07 Phil Global Communications v. de Vera

07 Phil Global Communications v. De Vera (Justin Luigi) c.
Management and treatment of employees that may necessitate

hospitalization including emergency cases and accidents;
June 7, 2005 | Garcia, J | Elements of Employer-Employee Relationship d. Conduct pre-employment physical check-up of prospective employees with
Petitioner: PHILIPPINE GLOBAL COMMUNICATIONS, INC. no additional medical fee;
e. Conduct home visits whenever necessary;
Respondents: RICARDO DE VERA f. Attend to certain medical administrative function such as accomplishing
medical forms, evaluating conditions of employees applying for sick leave of
SUMMARY: Ricardo De Vera wrote a letter and offered his services to Philippine absence and subsequently issuing proper certification, and all matters
Global Communications wherein he proposed his plan of works required of a referred which are medical in nature.
practitioner of industrial medicine. The 2 parties agreed and entered a 4. The 2 parties agreed and formalized respondent's proposal in a
Retainership Contract which was renewed yearly from 1981-1996. In December document denominated as “RETAINERSHIP CONTRACT” which will be
1996, Phil Global Comm wrote a letter informing De Vera that such contract will for a period of one year subject to renewal, it being made clear therein
be discontinued. De Vera filed a case of Illegal Dismissal. ISSUE: W/N an that respondent will cover "the retainership the Company previously had
employer-employee relationship exists between Phil Global with Dr. K. Eulau" and that respondent's "retainer fee" will be at
Communications and De Vera? NO The Court, in determining the existence of P4,000.00 a month.
an employer-employee relationship, has invariably adhered to the four-fold test: 5. The contract was renewed yearly from 1981-1994. There were just some
[1] the selection and engagement of the employee; [2] the payment of wages; [3] adjustments with the retainer fee. However, the renewal for the years
the power of dismissal; and [4] the power to control the employee's conduct, or 1995 and 1996 was done orally.
the so-called "control test", considered to be the most important element. 6. In December 1996, Phil Global Comm. thru a letter informed De Vera of
Applying the four-fold test to this case, the Court initially finds that it was De Vera its decision to discontinue the latter's "retainer's contract with the
himself who sets the parameters of what his duties would be in offering his Company effective at the close of business hours of December 31,
services to Phil Global Comm. This is evidenced by no less than his May 1981 1996" because management has decided that it would be more practical
letter. (check footnote 1) Phil Global Comm. had no control over the means and to provide medical services to its employees through accredited
methods by which De Vera went about performing his work at the company hospitals near the company premises.
premises. He could even embark in the private practice of his profession, not to 7. NLRC:
mention the fact that De Vera’s work hours and the additional compensation a. De Vera’s contention: case of illegal dismissal alleging that
therefor were negotiated upon by the parties. The parties themselves that he had been actually employed by Philcom as its company
practically agreed on every terms and conditions of De Vera’s engagement, physician since 1981 and was dismissed without due process..
which thereby negates the element of control in their relationship. b. Labor Arbiter’s Decision: DISMISS De Vera's complaint for
lack of merit, on the rationale that as a "retained physician"
DOCTRINE: The element of control is absent from the parties’ arrangement. Such under a valid contract mutually agreed upon by the parties, De
element of control is where the employer has reserved the right to control not only Vera was an "independent contractor" and that he "was not
as to the result of the work done but also as to the means and methods by which dismissed but rather his contract with [PHILCOM] ended when
the same is to be accomplished. said contract was not renewed after December 31, 1996".
c. De Vera’s Appeal: NLRC reversed (the word used is
"modified") that of the Labor Arbiter, on a finding that De Vera is
FACTS: Philcom's "regular employee" and accordingly directed the
1. Petitioner Philippine Global Communications, Inc. is a corporation engaged company to reinstate him to his former position without loss of
in the business of communication services and allied activities. seniority rights and privileges and with full backwages from the
2. Respondent Ricardo De Vera is a physician by profession whom petitioner date of his dismissal until actual reinstatement.
enlisted to attend to the medical needs of its employees. 8. CA: Modified decision of NLRC by deleting the award of traveling
3. On 15 May 1981, De Vera, wrote a letter and offered his services to the allowance, and ordering payment of separation pay to De Vera in lieu of
petitioner. He proposed his plan of works required of a practitioner in reinstatement
industrial medicine, to include the following: ISSUE/S:
a. Application of preventive medicine including periodic check-up of employees; 1. W/N an employer-employee relationship exists between Phil Global
b. Holding of clinic hours in the morning and afternoon for a total of five (5) hours
daily for consultation services to employees; Communications and De Vera? NO
