Maxicare Healthcare v. Contreras
REITERATIONFacts
The Antecedents: Maxicare Healthcare Corporation (Maxicare) hired Dr. Marian Brigitte A. Contreras (Dr. Contreras) as a retainer doctor for Philippine National Bank (PNB) under a verbal agreement for one year, with a retainer fee of ₱250.00 per hour. Subsequently, on July 3, 2003, Dr. Contreras was informed of a transfer. On August 4, 2003, a Service Agreement was executed, transferring her to Maybank Philippines for four months with a reduced retainer fee of ₱168.00 per hour. Procedural History: Dr. Contreras reported to Maybank for one day and then filed a complaint for constructive dismissal, claiming the transfer resulted in economic prejudice due to the diminished salary. The Labor Arbiter (LA) dismissed the complaint, finding that by reporting to the new assignment, Dr. Contreras ratified the new Service Agreement. The National Labor Relations Commission (NLRC) reversed the LA's decision, declaring Dr. Contreras illegally dismissed and ordering reinstatement with backwages, finding the transfer prejudicial. The Court of Appeals (CA) affirmed the NLRC's ruling. The Petition: Maxicare filed a petition before the Supreme Court, challenging the CA's decision and raising for the first time the issue of the non-existence of an employer-employee relationship, arguing that Dr. Contreras was an independent contractor.
Issue(s)
Whether Maxicare is estopped from raising the issue of the non-existence of an employer-employee relationship for the first time on appeal. Whether Dr. Contreras was constructively dismissed.
Ruling
The petition is denied. The Court of Appeals did not err in affirming the NLRC's decision. Maxicare is estopped from raising the issue of the non-existence of an employer-employee relationship for the first time on appeal. The transfer of Dr. Contreras to Maybank, which resulted in a diminution of her salary, constituted constructive dismissal.
Ratio Decidendi
On the issue of estoppel and change of theory on appeal: The Court reiterated the rule that a party who deliberately adopts a certain theory upon which a case is tried and decided by the lower court will not be permitted to change its theory on appeal. Maxicare actively participated in the proceedings before the Labor Arbiter and the National Labor Relations Commission without questioning the existence of an employer-employee relationship. The LA's decision favored Maxicare, and it was only after the NLRC reversed this decision that Maxicare raised the issue of jurisdiction and employer-employee relationship before the Court of Appeals. This belated raising of the issue constitutes a change of theory on appeal, which is unfair to the adverse party and offends the basic rules of fair play, justice, and due process. The Court emphasized that while jurisdiction may be assailed at any stage, active participation in the proceedings without raising the issue of jurisdiction will estop a party from assailing the lack thereof after an unfavorable decision. Maxicare's conduct of participating in two levels of labor tribunals without raising the issue of employer-employee relationship, and only doing so at the appellate court level, was deemed an undesirable practice and an afterthought to defeat the law. On the issue of constructive dismissal: The Court affirmed the findings of the NLRC and the CA that Dr. Contreras was constructively dismissed. The transfer of Dr. Contreras to Maybank, which resulted in a diminution of her salary from ₱250.00 per hour to ₱168.00 per hour, was considered prejudicial to her interests. The employer, Maxicare, had the burden of proving that the transfer was for valid grounds and was not unreasonable, inconvenient, or prejudicial to the employee. The execution of a new Service Agreement with a lower salary does not negate constructive dismissal arising from the termination of the original retainership without just or authorized cause. The disparity in remuneration clearly validated Dr. Contreras's claim of having reservations about the new agreement, and her signing it under duress of potential job loss did not negate the prejudicial nature of the transfer.
Main Doctrine
A party who actively participates in labor proceedings before the Labor Arbiter and the National Labor Relations Commission without raising the issue of the existence of an employer-employee relationship is estopped from raising such issue for the first time on appeal before the Court of Appeals, as it constitutes a change of theory on appeal which is contrary to the rules of fair play, justice, and due process.