GR 93310; (November, 1991) (Digest)
G.R. No. 93310 -12 November 21, 1991
UNIVERSITY OF THE EAST, petitioner, vs. THE SECRETARY OF LABOR AND EMPLOYMENT, et al., public respondents; ATTY. AMADO R. FOJAS AND UNIVERSITY OF THE EAST FACULTY ASSOCIATION, private respondents.
FACTS
The University of the East Faculty Association (UEFA), represented by counsel Atty. Amado Fojas, filed complaints with the Department of Labor and Employment (DOLE) against the University of the East (UE) for the payment of the faculty’s share in tuition fee increases as mandated by Presidential Decree No. 451. The Regional Director ruled in favor of UEFA, ordering UE to pay the monetary claims and to hold in trust a 10% attorney’s fee deductible from each faculty member. On appeal, the Secretary of Labor modified the order, directing that the 10% attorney’s fee be assessed against UE itself. UE contested the jurisdiction of the Regional Director and the Secretary over the money claims.
Subsequently, UEFA, now represented by new counsel Atty. Rogelio de Guzman, entered into a compromise agreement with UE to settle all pending cases. This agreement, approved by the DOLE, made no provision for the payment of attorney’s fees to the former counsel, Atty. Fojas. Atty. Fojas then filed a motion for the issuance of a writ of execution to enforce the earlier Secretary’s order awarding attorney’s fees against UE. The Secretary of Labor, through Undersecretary De la Serna, granted the motion, ordering UE to pay Atty. Fojas the 10% attorney’s fees based on the total monetary awards.
ISSUE
Whether the Secretary of Labor has the authority to award attorney’s fees in favor of UEFA’s former counsel, to be assessed against UE, despite a subsequent compromise agreement between the parties that was silent on such fees.
RULING
Yes, the Secretary of Labor retained the authority to award attorney’s fees. The Supreme Court affirmed the Secretary’s orders. The legal logic is twofold. First, the authority stems from Article 111(a) of the Labor Code, which allows the assessment of attorney’s fees equivalent to ten percent of the amount of wages recovered in cases of unlawful withholding of wages. This provision falls under labor standards laws, which the Secretary is empowered to enforce. The initial finding by the Regional Director of UE’s liability for the monetary claims established a factual basis for the application of this article.
Second, the compromise agreement that settled the main monetary claims did not extinguish the separate entitlement of Atty. Fojas to his fees for professional services rendered in successfully prosecuting the cases to a favorable resolution before the settlement. The Court cited jurisprudence holding that a compromise agreement entered without the knowledge of counsel, which deprives him of just fees, is improper. The withdrawal of the cases via compromise after a favorable ruling had essentially been secured does not negate counsel’s right to compensation for his efforts. Therefore, equity and law justified the Secretary’s directive for UE to pay the attorney’s fees directly to Atty. Fojas.