LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
94.Bank of the Philippines Island vs.
NLRC, 171 SCRA 556
FACTS: On March 22, 1983, the NLRC
resolved the bargaining deadlock between
BPI and its employees by fixing the wage
increases and other economic benefits
and ordering them to be embodied in a
new collective bargaining agreement to be
concluded by BPIEU-Metro Manila and ALU
with BPI. It did not decide the intra-union
dispute, however, holding that this was
under the original jurisdiction of the medarbiter and the exclusive appellate
jurisdiction of the Bureau of Labor
Relations.
Following the promulgation by the NLRC of
its decision of March 23, 1983, in Certified
Cases Nos. 0279 and 0281, private
respondent Ignacio Lacsina filed a motion
for the entry of attorney's lien for legal
services to be rendered by him as counsel
of BPIEU in the negotiation of the new
collective bargaining agreement with BPI.
The basis of this motion was a resolution
dated August 26, 1982, signed by
members of the BPI Employees Union,
providing for the terms and conditions,
including attorneys fees and his authority
to
check-off
with
the
company.
Accordingly, BPI deducted the amount of
P200.00 from each of the employees who
had signed the authorization. Upon
learning about this, the petitioners (ALU
and BPIEU-ALU) challenged the said order,
on the ground that it was not authorized
under the Labor Code.
On April 15, 1983, the NLRC issued a
resolution setting aside the order and
requiring BPI to safe-keep the amounts
sought to be deducted "until the rights
thereto of the interested parties shall have
been
determined
in
appropriate
proceedings.
Subsequently, the NLRC
issued an en banc resolution dated
September 27, 1983, ordering the release
to Lacsina of the amounts deducted
"except with respect to any portion thereof
as to which no individual signed
authorization has been given by the
members concerned or where such
authorization has been withdrawn.

The petitioners now impugn this order as

contrary to the provisions and spirit of the
Labor Code. While conceding that Lacsina
is entitled to payment for his legal
services, they argue that this must be
made not by the individual workers
directly, as this is prohibited by law, but by
the union itself from its own funds. In
support of this contention, they invoke
Article 222(b) of the Labor Code, providing
as follows:
Art. 222. Appearances and Fees.
(b) No attorney's fees, negotiation fees or
similar charges of any kind arising from
any collective bargaining negotiations or
conclusions of the collective agreement
shall be imposed on any individual
member of the contracting union:
Provided, however, that attorneys fees
may be charged against union funds in an
amount to be agreed upon by the parties.
Any contract, agreement or arrangement
of any sort to the contrary shall be null
and void.
They also cite the case of Pacific Banking
Corporation v. Clave, where the lawyer's
fee was taken not from the total economic
benefits received by the workers but from
the funds of their labor union.
ISSUE: Is the mentioned Resolution signed
by the BPI employees granting attorneys
fees to Lacsina to be deducted from the
employees wages valid?
HELD: Yes. The Court reads the afore-cited
provision as prohibiting the payment of
attorney's fees only when it is effected
through forced contributions from the
workers from their own funds as
distinguished from the union funds.
The purpose of the provision is to prevent
imposition on the workers of the duty to
individually contribute their respective
shares in the fee to be paid the attorney
for his services on behalf of the union in
its negotiations with the management.
The obligation to pay the attorney's fees
belongs to the union and cannot be
shunted to the workers as their direct
responsibility. Neither the lawyer nor the
union itself may require the individual
workers to assume the obligation to pay
the attorney's fees from their own pockets.

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So categorical is this intent that the law
also makes it clear that any agreement to
the contrary shall be null and void ab
initio.
We see no such imposition in the case at
bar. A reading of the above-cited
resolution will clearly show that the
signatories thereof have not been in any
manner compelled to undertake the
obligation they have there assumed. On
the contrary, it is plain that they were
voluntarily authorizing the check-off of the
attorney's fees from their payment of
benefits and the turnover to Lacsina of the
amounts deducted, conformably to their
agreement with him. There is no
compulsion here. And significantly, the
authorized deductions affected only the
workers who adopted and signed the
resolution and who were the only ones
from whose benefits the deductions were
made by BPI. No similar deductions were
taken from the other workers who did not
sign the resolution and so were not bound
by it.
That only those who signed the resolution
could be subjected to the authorized
deductions was recognized and made
clear by the order itself of the NLRC. It was
there categorically declared that the
check-off could not be made where "no
individual signed authorization has been
given by the members concerned or
where such authorization has been
withdrawn.
The Pacific Banking Corporation case is
not applicable to the present case because
there was there no similar agreement as
that entered into between Lacsina and the
signatories of the resolution in question.
Absent such an agreement, there was no
question that the basic proscription in
Article 222 would have to operate. It is
noteworthy, though, that the Court there
impliedly recognized arrangements such
as the one at bar with the following
significant observation.
Moreover, the case is covered squarely by
the mandatory and explicit prescription of
Art. 222 which is another guarantee
intended to protect the employee against
unwarranted practices that would diminish

his compensation without his knowledge

and consent.
A similar recognition was made in
Galvadores v. Trajano, where the payment
of the attorney's fees from the wages of
the employees was not allowed because:
"No check-offs from any amount due to
employees may be effected without
individual written authorities duly signed
by the employees specifically stating the
amount, purpose and beneficiary of the
deduction.
The
required
individual
authorizations in this case are wanting.
Finally, we hold that the agreement in
question is in every respect a valid
contract as it satisfies all the elements
thereof and does not contravene law,
morals, good customs, public order, or
public policy. On the contrary, it enables
the workers to avail themselves of the
services of the lawyer of their choice and
confidence
under
terms
mutually
acceptable to the parties and, hopefully,
also for their mutual benefit.
95.Traders Royal Bank Employees
Union vs. NLRC, 269 SCRA 733
[1997]
FACTS: Petitioner Traders Royal Bank
Employees Union and private respondent
Atty. Emmanuel Noel A. Cruz, head of the
E.N.A. Cruz and Associates law firm,
entered into a retainer agreement on
February 26, 1987 whereby the former
obligated itself to pay the latter a monthly
retainer fee of P3,000.00 in consideration
of the law firm's undertaking to render the
services enumerated in their contract.
During the existence of that agreement,
petitioner union referred to private
respondent the claims of its members for
holiday, mid-year and year-end bonuses
against their employer, Traders Royal Bank
(TRB).
These
employees
obtained
favorable decision from their complaint
which went through the SC.
The Supreme Court, in its decision
promulgated on August 30, 1990, modified
the decision of the NLRC by deleting the
award of mid-year and year-end bonus
differentials while affirming the award of

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
holiday
pay
differential.
The
bank
voluntarily complied with such final
judgment and determined the holiday pay
differential to be in the amount of
P175,794.32. Petitioner never contested
the amount thus found by TRB. The latter
duly paid its concerned employees their
respective entitlement in said sum
through their payroll. After private
respondent received the above decision of
the Supreme Court on September 18,
1990, he notified the petitioner union, the
TRB management and the NLRC of his
right to exercise and enforce his attorney's
lien over the award of holiday pay
differential through a letter dated October
8, 1990.
Thereafter, on July 2, 1991, private
respondent filed a motion before Labor
Arbiter Lorenzo for the determination of
his attorney's fees, praying that ten
percent (10%) of the total award for
holiday pay differential computed by TRB
at P175,794.32, or the amount of
P17,579.43, be declared as his attorney's
fees, and that petitioner union be ordered
to pay and remit said amount to him. The
LA and the NLRC affirmed Atty. Cruz
motion.
Petitioner union filed a comment and
opposition to said motion on July 15, 1991.
Petitioner maintains that the NLRC
committed grave abuse of discretion
amounting to lack of jurisdiction in
upholding the award of attorney's fees in
the amount of P17,574.43, or ten percent
(10%) of the P175,794.32 granted as
holiday pay differential to its members, in
violation of the retainer agreement; and
that the challenged resolution of the NLRC
is null and void, for the reasons hereunder
stated.
Although petitioner union concedes that
the NLRC has jurisdiction to decide claims
for attorney's fees, it contends that the
award for attorney' s fees should have
been incorporated in the main case and
not after the Supreme Court had already
reviewed and passed upon the decision of
the NLRC. Since the claim for attorney's
fees by private respondent was neither
taken up nor approved by the Supreme

