ENIEDA MONTILLA, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, JESSIE BAYDO, DANILO GREGAS AND JOSE MIRANDA, RESPONDENTS.

This is a petition for
review on certiorari to annul and set aside the Resolution of the public
respondent National Labor Relations Commission (NLRC) of Manila^[1] promulgated on March 1, 1984 which affirmed
the Order dated April 5, 1982 of the Labor Arbiter Jose Ma. V. Valencia.

It appears on record that
private respondents Jessie Baydo, Jose Miranda and Danilo Gregas were employed
as waiters on April 7, 1978, April 17, 1978 and October 1, 1978, respectively,
by petitioner Enieda Montilla who was the owner of a restaurant named “Sa
Kabukiran Restaurant” located at Libertad Extension, Bacolod City until
their dismissal on February 23, 1981.

Prior to their dismissal
or on February 12, 1981, private respondents filed a complaint against
petitioner with the Ministry of Labor and Employment of Bacolod City in
LRD Case No. 81-8139-81 for non-payment of living allowances, 13th month pay,
incentive leave pay, holiday pay, rest-day pay and underpayment of wages which
was subsequently amended in a Complaint^[2] dated
February 25, 1981 to include the charge of illegal dismissal against the
petitioner.

On the other hand petitioner maintained in her Answer:

“2.     x x x that complainants (herein private
respondents) were never employees of respondent Enieda Montilla (herein
petitioner) and if they had worked in the Sa Kabukiran Restaurant, they were
merely on commission basis, their compensation were dependent on whatever sales
made which includes all amounts pertaining to their allowances and more or less
they served only one (1) hour per
service to customers during lunch time or dinner in the evening;

“xxx.

“4. That the
respondent (herein petitioner) did not have any employer-employee relationship
with the complainants (herein private respondents) because they are actually
helping the regular waiters therein from which they share their commission and
which is not coming from the funds of the respondent Enieda Montilla (herein
petitioner) who is not connected with the said restaurant and being so they
were asked to leave the premises without the necessary clearance from the Ministry
of Labor and Employment for lack of employer-employee relationship.”^[3]

Thereafter, the Assistant Regional Director of the Ministry of
Labor and Employment endorsed this case to the Regional Arbitration Branch No.
VI of Bacolod City in A.B. Case No. A-384-81 and after hearing, issued an Order
on April 5, 1982, the dispositive portion of which reads as follows:

“WHEREFORE, premises considered, judgment is hereby rendered
for respondent (herein petitioner) to pay the amounts due complainants (herein
private respondents) for underpayment of wages, non-payment of cost of living
allowances, 13th month pay, incentive leave pay, holiday pay and rest day pay
in the total sum of P11,362,00 for Jessie Baydo, P3,422.50 for Danilo Gregas and
P8,051.70 for Jose Miranda.

“Respondents (herein petitioner) are further directed to
reinstate complainants (herein private respondents) to their former positions
without loss of seniority rights and with full backwages beginning February 24,
1981 up to the date of actual reinstatement.

“The complaint for unfair labor practice is dismissed for lack
of merit. “^[4]

On April 23, 1982, petitioner appealed to public respondent NLRC
which affirmed said decision in a Resolution^[5] dated
March 1, 1984.

On April 17, 1984, petitioner filed a Motion for Reconsideration
which was denied in a Resolution^[6] dated
March 28, 1985.

Thereafter, private respondents waived their respective claims on
the outcome of this case as evidenced by their affidavits^[7] in
which they received the following amounts of money as part of their
out-of-court settlement:

Jessie Baydo :
P9,000.00-December 19, 1985^[8]

Jose Miranda :
P4,000.00-November 29, 1985^[9]

Danilo Gregas :
P3,500.00-November 30, 1985^[10]

On August 21, 1989, the First Division of this Court issued a Resolution^[11]
requiring the parties to manifest whether they are still interested in
prosecuting the case.

On October 16, 1989, private respondents’ counsel manifested that
he is still interested in the early resolution of this case without which his
Motion to enforce the attorneys lien dated December 28, 1985 would be without
basis and that private respondents were only forced to accept the amounts
offered by the petitioner due to the delay in the resolution of this case since
they could no longer endure and sustain a long litigation.

Hence, this petition alleging grave abuse of discretion on the
part of the public respondent NLRC in finding that private respondents are
employees of the petitioner considering that she is only a lessor of “Sa
Kabukiran Restaurant” since said restaurant was leased to Eddie Daguinotan
from April, 1978 to November, 1978; to Elaine Asejo from January, 1979 to
December, 1979; to Gilda Montilla from the middle of January, 1980 to July,
1980; and to Alice Araneta from February, 1981 up to the time when this case
was set for hearing.

We do not agree with petitioner’s allegations.

