SC orders PLDT to regularize employees engaged in installation, repair and maintenance of service lines

The Supreme Court (SC) has ordered the regularization of Philippine Long Distance Telephone Company (PLDT) contractual employees performing duties directly engaged in its business, including the installation, repair, and maintenance services of its telecommunications lines. 

In a decision promulgated on February 14 but released Friday, the SC First Division junked the petitions for review on certiorari filed by former Labor Secretary Silvestre Bello III and the Mangaggawa ng Komunikasyon ng Pilipinas, assailing a 2018 Court of Appeals (CA) decision that affirmed, with modifications, the Department of Labor and Employment's (DOLE's) findings of labor violations by PLDT and its contractor.

Bello, as DOLE Secretary in January 2018, instructed the PLDT and its contractors to elevate the status of at least 7,000 contractual employees to regular employees. 

PLDT contested the DOLE order before the appellate court, claiming it was not in accordance with the law.

The SC affirmed the CA decision, clarifying that labor contracting is not per se illegal, citing Article 106 of the Labor Code which permits legitimate contracting. DOLE implements this through Department Order (DO) 18-A and  DO 174-2017.

It also said there is only labor-only contracting when the contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work, or service for a principal and any of the following elements are present: 

• the contractor or subcontractor does not have substantial capital or investment that relates to the job, work or service to be performed and the employees recruited, supplied, or placed by such contractor or subcontractor are performing activities that are directly related to the main business of the principal;
• or, the contractor does not exercise the right to control the performance of the work of the contractual employee.

Thus, the contractors’ workers PLDT outsourced for specific jobs, works, or services does not automatically mean they are employed under the company, the Court added.

The SC, however, exempted the employees engaged in installation, repair, and maintenance services of PLDT lines, saying their duties are directly related to the company’s business. 

“It cannot be denied that without the work performed by these employees, PLDT would not be able to carry on its business and deliver the services it promised its consumers,” the Court ruled.

Article 295 of the Labor Code states that employees may be deemed regular in three ways including “when the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer”.

Meanwhile, the SC remanded the case to the Office of the Regional Director (RDO) of the DOLE-NCR for the review and determining of the effects of the regularization of the workers performing installation, repair, and maintenance services.

“With regard to those workers performing installation, repair, and maintenance functions, we clarify that the Supreme Court remanded the case to the DOLE Regional Director to determine whether or not regularization is appropriate,” PLDT said in a disclosure to the Philippine Stock Exchange.

The RDO was likewise ordered to review, compute, and properly determine, the monetary award on the labor standards violation, to which PLDT and the concerned contractors are solidarily liable; and to conduct further appropriate proceedings, consistent with this decision.

Associate Justice Rodil Zalameda penned the ruling. —with Ted Cordero/LDF/VBL, GMA Integrated News