MANILA -- The Court of Appeals (CA) stopped the order of the Department of Labor and Employment (DOLE) directing the Philippine Long Distance Telephone Company (PLDT) to regularize 7,344 workers it hired from third party contractors.
In a 47-page decision dated July 31 penned by Associate Justice Edwin Sorongon, concurred by Associate Justices Sesinado Villon and Maria Filomena Singh, the CA’s Tenth Division granted the petition of the telecommunications giant for the issuance of the injunction against the order of Labor Secretary Silvestre Bello III and said only workers of contractors performing installations, repairs and maintenance services of the PLDT lines should be considered for regularization.
The court held 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 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 were 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 commission basis are not employees.”
The appellate court “set aside” the following contractual workers from being covered by the DOLE regularization order: janitorial services, messengerial and clerical services; information technology (IT) firms and services; IT support services, both hardware and software; and application development.
At the same time, the CA remands 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 appellate court said that contracting out of services is not illegal per se adding that janitorial, maintenance, security and messengerial services may be contracted out.
It said that laws allow contracting arrangements for the performance of specific jobs, works or services, even as it elaborated that for such outsourcing to be valid, it must be made with an independent contractor because the current labor rules expressly prohibit labor-only contracting.
It also said that contractual workers engaged in information technology-enabled services and sales agents, who are paid on commission basis, should not be regularized and that the length of service cannot always ripen to regular employment.
The CA said that while it commiserates and appreciates 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 Bello, in issuing the assailed orders, did not make his own independent consideration of the law and facts of the controversy; rather he simply accepted the views of his NCR director.
In seeking the Court’s intervention, the PLDT said it stands to suffer grave and irreparable damage from the implementation of the DOLE’s order if it is not reversed and if in the meantime, no restraining order or injunction is issued. (PNA)
