3 Wack Wack Golf and Country Club v. NLRC

3/10/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 456
280 SUPREME COURT REPORTS ANNOTATED

Wack Wack Golf & Country Club vs. National Labor Relations
Commission
*
G.R. No. 149793. April 15, 2005.
WACK WACK GOLF & COUNTRY CLUB, petitioner, vs.

NATIONAL LABOR RELATIONS COMMISSION, MARTINA G.
CAGASAN, CARMENCITA F. DOMINGUEZ, and BUSINESS
STAFFING AND MANAGEMENT, INC., respondents.
Actions; Certificate of Non-Forum Shopping; Pleadings and Practice;

A general manager has the authority to sue on behalf of the corporation and
to sign the requisite verification and certification of non-forum shopping;
Subsequent submission of the requisite documents constitute substantial
compliance—subsequent and substantial compliance by an appellant may
call for the relaxation of the rules of
_______________
* SECOND DIVISION.
281
VOL. 456, APRIL 15, 2005 281
Wack Wack Golf & Country Club vs. National Labor Relations Commission
procedure in the interest of justice.—In Novelty Philippines, Inc. v. Court of

Appeals, the Court recognized the authority of the general manager to sue
on behalf of the corporation and to sign the requisite verification and
certification of non-forum shopping. The general manager is also one person
who is in the best position to know the state of affairs of the corporation. It
was also error for the CA not to admit the requisite proof of authority when
in the Novelty case, the Court ruled that the subsequent submission of the
requisite documents constituted substantial compliance with procedural
rules. There is ample jurisprudence holding that the subsequent and
substantial compliance of an appellant may call for the relaxation of the
www.central.com.ph/sfsreader/session/0000017819ee176477af9a9c003600fb002c009e/t/?o=False 1/19
rules of procedure in the interest of justice. While it is true that rules of

procedure are intended to promote rather than frustrate the ends of justice,
and while the swift unclogging of court dockets is a laudable objective, it
nevertheless must not be met at the expense of substantial justice. It was,
therefore, reversible error for the CA to have dismissed the petition for
certiorari before it. The ordinary recourse for us to take is to remand the
case to the CA for proper disposition on the merits; however, considering
that the records are now before us, we deem it necessary to resolve the
instant case in order to ensure harmony in the rulings and expediency.
Labor Law; Quitclaims; Where the person making the waiver has done
so voluntarily, with a full understanding thereof, and the consideration for
the quitclaim is credible and reasonable, the transaction must be recognized
as being a valid and binding undertak-ing.—It cannot be said that the
respondents in the case at bar did not fully comprehend and realize the
consequences of their acts. Herein respondents are not unlettered persons
who need special protection. They held responsible positions in the
petitioner-employer, so they presumably understood the contents of the
documents they signed. There is no showing that the execution thereof was
tainted with deceit or coercion. Further, the respondents were paid hefty
amounts of separation pay indicating that their separation from the company
was for a valuable consideration. Where the person making the waiver has
done so voluntarily, with a full understanding thereof, and the consideration
for the quitclaim is credible and reasonable, the transaction must be
recognized as being a valid and binding undertaking. As in contracts, these
quitclaims amount to a valid and binding compromise agreement between
the parties which deserve to be respected.
282
Same; Independent Contractors; Words and Phrases; An independent

contractor is one who undertakes “job contracting.”—The ruling of the
NLRC is wrong. An independent contractor is one who undertakes “job
contracting,” i.e., a person who: (a) carries on an independent business and
undertakes the contract work on his own account under his own
responsibility according to his own manner and method, free from the
control and direction of his employer or principal in all matters connected
with the performance of the work except as to the results thereof; and (b)
has substantial capital or investment in the form of tools, equipments,
machineries, work premises and other materials which are necessary in the
conduct of the business. Jurisprudential holdings are to the effect that in
determining the existence of an independent contractor relationship, several
factors may be considered, such as, but not necessarily confined to, whether
or not the contractor is carrying on an independent business; the nature and
extent of the work; the skill required; the term and duration of the
relationship; the right to assign the performance of specified pieces of work;

