FIRST DIVISION
COCA
COLA BOTTLERS (PHILS.), G.R.
No. 146881
INC./ERIC
MONTINOLA, Manager,
Petitioners, Present:
PUNO,
C.J., Chairperson,
SANDOVAL-GUTIERREZ,
-
versus -
AZCUNA, and
GARCIA,
JJ.
DR. DEAN N. CLIMACO, Promulgated:
Respondent.
x
----------------------------------------------------------------------------------------
x
DECISION
AZCUNA, J.:
This is a petition for review on certiorari
of the Decision of the Court of Appeals[1]
promulgated on
Respondent Dr. Dean N. Climaco is a
medical doctor who was hired by petitioner Coca-Cola Bottlers Phils., Inc. by
virtue of a Retainer Agreement that stated:
WHEREAS, the COMPANY
desires to engage on a retainer basis the services of a physician and
the said DOCTOR is accepting such engagement upon terms and conditions
hereinafter set forth;
NOW,
THEREFORE, in consideration of the
premises and the mutual agreement
hereinafter contained, the parties agree as follows:
1.
This Agreement shall only be for a period of one (1)
year beginning
2.
The compensation to be paid by the company for the
services of the DOCTOR is hereby fixed at PESOS: Three Thousand Eight Hundred (P3,800.00)
per month. The DOCTOR may charge professional fee for hospital
services rendered in line with his specialization. All payments in connection with the Retainer
Agreement shall be subject to a withholding tax of ten percent (10%) to be
withheld by the COMPANY under the Expanded Withholding Tax System. In the event the withholding tax rate shall
be increased or decreased by appropriate
laws, then the rate herein stipulated shall accordingly be increased or
decreased pursuant to such laws.
3.
That in consideration of the above mentioned retainer’s
fee, the DOCTOR agrees to perform the duties and obligations enumerated in the
COMPREHENSIVE MEDICAL PLAN, hereto attached as Annex “A” and made an integral
part of this Retainer Agreement.
4.
That the applicable provisions in the Occupational
Safety and Health Standards, Ministry of Labor and Employment shall be
followed.
5.
That the DOCTOR shall be directly responsible to the
employee concerned and their dependents for any injury inflicted on, harm done
against or damage caused upon the employee of the COMPANY or their dependents during the course of his
examination, treatment or consultation, if such injury, harm or damage was
committed through professional negligence or incompetence or due to the other
valid causes for action.
6.
That the DOCTOR shall observe clinic hours at the
COMPANY’S premises from Monday to Saturday of a minimum of two (2) hours each
day or a maximum of TWO (2)
hours each day or treatment from
7.
That no employee-employer relationship shall exist
between the COMPANY and the DOCTOR whilst this contract is in effect, and in
case of its termination, the DOCTOR shall be entitled only to such retainer fee
as may be due him at the time of termination.[2]
The Comprehensive Medical Plan,[3]
which contains the duties and responsibilities of respondent, adverted to in
the Retainer Agreement, provided:
A.
OBJECTIVE
These
objectives have been set to give full consideration to [the] employees’ and
dependents’ health:
1. Prompt and adequate treatment of
occupational and non-occupational injuries and diseases.
2. To protect employees from any
occupational health hazard by evaluating health factors related to working
conditions.
3. To encourage employees [to] maintain
good personal health by setting up employee orientation and education on
health, hygiene and sanitation, nutrition, physical fitness, first aid
training, accident prevention and personnel safety.
4. To evaluate other matters relating to
health such as absenteeism, leaves and termination.
5. To give family planning motivations.
B.
COVERAGE
1. All employees and their dependents are
embraced by this program.
2. The health program shall cover
pre-employment and annual p.e., hygiene and sanitation, immunizations, family
planning, physical fitness and athletic programs and other activities such as
group health education program, safety and first aid classes, organization of
health and safety committees.
3. Periodically, this program will be
reviewed and adjusted based on employees’ needs.
C.
ACTIVITIES
1. Annual Physical Examination.
2. Consultations, diagnosis and treatment
of occupational and non-occupational illnesses and injuries.
3. Immunizations necessary for job
conditions.
4. Periodic inspections for food services
and rest rooms.
5. Conduct health education programs and
present education materials.
6. Coordinate with Safety Committee in
developing specific studies and program to minimize environmental health
hazards.
7. Give family planning motivations.
8. Coordinate with Personnel Department
regarding physical fitness and athletic programs.
9. Visiting and follow-up treatment of
Company employees and their dependents confined in the hospital.
