1st Batch Recent Labor Relations Cases

8/13/2019 1st Batch Recent Labor Relations Cases.

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G.R. No. 163700 April 18, 2012

CHARLIE JAO, Petitioner, vs. BCC PRODUCTS SALES INC., and TERRANCE TY, Respondents.D E C I S I O N

BERSAMIN, J.:

The issue is whether petitioner was respondents employee or not. Respondents denied an employer-employeerelationship with petitioner, who insisted the contrary.

Through his petition for review on certiorari, petitioner appeals the decision promulgated by the Court of Appeals(CA) on February 27, 2004,1 finding no employee-employer relationship between him and respondents, therebyreversing the ruling by the National Labor Relations Commission (NLRC) to the effect that he was the employee ofrespondents.

Antecedents

Petitioner maintained that respondent BCC Product Sales Inc. (BCC) and its President, respondent Terrance Ty (Ty),employed him as comptroller starting from September 1995 with a monthly salary of P20,000.00 to handle thefinancial aspect of BCCs business;2 that on October 19,1995, the security guards of BCC, acting upon the in structionof Ty, barred him from entering the premises of BCC where he then worked; that his attempts to report to work inNovember and December 12, 1995 were frustrated because he continued to be barred from entering the premisesof BCC;3 and that he filed a complaint dated December 28, 1995 for illegal dismissal, reinstatement with fullbackwages, non- payment of wages, damages and attorneys fees.4

Respondents countered that petitioner was not their employee but the employee of Sobien Food Corporation (SFC),the major creditor and supplier of BCC; and that SFC had posted him as its comptroller in BCC to oversee BCCsfinances and business operations and to look after SFCs interests or investments in BCC.5

Although Labor Arbiter Felipe Pati ruled in favor of petitioner on June 24, 1996,6 the NLRC vacated the ruling andremanded the case for further proceedings.7 Thereafter, Labor Arbiter Jovencio Ll. Mayor rendered a new decisionon September 20, 2001, dismissing petitioners complaint for want of an empl oyer-employee relationship betweenthe parties.8 Petitioner appealed the September 20, 2001 decision of Labor Arbiter Mayor.

On July 31, 2002, the NLRC rendered a decision reversing Labor Arbiter Mayors decision, and declaring thatpetitioner had been illegally dismissed. It ordered the payment of unpaid salaries, backwages and 13th month pay,separation pay and attorneys fees.9 Respondents moved for the reconsideration of the NL RC decision, but theirmotion for reconsideration was denied on September 30, 2002.10 Thence, respondents assailed the NLRC decisionon certiorari in the CA.

Ruling of the CA

On February 27, 2004, the CA promulgated its assailed decision,11 holding:

After a judicious review of the records vis--vis the respective posturing of the contending parties, we agree withthe finding that no employer-employee relationship existed between petitioner BCC and the private respondent. Onthis note, the conclusion of the public respondent must be reversed for being issued with grave abuse of discretion.

"Etched in an unending stream of cases are the four (4) standards in determining the existence of an employer-employee relationship, namely, (a) the manner of selection and e ngagement of the putative employee; (b) themode of payment of wages; (c) the presence or absence of power of dismissal; and, (d) the presence or absence ofcontrol of the putative employees conduct." Of these powers the power of control over the employees conduct isgenerally regarded as determinative of the existence of the relationship.

Apparently, in the case before us, all these four elements are absent. First, there is no proof that the services of theprivate respondent were engaged to perform the duties of a comptroller in the petitioner company. There is no

proof that the private respondent has undergone a selection procedure as a standard requisite for employment,especially with such a delicate position in the company. Neither is there any proof of his appointment nor is thereany showing that the parties entered into an employment contract, stipulating thereof that he will receiveP20,000.00/month salary as comptroller, before the private respondent commenced with his work as such. Second,as clearly established on record, the private respondent was not included in the petitioner companys payroll duringthe time of his alleged employment with the former. True, the name of the private respondent Charlie Jao appearsin the payroll however it does not prove that he has received his remuneration for his services. Notably, his namewas not among the employees who will receive their salaries as represented by the payrolls. Instead, it appearstherein as a comptroller who is authorized to approve the same. Suffice it to state that it is rather obscure for acertified public accountant doing the functions of a comptroller from September 1995 up to December 1995 not toreceive his salary during the said period. Verily, such scenario does not conform with the usual and ordinaryexperience of man. Coming now to the most controlling factor, the records indubitably reveal the undisputed factthat the petitioner company did not have nor did not exercise the power of control over the private respondent. Itdid not prescribe the manner by which the work is to be carried out, or the time by which the private respondenthas to report for and leave from work. As already stated, the power of control is such an important factor that otherrequisites may even be disregarded. In Sevilla v. Court of Appeals, the Supreme Court emphatically held, thus:

"The "control test," under which the person for whom the services are rendered reserves the right to direct not onlythe end to be achieved but also the means for reaching such end, is generally relied on by the courts."

We have carefully examined the evidence submitted by the private respondent in the formal offer of evidence andunfortunately, other than the bare assertions of the private respondent which he miserably failed to substantiate,we find nothing therein that would decisively indicate that the petitioner BCC exercised the fundamental power ofcontrol over the private respondent in relation to his employment not even the ID issued to the privaterespondent and the affidavits executed by Bertito Jemilla and Rogelio Santias. At best, these pieces of documentsmerely suggest the existence of employer-employee relationship as intimated by the NLRC. On the contrary, itwould appear that the said sworn statement provided a substantial basis to support the contention that the privaterespond ent worked at the petitioner BCC as SFCs representative, being its major creditor and supplier of goods andmerchandise. Moreover, as clearly pointed out by the petitioner in his Reply to the private respondents Comment,it is unnatural for SFC to still employ the private respondent "to oversee and supervise collections of accountreceivables due SFC from its customers or clients" like the herein petitioner BCC on a date later than December,1995 considering that a criminal complaint has already been instituted against him.

Sadly, the private respondent failed to sufficiently discharge the burden of showing with legal certainty thatemployee-employer relationship existed between the parties. On the other hand, it was clearly shown by thepetitioner that i t neither exercised control nor supervision over the conduct of the private respondentsemployment. Hence, the allegation that there is employer-employee relationship must necessarily fail.


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Consequently, a discussion on the issue of illegal dismissal therefore becomes unnecessary.

WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision of the public respondent NLRCdated July 31, 2002 and the Resolution dated September 30, 2002 are REVERSED and SET ASIDE. Accordingly, thedecision of the Labor Arbiter dated September 20, 2001 is hereby REINSTATED.

SO ORDERED.

After the CA denied petitioners motion for reconsideration on May 14, 2004,12 he filed a motion for extension to

file petition for review, which the Court denied through the resolution dated July 7, 2004 for failure to render anexplanation on why the service of copies of the motion for extension on respondents was not personally made.13The denial notwithstanding, he filed his petition for review on certiorari. The Court denied the petition on August18, 2004 in view of the denial of the motion for extension of time and the continuing failure of petitioner to renderthe explanation as to the non-personal service of the petition on respondents.14 However, upon a motion forreconsideration, the Court reinstated the petition for review on certiorari and required respondents to comment.15

Issue

The sole issue is whether or not an employer-employee relationship existed between petitioner and BCC. A findingon the existence of an employer-employee relationship will automatically warrant a finding of illegal dismissal,considering that respondents did not state any valid grounds to dismiss petitioner.

Ruling

The petition lacks merit.

The existence of an employer-employee relationship is a question of fact. Generally, a re-examination of factualfindings cannot be done by the Court acting on a petition for review on certiorari because the Court is not a trier offacts but reviews only questions of law. Nor may the Court be bound to analyze and weigh again the evidenceadduced and considered in the proceedings below.16 This rule is not absolute, however, and admits of exceptions.For one, the Court may look into factual issues in labor cases when the factual findings of the Labor Arbiter, theNLRC, and the CA are conflicting.17

Here, the findings of the NLRC differed from those of the Labor Arbiter and the CA. This conflict among suchadjudicating offices compels the Courts exercise of its authority to review and pass upon the evide nce presentedand to draw its own conclusions therefrom.

