Manggagawa sa Komunikasyon ng Pilipinas vs. PLDT, Inc.

The Secretary of Labor, in the exercise of visitorial and enforcement powers under Article 128 of the Labor Code, may determine the existence of an employer-employee relationship, but such determination must be supported by substantial evidence; anecdotal interview statements and speculative sampling applied to thousands of unexamined workers do not constitute substantial evidence and render the Secretary's ruling tainted with grave abuse of discretion.

PLDT, Inc. is a corporation engaged in the telecommunications business, which engaged the services of several contractors and sub-contractors for various phases of its operations. Manggagawa sa Komunikasyon ng Pilipinas (MKP) was the exclusive bargaining agent of PLDT's rank-and-file employees. A dispute arose from the negotiation of the collective bargaining agreement between PLDT and MKP, prompting the parties to agree to a "Special Assessment and Visit of Establishment" (SAVE) conducted by the Department of Labor and Employment (DOLE) to assess PLDT's and its contractors' compliance with DOLE Department Order No. 18-A, Series of 2011, and other labor standards.

PLDT, Inc. is a telecommunications corporation that engaged the services of numerous contractors and sub-contractors for various phases of its operations. MKP served as the exclusive bargaining agent of PLDT's rank-and-file employees. When a dispute arose during collective bargaining agreement negotiations between PLDT and MKP, the parties agreed to a "Special Assessment and Visit of Establishment" (SAVE) conducted by the DOLE. Pursuant to Administrative Order No. 648, a DOLE Assessment Team was constituted to assess, validate, and verify PLDT's and its contractors' compliance with DOLE Department Order No. 18-A, Series of 2011, as well as general labor standards and occupational safety and health standards.

During the inspection, the DOLE Assessment Team interviewed a total of 1,104 PLDT employees and contracted workers, along with 37 contractors' representatives from several PLDT offices in the National Capital Region. The interviews focused on PLDT's contracting activities and practices. On December 5, 2016, the DOLE Assessment Team presented its SAVE Report, which enumerated preliminary findings of violations of DO 18-A. The report indicated that PLDT exercised control and supervision over contractors' workers: PLDT set personnel requirements and conducted initial evaluation of job applicants; work schedules, deadlines, overtime, and leave were subject to PLDT's approval; PLDT reviewed contractors' workers' reports weekly; PLDT managers or supervisors addressed work problems; some contractors' workers performed tasks also performed by regular PLDT employees; and PLDT possessed authority to recommend replacement or termination of contractors' workers. Additionally, 47 contractors were found to have violated general labor standards provisions on overtime pay, holiday pay, service incentive leave, maternity and paternity leave, and 13th month pay, while 19 contractors made unauthorized deductions. Based on these findings, it was recommended that PLDT regularize contractual employees performing jobs directly related to its business and that PLDT be declared solidarily liable with the contractors for unpaid monetary benefits.

On January 6, 2017, PLDT filed a Manifestation and Motion contesting the DOLE Assessment Team's conclusions that it engaged labor-only contractors, asserting that the matters should be threshed out in an adversarial proceeding such as a regularization suit before the NLRC. Mandatory conferences were held on January 6, 10, and 17, 2017, during which contractors were summoned, given copies of the Notice of Results, and asked to provide documentation of compliance. The contractors submitted proof of payment, documentation, and affidavits challenging the labor-only contracting finding. On April 19, 2017, Secretary Bello publicly announced he would order the regularization of 10,000 workers performing jobs related to PLDT's business.

On July 3, 2017, the DOLE-NCR Regional Director issued his Order ruling that violations of labor-contracting rules are labor standards violations within the DOLE's visitorial and enforcement powers, and that the legal consequence of labor-only contracting is regularization by the principal. The Regional Director found that PLDT failed to refute the findings that some contractors were engaged in labor-only contracting, declared several contractors as labor-only contractors, and ordered PLDT and its contractors solidarily liable for unpaid monetary benefits amounting to PHP 78,699,983.71. PLDT appealed to Secretary Bello, who on January 10, 2018, issued a Resolution finding no merit in PLDT's appeal but partially granting some contractors' appeals. Secretary Bello ordered the regularization of 7,416 workers from the initial deployment, cancellation of declared labor-only contractors' DO 18-A registrations, and solidary payment of unpaid monetary benefits amounting to PHP 66,348,369.68. On April 24, 2018, Secretary Bello reduced the monetary liability to PHP 51,801,729.80 and the number of regularized employees to 7,344.

