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company, 24 and Certificates of Appreciation issued by Royal Star to

Laudato in recognition of her unselfish and loyal efforts in promoting


ANGELITO L. LAZARO, Proprietor of Royal
the company. 25 On the other hand, Lazaro has failed to present any
Star
Marketing, petitioner, vs. SOCIAL SECURIT convincing contrary evidence, relying instead on his bare assertions.
YCOMMISSION, ROSALINA
LAUDATO, SOCIAL SECURITY SYSTEM and The Memorandum evinces the fact that, contrary to Lazaro's claim,
THE HONORABLE COURT OF Royal Star exercised control over its sales supervisors or agents such
APPEALS, respondents. as Laudato as to the means and methods through which these
personnel performed their work.

FACTS OF THE CASE: Petition is denied.

Private respondent Rosalina M. Laudato ("Laudato") filed a petition


before the SSC for social security coverage and remittance of unpaid
monthly social security contributions against her three (3) employers.
Among the respondents was herein petitioner Angelito PHILIPPINE GLOBAL COMMUNICATIONS,
L. Lazaro ("Lazaro"), proprietor of Royal Star Marketing ("Royal Star"), INC., petitioner, vs. RICARDO DE
VERA, respondent.
which is engaged in the business of selling home appliances.

the SSC promulgated a Resolution 6 dated 8 November 1995 ruling in


FACTS OF THE CASE:
favor of Laudato. 7 Applying the "control test," it held that Laudato
was an employee of Royal Star, and ordered Royal Star to pay the
unremitted social security contributions of Laudato in the amount of Petitioner Philippine Global Communications, Inc. (PhilCom), is a
Five Thousand Seven Pesos and Thirty Five Centavos (P5,007.35), corporation engaged in the business of communication services and
allied activities, while respondent Ricardo De Vera is a physician by
together with the penalties totaling Twenty Two Thousand Two
profession whom petitioner enlisted to attend to the medical needs of
Hundred Eighteen Pesos and Fifty Four Centavos (P22,218.54). In its employees. At the crux of the controversy is Dr. De Vera's status vis
addition, Royal Star was made liable to pay damages to the SSC in the a vis petitioner when the latter terminated his engagement.
amount of Fifteen Thousand Six Hundred Eighty Pesos and Seven
Centavos (P15,680.07) for not reporting Laudato
It appears that on 15 May 1981, De Vera, via a letter dated 15 May
forsocial security coverage, pursuant to Section 24 of 1981, 3 offered his services to the petitioner, therein proposing his
the Social Security Law.
plan of works required of a practitioner in industrial medicine

ALLEGATION OF THE PETITIONER:


The parties agreed and formalized respondent's proposal in a
1. Lazaro denied that Laudato was a sales supervisor of Royal document denominated as RETAINERSHIP CONTRACT 4which will be
for a period of one year subject to renewal, it being made clear therein
Star, averring instead that she was a mere sales agent
that respondent will cover "the retainership the Company previously
whom he paid purely on commission basis. had with Dr. K. Eulau" and that respondent's "retainer fee" will be at
2. Laudato was not subjected to definite hours and conditions P4,000.00 a month. Said contract was renewed yearly. 5 The
of work. retainership arrangement went on from 1981 to 1994 with changes in
3. reiterated that Laudato was merely a sales agent who was the retainer's fee. However, for the years 1995 and 1996, renewal of
paid purely on commission basis, not included in the the contract was only made verbally.
company payroll, and who neither observed regular working
hours nor accomplished time cards. December 1996 when Philcom, thru a letter 6 bearing on the subject
boldly written as "TERMINATION — RETAINERSHIP CONTRACT",
ALLEGATION OF THE RESPONDENT: informed De Vera of its decision to discontinue the latter's "retainer's
contract with the Company effective at the close of business hours of
1. despite her employment as sales supervisor of the sales December 31, 1996" because management has decided that it would
agents for Royal Star from April of 1979 to March of be more practical to provide medical services to its employees through
1986, Lazaro had failed during the said period, to report her accredited hospitals near the company premises.
to the SSC for compulsory coverage or remit
Laudato's social security contributions. ALLEGATION OF THE RESPONDENT:

