1 | P a g e
Basic
2 | P a g e
Applicable
3 | P a g e 1.
SINGER SEWING MACHINE vs. NLRC January 24, 1991, 193 SCRA 271
Facts: Private respondent Singer Machine Collectors Union-Baguio (SIMACUB) filed a petition for direct certification as the sole and exclusive bargaining agent of all collectors of the Singer Sewing Machine Company (Singer). Singer opposed the petition claiming that the collectors are not employees but are independent contractors as evidenced by the Collection Agency Agreement (Agreement) between them. The Med-Arbiter granted the petition. Aggrieved, Singer appealed to the Secretary of Labor. The Secretary of Labor affirmed the Med-Arbiter‘s Decision and denied Singer‘s motion for reconsideration. Hence, this petition for certiorari to review the order and resolution of the Secretary of Labor and Employment.
Singer alleges that the collectors are not employees but independent contractors. It supported its allegation by stating the following stipulations in the Agreement: (a) a collector is designated as a ‗collecting agent‘ who is to be considered at all times as an independent contractor and not employee of Singer, (b) collection are to be made monthly or oftener, (c) an agent is paid a commission of 6% of all collections plus a bonus, xxx , (g) his services shall be terminated in case of failure to satisfy the required performance required.
Private respondent, on the other hand, relies on other features of the same Agreement. Among which are that an agent shall utilize only receipt forms authorized and issued by Singer; an agent has to submit and deliver at least once a week or as often as required a report of all collections made using report forms furnished by Singer; and the monthly collection quota, which quota they deemed as a control measure over the means by which an agent is to perform his services. They also rely on Art. 280 of the Labor Code and on Sec. 8 Rule 8, Book No. III of the Omnibus Rules defining job-contracting.
Issue: Whether or not collectors of Singer are employees and therefore are constitutionally granted the right to join or form labor organization for purposes of collective bargaining.
Ruling: No, collectors of Singer are not employees. Hence, they are not entitled to the constitutional right to join or form labor organization for purposes of collective bargaining. The Supreme Court mainly applied the control test where the existence of employer-employee relationship is determined by the following elements: (a) selection and engagement of the employee, (b) payment of wages, (c) power of dismissal and (d) power to control the employee‘s conduct although the latter is the most important element. In that regard, it was ruled that the element on the power to control the employee‘s conduct – the most important element – was absent. The forms, schedule of delivery and quota were controls used only for the result of the job, if they were really controls. There were also other circumstances uncontroverted in the pleadings that made the Supreme Court rule that they are independent contractors like: (1) collectors are not required to observe office hours nor report everyday; (2) they do not have to devote their time exclusively for Singer; (3) the manner and method of effecting collections are left to their discretion xxx (5) they are paid strictly on commission basis. This circumstances negate that Singer had any control as to the manner by which collectors perform collections.
4 | P a g e Art. 280 is not instructive because it only deals with casual and regular employees while the provision in the Omnibus Rules was only relevant in ascertaining whether the employer is solidarily liable with the contractor or subcontractor.
2.
MANILA GOLF & COUNTRY CLUB, INC. vs. IAC September 27, 1994, G.R. No. 64948
Facts: Caddies of the Manila Golf & Country Club, Inc. (the Club) filed a petition with the Social Security
Commission for coverage and availment of benefits under the Social Security System. The caddies allege that they are employees of the Club and thus entitled to SSS coverage, and that the Club has not registered them in the SSS.
The caddies contend that the following connotes the Club‘s control over the means and methods by which a caddy performs caddying services, and thus supports the existence of employer-employee relationship: Issue: Are persons performing caddying services for members of golf clubs and their guests in said clubs' courses or premises the employees of such clubs and therefore within the compulsory coverage of the SSS?
Ruling: They are NOT employees of the Club as the latter has no control over the means and methods by
which they perform caddying services. Thus they are not entitled to compulsory coverage in the SSS.
On the rules and regulations issued by the Club
As long as it is, the list detailing the various matters of conduct, dress, language, etc. covered by the petitioner's regulations, does not so circumscribe the actions or judgment of the caddies concerned as to leave them little or no freedom of choice whatsoever in the manner of carrying out their services.
In the very nature of things, caddies must submit to some supervision of their conduct while enjoying the privilege of pursuing their occupation within the premises and grounds of whatever club they do their work in. They work for the club to which they attach themselves on sufference but, on the other hand, also without having to observe any working hours, free to leave anytime they please, to stay away for as long they like. It is not pretended that if found remiss in the observance of said rules, any discipline may be meted them beyond barring them from the premises which, it may be supposed, the Club may do in any case even absent any breach of the rules, and without violating any right to work on their part. All these considerations clash frontally with the concept of employment.
On the rotation system enforced by the Club
This is less a measure of employer control than an assurance that the work is fairly distributed, a caddy who is absent when his turn number is called simply losing his turn to serve and being assigned instead the last number for the day.
5 | P a g e On the contrary to the stand that this suggests the Club‘s control over the caddies, the ―suggesting‖ shows that the Club has not the measure of control over the incidents of the caddies' work and compensation that an employer would possess. It is the Club‘s guests who decides how much they will pay to the caddies, and even whether they will pay them or not.
Other circumstances showing lack of Club’s control over means and methods of caddying
Club has no means of compelling the presence of a caddy. A caddy is not required to exercise his occupation in the premises of petitioner. He may work with any other golf club or he may seek employment as a caddy or otherwise with any entity or individual without restriction by the Club.
The caddies are not required to render a definite number of hours of work on a single day. Even the group rotation of caddies is not absolute because a player is at liberty to choose a caddy of his preference regardless of the caddy's order in the rotation.
A caddy who has rendered services to a player on one day may still find sufficient time to work elsewhere. Under such circumstances, he may then leave the premises of petitioner and go to such other place of work that he wishes. Or a caddy who is on call for a particular day may deliberately absent himself if he has more profitable caddying, or another, engagement in some other place. These are things beyond petitioner's control and for which it imposes no direct sanctions on the caddies.
3.
ENCYCLOPEDIA BRITANNICA (Philippines), INC. vs. NLRC G.R. No. 87098, November 4, 1996.
Facts: Limjoco was a Sales Division of Encyclopedia Britannica and was in charge of selling the products
through some sales representatives. As compensation, he would receive commissions from the products sold by his agents. He was also allowed to use the petitioner‘s name, goodwill and logo. It was agreed that office expenses would be deducted from Limjoco‘s commissions.