Aggrieved, PLDT filed a Petition for Certiorari before the Court of Appeals. On July 31, 2018, the CA affirmed Secretary Bello's resolutions with substantial modifications. The CA upheld the DOLE's jurisdiction to determine employer-employee relationships and agreed that workers performing installation, repair, and maintenance services of PLDT lines should be regularized. However, the CA reversed Secretary Bello's regularization order for workers performing janitorial, messengerial, clerical, IT-based, back-office, BPO, sales, and professional services, finding these not directly related to PLDT's core business. The CA found that Secretary Bello committed grave abuse of discretion because his findings were based on anecdotal evidence from interviews of fewer than 1,000 individuals applied to 7,344 employees, constituting speculative and conjectural reasoning insufficient to establish substantial evidence. The CA also noted Secretary Bello's apparent bias and his confusion of PLDT's control over results with control over means and methods. The CA remanded the case to the Regional Director for proper determination of factual issues and monetary awards.

MKP (G.R. No. 244695):

• Totality of Circumstances: MKP argued that the CA failed to consider the totality of circumstances of every contractor's agreement with PLDT, instead sweepingly categorizing them as either labor-only or legitimate contracting based only on contracted-out services, thereby unjustly disregarding the specific factual findings of the Regional Director and Sec. Bello that were supported by substantial evidence.
• Regularization of Non-Core Workers: MKP maintained that the CA erred in holding that workers performing work not "directly related to the core activities" of PLDT, such as janitors and security guards, cannot be regularized, asserting that jurisprudence contains cases where contractors deploying janitors and utility workers were found engaged in labor-only contracting, and that the laws on legitimate job contracting do not require performance of activities directly related to core activities before labor-only contracting may be found to exist.
• Installation, Repair, and Maintenance Workers: MKP asserted that the CA made the correct ruling, albeit on the wrong legal basis, when it declared workers engaged in installation, repair, and maintenance as regular employees, insisting that the violation was grounded on the fact that these workers performed functions done by regular PLDT employees, and that several contractors had no valid service contracts, no DOLE license, or repeatedly hired workers for terms shorter than provided in the service contract.
• Professional Services: MKP argued that the CA erred in declaring those performing medical, dental, engineering, and other professional services as independent contractors, stressing that the relationship among PLDT, the contractor, and the workers is trilateral and governed by Article 106 of the Labor Code.
• Sales Workers: MKP claimed that the CA erred in declaring sales workers as outside the coverage of DO 18-A, arguing that payment on commission basis does not negate the existence of an employer-employee relationship or the trilateral relationship regulated by DO 18-A.
• IT-Enabled Services: MKP argued that the CA should not have exempted contractors providing IT-enabled services, contending that what is exempt is the business process outsourced business, not the contractors themselves.
• Due Process: MKP contradicted the CA's ruling that PLDT was denied administrative due process, pointing out that PLDT participated during SAVE inspections and had opportunity to adduce evidence but refused to participate in mandatory conferences despite notice.
• Substantial Evidence: MKP argued that Sec. Bello's decision was based on substantial evidence, consisting of numerous interviews, affidavits, voluminous documents, and ocular inspection reports, and that the "Technical Protocols" attached to service contracts were indicative of PLDT's control over the means and methods of work, not mere guidelines for desired results.

