Midterm Case Digests
LABOR STANDARDS
Compiled by: Alexandra Nicole M. Baring,
LLBII-EH402
SUBMITTED TO:
2
Table of Contents
BASIC PRINCIPLES... 6
SINGER SEWING MACHINE vs. NLRC ... 6
MANILA GOLF & COUNTRY CLUB, INC. vs. IAC ... 7
ENCYCLOPEDIA BRITANNICA (Philippines), INC. vs. NLRC ... 8
CARUNGCONG vs. SUNLIFE ... 9
RAMOS vs. COURT OF APPEALS ... 10
JOSE Y. SONZA vs. ABS-CBN BROADCASTING CORPORATION ... 11
ANGELITO LAZARO vs. SOCIAL SECURITY COMMISSION ... 13
PHILIPPINE GLOBAL COMMUNICATIONS vs. DE VERA ... 14
ABS-CBN vs. NAZARENO ... 15
FRANCISCO vs. NATIONAL LABOR RELATIONS COMMISSION ... 16
NOGALES ET AL., vs. CAPITOL MEDICAL CENTER ET. AL. ... 17
COCA COLA BOTTLERS vs. DR. CLIMACO ... 19
CALAMBA MEDICAL CENTER vs. NATIONAL LABOR RELATIONS COMMISSION ... 20
ESCASIÑAS, ET. AL. vs. SHANGRILA-LAS MACTAN ISLAND RESORT, ET. AL ... 21
TONGCO vs. THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. ET. AL. ... 22
CAONG, JR. vs. BEGUALOS ... 23
ATOK BIG WEDGE COMPANY, INC. vs. JESUS P. GISON ... 24
SEMBLANTE ET AL. vs. COURT OF APPEALS ET AL. ... 25
BERNARTE vs. PHIL. BASKETBALL ASSOCIATION ET AL., ... 27
LIRIO vs. GENOVIA... 29
CHARLIE JAO vs. BCC PRODUCTS SALES, INC ... 31
LEGEND HOTEL vs. REALUYO ... 33
THE NEW PHILIPPINE SKYLANDERS, INC., vs. DAKILA ... 35
TESORO ET AL. vs. METRO MANILA RETREADERS INC. ET AL... 37
HIRING OF EMPLOYEE ... 38
OLLENDORF vs. ABRAHANSON ... 38
DEL CASTILLO vs. RICHMOND... 39
PT & T vs. NATIONAL LABOR RELATIONS COMMISSION ... 40
DUNCAN ASSO. OF DETAILMAN-PTGWO vs. GLAXO WELLCOME PHILS. ... 41
CITY OF MANILA vs. LAGUIO... 43
STAR PAPER CORP. vs. SIMBOL ... 45
DEL MONTE PHILIPPINES vs. VELASCO ... 46
YRASUEGUI vs. PHILIPPINE AIRLINES ... 47
WAGE AND THE WAGE RATIONALIZATION ACT ... 48
ILAW AT BUKLOD MANGGAGAWA vs. NATIONAL LABOR RELATIONS COMMISSION ... 48
EMPLOYERS CONFEDERATION OF THE PHILS vs. NATIONAL WAGES AND
PRODUCTIVITY COMMISSION ... 49
MABEZA vs. NATIONAL LABOR RELATIONS COMMISSION ... 50
JOY BROTHERS, INC. vs. NATIONAL WAGES AND PRODUCTIVITY COMMISSION ... 51
PRUBANKERS ASSOCIATION vs. PRUDENTIAL BANK ... 52
LIDUVINO M. MILLARES vs. NATIONAL LABOR RELATIONS COMMISSION ... 53
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS vs. QUISUMBING ... 54
BANKARD EMPLOYEES UNION-WORKERS ALLIANCE TRADE UNIONS vs. NATIONAL
LABOR RELATIONS COMMISSION ... 55
ODANGO VS. NATIONAL LABOR RELATIONS COMMISSION... 57
C. PLANAS COMMERCIAL vs. NATIONAL LABOR RELATIONS COMMISSION ... 58
EJR CRAFTS CORP. vs. COURT OF APPEALS ... 59
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METROPOLITAN BANK vs. NATIONAL WAGES AND PRODUCTIVITY COMMISSION ... 61
EQUITABLE BANK vs. SADAC ... 63
S.I.P FOOD HOUSE ET. AL vs. BATOLINA ... 64
SLL INTERNATIONAL CABLES SPECIALIST vs. NATIONAL LABOR RELATIONS
COMMISSION ... 65
VERGARA, JR. vs. COCA-COLA BOTTLERS PHILS INC. ... 67
ROYAL PLANT WORKERS UNION vs. COCA-COLA BOTTLERS PHILIPPINES INC. ... 69
THE NATIONAL WAGES AND PRODUCTIVITY COMMISSION ET. AL. vs. THE ALLIANCE OF
PROGRESSIVE LABOR ET. AL. ... 71
WAGE ENFORCEMENT AND RECOVERY ... 73
RAJAH HUMABON HOTEL vs. TRAJANO ... 73
