13. PAFLU vs. Binalbagan Isabela Sugar Co.

Philippine Association of Free Labor Unions (PAFLU), Enrique Entila and Victoriano
Tenazas vs. Binalbagan Isabela Sugar Company, Court of Industrial Relations and
Quintin Muning

FACTS:

COURT OF INDUSTRIAL RELATIONS ORDERED REINSTATEMENT WITH BACKWAGES

FOR ENTILA AND TENAZAS.

Cipriano Cid & Associates, counsel of Entila and Tenazas filed a notice of attorney's
lien equivalent to 30% of the total backwages.

i. Entila and Tenazas filed

manifestation indicating their non-objection to an award
of attorney's fees for 25% of their backwages

ii. Quentin Muning filed a

"Petition for the Award of Services Rendered" equivalent
to 20% of the backwages.

1. Opposed by Cipriano Cid & Associates the ground

that he is not a lawyer.

a. Court of Industrial Relations awarded 25%

of the backwages as compensation for
professional services rendered in the case,
apportioned as follows:

i. Cipriano 10%

ii. Quintin Muning 10%

 iii. Atanacio Pacis 5%

iii. CANON 34: condemns an

agreement providing for the division of attorney's fees,
whereby a non-lawyer union president is allowed to
share in said fees with lawyers

1. Sec 5(b) of RA 875 that —No justification for a

ruling, that the person representing the party-
litigant in the Court of Industrial Relations, even if
he is not a lawyer, is entitled to attorney's fees

a. Duty and obligation of the Court or Hearing

Officer to examine and cross examine
witnesses on behalf of the parties and to
assist in the orderly presentation of
evidence.

b. Representation should be exclusively

entrusted to duly qualified members of the
bar.

The permission for a non-member does not entitle the representative to

compensation for such representation.

Sec 24, Rule 138 Compensation of attorney's agreement as to fees:

i. An attorney shall be entitled

to have and recover from his client no more than a
reasonable compensation for his services.

a. Petition to take the Bar Exam in 1960 after failing in the 1959
Bar Examination.
 b. His uncle, TAPEL, opposed the petition alleging that his
nephew is not a person of good moral character for having
misrepresented, sometime in 1950, when he was 16 years old,
that he was eligible for 3rd year high school by utilizing the
school records of his cousin and name-sake, Juan M. Publico.

ii. PUBLICO has not completed

Grade 4

iii. Tapel instituted an

administrative case against his nephew for falsification of
school records or credentials.

PUBLICO PASSED THE BAR, took the lawyer's oath, and signed the Roll of
Attorneys.

Legal Officer-Investigator, Ricardo Paras, Jr., investigated and reported:

September 1961, Dulcisimo Tapel dropped the complaint on the ground that his
witnesses had turned hostile.

i. Motion denied, his

witnesses had already testified.

Recommended PUBLICO’s name to be stricken off the roll of attorneys.

i. Respondent falsified his

school records

ii. Thereby violating the

provisions of Sections 5 and 6, Rule 127 of the Rules of
Court, which require completion by a bar examinee or
candidate of the prescribed courses in elementary, high,
pre-law and law school, prior to his admission to the
practice of law.
11 years later, PUBLICO filed a Petition for Reinstatement alleging that he had
never received, for had he been informed, nor did he have any knowledge of the
Resolution of the Court ordering the Bar Division to strike his name from the Roll
of Attorneys.

He was advised to inquire into the outcome of the disbarment case against him.

He resigned from all his positions in public and private offices, and transferred to
Manila.

Prayed that Court allow reinstatement taking into consideration his exemplary
conduct from the time he became a lawyer, his services to the community the
numerous awards, resolutions and/'or commendations he received,

i. Court denied the Petition.

ii. Petitioner moved for

reconsideration was denied by the Court for lack of
merit.

5th plea avers that his enrollment in Third Year High School in Manila was through
the initiative of his uncle, Dulcisimo B. Tapel who accompanied him to school and
enrolled him in a grade level above his qualifications in spite of his demonstrations

i. Misrepresentation
committed was precipitated by his uncle; that being
merely 16 year old, he could not be expected to act with
discernment as he was still under the influence of his
uncle, who later on caused his disbarment

ii. No opposition has been filed

to any of the petitions.

ISSUE:
 May a non-lawyer recover attorney's fees for legal services rendered?