PLDT (G.R. No. 244752):

• Project or Seasonal Employment: PLDT asserted that the CA erred in upholding regularization of workers performing installation, repair, and maintenance services, arguing that the CA failed to consider the possibility that these workers were engaged as "project" or "seasonal" employees, and that a job being usually necessary or desirable does not automatically imply regular employment.
• Construction-Related Activities: PLDT pointed out that the work performed by these workers are construction-related activities distinct from PLDT's telecommunications business and excluded from the coverage of DO 174-2017.
• DOLE Jurisdiction: PLDT assailed the CA's pronouncement that Sec. Bello can determine the existence of employer-employee relationship in the exercise of visitorial and enforcement powers, maintaining that the purpose of SAVE is to verify compliance with labor laws based on data and not to adjudicate, and that regularization claims should be resolved in an adversarial proceeding within the jurisdiction of Labor Arbiters.

Sec. Bello (G.R. No. 245294):

• Scope of Certiorari Review: Sec. Bello argued that the CA's ruling should have been limited to determining whether he committed grave abuse of discretion, asserting that the writ of certiorari does not include correction of his evaluation of evidence, considering that factual findings of administrative agencies are generally binding and final when supported by substantial evidence.
• Application to 7,344 Employees: Sec. Bello surmised that there was nothing legally objectionable about applying his decision to 7,344 employees even if fewer than 1,000 were interviewed, arguing that in case of an award arising from a company's violation of labor legislations, the entire roster of employees should benefit.
• Control Finding: Sec. Bello contended that the finding of labor-only contracting was strongly supported by PLDT's exercise of control over contractors' workers, and that this control was sufficient to validate the finding notwithstanding that workers performed activities such as janitorial, messengerial, IT-related, and professional services.
• Other DO 18-A Violations: Sec. Bello asserted that apart from labor-only contracting, PLDT and its contractors committed other violations of DO 18-A that accorded regular status to workers, including contracting out services in bad faith by repeatedly hiring workers for periods shorter than their service agreement.
• Monetary Awards: Sec. Bello contended that the CA's reliance on South Cotabato was misplaced, as he based his award not only on interviews but also on several pieces of evidence presented during the entire SAVE proceedings, and that he adjusted monetary obligations based on documents and additional evidence submitted.
• Due Process: Sec. Bello belied findings that he deprived PLDT of due process, stating that PLDT was allowed to submit evidence during preliminary and mandatory conferences, and that he made an independent consideration of the law and facts.

N/A — The decision does not separately recount arguments attributed to a respondent party distinct from the petitioners' positions, as all three parties (MKP, PLDT, and Sec. Bello) filed petitions assailing different aspects of the CA Decision.

• Judicial Review in Labor Cases: Whether the Supreme Court's review of the CA's decision in labor cases is confined to determining whether the CA correctly found the presence or absence of grave abuse of discretion on the part of the Secretary of Labor.
• DOLE Jurisdiction: Whether the Secretary of Labor, in the exercise of visitorial and enforcement powers under Article 128 of the Labor Code, has jurisdiction to determine the existence of an employer-employee relationship.
• Exception Clause of Article 128: Whether the present case falls under the "exception clause" of Article 128(b) of the Labor Code, which would divest the DOLE of jurisdiction.
• Legality of Labor Contracting: Whether labor contracting is illegal per se, or whether a distinction must be drawn between legitimate labor contracting and labor-only contracting.
• Grave Abuse of Discretion: Whether Secretary Bello committed grave abuse of discretion in issuing his assailed resolutions, specifically whether the evidence relied upon constituted substantial evidence of labor-only contracting.
• Control Test: Whether the guidelines and "Technical Protocols" relied upon by Sec. Bello constitute control over the means and methods of performing work, or merely control over the desired results.
• Regularization of Installation, Repair, and Maintenance Workers: Whether workers performing installation, repair, and maintenance services of PLDT lines should be regularized as employees of PLDT, and whether PLDT's claim that they are project or seasonal employees has merit.
• Monetary Awards: Whether the computation of monetary awards by the Regional Director and Sec. Bello was proper, or whether the case should be remanded for recomputation.

