Dear Atty. Angela,

I am an employee for a manpower agency which assigned me as a machine operator for an ice cream company where I have been working for 7 years now. I was told by the head of our agency that I was going to be transferred to a different company since my services is no longer needed. I think this is unfair and illegal. I spoke to the head of the agency that I should be a regular employee of the company since all the directives come from them and that all equipment I operate is owned by the company and not of the agency. I was told that since the agency is registered in DoLE as a legal manpower agency, I am their regular employee and not of the company. Is this correct?

Ramon

***

Dear Ramon,

Based on the facts you mentioned, your employer agency is a mere labor-only contractor of the company.

In a legitimate job contracting, the contractor supplies another business or company with workers, along with the necessary tools and equipment for their tasks. The contractor is responsible for controlling and supervising the workers as their employer. On the other hand, a labor-only contracting involves the contractor supplying only workers without the necessary tools or equipment. Also, that the company is in control of the tasks and assignments being given to the employees. In this arrangement, the business or company manages the workers and is considered their true employer.

In the case of Nozomi Fortune Services, Inc., v. Naredo, G.R. No. 221043 (2024), the Supreme Court emphasized that a DOLE Certificate of Registration may help prevent assumptions of labor-only contracting, but it does not serve as conclusive proof of legality.

It further explained that there is labor-only contracting when (1) a contractor who supplies workers to an employer does not have substantial capital in the form of tools, equipment, work premises, etc., and (2) the workers perform tasks that are directly related to the employer’s principal business. Under this arrangement, the contractor is a mere agent of the employer who is ultimately responsible to the workers as if the employer directly employed them.

In your case, the task of operating the machine in manufacturing ice cream is essential to the operations of the company. That it does not have substantial capital in the form of equipment and that the company directed the means by which you perform work shows that it is your true employer.

Atty. Angela Antonio