Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 64948 September 27, 1994

MANILA GOLF & COUNTRY CLUB, INC., petitioner,

vs.
INTERMEDIATE APPELLATE COURT and FERMIN LLAMAR, respondents.

Bito, Misa & Lozada for petitioner.

Remberto Z. Evio for private respondent.

NARVASA, C.J.:

The question before the Court here is whether or not persons rendering caddying
services for members of golf clubs and their guests in said clubs' courses or premises
are the employees of such clubs and therefore within the compulsory coverage of the
Social Security System (SSS).

That question appears to have been involved, either directly or peripherally, in three
separate proceedings, all initiated by or on behalf of herein private respondent and his
fellow caddies. That which gave rise to the present petition for review was originally filed
with the Social Security Commission (SSC) via petition of seventeen (17) persons who
styled themselves "Caddies of Manila Golf and Country Club-PTCCEA" for coverage
and availment of benefits under the Social Security Act as amended, "PTCCEA" being 
the acronym of a labor organization, the "Philippine Technical, Clerical, Commercial
Employees Association," with which the petitioners claimed to be affiliated. The petition,
docketed as SSC Case No. 5443, alleged in essence that although the petitioners were
employees of the Manila Golf and Country Club, a domestic corporation, the latter had
not registered them as such with the SSS.
At about the same time, two other proceedings bearing on the same question were filed
or were pending; these were:

(1) a certification election case filed with the Labor Relations Division of the Ministry
of Labor by the PTCCEA on behalf of the same caddies of the Manila Golf and
Country Club, the case being titled "Philippine Technical, Clerical, Commercial
Association vs. Manila Golf and Country Club" and docketed as Case No. R4-
LRDX-M-10-504-78; it appears to have been resolved in favor of the petitioners
therein by Med-Arbiter Orlando S. Rojo who was thereafter upheld by Director
Carmelo S. Noriel, denying the Club's motion for reconsideration; 1

(2) a compulsory arbitration case initiated before the Arbitration Branch of the
Ministry of Labor by the same labor organization, titled "Philippine Technical,
Clerical, Commercial Employees Association (PTCCEA), Fermin Lamar and
Raymundo Jomok vs. Manila Golf and Country Club, Inc., Miguel Celdran, Henry
Lim and Geronimo Alejo;" it was dismissed for lack of merit by Labor Arbiter
Cornelio T. Linsangan, a decision later affirmed on appeal by the National Labor
Relations Commission on the ground that there was no employer-employee
relationship between the petitioning caddies and the respondent Club. 2

In the case before the SSC, the respondent Club filed answer praying for the dismissal
of the petition, alleging in substance that the petitioners, caddies by occupation, were
allowed into the Club premises to render services as such to the individual members
and guests playing the Club's golf course and who themselves paid for such services;
that as such caddies, the petitioners were not subject to the direction and control of the
Club as regards the manner in which they performed their work; and hence, they were
not the Club's employees.

Subsequently, all but two of the seventeen petitioners of their own accord withdrew their
claim for social security coverage, avowedly coming to realize that indeed there was no
employment relationship between them and the Club. The case continued, and was
eventually adjudicated by the SSC after protracted proceedings only as regards the two
holdouts, Fermin Llamar and Raymundo Jomok. The Commission dismissed the
petition for lack of merit, 3ruling:

. . . that the caddy's fees were paid by the golf players themselves and not by
respondent club. For instance, petitioner Raymundo Jomok averred that for their
services as caddies a caddy's Claim Stub (Exh. "1-A") is issued by a player who
will in turn hand over to management the other portion of the stub known as
Caddy Ticket (Exh. "1") so that by this arrangement management will know how
much a caddy will be paid (TSN, p. 80, July 23, 1980). Likewise, petitioner
Fermin Llamar admitted that caddy works on his own in accordance with the
rules and regulations (TSN, p. 24, February 26, 1980) but petitioner Jomok could
not state any policy of respondent that directs the manner of caddying (TSN, pp.
76-77, July 23, 1980). While respondent club promulgates rules and regulations
on the assignment, deportment and conduct of caddies (Exh. "C") the same are
designed to impose personal discipline among the caddies but not to direct or
conduct their actual work. In fact, a golf player is at liberty to choose a caddy of
his preference regardless of the respondent club's group rotation system and has
the discretion on whether or not to pay a caddy. As testified to by petitioner
Llamar that their income depends on the number of players engaging their
services and liberality of the latter (TSN, pp. 10-11, Feb. 26, 1980). This lends
credence to respondent's assertion that the caddies are never their employees in
the absence of two elements, namely, (1) payment of wages and (2) control or
supervision over them. In this connection, our Supreme Court ruled that in the
determination of the existence of an employer-employee relationship, the "control
test" shall be considered decisive (Philippine Manufacturing Co. vs. Geronimo
and Garcia, 96 Phil. 276; Mansal vs. P.P. Coheco Lumber Co., 96 Phil. 941;
Viana vs. Al-lagadan, et al., 99 Phil. 408; Vda, de Ang, et al. vs. The Manila Hotel
Co., 101 Phil. 358, LVN Pictures Inc. vs. Phil. Musicians Guild, et al., L-12582,
January 28, 1961, 1 SCRA 132. . . . (reference being made also to Investment
Planning Corporation Phil. vs. SSS 21 SCRA 925).