GUICO vs. SECRETARY OF LABOR ... 75
EX-BATAAN VETRERANS SECURITY AGENCY vs. SEC. OF LABOR, ET AL. ... 76
SAPIO vs. UNDALOC CONSTRUCTION ET. AL. ... 77
HON. SECRETARY OF LABOR vs. PANAY VETERANS SECURITY AND INVESTIGATION
AGENCY, ... 78
NATIONAL MINES AND ALLIED WORKERS UNION vs. MARCOPPER MINING CORP., ... 79
JETHRO INTELLIGENCE & SECURITY CORP. vs. SOLE, ET AL., ... 80
PHILIPPINE HOTELIERS INC. vs. NATIONAL UNION OF WORKERS IN HOTEL
RESTAURANT & ALLIED INDUSTRIES – DUSIT HOTEL NIKKO CHAPTER ... 82
TIGER CONSTRUCTION AND DEVELOPMENT CORPORATION vs. ABAY ET. AL. ... 84
PEOPLE‘S BROADCASTING (BOMBO RADYO PHILS) VS. SEC OF DOLE ET AL. ... 86
SUPERIOR PACKAGING CORP. VS. BALAGSAY ET AL. ... 88
WAGE PROTECTION PROVISIONS AND PROHIBITIONS REGARDING WAGES ... 90
GAA vs. COURT OF APPEALS ... 90
NESTLE PHILIPPINES vs. NATIONAL LABOR RELATIONS COMMISSION ... 91
FIVE J TAXI vs. NATIONAL LABOR RELATIONS COMMISSION ... 92
PHILIPPINE VETERANS BANK vs. NATIONAL LABOR RELATIONS COMMISSION ... 93
PHILIPPINE APPLIANCES CORP. vs. COURT OF APPEALS ... 94
AGABON vs. NATIONAL LABOR RELATIONS COMMISSION ... 95
AMERICAN WIRE & CABLE DAILY RATED EMPLOYEES vs. AMERICAN WIRE ... 97
HONDA PHILIPPINES vs. SAMAHAN NG MALAYANG MANGGAGAWA SA HONDA ... 98
PRODUCERS BANK vs. NATIONAL LABOR RELATIONS COMMISSION ... 99
JARDIN vs. NATIONAL LABOR RELATIONS COMMISSION ... 101
MANILA JOCKEY‘S CLUB EMPLOYEES LABOR UNION vs. MANILA JOCKEY CLUB ... 103
SAN MIGUEL CORP ET AL. vs. LAYOC, JR. ET AL. ... 104
SAN MIGUEL CORP. vs. PONTILLAS ... 105
. ... 105
ARCO METAL PRODUCTS CO. INC. ET AL. vs. SAMAHAN NG MGA MANGGAGAWA SA
ARCO METAL-NAFLU ... 106
AGUANZA vs. ASIAN TERMINAL INC., ET AL. ... 107
GENESIS TRANSPORT SERVICE INC ET AL. vs. UNYON NG MALAYANG MANGGAGAWA
NG GENESIS TRANSPORT ET AL. ... 108
CENTRAL AZUCARERA DE TARLAC vs. CENTRAL AZUCARERA DE TARLAC LABOR
UNION-NLU ... 109
SHS PERFORATED MATERIALS, INC. ET AL., vs. DIAZ ... 111
NINA JEWELRY MANUFACTURING OF METAL ARTS INC. vs. MONTECILLO ... 112
LOCSIN II vs. MEKENI FOOD CORP. ... 113
TH SHOPFITTERS CORP. ET AL. vs. T&H SHOPFITTERS CORP. UNION... 114
WESLEYAN UNIVERSITY-PHILS., vs. WESLEYAN UNIVERSITY-PHILS., FACULTY & STAFF
ASSO. ... 116
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BLUER THAN BLUE JOINT VENTURES CO. vs. ESTEBAN ... 117
PAYMENT OF WAGES ... 118
CONGSON vs. NATIONAL LABOR RELATIONS COMMISSION ... 118
NORTH DAVAO MINING vs. NATIONAL LABOR RELATIONS COMMISSION ... 119
NATIONAL FEDERATION OF LABOR vs. COURT OF APPEALS ... 120
HEIRS OF SARA LEE vs. REY ... 121
CONDITIONS OF EMPLOYMENT ... 123
SAN JUAN DE DIOS HOSPITAL vs. NATIONAL LABOR RELATIONS COMMISSION ... 123
SIMEDARBY vs. NATIONAL LABOR RELATIONS COMMISSION ... 124
PHILIPPINE AIRLINES vs. NATIONAL LABOR RELATIONS COMMISSION ... 125
BISIG MANGGAGAWA SA TRYCO vs. NATIONAL LABOR RELATIONS COMMISSION ... 128
MINIMUM LABOR STANDARD BENEFITS ... 130
UNION OF FILIPRO EMPLOYEES vs. VICAR ... 130
NATIONAL SUGAR REFINERY CORP. vs. NATIONAL LABOR RELATIONS COMMISSION
... 132
SALAZAR vs. NATIONAL LABOR RELATIONS COMMISSION ... 134
