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.

FACTS

A fire destroyed a portion of Wack Wack Golf & Country Club’s clubhouse, leading to the suspension of its Food and Beverage Department. The Club and its Employees Union entered into an Agreement offering a special separation package. Respondents Martina Cagasan and Carmencita Dominguez, employees from other departments, voluntarily availed of this package, receiving substantial sums and executing Release and Quitclaim documents in favor of Wack Wack. Subsequently, Wack Wack entered into a Management Contract with Business Staffing and Management, Inc. (BSMI) to handle various operational areas.
Pursuant to the Agreement’s provision for rehiring priority, Cagasan and Dominguez applied and were hired by BSMI as probationary project employees for assignment to Wack Wack. BSMI later terminated their services on the ground of redundancy. The respondents then filed complaints for illegal dismissal against both Wack Wack and BSMI before the Labor Arbiter, which were dismissed. The National Labor Relations Commission (NLRC) reversed this decision, holding Wack Wack and BSMI as solidarily liable. The Court of Appeals initially dismissed Wack Wack’s petition on technical grounds.

ISSUE

Whether an employer-employee relationship existed between Wack Wack and the respondents after they accepted the separation package and were subsequently hired by BSMI, thereby making Wack Wack solidarily liable for their alleged illegal dismissal.

RULING

No. The Supreme Court ruled that no employer-employee relationship existed between Wack Wack and the respondents after their valid separation. The acceptance of the separation benefits and the execution of the quitclaims, which were not shown to be vitiated by fraud or deceit, constituted a voluntary and valid severance of their employment with the Club. The essence of the Management Contract between Wack Wack and BSMI was the engagement of an independent contractor. The Court applied the four-fold test and found that BSMI had the sole power to hire, pay wages, discipline, and dismiss the respondents. The fact that the respondents performed work related to Wack Wack’s business and that the Club had a measure of control over the results of the contracted services did not establish an employer-employee relationship, as control over the means and methods of the work remained with BSMI. Consequently, Wack Wack could not be held solidarily liable for the termination effected by BSMI. The complaints for illegal dismissal against Wack Wack were dismissed.