G.R. No.

192084 September 14, 2011

JOSE MEL BERNARTE, Petitioner,

vs.
PHILIPPINE BASKETBALL ASSOCIATION (PBA), JOSE EMMANUEL M. EALA, and PERRY
MARTINEZ, Respondents.

DECISION

CARPIO, J.:

The Case

This is a petition for review1 of the 17 December 2009 Decision2 and 5 April 2010 Resolution3 of the Court of
Appeals in CA-G.R. SP No. 105406. The Court of Appeals set aside the decision of the National Labor Relations
Commission (NLRC), which affirmed the decision of the Labor Arbiter, and held that petitioner Jose Mel Bernarte is
an independent contractor, and not an employee of respondents Philippine Basketball Association (PBA), Jose
Emmanuel M. Eala, and Perry Martinez. The Court of Appeals denied the motion for reconsideration.

The Facts

The facts, as summarized by the NLRC and quoted by the Court of Appeals, are as follows:

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. During the term of Commissioner Eala, however, 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 which was from February 23, 2003 to June 2003. 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. The first contract was for the period January 1, 2003 to July 15, 2003; and the second was for
September 1 to December 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.4

In her 31 March 2005 Decision,5 the Labor Arbiter6 declared petitioner an employee whose dismissal by
respondents was illegal. Accordingly, the Labor Arbiter ordered the reinstatement of petitioner and the payment of
backwages, moral and exemplary damages and attorney’s fees, to wit:

WHEREFORE, premises considered all respondents who are here found to have illegally dismissed complainants
are hereby ordered to (a) reinstate complainants within thirty (30) days from the date of receipt of this decision and
to solidarily pay complainants:

JOSE MEL RENATO

BERNARTE GUEVARRA

1. backwages from January 1, 2004 up ₱536,250.00 ₱211,250.00

to the finality of this Decision, which to
date is

2. moral damages 100,000.00 50,000.00

3. exemplary damages 100,000.00 50,000.00

4. 10% attorney's fees 68,625.00 36,125.00

TOTAL ₱754,875.00 ₱397,375.00

 or a total of ₱1,152,250.00

The rest of the claims are hereby dismissed for lack of merit or basis.

SO ORDERED.7

In its 28 January 2008 Decision,8 the NLRC affirmed the Labor Arbiter’s judgment. The dispositive portion of the
NLRC’s decision reads:

WHEREFORE, the appeal is hereby DISMISSED. The Decision of Labor Arbiter Teresita D. Castillon-Lora dated
March 31, 2005 is AFFIRMED.

SO ORDERED.9

Respondents filed a petition for certiorari with the Court of Appeals, which overturned the decisions of the NLRC and
Labor Arbiter. The dispositive portion of the Court of Appeals’ decision reads:

WHEREFORE, the petition is hereby GRANTED. The assailed Decision dated January 28, 2008
and Resolution dated August 26, 2008 of the National Labor Relations Commission are ANNULLED and SET
ASIDE. Private respondents’ complaint before the Labor Arbiter is DISMISSED.

SO ORDERED.10

The Court of Appeals’ Ruling

The Court of Appeals 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. The Court of
Appeals held:

While the NLRC agreed that the PBA has no control over the referees’ acts of blowing the whistle and making calls
during basketball games, it, nevertheless, theorized that the said acts refer to the means and methods employed by
the referees in officiating basketball games for the illogical reason that said acts refer only to the referees’ skills.
How could a skilled referee perform his job without blowing a whistle and making calls? Worse, how can the PBA
control the performance of work of a referee without controlling his acts of blowing the whistle and making calls?

Moreover, this Court disagrees with the Labor Arbiter’s finding (as affirmed by the NLRC) that the Contracts of
Retainer show that petitioners have control over private respondents.

xxxx

Neither do We agree with the NLRC’s affirmance of the Labor Arbiter’s conclusion that private respondents’
repeated hiring made them regular employees by operation of law. 11

The Issues

The main issue in this case is whether petitioner is an employee of respondents, which in turn determines whether
petitioner was illegally dismissed.