LABOR CONGRESS OF THE PHILIPPINES vs. NATIONAL LABOR RELATIONS
COMMISSION ... 135
MERCIDAR FISHING CORP. vs. NATIONAL LABOR RELATIONS COMMISSION ... 137
SAN MIGUEL CORP. vs. COURT OF APPEALS ... 138
TAN VS. LAGRAMA ... 140
LAMBO vs. NATIONAL LABOR RELATIONS COMMISSION ... 141
R&E TRANSPORT vs. LATAG ... 142
ASIAN TRANSMISSION vs. COURT OF APPEALS ... 143
AUTOBUS TRANSPORT SYSTEM vs. BAUTISTA ... 144
SAN MIGUEL CORP. vs. DEL ROSARIO ... 146
PENARANDA vs. BAGANGA PLYWOOD CORP. ... 148
LEYTE IV ELECTRIC COOPERATIVE INC vs. LEYECO IV EMPLOYEES UNION-ALU ... 150
BAHIA SHIPPING SERVICES vs. CHUA ... 151
PNCC SKYWAY TRAFFIC MANAGEMENT AND SECURITY DIVISION WORKERS
ORGANIZATION ... 152
RADIO MINDANAO NETWORK, INC. vs. YBAROLA ... 153
OTHER SPECIAL BENEFITS ... 154
VILLUGA vs. NATIONAL LABOR RELATIONS COMMISSION ... 154
CJC TRADING vs. NATIONAL LABOR RELATIONS COMMISSION ... 155
PANTRANCO NORTH EXPRESS, INC. vs. NATIONAL LABOR RELATIONS COMMISSION
... 156
R&E TRANSPORT INC vs. AVELINA LATAG... 158
STA CATALINA COLLEGE vs. NATIONAL LABOR RELATIONS COMMISSION ... 159
HONDA PHILIPPINES vs. SAMAHAN NG MALAYANG MANGGAGAWA SA HONDA ... 160
JACULBE vs. SILLIMAN UNIVERSITY ... 162
INTERCONTINENTAL BROADCASTING CORP. vs. PANGANIBAN ... 164
LETRAN CALAMBA FACULTY & EMPLOYEES ASSOCIATION vs. NATIONAL LABOR
RELATIONS COMMISSION ... 165
REYES vs. NATIONAL LABOR RELATIONS COMMISSION ET. AL. ... 166
ARCO METAL PRODUCTS vs. SAMAHAN NG MANGGAGAWA SA ARCO-METAL-NAFLU 168
LOURDES CERCADO vs. UNIPROM INC. ... 169
RADIO MINDANAO NETWORK, INC. AND ERIC S. CANOY VS. DOMINGO Z. YBAROLA, JR.
AND ALFONSO E. RIVERA, JR. ... 170
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ELEAZAR S. PADILLO vs. RURAL BANK OF NABUNTURAN, INC. AND MARK S. OROPEZA
... 173
2011 NLRC RULES OF PROCEDURE ... 174
UERM MEMORIAL MEDICAL CENTER vs. NATIONAL LABOR RELATIONS COMMISSION
... 176
PHIL TRANCO SERVICES vs. NATIONAL LABOR RELATIONS COMMISSION ... 178
ST. MARTIN FUNERAL HOMES vs. NATIONAL LABOR RELATIONS COMMISSION ... 179
LUDO & LUYM CORP. vs. SOARNIDO ... 180
HANSIN ENGINEERING & CONSTRUCTION vs. COURT OF APPEALS ... 181
BALAGTAS MULTI-PURPOSE COOP. vs. COURT OF APPEALS ... 183
PHILIPPINE JOURNALISTIC INC. vs. NATIONAL LABOR RELATIONS COMMISSION ... 184
INTERCONTINENTAL BROADCASTING CORP. vs. AMARILLA ... 185
LOPEZ vs. Q.C. SPORTS CLUB ... 186
INTERCONTINENTAL BROADCASTING CORP. vs. AMARILLA ... 188
FAR EAST AGRICULTURAL SUPPLY, INC. vs. JIMMY LEBATIQUE ... 190
DEPARTMENT OF LABOR AND EMPLOYMENT PHILIPPINES. vs. ESTEVA ... 192
LETRAN CALAMBA FACULTY AND EMPLOYEES ASSOCIATION vs. NATIONAL LABOR
RELATIONS COMMISSION ... 194
METRO TRANSIT ORGANIZATION vs. PIGLAS NFWU-KMU ET AL. ... 195
J.K. MERCADO & SONS AGRICULTURAL ENTERPRISES, INC., vs. STO. TOMAS, ... 196
J. PHIL. MARINE INC. vs. NATIONAL LABOR RELATIONS COMMISSION ... 197
SY vs. ALC INDUSTRIES ... 198
PCI TRAVEL CORP vs. NATIONAL LABOR RELATIONS COMMISSION ... 199
LOCKHEED DETECTIVE AND WATCHMAN AGENCY, INC. vs. UNIVERSITY OF THE
PHILIPPINES ... 200
PORTILLO vs. RUDOLF LIETZ ... 201
BUILDING CARE CORP. LEOPARD SECURITY AND INVESTIGATION AGENCY vs.
