~epublit of tbe tlbilippines

~upreme QC.ourt
;ifnlanila

FIRST DIVISION

MANGGAGAWA SA KOMUNIKASYON G.R. No. 244695

NG PILIPINAS,
Petitioner,

- versus -

PLDT, INC.,
Respondent.
X--------------'-'--.X
PLDT, INC., G.R. No. 244752
Petitioner,

- versus -

HON. SECRETARY OF LABOR AND

EMPLOYMENT SILVESTRE H.
BELLO III; and MANGGAGAWA SA
KOMUNIKASYON NG PILIPINAS,
... Respondent.
x--·-------------x
SILVESTRE H. BELLO III, in his
capacity as the Secretary of the G.R. No. 245294
Department of Labor and Employment,
Petitioner, Present:

- versus - GESMUNDO, C.J, Chairperson

' . HERNANDO,
PLDT.INC., ZALAMEDA;
Respondent. ROSARIO,
MARQUEZ,JJ

Promulgated:
- !:''CO ~ 1 "lf'i'jl.
• . - 1 i..o l "V t..u-::~t).Jw
X - - - - -. - - - - - - -. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X

i
 Decision 2 G.R. Nos. 244695, 244752
& 245294

DECISION

ZALAMEDA, J.:

Before the Court are consolidated Petitions 1 for Review on Certiorari

under Rule 45 of the Rules of Court filed by petitioners Manggagawa sa
Komunikasyon ng Pilipinas (MKP), PLDT, Inc. (PLOT), and Silvestre Bello
III, in his capacity as then Secretary of the Department of Labor and
Employ1nent (Sec. Bello), a11 assailing the Decision2 and Resolution3of the
Court of Appeals (CA). In the challenged issuances, the CA affirmed, albeit
with substantial modifications, the resolutions issued by Sec. Bello in "In
Re: Special Assessment or Visit of the Establishment (SAVE) in Philippine
Long Distance Telephone Company (PLDT), "and docketed as OS-LS-0120-
08(]4~2017.

Antecedents

Petitioner;l)_LDT is a corporation engaged in the telecommunications

business. For its operation, it engaged the services of several contractors
and sub-contractors to provide services in various areas or phases of its
operations. Petitioner :tv1KP, on. the other hand, was the exclusive bargaining
agent of PLDT's rank-and~file employe·es. 4

To ~ettle the di~pute that arose from the negotiation of the collective
bargainjng _agreement between _P.LDT and MKP, the intervention of the
Department ofLabor and Employment (DOLE} was sought, and the parties
agr~ed _tp have a ''Special AssessmenCand Visit of Establishment" (SAVE)
conducted inPLDT. 5 Thus, the DOLE issued.Administrative Order No. 648
(AO
.., .
648),6 constituting;
, . .
a DOLE Assessment
. -
Team that will:

Rolio (G.R. No. 244695), pp. 17-96; Rollo (G.R. No. 244752), pp. 85-135-A; Rollo (G.R.. No. 245294),
pp. 87-147.
' Rollo (G.R.. No. 244695), pp. 99-145. The July :n, 2018 Decision in CA-G.R. SP No. 155563 was
penned by Associate Justice Edwin D. Sorongon and concurred in by Associate Justices Sesinando E.
Villon and Maria Filomena D. Singh (now a Member of this Court) of the Tenth Division, Court of
Appeals, Maniia. _ _ __ _ _
Jd. at.1'47-r56: The F_ebruary i 4, 2019" Re~oiution in CA-G. E: SP No. 155563 was penned by Associate
Justice Edwin D. Sorongon and concu~cd in by Associate _Justices Sesinando E. Villon and Maria
Filom~na D. Si,:,gh (now a M.ember of this Court) of the Former Tenth Division, Court of Appeals,
Ma:nl1a:
4
id. a,t 100. •
' Id.
6 ld:at '117.
 Decision 3 G.R. Nos. 244695, 244752
& 245294

[C]onduc, [SAVE] lo assess, validate and verify PLDT's, including

__ . its
·-
contractors/subcontractors, compliance to Denartment
... •
Order 18-A' Series
• of 2011,"" ori-the-job training and other training-in-employment practices,
-hi'ring practices, working arrangements and compliance with general labor
standards and occupational safety and health standards. 7
.,

During the inspection, the DOLE Assessment Team interviewed a

total of--1,104 PLDT employees and contracted workers, as well as 37
contractors' representatives from several offices of PLDT in the National
Capital Region. The focus of the interview was PLDT's contracting
activities and practices. 8

During a conference held on December 5, 2016, t.½.e DOLE

Assessment Team presented its Report on the Special Assessment and Visit
of the Philippine Long Distance Telephone Company (SAVE Report).' In the
SAVE Report, the DOLE Assessment Team enumerated their preliminary
findings of PLDT's and its contractor's violation of DOLE Department
Order No. 18-A, Series of 2011 (DO l 8-.A). 10 Among other things, the DOLE
Assessment Team reported matters that tend to establish that PLDT and its
contractors 'ate engaged irt laboraonly. ·contracting. In particular, the
interviews , of the workers ---intimated that PLDT exercised control and
supentision
; '. :-• . : .
over them, il -i.vhich
··, . -. .
,. ..•
is demonstrated by the
-.: . . . . .. . • ' . ·: . . . .
following:
.
• r• .,

a. - PLDT informed the contractors of its personnel needs, setting

___ the basic requirements for -hi:\":lng job_ applicants. PLDT also
_conducted initial evaluation of co):ltractors' job applicants, and
• those who· passed ·were referred to the contractor for the
completion o{the hiring process'. Contractors' employees also
- underwent trainings provided by PLDT, either alone or with the
contractor. 12
' t • , •. ,. . •

.b. \Vork schedules foi:- contractors' employees and work deadlines

-- -• _were set by PLDT. Rendition of overtime work and availment
of leave. benefits were subject to PLDT's approval. PLDT also
•• reviewed 'i:lie work and reports of contractors' workers on a
weekly basis."

,c. Problems ~ncou,nter~d by contractors' workers were referred to

8
Id. at 100.
9
Td. at 376-399.
'° Rules Implementing-Art{cles 106 to J 09 of Labc>r Code; as·amended· (2011 ).
11 Rollo (G.R. No. 24469.S);p. 395... •
,, M •
13
Id

I
 Decision 4 G.R. Nos. 244695, 244752
& 245294

PLDT's personnel for appropriate action. Most workers

interviewed also said that organic PLDT employees supervised
them. Special Point of Contact (SPOC) persons assigned by
contractors to PLDT only communicated problems encountered
by workers but •had no authority to address the concerns
• themselves. PLDT managers or supervisors were always
assigned to address work problems. 14

d. Some workers of contractors performed tasks also performed

by PLDT employees."

e. PLDT possessed the authority to recommend replacement or

termination of employment of contractors' workers. 16

lt was also reported that 47 of PLDT's contractors violated general

labor standards provisions on overtime pay, holiday pay, service incentive
leave, maternity leave, paternity leave and 13 th month pay. Nineteen
contractors were also found to have made unauthorized deductions for
uniform, safety shoes, cable handset, monitoring tablet and other tools. 11

Based on :this finding of control, it was recommended that PLDT

should regularize . contractual ,employees performing jobs that are directly
related to their busin~ss. PLDT was also· declared solidarily liable with the
contractors to pay the i;inpaid 1n0ri:etary benefits of the contractors' workers. 18

On Jan~ary 6, 2017, PLDT, through its counsel, filed a Manifestation

and Motion, 19 where PLDT contested the legal .or factual conclusions of the
DOLE Assessment Team that it has -engaged the services of labor-only
contractors. PLDT asserted that any of its alleged violation of DO 18-A
"can be explained by proper reference to appropriate documents, and with an
objective approach, in an adversarial proceeding, that is less reliant on
purely anecdotal evicience." 20 Thus, PLDT opined that it may be more
appropriate to thresh out these matters in.an adversarial proceeding such as a
regularization. .
suit before
.- .
the National
. .
Labor Relations
21
Commission (NLRC)
that is initiated by
- ., .
workers
• .,.
'
claiming regularization.
'.

.
On January 6, 10, and 17 of 2017'. mandatory conferences were held

14 Id., , •
!S 1£3{396.
l6. iii
17
Id. at 377.
18 • •-id. at 399.
19
Id. at 400--408.
"' Id. at'40t
,1 Id.
 Decision 5 G.R. Nos. 244695, 244752
&245294

by the DOLE Assessment Team. The contractors were summoned and given
copies of the Notice of Results. pertaining to each of them. They were also
asked to provide documents of their compliance with the labor standards
provisions they allegedly violated. The contractors provided proof of
payment as well as documentation and affidavits to challenge the finding
that they.were labor-only contractors. 22

~North noting that on April 19, 2017, Sec·. Bello announced during a
press.briefing that he "will order the regularization of 10,000 workers under
contr~cting and subcontracting arrangement but are performing jobs that are
related to PLDT business." 23

Order issued by the DOLE-NCR Regional Director

On July 3, 2017, the Regional Director of the DOLE-National Capital

Region (Regional Director) issued his Order24 where it was ruled:

i. I'LDT's Prayer in_ its Manifestation and Motion that the issue of
regularization b,e endorsed to the NLR.C, the Regional Director ruled
that vlolations. of the law ani:l rules in labor-contracting under Section
9, Rule VIII, Book Three of the Omnibus Rules Implementing the
Labor Code of the Philippines, 25 is considered a labor standards
violation and t.½us, witl:mi the visitorial and enforcement powers of the
DOLE.26 .·Further,. the legal consequence of .a finding of labor-only
. c,~r1tracting 1sthe regularization by the principal of the employees
. . . provid~d by .the laboi;-7only contractor. 27 . Hence, the issue of
•• 'i-egulari;2atfon pa.y be determined by the DOLE as in incident of its

22
Id. at IO I.
" Id.
" Id. at 439-745.
25
SEC. 9. Labor-only contracting. ~ (a) Any perso_n who undertakes to supply workers to an employer
shall be'deemed to be engaged in labor-only contracting where such person: (1) Does not have
substantial capital or investrnenUn the form of tools, equipment, machineries, work premises and other
materials; and (2) The workers recruited and placed by such person are performing activities which are
directly related to the principal business or operations. of the employer in which workers are habitually
employed. (b) Labm:-ority contracting as defined herein is hereby prohibited and the person acting as
contractor shaJl be ·considered merely_,_ as an agent, or intermedi.ary of the employer who shall be
responsible to the workers in the same manner and extent as if the latter were directly employed by him.
(c) For cases not falling under this Rule, the S_ecretaty of Labor and Employment""shall determine
.through appropriate .orders whether or not the contracti.'1g out of labor is permissible in the light of the
circumstances of each case- and after considering the operating needs of the employer and the rights of
the worker~ involved. In ~u-ch case,, he.ina)':pfescdbe conditioTis and restrictions to insllre the protection
and welfare ofihe workers: •• •
" Rollo.(G.R. No. 244695);-p. -648.
21 Id.
Decision 6 G.R. Nos. 244695, 244752
&245294

jurisdiction to the determine the existence of labor-only contracting. 28

2. _The Regional Director also ruled that PLDT failed to present evidence
to refute the LLCOs findings that some of its contractors are engaged
in labor-only contracting despite having been afforded due process.
As a result, several of PLDT's contractors were declared as "labor-
only contractors." 29

Based on these findings, the Regional Director found PLDT and its
contractors solidarily liable to pay the unpaid monetary benefits of the
contractors' workers amounting to PHP 78,699,983.71. The contractors
found to be engaged in labor-only contracting were ordered to cease and
desist from further engaging in contracting activities; and the license of
those with existing DO 18-A registration were revoked. Finally, PLDT was
ordered to regularize and include in its payroll, the workers of the declared
labor-only contractors. 30

On July 14, 2017, PLDT filed a Memorandum of Appeal31 before the

Secretary of Labor challenging the. Order of _the Regional Director. On July
2
12, 2017, the Regional Director issued a Supplemental Order3 enumerating
the .names of the_ workers ..of each_ contractor that were declared regular
employee§9f];'I.,DT. :on
August_ 3, 2017, MKP filed its Opposition to
PLDT's appeal.33 On September :28_, 2017, a Supplement to Opposition to
Appea1 34 was also filed where MKP .attached the affidavits of the workers
interviewed during the SAVE proceedings to support the Regional Director's
findino- ·that PLDt • and its contractors were engaged in labor-only
"'
contractiµg. 35 .