In 1974, Limjoco resigned to pursue his private business and filed a complaint against petitioner for alleged non-payment of separation pay and other benefits and also illegal deduction from sales commissions. Petitioner alleged that Limjoco was not an employee of the company but an independent dealer authorized to promote and sell its products and in return, received commissions therein. Petitioner also claims that it had no control and supervision over the complainant as to the manners and means he conducted his business operations. Limjoco maintained otherwise. He alleged he was hired by the petitioner and was assigned in the sales department.
The Labor Arbiter ruled that Limjoco was an employee of the company. NLRC also affirmed the decision and opined that there was no evidence supporting allegation that Limjoco was an independent contractor or dealer.
Issue: Whether or not there was an employee-employer relationship between the parties.
Ruling: There was no employee-employer relationship. In determining the relationship, the following
elements must be present: selection and engagement of the employee, payment of wages, power of dismissal and power to control the employee‘s conduct. The power of control is commonly regarded as the
6 | P a g e most crucial and determinative indicator of the presence or absence of an employee-employer relationship. Under the control test, an employee-employer relationship exists where the person for whom the services are performed reserves a right to control not only the end to be achieved, but also the manner and means to be employed in reaching that end.
The issuance of guidelines by the petitioner was merely guidelines on company policies which sales managers follow and impose on their respective agents. Limjoco was not an employee of the company since he had the free rein in the means and methods for conducting the marketing operations. He was merely an agent or an independent dealer of the petitioner. He was free to conduct his work and he was free to engage in other means of livelihood.
In ascertaining the employee-employer relationship, the factual circumstances must be considered. The element of control is absent where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated in according to the result of his efforts and not the amount thereof. Hence, there was no employee-employer relationship.
4.
CARUNGCONG vs. SUNLIFE
283 SCRA 319
Facts: Susan Carungcong began her career in the insurance industry in 1974 as an agent of Sun Life
Assurance Company of Canada (hereinafter Sun Life).
Now, it appears that sometime in November, 1989. Ms. Eleizer Sibayan, Manager of Sun Life's Internal Audit Department, commenced an inquiry into the special fund availments of Carungcong and other New Business Managers; this, allegedly because the Company's Vice President for Far East Asia, respondent Lance Kemp, had been receiving reports of anomalies in relation thereto from unit managers and agents.These special fund availments are governed by the following portion of the Agreement of January 1, 1986 under the sub-head, "New Business Manager's Expenses," viz:
Sun Life agrees to reimburse the New Business Manager for actual reasonable expenses properly incurred in performing his duties as New Business Manager provided such expenses are within the guidelines issued by Sun Life from time to time and are incurred for the purposes of gaining or producing income and that they are accounted for in the manner established by Sun Life and made known to the New Business Manager.
Such reimbursement by Sun Life of said expenses will be made only upon the submission by the New Business Manager of a statement in form and content acceptable to Sun Life detailing said expenses with attached receipts.
It also appears that Ms. Sibayan drew up a report (Summary of Availments) after having examined and analyzed the pertinent records, and interviewed the unit managers and agents mentioned in the receipts presented by Carungcong to support her claims for reimbursement of expenses for 1987, 1988 and 1989. Thereafter, on January 4, 1990, and again on January 10, 1990, Carungcong was confronted with and asked to explain the discrepancies set out in Sibayan's report. On January 11, 1990, she was given a letter signed by "Merton V. Deveza, CLU, Director, Marketing," which advised of the termination of her relationship with Sun Life, viz.:
7 | P a g e In our meeting with you yesterday we presented the charge of fraudulent reimbursement of the Branch Special Fund against you. Accordingly, you admitted having committed said act.
For dishonesty, disloyalty and breach of your Agent's Agreement and New Business Manager's Agreement with Sun Life of Canada dated June 10, 1974 and January 1, 1986, respectively, the Management has decided to terminate you as Agent and New Business Manager of Sun Life of Canada effective immediately.
Carungcong instituted proceedings for vindication in the Arbitration Branch of the National Labor Relations Commission on January 16, 1990. She succeeded in obtaining a favorable judgment. Labor Arbiter Ernesto S. Dinopol found that there existed an employer-employee relationship between her and Sun Life; ruled that she had been illegally dismissed, thus entitled to reinstatement without loss of seniority rights and other benefits; and ordered Sun Life, and its co-respondents Lance Kemp and Merton Deveza, jointly and severally to pay her P12,475,973.25 as "back commissions," P8,000,000.00 as moral damages, P2,000,000.00 as exemplary damages, and P2,047,597.32 as attorney's fees — a total of P22,523,570.57. On appeal, the National Labor Relations Commission reversed the Arbiter's judgment. It affirmed that no employment relationship existed between Carungcong and Sun Life. Nevertheless, it awarded to her P2,696,252.00 as "lost average commission" on the ground that during the appeal, she had neither been restored to work nor reinstated in payroll. However, the NLRC later eliminated this monetary award in a second decision promulgated on October 28, 1994 on the basis of a motion for reconsideration of Sun Life and its co-respondents. The NLRC declared itself without competence to make such an award absent an employment relationship between the parties.
Opting not to file a motion for reconsideration of the Commission's judgment, Carungcong forthwith initiated the special civil action of certiorari at bar (after obtaining an extension of time to do so), in which she seeks invalidation of the Commission's decision of October 28, 1994, and consequent restoration of the Labor Arbiter's awards.
Issue: Whether or not Carungcong should be considered as an employee of Sun Life?
Carungcong arguments:
Although she was not, as "new business manager," required either to account for her time or perform her duties in a fixed manner, she was nonetheless an employee subject to the control and supervision of Sun Life like any other managerial employee. She brands as ludicrous the accusation leveled against her, of having defrauded Sun Life of the sum of P6,000.00, since her annual income at that time was in excess of P3,000,000.00. She contends that the accusation was a mere fabrication of her Unit Managers, Jorge Chua and Corazon de Mesa, who were promoted to Branch Managers after termination of her employment, and that she actually had no hand in the preparation of the vouchers involved in the imputed anomaly, this task being entrusted to the branch office secretary, Lilet Ginete, selected and hired by Sun Life.
She also contends that in dismissing her, Sun Life failed to observe procedural due process. She was not furnished with copies of the audit report of her supposedly fraudulent use of her special fund availments, and was never afforded an opportunity to be heard by Sun Life officials prior to termination of her employment. She assails the decisions of the NLRC as tainted with bias and grave abuse of discretion, particularly in ignoring the "deluge of evidence" adduced before the labor arbiter.
