SC calls out DOLE's "arbitrary" inspections

In a landmark decision, released earlier this year, the Supreme Court reversed the DOLE secretary's decision which ordered PLDT to absorb as regular employees more than 7,000 contractors' workers who provided janitorial, medical, IT as well as BPO and call center services provided by more than 40 outsourcing and manpower services agencies.

This was in the case of Manggagawa Ng Komunikasyon sa Pilipinas versus PLDT, GR No 244695, promulgated on February 14, 2024. The High Court noted that the former DOLE secretary, my good friend Sec. Silvestre Bebot Bello, affirmed the ruling of the DOLE NCR regional director, which was mainly based on the report of the inspection team. Such a report was not founded on substantial evidence but largely lifted from the anecdotal narrations of less than a thousand workers and applied those anecdotes to cover no less than 7,000 contractuals. The Supreme Court ruled that PLDT was deprived of due process and the ruling of DOLE was not anchored on substantial evidence.

In other words, the inspectors went to PLDT and selected workers at random and got their versions on the issue of compliance with general labor standards and security of tenure. There was no hearing conducted. The side of PLDT and the 47 contractors were not duly heard, except on hurriedly prepared, submitted and read position papers.

The DOLE awarded more than 70 million and ordered PLDT not only to pay but also to absorb as regular employees more than 7,000 workers who were recruited by the contractors and outsourced service providers which were licensed to do business as such.

The Supreme Court adopted the arguments presented by the lawyers of PLDT and the contractors that the findings of the inspectors were arbitrary, conjectural, speculative and violative of due-process.

The high court also emphasized that the one-sided narrations made by the workers were not even transcribed, there were no transcript of the interviews, and such a procedure was done in the absence of management or its duly constituted representatives. On the basis of the self-serving allegations made by the contractual workers, the inspectors made their report and the regional director adopted them without any hearing at all.

Such a style of exercising the visitorial power under Article 128 does not afford due process to the employers. To make some findings of facts based only on the one-sided narration of anecdotes is a blatant violation of due process. The inspectors are not well-versed with the intricacies of law which are not verifiable in the ordinary course of inspections. They cannot just rush into conclusions that employers violate the provisions of law without listening to the side of management. They should also stop the practice of interviewing workers and do not allow a management representative during such interviews.

One saving grace is that Secretary Benny Laguesma, who is an experienced DOLE official rising from the ranks and a career executive official, came up with a department order that directs all inspectors and regional directors to conduct hearings before making such draconian decisions.

It is well-known that Secretary Laguesma, after retiring from government, became a famous management lawyer with a big law firm. That is why he understands the predicament of employers, especially the small and medium enterprises. Many investors are shying away from the Philippines because of labor policies and regulations that are grossly unfair to management.

The Supreme Court decision in PLDT and the department order issued by Sec Benny are very strong warnings to inspectors and regional directors to faithfully comply with due process and fulfill the requirements of substantial evidence. They should avoid conjectural, speculative and arbitrary inspections.