Coca-Cola Bottlers Phils. vs. Dr. Climaco, G.R. No.

146881, February 15, 2007 The circumstances of this case show that no ER-EE relationship exists between the parties because the company lacked the power of control over the performance by respondent of his duties. The company in providing a Comprehensive Medical Plan, merely issued guidelines in order to ensue that the end result was achieved, but did not control the means and methods by which respondent performed his assigned tasks. The company lacks the power of control that the contract provides that the respondent shall be directly responsible to the employee concerned and their dependents for any injury, harm or damage cause through professional negligence, incompetence, or other valid causes of action. The Court also 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. There is nothing wrong the employment of respondent as a retained physician of petitioner company and upholds the validity of the retainership agreement which clearly states that no ER-EE relationship existed between the parties. In the case of Coca-Cola Bottlers Phils. vs. Dr. Climaco, G.R. No. 146881, Feb. 15, 2007, the Supreme Court ruled there was no employer-employee relationship when the company in providing a Comprehensive Medical Plan, merely issued guidelines in order to ensue that the end result was achieved, but did not control the means and methods by which respondent performed his assigned tasks. The company lacks the power of control because the contract provides that the respondent shall be directly responsible to the employee concerned and their dependents for any injury, harm or damage cause through professional negligence, incompetence, or other valid causes of action. The Court also noted 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. Ramos vs. CA, 380 SCRA 467 There is no ER-EE relationship. The admission of a physician to membership in DLSMCs medical staff as active or visiting consultant is first decided upon by the Credentials Committee composed of the heads of the various specialty departments. The Credentials Committee then recommends to DLSMCs Medical Director or Hospital Administrator the acceptance or rejection of the applicant physician, and said director or administrator validates the committees recommendations. It is the same in cases of disciplinary actions lodged against a consultant. 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. In Ramos vs. CA, 380 SCRA 467, the Supreme Court held there is no ER-EE relationship. When the admission of a physician to membership in DLSMCs medical staff as active or visiting consultant is first decided upon by the Credentials Committee composed of the heads of the various specialty departments. The Credentials Committee then recommends to DLSMCs Medical Director or Hospital Administrator the acceptance or rejection of the applicant physician, and said director or administrator validates the committees recommendations. It is the same in cases of disciplinary actions lodged against a consultant. 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. Calamba Medical Center Inc. vs. NLRC, G.R. No. 176484 Drs. Lanzanas are declared employees by the petitioner hospital. Respondents work is monitored through its nursing supervisors, charge nurses and orderlies. Without the approval or consent of petitioner or its medical director, no operations can be undertaken in those areas. With respect to respondents sharing in some hospital fees, this scheme does not sever the employment tie as this merely mirrors another form of compensation or incentive similar to commission-based employees. Moreover, the respondents were made subject to petitioner-hospitals Code of Ethics. More importantly, identification cards were issued to them, as well as the payslips and BIR W-2 (now 2316) Forms, and the classification as salary of their remuneration. Moreover, it enrolled respondents in the SSS and Medicare (Philhealth) program,, In the case of Calamba Medical Center Inc. vs. NLRC, G.R. No. 176484, Nov. 25, 2005, the Supreme Court that Drs. Lanzanas are declared employees by the petitioner hospital. Respondents work is monitored through its nursing supervisors, charge nurses and orderlies. Without the approval or consent of petitioner or its medical director, no operations can be undertaken in those areas. With respect to respondents sharing in some hospital fees, this scheme does not sever the employment tie as this merely mirrors another form of compensation or incentive similar to commission-based employees. Moreover, the respondents were made subject to petitioner-hospitals Code of Ethics. More importantly, identification cards were issued to them, as well as the payslips and BIR W-2 (now 2316) Forms, and the classification as salary of their remuneration. Moreover, it enrolled respondents in the SSS and Medicare (Philhealth) program. Insular Life vs. Basiao The SC ruled in favor of Insular Life. Not every form of control that the hiring party reserves to himself over the conduct of the party hired in relation to the services rendered may be accorded the effect of establishing an ER-EE relationship between them in the legal or technical sense of the term. It is therefore, usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits. Of such a character are the rules which prescribe the qualifications of persons who may be insured, subject insurance applications to processing and approval by the Company, and also reserve to the Company the determination of the premiums to be paid and the schedules of payment. None of these really invades the agents contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence, cannot justifiably be said to establish an employeremployee relationship between him and the company. In Insular Life vs. Basiao, the Supreme Court ruled that there exist no ER-EE because it is usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits. Of such a character are the rules which prescribe the qualifications of persons who may be insured, subject insurance applications to processing and approval by the Company, and also reserve to the Company the determination of the premiums to be paid and the schedules of payment. None of these really invades the agents contractual prerogative to adopt his own selling methods or to sell insurance at his own time and

