Zuellig Freight vs. NLRC

[Civil Law: when are attorney’s fees recoverable]

                                            Zuellig Freight and Cargo Systems,  

                                                                         vs. 

                 National Labor Relations Commission and Ronaldo V. San Miguel

G.R. No. 157900;  July 22, 2013

Facts:   This is a petition appealing the decision of CA, whereby it dismissed its petition for certiorari and upheld the adverse decision of the NLRC finding San Miguel to have been illegally dismissed. San Miguel, employed as checker/custom representative, brought a complaint for unfair labor practice, illegal dismissal, non-payment of salaries and moral damages against petitioner, formerly known as Zeta Brokerage Corporation (Zeta). He contended that amendments of the articles of incorporation of Zeta were for the purpose of changing the corporate name, broadening the primary functions, and increasing the capital stock; and that such amendments could not mean that Zeta had been thereby dissolved. Petitioner countered that San Miguel’s termination from Zeta had been for a cause authorized by the Labor Code; that its non-acceptance of him had not been by any means irregular or discriminatory; that its predecessor-in-interest had complied with the requirements for termination due to the cessation of business operations and that it had no obligation to employ San Miguel in the exercise of its valid management prerogative.

NLRC and CA rendered its decision holding San Miguel to have been illegally dismissed ordering Zuellig to pay San Miguel his back wages and Attorney’s fees equivalent to ten percent (10%) of the total award.

Issue: Whether or not the awarding of attorney’s fees had basis in fact and in law.

Ruling:  Yes, the court upheld the CA, NLRC and Labor Arbiter unanimous decision, where the  amendments of the articles of incorporation of Zeta to change the corporate name to Zuellig Freight and Cargo Systems, Inc. did not produce the dissolution of the former as a corporation, therefore not giving them the license to terminate employees without just or authorized cause and considering that that San Miguel had been compelled to litigate and to incur expenses to protect his rights and interest entitles him to recover attorney’s fees.

In Producers Bank of the Philippines v. Court of Appeals, the Court ruled that attorney’s fees could be awarded to a party whom an unjustified act of the other party compelled to litigate or to incur expenses to protect his interest.