8 | P a g e That the challenged decisions were in fact precisely based on Carungcong's so-called "deluge of
evidence," and thus cannot in any sense be deemed "capricious, whimsical, arbitrary or despotic." They invoke the familiar rule that the findings of fact of administrative agencies are accorded respect, if not indeed finality, by this Court. The assert that jurisprudence and Carungcong's admissions before the Labor Arbiter negate the existence of an employment relationship; that in truth Carungcong was duly informed of the charge of fraud and dishonesty, a charge supported by adequate proof; and that therefore the cancellation of the business relationship between them and Carungcong was valid and legal, effected with due process and for just cause.
FINDINGS OF THE SUPREME COURT:
The record reveals the fraudulent character of these claims, that is to say, the unclean hands with which Carungcong has come to court. Her claims are categorically belied by no less than the eight (8) insurance managers and agents specifically named by her in her supporting documents, about whose impartially or credibility the Court has been cited to no persuasive cause for doubt or misgiving. Jorge Chuaand Corazon de Mesadeposed that as regards the special fund raised by Carungcong for prizes, awards, and outings, they had in fact contributed thereto but the latter had made it appear that she had raised and disbursed the entire fund by herself, and although she later obtained reimbursement therefor in the sum of more than P30,000.00, she never returned to them what they had contributed.
The record thus appears to establish adequate cause for Sun Life to terminate its relationship with Susan Carungcong. Her attention was drawn to the perfidious nature of her claims for reimbursement; she was accorded an opportunity to explain the same; she refused to do so.
Prescinding therefrom, the contracts she had willingly and knowingly signed with Sun Life repeatedly and clearly provided that said agreements were terminable by either party by written notice with or without cause. Her "Career Agent's (or Unit Manager's) Agreement" inter alia provided for termination of the agreement by death, or by written notice "with or without cause," Her "MANAGER'S
Supplementary Agreement." effective July 1, 1979, contained provisions regarding termination of the
agreement inter alia by written notice "without cause." A subsequent agreement by which she was named Manager for New Business, dated January 1, 1986, similarly provided for termination of relation, by among others, notice in writing with or without cause.
Noteworthy is that this last agreement of January 1, 1986 emphasized, like the "Career Agent's (or
Unit Manager's) Agreement" first signed by her, that in the performance of her duties defined herein. Carungcong would be considered an independent contractor and not . . an employee of Sun Life," and that "(u)nder no circumstance shall the New Business Manager and/or his employees be considered employees of Sun Life."
Ruling: It is germane to advert to the fact, which should by now be apparent, that Carungcong was not your ordinary run-of-the-mill employee, nor even your average managerial employee or supervisor. Her stated annual income from her occupation is impressive by any standards: "in excess of P3,000,000.00," exclusive of overriding commissions. Certainly, she may not be likened to an ordinary person applying for employment, or an ordinary employee striving to keep his job, under the moral dominance of the hiring entity or individual. By no means may Carungcong be considered as dealing, or having dealt, with Sun Life from an inferior position, as a disadvantaged, morally-dominated person. She must be deemed as having transacted with Sun Life's executives on more or less equal terms.
These considerations impel concurrence with the conclusions of the challenged decision and resolution of respondent Commission which considered Carungcong as an independent contractor, not an
9 | P a g e employee of Sun Life. It is significant that this issue of the precise status of Carungcong as an independent contractor, evidently deemed decisive by respondent Commission, was discussed by it at some length not once, but twice, first in its Decision of July 29, 1994, and then in its second Decision of October 28, 1994 resolving the separate motions for reconsideration of the parties.
In the Decision of July 29, 1994, the Commission said:
A thorough review of the facts and evidence adduced on record compels us to rule in the negative (on "the question of whether or not complainant Carungcong is a regular employee of respondents").
Moreover, it is true that complainant Carungcong's duties and functions derived from her then existing agreements/contracts were made subject to rules and regulations issued by respondent company, and for that matter, have likewise been made subject of certain limitations imposed by said respondent company. Nonetheless, these are not sufficient to accord the effect of establishing employer-employee relationship absent in this case. This is so because the insurance business is not just any other ordinary business. It is one that is imbued with public interest hence, it must be governed by the rules and regulations of the state. The controls adverted to by complainant are latent in the kind of business she is into and are mainly aimed at promoting the results the parties so desire and do not necessarily create any employer-employee relationships, where the employers' controls have to interfere in the methods and means by which the employee would like to employ to arrive at the desired results.
For that matter, complainant Carungcong was never paid a fixed wage or salary but was mainly paid by commissions, depending on the level and volume of her performance/production, the number of trained agents, when taken in and assigned to her, being responsible for her added income as she gets a certain percentage from the said agents' production as part of her commission.
In the second judgment of October 28, 1994, respondent Commission stressed the following points: Complainant's "theory of the case" appears to be limited to pointing out that respondent company issued rules and regulations to which she should conform. However, no showing has been made that such rules and regulations effectively and actually controlled or restricted her choice of methods in performing her duties as New Business Manager. Without such proof, there can be no plausible reason to believe that her contractual declaration that she was an independent contractor has been qualified.
Of course, Carungcong disagrees with these dispositions. Quite possibly, others may share her opinion, and insist that there was error in either the appreciation of the evidence or the choice of law or jurisprudence applied by the Commission. But such errors of judgment as might be ascribed to the Commission's reasoned conclusions may not be accorded so egregious a cast as to be fairly considered to constitute grave abuse of discretion meriting correction by the extraordinary writ of certiorari.
It should be apparent that no whimsicality, capriciousness, or want of logic or foundation may rationally be imputed to NLRC in its marshaling and analysis of the evidence, its identification of the issues, in its assessment of the arguments thereon, and its conclusions on the basis thereof. It is simply not possible in the premises to opine that grave abuse of discretion was attendant on its challenged decisions.
10 | P a g e
5.
ROGELIO E. RAMOS and ERLINDA RAMOS, in their own behalf and as natural guardians of the minors, ROMMEL RAMOS, ROY RODERICK RAMOS, and RON RAYMOND RAMOS vs.