MACARAEG ... 202
6
BASIC PRINCIPLES
SINGER SEWING MACHINE vs. NLRC
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.
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.
7
MANILA GOLF & COUNTRY CLUB, INC. vs. IAC
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: (1) The Club promulgates no less than 24 rules and regulations in just about every aspect of the conduct (conduct, dress,language, etc) that the caddy must observe, or avoid, when serving as such, any violation of any which could subject him to disciplinary action, which may include suspending or cutting off his access to the club premises. (2) The Club devises and enforces a group rotation system whereby a caddy is assigned a number, which designates his turn to serve a player. (3) The Club ―suggests‖ to guests the rate of fees payable to the caddies.
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. 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. On the Club‘s suggestion of rates to be paid, 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.
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 ay seek employment as a caddy or otherwise with any entity or individual without restriction by the Club. The caddues 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 circumstaces, 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 mposes no direct sanctions on the caddies.
8
ENCYCLOPEDIA BRITANNICA (Philippines), INC. vs. NLRC
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 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.
9
CARUNGCONG vs. SUNLIFE
Facts
Susan Carungcong began as an agent of Sun Life in 1974, she signed an ―Agent‘s Agreement‖ and was designated to solicit applications for insurance and annuity services. The contract set out in detail the terms and conditions — particularly those concerning the commissions payable to her — under which her relationship with the company would be governed. Five years later, said contract was superseded by 2 new agreements: first, is the "Career Agent's (or Unit Manager's) Agreement," dealt with such matters as the agent's commissions, his obligations, limitations on his authority, and termination of the agreement by death, or by written notice "with or without cause." It declared that the "Agent shall be an independent contractor and none of the terms of agreement shall be construed as creating an employer-employee relationship; second, was titled, "MANAGER'S Supplementary Agreement." Making explicit reference to the first agreement "which became effective on the 1st day of July, 1979" said second contract — explicitly described as a "further agreement" — contained provisions regarding remuneration (overriding commissions in accordance with a fixed schedule), limitation of authority, and termination of the agreement inter alia by written notice "without cause."
Subsequently, Carungcong and Sun Life executed another Agreement - by which the former was named New Business Manager with the function generally "to manage a New Business Office established by her and to obtain applications for life insurance policies and other products offered by or distributed through Sun Life and to perform such other duties in connection therewith as Sun Life may require from time to time." This latest Agreement stressed that the "New Business Manager in performance of his duties defined herein, shall be considered an independent contractor and not . . an employee of Sun Life," and that "under no circumstance shall the New Business Manager and/or his employees be considered employees of Sun Life."
After receiving reports of anomalies in relation thereto from unit managers and agents by the company‘s VP, the Manager of Sun Life's Internal Audit Department, commenced an inquiry into the special fund availments of Carungcong and other New Business Managers which later prompted the petitioner‘s termination. She then instituted proceedings for vindication in the Arbitration Branch of the National Labor Relations Commission where she succeeded in obtaining a favorable judgment finding 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.
Issue
Whether or not Carungcong should be considered as an employee of Sun Life? Ruling
Carungcong was an independent contractor and not an employee of Sun Life. 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.Noteworthy is that this last agreement, it was 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."
10
RAMOS vs. COURT OF APPEALS
Facts
Petitioner Erlinda Ramos was advised to undergo an operation for the removal of her stone in the gall bladder. She was referred to Dr. Hosaka, a surgeon, who agreed to do the operation. The operation was scheduled on June 17, 1985 in the De los Santos Medical Center. Erlinda was admitted to the medical center the day before the operation. On the following day, she was ready for operation as early as 7:30 am. Around 9:30, Dr. Hosaka has not yet arrived. By 10 am, Rogelio wanted to pull out his wife from the operating room. Dr. Hosaka finally arrived at 12:10 pm more than 3 hours of the scheduled operation.
