National Union of Workers In Hotel Restaurant And Allied Industries (NUWHRAIN) - Philippine Plaza Chapter vs. Philippines Plaza Inc.

 National Union of Workers In Hotel Restaurant And Allied Industries (NUWHRAIN) - Philippine Plaza Chapter vs. Philippines Plaza Inc.

G.R. No.177524

JULY 23, 2014

DOCTRINE: The terms of the subject provision are clear and provide no room for any other interpretation.  As there is no ambiguity, the terms must be taken in their plain, ordinary and popular sense. Consequently, MMPSEU cannot rely on the rule that a contract of insurance is to be liberally construed in favor of the insured.  Neither can it rely on the theory that any doubt must be resolved in favor of labor.

FACTS:

The Union is the collective bargaining agent of the rank-and-file employees of respondent Philippine Plaza Holdings, Inc. (PPHI). PPHI and the Union executed the "Third Rank-and-File Collective Bargaining Agreement as Amended” (CBA). The CBA provided, among others, for the collection, by the PPHI, of a ten percent (10%) service charge on the sale of food, beverage, transportation, laundry and rooms.  The distributable amount will be shared equally by all HOTEL employees, including managerial employees but excluding expatriates, with three shares to be given to PPHI Staff and three shares to the UNION (one for the national and two for the local funds) that may be utilized by them for purposes for which the UNION may decide. Sometime thereafter, the Union’s Service Charge Committee informed the Union President, through an audit report (1st audit report) of uncollected service charges for the last quarter of 1998 amounting to ₱2,952,467.61. The Union presented this audit report to the PPHI’s management during the February 26, 1999 Labor Management Cooperation Meeting (LMCM). The PPHI’s management responded that the Hotel Financial Controller would need to verify the audit report.

Through a letter, the PPHI admitted liability for ₱80,063.88 out of the ₱2,952,467.61. The Union claimed the uncollected service charges. However, PPHI denied the rest of the Union’s claims. During the LMCM, the Union maintained its position on uncollected service charges so that a deadlock on the issue ensued. The parties agreed to refer the matter to a third party for the solution. They considered two options – voluntary arbitration or court action – and promised to get back to each other on their chosen option. When the parties failed to reach an agreement, the Union  filed before the LA a complaint for non-payment of specified service charges. Labor Arbiter: Dismissed the Union’s complaint for lack of merit. The LA declared that the Union failed to show, by law, contract and practice, its entitlement to the payment of service charges from the entries specified in its audit reports (specified entries/transactions).

NLRC: Reversed the LA’s decision and considered the specified entries/transactions as "service chargeable." As the PPHI failed to prove that it paid or remitted the required service charges, the NLRC held the PPHI liable to pay the Union ₱5,566,007.62 representing the claimed uncollected service charges for the years 1997, 1998 and 1999 per the 3rd audit report. The PHHI went to the CA on a petition for certiorari after the NLRC denied its motion for reconsideration.

CA: Granted the PPHI’s petition. It affirmed the LA’s decision but ordered the PPHI to pay the Union the amount of ₱80,063.88 as service charges that it found was due under the circumstances. The Union filed the present petition after the CA denied its motion for Reconsideration. 

ISSUE: 

Whether or not the Union may collect from the PPHI, under the terms of the CBA, its share of the service charges. 

HELD:

We affirm the CA’s decision to be legally correct as it correctly reversed the NLRC decision for grave abuse of discretion. In this case, the CA found that the PPHI had not in fact been collecting service charges on the specified entries/transactions that we pointed out as either falling under "negotiated contracts" and/or "special rates" or did not involve a "sale of food, beverage, etc." Accordingly, Article 96 of the Labor Code finds no application in this case; the PPHI did not abolish or terminate the implementation of any company policy providing for the collection of service charges on specified entries/transactions that could have otherwise rendered it liable to pay an amount representing the covered employees’ share in the alleged abolished service charges. The Union’s claim for service charges for the year 1997 and the early months of 1998 could not have yet prescribed at the time it filed its complaint on May 3, 2001; Article 1155 of the Civil Code applies suppletorily to Article 291 of the Labor Code.

“Article 291 (now Article 305) of the Labor Code states that "all money claims arising from employer-employee relations x x x shall be filed within three (3) years from the time the cause of action accrued; otherwise, they shall forever be barred." Like other causes of action, the prescriptive period for money claims under Article 291 of the Labor Code is subject to interruption. And, in the absence of an equivalent Labor Codeprovision for determining whether Article 291’s three-year prescriptive period may be interrupted, Article 1155 of the Civil Code may be applied. Thus, the period of prescription of money claims under Article 291 is interrupted by: (1) the filing of an action; (2) a written extrajudicial demand by the creditor; and (3) a written acknowledgment of the debt by the debtor.

In the present petition, the facts indisputably showed that as early as 1998, the Union demanded, via the 1st audit report, from the PPHI the payment and/or distribution of the alleged uncollected service charges for the year 1997. From thereon, the parties went through negotiations (LCMC) to settle and reconcile on their respective positions and claims. Under these facts – the Union’s written extrajudicial demand through its 1st audit report and the successive negotiation meetings between the Union and the PPHI – the running of the three-year prescriptive period under Article 291 of the Labor Code could have effectively been interrupted. Consequently, the Union’s claims for the alleged uncollected service charges for the year 1997 could not have yet prescribed at the time it filed its complaint on May 3, 2001. This non-barring effect of prescription, notwithstanding (i.e., that the running of the three-year prescriptive period had effectively been interrupted – by the Union's written extrajudicial demand on the PPHI), the CA, as it affirmed the LA, still correctly denied the Union's claims for the alleged uncollected and/or undistributed service charges on the specified entries/transactions for the year 1997 and the early part of 1998. As the CA found and discussed in its decision, and with which we agree as amply supported by factual and legal bases, the nature of these specified entries/transactions as either excepted from the collection of service charges or not constituting a "sale of food, beverage, etc.," and the Union's failure to support its claims by sufficient evidence warranted, without doubt, the denial of the Union's action. In sum, we find the CA's denial of the Union's claim for service charges from the specified entries/transactions legally correct and to be well supported by the facts and the law. The CA correctly reversed for grave abuse of discretion the NLRC's decision.




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