CALAMBA MEDICAL CENTER, INC.

VS NATIONAL LABOR RELATIONS COMISSION

GR NO. 176484; NOVEMBER 25, 2008

FACTS:
 Spouses Ronaldo Lanzanas, and Merceditha Lanzana were both medical doctors whose services
were engaged by the Calamba Medical Center, a private hospital. They became part of the
hospital’s team of resident doctors.
 They were required to report twice a week and were paid a monthly retainer of Php 4,800 each.
They were also given a percentage share out of fees charged.
 Their schedules were fixed by the hospital’s medical director, they were issued IDs, and they
were enrolled in the SSS. Also, income taxes were withheld from them.
 On March 7, 1998, another physician at the hospital overheard a telephone conversation,
through an extension, of Dr. Lanzanas with another physician, Dr. Miscala. The two were
discussing about the low “census” or admission of patients to the hospital.
 Consequently, Dr. Lazanas received a memorandum that he committed acts inimical to the
interest of the hospital. The memo also required him to explain and informed him of his 30-day
preventive suspension during the investigation.
 Meanwhile, Dr. Merceditha was not given any work schedule. She wasn’t informed of the
reason therefor. Later on, the HRD informed her that her lack of work schedule was due to cost-
cutting measures.
 On March 14, 1998, the rank and file employees’ union went on strike due to unresolved
grievances in the hospital.
 On March 20, 1998, Dr. Lanzanas filed a complaint for illegal suspension, and Dr. Merceditha
filed a complaint of illegal suspension before the NLRC Regional Arbitration Board IV.
 On April 21, 1998, Sec. Trajano of DOLE issued return-to-work Order to the striking union
officers and employees of petitioner pending resolution of the labor dispute.
 On April 22, 1998, the medical director echoed the said order directing all union officers to
return to work, except those that were already terminated or are serving disciplinary actions.
 On April 25, 1998, Dr. Lanzanas received a notice of termination from the hospital. The
termination was due to his failure to comply with the return to work order, and that he is
unlawfully participating as member in the rank-and-file union’s concerted activities.
 On March 23, 1999, Labor Arbiter Macam dismissed the complaints of the spouses for want of
jurisdiction because there was no employee-employer relationship between the parties.
 On appeal, the NLRC reversed the LA’s decision.
 The hospital filed a motion for reconsideration before the CA. Initially, the NLRC’s decision was
set aside, but after further reconsideration filed by the spouses, the NLRC’s decision was
reinstated.

ISSUES:
W/N THERE EXISTS AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE SPOUSES AND
THE HOSPITAL
W/N THE SPOUSES WERE ILLEGALLY DISMISSED
RULING:
1. In resolving the issue, the Court emphasized the “control test”. 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.

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 is compensated according to the result of his
efforts and not the amount thereof, the element of control is absent.

In the instant case, private respondents maintained specific work-schedules, as determined by

petitioner through its medical director, which consisted of 24-hour shifts totaling forty-eight hours
each week and which were strictly to be observed under pain of administrative sanctions.

That petitioner exercised control over respondents gains light from the undisputed fact that in
the emergency room, the operating room, or any department or ward for that matter, 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. For control test to apply, it is not essential for the employer to actually supervise the
performance of duties of the employee, it being enough that it has the right to wield the power.

With respect to respondents' sharing in some hospital fees, this scheme does not sever the
employment tie between them and petitioner as this merely mirrors additional form or another
form of compensation or incentive similar to what commission-based employees receive as
contemplated in Article 97 (f) of the Labor Code, thus:

"Wage" paid to any employee shall mean the remuneration or earning, however designated,
capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece,
or commission basis, or other method of calculating the same, which is payable by an employer to
an employee under a written or unwritten contract of employment for work done or to be done, or
for services rendered or to be rendered and includes the fair and reasonable value, as determined
by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the
employer to the employee. x x x (Emphasis and underscoring supplied).

Finally, under Section 15, Rule X of Book III of the Implementing Rules of the Labor Code, an
employer-employee relationship exists between the resident physicians and the training hospitals,
unless there is a training agreement between them, and the training program is duly accredited or
approved by the appropriate government agency. In respondents' case, they were not undergoing
any specialization training.

Therefore, there is an employer-employee relationship between the spouses and the hospital.

2. In resolving the second issue, the Court dwelled in the fact that Dr. Lanzanas was
neither in a managerial nor supervisory position, but part of the rank and file. Thus, he is not barred
from being a part of the rank-and-file employees’ union.
 The Court cited Article 263(g) of the Labor Code:
“ART. 263. STRIKES, PICKETING, AND LOCKOUTS.–

xxxx

(g) x x x x

x x x x. In labor disputes adversely affecting the continued operation of such hospitals,
clinics or medical institutions, it shall be the duty of the striking union or locking-out
employer to provide and maintain an effective skeletal workforce of medical and other
health personnel, whose movement and services shall be unhampered and unrestricted,
as are necessary to insure the proper and adequate protection of the life and health of its
patients, most especially emergency cases, for the duration of the strike or lockout. In
such cases, the Secretary of Labor and Employment is mandated to immediately assume,
within twenty-four hours from knowledge of the occurrence of such strike or lockout,
jurisdiction over the same or certify to the Commission for compulsory arbitration. For this
purpose, the contending parties are strictly enjoined to comply with such orders,
prohibitions and/or injunctions as are issued by the Secretary of Labor and Employment or
the Commission, under pain of immediate disciplinary action, including dismissal or loss of
employment status or payment by the locking-out employer of backwages, damages and
other affirmative relief, even criminal prosecution against either or both of them.

x x x x (Emphasis and underscoring supplied)”

It was also noted that although a member of the union, there was no evidence that Dr. Lanzanas
participated in the strike that happened.

In addition, the hospital failed to observe the two requirements, before dismissal can be
effected ─ notice and hearing ─ which constitute essential elements of the statutory process; the first to
apprise the employee of the particular acts or omissions for which his dismissal is sought, and the
second to inform the employee of the employer's decision to dismiss him. Non-observance of these
requirements runs afoul of the procedural mandate.

In the case at bar, the termination notice sent to and received by Dr. Lanzanas on April 25, 1998
was the first and only time that he was apprised of the reason for his dismissal. He was not afforded,
however, even the slightest opportunity to explain his side. His was a "termination upon receipt"
situation.

On the other hand, as for the case of Dr. Merceditha, her dismissal was worse, it having been
effected without any just or authorized cause and without observance of due process. In fact, Dr.
Merceditha was never proffered any valid cause for her dismissal except its view that "her marriage to
[Dr. Lanzanas] has given rise to the presumption that her sympath[y] [is] with her husband; [and that
when [Dr. Lanzanas] declared that he was going to boycott the scheduling of their workload by the
medical doctor, he was presumed to be speaking for himself and for Dr. Merceditha.

Based on the foregoing, the Court ruled that both the spouses are illegally dismissed.