Ruling of Sec. Bello

36
On J~nuary 10, 2018, Sec. Bello issued his Resolution to the appeal
fi·led by PLDT arid the latter's contractors. Sec. Bello found no merit in1
PLDT's appeal but partially granted some of the appeal of the contractors.'
In his !Zesolution, Sec. Bello found t,'1.at the notarized statements of the

'I Id. -- -
" Id. at M8-c<549.
,o Id. at 698-861.
ii Id. at 862-928.
'' - Jd. at747-86L
" Jd. at929-964.
34
·Id.at 978--995.
,, ·_a at 1066-'-12s1.
36
ld. at 12~2-1481.. -
37 Id. - -
 Decision 7 G.R. Nos. 244695, 244752
& 245294

contractor's officers and the Service Agreements, and other documents that
PLDT offered were self-serving and did not constitute substantial evidence
to dispute the.Regional Director's ruling of labor-only contracting. On the
contrary,_.the Regional Director's finding that PLDT exercised control over
the contractors' workers was supported by said workers' affidavits, SAVE
notes, ~d interviews of contractors' officers and line supervisors. 38

"In summary, the Sec. Bello ordered the following:

1. Seven thousand four hundred sixteen workers of the contractors

that were declared as labor-only contractors were deemed as regular
employees of PLDT from the time of their initial deployment. PLDT
was ordered to include them in its payroll of regular employees.

2. The DO 18--A registration of the declared labor-only contractors

were ordered to be cancelled after the conduct· of cancellation
proceedings.

3. Contractors and. PLDT were ordered to solidarily pay the unpaid

ni:onetary benefits of the contractors' employees am.ounting to PHP
. 66,348,36Q.68 .

• 4. Contractors that were able to show proof of compliance with DO

.. 1.8-A were declared as legitimate contractors.

5. Contractors who were able to show sufficient proof of full or partial

payment of the unpaid monetary benefits of their workers had their
39
monetary liabiiity either deleted or reduced.

On April 24, 2018, Sec. Bello issued another resolution acting upon
the motions for reconsideration filed by PLDT and l\1KP. Sec. Bello further
reduced PLDT's and the contractors' total monetary liability to PHP
51 , 801 ' 729.80. . The number
.. . .
'
of employees
.
regularized was also reduced to
7,344.4° .

Aggrieved with Sec. Bello's ruling, PLDT filed a Petition for

Certiorari before.the CA.4'

·'' Ide at i399-1401.

39
Id. at 1461-1481.
"' Id. ano2.-·
41 Id.

I
Decision 8 G.R. Nos. 244695, 244752
& 245294

Ruling of the CA

On July 31, 2018, CA promulgated the assailed Decision affirming,

albeit with substantial modifications, the resolutions of Sec. Bello. The
dispositive portion of the Decision reads:

WHEREFORE, premises considered, judgment 1s rendered as

follows:

1. The· Court AFFI&"VIS ,vith modification, the Assailed Resolution

dated January 10, 2018, and Resolution dated April 24, 2018 in "In Re:
Special Assessment or Visit of the Establishment (SAVE) in Philippine Long
Distance Telephone Company (PLDT) ", and docketed as OS-LS-0120-
0804-2017, of public respondent Hon. Silvestre Bello III in his capacity as
Secretary, Department of Labor and Employment, insofar as the same
.ordered the regularization of individuals perfomling functions and jobs that
are usually necessary aud desirable in the usual course of the business of the
petitioner PLDT, Inc., specifically, as regards the installation, repair and
maintenance of PLDT communication lines. Accordingly, and consistent
with this Decision, the Court REMANDS to the Office of the Regional
Director of the Department of Labor and Employment - National Capital
Region the matter of the regularization of these individuals performing
installation, repair and maintenance services for the conduct of the
necessary factual determination on matters dealt with in this Decision.

2. The. Court SETS ASIDE the public respondent's Resolution dated

January 10, 2018 and Resolution dated April 24, 2018, insofar as these
issuances hav~ declared that. there was labor-only .contracting of the
following functions/jobs/ services, viz:

a. j;1pitorial services, messengerial and clerical services;

. b. information technology (IT) .firms and services;
c. 11° support serviyes, both hardw~e and software; and applications
. development; .
d. back office support and office operations;.
• e. business process outsourcfog or call .centers;
f. sales; and· .. . • • •
g. medkaC dental, tngfoeering and other professional services;

. ~nd, accordingly, iri .this regard, the r~spondents Hon. Secretary of

Labor and Employment Silvestre H.- Bello III, and Manggagawa sa
Konrnnikasyori rig Pilipin11s, their officers, representatives, agents or any
other ·person(s) acting • on their behalf or uuder their direction are
ENJOINED _from implementing, enforcing . and/or executing the
Compliance Ord~r dated July 3; 2017 in Case A'.o. NCROO-TSSD-JA-20~7-
05-001-GO-SOT/ Ref No. NCROO-TSSDI601-JA-004-PLDT, Resolunon
dated January 10, 2018, and Resolution date.d April 24, 2018 in "In Re:
Special Assessment or ·Visit of the.Establishment (SAVE) in Philippine Long
Distanc;e Telephone Company (PL[JT) '',. doc¼ted as OS-LS-0!20-0804-
2017,' and ·_. ;.
 Decision 9 G.R. Nos. 244695, 244752
&245294

3. The Court REMANDS this case to the Office of the Regional

Director of the-Department of Labor and Employment - National Capital
Region for the review and proper determination of the monetary award on
the labor standards violation of petitioner PLDT; Inc., and to conduct further
appropriate proceedings, consistent with this Decision.

SO ORDERED. 42

The CA upheld the jurisdiction of the Regional Director and Sec.

Bello to determine the existence of employer-employee relationship, which,
according to the CA, is a condition sine qua non in the exercise of their
visitorial and enforcement power. 43 The CA also agreed with Sec. Bello's
ruling to prohibit PLDT from contracting out activities, services, jobs or
functions that are usually necessary and desirable in the usual course of its
business. 44 Thus, the CA held that individuals deployed by contractors
performing installation, repair, and maintenance services of PLDT lines
should be considered regular employees of PLDT. 45

The appellate court, however, reversed Sec. Bello's ruling insofar as

he ordered the regulariz.ation of the follo:wing groups of. workers of the
contrac;tors: (1) {hose· performing janitorial,. maintenance, security, and
messengerial. ·services; 46 (2) medical services provider of PLDT; 47 (3)
individuals whd render ''professional services;" 48 (4) contractual workers
engaged iri information· technology-based servites; 49 and (5) employees
engaged in sales who are paid on commission basis. 50

To explain. the foregoing declarations, .the CA held that the primary

stanclard that _determi11es regular, employment is_ the reasonable connection
between .the activity performed by the employee and the usual business or
trade 'of the employer. When the employee performs activities considered
necessary and desirable to the overall bi,isiness scheme of the employer, the
iaw. regards the employee. as regular.. Thus, individuals deployed by the
contra~tors who ~re performing installaticm, repair, and maintenance services
of PLDT lines are considered regula~ employees of PLDT. 51

By ~ay of~ exception, the Labor Code also considers as regular, a.

·" I,iat 143-144.

43
Mat US-12.1.
" Id. at 122.
45
Id. .
" Id. ·atl22-l26.
·'" Id. at l26cCJ28.
" Id. at 128.
• Id. ai 128-130.
49
0
' Id.at 130-131.
51
Id. at 131-132.

i
Decision • 10 G.R. Nos. 244695, 244752
& 245294

casual employment arrangement that had lasted for at least one year,
regardless of the engagement's continuity. The exception, however, cannot
apply to the group of individual workers enumerated above. The engagement
of these workers, no matter how long cannot ripen into regular employment
with PLDT as the law is clear that- the exception only applies to casual
employees who rendered at least one year of service or, based on
jurisprudence, to project employees who were continuously rehired even
after ·the cessation of the project to which they were assigned. The said
group- of workers are neither casual nor project employees of PLDT but
rather are employees of independent contractors which supply services to the
company under permitted legitimate job contracts. They are governed by
different provisions of the Labor -Code and its applicable implementing
rules. For instance, the contractual workers engaged by PLDT in information
technolpgy-enabled services are explicitly governed by DO O1-2017, which,
on the other hand, are excluded from the application of DOLE Department
OrderNfo. 174, Series of2017 52 (DO 174-2017).53

Returning to its earlier ruling ordering the regularization of workers

performing instaUation, repair, ~d maintenance services of PLDT lines, the
CA_ -recognized that c.ertain legal consequences may arise from this
pron9uncement. _ '.The CA ~xplained that the regularization of said workers
might result.in.the.payment .of salaries and benefits beyond the prescriptive
period provide.cl -under, the °Labor Code, or employees receiving double
compensation. _The CA realized that the resolution of these legal
consequences woulcfrequire an inquiry into factual issues that the appellate
·c~urt cannqt dete~ine considering the _ limited scope and inflexible
character of a certiorari proceeding. Thus, the CA ordered the case be
tenianded to the _Rggional Director·.
for.. the proper determination of factual
is.sue~ concerning the legal consequences of its order to regularize specific
workers. of contractors."
' .
-
,. ..
.Finally, the CA ruled that the issuances of Sec, Bello were tainted with
grav·e abi.i~e of cliscretion. To begm with; the ruling of the Regional Director,
on __-which the resolution - of Sec. Bello was based, presumed, not
demonstrated, the.existence of control. It was based on interviews conducted
by the labor law co111pliance _officers of .not more than a _thousand
individuals, which figure_ also inc;ludes regular PLDT employees, but the
results of wfuch were made to apply to. at least 7,344 employees. It is highly
coujectura.l, jf not purely speculative to _consider the individual
.circumstances of some workers who were interyiewed to be exactly like the
factual circumstances pertaining to the other contractors' workers. Thus,

.
52 Rules implementing Articles i.06 to 109 of Labor Code, as amende<l (2017).
53 Rollo (G.R. No. 244695), pp. 132-133.
" Id. at J.33-134. •
 Decision. 11 G.R. Nos. 244695, 244752
& 245294

such findings cannot constitute the substantial evidence required to prove the
existence _9f employer-employee relationship or labor-only contracting. 55

Further, the_ assailed issuances neither stated nor referred to any

concrete evidence to support a finding of an employer-employee
relationship. The assailed issuances can only refer to inconclusive and
general declarations made by a handful of individuals who were interviewed
duri_ng the_inspection. The findings and conclusions of the Regional Director
were largely based on what PLDT referred to as anecdotal evidence. In the
absence _of facts supporting a general allegation or broad claim that
employment relationship existed, t.1-ie evidentiary standard could not be said
to have been satisfied.56

The CA also called-out Sec. Bella's apparent bias in favor of the

contractors' workers. According to the CA, this is evident from his public
comment that appears to have spilled over his appreciation of the evidence
presented in this case. The CA explained that Sec. Bello wrongly appreciated
the exercise by PLDT of its power to control the results intended to be
achieved by the contracting arrangement with the concept of control as to
the
- . -.
mea,ns and meth9ds of achie_;ing tl:J.e said results. 57
~

As. regards the mmwtary award ordered by Sec. Bello, the CA found
that the same was arrived at arbitrarily. It was based on the application of the
straight computation method, which is an oversimplified approach that is not
in accord with existing jurisprµdence .. Thus, the same must be remanded to
the ·Regional Director for the determination of the proper proceeding to
determine the exact amount of monetary award. 58 - -

Issue

Aggrieved by some aspect of the CA's decision or by its entirety,

petitioners filed their .respective petitions for review on certiorari before the
Court.

