Supreme Court Ruling: Hotel waiters are regular

Yes, I know, business is difficult. But labor laws are not suspended during the pandemic. The law on regular employment applies even during the COVID crisis. Management cannot circumvent the law by giving waiters and other employees in hotels and restaurants a series of five-month fixed-term contracts. The days of “endo” and “5-5-5” are over. President Duterte and DOLE Secretary Bello are going to run after you.

And the Supreme Court keeps on issuing decisions that uphold the workers' security of tenure. Not because they are anti-business. They are only interpreting and implementing the law. On October 5, 2020, at the height of the pandemic, the High Court decided the case of Allan Regala vs. Manila Hotel Corporation (GR 204684). This guy was hired in 2000 and continuously worked as a waiter until 2009, when was constructively dismissed by not giving him more work. He sued the hotel for illegal dismissal, and the labor arbiter dismissed the case in 2010. The NLRC, on appeal, decided that Regala was illegally dismissed. In 2012, the Court of Appeals reversed the NLRC and held that the arbiter was correct in dismissing the complaint. The Supreme Court, in 2020, after eight years of waiting, declared that Regala winner and that management had dismissed him illegally.

The High Court ruled that Regala was a regular employee because the tasks of waiters are necessary and desirable, if not indispensable, to the business of Manila Hotel. It was emphasized that what determines regular status is the provision of law and not the stipulation between the employer and the employee in their contracts. In this regard, I feel it is imperative to quote the provision of Article 295 of the Labor Code: "The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable, in the usual business or trade of the employer xxx". Although fixed-term employment is allowed in proper cases, it is prohibited when the scheme is availed of to circumvent the law on security of tenure.

Fixed-term employment is valid only when the employer and employee were dealing with each other on equal footing. Not one should have moral ascendancy over the other. The contract should not be one prepared by management and the only participation by the employee was to affix his signature. The legitimacy of fixed-term employment is negated when the contract is repeated or renewed a number of times. The series of renewals are always perceived as an indicator of regularity and desirability of the activities. The management was deemed to have abused its superior knowledge, superior power over the poor waiter, who did not have a bargaining leverage. Thus, the court decided in favor of the waiter.

Now, for the waiter, considering that he was dismissed here in 2009, and the decision in his favor was promulgated in 2020, that means a lot of backwages covering 11 years of salaries. Assuming that his gross salary was P20,000 a month (basic plus all benefits), multiplied by 122 months plus 11 thirteenth month payments, that would be P20,000 times 133 months or P2.6 million. Based on the doctrine in the case of Nacar vs. Gallery Frames, there must be a 6% interest imposed over that amount. Then attorney's fees of 10% shall be added because the waiter had to pay his lawyer and spent other litigation expenses. In some cases, of illegal dismissals, moral damages, and exemplary damages are awarded when there was bad faith and the termination was done in a cruel and oppressive manner.

The next time you eat in a hotel or restaurant, ask the waiter: Are you regular or “endo”? My advice to waiters is to assert their rights. My advice to management is to get a very competent adviser to guide them along the path of the Labor Code and the ethical HR practices, from hiring to retiring. To help both parties, I am giving free lectures every Thursday evening at 6 to 8 p.m. via Zoom. Just follow my Facebook and YouTube and coordinate with the UV College of Law, Associate Dean Atty. Darling Wagas for the links. Knowledge is power, and it is better to be forewarned than to regret.