Court, no attorney's fees should have

been allowed by the NLRC. Thus,
petitioner posits that the NLRC acted
without jurisdiction in making the award of
attorney's fees, as said act constituted a
modification of a final and executory
judgment of the Supreme Court which did
not award attorney's fees. It then cited
decisions of the Court declaring that a
decision which has become final and
executory can no longer be altered or
modified even by the court which
rendered the same.
ISSUE: Whether or not Atty. Cruz is
entitled to 10 % of the judgment award as
his attorneys fees even if it was not taken
up in the main decision of the SC.
HELD:
Yes,
not
in
the
concept
contemplatedin Article 111 of the Labor
Code. The Labor Arbiter erroneously set
the amount of attorney's fees on the basis
of Art. 111 of the Labor Code; a hearing
should have been conducted for the
proper determination of attorney's fees.
There are two commonly accepted
concepts of attorney's fees, the so-called
ordinary and extraordinary. In its ordinary
concept, an attorney's fee is the
reasonable compensation paid to a lawyer
by his client for the legal services he has
rendered to the latter. The basis of this
compensation
is
the
fact
of
his
employment by and his agreement with
the client.
In its extraordinary concept, an attorney's
fee is an indemnity for damages ordered
by the court to be paid by the losing party
in a litigation. The basis of this is any of
the cases provided by law where such
award can be made, such as those
authorized in Article 2208, Civil Code, and
is payable not to the lawyer but to the
client, unless they have agreed that the
award shall pertain to the lawyer as
additional compensation or as part
thereof.
It is the first type of attorney's fees which
private respondent demanded before the
labor arbiter. Also, the present controversy
stems
from
petitioner's
apparent

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
misperception
that
the
NLRC
has
jurisdiction over claims for attorney's fees
only before its judgment is reviewed and
ruled upon by the Supreme Court, and
that thereafter the former may no longer
entertain claims for attorney's fees. It will
be noted that no claim for attorney's fees
was filed by private respondent before the
NLRC when it acted on the money claims
of petitioner, nor before the Supreme
Court when it reviewed the decision of the
NLRC. It was only after the High Tribunal
modified the judgment of the NLRC
awarding the differentials that private
respondent filed his claim before the NLRC
for a percentage thereof as attorney's
fees.

judgment in favor of the client is satisfied

or the proceeds thereof delivered to the
client. It is apparent from the foregoing
discussion that a lawyer has two options
as to when to file his claim for professional
fees. Hence, private respondent was well
within his rights when he made his claim
and waited for the finality of the judgment
for holiday pay differential, instead of filing
it ahead of the award's complete
resolution. To declare that a lawyer may
file a claim for fees in the same action
only before the judgment is reviewed by a
higher tribunal would deprive him of his
aforestated options and render ineffective
the foregoing pronouncements of this
Court.

It would obviously have been impossible, if

not improper, for the NLRC in the first
instance and for the Supreme Court
thereafter to make an award for attorney's
fees when no claim therefor was pending
before them. Courts generally rule only on
issues and claims presented to them for
adjudication. Accordingly, when the labor
arbiter ordered the payment of attorney's
fees, he did not in any way modify the
judgment of the Supreme Court.

The provisions of the contract entered into

between petitioner and respondents are
clear and need no further interpretation;
all that is required to be done in the
instant controversy is its application. The
P3,000.00 which petitioner pays monthly
to private respondent does not cover the
services the latter actually rendered
before the labor arbiter and the NLRC in
behalf of the former. As stipulated in Part
C of the agreement, the monthly fee is
intended merely as a consideration for the
law firm's commitment to render the
services enumerated in Part A (General
Services) and Part B (Special Legal
Services) of the retainer agreement.

A CLAIM FOR ATTORNEY'S FEES MAY BE

ASSERTED EITHER IN THE VERY ACTION IN
WHICH THE SERVICES OF A LAWYER HAD
BEEN RENDERED OR IN A SEPARATE
ACTION - It is well settled that a claim for
attorney's fees may be asserted either in
the very action in which the services of a
lawyer had been rendered or in a separate
action.
Attorney's
fees
cannot
be
determined until after the main litigation
has been decided and the subject of the
recovery is at the disposition of the court.
The issue over attorney's fees only arises
when something has been recovered from
which the fee is to be paid. While a claim
for attorney's fees may be filed before the
judgment is rendered, the determination
as to the propriety of the fees or as to the
amount thereof will have to be held in
abeyance until the main case from which
the lawyer's claim for attorney's fees may
arise has become final. Otherwise, the
determination to be made by the courts
will be premature. Of course, a petition for
attorney's fees may be filed before the

The difference between a compensation

for a commitment to render legal services
and a remuneration for legal services
actually
rendered
can
better
be
appreciated with a discussion of the two
kinds of retainer fees a client may pay his
lawyer. These are a general retainer, or a
retaining fee, and a special retainer.
RETAINER FEES, GENERAL RETAINER AND
A SPECIAL RETAINER A general retainer,
or retaining fee, is the fee paid to a lawyer
to secure his future services as general
counsel for any ordinary legal problem
that may arise in the routinary business of
the client and referred to him for legal
action. The future services of the lawyer
are secured and committed to the
retaining client. For this, the client pays
the lawyer a fixed retainer fee which could

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
be monthly or otherwise, depending upon
their arrangement. The fees are paid
whether or not there are cases referred to
the
lawyer.
The
reason
for
the
remuneration is that the lawyer is
deprived of the opportunity of rendering
services for a fee to the opposing party or
other parties. In fine, it is a compensation
for lost opportunities. A special retainer is
a fee for a specific case handled or special
service rendered by the lawyer for a client.
A client may have several cases
demanding special or individual attention.
If for every case there is a separate and
independent contract for attorney's fees,
each fee is considered a special retainer.
THE P3,000.00 MONTHLY FEE PROVIDED IN
THE RETAINER AGREEMENT BETWEEN THE
UNION AND THE LAW FIRM REFERS TO A
GENERAL RETAINER OR A RETAINING FEE.
The P3,000.00 which petitioner pays
monthly to private respondent does not
cover the services the latter actually
rendered before the labor arbiter and the
NLRC in behalf of the former. As stipulated
in Part C of the agreement, the monthly
fee is intended merely as a consideration
for the law firm's commitment to render
the services enumerated in Part A
(General Services) and Part B (Special
Legal Services) of the retainer agreement.
Evidently, the P3,000.00 monthly fee
provided in the retainer agreement
between the union and the law firm refers
to a general retainer, or a retaining fee, as
said monthly fee covers only the law firm's
pledge, or as expressly stated therein, its
"commitment to render the legal services
enumerated." The fee is not payment for
private
respondent's
execution
or
performance of the services listed in the
contract, subject to some particular
qualifications or permutations stated
there. We have already shown that the
P3,000.00 is independent and different
from the compensation which private
respondent should receive in payment for
his services. While petitioner and private
respondent were able to fix a fee for the
latter's promise to extend services, they
were not able to come into agreement as
to the law firm's actual performance of
services in favor of the union. Hence, the
retainer agreement cannot control the

measure of remuneration
respondent's services.

for

private

PRIVATE RESPONDENT'S ENTITLEMENT TO

AN ADDITIONAL REMUNERATION FOR
SPECIAL SERVICES RENDERED IN THE
INTEREST OF PETITIONER IS BASED ON
QUASI-CONTRACT. The fact that
petitioner and private respondent failed to
reach a meeting of the minds with regard
to the payment of professional fees for
special services will not absolve the
former
of
civil
liability
for
the
corresponding remuneration therefor in
favor of the latter. Obligations do not
emanate only from contracts. One of the
sources of extra-contractual obligations
found in our Civil Code is the quasicontract premised on the Roman maxim
that nemo cum alterius detrimento
locupletari protest. As embodied in our
law,
certain
lawful,
voluntary
and
unilateral acts give rise to the juridical
relation of quasi-contract to the end that
no one shall be unjustly enriched or
benefited at the expense of another. A
quasi-contract between the parties in the
case
at
bar
arose
from
private
respondent's
lawful,
voluntary
and
unilateral prosecution of petitioner's cause
without awaiting the latter's consent and
approval. Petitioner cannot deny that it did
benefit from private respondent's efforts
as the law firm was able to obtain an
award of holiday pay differential in favor
of the union. It cannot even hide behind
the cloak of the monthly retainer of
P3,000.00 paid to private respondent
because, as demonstrated earlier, private
respondent's actual rendition of legal
services is not compensable merely by
said amount.
THE LABOR ARBITER ERRONEOUSLY SET
THE AMOUNT OF ATTORNEY'S FEES ON
THE BASIS OF ART. 111 OF THE LABOR
CODE; A HEARING SHOULD HAVE BEEN
CONDUCTED
FOR
THE
PROPER
DETERMINATION OF ATTORNEY'S FEES. Here, then, is the flaw we find in the award
for attorney's fees in favor of private
respondent. Instead of adopting the above
guidelines, the labor arbiter forthwith but
erroneously set the amount of attorney's
fees on the basis of Article 111 of the