Dr. Guiterres tried to intubate Erlinda. The nail beds of Erlinda were bluish discoloration in her left hand. At 3 pm, Erlinda was being wheeled to the Intensive care Unit and stayed there for a month. Since the ill-fated operation, Erlinda remained in comatose condition until she died.
The family of Ramos sued them for damages. Issue
Whether or not there was an employee-employer relationship that existed between the Medical Center and Drs. Hosaka and Guiterrez.
Ruling
No employer-employee between the doctors and hospital. Private Hospitals hire, fire and exercise real control over their attending and visiting consultant staff. While consultants are not technically employees, the control exercised, the hiring and the right to terminate consultants fulfill the hallmarks of an employer-employee relationship with the exception of payment of wages. The control test is determining.
In applying the four fold test, DLSMC cannot be considered an employer of the respondent doctors. It has been consistently held that in determining whether an employer-employee relationship exists between the parties, the following elements must be present: (1) selection and engagement of services; (2) payment of wages; (3) the power to hire and fire; and (4) the power to control not only the end to be achieved, but the means to be used in reaching such an end.
The hospital does not hire consultants but it accredits and grants him the privilege of maintaining a clinic and/or admitting patients. It is the patient who pays the consultants. The hospital cannot dismiss the consultant but he may lose his privileges granted by the hospital. The hospital‘s obligation is limited to providing the patient with the preferred room accommodation and other things that will ensure that the doctor‘s orders are carried out.
The court finds that there is no employer-employee relationship between the doctors and the hospital.
11
JOSE Y. SONZA vs. ABS-CBN BROADCASTING CORPORATION
Facts
In May 1994, ABS-CBN signed an agreement with Mel & Jay Management and Development Corp for a radio and television program. ABS-CBN agreed to pay for SONZA‘s services a monthly talent fee of P310,000 for the first year and P317,000 for the second and third year of the Agreement. ABS-CBN would pay the talent fees on the 10th and 25th days of the month. On April 1996, Sonza wrote a letter to ABS-CBN President Eugenio Lopez III about a recent event concerning his programs and career, and that the said violation of the company has breached the agreement, thus, the notice of rescission of Agreement was sent. At the end of the same month, Sonza filed a complaint against ABS-CBN before the DOLE for non-payment of salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan (ESOP) which was opposed by ABS-CBN on the ground there was no employer-employee relationship existed between the parties.
Issue
Whether Sonza was an employee or independent contractor. Ruling
There was no employer-employee relationship that existed, but that of an independent contractor. Case law has consistently held that the elements of an employer-employee relationship are:
(a) The selection and engagement of the 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. 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.
(b) The 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 "SSS, Medicare, x x x and 13th month pay" which the law automatically incorporates into every employer-employee contract.
(c) The power of dismissal - For violation of any provision of the Agreement, either party may terminate their relationship. During the life of the Agreement, 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. (d) The employer’s power to control the employee on the means and methods by which the work
is accomplished - The control test is the most important test. 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 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.
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." The KBP code applies to broadcasters, not to employees of radio and television stations. Broadcasters are not necessarily 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.
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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 a widespread and accepted practice in the entertainment industry. This practice is not designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station. The broadcast station normally spends substantial amounts of money, time and effort "in building up its talents as well as the programs they appear in and thus expects that said talents remain exclusive with the station for a commensurate period of time." Normally, a much higher fee is paid to talents who agree to work exclusively for a particular radio or television station. In short, the huge talent fees partially compensates for exclusivity.
13
ANGELITO LAZARO vs. SOCIAL SECURITY COMMISSION
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 an employee. Issue
Whether or not Laudato is considered employee of Royal Star Marketing Ruling
Laudato is an employee of Royal Star and as such is entitled to the coverage of Social Security Law. It is an accepted doctrine that 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.
The fact that Laudato was paid by way of commission does not preclude the establishment of an employee relationship. In Grepalife v. Judico, the Court upheld the existence of an employer-employee relationship between the insurance company and its agents, despite the fact that the compensation that the agents on commission received was not paid by the company but by the investor or the person insured. The relevant factor remains, as stated earlier, whether the "employer" controls or has reserved the right to control the "employee" not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. It should also be emphasized that the SSC, also as upheld by the Court of Appeals, found that Laudato was a sales supervisor and not a mere agent. As such, Laudato oversaw and supervised the sales agents of the company, and thus was subject to the control of management as to how she implements its policies and its end results.
The finding of the SSC that Laudato was an employee of Royal Star is supported by substantial evidence. The SSC examined the cash vouchers issued by Royal Star to Laudato, calling cards of Royal Star denominating Laudato as a ―Sales Supervisor‖ of the company, and Certificates of Appreciation issued by Royal Star to Laudato in recognition of her unselfish and loyal efforts in promoting the company.