the control and supervision of the work to another; the employer’s power
with respect to the hiring, firing, and payment of the contractor’s workers;
the control of the premises; the duty to supply premises, tools, appliances,
materials and labor; and the mode, manner and terms of payment.
Same; Employer-Employee Relationship; The right to hire and fire is
another element of the employer-employee relationship.—BSMI admitted
that it employed the respondents, giving the said retired employees some
degree of priority merely because of their work experience with the
petitioner, and in order to have a smooth transition of operations. In
accordance with its own recruitment policies, the respondents were made to
sign applications for employment, accepting the condition that they were
hired by BSMI as probationary employees only. Not being contrary to law,
morals, good custom, public policy and public order, these employment
contracts, which the parties are bound are considered valid. Unfortunately,
after a study and evaluation of its personnel organization, BSMI was
impelled to terminate the services of the respondents on the ground of
redundancy. This right to hire and fire is another element of the employer-
employee relationship which actually existed between the respondents and
BSMI, and not with Wack Wack.
283
VOL. 456, APRIL 15, 2005 283
Same; Same; Where there is no employer-employee relationship

between a corporation and certain individuals, the latter have no cause of
action for illegal dismissal and damages against the former.—There being
no employer-employee relationship between the petitioner and respondents
Cagasan and Dominguez, the latter have no cause of action for illegal
dismissal and damages against the petitioner. Consequently, the petitioner
cannot be validly ordered to reinstate the respondents and pay them their
claims for backwages.
PETITION for review on certiorari of the resolutions of the Court of

Appeals.
The facts are stated in the opinion of the Court.

Villareal, Rosacia, Diño & Patag for petitioner.
Gaudencio J. Tuliao, Jr. collaborating counsel for petitioner.
Pedro T. De Quiroz and Picazo, Buyco, Tan, Fider & Santos
for respondents.
CALLEJO, SR., J.:
1
1
This is a petition for review of the Resolution of the Court of
Appeals (CA) in CA-G.R. SP No. 63658, dismissing the petition for
certiorari before it for being insufficient in form and the subsequent
resolution denying the motion for reconsideration thereof.
The undisputed antecedent facts are as follows:
On November 29, 1996, a fire destroyed a large portion of the
main clubhouse of the Wack Wack Golf and Country Club (Wack
Wack), including its kitchen. In view of the reconstruction of the
whole clubhouse complex, Wack Wack filed a notice with the
Department of Labor and Employment (DOLE) on April 14, 1997
that it was going to suspend the operations of
_______________
1 Penned by Associate Justice Juan Q. Enriquez, Jr., with Associate Justices Ruben
T. Reyes, and Presbitero J. Velasco, Jr. (now the Court Administrator), concurring.
284

Commission
the Food and Beverage (F & B) Department one (1) month

thereafter. Notices to 54 employees (out of a complement of 85
employees in the department) were also sent out, informing them
that they need not report for work anymore after April 14, 1997 but
that they would still be paid their salaries up to May 14, 1997. They
were further told that they would be informed once full operations in
Wack Wack resume.
The Wack Wack Golf Employees Union branded the suspension
of operations of the F & B Department as arbitrary, discriminatory
and constitutive of union-busting, so they filed a notice of strike with
the DOLE’s National Conciliation and Mediation Board (NCMB).
Several meetings between the officers of Wack Wack and the Union,
headed by its President, Crisanto Baluyot, Sr., and assisted by its
counsel, Atty. Pedro T. De Quiroz, were held until the parties
2
entered into an amicable settlement. An Agreement was forged
whereby a special separation benefit/retirement package for
interested Wack Wack employees, especially those in the F & B
Department was offered. The terms and conditions thereof reads as
follows:
1. The UNION and the affected employees of F & B who are

members of the UNION hereby agree to accept the special
separation benefit package agreed upon between the CLUB
management on the one hand, and the UNION officers and
the UNION lawyer on the other, in the amount equivalent to
one-and-one-half months salary for every year of service,

regardless of the number of years of service rendered. That,
in addition, said employees shall also receive the other
benefits due them, namely, the cash equivalent of unused
vacation and sick leave credits, proportionate 13th month
pay; and other benefits, if any, computed without premium;
2. That the affected F & B employees who have already
signified intention to be separated from the service under
the special separation benefit package shall receive their
separation pay as soon as possible;
_______________
2 Rollo, p. 74.
285
VOL. 456, APRIL 15, 2005 285

