LABOR STANDARDS

CASE DIGEST
Submitted by: Nina Beleen F. Castillo

Makati Haberdashery, Inc. vs. NLRC

G.R. Nos. 83380-81, November 15, 1989
Facts:
Private respondents, have been working for Makati Haberdashery, Inc. as
tailors, seamstress, sewers, basters (manlililip) and "plantsadoras". They are
paid on a piece-rate basis except two workers who are paid on a monthly basis.
In addition to their piece-rate, they are given a daily allowance of three (P 3.00)
pesos provided they report for work before 9:30 a.m. everyday.
Private respondents are required to work from or before 9:30 a.m. up to 6:00 or
7:00 p.m. from Monday to Saturday and during peak periods even on Sundays
and holidays.
The Sandigan ng Manggagawang Pilipino, a labor organization of the
respondent workers, filed a complaint(a) underpayment of the basic wage; (b)
underpayment of living allowance; (c) non-payment of overtime work and other
money claims.
The Labor Arbiter decided in favor of the complainants which was further
affirmed by the NLRC. Petitioners filed the petition contending that public
respondents were erroneous in concluding that an employer-employee
relationship exist between Haberdashery and the private respondents.
Issue:
Whether or not an employer-employee relationship exists between petitioner
haberdashery and respondents workers.
Held:
The facts indubitably reveal that the most important requisite of control is
present. As gleaned from the operations of petitioner, when a customer enters
into a contract with the haberdashery or its proprietor, the latter directs an
employee who may be a tailor, pattern maker, sewer or "plantsadora" to take
the customer's measurements, and to sew the pants, coat or shirt as specified
by the customer. Supervision is actively manifested in all these aspects the
manner and quality of cutting, sewing and ironing.
Furthermore, the presence of control is immediately evident in a memorandum
issued by Assistant Manager which requires workers comply with the following

directives: To follow instructions only from specific persons; before accepting

the job orders tailors must check the materials, job orders, due dates and other
things to maximize the efficiency of production; all job orders must be finished
one day before the due date; alteration-Before accepting alteration person
attending on customers must ask first or must advise the tailors regarding the
due date; any tailor violating the memorandum will be subject to disciplinary
action.
It is evident that petitioner has reserved the right to control its employees not
only as to the result but also the means and methods by which the same are to
be accomplished.
Caurdanetaan Piece Workers Union vs. Laguesma & Corfarm Grains
G.R No. 113542, February 24, 1998
Facts:
Caurdanetaan Piece Workers Union members herein petitioners, worked for the
respondent, Corfarms Grains,Inc., as cargadores. Among of their jobs was to
load, unload and pile sacks of palay from the respondents warehouses to the
cargo trucks and from the cargo trucks to the buyers. Their salary paid by the
private respondent was on a piece rate basis. Some of the benefits being
demanded by the petitioners where denied by Corfarm to these cargadores
which led them to organize a union. Corfarm subsequently barred its members
from working with them when it learned of the unions formation and replaced
them with non-members of the union.
Petitioner filed a complaint for illegal dismissal.
Corfarm contends that it had no the power of control, saying that the
petitioner's members "were 'street-hired' workers and that here was no
superintendent-in-charge to give orders directly to the employees. The
respondent also alleged in its defense that there were no gate passes issued,
nor tools, equipment and paraphernalia issued by Corfarm for the loading and
unloading of the sacks of palay. They furthermore contend that employeremployee relationship is negated by the fact that they offer and actually
perform loading and unloading work for various rice mills in Pangasinan .
ISSUE:
Whether or not an employer-employee relationship between the CPWU members
and Respondent Corfarm exist.

HELD.
Yes. To determine the existence of an employer-employee relation, this Court
has consistently applied the "four-fold" test which has the following elements:
(1) the power to hire, (2) the payment of wages, (3) the power to dismiss, and (4)
the power to control - the last being the most important element.
Petitioners members performed work which is directly related, necessary and
vital to the operations of Corfarm. Moreover, Corfarm did not even allege that
petitioners members were independent contractors and did not contradict
petitioner's allegation that it paid wages directly to these workers without the
intervention of any third-party independent contractor. It also wielded the
power of dismissal over petitioners; in fact, its exercise of this power was the
progenitor of the illegal dismissal case

