Almirante: PAO’s attorney’s fees

PETITIONER Joselito A. Alva filed a complaint for illegal dismissal, underpayment of wages, non-payment of 13th month pay, service incentive leave, holiday premium, ECOLA, payment for rest day, night shift differential pay, moral and exemplary damages and attorney’s fees against respondents High Capacity Security Force, Inc. and Armando M. Villanueva. He was assisted in his case by a lawyer of the Public Attorney’s Office (PAO).

Both the Labor Arbiter (LA) and the National Labor Relations Commission (NLRC) awarded him attorney’s fees. When the case reached the Court of Appeals (CA) the award of attorney’s fees was deleted noting that petitioner was represented by the PAO.

Did the CA err?

Ruling: Yes.

Needless to say, in addition to the fact that attorney’s fees partake of an indemnity for damages awarded to the employee, there is nothing that prevents Alva and the PAO from entering into an agreement assigning attorney’s fees in favor of the latter.

It must be noted that in 2007, Congress passed R.A. No. 9406 inserting new sections in Chapter 5, Title III, Book IV of Executive Order No. 292 (E.O. 292), or the Administrative Code of 1987. R.A. No. 9406 sanctions the receipt by the PAO of attorney’s fees, and provides that such fees shall constitute a trust fund to be used for the special allowances of their officials and lawyers, viz.:

SEC. 6. New sections are hereby inserted in Chapter 5, Title III, Book IV of Executive Order No. 292, to read as follows:

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SEC. 16-D. Exemption from Fees and Costs of the Suit. - The clients of the PAO shall [sic] exempt from payment of docket and other fees incidental to instituting an action in court and other quasi-judicial bodies, as an original proceeding or on appeal.

The costs of the suit, attorney’s fees and contingent fees imposed upon the adversary of the PAO clients after a successful litigation shall be deposited in the National Treasury as trust fund and shall be disbursed for special allowances of authorized officials and lawyers of the PAO.

In fact, the matter of entitlement to attorney’s fees by a claimant who was represented by the PAO has already been settled in Our Haus Realty Development Corp. v. Alexander Parian, et al., 740 Phil. 699 (2014).

The Court, speaking through Associate Justice Arturo D. Brion, ruled that the employees are entitled to attorney’s fees, notwithstanding their availment of the free legal services offered by the PAO. The Court ruled that the amount of attorney’s fees shall be awarded to the PAO as a token recompense to them for their provision of free legal services to litigants who have no means of hiring a private lawyer, to wit:

It is settled that in actions for recovery of wages or where an employee was forced to litigate and, thus, incur expenses to protect his rights and interest, the award of attorney’s fees is legally and morally justifiable. Moreover, under the PAO Law or Republic Act No. 9406, the costs of the suit, attorney’s fees and contingent fees imposed upon the adversary of the PAO clients after a successful litigation shall be deposited in the National Treasury as trust fund and shall be disbursed for special allowances of authorized officials and lawyers of the PAO.

Thus, the respondents are still entitled to attorney’s fees. The attorney’s fees awarded to them will be paid to the PAO. It serves as a token recompense to the PAO for its provision of free legal services to litigants who have no means of hiring a private lawyer.

Alva’s availment of free legal services from the PAO does not disqualify him from an award of attorney’s fees. Simply put, Alva should be awarded attorney’s fees notwithstanding the fact that he was represented by the PAO. (Reyes, Jr., J., SC 2nd Div., Joselito A. Alva vs. High Capacity Security Force, Inc. and Armando M. Villanueva, G.R. No. 203328, November 8, 2017).