THIRD DIVISION

[G.R. No. 62909. April 18, 1989.]

HYDRO RESOURCES CONTRACTORS CORPORATION, petitioner,

vs. LABOR ARBITER ADRIAN N. PAGALILAUAN and the
NATIONAL LABOR RELATIONS COMMISSION, public
respondents, and ROGELIO A. ABAN, private respondent.

G.E. Aragones & Associates for petitioner.

The Solicitor General for public respondents.
Cirilo A. Bravo for private respondent.

SYLLABUS

1. LABOR LAWS; EMPLOYER-EMPLOYEE RELATIONSHIP; LAWYER IN THE

EXERCISE OF PROFESSION DISTINGUISHED FROM LAWYER AS AN EMPLOYEE. —
A lawyer, like any other professional, may very well be an employee of a private
corporation or even of the government. It is not unusual for a big corporation to
hire a staff of lawyers as its in-house counsel, pay them regular salaries, rank
them in its table of organization, and otherwise treat them like its other officers
and employees. At the same time, it may also contract with a law firm to act as
outside counsel on a retainer basis. The two classes of lawyers often work closely
together but one group is made up of employees while the other is not. A similar
arrangement may exist as to doctors, nurses, dentists, public relations
practitioners, and other professionals. Aban was employed by the petitioner to be
its Legal Assistant as evidenced by his appointment paper (Exhibit "A"). The
petitioner paid him a basic salary plus living allowance. Thereafter, Aban was
dismissed on his alleged failure to perform his duties well. (Exhibit "B"). Aban
worked solely for the petitioner and dealt only with legal matters involving the
said corporation and its employees. He also assisted the Personnel Officer in
processing appointment papers of employees. This latter duty is not an act of
lawyer in the exercise of his profession but rather a duty for the benefit of the
corporation. The above-mentioned facts show that the petitioner paid Aban's
wages, exercised its power to hire and fire the respondent employee and more
important, exercised control over Aban by defining the duties and functions of his
work.
2. ID.; ID.; TEST FOR EXISTENCE THEREOF; "RIGHT-OF-CONTROL" TEST;
DECISIVE FACTOR. — This Court is not without a guide in deciding whether or
not an employer-employee relation exists between the contending parties. As
stated in the case of Tabas v. California Manufacturing Co., (G.R. No. 80680,
January 26, 1989): "This Court has consistently ruled that the determination of
whether or not there is an employer-employee relation depends upon four
standards: (1) the manner of selection and engagement of the putative
employee; (2) the mode of payment of wages; (3) the presence or absence of a
power of dismissal; and (4) the presence or absence of a power to control the
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 putative employee's conduct. Of the four, the right-of-control test has been held
to be the decisive factor."
3. ID.; ID.; DENIAL OF THE EXISTENCE THEREOF BARRED BY ESTOPPEL. —
Estoppel lies against the petitioner. It may no longer question the jurisdiction of
the labor arbiter and NLRC. The petitioner presented documents (Exhibits "2" to
"19") before the Labor Arbiter to prove that Aban was a managerial employee.
Now, it is disclaiming that Aban was ever its employee. The proper procedure
was for the petitioner to prove its allegations that Aban drank heavily, violated
company policies, spent company funds and properties for personal ends, and
otherwise led the employer to lose trust and confidence in him. The real issue
was due process, not the specious argument raised in this petition.
4. ID.; APPEAL; FINDINGS OF FACT OF LABOR ARBITER RESPECTED. — The
findings of fact of the Labor Arbiter being supported by substantial evidence are
binding on this Court. (See Industrial Timber Corp. v. National Labor Relations
Commission, G.R. No. 83616, January 20, 1989).
5. ID.; EMPLOYMENT; ILLEGAL DISMISSAL; REINSTATEMENT AND
BACKWAGES WARRANTED IN CASE AT BAR. — Considering that the private
respondent was illegally dismissed from his employment in 1980, he is entitled
to reinstatement to his former or similar position without loss of seniority rights,
if it is still feasible, to backwages without qualification or deduction for three
years. (D.M. Consunji, Inc. v. Pucan, 159 SCRA 107 (1988); Flores v. Nuestro, G.R.
No. 66890, April 15, 1988), and to reasonable attorney's fees in the amount of
P5,000.00. Should reinstatement prove no longer feasible, the petitioner will pay
him separation pay in lieu of reinstatement. (City Trust Finance Co; p. v. NLRC,
157 SCRA 87; Santos v. NLRC, 154 SCRA 166; Metro Drug v. NLRC, et al., 143
SCRA 132; Luzon Brokerage v. Luzon Labor Union, 7 SCRA 116). The amount of
such separation pay as may be provided by law or the collective bargaining
agreement is to be computed based on the period from 24 October 1978 (date of
first employment) to 4 October 1983 (three years after date illegal dismissal).
[Manila Midtown Commercial Corporation v. Nuwhrain, 159 SCRA 212 (1988)].