G.R.Jvo: 244695

55
Id. tlt 134--~137.
56 rti."ali37-t39:
57 - id. at I-39" i42.
58 Id. at 142~143.
Decision G.R.Nos.244695,244752
& 245294

MK.I' alleges that the CA failed to consider the totality of the

circumstances of every contractor's contracting agreement with PLDT, and
instead, sweepingly categorized them as either labor-only or legitimate
contracting, based only on their contracted-out services. By doing so, the CA
unjustly disregarded the specific factual findings of the Regional Director
and Sec. Bello, even if these findings were supported by substantial
evidence, and therefore, conclusive and binding upon courts. What the CA
should. have done is to determine whether Sec. Bello had committed a
jurisdictioIJ.al error in his factual findings. Substantial evidence, MKP
argues, was presented during the •proceedings, which consisted of the
numerous interviews and- affidavits, voluminous documents supplied by
PLDT and its contractors, and reports on ocular inspection of outside plant
work sites. 59

Next, MKP claims that ilie CA erred in holding that the specific group
of contracted worker;, that perform Work not "directly related to the core
activities" of PLDT, such as janitors, and security guards, among others,
cannot be regularized by PLDT. 60 In this regard, MKP argues that
jurispn;dence is.replete of cases where a contractor that deployed janitors
and utili:ty. workers was. still .detern;iined to be engaged in . labor-only
contracti11g .• Similarly, there i~ nothing iri the laws defining legitimate job
contrp.cting that states that employees of contractors performing work not
direc_tiy related to the core activities. of the principal. may only be treated as
regular: employees of the contractor. They also i:J.ot require the performance
of.activities ''directly related to -the .coxe activities" of tt'le principal before
labor-011ly •contracting may be _said to exist. Mk? claims that the CA
effectively devised its own _indicator. for labor-9nly contracting that is
inconsistent •with the provisions of the Labor Code and DO 18-A, and
therefore .gi:av:ely abused. its cUscretion. -MY..P •also expiains that the CA's
ruling would create results that are iniquitous to the affected messengers and
janitors, It effectively shielded the erring contractors and PLDT from any
61
liability arising from their labor-only contracting scheme.

,
Further
. .. '
MKP asserts
..
that the CA made the correct ruling, albeit
hinged on the wrong legal basis, when it dedared as regular employees of
PLDT. ' workers
. . ·-
of. contractors
• ,. .
engaged
.
in the , installation, repair, and
maintenance of telephone·or dataJines. MKP insists that PLDT's and the
concerned contractors' violation is grounded upon the fact that these workers
~ere pe~f<,nmirtg Ji.mctions being done by regular empioyees of PLDT-
Moreover,. several. c,ontractors. svpplying these workers: -(1) had no valid
sen·1ce coriil"acts witlrPLDT, (2) had no DOLE contractor's license, or (3)

•59 Jd: at 43~fr.·

19. ld. at 49-50.
61 rd, at ~p-:55_
- -: ','
 Decision__ 13 G.R. Nos. 244695, 244752
& 245294

their workers were repeatedly hired for terms shorter than that provided in
tlie service contact. 62

• Similarly, the CA made the wrong n1ling when it declared those who
perform :m·edical, dental, engineering, and other professional services as
independent contractors, and thus, no labor-only contracting could exist
between them and PLDT as their relationship is only bilateral. MKP stresses
t..1:tat the relationship between PLDT, the contractor providing these medical,
dental, engineering, and other professional services, and the latter's workers,
is a trilateral one governed by Article 106 of the Labor Code. 63

MKP also found as. an error the appellate court's declaration that sales
workers of PLDT's contractors are outside the coverage of DO 18-A. These
workers were supplied by contractors found to be engaged in labor-only
contracting primarily because some contractors exercised no control and
supervision over the performance of sales personnel of their work. MKP also
argues that the payment on cormnission basis does not negate the existence
of employer-employee relationship. It does not change the fact that these
worker::;, the contractor that hire_d _ them, :md PLDT have a trilateral
relati9nship.that is regulated 'by DO 18-A. Since the contractors committed
prohibited contracting activities, these employees should be deemed as
PLDT's- t;mployees. 64 ._

•...Next, MKP
claims that the CA "should not have exempted contractors
of .PLDT providing information technology::,enabled services and sales
agents_ from the coverage of D0 18-A. MKP .argues that .what is exempt is
the ·bu§iness ·_process_ outsourced_ but • not· • the c·ontractors themselves.
Othenvis( every_ .contractor which Jmve these services as its principal
purpose -hl. theii-· articles ofincorporation shall be exempt from the coverage
65
of Article 1Q6 ofthe Labor Code and the issuance_s implementing it.

_l\1K;P co!]tra4icts the_ CA's i-uli.ng that Sec. Bello's decision was tainted
w1th grave abuse of discretion because PLDT was denied administrative due
process.' PLOT participated q.ctively during the SAVE inspections and had _
the opp_ortunity to adduce evidence, and comment and oppose the activities
conducted ,by -the DOLE Assessment Team. -However, PLDT refused to
pq.rticikate, despite notice, in the mandatory conferences called by the
DOLE-NCR RD .. Had fr chosen.to participate, PLDT could have presented
e;idertce to refute the DQI~E Assessment Tearn's report. Further, during the
SA\:'E ,i11spection and while the mandatory conferences were going on,

-s 2Id. at .58 ...••

,,. Jd."at60----{i2.-
64 • Id. at 63--,6.5,.
": Id. at 68-.

I
Decision· 14 G.R. Nos. 244695, 244752
& 245294

PLDT filed several please pleadings with the DOLE Assessment Team. It
also appealed the Order of the Regional Director before· Sec. Bello, and
when it received the latter's adverse decision. PLDT also moved for
reconsideration. 66

MKP also· argues that the decision of Sec. Bello was based on
substantial evidence. The representative number of workers interviewed
was· -~uffl"cient to show the violations committed by PLDT and the
c-outractors, as those not interviewed are also employed under the same
contracts·and are subjected to the same working conditions. Moreover, t.li.e
sworn testimonies were corroborated by documentary evidence such as the
"Technical Protocols" attached and made part of the service contracts
between PLDT and the contractors. Contrary to the CA's ruling, the
"Technical Protocols" are indicative of the control that PLDT exercises over
the workers of its contractors. These protocols are not mere guidelines to
achieve the desired results but are dictations of the means and methods to be
employed in doing the work. 67

G.R. No.-244752

•• f;LDT asserts that the CA erred in upholding the regularization of the

contractors' workers performing installation, repair, and maintenance
services: According fo PLDT, the CA failed to consider the possibility that
thes~':workers were engaged as "projeet" or ''seasonal" employees, which are
valid, employment .arrangements for the performance of any kinds of
services, whether they be usually necessary or desirable in the usual business
or trade of.L½e employer or not.. PLDT holds that the CA disregarded the
clear~cut distinctions between .a "fixedcierni" employment on one hand, and
a "regular''. employment on the other, when it lllade a sweeRing declaration
that . the. "installation, repair_ and maint<:nan.ce" . workers should be
regul~riz~d_- The fact that· a job is •usually necessary or desirable, PLDT
68
explains, does not. automatically
. imply regular
.
employment.
.

PLDT also points out that the work performed by the workers
concerned are construction-related activities that are, not only distinct from
PLDT's, telec;ommunication business, but also excluded from the coverage of
DO 174-20170 69

66 !d. at ·t,6-74.
6-r-· Id: at 74--8K •
68 ,,, Roi/o-(G:R.·NO, 244752), pp, 9.8":102.
6' Id. at io1--X10: • • •
 Decision. • 15 G.R Nos. 244695, 244752
& 245294

PLDT also assails the CA's pronouncement that Sec. Bello can
determine the existence of employer-employee relationship in the exercise of
his visiforial and enforcement powers. PLDT maintains that such conclusion
h~s· no basis in fact and iaw because the purpose of SAVE is to verify
compliance with labor laws based on data and not to adjudicate. Meanwhile,
the existence of employer-employee relationship, and consequently,
regularization, is a legal issue, the determination of which requires
exarri1rtation -of evidence that are not verifiable in the normal course of a
labor inspection. PLDT is· adamant that the regularization claims should be
resolved in an adversarial· proceeding that is within the jurisdiction of the
Labor Arbiters. 70

G.R. No. 245294

For his part, Sec. Bello argues that the CA's ruling should have been
limited to the determination of whether he committed grave of abuse of
discretion.. He. explains that the writ of certiorari does not include the
corre,::tion of his evaluation of th.e evidence. on record, considering that the
factual findings· of administrative agencies are generally held to be binding.
<U1g. final s9 ,jong as they are supported by substantial evidence. Sec. Bello
Claims that the~e is nothing to support the accusation that he arrived at his
findings m:bitrarily. He examined the. evidence offered by PLDT and each
contractor involved, not only during the main appeal, but also upon their
motions for reconsideration. Also, his findings were based on several pieces
of ev{dence, both testimonial and documentary. 71
~ .
• Further, Sec. Bello surmises tiiat there is nothing legally objectionable
• about the· fact that his decision was applied to 7,344 employees even if the
number of workers interviewed were not more than 1,000. According to
Sec. Bello, in case of an award arising from a company's violation of labor
legislations, the entire roster of employees should benefit from the award. 72

TI1e finding that PLDT was. engaged in labor-only contracting,

according to Sec. Bello,· is strongly supported by the fact that PLDT was
~x;ercjsing control o,ver the workers of the contractors. This conclusion was
reached after he considered the totality .of the evidence presented by all
parties, including those offered by the contractors and PLDT's organic
employees. 73 •