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
Labor Code. He completely relied on the
operation of Article 111 when he fixed the
amount of attorney's fees at P17,574.43.
As already stated, Article 111 of the Labor
Code regulates the amount recoverable as
attorney's fees in the nature of damages
sustained by and awarded to the
prevailing party. It may not be used
therefore, as the lone standard in fixing
the exact amount payable to the lawyer
by his client for the legal services he
rendered. Also, while it limits the
maximum allowable amount of attorney's
fees, it does not direct instantaneous and
automatic award of attorney's fees in such
maximum limit. It, therefore, behooves the
adjudicator
in
questions
and
circumstances similar to those in the case
at bar, involving a conflict between lawyer
and client, to observe the above
guidelines in cases calling for the
operation of the principles of quasicontract and quantum meruit, and to
conduct a hearing for the proper
determination of attorney's fees. The
criteria found in the Code of Professional
Responsibility are to be considered, and
not disregarded, in assessing the proper
amount. Here, the records do not reveal
that the parties were duly heard by the
labor arbiter on the matter and for the
resolution of private respondent's fees.
As already stated, Article 111 of
the Labor Code regulates the amount
recoverable as attorney's fees in the
nature of damages sustained by and
awarded to the prevailing party. It may not
be used therefore, as the lone standard in
fixing the exact amount payable to the
lawyer by his client for the legal services
he rendered. Also, while it limits the
maximum allowable amount of attorney's
fees, it does not direct the instantaneous
and automatic award of attorney's fees in
such maximum limit.

criteria found in the Code of Professional

Responsibility are to be considered, and
not disregarded, in assessing the proper
amount. Here, the records do not reveal
that the parties were duly heard by the
labor arbiter on the matter and for the
resolution of private respondent's fees.

It, therefore, behooves the adjudicator in

questions and circumstances similar to
those in the case at bar, involving a
conflict between lawyer and client, to
observe the above guidelines in cases
calling for the operation of the principles
of quasi-contract and quantum meruit,
and to conduct a hearing for the proper
determination of attorney's fees. The

The respondents filed their complaints,

they alleged therein that they were over
worked, they have to work for 7 days,
forced to over time for 3 times a week,
and that their overtime was based on
minimum wage. And without cause and
due process the respondents were
terminated.

It is axiomatic that the reasonableness of

attorney's fees is a question of fact.
Ordinarily, therefore, we would have
remanded this case for further reception
of evidence as to the extent and value of
the
services
rendered
by
private
respondent to petitioner. However, so as
not to needlessly prolong the resolution of
a comparatively simple controversy, we
deem it just and equitable to fix in the
present recourse a reasonable amount of
attorney's fees in favor of private
respondent. For that purpose, we have
duly taken into account the accepted
guidelines therefor and so much of the
pertinent data as are extant in the records
of this case which are assistive in that
regard. On such premises and in the
exercise of our sound discretion, we hold
that the amount of P10,000.00 is a
reasonable and fair compensation for the
legal services rendered by private
respondent to petitioner before the labor
arbiter and the NLRC.
96.Brahm Industries vs. NLRC, 280
SCRA 824 [1997]
FACTS: Roberto M. Durian, Jone M.
Comendador and Reynaldo C. Gagarino
(respondents) filed a case for illegal
suspension, illegal dismissal, illegal lay-off,
illegal deductions, non-payment of service
incentive leave, 13th month pay, and
actual, moral and exemplary damages
against Brahm Industries, Inc. (BRAHM)
before the Labor Arbiter.

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
Brahm contended that Gagarino left the
company for abroad, and when he
returned in the country, he work for
another company, and in the case of 2
other respondents, they left the job for
inability to account for some tools
amounting to 10,000php. Also, Brahm
asserted that these respondents were not
employees, since they have their own
customers and clients, and the character
of their work is based upon the availability
of projects or it depends if there are
contracts for projects such as constructing
water purifier or water control devices.
On Feb. 8, 1994, the labor arbiter ruled in
favor of the respondents, BRAHM was
ordered to reinstate them, pay their back
wages and pay their attorneys fees.
However, with regards to Gagarinos case,
it was dismissed by the labor arbiter since
it was found out that he really left the
company for more than 2 years before he
filed the complaint. Gagarino did not
appeal the order of the labor arbiter.
The decision was appealed by BRAHM to
the NLRC with regards to ruling of the
labor arbiter which did not favor them.
However, NLRC affirmed the ruling of labor
arbiter.
This prompted BRAHM to appeal the
decision in Supreme Court (SC).
ISSUE: Whether or not Durian
Comendador are project employees.

and

HELD: No, they are no project employees.

A project employee is one whose
employment has been fixed for a specific
project or undertaking, the completion or
termination of which has been determined
at the time of the engagement of the
employee or where the work or service to
be performed is seasonal in nature and
the employment is for the duration of the
season.[6] Before an employee hired on a
per project basis can be dismissed, a
report must be made to the nearest
employment office of the termination of
the services of the workers everytime it
completed a project, pursuant to Policy
Instruction No. 20.

Based on the facts, BRAHM did not follow

anything mentioned above and in
pursuant to the case of Ochoco v. National
Labor Relations Commission, where the SC
held that the failure of the employer to
follow such rule is a proof that the
employee is not a project employee rather
a regular employee.
Furthermore, in pursuant to the Art. 280 of
the Labor Code which provides:
Art. 280. Regular and Casual Employment.
- The provisions of written agreement to
the
contrary
notwithstanding
and
regardless of the oral agreement of the
parties, an employment shall be deemed
to be regular where the employee has
been engaged to perform activities which
are usually necessary or desirable in the
usual business or trade of the employer,
except where the employment has been
fixed for a specific project or undertaking
the completion or termination of which
has been determined at the time of the
engagement of the employee or where the
work or services to be performed is
seasonal in nature and the employment is
for the duration of the season.
An employment shall be deemed to be
casual if it is not covered by the preceding
paragraph: provided, that, any employee
who has rendered at least one (1) year of
service,
whether
such
service
is
continuous or broken, shall be considered
a regular employee with respect to the
activity in which he is employed and his
employment shall continue while such
activity exists (underscoring supplied).
Those respondents, namely durian worked
for 5 years while comendador worked for 9
years under BRAHM. Mere self serving
statements coming from the petitioners
will not prove that the respondents are
project employees.
Even in the issue of abandonment raised
by BRAHM, it doesnt disprove that they
illegally terminate the respondent, sense
they did not offer any proof to such issue.
Thus, the petition was dismissed.
97.Heirs of Aniban vs. NLRC, 282
SCRA 377 [1997]

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
FACTS: Reynaldo Aniban was employed
by the Philippine Transmarine Carriers,
Inc. (TRANSMARINE) as radio operator
(R/O) on board the vessel "Kassel" for a
contract period of nine (9) to eleven
(11) months. During the period of his
employment,
R/O Aniban died due to
myocardial infarction. He was survived by
a pregnant wife and three (3) minor
children who prayed for death benefits
provided under par. (1) of the POEA
Standard Employment Contract thus 1. In case of death of the seaman during
the term of his contract, the employer
shall pay his beneficicaries the Philippine
currency equivalent to the amount of:
x x x x b. US$13,000.00 for other officers
including radio operators and master
electricians.
A claim was also made for additional
death benefits under the Collective
Bargaining Agreement executed between
Associated Marine Officers and Seamen's
Union of the Philippines and NORWEGIAN
represented by TRANSMARINE, to wit:
Article 11
Compensation for loss of Life
Death caused by an Occupational Injury
or Disease. - In the event of death of an
officer due to an occupational injury or
disease while serving on board, while
travelling to and from the vessel on
Company's business or due to marine
peril,
the Company
will
pay his
beneficiaries
a compensation
in
accordance with the POEA's rules and
regulations x x x x
It is agreed that
these beneficiaries will be the following
next of kin: The officer's spouse, children
or parents in this preferential order.
The company will pay an additional
compensation to the beneficiaries listed
above with same preferential order to that
compensation provided by
the
POEA
Rules and Regulations. The additional
compensation will be US$30,000.00 plus
US$8,000.00 to each child under the age
of
eighteen
(18)
years,
maximum
US$24,000.00 (not exceeding 3 children).

