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Topic: Employer- Employee Relationship Absent
Case #1:
Philippine Global Communications vs. De Vera
G.R. No. 157214. June 7, 2005
Facts:
De Vera and petitioner company entered into a contract where respondent was to attend to the
medical needs of petitioners employees while being paid a retainer fee of P4,000.00 per month. Later, De
Vera was informed by the petitioner that the retainership will be discontinued. Respondent filed a case for
illegal dismissal alleging that that he had been actually employed by Philcom as its company physician since
1981 and was dismissed without due process. He averred that he was designated as a company physician on
retainer basis for reasons allegedly known only to Philcom. He likewise professed that since he was not
conversant with labor laws, he did not give much attention to the designation as anyway he worked on a fulltime basis and was paid a basic monthly salary plus fringe benefits, like any other regular employees of
Philcom. On 21 December 1998, Labor Arbiter Ramon Valentin C. Reyes came out with a decision dismissing
De Veras complaint for lack of merit, on the rationale that as a retained physician under a valid contract
mutually agreed upon by the parties, De Vera was an independent contractor and that he was not
dismissed but rather his contract ended when said contract was not renewed after December 31, 1996.
Issue: Whether or not de Vera is an employee of PhilCom or an independent contractor.
Held:
Applying the four fold test, de Vera is not an employee. There are several indicators apart from the fact
that the power to terminate the arrangement lay on both parties:
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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;
He was subjected by petitioner to the ten percent withholding tax for his professional fee, in
accordance with the NIRC, matters which are simply inconsistent with an employer-employee
relationship;
The records 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.
Finally, the element of control is absent. Respondent PHILCOM did not have control over the
schedule of the complainant as it [is] the complainant who is proposing his own schedule and
asking to be paid for the same. This is proof that the complainant understood that his relationship
with the respondent PHILCOM was a retained physician and not as an employee. If he were an
employee he could not negotiate as to his hours of work.
Case #2: Coca Cola Bottlers (Phils.), Inc vs. Dr. Dean N. Climaco
G.R. No. 146881
February 5, 2007
Facts:
Climaco is a medical doctor who was hired by petitioner Coca-Cola Bottlers Phils., Inc (Coca-Cola), by
virtue of a Retainer Agreement. The Retainer Agreement was renewed annually. The last one expired
December 31, 1993. Despite the non-renewal of the Retainer Agreement, respondent continued to perform
his functions as company doctor to Coca-Cola until he received a letter from petitioner company concluding
their retainership agreement. It is noted that as early as September 1992, petitioner was already making
inquiries regarding his status with petitioner company. Petitioner company, however, did not take any action.
Respondent inquired from the management of petitioner company whether it was agreeable to recognize him
as a regular employee. The management refused to do so. Respondent filed a Complaint before the NLRC
seeking recognition as a regular employee of petitioner company and prayed for the payment of all benefits of
a regular employee. While the complaint was pending before the Labor Arbiter, respondent received a letter
from petitioner company concluding their retainership agreement effective 30 days from receipt thereof. This
prompted respondent to file a complaint for illegal dismissal against petitioner company. The Labor Arbiter
and NLRC declared that there is no employer-employee relationship existed between the parties. However,
the Court of Appeals declared that respondent should be classified as a regular employee having rendered 6
years of service as plant physician by virtue of several renewed retainer agreements.
Issue: Whether or not there exists an employer-employee relationship between the parties
Ruling:
No. The court, in determining the existence of an employer-employee relationship used the four-fold
test which includes the selection and engagement of the employee; the payment of wages; the power of
dismissal; and the power to control the employees conduct.
The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this
case show that no employer-employee relationship exist between the parties, they correctly found that
petitioner company lacked the power of control over the performance by respondent of his duties. The Labor
Arbiter reasoned that the Comprehensive Medical Plan, which contains the respondents objectives, duties
and obligations, does not tell respondent how to conduct his physical examination, how to immunize, or how
to diagnose and treat his patients, employees of company, in each case.
In effect, through the Comprehensive Medical Plan, provided guidelines merely to ensure that the
end result was achieved, but did not control the means and methods by which respondent performed his
assigned tasks.
The NLRC affirmed the findings of the Labor Arbiter and stated that it is precisely because the
company lacks the power of control that the contract provides that respondent shall be directly responsible to
the employee concerned and their dependents for any injury, harm or damage caused through professional
negligence, incompetence or other valid causes of action.
In addition, the Court finds that the schedule of work and the requirement to be on call for
emergency cases do not amount to such control, but are necessary incidents to the Retainership Agreement.
The Court agrees that there is nothing wrong with the employment of respondent as a retained physician of
petitioner company and upholds the validity of the Retainership Agreement which clearly stated that no
employe-employee relationship existed between the parties. Considering that there is no employer-employee
relationship between the parties, the termination of the Retainership Agreement , which is accordance with
the provisions of the Agreement, does not constitute illegal dismissal of respondent.
Facts:
Respondent Realuyo, whose stage name was Joey R. Roa, was employed in September 1992 at the Legend Hotel
Manilas Tinglaw Restaurant, which belonged to the petitioner Titanium Corp. He was paid per nights performance,
which had been fixed from 7 p.m. to 10 p.m. for three to six times a week. He was required to conform with the venues
motif and had been subjected to rules on employees representation checks and chits. On July 9, 1999, the management
of Legend Hotel Manila notified him that as a cost-cutting measure, his services would no longer be required.
Subsequently, respondent filed a complaint for constructive illegal dismissal and several money claims. Petitioner
invoked the defense of lack of employer-employee relationship with respondent.
Issue: Whether or not there exists an employer-employee relationship.
Ruling:
Yes. A review of the circumstances reveals that respondent was, indeed, the petitioners employee. He was
undeniably employed as a pianist in petitioners Madison Coffee Shop/Tanglaw Restaurant from September 1992 until
his services were terminated on July 9, 1999. The power of the employer to control the work of the employee is
considered the most significant determinant of the existence of an employer-employee relationship. This is the so-called
control test, and is premised on whether the person for whom the services are performed reserves the right to control
both the end achieved and the manner and means used to achieve that end.
A review of the records shows, however, that respondent performed his work as a pianist under petitioners
supervision and control. Specifically, petitioners control of both the end achieved and the manner and means used to
achieve that end was demonstrated by the following, to wit:
a. He could not choose the time of his performance, which petitioners had fixed from 7:00 pm to 10:00 pm,
three to six times a week;
b. He could not choose the place of his performance;
c. The restaurants manager required him at certain times to perform only Tagalog songs or music, or to wear
barong Tagalog to conform to the Filipiniana motif; and
d. He was subjected to the rules on employees representation check and chits, a privilege granted to other
employees.
Relevantly, it is worth remembering that the employer need not actually supervise the performance of duties by
the employee, for it sufficed that the employer has the right to wield that power.