CASE DIGEST 10 BERNATE VS PBA, G.R. No.

192084
FACTS OF THE CASE: 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 made to
sign contracts on a year-to-year basis, however, during
the term of Commissioner Eala, 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-Filipino Cup. It was only during
the second conference when he was made 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 contract would not be renewed citing his
unsatisfactory performance on and off the court. It was
a total shock for Bernarte who was awarded Referee of
the year in 2003. He felt that the dismissal was caused
by his refusal to fix a game upon order of Ernie De Leon.
On the other hand, complainant Guevarra alleges that
he was invited to join the PBA pool of referees in
February 2001. On March 1, 2001, he signed a contract
as trainee. Beginning 2002, he signed a yearly contract
as Regular Class C referee. On May 6, 2003, respondent
Martinez issued a memorandum to Guevarra expressing
dissatisfaction over his questioning on the assignment
of referees officiating out-of-town games. Beginning
February 2004, he was no longer made to sign a
contract. Respondents aver, on the other hand, that
complainants entered into two contracts of retainer with
the PBA in the year 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
contracts of retainer were simply not renewed. PBA had
the prerogative of whether or not to renew their
contracts, which they knew were fixed. Labor Arbiter
declared petitioner an employee whose dismissal by
respondents was illegal and ordered the reinstatement
of petitioner and the payment of backwages. The NLRC
affirmed the Labor Arbiters judgment. The CA reversed
the NLRCs decision and found petitioner an
independent contractor since respondents did not
exercise any form of control over the means and
methods by which petitioner performed his work as a
basketball referee and private respondents repeated
hiring did not made them regular employees by
operation of law.
ISSUE:
Whether or not petitioner is an employee of
respondents, which in turn determines whether
petitioner was illegally dismissed. NO
RULING: The petition was not granted and affirmed the
CAs decision. The Court ruled that the non-renewal of
the contract between the parties does not constitute
illegal dismissal of petitioner by respondents. The
existence of an employer-employee relationship is
ultimately a question of fact. As a general rule, factual
issues are beyond the province of this Court. However,
this rule admits of exceptions, one of which is where
there are conflicting findings of fact between the Court
of Appeals, on one hand, and the NLRC and Labor
Arbiter, on the other, such as in the present case. To
determine the existence of an employer-employee
relationship, case law has consistently applied the fourfold test, to wit: CODE: ESP E - Employers power to
control the employee on the means and methods by
which the work is accomplished; S - Selection and
engagement of the employee; P - Payment of wages; Power of dismissal. The so-called control test is the
most important indicator of the presence or absence of
an employer-employee relationship. The foregoing
stipulations in the retainer agreement hardly
demonstrate control over the means and methods by
which petitioner performs his work as a referee

officiating a PBA basketball game. The contractual

stipulations do not pertain to, much less dictate, how
and when petitioner will blow the whistle and make
calls. On the contrary, they merely serve as rules of
conduct or guidelines in order to maintain the integrity
of the professional basketball league. Logically, the line
should be drawn between rules that merely serve as
guidelines towards the achievement of the mutually
desired result without dictating the means or methods
to be employed in attaining it, and those that control or
fix the methodology and bind or restrict the party hired
to the use of such means. The first, which aim only to
promote the result, create no employer-employee
relationship unlike the second, which address both the
result and the means used to achieve it. 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 very nature of petitioners job of
officiating a 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 are required
to report for work only when PBA games are scheduled,
which is three times a week spread over an average of
only 105 playing days a year, and they officiate games
at an average of two hours per game; and (2) the only
deductions from the fees received by the referees are
withholding taxes. In other words, unlike regular
employees who ordinarily report for work eight 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 hours per game. In addition,
there are no deductions for contributions to the Social
Security System, Philhealth or Pag-Ibig, which are the
usual deductions from employees salaries. These
undisputed circumstances buttress the fact that
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 special skills and
independent judgment are required specifically for such
position and cannot possibly be controlled by the hiring
party. In addition, the fact that PBA repeatedly hired
petitioner does not by itself prove that petitioner is an
employee of the former. For a hired party to be
considered an employee, the hiring party must have
control over the means and methods by which the hired
party is to perform his work, which is absent in this
case.

