Manila Golf Club vs.

IAC Facts: The "Caddies of Manila Golf and Country ClubPTCCEA" petitioned with Social Security Commission (SSC) for coverage and availment of benefits under the Social Security Act as amended, Manila Golf and Country Club (MGC), had not registered them as employeed with the SSS based on the absence of 2 elements: (1) payment of wages(paid by the golf players themselves and not by respondent club. ) and (2) control or supervision over them.(manner in which they performed their work). SSC dismissed their petition, thus they appealed to IAC. The latter declared that employer-employee relationship between the Club and Fermin Llamar passed the so-called "control test,".: 24-hour rules and regulations, group rotation system, club's "suggesting" the rate of fees payable to the caddies Issue: whether persons rendering caddying services are the employees and therefore within the compulsory coverage of the Social Security System Ruling: No. Petitioner's regulations, does not circumscribe the actions or judgment of the caddies concerned as to leave them little or no freedom of choice whatsoever in the manner of carrying out their services. Caddies must submit to some supervision of their conduct while enjoying the privilege of pursuing their occupation within the premises. Club has no measure of control over the incidents of the caddies' work and compensation that an employer would possess. The group rotation system socalled, is less a measure of employer control than an assurance that the work is fairly distributed, a caddy who is absent when his turn number is called simply losing his turn to serve and being assigned instead the last number for the day. The caddies were not required to render a definite number of hours of work on a single day. Even the group rotation of caddies is not absolute because a player is at liberty to choose a caddy of his preference regardless of the caddy's order in the rotation.

Issue: Whether they union members are employees or independent contractors. Ruling: Independent contractors. The provisions of the Agreement permit a collecting agent to perform collection services for the company without being subject to the control of the latter except only as to the result of his work. Any control in the receipt and report requirements is only with respect to the end result of the collection since the requirements regulate the things to be done after the performance of the collection job or the rendition of the service. The monthly collection quota is a normal requirement found in similar contractual agreements and is so stipulated to encourage a collecting agent to report at least the minimum amount of proceeds. The Company and each collecting agent intended that the former take control only over the amount of collection, which is a result of the job performed. The plain language of the agreement reveals that the designation as collection agent does not create an employment relationship and that the applicant is to be considered at all times as an independent contractor. This is consistent with the first rule of interpretation that the literal meaning of the stipulations in the contract controls. No such words as "to hire and employ" are present. Moreover, the agreement did not fix an amount for wages nor the required working hours. Compensation is earned only on the basis of the tangible results produced, i.e., total collections made. The collection agent does his work "more or less at his own pleasure" without a regular daily time frame imposed on him. There is nothing in the agreement which implies control by the Company not only over the end to be achieved but also over the means and methods in achieving the end. since private respondents are not employees of the Company, they are not entitled to the constitutional right to join or form a labor organization for purposes of collective bargaining Additional notes: The elements for the determination of the employeremployee relationship; "(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 although the latter is the most important element" Encyclopedia Britannica vs, NLRC Facts: Private respondent (PR), Sales Division Manager, was in charge of selling petitioners products through some sales representatives. Compensation was through, commissions from the products sold by his agents. As agreed, office expenses would be deducted from PRs commissions. Petitioner Company (PC) would also be informed about appointments, promotions, and transfers of employees in PRs district.

Singer Sewing Machine Co. vs. Drilon Facts: A Collection Agency Agreement was signed between the Company and each of the union members who signed a contract Respondent union filed a petition for direct certification as the sole and exclusive bargaining agent of all collectors of the Singer Sewing Machine Company. Paragraph 2 of the Agreement states that an agent shall utilize only receipt forms authorized and issued by the Company ; paragraph 3 which states that an agent has to submit and deliver at least once a week or as often as required a report of all collections made using report forms furnished by the Company; paragraph 4 on the monthly collection quota required by the Company is deemed by respondents as a control measure over the means by which an agent is to perform his services. Company opposed the petition since the union members are actually not employees but are independent contractors.