Commission
3. That the same package shall, likewise, be made available to

other employees who are members of the bargaining unit
and who may or may not be affected by future similar
suspensions of operations. The UNION re-affirms and
recognizes that it is the sole prerogative of the management
of the Club to suspend part or all of its operations as may be
necessitated by the exigencies of the situation and the
general welfare of its membership. The closure of the West
Course, which is scheduled for conversion to an All-
Weather Championship golf course, is cited as an example.
It is, however, agreed that if a sufficient number of
employees, other than F & B employees, would apply for
availment of the package within the next two months, the
Club may no longer go through the process of formally
notifying the Department of Labor. The processing and
handling of benefits for these other employees shall be done
over a transition period within one year;
4. All qualified employees who may have been separated from
the service under the above package shall be considered
under a priority basis for employment by concessionaires
and/or contractors, and even by the Club upon full
resumption of operations, upon the recommendation of the
UNION. The Club may even persuade an employee-
applicant for availment under the package to 3
remain on
his/her job, or be assigned to another position.
Respondent Carmencita F. Dominguez, who was then working in the

Administrative Department of 4Wack Wack, was the first to avail of
the special separation package. Computed at 1 1/2 months for every
year of service pursuant to the Agreement, her separation pay
amounted 5to P91,116.84, while economic benefits amounted to
P6,327.53. On September 18, 1997, Dominguez signed a Release
6
and Quitclaim in favor of Wack Wack.
Respondent Martina B. Cagasan was Wack Wack’s Personnel
Officer who, likewise, volunteered to avail of the sepa-
_______________
3 Id., at pp. 74-75.

4 Id., at p. 76.
5 Id., at p. 77.
6 Id., at p. 78.
286

Commission
7
ration package. On September 30, 1997, she received from Wack
Wack the amount of P469,495.66 as separation 8
pay and other
economic 9 benefits amounting to P17,010.50. A Release and
Quitclaim was signed on September 30, 1997.
The last one to avail of the separation package was Crisanto
10
Baluyot, Sr. who, in a Letter dated January 16, 1998 addressed to
Mr. Bienvenido Juan, Administrative Manager of Wack Wack,
signified his willingness to avail of the said early retirement
11
package. The total amount of P688,290.30 was received and the
12
Release and Quitclaim signed on May 14, 1998.
On October 15, 1997, Wack Wack entered into a Management
13
Contract with Business Staffing and Management, Inc. (BSMI), a
corporation engaged in the business as Management Service
Consultant undertaking and managing for a fee projects which are
specialized and technical in character like marketing, promotions,
merchandising,
14
financial management, operation management and
the like. BSMI was to provide management services for Wack
Wack in the following operational areas:
1. Golf operations management;

2. Management and maintenance of building facilities;
3. Management of food and beverage operation;
4. Management of materials and procurement functions;
5. To provide and undertake administrative and support

15
services for the [said] projects.
_______________
7 Id., at p. 80.
8 Id., at p. 81.
9 Id., at p. 82.
10 Id., at p. 84.
11 Id., at p. 85.
12 Id., at p. 86.
13 Id., at pp. 67-71.
14 Id., at p. 164.
15 Id., at p. 68.
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Commission
Pursuant to the Agreement, the retired employees of Wack Wack by

reason of their experience were given priority by BSMI in hiring. On
October 21, 1997, respondents Cagasan and Dominguez filed their
16
respective applications for employment with BSMI. They were
eventually hired by BSMI to their former positions in Wack Wack as
17
project employees and were issued probationary contracts.
Aside from BSMI, Wack Wack also engaged several contractors
which were assigned in various operating functions of the club, to
wit:
1. Skills and Talent Employment Promotion (STEP) whose 90

workers are designated as locker attendants, golf bag
attendants, nurses, messengers, technical support engineer,
golf director, agriculturist, utilities and gardeners;
2. Marvel Manpower Agency—whose 19 employees are
designated as sweepers, locker attendants, drive range
attendant, telephone operator, workers and secretaries;
3. City Service Corporation—contractor for janitorial services
for the whole club;
4. Microstar Business and Management Services, Inc. whose
15 employees are designated in the Finance and Accounting
18
departments.
Due to these various management service contracts, BSMI

undertook an organizational analysis and manpower evaluation to
determine its efficacy, and to streamline its operations. In the course
of its assessment, BSMI saw that the positions of Cagasan and

Dominguez were redundant. In the case of respondent Cagasan, her
tasks as personnel officer were likewise being taken cared of by the
different management service contractors; on the other hand,
Dominguez’s work as telephone operator was taken over by the
personnel of the
_______________
16 Id., at pp. 118-119.