Petitioner raises the procedural issue of whether the Labor Arbiter’s decision has become final and executory for
failure of respondents to appeal with the NLRC within the reglementary period.

The Ruling of the Court

The petition is bereft of merit.

The Court shall first resolve the procedural issue posed by petitioner.

Petitioner contends that the Labor Arbiter’s Decision of 31 March 2005 became final and executory for failure of
respondents to appeal with the NLRC within the prescribed period. Petitioner claims that the Labor Arbiter’s decision
was constructively served on respondents as early as August 2005 while respondents appealed the Arbiter’s
decision only on 31 March 2006, way beyond the reglementary period to appeal. Petitioner points out that service of
an unclaimed registered mail is deemed complete five days from the date of first notice of the post master. In this
case three notices were issued by the post office, the last being on 1 August 2005. The unclaimed registered mail
was consequently returned to sender. Petitioner presents the Postmaster’s Certification to prove constructive
service of the Labor Arbiter’s decision on respondents. The Postmaster certified:

xxx

That upon receipt of said registered mail matter, our registry in charge, Vicente Asis, Jr., immediately issued the first
registry notice to claim on July 12, 2005 by the addressee. The second and third notices were issued on July 21 and
August 1, 2005, respectively.
That the subject registered letter was returned to the sender (RTS) because the addressee failed to claim it after our
one month retention period elapsed. Said registered letter was dispatched from this office to Manila CPO (RTS)
under bill #6, line 7, page1, column 1, on September 8, 2005. 12

Section 10, Rule 13 of the Rules of Court provides:

SEC. 10. Completeness of service. – Personal service is complete upon actual delivery. Service by ordinary mail is
complete upon the expiration of ten (10) days after mailing, unless the court otherwise provides. Service by
registered mail is complete upon actual receipt by the addressee, or after five (5) days from the date he received the
first notice of the postmaster, whichever date is earlier.

The rule on service by registered mail contemplates two situations: (1) actual service the completeness of which is
determined upon receipt by the addressee of the registered mail; and (2) constructive service the completeness of
which is determined upon expiration of five days from the date the addressee received the first notice of the
postmaster.13

Insofar as constructive service is concerned, there must be conclusive proof that a first notice was duly sent by the
postmaster to the addressee.14 Not only is it required that notice of the registered mail be issued but that it should
also be delivered to and received by the addressee.15 Notably, the presumption that official duty has been regularly
performed is not applicable in this situation. It is incumbent upon a party who relies on constructive service to prove
that the notice was sent to, and received by, the addressee.16

The best evidence to prove that notice was sent would be a certification from the postmaster, who should certify not
only that the notice was issued or sent but also as to how, when and to whom the delivery and receipt was made.
The mailman may also testify that the notice was actually delivered. 17

In this case, petitioner failed to present any concrete proof as to how, when and to whom the delivery and receipt of
the three notices issued by the post office was made. There is no conclusive evidence showing that the post office
notices were actually received by respondents, negating petitioner’s claim of constructive service of the Labor
Arbiter’s decision on respondents. The Postmaster’s Certification does not sufficiently prove that the three notices
were delivered to and received by respondents; it only indicates that the post office issued the three notices. Simply
put, the issuance of the notices by the post office is not equivalent to delivery to and receipt by the addressee of the
registered mail. Thus, there is no proof of completed constructive service of the Labor Arbiter’s decision on
respondents.

At any rate, the NLRC declared the issue on the finality of the Labor Arbiter’s decision moot as respondents’ appeal
was considered in the interest of substantial justice. We agree with the NLRC. The ends of justice will be better
served if we resolve the instant case on the merits rather than allowing the substantial issue of whether petitioner is
an independent contractor or an employee linger and remain unsettled due to procedural technicalities.