COURT OF APPEALS, DE LOS SANTOS MEDICAL CENTER, DR. ORLINO HOSAKA and DR. PERFECTA GUTIERREZ
Facts: Erlinda Ramos was seeking professional medical help for the removal of stones in her gall
bladder.Dr. Hosaka advised her to undergo surgery.The operation was scheduled for June 17, 1985 at 9:00 in the morning at private respondent De Los Santos Medical Center (DLSMC). Since neither petitioner Erlinda nor her husband, petitioner Rogelio, knew of any anesthesiologist, Dr. Hosaka recommended to them the services of Dr. Gutierrez.The operation was scheduled for June 17, 1985 at 9:00 in the morning at private respondent De Los Santos Medical Center (DLSMC).Dr. Hosaka finally arrived at the hospital at around 12:10 in the afternoon, or more than three (3) hours after the scheduled operation.Cruz, who was then still inside the operating room, heard about Dr. Hosaka‘s arrival. While she held the hand of Erlinda, Cruz saw Dr. Gutierrez trying to intubate the patient. Cruz heard Dr. Gutierrez utter: "ang hirap ma-intubate
nito, mali yata ang pagkakapasok. O lumalaki ang tiyan." Cruz noticed a bluish discoloration of Erlinda‘s
nailbeds on her left hand. She (Cruz) then heard Dr. Hosaka instruct someone to call Dr. Calderon, another anesthesiologist. When he arrived, Dr. Calderon attempted to intubate the patient. The nailbeds of the patient remained bluish, thus, she was placed in a trendelenburg position – a position where the head of the patient is placed in a position lower than her feet. At this point, Cruz went out of the operating room to express her concern to petitioner Rogelio that Erlinda‘s operation was not going well.Cruz quickly rushed back to the operating room and saw that the patient was still in trendelenburg position. At almost 3:00 in the afternoon, she saw Erlinda being wheeled to the Intensive Care Unit (ICU). The doctors explained to petitioner Rogelio that his wife had bronchospasm. Erlinda stayed in the ICU for a month. She was released from the hospital only four months later or on November 15, 1985. Since the ill-fated operation, Erlinda remained in comatose condition until she died on August 3, 1999.
Issues:
There were three issues, but since this is a digest, I think it is more important to dwell on what is related to our topic in class
1. WHETHER OR NOT DR. ORLINO HOSAKA (SURGEON) IS LIABLE FOR NEGLIGENCE; 2. WHETHER OR NOT DR. PERFECTA GUTIERREZ (ANESTHESIOLOGIST) IS LIABLE FOR NEGLIGENCE; AND
3. WHETHER OR NOT THE HOSPITAL IS LIABLE FOR ANY ACT OF NEGLIGENCE COMMITTED BY THEIR VISITING CONSULTANT SURGEON AND ANESTHESIOLOGIST.
DSLMC opposes their liability by saying that there was no employer-employee relationship that existed between them and the doctors (Drs. Hosaka and Guttierez); absent such relationship they cannot be held liable for the negligence of the doctors.
Remember the four fold test:
Selection and engagement of services; payment of wages
the power to hire and fire and
the power to control not only the end to be achieved, but the means to be used in reaching such an end A. As to selection and the power to hire and fire
The hospital merely accredits the doctors and gives them the privilege to maintain a clinic and admit patients within the hospital. The admission of a physician to membership in DLSMC‘s medical staff as active or visiting consultant is first decided upon by the Credentials Committee thereof, which is composed of the
11 | P a g e heads of the various specialty departments such as the Department of Obstetrics and Gynecology, Pediatrics, Surgery with the department head of the particular specialty applied for as chairman.
The Credentials Committee then recommends to DLSMC's Medical Director or Hospital Administrator the acceptance or rejection of the applicant physician, and said director or administrator validates the committee's recommendation.
As to disciplinary action, the hospital director is only an ex-officio chairman of the disciplining committee, the matter is initiated by the department to whom the doctor belongs and is referred to the Ethics Committee composed of the department‘s specialty heads
B.As to payment of wages
It is not the hospital, but the patient, who pays the doctor for his/her consultation fees
The contract entered into by the patient with the doctor (A) is different from the one the patient enters with the hospital (B).
A – is a contract for the service of the doctor, to render to the patient medical services
B – is contract by the hospital to provide facilities and make its staff available to the patient (staff means the lab technicians, nurses, etc. Apparently does not include the doctors).
It was also not shown that the hospital failed to provide such facilities to Ramos As to power of control
Lastly, DLSMC argues that when a doctor refers a patient for admission in a hospital, it is the doctor who prescribes the treatment to be given to said patient. The hospital‘s obligation is limited to providing the patient with the preferred room accommodation, the nutritional diet and medications prescribed by the doctor, the equipment and facilities necessary for the treatment of the patient, as well as the services of the hospital staff who perform the ministerial tasks of ensuring that the doctor‘s orders are carried out strictly.
RULING:
The Court found that the hospital was not to be held solidarily liable with the doctors for their negligence. They were absolved from ANY liability.
Other matters:
The damages awarded to Ramos were modified, considering that she had already died, negating the need for further medical care and expenses.
6.
JOSE Y. SONZ vs. ABS-CBN BROADCASTING CORPORATION
Facts:ABS-CBN Broadcasting Corporation (―ABS-CBN‖) signed an Agreement (―Agreement‖) with the Mel and Jay Management and Development Corporation (―MJMDC‖). ABS-CBN was represented by its corporate officers while MJMDC was represented by SONZA
- As ―AGENT,‖ MJMDC agreed to provide SONZA‘s services exclusively to ABS-CBN as talent for radio and television. The services are enumerated as follows:
a. Co-host for Mel & Jay radio program, 8:00 to 10:00 a.m., Mondays to Fridays; b. Co-host for Mel & Jay television program, 5:30 to 7:00 p.m., Sundays
- SONZA filed a complaint against ABS-CBN before the Department of Labor and Employment, National Capital Region. He complained that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock
Option Plan (―ESOP‖).
- ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties
12 | P a g e - The Labor Arbiter rendered his Decision dated 8 July 1997 dismissing the complaint for lack of jurisdiction. Stating:
a ―talent‖ as above-described cannot be considered as an employee by reason of the peculiar circumstances surrounding the engagement of his services. Complainant was engaged by respondent by reason of his peculiar skills and talent as a TV host and a radio broadcaster. Unlike an ordinary employee, he was free to perform the services he undertook to render in accordance with his own style.
Agreement are certainly very much higher than those generally given to employees. For one, complainant Sonza‘s monthly talent fees amount to a staggering P317,000. Moreover, his engagement as a talent was covered by a specific contract. Likewise, he was not bound to render eight (8) hours of work per day as he worked only for such number of hours as may be necessary.
