Doorman Peter Lee was all smiles as he watched crowds of shoppers file past the Grand Hyatt Union Square on Friday. He was happy to be back to work after the 38-day lockout.

"Everyone's happy, especially because we came back just in time for the holiday,'' Lee said. "Lots of people have said to me, 'Glad to see you back to work.' Even homeless guys have come by and said, 'Nice to see you back.'

"The only thing that worries me is that we're basically working without a contract,'' said Lee, who also wore a small "Proud 2 Be Union'' button, a subtle reminder that the labor dispute that caused a lockout of 4,300 workers at 14 major San Francisco hotels has not been fully settled.

Negotiators for the hotels and the union agreed last Saturday to a 60-day cooling-off period, which allowed locked-out workers to return starting as early as Tuesday evening. Both sides are expected to return to the bargaining table on Thursday to continue negotiations on such issues as pay increases, health care benefits and length of the contract.

Still, hotel workers who were on the other side of the picket lines just a few days ago were glad to see the union workers back at their posts instead of outside in the cold carrying picket signs and chanting.

"It's a relief,'' said Willis Roverso, a bellman at the Westin St. Francis. "My budget was really being stretched out.''

Roverso said it felt a little odd when he and other locked-out workers returned to work Wednesday. But he felt good about receiving hugs from co- workers he hadn't seen in weeks. "It's starting to feel a little more normal, '' he said.

Housekeeper Bemela Chanan was glad to be back. "People need the extra money for the holidays,'' she said. "You know how expensive it is to live in San Francisco.''

She also said she is "happy things worked out. It was hard for union leaders and it was hard for management.'' But she said she hopes the two sides can work out a new contract.

"I'm not really worried, but if I have to fight and go out again, I would go out,'' Chanan said. "This fight is still on.''

About the only looks of disappointment were on the faces of Nathan Rooke, 8, and his sister, Olivia, 6, from San Jose, who had hoped to see the usual big gingerbread house exhibit in the lobby of the St. Francis.

Their father, Steve Rooke, had wondered whether the gingerbread house was the victim of the lockout, but hotel workers said the gingerbread house would not appear this year because of changes being made to an adjacent restaurant.

"I'm glad the hotel workers are back so they can have some money to spend at Christmas time,'' Rooke said. "But now I hear we're going to have a grocery strike like we had in Southern California.''