To prove his employment with BCC, petitioner offered the following: (a) BCC Identification Card (ID) issued to himstating his name and his position as "comptroller," and bearing his picture, his signature, and the signature of Ty; (b)a payroll of BCC for the period of October 1-15, 1996 that petitioner approved as comptroller; (c) various bills andreceipts related to expenditures of BCC bearing the signature of petitioner; (d) various checks carrying thesignatures of petitioner and Ty, and, in some checks, the signature of petitioner alone; (e) a court order showingthat the issuing court considered petitioners ID as proof of his employment with BCC; (f) a letter of petitioner datedMarch 1, 1997 to the Department of Justice on his filing of a criminal case for es tafa against Ty for non-payment ofwages; (g) affidavits of some employees of BCC attesting that petitioner was their co-employee in BCC; and (h) anotice of raffle dated December 5, 1995 showing that petitioner, being an employee of BCC, received the notice ofraffle in behalf of BCC.18

Respondents denied that petitioner was BCCs employee. They affirmed that SFC had installed petitioner as itscomptroller in BCC to oversee and supervise SFCs collections and the account of BCC to protect SFCs interest; thattheir issuance of the ID to petitioner was only for the purpose of facilitating his entry into the BCC premises inrelation to his work of overseeing the financial operations of BCC for SFC; that the ID should not be considered asevidence of petitioners employment in BCC;19 that petitioner executed an affidavit in March 1996,20 stating,among others, as follows:

1. I am a CPA (Certified Public Accountant) by profession but presently associated with, or employed by, Sobien

Food Corporation with the same business address as abovestated;

2. In the course of my association with, or employment by, Sobien Food Corporation (SFC, for short), I have beenentrusted by my employer to oversee and supervise collections on account of receivables due SFC from itscustomers or clients; for instance, certain checks due and turned over by one of SFCs customers is BCC ProductSales, Inc., operated or run by one Terrance L. Ty, (President and General manager), pursuant to, or in accordancewith, arrangements or agreement thereon; such arrangement or agreement is duly confirmed by said Terrance Ty,as shown or admitted by him in a public instrument executed therefor, particularly par. 2 of that certain Counter-Affidavit executed and subscribed on December 11, 1995, xerox copy of which is hereto attached, duly marked asAnnex "A" and made integral part hereof.

3. Despite such admission of an arrangement, or agreement insofar as BCC-checks were delivered to, or turned overin favor of SFC, Mr. Terrance Ty, in a desire to blemish my reputation or to cause me dishonor as well as to imputeunto myself the commission of a crime, state in another public instrument executed therefor in that:

"3. That all the said 158 checks were unlawfully appropriated by a certain Charlie Jao absolutely without anyauthority from BCC and the same were reportedly turned over by said Mr. Jao to a person who is not an agent or isnot authorized representative of BCC."

xerox copy of which document (Affidavit) is hereto attached, duly marked as Annex "B" and made integral parthereof. (emphasis supplied)

and that the affidavit constituted petitioners admission of the arrangement or agreement between BCC and SFC forthe latter to a ppoint a comptroller to oversee the formers operations.

Petitioner counters, however, that the affidavit did not establish the absence of an employer-employee relationshipbetween him and respondents because it had been executed in March 1996, or after his employment withrespondents had been terminated on December 12, 1995; and that the affidavit referred to his subsequentemployment by SFC following the termination of his employment by BCC.21

We cannot side with petitioner.

Our perusal of the affidavit of petitioner compels a conclusion similar to that reached by the CA and the LaborArbiter to the effect that the affidavit actually supported the contention that petitioner had really worked in BCC asSFCs representative. It does seem more natural and more believable that petitioners affidavit was referring to hisemployment by SFC even while he was reporting to BCC as a comptroller in behalf of SFC. As respondents pointedout, it was implausible for SFC to still post him to oversee and supervise the collections of accounts receivables duefrom BCC beyond December 1995 if, as he insisted, BCC had already illegally dismissed him and had even prevented


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him from entering the premises of BCC. Given the patent animosity and strained relations between him andrespondents in such circumstances, indeed, how could he still efficiently perform in behalf of SFC the essentialresponsibility to "oversee and supervise collections" at BCC? Surely, respondents would have vigorously objected toany arrangement with SFC involving him.

We note that petitioner executed the affidavit in March 1996 to refute a statement Ty himself made in his ownaffidavit dated December 11, 1995 to the effect that petitioner had illegally appropriated some checks withoutauthority from BCC.22 Petitioner thereby sought to show that he had the authority to receive the checks pursuantto the arrangements between SFC and BCC. This showing would aid in fending off the criminal charge respondents

filed against him arising from his mishandling of the checks. Naturally, the circumstances petitioner adverted to inhis March 1996 affidavit concerned those occurring before December 11, 1995, the same period when he actuallyworked as comptroller in BCC.

Further, an affidavit dated September 5, 2000 by Alfredo So, the President of SFC, whom petitioner offered as arebuttal witness, lent credence to respondents denial of petitioners employment. So declared in that affidavit,among others, that he had known petitioner for being "earlier his retained accountant having his own office but didnot hold office" in SFCs premises; that Ty had approached him (So) "looking for an accountant or comptroller to beemployed by him (Ty) in *BCCs+ distribution business" of SFCs general merchandise, and had later asked him on hisopinion about petitioner; and that he (So) had subsequently learned that "Ty had already employed [petitioner] ashis comptroller as of September 1995."23

The statements of So really supported respondents position in that petitioners associa tion with SFC prior to hissupposed employment by BCC went beyond mere acquaintance with So. That So, who had earlier merely "retained"petitioner as his accountant, thereafter employed petitioner as a "retained" accountant after his supposed illegaldismi ssal by BCC raised a doubt as to his employment by BCC, and rather confirmed respondents assertion ofpetitioner being an employee of SFC while he worked at BCC.

Moreover, in determining the presence or absence of an employer-employee relationship, the Court hasconsistently looked for the following incidents, to wit: (a) the sele ction and engagement of the employee; (b) thepayment of wages; (c) the power of dismissal; and (d) the employers power to control the employee on the meansand methods by which the work is accomplished. The last element, the so-called control test, is the most importantelement.24

Hereunder are some of the circumstances and incidents occurring while petitioner was supposedly employed byBCC that debunked his claim against respondents.

It can be deduced from the March 1996 affidavit of petitioner that respondents challenged his authority to deliversome 158 checks to SFC. Considering that he contested respondents challenge by pointing to the existingarrangements between BCC and SFC, it should be clear that respondents did not exercise the power of control overhim, because he thereby acted for the benefit and in the interest of SFC more than of BCC.

In addition, petitioner presented no document setting forth the terms of his employment by BCC.1wphi1 Thefailure to present such agreement on terms of employment may be understandable and expected if he was acommon or ordinary laborer who would not jeopardize his employment by demanding such document from theemployer, but may not square well with his actual status as a highly educated professional.

Petitioners admission that he did not receive his salary for the three months of his employment by BCC, as hiscomplaint for illegal dismissal and non-payment of wages25 and the criminal case for estafa he later filed againstthe respondents for non-payment of wages26 indicated, further raised grave doubts about his assertion ofemployment by BCC. If the assertion was true, we are puzzled how he could have remained in BCCs emplo y in thatperiod of time despite not being paid the first salary of P20,000.00/month. Moreover, his name did not appear inthe payroll of BCC despite him having approved the payroll as comptroller.

Lastly, the confusion about the date of his alleged illegal dismissal provides another indicium of the insincerity ofpetitioners assertion of employment by BCC. In the petition for review on certiorari, he averred that he had been

barred from entering the premises of BCC on October 19, 1995,27 and thus was illegally dismissed. Yet, hiscomplaint for illegal dismissal stated that he had been illegally dismissed on December 12, 1995 when respondentssecurity guards barred him from entering the premises of BCC,28 causing him to bring his complaint only onDecember 29, 1995, and after BCC had already filed the criminal complaint against him. The wide gap betweenOctober 19, 1995 and December 12, 1995 cannot be dismissed as a trivial inconsistency considering that the severalincidents affecting the veracity of his assertion of employment by BCC earlier noted herein transpired in thatinterval.

With all the grave doubts thus raised against petitioners claim, we need not dwell at length on the other proofs hepresented, like the affidavits of some of the employees of BCC, the ID, and the signed checks, bills and receipts.Suffice it to be stated that such other proofs were easily explainable by respondents and by the aforestatedcircumstances showing him to be the em ployee of SFC, not of BCC.

WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals; and ORDERS petitioner to pay the costs ofsuit.

SO ORDERED.

G.R. No. 192084 September 14, 2011

JOSE MEL BERNARTE, Petitioner,vs.PHILIPPINE BASKETBALL ASSOCIATION (PBA), JOSE EMMANUEL M. EALA, and PERRY MARTINEZ, Resp

D E C I S I O N

CARPIO, J.:

The Case

This is a petition for review1 of the 17 December 2009 Decision2 and 5 April 2010 Resolution3 of the Court ofAppeals in CA-G.R. SP No. 105406. The Court of Appeals set aside the decision of the National Labor RelationsCommission (NLRC), which affirmed the decision of the Labor Arbiter, and held that petitioner Jose Me l Bernarte isan independent contractor, and not an employee of respondents Philippine Basketball Association (PBA), JoseEmmanuel M. Eala, and Perry Martinez. The Court of Appeals denied the motion for reconsideration.