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.18

To determine the existence of an employer-employee relationship, case law has consistently applied the four-fold
test, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal;
and (d) the employer’s power to control the employee on the means and methods by which the work is
accomplished. The so-called "control test" is the most important indicator of the presence or absence of an
employer-employee relationship.19

In this case, PBA admits repeatedly engaging petitioner’s services, as shown in the retainer contracts. PBA pays
petitioner a retainer fee, exclusive of per diem or allowances, as stipulated in the retainer contract. PBA can
terminate the retainer contract for petitioner’s violation of its terms and conditions.

However, respondents argue that the all-important element of control is lacking in this case, making petitioner an
independent contractor and not an employee of respondents.

Petitioner contends otherwise. Petitioner asserts that he is an employee of respondents since the latter exercise
control over the performance of his work. Petitioner cites the following stipulations in the retainer contract which
evidence control: (1) respondents classify or rate a referee; (2) respondents require referees to attend all basketball
games organized or authorized by the PBA, at least one hour before the start of the first game of each day; (3)
respondents assign petitioner to officiate ballgames, or to act as alternate referee or substitute; (4) referee agrees to
observe and comply with all the requirements of the PBA governing the conduct of the referees whether on or off the
court; (5) referee agrees (a) to keep himself in good physical, mental, and emotional condition during the life of the
contract; (b) to give always his best effort and service, and loyalty to the PBA, and not to officiate as referee in any
basketball game outside of the PBA, without written prior consent of the Commissioner; (c) always to conduct
himself on and off the court according to the highest standards of honesty or morality; and (6) imposition of various
sanctions for violation of the terms and conditions of the contract.

The foregoing stipulations 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. As correctly observed
by the Court of Appeals, "how could a skilled referee perform his job without blowing a whistle and making calls? x x
x [H]ow can the PBA control the performance of work of a referee without controlling his acts of blowing the whistle
and making calls?"20

In Sonza v. ABS-CBN Broadcasting Corporation,21 which determined the relationship between a television and radio
station and one of its talents, the Court held that not all rules imposed by the hiring party on the hired party indicate
that the latter is an employee of the former. The Court held:

We find that these general rules are merely guidelines towards the achievement of the mutually desired result,
which are top-rating television and radio programs that comply with standards of the industry. We have ruled that:

Further, not every form of control that a party reserves to himself over the conduct of the other party in relation to the
services being rendered may be accorded the effect of establishing an employer-employee relationship. The facts of
this case fall squarely with the case of Insular Life Assurance Co., Ltd. v. NLRC. In said case, we held that:

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.22

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 referees decide whether
an infraction was committed, and the PBA cannot overrule them once the decision is made on the playing court. The
referees are the only, absolute, and final authority on the playing court. Respondents or any of the PBA officers
cannot and do not determine which calls to make or not to make and cannot control the referee when he blows the
whistle because such authority exclusively belongs to the referees. The very nature of petitioner’s 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 Yonan v. United States Soccer Federation, Inc.,23 the United States District Court of Illinois held that plaintiff, a
soccer referee, is an independent contractor, and not an employee of defendant which is the statutory body that
governs soccer in the United States. As such, plaintiff was not entitled to protection by the Age Discrimination in
Employment Act. The U.S. District Court ruled:

Generally, "if an employer has the right to control and direct the work of an individual, not only as to the result to be
achieved, but also as to details by which the result is achieved, an employer/employee relationship is likely to exist."
The Court must be careful to distinguish between "control[ling] the conduct of another party contracting party by
setting out in detail his obligations" consistent with the freedom of contract, on the one hand, and "the discretionary
control an employer daily exercises over its employee’s conduct" on the other.