convenience, hence, cannot justifiably be said to establish an employer-employee relationship between him and the company. Carungcong vs. Sunlife It was emphasized in the agreements between the parties that Carungcong would be considered as an independent contractor and not an employee. Carungcong was not an ordinary employee because here annual income from here occupation was in excess of P3M, exclusive of overriding commissions. Moreover, it is true that complainant Carungcongs duties and functions derived from here then existing agreements/contracts were made subject to rules and regulations issued by respondent company, and for that matter, have likewise been made subject of certain limitations imposed by said respondent company. Nonetheless, these are not sufficient to accord the effect of establishing ER-EE relationship absent in this case. This is so because insurance business is not just any other ordinary business. It is one that is imbued with public interest; hence, it must be governed by the 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 ER-EE relationship, where the employers controls have to interfere in the methods and means by which the employee would like to employ to arrive at the desired results. For that matter, complainant Carungcong was never paid a fixed wage or salary but mainly paid by commissions, depending on the level and volume of performance/production, the number of trained agents, when taken in and assigned to being responsible for her added income as she gets a certain percentage from the agents productions as part of her commission. was her her, said

In the case of Carungcong vs. Sunlife, 283 SCRA 319, the Supreme Court emphasized in the agreements between the parties that petitioner would be considered as an independent contractor and not an employee. Carungcong was not an ordinary employee because here annual income from here occupation was in excess of P3M, exclusive of overriding commissions. Moreover, 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 ER-EE relationship, where the employers controls have to interfere in the methods and means by which the employee would like to employ to arrive at the desired results. Abante vs. Lamadrid Bearing & Parts, G.R. No. 159890, May 28, 2004 Applying the four fold test, an ER-EE relationship is notably absent in this case. It is true that he was paid in commission yet no quota was imposed therefore a dismal performance would not warrant a ground for dismissal. There was no specific office hours he was required to observe. He was not designated to conduct services at a particular area or time. He pursued his selling without interference or supervision from the company. The company did not prescribe the manner of selling merchandise. While he was sometimes required to report to Manila, these were intended to guide him. Moreover, petitioner was free to offer his services to other companies. In Abante vs. Lamadrid, G.R. No. 159890, May 28, 2004, the Supreme Court ruled that the ER-EE relationship is notably absent in this case. It is true that he was paid in commission yet no quota was imposed therefore a dismal performance would not warrant a ground for dismissal. There was no specific office hours he was required to observe. He was not designated to conduct services at a particular area or time. He pursued his selling without interference or supervision from the company. The company did not prescribe the manner of selling merchandise. While he was sometimes required to report to Manila, these were

intended to guide him. companies.

Moreover, petitioner was free to offer his services to other

From the above cases, the Supreme Court, in determining the existence of an employeremployee 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, or the so -called control test, considered to be the most important element.. Under the control test, an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task. When the work is being monitored and that there is a need for approval for operations to be undertaken, it is enough that the right to wield such power that the control test would apply and not necessary that there is actual supervision of the performance of duties of the employee by the employer. Moreover, the mere sharing of hospital does not negate the fact of employment. Being subject to the Code of Ethics, as well as the issuance of identification cards, payslips and BIR forms and enrollment in the SSS and Medicare(Philheatlh) program would be incontrovertible proof of the employment status. (Calamba case). On the other, there exists no employer-employee relationship when the 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 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. (Coca-Cola case). Also, no relationship exists when the hospital does not hire or engage or dismiss the services of the consultant, but rather only accredits that latter only after the recommendation of the Credentials Committee and that the medical services rendered by the consultant to their respective patients was not paid by the hospital. (Ramos case) In the case of insurance companies, usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits. None of these really invades the agents contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence, cannot justifiably be said to establish an employeremployee relationship between him and the company. (Insular case) Contracts entered into willingly and knowingly signed which clearly provide that said agreements were terminable by either party and that the agent and his employees are not considered employees of the insurance company are considered binding. Such agent is considered an independent contractor and not an employee of the insurance company. (Carungcong case) Lastly, there is no ER-EE relationship when the company does not prescribe the manner of selling merchandise and that the salesman is free to offer his services to other companies. (Abante case)