The Facts


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The facts, as summarized by the NLRC and quoted by the Court of Appeals, are as follows:

Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as referees.During the leadership of Commissioner Emilio Bernardino, they were m ade to sign contracts on a year-to-year basis.During the term of Commissioner Eala, however, changes were made on the terms of their employment.

Complainant Bernarte, for instance, was not made to sign a contract during the first conference of the All-FilipinoCup which was from February 23, 2003 to June 2003. It was only during the second conference when he was m ade

to sign a one and a half month contract for the period July 1 to August 5, 2003.

On January 15, 2004, Bernarte received a letter from the Office of the Commissioner advising him that his contractwould not be renewed citing his unsatisfactory performance on and off the court. It was a total shock for Bernartewho was awarded Referee of the year in 2003. He felt that the dismissal was caused by his refusal to fix a gameupon order of Ernie De Leon.

On the other hand, complainant Guevarra alleges that he was invited to join the PBA pool of referees in February2001. On March 1, 2001, he signed a contract as trainee. Beginning 2002, he signed a yearly contract as RegularClass C referee. On May 6, 2003, respondent Martinez issued a memorandum to Guevarra expressing dissatisfactionover his questioning on the assignment of referees officiating out-of-town games. Beginning February 2004, he wasno longer made to sign a contract.

Respondents aver, on the other hand, that complainants entered into two contracts of retainer with the PBA in theyear 2003. The first contract was for the period January 1, 2003 to July 15, 2003; and the second was for September1 to December 2003. After the lapse of the latter period, PBA decided not to renew their contracts.

Complainants were not illegally dismissed because they were not employees of the PBA. Their respective contractsof retainer were simply not renewed. PBA had the prerogative of whether or not to renew their contracts, whichthey knew were fixed.4

In her 31 March 2005 Decision,5 the Labor Arbiter6 declared petitioner an employee whose dismissal byrespondents was illegal. Accordingly, the Labor Arbiter ordered the reinstatement of petitioner and t he payment ofbackwages, moral and exemplary damages and attorneys fees, to wi t:

WHEREFORE, premises considered all respondents who are here found to have illegally dismissed complainants arehereby ordered to (a) reinstate complainants within thirty (30) days from the date of receipt of this decision and tosolidarily pay complainants:

JOSE MEL BERNARTE RENATO GUEVARRA1. backwages from January 1, 2004 up to the finality of this Decision, which to date is P536,250.00 P211,250.002. moral damages 100,000.00 50,000.003. exemplary damages 100,000.00 50,000.004. 10% attorney's fees 68,625.00 36,125.00TOTAL P754,875.00 P397,375.00or a total of P1,152,250.00

The rest of the claims are hereby dismissed for lack of merit or basis.

SO ORDERED.7

In its 28 J anuary 2008 Decision,8 the NLRC affirmed the Labor Arbiters judgment. The dispositive portion of theNLRCs decision reads:

WHEREFORE, the appeal is hereby DISMISSED. The Decision of Labor Arbiter Teresita D. Castillon-Lora dated March

31, 2005 is AFFIRMED.

SO ORDERED.9

Respondents filed a petition for certiorari with the Court of Appeals, which overturned the decisions of the NL RCand Labor Arbiter. The dispositive portion of the Court of Appeals decision reads:

WHEREFORE, the petition is hereby GRANTED. The assailed Decision dated January 28, 2008 and Resolution datedAugust 26, 2008 of the National Labor Relations Commission are ANNULLED and SET ASIDE. Private respondentscomplaint before the Labor Arbiter is DISMISSED.

SO ORDERED.10

The Court of Appeals Ruling

The Court of Appeals found petitioner an independent contractor since respondents did not exercise any form ofcontrol over the means and methods by which petitioner performed his work as a basketball referee. The Court ofAppeals held:

While the NLRC agreed that the PBA has no control over the referees acts of blowing the whistle and making callsduring basketball games, it, nevertheless, theorized that the said acts refer to the means and methods employed bythe referees in officiating basketball games for the illogical reason that said acts refer only to the referees skills.How could a skilled referee perform his job without blowing a whistle and making calls? Worse, how can the PBAcontrol the performance of work of a referee without controlling his acts of blowing the whistle and making calls?

Moreover, this Court disagrees with the Labor Arbiters finding (as affirmed by the NLRC) that the Contracts ofRetainer show that petitioners have control over private respondents.

x x x x

Neither do We agree w ith the NLRCs affirmance of the Labor Arbiters conclusion that private respondentsrepeated hiring made them regular employees by operation of law.11

The Issues

The main issue in this case is whether petitioner is an employee of respondents, which in turn determines whetherpetitioner was illegally dismissed.


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Petitioner raises the procedural issue of whether the Labor Arbiters decision has become final and executory forfailure of respondents to appeal with the NLRC within the reglementary period.

The Ruling of the Court

The petition is bereft of merit.

The Court shall first resolve the procedural issue posed by petitioner.

Petitioner contends that the Labor Arbiters Decision of 31 March 2005 became final and executory for failure ofrespondents to appeal with the NLRC within the prescribed period. Petitioner claims that the Labor Arbitersdecision was constructively served on respondents as early as August 2005 while respondents appealed theArbiters decision only on 31 March 2006, way beyond t he reglementary period to appeal. Petitioner points out thatservice of an unclaimed registered mail is deemed complete five days from the date of first notice of the postmaster. In this case three notices were issued by the post office, the last being on 1 August 2005. The unclaimedregistered mail was consequently returned to sender. Petitioner presents the Postmasters Certification to proveconstructive service of the Labor Arbiters decision on respondents. The Postmaster certified:

x x x

That upon receipt of said registered mail matter, our registry in charge, Vicente Asis, Jr., immediately issued the firstregistry notice to claim on July 12, 2005 by the addressee. The second and third notices were issued on July 21 andAugust 1, 2005, respectively.

That the subject registered letter was returned to the sender (RTS) because the addressee failed to claim it after ourone month retention period elapsed. Said registered letter was dispatched from this office to Manila CPO (RTS)

under bill #6, line 7, page1, column 1, on September 8, 2005.12

Section 10, Rule 13 of the Rules of Court provides:

SEC. 10. Completeness of service. Personal service is complete upon actual delivery. Service by ordinary mail iscomplete upon the expiration of ten (10) days after mailing, unless the court otherwise provides. Service byregistered mail is complete upon actual receipt by the addressee, or after five (5) days from the date he receivedthe first notice of the postmaster, whichever date is earlier.

The rule on service by registered mail contemplates two situations: (1) actual service the completeness of which isdetermined upon receipt by the addressee of the registered mail; and (2) constructive service the completeness ofwhich is determined upon expiration of five days from the date the addressee received the first notice of thepostmaster.13

Insofar as constructive service is concerned, there must be conclusive proof that a first notice was duly sent by thepostmaster to the addressee.14 Not only is it required that notice of the registered mail be issued but that it shouldalso be delivered to and received by the addressee.15 Notably, the presumption that official duty has been regularlyperformed is not applicable in this situation. It is incumbent upon a party who relies on constructive service toprove that the notice was sent to, and received by, the addressee.16

The best evidence to prove that notice was sent would be a certification from the postmaster, who should certifynot only that the notice was issued or sent but also as to how, when and to whom the delivery and receipt wasmade. The mailman may also testify that the notice was actually delivered.17

In this case, petitioner failed to present any concrete proof as to how, when and to whom the delivery and receiptof the three notices issued by the post office was made. There is no conclusive evidence showing that the postoffice notices were actually received by respondents, negating petitioners claim of constructive service of the LaborArbiters decision on respondents. The Postmasters Certification does not sufficiently prove that the three noticeswere delivered to and received by respondents; it only indicates that the post office issued the three notices. Simply

put, the issuance of the notices by the post office is not equivalent to delivery to and receipt by the addressee ofthe registered mail. Thus, there is no proof of completed constructive service of the Labor Arbiters decision onrespondents.

At any rate, the NLRC declared the issu e on the finality of the Labor Arbiters decision moot as respondents appealwas considered in the interest of substantial justice. We agree with the NLRC. The ends of justice will be betterserved if we resolve the instant case on the merits rather than allowing the substantial issue of whether petitioneris an independent contractor or an employee linger and remain unsettled due to procedural technicalities.