The award of 10% to Quintin Muning who is not a lawyer according to the
order, is sought to be voided in the present petition.

WON a union may appeal an award of attorney's fees which are deductible
from the backpay of some of its members. YES.

It was PAFLU that moved for an extension of time to file the present
petition for review; union members Entila and Tenazas did not ask for
extension but they were included as petitioners in the present petition.
Their inclusion in the petition as co-petitioners was belated.

HELD:

ORDERS UNDER REVIEW ARE SET ASIDE AS THEY ARE AWARDED 10% OF
BACKWAGES AS ATTORNEY’S FEES FOR MUNING. COSTS AGAINST MUNING.

Lawyer-client relationship is only possible if one is a lawyer. Since respondent

Muning is not one, he cannot establish an attorney-client relationship with
Enrique Entila and Victorino Tenezas or with PAFLU, and he cannot, therefore,
recover attorney's fees.

Public policy demands that legal work in representation of parties litigant should
be entrusted only to those possessing tested qualifications, for the ethics of the
profession and for the protection of courts, clients and the public.

The reasons are that the ethics of the legal profession should not be violated:

Acting as an attorney with authority constitutes contempt of court, which is

punishable by fine or imprisonment or both,

Law will not assist a person to reap the fruits or benefit of an act or an act done in
violation of law
If were to be allowed to non-lawyers, it would leave the public in hopeless
confusion as to whom to consult in case of necessity and also leave the bar in a
chaotic condition, aside from the fact that non-lawyers are not amenable to
disciplinary measures.

In response to UNION may appeal an award of attorney's fees which are

deductible from the backpay of some of its members:

YES because such union or labor organization is permitted to institute an action in

the industrial courton behalf of its members

If an award is disadvantageous to its members, the union may prosecute an

appeal as an aggrieved party, under Sec 6, RA 875:

i. Sec. 6. Unfair Labor Practice

cases — Appeals. — Any person aggrieved by any order
of the Court may appeal to the Supreme Court of the
Philippines.

Usually, individual unionist is not in a position to bear the financial burden of

litigations.

Posted 30th December 2012 by Lee Anne

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14.

Five J Taxi vs. NLRC

G.R. No. 111474

SECOND DIVISION
[ G.R. No. 111474, August 22, 1994 ]
FIVE J TAXI AND/OR JUAN S. ARMAMENTO, PETITIONERS, VS.
NATIONAL LABOR RELATIONS COMMISSION, DOMINGO MALDIGAN
AND GILBERTO SABSALON, RESPONDENTS.