A piece of documentary evidence appreciated by the SSC is Memorandum dated 3 May 1980 of Teresita Lazaro, General Manager of Royal Star, directing that no commissions were to be given on all ―main office‖ sales from walk-in customers and enjoining salesmen and sales supervisors to observe this new policy. The Memorandum evinces the fact that Royal Star exercised control over its sales supervisors or agents such as Laudato as to the means and methods through which these personnel performed their work.
14
PHILIPPINE GLOBAL COMMUNICATIONS vs. DE VERA
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 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
Supreme Court 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. From the time respondent 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.
15
ABS-CBN vs. NAZARENO
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
Whether or not the respondents are regular employees. Ruling
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.
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.
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.
16
FRANCISCO vs. NATIONAL LABOR RELATIONS COMMISSION
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.
Issue
Whether there was an employer-employee relationship between petitioner and private respondent Kasei Corporation
Ruling
The answer is in the affirmative, and consquently, petitioner was illegally dismissed. 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. 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.
17
NOGALES ET AL., vs. CAPITOL MEDICAL CENTER ET. AL.
Facts
Corazon was under the exclusive care of Dr Oscar Estrada beginning the fourth month of her pregnancy. While on her last trimester of pregnancy, Dr Estrada noted an increase of her blood pressure and development of leg edema indicating preeclampsia which is a dangerous complication of pregnancy.
Around midnight of 25 May 1976, Corazon started to experience mild labor pains prompting Spouses Nogales to see Dr. Estrada at his home. After examining Corazon, Dr. Estrada advised her immediate admission to the Capitol Medical Center. 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
Whether or not CMC is vicariously liable for the negligence of Dr. Estrada. Ruling
CMC is vicariously liable. 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. 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
In the present 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." 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. 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.
The second factor focuses on the patient's reliance. It is sometimes characterized as an inquiry on whether the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence.
The records show that the Spouses Nogales relied upon a perceived employment relationship with CMC in accepting Dr. Estrada's services. Rogelio testified that he and his wife specifically chose Dr. Estrada to handle Corazon's delivery not only because of their friend's recommendation, but more importantly because of Dr. Estrada's "connection with a reputable hospital, the [CMC]." In other words, Dr. Estrada's relationship with CMC played a significant role in the Spouses Nogales' decision in accepting Dr. Estrada's services as the obstetrician-gynecologist for Corazon's delivery. Moreover, as earlier stated, there is no showing that before and during Corazon's confinement at CMC, the Spouses Nogales knew or should have known that Dr. Estrada was not an employee of CMC.
Even simple negligence is not subject to blanket release in favor of establishments like hospitals but may only mitigate liability depending on the circumstances.When a person needing urgent medical attention rushes to a hospital, he cannot bargain on equal footing with the hospital on the terms of admission and operation. Such a person is literally at the mercy of the hospital. There can be no clearer
18
example of a contract of adhesion than one arising from such a dire situation. Thus, the release forms of CMC cannot relieve CMC from liability for the negligent medical treatment of Corazon.
19
COCA COLA BOTTLERS vs. DR. CLIMACO
Facts
Dr. Dean Climaco(respondent), a medical doctor, was hired by Coca-cola Bottlers Phil.(petitioner) by virtue of a Retainer Agreement. Among the terms and conditions under their retainer agreement are:
1. That the agreement shall only for 1 year beginning Jan. 1, 1988 to Dec. 31, 1988. Either party may terminate the contract upon giving a 30-day written notice to the other;
2. That petitioner shall compensate respondent a retainer fee of P3,800/month. The DOCTOR may charge professional fee for hospital services rendered in line with his specialization;
3. That in consideration of the retainer‘s fee, the DOCTOR agrees to perform the duties and obligations in the COMPREHENSIVE MEDICAL PLAN, made an integral part of this retainer agreement;
4. That the DOCTOR shall observe clinic hours at the company‘s premises from Monday to Saturday of a minimum of two (2) hours each day or a maximum of TWO (2) hours each day or treatment from 7:30 a.m. to 8:30 a.m and 3:00pm to 4:00pm. It is further understood that the DOCTOR shall be on call at all times during the other workshifts to attend to emergency case(s); 5. That no employee-employer relationship shall exist between the company and the DOCTOR. The retainer agreement expired after 1 year. However, despite the non-renewal of the agreement, respondent continued to perform his functions as company doctor to petitioner until he received a letter dated march 9, 1995 from the company ending their retainership agreement. Respondent thereafter filed a complaint before the NLRC seeking recognition as a regular employee of petitioner and thus prayed from payment of all the benefits of a regular employee including 13th month pay, COLA, holiday pay, service incentive leave, and Christmas bonus. Also, respondent filed another complaint for illegal dismissal against petitioner.
