G.R. No. 194352; January 30, 2013
MAXICARE PCIB CIGNA HEALTHCARE (now MAXICARE HEALTHCARE CORPORATION), ERIC S. NUBLA, JR. M.D. and RUTH A. ASIS, M.D., Petitioners, vs. MARIAN BRIGITTE A. CONTRERAS, M.D., Respondent.

FACTS

Petitioner Maxicare Healthcare Corporation hired respondent Dr. Marian Brigitte A. Contreras in March 2003 as a retainer doctor at the Philippine National Bank (PNB) Head Office under a verbal agreement, with a retainer fee of ₱250.00 per hour. In July 2003, Dr. Contreras was informed by Maxicare’s medical specialist that she would be transferred to another account. Subsequently, on August 4, 2003, a Service Agreement was executed, transferring Dr. Contreras to Maybank Philippines for a four-month period at a reduced rate of ₱168.00 per hour. Dr. Contreras reported to Maybank for only one day before filing a complaint for constructive dismissal on August 8, 2003.
The Labor Arbiter dismissed the complaint, ruling that by signing the new Service Agreement and reporting for duty, Dr. Contreras had ratified the contract and waived any claims under the previous agreement. On appeal, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s decision, declaring that Dr. Contreras was illegally dismissed. The NLRC found that the termination of her PNB retainership and the imposition of a new contract with significantly lower pay constituted constructive dismissal. The Court of Appeals affirmed the NLRC’s ruling.

ISSUE

Whether the Court of Appeals erred in affirming the NLRC’s finding that Dr. Contreras was illegally dismissed.

RULING

The Supreme Court denied the petition and affirmed the rulings of the NLRC and the Court of Appeals. The Court held that the unilateral imposition of a new service agreement with substantially inferior terms, specifically a drastic reduction in salary from ₱250.00 to ₱168.00 per hour, constituted constructive dismissal. Constructive dismissal exists when an act of clear discrimination, insensibility, or disdain by an employer renders the employee’s continued work intolerable, forcing resignation. The execution of the new contract did not negate the illegal dismissal, as it was effectively a contract of adhesion presented under circumstances where the employee, faced with the threat of losing her job, had no realistic opportunity to negotiate.
Furthermore, the Court rejected Maxicare’s belated attempt to question the existence of an employer-employee relationship, a defense raised only for the first time on appeal. The Court emphasized that Maxicare was bound by its prior judicial admissions and submissions in the lower tribunals, where it consistently argued the case on the premise that Dr. Contreras was its employee, defending the dismissal as being for a valid cause. A party cannot change its theory on appeal as a matter of fairness and procedure. The elements of control over Dr. Contreras’s hiring, work assignments, schedule, and conduct substantiated the employment relationship. Thus, the termination without just or authorized cause was illegal.