Calamba Medical Center, Inc.

vs National Labor Relations Commission

571 SCRA 585 – Labor Law – Labr Relations – Labor Standards – Strike – Managerial
Employees – Control – Illegal Dismissal
Ronaldo Lanzanas and Merceditha Lanzanas are doctors employed by Calamba Medical
Center, Inc. They are given a retainer’s fee by the hospital as well as shares from fees
obtained from patients.
One time, Ronaldo was overheard by Dr. Trinidad talking to another doctor about how low
the admission rate to the hospital is. That conversation was reported to Dr. Desipeda who
was then the Medical Director of the hospital.
Eventually Ronaldo was suspended. Ronaldo filed a case for Illegal Suspension in March
1998. In the same month, the rank and file employees organized a strike against the
hospital for unfair labor practices. Desipeda eventually fired Ronaldo for his alleged
participation in the strike, which is not allowed under the Labor Code for he is a managerial
employee. Desipeda also fired Merceditha on the ground that she is the wife of Ronaldo
who naturally sympathizes with him.
The Labor Arbiter ruled that there was no Illegal Suspension for there was no employer-
employee relationship because the hospital has no control over Ronaldo as he is a doctor
who even gets shares from the hospitals earnings.
The National Labor Relations Commission as well as the Court of Appeals reversed the LA.
ISSUE: Whether or not there is an employer-employee relationship?
HELD: Yes. 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. There is control in this case because of the
fact that Desipeda schedules the hours of work for Ronaldo and his wife.
The doctors are also registered by the hospital under the SSS which is premised on an
employer-employee relationship.
There is Illegal Dismissal committed against Rolando for there was no notice and hearing
held. It was never shown that Rolando joined the strike. But even if he did, he has the right
to do so for he is not a part of the managerial or supervisory employees. As a doctor, their
decisions are still subject to revocation or revision by Desipeda.
There is Illegal Dismissal committed against Merceditha for the ground therefor was not
mentioned in Article 282 of the Labor Code.
When is Control (One of the Four Tests of Employer-Employee Relationship) 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 is compensated according to the result
of his efforts and not the amount thereof, the element of control is absent.

CALAMBA MEDICAL CENTER

 VS

NATIONAL LABOR RELATIONS COMMISSION

571 SCRA 585 (2008)

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.

Petitioner Calamba Medical Center (CMC), engaged the services of medical doctors-
spouses Ronaldo Lanzanas (Dr. Ronaldo) and Merceditha Lanzanas (Dr. Merceditha) as
part of its team of resident physicians. They were given, among
others, identificationcards and work schedules; and were paid a monthly retainer. They
were likewise enrolled in the Social Security System (SSS). Subsequently, CMC’s medical
director issued a Memorandum to Dr. Ronaldo after a resident physician overheard Dr.
Ronaldo and a fellow employee discussing the low admission in the hospital. After the
incident involving her husband, Dr. Merceditha was no longer given any
work assignments.

Afterwards, the rank and file employees union of Calamba Medical Center went on a
strike. Dr. Ronaldo and Dr. Merceditha meanwhile filed a complaint for illegal
suspension and illegal dismissal, respectively before the National Labor Relations
Commission Regional Arbitration Board (NLRC-RAB). Consequently, the Department
of Labor and Employment (DOLE) issued a return to work order. Dr. Ronaldo, on the
other hand, received a notice of termination indicating his failure to return for work. Dr.
Ronaldo thus amended his complaint to illegal dismissal. The CMC contends that the
doctors-spouses are not employees of the same, so that they cannot be illegally
dismissed.

ISSUES:
Whether or not an employee-employer relationship does not exist between Calamba
Medical Center and the doctors-spouses Lanzanas

HELD:
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.

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 is compensated according to the
result of his efforts and not the amount thereof, the element of control is absent.

As priorly stated, the spouses-doctors maintained specific work-schedules, as

determined by petitioner through its medical director, which consisted of 24-hour shifts
totaling forty-eight hours each week and which were strictly to be observed under pain
of administrative sanctions.
That CMC exercised control over spouses-doctors gains light from the undisputed fact
that in the emergency room, the operating room, or any department or ward for that
matter, spouses-doctors’ work is monitored through its nursing supervisors, charge
nurses and orderlies. Without the approval or consent of CMC 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 spouses-doctors sharing in some hospital fees, this scheme does not
sever the employment tie between them and CMC 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.
The spouses-doctors were in fact 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, the CMC 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,[35] except in cases of compulsory coverage of the self-employed.
It would be preposterous for an employer to report certain persons as employees and
pay their SSS premiums as well as their wages if they are not its employees.

And if the spouses-doctors were not CMC’s employees, how does it account for its
issuance of the earlier-quoted March 7, 1998 memorandum explicitly stating that
respondent is ―employed‖ in it and of the subsequent termination letter indicating Dr.
Ronaldo’s employment status.

Finally, under Section 15, Rule X of Book III of the Implementing Rules of the Labor
Code, an employer-employee relationship exists between the resident physicians and
the training hospitals, unless there is a training agreement between them, and the
training program is duly accredited or approved by the appropriate government agency.
In the spouses-doctors’ case, they were not undergoing any specialization training. They
were considered non-training general practitioners, assigned at the emergency rooms
and ward sections.