70
Id. ·at ll4·-124.
11
- Rol/o(G.R. Noi245294), p. 103-104.
72 Id. at l-04-106. •
" Id. at.1) 7-.J27.
Decision· • 16 G.R.Nos.244695,244752
& 245294

: · PLDT's control over the contractors' worker, Sec. Bello contends, is

sµfficient tq validate the finding of labor-only· contracting notwithstanding
that the workers_ were performing activities such as janitorial, messengerial,
and _cledcal services, IT~related services, back-office support and office
operations, business processing outsourcing, sales, and medical, engineering,
and _other professional services, so long as their work were controlled by
PLDT. Thus, it was an error on the part of the CA to declare that the above-
mentioneci services were correctly contracted out by PLDT. 74

Next, Sec. Bello asserts that apart from the finding of labor-only
contracting, PLDT and its contractors committed several violations of DO
18-A that also effectively accorded regular status to the workers. Sec. Bello
points out that PLDT and the contractors were guilty of contracting out
services in bad faith when they repeatedly hired their workers for periods
shortei·than their service agreement, in an obvious effort to circumvent their
right to security of tenure. This finding, Sec. Bello explains, was arrived at
after all available substantial evidence was considered, and thus, should be
given great respect. 75

A,s reg~d~ the supposed arbitra.,"iness •of his monetary awards, Sec.
Bello contends that .the CA's relianc~ on South Cotahato Communications
<;orp.•'.v. $to. Tomas (South Cotabato), 76 to justify its ruling is misplaced.
Dniike ju South Cotabato, • Sec. ;Bello based his award not only on the
interviews of the. workers but also on tl1e several pieces • of evidence
pres~~ted during the entire ~AVE proceedings. This is supported by the fact
t._>iat Sec. Bello adjusted the monetary obligations of some contractors based
on t._>ie documents and.addltional evidence they.submitted. Sec. Bello claims
that if his computations have been ;;rrbitrary, the monetary award should have
77
been uniform
.. ' ''
between him and the
•
Regional
..,
Director.
• - -

Finally, Sec. Bello. belies the findings that he deprived PLDT of its
right to due process,' and that his rulrng failed to distinctly state the facts and
law on which it was,1:.iased, Sec. Bello bares that PLDT was not denied the
opportunity to. present its case .as it was allowed to submit evidence ~urin_g
the ,prdiminary and mandatory conferences. He then concluded with his
argument that he made an independent consideration of the law and facts for
if merely relied on the findings of the Regional Director, it would not be
possible.for.him to 1nakt; tl:J.e necessary modifications and adjustment in his

,,. Id. aii21.:.129.

75 Id.at i29-l33.

-76 787 Phi!.494 (2016)[Per LVelasco, Jr., Third Division].

77 R~doJG.R. No. 2452~4). p. ,133-138.
 Decision - 17 G.R. Nos. 244695, 244752
& 245294

ruling. 78

Ruling of the Court

We sustain the assailed Decision of the CA and, thus, dismiss the

consolidated Petitions.

The extent •of the Courts judicial

review of labor cases vis a-vis the 0

scope of the CA s certiorari review of

the decisions of the Secretary of
Labor and the labor tribunals

To begin W~th, it must be emphasized that the consolidated petitions

b~fore'.Us are .riddled with factual issues that would require the Court to take
a second look at the records of the case just to have a complete disposition
of this long-drawn controversy. Normally, these ±actual issues are outside
the ambit of a petition for review on certio:ra,:ri under Rule 45 of the Rules of
Court, which is a mode of appeal that is almost restricted to pure questions
of law, 79 save for some exceptions where factual review is aliowed, such as
80
when the finding of the lower tribunals.. are
. contradictory.
,_ '

- We had. recently confirmed this doctrine in Coca-Cola FEMSA

Philippines, Inc. 1,: Coca-Cola FEJ11SA Phils., MOP Manufacturing Unit
Coordinators and Supervisors Union-All Workers Alliance Trade Unions
(!2CFP-JVIMUCSU~AWA1U), 81 wher~ We explained:

_f,s early as 1993,_ the Court has already ruled that "h!,dicial review
••• bv (the Supreme) Court in labor cases does not go so far as to evaluate
the· sufficiency_of the evidence upon which the labor officer or office
based his or its determination but are limited to issues of jurisdiction
and grave abuse of discretion." Tnis limitation on the scope of review in
labor cases . is·. based on il1e summary nature of labor adjudication
. proceedings and- the nature of· the _mode of revie,1: al19wed by law
-therefrom, Thus, ''[i]n labor cases, petitions for review 6i1 certiorari under
''.Rule 45. [are] limited t6 deterinining whether the Court of Appeals was

78
Jd, at 138-142. - .
79
}vfanggagawa 1:ig Komr.m_tkm;yon,sa f1~~i'pinas v..Phi!ippin? 1:ong Dfr,tance Telephone Co., Inc., 809 PhiL
106, 120{2017) [Perr Leone::i: Second Division]. • • • .
w Dela,-CTid~Ccig{Jmpawv.·'.One / 1letw(;rk Bani-;~ Inc.; G.R,:}fo .. i17414: JulJe 22, 2022 [Per J. Leanen,
SeconQ. Division].
&i G.R: ~9- 23$633~ November 17,202 i [Per J. Gaerlan, Secrn}d Dh)sion].

i
Decisiqn 18 G.R.Nos.244695,244752
& 245294

. - ..
correct in finding the presence or absence of grave abuse of discretion and
jurisdictional errors on the part of the lower tribunal. " 82

Meanwhile, and as already intimated in the above-quoted ruling, the

purview of the CA's certiorari powers over labor disputes are focused on
fmding whether grave abuse of discretion attended the assailed ruling of the
labor tribunal or ·officer. 8'
..
: : No _doctrine is _more settled than tha:t the sole office of a writ of
certiorari is the correction of e1Tors of jurisdiction including the commission
of grave abuse of discretion amounting to lack ofjurisdiction. 84 A court or
tribunal is said to have acted with grave abuse of discretion when it
capriciously acts or whimsicaJly exercises judgment to be "equivalent to
lack of jurisdiction."" Furthermore, the abuse of discretion must be so
flagrant to amount to a refusal to perform a duty or to act as provided by
law. 86 In labor disputes, grave abuse Qf discretion may be lJ,scribed to labor
officers and tribunals when, inter alia, _their findings and conclusions are not
supported by substantial evidence. or that mnount of relevant evidence which
a reasonable mind might accept as adequ<;1te to justify a conclusion. 87 In
Barrog~·.v. Qifezon Cofleg~s of the Nortn,88 w~·heid: -

In labor cases, grave abuse of discretion may be ascribed when its

firt<lings and co11clusions are not supported by substantial evidence, which
•-refers to that arno1iiit. of relevant evidence that a reasonable. mind might
accept as adeq uitte to justify a conclusion.: Thus, if the NLRC's ruling has •
'basis· in t.hc •evidence and the applicable law and jurisprudence, then no
grave abuse of discretion exists and the CA should so declare and,
accordingly, c!isi:niss the petition. 89

• Ba~;d on the.fore~o1ng, ihe scope of the Court's review of the CA's

de¢isi~~l involv!Ilg labor disputes reITlains confined to questions of law; a
unique question ~flaw, .at that: did tl1e CA _co~e~tly determin~ whe~er
gi:ave abuse of discretion attended the deternun_at10n ~~ resolut10n _of ~e
NLRL~, or for this matter, the Secretary of L<;1bor'! 90 This 1s best exp lamed m
' i' ' '. :, • •. ' 91 ~
l•dontoya
. ~. v. ·rransmed
' . . J'vfanzla
-
Corp., ,.
.to
.
wit:

. .
82 Jd:; Emphasis and underscoring s~pphed: i • :• - • ••• _- ·_ • ' _• _
~3 G. & ·S .Ti-a'nsport Cmp. v, Medina, G.R. No. 243768.; Septemb~r 5, 2022 [I'er J. Hernando, F1rst

.. DixisionJ. _ .. . . . . . _ . _.
,, •• Romy'.<'Freight Service v: Castro, 523 Phil. 540,'546 (2006) [Per J. Corona, Second DlV!s10n].
ts lvfanggaga:wa ng Komunika~~von sa Filipinas v. Philippine Long Distance Telephone_ Co., Inc., supra
-79. - •••
86 Id -· • • . -· · : . · -· . • · . . .. . -
;j 7 . Atfer.za. v. Orophti ~Sh{~f}{ng );t;rnatiotial CO.; Inc., ..815 P!1H.. 480, 491. (20 l 7) [P~r J. Perlas-Bernabe,
First Divis.iOni: •• •• - •• • - • •• -· ,•• • •
" 844 Phii. fo"3 l (20}8):[Per ·Per\es-Bernabe;Second Division].
8q Jd, at.1039; Citations Oriiitte"d-: •
90 G.R. No.-238633; Ncweiober 17, 2021 [Per J. Gaerlan, Second· Division].
" 613 Phil;,{i96-(200~JJPer J. Brien, Second Division].
 Decision 19 G.R. Nos. 244695, 244752
& 245294

. \Ve review in this Rµ.le 45 petition the decision of the CA on a Rule

65 petition _file<): by Montoya·with that court. In a Rule 45 review, we
_coµsider the correctness of the assailed CA decision, in contrast with the
review for jurisdictional error that we undertake under Rule 65.
Furthermore, Rule 45 limits us to the review of questions of law raised
against the assailed CA decision. In ruling for legal correctness. we have
_ t~ view the CA decision in the same context that the petition for
. certiorari it ruled ·upon was presented to it: we have to examine the CA
·tlecisi.on .from the prism of whether it correctly determined the
·presence or absence of grave abuse of discretion in the NLRC decision
liefore it, not on -the basis ofwhether the NLRC' decision on the merits
oftfre case was· correct. I11 o'th~t words, we have to be keenly aware that
the CA undertook a Rule 65 review, not a review on appeal, of the NLRC
decision challenged before it. This is the approach that should be basic in a
Rule 45 review of a· CA ruling in a labor case. 92 (Emphasis and
tmderscoring supplied) •

Bearing these foregoing principles in mind, We rule that the CA did

not err in finding grave abuse of discretion on the part of Sec. Bello in
issuing his assailed Resolutions. As will be discussed, the CA correctly
ml_ed that the Resolutions of Sec. Bello were not supported by substantial
evidence._ • • .• • •• •

The Secretary ofLabor, in the exercise of

its visitorial and enforcement power, may
determine . the existence . of
. e,nployer- .
employee relationship·

The SAVE'process'was·conducted in PLDT's premises and offices·

pursuant to theDOLE's visitorialand enforcement powers under Article 128
of the i:abor, Code, which provides:

,-\RT. 128'. Visitorial and Enforcement Power. (a) The Secretary of

Labor and Employment or his duly authorized representatives, including
labor regiµation officers, shaH have ac.cess to, day or night; whenever work
• is being undertaken therei_n, and the right to coj-/y therefrom, to question
any employee iirnf investigate-any fact,· condition or matter which may be
necessary to·detem1ine violations or which may aid in the enforcement of
this Cod~ a,,d of any labor'law, wage order or rules and reguiations issued
pursuant thereto .. •

• (b) Notwithstanding the provisions ofArtides J29 a,,d 217 of this

• ·Code· to. t.ii:e coi1trary, •a.ncl in cases wh,~re the relationship of employer-

"· Id. at 7:0.6-707:

Decision 20 G.F.. l~os.244695,244752
& 245294

employee s iii" exists, the Secretary of Labor and. Employment or his duly
authori~ed ,epresentatives shall have the power to issue compliance orders
(o give effe t to the labor standards provisions ofthis Code and other labor
l~i;?islation ased on the findings of labor_ employment and enforcement
officen; or industrial safety engineers made· in t.lie course of inspection.
11).e Secret • or his duly authorized representatives shall issue writs of
execution ·t the appropriate authority for the enforcement of their orders,
except in c;ases where the employer contests th<, findings of the labor
employment an.d enforcement officer and _raises issues supported by
documentary proofs which were not considered in the • course of
i_nspection.