The fact that per the May 1994 Agreement complainant was accorded some benefits normally given to an employee is inconsequential. Whatever benefits complainant enjoyed arose from specific agreement by the parties and not by reason of employer-employee relationship.
―All these benefits are merely talent fees and other contractual benefits and should not be deemed as ‗salaries, wages and/or other remuneration‘ accorded to an employee, notwithstanding the nomenclature appended to these benefits.
The fact that complainant was made subject to respondent‘s Rules and Regulations, likewise, does not detract from the absence of employer-employee relationship
―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. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means to achieve
- SONZA appealed to the NLRC but it affirmed the labor Arbiter‘s ruling.
- SONZA filed a special civil action for certiorari before the Court of Appeals. Court of Appeals rendered a Decision dismissing the case
- Hence, this petition
SONZA contends that the Labor Arbiter has jurisdiction over the case because he was an employee of ABS-CBN. On the other hand, ABS-CBN insists that the Labor Arbiter has no jurisdiction because SONZA was an independent contractor.
SONZA maintains that all essential elements of an employer-employee relationship are present in this case. Case law has consistently held that the elements of an employer-employee relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer‘s power to control the employee on the means and methods by which the work is accomplished.[18] The last element, the so-called ―control test‖, is the most important element.
Ruling:
A. Selection and Engagement of Employee
- ABS-CBN engaged SONZA‘s services to co-host its television and radio programs because of SONZA‘s peculiar skills, talent and celebrity status
- Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The specific selection and hiring of SONZA,because of his
unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative,
but not conclusive, of an independent contractual relationship. If SONZA did not possess such unique skills, talent and celebrity status, ABS-CBN would not have entered into the Agreement with SONZA but would have hired him through its personnel department just like any other employee
B. Payment of Wages
- ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to MJMDC
- All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. If SONZA were ABS-CBN‘s employee, there would be no need for the parties to stipulate on benefits such as
13 | P a g e ―SSS, Medicare, x x x and 13th month pay‖ which the law automatically incorporates into every
employer-employee contract.
- SONZA‘s talent fees, amounting to P317,000 monthly in the second and third year, are so huge and out of the ordinary that they indicate more an independent contractual relationship rather than an employer-employee relationship. ABS-CBN agreed to pay SONZA such huge talent fees precisely because of SONZA‘s unique skills, talent and celebrity status not possessed by ordinary employees. Obviously, SONZA acting alone possessed enough bargaining power to demand and receive such huge talent fees for his services. The power to bargain talent fees way above the salary scales of ordinary employees is a circumstance indicative, but not conclusive, of an independent contractual relationship.
- The payment of talent fees directly to SONZA and not to MJMDC does not negate the status of SONZA as
an independent contractor. The parties expressly agreed on such mode of payment
C. Power of Dismissal
- For violation of any provision of the Agreement, either party may terminate their relationship. SONZA
failed to show that ABS-CBN could terminate his services on grounds other than breach of contract, such as retrenchment to prevent losses as provided under labor laws
- ABS-CBN agreed to pay SONZA‘s talent fees as long as ―AGENT and Jay Sonza shall faithfully and completely perform each condition of this Agreement.‖Even if it suffered severe business losses, ABS-CBN could not retrench SONZA because ABS-CBN remained obligated to pay SONZA‘s talent fees during the life of the Agreement. This circumstance indicates an independent contractual relationship between SONZA and ABS-CBN.
- The manner by which SONZA terminated his relationship with ABS-CBN is immaterial. Whether SONZA rescinded the Agreement or resigned from work does not determine his status as employee or independent contractor.
D. Power of Control
Since there is no local precedent on whether a radio and television program host is an employee or an independent contractor, we refer to foreign case law in analyzing the present case.
In Alberty-Vélez v. Corporación De Puerto Rico Para La Difusión Pública (―WIPR‖): It ruled that a television program host is an independent contractor.
― First, a television actress is a skilled position requiring talent and training not available on-the-job. Alberty possesses a master‘s degree in public communications and journalism; is trained in dance, singing, and modeling; taught with the drama department at the University of Puerto Rico; and acted in several theater and television productions .
Second, Alberty provided the ―tools and instrumentalities‖ necessary for her to perform. Specifically, she provided, or obtained sponsors to provide, the costumes, jewelry, and other image-related supplies and services necessary for her appearance.‖
- In applying the control test to the present case, we find that SONZA is not an employee but an independent contractor. The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well – the less control the hirer exercises, the more likely the worker is considered an independent contractor
First,
ABS-CBN engaged SONZA‘s services specifically to co-host the ―Mel & Jay‖ programs. ABS-CBN did not assign any other work to SONZA. To perform his work, SONZA only needed his skills and talent. How SONZA delivered his lines, appeared on television, and sounded on radio were outside ABS-CBN‘s control. SONZA did not have to render eight hours of work per day. The Agreement required SONZA to attend only.
The rehearsals and tapings of the shows, as well as pre- and post-production staff meetings. ABS-CBN could not dictate the contents of SONZA‘s script. However, the Agreement prohibited SONZA from criticizing in his shows ABS-CBN or its interests.The clear implication is that SONZA had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. ABS-CBN‘s sole
14 | P a g e concern was the quality of the shows and their standing in the ratings. Clearly, ABS-CBN did not exercise control over the means and methods of performance of SONZA‘s work.
Although ABS-CBN did have the option not to broadcast SONZA‘s show, ABS-CBN was still obligated to pay SONZA‘s talent fees. Thus, even if ABS-CBN was completely dissatisfied with the means and methods of SONZA‘s performance of his work, or even with the quality or product of his work, ABS-CBN could not dismiss or even discipline SONZA. All that ABS-CBN could do is not to broadcast SONZA‘s show but ABS-CBN must still pay his talent fees in full.
ABS-CBN could not terminate or discipline SONZA even if the means and methods of performance of his work - how he delivered his lines and appeared on television - did not meet ABS-CBN‘s approval. This proves that ABS-CBN‘s control was limited only to the result of SONZA‘s work
In either case, ABS-CBN must still pay SONZA‘s talent fees in full until the expiry of the Agreement. No doubt, ABS-CBN supplied the equipment, crew and airtime needed to broadcast the ―Mel & Jay‖ programs. However, the equipment, crew and airtime are not the ―tools and instrumentalities‖ SONZA needed to perform his job. What SONZA principally needed were his talent or skills and the costumes necessary for his appearance.