ISSUE: 1. he had been actually employed by Philcom as its company


physician since 1981 and was dismissed without due
Whether or not lauduto is entitled to payment of sss. process.
2. that he was designated as a "company physician on retainer
Whether ther exists an employer-employee relationship basis" for reasons allegedly known only to Philcom.
3. he worked on a full-time basis and was paid a basic monthly
 there exists an employer employee relationship because salary plus fringe benefits, like any other regular employees
even though lauduto was a sales supervisor or even a sales of Philcom.
agent, her work, means and method is subject to the control
of the employer. ISSUE:

RULING: Whether there exists an employer employee relationship between phil


com and de vera?
It is an accepted doctrine that for the purposes of coverage under
the Social Security Act, the determination of employer-employee  There is no employer employee relationship. There only
relationship warrants the application of the "control test," that is, exists and independent contractorship
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 RULING:
the means and methods by which the same is accomplished. 14 The
SSC, as sustained by the Court of Appeals, applying the control test
found that Laudato was an employee of Royal Star. We find no the Court, in determining the existence of an employer-employee
reversible error. relationship, has invariably adhered to the four-fold test, to wit: [1] the
selection and engagement of the employee; [2] the payment of
wages; [3] the power of dismissal; and [4] the power to control the
The finding of the SSC that Laudato was an employee of Royal Star is
employee's conduct, or the so-called "control test", considered to be
supported by substantial evidence. The SSC examined the cash the most important element.
vouchers issued by Royal Star to Laudato, 23 calling cards of Royal
Star denominating Laudato as a "Sales Supervisor" of the

ATHENA SALAS- LABOR STANDARDS REQUIRED CASES Page 1


Applying the four-fold test to this case, we initially find that it was show, respondents were paid all salaries and benefits due
respondent himself who sets the parameters of what his duties would them under the law.
be in offering his services to petitioner. This is borne by no less than
his 15 May 1981 letter 2. Petitioner also alleged that the Labor Arbiter had no
jurisdiction to involve the CBA and interpret the same,
especially since respondents were not covered by the
The labor arbiter added the indicia, not disputed by respondent, that bargaining unit.
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 ALLEGATION OF THE RESPONDENT:
subjected by petitioner to the ten (10%) percent withholding tax for
his professional fee, in accordance with the National Internal Revenue 1. Complainants were engaged by respondent ABS-CBN as
Code, matters which are simply inconsistent with an employer- regular and full-time employees for a continuous period of
employee relationship. In the precise words of the labor arbiter: more than five (5) years with a monthly salary rate of Four
Thousand (P4,000.00) pesos beginning 1995 up until the
". . . After more than ten years of services to PHILCOM, the filing of this complaint on November 20, 2000.
complainant would have noticed that no SSS deductions were made on 2. insisted that they belonged to a "work pool" from which
his remuneration or that the respondent was deducting the 10% tax petitioner chose persons to be given specific assignments at
its discretion, and were thus under its direct supervision and
for his fees and he surely would have complained about them if he had
control regardless of nomenclature.
considered himself an employee of PHILCOM. But he never raised
those issues. An ordinary employee would consider the SSS payments
ISSUE:
important and thus make sure they would be paid. The complainant
never bothered to ask the respondent to remit his SSS contributions.
respondents are not mere project employees, but regular employees
This clearly shows that the complainant never considered himself an
who perform tasks necessary and desirable in the usual trade and
employee of PHILCOM and thus, respondent need not remit anything
business of petitioner and not just its project employees.
to the SSS in favor of the complainant."
RULING:
The petition is granted

We agree with respondents’ contention that where a person has


ABS-CBN BROADCASTING CORPORATION, petitioner, rendered at least one year of service, regardless of the nature of the
vs. activity performed, or where the work is continuous or intermittent,
MARLYN NAZARENO, MERLOU GERZON, JENNIFER the employment is considered regular as long as the activity exists, the
DEIPARINE, and JOSEPHINE LERASAN, respondents. 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:

FACTS OF THE CASE: ART. 280. 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
Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in
be regular where the employee has been engaged to perform activities
the broadcasting business and owns a network of television and radio
which are usually necessary or desirable in the usual business or trade
stations, whose operations revolve around the broadcast, transmission,
of the employer except where the employment has been fixed for a
and relay of telecommunication signals. It sells and deals in or
specific project or undertaking the completion or termination of which
otherwise utilizes the airtime it generates from its radio and television
has been determined at the time of the engagement of the employee
operations. It has a franchise as a broadcasting company, and was
or where the work or services to be performed is seasonal in nature
likewise issued a license and authority to operate by the National
and the employment is for the duration of the season.
Telecommunications Commission.