• Judicial Review in Labor Cases: Yes. The Court's review of the CA's decision in labor cases is confined to determining whether the CA correctly found the presence or absence of grave abuse of discretion on the part of the Secretary of Labor, not whether the Secretary's decision on the merits was correct.
• DOLE Jurisdiction: Yes. The Secretary of Labor, in the exercise of visitorial and enforcement powers under Article 128 of the Labor Code, may determine the existence of an employer-employee relationship, as such determination is a condition sine qua non for the exercise of those powers.
• Exception Clause of Article 128: No. The present case does not fall under the "exception clause" of Article 128, because the evidence considered — service agreements, employment documents, and work area inspections — is verifiable in the normal course of inspection.
• Legality of Labor Contracting: No, labor contracting is not illegal per se. The law allows contracting arrangements for the performance of specific jobs, works, or services, provided they are made to an independent contractor, as current labor rules expressly prohibit only labor-only contracting.
• Grave Abuse of Discretion: Yes. Sec. Bello committed grave abuse of discretion because his findings of labor-only contracting were not supported by substantial evidence, being based largely on anecdotal interview statements and speculative "sampling" applied to thousands of unexamined workers.
• Control Test: No. The guidelines, Technical Protocols, and Implementing Guidelines relied upon by Sec. Bello were results-oriented and did not dictate the means and methods of performing work; they merely served as guidelines toward achieving the desired result without controlling the methodology.
• Regularization of Installation, Repair, and Maintenance Workers: Yes. Workers performing installation, repair, and maintenance services of PLDT lines should be regularized because they perform tasks necessary and desirable and directly related to PLDT's telecommunications business; PLDT's claim of project or seasonal employment was unsupported by any evidence.
• Monetary Awards: No. The monetary awards were computed using an oversimplified "straight computation method" resulting in uniform amounts across workers of different contractors, which was arbitrary; the case was remanded to the Regional Director for proper computation.

• Judicial Review in Labor Cases: The Court explained that in a Rule 45 review of a CA decision rendered on a Rule 65 petition in a labor case, the inquiry is confined to whether the CA correctly determined the presence or absence of grave abuse of discretion in the labor tribunal's decision. The Court is not tasked with evaluating the correctness of the labor tribunal's decision on the merits. This principle was confirmed in Coca-Cola FEMSA Philippines, Inc. vs. Coca-Cola FEMSA Phils., MOP Manufacturing Unit Coordinators and Supervisors Union-All Workers Alliance Trade Unions and Montoya vs. Transmed Manila Corp., where the Court emphasized that the CA undertook a Rule 65 review, not a review on appeal, and the Supreme Court's Rule 45 review must examine the CA decision through that same prism.

• DOLE Jurisdiction: The Court held that the DOLE's power to determine the existence of an employer-employee relationship is indispensable to its visitorial and enforcement mandate under Article 128 of the Labor Code. Relying on People's Broadcasting Service vs. Secretary of the Department of Labor and Employment, the Court confirmed that no limitation was placed upon the DOLE's power to determine employer-employee relationships, and that the DOLE may utilize the same four-element test used by courts (selection and engagement, payment of wages, power of dismissal, and power of control) even in the course of inspection. The existence of an employer-employee relationship is a condition precedent for the exercise of visitorial and enforcement powers; conversely, if no such relationship exists, the Secretary is without jurisdiction.

• Exception Clause of Article 128: The Court held that the "exception clause" of Article 128(b) requires concurrence of three elements: (a) the employer contests the findings of the labor regulations officer and raises issues; (b) resolving such issues requires examination of evidentiary matters; and (c) such matters are not verifiable in the normal course of inspection. Applying this test, the Court found that the evidence considered — service agreements, employment documents, and work area inspections — was verifiable in the normal course of inspection. PLDT's reliance on Meteoro vs. Creative Creatures, Inc. was distinguished: in Meteoro, the resolution of whether workers were independent contractors required examination of evidentiary matters not verifiable during inspection because the facts involved workers allegedly working for different companies outside their service contracts. Here, the "dynamics" of the trilateral relationship could be determined from contracts and related documents expected to be maintained at the workplace. The mere assertion that the case involves a trilateral relationship, without more, does not trigger the exception clause.