The existence of an employer-employee relationship is ultimately a question of fact. As a general rule, factual issuesare beyond the province of this Court. However, this rule admits of exceptions, one of which is where there areconflicting findings of fact between the Court of Appeals, on one hand, and the NLRC and Labor Arbiter, on theother, such as in the present case.18

To determine the existence of an employer-employee relationship, case law has consistently applied the four-foldtest, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power ofdismiss al; and (d) the employers power to control the employee on the means and methods by which the work is

accomplished. The so-called "control test" is the most important indicator of the presence or absence of anemployer-employee relationship.19

In this ca se, PBA admits repeatedly engaging petitioners services, as shown in the retainer contracts. PBA payspetitioner a retainer fee, exclusive of per diem or allowances, as stipulated in the retainer contract. PBA canterminate the retainer contract for petit ioners violation of its terms and conditions.

However, respondents argue that the all-important element of control is lacking in this case, making petitioner anindependent contractor and not an employee of respondents.

Petitioner contends otherwise. Petitioner asserts that he is an employee of respondents since the latter exercisecontrol over the performance of his work. Petitioner cites the following stipulations in the retainer contract whichevidence control: (1) respondents classify or rate a referee; (2) respondents require referees to attend all basketballgames organized or authorized by the PBA, at least one hour before the start of the first game of each day; (3)respondents assign petitioner to officiate ballgames, or to act as alternate referee or substitute; (4) referee agreesto observe and comply with all the requirements of the PBA governing the conduct of the referees whether on oroff the court; (5) referee agrees (a) to keep himself in good physical, mental, and emotional condition during the lifeof the contract; (b) to give always his best effort and service, and loyalty to the PBA, and not to officiate as refereein any basketball game outside of the PBA, without written prior consent of the Commissioner; (c) always toconduct himself on and off the court according to the highest standards of honesty or morality; and (6) impositionof various sanctions for violation of the terms and conditions of the contract.


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The foregoing stipulations hardly demonstrate control over the means and methods by which petitioner performshis work as a referee officiating a PBA basketball game. The contractual stipulations do not pertain to, much lessdictate, how and when petitioner will blow the whistle and make calls. On the contrary, they merely serve as rulesof conduct or guidelines in order to maintain the integrity of the professional basketball league. As correctlyobserved by the Court of Appeals, "how could a skilled referee perform his job without blowing a whistle andmaking calls? x x x [H]ow can the PBA control the performance of work of a referee without controlling his acts ofblowing the whistle and making calls?"20

In Sonza v. ABS-CBN Broadcasting Corporation,21 which determined the relationship between a television and radiostation and one of its talents, the Court held that not all rules imposed by the hiring party on the hired partyindicate that the latter is an employee of the former. The Court held:

We find that these general rules are merely guidelines towards the achievement of the mutually desired result,which are top-rating television and radio programs that comply with standards of the industry. We have ruled that:

Further, not every form of control that a party reserves to himself over the conduct of the other party in relation tothe services being rendered may be accorded the effect of establishing an employer-employee relationship. Thefacts of this case fall squarely with the case of Insular Life Assurance Co., Ltd. v. NLRC. In said case, we held that:

Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of themutually desired result without dictating the means or methods to be employed in attaining it, and those thatcontrol or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aimonly to promote the result, create no employer-employee relationship unlike the second, which address both theresult and the means used to achieve it.22

We agree with respondents that once in the playing court, the referees exercise their own independent judgment,based on the rules of the game, as to when and how a call or decision is to be made. The referees decide whetheran infraction was committed, and the PBA cannot overrule them once the decision is made on the playing court.The referees are the only, absolute, and final authority on the playing court. Respondents or any of the PBA officerscannot and do not determine which calls to make or not to make and cannot control the referee when he blows thewhistle because such authority exclusively belongs to the referees. The very nature of petitioners job of officiatinga professional basketball game undoubtedly calls for freedom of control by respondents.

Moreover, the following circumstances indicate that petitioner is an independent contractor: (1) the referees arerequired to report for work only when PBA games are scheduled, which is three times a week spread over anaverage of only 105 playing days a year, and they officiate games at an average of two hours per game; and (2) theonly deductions from the fees received by the referees are withholding taxes.

In other words, unlike regular employees who ordinarily report for work eig ht hours per day for five days a week,petitioner is required to report for work only when PBA games are scheduled or three times a week at two hoursper game. In addition, there are no deductions for contributions to the Social Security System, Philhealth or Pag -Ibig, which are the usual deductions from emp loyees salaries. These undisputed circumstances buttress the factthat petitioner is an independent contractor, and not an employee of respondents.

Furthermore, the applicable foreign case law declares that a referee is an independent contractor, whose specialskills and independent judgment are required specifically for such position and cannot possibly be controlled by thehiring party.

In Yonan v. United States Soccer Federation, Inc.,23 the United States District Court of Illinois held that plaintiff, asoccer referee, is an independent contractor, and not an employee of defendant which is the statutory body thatgoverns soccer in the United States. As such, plaintiff was not entitled to protection by the Age Discrimination inEmployment Act. The U.S. District Court ruled:

Generally, "if an employer has the right to control and direct the work of an individual, not only as to the result tobe achieved, but also as to details by which the result is achieved, an employer/employee relationship is likely toexist." The Court must be careful to distinguish between "control[ling] the conduct of another party contractingparty by setting out in detail his obligations" consistent with the freedom of contract, on the one hand, and "thediscretionary control an employer daily exercises over its employees conduct" on the other.

Yonan asserts that the Federation "closely supervised" his performance at each soccer game he officiated by givinghim an assessor, discussing his performance, and controlling what clothes he wore while on the field and traveling.Putting aside that the Federation did not, for the most part, control what clothes he wore, the Federation did notsupervise Yonan, but rather evaluated his performance after matches. That the Federation evaluated Yonan as areferee does not mean that he was an employee. There is no question that parties retaining independentcontractors may judge the performance of those contractors to determine if the contractual relationship shouldcontinue. x x x

It is undisputed that the Federation did not control the way Yonan refereed his games.1wphi1 He had fulldiscretion and authority, under the Laws of the Game, to call the game as he saw fit. x x x In a similar vein,subjecting Yonan to qualification standards and pro cedures like the Federations registration and training

requirements does not create an employer/employee relationship. x x x

A position that requires special skills and independent judgment weights in favor of independent contractor status.x x x Unskilled work, on the other hand, suggests an employment relationship. x x x Here, it is undisputed thatsoccer refereeing, especially at the professional and international level, requires "a g reat deal of skill and naturalability." Yonan asserts that it was th e Federations training that made him a top referee, and that suggests he wasan employee. Though substantial training supports an employment inference, that inference is dulled significantlyor negated when the putative employers activity is the result of a statutory requirement, not the employerschoice. x x x

In McInturff v. Battle Ground Academy of Franklin,24 it was held that the umpire was not an agent of the TennesseeSecondary School Athletic Association (TSSAA), so the players vicarious liabili ty claim against the association shouldbe dismissed. In finding that the umpire is an independent contractor, the Court of Appeals of Tennesse ruled:

The TSSAA deals with umpires to achieve a result-uniform rules for all baseball g ames played between TSSAAmember schools. The TSSAA does not supervise regular season games. It does not tell an official how to conduct thegame beyond the framework established by the rules. The TSSAA does not, in the vernacular of the case law,control the means and method by which the umpires work.

In addition, the fact that PBA repeatedly hired petitioner does not by itself prove that petitioner is an employee ofthe former. For a hired party to be considered an employee, the hiring party must have control over the means and


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methods by which the hired party is to perform his work, which is absent in this case. The continuous rehiring byPBA of petitioner simply signifies the renewal of the contract between PBA and petitioner, and highlights thesatisfactory services rendered by petitioner warranting such contract renewal. Conversely, if PBA decides todiscontinue petitioners services at the end of the term fixed in the contract, whether for unsatisfactory services, orviolation of the terms and conditions of the contract, or for whatever other reason, the same merely results in thenon-renewal of the contract, as in the present case. The non-renewal of the contract between the parties does notconstitute illegal dismissal of petitioner by respondents.

WHEREFORE, we DENY the petition and AFFIRM the assailed decision of the Court of Appeals.

SO ORDERED.

G.R. No. 196426 , August 15, 2011 MARTICIO SEMBLANTE and DUBRICK PILAR, Petitioners, vs.COURT OF APPEALS, 19th DIVISION, now SPECIAL FORMER 19th DIVISION, GALLERA DE MANDAUE / SPOUSESVICENTE and MARIA LUISA LOOT, Respondents.

D E C I S I O N

VELASCO, JR., J.:

Before Us is a Petition for Review on Certiorari under Rule 45, assailing and seeking to set aside the Decision1 andResolution2 dated May 29, 2009 and February 23, 2010, respectively, of the Court of Appeals (CA) in CA-G.R. SP No.03328. The CA affirmed the October 18, 2006 Resolution3 of the National Labor Relations Commission (NLRC),Fourth Division (now Seventh Division), in NLRC Case No. V-000673-2004.

