G.R. No. L-26146 October 31, 1969
SOCIAL SECURITY SYSTEM, petitioner, vs. THE HONORABLE COURT OF APPEALS, MANILA JOCKEY CLUB, INC., PHILIPPINE RACING CLUB, INC., respondents.

FACTS

The Social Security System (SSS) issued a resolution on July 3, 1963, holding that an employer-employee relationship exists between the Manila Jockey Club, Inc. and the Philippine Racing Club, Inc. (racing clubs) and the jockeys, thus bringing the jockeys under the coverage of the Social Security Act. The Court of Appeals set aside this resolution in its decision of February 4, 1966, declaring that jockeys are not employees of the racing clubs. The SSS appealed this decision to the Supreme Court via certiorari. The facts, as found by the Court of Appeals, are: 1) Only two racing clubs exist, and their personnel are prohibited from owning race horses. 2) Horse owners file declarations with the clubs for scheduled races, stating the horse and jockey’s name, with the jockey’s signature showing conformity. The clubs screen these for disqualifications, then print the program. 3) A maximum of 14 horses and jockeys participate per race. 4) From total bets, a portion is prize money, shared by the winning horse owner, jockey (20%), and trainer (10%). Jockeys of non-winning mounts receive nothing from the prize money. 5) Stewards, paid per diems by the clubs but licensed by the Games and Amusements Board (GAB), supervise races and enforce GAB rules. 6) Jockeys must secure a license from the GAB and pay a nominal fee to the club to use tracks, participate, or sit in the grandstand. 7) The clubs have regular employees (e.g., janitors, guards) already under SSS coverage. Evidence showed the selection and employment of a jockey is made by the horse owner, and the jockey decides which horse to mount, by mutual agreement. The racing club cannot compel a change in this agreement. The stewards’ powers derive from law and GAB rules, not the clubs, and their decisions are independent, controlling the jockeys, horse owners, and clubs during races.

ISSUE

Whether or not jockeys are employees of the Manila Jockey Club, Inc. and the Philippine Racing Club, Inc., such that they fall within the compulsory coverage of the Social Security Act.

RULING

No. The Supreme Court affirmed the decision of the Court of Appeals, holding that jockeys are not employees of the racing clubs. The Court applied the “control test” established in the controlling case of Investment Planning Corporation v. Social Security System to determine the existence of an employer-employee relationship. Under this test, the relationship exists when the employer controls or has the right to control the employee not only as to the result of the work but also as to the means and methods by which it is accomplished. The facts demonstrated the absence of such control by the racing clubs over the jockeys. The selection of the jockey is mutually agreed upon by the horse owner and the jockey, and the clubs cannot interfere with this choice. During the races, control is exercised by the stewards, whose authority is derived from law and GAB rules, not from the clubs. Furthermore, jockeys are not subject to definite hours or conditions of work by the clubs and are compensated based on a percentage of prize money (a result of their efforts), not a fixed wage. The Court rejected the petitioner’s plea to apply the “economic reality” or “economic facts of the relation” test, as this approach had already been considered and rejected in the Investment Planning Corporation decision. The Court adhered to the doctrine that where the element of control is absent, no employer-employee relationship exists for purposes of the Social Security Act.