• Legality of Labor Contracting: The Court clarified that contracting out services is not illegal per se but is an exercise of management prerogative. Citing BPI Employees Union-Dayap City-FUBU vs. Bank of the Philippines Islands and Aliviado vs. Procter & Gamble Phils., Inc., the Court explained that the law allows contracting arrangements for specific jobs, works, or services, provided the outsourcing is made to an independent contractor. Labor-only contracting exists when the contractor lacks substantial capital or investment and the workers perform activities directly related to the principal's main business, or when the contractor does not exercise the right to control over the performance of the contractual employee's work. The Court emphasized that a finding of labor-only contracting must be anchored on substantial evidence.

• Grave Abuse of Discretion: The Court agreed with the CA that Sec. Bello committed grave abuse of discretion. Drawing parallels with South Cotabato Communications Corp. vs. Sto. Tomas, the Court held that the interviews of workers were mere allegations devoid of probative value. While the interviews may have invited the DOLE's attention to potential violations, relying heavily on them to support conclusions of labor-only contracting ignored basic evidentiary tenets. The Court warned, citing Tongko vs. The Manufacturers Life Insurance Co., Inc., about the dangers of anecdotal evidence, which is malleable and may be tailored to suit any narrative. The application of findings based on statements of fewer than 1,000 employees to 7,344 workers was condemned as speculative and conjectural, as facts and circumstances showing control may not be uniform but must be established with particularity. The DOLE could have done more — it had the power to inspect actual work and the extent of PLDT's involvement — but no such thorough fact-finding was conducted. The Court also invoked the administrative due process requirements from Ang Tibay vs. The Court of Industrial Relations, including the requirement that evidence must be substantial and that decisions must be based on the deciding authority's independent consideration of law and facts.

• Control Test: The Court agreed with the CA that Sec. Bello mistook PLDT's exercise of control over results with control over means and methods. Relying on Orozco vs. Court of Appeals, the Court drew a line between rules that merely serve as guidelines toward achieving the mutually desired result without dictating the means or methods, and those that control or fix the methodology. The Technical Protocols, Implementing Guidelines, General Scope of Work, product training, and evaluation of contractors were all results-oriented. The Technical Protocol, for instance, instructed the technician to install or troubleshoot but left the worker to decide how the installation or troubleshooting were to be carried out. Sustaining MKP's and Sec. Bello's view would preclude any company from recommending guides and procedures consistent with its own systems and infrastructure.

• Regularization of Installation, Repair, and Maintenance Workers: The Court sustained the CA's finding that workers engaged in installation, repair, and maintenance of PLDT lines perform tasks necessary and desirable and directly related to PLDT's telecommunications business. Under Article 295 of the Labor Code, what determines regular employment is the reasonable connection between the work performed and the usual business or trade of the employer. PLDT's claim that these workers might be project or seasonal employees was rejected for lack of evidence: the burden of proof to establish project employment belongs to the employer, and PLDT offered no proof of a specific project or undertaking with determined duration, nor any proof of seasonal work or fixed-term engagement. The Court remanded the case for factual determination of the consequences of regularization, including years of service, actual deployment periods, receipt of salaries, and payment of benefits.

• Monetary Awards: The Court agreed with the CA that the "straight computation method" used by the Regional Director and Sec. Bello was arbitrary. The Court observed that uniform amounts of service incentive leave pay (PHP 5,701.70), unpaid 13th month pay (PHP 24,016.17), and refund of unauthorized deductions (PHP 500.00) were awarded not only to workers of the same contractor but to workers of different contractors. This uniformity was found unrealistic and impossible given that workers were employed by different contractors under separate employment contracts performing different works. The Regional Director failed to explain how the amounts were computed. While PLDT and the contractors remain solidarily liable under Article 109 of the Labor Code, the case was remanded for proper computation after appropriate proceedings.

• Scope of Judicial Review in Labor Cases — In a Rule 45 review of a CA decision rendered on a Rule 65 petition in a labor case, the Supreme Court's inquiry is confined to whether the CA correctly determined the presence or absence of grave abuse of discretion in the labor tribunal's decision, not whether the decision on the merits was correct. The Court reviews the CA decision from the prism of whether it correctly determined grave abuse of discretion, not on the basis of whether the labor tribunal's decision was correct on the merits.

