VFR-on-top is an IFR clearance in the US that a pilot can request to allow an IFR flight to use VFR altitudes provided that it can remain in VMC. Requesting and receiving a VFR-on-top clearance doesn't cancel the IFR flight plan.
When is this clearance useful? It allows the pilot a greater choice of cruising altitudes, but why would a pilot prefer to use VFR-on-top rather than request a different IFR altitude? VFR-on-top adds at least one task to the pilot's workload - maintaining VFR cloud clearance - without reducing the IFR workload.