RESOLUTION
REGALADO, J.:
Petitioners Five J Taxi and/or Juan S. Armamento filed this special civil action for
certiorari to annul the decision[1] of respondent National Labor Relations
Commission (NLRC) ordering petitioners to pay private respondents Domingo
Maldigan and Gilberto Sabsalon their accumulated deposits and car wash
payments, plus interest thereon at the legal rate from the date of promulgation of
judgment to the date of actual payment, and 10% of the total amount as and for
attorney's fees.
We have given due course to this petition for, while to the cynical the de minimis
amounts involved should not impose upon the valuable time of this Court, we find
therein a need to clarify some issues the resolution of which are important to small
wage earners such as taxicab drivers. As we have heretofore repeatedly
demonstrated, this Court does not exist only for the rich or the powerful, with their
reputed monumental cases of national impact. It is also the Court of the poor or the
underprivileged, with the actual quotidian problems that beset their individual
lives.
Private respondents Domingo Maldigan and Gilberto Sabsalon were hired by the
petitioners as taxi drivers[2] and, as such, they worked for 4 days weekly on a 24-
hour shifting schedule. Aside from the daily "boundary" of P700.00 for air-
conditioned taxi or P450.00 for non-airconditioned taxi, they were also required to
pay P20.00 for car washing, and to further make a P15.00 deposit to answer for
any deficiency in their "boundary," for every actual working day.
In less than 4 months after Maldigan was hired as an extra driver by the petitioners,
he already failed to report for work for unknown reasons. Later, petitioners learned
that he was working for "Mine of Gold" Taxi Company. With respect to Sabsalon,
while driving a taxicab of petitioners on September 6, 1983, he was held up by his
armed passenger who took all his money and thereafter stabbed him. He was
hospitalized and after his discharge, he went to his home province to recuperate.
In January 1987, Sabsalon was re-admitted by petitioners as a taxi driver under the
same terms and conditions as when he was first employed, but his working
schedule was made on an "alternative basis," that is, he drove only every other day.
However, on several occasions, he failed to report for work during his schedule.
On September 22, 1991, Sabsalon failed to remit his "boundary" of P700.00 for the
previous day. Also, he abandoned his taxicab in Makati without fuel refill worth
P300.00. Despite repeated requests of petitioners for him to report for work, he
adamantly refused. Afterwards it was revealed that he was driving a taxi for
"Bulaklak Company."
Sometime in 1989, Maldigan requested petitioners for the reimbursement of his
daily cash deposits for 2 years, but herein petitioners told him that not a single
centavo was left of his deposits as these were not even enough to cover the amount
spent for the repairs of the taxi he was driving. This was allegedly the practice
adopted by petitioners to recoup the expenses incurred in the repair of their taxicab
units. When Maldigan insisted on the refund of his deposit, petitioners terminated
his services. Sabsalon, on his part, claimed that his termination from employment
was effected when he refused to pay for the washing of his taxi seat covers.
On November 27, 1991, private respondents filed a complaint with the Manila
Arbitration Office of the National Labor Relations Commission charging
petitioners with illegal dismissal and illegal deductions. That complaint was
dismissed, the labor arbiter holding that it took private respondents two years to
file the same and such unreasonable delay was not consistent with the natural
reaction of a person who claimed to be unjustly treated, hence the filing of the case
could be interpreted as a mere afterthought.
Respondent NLRC concurred in said findings, with the observation that private
respondents failed to controvert the evidence showing that Maldigan was
employed by "Mine of Gold" Taxi Company from February 10, 1987 to December
10, 1990; that Sabsalon abandoned his taxicab on September 1, 1990; and that they
voluntarily left their jobs for similar employment with other taxi operators. It,
accordingly, affirmed the ruling of the labor arbiter that private respondents'
services were not illegally terminated. It, however, modified the decision of the
labor arbiter by ordering petitioners to pay private respondents the awards stated at
the beginning of this resolution.
Petitioners' motion for reconsideration having been denied by the NLRC, this
petition is now before us imputing grave abuse of discretion on the part of said
public respondent.
This Court has repeatedly declared that the factual findings of quasi-judicial
agencies like the NLRC, which have acquired expertise because their jurisdiction
is confined to specific matters, are generally accorded not only respect but, at
times, finality if such findings are supported by substantial evidence.[3] Where,
however, such conclusions are not supported by the evidence, they must be struck
down for being whimsical and capricious and, therefore, arrived at with grave
abuse of discretion.[4]
Respondent NLRC held that the P15.00 daily deposits made by respondents to
defray any shortage in their "boundary" is covered by the general prohibition in
Article 114 of the Labor Code against requiring employees to make deposits, and
that there is no showing that the Secretary of Labor has recognized the same as a
"practice" in the taxi industry. Consequently, the deposits made were illegal and the
respondents must be refunded therefor.
Article 114 of the Labor Code provides as follows:
"Article 114. Deposits for loss or damage. - No employer shall require his worker
to make deposits from which deductions shall be made for the reimbursement of
loss of or damage to tools, materials; or equipment supplied by the employer,
except when the employer is engaged in such trades, occupations or business
where the practice of making deposits is a recognized one, or is necessary or
desirable as determined by the Secretary of Labor in appropriate rules and
regulations."