PR resigned and filed a complaint against PC with the DOLE claiming for non-payment of separation pay and other benefits, and also illegal deduction from his sales commissions. PC alleged that PR was not its employee but an independent dealer authorized to promote and sell its products and in return, received commissions therefrom and it had no control and supervision over the complainant as to the manner and means he conducted his business operations. PR maintained otherwise, alleged that he was hired by the PC in July 1970, was assigned in the sales department, and was earning an average of P4,000.00 monthly as his sales commission. Labor Arbiter ruled that PR was an employee of the PC due to the periodic reports of his sales activities and all transactions were subject to the final approval of the PC, an evidence that PC had active control on the sales activities. NLRC affirmed since PC dictated how and where to sell its products and, by law, independent contractor should have substantial capital or investment. Issue: Whether an employer-employee relationship exist Ruling: NO! The elements are: 1) selection and engagement of the employee; 2) payment of wages; 3) power of dismissal; and 4) the power to control the employees conduct. (most crucial and determinative indicator; a.k.a. CONTROL TEST) - where the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the manner and means to be used in reaching that end. PCs Memoranda to PR did not prove actual control; were merely guidelines on company policies which the sales managers follow and impose on their respective agents. The sales operations were primarily conducted by independent authorized agents who did not receive regular compensations but only commissions based on the sales of the products. PR was free to conduct and promote their sales operations and had free rein in the means and methods for conducting the marketing operations. N.B. the element of control is absent; where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to the result of his efforts and not the amount thereof,

schedule, limit of authority and termination. Another agreement was executed making her as New Business Manager where she is considered an independent contractor and not ** an employee of Sun Life, C was terminated for the alleged discrepancies in the special fund availments and promptly instituted proceedings for vindication. Labor Arbiter found that there existed an employeremployee relationship; ruled that she had been illegally dismissed, thus entitled to reinstatement without loss of seniority rights and other benefits. National Labor Relations Commission reversed the Arbiters judgment. Hence, present petition for certiorari to invalidate NLRCs decision, restore Labor Arbiters award. Issue: Whether petitioner is an employee. Ruling: NO! Her contracts/ agreement since she started as insurance agent, then as unit manager and finally as business/branch manager expressly say so. SL issued rules and regulations which made C subject to certain limitations. This is because insurance business imbued with public interest hence, it must be governed by rules and regulations of the state. The controls adverted to by complainant are latent in the kind of business she is into and are mainly aimed at promoting the results the parties so desire and do not necessarily create any employeremployee relationships. The rules merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it to promote the result, creating no employer-employee relationship. There is no showing has been made that such rules and regulations effectively and actually controlled or restricted her choice of methods in performing her duties as New Business Manager Ramos vs. CA 2002 Facts: Erlinda Ramos, after seeking professional medical help, was advised to undergo cholecystectomy, referred to Dr. Hosaka, a surgeon who recommended Dr. Gutierrez, anesthesiologist. Dr. Hosaka finally arrived at the hospital more than three (3) hours after the scheduled operation. Dr. Gutierrez was unable to intubate the patient leading to the latters oxygen deprivation thus prompted another anesthesiologists service, Dr. Calderon. At 3pm, the patient was wheeled (ICU). She remained in comatose condition until she died. Issue:.

Carungcong vs. Sunlife Facts: Carungcong (C), agent of Sun Life Assurance Co. (SL), signed an Agent Agreement to solicit applications for insurance and annuity policies. The contract was superseded some five years later with (1) Career Agents (or Unit Managers) Agreement which declared that Agent shall be an independent contractor; and (2) MANAGERS Supplementary Agreement which referred to remuneration of overriding commissions with fixed

1. Whether the anesthesiologist (Gutierrez) is liable for negligence; 2. Whether the surgeon is liable for negligence 3. Whether the hospital is liable for any act of negligence committed by their visiting consultant surgeon and anesthesiologist. Ruling:

1. Yes, it was sufficiently established that she failed to exercise the standards of care in the administration of anesthesia on a patient. Dr. Gutierrez omitted to perform a thorough preoperative evaluation on Erlinda. As she herself admitted, she saw Erlinda for the first time on the day of the operation itself, one hour before the scheduled operation, unaware of the physiological make-up and needs of Erlinda. Applying the doctrine of res ipsa loquitur, the testimony of witnesses was properly given credence in the case at bar. 2. Yes. Hosaka exercised a certain degree of, at the very least, supervision over the procedure then being performed on Erlinda. He recommended to petitioners the services of Dr. Gutierrez and worked as a team. They were certainly not completely independent of each other so as to absolve one from the negligent acts of the other physician. His late arrival (3hrs) subjected the patient to continued starvation, consequently, to the risk of acidosis and has caused anxiety to the patient which adversely affected the administration of anesthesia. 3. No. The following elements must be present to determine existence of employer-employee relationship: (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. There is no employer-employee relationship between DLSMC and Drs. Gutierrez and Hosaka which would hold DLSMC solidarily liable for the injury suffered by petitioner Erlinda under Article 2180 of the Civil Code. The admission of a physician to membership in DLSMCs medical staff as active or visiting consultant is first decided upon by the Credentials Committee thereof, The Credentials Committee then recommends to DLSMC's Medical Director or Hospital Administrator the acceptance or rejection of the applicant physician, and said director or administrator validates the committee's recommendation. The medical director/hospital administrator merely acts as ex-officio member of said committee. Neither is there any showing that it is DLSMC which pays any of its consultants for medical services rendered by the latter to their respective patients. Moreover, the contract between the consultant in respondent hospital and his patient is separate and distinct from the contract between respondent hospital and

said patient. The first has for its object the rendition of medical services by the consultant to the patient, while the second concerns the provision by the hospital of facilities and services by its staff such as nurses and laboratory personnel necessary for the proper treatment of the patient.