• Visitorial and Enforcement Powers of the Secretary of Labor — Under Article 128 of the Labor Code, the Secretary of Labor or duly authorized representatives have the power to determine the existence of an employer-employee relationship as a condition sine qua non for the exercise of visitorial and enforcement powers. The DOLE may utilize the four-element test (selection and engagement, payment of wages, power of dismissal, power of control) even in the course of inspection. No limitation was placed upon this power, and no procedure requires referral to the NLRC.

• Exception Clause of Article 128(b) — The "exception clause" that divests the DOLE of jurisdiction requires concurrence of three elements: (a) the employer contests the findings of the labor regulations officer and raises issues; (b) resolving such issues requires examination of evidentiary matters; and (c) such matters are not verifiable in the normal course of inspection. The key requirement is that the evidentiary matters be not verifiable in the course of inspection. Where evidence is verifiable in the normal course of inspection, even if presented belatedly, the Regional Director and DOLE Secretary are not divested of jurisdiction.

• Legitimate vs. Labor-Only Contracting — Labor contracting is not illegal per se; it is a management prerogative. Labor-only contracting exists when: (i) the contractor does not have substantial capital or investment and the workers perform activities directly related to the main business of the principal; or (ii) the contractor does not exercise the right to control over the performance of the contractual employee's work. A finding of labor-only contracting must be anchored on substantial evidence.

• Control Test — Results vs. Means and Methods — Not every form of control reserved by the principal establishes an employer-employee relationship. A line must be drawn between rules that merely serve as guidelines toward achieving the mutually desired result without dictating the means or methods, and those that control or fix the methodology and bind the party hired to the use of such means. The first creates no employer-employee relationship; the second does.

• Substantial Evidence in Administrative Labor Proceedings — Substantial evidence is such amount of relevant evidence as a reasonable mind might accept as adequate to justify a conclusion. Mere allegations, unsubstantiated by evidence, are not equivalent to proof. Anecdotal evidence and self-serving statements are devoid of probative value. Conclusions based on "sampling" or "probability" applied to unexamined workers are speculative and do not constitute substantial evidence. Administrative bodies have the active duty to use authorized legal methods of securing evidence and informing themselves of facts material and relevant to the controversy.

• Regular Employment Under Article 295 — An employment is deemed regular where the employee has been engaged to perform activities usually necessary or desirable in the usual business or trade of the employer, except where the employment is fixed for a specific project or undertaking the completion of which was determined at the time of engagement, or where the work is seasonal in nature and the employment is for the duration of the season. The burden of proving project or seasonal employment belongs to the employer.

• "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 under the premises of any evidentiary weight, can hardly be taken as the substantial evidence contemplated for the DOLE'S conclusion." — This passage, quoted from South Cotabato, articulates the evidentiary standard required of the Secretary of Labor's findings and was applied to reject the anecdotal interview evidence relied upon by Sec. Bello.

• "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 attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means." — Quoted from Orozco vs. Court of Appeals, this passage defines the critical distinction between control over results and control over means and methods, the controlling test for determining whether guidelines establish an employer-employee relationship in a contracting arrangement.

• "Conclusions 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 individualized, and therefore, must be established with particularity." — This passage states the ratio decidendi for rejecting the DOLE's application of interview findings from fewer than 1,000 workers to 7,344 employees, establishing that individualized proof is required rather than speculative extrapolation.

• "The DOLE must have the power to determine whether or not an employer-employee relationship exists, and from there to decide whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as amended by RA 7730." — Quoted from People's Broadcasting Service, this passage confirms the DOLE's authority to determine employer-employee relationships in the exercise of visitorial and enforcement powers, a jurisdictional question central to the case.

• South Cotabato Communications Corp. vs. Sto. Tomas, 787 Phil. 494 (2016) — Controlling precedent on the insufficiency of mere allegations as substantial evidence and the impropriety of the "straight computation method" for monetary awards. The Court relied heavily on this case to find that Sec. Bello's anecdotal evidence fell below the quantum of proof required and that the uniform monetary awards were arbitrary.

