G.R. No. L-71504 December 17, 1993
ENIEDA MONTILLA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, JESSIE BAYDO, DANILO GREGAS AND JOSE MIRANDA, respondents.

FACTS

Private respondents Jessie Baydo, Jose Miranda, and Danilo Gregas were employed as waiters by petitioner Enieda Montilla, owner of “Sa Kabukiran Restaurant” in Bacolod City, from April and October 1978 until their dismissal on February 23, 1981. They filed a complaint for non-payment of various monetary benefits and later amended it to include illegal dismissal. Petitioner denied an employer-employee relationship, claiming the complainants worked on commission, served only about one hour per customer service, and were helping regular waiters share commissions. She also asserted she was merely a lessor of the restaurant to different individuals during the periods in question. The Labor Arbiter ruled in favor of private respondents, ordering payment of monetary benefits, reinstatement, and backwages. The NLRC affirmed this decision. Subsequently, private respondents executed affidavits of waiver, receiving sums of money from petitioner in an out-of-court settlement (Baydo: P9,000; Miranda: P4,000; Gregas: P3,500). Private respondents’ counsel later manifested that his clients were forced to settle due to the delay in litigation and filed a motion to enforce an attorney’s lien.

ISSUE

The primary issues were: (1) Whether an employer-employee relationship existed between petitioner and private respondents; and (2) Whether the subsequent compromise agreement and waivers executed by private respondents were valid and binding.

RULING

The Supreme Court denied the petition for certiorari. It held that an employer-employee relationship did exist, applying the four-fold test and emphasizing the right-of-control test. The Court found petitioner’s claim of being merely a lessor unmeritorious, noting evidence such as a notarized banking agreement where she signed as the authorized representative of the restaurant and testimonies that the restaurant’s manager paid the employees’ SSS contributions. However, the Court ruled that the compromise agreement and waivers executed by private respondents, where they received monetary settlements, were valid and binding. Citing Periquet vs. NLRC, the Court held that waivers are valid if voluntarily entered into and represent a reasonable settlement, which was the case here. Consequently, the NLRC Resolution could no longer be enforced. Regarding the attorney’s lien, the Court held it could not be enforced in this proceeding, as a charging lien requires a money judgment and execution; counsel must file a separate appropriate action for collection against his clients.