The primary standard, therefore, of determining regular employment is


Petitioner employed respondents Nazareno, Gerzon, Deiparine, and
the reasonable connection between the particular activity performed
Lerasan as production assistants (PAs) on different dates. They were
by the employee in relation to the usual trade or business of the
assigned at the news and public affairs, for various radio programs in
employer. The test is whether the former is usually necessary or
the Cebu Broadcasting Station, with a monthly compensation ofP4,000.
desirable in the usual business or trade of the employer. The
They were issued ABS-CBN employees’ identification cards and were
connection can be determined by considering the nature of work
required to work for a minimum of eight hours a day, including
performed and its relation to the scheme of the particular business or
Sundays and holidays.
trade in its entirety. Also, if the employee has been performing the job
On December 19, 1996, petitioner and the ABS-CBN Rank-and-File for at least a year, even if the performance is not continuous and
Employees executed a Collective Bargaining Agreement (CBA) to be merely intermittent, the law deems repeated and continuing need for
effective during the period from December 11, 1996 to December 11, its performance as sufficient evidence of the necessity if not
1999. However, since petitioner refused to recognize PAs as part of the indispensability of that activity to the business. Hence, the
bargaining unit, respondents were not included to the CBA. employment is considered regular, but only with respect to such
activity and while such activity exists.
On October 12, 2000, respondents filed a Complaint for Recognition of
Regular Employment Status, Underpayment of Overtime Pay, Holiday In determining whether an employment should be considered regular
Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th or non-regular, the applicable test is the reasonable connection
Month Pay with Damages against the petitioner before the NLRC. between the particular activity performed by the employee in relation
to the usual business or trade of the employer. The standard, supplied
ALLEGATION OF THE PETITIONER: by the law itself, is whether the work undertaken is necessary or
desirable in the usual business or trade of the employer, a fact that
1. that PAs, reporters, anchors and talents occasionally can be assessed by looking into the nature of the services rendered
"sideline" for other programs they produce, such as drama and its relation to the general scheme under which the business or
talents in other productions. As program employees, a PA’s trade is pursued in the usual course.
engagement is coterminous with the completion of the
program, and may be extended/renewed provided that the Not considered regular employees are "project employees," the
program is on-going; a PA may also be assigned to new completion or termination of which is more or less determinable at the
programs upon the cancellation of one program and the time of employment, such as those employed in connection with a
commencement of another. As such program employees, particular construction project, and "seasonal employees" whose
employment by its nature is only desirable for a limited period of time.
their compensation is computed on a program basis, a fixed
Even then, any employee who has rendered at least one year of
amount for performance services irrespective of the time
service, whether continuous or intermittent, is deemed regular with
consumed. At any rate, petitioner claimed, as the payroll will respect to the activity performed and while such activity actually
exists.

ATHENA SALAS- LABOR STANDARDS REQUIRED CASES Page 2


Respondents cannot be considered "talents" because they are not 1. They alleged that petitioner was hired in 1995 as one of its
actors or actresses or radio specialists or mere clerks or utility technical consultants on accounting matters and act
employees. They are regular employees who perform several different concurrently as Corporate Secretary. As technical consultant,
duties under the control and direction of ABS-CBN executives and
petitioner performed her work at her own discretion without
supervisors.
control and supervision of Kasei Corporation. Petitioner had
no daily time record and she came to the office any time she
there are two kinds of regular employees under the law: (1) those
wanted. The company never interfered with her work except
engaged to perform activities which are necessary or desirable in the
that from time to time, the management would ask her
usual business or trade of the employer; and (2) those casual
opinion on matters relating to her profession. Petitioner did
employees who have rendered at least one year of service, whether
not go through the usual procedure of selection of
continuous or broken, with respect to the activities in which they are
employees, but her services were engaged through a Board
employed.
Resolution designating her as technical consultant. The
money received by petitioner from the corporation was her
It is obvious that one year after they were employed by petitioner,
professional fee subject to the 10% expanded withholding
respondents became regular employees by operation of law
tax on professionals, and that she was not one of those
reported to the BIR or SSS as one of the company’s
PETITION OF THE ABS CBN IS DENIED
employees.

