G.R. No.

L-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.

GUTIERREZ, JR., J.:

Facts:

 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. Abanto his former position
without loss of seniority rights, to pay him 12 months backwages in the amount of
₱18,000.00 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 20b1 ₱ 1,500.00 plus an initial living
allowance of ₱ 50.00 which gradually increased to ₱ 320.00.
 On September 4, 1980, Aban received a letter from the corporation informing 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.
 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. Thus, the petitioner argues that the labor arbiter and NLRC have no jurisdiction
over the instant case.

Hence, this present petition.

Issue:
The only issue raised by the petitioner is whether or not there was an employer-employee
relationship between the Petitioner Corporation and Aban.
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 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.

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 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 a 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.

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 limber 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 ₱ 5,000.00. Should reinstatement prove no longer feasible, the
petitioner will pay him separation pay in lieu of reinstatement. (City Trust Finance Corp. 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 of illegal
dismissal). [Manila Midtown Commercial Corporation v. Nuwhrain 159 SCRA 212 (1988)].

Ruling:

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 of seniority rights and
to pay three (3) years backwages without qualification or deduction and ₱ 5,000.00 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 ₱ 5,000.00 attorney's
fees.

SO ORDERED.

Fernan, C.J., Feliciano, Bidin and Cortes, JJ., concur.

TOPIC: Employer-employee relationship

FACTS: This is a petition to review on certiorari the resolution of the NLRC which affirmed the labor
arbiter's decision ordering herein petitioner, Hydro Resources Contractors Corporation to reinstate
Rogelio Abanto 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. Petitioner corporation
hired the private respondent Aban as its Legal Assistant. He received a basic monthly salary of Pl,500.00
plus an initial living allowance of P50.00 which gradually increased to P320.00. Aban received a letter
from the corporation informing him that he would be considered terminated because of his alleged
failure to perform his duties well. 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 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, 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.
ISSUE: Whether or not there was an employer-employee relationship between the petitioner
corporation and Aban, if so, the public respondents have jurisdiction over the case.

RULLING:

Yes. 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.

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.
The petitioner paid him a basic salary plus living allowance. Thereafter, Aban was dismissed on his
alleged failure to perform his duties well. 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 a 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 before the Labor Arbiter to prove that Aban was
a managerial employee. Now, it is disclaiming that Aban was ever its employee. Considering that the
private respondent was illegally dismissed from his employment, he is entitled to reinstatement or
separation pay in lieu thereof and to backwages. ADJUDICATION: Petition was dismissed for lack of
merit.