Only $13,000 was granted under the POEA

Standard Employment Contract. The claim
under the CBA was rejected on the ground
that myocardial infarction of which R/O
Aniban died was not an occupational
disease as to entitle his heirs to the
additional
death
benefits
provided
therein.
Consequently, Brigida Aniban
(wife) and her children filed a formal
complaint for non-payment of death
compensation benefits under the CBA.
ISSUES:
(a) WON the POEA has jurisdiction to
determine the claim of petitioners for
death benefits---YES
(b) WON myocardial infarction is an
occupational
disease
as
to
entitle
petitioners
to the
death
benefits
provided under the CBA. ---YES
HELD:
(a) It is not disputed that R/O Reynaldo
Aniban was a Filipino seaman and that he
died on board the vessel of his foreign
employer during the existence of his
employment contract, hence, this claim
for death benefits by his widow and
children.
The law applicable at the time the
complaint was filed on 13 November 1992
was Art. 20 of the Labor Code as amended
by E. O. Nos. 797 and 247 which clearly
provided that "original and exclusive
jurisdiction over all matters or cases
including
money
claims,
involving
employer-employee
relations,
arising
out of or by virtue of any law or contract
involving Filipino seamen for overseas
employment is vested with the POEA.
On the other hand, the jurisdiction of the
ECC comes
into play only when the
liability of the State Insurance Fund is in
issue, as correctly suggested
by the
Solicitor General. The ECC was created
under Title II, Bk. IV, of the Labor Code
with
the
heading
of
Employees
Compensation and State Insurance Fund.
In addition to its powers and duties
enumerated in Art.
177,
Art. 180
explicitly provides that the Commission
exercises appellate jurisdiction only over

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
decisions rendered
by
either the
Government Service Insurance System
(GSIS) or Social Security System (SSS) in
the exercise of their respective original
and exclusive jurisdictions. Hence, the
ECC may not be considered as having
jurisdiction over money claims, albeit
death compensation benefits, of overseas
contract workers. Thus, in so ruling, the
NLRC clearly committed grave abuse of
discretion.
(b) The POEA ruled in the affirmative
when it likened the infirmity to a "heart
attack" commonly aggravated by pressure
and strain. It was observed that R/O
Aniban, in addition to undergoing physical
exertion while performing his duties as
radio operator, was also exposed to undue
pressure and strain as he was required
to be on call twenty-four (24) hours a
day to receive/transmit messages and to
keep track of weather conditions. Such
pressure and strain were aggravated by
being away from his family,
a plight
commonly suffered by all seamen. In the
case of R/O Aniban, the separation was
particularly distressful as his pregnant wife
was due to deliver
their fourth child.
Hence, the POEA ruled that myocardial
infarction was an occupational disease.
We cannot rule otherwise.
Reynaldo
Aniban was healthy at the time he
boarded the vessel of his foreign
employer. His medical records reveal that
he had no health problem except for a
"defective central vision secondary to
injury." Hence, he was certified "fit to
work as radio operator" by the examining
physician.
However, R/O Aniban died
three (3) months after he boarded "Kassel"
due
to myocardial infarction.
As
aforesaid, the POEA ruled that the cause
of
death
could
be
considered
occupational. Being a factual finding by
the administrative agency tasked with its
determination, such conclusion deserves
respect and must be accorded finality.
Besides we have already repeatedly ruled
that death due to myocardial infarction
is compensable. In Eastern Shipping Lines,
Inc. v. POEA, although compensability was
not
the
main issue, we upheld the
decision of the
POEA adjudging as

compensable the death of a seaman on

board the vessel of his foreign employer
due to myocardial infarction.
Although it may be conceded in the
instant case that the physical exertion
involved in carrying out the functions of a
radio operator may have been quite
minimal,
we
cannot discount the
pressure and strain that went with the
position of radio operator.
As radio
operator, Reynaldo Aniban had to place
his full attention in hearing the exact
messages received by the vessel and to
relay those that needed to be transmitted
to the mainland or to other vessels. We
have already recognized that any kind of
work or labor produces stress and strain
normally resulting in the wear and tear
of the human body. It is not required
that the occupation be the only cause of
the disease as it is enough that the
employment contributed even in a small
degree to its development.
It must be stressed that the strict rules
of evidence are not applicable in claims for
compensation considering that probability
and not the ultimate degree of certainty
is the test of proof in compensation
proceedings.
It is a matter of judicial notice that an
overseas worker, having to ward off
homesickness
by
reason
of
being
physically separated from his family for
the entire duration of his contract, bears a
great degree of emotional strain while
making an effort to perform his work well.
The strain is even greater in the case of a
seaman who is constantly subjected to the
perils of the sea while at work abroad
and away from his family. In this case,
there is substantial proof that myocardial
infarction is an occupational disease for
which Aniban's employer obligated itself
to pay death benefits and additional
compensation under the CBA in the event
of the demise of its employee by reason
thereof.
98.Sapio vs. Undaloc Construction et
al., G.R. No. 155034, May 22, 2008

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APPEARANCE OF LAWYERS
FACTS: Petitioner filed against Undaloc
Construction
and/or
Engineer
Cirilo
Undaloc
for
illegal
dismissal,
underpayment of wages and nonpayment
of statutory benefits. Respondent Undaloc
Construction, a single proprietorship
owned by Cirilo Undaloc, is engaged in
road construction business in Cebu City.
Petitioner
had
been
employed
as
watchman from 1 May 1995 to 30 May
1998 when he was terminated on the
ground that the project he was assigned to
was already finished, he being allegedly a
project employee. Petitioner asserted he
was a regular employee having been
engaged to perform works which are
usually necessary or desirable in
respondents business. He claimed that
from 1 May to 31 August 1995 and from 1
September to 31 December 1995, his daily
wage rate was only P80.00 and P90.00,
respectively, instead of P121.87 as
mandated by Wage Order No. ROVII-03.
From 1 March 1996 to 30 May 1998, his
daily rate was P105.00. He further alleged
that he was made to sign two payroll
sheets, the first bearing the actual amount
he received wherein his signature was
affixed to the last column opposite his
name, and the second containing only his
name and signature.
To buttress this
allegation, petitioner presented the payroll
sheet covering the period from 4 to 10
December 1995 in which the entries were
written in pencil. He also averred that his
salary from 18 to 30 May 1998 was
withheld by respondents.
Respondent Cirilo Undaloc maintained that
petitioner was hired as a project employee
on 1 May 1995 and was assigned as
watchman from one project to another
until the termination of the project on 30
May 1998. Refuting the claim of
underpayment, respondent presented the
payroll sheets from 2 September to 8
December 1996, 26 May to 15 June 1997,
and 12 January to 31 May 1998.
On 12 July 1999, the Labor Arbiter
rendered a decision finding complainant to
be a project employee and his termination
was for an authorized cause. However,
respondent is found liable to pay
complainants salary of P2,648.45 and

13th month pay of P2,489.00. Respondent

is also found liable to pay complainants
salary differential in the amount of
P24,902.88. Attorneys fee of P3,000.00 is
also awarded.
Respondents appealed the award of salary
differential to the NLRC, which sustained
the findings of the Labor Arbiter.
Upon appeal, the Court of Appeals deleted
the award of salary differential and
attorneys fees, who did not subscribe to
the common findings of the Labor Arbiter
and the NLRC.
It pointed out that
allegations of fraud in the preparation of
payroll sheets must be substantiated by
evidence and not by mere suspicions or
conjectures,
ISSUE: Whether or not petitioner was
entitled to the award of salary differential
and attorneys fees.
HELD: While the SC adhered to the
position of the appellate court that the
tendency to alter the entries in the
payrolls was not substantiated, it did
subscribe to the total deletion of the
award of salary differential and attorneys
fees.
The
Labor
Arbiter
erred
in
his
computation, it granted a higher salary
differential. He fixed the daily wage rate
actually received by petitioner at P105.00
without taking into consideration the
P141.00 rate indicated in the typewritten
payroll sheets submitted by respondents.
Moreover, the Labor Arbiter misapplied
the wage orders when he wrongly
categorized respondent as falling within
the first category. Based on the stipulated
number of employees and audited
financial statements, respondents should
have been covered by the second
category (which is lower).
The total salary differential that petitioner
is lawfully entitled to amounts to
P6,578.00 However, pursuant to Section
12 of Republic Act (R.A.) No. 6727, as
amended by R.A. No. 8188. Respondents
are required to pay double the amount