17 Id., at pp. 120-123.
18 Id., at pp. 195-196.
288

Commission
19
accounting department. Thus, in separate Letters dated February
27, 1998, the services of Dominguez and Cagasan were terminated.
With respect to Baluyot, he applied for the position of Chief Porter
on May 12, 1998. The position, however, was among those
recommended to be abolished by the BSMI, so he was offered the
position of Caddie Master Aide with a starting salary of P5,500.00 a
month. Baluyot declined the offer. Pending Wack Wack’s approval
of the proposed abolition of the position of Chief Porter, Baluyot
was temporarily accepted to the position with a monthly salary of
P12,000.00. In July 1998, Baluyot decided not to accept the position
of Caddie Master Aide; thus, BSMI continued with its plan to
abolish the said position of Chief Porter and Baluyot was dismissed
from the service.
Thereafter, the three (3) employees filed their respective
complaints with the National Labor Relations Commission (NLRC)
for illegal dismissal and damages against Wack Wack and BSMI.
The complainants averred that they were dismissed without
cause. They accepted the separation package upon the assurance that
they would be given their former work and assignments once the
Food and Beverage Department of Wack Wack resumes its
operations. On the other hand, the respondents therein alleged that
the dismissal of the complainants were made pursuant to a study and
evaluation of the different jobs and positions and found them to be
redundant.
20
In a Decision dated January 25, 2000, the Labor Arbiter found
that the dismissal of Dominguez and Cagasan was for a valid and
authorized cause, and dismissed their complaints.
The position of personnel manager occupied by Martina Cagasan was

redundated as it is allegedly not necessary, because her
_______________
19 Id., at pp. 124-125.

20 Id., at pp. 161-163.
289
VOL. 456, APRIL 15, 2005 289

functions will be taken over [by] the field superintendent and the company’s
personnel and operations manager. The work of Carmencita Dominguez on
the other hand as telephone operator will be taken over by the accounting
department personnel. Such move really are intended to streamline
operations. While admittedly, they are still necessary in the operations of
Wack Wack, their jobs can be assigned to some other personnel, who will be
performing dual functions and does save Wack Wack money. This is
feasible on account of the fact that they are functions pertaining to
21
administrative work.
As to Baluyot, however, the Labor Arbiter found that while the

position of chief porter had been abolished, the caddie master aide
had been created. Their functions were one and the same. The
porters, upon instructions from the chief porter, are the ones who
bring down the golf bags of the players from the vehicle. The caddie
master receives them and counts the number of clubs inside the golf
set. After the game, the same procedure is repeated before the golf
22
sets are loaded once more into the vehicle. The Labor Arbiter
found that the dismissal of Baluyot as Chief Porter was unjustified
and can not be considered redundant in the case at bar. It was a
means resorted to in order to unduly sever Baluyot’s relationship
with BSMI without justifiable cause. The Labor Arbiter therefore
found Baluyot’s dismissal to be illegal. The dispositive portion of
the decision reads as follows:
“CONFORMABLY WITH THE FOREGOING, judgment is hereby

rendered dismissing the complaints of Carmencita F. Dominguez and
Martina Cagasan for lack of merit. Finding Crisanto Baluyot’s dismissal to
be illegal. Consequently, he should immediately be reinstated to his former
position as Chief Porter or Caddie Master, and paid his backwages which, as
of December 31, 1999, has accumulated in the sum of P180,000.00 by
BSMI.
23
All other claims are dismissed for lack of merit.”
_______________
21 Id., at p. 171.
22 Id.
23 Id., at p. 173.
290

Commission
Since Baluyot no longer appealed the decision, complainants

Dominguez and Cagasan filed a Partial Appeal on the ground of
prima facie abuse of discretion on the part of the Labor Arbiter and
serious errors in his findings of facts and law. Their claims were
anchored on the Agreement between the Union and management,
that they were promised to be rehired upon the full resumption of
operations of Wack Wack. They asserted that Wack Wack and BSMI
should not avoid responsibility to their employment, by conniving
with each other to render useless and meaningless the Agreement.
BSMI also appealed to the NLRC, alleging that the Labor Arbiter
committed grave abuse of discretion in finding Baluyot’s dismissal
to be illegal, when in fact his position as Chief Porter was abolished
pursuant to a bona fide reorganization of Wack Wack. It was not
motivated by factors other than the promotion of the interest and
welfare of the company. 24
On September 27, 2000, the NLRC rendered its Decision
ordering Wack Wack to reinstate Carmencita F. Dominguez and
Martina Cagasan to their positions in respondent Wack Wack Golf &
Country Club with full backwages and other benefits from the date
of their dismissal until actually reinstated. It anchored its ruling on
the Agreement dated June 16, 1997 25reached between the Union and
Wack Wack, particularly Section 4 thereof. The NLRC directed
Wack Wack to reinstate the respondents and pay their backwages
since “Business Staffing and Management, Inc. (BSMI) is a
contractor who [merely] supplies workers to respondent Wack
Wack. It has nothing to do with the grievance of the complainants
with their employer, respondent Wack Wack.”
_______________
24 Id., at pp. 212-216.