CASE DIGEST 11 ATOK VS GISON, G.R. No. 169510

FACTS OF THE CASE: Respondent Jesus P. Gison was
engaged as part-time consultant on retainer basis by
petitioner Atok Big Wedge Company, Inc. through its
then Asst. Vice-President and Acting Resident Manager,
Rutillo A. Torres. As a consultant on retainer basis,
respondent assisted petitioner's retained legal counsel
with matters pertaining to the prosecution of cases
against illegal surface occupants within the area
covered by the company's mineral claims. Respondent
was likewise tasked to perform liaison work with several
government agencies, which he said was his expertise.
Petitioner did not require respondent to report to its
office on a regular basis, except when occasionally
requested by the management to discuss matters
needing his expertise as a consultant. As payment for
his services, respondent received a retainer fee of
P3,000.00 a month. The parties executed a retainer
agreement, but such agreement was misplaced and can
no longer be found. The said arrangement continued for
the next eleven years. Sometime thereafter, since
respondent was getting old, he requested that
petitioner cause his registration with the Social Security
System (SSS), but petitioner did not accede to his
request. He later reiterated his request but it was

ignored by respondent considering that he was only a

retainer/consultant. Thus, respondent filed a Complaint
with the SSS against petitioner for the latter's refusal to
cause his registration with the SSS. Thereafter, a
Memorandum was issued advising respondent that
within 30 days from receipt thereof, petitioner is
terminating his retainer contract with the company
since his services are no longer necessary. Respondent
then filed a Complaint for illegal dismissal, unfair labor
practice, underpayment of wages, non-payment of 13th
month pay, vacation pay, and sick leave pay with the
National Labor Relations Commission (NLRC) against
petitioner, Mario D. Cera, and Teofilo R. Asuncion, Jr.
Labor Arbiter rendered a Decision ruling in favor of the
petitioner and found no employer-employee relationship
between petitioner and respondent. NLRC affirmed the
decision of the Labor Arbiter. CA reversed the decision
of the NLRC and ruled that he is deemed a regular
employee of the petitioner after the lapse of one year
from his employment. Considering also that respondent
had been performing services for the petitioner for
eleven years, respondent is entitled to the rights and
privileges of a regular employee.

ISSUE: Whether or not there was an employer-employee

relationship between the petitioner and the respondent.
NO
RULING: The petition was granted. The Court ruled that
since that there is no employer-employee relationship
between the parties, the termination of respondent's
services by the petitioner after due notice did not
constitute illegal dismissal warranting his reinstatement
and the payment of full backwages, allowances and
other benefits. Well-entrenched is the doctrine that the
existence of an employer-employee relationship is
ultimately a question of fact and that the findings
thereon by the Labor Arbiter and the NLRC shall be
accorded not only respect but even finality when
supported by substantial evidence. Being a question of
fact, the determination whether such a relationship
exists between petitioner and respondent was well
within the province of the Labor Arbiter and the NLRC.
Being supported by substantial evidence, such
determination should have been accorded great weight
by the CA in resolving the issue. To determine the
existence of an employer-employee relationship, case
law has consistently applied the four-fold test, to wit:
CODE: ESP E - Employers power to control the employee
on the means and methods by which the work is
accomplished; S - Selection and engagement of the
employee; P - Payment of wages; - Power of dismissal.
The so-called control test is commonly regarded as the
most crucial and determinative indicator of the
presence or absence of an employer-employee
relationship. Under the control test, an employeremployee relationship exists where the person for
whom the services are performed reserves the right to
control not only the end achieved, but also the manner
and means to be used in reaching that end. Applying
the aforementioned test, an employer-employee
relationship is apparently absent in the case at bar.
Among other things, respondent was not required to
report everyday during regular office hours of petitioner.
Respondent's monthly retainer fees were paid to him
either at his residence or a local restaurant. More
importantly, petitioner did not prescribe the manner in
which respondent would accomplish any of the tasks in
which his expertise as a liaison officer was needed;
respondent was left alone and given the freedom to
accomplish the tasks using his own means and method.
Respondent was assigned tasks to perform, but
petitioner did not control the manner and methods by
which respondent performed these tasks. Verily, the
absence of the element of control on the part of the

petitioner engenders a conclusion that he is not an

employee of the petitioner. Moreover, the absence of
the parties' retainership agreement notwithstanding,
respondent clearly admitted that petitioner hired him in
a limited capacity only and that there will be no
employer-employee relationship between them.
Respondent is not an employee, much more a regular
employee of petitioner. Despite the fact that petitioner
made use of the services of respondent for eleven
years, he still cannot be considered as a regular
employee of petitioner. Article 280 of the Labor Code, in
which the lower court used to buttress its findings that
respondent became a regular employee of the
petitioner, is not applicable in the case at bar. Indeed,
the Court has ruled that said provision is not the
yardstick for determining the existence of an
employment relationship because it merely
distinguishes between two kinds of employees; it does
not apply where the existence of an employment
relationship is in dispute.

