GR 181972; (August, 2009) (Digest)
G.R. No. 181972 ; August 25, 2009
PHILIPPINE HOTELIERS, INC., DUSIT HOTEL NIKKO-MANILA, Petitioner, vs. NATIONAL UNION OF WORKERS IN HOTEL, RESTAURANT, AND ALLIED INDUSTRIES (NUWHRAIN-APL-IUF)- DUSIT HOTEL NIKKO CHAPTER, Respondents.
FACTS
Wage Order No. NCR-09, effective November 5, 2001, granted a ₱30.00 daily Emergency Cost of Living Allowance (ECOLA) to private sector workers in the NCR receiving daily wages between ₱250.00 and ₱290.00. Respondent Union reported petitioner Dusit Hotel Nikko’s non-compliance to the DOLE-NCR. After inspections, DOLE-NCR found 144 of the hotel’s employees entitled to the ECOLA and issued an Order on October 22, 2002, directing payment of ₱1,218,240.00 in unpaid allowances plus a penalty of double indemnity under Republic Act No. 6727 , as amended.
Dusit Hotel filed a Motion for Reconsideration, arguing that an NLRC Decision dated October 9, 2002, which resolved a collective bargaining deadlock and granted wage increases to employees retroactive to January 1, 2001, had rendered the DOLE Order moot. It contended that with these new wage rates and service charge shares, the 144 employees were no longer within the wage bracket covered by Wage Order No. 9. DOLE-NCR initially set aside its Order but later reinstated it upon the Union’s motion. The Court of Appeals affirmed the DOLE-NCR Order, including the double indemnity.
ISSUE
Whether the Court of Appeals erred in affirming the DOLE-NCR Order directing payment of ECOLA under Wage Order No. 9 and imposing the penalty of double indemnity.
RULING
The Supreme Court partially granted the petition. On the entitlement to ECOLA, the Court ruled that the NLRC-awarded wage increases, effective January 1, 2001, did not retroactively disqualify employees from receiving the ECOLA mandated by Wage Order No. 9 for the period it was in effect. The wage order created an immediate statutory obligation upon its effectivity on November 5, 2001. The subsequent NLRC Decision granting higher base wages did not extinguish the employer’s prior obligation to pay the separate ECOLA benefit for the covered period. Therefore, the 144 employees who fell within the specified wage bracket from November 5, 2001, until their wages exceeded the threshold were legally entitled to the allowance.
However, the Court deleted the imposition of double indemnity. The penalty under Section 12 of R.A. No. 6727 is criminal in nature and requires a finding of willful refusal or failure to pay. The DOLE-NCR’s Order was a mere compliance order, not a final judgment in a criminal action. The imposition of the civil liability aspect of double indemnity is inseparable from criminal liability and cannot be imposed administratively without a corresponding criminal conviction. Thus, while Dusit Hotel was ordered to pay the unpaid ECOLA, the penalty of double indemnity was removed.