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
owed to petitioner, bringing their total
liability to P13,156.00.
Section 12. Any person, corporation, trust,
firm, partnership, association or entity
which refuses or fails to pay any of the
prescribed increases or adjustments in the
wage rates made in accordance with this
Act shall be punished by a fine not less
than
Twenty-five
thousand
pesos
(P25,000.00) nor more than One hundred
thousand
pesos
(P100,000.00)
or
imprisonment of not less than two (2)
years nor more than four (4) years, or both
such fine and imprisonment at the
discretion of the court: Provided, That any
person convicted under this Act shall not
be entitled to the benefits provided for
under the Probation Law.
The employer concerned shall be ordered
to pay an amount equivalent to double the
unpaid benefits owing to the employees:
Provided, That payment of indemnity shall
not absolve the employer from the
criminal liability imposable under this Act.
If the violation is committed by a
corporation, trust or firm, partnership,
association or any other entity, the
penalty of imprisonment shall be imposed
upon the entitys responsible officers,
including, but not limited to, the president,
vice president, chief executive officer,
general manager, managing director or
partner. (Emphasis supplied)
The award of attorneys fees is warranted
under the circumstances of this case.
Under Article 2208 of the New Civil Code,
attorney's fees can be recovered in
actions for the recovery of wages of
laborers and actions for indemnity under
employer's liability laws but shall not
exceed 10% of the amount awarded. The
fees may be deducted from the total
amount due the winning party.
99.Atty. Ortiz vs. San Miguel Corp.,
G.R. No. 151983-84, July 31, 2008
This case is a Petition for Review on
Certiorari under Rule 45 of the 1997
Revised Rules of Civil Procedure seeking to
modify or partially reconsider the Decision

dated 22 August 2001 and Resolution

dated 9 January 2002 of the Court of
Appeals in CA-G.R. SP No. 54576-77,
insofar as the award of attorneys fees is
concerned. Herein petitioner Jose Max S.
Ortiz prays that this Court affirm the
award of attorneys fees equivalent to
10% of the monetary award adjudged by
the National Labor Relations Commission
(NLRC) in its Decisions dated 21 July 1995
and 25 July 1995 in NLRC Cases No. V0255-94 and No. V-0068-95, respectively.
Petitioner asserts that he is entitled to the
said attorneys fees.
FACTS: The petitioner in this case, Jose
Max S. Ortiz, is a member of the Philippine
Bar who represented the complainants in
NLRC Cases No. V-0255-94 (hereinafter
referred to as the Aguirre Cases) and No.
V-0068-95 (hereinafter referred to as the
Toquero Case) instituted against herein
private respondent San Miguel Corporation
sometime
in
1992
and
1993.The
respondent is a corporation duly organized
and existing under and by virtue of the
laws of the Republic of the Philippines. It
is primarily engaged in the manufacture
and sale of food and beverage particularly
beer products. In line with its business, it
operates breweries and sales offices
throughout
the
Philippines.The
complainants in NLRC Cases, Aguirre
Cases and Toquero Case were employees
at private respondent's Sales Offices in the
Province of Negros Occidental.
The complainants of Cases, Aguire and
Toquero got a favorable decision in NLRC
regarding their money claims against San
Miguel Corporation. In effect, San Miguel
Corporation filed a Petitions for Certiorari.
While this respondents petitions were
pending before the Court of Appeals, all
but one of the remaining complainants in
Aguirre and Toquero Cases on various
dates before two Labor Arbiters and in the
presence of two witnesses, signed
separate Deeds of Release, Waiver and
Quitclaim in favor of private respondent.
Based on the Deeds they executed,
complainants agreed to settle their claims
against private respondent for amounts
less than what the NLRC actually awarded.
Private respondent withheld 10% of the

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
total amount agreed upon by the parties
in the said Deeds as attorney's fees and
handed it over to petitioner. Private
respondent then attached the Deeds to its
Manifestation and Motion filed before the
appellate court. Then the Court of appeals
rendered a decision affirming the NLRC
decisions, only in so far as it concerned
complainant
Alfredo
Gadian,
Jr.
(complainant
Gadian),
the
only
complainant who did not execute a Deed
of Release, Waiver and Quitclaim. With
respect to the other complainants in the
Aguirre
and
Toquero
Cases,
their
complaints were dismissed on account of
their duly executed Deeds of Release,
Waiver and Quitclaim. In a Resolution
dated 9 January 2002, the appellate court
denied the motion of complainant Gadian
and his counsel, herein petitioner , that
the award of attorney's fees of 10% should
be based on the monetary awards
adjudged by the NLRC.
Thus, this petition filed before the Court
praying to affirm the award of attorney's
fees equivalent to 10% of the monetary
award adjudged by the NLRC in its
Decisions dated 21 July 1995 and 25 July
1995 in Toquero Case and Aguirre Cases
respectively.
ISSUE: Whether he is entitled to the
amount of attorney's fees as adjudged by
the NLRC in its Decisions in the Aguirre
and Toquero Cases or only to the 10% of
the amounts actually paid to his clients,
the complainants who signed the Deeds of
Release, Waiver and Quitclaim.
HELD: This Court has consistently ruled
that a question of law exists when there is
a doubt or controversy as to what the law
is on a certain state of facts. On the other
hand, there is a question of fact when the
doubt or difference arises as to the alleged
truth or falsehood of the alleged facts. For
a question to be one of law, it must
involve no examination of the probative
value of the evidence presented by the
litigants or any of them. The test of
whether a question is one of law or of fact
is not the appellation given to such
question by the party raising the same;
rather, it is whether the appellate court

can determine the issue raised without

reviewing or evaluating the evidence, in
which case, it is a question of law;
otherwise, it is a question of fact.
The aforesaid issue evidently involves a
question of law. What it needs to do is
ascertain and apply the relevant law and
jurisprudence on the award of attorney's
fees to the prevailing parties in labor
cases
Article 111 of the Labor Code, as
amended, specifically provides:
ART. 111. ATTORNEY'S FEES.
(a) In cases of unlawful withholding of
wages the culpable party may be
assessed attorney's fees equivalent to ten
percent of the amount of wages
recovered.
b) It shall be unlawful for any person to
demand or accept, in any judicial or
administrative
proceedings
for
the
recovery of the wages, attorney's fees
which exceed ten percent of the amount
of wages recovered.
In PCL Shipping Philippines, Inc. v. National
Labor Relations Commission citing Dr.
Reyes v. Court of Appeals, this Court
enunciated that there are two commonly
accepted concepts of attorney's fees, the
so-called ordinary and extraordinary. In its
ordinary concept, an attorney's fee is the
reasonable compensation paid to a lawyer
by his client for the legal services the
former has rendered to the latter. The
basis of this compensation is the fact of
the attorney's employment by and his
agreement with the client. In its
extraordinary concept, attorney's fees are
deemed indemnity for damages ordered
by the court to be paid by the losing party
in a litigation. The instances in which
these may be awarded are those
enumerated in Article 2208 of the Civil
Code, specifically paragraph 7 thereof,
which pertains to actions for recovery of
wages, and is payable not to the lawyer
but to the client, unless they have agreed
that the award shall pertain to the lawyer
as additional compensation or as part
thereof. Article 111 of the Labor Code, as
amended, contemplates the extraordinary
concept of attorney's fees.

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
Based on the foregoing, the attorney's
fees awarded by the NLRC in its Decisions
in the Aguirre and Toquero Cases pertain
to the complainants, petitioner's clients,
as indemnity for damages; and not to
petitioner as compensation for his legal
services. Records show that the petitioner
neither alleged nor proved that his clients,
the complainants, willingly agreed that the
award of attorney's fees would accrue to
him as an additional compensation or part
thereof. What the complainants explicitly
agreed to in their individual Deeds of
Release, Waiver, and Quitclaim was that
the 10% attorney's fees of the petitioner
shall be deducted from the amount of the
gross settlement.
Thus, this Court has no recourse but to
interpret the award of attorney's fees by
the NLRC in its extraordinary concept. And
since the attorney's fees pertained to the
complainants as indemnity for damages, it
was totally within the complainants' right
to waive the amount of said attorney's
fees and settle for a lesser amount thereof
in exchange for the immediate end to
litigation.
Petitioner
cannot
prevent
complainants from compromising and/or
withdrawing their complaints at any stage
of the proceedings just to protect his
anticipated attorney's fees.
Even assuming arguendo that the
complainants in the Aguirre and Toquero
Cases did indeed agree that the attorney's
fees awarded by the NLRC should be
considered in their ordinary concept, i.e.,
as compensation for petitioner's services,
we refer back to Article 111 of the Labor
Code, as amended, which provides that
the attorney's fees should be equivalent to
10% of the amount of wages recovered.
Since the complainants decided to settle
their complaints against the private
respondent, the amounts actually received
by them pursuant to the Deeds of Release,
Waiver and Quitclaim are the amounts
"recovered" and the proper basis for
determining the 10% attorney's fees.
In the case at bar, it is beyond cavil that
the petitioner is not the real party in
interest; hence, he cannot file this Petition
to recover the attorney's fees as adjudged

