G.R. No. 177524 July 23, 2014
NATIONAL UNION OF WORKERS IN HOTEL RESTAURANT AND ALLIED INDUSTRIES (NUWHRAIN-APL-IUF), PHILIPPINE PLAZA CHAPTER, Petitioner, vs. PHILIPPINE PLAZA HOLDINGS, INC., Respondent.

FACTS

Petitioner Union, the collective bargaining agent for the rank-and-file employees of respondent Philippine Plaza Holdings, Inc. (PPHI), filed a complaint for non-payment of service charges and unfair labor practice. The parties’ Collective Bargaining Agreement (CBA) required PPHI to collect a 10% service charge on the sale of food, beverage, transportation, laundry, and rooms, except on negotiated contracts and special rates, and to distribute 95-100% of the collected amount to employees. The Union, through audit reports, claimed PPHI failed to collect and distribute service charges on various transactions from 1997-1999, including Journal Vouchers (covering Westin Gold Card revenue and Maxi-Media barter), Banquet Other Revenue, Staff and Promo, Guaranteed No Show, and F & B Revenue, totaling P5,566,007.62. PPHI admitted liability only for P80,063.88, contending the other items were either exempt (as negotiated contracts/special rates), were revenues belonging to third parties, or were non-revenue business expenses. The Labor Arbiter dismissed the complaint, ruling the Union failed to prove entitlement. The NLRC reversed, holding PPHI liable for the full claimed amount. The Court of Appeals reinstated the Labor Arbiter’s decision but ordered PPHI to pay the admitted P80,063.88, ruling the specified transactions were either exempt under the CBA or insufficiently proven by the Union.

ISSUE

Whether the respondent PPHI is obligated under the CBA to collect and distribute service charges on the specified transactions claimed by the petitioner Union.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ decision. The Court held that the obligation to distribute service charges to employees under the CBA arises only after the hotel has collected such charges. The Union failed to prove that PPHI collected, or was obligated to collect, a 10% service charge on the disputed transactions. The specified entries either fell under the CBA’s exemptions for “negotiated contracts” and “special rates” (e.g., the Maxi-Media barter agreement, business promotions, and staff perks) or did not involve the sale of the specific services enumerated in the CBA (e.g., Westin Gold Card sales involved a contractual right, not a direct sale of food or rooms; Gift Certificates were not themselves sales of services). The Court also found the Union’s claims for service charges accruing prior to May 3, 1998, had prescribed under the three-year prescriptive period in Article 291 of the Labor Code. The claim for unfair labor practice was dismissed for lack of merit, as PPHI’s refusal to pay was based on a valid interpretation of the CBA and did not constitute bad faith. PPHI was ordered to pay the Union the admitted amount of P80,063.88.