Case Digest (G.R. No. 170904)
Facts:
Bani Rural Bank, Inc., ENOC Theater I and II, and Rafael de Guzman (Petitioners) were respondents in illegal dismissal complaints filed by Teresa de Guzman, Edgar C. Tan, and Teresa G. Tan (Respondents). On March 17, 1995 the NLRC found illegal dismissal, ordered reinstatement with backwages (less earnings elsewhere) and remanded computation; Labor Arbiter Rolando D. Gambito first computed backwages only until August 25, 1995.
On July 31, 1998 the NLRC modified the March 17, 1995 resolution, awarded separation pay in lieu of reinstatement because of strained relations, and excluded certain earnings from the “less earnings elsewhere” deduction; that decision became final on January 29, 1999 and was followed by further recomputations and appeals to the Court of Appeals and this Court.
Issues:
- Whether the respondents’ backwages should be computed only until August 25, 1995 or until January 29, 1999, the finality of the NLRC’s July 31, 1998 decision ordering separation pay.
- Whether the NLRC acted without jurisdiction or with grave abuse of discretion in reversing Labor Arbiter Gambito’s order and denying petitioners’ motion for reconsideration.
Ruling:
The petition was denied and the Court affirmed the Court of Appeals’ decision with modification. The Court ordered petitioners to pay backwages from the date of illegal dismissal until January 29, 1999, separation pay computed to January 29, 1999, and legal interest of six percent per annum from January 29, 1999 until full satisfaction, and directed the labor arbiter to recompute the awards.
Ratio:
The Court distinguished the final finding of illegal dismissal from subsequent computations and held that the NLRC validly modified the March 17, 1995 resolution upon a supervening event — the strained relations disclosed during execution — justifying substitution of separation pay for reinstatement. Under Article 279 of the Labor Code and controlling jurisprudence (e.g., Session Delights Ice Cream and Fast Foods v. Court of Appeals), when separation pay is ordered in lieu of reinstatement the proper cut‑off for backwages is the finality of the decision ordering separation pay; no grave abuse of discretion was shown, and review under Rule 45 is limited to questions of law.
Doctrine:
- A final judgment is immutable except for supervening events that arise after finality and justify modification.
- Under Article 279, separation pay may be awarded in lieu of reinstatement where reinstatement is no longer viable, and backwages are then computed up to the finality of the decision ordering separation pay.
- In a Rule 45 review of a CA labor decision, the Court limits its inquiry to whether the CA correctly resolved the presence or absence of grave abuse of discretion in the NLRC decision.
- Legal interest at six percent per annum attaches to a money judgment from the date the judgment became final.