Records show the respondent club had reported for SS coverage Graciano Awit
and Daniel Quijano, as bat unloader and helper, respectively, including their
ground men, house and administrative personnel, a situation indicative of the
latter's concern with the rights and welfare of its employees under the SS law, as
amended. The unrebutted testimony of Col. Generoso A. Alejo (Ret.) that the ID
cards issued to the caddies merely intended to identify the holders as accredited
caddies of the club and privilege(d) to ply their trade or occupation within its
premises which could be withdrawn anytime for loss of confidence. This gives us
a reasonable ground to state that the defense posture of respondent that
petitioners were never its employees is well taken. 4

From this Resolution appeal was taken to the Intermediate appellate Court by the union
representing Llamar and Jomok. After the appeal was docketed 5 and some months
before decision thereon was reached and promulgated, Raymundo Jomok's appeal was
dismissed at his instance, leaving Fermin Llamar the lone appellant. 6

The appeal ascribed two errors to the SSC:

 (1) refusing to suspend the proceedings to await judgment by the Labor Relations
Division of National Capital Regional Office in the certification election case (R-4-
LRD-M-10-504-78) supra, on the precise issue of the existence of employer-
employee relationship between the respondent club and the appellants, it being
contended that said issue was "a function of the proper labor office"; and

(2) adjudicating that self same issue a manner contrary to the ruling of the Director
of the Bureau of Labor Relations, which "has not only become final but (has
been) executed or (become) res adjudicata." 7

The Intermediate Appellate Court gave short shirt to the first assigned error, dismissing
it as of the least importance. Nor, it would appear, did it find any greater merit in the
second alleged error. Although said Court reserved the appealed SSC decision and
declared Fermin Llamar an employee of the Manila Gold and Country Club, ordering
that he be reported as such for social security coverage and paid any corresponding
benefits, 8 it conspicuously ignored the issue of res adjudicata raised in said second
assignment. Instead, it drew basis for the reversal from this Court's ruling in Investment
Planning Corporation of the Philippines vs. Social Security System, supra  9 and
declared that upon the evidence, the questioned employer-employee relationship
between the Club and Fermin Llamar passed the so-called "control test," establishment
in the case — i.e., "whether the employer controls or has reserved the right to control
the employee not only as to the result of the work to be done but also as to the means
and methods by which the same is to be accomplished," — the Club's control over the
caddies encompassing:

(a) the promulgation of no less than twenty-four (24) rules and regulations just about
every aspect of the conduct that the caddy must observe, or avoid, when serving
as such, any violation of any which could subject him to disciplinary action, which
may include suspending or cutting off his access to the club premises;
(b) the devising and enforcement of a group rotation system whereby a caddy is
assigned a number which designates his turn to serve a player;
(c) the club's "suggesting" the rate of fees payable to the caddies.

Deemed of title or no moment by the Appellate Court was the fact that the caddies were
paid by the players, not by the Club, that they observed no definite working hours and
earned no fixed income. It quoted with approval from an American decision 10 to the
effect that: "whether the club paid the caddies and afterward collected in the first
instance, the caddies were still employees of the club." This, no matter that the case
which produced this ruling had a slightly different factual cast, apparently having
involved a claim for workmen's compensation made by a caddy who, about to leave the
premises of the club where he worked, was hit and injured by an automobile then
negotiating the club's private driveway.

