Case Summary (G.R. No. 203328)
Relevant Timeline and Procedural History
- November 1, 2003: Alva hired as a security guard, later promoted through ranks until 2007.
- October 21, 2007: Alva suspended for one month due to alleged duty lapses and favoritism; subsequently placed on floating status.
- April 22, 2008: Six months lapsed without reassignment, effectively leading to constructive dismissal.
- Alva filed a Complaint for Illegal Dismissal and related claims, represented by the Public Attorney’s Office (PAO).
- Several rulings followed: the Labor Arbiter (LA) found illegal dismissal and awarded backwages, separation pay, and attorney’s fees; the National Labor Relations Commission (NLRC) modified the award omitting backwages and separation pay but maintained nominal damages and attorney’s fees, later deleting attorney’s fees upon reconsideration; the Court of Appeals (CA) reinstated most awards but deleted attorney’s fees on the ground that Alva was represented by the PAO.
- The Supreme Court finally resolved the issue on the entitlement to attorney’s fees despite Alva’s representation by the PAO.
Applicable Law and Legal Framework
- The 1987 Philippine Constitution governs employment and labor relations as the case was decided after 1990.
- Article 111 of the Labor Code provides for the award of attorney’s fees in cases of unlawful withholding of wages, capped at 10% of the amount of wages recovered.
- Article 2208 of the Civil Code lists specific instances where attorney’s fees may be awarded, including when the defendant’s act compelled the plaintiff to litigate and in actions for the recovery of wages of laborers.
- Republic Act No. 9406 (PAO Law), enacted in 2007, authorizes the PAO to receive attorney’s fees as a trust fund for special allowances for PAO officials and lawyers, even when providing free legal services to indigent litigants.
Labor Arbiter’s Findings
The LA ruled in favor of Alva, concluding:
- Alva was illegally dismissed due to prolonged floating status without reassignment or reinstatement.
- Backwages, separation pay, and monetary claims were awarded.
- Attorney’s fees were granted equivalent to 10% of the monetary award, recognizing that Alva was compelled to hire legal counsel to protect his rights.
NLRC’s Modification and Resolution
- NLRC acknowledged just cause in dismissal but recognized lack of procedural due process.
- Modified the award by deleting backwages and separation pay, awarding nominal damages and monetary claims.
- Initially maintained attorney’s fees but deleted them upon reconsideration, reasoning that the dismissal was justified and there was no bad faith, thus no basis for attorney’s fees.
Court of Appeals’ Decision
- Reinstated findings of illegal dismissal, ruling that the prolonged floating status amounted to constructive dismissal and procedural due process was not observed.
- Ordered payment of backwages, separation pay, and monetary claims.
- Deleted attorney’s fees on the ground that Alva was represented by the PAO, thereby negating the need for attorney’s fees.
Issue on Attorney’s Fees
The sole issue before the Supreme Court was whether the deletion of attorney’s fees was proper given Alva’s representation by the PAO, which offers free legal services.
Supreme Court’s Legal Analysis on Attorney’s Fees
- Attorney’s fees in labor cases can be ordinary (compensation to counsel) or extraordinary (indemnity for damages awarded to the party). The latter is applicable in labor disputes involving unlawful withholding of wages.
- Article 111 of the Labor Code sanctions attorney’s fees for unlawful withholding of wages without requiring proof of bad faith; the mere fact that wages were not paid without justification suffices.
- Article 2208 of the Civil Code allows for attorney’s fees when a plaintiff is compelled to litigate to protect his rights, including actions for recovery of wages.
- Jurisprudence confirms that employee-litigants forced to file for recovery of wages are entitled to attorney’s fees, even if unaccompanied by malice or bad faith on the employer’s part.
- The PAO Law (Republic Act No. 9406) explicitly authorizes the award and collection of attorney’s fees by the PAO despite providing free services, designating such fees as a trust fund for special allowances of PAO attorneys and officials.
- Representation by the PAO does not bar the employee from receiving attorney’s fees; instead, such fees serve as a token recompense for the PAO’s free legal assistance.
- Prior jurisprudence (Our Haus Realty Development Corporation v. Parian) established that attorney’s fees awarded to PAO-represented clients shall be paid to the PAO, acknowledging the policy of supporting indigent litigants without discriminating against their right to attorney’s fees.
Rejection of Respondents’ Reliance on Lambo v. NLRC
- The respondents’ reliance on Lambo v. NLRC was misplaced because that case was decided under the old Executive Order No. 292, which did not all
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Case Syllabus (G.R. No. 203328)
Facts and Procedural History
- Joselito A. Alva was hired on November 1, 2003, as a security guard by High Capacity Security Force, Inc. (High Capacity), and periodically promoted to Assistant Security Officer and then Security Officer.
- On June 5, 2007, Alva was assigned Assistant Officer-in-Charge at HRD-PTE, Ltd. Inc., where an incident involving unauthorized entry of a garbage truck occurred under his supervision.
- Alva was suspended for one month starting October 21, 2007, and later placed on floating status without an assignment after HRD-PTE requested his relief due to alleged misconduct.
- Alva was informed on November 23, 2007, that no officer’s post was available and was offered a temporary position as an ordinary guard, but was never assigned any work.
- After unsuccessful requests for reassignment, Alva filed a Complaint for Illegal Dismissal, Underpayment of Wages, Non-Payment of Monetary Benefits, Moral Damages, Exemplary Damages, and Attorney’s Fees against High Capacity and its General Manager, Armando Villanueva.
- Alva was represented by the Public Attorney’s Office (PAO) during the labor proceedings.
Labor Arbiter’s Decision
- On October 28, 2008, the Labor Arbiter (LA) ruled High Capacity guilty of illegal dismissal, citing Alva’s placement on floating status for over six months without assignment.
- The LA ordered reinstatement and payment of backwages from the start of the floating status until decision promulgation.
- Alternatively, the LA awarded separation pay instead of reinstatement and granted attorney’s fees amounting to 10% of the total monetary award, recognizing that Alva was compelled to seek legal assistance.
- High Capacity appealed to the National Labor Relations Commission (NLRC) dissatisfied with the LA’s decision.
NLRC Ruling and Resolution
- On December 8, 2009, the NLRC modified the LA’s ruling, finding Alva’s dismissal justified due to sleeping while on duty but noted procedural due process violation.
- The NLRC deleted backwages and separation pay awards but granted nominal damages (Php 30,000), payment of holiday pay, service incentive leave pay, and 13th-month pay totaling Php 52,890.
- Attorney’s fees amounting to 10% of the judgment award were maintained.
- Upon Motions for Reconsideration, the NLRC partially granted High Capacity’s motion by deleting attorney’s fees, stating no bad faith was present due to justified dismissal.
- Both parties filed separate petitions for certiorari before the Court of Appeals (CA), which were consolidated.
Court of Appeals Decision and Resolution
- On February 24, 2012, the CA held that Alva was constructively dismissed due to indefinite floating status beyond six months without reassignment.
- The CA emphasized the breach of procedural due process and declared the dismissal illegal.
- The CA ordered payment of backwages from salary withholding date to finality, separation pay in lieu of reinstatement, and monetary claims (holiday pay, service leave, 13th month pay).
- Notably, the CA deleted the award of attorney’s fees on account that Alva was represented free of charge by the PAO.
- Motions for reconsideration filed by both parties were denied by the CA on August 30, 2012.
Issue on Appeal
- The sole issue presented before the Supreme Court was whether the CA erred in deleting the award of attorney’s fees in favor of Alva despite his successful claim for illegal dismissal and monetary benefits.