G.R. No. 176484 November 25, 2008
CALAMBA MEDICAL CENTER, INC., petitioner vs. NATIONAL LABOR RELATIONS COMMISSION, RONALDO LANZANAS AND MERCEDITHA LANZANAS, respondents.

FACTS

Petitioner Calamba Medical Center engaged the services of medical doctors-spouses Ronaldo Lanzanas and Merceditha Lanzanas as part of its team of resident physicians in March 1992 and August 1995, respectively. They reported at the hospital twice-a-week on twenty-four-hour shifts and were paid a monthly “retainer” of P4,800.00 each, plus a percentage share from certain fees. Their work schedules were fixed by petitioner’s medical director, Dr. Raul Desipeda. They were issued identification cards, enrolled in the SSS, and income taxes were withheld from them.
On March 7, 1998, Dr. Desipeda issued a memorandum to Dr. Ronaldo Lanzanas placing him under preventive suspension for 30 days due to alleged acts inimical to the hospital’s interest, based on an overheard telephone conversation. Petitioner did not give Dr. Merceditha Lanzanas any work schedule after this incident.
Dr. Lanzanas filed a complaint for illegal suspension, and Dr. Merceditha filed for illegal dismissal. On March 14, 1998, the hospital’s rank-and-file union went on strike. The Secretary of Labor issued a return-to-work order. Petitioner later sent Dr. Lanzanas a notice of termination dated April 25, 1998, citing his failure to report back to work despite the DOLE order and his alleged unlawful participation in union activities.
The Labor Arbiter dismissed the complaints, finding no employer-employee relationship. The NLRC reversed this, finding illegal dismissal and awarding backwages, separation pay, moral and exemplary damages, and attorney’s fees. The Court of Appeals initially granted petitioner’s petition but later reinstated the NLRC decision in an Amended Decision, though it reduced the moral and exemplary damages.

ISSUE

Whether an employer-employee relationship existed between petitioner Calamba Medical Center and respondents Dr. Ronaldo Lanzanas and Dr. Merceditha Lanzanas.

RULING

Yes, an employer-employee relationship existed. The Supreme Court applied the four-fold “control test.” The elements are present: (1) petitioner engaged respondents’ services; (2) petitioner paid them a monthly retainer and a share of fees; (3) petitioner exercised the power of dismissal, as shown by the termination notice; and (4) petitioner exercised control over their conduct. Specifically, petitioner’s medical director fixed their work schedules, issued instructions relating to their duties (e.g., admission of patients, treatment of cases), and could overrule their decisions. The fact that they reported on 24-hour shifts twice a week as scheduled by the hospital, and were subject to administrative sanctions, indicates control. Their enrollment in SSS and withholding of income taxes further support the existence of an employment relationship. The Court found the spouses were illegally dismissed, as petitioner failed to substantiate the grounds for termination (participation in strike for Dr. Ronaldo; marriage to Dr. Ronaldo for Dr. Merceditha). The awards of backwages, separation pay, and modified damages were sustained.