That same issue of res adjudicata, ignored by the IAC beyond bare mention thereof, as
already pointed out, is now among the mainways of the private respondent's defenses
to the petition for review. Considered in the perspective of the incidents just recounted,
it illustrates as well as anything can, why the practice of forum-shopping justly merits
censure and punitive sanction. Because the same question of employer-employee
relationship has been dragged into three different fora, willy-nilly and in quick
succession, it has birthed controversy as to which of the resulting adjudications must
now be recognized as decisive. On the one hand, there is the certification case [R4-
LRDX-M-10-504-78), where the decision of the Med-Arbiter found for the existence of
employer-employee relationship between the parties, was affirmed by Director Carmelo
S. Noriel, who ordered a certification election held, a disposition never thereafter
appealed according to the private respondent; on the other, the compulsory arbitration
case (NCR Case No. AB-4-1771-79), instituted by or for the same respondent at about
the same time, which was dismissed for lack of merit by the Labor Arbiter, which was
afterwards affirmed by the NLRC itself on the ground that there existed no such
relationship between the Club and the private respondent. And, as if matters were not
already complicated enough, the same respondent, with the support and assistance of
the PTCCEA, saw fit, also contemporaneously, to initiate still a third proceeding for
compulsory social security coverage with the Social Security Commission (SSC Case
No. 5443), with the result already mentioned.

Before this Court, the petitioner Club now contends that the decision of the Med-Arbiter
in the certification case had never become final, being in fact the subject of three
pending and unresolved motions for reconsideration, as well as of a later motion for
early resolution. 11 Unfortunately, none of these motions is incorporated or reproduced
in the record before the Court. And, for his part, the private respondent contends, not
only that said decision had been appealed to and been affirmed by the Director of the
BLR, but that a certification election had in fact been held, which resulted in the
PTCCEA being recognized as the sole bargaining agent of the caddies of the Manila
Golf and Country Club with respect to wages, hours of work, terms of employment,
etc. 12 Whatever the truth about these opposing contentions, which the record before the
Court does not adequately disclose, the more controlling consideration would seem to
be that, however, final it may become, the decision in a certification case, by the  
very nature of that proceedings, is not such as to foreclose all further dispute between
the parties as to the existence, or non-existence, of employer-employee relationship
between them.

It is well settled that for res adjudicata, or the principle of bar by prior judgment, to apply,
the following essential requisites must concur: (1) there must be a final judgment or
order; (2) said judgment or order must be on the merits; (3) the court rendering the
same must have jurisdiction over the subject matter and the parties; and (4) there must
be between the two cases identity of parties, identity of subject matter and identity of
cause of action. 13

Clearly implicit in these requisites is that the action or proceedings in which is issued the
"prior Judgment" that would operate in bar of a subsequent action between the same
parties for the same cause, be adversarial, or contentious, "one having opposing
parties; (is) contested, as distinguished from an ex parte hearing or proceeding. . . . of
which the party seeking relief has given legal notice to the other party and afforded the
latter an opportunity to contest it" 14 and a certification case is not such a proceeding, as
this Court already ruled:

A certification proceedings is not a "litigation" in the sense in which the term is

commonly understood, but mere investigation of a non-adversary, fact-finding
character, in which the investigating agency plays the part of a disinterested
investigator seeking merely to ascertain the desires of the employees as to the
matter of their representation. The court enjoys a wide discretion in determining
the procedure necessary to insure the fair and free choice of bargaining
representatives by the employees.15

Indeed, if any ruling or judgment can be said to operate as res adjudicata on the
contested issue of employer-employee relationship between present petitioner and the
private respondent, it would logically be that rendered in the compulsory arbitration case
(NCR Case No. AB-4-771-79, supra), petitioner having asserted, without dispute from
the private respondent, that said issue was there squarely raised and litigated, resulting
in a ruling of the Arbitration Branch (of the same Ministry of Labor) that such relationship
did not exist, and which ruling was thereafter affirmed by the National Labor Relations
Commission in an appeal taken by said respondent. 16

In any case, this Court is not inclined to allow private respondent the benefit of any
doubt as to which of the conflicting ruling just adverted to should be accorded primacy,
given the fact that it was he who actively sought them simultaneously, as it were, from
separate fora, and even if the graver sanctions more lately imposed by the Court for
forum-shopping may not be applied to him retroactively.

Accordingly, the IAC is not to be faulted for ignoring private respondent's invocation
of res adjudicata; on contrary, it acted correctly in doing so.

Said Court’s holding that upon the facts, there exists (or existed) a relationship of
employer and employee between petitioner and private respondent is, however, another
matter. The Court does not agree that said facts necessarily or logically point to such a
relationship, and to the exclusion of any form of arrangements, other than of
employment, that would make the respondent's services available to the members and
guest of the petitioner.