Alipio Ruga et al. vs. NLRC and De Guzman Fishing Enterprises and/or
Arsenio de Guzman
G.R. No. L-72654-61, January 22, 1990
Facts:
Petitioners Alipio Ruga et al. were fishermen-crew members of the trawl fishing
vessel 7/B Sandayman II owned and operated by De Guzman Fishing
Enterprises. Petitioners were engaged in various capacities and were paid on
percentage commission basis in cash by the cashier of private respondent.
They received 13% of the proceeds of the sale of the fish-catch if the total
proceeds exceeded the cost of crude oil consumed during the fishing trip,
otherwise, they received 10%.
On September 11, 1983, petitioners were ordered by the president of private
respondent, to proceed to the police station in Camaligan, Camarines Sur for
investigation regarding reports that petitioners sold their catch in mid-sea.
Petitioners were then not allowed to return to work and they individually filed
complaints for illegal dismissal and non-payment of 13th month pay, emergency
cost of living allowance and service incentive pay.
Labor Arbiter claims that a joint fishing venture existed between the parties
and not employer-employee relationship.

Issue:
Whether or not there an employer-employee relationship between petitioners
and private respondent?
Held:
Yes, as outlined in Sera et al. vs. Agarrado et al. the four-fold test in
determining employer-employee relationship are the following: (1) selection and
engagement of employee; (2) payment of wages; (3) power of dismissal and (4)
power to control employees action with respect to the means and methods by
which the work is to be accomplished. The employment relation arises from
contract of hire, express or implied. In the absence of which no employeremployee relationship exists. From the four-fold test, there is also the control
test, where the person for whom services are performed reserves a right to
control not only the end to be achieved but also the means to be used in
reaching such end. The test calls merely for the existence of the right to control
the manner of doing the work, not the actual exercise of the right. In the case
at bar, private respondents monitored the petitioners activities through a single
side band radio, directed them to report their activities, position and number of
tubes of fish-catch in one day. Petitioners were also hired by private
respondents, in fact.

ALEJANDRO MARAGUINOT, JR. and PAULINO ENERO vs NLRC

GRN 120969 January 22, 1998
Facts:
Petitioner Alejandro Maraguinot, Jr. maintains that he was employed by private
respondents filming crew and was was promoted to the rank of Electrician.
Petitioner Paulino Enero, on his part, claims that private respondents employed
him as a member of the shooting crew . Petitioners' tasks consisted of loading,
unloading and arranging movie equipment in the shooting area as instructed
by the cameraman and performing other tasks that the cameraman and/or
director may assign.
Petitioners sought the assistance of their supervisor, Mrs. Alejandria Cesario,
to facilitate their request that private respondents adjust their salary in
accordance with the minimum wage law who informed them that Mr. Vic del

Rosario would agree to increase their salary only if they signed a blank
employment contract. As petitioners refused to sign, private respondents forced
Enero to go on leave, then refused to take him back when he reported for work.
Meanwhile, Maraguinot was again asked to sign a blank employment contract,
and when he still refused, private respondents terminated his services.
Petitioners thus sued for illegal dismissal before the Labor Arbiter.
Respondents claim that Viva Films is primarily engaged in the distribution and
exhibition of movies - but not in the business of making movie and that private
respondent Vic del Rosario is merely an executive producer, i.e., the financier
who invests a certain sum of money for the production of movies distributed
and exhibited by VIVA.
Private respondents assert that they contract persons called "producers" to
"produce" or make movies for private respondents; and contend that petitioners
are project employees of the associate producers who, in turn, act as
independent contractors. As such, there is no employer-employee relationship
between petitioners and private respondents.
Issue:
Whether or not an employer-employee relationship existed between petitioners
and private respondents or any one of private respondents
Held:
All the circumstances indicate an employment relationship between petitioners
and VIVA alone, thus the inevitable conclusion is that petitioners are employees
only of VIVA. In respect to the respondents allegation that the petitioners are
project employees, it is a settled rule that contracting out of labor is allowed
only in case of job contracting. In the case at bar, the associate producers
cannot be considered as job contractors but only agents because they are not
engaged in the business of making motion pictures. The movie making
equipment are supplied to the producers and owned by VIVA. In addition, the
associate producers cannot be considered as labor only contractors as they did
not supply, recruit nor hire workers.
It may not be ignored, however, that private respondents expressly admitted
that petitioners were part of a work pool; 31 and, while petitioners were initially
hired possibly as project employees, they had attained the status of regular
employees in view of VIVA's conduct.

