Case Digest: Samonte et al. v. La Salle Greenhills, Inc.

G.R. No. 199683

February 10, 2016

PEREZ, J.:

Facts:

Petitioners are medical professional hired by LSGI under a uniform one-page Contract of Retainer for the period of a specific academic calendar beginning in June of 1989 and the succeeding 15 years and terminating in March of the following year when the school year ends. The contract specifically provides that the retainer is only temporary in character and exclusively limited to the undertaking and/or to the job/task assigned to the retainer within the said undertaking. Furthermore, at any time prior to the expiration or completion date/s, LSGI may upon written notice to the retainers, terminate the contract should the retainer fail in anyway to perform his assigned job or task to the satisfaction of the school of for any just cause.

Accordingly, after 15 consecutive years of renewal each academic year, on the last day of the 15th year in 2004, the school (LSGI) informed the petitioner that their contracts will no longer be renewed for the following school year.

When petitioners’ requests for payment of their separation pay were denied, they filed a complaint for illegal dismissal with prayer for separation pay, damages and attorneys’ fees. They alleged that they were regular employees because received regular benefits, bonuses & more, that they were subjected to the school’s administrative and disciplinary rules and regulations.

On the other hand, LSGI posited that petitioners were independent contractors retained by LSGI by reason of their medical skills and expertise to provide ancillary medical and dental services to both students and faculty. More importantly, petitioners were paid retainer fees and not regular salaries and whose performance is not subject to the control of the school.

The Labor Arbiter dismissed the complaint and ruled that the petitioners were independent contractors but on the ground of compassionate social justice, awarded separation pay. Both parties appealed the decision to the NLRC. The NLRC disagreed with the appealed decision, finding petitioners as fixed term employees according to the Contract of Retainer signed by the parties. In a petition for certiorari, the court of appeals affirmed the NLRC decision.

Issue:

Whether or not petitioners were regular employees who may only be dismissed for just and authorized causes.

Ruling:

The petitioners attained retained regular employment.

A fixed-term employment is allowable under the Labor Code wherein the parties agree upon the day certain for the commencement and termination of their employment relationship. A day certain being understood to be "that which must necessarily come, although it may not be known when. Furthermore, the term must be voluntarily and knowingly entered into by the parties who must have dealt with each other on equal terms not one exercising moral dominance over the other.

Further, a fixed-term contract is an employment contract, the repeated renewals of which make for a regular employment. In Fuji Network Television v. Espiritu, the court noted that Fuji's argument that Espiritu was an independent contractor under a fixed-term contract is contradictory where employees under fixed-term contracts cannot be independent contractors because in fixed-term contracts, an employer-employee relationship exists.

The uniform one-page Contracts of Retainer signed by petitioners were prepared by LSGI alone. Petitioners, medical professionals as they were, were still not on equal footing with LSGI as they obviously did not want to lose their jobs that they had stayed in for fifteen (15) years. There is no specificity in the contracts regarding terms and conditions of employment that would indicate that petitioners and LSGI were on equal footing in negotiating it. Notably, without specifying what are the tasks assigned to petitioners, LSGI "may upon prior written notice to the retainer, terminate [the] contract should the retainer fail in any way to perform his assigned job/task to the satisfaction of La Salle Greenhills, Inc. or for any other just cause."

In all, given the following: (1) repeated renewal of petitioners' contract for fifteen years, interrupted only by the close of the school year; (2) the necessity of the work performed by petitioners as school physicians and dentists; and (3) the existence of LSGI's power of control over the means and method pursued by petitioners in the performance of their job, we rule that petitioners attained regular employment, entitled to security of tenure who could only be dismissed for just and authorized causes. Consequently, petitioners were illegally dismissed and are entitled to the twin remedies of payment of separation pay and full back wages.