Issue
Whether or not there exist an employer-employee relationship between the parties. Ruling
The Court ruled that petitioner company lacked the power of control over the performance by respondent of his duties.The Court citing the case of Neri vs. NLRC said, petitioner company, through the Comprehensive Medical Plan, provided guidelines merely to ensure that the end result was achieved. In other words, what was sought to be controlled by the petitioner company was actually the end result of the task. The guidelines or the Comprehensive Medical Plan were laid down merely to ensure that the desired end result was achieved but did not control the means and methods by which respondent performed his assigned tasks.
The Supreme Court further held that, an employee is required to stay in the employer‘s workplace or proximately close thereto that he cannot utilize his time effectively and gainfully for his own purpose. Such is not the prevailing situation here. The respondent does not dispute that fact that outside of the two (2) hours that he is required to be at petitioner company‘s premises, he is not at all further required to just sit around in the premises and wait for an emergency to occur so as to enable him from using such hours for his own benefit and advantage. In fact, respondent maintains his own private clinic attending his private practice in the city, where he services his patients and bills them accordingly.
The Court finds that the requirement to be on call for emergency cases do not amount to such control, but are necessary incidents to the Retainership Agreement. The Supreme Court also notes that the Agreement granted to both parties the power to terminate their relationship upon giving a 30-day notice. Hence, petitioner company did not wield the sole power of dismissal or termination.
20
CALAMBA MEDICAL CENTER vs. NATIONAL LABOR RELATIONS
COMMISSION
Facts
Calamba Medical Center, engaged the services of medical doctors-spouses Dr. Ronaldo and Dr. Merceditha Lanzanas as part of its team of resident physicians. Reporting at the hospital twice-a-week on twenty-four-hour shifts, respondents were paid a monthly ―retainer‖ of P4,800.00 each. Resident physicians were also given a percentage share out of fees charged for out-patient treatments, operating room assistance and discharge billings, in addition to their fixed monthly retainer.
The work schedules of the members of the team of resident physicians were fixed by petitioner‘s medical director Dr. Desipeda, and they were issued ID, enrolled in the SSS and withheld tax from them. After an incident where Dr. Trinidad overheard a phone conversation between Dr. Ronaldo and a fellow employee Diosdado Miscala, the former was given a preventive suspension and his wife Dr. Merceditha was not given any schedule after sending the Memorandum. On March 1998, Dr. Ronaldo filed a complaint for illegal suspension and Dr. Merceditha for illegal dismissal.
Issue
Whether or not there exists an employer-employee relationship between petitioner and the spouses-respondents.
Ruling
Drs. Lanzanas were declared employees of the petitioner hospital. Under the control test, an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task.
That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room, the operating room, or any department or ward for that matter, respondents‘ work is monitored through its nursing supervisors, charge nurses and orderlies. Without the approval or consent of petitioner or its medical director, no operations can be undertaken in those areas. For control test to apply, it is not essential for the employer to actually supervise the performance of duties of the employee, it being enough that it has the right to wield the power.
With respect to respondents‘ sharing in some hospital fees, this scheme does not sever the employment tie between them and petitioner as this merely mirrors additional form or another form of compensation or incentive similar to what commission-based employees receive as contemplated in Article 97 (f) of the Labor Code.
Moreover, respondents were made subject to petitioner-hospital‘s Code of Ethics,the provisions of which cover administrative and disciplinary measures on negligence of duties, personnel conduct and behavior, and offenses against persons, property and the hospital‘s interest.
More importantly, petitioner itself provided incontrovertible proof of the employment status of respondents, namely, the identification cards it issued them, the payslips and BIR W-2 (now 2316) Forms which reflect their status as employees, and the classification as ―salary‖ of their remuneration. Moreover, it enrolled respondents in the SSS and Medicare (Philhealth) program. It bears noting at this juncture that mandatory coverage under the SSS Law is premised on the existence of an employer-employee relationship, except in cases of compulsory coverage of the self-employed.
21
ESCASIÑAS, ET. AL. vs. SHANGRILA-LAS MACTAN ISLAND RESORT, ET.
AL
Facts
Registered nurses Jeromie D. Escasinas and Evan Rigor Singco (petitioners) were engaged in 1999 and 1996, respectively, by Dr. Jessica Joyce R. Pepito (respondent doctor) to work in her clinic at respondent Shangri-la‘s Mactan Island Resort (Shangri-la) in Cebu of which she was a retained physician. In late 2002, petitioners filed with the National Labor Relations Commission a complaint for regularization, underpayment of wages, non-payment of holiday pay, night shift differential and 13th month pay differential against respondents, claiming that they are regular employees of Shangri-la.