A project employee or a member of a work pool may acquire the status of a

regular employee when the following concur:
1) There is a continuous rehiring of project employees even after cessation of a
project; 32 and
2) The tasks performed by the alleged "project employee" are vital, necessary
and indispensable to the usual business or trade of the employer. 33

ORLANDO FARM GROWERS ASSOCIATION/GLICERIO AOVER vs.NLRC

G.R. No. 129076. November 25, 1998

Facts:
Petitioner Orlando Farm Growers Association is an association of landowners
engaged in the production of export quality bananas located in Kinamayan,
Sto. Tomas, Davao del Norte, established for the sole purpose of dealing
collectively with Stanfilco on matters concerning technical services, canal
maintenance, irrigation and pest control, among others.
Respondents (about 20 complainants) were hired as farm workers by several
member-landowners but, nonetheless, were made to perform functions as
packers and harvesters in the plantation of petitioner association. Respondents
were dismissed on various dates. Thus, they filed against petitioner for illegal
dismissal and monetary benefits. Labor arbiter Sancho ordered reinstatement
of respondents and payment of backwages and other benefits
Petitioner contends it cannot be considered as an employed for the reasons that
an association which was not registered and was formed based exclusively to
serve as an effectual medium for dealing collectively with Stanfilco and
inexistent in law.
Issue:
Whether or not an unregistered association may be an employer independent of
the respective members it represents
Held:

Yes. Petition is dismissed. NLRC judgment affirmed but remanded back to

Labor Arbiter Sancho to specify the amount each respondent is entitled to.
The law does not require an employer to be registered before he may considered
as one within the definition of the Labor Code. According to Art 212 (e) of the
Labor Code, it defines an employer as any person acting in the interest of an
employer, directly or indirectly
To determine the existence of employer employee relationship (Filipinas
Broadcasting Network v. NLRC): (1) The manner of selection and engagement
(2) Payment of wages (3) Presence or absence of the power of dismissal (4)
Presence or absence of the power of control, which is considered the most
important element.
The following facts serve as evidence to support existence of employer
employee relationship. During the subsistence of the association, several
circulars and memoranda were issued concerning, among other things,
absences without formal request, loitering in the work area and disciplinary
measures with which every worker is enjoined to comply. The employees were
issued IDs. In Domasig v. NLRC, the issuance of ID was held to be not only as a
security measure but mainly to identify the holder as a bonafide employee of
the firm

National Sugar Refineries Corporation vs. National Labor Relations

Commission and NBSR Supervisory Union, (PACIWU) TUCP
G.R. No. 101761 March 24, 1993
Facts:
On June 1, 1988, National Sugar Refineries Corporation, petitioner, implement
a Job evaluation (JE) program affecting all employees including the members of
respondent union, granted salary adjustments and increase in benefits,
therefore the respondents were re-classified as managerial staff. Two years
passed and the respondent union filed an action against the Executive Labor
Arbiter alleging non-payment of overtime and other benefits. In its decision, the
Labor Arbiter ordered that the petitioner pay the respondent overtime and
benefits, reasoning that they are not managerial employee under the definition
provided in Art. 212(m).
The petitioner, however, alleges that the respondent was not entitled to benefits
and should be considered as managerial staff as contemplated in Art. 82.

Issue:
Whether or not the members of respondent union are entitled to the benefits
provided in Labor Code such as premium pay among others?

Held:
United Pepsi cola ruling was adopted here: Managerial employees are ranked
as Top managers, Middle managers and First Line Managers. Top and Middle
Managers have the authority to devise, implement and control strategic and
operational policies while the task of First-Line Managers is simply to ensure
that such policies are carried out by the rank-and-file employees of an
organization.
Under this distinction, managerial employees therefore fall in two (2)
categories, namely, the managers per se composed of Top and Middle
Managers, and the supervisors composed of First-Line Managers.
Thus, the mere fact that an employee is designated manager does not ipso
facto make him one. Designation should be reconciled with the actual job
description of the employee, for it is the JOB DESCRIPTION that determines
the nature of employment. In this case, a thorough dissection of the job
description of the concerned supervisory employees and section heads
indisputably show that they are NOT actually managerial employees BUT ONLY
supervisory employees SINCE THEY DO NOT LAY DOWN COMPANY
POLICIES.

