Court of Appeals Nullifies Order for PLDT to Regularize at Least 8,000 Workers

The Philippine Long Distance Telephone Company (PLDT) has managed to get relief from the Court of Appeals, which nullified an order from the Department of Labor and Employment (DOLE) for the company to regularize 7, 344 workers that it hired from third-party contractors.

In its ruling. dated July 31, 2018, but made public only on Monday, the appeals court’s 10th Division, through Associate Justice Edwin Sorongon, nullified the resolution issued by DOLE last January requiring PLDT to regularize workers involved in the following:

  • business process outsourcing (BPO) services
  • information technology (IT) services
  • IT support services and applications development
  • janitorial, messengerial and clerical services
  • back office support and office operations
  • sales
  • medical, dental, engineering and other professional services

The court said it could not find any concrete evidence that the more than 7,000 workers should be regularized.

It noted that, in coming up with the order, records had shown that DOLE’s regional director “heavily relied” on the interviews of some employees and then applied them to all other workers and employees who were not actually interviewed.

“It is highly conjectural, if not purely speculative, to consider the individual circumstances of some workers who were interviewed to be exactly similar to the factual circumstances pertaining to the other contractors’ workers,” the appeals court said.

“Such findings cannot constitute the substantial evidence required to prove the existence of employer-employee relationship or labor-only contracting,” the court added.

The court added that PLDT did not violate any law when it decided not to regularize the BPO and IT support personnel.

It noted that DOLE Department Circular No. 1, series of 2017, actually exempted such services from the coverage of Department Order No. 174, which defined labor-only contracting.

This meant “there is no basis for [the] inclusion” of the employees of the contractors rendering IT support services for PLDT in the regularization order.

Neither were personnel who render medical, dental, engineering and other professional services covered by regularization.

The court said they were “independent contractors” because of their “unique skills and talents” meant the PLDT management “lack[ed]… control over the means and methods in the performance of their work.”

“This group of employees is expected to provide professional service based on their independent discretion as such professionals,” read the decision.

Like the BPO and IT support personnel, the professionals are also exempted from DOLE Department Circular No. 001-17 from coverage in its regularization orders.

Similarly, the sales agents who were paid on commission basis could not be covered by the regularization order because of the same circular.

The court stressed that “the consistent and long settled rule in jurisprudence is that those who are paid on a commission basis are not employees.”

At the same time, the court remanded the case to the DOLE-NCR office for the review and proper determination of the monetary award on the labor standard violations of PLDT and to conduct further proceedings, consistent with its decision.

The court said that while it commiserated and appreciated the toil and hardships of the employees that will be affected by its ruling, “this sense of compassion should also be coupled with a sense of fairness and justice to all the parties concerned.”

“Hence, while social justice has an inclination to give protection to the working class, the cause of the labor sector is not upheld at all times as the employer has also the right entitled to respect in the interest of simple fair play,’ it added.

The CA said Labor Secretary Silvestre Bello III in issuing the assailed orders did not make his own independent consideration of the law and facts of the controversy, but rather he simply accepted the views of his NCR director.

Concurring in the decision were Associate Justices Sesinando E. Villon and Maria Filomena D. Singh.

Meanwhile, PLDT issued a statement said it was already studying the Court of Appeals decision “to determine the company’s appropriate next steps.”

Source: Inquirer


The owner of Ervin Soliven website and currently working as a Retention Specialist at Alorica Philippines.

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