by the NLRC in its Decisions dated 21 July

1995 and 25 July 1995 in the Aguirre and
Toquero Cases, respectively. To reiterate,
the award of attorney's fees pertain to the
prevailing parties in the NLRC cases,
namely, the complainants, all but one of
whom no longer pursued their complaints
against private respondent after executing
Deeds of Release, Waiver and Quitclaim.
Not being the party to whom the NLRC
awarded the attorney's fees, neither is the
petitioner the proper party to question the
non-awarding of the same by the
appellate court.
This would show that petitioner has been
compensated for the services he rendered
the complainants. It may do well for
petitioner to remember that as a lawyer,
he is a member of an honorable
profession, the primary vision of which is
justice. The practice of law is a decent
profession and not a money-making trade.
Compensation should be but a mere
incident.
If petitioner earnestly believes that the
amounts he already received are grossly
deficient, petitioner's remedy is not
against the private respondent, but
against his own clients, the complainants.
He should file a separate action for
collection of sum of money against
complainants
to
recover
just
compensation for his legal services, and
not the present Petition for Review to
claim from private respondent the
attorney's fees which were adjudged by
the NLRC in favor of complainants as the
prevailing parties in the Aguirre and
Toquero Cases.
WHEREFORE, the instant Petition is hereby
DENIED.
100. Masmud vs. NLRC et al., G.R.
No. 183385, Feb. 13, 2009
FACTS: On July 9, 2003, Evangelina
Masmud's (Evangelina) husband, the late
Alexander J. Masmud (Alexander), filed a
complaint against First Victory Shipping
Services and Angelakos (Hellas) S.A. for
non-payment of permanent disability
benefits, medical expenses, sickness
allowance, moral and exemplary damages,
and attorney's fees. Alexander engaged

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
the services of Atty. Rolando B. Go, Jr.
(Atty. Go) as his counsel.
In consideration of Atty. Go's legal
services, Alexander agreed to pay
attorney's fees on a contingent basis, as
follows: twenty percent (20%) of total
monetary claims as settled or paid and an
additional ten percent (10%) in case of
appeal. It was likewise agreed that any
award of attorney's fees shall pertain to
respondent's law firm as compensation.
On November 21, 2003, the Labor Arbiter
(LA) rendered a Decision granting the
monetary claims of Alexander.
Alexander's employer filed an appeal
before the National Labor Relations
Commission (NLRC). During the pendency
of the proceedings before the NLRC,
Alexander died. After explaining the terms
of the lawyer's fees to Evangelina, Atty. Go
caused her substitution as complainant.
On April 30, 2004, the NLRC rendered a
Decision
dismissing
the
appeal
of
Alexander's employer.
Eventually, the decision of the NLRC
became final and executory. Atty. Go
moved for the execution of the NLRC
decision, which was later granted by the
LA. The surety bond of the employer was
garnished. Upon motion of Atty. Go, the
surety company delivered to the NLRC
Cashier, through the NLRC Sheriff, the
check
amounting
to
P3,454,079.20.
Thereafter, Atty. Go moved for the release
of the said amount to Evangelina.
On January 10, 2005, the LA directed the
NLRC Cashier to release the amount of
P3,454,079.20 to Evangelina. Out of the
said amount, Evangelina paid Atty. Go the
sum of P680,000.00.
Dissatisfied, Atty. Go filed a motion to
record and enforce the attorney's lien
alleging that Evangelina reneged on their
contingent fee agreement. Evangelina
paid only the amount of P680,000.00,
equivalent to 20% of the award as
attorney's fees, thus, leaving a balance of
10%, plus the award pertaining to the
counsel as attorney's fees.
In response to the motion filed by Atty. Go,
Evangelina filed a comment with motion to

release the amount deposited with the

NLRC Cashier. In her comment, Evangelina
manifested that Atty. Go's claim for
attorney's fees of 40% of the total
monetary award was null and void based
on Article 111 of the Labor Code.
ISSUE: WHETHER OR NOT THE 40%
LAWYERS FEE ON CONTINGENT BASIS OF
ATTY. GO IS PROPER? (AFFIRMATIVE)
HELD: There are two concepts of
attorney's fees. In the ordinary sense,
attorney's fees represent the reasonable
compensation paid to a lawyer by his
client for the legal services rendered to
the latter. On the other hand, in its
extraordinary concept, attorney's fees
may be awarded by the court as
indemnity for damages to be paid by the
losing party to the prevailing party, such
that, in any of the cases provided by law
where such award can be made, e.g.,
those authorized in Article 2208 of the
Civil Code, the amount is payable not to
the lawyer but to the client, unless they
have agreed that the award shall pertain
to the lawyer as additional compensation
or as part thereof.
Here, we apply the ordinary concept of
attorney's fees, or the compensation that
Atty. Go is entitled to receive for
representing Evangelina, in substitution of
her husband, before the labor tribunals
and before the court.
Evangelina maintains that Article 111 of
the Labor Code is the law that should
govern Atty. Go's compensation as her
counsel and assiduously opposes their
agreed retainer contract.
Article 111 of the said Code provides:
ART. 111. Attorney's fees. - (a) In cases of
unlawful withholding of wages the
culpable party may be assessed attorney's
fees equivalent to ten percent of the
amount
of
the
wages
recovered.rbl rl l lbrr
Contrary to Evangelina's proposition,
Article 111 of the Labor Code deals with
the extraordinary concept of attorney's
fees. It regulates the amount recoverable
as attorney's fees in the nature of

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
damages sustained by and awarded to the
prevailing party. It may not be used as the
standard in fixing the amount payable to
the lawyer by his client for the legal
services he rendered.
In this regard, Section 24, Rule 138 of the
Rules of Court should be observed in
determining Atty. Go's compensation. The
said Rule provides:
SEC. 24. Compensation of attorney's;
agreement as to fees. - An attorney shall
be entitled to have and recover from his
client no more than a reasonable
compensation for his services, with a view
to the importance of the subject matter of
the controversy, the extent of the services
rendered, and the professional standing of
the attorney. No court shall be bound by
the opinion of attorneys as expert
witnesses as to the proper compensation,
but may disregard such testimony and
base its conclusion on its own professional
knowledge. A written contract for services
shall control the amount to be paid
therefor unless found by the court to be
unconscionable or unreasonable.
The retainer contract between Atty. Go
and Evangelina provides for a contingent
fee. The contract shall control in the
determination of the amount to be paid,
unless found by the court to be
unconscionable
or
unreasonable.
Attorney's fees are unconscionable if they
affront one's sense of justice, decency or
reasonableness.
The
decree
of
unconscionability or unreasonableness of
a stipulated amount in a contingent fee
contract will not preclude recovery.
The criteria found in the Code of
Professional Responsibility are also to be
considered in assessing the proper
amount of compensation that a lawyer
should receive.rl Canon 20, Rule
20.01 of the said Code provides:
CANON 20 - A LAWYER SHALL CHARGE
ONLY FAIR AND REASONABLE FEES.
Rule 20.01. - A lawyer shall be guided by
the following factors in determining his
fees:
(a) The time spent and the extent of the
services rendered or required;

(b) The novelty and difficulty of the

question involved;
(c) The importance of the subject matter;
(d) The skill demanded;
(e) The probability of losing other
employment as a result of acceptance of
the proffered case;
(f) The customary charges for similar
services and the schedule of fees of the
IBP Chapter to which he belongs;
(g)
The
amount
involved
in
the
controversy and the benefits resulting to
the client from the service;
(h) The contingency or certainty of
compensation;
(i) The character of the employment,
whether occasional or established; and
(j) The professional standing of the lawyer.
Contingent fee contracts are subject to the
supervision and close scrutiny of the court
in order that clients may be protected
from unjust charges. The amount of
contingent fees agreed upon by the
parties is subject to the stipulation that
counsel will be paid for his legal services
only if the suit or litigation prospers. A
much higher compensation is allowed as
contingent fees because of the risk that
the lawyer may get nothing if the suit fails.
The Court finds nothing illegal in the
contingent fee contract between Atty. Go
and Evangelina's husband. The CA
committed no error of law when it
awarded the attorney's fees of Atty. Go
and allowed him to receive an equivalent
of 39% of the monetary award.
Considering that Atty. Go successfully
represented his client, it is only proper
that
he
should
receive
adequate
compensation for his efforts. Even as we
agree with the reduction of the award of
attorney's fees by the CA, the fact that a
lawyer plays a vital role in the
administration of justice emphasizes the
need to secure to him his honorarium
lawfully earned as a means to preserve
the decorum and respectability of the
legal profession. A lawyer is as much
entitled to judicial protection against
injustice or imposition of fraud on the part
of his client as the client is against abuse
on the part of his counsel. The duty of the
court is not alone to ensure that a lawyer
acts in a proper and lawful manner, but