25 See Note 3.
291
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Commission
Wack Wack and BSMI filed 26

a motion for reconsideration which was
denied in the Resolution dated December 15, 2000.
Wack Wack, now the petitioner, consequently filed a petition for
certiorari with the Court of Appeals, docketed as CA-G.R. SP No.
63658 alleging the following:
A. RESPONDENT NLRC COMMITTED GRAVE ABUSE

OF DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION AND DENIAL OF DUE PROCESS
IN HOLDING THAT RESPONDENTS CAGASAN AND
DOMINGUEZ HAVE REGAINED THEIR JOBS OR
EMPLOYMENT PURSUANT TO THE AGREEMENT
BETWEEN PETITIONER AND WACK WACK GOLF
EMPLOYEES UNION.
B. RESPONDENT NLRC COMMITTED GRAVE ABUSE
IN RULING THAT RESPONDENT BSMI IS NOT AN
INDEPENDENT CONTRACTOR BUT A MERE
SUPPLIER OF WORKERS TO THE PETITIONER.
C. RESPONDENT NLRC COMMITTED GRAVE ABUSE
IN HOLDING PETITIONER LIABLE FOR THE
REINSTATEMENT OF RESPONDENTS CAGASAN
AND DOMINGUEZ AND FOR THE PAYMENT OF
THEIR SUPPOSED BACKWAGES DESPITE THE
ABSENCE OF EMPLOYER-EMPLOYEE RELATION
27
BETWEEN THEM.
Likewise, BSMI also assailed the resolutions of the NLRC and filed
its own petition
28
for certiorari with the CA, docketed as CA-G.R. SP
No. 63553. A perusal of the petition which is
_______________
26 Id., at p. 236.
27 CA Rollo, p. 13.
28 A decision was promulgated on March 31, 2004 where the CA upheld the
validity of the dismissal of Cagasan, Dominguez and Baluyot on the ground of
redundancy. The CA thereby reversed and set aside the Resolutions of the NLRC
dated September 27, 2000 and
292

Commission
attached to the records reveal that BSMI ascribes grave abuse of

discretion on the part of the NLRC in ruling that: (a) the private
respondents have regained their employment pursuant to the
Agreement between Wack Wack and the Wack Wack Golf
Employees Union; (b) the dismissal of private respondents was
made pursuant to the petitioner’s exercise of its management
prerogatives; and (c) the petitioner (BSMI) is liable for the
reinstatement of private respondents and the payment of their
29
backwages.
On April 3, 2001, the CA (Twelfth Division) dismissed the
petition on the ground that the petitioner therein failed to attach an
Affidavit of Service as required in Section 11, Rule 13 of the 1997
Rules of Civil Procedure. Moreover, the verification and certification
against forum shopping was insufficient for having been executed by
the general manager who claimed to be the duly-authorized
representative of the petitioner, but did not show any proof of
authority, i.e., a board resolution, to the effect.
A motion for reconsideration was, consequently, filed appending
thereto the requisite documents of proof of authority. It asserted that
in the interest of substantial justice, the CA should decide the case
on its merits.
30
BSMI filed a Comment to the Motion for Reconsideration of
the petitioner, also urging the CA to set aside technicalities and to
consider the legal issues involved: (a) whether or not there is a
guaranty of employment in favor of the complainants under the
Agreement between the petitioner and the Union; (b) whether or not
the termination of the employment of the complainants, based on
redundancy, is legal and valid; and (c) who are the parties liable for
the reinstatement of the complainants and the payment of
backwages. It further added
_______________
December 15, 2000. Said case became final and executory and entry of judgment
was made in due course on August 8, 2004.
29 CA Rollo, pp. 249-250.
30 Id., at pp. 233-236.
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Commission
that it shares the view of the petitioner, that the assailed resolutions
of the NLRC are tainted with legal infirmities. For this reason, it was
also constrained to file its own petition for certiorari with the CA,
docketed as CA-G.R. SP No. 63553 pending with the Special Fourth
Division, just to stress that there is no guaranty of perpetual
employment in favor of the complainants.
On August 31, 2001, the CA denied petitioner’s motion for
reconsideration.
The petitioner is now before the Court, assailing the twin
resolutions of the CA. It points out that BSMI has filed its petition
for certiorari before the CA one day late and yet, the Special Fourth
Division admitted the petition in the interest of substantial
31
justice,
and directed the respondents to file a comment thereon; whereas, in
the instant case, the mere lack of proof of authority of Wack Wack’s
General Manager to sign the certificate of non-forum shopping was
considered fatal by the CA’s Twelfth Division. It further asserts that
its petition for certiorari is meritorious, considering that the NLRC
committed grave abuse of discretion in ordering Wack Wack to
reinstate the respondents Cagasan and Dominguez, and to pay their
backwages when indubitable evidence shows that the said
respondents were no longer employees of Wack Wack when they
filed their complaints with the Labor Arbiter.
There is merit in the petition.
32
In Novelty Philippines, Inc. v. Court of Appeals, the Court
recognized the authority of the general manager to sue on behalf of
the corporation and to sign the requisite verification and certification
of non-forum shopping. The general manager is also one person who
is in the best position to know the state of affairs of the corporation.
It was also error for the CA not to admit the requisite proof of
authority when in the Novelty
_______________
31 Rollo, p. 313.
32 G.R. No. 146125, 17 September 2003, 411 SCRA 211.
294