DECISION

GUTIERREZ, JR., J : p

This is a petition to review on certiorari the resolution of the National Labor

Relations Commission (NLRC) which affirmed the labor arbiter's decision ordering
herein petitioner, Hydro Resources Contractors Corporation to reinstate Rogelio
A. Aban to his former position without loss of seniority rights, to pay him 12
months backwages in the amount of P18,000.00 and to pay attorney's fees in
the amount of P1,800.00.
On October 24, 1978, petitioner corporation hired the private respondent Aban as
its "Legal Assistant." He received a basic monthly salary of P1,500.00 plus an
initial living allowance of P50.00 which gradually increased to P320.00.
On September 4, 1980, Aban received a letter from the corporation informing
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 him that he would be considered terminated effective October 4, 1980 because
of his alleged failure to perform his duties well.
On October 6, 1980, Aban filed a complaint against the petitioner for illegal
dismissal.
The labor arbiter ruled that Aban was illegally dismissed. This ruling was
affirmed by the NLRC on appeal.
Hence, this present petition.
The only issue raised by the petitioner is whether or not there was an employer-
employee relationship between the petitioner corporation and Aban. The
petitioner questions the jurisdiction of the public respondents considering the
alleged absence of an employer-employee relationship.
The petitioner contends that its relationship with Aban is that of a client with his
lawyer. It is its position that "(a) lawyer as long as he is acting as such, as long as
he is performing acts constituting practice of law, can never be considered an
employee. His relationship with those to whom he renders services, as such
lawyer, can never be governed by the labor laws. For a lawyer to so argue is not
only demeaning to himself (sic), but also his profession and to his brothers in the
profession." Thus, the petitioner argues that the labor arbiter and NLRC have no
jurisdiction over the instant case. prLL

The contention is without merit.

A lawyer, like any other professional, may very well be an employee of a private
corporation or even of the government. It is not unusual for a big corporation to
hire a staff of lawyers as its in-house counsel, pay them regular salaries, rank
them in its table of organization, and other. vise treat them like its other officers
and employees. At the same time, it may also contract with a law firm to act as
outside counsel on a retainer basis. The two classes of lawyers often work closely
together but one group is made up of employees while the other is not. A similar
arrangement may exist as to doctors, nurses, dentists, public relations
practitioners, and other professionals.
This Court is not without a guide in deciding whether or not an employer-
employee relation exists between the contending parties or whether or not the
private respondent was hired on a retainer basis.
As stated in the case of Tabas v. California Manufacturing Co., (G.R. No. 80680,
January 26, 1989):
"This Court has consistently ruled that the determination of whether or
not there is an employer-employee relation depends upon four standards:
(1) the manner of selection and engagement of the putative employee; (2)
the mode of payment of wages; (3) the presence or absence of a power
of dismissal; and (4) the presence or absence of a power to control the
putative employee's conduct. Of the four, the right-of-control test has
been held to be the decisive factor."

Aban was employed by the petitioner to be its Legal Assistant as evidenced by

his appointment paper (Exhibit "A"). The petitioner paid him a basic salary plus
living allowance. Thereafter, Aban was dismissed on his alleged failure to perform
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 his duties well. (Exhibit "B").
Aban worked solely for the petitioner and dealt only with legal matters involving
the said corporation and its employees. Its also assisted the Personnel Officer in
processing appointment papers of employees. This latter duty is not an act of
lawyer in the exercise of his profession but rather a duty for the benefit of the
corporation.
The above-mentioned facts show that the petitioner paid Aban's wages, exercised
its power to hire and fire the respondent employee and more important,
exercised control over Aban by defining the duties and functions of his work.
Moreover, estoppel lies against the petitioner. It may no longer question the
jurisdiction of the labor arbiter and NLRC.
The petitioner presented documents (Exhibits "2" to "19") before the Labor
Arbiter to prove that Aban was a managerial employee. Now, it is disclaiming
that Aban was ever its employee. The proper procedure was for the petitioner to
prove its allegations that Aban drank heavily, violated company policies, spent
company funds and properties for personal ends, and otherwise led the employer
to lose trust and confidence in him. The real issue was due process, not the
specious argument raised in this petition.prcd

The new theory presented before this Court is a last-ditch effort by the petitioner
to cover up for the unwarranted dismissal of its employee. This Court frowns
upon such delaying tactics.

The findings of fact of the Labor Arbiter being supported by substantial evidence
are binding on this Court. (See Industrial Timber Corp. v. National Labor Relations
Commission, G.R. No. 83616, January 20, 1989).
Considering that the private respondent was illegally dismissed from his
employment in 1980, he is entitled to reinstatement to his former or similar
position without loss of seniority rights, if it is still feasible, to backwages
without qualification or deduction for three years, (D.M. Consunji, Inc. v. Pucan,
159 SCRA 107 (1988); Flores v. Nuestro, G.R. No. 66890, April 15, 1988), and to
reasonable attorney's fees in the amount of P5,000.00. Should reinstatement
prove no longer feasible, the petitioner will pay him separation pay in lieu of
reinstatement. (City Trust Finance Co; p. v. NLRC, 157 SCRA 87; Santos v. NLRC,
154 SCRA 166; Metro Drug v. NLRC, et al., 143 SCRA 132; Luzon Brokerage v.
Luzon Labor Union, 7 SCRA 116). The amount of such separation pay as may be
provided by law or the collective bargaining agreement is to be computed based
on the period from 24 October 1978 (date of first employment) to 4 October
1983 (three years after date illegal dismissal). [Manila Midtown Commercial
Corporation v. Nuwhrain, 159 SCRA 212 (1988)].
WHEREFORE, the petition is hereby DISMISSED for lack of merit. The petitioner
is ordered to reinstate the private respondent to his former or a similar position
without loss seniority rights and to pay three (3) years backwages without
qualification or deduction and P5,000.00 in attorney's fees. Should reinstatement
not be feasible, the petitioner shall pay the private respondent termination
benefits in addition to the above stated three years backpay and P5,000.00
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 attorney's fees.
SO ORDERED.
Fernan (C.J.), Feliciano, Bidin and Cortes, JJ., concur.

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