The
Retainer Agreement, which began
on
It is noted that as early as
September 1992, petitioner was already making inquiries regarding his status with petitioner company. First, he wrote a letter addressed to Dr.
Willie Sy, the Acting President and Chairperson of the Committee on Membership,
Philippine College of Occupational Medicine. In response, Dr. Sy wrote a letter[5] to
the Personnel Officer of Coca-Cola Bottlers Phils.,
Petitioner company, however, did not
take any action. Hence, respondent made
another inquiry directed to the Assistant Regional Director, Bacolod City
District Office of the Department of Labor and Employment (DOLE), who referred
the inquiry to the Legal Service of the DOLE, P5,000
may be filed with the National Labor Relations Commission (NLRC). He stated that their opinion is strictly
advisory.
An inquiry was likewise addressed to
the Social Security System (SSS). Thereafter, Mr. Romeo R. Tupas, OIC-FID of
Respondent inquired from the
management of petitioner company whether it was agreeable to recognizing him as
a regular employee. The management
refused to do so.
On
While the complaint was pending
before the Labor Arbiter, respondent received a letter dated
In a Decision[10]
dated
WHEREFORE,
premises considered, judgment is hereby rendered dismissing the instant
complaint seeking recognition as a regular employee.
SO ORDERED.[11]
In a Decision[12]
dated February 24, 1997, Labor Arbiter Benjamin Pelaez dismissed the
case for illegal dismissal (RAB Case No. 06-04-10177-95) in view of the
previous finding of Labor Arbiter Jesus
N. Rodriguez, Jr. in RAB Case No. 06-02-10138-94 that complainant therein, Dr. Dean Climaco, is not
an employee of Coca-Cola Bottlers
Phils., Inc.
Respondent appealed both decisions to
the NLRC, Fourth Division,
In a Decision[13] promulgated
on
Respondent’s motion for
reconsideration was denied by the NLRC in a Resolution[14]
promulgated on
Respondent filed a petition for
review with the Court of Appeals.
In a Decision promulgated on July 7,
2000, the Court of Appeals ruled that an employer-employee relationship existed
between petitioner company and
respondent after applying the four-fold test: (1) the power to hire the
employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the employer’s power to control the
employee with respect to the means and methods by which the work is to be
accomplished.
The Court of Appeals held:
The
Retainer Agreement executed by and between the parties, when read together with
the Comprehensive Medical Plan which was made an integral part of the retainer
agreements, coupled with the actual services rendered by the petitioner, would
show that all the elements of the above test are present.
First,
the agreements provide that “the COMPANY desires to engage on a retainer basis
the services of a physician and the said DOCTOR is accepting such engagement x
x x” (Rollo, page 25). This clearly shows that Coca-Cola
exercised its power to hire the services of petitioner.
Secondly,
paragraph (2) of the agreements showed that petitioner would be entitled to a
final compensation of Three Thousand Eight Hundred Pesos per month, which
amount was later raised to Seven Thousand Five Hundred on the latest
contract. This would represent the
element of payment of wages.
Thirdly,
it was provided in paragraph (1) of the agreements that the same shall be valid
for a period of one year. “The said term
notwithstanding, either party may terminate the contract upon giving a thirty
(30) day written notice to the other.” (Rollo, page 25). This would show that Coca-Cola had the power
of dismissing the petitioner, as it later on did, and this could be done for no
particular reason, the sole requirement
being the former’s compliance with the 30-day notice requirement.
Lastly,
paragraphs (3) and (6) of the agreements reveal that Coca-Cola exercised the
most important element of all, that is, control, over the conduct of petitioner
in the latter’s performance of his duties as a doctor for the company.
It
was stated in paragraph (3) that the doctor agrees to perform the duties and
obligations enumerated in the Comprehensive Medical Plan referred to
above. In paragraph (6), the fixed and
definite hours during which the petitioner must render service to the company
is laid down.
We
say that there exists Coca-Cola’s power to control petitioner because the
particular objectives and activities to be observed and accomplished by the
latter are fixed and set under the Comprehensive Medical Plan which was made an
integral part of the retainer agreement.
Moreover, the times for accomplishing these objectives and activities
are likewise controlled and determined by the company. Petitioner is subject to definite hours of
work, and due to this, he performs his duties to Coca-Cola not at his own
pleasure but according to the schedule dictated by the company.
In
addition, petitioner was designated by Coca-Cola to be a member of its Bacolod
Plant’s Safety Committee. The minutes of
the meeting of the said committee dated
It
was averred by Coca-Cola in its comment that they exercised no control over
petitioner for the reason that the latter was not directed as to the procedure
and manner of performing his assigned tasks.