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
also to see that a lawyer is paid his just
fees. With his capital consisting of his
brains and with his skill acquired at
tremendous cost not only in money but in
expenditure of time and energy, he is
entitled to the protection of any judicial
tribunal against any attempt on the part of
his client to escape payment of his just
compensation. It would be ironic if after
putting forth the best in him to secure
justice for his client, he himself would not
get his due.
101. Kaisahan at kapatiran ng mga
Manggagawa at Kawani sa MWCEast Zone Union vs. Manila Water
Company,
G.R.
No.
174179,
November 16, 2011
FACTS: The Union is the duly-recognized
bargaining agent of the rank-and-file
employees of the respondent Manila Water
Company, Inc. while Borela is the Union
President. In 1997, the Metropolitan
Waterworks
and
Sewerage
System
(MWSS) entered into a Concession
Agreement with the Company to privatize
the operations of the MWSS. The
Agreement
provides
that
the
Concessionaire shall grant its employees
benefits no less favorable than those
granted to MWSS employees at the time
of their separation from MWSS. Among
the benefits enjoyed by the employees of
the
MWSS
were
the
amelioration
allowance (AA) and the cost-of-living
allowance (COLA). The payment of the AA
and the COLA was discontinued pursuant
to Republic Act No. 6758, otherwise known
as the Salary Standardization Law,
which integrated the allowances into the
standardized salary. The Company agreed
to reinstate them upon renegotiation of
the parties CBA but however failed to give
them. As a result, the Union and Borela
filed a complaint against the Company for
payment of the AA, COLA, moral and
exemplary damages, legal interest, and
attorneys fees before the National Labor
Relations Commission (NLRC). In his
decision of August 20, 2003, Labor Arbiter
Aliman D. Mangandog ( LA) ruled in favor
of the petitioners and ordered the
payment of ten percent (10%) attorneys
fees in addition to their benefits and

interests. The award of attorneys fees

was upheld by NLRC. However, this was
reversed by the CA. CAs Decision: The
additional grant of 10% attorneys fees
violates Article 111 of the Labor Code
considering that the MOA between the
parties already ensured the payment of
10% attorneys fees, deductible from the
AA and CBA receivables of the Unions
members.
ISSUE: Whether or not the workers are
entitled to attorneys fees.
HELD: Yes. In the present case, the ten
percent (10%) attorneys fees awarded by
the NLRC on the basis of Article 111 of the
Labor Code accrue to the Unions
members as indemnity for damages and
not
to
the
Unions
counsel
as
compensation for his legal services,
unless, they agreed that the award shall
be given to their counsel as additional or
part of his compensation; in this case the
Union bound itself to pay 10% attorneys
fees to its counsel under the MOA and also
gave up the attorneys fees awarded to
the Unions members in favor of their
counsel. This is supported by Borelas
affidavit which stated that [t]he 10%
attorneys
fees
paid
by
the
members/employees is separate and
distinct from the obligation of the
company to pay the 10% awarded
attorneys fees which we also gave to our
counsel as part of our contingent fee
agreement.[43]
The limit to this
agreement is that the indemnity for
damages imposed by the NLRC on the
losing party (i.e., the Company) cannot
exceed ten percent (10%).
Properly viewed from this perspective, the
award cannot be taken to mean an
additional grant of attorneys fees, in
violation of the ten percent (10%) limit
under Article 111 of the Labor Code since
it rests on an entirely different legal
obligation than the one contracted under
the MOA. Simply stated, the attorneys
fees contracted under the MOA do not
refer to the amount of attorneys fees
awarded by the NLRC; the MOA provision
on attorneys fees does not have any
bearing at all to the attorneys fees

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APPEARANCE OF LAWYERS
awarded by the NLRC under Article 111 of
the Labor Code.
Based on these
considerations, it is clear that the CA erred
in ruling that the LAs award of attorneys
fees violated the maximum limit of ten
percent (10%) fixed by Article 111 of the
Labor Code.
Under this interpretation, the Companys
argument that the attorneys fees are
unconscionable as they represent 20% of
the amount due or about P21.4 million is
more apparent than real.
Since the
attorneys fees awarded by the LA
pertained to the Unions members as
indemnity for damages, it was totally
within their right to waive the amount and
give it to their counsel as part of their
contingent fee agreement. Beyond the
limit fixed by Article 111 of the Labor
Code, such as between the lawyer and the
client, the attorneys fees may exceed ten
percent (10%) on the basis of quantum
meruit, as in the present case.
102. Malvar vs. Kraft Food Phils Inc.
et al., G.R. No. 183952, Sept. 9,
2013
FACTS: The case initially concerned the
execution of a final decision of the Court of
Appeals (CA) in a labor litigation, but has
mutated into a dispute over attorney's
fees between the winning employee and
her attorney after she entered into a
compromise agreement with her employer
under circumstances that the attorney has
bewailed as designed to prevent the
recovery of just professional fees.
Antecedents
On August 1, 1988, Kraft Foods (Phils.),
Inc. (KFPI) hired Czarina Malvar (Malvar) as
its Corporate Planning Manager. From then
on, she gradually rose from the ranks,
becoming in 1996 the Vice President for
Finance in the Southeast Asia Region of
Kraft Foods International (KFI),KFPIs
mother company. On November 29, 1999,
respondent Bienvenido S. Bautista, as
Chairman of the Board of KFPI and
concurrently the Vice President and Area
Director for Southeast Asia of KFI, sent
Malvar a memo directing her to explain
why no administrative sanctions should be

imposed on her for possible breach of

trust and confidence and for willful
violation
of
company
rules
and
regulations. Following the submission of
her written explanation, an investigating
body was formed. In due time, she was
placed under preventive suspension with
pay. Ultimately, on March 16, 2000, she
was served a notice of termination.
Obviously aggrieved, Malvar filed a
complaint for illegal suspension and illegal
dismissal against KFPI and Bautista in the
National Labor Relations Commission
(NLRC). In a decision dated April 30, 2001,
the Labor Arbiter found and declared her
suspension and dismissal illegal, and
ordered her reinstatement, and the
payment of her full backwages, inclusive
of allowances and other benefits, plus
attorneys fees.
On October 22, 2001, the NLRC affirmed
the decision of the Labor Arbiter but
additionally ruled that Malvar was entitled
to "any and all stock options and bonuses
she was entitled to or would have been
entitled to had she not been illegally
dismissed from her employment," as well
as to moral and exemplary damages.
KFPI
and
Bautista
sought
the
reconsideration of the NLRCs decision, but
the NLRC denied their motion to that
effect.
Undaunted, KFPI and Bautista assailed the
adverse outcome before the CA on
certiorari, contending that the NLRC
thereby committed grave abuse of
discretion. However, the petition for
certiorari was dismissed by the CA on
December 22, 2004, but with the CA
reversing the order of reinstatement and
instead
directing
the
payment
of
separation pay to Malvar, and also
reducing the amounts awarded as moral
and exemplary damages.
After the judgment in her favor became
final and executory on March14, 2006,
Malvar moved for the issuance of a writ of
execution. The Executive Labor Arbiter
then referred the case to the Research and
Computation Unit (RCU) of the NLRC for
the computation of the monetary awards

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
under
the
judgment.
The
RCUs
computation ultimately arrived at the total
sum of P41,627,593.75.
On November 9, 2006, however, Labor
Arbiter Jaime M. Reyno issued an order,
finding that the RCUs computation lacked
legal basis for including the salary
increases that the decision promulgated
did not include. Hence, Labor Arbiter
Reyno reduced Malvars total monetary
award to P27,786,378.11.
Both parties appealed the computation to
the NLRC, which, on April19, 2007,
rendered its decision setting aside Labor
Arbiter Reynos November 9, 2006 order,
and adopting the computation by the RCU.

award due to private respondent based on

her salary at the time of her termination,
without
including
projected
salary
increases.

In its resolution dated May 31, 2007, the

NLRC denied the respondents motion for
reconsideration.

The Compromise Payment includes full

and complete payment and settlement of
Ms. Malvars salaries and wages up to the
last day of her employment, allowances,
13th and 14th month pay, cash conversion
of her accrued vacation, sick and
emergency
leaves,
separation
pay,
retirement pay and such other benefits,
entitlements, claims for stock, stock
options or other forms of equity
compensation
whether
vested
or
otherwise and claims of any and all kinds
against KFPI and KFI and Altria Group, Inc.,
their
predecessors-in-interest,
their
stockholders, officers, directors, agents or
successors-in-interest,
affiliates
and
subsidiaries, up to the last day of the
aforesaid cessation of her employment.