1
a. Note: according to the SC this is a question of fact well within the 8. The Court said that the power to terminate the parties' relationship was
province of the NLRC. Nonetheless, given the reality that the mutually vested on both. Either may terminate the arrangement at will,
NLRC's findings are at odds with those of the labor arbiter, the with or without cause.
Court is constrained to look deeper into the attendant 9. Article 280 of the Labor Code1, quoted by the appellate court, is not the
circumstances obtaining in this case, as appearing on record. yardstick for determining the existence of an employment relationship.
RATIO: As it is, the provision merely distinguishes between two (2) kinds of
On whether an employer-employee relationship exists between Phil Global employees, i.e., regular and casual. It does not apply where, as here, the
Communications and De Vera? NO very existence of an employment relationship is in dispute.
10. With the recognition of the fact that petitioner consistently engaged the
1. The Court, in determining the existence of an employer-employee services of respondent on a retainer basis, as shown by their various
relationship, has invariably adhered to the four-fold test "retainership contracts", so can petitioner put an end, with or without
a. [1] the selection and engagement of the employee; cause, to their retainership agreement as therein provided.
b. [2] the payment of wages;
c. [3] the power of dismissal; and OTHER NOTES:
d. [4] the power to control the employee's conduct, or the so-called MAY 1981 LETTER:
"control test", considered to be the most important element. Madam:
2. Applying the four-fold test to this case, the Court initially finds that it was De I shall have the time and effort for the position of Company physician with your
Vera himself who sets the parameters of what his duties would be in corporation if you deemed it necessary. I have the necessary qualifications,
offering his services to Phil Global Comm. This is evidenced by no less than training and experience required by such position and I am confident that I can
his May 1981 letter. (check footnote 1) serve the best interests of your employees, medically. My plan of works and
3. The element of control is absent from the parties’ arrangement. Such targets shall cover the duties and responsibilities required of a practitioner in
element of control is where the employer has reserved the right to industrial medicine which includes the following: <Insert 3 a-f>
control not only as to the result of the work done but also as to the On the subject of compensation for the services that I propose to render to the
means and methods by which the same is to be accomplished. corporation, you may state an offer based on your belief that I can very well
4. Phil Global Comm. had no control over the means and methods by which qualify for the job having worked with your organization for sometime now.
De Vera went about performing his work at the company premises. He I shall be very grateful for whatever kind attention you may extend on this matter
could even embark in the private practice of his profession, not to mention and hoping that it will merit acceptance, I remain
the fact that De Vera’s work hours and the additional compensation therefor Very truly yours,  (signed)  RICARDO V. DE VERA, M.D
were negotiated upon by the parties.
5. The parties themselves practically agreed on every terms and
DISPOSITION:
conditions of De Vera’s engagement, which thereby negates the
WHEREFORE, the petition is GRANTED and the challenged decision of the
element of control in their relationship.
Court of Appeals REVERSED and SET ASIDE. The 21 December 1998 decision
6. The labor arbiter added the indicia, not disputed by respondent, that from
of the labor arbiter is REINSTATED.
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 subjected by petitioner to the ten 1
ART. 280. Regular and casual employment. - The provisions of written agreement to the contrary
(10%) percent withholding tax for his professional fee, in accordance with notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to
the National Internal Revenue Code, matters which are simply inconsistent be regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been fixed
with an employer-employee relationship. for a specific project or undertaking the completion or termination of which has been determined at the
7. The elements of an employer-employee relationship are wanting in time of the engagement of the employee or where the work or service to be performed is seasonal in
this case. The court added that the records are replete with evidence nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided,
showing that respondent had to bill petitioner for his monthly professional That any employee who has rendered at least one year of service, whether such service is continuous or
fees. It simply runs against the grain of common experience to imagine that broken, shall be considered a regular employee with respect to the activity in which he is employed and
an ordinary employee has yet to bill his employer to receive his salary. his employment shall continue while such activity exists.

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07 Phil Global Communications v. De Vera (Justin Luigi) c.

Management and treatment of employees that may necessitate

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