Yonan asserts that the Federation "closely supervised" his performance at each soccer game he officiated by giving
him an assessor, discussing his performance, and controlling what clothes he wore while on the field and traveling.
Putting aside that the Federation did not, for the most part, control what clothes he wore, the Federation did not
supervise Yonan, but rather evaluated his performance after matches. That the Federation evaluated Yonan as a
referee does not mean that he was an employee. There is no question that parties retaining independent contractors
may judge the performance of those contractors to determine if the contractual relationship should continue. x x x

It is undisputed that the Federation did not control the way Yonan refereed his games. He had full discretion and
1âwphi 1

authority, under the Laws of the Game, to call the game as he saw fit. x x x In a similar vein, subjecting Yonan to
qualification standards and procedures like the Federation’s registration and training requirements does not create
an employer/employee relationship. x x x

A position that requires special skills and independent judgment weights in favor of independent contractor status. x
x x Unskilled work, on the other hand, suggests an employment relationship. x x x Here, it is undisputed that soccer
refereeing, especially at the professional and international level, requires "a great deal of skill and natural ability."
Yonan asserts that it was the Federation’s training that made him a top referee, and that suggests he was an
employee. Though substantial training supports an employment inference, that inference is dulled significantly or
negated when the putative employer’s activity is the result of a statutory requirement, not the employer’s choice. x x
x
In McInturff v. Battle Ground Academy of Franklin,24 it was held that the umpire was not an agent of the Tennessee
Secondary School Athletic Association (TSSAA), so the player’s vicarious liability claim against the association
should be dismissed. In finding that the umpire is an independent contractor, the Court of Appeals of Tennesse
ruled:

The TSSAA deals with umpires to achieve a result-uniform rules for all baseball games played between TSSAA
member schools. The TSSAA does not supervise regular season games. It does not tell an official how to conduct
the game beyond the framework established by the rules. The TSSAA does not, in the vernacular of the case law,
control the means and method by which the umpires work.

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. The continuous rehiring by
PBA of petitioner simply signifies the renewal of the contract between PBA and petitioner, and highlights the
satisfactory services rendered by petitioner warranting such contract renewal. Conversely, if PBA decides to
discontinue petitioner’s services at the end of the term fixed in the contract, whether for unsatisfactory services, or
violation of the terms and conditions of the contract, or for whatever other reason, the same merely results in the
non-renewal of the contract, as in the present case. The non-renewal of the contract between the parties does not
constitute illegal dismissal of petitioner by respondents.

WHEREFORE, we DENY the petition and AFFIRM the assailed decision of the Court of Appeals.

SO ORDERED.
G.R. No. 187122 February 22, 2012

NEGROS SLASHERS, INC., RODOLFO C. ALVAREZ AND VICENTE TAN, Petitioners,

vs.
ALVIN L. TENG, Respondent.

DECISION

VILLARAMA, JR., J.:

Before us is a petition for review on certiorari assailing the Decision1 dated September 17, 2008 and
Resolution2 dated February 11 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 00817. The appellate court had
reversed and set aside the September 10, 2004 Decision3 and March 21, 2005 Resolution4 of the National Labor
Relations Commission (NLRC) and reinstated with modification the Decision5 of the Labor Arbiter finding respondent
to have been illegally dismissed.

The facts are undisputed.

Respondent Alvin Teng is a professional basketball player who started his career as such in the Philippine
Basketball Association and then later on played in the Metropolitan Basketball Association (MBA).

On February 4, 1999, Teng signed a 3-year contract6 (which included a side contract and agreement for additional
benefits and bonuses) with the Laguna Lakers. Before the expiration of his contract with the Laguna Lakers on
December 31, 2001, the Lakers traded and/or transferred Teng to petitioner Negros Slashers, with the latter
assuming the obligations of Laguna Lakers under Teng’s unexpired contract, including the monthly salary of
₱250,000, ₱50,000 of which remained to be the obligation of the Laguna Lakers. On March 28, 2000, the
management of the Laguna Lakers formally informed Teng of his transfer to the Negros Slashers.7 Teng executed
with the Negros Slashers the Player’s Contract of Employment.8

On Game Number 4 of the MBA Championship Round for the year 2000 season, Teng had a below-par playing
performance. Because of this, the coaching staff decided to pull him out of the game. Teng then sat on the bench,
untied his shoelaces and donned his practice jersey. On the following game, Game Number 5 of the Championship
Round, Teng called-in sick and did not play.

On November 21, 2000, Vicente Tan, Finance Head of Negros Slashers, wrote9 Teng requiring him to explain in
writing why no disciplinary action should be taken against him for his precipitated absence during the crucial Game
5 of the National Championship Round. He was further informed that a formal investigation would be conducted on
November 28, 2000. The hearing, however, did not push through because Teng was absent on the said scheduled
investigation. Hearing was rescheduled for December 11, 2000. On said date, the investigation proceeded, attended
by Teng’s representatives, Atty. Arsenio Yulo and Atty. Jose Aspiras.10 A subsequent meeting was also conducted
attended by the management, coaching staff and players of the Negros Slashers team, wherein the team members
and coaching staff unanimously expressed their sentiments against Teng and their opposition against the possibility
of Teng joining back the team.11

On March 16, 2001, the management of Negros Slashers came up with a decision, and through its General
Manager, petitioner Rodolfo Alvarez, wrote12 Teng informing him of his termination from the team.

On July 28, 2001, Teng filed a complaint before the Office of the Commissioner of the MBA pursuant to the
provision of the Uniform Players Contract which the parties had executed. Subsequently, on November 6, 2001,
Teng also filed an illegal dismissal case with the Regional Arbitration Branch No. VI of the NLRC.13

On July 16, 2002, the Labor Arbiter issued a decision finding Teng’s dismissal illegal and ordering petitioner Negros
Slashers, Inc. to pay Teng ₱2,530,000 representing his unpaid salaries, separation pay and attorney’s fees. The
Labor Arbiter ruled that the penalty of dismissal was not justified since the grounds relied upon by petitioners did not
constitute serious misconduct or willful disobedience or insubordination that would call for the extreme penalty of
dismissal from service. The dispositive portion of the Labor Arbiter’s decision reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of complainant illegal
and respondents Negros Slashers, Inc. are hereby ordered to PAY complainant the total sum of TWO MILLION
FIVE HUNDRED THIRTY THOUSAND (P2,530,000.00) PESOS representing complainant’s unpaid salaries,
separation pay and attorney’s fee, the award to be deposited with this Office within ten (10) days from receipt of this
Decision.

All other claims are hereby DISMISSED for lack of merit.

SO ORDERED.14

The case was then appealed to the NLRC. On September 10, 2004, the NLRC issued a Decision setting aside the
July 16, 2002 Decision of the Labor Arbiter and entering a new one dismissing the complaint for being premature
since the arbitration proceedings before the Commissioner of the MBA were still pending when Teng filed his
complaint for illegal dismissal. The dispositive portion of the NLRC Decision reads:

WHEREFORE, premises considered, the decision of the Executive Labor Arbiter a quo is hereby REVERSED and
SET ASIDE. A new one is entered, dismissing the instant case for being premature.
SO ORDERED.15

Teng filed a motion for reconsideration, but it was denied for being filed beyond the ten-day reglementary period
provided for in Section 15,16 Rule VII of the NLRC Rules of Procedure.

Aggrieved, Teng filed a petition for certiorari with the CA assailing the NLRC Decision dated September 10, 2004
and the Resolution dated March 21, 2005 denying his motion for reconsideration.

On September 17, 2008 the CA rendered the assailed Decision setting aside the September 10, 2004 Decision and
March 21, 2005 Resolution of the NLRC and reinstating with modification the Labor Arbiter’s Decision.

The CA reinstated the findings of the Labor Arbiter that Teng was illegally dismissed because the grounds relied
upon by petitioners were not enough to merit the supreme penalty of dismissal. The CA held that there was no
serious misconduct or willful disobedience or insubordination on Teng’s part. On the issue of jurisdiction, the CA
ruled that the Labor Arbiter had jurisdiction over the case notwithstanding the pendency of arbitration proceedings in
the Office of the Commissioner of the MBA.

Petitioners sought reconsideration of the above ruling, but their motion was denied by the CA in a Resolution17 dated
February 11, 2009.

Petitioners now come to this Court assailing the Decision dated September 17, 2008 and Resolution dated February
11, 2009 of the CA.

Firstly, petitioners argue that respondent Teng and his counsel committed a blatant violation of the rule against
forum shopping. Petitioners aver that on July 28, 2001, Teng filed a complaint before the MBA pursuant to the
voluntary arbitration provision of the Uniform Players Contract he executed with Negros Slashers, Inc. During the
pendency of said complaint, Teng filed another complaint for illegal dismissal with the Labor Arbiter. It is petitioners’
position that Teng lied by certifying under oath that there is no similar case pending between him and Negros
Slashers, Inc., when in fact, months before he had filed a complaint with the MBA alleging the same factual
antecedents and raising the same issues.

Secondly, petitioners argue that the CA erred in ruling that Teng’s offenses were just minor lapses and irresponsible
action not warranting the harsh penalty of dismissal. Petitioners allege that the CA paid scant attention to two very
important pieces of evidence which would clearly show the gravity and seriousness of the offenses committed by
Teng. Petitioners claim that these two documents, i.e., the minutes of the meeting18 of players, management, and
coordinating staff, and a petition19 by the players to the management not to allow Teng to come back to the team,
would show that Teng should not have been treated as an ordinary working man who merely absented himself by
feigning sickness when called upon to work. Petitioners argue that the nature of the work and team atmosphere
should have been considered and given credence. By neglecting these two documents, the CA failed to appreciate
the gravity of the misconduct committed by Teng and the effects it had on the basketball organization.

Petitioners also argue that respondent’s petition for certiorari with the CA should have been dismissed outright
because it was filed beyond the reglementary period. Petitioners point out that Teng received the NLRC Decision on
October 15, 2004 and therefore had ten days20 or until October 25, 2004 within which to file a motion for
reconsideration. But he filed his motion for reconsideration only on October 26, 2004 and said motion was
denied21 on March 21, 2005 for being filed late. Thereafter he filed his petition for certiorari22 with the CA on June 20,
2005. Petitioners contend that the petition for certiorari was filed beyond the period allowed by the Rules of
Court because the 60-day period to file the petition for certiorari should have started to run from the receipt of the
NLRC decision on October 15, 2004. And it should have expired on December 14, 2004 because it was as if no
motion for reconsideration was filed in the NLRC. Further, petitioners argue that the CA could not take cognizance
of the case because it is a settled rule that certiorari as a special civil action will not lie unless a motion for
reconsideration is first filed before the NLRC to allow it an opportunity to correct its errors. In this case, since the
motion for reconsideration was filed late, it should have been treated as if no motion for reconsideration was filed.

Teng, on the other hand, maintains that there is no violation of the rule against forum shopping. He submits that he
indeed filed his complaint before the MBA as early as July 28, 2001. Unfortunately, for more than three months, the
supposed voluntary arbitration failed to yield any result until the MBA itself was dissolved. It was only on November
2001, after exhausting the arbitration process, did he file his complaint before the Labor Arbiter. In other words, it
was only after the MBA failed to come up with a resolution on the matter did he opt to seek legal redress elsewhere.

On the merits, Teng relies on the reasoning of the Labor Arbiter in finding that his alleged lapses and misconduct
were too minor to justify the extreme penalty of dismissal from service. In large part, he quotes the Labor Arbiter’s
decision, and emphasizes the Labor Arbiter’s statements that (1) loosening of the shoe laces and the donning of the
practice jersey are not indicative of serious misconduct that would justify dismissal from employment; (2) it cannot
be concluded that he merely feigned sickness when he informed the Coach of his inability to play during Game No.
5; and (3) there is no showing of any bad faith or ill motive on his part that would qualify his actions as serious,
severe and grave as to warrant termination from service.

Teng also argues that the CA aptly clarified and explained the legal reason why the petition for certiorari was given
due course despite some procedural lapses regarding the motion for reconsideration with the NLRC. Teng stresses
that jurisprudence allows the relaxation of procedural rules even of the most mandatory character in the interest of
substantial justice. In this particular case, justice and equity calls for the relaxation of the reglementary period for
filing a motion for reconsideration as well as the rule prohibiting the filing of a petition for certiorari without first filing
a motion for reconsideration.
Simply put, the basic issues for our resolution are as follows: (1) whether the CA erred in giving due course to
respondent Teng’s petition for certiorari despite its late filing; (2) whether Teng violated the rule on forum shopping
when he filed a complaint for illegal dismissal with the Regional Arbitration Branch of the NLRC while a similar
complaint was pending in the Office of the Commissioner of the MBA; and (3) whether the CA erred in ruling that
Teng’s dismissal from the Negros Slashers Team was unjustified and too harsh considering his misconduct.

The petition is bereft of merit.

On the first issue raised by petitioners, we rule that the CA did not commit a reversible error in giving due course to
Teng’s petition for certiorari although said petition was filed late. Ordinarily, rules of procedure are strictly enforced
by courts in order to impart stability in the legal system. However, in not a few instances, we relaxed the rigid
application of the rules of procedure to afford the parties the opportunity to fully ventilate their cases on the merits.
This is in line with the time honored principle that cases should be decided only after giving all the parties the
chance to argue their causes and defenses. In that way, the ends of justice would be better served. For indeed, the
general objective of procedure is to facilitate the application of justice to the rival claims of contending parties,
bearing always in mind that procedure is not to hinder but to promote the administration of justice.23 In Ong Lim Sing,
Jr. v. FEB Leasing and Finance Corporation,24 we ruled:

Courts have the prerogative to relax procedural rules of even the most mandatory character, mindful of the duty to
reconcile both the need to speedily put an end to litigation and the parties’ right to due process. In numerous cases,
this Court has allowed liberal construction of the rules when to do so would serve the demands of substantial justice
and equity. x x x

Indeed the prevailing trend is to accord party litigants the amplest opportunity for the proper and just determination
of their causes, free from the constraints of needless technicalities.

Here, besides the fact that a denial of the recourse to the CA would serve more to perpetuate an injustice and
violation of Teng’s rights under our labor laws, we find that as correctly held by the CA, no intent to delay the
administration of justice could be attributed to Teng. The CA therefore did not commit reversible error in excusing
Teng’s one-day delay in filing his motion for reconsideration and in giving due course to his petition for certiorari.

As regards the second issue, we likewise find no merit in petitioners’ claim that respondent’s act of filing a complaint
with the Labor Arbiter while the same case was pending with the Office of the Commissioner of the MBA constituted
forum shopping.

For forum shopping to exist, it is necessary that (a) there be identity of parties or at least such parties that represent
the same interests in both actions; (b) there be identity of rights asserted and relief prayed for, the relief being
founded on the same facts; and (c) the identity of the two preceding particulars is such that any judgment rendered
in one action will, regardless of which party is successful, amount to res judicata in the other action.25

Petitioners are correct as to the first two requisites of forum shopping. First, there is identity of parties involved:
Negros Slashers Inc. and respondent Teng. Second, there is identity of rights asserted i.e., the right of management
to terminate employment and the right of an employee against illegal termination. However, the third requisite of
forum shopping is missing in this case. Any judgment or ruling of the Office of the Commissioner of the MBA will not
amount to res judicata. As defined in Agustin v. Delos Santos, 26

Res Judicata is defined as "a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by
judgment." According to the doctrine of res judicata, an existing final judgment or decree rendered on the merits,
and without fraud or collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction, is
conclusive of the rights of the parties or their privies, in all other actions or suits in the same or any other judicial
tribunal of concurrent jurisdiction on the points and matters in issue in the first suit. To state simply, a final judgment
or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in
all later suits on all points and matters determined in the former suit. (Emphasis supplied.)