An order issued by the duly authorized representative of the

Secretary of Labor and Employment under this Article may be appealed to
the latter. In case said order involves a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by the Secretary
of Labor and Employment in the amount equivalent to the.monetary award
in the order appealed from. • •

(c) The Secretary of Labor and Employment may like'!lrise order

stoppage of work. or suspensio11 of opeia,tions of any uni_t or department of
an· establislnr!1,ut y;hen non:complianc;e with th~ law or implementing
i,ules an~ regu]atfor\s poses grave and imrr1inent dlli!ger to the health and
safety of worki:;rs in the ·;irorkplace. Within twenty-four hours, a hearing
shatlbe conducted 1:0 determine whether an order for the stoppage of work
or· suspension of operations shall be lifted or not'. In case the violation is
attributable to the fault ,of the employer, he shaU pay the employees
concerned their salaries lir wages during the period of Sl.lCh stoppage of
~ork or suspension of operation. , - -- - -_ --
. ,. - ' ' ' . .. ,. '

_(d) It shalf be unlawful for.any person or eiitify to obstruct, impede·,

delay or otherwise render ineffective the orders of the Secretary of Labor
and Employment or his duly authorized representatives issued pursuant to
the authority granted ®der this.Article, and no inferior court or entity shall
issue tep;i:porary or. permanent injunction or restraining order or otherwise
assume jurisdictipn over any case in'{olving the enforcement orders issued
in accordance with this Article.

. _(e) /i,ny go.;,emment ~mployee found guilty of violation of, or

~buse of authority, under this Article shall, after appropriate administrative
investigation, _be subject to_ summary_ dismissaLfro;n the service. _

{i) Th6 Secretary ofLabor~d EmpJoym<c.ntmay, by appropriate

regulatioi1~, require •emplqyer~ fo keep amt i;naintair1 such employment
records ·as inay· !Je necessai'y _in· aid -of his •visitClrial and enforcement
03
power~ uudei- tl"iis-Code.

The purpose of these powers granted 1:o _the S~cretary of Labor, or his

93 L.'\.BOR Corn:, art. 12$.

 • I

I
Decision . • I
21 G.R. Nos. 244695, 244752
& 245294

' •
duly authorizeq representative, is to determine violations of, and to enforce
the provisions 9fthe Labor Code and any labor law, wage order, or rules and
regulations iss4ed pursuant thereto. Indispensable to the DOLE's exercise of
such power is ifhe existence of an actual employer-employee relationship
betwee11 the patfies. 94 .

Tlris -p~~er of the DOLE to determine the existence of an employer- .

employee· relaticinship to carry out its mandate under Article 128 has been
settled in People:~ Broadcasting Service v. Secretary of the Department of
Labor and Employment. 95 'Thus:

No limitation in the law was placed upon the power of the DOLE
to determine the existence of an employer-employee relationship. No
procedure Was laid down where the DOLE would only ma.1<:e a preliminary
finding, that the power was primarily held by the NLRC. The law did not
say that the DOLE would first seek the NLRC's det<::rrnination of the
·eyistence of an employer-employee relationship, or that should the
existence of the employer-employee relationship be disputed, the DOLE
would refer the matter to the NLRC The DOLE must have the power to
determine whetller. Qr. Q.ot a~ employi:r-empfoyee relationship exists,
. aiid from there to decide whether or not t(fissU:e compliance orders in •
a·ccordamie with" Art: 1'28(b) of the. Labor Code, as· amended by RA
·-7730.

•The DOLE, in determining the existence of an employer-employee

rel~tionship, has a ready set of guidelines to follow, the same guide the
courts themselves use. The elements to determine the existence of an
. empicymentrelationship are: (1). th,~. sel~ction arid engagement of the
·employee; (2)"the payment-'.ofwagcs; (3) the power of dismissal; (4) the
•• • employefs power to control the employee's conduct. The use of this test is
JJ.ot so1ely limited to the NLRC. The DOLE Secretary, or his or her
representatives, can utilize the same test, even in the course of inspection,
making use of the. same e,idence that would have been presented before
the NLRC:'• (Emphasis supplied) • •
-·. . .. , , . -
:The DOLE has the authority to rule owthe ex.ist!:nce of an e111ployer-
employc;e relationship between the parties, considering that such relationship
is a condition precedenFfor the exercise of its visitorial and enforcement
powericCortvetsely; ifthei-e is no employer ·employee relationship, or if one
0

has already been terii1iiiiiti;;d, the _Secretary ofLabor is 'mthout jurisdiction to

determine -if violations of labor standards. provision had in fact been
committ~d;:~~d to direct empl~yers to comply with their alleged violations
ofiabor·standards. 0
' •

94
South. Cotabat~, (,;o~lni.mi;aiicn.·t Co~;. 1-:__.,~tO. T;J;as, _787 ·phil, ,494, .506,{,2016) !Per J. Velasco, Jr.,
•
Third J)i~i$ionJ : •• •, •• •• '
" 683 Phi1. 509 (1012)iPer J. Ve!asco;Jr., En·Banc].
06 Id. at-5f8. - • .
97
S~uth Cotabato' Commzinicarions Corp/ .v. Sto.'--Tumas. 787 l'hiL- 494; 508 (20/'6} [Per J. Velasco, Jr.,
Decision 22 G.R. Nos. 244695, 244752
& 245294

'
The pre.sent case does not fall under the
"t!xception clause" of Artiele 128 of the
Labor Code 1

PLDT asserts that thJ DOLE has no jurisdiction over the case because
the _pj¢tes, of evi!],ence t,1sed in determining the existence of employer-
employee relationship are not subject to the "normal course" of a labor
inspection under Article 128 of the Labor Code. 98 Moreover, according to
PLDT, considering that. the present case involves_ an inquiry into the
dynarnics of the trilateral relationship between the principal, the contractor,
and the contractors' workers, the DOLE was divested of its jurisdiction to
determine the employer-employee relationship. 99 •

Vv'e do not agree.

In J'vfeteoro v. Creative Creatures, Inc. (Meteoro), 100 We held that the

so-called "exception clause" of Article 128 of the Labor Code has the
fQ)Jowing elements, all of which; must concur: (a) that the employer contests
i:he findmgs of the labor regulatiotis officer and raises issues thereon; (b) that
to -
in .9r9-er:. resolve such issues, there •• is a need to examine evidentiary
matters; and (c) that such matters are not verifiable in the normal course of
inspection. 101 To divest the DOLE of jurisdiction under the "exception
clause," We ex-plained: _ -

We would like to emphasjze •t.hat "fo _cont;st" ~1eans to raise

-questions as to "i:he amounts cori:iplained of or the absence of violation of
labor standards laws; or, - as -_ in the- instant case, issues as to the
• complainants' .rightto labor staiidanls benefits. To be'sure, raising lack of
- jurisdiction alone-is not the "con,test" contemplated by the exception
__ : clause, It i,& necessary that the_ employer _co_ntest the findings of the
•_ . lal;>oir regulations ,officer during the hearing or after receipt of the
~otiee of inspection results ..More importantly, the key requirement for
the Regional Director and the DOLE Seuetary to be divested of
jutisdiction is that the evidentiary matters be not verifiable in the
course of inspection. Where the evidence presented was verifiable in the
hormal course of inspection,.even ifpresented belatedly by the c,mployer,
. the Regional Director, and later the DOLE Secreta..7, may still examine it;
102
_, and these officers are not divested of jurisdiction to_ qecide the case.
(Emphasis ~upplied)

Tnird· Division]. •
" Roi!o (G,R: )'lo. 244752), pp. i 13-123.
99
/d.. ai 11-8--1'2 L
100 -61 o PhiL 150. (20Q9) [Per J, Nachura, 'TT1ird Div,i~ionl,
1u1 Id. at 160; Citations·.omitted.

'" Id. at)62-:,-f63,- -

 Decision 23 G.R. Nos. 244695, 244752
& 245294

Thus, in Bay Haven, inc:_ 1,: Abuan, 103 We held that the DOLE was
not dive~~ed of its jurisdiction over the case because the piec~s of evidence
consid~red: (alleged contract of iease, payroll sheets, and quitclaims) were
all v~rifiable in the normal course of inspection. We further held that
granting they were not examined by the labor inspector, they have
nevertheless been thoroughly examined by the Regional Director and the
DOLE Secretary..For. these reasons, the exclusion clause of Article 128 (b)
does not apply. 104 • • • _ •
. . '

Here, the DOLE was not divested of its jurisdiction because the
evidence considered are verifiable in the normal course of inspection. PLDT
asserts tl::iat the DOLE relied on the affidavits, SAVE notes, and interviews of
contractors' officers and line s~pervisors in • issuing the Resolutions.
However, records show that the DOLE also examined service agreements
anclother employment documents and _inspected work areas. 105 Certainly, the
service agreements and other employment d,ocuments are verifiable in the
normal course of inspection.

PLDT also relies on Our pronouncement in Meteoro where We ruled

that- "wµether . or ·noL petitioners were - independent contractors/project
employees/freelance workers is a question of fact that necessitates that
examination of evidentiary matters not verifiable in the normal course of
inspectkm." 106 This pronouncement must be purinto context. In Meteoro, the
resporident .(corporation) claimed that the petitioners were not precluded
from working. outside .the.service contracts they had .entered into with the
respondent and that there were instances when petitioners aban.doned their
service· conrracts with the respondent, because they had to work on another
proje.::t ,vith a different company. With this, We held that the resolution of
these issuesrequire.s the examin.ation of eviqentiary matters not verifiable in
the norm.al course of inspection. 107 Jn other words, it is not the question of
whesther. the .individuals inv-olved are independent _contractor, project
employees or freelance ,vorkers that divests the _DOLE jurisdiction over the
case, Rather.. it IS whether the answer_ to this . question requires the
~xammsticm
.. ; . , .-of
, '
ev:identiary
·-
matters
. ,.
not ~1-erifiable. in the n01mal course of
inspection.

In this case, PLDT submits that the DOLE has no jurisdiction over the
ca_se co~sideri11g that the inquiry examines the dynamics of the trilateral
relationship_ among the •- principal, the contractor, and the contractor's

i03 ·ss2 Ph,ij_ 451 (2otls; rPer' J. A~1~tria~Marr.ifte7~ 'CT~i~d Div~sioDJ.

JO~. ·:/d_ af.if6(j, •• • '
'"' Rollo (0.R. No. 24469;5), p. 377. . . . . .
6
w /?.ollq _(G.R_. No. 2447°_52).. p. 118; fyfeteoro v: Creative CreqtY.res;""("'!c.• supra note 99, at 162.
lti.7,. M'eteor'c v: C~ecitive Creatv.res, !nc., li:l · • · ·• • ,,. · '-. • - • ·
Decision 24 G.R.Nos.244695,244752
& 245294

worl<:ers: This assertion; without more, wilI not trigger the application of the
"exception clause" lLrider Article 128 of the Labor Code. To be sure, this
"dynamics" may easily be determined in the contracts and other related
docurnents that are expected to be kept and maintained in premises of the
workpfa,_ce. As sµch, PLDT fails to establish that the factual circumstances
surrounding this case necessitate an examination of evidentiary matters not
verifi_able in the normal course of inspection. Therefore, this case falls under
the jurisdiction of the DOLE. -

Labor contracting is not illegal per se

We must clarify that labor contracting is not illegal per se. The fact
that PLDT had contracted out specific jobs, works., or services does not
automatically mean that the contractors' employees are the direct'employees
ofPLDT.

. _In .BPI Employees Union-Dayap City-FUBU v. Bank of the

Philippines Islands, 108 \Ve held that contracting out of services is not illegal
per :·se; which is _an exercise of business judgm(:nt or management
prerqgative and -absent any proof that the employer acted maliciously or
filbitr~r~y, We will not interfere with the -exercise of judgment by an
employer.109
110
__ .\Ve e:xplained inAliviado v. Procter &·Gamble Phils .. Inc. that:

Clearly, the law and its implementing mies allow contracting

arrangements for the performance of specific jobs, works or services.
-·-- - ' Indeed, it is management prerogative to far-m out any of its activities,
regardless of whether such activity is peripheral or core in nature.
However; in order for such outsourcing to be valid, it must be made to an
independent contractor because the Cllf!"ent labor rules expressly prohibit
.labor-only contracting.

To emphasize; thej-e is labor~oniy •contracting when the contractor

or sub-contractor merely recruits, supplies or places workers to perform a
ot
job, work or service fo; a principal and any the following elements are
present:
' '
- i} The contractor or subcontractor does not have substantial
·capitai'orinvestrpel)t which relat<;s tot\1e jol;), work or service to be
perfonned and the eh1pkiyees recruited, suppli~d or" placed by such

'°' 715 Phii. 35 (20l3) [Per J. Mendoza,Third Division]. _

109
ld. at 49:
110 628 Phil. 46f(2010) [Per:J_ Del Casiillo, Second Division].
 Decisioµ 25 O.R. Nos. 244695, 244752
&245294

. c µ.tractor or subcontractor are performing •activities which are

. ~rectly related to the main business of the principal; or

The contractor does not exercise the right to control over

1 performance of the work of the contractual employee. 111

.
Indeed, rticle 106 of the Labor Code expressly allows ·an employer
to engag~ in legitimate labor contracting, which the DOLE implements
through DO 18-A and DO 174-2017. An employer is not necessarily
en~t~ged: in -1abor~only contracting whenever it farms out specific jobs,
works, or services. We mi.rs{ distinguish between legitimate labor contracting
and labor-only contracting.

As will be discussed below,. Sec. Bello 's findings that PLDT engaged
in labor-only contracting •must be anchored on substantial evidence.
Otherwise, We cannot sustain Sec. Bella's assailed Resoluti9ns.

Sec. Bello committed grave abuse

of discretion in issuing the
assailed resolutions

Factual findings of the S~crefa.ry of Labor are generally accorded

respect and finality in ·the absence of grave abusec of discretion. n2 As already
mentioned, in labor cases, ··grave .abuse of discretion may be ascribed when
it~ _findings ~d conclusio11s are not supported by substantial evidence. m

•. ·: In mling that Sec, Bellp committed grave abuse pf discretion, the CA

dre,w. hea,ry parailels between the present case and our ruling in South
c;tabato. Ji 4 The appellate court explained that the ruling of the Regional
Director was li.ighly. conject,;ll'al as. it was based mairJy on anecdotal
evidence, i.e'.~ the interv1ews conducted by the labor law compliance officers
of npt )n9re_ than a thousa..'ld individuals, which figure also includes regular
PLDT employees, but the results of which were made to apply to at least
7,3441 employe~s. According to the CA, ~e intervi~ws do not constitute
substantial . e_v1clence . to . pro_ve . the existence 01 employer-employee
relatiot?-ship. or iabor-oril)' contracting.

We agree with the CA.

rn Id. ai 483; Ciiatioll orri,frteci; Emphasis supplied.

112
Fininur,.·:"Cf~nel'at .4~:SUra~ce-• 't:orp. 1,: -Salik,___266 PhiL ~03:·-'~ 0~8"t! (1990) [Per J_ Paras, Second
. Divfaion]. •
:n B,arToga 1-; _Quezon-Colleg4s oftJie Nor.th s·upra·1lote 88.·
·1- 14 • Supraif.ote. 76. •
Decision 26 G.R. Nos. 244695, 244752
& 245294

• Substantial evidence was already defined as such amount of relevant

evidence which. a 1:easonable mind might accept as adequate to justify a
conclusion_iis Indeed, in South Cotabato,. the Court found the employees'
allegation in their Reply as insufficient evidence to support the ruling of the
Secretary of Labor. Thus:

. The Secretary of Labor adverts to private respondents'

·· allegation in their, Reply to iustify theiF status as employees of
. petitioners. The proffered justification falls below the quantum of
.proof necessary. to establish such fact as allegations can easily be
· concocted and manufactured. Private respondents' allegations are
inadequate to support a conclusion absent other concrete proof that would
support or corrciborate the same. ·Mere allegation, without more, is not
evidence and is not equivalent to proof Hence, private respondents'
allegations, essentially self-serving statements as they are and devoid
. m1der the premises _of any evidentiary weight, can hardly be talcen as the
substantial evidence contemplated for the DOLE's conclusion.that they are
employees of petitioners. 116 (Emphasis and underscoring supplied) • •

Tne same is true in this case .

. Indeed;•.the. doctrine. requiring the decisions o.f the Secretary of Labor

to .be· supported by substantial.evidence was not _created out of thin air but
find~ mooring in the oft,cited requirements of administrative due process,
which~was. first enunciated in Ang Tibay v. The Court of Industrial Relations
and National Labor Union, Inc. 117 In Commissioner of Internal Revenue v.
Avon Products Manufacturing,. Jnc., 118 these requirements were re-stated as
follows·~: ,

In Ang Tifiay v. The Court of Industrial Relations, t.his Court

ob.served that. although 'quasi-judidai agencies ''.may. be said to be free
from the rigidify of ·certain ptocedurai requirements[, it] does not mean
that .if can, iri 'justidable cases coming before it, .entirely ignore or
iii;fegard the fu,_'1drtrtiental and essential req u1rements of due process in
trials and investigations of an administrative character." .It then enumerated
the fundmnenta'.f ~equireinents of due process that must be respected in
a~nistrati'1e proceedirigs: •• • •
., ; . '" . . ..
(1) The party interested or affected must be able to present his or
her own case arid stibniit evidence in support of it.

.. ·: J2)The administr3:tive· tribun?j or body must consider the evidence

pr~sented..

"5 Vaiencia" Classiqur r'inyl Products Corporatfon, 804Phil_: 492, 504 (2017) [Per J. Del Castillo, First
Divisidn]. •
»':Supra not, 76, .at 511.-512.· • • • . •
117 69 Phi\_6;5, 642-644 (1940) [Perl Laurel, En Banc].
'" 841 Phil. l 14 (2018) [Per J. Leanen, Thcrd Division].
Decision 27. G.R.Nos.244695,244752
&245294

(3)_ There must be evidence supporting the trib_unal's decision.

(4) J'he e"idence must be substantial-or "such relevant evidence

as a reasonable mind might- accept as adequate to support a
conclusion."

(5) The administrative tiibunal's decision must be rendered on

_-the 'evidence presented. or at least- contained in the record and
.... dis<!losed· to the parties affected.

(6) The administra.tive tribunal's decision must be based on the

deciding authority's own independent consideration of the law and
facts governing the case. •

(7) The administrative tribunal's decision is rendered in a manner

that the pa.rties may know the various issues involved and the reasons for
the decision. 119 (Emphasis and underscoring supplied)

To ensure that their n1lings are backed by substantial evidence,

administrative tribunals, bodies, and officers, including the Secretary of
Labor, are enjoined to utilize "authorized legal. methods of securing evidence
and infonning - [themselves] of facts material and relevant to the
controversy." 120 Tllus:

ln fact, the· seminal words of Ang Tibay manifest a desire for

a.dniinistrative bodies to exhaust all possible means to ensure that the
decision rendered be based on -the accurate appreciation of facts. The
Court r~rnindecf that administrative bodies have tl1e active duty to use the
iuthori;ed legal metl_lods of securing evidence and informing itself of facts
material and relevant to the controversy. 12 '

It is, therefore, eyident that even if labor proceedings, such as the

Secreta'r"Y 'of Labor's· exercise of his or her visitorial and enforcement
powers, are not tethered to technical rules of.procedure, the process cannot
completely ignore basic tenets of appreciating evidence. For instance, self-
serving statements c_ani1ot be accepted as evidence. 122 Aiso settled is the rule
that bare allegations, unsubstantiated by evidence, are not equivalent to
proof. 173 Tl}is _yvas reiterated by the Court recently· in Sermona v. Hacienda
Lumboy 1": -

119
Id. at 135.
iw SaunaT v EXecu!ive.Secreiary,-, .S22 Phil. 536~ 551 (20J 7) [Per .T. lv1artires, :TI:iird Division].
121 Id.
121 See kestaurar/te·- La,_,,· Conchas y'.' Go-v.Clfes, 372 Phil. 697; 703--704 (1999). [PCT 1. Kapunan, First
DiviSibilJ: , _
123 Rosarcso -,.L$oria,.7I J-· Phil 644, 656 {2013/[Per J. T\,fondo.za, Third Division]..
124 G.R. NO.. . 205524,
. . hnuary
. .. 18;·.2023 [Per J. .Leol]en, Second Djvfaion]:
 Decision •• 28 G.R. Nos. 244695, 244752
& 245294

I
Although Section i10, Rnle VII of the New Rules of Procedure
of the NLRC allows al relaxation of the rules of procedure and
evidence in labor cases, this rule· of liberalitv does not mean a
. _ c_OmJ?lete dispensation 6f proof. Labor officials are enjoined to use
_.reasonable means to ascertain Lhe facts speedily and objectively with little
r,:,gard to technicalities oi formalities but nowhere in the rules are they
provided a license to completely discount evidence, or the lack of it. The
quaiitum· of proof-required, however, must still be satisfied. 125 (Emphasis
!1fid underscoring s1;1pplied) ,

The evidence relied upon by Sec.

Be{lo failed to· establish, among
otliers, labor-only contracting and
other. illicit forms of employment
arrangements

Central to Sec. Bello's declaration that PLDT and its contractors were
engaged in labor-onJy contracting was .the finding that ]:'LDT, allegedly, was
exercising control over the cc;,ntracto.rs' en:iWoyees. Sec.· Bello also found
that PLDT's. contractors committed other violations, such as repeatedly
hiring its workers fur. short duration.

Hei'e, Sec: Bell o's finding of control allegediyexercised by PLDT was

largely based. on the intervie,vs of the workers, and sµpported by the service
agreen1~ii.'ts,. ''Tec_hb.ical. Protocols" attached to some of the service
agreements between PLDT and the contractors, as well as other employment
documents. • Sec. Bello also anchored on these interviews his findings of
other violations, such as the contractors' alleged practice of repeatedly hiring
workers foi short contracts .. We agree with the CA that these pieces of
evic!en~e a;e not_sub~tantial tCJ establish these allegations.

to be sure, the interviews of the workers are mere allegations that are
de~oid of any probative value. While these interviews may have invited the
DOLE's attention to PLDT's and its contractors' potential violations, to rely
heavily ,on these pieces _of evidence to support its conclusion.is to ignore
ba~ic evidentiary
. ----- • -~-
tenets and principles
. -
.

In,S~uth Cotabuto,' 26 the Court rejected this spec:-ie of evidence as

suhstan_tial evidence. •It was eXI))ained:

i:!S -'iavrer· ;.-_fi};:AP/l-~Orp\68-2Phii.'"j59,·~-n (201"2) [l?e-r J. )\lfondOi~ Third Divisionl :··

12
n .__Supra .got~.71· • ••
Decision 29 G.R. Nos. 244695, 244752
. & 245294

The proffered justification falis below the ·quantum of proof

•11ecessarj to establish such fact as allegations can easily be concocted and
manufactured. Private respondents' allegations are inadequate to support a
conclusion absent other concrete proof that would support or corroborate
the same. Mere allegation, vii1;hout more, is not evidence and is not
equivalent to proof. Hence, private respondents' allegations, essentially
self-serving statements as tliey are and devoid. under the premises of
any evidentiary weight, can hardly be taken as the substantial
evidence contemplated for the DOLE's conclusion . ..

·Indeed, as astutely cited by the CA, in Tongko v. The }vfanufacturers

Life lnsura,nce Co., Jnc., 127 the Court already warned about the dangers of
utilizjng anecdotal evidence to support factual conclusions. Thus:

A disturbing note, with respect to the presented affidavits and

Tongkos alleged administrative functions, is the selective citation of the
.12ortions supportive of an employment relationship and the consequent
omission of portions leading to the ·contrary conclusiort ... For example, the
following por".ions of the affidavit of Regional Sales Manager John Chua.,
.\vith ·counterparts in the other affidavits, were not brought out in the
Decision of November 7, 2008,.whiie the other portions suggesting labor
law control
. .
were
highlighted. . . • • • •
...... .
•

'.The. answers to thes·e questions may, to some extent, be deduced

. fronJ. the evidence at hand, as P.artly distussed"!lbove. But strictfy speaking,
tne. questions cannot definitively arid concretely be ansv:ered through the
evidence on t'ecord. The toncrete •evidence required to settle t,'1ese
questions is simply rtot there, since orJy the Agreement and the anecdotal
1
affidavits have been marked·and submitted as evidence. "

,;As cari be shown above, anecdotal evidence is.malleable and may be

tailored to suit any narrative or conclusion.·

We also agree 'iliaf.the application to 7;344 workers of the DOLE's

findings l,ased di:1, the st~tements of not more . than 1000 employees is
venturing in.speculation and guesswork. Conclt\sions based on "sampling"
or "probability" ·should not be considered as substantiaL evidence because
facts and circumstances showing control may not be uniform.but instead be
individuaiized, and therefore, must be establi.shed: vvith particularity. The
approach employed by the DOLE. was highly speculative and failed to meet
the substantial evidence requirement. The Court expresses apprehension to
this approach considering the result of the interviews of less than 1000
employees ,</ere used as basis to regularize 6000 other employees. As

127 636 PttlL 57 (2019) [Per J. Brion, En BUricl

'" [d. at 97,c9g; 10 l. • • ••
Decision 30 G.R. Nos. 244695, 244752
& 245294

mentioned; ·what is true for some may not be true for the rest. This
conjectural method is indeed whimsical and arbitra..ry clearly indicating that
the conclusions reached was tainted by grave abuse of discretion.

. The heart of the matter is that the DOLE could have done more to
collect evidence and to convince itself that the statements of the workers,
are, in fact, grounded in reality. It had the power to inspect the actual work
being done by the contractors' workers and the extent of PLDT's
involvement in their work. This could have transcended the nature of these
statements from being mere allegations to substantial evidence. However,
based on the facts presented by the parties, no such thorough fact-finding
was done.

Finally, the Court notes that in his resolution, Sec. Bello also indicated
the contractors' alleged comrnission of other illegal forms of employment
arrangements. &'!long those highlighted were the practice of repeatedly
hiring workers for short periods, and contractors' workers performing work
already performed by regular employees. Nevertheless, these findings suffer
the same evidentiary defect as. they are .based largely, if not exclusively, from
tfu.e ·_i11teryiew,s · of the workers Therefore," there is also no substantial
evidence
" .
to sustain said. findings. .
·-- ,.. ,_._.,

Tfi.e guidelines· allegedly proving

PLDT's control over the means
~nd •~etnod/ of pe/formi~g. work
"are,· .. infaqt, dil;ecied. t?wards the
companj
•
s1 desired
~-..
results
. '

, Tue Court is also in accord with the CA's pronouncements that Sec.
Bello mistook PLDT's exercise of its power to control the results with
control a~ to· the means and methods of achieving the said results. Indeed,
the validation of results and quality: checking of final output, the use of
Techr1ical Protocols and • Implementing Guidelines, fl:ie outline of the
;,General Scope of \Vcirk"' pr~duct training and knoyvledge, and evaluation
of the.-. . c~ntractors
. -~- ·-. ., -
were
all erroneously
. '
considered
• • '.
to. be "means
•
and methods
control". : .

It h;s been held that not all form of control could make the principal
and contractor liable for labor-only contracting. ln Orozco v. Court of
Appea1s-, 129 th~ Coi:ir,t;hdd:

'" 584 Phil, 35 (2008) [Jf'e~ J.i',aFhura; T"nird Division]:

Decision. 31 G.R.Nos.244695,244752
& 245294

- It should, however, be obvious that not every form of control that the
hiring party reserves to himself· over the conduct of the party hired in
relation to the services rendered may be accorded the effect of establishing
an .employer-employee relationship between. them in the legal or technical
sens'.<· of tli.e term. A line must be drawn somewhere, if the recognized
distinction between an employee and an individual contractor is •not to
-~anish altogether. Realistically, it would be a rare contract of service that
gives -uritrammelled freedom to the party hired and eschews any intervention
_whatsoever in his performance of the engagement.

Logically, the line should be drawn between rules that merely

serve as guidelines towards the achievement of the mutually desired
result without dictating the means or methods . to be employed in
.?ttaining it, and those that control or fix the methodology and bind or
restrict the party hired to the use of such means. The first, which aim
only to promote the result, create no emploVer-employee relationship
unlike the second, which address both· the result and the ineans used to
achieve it. Eo (Emphasis and underscoring supplied, citations oµritted)_

These guidelines or indicators are still results-oriented, i.e., it is

concerned with the successful implementation and completion of the work to
be performed by the employee. Contrary to MKP's and Sec. Bella's claims,
these guidelines do riot dictate the means and methods of how the work is to
be performed. To be sure, the guidelines did not direct the· employee to
utilize specific tools or a particular method. For instance, the "Technical
Protocor' •instructs tbe -technician to _install or to troubleshoot but said
worker is .left to decide .how the installation or troubleshooting are to be
cah-ied out:Td sustain l\1KP's arid Sec. Bello's view would preclude any
company, such as PLDT, f6 recommend guides and procedures that are
consistent with its own systems, infrastructures, and facilities, which would
also ensure that.the c"ontfactor~' work satisfies the needs and the intended
results ofJ?LDT..

There 'i.i no rnerit in PLDT's claim

the those engaged in installation,
repair, arid maintenance sirvzces of -
PLDT .lines may be considered as
"prcyec.t'' or .''seasona.~" employees

Toe. Court, nevertheless, sustains the CA's findings that the workers
~ngaged ii/ 1nstallation,repair; and maintenance services of PLDT lines need
to:· be regularized _bec:ause they . perfonn_ tasks that are necessary and
de~1rable, fu'1d directly related to the busfoess of PLDT.
Decision G.R. Nos. 244695, 244752
& 245294

. Anent this issue, PLDT argues that the CA ;,failed to account for the
possibility of 'project' or 'seasonal' engagements." 131 PLDT's claim has no
merit. To be sure, it is outside the province of the CA's competence to
speculate on the nature of the· worker's employment It is up to PLDT to
prov~_:with sµbstantial evidence that what We have in Our midst are, as a
matter of fact and not possibly, cases of project or seasonatemployment. It is
settled-that the burden of proof to establish project employment belongs to
the employer. 132 PLDT's obligation is to prove its claim, not to enumerate
legal ·provisions, doctrines, an.d precedents. Apart from its bare assertion,
PLDT offered no iota of proof that the employee was assigned to carry out a
specific project or undertaking, and the duration and scope of which were
specified at the time the employee was engaged for such project. 133 Neither
did PLDT prove that there was indeed a project undertaken.' 34

The same is true with proving seasonal or fixed-term employment. 135

To exciude those claimed as "seaso1ia1" employee from those classified as
regular employees, the employer must show that; (1) the employee must be
perfonrung work or services that are seasonal in nature; and (2) they had
been err1ployed for th~ d~ration pf the season. 13, No proof was ever given by
PLOT.to establish these circumstances .. , •

_.J 0~ th~-othe~ hal1d, the law on the,rnatter i~ cl~ar. Article 295 of the
Labp,rCode provides:. . . , .. . . • •
- ' ...
. . . _ ART. 295, [28Q] Regular and Casual Employment. - The
pr9visions of wtitt.en agreement to· the ·contrary notwithstanding and
regardless· of the oral agreement of the parties, an cmploy1;1ent shall be·
, deeriied·to be rcgular••where the employee has been engaged to perform
·:·activities which are.usually necessary or desirable irrthe usual business or
trade: of the employer, except where.the employmeni has been fixed for a
• . ·spe~ific project or undertaking the completion or termi.iiation of which has
•. be~n determined at the time of the engagement c>f the employee or where
•• tlie work or •;ervice •to be performed is seasonal in nature and the
137
employment is for the duration of the seas,m.

We agree ·viiith the CA that the· employees engaged m installation,

repair, and maintenance· services ·of PLDT-1ines; are performing work

i,, ;,..;,Iio IG.R No. 244752), pc 98. • · • • ••• •

132 (;~Z'f~~ ·l>:_ Afa~~ir }'vfanila Cu. Ltd., inc., G.R_._ No. 23962~, June 21, 2021 [Per J. J. Lopez, Third
• D1vis,on], . •. · · · ·· •• • •• . • •• i· J H d
i~ 3. See Enifn¢erihg' & Constfucticn·CoYporation :()JAsia 1-: ?vile,_ 'i±Tl PhiL-·60, 74 (2020} ~Per - eman o,
.- _·se~bnd,Divjsion].
134
Supra note 13'1. _ _ . . . . . Y ••
n.: :see
Prtce -v.-lnnodata Phils.-· Jnc., 588 P-hiL 568, .?86 .(2008).I_per J. C~1cv_~Nazano, Third_ D1V1~10n]. .
: 3o Universal Robin(i Sugar, },filling· Corp: v. Acibo, 724 Phil. :489, 501_:502 (20]4) '[Per J. Sereno, Frrst
·•. . . . - - , .. , ' . .
Di visioD-J. ._
1'.) 7 LABOR GoDii,:_._A.rti,~le 295..·
Decision 33 G.R. Nos. 244695, 244752
& 245294

directly related to PLDT's telecommunication business. Under Article 295,

what determines regular employment is the reasonable connection between
work performed by the employee and the usual business or trade of the
employer. 138 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.

Finally, the Court echoes the CA's view that regularization of the
employees identified above would entail factual consequences that cannot be
determined in this Decision. The CA correctly observed:

Clearly, the application of these legal provisions to the facts of the

case requires an inquiry into factual issues, such as the years of service of
the contractors' workers and their period of actual deployment with PLDT,
their receipt of salaries from the respective contractors, the amount and
level thereof, and the payment of other benefits. These are factual issues
which the Court in a certiorari proceeding under Rule 65 of the Rules of
Court - being limited in scope and inflexible in character and limited to
jurisdictional errors - cannot wade into.

More importantly, the determination of which contractors and

individuals deployed by these contractors are performing installation,
repair and maintenance services of PLDT lines, likewise, requires an
inquiry into facts that are presently not available to this Court and is a
matter that is precluded by the present Rule 65 petition.

Given all the above, a remand of the case for further conduct of
proceedings by the Regional Director for the determination of these factual
issues is in order. 139

Similarly, the Court deems it necessary to remand the case to the .

Regional Director for the proper identification, review, and determination of
these factual consequences of regularization.

The computation of the monetary

awards, to which PLDT and the
erring contractors are solidarity
liable, needs to be revisited

Finally, the Court agrees with the CA's observation that the Regional
Director and ultimately, Sec. Bello, adopted a "straight computation method"

I
"' De Leon " National Labor Relations Commission, 257 Phil. , 26, 632 (I 989) [Per J. Fernan, Third
.
Division].
139
Rollo (G.R. No. 244695), p. 134.
 Decision 34 G.R. Nos. 244695, 244752
& 245294

in srriving at the monetary awards given to the contractors' workers. The

"straight computation method" was explained in South Cotabato 140 in this
manner:

In a similar vein, the use of the straight computation method in

awarding the sum of [PHP] 759,752 to private respondents, without
reforence to any other evidence other than the interviews conducted during
the inspection, is highly telling that the DOLE failed to consider evidence in
arriving at its award and leads this Court to conclude that such amount was
arrived at arbitrarily.

It is quite implausible for the nine (9) private respondents to be

entitled to uniform amounts of Service Incentive Leave (SIL) pay.
holiday pay premium, and rest day premium pay for three (3} years,
without any disparity in the amounts due them since entitlement to said
_benefits would largely depend on the actual rest days and holidays
. _worked and amount of remaining leave credits in a year. 141 (Emphasis
and underscoring supplied)

Sin1ilarly, the Court observed here that the Regional Director awarded
uniform amounts of service incentive leave-pay (PHP 5,701.70), unpaid 13 th
month pay (PHP 24,016.17), and ref=d of. unauthorized deductions (PHP
500.00), not only to workers working for the same contractor, but to workers
employed by different contractors. The trend appears to almost all
contractors, and whi:le some employees were given different amounts, they
come very few and far between. To·illustrate, reproduced below are portions
of the Regional Director's Order showing the amounts awarded to the
workers· of three contractors: AE Researcher Exponents, Inc., Aremay
Enterpri~e, and Comworks, Inc. The names of the workers will be withheld
for purposes of anonymity. Thus:

AE Researcher Exponents, Inc.: .

- . .. .
No. .: Nanie of.Employee 13th •Service .Total
Month Pay Incentive
.. .. " . . .. - ·~ -~·· Leave
1 xxx· 24,016.17 5,701.70 29,717.87
.2 XXX 24,016.17 5,701.70 29,717.87
3 XXX 24,016.17 5,701.70 29,717.87
4. XXX 9,242.33 1,787.62 11,029.95
I •
5. Y,.XX 24,0.16.17 5,701.70 29,717.87
6 . -XXX I 24,016.17 5,701.70 29,717.87
7 XXX 24,016.17 5,701.70 29,717.87
8 " XXX 24,016.17 1,782.62 25,803.79
9 - • X.'lX . ..
• 24,016.17 5,701.70 29,717.87

140
-Supra _note 76.
141
• Jd.
at SU-512..
Decision G.R. Nos. 244695, 244752
&245294

10 XXX 24,016.17 5,701.70 29,717.87

11 XXX 10,096.67 2,589.29 12,685.96
12 XXX 24,016.17 5,701.70 29,717.87
13 XXX 24,016.17 5,701.70 29,717.87
14 XXX 24,016.17 5,701.70 29,717.87
15 XXX 24,016.17 5,701.70 29,717.87 142

Arerri.ay Enterprises:

No. Name of Employee Service Unauthorized Total

Incentive deductions
Leave
1 XXX 5,701.70 500.00 6,201.70
2 XXX 5,701.70 500.00 6,201.70
.,
~
XXX 5,701.70 500.00 6,201.70
4 XXX 5,701.70 500.00 6,201.70
5 XXX 5,701.70 500.00 6,201.70
6 XXX 5,701.70 500.00 6,201.70 143

Comworks, Inc.:

No Name of .. 13th Service __ U_nauthoriz!)d Total

. Employee Month Incentive deductions
Pav Leave
l XXX 8,426.73 2,714.64 500.00 11,641.37
2 XXX 24,016.17 5,701.70 500.00 30,217.87
3 XXX 23,189.33 5,505.31 500.00 29,194.64
4 XXX 24,016.17 5,701.70 500.00 30,217.87
5 XXX 24,016.17 5,701.70 500.00 30,217.87
.. 500.00 30,217.87
6. XXX 24,016.17 . 5,701.70
i XXX 24,016.17 . 5,701.70 500.00 30,217.87
8 XXX 24,016.17 5,701.70 500.00 30,217.87
9 XXX 24,016.17 5,701.70 500.00 30,217.87
10 XXX 24,016.17 5,701.70 _ 500.00 30,217.87
11 XXX 21,610.83 2,800.36 500,00 24,911.19
12 XXX 24,016.17 .. 5,701.70 500.00 30,217.87
13 x.xx 24,016.17 5,701.70 500.00 30,217.87
14 XXX 24,016.17 5,701.70 500.00 30,217.87
x.xx 24,016.17 5,701.70 500.00 30,217.87
15
5,701.70 500.00 30,217.87
16 XXX ' 24,016.17
17- xx.x 24,016.17 5,701.70 500.00 30,217.87
24,016.17 5,701.70 500.00 30,217.87
-18- . --- XXX-
24,016.17 5,701.70 500:00 30,217.87
19 XXX
..
18,303.50 4,344.77 500.00 23,148.27
20 XXX
24,016.17 5,701.70 500.00 30,217.87
21 XXX
-xxx 24,016.17 5,701.70 500.00 30,217.87
22
'
''' Rollo (G.R. No. 244695), pp. 510.
143 - Id. .at 512. - •
Decision 36 G.R. Nos. 244695, 244752
& 245294

23 XXX 24,016.17 5,701.70 500.00 30,217.87

24 XXX 20,784.00 4,933.97 500.00 26,217.97
25 XXX 24,016.17 5,701.70 500.00 30,217.87
26 XXX 10,912,17 2,589.29 500.00 14,001.46
27 XXX 24,016.17 5,701.70 500.00 30,217.87
2s· XXX 24,016.17 • 5,701.70 500.00 30,217.87 144
..

Toe uniformity of the amounts awarded implies one tlring - that

almost all workers are receiving the same salary. We find this unrealistic if
not impossible considering that: (1) the workers were employed by different
contractors, (2) they are, preslL.'Tlably, engaged under separate employment
contracts, and (3) they are, presumably and in varying degrees, performing
different works or activities. Worse, the Regional Director failed to explain
how these amounts were computed apart from his description that they were
"based on the assessment". While Sec. Bello appears to have scrutinized the
a1N"ards_ to the extent that he determined, per contractor, who is entitled to
them and who are not, the Court cmmot affirm these monetary awards,
which, to Our minds, were erroneously computed .
. ..
Make no mistake, nevertheless, that under. .brticle 109 of the Labor
Code, PLDT and the contractors remain solidarily liabie for these amounts.
HC>wever, We agree with the· CA that the case should be remanded to the
Regional Director for .the correct computation of the monetary awards after
the conduct of the necessary proceedings intended for this purpose.

FOR THESE REASONS, the Petitions in G.R. No. 244695, G.R.

No. 24;'1-751, and G.R. No. 245294 filed by petitioners Manggagawa sa
Komunikasyon ng Pilipinas, PLDT, Inc., and Silvestre H. Bello III (Sec.
Bello), respeetive,ly, are DISMISSED. The Decision dated July 31, 2018
and Resolution dated February 14, 2019 of the Court of Appeals in CA-G.R•
. SI> No. 155563 are.AFFIRMED. ••
·- ·-·
•..The Resolution of Silvestre H. Bello III in OS-LSa0120-0.804-2017,
iss_lled in his cap,idty as theµ Secretary of Labor, is MODIFIED. Sec.
Bell o's order to regularize the workers of PLDT's service contractors is SET
ASIDE,. except those performing installation, repair, and maintenance
;~r~ices, -~ho are hereby declared regular employees of PLDT subject to the
terms of the REMAN:O as set o_ut below.

·._ Acco~dingly, the Cou.rt REMANDS the case to the Office ·of the
Regional Director of the Department of Labor and Employme?t - National
C_apital Region and ORDERS ;,aid office to conduct the following:

"'. Jd. at 518~519. •

Decision 37 G.R. Nos. 244695, 244752
&245294

(1) To revjew and properly determine the effects of the regularization

of t.1.e workers performing installation, repair, and maintenance
services;

(2) To review, compute, and properly determine, the monetary award

on the labor standards violation, to which petitioner PLDT, Inc.,
and the concerned contractors are solidarily liable; and

(3) To conduct further appropriate proceedings, consistent with this

.Decision.

SO ORDERED.
Decision 38 G.R. Nos. 244695, 244752
&245294

WE CONCUR:

G.GESMUNDO
hief Justice
Chairperson

.•

. L. HERNANDO RIC .ROSARIO

Associate Justice Ass ciate Justice

X/1)4~~
JO~I])AS P. MARQUEZ
Associate Justice

CERTIFICATION

Pursuant to the Section 13, Article VIII of the Constitution, I certify

that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the v,rriter of the opinion of the Court's
Division.

. GESMUNDO