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PSI, together with Dr. Miguel Ampil (Dr. Am In May 1994, ABS-CBN signed
an agreement with the Mel and Jay Management and Development Corporation
(MJMDC). ABS-CBN was represented by its corporate officers while MJMDC was
represented by Sonza, as President and general manager, and Tiangco as its EVP and
treasurer. Referred to in the agreement as agent, MJMDC agreed to provide Sonzas
services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to
pay Sonza a monthly talent fee of P310, 000 for the first year and P317, 000 for the
second and third year.
On April 1996, Sonza wrote a letter to ABS-CBN's President, Eugenio Lopez III, where
he irrevocably resigned in view of the recent events concerning his program and career.
The acts of the station are violative of the Agreement and said letter will serve as notice
of rescission of said contract. The letter also contained the waiver and renunciation for
recovery of the remaining amount stipulated but reserves the right to seek recovery of
the other benefits under said Agreement.
After the said letter, Sonza filed with the Department of Labor and Employment a
complaint alleging that ABS-CBN did not pay his salaries, separation pay, service
incentive pay,13th month pay, signing bonus, travel allowance and amounts under the
Employees Stock Option Plan (ESOP). ABS-CBN contended that no employeeemployer relationship existed between the parties. However, ABS-CBN continued to
remit Sonzas monthly talent fees but opened another account for the same purpose.
The Labor Arbiter dismissed the complaint and found that there is no employeeemployer relationship. The LA ruled that he is not an employee by reason of his
peculiar skill and talent as a TV host and a radio broadcaster. Unlike an ordinary
employee, he was free to perform his services in accordance with his own style. NLRC
and CA affirmed the LA. Should there be any complaint, it does not arise from an
employer-employee relationship but from a breach of contract.
ISSUE: Whether or not there was employer-employee relationship between the parties.
HELD:
There is no employer-employee relationship between Sonza and ABS-CBN. Petition
denied. Judgment decision affirmed.
Case law has consistently held that the elements of an employee-employer relationship
are selection and engagement of the employee, the payment of wages, the power of
dismissal and the employers power to control the employee on the means and
methods by which the work is accomplished. The last element, the so-called "control
test", is the most important element.
B. Payment of Wages
ABS-CBN directly paid SONZA his monthly talent fees with no part of his fees going to
MJMDC. SONZA asserts that this mode of fee payment shows that he was an
employee of ABS-CBN. SONZA also points out that ABS-CBN granted him benefits
and privileges which he would not have enjoyed if he were truly the subject of a valid
job contract.
All the talent fees and benefits paid to SONZA were the result of negotiations that led to
the Agreement. If SONZA were ABS-CBNs 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.
Whatever benefits SONZA enjoyed arose from contract and not because of an
employer-employee relationship. In addition, SONZAs talent fees are so huge and out
of the ordinary that they indicate more an independent contractual relationship rather
than an employer-employee relationship. ABS-CBN agreed to pay SONZA such huge
talent fees precisely because of SONZAs unique skills, talent and celebrity status not
possessed by ordinary employees.
C. Power of Dismissal
For violation of any provision of the Agreement, either party may terminate their
relationship. SONZA failed to show that ABS-CBN could terminate his services on
grounds other than breach of contract, such as retrenchment to prevent losses as
provided under labor laws.
During the life of the Agreement, ABS-CBN agreed to pay SONZAs 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 SONZAs talent fees during the
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.
SONZA admits that even after ABS-CBN ceased broadcasting his programs, ABS-CBN
still paid him his talent fees. Plainly, ABS-CBN adhered to its undertaking in the
Agreement to continue paying SONZAs talent fees during the remaining life of the
Agreement even if ABS-CBN cancelled SONZAs programs through no fault of SONZA.
D. Power of Control
First, SONZA contends that ABS-CBN exercised control over the means and methods
of his work. SONZAs argument is misplaced. ABS-CBN engaged SONZAs 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-CBNs 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
SONZAs 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, SONZA urges us to rule that he was ABS-CBNs employee because ABS-CBN
subjected him to its rules and standards of performance. SONZA claims that this
indicates ABS-CBNs control not only [over] his manner of work but also the quality of
his work." 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.
In any event, not all rules imposed by the hiring party on the hired party indicate that
the latter is an employee of the former. In this case, SONZA failed to show that these
rules controlled his performance. We find that these general rules are merely guidelines
towards the achievement of the mutually desired result, which are top-rating television
and radio programs that comply with standards of the industry.