• People's Broadcasting Service vs. Secretary of the Department of Labor and Employment, 683 Phil. 509 (2012) — Followed. Established that the DOLE has the power to determine the existence of an employer-employee relationship in the exercise of visitorial and enforcement powers, using the same four-element test employed by courts.

• Meteoro vs. Creative Creatures, Inc., 610 Phil. 150 (2009) — Distinguished. Established the elements of the "exception clause" of Article 128(b). The Court distinguished this case on the ground that the evidentiary matters at issue here were verifiable in the normal course of inspection, unlike in Meteoro where resolution required examination of matters not verifiable during inspection.

• Bay Haven, Inc. vs. Abuan, 582 Phil. 451 (2008) — Followed. Held that the DOLE was not divested of jurisdiction because the evidence considered was verifiable in the normal course of inspection, supporting the Court's conclusion that the exception clause did not apply.

• Orozco vs. Court of Appeals, 584 Phil. 35 (2008) — Followed. Established the distinction between control over results and control over means and methods, which the Court applied to reject Sec. Bello's finding that PLDT's Technical Protocols constituted control over the means and methods of work.

• Ang Tibay vs. The Court of Industrial Relations, 69 Phil. 635 (1940) — Followed. Enumerated the fundamental requirements of due process in administrative proceedings, including the requirement that evidence must be substantial and that decisions must be based on the deciding authority's independent consideration of law and facts.

• Tongko vs. The Manufacturers Life Insurance Co., Inc., 636 Phil. 57 (2010) — Followed. Warned about the dangers of utilizing anecdotal evidence to support factual conclusions, noting that such evidence is malleable and may be tailored to suit any narrative.

• Aliviado vs. Procter & Gamble Phils., Inc., 628 Phil. 469 (2010) — Followed. Explained that contracting out of services is a management prerogative and that labor-only contracting exists only when specific elements are present, requiring substantial evidence.

• Montoya vs. Transmed Manila Corp., 613 Phil. 696 (2009) — Followed. Articulated the proper approach for Rule 45 review of CA decisions in labor cases: the Court examines whether the CA correctly determined the presence or absence of grave abuse of discretion, not whether the labor tribunal's decision was correct on the merits.

• Article 128, Labor Code — Visitorial and enforcement powers of the Secretary of Labor. The Court held that the DOLE may determine the existence of employer-employee relationships in the exercise of these powers, and that the "exception clause" in Article 128(b) did not apply because the evidence was verifiable in the normal course of inspection.

• Article 106, Labor Code — Governs legitimate labor contracting and labor-only contracting. The Court cited this provision to distinguish permissible contracting arrangements from prohibited labor-only contracting, and to confirm that the relationship among principal, contractor, and workers is trilateral.

• Article 295 (formerly Article 280), Labor Code — Defines regular and casual employment. The Court applied this provision to hold that workers performing installation, repair, and maintenance of PLDT lines are regular employees because they perform activities necessary and desirable in PLDT's telecommunications business, and that PLDT failed to prove project or seasonal employment.

• Article 109, Labor Code — Solidary liability of employers and contractors. The Court confirmed that PLDT and the erring contractors remain solidarily liable for monetary awards, notwithstanding the remand for proper computation.

• DOLE Department Order No. 18-A, Series of 2011 — Rules implementing Articles 106 to 109 of the Labor Code on contracting and subcontracting arrangements. The SAVE was conducted to assess compliance with this order, and the Court referenced it in analyzing the elements of labor-only contracting.

• DOLE Department Order No. 174, Series of 2017 — Rules implementing Articles 106 to 109 of the Labor Code (2017). Referenced in connection with the CA's ruling that certain worker categories, such as IT-enabled services, are governed by different regulations.

• Section 9, Rule VIII, Book Three, Omnibus Rules Implementing the Labor Code — Defines labor-only contracting. The Regional Director ruled that violations of this section are labor standards violations within the DOLE's visitorial and enforcement powers.

Gesmundo, C.J. (Chairperson), Hernando, Rosario, and Marquez, JJ., concurred.

N/A — No dissenting opinions appear in the provided text.