CASE DIGEST 12 NITTO ENTERPRISES VS NLRC, G.R. No.

114337 September 29, 1995 FACTS OF THE CASE:
Petitioner Nitto Enterprises, a company engaged in the
sale of glass and aluminum products, hired Roberto
Capili sometime in May 1990 as an apprentice
machinist, molder and core maker as evidenced by an
apprenticeship agreement for a period of six (6) months
from May 28, 1990 to November 28, 1990 with a daily
wage rate of P66.75 which was 75% of the applicable
minimum wage. On August 2, 1990, Roberto Capili who
was handling a piece of glass which he was working on,
accidentally hit and injured the leg of an office secretary
who was treated at a nearby hospital. Later that same
day, after office hours, private respondent entered a
workshop within the office premises which was not his
work station. There, he operated one of the power press
machines without authority and in the process injured
his left thumb. Petitioner spent the amount of P1,023.04
to cover the medication of private respondent. The
following day, Roberto Capili was asked to resign in a
letter. On August 3, 1990 private respondent executed a
Quitclaim and Release in favor of petitioner for and in
consideration of the sum of P1,912.79. Three days after,
private respondent formally filed before the NLRC a
complaint for illegal dismissal and payment of other
monetary benefits. The Labor Arbiter rendered his
decision finding the termination of private respondent
as valid and dismissing the money claim for lack of
merit. It ruled that private respondent who was hired as
an apprentice violated the terms of their agreement
when he acted with gross negligence resulting in the
injury not only to himself but also to his fellow worker,
and had shown that "he does not have the proper
attitude in employment particularly the handling of
machines without authority and proper training. The
NLRC reversed the decision of the Labor Arbiter. It ruled
that complainant was respondent's regular employee
under Article 280 of the Labor Code, as early as May
28,1990, who thus enjoyed the security of tenure.
ISSUE: Whether or not there is valid cause for the
termination of the service of private respondent. NO
RULING: The petition was not granted. The Court
affirmed the NLRCs decision that respondent was
considered a regular employee. The law is clear on this
matter. Article 61 of the Labor Code provides: Contents
of apprenticeship agreement. Apprenticeship
agreements, including the main rates of apprentices,
shall conform to the rules issued by the Minister of
Labor and Employment. The period of apprenticeship
shall not exceed six months. Apprenticeship
agreements providing for wage rates below the legal
minimum wage, which in no case shall start below 75%

per cent of the applicable minimum wage, may be

entered into only in accordance with apprenticeship
program duly approved by the Minister of Labor and
Employment. The Ministry shall develop standard model
programs of apprenticeship. In the case at bench, the
apprenticeship agreement between petitioner and
private respondent was executed on May 28, 1990
allegedly employing the latter as an apprentice in the
trade of "care maker/molder." On the same date, an
apprenticeship program was prepared by petitioner and
submitted to the Department of Labor and Employment.
However, the apprenticeship Agreement was filed only
on June 7, 1990. Notwithstanding the absence of
approval by the Department of Labor and Employment,
the apprenticeship agreement was enforced the day it
was signed. Based on the evidence before us, petitioner
did not comply with the requirements of the law. It is
mandated that apprenticeship agreements entered into
by the employer and apprentice shall be entered only in
accordance with the apprenticeship program duly
approved by the Minister of Labor and Employment.
Prior approval by the Department of Labor and
Employment of the proposed apprenticeship program is,
therefore, a condition sine quo non before an
apprenticeship agreement can be validly entered into.

The act of filing the proposed apprenticeship program

with the Department of Labor and Employment is a
preliminary step towards its final approval and does not
instantaneously give rise to an employer-apprentice
relationship. Hence, since the apprenticeship
agreement between petitioner and private respondent
has no force and effect in the absence of a valid
apprenticeship program duly approved by the DOLE,
private respondent's assertion that he was hired not as
an apprentice but as a delivery boy ("kargador" or
"pahinante") deserves credence. He should rightly be
considered as a regular employee of petitioner as
defined by Article 280 of the Labor Code. Art. 280 of the
Labor provides that, xxx an employment shall be
deemed to be regular where the employee has been
engaged to perform activities which are usually
necessary or desirable in the usual business or trade of
the employer, except where the employment has been
fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or services to be
performed is seasonal in nature and the employment is
for the duration of the season.