Republic of the
Supreme Court
SECOND DIVISION
SESSION
DELIGHTS ICE CREAM AND FAST FOODS,
Petitioner, -
versus
- THE HON. COURT
OF APPEALS (Sixth Division), HON. NATIONAL LABOR RELATIONS COMMISSION (Second
Division) and ADONIS ARMENIO M. FLORA, Respondents. |
G.R. No. 172149
Present: CARPIO, J., Chairperson, BRION, BERSAMIN,* ABAD, and PEREZ, JJ. Promulgated: February 8, 2010 |
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D E C I S I O N
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BRION, J.: |
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We rule on the petition for review on certiorari assailing the decision[1] and resolution[2] of the Court of Appeals[3] (CA) in CA-G.R. SP No. 89326. These CA rulings dismissed the petition for certiorari the petitioner – Session Delights Ice Cream and Fast Foods (petitioner) – filed to challenge the resolutions[4] of the Second Division of the National Labor Relations Commission[5] (NLRC) that in turn affirmed the order[6] of the Labor Arbiter[7] granting a re-computation of the monetary awards in favor of the private respondent Adonis Armenio M. Flora (private respondent).
The
Facts
The private respondent filed against
the petitioner a complaint for illegal dismissal, entitled “Adonis Armenio M. Flora, Complainant versus
Session Delights Ice Cream & Fast Foods, et. al, Private respondents,” docketed as NLRC Case No. RAB-CAR
The
labor arbiter decided the complaint on
WHEREFORE,
judgment is hereby rendered declaring private respondent guilty of illegal dismissal.
Accordingly, private respondent SESSION DELIGHTS is ordered to pay complainant
the following:
a) Backwages:
P170.00
x 154 days P 26,180.00
Proportional
13th month pay
P 26,180/12 2,181.65 28,361.65
b) Separation Pay:
P 170.00 x 314/12
x 1 4,448.35
c) Indemnity of P5,000.00 for failure to observe
due process
d) Attorney’s fees which is 10% of the total award in the
amount of P3,781.00.
SO ORDERED.[8]
On the petitioner’s appeal, the
NLRC affirmed the labor arbiter’s decision in its resolutions dated
WHEREFORE, premises considered, the decision under
review is hereby AFFIRMED, and the appeal, DISMISSED, for lack of merit.[10]
The petitioner continued
to seek relief, this time by filing a petition for certiorari before the CA, which petition was docketed as CA-G.R. SP
No. 74653.
On
WHEREFORE, premises considered, the instant petition is hereby
DISMISSED. The decision of the National Labor Relations Commission is AFFIRMED
with modification that the award of proportional 13th month pay as
well as the award of indemnity of P 5,000.00 for failure to observe due
process are DELETED.
In January 2004, and in the
course of the execution of the above final judgment pursuant to Section 3, Rule VIII[13]
of the then NLRC Rules of Procedure, the Finance Analyst of the Labor Arbiter’s
Office held a pre-execution conference with the contending parties in
attendance. The Finance Analyst submitted an updated computation of the monetary awards due the private respondent
in the total amount of P235,986.00.[14] This
updated computation included additional backwages and separation pay due the
private respondent computed from
C O M P U T
A T I O N
Total computation as per
NLRC CAR
decision dated
1.
Additional backwages: (
P178.00 x 52 days =
9,256.00
P185.00 x 365 days =
67,525.00
P190.00 x 382 days =
72,580.00 149,361.00
Proportional 13th
month pay:
P149,361.00/12 =
12,446.75
161,807.75
2.
Additional separation pay:
P190.00 x 314/12 x 3 years = 14,915.00
3.
Additional attorney’s fee:
P176,722.75 x 10% = 17,672.25
194,395.00
TOTAL 253,986.00
The petitioner objected to
the re-computation and appealed the labor arbiter’s order to the NLRC. The
petitioner claimed that the updated computation was inconsistent with the dispositive
portion of the labor arbiter’s
The petitioner sought
recourse with the CA through a petition for certiorari
on the ground that the NLRC acted with grave abuse of discretion amounting to
lack or excess of jurisdiction.
