RECOMPUTATION OF THE MONETARY AWARD IN THE LABOR ARBITER DECISION IS A CONSEQUENCE OF ILLEGAL DISMISSAL AND DOES NOT ALTER THE DECISION

Recomputation of the monetary award is a necessary consequence of the finding of illegal dismissal. It does not violate the rule on immutability of final and executory judgment.

Matroguards Security Agency Corporation (known as Beeguards Corporation) and Ms. Milagros T. Chan

G.R. No. 215630, March 9, 2015

Facts:

Alberto Hilongo was dismissed from service. Thus, he sued his employer.

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In a Decision dated April 30, 2010 in NLRC NCR-10-14411-09, entitled Alberto Hilongo v. Bee Guards Corp./Milagros Chan, the Labor Arbiter ruled that respondent Alberto N. Hilongo was   illegally dismissed.

On appeal, the National Labor Relations Commission (NLRC) reversed the ruling of the Labor Arbiter in its Decision dated September 30, 2010 and Resolution dated November 23, 2010.

Aggrieved, Hilongo filed a petition for certiorari before the CA, docketed as CA-G.R. SP No. 117891.

In its Decision dated September 7, 2012, the CA reversed the NLRC decision and reinstated the Labor Arbiter’s Decision dated April 30, 2010. Petitioners’ motion for reconsideration was denied by the CA in its Resolution dated March 26, 2013.

Petitioners no longer appealed to SC.

Hilongo then filed a motion for entry of judgment and a motion for clarification of Decision/Resolution praying that the CA’s March 26, 2013 Resolution be clarified and interpreted to include the amount of the award as stated in the Labor Arbiter’s Decision dated April 30, 2010 and additional award computed from May 1, 2010 to March 26, 2013, or the date the CA denied petitioners’ motion for reconsideration.

In its Resolution dated June 11, 2013, the CA granted the motion for entry of judgment and noted Hilongo’s motion for clarification of Decision/Resolution. The CA held that when an appellate court affirms the Labor Arbiter’s ruling, it is understood that awards due to the illegally dismissed employee shall be recomputed in order to account for the period of time that has lapsed from the rendition of the Labor Arbiter’s decision up to its finality.

The CA quoted the Supreme Court ruling in Session Delights Ice Cream and Fast Foods v. Court of Appeals, and Gonzales v. Solid Cement Corporation.

After the corresponding entry of judgment was issued, the case was remanded to the Labor Arbiter. Respondent Hilongo filed a motion for issuance of writ of execution alleging that the June 11, 2013 CA Resolution had confirmed that the amount of P170,520.31 awarded by the Labor Arbiter is not sufficient, and that there is a need to compute additional monetary awards reckoned from May 1, 2010 up to April 26, 2013 or the date Hilongo presumed as the date of finality of the decision.

LA Ruling:

In an Order dated October 29, 2013, the Labor Arbiter directed the issuance of a writ of execution and ruled that the award of P170,520.31 as stated in the Labor Arbiter’s Decision dated April 30, 2010 prevails.

NLRC Ruling:

Hilongo filed a petition for extraordinary remedy before the NLRC which dismissed the petition in its Decision dated November 29, 2013. The NLRC also denied Hilongo’s motion for reconsideration in its Resolution dated January 16, 2014.

Hence, Hilongo filed a petition for certiorari before the CA.

CA Ruling:

In the assailed Decision dated July 22, 2014, the CA granted Hilongo’s petition and set aside the NLRC Decision dated November 29, 2013 and Resolution dated January 16, 2014. The CA ordered the Labor Arbiter to re-compute Hilongo’s monetary awards.

The CA held that it is already settled that the computation of the monetary awards due to the illegally dismissed employee must continue to run until the final termination of the case on appeal. The CA ruled that the Labor Arbiter should have been guided by the CA Resolution dated June 11, 2013 which had clarified that a re-computation of Hilongo’s award is necessary.

The CA also ruled that the re-computation of the monetary awards is a necessary consequence that flows from the nature of the illegality of Hilongo’s dismissal. The CA further noted that since the Labor Arbiter’s Decision dated April 30, 2010 had ordered the payment of separation pay, in lieu of reinstatement, the finality of said decision on June 11, 2013 effectively declares that Hilongo’s employment relationship with petitioners has ended on said date.

Hence, separation pay and back wages must be computed up to that point to account for the time the illegally dismissed employee should have been paid his salary and benefit entitlements.

Hence, the petition.

Issue/s:

Whether or not if the appellate court affirms the Labor Arbiter’s ruling, it is understood that awards due to the illegally dismissed employee shall be recomputed in order to account for the period of time that has lapsed from the rendition of the Labor Arbiter’s decision up to its finality.

Whether or not the Decision of the NLRC which was set aside by the Court of Appeals was the Decision that became final for purposes of re-computation.

SC Ruling:

The SC denied the petition.

In Nacar vs. Gallery Frames, it was held that no essential change is made by a recomputation as this step is a necessary consequence that flows from the nature of the illegality of dismissal declared by the Labor Arbiter in that decision. A recomputation (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 up until full satisfaction, as expressed under Article 279 of the Labor Code. The recomputation 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.

Nacar reiterated the Court’s ruling in the earlier cases of Session Delights and Gonzales. Thus, the SC did not agree with petitioners’ contention that a decision that has acquired finality becomes immutable and unalterable.

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 SC noted that the CA, in its Decision dated September 7, 2012, had reversed the NLRC Decision dated September 30, 2010 and Resolution dated November 23, 2010, and reinstated the Labor Arbiter’s Decision dated April 30, 2010. Thus, petitioners cannot claim that the NLRC decision which was set aside with finality is “the NLRC’s final decision” and “the final decision” that effectively declared the employment relationship between the parties as ended.

Said CA Decision dated September 7, 2012 became final and executory on April 26, 2013. Thus, the April 30, 2010 Decision of the Labor Arbiter which ordered the payment of separation pay in lieu of reinstatement, effectively ended the employment relationship of the parties on April 26, 2013, the date the CA decision became final.

Since the Labor Arbiter’s computation of Hilongo’s monetary award was up to the date of his April 30, 2010 Decision only, the CA properly decreed the computation of additional back wages and separation pay.