Commission
case, the Court ruled that the subsequent submission of the requisite
documents constituted substantial compliance with procedural rules.
There is ample jurisprudence holding that the subsequent and
substantial compliance of an appellant may call for the relaxation of
33
the rules of procedure in the interest of justice. While it is true that
rules of procedure are intended to promote rather than frustrate the
ends of justice, and while the swift unclogging of court dockets is a
laudable objective, it nevertheless must not be met at the expense of
34
34
substantial justice. It was, therefore, reversible error for the CA to
have dismissed the petition for certiorari before it. The ordinary
recourse for us to take is to remand the case to the CA for proper
disposition on the merits; however, considering that the records are
now before us, we deem it necessary to resolve the instant case in
order to ensure harmony in the rulings and expediency.
Indeed, the merits of the case constitute special or compelling
reasons for us to overlook the technical rules in this case. With the
dismissal of its petition for certiorari before the CA, the petitioner by
virtue of the NLRC decision is compelled to reinstate respondents
Cagasan and Dominguez and pay their full backwages from the time
of their dismissal until actual reinstatement when the attendant
circumstances, however, show that the respondents had no cause of
action against the petitioner for illegal dismissal and damages.
It must be recalled that said respondents availed of the special
separation package offered by the petitioner. This special separation
package was thought of and agreed by the two parties (Wack Wack
and the Union) after a series of discussions and negotiations to avert
35
any labor unrest due to the closure of Wack Wack. Priority was
given to the employees of
_______________
33 Jaro v. Court of Appeals, G.R. No. 127536, 19 February 2002, 377 SCRA 282.
34 General Milling Corporation v. National Labor Relations Commission, G.R.
No. 153199, 17 December 2002, 394 SCRA 207.
35 Rollo, p. 73.
295
VOL. 456, APRIL 15, 2005 295

Commission
the F & B Department, but was, likewise, offered to the other

employees who may wish to avail of the separation package due to
the reconstruction of Wack Wack. Respondents do not belong to the
F & B Department and yet, on their own volition opted to avail of
the special separation package. The applications which were
similarly worded read as follows:
TO : WACK WACK GOLF & COUNTRY CLUB

BOARD OF DIRECTORS AND MANAGEMENT
Based on the information that the Club and the employees’ Union have
reached an agreement on a special separation benefit package equivalent to
one-and-one-half months salary for every year of service, regardless of the
number of years of service, for employees who have been affected and may
be affected by ongoing as well as forthcoming Club renovation, construction
and related activities and reportedly even for those who may not be affected
but wish to avail of an early retirement under the above package
arrangement, I hereby register my desire to be separated from the Club and
36
receive the benefits under the above stated package.
Thereafter, the respondents signed their respective release and

quitclaims after receiving their money benefits.
It cannot be said that the respondents in the case at bar did not
fully comprehend and realize the consequences of their acts. Herein
respondents are not unlettered persons who need special protection.
They held responsible positions in the petitioner-employer, so they
presumably understood the contents of the documents they signed.
There is no showing that the execution thereof was tainted with
deceit or coercion. Further, the respondents were paid hefty amounts
of separation pay indicating that their separation from the company
was for a valuable consideration. Where the person making the
waiver has done so voluntarily, with a full understanding thereof,
and the consideration for the quitclaim is credible and reasonable,
the transaction must be recognized as being a
_______________
36 Id., at pp. 76 and 80.
296

Commission
37
valid and binding undertaking. As in contracts, these quit-claims
amount to a valid and binding compromise agreement between the
38
parties which deserve to be respected.
39
We reiterate what was stated in the case of Periquet v. NLRC
that:
Not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the
waiver was wangled from an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law will step in to annul
the questionable transaction. But where it is shown that the person making
the waiver did so voluntarily, with full understanding of what he was doing,
and the consideration for the quitclaim is credible and reasonable, the
40
transaction must be recognized as a valid and binding undertaking. . . .
When the respondents voluntarily signed their quitclaims and

accepted the separation package offered by the petitioner, they,
thenceforth, already ceased to be employees of the petitioner.