The CA Rulings
The CA partially granted the
petition in its decision of
WHEREFORE, the petition is PARTIALLY GRANTED. The Labor Arbiter is DIRECTED to compute only the following
(a) private respondent’s backwages from the time his salary was withheld up to
July 29, 2003, the finality of the Decision in CA-G.R. SP No. 74653; (b)
private respondent’s separation pay from July 31, 2000 up to July 29, 2003; and
(c) attorney’s fees equivalent to 10% of the total monetary claims from (a) and
(b). The total monetary award shall earn legal interest from
SO
ORDERED.[15]
The CA explained in this ruling that employees illegally
dismissed are entitled to reinstatement, full backwages, inclusive of
allowances and other benefits or their monetary equivalent, computed from the
time actual compensation was withheld from them, up to the time of actual
reinstatement. If reinstatement is no
longer feasible, the backwages shall be computed from the time of their illegal
dismissal up to the finality of the decision. The CA reasoned that a re-computation
of the monetary awards was necessary to determine the correct amount due the
private respondent from the time his salary was withheld from him until July
29, 2003 (the date of finality of the July 4, 2003 decision in CA-G.R. SP No.
74653) since the separation pay, which was awarded in lieu of reinstatement,
had not been paid by the petitioner. The
attorney’s fees likewise have to be re-computed in light of the deletion of the
proportionate 13th month pay and indemnity awards.
The petitioner timely filed
a motion for reconsideration which the CA denied in its resolution of
The Issue
The
lone issue the petitioner raised is whether
a final and executory decision (the labor arbiter’s decision of
In the pleadings submitted
to the Court, the petitioner insists on a literal reading and application of
the labor arbiter’s
The petitioner, as an
alternative argument, argues that even assuming that the body of the CA
decision in CA-G.R. SP No. 74653 intended a computation of the monetary award
up to the finality of the decision, the dispositive portion remains to be the
directive that should be enforced, as it is the part of the decision that
governs, settles, and declares the rights and obligations of the parties.
The private respondent, for his part, counters that the computation
of the monetary award until the finality of the CA decision in CA-G.R. SP No.
74653 is in accord with Article 279 of the Labor Code, as amended.
The Court’s Ruling
We resolve to dismiss the
petition and, accordingly, affirm the CA decision.
We state at the outset that,
as a rule, we frown upon any delay in the execution of final and executory
decisions, as the immediate enforcement of the parties’ rights, confirmed by a
final decision, is a major component of the ideal administration of
justice. We admit, however, that
circumstances may transpire rendering delay unavoidable. One such occasion is when the execution of
the final judgment is not in accord with what the final judgment decrees in its
dispositive portion. Just as the
execution of a final judgment is a matter of right for the winning litigant who
should not be denied the fruits of his or her victory, the right of the losing
party to give, perform, pay, and deliver only what has been decreed in the
final judgment should also be respected.
That a judgment should be
implemented according to the terms of its dispositive portion is a long and
well-established rule.[16]
Otherwise stated, it is the dispositive portion that categorically states the
rights and obligations of the parties to the dispute as against each other.[17]
Thus, it is the dispositive portion which the entities charged with the execution
of a final judgment that must be enforced to ensure the validity of the
execution.[18]
A companion to the above rule
on the execution of a final judgment is the principle of its immutability. Save
for recognized exceptions,[19] a
final judgment may no longer be altered, amended or modified, even if the
alteration, amendment or modification is meant to correct what is perceived to
be an erroneous conclusion of fact or law and regardless of what court, be it
the highest Court of the land, renders it.[20] Any
attempt on the part of the responsible entities charged with the execution of a
final judgment to insert, change or add matters not clearly contemplated in the dispositive portion
violates the rule on immutability of judgments.
In the present case, with the
CA’s deletion of the proportionate 13th month pay and indemnity awards
in the labor arbiter’s
Award of backwages and
separation pay
A distinct feature of the
judgment under execution is that the
We reject the petitioner’s
view as a narrow and misplaced interpretation of an illegal dismissal decision,
particularly of the terms of the labor arbiter’s decision.
While the private respondent
failed to appeal the
As the case developed and is
presented to us, the issue before us is not the correctness of the awards, nor
the finality of the CA’s judgment, nor the petitioner’s failure to appeal. The
issue before us is the propriety of the computation of the awards made, and, whether this violated the
principle of immutability of final judgments.
In concrete terms, the
question is whether a re-computation in the course of execution of the labor
arbiter’s original computation of the awards made, pegged as of the time the
decision was rendered and confirmed with modification by a final CA decision, is
legally proper. The question is posed, given that the petitioner did not
immediately pay the awards stated in the original labor arbiter’s decision; it
delayed payment because it continued with the litigation until final judgment
at the CA level.