ADDITIONAL CASES:

1. Anastacio Viaa vs. Alejo Al-lagadan and Filomena Piga

G.R. No. L-8967, May 31, 1956
Facts:
Anastacio Viaa owned a fishing sailboat which was named Magkapatid
which, because of a collision between two naval ships, on the night of
September 3, 1948 sunk between Bataan and Corregidor. Alejandro Al-lagadan
disappeared with the sailboat, His parents, Alejo Al-lagadan and Filomena Piga,

filed a claim for compensation under Act 3428. The Workmens Compensation
Commission (WCC) rendered a decision ordering Viaa to pay Alejo and
Filomena the sum of 1,500 in lump sum with 6% interest from Sept. 3, 1948
until fully paid.
Issue: Whether or not Alejandro Al-lagadan an employee of petitioner to be
entitled to compensation benefits
Held:
It is not clear. In determining the existence of employer-employee relationship,
the following elements are generally considered: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; (d) the power to control the employees conduct the latter being the
most important. The first element, considering the facts, are insufficient to
warrant a reasonable conclusion, one way or the other, since the practice
commonly followed is on a share basis, that is, the hiring of the crew is done by
the patron himself and not the owner of the batel. When a patron enters into a
contract with the ship owner, he already has a crew with him. This suggests
that the members of the crew are chosen by the patron. But the report does not
indicate if said practice was used in case at bar. On the other hand, petitioner
contends that Alejandro was his partner, and that therefore, if the crew was
selected and engaged by the patron, the latter did so as agent of petitioner. If
petitioner were a partner of crew members, then neither the former nor the
patron could control or dismiss the latter.

2. Investment Planning Corp. of the Philippines vs. SSS

G.R. No. L-19124, November 18, 1967
Facts:
Petitioner is a local corporation engaged in business management and the sale
of securities. It has two classes of agents who sell its investment plans: (1)
salaried employees who keep definite hours and work under the control and
supervision of the company; and (2) registered representatives who work on a
commission basis. On August 27, 1960 petitioner filed an exemption for its
registered representatives to be covered under the social security act (RA 1161
as amended), which was denied.
Issue:

Whether or not there an employer-employee relationship between the petitioner

and its registered representatives within the meaning of ra 1161?
Held:
No, sec. 8d of RA 1161 defines the term employee as any person who
performs services for an employer in which either or both mental and physical
efforts are used and who receives compensation for such services, where there
is, employer-employee relationship. (as amended by Sec. 4, RA 2658). While it
is admitted that both mental and physical efforts in the performance of their
services. The compensation they receive is not for those efforts but rather for
the results thereof.
Under the control test principle, there is an employer-employee relationship
if 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.
In the contract between petitioner and registered representatives, nothing
therein indicates the former having control of the latter with respect to the
means and methods they employ in the performance of their work and
termination for certain causes does not mean such control exists, for the
causes of termination (e.g. failure to meet annual quota or inability to make
sales wihin a six-month period) have no relation to the means and methods of
work ordinarily required of or imposed upon employees

3. Dy Keh Beng vs. International Labor and Marine Union of the

Philippines, et al.
G.R. No. L-32245, May 25, 1979
Facts:
Dy Keh Beng is owner of a basket factory and was charged for unfair labor
practices under sec. 4a, sub-paragraph 1 and 4 of ra 875 in the dismissal of
carlos solano and ricardo tudla for their union activities.
The Court of Industrial Relations in a decision dated March 23, 1970 ordered
the reinstatement of solano and tudla with backwages and other rights granted
by law.
Issue:

Whether or not there an employer-employee relationship between beng and

solano-tudla?
Held:
Yes, the control test under which an employer-employee 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 means to be used in
reaching such end. The control test calls for the existence of the right to
control the manner of doing the work, not the actual exercise of the right. In
the case at bar, those working under Dy would have to observe the latters
requirements of size and quality of kaing. Some control would necessarily be
exercised by Dy as the making of the kaing would be subject to Dys
specifications. In addition, since the work on the baskets is done at Dys
establishments, it can be inferred that Dy could easily exercise control on the
men he employed.

