Case Summary (G.R. No. 192084)
Petitioner
Jose Mel Bernarte was engaged by the PBA to officiate professional basketball games under successive short-term “retainer” contracts and claims illegal dismissal following non-renewal.
Respondents
The PBA, headed by Commissioner Eala and with Martinez as official, contends that Bernarte signed fixed-term contracts as an independent contractor and that non-renewal does not constitute dismissal.
Key Dates
• 23 February–June 2003: First PBA conference (no contract signed by Bernarte).
• 1 July–5 August 2003: One-and-a-half-month contract signed.
• 15 January 2004: Notice of non-renewal.
• 31 March 2005: Labor Arbiter decision for reinstatement and damages.
• 28 January 2008: NLRC affirms Labor Arbiter.
• 17 December 2009: Court of Appeals reverses—finds independent contractor.
• 14 September 2011: Supreme Court decision.
Applicable Law
• 1987 Philippine Constitution (labor rights, due process).
• Labor Code jurisprudence applying the four-fold employer-employee test: (a) selection/engagement; (b) payment of wages; (c) power of dismissal; (d) control over means and methods (control test as primary).
• Rule 13, Sec. 10, Rules of Court on service by registered mail.
• Rule 45, Rules of Court for petition for review on certiorari.
Facts
Bernarte and co-referee Guevarra were invited into the PBA’s referee pool, signing annual or short-term retainer contracts. Contracts stipulated classification, attendance requirements, conduct guidelines, and sanctions for breaches. Non-renewals were communicated as based on performance and contractual discretion.
Procedural History
- Labor Arbiter (31 March 2005): Finds employer-employee relationship; orders reinstatement, backwages, moral/exemplary damages, attorney’s fees.
- NLRC (28 January 2008): Affirms Labor Arbiter.
- Court of Appeals (17 December 2009; 5 April 2010 resolution): Grants certiorari, holds Bernarte an independent contractor; dismisses complaint.
- Supreme Court petition for review under Rule 45.
Issue
Whether Bernarte was an employee of the PBA—entitling him to protection against illegal dismissal—or an independent contractor whose contract non-renewal is not dismissal.
Ruling on Service of Process
Bernarte argued the Labor Arbiter’s decision became final for lack of a timely NLRC appeal, citing constructive service via unclaimed registered mail. The Court held he failed to prove actual delivery or receipt of postmaster notices; constructive service was not established. NLRC nonetheless considered the appeal in the interest of substantial justice, rendering the issue moot.
Ruling on Employer-Employee Relationship
Applying the four-fold test:
(a) Selection and engagement – PBA engaged Bernarte under fixed-term contracts.
(b) Payment of wages – PBA paid a retainer fee exclusive of allowances.
(c) Power of dismissal – PBA could terminate for contractual breach.
(d) Control over means and methods –
Case Syllabus (G.R. No. 192084)
Procedural Posture
- Petition for review under Rule 45 of the Rules of Court of the Court of Appeals’ 17 December 2009 Decision and 5 April 2010 Resolution in CA-G.R. SP No. 105406.
- The Court of Appeals set aside the National Labor Relations Commission (NLRC) decision, held petitioner an independent contractor, and denied reconsideration.
- The petition challenges (a) the procedural finality of the Labor Arbiter’s decision and (b) the substantive finding that petitioner is not an employee.
Facts
- Under Commissioner Emilio Bernardino, Bernarte and co-complainant Guevarra joined the PBA referee pool on yearly contracts.
- During Commissioner Eala’s term:
- Bernarte had no contract in the First Conference All-Filipino Cup (Feb 23–Jun 2003); signed a 1½-month retainer for Jul 1–Aug 5, 2003.
- Jan 15, 2004 letter advised non-renewal due to “unsatisfactory performance,” allegedly after refusing to fix a game.
- Guevarra joined as trainee on Mar 1, 2001; Regular Class C referee contracts from 2002; received a May 6, 2003 memo for questioning out-of-town assignments; no contract from Feb 2004.
- Respondents’ position:
- Two 2003 retainer contracts: Jan 1–Jul 15 and Sep 1–Dec 2003.
- Non-renewal was within PBA’s prerogative; no employer-employee relationship; hence no illegal dismissal.
Labor Arbiter Decision
- March 31, 2005 Decision by Labor Arbiter Teresita D. Castillon-Lora:
- Found Bernarte and Guevarra employees illegally dismissed.
- Ordered reinstatement within 30 days and solidarity payment of:
- Backwages: P536,250 (Bernarte), P211,250 (Guevarra)
- Moral damages: P100,000 each
- Exemplary damages: P50,000 each
- 10% attorney’s fees
- Total awards: P1,152,250 (Bernarte), P397,375 (Guevarra).
NLRC Decision
- January 28, 2008 NLRC Decision:
- Dismissed respondents’ appeal.
- Affirmed the Labor Arbiter’s March 31, 2005 Decision.
Court of Appeals Decision
- 17 December 2009 Decision and 5 Apr