Petitioners Marticio Semblante (Semblante) and Dubrick Pilar (Pilar) assert that they were hired by respondents-spouses Vicente and Maria Luisa Loot, the owners of Gallera de Mandaue (the cockpit), as the official masiador andsentenciador, respectively, of the cockpit sometime in 1993.

As the masiador, Semblante calls and takes the bets from the gamecock owners and other bettors and orders thestart of the cockfight. He also distributes the winnings after deducting the arriba, or the commission for the cockpit.Meanwhile, as the sentenciador, Pilar oversees the proper gaffing of fighting cocks, determines the fi ghting cocksphysical condition and capabilities to continue the cockfight, and eventually declares the result of the cockfight.4

For their services as masiador and sentenciador, Semblante receives PhP 2,000 per week or a total of PhP 8,000 permonth, while Pilar gets PhP 3,500 a week or PhP 14,000 per month. They work every Tuesday, Wednesday,Saturday, and Sunday every week, excluding monthly derbies and cockfights held on special holidays. Their workingdays start at 1:00 p.m. and last until 12:00 midnight, or until the early hours of the morning depending on the needsof the cockpit. Petitioners had both been issued employees identification cards5 that they wear every time theyreport for duty. They alleged never having incurred any infraction and/or violation of the cockpit rules andregulations.

On November 14, 2003, however, petitioners were denied e ntry into the cockpit upon the instructions ofrespondents, and were informed of the termination of their services effective that date. This prompted petitionersto file a complaint for illegal dismissal against respondents.

In answer, respondents denied that petitioners were their em ployees and alleged that they were associates ofrespondents independent contractor, Tomas Vega. Respondents claimed tha t petitioners have no regular workingtime or day and they are free to decide for themselves whether to report for work or not on any cockfighting day. Intimes when there are few cockfights in Gallera de Mandaue, petitioners go to other cockpits in the vicinity. Lastly,petitioners, so respondents assert, were only issued identification cards to indicate that they were free from thenormal entrance fee and to differentiate them from the general public.6

In a Decision dated June 16, 2004, Labor Arbiter Julie C. Rendoque found petitioners to be regular employees ofrespondents as they performed work that was necessary and indispensable to the usual trade or business of

respondents for a number of years. The Labor Arbiter also ruled that petitioners were illegally dismissed, and soordered respondents to pay petitioners their backwages and separation pay.7

Respondents counsel received the Labor Arbiters Decision on September 14, 2004. And within the 10 -day appealperiod, he filed the respondents appeal wit h the NLRC on September 24, 2004, but without posting a cash or suretybond equivalent to the monetary award granted by the Labor Arbiter.8

It was only on October 11, 2004 that respondents filed an appeal bond dated October 6, 2004. Hence, in aResolution9 dated August 25, 2005, the NLRC denied the appeal for its non-perfection.

Subsequently, however, the NLRC, acting on respondents Motion for Reconsideration, reversed its Resolution onthe postulate that their appeal was m eritorious and the filing of an appeal bond, albeit belated, is a substantialcompliance with the rules. The NLRC held in its Resolution of October 18, 2006 that there was no employer-employee relationship between petitioners and respondents, respondents having no part in the selection andengagement of petitioners, and that no separate individual contract with respondents was ever executed bypetitioners.10

Following the denial by the NLRC of their Motion for Reconsideration, per Resolution dated January 12, 2007,petitioners went to the CA on a petition for certiorari. In support of their petition, petitioners argued that the NLRCgravely abused its discretion in entertaining an appeal that was not perfected in the first place. On the other hand,respondents argued that the NLRC did not commit grave abuse of discretion, since they eventually posted theirappeal bond and that their appeal was so meritorious warranting the relaxation of the rules in the interest of

justice.11

In its Decision dated May 29, 2009, the appellate court found for respondents, noting that referees and bet-takersin a cockfight need to have the kind of expertise that is characteristic of the game to interpret messages conveyedby mere gestures. Hence, petitioners are akin to independent contractors who possess unique skills, expertise, andtalent to distinguish them from ordinary employees. Further, respondents did not supply petitioners with the toolsand instrumentalities they needed to perform work. Petitioners only needed their unique skills and talents toperform their job as masiador and sentenciador.12 The CA held:

In some circumstances, the NLRC is allowed to be liberal in the interpretation of the rules in deciding labor cases. Inthis case, the appeal bond was filed, although late. Moreover, an exceptional circumstance obtains in the case atbench which warrants a relaxation of the bond requirement as a condition for perfecting the appeal. This case ishighly meritorious that propels this Court not to strictly apply the rules and thus prevent a grave injustice frombeing done.


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As elucidated by the NLRC, the circumstances obtaining in this case wherein no actual employer-employee existsbetween the petitioners and the private respondents [constrain] the relaxation of the rules. In this regard, we findno grave abuse attributable to the administrative body.

x x x x

Petitioners are duly licensed "masiador" and "sentenciador" in the cockpit owned by Lucia Loot. Cockfighting, whichis a part of our cultural heritage, has a peculiar set of rules. It is a game based on the fighting ability of the gamecocks in the cockpit. The referees and bet-takers need to have that kind of expertise that is characteristic of the

cockfight gambling who can interpret the message conveyed even by mere gestures. They ought to have the talentand skill to get the bets from numerous cockfighting aficionados and decide which cockerel to put in the arena.They are placed in that elite spot where they can control the game and the crowd. They are not given salaries bycockpit owners as their compensation is based on the "arriba". In fact, they can offer their services everywherebecause they are duly licensed by the GAB. They are free to choose which cockpit arena to enter and offer theirexpertise. Private respondents cannot even control over the means and methods of the manner by which theyperform their work. In this light, they are akin to independent contractors who possess unique skills, e xpertise andtalent to distinguish them from ordinary employees.

Furthermore, private respondents did not supply petitioners with the tools and instrumentalities they needed toperform their work. Petitioners only needed their talent and skills to be a "masiador" and "sentenciador". As such,they had all the tools they needed to perform their work. (Emphasis supplied.)

The CA refused to reconsider its Decision. Hence, petitioners came to this Court, arguing in the main that the CAcommitted a reversible error in entertaining an appeal, which was not perfected in the first place.

Indeed, the posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards

from the Decision of the Labor Arbiter.13 Article 223 of the Labor Code provides:

Article 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed tothe Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, ororders. Such appeal may be entertained only on any of the following grounds:

x x x x

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon theposting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in theamount equivalent to the monetary award in the judgment appealed from. (Emphasis supplied.)

Time and again, however, this Court, considering the substantial merits of the case, has relaxed this rule on, andexcused the late posting of, the appeal bond when there are strong and compelling reasons for the liberality,14such as the prevention of miscarriage of justice extant in the case15 or the special circumstances in the casecombined with its legal merits or the amount and the issue involved.16 After all, technical rules cannot preventcourts from exercising their duties to determine and settle, equitably and completely, the rights and obligations ofthe parties.17 This is one case where the exception to the ge neral rule lies.

While respondents had failed to post their bond within the 10-day period provided above, it is evident, on the otherhand, that petitioners are NOT employees of respondents, since their relationship fails to pass muster the four-fold

test of employment We have repeatedly mentioned in countless decisions: (1) the se lection and engagement of theemployee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employeesconduct, which is the most important element.18 1avvphi1

As found by both the NLRC and the CA, respondents had no part in petitioners select ion and management;19petitioners compensation was paid out of the arriba (which is a percentage deducted from the total bets), not bypetitioners;20 and petitioners performed their functions as masiador and sentenciador free from the direction andcontrol of respondents.21 In the conduct of their work, petitioners relied mainly on their "expertise that ischaracteristic of the cockfight gambling,"22 and were never given by respondents any tool needed for the

performance of their work.23

Respondents, not being petitioners employers, could never have dismissed, legally or illegally, petitioners, sincerespondents were without power or prerogative to do so in the first place. The rule on the posting of an appealbond cannot defeat the substantive rights of respondents to be free from an unwarranted burden of answering foran illegal dismissal for which they were never responsible.1avvphi1

Strict implementation of the rules on appeals must give way to the factual and legal reality that is evident from therecords of this case.24 After all, the primary objective of our laws is to dispense justice and equity, not the contrary.

WHEREFORE, We DENY this petition and AFFIRM the May 29, 2009 Decision and February 23, 2010 Resolution ofthe CA, and the October 18, 2006 Resolution of the NLRC.

SO ORDERED.

G.R. No. 170351 March 30, 2011

LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION - ALU - TUCP, Petitioner,vs.PHILIPPINE NATIONAL OIL COMPANY - ENERGY DEVELOPMENT CORPORATION, Respondent.