A source of misunderstanding
in implementing the final decision in this case proceeds from the way the original
labor arbiter framed his decision. The
decision consists essentially of two parts.
The first is that part
of the decision that cannot now be disputed because it has been confirmed with finality. This is the finding of the illegality of the
dismissal and the awards of separation pay in lieu of reinstatement, backwages,
attorney’s fees, and legal interests.
The second part is
the computation of the awards made. On
its face, the computation the labor arbiter made shows that it was time-bound
as can be seen from the figures used in the computation. This part, being merely a computation of what
the first part of the decision established and declared, can, by its nature, be
re-computed. This is the part, too, that the petitioner now posits should no
longer be re-computed because the computation is already in the labor arbiter’s
decision that the CA had affirmed. The public
and private respondents, on the other hand, posit that a re-computation is
necessary because the relief in an illegal dismissal decision goes all the way
up to reinstatement if reinstatement is to be made, or up to the finality of
the decision, if separation pay is to be given in lieu reinstatement.
That the labor arbiter’s
decision, at the same time that it found that an illegal dismissal had taken
place, also made a computation of the award, is understandable in light of Section
3, Rule VIII of the then NLRC Rules of Procedure which requires that a
computation be made. This Section in
part states:
[T]he Labor Arbiter of origin, in cases
involving monetary awards and at all events, as far as practicable, shall
embody in any such decision or order the detailed and full amount awarded.
Clearly implied from this original
computation is its currency up to the finality of the labor arbiter’s decision. As we noted above, this implication is apparent
from the terms of the computation itself, and no question would have arisen had
the parties terminated the case and implemented the decision at that point.
However, the petitioner disagreed
with the labor arbiter’s findings on all counts – i.e., on the finding
of illegality as well as on all the consequent awards made. Hence, the petitioner appealed the case to
the NLRC which, in turn, affirmed the labor arbiter’s decision. By law,[21]
the NLRC decision is final, reviewable only by the CA on jurisdictional
grounds.
The petitioner appropriately
sought to nullify the NLRC decision on jurisdictional grounds through a timely filed
Rule 65 petition for certiorari.
The CA decision, finding that NLRC exceeded its authority in affirming
the payment of 13th month pay and indemnity, lapsed to finality and was
subsequently returned to the labor arbiter of origin for execution.
It was at this point that the
present case arose. Focusing on the core
illegal dismissal portion of the original labor arbiter’s decision, the
implementing labor arbiter ordered the award re-computed; he apparently read
the figures originally ordered to be paid to be the computation due had the
case been terminated and implemented at the labor arbiter’s level. Thus, the labor arbiter re-computed the award
to include the separation pay and the backwages due up to the finality of the
CA decision that fully terminated the case on the merits. Unfortunately, the
labor arbiter’s approved computation went beyond the finality of the CA
decision (July 29, 2003) and included as well the payment for awards the final
CA decision had deleted – specifically, the proportionate 13th month
pay and the indemnity awards. Hence, the
CA issued the decision now questioned in the present petition.
We see no error in the CA
decision confirming that a re-computation is necessary as it essentially
considered the labor arbiter’s original decision in accordance with its basic
component parts as we discussed above. To reiterate, the first part contains
the finding of illegality and its monetary consequences; the second part is the
computation of the awards or monetary consequences of the illegal dismissal, computed
as of the time of the labor arbiter’s original decision.
To illustrate these points,
had the case involved a pure money claim for a specific sum (e.g. salary for a specific period) or a
specific benefit (e.g. 13th
month pay for a specific year) made by a former
employee, the labor arbiter’s computation would admittedly have continuing
currency because the sum is specific and any variation may only be on the
interests that may run from the finality of the decision ordering the payment
of the specific sum.
In contrast with a ruling on
a specific pure money claim, is a claim that relates to status (as in this
case, where the claim is the legality of the termination of the employment
relationship). In this type of cases,
the decision or ruling is essentially declaratory of the status and of the
rights, obligations and monetary consequences that flow from the declared
status (in this case, the payment of separation pay and backwages and
attorney’s fees when illegal dismissal is found). When this type of decision is executed, what
is primarily implemented is the declaratory finding on the status and the
rights and obligations of the parties therein; the arising monetary
consequences from the declaration only follow as component of the parties’
rights and obligations.