To clarify, res judicata is defined in jurisprudence as to have four basic elements: (1) the judgment sought to bar the
new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject
matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be as
between the first and second action, identity of parties, subject matter, and causes of action. 27

Here, although contractually authorized to settle disputes, the Office of the Commissioner of the MBA is not a court
of competent jurisdiction as contemplated by law with respect to the application of the doctrine of res judicata. At
best, the Office of the Commissioner of the MBA is a private mediator or go-between as agreed upon by team
management and a player in the MBA Player’s Contract of Employment. 28 Any judgment that the Office of the
Commissioner of the MBA may render will not result in a bar for seeking redress in other legal venues. Hence,
respondent’s action of filing the same complaint in the Regional Arbitration Branch of the NLRC does not constitute
forum shopping.

On the third issue, we find that the penalty of dismissal handed out against Teng was indeed too harsh.

We understand petitioners in asserting that a basketball organization is a "team-based" enterprise and that a
harmonious working relationship among team players is essential to the success of the organization. We also take
into account the petition of the other team members voicing out their desire to continue with the team without Teng.
We note likewise the sentiments of the players and coaching staff during the meeting of February 4, 2001 stating
how they felt when Teng "abandoned" them during a crucial Game Number 5 in the MBA championship round.
Petitioners rely heavily on the alleged effects of Teng’s actions on the rest of the team. However, such reaction from
team members is expected after losing a game, especially a championship game. It is also not unlikely that the team
members looked for someone to blame after they lost the championship games and that Teng happened to be the
closest target of the team’s frustration and disappointment. But all these sentiments and emotions from Negros
Slashers players and staff must not blur the eyes of the Court from objectively assessing Teng’s infraction in order
to determine whether the same constitutes just ground for dismissal. The incident in question should be clear: Teng
had a below-par performance during Game Number 4 for which he was pulled out from the game, and then he
untied his shoelaces and donned his practice jersey. In Game Number 5, he did not play.

As an employee of the Negros Slashers, Teng was expected to report for work regularly. Missing a team game is
indeed a punishable offense. Untying of shoelaces when the game is not yet finished is also irresponsible and
unprofessional. However, we agree with the Labor Arbiter that such isolated foolishness of an employee does not
justify the extreme penalty of dismissal from service. Petitioners could have opted to impose a fine or suspension on
Teng for his unacceptable conduct. Other forms of disciplinary action could also have been taken after the incident
to impart on the team that such misconduct will not be tolerated.

In Sagales v. Rustan’s Commercial Corporation,29 this Court ruled:

Truly, while the employer has the inherent right to discipline, including that of dismissing its employees, this
prerogative is subject to the regulation by the State in the exercise of its police power.

In this regard, it is a hornbook doctrine that infractions committed by an employee should merit only the
corresponding penalty demanded by the circumstance. The penalty must be commensurate with the act,
conduct or omission imputed to the employee and must be imposed in connection with the disciplinary
authority of the employer. (Emphasis in the original.)

In the case at bar, the penalty handed out by the petitioners was the ultimate penalty of dismissal. There was no
warning or admonition for respondent’s violation of team rules, only outright termination of his services for an act
which could have been punished appropriately with a severe reprimand or suspension.

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit and the Decision of the Court of
Appeals dated September 17, 2008 and Resolution dated February 11, 2009, in CA-G.R. SP No. 00817 are hereby
AFFIRMED.

With costs against the petitioners.

SO ORDERED.