Jose Mel Bernarte vs PBA their contracts.

PBA contended that complainants were

not illegally dismissed because they were not
Doctrine: The applicable foreign case law declares that employees of the PBA. Their respective contracts of
a referee is an independent contractor, whose special retainer were simply not renewed. PBA had the
skills and independent judgment are required
prerogative of whether or not to renew their contracts,
specifically for such position and cannot possibly be which they knew were fixed.
controlled by the hiring party.
Petitioners filed an illegal dismissal case with the Labor
Facts: Arbiter which was granted their petition and ordered
Jose Mel Bernarte and Renato Guevarra were invited to the reinstatement of petitioner and the payment of
join the PBA as referees. During the leadership of backwages, moral and exemplary damages and
Commissioner Emilio Bernardino, they were made to attorney’s fees on March 31, 2005.
sign contracts on a year-to-year basis. During the term NLRC affirmed the decision of the LA on January 28,
of Commissioner Eala, however, changes were made on 2008. Thereafter, PBA filed a petition for certiorari on
the terms of their employment. Court of Appeals which reversed then decisions of NLRC
Complainant Bernarte, for instance, was not made to and CA. Court of Appeals found petitioner an
sign a contract during the first conference of the All- independent contractor since respondents did not
Filipino Cup which was from February 23, 2003 to June exercise any form of control over the means and
2003. It was only during the second conference when methods by which petitioner performed his work as a
he was made to sign a one and a half month contract basketball referee. CA disagrees that the Contracts of
for the period July 1 to August 5, 2003. Retainer show that petitioners have control over private
respondents.
On January 15, 2004, Bernarte received a letter from
the Office of the Commissioner advising him that his Hence this petition to the SC.
contract would not be renewed citing his unsatisfactory Issue:
performance on and off the court. It was a total shock
for Bernarte who was awarded Referee of the year in Whether petitioners are employees of respondents and
2003. He felt that the dismissal was caused by his if they were illegally dismissed?
refusal to fix a game upon order of Ernie De Leon.
Ruling:
On the other hand, complainant Guevarra alleges that
he was invited to join the PBA pool of referees in No. This petition is bereft of merit. To determine the
February 2001. On March 1, 2001, he signed a contract existence of an employer-employee relationship, case
as trainee. Beginning 2002, he signed a yearly contract law has consistently applied the four-fold test, to wit:
as Regular Class C referee. On May 6, 2003, respondent (a) the selection and engagement of the employee; (b)
Martinez issued a memorandum to Guevarra expressing the payment of wages; (c) the power of dismissal; and
dissatisfaction over his questioning on the assignment (d) the employer’s power to control the employee on
of referees officiating out-of-town games. Beginning the means and methods by which the work is
February 2004, he was no longer made to sign a accomplished. The so-called “control test” is the most
contract. important indicator of the presence or absence of an
employer-employee relationship
Respondents aver, on the other hand, that
In this case, PBA admits repeatedly engaging
complainants entered into two contracts of retainer
with the PBA in the year 2003. The first contract was for petitioner’s services, as shown in the retainer contracts.
the period January 1, 2003 to July 15, 2003; and the PBA pays petitioner a retainer fee, exclusive of per diem
second was for September 1 to December 2003. After or allowances, as stipulated in the retainer contract.
the lapse of the latter period, PBA decided not to renew
PBA can terminate the retainer contract for petitioner’s officiate games at an average of two hours per game;
violation of its terms and conditions. and (2) the only deductions from the fees received by
the referees are withholding taxes.
Petitioner asserts that he is an employee of
respondents since the latter exercise control over the In other words, unlike regular employees who ordinarily
performance of his work because of the following report for work eight hours per day for five days a week,
stipulations in the retainer contract which evidence petitioner is required to report for work only when PBA
control: (1) respondents classify or rate a referee; (2) games are scheduled or three times a week at two
respondents require referees to attend all basketball hours per game. In addition, there are no deductions for
games organized or authorized by the PBA, at least one contributions to the Social Security System, Philhealth
hour before the start of the first game of each day; (3) or Pag-Ibig, which are the usual deductions from
respondents assign petitioner to officiate ballgames, or employees’ salaries. These undisputed circumstances
to act as alternate referee or substitute; (4) referee buttress the fact that petitioner is an independent
agrees to observe and comply with all the requirements contractor, and not an employee of respondents.
of the PBA governing the conduct of the referees
whether on or off the court; (5) referee agrees (a) to Furthermore, the applicable foreign case law declares
keep himself in good physical, mental, and emotional that a referee is an independent contractor, whose
condition during the life of the contract; (b) to give special skills and independent judgment are required
always his best effort and service, and loyalty to the specifically for such position and cannot possibly be
PBA, and not to officiate as referee in any basketball controlled by the hiring party.
game outside of the PBA, without written prior consent In Yonan v. United States Soccer Federation, Inc., it was
of the Commissioner; (c) always to conduct himself on held that a position that requires special skills and
and off the court according to the highest standards of independent judgment weights in favor of independent
honesty or morality; and (6) imposition of various contractor status. x x x Unskilled work, on the other
sanctions for violation of the terms and conditions of hand, suggests an employment relationship. x x x Here,
the contract. it is undisputed that soccer refereeing, especially at the
professional and international level, requires “a great
The foregoing stipulations hardly demonstrate control
over the means and methods by which petitioner deal of skill and natural ability.”
performs his work as a referee officiating a PBA The fact that PBA repeatedly hired petitioner does not
basketball game. Further, not every form of control that by itself prove that petitioner is an employee of the
a party reserves to himself over the conduct of the former. For a hired party to be considered an employee,
other party in relation to the services being rendered the hiring party must have control over the means and
may be accorded the effect of establishing an employer- methods by which the hired party is to perform his
employee relationship. Once in the playing court, the work, which is absent in this case. The continuous
referees exercise their own independent judgment, rehiring by PBA of petitioner simply signifies the
based on the rules of the game, as to when and how a renewal of the contract between PBA and petitioner,
call or decision is to be made. The very nature of and highlights the satisfactory services rendered by
petitioner’s job of officiating a professional basketball petitioner warranting such contract renewal.
game undoubtedly calls for freedom of control by Conversely, if PBA decides to discontinue petitioner’s
respondents. services at the end of the term fixed in the contract,
Moreover, the following circumstances indicate that whether for unsatisfactory services, or violation of the
petitioner is an independent contractor: (1) the referees terms and conditions of the contract, or for whatever
are required to report for work only when PBA games other reason, the same merely results in the non-
are scheduled, which is three times a week spread over renewal of the contract, as in the present case. The non-
an average of only 105 playing days a year, and they renewal of the contract between the parties does not
constitute illegal dismissal of petitioner by respondents.