It can be deduced therefrom that the said article provides the rule on deposits for
loss or damage to tools, materials or equipments supplied by the employer. Clearly,
the same does not apply to or permit deposits to defray any deficiency which the
taxi driver may incur in the remittance of his "boundary." Also, when private
respondents stopped working for petitioners, the alleged purpose for which
petitioners required such unauthorized deposits no longer existed. In other case,
any balance due to private respondents after proper accounting must be returned to
them with legal interest.
However, the unrebutted evidence with regard to the claim of Sabsalon is as
follows:
DEPOSITS SHORTAGES VALES
YEAR
1987 P1,403.00 P 567.00 P1,000.00
1988 720.00 760.00 200.00
1989 686.00 130.00 1,500.00
1990 605.00 570.00 --
1991 165.00 2,300.00 --
P3,579.00 P4,327.00 P2,700.00
The foregoing accounting shows that from 1987-1991, Sabsalon was able to
withdraw his deposits through vales or he incurred shortages, such that he is even
indebted to petitioners in the amount of P3,448.00. With respect to Maldigan's
deposits, nothing was mentioned questioning the same even in the present petition.
We accordingly agree with the recommendation of the Solicitor General that since
the evidence shows that he had not withdrawn the same, he should be reimbursed
the amount of his accumulated cash deposits.[5]
On the matter of the car wash payments, the labor arbiter had this to say in his
decision: "Anent the issue of illegal deductions, there is no dispute that as a matter
of practice in the taxi industry, after a tour of duty, it is incumbent upon the driver
to restore the unit he has driven to the same clean condition when he took it out,
and as claimed by the respondents (petitioners in the present case), complainant(s)
(private respondents herein) were made to shoulder the expenses for washing, the
amount doled out was paid directly to the person who washed the unit, thus we
find nothing illegal in this practice, much more (sic) to consider the amount paid
by the driver as illegal deduction in the context of the law."[6] (Words in
parentheses added.)
Consequently, private respondents are not entitled to the refund of the P20.00 car
wash payments they made. It will be noted that there was nothing to prevent
private respondents from cleaning the taxi units themselves, if they wanted to save
their P20.00. Also, as the Solicitor General correctly noted, car washing after a tour
of duty is a practice in the taxi industry, and is, in fact, dictated by fair play.
On the last issue of attorney's fees or service fees for private respondents'
authorized representative, Article 222 of the Labor Code, as amended by Section 3
of Presidential Decree No. 1691, states that non-lawyers may appear before the
NLRC or any labor arbiter only (1) if they represent themselves, or (2) if they
represent their organization or the members thereof. While it may be true that
Guillermo H. Pulia was the authorized representative of private respondents, he
was a non-lawyer who did not fall in either of the foregoing categories. Hence, by
clear mandate of the law, he is not entitled to attorney's fees.
Furthermore, the statutory rule that an attorney shall be entitled to have and
recover from his client a reasonable compensation for his services[7] necessarily
imports the existence of an attorney-client relationship as a condition for the
recovery of attorney's fees, and such relationship cannot exist unless the client's
representative is a lawyer.[8]
WHEREFORE, the questioned judgment of respondent National Labor Relations
Commission is hereby MODIFIED by deleting the awards for reimbursement of
car wash expenses and attorney's fees and directing said public respondent to order
and effect the computation and payment by petitioners of the refund for private
respondent Domingo Maldigan's deposits, plus legal interest thereon from the date
of finality of this resolution up to the date of actual payment thereof.
SO ORDERED.

15. Kanlaon vs NLRC

FACTS: Petitioner is a domestic corporation engaged in the construction business

nationwide with principal office at No. 11 Yakan St., La Vista Subdivision, Quezon
City. In 1988, petitioner was contracted by the National Steel Corporation to
construct residential houses for its plant employees in Steeltown, Sta. Elena, Iligan
City. Private respondents were hired by petitioner as laborers in the project and
worked under the supervision of Engineers Paulino Estacio and Mario Dulatre. In
1989, the project neared its completion and petitioner started terminating the
services of private respondents and its other employees.

In 1990, private respondents filed separate complaints against petitioner before

Sub-Regional Arbitration Branch XII, Iligan City. Numbering forty-one (41) in all,
they claimed that petitioner paid them wages below the minimum and sought
payment of their salary differentials and thirteenth-month pay. Engineers Estacio
and Dulatre were named co-respondents.

The preliminary conferences before the labor arbiters were attended by Engineers
Estacio and Dulatre and private respondents. At the conference of June 11, 1990
before Arbiter Siao, Engineer Estacio admitted petitioner’s liability to private
respondents and agreed to pay their wage differentials and thirteenth-month pay
on June 19, 1990. As a result of this agreement, Engineer Estacio allegedly waived
petitioner’s right to file its position paper. 1 Private respondents declared that
they, too, were dispensing with their position papers and were adopting their
complaints as their position paper.

Extension was denied by the LA Siao and ordered the employer company to pay
the employees.

Petitioner appealed to respondent National Labor Relations Commission. It

alleged that it was denied due process and that Engineers Estacio and Dulatre had
no authority to represent and bind petitioner.