Nowhere does it appear in the Agreement that the petitioner assured
the respondents of continuous employment in Wack Wack. Qualified
employees were given priority in being hired by its concessionaires
and/or contractors such as BSMI when it entered into a management
contract with the petitioner.
This brings us to the threshold issue on whether or not BSMI is
an independent contractor or a labor-only contractor. The NLRC
posits that BSMI is merely a supplier of workers
_______________
37 Magsalin v. National Organization of Working Men, G.R. No. 148492, 9 May

2003, 403 SCRA 199.
38 Samaniego v. National Labor Relations Commission, G.R. No. 93059, 3 June
1991, 198 SCRA 111.
39 G.R. No. 91298, 22 June 1990, 186 SCRA 724.
40 Id., at pp. 730-731.
297
VOL. 456, APRIL 15, 2005 297

Commission
or a labor-only contractor; hence, the petitioner remains to be the

principal employer of the respondents and liable for their
reinstatement and payment of backwages.
The ruling of the NLRC is wrong. An independent contractor is
one who undertakes “job contracting,” i.e., a person who: (a) carries
on an independent business and undertakes the contract work on his
own account under his own responsibility according to his own
manner and method, free from the control and direction of his
employer or principal in all matters connected with the performance
of the work except as to the results thereof; and (b) has substantial
capital or investment in the form of tools, equipments, machineries,
work premises and other materials which are necessary in the
conduct of the business. Jurisprudential holdings are to the effect
that in determining the existence of an independent contractor
relationship, several factors may be considered, such as, but not
necessarily confined to, whether or not the contractor is carrying on
an independent business; the nature and extent of the work; the skill
required; the term and duration of the relationship; the right to
assign the performance of specified pieces of work; the control and
supervision of the work to another; the employer’s power with
respect to the hiring, firing, and payment of the contractor’s workers;
the control of the premises; the duty to supply premises, tools,
appliances, materials and labor; and the mode, manner and terms of
41
payment.
There is indubitable evidence showing that BSMI is an
independent contractor, engaged in the management of projects,
business operations, functions, jobs and other kinds of business
ventures, and has sufficient capital and resources to undertake its
principal business. It had provided management services to various
industrial and commercial business establishments. Its Articles of
Incorporation proves its suffi-
_______________
41 New Golden City Builders & Development Corporation v. Court of Appeals,

G.R. No. 154715, 11 December 2003, 418 SCRA 411.
298

Commission
cient capitalization. In December 1993, Labor Secretary Bienvenido

Laguesma, in the case of In re Petition for Certification Election
Among the Regular Rank-and-File Employees Workers of Byron-
Jackson (BJ) Services International Incorporated, Federation of
42
Free Workers (FFW)-Byron Jackson Services Employees Chapter,
recognized BSMI as an independent contractor. As a legitimate job
contractor, there can be no doubt as to the existence of an employer-
43
employee relationship between the contractor and the workers.
BSMI admitted that it employed the respondents, giving the said
retired employees some degree of priority merely because of their
work experience with the petitioner, and in order to have a smooth
44
transition of operations. In accordance with its own recruitment
policies, the respondents were made to sign applications for
employment, accepting the condition that they were hired by BSMI
as probationary employees only. Not being contrary to law, morals,
good custom, public policy and public order, these employment
contracts, which the parties are bound are considered valid.
Unfortunately, after a study and evaluation of its personnel
organization, BSMI was impelled to terminate the services of the
respondents on the ground of redundancy. This right to hire and fire
45
is another element of the employer-employee relationship which
actually existed between the respondents and BSMI, and not with
Wack Wack.
There being no employer-employee relationship between the
petitioner and respondents Cagasan and Dominguez, the latter have
no cause of action for illegal dismissal and damages against the
petitioner. Consequently, the petitioner can-
_______________
42 Rollo, p. 108.
43 Coca Cola Bottlers Phils., Inc. v. National Labor Relations Commission, G.R.
No. 120466, 17 May 1999, 307 SCRA 131.
44 CA Rollo, p. 18.
45 Tan v. Lagrama, G.R. No. 151228, 15 August 2002, 387 SCRA 393.
299
VOL. 456, APRIL 15, 2005 299