It went as far as saying that “petitioner was not told how to immunize,
inject, treat or diagnose the employees of the respondent (Rollo, page
228). We believe that if the “control test” would be interpreted this
strictly, it would result in an absurd and ridiculous situation wherein we
could declare that an entity exercises control over another’s activities only
in instances where the latter is directed by the former on each and every stage
of performance of the particular activity.
Anything less than that would be tantamount to no control at all.
To
our minds, it is sufficient if the task or activity, as well as the means of
accomplishing it, is dictated, as in this case where the objectives and activities
were laid out, and the specific time for performing them was fixed by the
controlling party.[15]
Moreover, the Court of Appeals declared
that respondent should be classified as a regular employee having rendered six
years of service as plant physician by virtue of several renewed retainer
agreements. It underscored the provision in Article 280[16]
of the Labor Code stating that “any employee who has rendered at least one year
of service, whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed, and his
employment shall continue while such activity exists.” Further, it held that the termination of
respondent’s services without any just or authorized cause constituted illegal
dismissal.
In addition, the Court of Appeals found
that respondent’s dismissal was an act oppressive to labor and was effected in
a wanton, oppressive or malevolent manner which entitled respondent to moral
and exemplary damages.
The dispositive portion of the Decision reads:
WHEREFORE, in view of the foregoing,
the Decision of the National Labor Relations Commission dated
1.
Reinstate the petitioner with full backwages without
loss of seniority rights from the time his compensation was withheld up to the time
he is actually reinstated; however, if reinstatement is no longer possible, to
pay the petitioner separation pay equivalent to one (1) month’s salary for
every year of service rendered, computed at the rate of his salary at the time
he was dismissed, plus backwages.
2.
Pay petitioner moral damages in the amount of P50,000.00.
3.
Pay petitioner exemplary damages in the amount of P50,000.00.
4.
Give to petitioner all other benefits to which a
regular employee of Coca-Cola is entitled from the time petitioner became a
regular employee (one year from effectivity date of employment) until the time
of actual payment.
SO ORDERED.[17]
Petitioner company filed a motion for
reconsideration of the Decision of the Court of Appeals.
In a Resolution promulgated on
The Court of Appeals clarified that respondent
was a “regular part-time employee and should be accorded all the proportionate
benefits due to this category of employees of [petitioner] Corporation under
the CBA.” It sustained its decision on
all other matters sought to be reconsidered.
Hence, this petition filed by Coca-Cola
Bottlers Phils., Inc.
The issues are:
1.
THAT THE HONORABLE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR, BASED ON A SUBSTANTIAL QUESTION OF LAW, IN REVERSING THE
FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION,
CONTRARY TO THE DECISIONS OF THE HONORABLE SUPREME COURT ON THE MATTER.
2.
THAT THE HONORABLE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR, BASED ON A SUBSTANTIAL QUESTION OF LAW, IN REVERSING THE
FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND
HOLDING INSTEAD THAT THE WORK OF A PHYSICIAN IS NECESSARY AND DESIRABLE TO THE
BUSINESS OF SOFTDRINKS MANUFACTURING, CONTRARY TO THE RULINGS OF THE SUPREME
COURT IN ANALOGOUS CASES.
3.
THAT THE HONORABLE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR, BASED ON A SUBSTANTIAL QUESTION OF LAW, IN REVERSING THE
FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND
HOLDING INSTEAD THAT THE PETITIONERS EXERCISED CONTROL OVER THE WORK OF THE
RESPONDENT.
4.
THAT THE HONORABLE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR, BASED ON A SUBSTANTIAL QUESTION OF LAW, IN REVERSING THE
FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND
FINDING THAT THERE IS EMPLOYER-EMPLOYEE RELATIONSHIP PURSUANT TO ARTICLE 280 OF
THE LABOR CODE.
5.
THAT THE HONORABLE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR, BASED ON A SUBSTANTIAL QUESTION OF LAW, IN REVERSING THE
FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND
FINDING THAT THERE EXISTED ILLEGAL DISMISSAL WHEN THE EMPLOYENT OF THE
RESPONDENT WAS TERMINATED WITHOUT JUST CAUSE.
6.