ANGELINA FRANCISCO, Petitioner, ISSUE:


vs.
NATIONAL LABOR RELATIONS COMMISSION, KASEI
Whether or not the petitioner was illegally dimissed?
CORPORATION, SEIICHIRO TAKAHASHI, TIMOTEO ACEDO,
DELFIN LIZA, IRENE BALLESTEROS, TRINIDAD LIZA and
RAMON ESCUETA, Respondents.  The corporation constructively dismissed petitioner when it
reduced her salary by P2,500 a month from January to
September 2001.
FACTS OF THE CASE:
 A diminution of pay is prejudicial to the employee and
In 1995, petitioner was hired by Kasei Corporation during its amounts to constructive dismissal. Constructive dismissal is
incorporation stage. She was designated as Accountant and Corporate an involuntary resignation resulting in cessation of work
Secretary and was assigned to handle all the accounting needs of the resorted to when continued employment becomes
company. She was also designated as Liaison Officer to the City of impossible, unreasonable or unlikely; when there is a
Makati to secure business permits, construction permits and other demotion in rank or a diminution in pay; or when a clear
licenses for the initial operation of the company. Although she was discrimination, insensibility or disdain by an employer
designated as Corporate Secretary, she was not entrusted with the becomes unbearable to an employee.
corporate documents; neither did she attend any board meeting nor
 where an employee ceases to work due to a demotion of
required to do so. She never prepared any legal document and never
rank or a diminution of pay, an unreasonable situation arises
represented the company as its Corporate Secretary. However, on which creates an adverse working environment rendering it
some occasions, she was prevailed upon to sign documentation for the impossible for such employee to continue working for her
company. employer. Hence, her severance from the company was not
of her own making and therefore amounted to an illegal
termination of employment.
1996, petitioner was designated Acting Manager. The corporation also
hired Gerry Nino as accountant in lieu of petitioner. As Acting Manager,
petitioner was assigned to handle recruitment of all employees and Whether there is an employer employee relationship?
perform management administration functions; represent the company
in all dealings with government agencies, especially with the Bureau of  There exists an employer employee relationship applying the
Internal Revenue (BIR), Social Security System (SSS) and in the city two tiered approach in determining the relationship of
government of Makati; and to administer all other matters pertaining employees
to the operation of Kasei Restaurant which is owned and operated by
Kasei Corporation. 7
RULING:

For five years, petitioner performed the duties of Acting Manager. As


there has been no uniform test to determine the existence of an
of December 31, 2000 her salary was P27,500.00 plus P3,000.00
employer-employee relation. Generally, courts have relied on the so-
housing allowance and a 10% share in the profit of Kasei Corporation. called right of control test where the person for whom the services are
performed reserves a right to control not only the end to be achieved
January 2001, petitioner was replaced by Liza R. Fuentes as Manager. but also the means to be used in reaching such end. In addition to the
standard of right-of-control, the existing economic conditions
Kasei Corporation reduced her salary by P2,500.00 a month beginning prevailing between the parties, like the inclusion of the employee in
January up to September 2001 for a total reduction of P22,500.00 as the payrolls, can help in determining the existence of an employer-
of September 2001. Petitioner was not paid her mid-year bonus employee relationship.
allegedly because the company was not earning well. On October
2001, petitioner did not receive her salary from the company. She in certain cases the control test is not sufficient to give a complete
made repeated follow-ups with the company cashier but she was picture of the relationship between the parties, owing to the
complexity of such a relationship where several positions have been
advised that the company was not earning well.
held by the worker. There are instances when, aside from the
employer’s power to control the employee with respect to the means
On October 15, 2001, petitioner asked for her salary from Acedo and and methods by which the work is to be accomplished, economic
the rest of the officers but she was informed that she is no longer realities of the employment relations help provide a comprehensive
connected with the company. analysis of the true classification of the individual, whether as
employee, independent contractor, corporate officer or some other
capacity.
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. 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
ALLEGATION OF THE PETITIONER:
accomplished; and (2) the underlying economic realities of the activity
or relationship.
1. she was required to sign a prepared resolution for her
replacement but she was assured that she would still be
connected with Kasei Corporation.

