Bianca Danica Santiago Villarama

G.R. No. 181972 August 25, 2009 Chico-Nazario., J.

PHILIPPINE HOTELIERS, INC., DUSIT HOTEL NIKKO-MANILA petitioner, vs.
NATIONAL UNION OF WORKERS IN HOTEL, RESTAURANT AND ALLIED INDUSTRIES
(NUWHRAIN) - DUSIT HOTEL NIKKO CHAPTER, respondent.

11/5/01 - Wage Order No. 9 (WO#9) took effect. It granted P 30 ECOLA to all private sector workers
and employees in NCR with a daily wage rate of P 250 to P 290.
3/20/02 - NUWHRAIN (Union) sent a letter to Director Maraan of DOLE-NCR reporting the non-
compliance of Dusit with the ECOLA required under WO#9 while there was an ongoing compulsory
arbitration before the NLRC due to a bargaining deadlock between the Union and Dusit.
Labor Standards Officer Navidad conducted 2 inspections of the hotel. The first inspection revealed the
employees were receiving more than P 290 daily wage, hence WO#9 did not apply (note: payrolls were not
submitted yet). The second inspection revealed there were 144 employees affected by WO#9.
10/09/02 - NLRC rendered a decision in the compulsory arbitration granting 3 rounds of wage
increases (P 500/mo. retroacting to Jan. 1, 2001; P 550/mo. in Jan 1, 2002; P 600/mo. in Jan. 1, 2003).
10/22/02 - DOLE-NCR issued a Compliance Order directing the hotel to pay the 144 affected employees
the total amount of P1,218,240 corresponding to unpaid ECOLA under WO#9, plus the penalty of double
indemnity, pursuant to Section 12 of RA 6727.
o Dusit filed an MR. It alleged the DOLE-NCR Order had become moot and academic considering the
wage increase granted by the NLRC, which took the employees out of the coverage of WO#9.
DOLE-NCR set aside its Order and dismissed the complaint of the Union.
o The Union appealed before the DOLE Secretary, maintaining the wage increases granted by the
NLRC should not be deemed compliance by Dusit with WO#9. DOLE Acting Sec. Imson initially
granted the Union's appeal, but later reversed upon Dusit's MR. He admitted he had disregarded
that the wage increase granted in the NLRC decision retroacted to Jan. 1, 2001. Hence, the wage
increase already constituted complience with WO#9. Union filed an MR which was denied.
o The Union appealed to the CA, which ruled in their favor. Referring to Section 13 of WO#9, the CA
declared that wage increases/allowances granted by the employer shall not be credited as
compliance with the prescribed increase in the WO, unless so provided in the law or the CBA itself.
CA ordered Dusit to pay ECOLA to the 144 employees. Dusit filed an MR which was denied.

W/N the 144 affected employees are still entitled to the ECOLA under WO#9 despite the wage increases
NO. Only 82 employees are still entitled to the ECOLA (1st tranch) after applying the wage increase.
The reliance of the Union on Section 13 of WO#9 is misplaced. This section would apply only if Dusit
were proposing to pay its employees the wage increases in place of the ECOLA. The position of Dusit
is merely that the retroactive increases place said employees beyond the coverage of WO No. 9.
The retroactively increased salaries of the employees granted in the NLRC decision should be used as
bases for determining W/N they were entitled to ECOLA under WO#9. Otherwise, the Court would be
sanctioning unjust enrichment on the part of the employees.
After applying the 1st round of the wage increase, only 82 hotel employees had daily salary
rates falling within the range of P250 to P290. Thus, upon the effectivity of WO#9, only the said 82
employees were entitled to receive the first tranch of ECOLA, equivalent to P15 per day.
After the 2nd round of the wage increase, the daily salary rates of all hotel employees were already
above P 290. Consequently, by 01/01/02, no hotel employee was qualified to receive ECOLA.
W/N (as Dusit argues) the 82 employees' receipt of their shares in the service charges already
constituted substantial compliance with WO#9 NO.
Pursuant to Labor Code Art. 96, the hotel employees have a right to their share in the service charges.
Undoubtedly, their right to their shares in the service charges collected by Dusit is distinct and separate
from their right to ECOLA; gratification by Dusit of one does not result in the satisfaction of the other.
W/N Dusit is liable for the penalty of double indemnity NO.
Under Section 2(m) of DOLE Department Order No. 10, Series of 1998, the Notice of Inspection Result
(issued prior to the Compliance Order) should contain an advice that the employer shall be liable for
double indemnity in case of refusal/failure to correct the violation within 5 calendary days. Here, the
Notice of Inspection Reult dated 05/29/02 did not contain such an advice. This deprived Dusit of the
opportunity to decide and act accordingly within the 5-day period so as to avoid the penalty.