A radio broadcast specialist who works under minimal supervision is an independent contractor
Second,
The Agreement stipulates that SONZA shall abide with the rules and standards of performance ―covering talents‖ of ABS-CBN. The Agreement does not require SONZA to comply with the rules and standards of performance prescribed for employees of ABS-CBN. The code of conduct imposed on SONZA under the Agreement refers to the ―Television and Radio Code of the Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which has been adopted by the COMPANY (ABS-CBN) as its Code of Ethics.‖
This code applies to broadcasters, not to employees of radio and television stations. Clearly, the rules and standards of performance referred to in the Agreement are those applicable to talents and not to employees of ABS-CBN .
In this case, SONZA failed to show that these rules controlled his performance. We find that these general rules are merely guidelines towards the achievement of the mutually desired result.
Lastly,
Being an exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control.
The hiring of exclusive talents is not designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station.
- In a labor-only contract, there are three parties involved: (1) the ―labor-only‖ contractor; (2) the employee who is ostensibly under the employ of the ―labor-only‖ contractor; and (3) the principal who is deemed the real employer
- The ―labor-only‖ contractor is the agent of the principal. The law makes the principal responsible to the employees of the ―labor-only contractor‖ as if the principal itself directly hired or employed the employees. These circumstances are not present in this case.
- In this case, only two parties involved under the Agreement, namely, SONZA and ABS-CBN. MJMDC merely acted as SONZA‘s agent. The Agreement expressly states that MJMDC acted as the ―AGENT‖ of SONZA. The records do not show that MJMDC acted as ABS-CBN‘s agent. MJMDC, which stands for Mel and Jay Management and Development Corporation, is a corporation organized and owned by SONZA and TIANGCO.
- It is absurd to hold that MJMDC, which is owned, controlled, headed and managed by SONZA, acted as agent of ABS-CBN in entering into the Agreement with SONZA, who himself is represented by MJMDC - MJMDC is a management company devoted exclusively to managing the careers of SONZA, and not engaged in any other business, not even job contracting.
15 | P a g e
7.
ANGELITO LAZARO, PROPRIETOR OF ROYAL STAR MARKETING VS. SOCIAL SECURITY COMMISSION ROSALINA LAUDATO AND CA.
GR No. 138254, 30 July 2004
Principles of law: for the purposes of coverage under the Social Security Act, the determination of employer-employee relationship warrants the application of the ―control test,‖ that is, whether the employer controls or has reserved the right to control the employee, not only as to the result of the work done, but also as to the means and methods by which the same is accomplished
Facts: Rosalina Laudato filed a case against 3 of her employers including Royal Star Marketing for
remittance of her unpaid monthly SSC contributions;
Despite her being a supervisor of sales agents for Royal Star Marketing, said company failed to report her to SSC for compulsory coverage;
As a defense, Royal Star claims that Laudato was merely an agent paid on a commission basis and that she was not subject to definite hours and conditions of work, hence, she is not even an employee of Royal Star; Applying the ―control test,‖ SSC ruled that Laudato was an employee of Royal Star, on the other hand, Royal Star claims that they had no control over her activities and hence, she was not employee;
Issue: Is Laudato an employee considering that she does not have fixed hours of work?
What is the proper determination of employee-employer relationship for purposes of coverage under Social Security Act?
Ruling:Yes. Citing Cosmopolitan Funeral Homes v. Maalat, this Court declared that there was an
employer-employee relationship, noting that ―[the] supervisor, although compensated on commission basis, [is] exempt from the observance of normal hours of work for his compensation is measured by the number of sales he makes.
The proper determination is the ―control test.‖ That is, whether the employer controls or has reserved the right to control the employee, not only as to the result of the work done, but also as to the means and methods by which the same is accomplished.
8.
PHIL. GLOBAL COMM. VS DE VERA G.R. No. 157214; June 7, 2005
Principle of Law: Any agreement may provide that one party shall render services for and in behalf of another, no matter how necessary for the latter‘s business, even without being hired as an employee. There was no employee-employer relationship in a case where element of control of the employer over the employee is absent.
Facts: Philippine Global Communications inc. is a corporation engaged in the business of communication services and allied activities while Ricardo de Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees. The controversy rose when petitioner terminated his engagement.
In 1981, Dr. de Vera offered his services to petitioner. The parties agreed and formalized the respondent‘s proposal in a document denominated as retainership contract which will be for a period of one year, subject to renewal and clearly stated that respondent will cover the retainership the company previously with Dr. Eulau. The agreement went until 1994, in the years 1995-1996, it was renewed verbally. The turning point of the parties‘ relationship was when petitioner, thru a letter bearing the subject
16 | P a g e TERMINATION – RETAINERSHIP CONTRACT, informed Dr. de Vera of its decision to discontinue the latter‘s retainer contract because the management has decided that it would be more practical to provide medical services to its employees through accredited hospitals near the company premises.
On January 1997, de Vera filled a complaint for illegal dismissal before the NLRC, alleging that he had been actually employed by the company as its company physician since 1991. The commission rendered decision in favor of Philcom and dismissed the complaint saying that de Vera was an independent contractor. On appeal to NLRC, it reversed the decision of the Labor Arbiter stating that de Vera is a regular employee and directed the company to reinstate him. Philcom appealed to the CA where it rendered decision deleting the award but reinstating de Vera. Philcom filed this petition involving the difference of a job contracting agreements from employee-employer relationship.
Issue: Whether or not there exists an employee-employer relationship between the parties.
Ruling:SC ruled that there was no such relationship existing between Dr. de Vera and Phil. Com. Upon reading the contract dated September 6, 1982, signed by the complainant himself , it clearly states that is a retainership contract. The retainer fee is indicated thereon and the duration of the contract for one year is also clearly indicated in paragraph 5 of the Retainership Contract.
The complainant cannot claim that he was unaware that the ‗contract‘ was good only for one year, as he signed the same without any objections. The complainant also accepted its renewal every year thereafter until 1994. As a literate person and educated person, the complainant cannot claim that he does not know what contract he signed and that it was renewed on a year to year basis.
The labor arbiter added the indicia, not disputed by respondent, that from the time he started to work with petitioner, he never was included in its payroll; was never deducted any contribution for remittance to the Social Security System (SSS); and was in fact subjected by petitioner to the ten (10%) percent withholding tax for his professional fee, in accordance with the National Internal Revenue Code, matters which are simply inconsistent with an employer-employee relationship.
The elements of an employer-employee relationship are wanting in this case. The record are replete with evidence showing that respondent had to bill petitioner for his monthly professional fees. It simply runs against the grain of common experience to imagine that an ordinary employee has yet to bill his employer to receive his salary.