4. Angelina Francisco vs. NLRC, Kasei Corp., et al.

G.R. No. 170087, August 31, 2006
Facts:
Petitioner was hired in 1995 by Kasei Corp. and designated as Accountant,
Liaison Officer to the City of Makati and Corporate Secretary. Although
designated as Corporate Secretary, she was not given the responsiblity of
handling corporate documents nor attended board meetings. In 1996,
petitioner was designated as an Acting Manager and handled recruitment of
employees, performing management administration functions and
administrative matters related to the operation of Kasei Restaurant, which is
under the ownership and operations of Kasei Corp. Petitioner was
subsequently replaced and was required to sign a resolution for her
replacement but the company assured of her continued connection with Kasei
Corp. Petitioner was then informed by the officers of the company that she was
no longer connected with Kasei Corp did not report for work. She eventually
filed action for constructive dismissal.

Issue: Whether or not there was an employee-employee relationship between

petitioner and Kasei Corp.?

Held:
Yes, under the control test, which determines an employer-employee
relationship when the person for whom the services are performed reserves the
right to control not only the end achieved but also the manner and means to
achieve that end, there was an employer-employee relationship since petitioner
was under the control and supervision of Seiji Kamura, the corporations
Technical Consultant, she reported for work regularly and served in various
capacities as accountant, liaison officer, technical consultant, acting manager
and corporate secretary.
Under the economic dependence test, which determines employer-employee
relationship based upon the whole economic activity such as: (1) extent to
which the services performed are an integral part of the employers business;
(2) extent of workers investment in equipment and facilities; (3) nature and
degree of control exercised by the employer; (4) workers opportunity for profit
and loss; (5) amount of initiative, skill, judgment or foresight required for the
success of the claimed independent enterprise; (6) permanency and duration of
the relationship between the worker and the employer; and (7) degree of
dependency of the worker upon the employer for his continued employment in
that line of business, petitioner can likewise be considered an employee
because she served the company for 6 years before dismissal, receiving
vouchers indicating her salary and 13th month pay, bonuses and allowances as
well as SSS deductions from August 1, 1999 to December 18, 2000. It is clear
that petitioner is economically dependent on respondent corporation for
employment in the latters line of business.

5. NLRC vs. Benedicto Dinglasan

G.R. No. L-7945, March 23, 1956
Facts:
Respondent Dinglasan is the owner and operator of TPU jeepneys plying
between Espaa-Quiapo-Pier and vice versa. Petitioners are drivers who had
verbal orders with respondent for the use of the latters jeepneys upon payment
of 7.50 for 10 hours use, otherwise known as boundary system. Said drivers
did not receive salaries or wages from Mr. Dinglasan; their days earnings being

the excess over the 7.50 that they paid for the use of the jeepneys. In the
event they did not earn more, respondent did not have to pay them anything.
Dinglasan has been charged for unfair labor practices but contends that there
is no employer-employee relationship between him and the drivers being that
he did not pay salaries to the drivers, the drivers earning as heretofore
described. The Court of Industrial Relations (CIR) affirmed such contention of
respondent.
Issue:
Whether or not there is an employer-employee relationship that exists between
Dinglasan and the drivers?
Held:
It is not clear from the facts that there is an employer-employee relationship.
The CIR in its decision declaring that no employer-employee relationship
existed between Dinglasan and the drivers did not actually state supporting
facts thereto. Being that the drivers did not invest in the jeepneys, the business
being within the complete control of respondent, the titles of conveyance also
being held by the respondent and that supervision was exercised by the
respondent as to the route taken by the drivers are within those prescribed by
the Public Service Commission and that control over the jeepneys and drivers
were manifest everytime the jeepneys pass upon the respondents gasoline
station, where the jeepneys were checked for water, oil, gas, and tire pressure.
Neither can lessor-lessee relationship be attributed since the owner herein did
not really lose control and management of the jeepneys as aforesaid explained.
6. Andres and Ester Villavilla vs. CA, Social Security Commission,
Reynaldo Mercado and Marcelo Cosuco, respondents, SSS, intervenor
G.R. No. 79664, August 11, 1992
Facts:
Arturo Villavilla, son of petitioners, was employed as tripulante (crew member)
of the fisng boat F/B Saint Theresa from 1974 until September 11, 1977 when
the boat sank off Palawan. Arturo was not among the known survivors. On
November 20, 1979, petitioners filed a petition with the Social Security
Commission against Reynaldo Mercado and Marcelino Cosuco, owner of the illfated fishing boat, for death compensation whom respondents failed to register
as their employee. Cosuco filed an answer denying all allegations and claiming
he already sold the boat to Mercado on Dec. 10, 1975, from then on did not

