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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
The Court ruled that the workers were entitled to the same rights and benefits as regular employees of the employer. The decision was grounded in Articles 106 to 109 of the Labor Code, which prohibit labor-only contracting when the contractor lacks substantial capital and the workers are engaged in the employer’s core activities. Such arrangements violate labor laws and compromise workers’ rights.
The Supreme Court Decides: The decision that the workers were entitled to the same rights and benefits as regular employees of the employer was grounded in Articles 106 to 109 of the Labor Code, which prohibit labor-only contracting when the contractor lacks substantial capital and the workers are engaged in the employer’s core activities.
The dispute originated from a Special Assessment and Visit of Establishment (SAVE) conducted by the Department of Labor and Employment (DOLE) at PLDT’s facilities to evaluate compliance with labor standards.
The assessment was prompted by claims from the Manggagawa sa Komunikasyon ng Pilipinas, the exclusive bargaining agent for PLDT’s rank-and-file employees, regarding the employment status of workers supplied by various contractors.
DOLE Secretary Silvestre Bello III issued resolutions declaring that PLDT was engaged in labor-only contracting concerning several services, including janitorial services, IT services, and other professional services.
The DOLE’s findings indicated that PLDT exercised control over the workers, leading to the conclusion that these workers should be regularized and that PLDT was solidarily liable for unpaid benefits.
DOLE Regional Director ruled against PLDT, declaring several contractors as labor-only contractors and ordering the regularization of workers.
The Court of Appeals (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. The CA
held that individuals deployed by contractors performing installation, repair, and maintenance
services of PLDT lines should be considered regular employees of PLDT. Hence, these consolidated petitions for review on certiorari.
The issues in this case are whether or not the contracting arrangement between the employer and the contractor qualifies as labor-only contracting, and whether or not the workers are entitled to the same rights and benefits as regular employees of the employer.
The Supreme Court Decides
The Supreme Court affirmed the authority of the DOLE and Secretary Bello to declare PLDT and its contractors as engaging in labor-only contracting.
The Court ruled that the workers were entitled to the same rights and benefits as regular employees of the employer. The decision was grounded in Articles 106 to 109 of the Labor Code, which prohibit labor-only contracting when the contractor lacks substantial capital and the workers are engaged in the employer’s core activities. Such arrangements violate labor laws and compromise workers’ rights.
The Court sustained the CA’s findings that the workers engaged in installation, repair, and maintenance services of PLDT lines need to be regularized because they perform tasks that are necessary and desirable, and directly related to the business of PLDT.
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.
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