ALLEGATIONS OF THE RESPONDENTS: G.R. No. 142625 December 19, 2006

ATHENA SALAS- LABOR STANDARDS REQUIRED CASES Page 3


ROGELIO P. NOGALES, for himself and on behalf of the ISSUE:
minors, ROGER ANTHONY, ANGELICA, NANCY, and MICHAEL
CHRISTOPHER, all surnamed NOGALES, petitioners, 1. is the Capitol Medical Center is solidarily liable for the
vs. negligence committed by Dr. Estrada?
CAPITOL MEDICAL CENTER, DR. OSCAR ESTRADA, DR. ELY
2. Is there an employee-employer relationship between Dr.
VILLAFLOR, DR. ROSA UY, DR. JOEL ENRIQUEZ, DR.
PERPETUA LACSON, DR. NOE ESPINOLA, and NURSE J. Estrada and Capitol Medical Center?
DUMLAO, respondents. a. whether CMC is automatically exempt from liability
considering that Dr. Estrada is an independent
FACTS OF THE CASE: contractor-physician.

Pregnant with her fourth child, Corazon Nogales ("Corazon"), who was RULING:
then 37 years old, was under the exclusive prenatal care of Dr. Oscar
"borrowed servant" doctrine considering that Dr. Estrada was an
Estrada ("Dr. Estrada") beginning on her fourth month of pregnancy or
independent contractor who was merely exercising hospital privileges.
as early as December 1975. While Corazon was on her last trimester of
This doctrine provides that once the surgeon enters the operating
pregnancy, Dr. Estrada noted an increase in her blood pressure and
room and takes charge of the proceedings, the acts or omissions of
development of leg edema5 indicating preeclampsia,6 which is a
operating room personnel, and any negligence associated with such
dangerous complication of pregnancy.
acts or omissions, are imputable to the surgeon.
Around midnight of 25 May 1976, Corazon started to experience mild
 While the assisting physicians and nurses may be employed
labor pains Dr. Estrada advised her immediate admission to the Capitol
by the hospital, or engaged by the patient, they normally
Medical Center
become the temporary servants or agents of the surgeon in
Based on the Doctor's Order Sheet,11 around 3:00 a.m., Dr. Estrada charge while the operation is in progress, and liability may
ordered for 10 mg. of valium to be administered immediately by be imposed upon the surgeon for their negligent acts under
intramuscular injection. the doctrine of respondeat superior.

