Case Summary (G.R. No. 196426)
Employment Facts
Petitioners alleged they were hired in 1993 and worked as the official masiador and sentenciador of the cockpit. Semblante’s stated compensation was PhP 2,000 weekly (PhP 8,000 monthly); Pilar’s was PhP 3,500 weekly (PhP 14,000 monthly). Workdays: Tuesdays, Wednesdays, Saturdays, and Sundays, starting at 1:00 p.m. and extending to midnight or later; special derbies and holidays excluded. Both wore employee identification cards when reporting for duty and claimed no infractions of cockpit rules.
Termination and Complaint
On November 14, 2003, petitioners were denied entry and informed that their services were terminated effective that date. Petitioners filed a complaint for illegal dismissal against respondents. Respondents denied an employer-employee relationship, asserting petitioners were associates of an independent contractor (Tomas Vega), free to choose whether to work and to offer their services in other cockpits when work at Gallera de Mandaue was scarce. Respondents also maintained that the identification cards merely exempted petitioners from the entrance fee and identified them from the public.
Labor Arbiter Decision
Labor Arbiter Julie C. Rendoque (Decision dated June 16, 2004) found petitioners to be regular employees because their work was necessary and indispensable to respondents’ usual trade or business. The Labor Arbiter ruled the dismissals illegal and ordered respondents to pay backwages and separation pay.
NLRC Proceedings and Appeal Bond Issue
Respondents filed an appeal with the NLRC within the 10-day period but did not post the cash or surety bond equivalent to the monetary award at the time of filing. An appeal bond was later filed on October 11, 2004, dated October 6, 2004. The NLRC initially denied the appeal for non-perfection in a Resolution dated August 25, 2005, but upon motion for reconsideration reversed itself in an October 18, 2006 Resolution, holding that the appeal was meritorious and that the belated filing of the bond constituted substantial compliance.
Court of Appeals Decision
The Court of Appeals (Decision dated May 29, 2009) affirmed the NLRC’s reversal and concluded that petitioners were akin to independent contractors. The CA emphasized that masiadors and sentenciadors require specialized expertise characteristic of cockfighting—ability to interpret gestures, manage bets, and exercise decision-making regarding which cockerels to put in the arena. The CA noted that petitioners were licensed by the Games and Amusements Board (GAB), could offer services in multiple cockpits, were compensated by the arriba rather than salaries from cockpit owners, and were not supplied tools or instrumentalities by respondents. The CA therefore found no employer-employee relationship and sustained the NLRC’s relaxation of the appeal bond requirement given the circumstances and merits of the appeal.
Applicable Law and Constitutional Basis
Applicable statutory provision: Article 223 of the Labor Code governing appeals from Labor Arbiter decisions and the requirement that, in judgments involving monetary awards, an employer’s appeal may be perfected only upon posting a cash or surety bond equivalent to the award. Constitutional basis: the decision was rendered after 1990; the 1987 Constitution served as the fundamental law under which the Court exercised its jurisdiction and articulated principles of justice and equity in the exercise of judicial discretion.
Legal Issue on Appeal Bond and Standards for Relaxation
The principal legal issues were (1) whether the NLRC committed grave abuse of discretion by entertaining an appeal that initially lacked a timely appeal bond; and (2) whether petitioners were employees or independent contractors. The Court reiterated that while the posting of an appeal bond is indispensable to the perfection of an employer’s appeal in labor cases involving monetary awards, jurisprudence allows relaxation of this rule where substantial merits, prevention of miscarriage of justice, or exceptional circumstances render strict compliance unjust. The Court recognized established precedents allowing liberal interpretation of procedural requirements when strong and compelling reasons exist.
Application of the Four-Fold Test and Employment Determination
The Court applied the four-fold test to determine the existence of an employer-employee relationship: (1) selection and engagement, (2) payment of wages, (3) power of dismissal, and (4) power to control the employee’s conduct (the most important element). The Court accepted the NLRC and CA findings that respondents had no role in petitioners’ selection and management; petitioners’ compensation came from the arriba rather than regular wages paid by respondents; respondents lacked the power to dismiss petitioners
...continue readingCase Syllabus (G.R. No. 196426)
Procedural Posture
- Petition for Review on Certiorari under Rule 45 filed before the Supreme Court contesting the Court of Appeals (CA) Decision dated May 29, 2009 and Resolution dated February 23, 2010 in CA-G.R. SP No. 03328.