THAT THE HONORABLE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR, BASED ON A SUBSTANTIAL QUESTION OF LAW, IN REVERSING THE
FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND
FINDING THAT THE RESPONDENT IS A REGULAR PART TIME EMPLOYEE WHO IS ENTITLED TO
PROPORTIONATE BENEFITS AS A REGULAR PART TIME EMPLOYEE ACCORDING TO THE PETITIONERS’
CBA.
7. THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED ON A SUBSTANTIAL QUESTION OF LAW, IN REVERSING THE FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABOR RELATIONS COMMISSION, AND FINDING THAT THE RESPONDENT IS ENTITLED TO MORAL AND EXEMPLARY DAMAGES.
The main issue in this case is
whether or not there exists an employer-employee relationship between the
parties. The resolution of the main
issue will determine whether the termination of respondent’s employment is
illegal.
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 employee’s
conduct, or the so-called “control test,” considered to be the most important
element.[18]
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 exists
between the parties. The Labor Arbiter
and the NLRC 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 respondent’s 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 [petitioner] company, in each case.” He likened this case to that
of Neri v. National Labor Relations Commission,[19] which held:
In the case of petitioner Neri, it is admitted that FEBTC issued a job description which detailed her functions as a radio/telex operator. However, a cursory reading of the job description shows that what was sought to be controlled by FEBTC was actually the end result of the task, e.g., that the daily incoming and outgoing telegraphic transfer of funds received and relayed by her, respectively, tallies with that of the register. The guidelines were laid down merely to ensure that the desired end result was achieved. It did not, however, tell Neri how the radio/telex machine should be operated.
In effect, the
Labor Arbiter held that petitioner
company, 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.
The Labor
Arbiter also correctly found that the provision in the Retainer Agreement that
respondent was on call during emergency cases did not make him a regular
employee. He explained, thus:
Likewise, the allegation of complainant that
since he is on call at anytime of the day and night makes him a regular
employee is off-tangent. Complainant
does not dispute the fact that outside of the two (2) hours that he is required
to be at respondent company’s premises, he is not at all further required to
just sit around in the premises and wait for an emergency to occur so as to
enable him from using such hours for his own benefit and advantage. In fact, complainant maintains his own
private clinic attending to his private practice in the city, where he services
his patients, bills them accordingly -- and if it is an employee of respondent
company who is attended to by him for special treatment that needs
hospitalization or operation, this is subject to a special billing. More often than not, an employee is required
to stay in the employer’s workplace or proximately close thereto that he cannot
utilize his time effectively and gainfully for his own purpose. Such is not the prevailing situation here.
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 also notes that the
Retainership Agreement granted to both parties the power to terminate their
relationship upon giving a 30-day notice.
Hence, petitioner company did not wield the sole power of dismissal or termination.
The Court agrees with the Labor
Arbiter and the NLRC 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 employer-employee
relationship existed between the parties.
The Agreement also stated that it was only for a period of 1 year
beginning
Considering that there is no
employer-employee relationship between the parties, the termination of the
Retainership Agreement, which is in accordance with the provisions of the
Agreement, does not constitute illegal dismissal of respondent. Consequently, there is no basis for the moral
and exemplary damages granted by the Court of Appeals to respondent due to his
alleged illegal dismissal.
WHEREFORE, the
petition is GRANTED and the Decision
and Resolution of the Court of Appeals are REVERSED
and SET ASIDE. The Decision and
Resolution dated
No costs.
SO ORDERED.
ADOLFO S. AZCUNA
Associate Justice
WE
CONCUR:
REYNATO S. PUNO
Chairperson
Chief Justice
ANGELINA
SANDOVAL-GUTIERREZ RENATO
C. CORONA
Associate Justice
Associate Justice
Working Chairperson
CANCIO C. GARCIA
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the
Constitution, it is hereby certified that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Docketed as CA-G.R. SP No. 50760.
[2] Rollo, pp. 86-87.
[3]
[4]
[5] CA Rollo, p. 21.
[6] Art. 157. Emergency medical and dental services.-- It shall be the duty of every employer to furnish his employees in any locality with free medical and dental attendance and facilities consisting of:
x x x
(b) The services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic, when the number of employees exceeds two hundred (200) but not more than three hundred (300).
[7] CA Rollo, p. 29.
[8]
[9]
[10] Rollo, p. 38.
[11]
[12]
[13]
[14]
[15]
[16] Art. 280. Regular and Casual Employment.—The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to 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 for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in 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, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.
[17]
[18] Philippine Global Communications, Inc. v. De Vera, G.R. No. 157214, June 7, 2005, 459 SCRA 260, 268.
[19] G.R. Nos. 97008-09,