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BACKWAGES AND SEPARATION PAY THAT HAVE ALREADY BEEN EXECUTED AND FULLY SATISFIED CANNOT BE RE-COMPUTED
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Backwages must be computed from the time the employee was unjustly dismissed until his or her actual reinstatement or upon payment of his or her separation pay if reinstatement is no longer feasible. It cannot be re-computed after they have been fully satisfied in an execution or they will violate the law against unjust enrichment.
Thus, the SC held in the following case:
Tan vs. Dagpin
G.R. No. 212111, January 15, 2020
Appeal with NLRC; Service of court’s notices and orders; Service on counsel; Reckoning of reglementary period is the date of receipt of counsel of the notice
Facts:
On September 12, 2003, the Labor Arbiter (LA) declared Tan and her company, C&L Lending Investor (Tan, et al.) liable for illegal dismissal of respondent Luzvilla B. Dagpin (Dagpin), with separation pay, backwages, service incentive leave pay, 13th month pay, moral and exemplary damages, and attorney’s fees.
The National Labor Relations Commission (NLRC) dismissed Tan, et al.’s appeal. It also denied the motion for reconsideration. They filed before the Court of Appeals (CA) a petition for certiorari docketed as CA-G.R. SP NO. 0038. The CA issued a temporary restraining order (TRO) against the enforcement of the LA’s Decision.
Meantime, Entry of Judgment was issued on the NLRC Resolution. Dagpin filed with the Executive Labor Arbiter (ELA) a Motion to Admit Computation and Issuance of Writ of Execution where she computed her separation pay, backwages, and other claims up to the finality of judgment on January 10, 2005.
After the TRO issued by the CA expired, the ELA ordered the release of Tan, et al.’s cash bond in partial satisfaction of the judgment. The ELA also granted Dagpin’s Motion to Admit Computation and Issuance of the Writ of Execution. The writ subsequently was fully enforced and satisfied.
Back to CA-G.R. SP No. 00038, the CA dismissed the petition for certiorari, for lack of merit. Tan, et al. further sought relief from the SC which was denied. This became final and executory on August 21, 2008.
Dagpin, thereafter, on November 3, 2008, filed another Motion for Approval of Computation and Issuance of Writ of Execution; and later, on November 12, 2008, a Manifestation seeking additional increments to her monetary award. She claimed that her backwages and separation pay should be computed up to August 21, 2008 when the SC’s resolution on the issue of illegal became final and executory.
When the aforesaid motion was heard Dagpin appeared, sans her counsel Atty. Lawrence Carin who advised her to engage the services of Atty. Keneth P. Rosal only for the incident at hand. Atty. Carin was allegedly attending to some personal matters in Dumaguete City aside from the fact that he had “suspended himself” from the practice of law because of his failure to comply with the Mandatory Continuing Legal Education (MCLE) requirements. Complying with Atty. Carin’s instructions, Dagpin engaged Atty. Rosal to represent her in the subsequent hearing on the motion. Atty. Rosal, in turn, entered his appearance as counsel for Dagpin.
ELA Ruling:
By Order dated February 19, 2009, the ELA denied Dagpin’s Motion for Approval of Computation and Issuance of Writ of Execution. The ELA emphasized that since Dagpin had already enforced and received full payment of the monetary award she was entitled to up until January 10, 2005, she was already estopped from claiming, thereafter, the so-called increments to such monetary award.
Dagpin filed appeal memorandum.
NLRC Ruling:
The NLRC dismissed the appeal for having been filed out of time. The NLRC ruled that the ten (10)-day appeal period must be reckoned from the time Dagpin received the ELA’s February 19, 209 Order on March 19, 2009 and not from Atty. Rosal’s purported receipted on March 30, 2009 of copy of the Order handed him by respondent.
The NLRC ruled that Atty. Rosal was not Dagpin’s counsel of record while Atty. Carin was no longer respondent’s counsel when the aforesaid Order was served. Consequently, Dagpin, who received it on March 19, 2009, had until March 29, 2009 to perfect her appeal. Since Dagpin filed her appeal memorandum only on April 13, 2009, or fifteen (15) days later, the Order dated February 19, 2009 had already become final and executory.
Dagpin filed a Motion for Reconsideration. She explained that the ELA Order dated February 19, 2009, albeit address to “L. Dagpin c/o Atty. Kenneth P. Rosal” was directly delivered to her on March 19, 2009, and not to her counsel. Since Atty. Carin could not prepare her appeal as he had “suspended” himself from the practice of law and was attending an IBP Convention in Bacolod City, he instructed her to refer the case to Atty. Rosal, who unfortunately, was also attending the convention. Thus, she was able to give the Order to Atty. Rosal only on March 30, 2009 and the latter was able to file the appeal only on April 13, 2009.
The NLRC denied reconsideration. Respondent, thus, filed a petition for certiorari before the CA.
CA Ruling:
The CA reversed.
The CA ruled that the service of the February 19, 2009 Order on Dagpin herself, instead of her counsel, was not the legal service contemplated by law. The NLRC, therefore, gravely abused its discretion when it dismissed the appeal for non-perfection albeit there was no proper service of said notice/order.