NLRC affirmed the decisions of the Labor Arbiters.

RULING: It has been established that petitioner is a private domestic corporation

with principal address in Quezon City. The complaints against petitioner were filed
in Iligan City and summons served on Engineer Estacio in Iligan City. The question
now is whether Engineer Estacio was an agent and authorized representative of
petitioner.

Under the Revised Rules of Court, 7 service upon a private domestic corporation
or partnership must be made upon its officers, such as the president, manager,
secretary, cashier, agent, or any of its directors. These persons are deemed so
integrated with the corporation that they know their responsibilities and
immediately discern what to do with any legal papers served on them.
In the case at bar, Engineer Estacio, assisted by Engineer Dulatre, managed and
supervised the construction project. 9 According to the Solicitor General and
private respondents, Engineer Estacio attended to the project in Iligan City and
supervised the work of the employees thereat. As manager, he had sufficient
responsibility and discretion to realize the importance of the legal papers served
on him and to relay the same to the president or other responsible officer of
petitioner. Summons for petitioner was therefore validly served on him.

Engineer Estacio’s appearance before the labor arbiters and his promise to settle
the claims of private respondents is another matter.

The general rule is that only lawyers are allowed to appear before the labor
arbiter and respondent Commission in cases before them. The Labor Code and the
New Rules of Procedure of the NLRC, nonetheless, lists three (3) exceptions to the
rule, viz:

Sec. 6. Appearances. — . . . .

A non-lawyer may appear before the Commission or any Labor Arbiter only if:
(a) he represents himself as party to the case;
(b) he represents the organization or its members, provided that he shall be made
to present written proof that he is properly authorized; or
(c) he is a duly-accredited member of any legal aid office duly recognized by the
Department of Justice or the Integrated Bar of the Philippines in cases referred
thereto by the latter. . . . 10

A non-lawyer may appear before the labor arbiters and the NLRC only if: (a) he
represents himself as a party to the case; (b) he represents an organization or its
members, with written authorization from them: or (c) he is a duly-accredited
member of any legal aid office duly recognized by the Department of Justice or
the Integrated Bar of the Philippines in cases referred to by the latter. 11
Engineers Estacio and Dulatre were not lawyers. Neither were they duly-
accredited members of a legal aid office. Their appearance before the labor
arbiters in their capacity as parties to the cases was authorized under the first
exception to the rule. However, their appearance on behalf of petitioner required
written proof of authorization. It was incumbent upon the arbiters to ascertain
this authority especially since both engineers were named co-respondents in the
cases before the arbiters. Absent this authority, whatever statements and
declarations Engineer Estacio made before the arbiters could not bind petitioner.

Nevertheless, even assuming that Engineer Estacio and Atty. Abundiente were
authorized to appear as representatives of petitioner, they could bind the latter
only in procedural matters before the arbiters and respondent Commission.
Petitioner’s liability arose from Engineer Estacio’s alleged promise to pay. A
promise to pay amounts to an offer to compromise and requires a special power
of attorney or the express consent of petitioner. The authority to compromise
cannot be lightly presumed and should be duly established by evidence.

Sec. 7. Authority to bind party. — Attorneys and other representatives of parties

shall have authority to bind their clients in all matters of procedure; but they
cannot, without a special power of attorney or express consent, enter into a
compromise agreement with the opposing party in full or partial discharge of a
client’s claim.

After petitioner’s alleged representative failed to pay the workers’ claims as

promised, Labor Arbiters Siao and Palangan did not order the parties to file their
respective position papers. The arbiters forthwith rendered a decision on the
merits without at least requiring private respondents to substantiate their
complaints. The parties may have earlier waived their right to file position papers
but petitioner’s waiver was made by Engineer Estacio on the premise that
petitioner shall have paid and settled the claims of private respondents at the
scheduled conference. Since petitioner reneged on its “promise,” there was a
failure to settle the case amicably. This should have prompted the arbiters to
order the parties to file their position papers.
Sec. 3. Submission of Position Papers/Memorandum. — Should the parties fail to
agree upon an amicable settlement, in whole or in part, during the conferences,
the Labor Arbiter shall issue an order stating therein the matters taken up and
agreed upon during the conferences and directing the parties to simultaneously
file their respective verified position papers.