MAKATI SPORTS CLUB, INC., PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION (NLRC) AND ROMULO GONZALES, RESPONDENTS.

Makati Sports Club versus National Labor Relations Commission and Romulo Gonzales

The Case

This is a labor case in which Makati Sports Club, Incorporated asks the Supreme Court to overturn a ruling of the National Labor Relations Commission that found its former worker, Romulo Gonzales, to be a regular employee who was illegally dismissed. The Club insists that Gonzales was merely an on call waiter and therefore could be let go at will. The case matters because it fixes the test for regularization under the Labor Code: length of service in an activity that is necessary and desirable in the employer's business, not the label the employer pins on the worker.

Procedural History

Romulo Gonzales filed a complaint for illegal dismissal, non payment of holiday pay, and thirteenth month pay before the Labor Arbiter. The Labor Arbiter dismissed the complaint for illegal dismissal for lack of merit, but ordered the Club to pay Gonzales his thirteenth month pay for the year 2001 in the amount of six thousand five hundred pesos, proportionate to the actual period of his employment. Gonzales appealed to the National Labor Relations Commission. The Commission reversed and set aside the Labor Arbiter's decision, declared Gonzales a regular employee who had been illegally dismissed, and ordered his reinstatement with full back wages and proportionate thirteenth month pay. The Club's motion for reconsideration was denied. The Club then came to the Supreme Court by petition, raising the sole issue of whether the Commission had gravely abused its discretion in ruling that Gonzales was a regular employee.

Facts

Romulo Gonzales was hired by Makati Sports Club sometime in March 2000 at a daily salary of two hundred fifty pesos, which he received on a weekly basis. He performed various assignments: waiter in the different outlets of the sports club, gym attendant, pool attendant, and locker attendant. On a regular schedule he worked from six o'clock in the morning to eight o'clock in the evening.

On September 18, 2002, Gonzales was no longer allowed to enter the premises of the Club. He was escorted by a guard inside only upon his request to retrieve his personal belongings. On October 9, 2002, he filed his complaint for illegal dismissal, non payment of holiday pay, and thirteenth month pay.

The Club's defense was that Gonzales was an on call waiter, that his activity was seasonal, and that he was hired for specific projects, functions, or parties, so that his employment ceased each time a specific project was accomplished. The Commission found no single piece of evidence to support this, and noted that the Club never reported any cessation of his services to the Department of Labor and Employment.

Issues

• Whether or not the National Labor Relations Commission committed grave abuse of discretion in ruling that Romulo Gonzales is a regular employee.
• Whether or not a gross error of judgment is the same as grave abuse of discretion correctible by the writ of certiorari.
• Whether or not Gonzales's dismissal was illegal for want of a just or authorized cause and due process.

Applicable Provisions

Article 280 of the Labor Code, as quoted in the decision, provides:

That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

This is the provision on which the entire ruling turns, because it fixes regular status by operation of law once one year of service is rendered in an activity necessary and desirable to the employer's business.

Rule 65 of the Rules of Court, as discussed in the decision, governs the writ of certiorari, which the Court describes in these words:

The writ of certiorari dealt with in Rule 65 of the Rules of Court is a prerogative writ, never demandable as a matter of right, never issued except in the exercise of judicial discretion.

This defines the narrow door through which the Club had to pass, since the writ corrects errors of jurisdiction and not mere errors of judgment.

Ruling

On the first issue, the Court held that the Commission committed no error, and it subscribed to the Commission's conclusion. Gonzales performed the usual functions of a waiter, which are undisputedly necessary and desirable in the usual business of the Club, and he served from June 2000 until his dismissal on September 18, 2002, a period of more than two years. Under Article 280, he became a regular employee as of June 2001. The Court stressed that the clear and unambiguous language of the last sentence of Article 280 admits of no exception, and that what the law excludes, it does not include. The nomenclature of on call waiter is beside the point. Before attaining regular status he was a casual employee, not a project employee, and the Club offered no evidence of any specific undertaking, season, or period, nor any report of cessation of services to the Department of Labor and Employment.

On the second issue, the Court held that the contention was bereft of merit. Grave abuse of discretion implies a capricious and whimsical exercise of power amounting to lack or excess of jurisdiction, or the exercise of power in an arbitrary or despotic manner by reason of passion or personal hostility. A mere error of judgment committed in the exercise of jurisdiction is not correctible by certiorari, whose sole office is the correction of errors of jurisdiction. Hence gross error is not tantamount to grave abuse of discretion.

On the third issue, the Court held that a regular employee may not be dismissed from service for want of a just or authorized cause and due process; otherwise, his dismissal is illegal. The Commission's award of reinstatement, back wages, and thirteenth month pay was therefore affirmed.

Doctrine

A Bar candidate should retain these rules. First, under Article 280 of the Labor Code, an employee who has rendered at least one year of service, whether continuous or broken, is a regular employee with respect to the activity in which he is employed, and his employment continues while that activity exists. Second, regular status is fixed by law and not by the label the employer gives the worker; calling him an on call or project employee does not defeat the law where the activity is necessary and desirable in the employer's business. Third, the last sentence of Article 280 admits of no exception; what the law excludes, it does not include. Fourth, a regular employee may be dismissed only for a just or authorized cause and with due process. Fifth, grave abuse of discretion means capricious and whimsical exercise of power, and a mere error of judgment is not correctible by certiorari under Rule 65.

Disposition

The petition was dismissed for lack of merit, and the assailed decision of the National Labor Relations Commission was affirmed in its entirety, sustaining Gonzales's reinstatement with back wages and thirteenth month pay.

Remember This

Memorize this line: the clear and unambiguous language of the last sentence of Article 280 admits of no exception, and what the law excludes, it does not include. Examiners use this case to test regularization by length of service despite an on call label, and to distinguish a gross error of judgment from grave abuse of discretion under Rule 65.