On the merits, the CA decreed that a recomputation of the monetary consequences of illegal dismissal does not violate the principle of immutability of final judgments for it does not affect the illegal dismissal ruling itself. Since Tan, et al. pursued the review of the case up to the SC, the backwages and separation pay should be computed until August 21, 2008 when the SC’s resolution in Dagpin’s favor became final. This is regardless of the fact that Dagpin had already secured a writ of execution from the ELA who computed her monetary awards only up until the dismissal of Dagpin’s appeal to the NLRC became final on January 10, 2005.
Tan, et al.’s motion for reconsideration was denied.
Issue/s:
Whether or not the ten-day period to file memorandum of appeal before the NLRC commences from the time the litigant received the Order appealed from and not from receipt of her counsel, who voluntarily “suspended” from practice due to MCLE matter
Whether or not the backwages and separation pay for a judgment that had already become final and executory, been fully executed and satisfied with the NLRC should be re-computed up to the time that the resolution of the appellate remedies subsequent to such execution, had become final and executory with
the SC
SC Ruling:
The SC partially granted the petition.
The SC held that where a party appears by attorney in an action or proceeding in a court of record, all notices must be served on the attorney of record. Service of the court’s order on any person other than the counsel of record is not legally effective, nay, binding on the party. It cannot start the corresponding reglementary period for the subsequent procedural steps which may be taken by the attorney. This rule is founded on considerations of fair play. A party engages a counsel precisely because he or she does not feel competent to deal with the intricacies of law and procedure.
When the notice/order is directly served on the party, he or she would have to communicate with his or her attorney and turn over the notice/order to the latter, thereby shortening the remaining period for taking the proper steps to protect the party’s interest.
In the absence of a notice of withdrawal or substitution of counsel, the court will rightly assume that the counsel of record continues to represent his client and receipt of notice by the former is the reckoning point of the reglementary period. Here, Dagpin’s counsel of record, Atty. Carin merely instructed her to refer the case to Atty. Rosal at the tail end of the proceedings before the LA since he could not then continue practicing law because he failed to comply with the MCLE requirements and he was then attending an IBP convention in Bacolod City.
There is no showing though that he filed a notice of withdrawal or that Dagpin herself declared that she was terminating Atty. Carin’s services. Notices, decisions, and resolutions should have, therefore, been sent to Atty. Carin as respondent’s counsel of record. But even assuming that Atty. Carin had indeed withdrawn his representation, notices, decisions, and resolutions should have at least been served on Atty. Rosal for the latter had also entered his appearance as Dagpin’s counsel. The fact that copy of the ELA Order was addressed to “L. Dagpin c/o Atty. Kenneth P. Rosal” clearly indicates that the NLRC acknowledged Atty. Rosal as Dagpin’s new counsel.
As it was, however, a copy of the ELA Order was served not on Atty. Rosal but directly on Dagpin herself who received it on March 19, 2009. This is not the proper service contemplated by law. Consequently, the reglementary period for appeal was not deemed to have commenced from Dagpin’s receipt of the ELA Order. Even then, Atty. Rosal was deemed to have acknowledged it when, on the basis thereof, he computed the ten-day period from March 30, 2009 to April 9, 2009 for purposes of filing Dagpin’s memorandum of appeal. Since April 9, 2009 fell on a holiday, and April 10, 11, and 12, 2009 were also holidays, the filing of Dagpin’s memorandum of appeal on April 13, 2009 was within the reglementary period.
On the issue of re-computation of the incremental award, the SC held that execution is the final stage of litigation, the end of the suit. The labor laws dictate that backwages must be computed from the time the employee was unjustly dismissed until his or her actual reinstatement or upon payment of his or her separation pay if reinstatement is no longer feasible.
Hence, insofar as accrued backwages and other benefits are concerned, the employer’s obligation to the employee continues to accumulate until he actually implements the reinstatement aspect of the final judgment or fully satisfies the monetary award in case reinstatement is no longer possible.
It is undisputed that the NLRC Resolution which affirmed the fact of Dagpin’s illegal dismissal and monetary award became final and executory on January 10, 2005. As soon as an entry of judgment thereon was issued, the corresponding writ of execution got implement and satisfied in full. But this, notwithstanding, Tan, et al. opted to fight it out before the CA and later, before the SC. As it was, Tan, et al. lost in both for a. The SC’s resolution dismissing the petition became final and executory on August 21, 2008. Notably, there was no modification of the NLRC Resolution which had been earlier executed and satisfied in Dagpin’s favor.
Although Tan, et al. formally opposed Dagpin’s claims all the way up to the SC, they, nonetheless, yielded
to the execution of judgment sought by Dagpin way back in 2005 at the ELA’s level. Inasmuch as Tan, et al. had already satisfied the final monetary benefits awarded to Dapgin, the latter may not ask for another round of execution, lest, it violates the principle against unjust enrichment.
It is settled that a final judgment may no longer be altered, amended, or modified, even if the alteration, amendment or modification is meant to correct a perceived error in conclusions of fact and law and regardless of what court renders it. More so when, as in this case, such final judgment had already been executed and fully satisfied.
Dagpin’s receipt of the full separation pay and other benefits effectively severed the employer-employee relationship between her and Tan, et al. From that point up until the finality of the SC Resolution dated June 23, 2008, Dagpin was no longer an employee of Tan, et al. Hence, she has no more right to demand further benefits as such.
Granting a recomputation and, consequently, another round of execution would indubitably alter the original decision which had been completely satisfied, nay, unjust enrichment would certainly result.