Dr. Joel Enriquez ("Dr. Enriquez"), an anesthesiologist at CMC, was private hospitals, hire, fire and exercise real control over their
notified at 4:15 a.m. of Corazon's admission. Subsequently, when attending and visiting "consultant" staff. While "consultants" are
asked if he needed the services of an anesthesiologist, Dr. Estrada not, technically employees, a point which respondent hospital
refused. Despite Dr. Estrada's refusal, Dr. Enriquez stayed to observe asserts in denying all responsibility for the patient's condition,
Corazon's condition. the control exercised, the hiring, and the right to terminate
consultants all fulfill the important hallmarks of an employer-
Corazon later on delivered the baby but was very weak and needs to employee relationship, with the exception of the payment of
be intubated and resuscitated. When the baby was out using forceps, wages. In assessing whether such a relationship in fact exists,
the cervical tissues of Corazon was already torn and so profuse vaginal the control test is determining. Accordingly, on the basis of
bleeding occurred. Dr. Espinola, who was fetched from his residence the foregoing, we rule that for the purpose of allocating
by an ambulance, arrived at the CMC about an hour later or at 9:00 responsibility in medical negligence cases, an employer-
a.m. He examined the patient and ordered some resuscitative employee relationship in effect exists between hospitals and
measures to be administered. Despite Dr. Espinola's efforts, Corazon their attending and visiting physicians.
died at 9:15 a.m. The cause of death was "hemorrhage, post partum."
The basis for holding an employer solidarily responsible for the
negligence of its employee is found in Article 2180 of the Civil Code
On 14 May 1980, petitioners filed a complaint for damages15 with the
which considers a person accountable not only for his own acts but
Regional Trial Court16 of Manila against CMC, Dr. Estrada, Dr. Villaflor,
Dr. Uy, Dr. Enriquez, Dr. Lacson, Dr. Espinola, and a certain Nurse J. also for those of others based on the former's responsibility under a
Dumlao for the death of Corazon. Charged CMC with negligence in the relationship of patria potestas.
selection and supervision of defendant physicians and hospital staff.
the control test, such test essentially determines whether an
After more than 11 years of trial, the trial court rendered judgment on employment relationship exists between a physician and a
22 November 1993 finding Dr. Estrada solely liable for damages. The hospital based on the exercise of control over the physician as
trial court ruled as follows: 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 victim was under his pre-natal care, apparently, his fault began the employee (or the physician) is to accomplish his task.
from his incorrect and inadequate management and lack of treatment
of the pre-eclamptic condition of his patient.
the Court finds no single evidence pointing to CMC's exercise of control
over Dr. Estrada's treatment and management of Corazon's condition.
On 6 February 1998, the Court of Appeals affirmed the decision of the It is undisputed that throughout Corazon's pregnancy, she was under
trial court. 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
ALLEGATIONS OF THE PETITIONER:
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
1. defendant physicians and CMC personnel were negligent in employee of CMC.42 CMC merely allowed Dr. Estrada to use its
the treatment and management of Corazon's condition. facilities43 when Corazon was about to give birth, which CMC
2. claimed that aside from Dr. Estrada, the remaining considered an emergency. Considering these circumstances, Dr.
respondents should be held equally liable for negligence. Estrada is not an employee of CMC, but an independent contractor.
3. CMC, in allowing Dr. Estrada to practice and admit patients
at CMC, should be liable for Dr. Estrada's malpractice. In general, a hospital is not liable for the negligence of an independent
contractor-physician. There is, however, an exception to this principle.
ALLEGATIONS OF THE RESPONDENTS: The hospital may be liable if the physician is the "ostensible"
agent of the hospital.44This exception is also known as the
1. CMC disclaims liability by asserting that Dr. Estrada was a "doctrine of apparent authority."
mere visiting physician and that it admitted Corazon because
her physical condition then was classified an emergency
CMC impliedly held out Dr. Estrada as a member of its medical staff.
obstetrics case. Through CMC's acts, CMC clothed Dr. Estrada with apparent authority
2. alleges that Dr. Estrada is an independent contractor "for thereby leading the Spouses Nogales to believe that Dr. Estrada was
whose actuations CMC would be a total stranger." an employee or agent of CMC. CMC cannot now repudiate such
3. it had no control or supervision over Dr. Estrada in the authority.
exercise of his medical profession.

ATHENA SALAS- LABOR STANDARDS REQUIRED CASES Page 4


First, CMC granted staff privileges to Dr. Estrada. CMC extended its ALLEGATIONS OF THE PETITIONER (coca-cola):
medical staff and facilities to Dr. Estrada. Upon Dr. Estrada's request
for Corazon's admission, CMC, through its personnel, readily 1. they exercised no control over petitioner for the reason that
accommodated Corazon and updated Dr. Estrada of her condition. the latter was not directed as to the procedure and manner
of performing his assigned tasks.
Second, CMC made Rogelio sign consent forms printed on CMC 2. complainant maintains his own private clinic attending to his
letterhead. Prior to Corazon's admission and supposed hysterectomy, private practice in the city, where he services his patients,
CMC asked Rogelio to sign release forms, the contents of which bills them accordingly
reinforced Rogelio's belief that Dr. Estrada was a member of CMC's
medical staff. ALLEGATIONS OF THE RESPONDENTS:

CMC's defense that all it did was "to extend to [Corazon] its facilities" 1. since he is on call at anytime of the day and night makes
is untenable. The Court cannot close its eyes to the reality that him a regular employee is off-tangent.
hospitals, such as CMC, are in the business of treatment. 2. That he has been working for the company for more than 1
year and therefore he should be treated as a regular
the release forms of CMC cannot relieve CMC from liability for the employee.
negligent medical treatment of Corazon.
ISSUE:
WHEREFORE, the Court PARTLY GRANTS the petition. The Court
finds respondent Capitol Medical Center vicariously liable for the  whether or not there exists an employer-employee
negligence of Dr. Oscar Estrada. The amounts of P105,000 as actual relationship between the parties
damages andP700,000 as moral damages should each earn legal  whether the termination of respondent’s employment is
interest at the rate of six percent (6%) per annum computed from the illegal.
date of the judgment of the trial court. The Court affirms the rest of
the Decision dated 6 February 1998 and Resolution dated 21 March RULING:
2000 of the Court of Appeals in CA-G.R. CV No. 45641.
The Court, in determining the existence of an employer-employee
SO ORDERED. relationship, has invariably adhered to the four-fold test: (1) the
selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the
employee’s conduct, or the so-called "control test," considered to be
G.R. No. 146881 February 5, 2007 the most important element.

