Resort's "full-time nurses" not regular employees

According to a Sun.Star Cebu report on March 18, 2009, the Supreme Court has dismissed a labor case filed against Shangri-la’s Mactan Island Resort.

The five-star resort allegedly failed to grant regular employment status to two nurses despite years of service. The Court said that while the Labor Code requires companies to make available the services of a “full-time registered nurse” to its employees, it does not need to actually hire one.

In interpreting Article 157 of the Labor Code, the Court said that “the phrase ‘services of a full-time registered nurse’ should thus be taken to refer to the kind of services that the nurse will render in the company’s premises and to its employees, not the manner of his engagement.”

The nurses in this case accused the resort of violating the labor law by not giving them benefits due to regular employees. "They complained of underpayment of wages, non-payment of holiday pay, night shift differential and 13th month pay," Sun.Star reported.

Shangri-la’s management countered that the two were not resort employees but people hired by the resort's retained physician.

Arbitrators said there was an employer-employee relationship between the nurses and Shangri-la because the former performed work necessary and desirable to Shangri-la’s business; and that they observed clinic hours and rendered services only to Shangri-la’s guests and employees. Their salaries also passed through Shangri-la’s Human Resource Department and that in-house physician who hired them is also an employee.

A memorandum of agreement between the doctor and Shangri-la merely served to circumvent the doctor’s tenurial security and that of the employees under her, according to an earlier judgment.

Later at the Court of Appeals, it regarded the resort as "not principally engaged in the business of providing medical or health care services,” such that the nurses “could not be regarded as regular employees of Shangri-la.”

At the Supreme Court, the nurses raised two points: First, that the resort is required to hire a full-time registered nurse under Article 157 of the Labor Code; Second, whatever the effects of the MOA between the resident doctor and Shangri-la on the status of their employment is void because she isn’t a licensed sub-contractor.

But the Court held that the resident doctor is a legitimate independent contractor.

Here's the online copy of the case from the Supreme Court website: Jerome D. Escasinas, et al. Vs. Shangri-la's Mactan Island Resort, et al.