The power to terminate the parties‘ relationship was mutually vested on both. Either may terminate the arrangement at will, with or without cause.
Remarkably absent is the element of control whereby the employer has reserved the right to control the employee not only as to the result of the work done but also as to the means and methods by which the same is to be accomplished.
Petitioner had no control over the means and methods by which respondent went about performing his work at the company premises. In fine, the parties themselves practically agreed on every terms and conditions of the engagement, which thereby negates the element of control in their relationship.
Petition is GRANTED.
9.
ABS-CBN vs Nazareno G.R. 164156, 2006
17 | P a g e
Facts:ABS-CBN employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production
assistants (PAs) on different dates. They were assigned at the news and public affairs, for various radio programs in the Cebu Broadcasting Station, with a monthly compensation of P4,000. They were issued ABS-CBN employees‘ identification cards and were required to work for a minimum of eight hours a day, including Sundays and holidays. They were made to: a) Prepare, arrange airing of commercial broadcasting based on the daily operations log and digicart of respondent ABS-CBN; b) Coordinate, arrange personalities for air interviews; c) Coordinate, prepare schedule of reporters for scheduled news reporting and lead-in or incoming reports; d) Facilitate, prepare and arrange airtime schedule for public service announcement and complaints; e) Assist, anchor program interview, etc; and f) Record, log clerical reports, man based control radio.
Petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA) to be effective during the period from Dec 11, 1996 to Dec 11, 1999. However, since petitioner refused to recognize PAs as part of the bargaining unit, respondents were not included to the CBA.
Due to a memorandum assigning PA‘s to non-drama programs, and that the DYAB studio operations would be handled by the studio technician. There was a revision of the schedule and assignments and that respondent Gerzon was assigned as the full-time PA of the TV News Department reporting directly to Leo Lastimosa.
On Oct 12, 2000, respondents filed a Complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before the NLRC.
Issue: WON the respondents are regular employees?
Held: Respondents are considered regular employees of ABS-CBN and are entitled to the benefits granted
to all regular employees.
Where a person has rendered at least one year of service, regardless of the nature of the activity performed, or where the work is continuous or intermittent, the employment is considered regular as long as the activity exists. The reason being that a customary appointment is not indispensable before one may be formally declared as having attained regular status. Article 280 of the Labor Code provides:
REGULAR AND CASUAL EMPLOYMENT.—The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.
Any employee who has rendered at least one year of service, whether continuous or intermittent, is deemed regular with respect to the activity performed and while such activity actually exists. The fact that
respondents received pre-agreed ―talent fees‖ instead of salaries, that they did not observe the required office hours, and that they were permitted to join other productions during their free time are not conclusive of the nature of their employment. They are regular employees who perform several different duties under the control and direction of ABS-CBN executives and supervisors.
18 | P a g e There are two kinds of regular employees under the law: (1) those engaged to perform activities which are necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which they are employed.
What determines whether a certain employment is regular or otherwise is the character of the activities
performed in relation to the particular trade or business taking into account all the circumstances, and in some cases the length of time of its performance and its continued existence.
The employer-employee relationship between petitioner and respondents has been proven by the ff:
First. In the selection and engagement of respondents, no peculiar or unique skill, talent or
celebrity status was required from them because they were merely hired through petitioner‘s personnel department just like any ordinary employee.
Second. The so-called ―talent fees‖ of respondents correspond to wages given as a result of an
employer-employee relationship. Respondents did not have the power to bargain for huge talent fees, a circumstance negating independent contractual relationship.
Third. Petitioner could always discharge respondents should it find their work unsatisfactory, and
respondents are highly dependent on the petitioner for continued work.
Fourth. The degree of control and supervision exercised by petitioner over respondents through its
supervisors negates the allegation that respondents are independent contractors.
The presumption is that when the work done is an integral part of the regular business of the employer and when the worker, relative to the employer, does not furnish an independent business or professional service, such work is a regular employment of such employee and not an independent contractor.
10.
ANGELINA FRANCISCO vs.
NATIONAL LABOR RELATIONS COMMISSION, KASEI CORPORATION, SEIICHIRO TAKAHASHI, TIMOTEO ACEDO, DELFIN LIZA, IRENE BALLESTEROS, TRINIDAD LIZA and RAMON ESCUETA G.R. No. 170087 August 31, 2006
Facts: In 1995, petitioner was hired by Kasei Corporation as Accountant and Corporate Secretary, and as
Liaison Officer to the City of Makati. In 1996, petitioner was designated as Acting Manager while her old position as accountant was accorded to Gerry Nino, and she did so for five years.
In January 2001, petitioner was replaced by Liza R. Fuentes as Manager and was allegedly required to sign a prepared resolution for the replacement but was assured that she will still be connected with Kasei Corporation as Technical Assistant to Seiji Kamura and in charge of all BIR matters. Thereafter, Kasei Corporation reduced her salary. Petitioner made repeated follow-ups with the company cashier but she was advised that the company was not earning well.
On October 15, 2001, petitioner asked for her salary but she was informed that she is no longer connected with the company. Since she was no longer paid her salary, petitioner did not report for work and filed an action for constructive dismissal before the labor arbiter.
19 | P a g e The Labor Arbiter found that petitioner was illegally dismissed.
Issues: The core issues to be resolved in this case are (1) whether there was an employer-employee
relationship between petitioner and private respondent Kasei Corporation; and if in the affirmative, (2) whether petitioner was illegally dismissed.
Ruling: The answer is both in the affirmative.
The court held that the better approach would therefore be to adopt a two-tiered test involving: (1) the putative employer‘s power to control the employee with respect to the means and methods by which the work is to be accomplished; and (2) the underlying economic realities of the activity or relationship.
Hence, determination of such a relationship depends upon the circumstances of the whole economic activity, such as: (1) the extent to which the services performed are an integral part of the employer‘s business; (2) the extent of the worker‘s investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the worker‘s opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and (7) the degree of dependency of the worker upon the employer for his continued employment in that line of business. The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of business.
By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji Kamura, the corporation‘s Technical Consultant. It is therefore apparent that petitioner is economically dependent on the respondent corporation for her continued employment in the latter‘s line of business.
There can be no other conclusion that petitioner is an employee of respondent Kasei Corporation. She was selected and engaged by the company for compensation, and is economically dependent upon respondent for her continued employment in that line of business. More importantly, Respondent Corporation had the power to control petitioner with the means and methods by which the work is to be accomplished.