Further, no evidence was adduced to show that the injury suffered by petitioner Erlinda was due to a failure on the part of respondent DLSMC to provide for hospital facilities and staff necessary for her treatment.

Sonza vs. ABS-CBN Facts: ABS signed with MJMDC an agreement to provide SONZAs services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed to pay for SONZAs services a monthly talent fee. SONZA irrevocably resigned and complained that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan (ESOP). ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed. Issue: Whether there exist an employer-employee relationship Ruling: No. The elements of an employer-employee relationship are: (a) the selection employee; and engagement of the

- Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The specific selection and hiring of SONZA,because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. If SONZA did not possess such unique skills, talent and celebrity status, ABSCBN would not have entered into the Agreement with SONZA but would have hired him through its personnel department just like any other employee. (b) the payment of wages; - If SONZA were an employee, there would be no need for the parties to stipulate on benefits such as SSS, Medicare, x x x and 13th month pay[20] which the law automatically incorporates into every employer-employee contract. 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.

(c) the power of dismissal; - 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. ABS-CBN remained obligated to pay SONZAs talent fees during the life of the Agreement. Even after ABS-CBN ceased broadcasting his programs, ABS-CBN still paid him his talent fees. (d) the employers power to control the employee on the means and methods by which the work is accomplished. control test, is the most important element. - Control Test: based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises, the more likely the worker is considered an independent contractor - television program host is an independent contractor. (US Case: Alberty-Vlez v. Corporacin De Puerto Rico Para La Difusin Pblica (WIPR) - SONZA is not an employee but an independent contractor. ABS-CBN did not assign any other work to SONZA. SONZA delivered his lines, appeared on television, and sounded on radio were outside ABSCBNs control. ABS-CBNs control was limited only to the result of SONZAs work, whether to broadcast the final product or not. The equipment, crew and airtime of ABS are not the tools and instrumentalities SONZA needed to perform his job. What SONZA principally needed were his talent or skills and the costumes necessary for his appearance. The code of conduct imposed on SONZA under the Agreement the KBP code which 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 ABSCBN.

There are essentially only two parties involved under the Agreement, namely, SONZA and ABS-CBN. MJMDC merely acted as SONZAs agent

Lazaro vs. SSC Facts: Laudato, filed a petition before the SSC for social security coverage and remittance of unpaid monthly social security contributions against her employers, among them was petitioner and alleged that they had failed during the said period, to report her, as a sales supervisor of the sales agents, to the SSC for compulsory coverage or remit Laudatos social security contributions. Lazaro, petitioner, denied that Laudato was a sales supervisor, averring instead that she was a mere sales agent whom he paid purely on commission basis and not subjected to definite hours and conditions of work. SSC ruled in favor of Laudato based on the control test. Issue: Whether Laudato was an employee Ruling: Yes. The fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee relationship. Neither does it follow that a person who does not observe normal hours of work cannot be deemed an employee. Laudato was a sales supervisor and not a mere agent. As such, she oversaw and supervised the sales agents of the company, and thus was subject to the control of management as to how she implements its policies and its end results. The Memorandum states that no commissions were to be given on all main office sales from walk-in customers and enjoining salesmen and sales supervisors to observe this new policy. This evinced the fact that the company exercised control over its sales supervisors or agents such as Laudato as to the means and methods through which these personnel performed their work.

PhilCom vs. De Vera Facts: PhilCom enlisted De Vera to attend to the medical needs of its employees. De Vera offered his services to the petitioner, therein proposing his plan of works required of a practitioner in industrial medicine. The parties agreed and formalized the proposal into RETAINERSHIP CONTRACT. PhilCom discontinued De Veras retainers contract as it decided that it would be more practical to provide medical services to its employees through accredited hospitals near the company premises. De Vera filed a complaint for illegal dismissal and averred that he was designated as a company physician on retainer basis. Labor Arbiter dismissed De Veras complaint for lack of merit. NLRC reversed. CA sustained NLRC decision. Issue: Whether there exist an employer-employee relationship

Sideline Notes: SONZA contended he is a talent of MJMDC which contracted out his services to ABSCBN insists that MJMDC is a labor-only contractor and ABS-CBN is his employer. In a labor-only contract, there are three parties involved: (1) the labor-only contractor; (2) the employee who is ostensibly under the employ of the labor-only contractor; and (3) the principal who is deemed the real employer. Under this scheme, the labor-only contractor is the agent of the principal. The law makes the principal responsible to the employees of the labor-only contractor as if the principal itself directly hired or employed the employees.[48] These circumstances are not present in this case.