D E C I S I O N

NACHURA, J.:

Under review is the Decision1 dated June 30, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 65760, whichdismissed the petition for certiorari filed by petitioner Leyte Geothermal Power Progressive Employees Union ALUTUCP (petitioner Union) to annul and set aside the decision2 dated December 10, 1999 of the National LaborRelations Commission (NLRC) in NLRC Certified Case No. V-02-99.

The facts, fairly summarized by the CA, follow.

[Respondent Philippine National Oil Corporation]-Energy Development Corporation [PNOC-EDC] is a government-owned and controlled corporation engaged in exploration, development, utilization, generation and distribution ofenergy resources like geothermal energy.

Petitioner is a legitimate labor organization, duly registered with the Department of Labor and Employment (DOLE)Regional Office No. VIII, Tacloban City.


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Among *respondents+ geothermal projects is the Leyte Geothermal Power Project located at the Greater TongonanGeothermal Reservation in Leyte. The said Project is composed of the Tongonan 1 Geothermal Project (T1GP) andthe Leyte Geothermal Production Field Project (LGPF) which provide the power and electricity needed not only inthe provinces and cities of Central and Eastern Visayas (Region VII and VIII), but also in the island of Luzon as well.Thus, the [respondent] hired and employed hundreds of employees on a contractual basis, whereby, theiremployment was only good up to the completion or termination of the project and would automatically expireupon the completion of such project.

Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects had become members ofpetitioner. In view of that circumstance, the petitioner demands from the [respondent] for recognition of it as thecollective bargaining agent of said employees and for a CBA negotiation with it. However, the [respondent] did notheed such demands of the petitioner. Sometime in 1998 when the project was about to be completed, the[respondent] proceeded to serve Notices of Termination of Employment upon the employees who are members ofthe petitioner.

On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the [respondent] on the ground ofpurported commission by the latter of unfair labor practice for "refusal to bargain collectively, union busting andmass termination." On the same day, the petitioner declared a strike and staged such strike.

To avert any work stoppage, then Secretary of Labor Bienvenido E. Laguesma intervened and issued the Order,dated January 4, 1999, certifying the labor dispute to the NLRC for compulsory arbitration. Accordingly, all thestriking workers were directed to return to work within twelve (12) hours from receipt of the Order and for the[respondent] to accept them back under the same terms and conditions of employment prior to the strike. Further,the parties were directed to cease and desist from committing any act that would exacerbate the situation.

However, despite earnest efforts on the part of the Secretary of Labor and Employment to settle the disputeamicably, the petitioner remained adamant and unreasonable in its position, causing the failure of the negotiationtowards a peaceful compromise. In effect, the petitioner did not abide by [the] assumption order issued by theSecretary of Labor.

Consequently, on January 15, 1999, the [respondent] filed a Complaint for Strike Illegality, Declaration of Loss ofEmployment and Damages at the NLRC-RAB VIII in Tacloban City and at the same time, filed a Petition forCancellation of Petitioners Certificate of Registration with DOLE, Regional Office No. VIII. The two cases were lateron consolidated pursuant to the New NLRC Rules of Procedure. The consolidated case was docketed as NLRCCertified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99). The said certified casewas indorsed to the NLRC 4th Division in Cebu City on June 21, 1999 for the proper disposition thereof.3

In due course, the NLRC 4th Division rendered a decision in favor of respondent, to wit:

WHEREFORE, based on the foregoing premises, judgment is hereby rendered as follows:

1. Declaring the officers and members of [petitioner] Union as project employees;

2. Declaring the termination of their employment by reason of the completion of the project, or a phase or portionthereof, to which they were assigned, as valid and legal;

3. Declaring the strike staged and conducted by [petitioner] Union through its officers and members on December28, 1998 to January 6, 1999 as illegal for failure to comply with the mandatory requirements of the law on strike[;]

4. Declaring all the officers and members of the board of [petitioner] Union who instigated and spearheaded theillegal strike to have lost their employment[;]

5. Dismissing the claim of [petitioner] Union against PNOC-EDC for unfair labor practice for lack of merit[;]

6. Dismissing both parties claims against each other for violation of the Assumption Order dated January 4, 1999

for lack of factual basis[;]

7. Dismissing all other claims for lack of merit.4

Petitioner Union filed a motion for reconsideration of the NLRC decision, which was subsequently denied.Posthaste, petitioner Union filed a petition for certiorari before the CA, alleging grave abuse of discretion in thedecision of the NLRC. As previously adverted to, the CA dismissed the petition for certiorari, thus:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the Petition. Theassailed Decision dated December 10, 1999 of the NLRC 4th Division in NLRC Certified Case No. V-02-99 (NCMB-RABVIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99) and its Order dated March 30, 2001 are hereby AFFIRMED.

Costs against the Petitioner.5

Hence, this appeal by certiorari filed by petitioner Union, positing the following questions of law:

1. MAY THE HONORABLE COURT OF APPEALS SUSTAIN THE "PROJECT CONTRACTS" THAT ARE DESIGNED TO DENY

AND DEPRIVE THE EMPLOYEES THEIR RIGHT TO SECURITY OF TENURE BY MAKING IT APPEAR THAT THEY ARE MEREPROJECT EMPLOYEES?

2. WHEN THERE ARE NO INTERVALS IN THE EMPLOYEES CONTRACT, SUCH THAT THE SO-CALLED UNDERTAKINGWAS CONTINUOUS, ARE THE EMPLOYEES PROPERLY TREATED AS PROJECT EMPLOYEES?

3. MAY THE HONORABLE COURT OF APPEALS IGNORETHE FIRMS OWN ESTIMATE OF JOB COMPLETION, PROVINGTHAT THERE IS STILL 56.25% CIVIL/STRUCTURAL WORK TO BE ACCOMPLISHED, AND RULE THAT THE EMPLOYEEWERE DISMISSED FOR COMPLETION [OF] THE "PROJECT?"

4. MAY A FIRM HIDE UNDER THE SPURIOUS CLOAK OF "PROJECT COMPLETION" TO DISMISS EN MASSE THEEMPLOYEES WHO HAVE ORGANIZED AMONG THEMSELVES A LEGITIMATE LABOR ORGANIZATION TO PROTECTTHEIR RIGHTS?

5. WHEN THERE IS NO STOPPAGE OF WORK, MAY A PROTEST ACTIVITY BE CONSIDERED AS A STRIKE CONTRARY ITS CONCEPTUAL DEFINITION UNDER ARTICLE 212 (O) OF THE LABOR CODE OF THE P HILIPPINES?

6. WHEN THE DISMISSAL IS AIMED AT RIDDING THE COMPANY OF MEMBERS OF THE UNION, IS THIS UNIONBUSTING?6

Stripped of rhetoric, the issues for our resolution are:


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1. Whether the officers and members of petitioner Union are project employees of respondent; and

2. Whether the officers and members of petitioner Union engaged in an illegal strike.

On the first issue, petitioner Union contends that its officers and members performed activities that were usuallynecessary and desirable to respondents usual business. In fact, petitioner Union reiterates that its officers andmembers were assigned to the Construction Department of respondent as carpenters and masons, and to other

jobs pursuant to civil works, which are usually necessary and desirable to the department. Petitioner Union likewise

points out that there was no interval in the employment contract of its officers and members, who were allemployees of respondent, which lack of interval , for petitioner Union, "manifests that the undertaking is usuallynecessary and desirable to the usual t rade or business of the employer."

We cannot subscribe to the view taken by petitioner Union.

