G.R. Nos. 244695, 244752 & 245294. February 14, 2024.
MANGGAGAWA SA KOMUNIKASYON NG PILIPINAS, Petitioner, vs. PLDT, INC., Respondent. / PLDT, INC., Petitioner, vs. HON. SECRETARY OF LABOR AND EMPLOYMENT SILVESTRE H. BELLO III; AND MANGGAGAWA SA KOMUNIKASYON NG PILIPINAS, Respondent. / SILVESTRE H. BELLO III, IN HIS CAPACITY AS THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, Petitioner, vs. PLDT, INC., Respondent.

FACTS

PLDT, a telecommunications company, engaged several contractors and subcontractors for its operations. MKP was the exclusive bargaining agent of PLDT’s rank-and-file employees. To settle a collective bargaining agreement dispute, the parties agreed to a DOLE-conducted “Special Assessment and Visit of Establishment” (SAVE). The DOLE Assessment Team interviewed 1,104 PLDT employees and contracted workers. Its SAVE Report found indications of labor-only contracting, citing that PLDT exercised control and supervision over the contractors’ workers: PLDT set hiring requirements and evaluated applicants, set work schedules and deadlines, approved overtime and leaves, reviewed work reports, had its own personnel supervise the workers and address problems, and possessed authority to recommend the replacement or termination of contractors’ workers. Contractors were also found to have violated general labor standards. The DOLE Regional Director subsequently issued an Order declaring several contractors as labor-only contractors, ordering PLDT to regularize their workers, and holding PLDT and its contractors solidarily liable for unpaid monetary benefits. PLDT appealed to the Secretary of Labor, arguing the regularization issue should be threshed out in an adversarial proceeding before the NLRC. Secretary of Labor Silvestre Bello III issued a Resolution affirming the finding of labor-only contracting and ordering the regularization of 7,416 workers, but setting aside the monetary awards for further proceedings. The Court of Appeals affirmed the regularization order but ruled that the DOLE Secretary exceeded his authority in setting aside the monetary awards without a factual or legal basis. All parties (MKP, PLDT, and Sec. Bello) filed petitions before the Supreme Court.

ISSUE

The core issue is whether the DOLE, through the Secretary of Labor, properly exercised its visitorial and enforcement powers under Article 128 of the Labor Code in ordering the direct regularization of workers of contractors declared to be engaged in labor-only contracting based on findings from a SAVE, without the need for a separate adversarial proceeding before the NLRC.

RULING

Yes. The Supreme Court affirmed the Court of Appeals’ decision with modifications. The DOLE Secretary properly exercised his visitorial and enforcement powers under Article 128 of the Labor Code. The finding of labor-only contracting is a labor standards violation, and the legal consequence—the regularization of the employees by the principal—is within the DOLE’s power to order. The proceedings conducted, which included interviews, conferences, and the submission of evidence by PLDT and the contractors, satisfied due process. The factual findings of labor-only contracting, based on the workers’ affidavits and SAVE notes demonstrating PLDT’s control, were supported by substantial evidence. The Court reinstated the Regional Director’s order for PLDT and the contractors to solidarily pay the unpaid monetary benefits, as the DOLE Secretary had no valid basis to set it aside. The regularization order was upheld, but the Court clarified that the workers’ entitlement to full regular employee benefits from PLDT commences only from the finality of the decision declaring them as such, not retroactively.