The Labor Arbiter and the NLRC correctly found that petitioner
COCA COLA BOTTLERS (PHILS.), INC./ERIC MONTINOLA,
Manager, Petitioners, company lacked the power of control over the performance by
vs. respondent of his duties. The Labor Arbiter reasoned that the
DR. DEAN N. CLIMACO, Respondent. Comprehensive Medical Plan, which contains the respondent’s
objectives, duties and obligations, does not tell respondent "how to
FACTS OF THE CASE: conduct his physical examination, how to immunize, or how to
diagnose and treat his patients, employees of [petitioner] company, in
each case."
Respondent Dr. Dean N. Climaco is a medical doctor who was hired by
petitioner Coca-Cola Bottlers Phils., Inc. by virtue of a Retainer
Agreement. The Retainer Agreement, which began on January 1, the Labor Arbiter held that petitioner company, through the
1988, was renewed annually. The last one expired on December 31, Comprehensive Medical Plan, provided guidelines merely to ensure
1993. Despite the non-renewal of the Retainer Agreement, respondent that the end result was achieved, but did not control the means and
continued to perform his functions as company doctor to Coca-Cola methods by which respondent performed his assigned tasks.
until he received a letter4 dated March 9, 1995 from petitioner
company concluding their retainership agreement effective 30 days
The NLRC affirmed the findings of the Labor Arbiter and stated that it
from receipt thereof.
is precisely because the company lacks the power of control that the
contract provides that respondent shall be directly responsible to the
It is noted that as early as September 1992, petitioner was already employee concerned and their dependents for any injury, harm or
making inquiries regarding his status with petitioner company. First, he damage caused through professional negligence, incompetence or
wrote a letter addressed to Dr. Willie Sy, the Acting President and other valid causes of action.
Chairperson of the Committee on Membership, Philippine College of
Occupational Medicine. In response, Dr. Sy wrote a letter5 to the
The Labor Arbiter also correctly found that the provision in the
Personnel Officer of Coca-Cola Bottlers Phils., Bacolod City, stating that
respondent should be considered as a regular part-time physician, Retainer Agreement that respondent was on call during emergency
having served the company continuously for four (4) years. He likewise cases did not make him a regular employee.
stated that respondent must receive all the benefits and privileges of
an employee under Article 157 (b)6 of the Labor Code.
Considering that there is no employer-employee relationship between
the parties, the termination of the Retainership Agreement, which is in
Petitioner company, however, did not take any action. accordance with the provisions of the Agreement, does not constitute
illegal dismissal of respondent. Consequently, there is no basis for the
November 28, 1996, Labor Arbiter Jesus N. Rodriguez, Jr. found that moral and exemplary damages granted by the Court of Appeals to
petitioner company lacked the power of control over respondent’s respondent due to his alleged illegal dismissal.
performance of his duties, and recognized as valid the Retainer
Agreement between the parties. WHEREFORE, the petition is GRANTED and the Decision and
Resolution of the Court of Appeals are REVERSED and SET ASIDE. The
Decision and Resolution dated November 28, 1997 and August 7,
November 28, 1997, the NLRC dismissed the appeal in both cases for
lack of merit. It declared that no employer-employee relationship 1998, respectively, of the National Labor Relations Commission are
existed between petitioner company and respondent based on the REINSTATED.
provisions of the Retainer Agreement which contract governed
respondent’s employment.

July 7, 2000, the Court of Appeals ruled that an employer-employee


relationship existed between petitioner company and respondent after
applying the four-fold test: (1) the power to hire the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the employer’s
power to control the employee with respect to the means and methods
by which the work is to be accomplished.

ATHENA SALAS- LABOR STANDARDS REQUIRED CASES Page 5

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