As long as it is, the list made in the appealed decision detailing the various matters of
conduct, dress, language, etc. covered by the petitioner's regulations, does not, in the
mind of the Court, so circumscribe the actions or judgment of the caddies concerned as
to leave them little or no freedom of choice whatsoever in the manner of carrying out
their services. In the very nature of things, caddies must submit to some supervision of
their conduct while enjoying the privilege of pursuing their occupation within the
premises and grounds of whatever club they do their work in. For all that is made to
appear, they work for the club to which they attach themselves on sufference but, on the
other hand, also without having to observe any working hours, free to leave anytime
they please, to stay away for as long they like. It is not pretended that if found remiss in
the observance of said rules, any discipline may be meted them beyond barring them
from the premises which, it may be supposed, the Club may do in any case even absent
any breach of the rules, and without violating any right to work on their part. All these
considerations clash frontally with the concept of employment.

The IAC would point to the fact that the Club suggests the rate of fees payable by the
players to the caddies as still another indication of the latter's status as employees. It
seems to the Court, however, that the intendment of such fact is to the contrary,
showing that the Club has not the measure of control over the incidents of the caddies'
work and compensation that an employer would possess.

The Court agrees with petitioner that the group rotation system so-called, is less a
measure of employer control than an assurance that the work is fairly distributed, a
caddy who is absent when his turn number is called simply losing his turn to serve and
being assigned instead the last number for the day. 17

By and large, there appears nothing in the record to refute the petitioner's claim that:

(Petitioner) has no means of compelling the presence of a caddy. A caddy is not

required to exercise his occupation in the premises of petitioner. He may work
with any other golf club or he may seek employment a caddy or otherwise with
any entity or individual without restriction by petitioner. . . .

. . . In the final analysis, petitioner has no was of compelling the presence of the
caddies as they are not required to render a definite number of hours of work on
a single day. Even the group rotation of caddies is not absolute because a player
is at liberty to choose a caddy of his preference regardless of the caddy's order in
the rotation.

It can happen that a caddy who has rendered services to a player on one day
may still find sufficient time to work elsewhere. Under such circumstances, he
may then leave the premises of petitioner and go to such other place of work that
he wishes (sic). Or a caddy who is on call for a particular day may deliberately
 absent himself if he has more profitable caddying, or another, engagement in
some other place. These are things beyond petitioner's control and for which it
imposes no direct sanctions on the caddies. . . . 18

WHEREFORE, the Decision of the Intermediate Appellant Court, review of which is

sought, is reversed and set aside, it being hereby declared that the private respondent,
Fermin Llamar, is not an employee of petitioner Manila Golf and Country Club and that
petitioner is under no obligation to report him for compulsory coverage to the Social
Security System. No pronouncement as to costs.

SO ORDERED.

Regalado and Mendoza, JJ., concur.

Padilla, J., is on leave.
Puno, J., took no part.
 
#Footnotes

1 Rollo, pp. 215-216.

2 NCR Case No. AB-4-1771-79, Rollo, pp. 143-151.
3 In a unanimous resolution dated May 20, 1981 written by Chairman Adrian E.
Cristobal.
4 Rollo, pp. 87-90.
5 as AC-G.R. SP No. 13648.
6 Rollo, p. 52.
7 Id., at pp. 52-53.
8 Decision promulgated June 20, 1983, rendered by the First Special Cases
Division, Rollo, pp. 48-58.
9 21 SCRA 925, 929; footnote 2.
10 Indian Hill Club vs. Industrial Commission, et al., 140 NE 871, 872, 309 III.
271; Rollo, pp. 55-56.
11 Brief for Petitioner, p. 32; Rollo, p. 19.
12 Brief for Private Respondent, pp. 2-4; Rollo, p. 216.
13 Valencia vs. RTC of Quezon City, Br. 90. 184 SCRA 80, 90-91, citing Yusingco, et
al., vs. Ong Hing Lian, 42 SCRA 589, and Daeng vs. IAC, et al., 154 SCRA 159.
14 Black's Law Dictionary, 5th edition, p. 40.
15 LVN Pictures, Ic., vs. Phil. Musicians Guild and CIR, 110 Phil. 725, citing N.L.R.B.
vs. Botany Worsted Mills, 319 U.S. 751, 87 L. ed. 1705, and Southern S.S. Co. vs.
N.L.R.B. 316 U.S. 31, 86 L. ed. 1246, and N.L.R.B. vs. A. J. Tower Co., 66 Sup. Ct.
1911; also Rothenberg on Labor Relations, p. 514.
16 Brief for Petitioner, pp. 32-36; Rollo, p. 202.
17 Petition for Review, p. 4; Rollo, p. 18
18 Id., Rollo, pp. 18-19.