participate in the hiring of crewmembers or operation and management of the

boat. Mercado was declared in default for failing to file an answer.
Social Security Commission issued an order dismissing petition for lack of
cause of action, on appeal with the CA, decision of aforesaid commission was
affirmed being no reversible error.
Issue:
Whether or not there is an employer-employee relationship between Arturo and
private respondents?
Held:
No, there was no employer-employee relationship between Arturo Villavilla and
the private respondents since the arrangement between the boat crew and the
boat owners was joint venture. The crew members did not receive fixed
compensation as they only shared in the catch, they ventured into the sea
irrespective of the instructions of the boat owners as to how long, where to go
fishing and when to go fishing. The crew were paid based on their share in the
catch. The boat owners merely supplied the boat used for fishing and waited for
the boat to arrive to receive their share.
7. Philippine Global Communications v. De Vera
G.R. No. 157214. June 7, 2005
Facts:
Respondent Ricardo De Vera is a physician by profession who was enlisted by
petitioner, Philippine Global Communications (PhilCom), to attend to the
medical needs of its employees. He was hired by PhilCom on a retainer basis
where a contract between the parties would last only for 1 year but shall be
under agreement of an extension. De Veras contract was extended and in an
oral agreement, was eventually retained. De Veras retainership eventually
ended by the end of 1996. He filed a complaint for illegal dismissal with the
labor arbiter who dismissed the complaint. NLRC reversed the decision,
claiming that De Vera is a regular employee of PhilCom.
Issue:
Whether or not there was an employer-employee relationship between PhilCom
and De Vera.
Held:

One reason was because it was De Vera, himself, who dictated to PhilCom what
services he was going to render for the company. This was evident in the letter
De Vera sent to the company when he was still proposing his services.
Also, in another letter to the company, De Vera was dictating to the company
the time when he would be NO. Applying the 4-fold test, the SC found that De
Vera cannot be considered an employee of PhilCom.
coming to work. The 2 facts above point to the fact that the company did not
have full control over De Veras work. Note also that the power to terminate the
parties relationship was mutually vested on both. Either may terminate the
arrangement at will, with or without cause.
It does not also matter that the services that De Vera renders for the company
be considered as necessary and desirable because such qualifications are
determinative of whether the employee is regular or casual. The Court held
that even if the services rendered are necessary and desirable, this does not
presuppose that there was an EER between the parties. This is precisely why
there are independent contractors.
8. COCA-COLA BOTTLERS PHILS., INC., vs. DR. DEAN CLIMACO
G.R. No. 146881. February 15, 2007

Facts:
Dr. Climaco is a medical doctor who was hired by the petitioner by virtue of
retainer agreement which began on January 1, 1988. The agreement states
that there is no employer-employee relationship between the parties. The
retainer agreement was renewed annually. The last agreement expired on
December 1993. Respondent sustained performing his services as company
doctor regardless of the non-renewal of the contract, until he received a letter
in March 1995 concluding their retainer agreement.
Respondent filed a complaint before the NLRC seeking recognition as a regular
employee of the petitioner company and prayed for the payment of all benefits
of a regular employee. In the decision of the Labor Arbiter, the company lacked
control over the respondents performance of his duties. Respondent appealed
where it rendered that no employer-employee relationship existed between the
parties.
The CA ruled that an employer-employee relationship existed.
Issue:
Whether or not there exists an employer-employer relationship?

Held:
The court, in determining the existence of an employer-employee 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 employees conduct.
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.

9. ROGELIO RAMOS and ERLINDA RAMOS vs. CA

GR 124354. April 11, 2002

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.
Held:
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 hospitals obligation
is limited to providing the patient with the preferred room accommodation
and other things that will ensure that the doctors orders are carried out.
The court finds that there is no employer-employee relationship between the
doctors and the hospital.