The distinction between a regular and a project employment is provided in Article 280, paragraph 1, of the LaborCode:

ART. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstandingand regardless of the oral agreement of the parties, an employment shall be deemed to be regular where theemployee has been engaged to perform activities which are usually necessary or desirable in the usual business ortrade of the employer, except where the employment has been fixed for a specific project or undertaking thecompletion or termination of which has been determined at the time of the engagement of the employee or wherethe work or service to be performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any

employee who has rendered at least one year of service, whether such service is continuous or broken, shall beconsidered a regular employee with respect to the activity in which he is employed and his employment shallcontinue while such actually exists.7

The foregoing contemplates four (4) kinds of employees: (a) regular employees or t hose who have been "engagedto perform activities which are usually necessary or desirable in the usual business or trade of the employer"; (b)project employees or those "whose employment has been fixed for a specific project or undertaking[,] thecompletion or termination of which has been determined at the time of the engagement of the employee"; (c)seasonal employees or those who work or perform services which are seasonal in nature, and the employment isfor the duration of the season;8 and (d) casual employees or those who are not regular, project, or seas onalemployees. Jurisprudence has added a fifth kind a fixed-term employee.9

Article 280 of the Labor Code, as worded, establishes that the nature of the employment is determined by law,regardless of any contract expressing otherwise. The supremacy of the law over the nomenclature of the contractand the stipulations contained therein is to bring to life the policy enshrined in the Constitution to "afford fullprotection to labor."10 Thus, labor contracts are placed on a higher plane than ordinary contracts; these areimbued with public interest and therefore subject to the police power of the State.11

However, notwithstanding the foregoing iterations, project employment contracts which fix the employment for aspecific project or undertaking remain valid under the law:

x x x By entering into such a contract, an employee is deemed to understand that his employment is coterminouswith the project. He m ay not expect to be employed continuously beyond the completion of the project. It is of

judicial notice that project employees engaged for manual services or those for special skills like those of carpentersor masons, are, as a rule, unschooled. However, this fact alone is not a valid reason for bestowing special treatmenton them or for invalidating a contract of employment. Project employment contracts are not lopsided agreementsin favor of only one party thereto. The employers interest is equally important as that of the employee*s+ for theirsis the interest that propels economic activity. While it may be true that it is the employer who drafts projectemployment contracts with its business interest as overriding consideration, such contracts do not, of necessity,prejudice the employee. Neither is the employee left helpless by a prejudicial employment contract. After all, under

the law, the interest of the worker is paramount.12

In the case at bar, the records reveal that the officers and the members of petitioner Union signed employmentcontracts indicating the specific project or phase of work for which they were hired, with a fixed period ofemployment. The NLRC correctly disposed of this issue:

A deeper examination also shows that [the individual members of petitioner Union] indeed signed and accepted the[employment contracts] freely and voluntarily. No evidence was presented by [petitioner] Union to prove improperpressure or undue influence when they entered, perfected and consummated [the employment] contracts. In fact,it was clearly established in the course of the trial of this case, as explained by no less than the President of[petitioner] Union, that the contracts of employment were read, comprehended, and voluntarily accepted by them.x x x.

x x x x

As clearly shown by *petitioner+ Unions own admission, both parties had executed the contracts freely andvoluntarily without fo rce, duress or acts tending to vitiate the worker*s+ consent. Thus, we see no reason not to

honor and give effect to the terms and conditions stipulated therein. x x x.13

Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are supported by substantialevidence.

It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial bodies, which are deemedto have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respectbut even finality, and bind the Court when supported by substantial evidence.14 Rule 133, Section 5 definessubstantial evidence as "that amount of relevant evidence which a reasonable mind might accept as adequate to

justify a conclusion."

Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in laborcases.15 We may take cognizance of and resolve factual issues, only when the findings of fact and conclusions oflaw of the Labor Arbiter or the NLRC are inconsistent with those of the CA.16

In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and the members ofpetitioner Union were project employees. Nonetheless, petitioner Union insists that they were regular employees

since they performed work which was usually necessary or desirable t o the usual business or trade of theConstruction Department of respondent.

The landmark case of ALU-TUCP v. NLRC17 instructs on the two (2) categories of project employees:


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It is evidently important to become clear about the meaning and scope of the term "project" in the present context.The "project" for the carrying out of which "project employees" are hired would ordinarily have some relationshipto the usual business of the employer. Exceptionally, the "project" undertaking might not have an ordinary ornormal relationship to the usual business of the employer. In this latter case, the determination of the scope andparameters of the "project" becomes fairly easy. x x x. From the viewpoint, however, of the leg al characterizationproblem here presented to the Court, there should be no difficulty in designating the employees who are retainedor hired for the purpose of undertaking fish culture or the production of vegetables as "project employees," asdistinguished from ordinary or "regular employees," so long as the duration and scope of the project were

determined or specified at the time of engagement of the "project employees." For, as is evident from theprovisions of Article 280 of the Labor Code, quoted earlier, the principal test for determining whether particularemployees are properly characterized as "project employees" as distinguished from "regular employees," iswhether or not the "project employees" were assigned to carry out a "specific project or undertaking," the duration(and scope) of which were specified at the time the employees were engaged for that project.

In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2)distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within theregular or usual business of the employer company, but which is distinct and separate, and identifiable as such,from the other undertakings of the company. Such job or undertaking begins and ends at determined ordeterminable times. The typical example of this first type of project is a particular construction job or project of aconstruction company. A construction company ordinarily carries out two or more [distinct] identifiableconstruction projects: e.g., a twenty-five-storey hotel in Makati; a residential condominium building in Baguio City;and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these separateprojects, the scope and duration of which has been determined and made known to the employees at the time ofemployment, are properly treated as "project employees," and their se rvices may be lawfully terminated atcompletion of the project.

The term "project" could also refer to, secondly, a particular job or undertaking that is not within the regularbusiness of the corporation. Such a job or undertaking must also be identifiably separate and distinct from theordinary or regular business operations of the employer. The job or undertaking also begins and ends at determinedor determinable times.18

Plainly, the litmus test to determine whether an individual is a project employee lies in setting a fixed period ofemployment involving a specific undertaking which completion or termination has been determined at the t ime ofthe particular employees engagement.

In this case, as previously adverted to, the officers and the mem bers of petitioner Union were specifically hired asproject employees for respondents Leyte Geothermal Power Project located at the Greater Tongonan GeothermalReservation in Leyte. Consequently, upon the completion of the project or substantial phase thereof, the officersand the members of petitioner Union could be validly terminated.

Petitioner Union is adamant, however, that the lack of interval in the employment contracts of its officer andmembers negates the latters status

as mere project employees. For petitioner Union, the lack of interval further drives home its point that its officersand members are regular employees who performed work which was usually necessary or desirable to the usualbusiness or trade of respondent.

We are not persuaded.

Petitioner Unions members employment for more than a year does equate to their regular employment withrespondent. In this regard, Mercado, Sr. v. NLRC19 illuminates:

The first paragraph [of Article 280 of the Labor Code] answers the question of who are regular employees. It statesthat, regardless of any written or oral agreement to the contrary, an employee is deemed regular where he isengaged in necessary or desirable activities in the usual business or trade of the employer, except for project

employees.

A project employee has been defined to be one whose employment has been fixed for a specific project orundertaking, the completion or termination of which has been determined at the time of the engagement of theemployee, or where the work or service to be performed is seasonal in nature and the employment is for theduration of the season, as in the present case.

The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not fall under thedefinition of the preceding paragraph. The proviso, in said second paragraph, deems as regular employees those"casual" employees who have rendered at least one year of service regardless of the fact that such service may becontinuous or broken.

Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable to their case andthat the Labor Arbiter should have considered them regular by virtue of said proviso. The contention is withoutmerit.

The general rule is that the office of a proviso is to qualify or modify only the phrase immediately preceding it or

restrain or limit the generality of the clause that it immediately follows. Thus, it has been held that a proviso is t o beconstrued with reference to the immediately preceding part of the provision to which it is attached, and not to thestatute itself or to other sections thereof. The only exception to this rule is where the clear legislative intent is torestrain or qualify not only the phrase immediately preceding it (the proviso) but also earlier provisions of thestatute or even the statute itself as a whole.

Policy Instruction No. 12 of the Department of Labor and Employment discloses that the concept of regular andcasual employees was designed to put an end to casual employment in regular jobs, which has been abused bymany employers to prevent so called casuals from enjoying the benefits of regular employees or to preventcasuals from joining unions. The same instructions show that the proviso in the second paragraph of Art. 280 wasnot designed to stifle sm all-scale businesses nor to oppress agricultural land owners to further the interests oflaborers, whether agricultural or industrial. What it seeks to eliminate are abuses of employers against theiremployees and not, as petitioners would have us believe, to prevent small-scale businesses from engaging inlegitimate methods to realize profit. Hence, the proviso is applicable only to the employees who are deemed"casuals" but not to the "project" employees nor the regular employees treated in paragraph one of Art. 280.

Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their

employment legally ends upon completion of the project or the [end of the] season. The termination of theiremployment cannot and should not constitute an illegal dismissal.


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Considering our holding that the officers and the me mbers of petitioner Union were project employees, its claim ofunion busting is likewise dismissed.

On the second issue, petitioner Union contends that there was no stoppage of work; hence, they did not strike.Euphemistically, petitioner Union avers that it "only engaged in picketing,"20 and maintains that "without any workstoppage, [its officers and members] only engaged in xxx protest activity."

We are not convinced. Petitioner Union splits hairs.

To begin with, quite evident from the records is the undisputed fact that petitioner Union filed a Notice of Strike onDecember 28, 1998 with the Department of Labor and Employment, grounded on respondents purpo rted

unfair labor practices, i.e., "refusal to bargain collectively, union busting and mass termination." On even date,petitioner Union declared and staged a strike.

