is considered a regular employee, regardless of any contrary agreement.
What was the Court of Appeals’ initial decision?	The Court of Appeals initially ruled that there was no employer-employee relationship. It based this decision on the perceived lack of evidence supporting the four-fold test, such as insufficient proof of wage payments and direct control.
How did the Supreme Court view the workers’ long-term engagement?	The Supreme Court considered the workers’ long-term engagement—ranging from 10 to 30 years—as a significant factor. This demonstrated the continuous need for their services and supported their claim to regular employment status, regardless of intermittent hiring.
Why did the Supreme Court reverse the Court of Appeals’ decision?	The Supreme Court reversed the Court of Appeals’ decision because it found that the batillos performed tasks essential to St. Joseph’s business. This, coupled with their long-term engagement, indicated a regular employment relationship under the Labor Code.
What is the significance of this ruling for workers in similar situations?	This ruling provides stronger protection for workers who perform essential tasks but are hired on an intermittent basis. It clarifies that continuous engagement in necessary activities can lead to regular employment status, entitling them to full labor rights.
How does this case prevent the circumvention of labor laws?	This case prevents employers from using intermittent hiring practices to deny workers their rights as regular employees. It reinforces the principle that the nature of the work and its necessity to the business are key factors in determining employment status.

In conclusion, the Supreme Court’s decision in this case reinforces the protection of workers’ rights by affirming that those performing tasks essential to a business are entitled to regular employment status, regardless of intermittent engagement. This ruling emphasizes the importance of examining the true nature of the work performed and its contribution to the employer’s business operations.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: NESTOR ILUSTRISIMO, VS. ST. JOSEPH FISH BROKERAGE, INC., G.R. No. 235761, October 06, 2021