It is well-settled that in determining the existence of an
employer-employee relationship, the elements that are generally considered are
the following: (a) the manner of
selection and engagement of the putative employee; (b) the mode of payment of
wages; (c) the presence or absence of the power of dismissal; and (d) the
presence or absence of a power to control the putative employee’s conduct.^[12]

This Court had generally relied on the so-called right-of-control
test where the person for whom the services are performed reserves a right to
control not only the end achieved but also the means to be used in reaching
such end.^[13]
In the case at bar, petitioner’s contention that private respondents are not
her employees since she was merely a lessor of the restaurant and had acted
only in a representative capacity for her different lessees is not
meritorious. As held by the Labor
Arbiter in its Order:

“A similar conclusion could also be made as regards the
testimonies given by Eddie Daguinotan and Alice Araneta, both alleged to be
lessees of the property during the period covered by the complaint. There is no dispute that both had been
employees of respondent Enieda Montilla (herein petitioner). Relative to their declarations, it would not
be amiss to state that the same were made more in deference to the wishes of
respondent Enieda Montilla, their employer. The fact is that Alice Araneta, for instance, is still an employee of Sa
Kabukiran Restaurant. It would be more
logical to believe, instead, the testimonies made by Jose Javelosa,
respondent’s (petitioner’s) former promoter and PRO manager, no longer having
any connection at all with any of the litigants. He consistently averred that Eddie Daguinotan was hired as a cook
of Sa Kabukiran Restaurant and was, in fact, under his supervision at the said
restaurant. The various documents shown
by respondent (Exhibits “1”, “1-A”, “1-B” and
“2”) are not absolute proof of ownership. Precisely, the same are contested by complainants (herein private
respondents) as the same are alleged to be a scheme adopted by respondent
Enieda Montilla (herein petitioner) to evade her responsibilities under the
law. Exhibit “C” for the
complainants (herein private respondents), [which is a] Pacific Banking
Corporation Interbank/Master Charge Merchant Agreement, acknowledged before a
notary public on March 21, 1979 is very material to the issue. It shows respondent Enieda Montilla (herein
petitioner) signing the agreement as authorized representative of Sa Kabukiran
Restaurant. How can she now claim to
have nothing to do with the restaurant’s operations except as lessor
thereof?”^[14]

Moreover, private respondents’ testimonies that Gilda Montilla,
proprietor/manager of Sa Kabukiran Restaurant, paid their Social Security
System premium contributions adds strength to the conclusion that the latter
are considered employees of the restaurant. Indeed, private respondents are employees of petitioner’s restaurant.

However, the fact that private respondents entered into a
compromise agreement in connection with the complaints they filed against
petitioner and executed affidavits
of waiver in full settlement of the judgment in the NLRC case, amounts to a
valid and binding compromise agreement. As we held in Periquet vs. NLRC:^[15]

“Not all waivers and quitclaims are invalid as against public
policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is binding
on the parties and may not later be disowned simply because of a change of
mind. It is only where there is clear
proof that the waiver was wangled from an unsuspecting or gullible person, or
the terms of settlement are unconscionable on its face, that the law will step
in to annul the questionable transaction. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and the consideration for
the quitclaim is credible and reasonable, the transaction must be recognized as
a valid and binding undertaking. As in
this case.”

With respect to the Motion filed by the private respondents’
counsel praying that the Court order petitioner to pay 10% of the total award
granted to the private respondents as his attorney’s lien under the authority
of Rule VIII, Section 11 of the Omnibus Rules Implementing the Labor Code, we
hold that no such attorney’s lien could be enforced.

A charging lien to be enforceable as security for the payment of
attorney’s fees requires as a condition sine qua non a judgment for money and execution in
pursuance of such judgment. A lawyer
may enforce his right to fees by filing the necessary petition as an incident
in the main action in which his services were rendered when something is due
his client in the action from which the fee is to be paid.^[16]

The attorney’s lien can be enforced in the same action if his
client is awarded a certain sum by the Court. Only in cases where no amount is awarded to his client will the filing of
an appropriate action be necessary.^[17]

Accordingly, counsel for private respondents can still collect
his legal fees by filing an appropriate
action for collection against his clients.

WHEREFORE, the petition for certiorari is hereby DENIED
and the Resolution dated March 1, 1984 of respondent NLRC cannot anymore be
enforced in view of the valid compromise agreement entered into between herein
petitioner and private respondent.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, Regalado, and Puno, JJ., concur.

^[1]
Penned by Presiding Commissioner Ricardo C. Castro with the concurrence of
Commissioner Cecilio T. Seno and Commissioner Federico O. Borromeo.

^[2]
Rollo, pp. 11-13.

^[3]
Id., at pp. 14-16.

^[4]
Id., at p. 29.

^[5]
Id., at pp. 36-40.

^[6]
Id., at p. 46.

^[7]
Id., at pp. 187-189.

^[8]
Id., at p. 187.

^[9]
Id., at p. 188.

^[10]
Id., at p. 189.

^[11]
Id., at p. 122.

^[12]
Hijos De F. Escaño, Inc. vs. NLRC, 201 SCRA 63 [1991].

^[13]
Ruga vs. National Labor Relations Commission, 181 SCRA 266 [1990].

^[14]
Rollo, p. 27-28.

^[15]
186 SCRA 724 [1990].

^[16]
Metropolitan Bank and Trust Co. vs. Court of Appeals, et al., 181 SCRA
367 (1990).

^[17]
Morente vs. Firmalino, 71 Phil. 49.