Ruling: No. De Vera himself sets the parameters of what his duties would be in offering his services to the petitioner. The fact that the complainant was not considered an employee was recognized by the complainant himself in a signed letter to the respondent dated April 21, 1982. 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. 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 (SSS); and was in fact subjected by petitioner to the ten (10%) percent withholding tax for his professional fee, in accordance with the National Internal Revenue Code, matters which are simply inconsistent with an employer-employee relationship. Respondent had to bill petitioner for his monthly professional fees. the power to terminate the parties relationship was mutually vested on both. Either may terminate the arrangement at will, with or without cause. Remarkably absent from the parties arrangement is the element of control. any agreement may provide that one party shall render services for and in behalf of another, no matter how necessary for the latters business, even without being hired as an employee (independent contractorship, agency). Article 157 of the Labor Code clearly and unequivocally allows employers in non-hazardous establishments to engage on retained basis the service of a dentist or physician which revolts against the idea that this engagement gives rise to an employer-employee relationship. ABS-CBN vs. Nazareno Facts: Respondents were production assistants, monthly salary rate of P4,000.00, issued identification cards and were required to work for a minimum of eight hours a day, including Sundays and holidays. They insisted that they belonged to a work pool from which petitioner chose persons to be given specific assignments at its discretion, and were thus under its direct supervision and control regardless of nomenclature Petitioner refused to recognize PAs as part of the bargaining unit, respondents were not included to the CBA. Petitioner alleged in its position paper that the respondents were PAs who basically assist in the conduct of a particular program ran by an anchor or talent and are considered program employees in that, as distinguished from regular or station employees, engaged by the station for a particular or specific program broadcasted by the radio station. Thus, as program employees, a PAs engagement is coterminous with the completion of the program. Their compensation is computed on a program basis, a fixed amount for performance services

irrespective of the time consumed. Labor Arbiter rendered judgment in favor of the respondents, and declared that they were regular employees. NLRC granted and computed respondents monetary benefits based on the CBA. CA affirmed. Issue: Whether the respondents were regular employees thus entitled to the benefits under CBA Ruling: Yes. Where a person has rendered at least one year of service, regardless of the nature of the activity performed, or where the work is continuous or intermittent, the employment is considered regular as long as the activity exists, the reason being that a customary appointment is not indispensable before one may be formally declared as having attained regular status (In re Art. 280. LC). There are two kinds of regular employees under the law: (1) those engaged to perform activities which are necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which they are employed. What determines whether a certain employment is regular or otherwise is not the will or word of the employer, to which the worker oftentimes acquiesces, much less the procedure of hiring the employee or the manner of paying the salary or the actual time spent at work. It is the character of the activities performed in relation to the particular trade or business taking into account all the circumstances, and in some cases the length of time of its performance and its continued existence. One year after they were employed by petitioner, respondents became regular employees by operation of law. it is undisputed that respondents had continuously performed the same activities for an average of five years. Their assigned tasks are necessary or desirable in the usual business or trade of the petitioner. The persisting need for their services is sufficient evidence of the necessity and indispensability of such services to petitioners business or trade. A collective bargaining agreement is a contract entered into by the union representing the employees and the employer. However, even the non-member employees are entitled to the benefits of the contract. To accord its benefits only to members of the union without any valid reason would constitute undue discrimination against nonmembers. A collective bargaining agreement is binding on all employees of the company. The employer-employee relationship between petitioner and respondents has been proven. (1) [Selection and Engagement] no peculiar skill, talent or celebrity status and were hired through petitioners personnel department; (2) [Wages] given as a result of the employer-employee relationship, no power to bargain huge talent fees; (3) [Power of Dismissal] Petitioner could always discharge respondents, respondents are highly dependent on the petitioner; (4) [Degree of Control] petitioner control over the respondent through its supervisors.

