G.R. No. 120592 March 14, 1997
TRADERS ROYAL BANK EMPLOYEES UNION-INDEPENDENT, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and EMMANUEL NOEL A. CRUZ, respondents.

FACTS

Petitioner Traders Royal Bank Employees Union retained the law firm of Atty. Emmanuel Noel A. Cruz to prosecute its members’ claims for holiday, mid-year, and year-end bonuses against Traders Royal Bank (TRB). The NLRC decided in favor of the employees, but this decision was elevated to the Supreme Court. The Supreme Court, in a final and executory decision, modified the NLRC award by deleting the mid-year and year-end bonus differentials but affirming the award for holiday pay differential, which TRB computed and paid at P175,794.32. The Supreme Court’s decision did not include an award for attorney’s fees.
Subsequently, Atty. Cruz filed a motion before the Labor Arbiter to determine his attorney’s fees, claiming a 10% contingent fee on the collected holiday pay award pursuant to an alleged verbal agreement. The Labor Arbiter granted the motion, ordering the union to pay P17,574.43. The NLRC affirmed this order. The union petitioned the Supreme Court, arguing that the NLRC acted without jurisdiction because its order effectively modified the final Supreme Court decision which did not award attorney’s fees.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in awarding attorney’s fees to private respondent after the Supreme Court had rendered a final and executory decision in the main case that did not include such an award.

RULING

No. The NLRC did not commit grave abuse of discretion. The Supreme Court clarified the distinction between the two concepts of attorney’s fees. The “extraordinary concept” refers to an indemnity for damages ordered against the losing party, which must be included in the main judgment. The “ordinary concept” refers to compensation due to a lawyer from his client under their retainer agreement, which is a separate contractual obligation. The fees claimed by Atty. Cruz fall under the ordinary concept—compensation from his own client, the union, not from the adverse party TRB.
Therefore, the claim for these fees is not part of the money judgment against TRB and does not constitute a modification of the Supreme Court’s final decision. It is a separate collection suit arising from the contract for professional services. The NLRC properly exercised jurisdiction over this incidental matter. However, the Supreme Court found the 10% contingent fee unreasonable due to the absence of a written agreement and the limited nature of the legal services rendered, which primarily involved execution proceedings after the Supreme Court’s final ruling. Consequently, the award was reduced to P10,000.00 as reasonable compensation.