Commission
not be validly ordered to reinstate the respondents and pay them

their claims for backwages.
WHEREFORE, the petition is GRANTED. The Resolutions of
the Court of Appeals and the NLRC are SET ASIDE and
REVERSED. The complaints of respondents Cagasan and
Dominguez are DISMISSED. No costs.
SO ORDERED.
Puno (Chairman), Austria-Martinez, Tinga and Chico-

Nazario, JJ., concur.
Petition granted, resolutions set aside and reversed. Complaints

dismissed.
Notes.—The principal and the contractor are jointly and

severally liable to the employees for the latter’s money claims.
(Helpmate, Inc. vs. National Labor Relations Commission, 276
SCRA 315 [1997])
When a worker possesses some attributes of an employee and
others of an independent contractor, which make him fall within an
intermediate area, he may be classified under the category of an
employee when the economic facts of the relations make it more
nearly one of employment than one of independent business
enterprise with respect to the ends sought to be accomplished.
(Social Security System vs. Court of Appeals, 348 SCRA 1 [2000])
——o0o——
300
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3/10/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 456

280 SUPREME COURT REPORTS ANNOTATED

WACK WACK GOLF & COUNTRY CLUB, petitioner, vs.

Actions; Certiﬁcate of Non-Forum Shopping; Pleadings and Practice;

VOL. 456, APRIL 15, 2005 281

procedure in the interest of justice.—In Novelty Philippines, Inc. v. Court of

rules of procedure in the interest of justice. While it is true that rules of

282 SUPREME COURT REPORTS ANNOTATED

Same; Independent Contractors; Words and Phrases; An independent

relationship; the right to assign the performance of speciﬁed pieces of work;

VOL. 456, APRIL 15, 2005 283

Same; Same; Where there is no employer-employee relationship

PETITION for review on certiorari of the resolutions of the Court of

The facts are stated in the opinion of the Court.

CALLEJO, SR., J.:

284 SUPREME COURT REPORTS ANNOTATED

the Food and Beverage (F & B) Department one (1) month

1. The UNION and the affected employees of F & B who are

one-and-one-half months salary for every year of service,

VOL. 456, APRIL 15, 2005 285

3. That the same package shall, likewise, be made available to

Respondent Carmencita F. Dominguez, who was then working in the

3 Id., at pp. 74-75.

286 SUPREME COURT REPORTS ANNOTATED

1. Golf operations management;

5. To provide and undertake administrative and support

VOL. 456, APRIL 15, 2005 287

Pursuant to the Agreement, the retired employees of Wack Wack by

1. Skills and Talent Employment Promotion (STEP) whose 90

Due to these various management service contracts, BSMI

of its assessment, BSMI saw that the positions of Cagasan and

16 Id., at pp. 118-119.

288 SUPREME COURT REPORTS ANNOTATED

The position of personnel manager occupied by Martina Cagasan was

19 Id., at pp. 124-125.

VOL. 456, APRIL 15, 2005 289

As to Baluyot, however, the Labor Arbiter found that while the

“CONFORMABLY WITH THE FOREGOING, judgment is hereby

290 SUPREME COURT REPORTS ANNOTATED

Since Baluyot no longer appealed the decision, complainants

24 Id., at pp. 212-216.

VOL. 456, APRIL 15, 2005 291

Wack Wack and BSMI ﬁled 26

A. RESPONDENT NLRC COMMITTED GRAVE ABUSE

292 SUPREME COURT REPORTS ANNOTATED

attached to the records reveal that BSMI ascribes grave abuse of

VOL. 456, APRIL 15, 2005 293

294 SUPREME COURT REPORTS ANNOTATED

VOL. 456, APRIL 15, 2005 295

the F & B Department, but was, likewise, offered to the other

TO : WACK WACK GOLF & COUNTRY CLUB

Thereafter, the respondents signed their respective release and

36 Id., at pp. 76 and 80.

296 SUPREME COURT REPORTS ANNOTATED

When the respondents voluntarily signed their quitclaims and

thenceforth, already ceased to be employees of the petitioner.

37 Magsalin v. National Organization of Working Men, G.R. No. 148492, 9 May

VOL. 456, APRIL 15, 2005 297

or a labor-only contractor; hence, the petitioner remains to be the