The court stated where an employee ceases to work due to a demotion of rank or a diminution of pay, an unreasonable situation arises which creates an adverse working environment rendering it impossible for such employee to continue working for her employer (Inc. v. Florendo-Flores). Hence, her severance from the company was not of her own making and therefore amounted to an illegal termination of employment.
11.
NOGALES ET AL. VS CAPITOL MEDICAL CENTER ET AL. G.R. No. 142625, December 19, 2006
Facts:Pregnant with her fourth child, Corazon Nogales (―Corazon‖), who was then 37 years old, was under
the exclusive prenatal care of Dr. Oscar Estrada (―Dr. Estrada‖) beginning on her fourth month of pregnancy or as early as December 1975. While Corazon was on her last trimester of pregnancy, Dr. Estrada noted an increase in her blood pressure and development of leg edema indicating preeclampsia, which is a dangerous complication of pregnancy.
20 | P a g e Around midnight of 25 May 1976, Corazon started to experience mild labor pains prompting Corazon and Rogelio Nogales (―Spouses Nogales‖) to see Dr. Estrada at his home. After examining Corazon, Dr. Estrada advised her immediate admission to the Capitol Medical Center (―CMC‖).
On 26 May 1976, Corazon was admitted at 2:30 a.m. at the CMC after the staff nurse noted the written admission requestof Dr. Estrada. Upon Corazon‘s admission at the CMC, Rogelio Nogales (―Rogelio‖) executed and signed the ―Consent on Admission and Agreement‖ and ―Admission Agreement.‖Corazon was then brought to the labor room of the CMC.
Eventually, Corazon died after giving birth to the child, which prompted the petitioners to file a complaint for damages against CMC, Dr. Estrada and other physicians and a certain nurse for Corazon‘s death. Petitioners mainly contended that defendant physicians and CMC personnel were negligent in the treatment and management of Corazon's condition. Petitioners charged CMC with negligence in the selection and supervision of defendant physicians and hospital staff.
Issue:WON there exists an employer-employee relationship
WON CMC is vicariously liable for the negligence of Dr. Estrada
Ruling: Dr. Estrada is not an employee of CMC, but an independent contractor. However, CMC is still
vicariously liable
CMC disclaims liability by asserting that Dr. Estrada was a mere visiting physician and that it admitted Corazon because her physical condition then was classified an emergency obstetrics case.
CMC alleges that Dr. Estrada is an independent contractor ―for whose actuations CMC would be a total stranger.‖ CMC maintains that it had no control or supervision over Dr. Estrada in the exercise of his medical profession.
In Ramos v. Court of Appeals, Court had the occasion to determine the relationship between a hospital and a consultant or visiting physician and the liability of such hospital for that physician's negligence:
In other words, private hospitals, hire, fire and exercise real control over their attending and visiting ―consultant‖ staff. While ―consultants‖ are not, technically employees, a point which respondent hospital asserts in denying all responsibility for the patient‘s condition, the control exercised, the hiring, and the right to terminate consultants, all fulfills the important hallmarks of an employer-employee relationship, with the exception of the payment of wages. In assessing whether such a relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing, we rule that for the purpose of allocating responsibility in medical negligence cases, an employer-employee relationship in effect exists between hospitals and their attending and visiting physicians.
The basis for holding an employer solidarily responsible for the negligence of its employee is found in Article 2180 of the Civil Code which considers a person accountable not only for his own acts but also for those of others based on the former‘s responsibility under a relationship of patria potestas. x x x
While the Court in Ramos did not expound on the control test, such test essentially determines whether an employment relationship exists between a physician and a hospital based on the exercise of control over the physician as to details. Specifically, the employer (or the hospital) must have the right to control both the means and the details of the process by which the employee (or the physician) is to accomplish his task.
21 | P a g e After a thorough examination of the voluminous records of this case, the Court finds no single evidence pointing to CMC‘s exercise of control over Dr. Estrada‘s treatment and management of Corazon‘s condition. It is undisputed that throughout Corazon‘s pregnancy, she was under the exclusive prenatal care of Dr. Estrada. At the time of Corazon‘s admission at CMC and during her delivery, it was Dr. Estrada, assisted by Dr. Villaflor, who attended to Corazon. There was no showing that CMC had a part in diagnosing Corazon‘s condition. While Dr. Estrada enjoyed staff privileges at CMC, such fact alone did not make him an employee of CMC. CMC merely allowed Dr. Estrada to use its facilities when Corazon was about to give birth, which CMC considered an emergency. Considering these circumstances, Dr. Estrada is not an employee of CMC, but an independent contractor.
In general, a hospital is not liable for the negligence of an independent contractor-physician. There is, however, an exception to this principle. The hospital may be liable if the physician is the ―ostensible‖ agent of the hospital. This exception is also known as the ―doctrine of apparent authority.‖ In Gilbert v. Sycamore Municipal Hospital, the Illinois Supreme Court explained the doctrine of apparent authority in this wise:
Under the doctrine of apparent authority a hospital can be held vicariously liable for the negligent acts of a physician providing care at the hospital, regardless of whether the physician is an independent contractor, unless the patient knows, or should have known, that the physician is an independent contractor. The elements of the action have been set out as follows:
―For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that: (1) the hospital, or its agent, acted in a manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital; (2) where the acts of the agent create the appearance of authority, the plaintiff must also prove that the hospital had knowledge of and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence.‖
The element of ―holding out‖ on the part of the hospital does not require an express representation by the hospital that the person alleged to be negligent is an employee. Rather, the element is satisfied if the hospital holds itself out as a provider of emergency room care without informing the patient that the care is provided by independent contractors.
The doctrine of apparent authority essentially involves two factors to determine the liability of an independent-contractor physician.
The first factor focuses on the hospital‘s manifestations and is sometimes described as an inquiry whether the hospital acted in a manner which would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital. In this regard, the hospital need not make express representations to the patient that the treating physician is an employee of the hospital; rather a representation may be general and implied.
The doctrine of apparent authority is a species of the doctrine of estoppel. Estoppel rests on this rule: ―Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act or omission, be permitted to falsify it.‖
In the instant case, CMC impliedly held out Dr. Estrada as a member of its medical staff. Through CMC‘s acts, CMC clothed Dr. Estrada with apparent authority thereby leading the Spouses Nogales to believe that Dr. Estrada was an employee or agent of CMC. CMC cannot now repudiate such authority.