Second, then Secretary of Labor, Bienvenido E. Laguesma, intervened and issued a Return-to-Work Order21 datedJanuary 4, 1999, certifying the labor dispute to the NLRC for compulsory arbitration. The Order narrates the factsleading to the labor dispute, to wit:

On 28 December 1998, [petitioner Union] filed a Notice of Strike against [respondent] citing unfair labor practices,specifically: refusal to bargain collectively, union busting and mass termination as the grounds [therefor]. On thesame day, *petitioner+ Union went on strike and took control over *respondents+ facilities of its Ley te GeothermalProject.

Attempts by the National Conciliation and Mediation Board RBVIII to forge a mutually acceptable solution provedfutile.

In the meantime, the strike continues with no settlement in sight placing in jeopardy the supply of much neededpower supply in the Luzon and Visayas grids.

x x x x

The on-going strike threatens the availability of continuous electricity to these areas which is critical to day-to-daylife, industry, commerce and trade. Without doubt, *respondents+ operations *a re] indispensable to the nationalinterest and falls (sic) within the purview of Article 263 (g) of the Labor Code, as amended, which warrants (sic) theintervention of this Office.

Third, petitioner Union itself, in its pleadings, used the word "strike."

Ultimately, petitioner Unions asseverations are belied by the factual findings of the NLRC, as affirmed by the CA:

The failure to comply with the mandatory requisites for the conduct of strike is both admitted and clearly shown onrecord. Hence, it is undisputed that no strike vote was conducted; likewise, the cooling-off period was not observed

and that the 7-day strike ban after the submission of the strike vote was not complied with since there was no s trikevote taken.

x x x x

The factual issue of whether a notice of strike was timely filed by [petitioner] Union was resolved by the evidenceon record. The evidence revealed that [petitioner] Union struck even before it could file the required notice ofstrike. Once again, this re lied on *petitioner+ Unions proof. *Petitioner+ Union*s+ witness said:

Atty. Sinsuat : You stated that you struck on 28 December 1998 is that correct?

Witness : Early in the morning of December 1998.

x x x x

Atty. Sinsuat : And you went there to conduct the strike did you not?

Witness : Our plan then was to strike at noon of December 28 and the strikers will be positioned at their respectiveareas.22

Article 263 of the Labor Code enumerates the requisites for holding a strike:

Art. 263. Strikes, picketing, and lockouts. (a) x x x.

x x x x.

(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike orthe employer may file a notice of lockout with the Department at least 30 days before the intended date thereof. Incases of unfair labor practice, the period of notice s hall be 15 days and in the absence of a duly certified bargainingagent, the notice of strike may be filed by any legitimate labor organization in behalf of its members. However, in

case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting, where the existence of the union is threatened, the 15-day cooling-offperiod shall not apply and the union may take action immediately.

(d) The notice must be in accordance with such implementing rules and regulations as the Department of Labor andEmployment may promulgate.

(e) During the cooling-off period, it shall be the duty of the Department to exert all efforts at me diation andconciliation to effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisitenumber of days from the mandatory filing of the notice, the labor union may strike or the employer may declare alockout.

(f) A decision to declare a strike must be approved by a majority of the total union membership in the bargainingunit concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare alockout must be approved by a majority of the board of directors of the corporation or association or of thepartners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be validfor the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote

was taken. The Department may, at its own initiative or upon the request of any affected party, supervise theconduct of the secret balloting. In every case, the union or the employer s hall furnish the Department the results ofthe voting at least seven days before the intended strike or lockout, subject to the cooling-off period hereinprovided.


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In fine, petitioner Unions bare contention that it did not hold a strike can not trump the factual findings of the NLRCthat petitioner Union indeed struck against respondent. In fact, and more importantly, petitioner Union failed tocomply with the requirements set by law prior to holding a strike.1avvphi1

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 65760 is AFFIRMED.Costs against petitioner Union.

SO ORDERED.

G.R. No. 163033 , October 2, 2009 SAN MIGUEL CORPORATION, Petitioner, vs.EDUARDO L. TEODOSIO, Respondent.

D E C I S I O N

PERALTA, J.:

This is a petition for review on certiorari, under Rule 45 of the Rules of Court, seeking to annul and set aside theDecision1 dated October 30, 2003, rendered by the Court of Appeals (CA) in CA-G.R. SP No. 60334 and itsResolution2 dated February 24, 2004 denying petitioners motion for reconsideration.

The factual and procedural antecedents are as follows:

On September 5, 1991, respondent Eduardo Teodosio was hired by San Miguel Corporation (SMC) as a casualforklift operator in its Bacolod City Brewery.3 As a forklift operator, respondent was tasked with loading andunloading pallet4 of beer cases within the brewery premises. Respondent continuously worked from September 5,

1991 until March 1992, after which he was "asked to rest" for a while. A month after, or sometime in April 1992,respondent was rehired for the same position, and after serving for about five to six months, he was again "asked torest." After three weeks, he was again rehired as a forklift operator. He continued to work as such until August1993.5

Sometime in August 1993, respondent was made to sign an "Employment with a Fixed Period"6 contract by SMC,wherein it was stipulated, among other things, that respondents employment would be "from Au gust 7, 1993 toAugust 30, 1995, or upon cessation of the instability/fluctuation of the market demand, whichever comes first."Thereafter, respondent worked at the plant without interruption as a forklift operator.

On March 20, 1995, respondent was trans ferred to the plants bottling section as a case piler. In a letter7 datedApril 10, 1995, respondent formally informed SMC of his opposition to his transfer to the bottling section. Heasserted that he would be more effective as a forklift operator because he had been employed as such for morethan three years already. Respondent also requested that he be transferred to his former position as a forkliftoperator. However, SMC did not answer his letter.

In an undated letter,8 respondent informed SMC that he was applying for the vacant position of bottling crew as he

was interested in becoming a regular employee of SMC.

On June 1, 1995, SMC notified the respondent that his employment shall be terminated on July 1, 1995 incompliance with the Employment with a Fixed Period contract.9 SMC explained that this was due to the

reorganization and streamlining of its operations.

In a letter10 dated July 3, 1995, respondent expressed his dismay for his dismissal. He informed SMC that despitethe fact that he would be compelled to receive his separation pay and would be forced to sign a waiver to thateffect, this does not mean that he would be waiving his right to question his dismissal and to claim employmentbenefits as provided in the Collective Bargaining Agreement (CBA) and company policies.

Thereafter, respondent signed a Receipt and Release11 document in favor of SMC and accepted his separation pay,thereby releasing all his claims against SMC.

On July 4, 1995, respondent filed a Complaint12 against SMC before the National Labor Relations Commission(NLRC), Regional Arbitration Branch No. VI, Bacolod City, for illegal dismissal and underpayment of wages and otherbenefits.

After the filing of th e parties respective pleadings, the Labor Arbiter rendered a Decision13 dismissing thecomplaint for lack of merit. The Labor Arbiter concluded that the contract of employment with a fix period signedby respondent was a legitimate exercise of management prerogative. There was thus nothing illegal aboutrespondents transfer to the bottling section and the assignment of a regular employee to his former position.Considering that respondent failed to qualify in the bottling section and there was no longer any available positionfor him, his termination in accordance with the employment contract was valid. Moreover, the Labor Arbiter opinedthat since the respondent was not a union member and not a regular employee of SMC, he was not entitled to thebenefits granted by the existing CBA.14

Aggrieved, respondent sought recourse before the NLRC, Fourth Division, Cebu City. On November 26, 1999, theNLRC rendered a Decision15 dismissing the appeal and affirming the decision of the Labor Arbiter. The NLRC

anchored its decision on the fact that respondent signed a "Receipt and Release" upon receiving his separation payfrom SMC. It upheld the validity of the said Receipt and Release document, finding the same to have beenvoluntarily executed by the respondent and the consideration therefor appears to be reasonable under thecircumstances.16 The respondent filed a motion for reconsideration, but it was denied in a Resolution17 dated May26, 2000.

Respondent then filed before the CA a petition for certiorari, docketed as CA-G.R. SP No. 60334, seeking to annuland set aside the said Decision and Resolution of the NLRC.18

On October 30, 2003, the CA rendered a Decision19 granting the petition, the decretal portion of which reads:

WHEREFORE, the instant petition is GRANTED. The Decision dated November 29, 1999 and Resolution dated May26, 2000 of the National Labor Relations Commission, Fourth Division, Cebu City and Decision dated April 24, 1998of the Labor Arbiter are REVERSED and SET ASIDE. Judgment is rendered ordering:

1. The reinstatement of petitioner Eduardo Teodosio to his position as forklift operator without loss of seniorityrights.

2. The private respondent San Miguel Corporation to pay the full backwages of the petitioner from the day of hisillegal dismissal until actual reinstatement. Said backwages shall be computed on the basis of the ba

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