Lastly, SONZA insists that the exclusivity clause in the Agreement is the most extreme
form of control which ABS-CBN exercised over him. This argument is futile. Being an
exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. Even
pil) and Dr. Juan Fuentes (Dr. Fuentes), was impleaded by Enrique
Agana and Natividad Agana (later substituted by her heirs), in a
complaint10 for damages filed in the Regional Trial Court (RTC) of
Quezon City, Branch 96, for the injuries suffered by Natividad when Dr.
Ampil and Dr. Fuentes neglected to remove from her body two gauzes
which were used in the surgery they performed on her on April 11, 1984
at the Medical City General Hospital. PSI was impleaded as owner,
operator and manager of the hospital.
In a decision dated March 17, 1993, the RTC held PSI solidarily liable
with Dr. Ampil and Dr. Fuentes for damages. On appeal, the Court of
Appeals (CA), absolved Dr. Fuentes but affirmed the liability of Dr.
Ampil and PSI, subject to the right of PSI to claim reimbursement from
Dr. Ampil.
On petition for review, this Court, in its January 31, 2007 decision,
affirmed the CA decision. PSI filed a motion for reconsideration16 but
the Court denied it in a resolution dated February 11, 2008.
After gathering its thoughts on the issues, this Court holds that PSI is
liable to the Aganas, not under the principle of respondeat superior for
lack of evidence of an employment relationship with Dr. Ampil but
under the principle of ostensible agency for the negligence of Dr. Ampil
and, pro hac vice, under the principle of corporate negligence for its
failure to perform its duties as a hospital.
ISSUE:
Whether a hospital may be held liable for the negligence of physiciansconsultants allowed to practice in its premises.
HELD:
Within that reality, three legal relationships crisscross: (1) between the
hospital and the doctor practicing within its premises; (2) between the
hospital and the patient being treated or examined within its premises
and (3) between the patient and the doctor. The exact nature of each
relationship determines the basis and extent of the liability of the
hospital for the negligence of the doctor.
In fine, as there was no dispute over the RTC finding that PSI and Dr.
Ampil had no employer-employee relationship, such finding became
final and conclusive even to this Court.
Nonetheless, to allay the anxiety of the intervenors, the Court holds that,
in this particular instance, the concurrent finding of the RTC and the CA
that PSI was not the employer of Dr. Ampil is correct. Control as a
determinative factor in testing the employer-employee relationship
between doctor and hospital under which the hospital could be held
vicariously liable to a patient in medical negligence cases is a requisite
fact to be established by preponderance of evidence. Here, there was
insufficient evidence that PSI exercised the power of control or wielded
such power over the means and the details of the specific process by
which Dr. Ampil applied his skills in the treatment of Natividad.
Consequently, PSI cannot be held vicariously liable for the negligence
of Dr. Ampil under the principle of respondeat superior.
There is, however, ample evidence that the hospital (PSI) held out to the
patient (Natividad) that the doctor (Dr. Ampil) was its agent. Present are
the two factors that determine apparent authority: first, the hospital's
implied manifestation to the patient which led the latter to conclude that
the doctor was the hospital's agent; and second, the patients reliance
upon the conduct of the hospital and the doctor, consistent with ordinary
care and prudence.
This Court must therefore maintain the ruling that PSI is vicariously
liable for the negligence of Dr. Ampil as its ostensible agent.
The Court notes that PSI made the following admission in its Motion for
Reconsideration:
51. Clearly, not being an agent or employee of petitioner PSI, PSI [sic]
is not liable for Dr. Ampil's acts during the operation. Considering
further that Dr. Ampil was personally engaged as a doctor by Mrs.
Agana, it is incumbent upon Dr. Ampil, as "Captain of the Ship", and as
the Agana's doctor to advise her on what to do with her situation vis-avis the two missing gauzes. In addition to noting the missing gauzes,
regular check-ups were made and no signs of complications were
exhibited during her stay at the hospital, which could have alerted
petitioner PSI's hospital to render and provide post-operation services to
and tread on Dr. Ampil's role as the doctor of Mrs. Agana. The absence
of negligence of PSI from the patient's admission up to her discharge is
borne by the finding of facts in this case. Likewise evident therefrom is
the absence of any complaint from Mrs. Agana after her discharge from
the hospital which had she brought to the hospital's attention, could have
alerted petitioner PSI to act accordingly and bring the matter to Dr.
Ampil's attention. But this was not the case. Ms. Agana complained
ONLY to Drs. Ampil and Fuentes, not the hospital. How then could PSI
possibly do something to fix the negligence committed by Dr. Ampil
when it was not informed about it at all. (emphasis supplied)
the surgery on Natividad Agana, it had the power to review or cause the
review of what may have irregularly transpired within its walls strictly
for the purpose of determining whether some form of negligence may
have attended any procedure done inside its premises, with the ultimate
end of protecting its patients.