Shangri-la claimed, however, that petitioners were not its employees but of respondent doctor, that Article 157 of the Labor Code, as amended, does not make it mandatory for a covered establishment to employ health personnel, that the services of nurses is not germane nor indispensable to its operations, and that respondent doctor is a legitimate individual contractor who has the power to hire, fire and supervise the work of nurses under her.
Issue
Whether or not there exists an employer-employee relationship between Shangri-la and petitioners.
Ruling
The Court holds that respondent doctor is a legitimate independent contractor. That Shangri-la provides the clinic premises and medical supplies for use of its employees and guests do not necessarily prove that respondent doctor lacks substantial capital and investment. Besides, the maintenance of a clinic and provision of medical services to its employees is required under Art. 157, which are not directly related to Shangri-la‘s principal business – operation of hotels and restaurants.
As to payment of wages, respondent doctor is the one who underwrites the following: salaries, SSS contributions and other benefits of the staff; group life, group personal accident insurance and life/death insurance for the staff with minimum benefit payable at 12 times the employee‘s last drawn salary, as well as value added taxes and withholding taxes, sourced from her P60,000.00 monthly retainer fee and 70% share of the service charges from Shangri-la‘s guests who avail of the clinic services. It is unlikely that respondent doctor would report petitioners as workers, pay their SSS premium as well as their wages if they were not indeed her employees.
With respect to the supervision and control of the nurses and clinic staff, it is not disputed that a document, ―Clinic Policies and Employee Manual‖ claimed to have been prepared by respondent doctor exists, to which petitioners gave their conformity and in which they acknowledged their co-terminus employment status. It is thus presumed that said document, and not the employee manual being followed by Shangri-la‘s regular workers, governs how they perform their respective tasks and responsibilities. In fine, as Shangri-la does not control how the work should be performed by petitioners, it is not petitioners‘ employer.
22
TONGCO vs. THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC.
ET. AL.
Facts
This is a resolution of the petition to set aside the June 29, 2010 decision of the Supreme Court that the petitioner was an insurance agent, not the employee, of the respondent The Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife).
In his motion for reconsideration, petitioner argues that for 19 years, he performed administrative functions and exercised supervisory authority over employees and agents of Manulife, in addition to his insurance agent functions. In these 19 years, he was designated as a Unit Manager, a Branch Manager and a Regional Sales Manager, and now posits that he was not only an insurance agent for Manulife but was its employee as well.
Issue
Whether or not petitioner Tongco can be considered an employee of Manulife. Ruling
Petitioner failed to establish the presence of an employer-employee relationship. Based on the control test, petitioner failed to show that the control Manulife exercised over him was the control required to exist in an employer-employee relationship. It carried only the characteristic of the relationship between an insurance company and its agents, as defined by the Insurance Code and by the law of agency under the Civil Code. His assertions that labor law control was exercised by Manulife over him (1) when it set the objectives and sales targets regarding production, recruitment and training programs; and (2) when it prescribed the Code of Conduct for Agents and the Manulife Financial Code of Conduct to govern his activities do not hold water. These are built-in elements of control specific to an insurance agency which provides in the Insurance Code definite parameters in the way an agent negotiates for the sale of the company‘s insurance products, his collection activities and his delivery of the insurance contract or policy. The Civil Code also defines an agent as a person who binds himself to do something in behalf of another, with the consent or authority of the latter. Article 1887 of the Civil Code also provides that in the execution of the agency, the agent shall act in accordance with the instructions of the principal. Thus, it can be gleaned that the activities carried out by Manulife as pointed out above cannot be considered ‗control‘ of the means and manner of doing an assigned task as defined in the Labor Code. These controls are only aimed at specific results in undertaking an insurance agency, and are, in fact, parameters set by law in defining an insurance agency and the attendant duties and responsibilities an insurance agent must observe and undertake.
Manulife‘s codes of conduct, likewise, do not necessarily intrude into the insurance agents‘ means and manner of conducting their sales. Codes of conduct are norms or standards of behavior rather than employer directives into how specific tasks are to be done. These codes, as well as insurance industry rules and regulations, are not per se indicative of labor law control under our jurisprudence.
With regards to the various titles petitioner held in Manulife, these do not support his claim that he is Manulife‘s employee. The petitioner‘s occupation was to sell Manulife‘s insurance policies and products from 1977 until the termination of the Career Agent‘s Agreement. Due to the nature of this job, Manulife permitted him to exercise guiding authority over other agents who operate under their own agency agreements with Manulife and whose commissions he shared. His designation also changed from unit manager to branch manager and then to regional sales manager, to reflect the increase in the number of agents he recruited and guided, as well as the increase in the area where these agents operated.
The titles and positions the petitioner held did not change his status from the insurance agent that he had always been (as evidenced by the Agreement that governed his relationship with Manulife from the start to its disagreeable end). Tongco simply progressed from his individual agency to being a lead agent who could use other agents in selling insurance and share in the earnings of these other agents.