Malvar filed a second motion for the

issuance of a writ of execution to enforce
the decision of the NLRC rendered on April
19, 2007. After the writ of execution was
issued, a partial enforcement as effected
by garnishing the respondents funds
deposited
with
Citibank
worth
37,391,696.06.
On July 27, 2007, the respondents went to
the CA on certiorari (with prayer for the
issuance of a temporary restraining order
(TRO) or writ of preliminary injunction),
assailing the NLRCs setting aside of the
computation by Labor Arbiter Reyno (CAG.R. SP No. 99865). The petition mainly
argued that the NLRC had gravely abused
its discretion in ruling that: (a) the
inclusion of the salary increases and other
monetary benefits in the award to Malvar
was final and executory; and (b) the
finality of the ruling in CA-G.R. SP No.
69660 precluded the respondents from
challenging the inclusion of the salary
increases and other monetary benefits.
The CA issued a TRO, enjoining the NLRC
and Malvar from implementing the NLRCs
decision.
On April 17, 2008, the CA rendered its
decision reversing the NLRC decision.
The matter of computation of monetary
awards for private respondent is hereby
REMANDED to the Labor Arbiter and he is
DIRECTED to recompute the monetary

Malvar sought reconsideration, but the CA

denied her motion on July30, 2008.
Aggrieved, Malvar appealed to the Court,
assailing the CAs decision.
On December 9, 2010, while her appeal
was pending in this Court, Malvar and the
respondents entered into a compromise
agreement, the pertinent dispositive
portion of which is quoted as follows:

Thereafter, Malvar filed an undated Motion

to Dismiss/Withdraw Case, praying that
the
appeal
be
immediately
dismissed/withdrawn in view of the
compromise agreement, and that the case
be considered closed and terminated.
Before the Court could act on Malvars
Motion to Dismiss/Withdraw Case, the
Court received on February 15, 2011 a socalled Motion for Intervention to Protect
Attorneys Rights from The Law Firm of
Dasal, Llasos and Associates, through its
Of Counsel Retired Supreme Court
Associate Justice Josue N. Bellosillo
(Intervenor), whereby the Intervenor
sought, among others, that both Malvar
and KFPI be held and ordered to pay

LABOR STANDARDS | ATTORNEY'S FEES &

APPEARANCE OF LAWYERS
jointly and severally
contingent fees.

the

Intervenors

Upon execution of the Compromise

Agreement
and
pursuant
thereto,
Petitioner
immediately
received
(supposedly)
from
RespondentsP40,000,000.00. But despite
the settlement between the parties,
Petitioner did not pay Intervenor its just
compensation as set forth in their
engagement agreement; instead, she
immediately moved to Dismiss/Withdraw
the Present Petition On 15.
Opposing the Motion for Intervention,28
Malvar stresses that there was no truth to
the Intervenors claim to defraud it of its
professional fees; that the Intervenor
lacked the legal capacity to intervene
because it had ceased to exist after Atty.
Marwil N. Llasos resigned from the
Intervenor and Atty. Richard B. Dasal
became barred from private practice upon
his appointment as head of the Legal
Department of the Small Business
Guarantee and Finance Corporation, a
government subsidiary; and that Atty.
Llasos and Atty. Dasal had personally
handled her case.
ISSUES: (a) Whether or not Malvars
motion to dismiss the petition on the
ground
of
the
execution
of
the
compromise agreement was proper; and
(b) whether or not the Motion for
Intervention to protect attorneys rights
can prosper..
HELD: Clients right to settle litigation by
compromise agreement, and to terminate
counsel; limitations
A compromise agreement is a contract,
whereby the parties undertake reciprocal
obligations to avoid litigation, or put an
end to one already commenced. The client
may enter into a compromise agreement
with the adverse party to terminate the
litigation before a judgment is rendered
therein. If the compromise agreement is
found to be in order and not contrary to
law, morals, good customs and public
policy, its judicial approval is in order.
Compromise agreement, once approved
by final order of the court, has the force of
res judicata between the parties and will

not be disturbed except for vices of

consent or forgery.
A client has an undoubted right to settle
her litigation without the intervention of
the attorney, for the former is generally
conceded to have exclusive control over
the subject matter of the litigation and
may at anytime, if acting in good faith,
settle and adjust the cause of action out of
court before judgment, even without the
attorneys intervention. It is important for
the client to show, however, that the
compromise
agreement
does
not
adversely affect third persons who are not
parties to the agreement.
By the same token, a client has the
absolute right to terminate the attorneyclient relationship at any time with or
without cause. But this right of the client is
not unlimited because good faith is
required in terminating the relationship.
The right is also subject to the right of the
attorney to be compensated.
A client may at any time dismiss his
attorney or substitute another in his place,
but if the contract between client and
attorney has been reduced to writing and
the dismissal of the attorney was without
justifiable cause, he shall be entitled to
recover
from
the
client
the
full
compensation stipulated in the contract.
However, the attorney may, in the
discretion of the court, intervene in the
case to protect his rights. For the payment
of his compensation the attorney shall
have a lien upon all judgments for the
payment of money, and executions issued
in pursuance of such judgment, rendered
in the case wherein his services had been
retained by the client. (Bold emphasis
supplied)
In fine, it is basic that an attorney is
entitled to have and to receive a just and
reasonable compensation for services
performed at the special instance and
request of his client. The attorney who has
acted in good faith and honesty in
representing and serving the interests of
the
client
should
be
reasonably
compensated for his service.

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APPEARANCE OF LAWYERS
2. Compromise agreement is to be
approved despite favorable action on the
Intervenors Motion for Intervention
On considerations of equity and fairness,
the Court disapproves of the tendencies of
clients compromising their cases behind
the backs of their attorneys for the
purpose of unreasonably reducing or
completely
setting
to
naught
the
stipulated contingent fees. Thus, the Court
grants the Intervenors Motion for
Intervention to Protect Attorneys Rights
as
a
measure
of
protecting
the
Intervenors right
to its
stipulated
professional fees that would be denied
under the compromise agreement. The
Court does so in the interest of protecting
the rights of the practicing Bar rendering
professional services on contingent fee
basis.
Nonetheless, the claim for attorneys fees
does not void or nullify the compromise
agreement between Malvar and the
respondents. There being no obstacles to
its approval, the Court approves the
compromise agreement. The Court adds,
however, that the Intervenor is not left
without a remedy, for the payment of its
adequate and reasonable compensation
could not be annulled by the settlement of
the litigation without its participation and
conformity. It remains entitled to the
compensation, and its right is safeguarded
by the Court because its members are
officers of the Court who are as entitled to
judicial protection against injustice or
imposition of fraud committed by the
client as much as the client is against their
abuses as her counsel. In other words, the
duty of the Court is not only to ensure that
the attorney acts in a proper and lawful
manner, but also to see to it that the
attorney is paid his just fees. Even if the
compensation
of
the
attorney
is
dependent only on winning the litigation,
the subsequent withdrawal of the case
upon the clients initiative would not
deprive the attorney of the legitimate
compensation for professional services
rendered.
The stipulations of the written agreement
between Malvar and the Intervenors, not

being contrary to law, morals, public

policy, public order or good customs, were
valid and binding on her. They expressly
gave rise to the right of the Intervenor to
demand compensation. In a word, she
could not simply walk away from her
contractual
obligations
towards
the
Intervenor, for Article 1159 of the Civil
Code provides that obligations arising
from contracts have the force of law
between the parties and should be
complied with in good faith.
As a final word, it is necessary to state
that no court can shirk from enforcing the
contractual stipulations in the manner
they have agreed upon and written. As a
rule, the courts, whether trial or appellate,
have no power to make or modify
contracts between the parties. Nor can the
courts
save
the
parties
from
disadvantageous provisions. The same
precepts hold sway when it comes to
enforcing fee arrangements entered into
in writing between clients and attorneys.
In the exercise of their supervisory
authority over attorneys as officers of the
Court, the courts are bound to respect and
protect the attorneys lien as a necessary
means to preserve the decorum and
respectability of the Law Profession.
Hence, the Court must thwart any and
every effort of clients already served by
their attorneys worthy services to deprive
them of their hard-earned compensation.
Truly, the duty of the courts is not only to
see to it that attorneys act in a proper and
lawful manner, but also to see to it that
attorneys are paid their just and lawful
fees.
WHEREFORE, the Court APPROVES the
compromise agreement; GRANTS the
Motion
for
Intervention
to
Protect
Attorney's Rights; and ORDERS Czarina T.
Malvar and respondents Kraft Food
Philippines
Inc.
and
Kraft
Foods
International to jointly and severally pay to
Intervenor Law Firm, represented by
Retired
Associate
Justice
Josue
N.
Bellosillo, its stipulated contingent fees of
10% of P41,627,593.75, and the further
sum equivalent to 10% of the value of the
stock option.

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