Session Delights v. CA (G.R. No. 172149; February 8, 2010)


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.The labor arbiter decided the complaint on February 8, 2001, finding that the petitioner illegally dismissed the private respondent. The decision awarded the private respondent backwages, separation pay in lieu of reinstatement, indemnity, and attorneys fees, under a computation that the decision itself outlined in its dispositive portion.

On the petitioners appeal, the NLRC affirmed the labor arbiters decision.

On July 4, 2003, the CA dismissed the petition and affirmed with modification the NLRC decision by deleting the awards for a proportionate 13th month pay and for indemnity.

In January 2004, and in the course of the execution of the above final judgment pursuant to Section 3,Rule VIII of the then NLRC Rules of Procedure, the Finance Analyst of the Labor Arbiters 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. This updated computation included additional backwages and separation pay due the private respondent computed from March 1, 2001 to September 17, 2003. The computation also included the proportionate amount of the private respondents 13th month pay. On March 25, 2004, the labor arbiter approved the updated computation.

The petitioner objected to the re-computation and appealed the labor arbiters order to the NLRC. The NLRC disagreed with the petitioner and affirmed the labor arbiters decision in a resolution dated October 25, 2004. The NLRC also denied the petitioner's motion for reconsideration in its resolution dated January 31, 2005.

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 partially granted the petition in its decision of December 19, 2005 (now challenged before us) by deleting the awarded proportionate 13th month pay.

The petitioner timely filed a motion for reconsideration which the CA denied in its resolution of March 30, 2006, now similarly assailed before us.

ISSUE: [1] Was the computation of the awards proper? [2] Did it violate the principle of immutability of final judgments?

HELD: 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. Otherwise stated, it is the dispositive portion that categorically states the rights and obligations of the parties to the dispute as against each other. 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.

A companion to the above rule on the execution of a final judgment is the principle of its immutability. Save for recognized exceptions, 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. 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 CAs deletion of the proportionate 13th month pay and indemnity awards in the labor arbiter's February 8, 2001 decision, only the awards of backwages, separation pay, and attorney's fees remain. These are the awards subject to execution.

A distinct feature of the judgment under execution is that the February 8, 2001 labor arbiter decision already provided for the computation of the payable separation pay and backwages due, and did not literally order the computation of the monetary awards up to the time of the finality of the judgment. The private respondent, too, did not contest the decision through an appeal. The petitioners argument to confine the awards to what the labor arbiter stated in the dispositive part of his decision is largely based on these established features of the judgment.

We reject the petitioners view as a narrow and misplaced interpretation of an illegal dismissal decision, particularly of the terms of the labor arbiters decision.

While the private respondent failed to appeal the February 8, 2001 decision of the labor arbiter, the failure, at the most, had the effect of making the awards granted to him final so that he could no longer seek any other affirmative relief, or pray for any award additional to what the labor arbiter had given. Other than these, the illegal dismissal case remained open for adjudication based on the appeal made for the higher tribunals consideration. In other words, the higher tribunals, on appropriate recourses made, may reverse the judgment and declare that no illegal dismissal took place, or affirm the illegal dismissal already decreed with or without modifying the monetary consequences flowing from the dismissal.

We see no error in the CA decision confirming that a re-computation is necessary as it essentially considered the labor arbiters 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 arbiters 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 arbiters 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 attorneys 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.

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. Recourse to the payment of separation pay is made when continued employment is no longer possible, in cases where the dismissed employees 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.

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's 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 petitioners 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 arbiters 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. DENIED.