Francisco vs. NLRC Facts: Petitioner was designated as Acting Manager for five years with salary as of Dec. 2000 of P27,500.00 plus P3,000.00 housing allowance and a 10% share in the profit of Kasei Corporation. She was handling recruitment, dealing management administration functions, representing the company in its dealings and administered the operation of Kasei Restaurant. In 2001, she was replaced by Liza R. Fuentes as Manager. She was required to sign a prepared resolution for her replacement but she was assured that she would still be connected with Kasei Corporation. Kasei Corporation reduced her salary by P2,500.00 a month beginning January up to September 2001 for a total reduction of P22,500.00 as of September 2001. . On October 2001, petitioner did not receive her salary from the company. Petitioner asked for her salary but she was informed that she is no longer connected with the company. Private respondents averred that petitioner is not an employee: as a technical consultant she performed her work at her own discretion without control and supervision of Kasei Corporation, no daily time record, services were engaged through a Board Resolution, professional fee subject to the 10% expanded withholding tax on professionals, not reported to the BIR or SSS as a companys employee. Labor Arbiter found that petitioner was illegally dismissed. NLRC affirmed with modification the Decision of the Labor Arbiter. Court of Appeals reversed the NLRC decision. Issue: Whether there was an employer-employee relationship between petitioner and private respondent Ruling: Yes. In certain cases the control test is not sufficient to give a complete picture of the relationship between the parties, owing to the complexity of such a relationship. The better approach is a two-tiered test involving: (1) the putative employers power to control the employee with respect to the means and methods by which the work is to be accomplished; and (2) the underlying economic realities of the activity or relationship. This test would provide us with a framework of analysis which would take into consideration the totality of circumstances surrounding the true nature of the relationship especially in case where there is no written agreement or terms of reference to base the relationship on. the determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity. The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of business. Under the broader economic reality test, the petitioner can likewise be said to be an employee of respondent corporation because she had served the company for six years before her dismissal, receiving check vouchers indicating her

salaries/wages, benefits, 13th month pay, bonuses and allowances, as well as deductions and SSS contributions. Nogales vs. Capitol Medical Center Facts: Corazon, pregnant with their fourth child, was under the exclusive prenatal care of Dr. Oscar Estrada and noted that the patient has preeclampsia. She was rushed to the hospital at 2:30am and at 6:13am she started to experience convulsion. Dr. Estrada ordered the injection of ten grams of magnesium sulfate. However, Dr. Villaflor who was assisting Dr. Estrada, administered only 2.5 grams. The baby came out in an apneic, cyanotic, weak and injured condition. Corazon began to manifest moderate vaginal bleeding which rapidly became profuse. Corazons blood pressure dropped from 130/80 to 60/40 within five minutes. Dr. Espinola, the head of OB-GYNE ordered immediate hysterectomy, so Rogelio Nogales was made to sign Consent to Operation. Despite efforts, Corazon died at 9:15 a.m. due to postpartal hemorrhage. Petitioners filed a complaint in RTC for damages and charging CMC with negligence in the selection and supervision of defendant physicians and hospital staff. RTC judged Dr. Estrada solely liable for damages. CA affirmed. Issue: Whether CMC is vicariously liable for the negligence of Dr. Estrada. Ruling: Yes. Although there is no single evidence pointing to CMCs exercise of control over Dr. Estradas treatment and management of Corazons condition, that she was under the exclusive prenatal care of Dr. Estrada, and in general, a hospital is not liable for the negligence of an independent contractor-physician, there is, however, an exception to this principle, known as the doctrine of apparent authority.. The hospital may be liable if the physician is the ostensible agent of the hospital. It involves two factors. (1) hospitals manifestations whether the hospital acted in a manner which would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital. A representation may be general and implied. CMC granted staff privileges to Dr. Estrada. CMC made Rogelio sign consent forms printed on CMC letterhead. Dr. Estradas referral of Corazons profuse vaginal bleeding to Dr. Espinola, gave the impression that Dr. Estrada as a member of CMCs medical staff was collaborating with other CMC-employed specialists. (2) patients reliance- whether the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence. Nogales spouse chose Dr. Estrada due to his connection with a reputable hospital (CMC). They looked to CMC to provide the best medical care and support services for Corazons delivery. Present day hospitals, as their manner of operation plainly demonstrates, do far more than furnish facilities for treatment. They regularly employ on a

salary basis a large staff of physicians, nurses and interns, as well as administrative and manual workers, and they charge patients for medical care and treatment, collecting for such services. Certainly, the person who avails himself of hospital facilities expects that the hospital will attempt to cure him, not that its nurses or other employees will act on their own responsibility. Consent on Admission and Consent to Operation do not expressly release CMC from liability for injury to Corazon due to negligence during her treatment or operation. Neither do the consent forms expressly exempt CMC from liability for Corazons death due to negligence during such treatment or operation.