CASE SYNTHESIS IN EMPLOYER EMPLOYEE RELATIONSHIP: In the case of Coca-Cola Bottlers Phils. vs. Dr. Climaco, G.R. No. 146881, Feb. 15, 2007 , the Supreme Court ruled there was no employer-employee relationship when the company in providing a Comprehensive Medical Plan, merely issued guidelines in order to ensue that the end result was achieved, but did not control the means and methods by which respondent performed his assigned tasks. The company lacks the power of control because the contract provides that the respondent shall be directly responsible to the employee concerned and their dependents for any injury, harm or damage cause through professional negligence, incompetence, or other valid causes of action. The Court also noted 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. In Ramos vs. CA, 380 SCRA 467, the Supreme Court held there is no ER-EE relationship. When the admission of a physician to membership in DLSMCs medical staff as active or visiting consultant is first decided upon by the Credentials Committee composed of the heads of the various specialty departments. The Credentials Committee then recommends to DLSMCs Medical Director or Hospital Administrator the acceptance or rejection of the applicant physician, and said director or administrator validates the committees recommendations. It is the same in cases of disciplinary actions lodged against a consultant. 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. In the case of Calamba Medical Center Inc. vs. NLRC, G.R. No. 176484, Nov. 25, 2005 , the Supreme Court that Drs. Lanzanas are declared employees by the petitioner hospital. Respondents work is monitored through its nursing supervisors, charge nurses and orderlies. Without the approval or consent of petitioner or its medical director, no operations can be undertaken in those areas. With respect to respondents sharing in some hospital fees, this scheme does not sever the employment tie as this merely mirrors another form of compensation or incentive similar to commission-based employees. Moreover, the respondents were made subject to petitioner-hospitals Code of Ethics. More importantly, identification cards were issued to them, as well as the payslips and BIR W-2 (now 2316) Forms, and the classification as salary of their remuneration. Moreover, it enrolled respondents in the SSS and Medicare (Philhealth) program. In Insular Life vs. Basiao, 179 SCRA 459, the Supreme Court ruled that there exist no EREE because it is usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits. Of such a character are the rules which prescribe the qualifications of persons who may be insured, subject insurance applications to processing and approval by the Company, and also reserve to the Company the determination of the premiums to be paid and the schedules of payment. None of these really invades the agents contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence, cannot justifiably be said to establish an employeremployee relationship between him and the company. In the case of Carungcong vs. Sunlife, 283 SCRA 319, the Supreme Court emphasized in the agreements between the parties that petitioner would be considered as an independent contractor and not an employee. Carungcong was not an ordinary employee because here annual income from here occupation was in excess of P3M, exclusive of overriding

commissions. Moreover, 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 ER-EE relationship, where the employers controls have to interfere in the methods and means by which the employee would like to employ to arrive at the desired results. In Abante vs. Lamadrid, G.R. No. 159890, May 28, 2004 , the Supreme Court ruled that the ER-EE relationship is notably absent in this case. It is true that he was paid in commission yet no quota was imposed therefore a dismal performance would not warrant a ground for dismissal. There was no specific office hours he was required to observe. He was not designated to conduct services at a particular area or time. He pursued his selling without interference or supervision from the company. The company did not prescribe the manner of selling merchandise. While he was sometimes required to report to Manila, these were intended to guide him. Moreover, petitioner was free to offer his services to other companies. From the above cases, the Supreme Court, in determining the existence of an employeremployee 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, or the so -called control test, considered to be the most important element.. Under the control test, an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task. When the work is being monitored and that there is a need for approval for operations to be undertaken, it is enough that the right to wield such power that the control test would apply and not necessary that there is actual supervision of the performance of duties of the employee by the employer. Moreover, the mere sharing of hospital does not negate the fact of employment. Being subject to the Code of Ethics, as well as the issuance of identification cards, payslips and BIR forms and enrollment in the SSS and Medicare(Philheatlh) program would be incontrovertible proof of the employment status. (Calamba case). On the other, there exists no employer-employee relationship when the 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 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. (Coca-Cola case). Also, no relationship exists when the hospital does not hire or engage or dismiss the services of the consultant, but rather only accredits that latter only after the recommendation of the Credentials Committee and that the medical services rendered by the consultant to their respective patients was not paid by the hospital. (Ramos case) In the case of insurance companies, usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits. None of these really invades the agents contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence, cannot justifiably be said to establish an employeremployee relationship between him and the company. (Insular case)

Contracts entered into willingly and knowingly signed which clearly provide that said agreements were terminable by either party and that the agent and his employees are not considered employees of the insurance company are considered binding. Such agent is considered an independent contractor and not an employee of the insurance company. (Carungcong case) Lastly, there is no ER-EE relationship when the company does not prescribe the manner of selling merchandise and that the salesman is free to offer his services to other companies. (Abante case)