G.R. No. 157214 - Philippine Global Communications, Inc. vs. De Vera

Petitioner Philippine Global Communications, Inc. (PhilCom) is engaged in communication services and allied activities.
Respondent Ricardo De Vera is a physician enlisted by petitioner to attend to the medical needs of its employees, engaged under a "retainership contract."

On 15 May 1981, De Vera sent a letter offering his services as company physician, outlining specific duties such as preventive medicine, clinic hours, emergency case management, pre-employment physical exams, home visits, and medical administrative functions.
The parties formalized the terms in a written Retainership Contract for one year, subject to renewal, specifying a monthly retainer fee (initially P4,000.00). The contract expressly covered the retainer arrangement previously with another doctor.
The contract was renewed yearly until 1994; for 1995 and 1996, renewals were only verbal.

In December 1996, petitioner sent a letter terminating the retainership contract effective 31 December 1996, citing a decision to provide medical services through accredited hospitals instead.
On 22 January 1997, De Vera filed a complaint for illegal dismissal with the National Labor Relations Commission (NLRC), alleging he was a regular employee dismissed without due process despite his "retainer basis" designation, and claimed he worked full-time with salary and fringe benefits.

On 21 December 1998, Labor Arbiter dismissed the complaint, ruling De Vera was an independent contractor under a valid retainership contract not renewed past December 1996.
On 23 October 2000, the NLRC reversed the labor arbiter, ruling De Vera was a regular employee and ordering reinstatement with full backwages, 13th-month pay, and travel allowance.
Motion for reconsideration was denied by NLRC on 27 February 2001.
PhilCom appealed to the Court of Appeals, which on 12 September 2002 modified the award by deleting travel allowance and substituting separation pay for reinstatement, while affirming backwages and 13th-month pay. Motion for reconsideration denied on 13 February 2003.

PhilCom’s petition on review argues the Court of Appeals erred in treating De Vera as an employee instead of an independent contractor under a legitimate contracting arrangement, citing distinctions between job contracting and employer-employee relationships.
The primary legal issue became the factual question of the existence of employer-employee relationship.

Whether an employer-employee relationship existed between petitioner PhilCom and respondent De Vera at the time of termination.
Whether the provisions of Article 280 and Article 157 of the Labor Code apply to determine De Vera’s status.
Whether the retention agreement constituted an employment contract or an independent contractor arrangement.
Whether the failure to give a 60-day notice prior to termination of the retainership contract affects the validity of the termination.