Philippine Hoteliers Inc.

v NUWHRAIN-APL-IUF (2009)

Petitioners: Philippine Hoteliers Inc, Dusit Hotel Nikko-Manila

Respondents: National Union of Workers In Hotel, Restaurant and Allied Industries

Service Charges

Chico-Nazario, J.

FACTS:

 Wage Order No. 9 was approved by the Regional Tripartite Wages and Productivity Board which took effect
on Nov. 5, 2001. It granted P30 ECOLA to particular employees and workers of all private sectors.
 Those covered by the WO were those receiving daily wage rates of P250 up to P290. The ECOLA would be
payable in two tranches – the first being effective on Nov. 5 and the second on Feb. 1, 2002.
 On March 2002, respondent Union sent a letter to DOLE-NCR reporting the non-compliance of Dusit Hotel
with WO No. 9. At the same time, there was an on-going compulsory arbitration before the NLRC due to a
bargaining deadlock between the Union and Dusit Hotel.
 DOLE-NCR then conducted inspections in Dusit Hotel’s premises which revealed that 144 employees were
covered by the implementation of WO No. 9 hence entitled to receive ECOLA. Because of this, it directed
the hotel to effect restitution for the correction of the noted violations through an Order.
 In the meantime, NLRC rendered a decision in the compulsory arbitration between the CBA deadlock of
Dusit and the Union. It granted the hotel employees wage increases of P500/month (effective Jan. 1, 2001),
P500/month (Jan. 1, 2002), P600/month (Jan. 1, 2003).
 DOLE-NCR: granted appeal of Dusit - the NLRC decision granting the wage increases under the CBA to
hotel employees retroactive to Jan. 1, 2001 rendered the DOLE-NCR Order moot and academic as it would
remove the employees from the ambit of WO No. 9. DOLE-NCR granted the motion.
 DOLE Secretary: granted the appeal of the Union and stated that the wage increase under the CBA shall not
be credited as compliance with the wage order. Dusit appealed and the DOLE secretary reversed his order
– wage increase taken together with the hotel employees’ share in the service charges of Dusit Hotel
constituted compliance with WO No. 9.
 CA: ruled for the Union - wage increase not compliance unless so provided in the law or the CBA which it
did not in both cases; Dusit failed to substantiate its position that receipt by its employees of service charges
collected also deemed substantial compliance with the payment of ECOLA.

ISSUE/S:

 WoN the 144 hotel employees were still entitled to ECOLA granted by WO No. 9 despite their salary
increase: NO
o Sec 1 of WO No 9 plainly stated that only private sector workers and employees in the NCR
receiving daily wage rates of P250 to P290 shall be entitled to ECOLA. It took effect on Nov. 5,
2001. Meanwhile the salary increases were retroactive to January 1, 2001.
o Dusit: included retroactive salary increases in computing ng the daily salaries of its employees
o Union: determination should be based on the hotel employees’ daily salaries exclusive of the
retroactive salary increases
o SC: agrees with Dusit that the increased salaries should be used as bases for determining whether
they were entitled to ECOLA under WO No. 9 since the NLRC decision stated that the increases
were retroactive to Jan. 1, 2001 and Jan. 1, 2002.
o There is no logic in recognizing salary increases for one purpose (to recover unpaid amounts
thereof) but not for the other (to determine entitlement to ECOLA). It would be unjust enrichment on
the employees’ part who would be receiving increases in their salaries and ECOLA even if they are
not covered by the wage order.
 o After the Jan. 1, 2001 increase, 82 hotel employees would be within the range to receive ECOLA
on Nov. 5 in its first tranch. After the Jan. 1, 2002 increase, no more hotel employees would be
qualified to receive ECOLA.
 WoN receipt by the hotel employees of their shares in service charges constitute substantial compliance
with the prescribed payment of ECOLA under WO No. 9: NO
o Under Art. 96 of the Labor Code, hotel employees have a right in their share in the service charges
collected by Dusit Hotel.
o Since it is explicitly mandated to its employees and management their respective shares in the
service charges collected, the hotel cannot claim that payment thereof to its 82 employees
constitute substantial compliance with the payment of ECOLA under WO No. 9.
o The right to their shares in the service charges is distinct and separate from their right to ECOLA.

HELD: CA decision AFFIRMED. Dusit to pay the 82 hotel employees eligible the first tranch of the ECOLA of P15/day
from Nov 5, 2001 to Dec 31, 2001.