In the present case, the CA
confirmed that indeed an illegal dismissal had taken place, so that separation
pay in lieu of reinstatement and backwages should be paid. How much that separation pay would be, would
ideally be stated in the final CA decision; if not, the matter is for handling
and computation by the labor arbiter of origin as the labor official charged
with the implementation of decisions before the NLRC.[22]
As the CA correctly pointed
out, the basis for the computation of separation pay and backwages is Article
279 of the Labor Code, as amended, which reads:
x x x An
employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights
and other privileges and to his full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement.
By jurisprudence derived from this provision, separation pay may be awarded to an illegally dismissed employee in lieu of reinstatement.[23] Recourse to the payment of separation pay is made when continued employment is no longer possible, in cases where the dismissed employee’s position is no longer available, or the continued relationship between the employer and the employee is no longer viable due to the strained relations between them, or when the dismissed employee opted not to be reinstated, or payment of separation benefits will be for the best interest of the parties involved.[24]
This reading of Article 279, of course, does not appear to be disputed in the present case as the petitioner admits that separation pay in lieu of reinstatement shall be paid, computed up to the finality of the judgment finding that illegal dismissal had taken place. What the petitioner simply disputes is the re-computation of the award when the final CA decision did not order any re-computation while the NLRC decision that the CA affirmed and the labor arbiter decision the NLRC in turn affirmed, already made a computation that – on the basis of immutability of judgment and the rule on execution of the dispositive portion of the decision – should not now be disturbed.
Consistent with what we discussed above, we hold that under the terms of the decision under execution, no essential change is made by a re-computation as this step is a necessary consequence that flows from the nature of the illegality of dismissal declared in that decision. A re-computation (or an original computation, if no previous computation has been made) is a part of the law – specifically, Article 279 of the Labor Code and the established jurisprudence on this provision – that is read into the decision. By the nature of an illegal dismissal case, the reliefs continue to add on until full satisfaction, as expressed under Article 279 of the Labor Code. The re-computation of the consequences of illegal dismissal upon execution of the decision does not constitute an alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only the computation of monetary consequences of this dismissal is affected and this is not a violation of the principle of immutability of final judgments.
We fully appreciate the petitioner’s efforts in trying to clarify how the standing jurisprudence on the payment of separation pay in lieu of reinstatement and the accompanying payment of backwages ought to be read and reconciled. Its attempt, however, is out of place and, rather than clarify, may only confuse the implementation of Article 279; the core issue in this case is not the payment of separation pay and backwages but their re-computation in light of an original labor arbiter ruling that already contained a dated computation of the monetary consequences of illegal dismissal.
That
the amount the petitioner shall now pay has greatly increased is a consequence
that it cannot avoid as it is the risk that it ran when it continued to seek
recourses against the labor arbiter’s decision.
Article 279 provides for the consequences of illegal dismissal in no
uncertain terms, qualified only by jurisprudence in its interpretation of when
separation pay in lieu of reinstatement is allowed. When that happens, the finality of the
illegal dismissal decision becomes the reckoning point instead of the reinstatement
that the law decrees. In allowing separation pay, the final decision effectively
declares that the employment relationship ended so that separation pay and
backwages are to be computed up to that point.
The decision also becomes a judgment for money from which another
consequence flows – the payment of interest in case of delay. This was what the CA correctly decreed when
it provided for the payment of the legal interest of 12% from the finality of
the judgment, in accordance with our ruling in Eastern
Shipping Lines, Inc. v. Court of Appeals.[25]
WHEREFORE, premises
considered, we hereby AFFIRM the decision
of the Court of Appeals dated
For greater certainty, the petitioner is ORDERED to PAY the private respondent:
(a) backwages computed from
(b) separation pay computed from
(c) ten percent (10%) attorney’s fees based on the total amount
of the awards under (a) and (b) above; and
(d) legal interest of twelve
percent (12%) per annum of the total
monetary awards computed from
The labor
arbiter is hereby ORDERED to make another re-computation according to
the above directives.
Costs
against the petitioner.
SO ORDERED.
ARTURO
D. BRION
Associate Justice
WE CONCUR:
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ANTONIO
T. CARPIO Associate Justice Chairperson |
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LUCAS
P. BERSAMIN Associate Justice |
ROBERTO
A. ABAD Associate Justice |
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JOSE
P. PEREZ Associate Justice |
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ATTESTATION
I attest that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
ANTONIO
T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of
the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice