The Court of Appeals (CA) has dealt a blow to the Duterte administration’s efforts to regularize many workers of PLDT, Inc.

In a recent 47-page decision, the CA 10th Division set aside the Department of Labor and Employment’s (DOLE) January 10, 2018 resolution ordering the regularization of the workers performing the following duties:

*business process outsourcing (BPO) or call center personnel;

*information technology (IT) services;

*IT support services and applications development;

*janitorial, messengerial and clerical services;

*back office support and office operations;

sales, and;

medical, dental, engineering and other professional services.

The CA disagreed with Labor Secretary Silvestre Bello’s finding that PLDT committed the illegal practice of labor-only contracting for the aforementioned services.

To recall, PLDT terminated its labor agreements with the manpower contractors in order to avoid complying with the DOLE order to regularize the BPO and IT support personnel.

Aside from causing the layoff of such personnel, PLDT’s move also came at the expense of the telecommunications company’s customer services.

The CA, however, justified the refusal of PLDT to regularize the BPO and IT support personnel.

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

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

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

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

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

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

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

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

Meanwhile, the court said the janitorial, maintenance and security services could be outsourced to manpower agencies because these were “not in any way directly related to the core activities of PLDT.”

The appeals court gave more importance to PLDT’s “exercise of business judgment or management prerogative” in its choice not to give the said employees the security of tenure.

“Contracting out of services is not illegal per se. Our laws allow contracting arrangements for the performance of specific jobs, works or services,” read the decision penned by Associate Justice Edwin Sorongon.

On the other hand, the appeals court sustained Bello’s order to regularize personnel involved in the installation, repair and maintenance of PLDT communication lines, since their work were more directly related to the company’s business.

See related stories:

Duterte washes hands of failure to end ‘endo’: It’s not part of my territory

PLDT says Bello’s regularization order ‘unfair’

Duterte’s’powerful support’ needed to force big firms ike PLDT, Jollibee, PAL to regularize ‘endo’ workers – labor group

PLDT’s Voyager to forge strategic partnership with Asian group soon

Inflation, endo, pol dynasties first: Robredo says railroading ChaCha won’t address gov’t pressing problems

PLDT Group takes fastest carrier crown

After PLDT, Jollibee, DOLE to inspect TV networks on compliance with labor laws

DOLE to PLDT: Comply or face the consequences!

DOLE to punish PLDT-MVP if it terminates 7,300 endo workers