- The CA had affirmed the National Labor Relations Commission (NLRC), Fourth Division (now Seventh Division), Resolution dated October 18, 2006 in NLRC Case No. V-000673-2004.
- Petitioners are Marticio Semblante and Dubrick Pilar; respondents are the Court of Appeals, Gallera de Mandaue, and spouses Vicente and Maria Luisa Loot.
- The Supreme Court issued the decision penned by Justice Velasco, Jr., denying the petition and affirming the CA and NLRC rulings.
Factual Background
- Petitioners alleged they were hired by respondents-spouses Vicente and Maria Luisa Loot, owners of Gallera de Mandaue (the cockpit), as official masiador and sentenciador respectively, sometime in 1993.
- Description of roles:
- Masiador (Semblante): calls and takes bets from gamecock owners and other bettors, orders the start of the cockfight, distributes winnings after deducting the arriba (cockpit commission).
- Sentenciador (Pilar): oversees proper gaffing of fighting cocks, assesses a cock’s physical condition and capability to continue fighting, and declares the result of the cockfight.
- Compensation claimed by petitioners:
- Semblante: PhP 2,000 per week, totaling PhP 8,000 per month.
- Pilar: PhP 3,500 per week, totaling PhP 14,000 per month.
- Work schedule and conditions alleged by petitioners:
- Work every Tuesday, Wednesday, Saturday, and Sunday, excluding monthly derbies and special holidays.
- Working hours start at 1:00 p.m. and last until 12:00 midnight or into early morning depending on cockpit needs.
- Both issued employee identification cards which they wore while on duty.
- Petitioners alleged they never incurred infractions or violations of cockpit rules and regulations.
- Termination and complaint:
- On November 14, 2003, petitioners were denied entry and informed that their services were terminated effective that date.
- Petitioners filed a complaint for illegal dismissal against respondents.
Respondents’ Position and Defense
- Respondents denied an employer-employee relationship and asserted petitioners were associates of their independent contractor, Tomas Vega.
- Contentions by respondents:
- Petitioners had no regular working time or day and could decide whether to report on any cockfighting day.
- Petitioners sometimes worked at other cockpits when Gallera de Mandaue had few cockfights.
- Identification cards were issued only to exempt petitioners from the normal entrance fee and to distinguish them from the general public.
- Respondents did not employ petitioners nor execute separate individual contracts with them.
Labor Arbiter Decision (June 16, 2004)
- Labor Arbiter Julie C. Rendoque found petitioners to be regular employees of respondents.
- Reasoning: petitioners performed work necessary and indispensable to respondents’ usual trade or business for many years.
- Ruling: petitioners were illegally dismissed; respondents were ordered to pay petitioners backwages and separation pay.
NLRC Proceedings and Appeal-Bond Controversy
- Respondents’ counsel received the Labor Arbiter’s Decision on September 14, 2004.
- An appeal was filed with the NLRC on September 24, 2004 by respondents, within the 10-day appeal period, but without posting the required cash or surety bond equivalent to the monetary award.
- Respondents filed an appeal bond dated October 6, 2004, submitted on October 11, 2004 (belated).
- NLRC Resolution dated August 25, 2005 denied the appeal for non-perfection due to absence of timely bond posting.
- Upon respondents’ Motion for Reconsideration, the NLRC reversed itself, holding that the belated filing of an appeal bond was a substantial compliance because the appeal was meritorious; the NLRC issued a Resolution dated October 18, 2006 finding no employer-employee relationship between petitioners and respondents.
NLRC Findings on Employment Relationship (October 18, 2006 Resolution)
- NLRC held respondents had no part in selection and engagement of petitioners.
- NLRC found no separate individual contract executed between petitioners and respondents.
- NLRC concluded petitioners were not employees of respondents.
Court of Appeals Decision (May 29, 2009)
- The CA affirmed the NLRC’s findings and entertained respondents’ appeal despite the late bond filing.
- CA reasoning on bond relaxation:
- The appeal bond was filed, albeit late, and the case was highly meritorious, justifying relaxation of procedural rules in the interest of justice.
- Exceptional circumstances and meritorious appeal warranted liberal interpretation and relaxation of the bond requirement.
- CA reasoning on employment status:
- Masiador and sen