And finally, by such admission, PSI barred itself from arguing in its
second motion for reconsideration that the concept of corporate
responsibility was not yet in existence at the time Natividad underwent
treatment; and that if it had any corporate responsibility, the same was
limited to reporting the missing gauzes and did not include "taking an
active step in fixing the negligence committed." An admission made in
the pleading cannot be controverted by the party making such admission
and is conclusive as to him, and all proofs submitted by him contrary
To begin with, PSI could not simply wave off the problem and
nonchalantly delegate to Dr. Ampil the duty to review what transpired
during the operation. The purpose of such review would have been to
pinpoint when, how and by whom two surgical gauzes were mislaid so
that necessary remedial measures could be taken to avert any jeopardy
to Natividads recovery. Certainly, PSI could not have expected that
purpose to be achieved by merely hoping that the person likely to have
mislaid the gauzes might be able to retrace his own steps. By its own
standard of corporate conduct, PSI's duty to initiate the review was nondelegable.
While Dr. Ampil may have had the primary responsibility of notifying
Natividad about the missing gauzes, PSI imposed upon itself the
separate and independent responsibility of initiating the inquiry into the
missing gauzes. The purpose of the first would have been to apprise
Natividad of what transpired during her surgery, while the purpose of
the second would have been to pinpoint any lapse in procedure that led
to the gauze count discrepancy, so as to prevent a recurrence thereof and
to determine corrective measures that would ensure the safety of
Natividad. That Dr. Ampil negligently failed to notify Natividad did not
release PSI from its self-imposed separate responsibility.
Thus, the record taken during the operation of Natividad which reported
a gauze count discrepancy should have given PSI sufficient reason to
initiate a review. It should not have waited for Natividad to complain.
and ensure that all the facilities and equipment at the restaurant were
properly maintained and serviced, could have prevented the whole
debacle from occurring.
Jumuad was found to have willfully breached her duties as to be
unworthy of the trust and confidence of Hi-Flyer. First, Jumuad was a
managerial employee; she executed management policies and had the
power to discipline the employees of KFC branches in her area. She
recommended actions on employees to the head office. According to
the Supreme Court, based on established facts, the mere existence of
the grounds for the loss of trust and confidence justifies petitioners
dismissal. In the present case, the CERs reports of Hi-Flyer show that
there were anomalies committed in the KFC branches managed by
Jumuad. On the principle of respondeat superior or command
responsibility alone, Jumuad may be held liable for negligence in the
performance of her managerial duties. She may not have been directly
involved in causing the cash shortages in KFC-Bohol, but her
involvement in not performing her duty monitoring and supporting the
day to day operations of the branches and ensure that all the facilities
and equipment at the restaurant were properly maintained and
serviced, could have prevented the whole debacle from occurring.
day to day operations of the branches and ensure that all the facilities
and equipment at the restaurant were properly maintained and
serviced, could have prevented the whole debacle from occurring.
dismissal. In the present case, the CERs reports of Hi-Flyer show that
there were anomalies committed in the KFC branches managed by
Jumuad. On the principle of respondeat superior or command
responsibility alone, Jumuad may be held liable for negligence in the
performance of her managerial duties. She may not have been directly
involved in causing the cash shortages in KFC-Bohol, but her
involvement in not performing her duty monitoring and supporting the
day to day operations of the branches and ensure that all the facilities
and equipment at the restaurant were properly maintained and
serviced, could have prevented the whole debacle from occurring.
duties. She may not have been directly involved in causing the cash
shortages in KFC-Bohol, but her involvement in not performing her duty
monitoring and supporting the day to day operations of the branches
and ensure that all the facilities and equipment at the restaurant were
properly maintained and serviced, could have prevented the whole
debacle from occurring.
Jumuad was found to have willfully breached her duties as to be
unworthy of the trust and confidence of Hi-Flyer. First, Jumuad was a
managerial employee; she executed management policies and had the
power to discipline the employees of KFC branches in her area. She
recommended actions on employees to the head office. According to
the Supreme Court, based on established facts, the mere existence of
the grounds for the loss of trust and confidence justifies petitioners
dismissal. In the present case, the CERs reports of Hi-Flyer show that
there were anomalies committed in the KFC branches managed by
Jumuad. On the principle of respondeat superior or command
responsibility alone, Jumuad may be held liable for negligence in the
performance of her managerial duties. She may not have been directly
involved in causing the cash shortages in KFC-Bohol, but her
involvement in not performing her duty monitoring and supporting the
day to day operations of the branches and ensure that all the facilities
and equipment at the restaurant were properly maintained and
serviced, could have prevented the whole debacle from occurring.