G.R. No. 62909 - Hydro Resources Contractors Corp. vs. Pagalilauan

On October 24, 1978, petitioner Hydro Resources Contractors Corporation hired Rogelio A. Aban as its Legal Assistant.
Aban’s compensation comprised a basic monthly salary of P1,500.00 along with a living allowance that started at P50.00 and eventually increased to P320.00.

On September 4, 1980, Aban received a letter informing him that his employment would be terminated effective October 4, 1980 due to alleged inadequate performance.
Following his dismissal, on October 6, 1980, Aban filed a complaint against the petitioner, alleging illegal dismissal.

The labor arbiter ruled in favor of Aban by finding that his dismissal was illegal.
The National Labor Relations Commission (NLRC) affirmed the labor arbiter’s decision on appeal, thereby ordering:

The reinstatement of Aban to his former position without loss of seniority rights;
Payment of 12 months—three years’—backwages; and
Payment of attorney’s fees.

The petitioner contended that there was no employer-employee relationship with Aban, arguing that he functioned as a lawyer and, therefore, his services were rendered under a client-lawyer arrangement rather than an employment contract.
This argument was used to question the jurisdiction of the labor arbiter and NLRC over the case.
The Court clarified that a lawyer, like other professionals, can be employed directly by a corporation as an in-house counsel and subject to the labor laws.

Evidence, including Aban’s appointment paper (Exhibit “A”) and the dismissal letter (Exhibit “B”), supported that Aban was hired, paid, and controlled by the petitioner.
Aban’s functions included handling legal matters strictly for the corporation and assisting in administrative tasks, indicating a direct employment relationship beyond mere consulting or retainer services.

Whether the petitioner’s relationship with Aban should be characterized as that of an employer-employee or merely a client-lawyer engagement.
Whether the petitioner’s argument that Aban performed as a lawyer exempts him from the protection of the labor laws.

Whether the NLRC and the labor arbiter had the proper jurisdiction to rule on Aban’s claim for illegal dismissal, given the petitioner’s challenge on the nature of the relationship.

Whether reinstatement without loss of seniority, backwages for three years, and attorney’s fees were proper remedies for the illegal dismissal.