G.R. No.
189871 : August 13, 2013
DARIO NACAR, Petitioner, v. GALLERY FRAMES AND/OR FELIPE
BORDEY, JR., Respondents.
PERALTA,J.:
FACTS:
On October 15, 1998, the Labor Arbiter rendered a Decisionin favor of petitioner
and found that he was dismissed from employment without a valid or just cause.
Thus, petitioner was awarded backwages and separation pay in lieu of
reinstatement in the amount ofP158,919.92.
Respondents appealed to the NLRC, but it was dismissed for lack of merit.
Accordingly, the NLRC sustained the decision of the Labor Arbiter. Respondents
filed a motion for reconsideration, but it was denied. Dissatisfied, respondents
filed a Petition for Review on Certiorari before the CA but it was likewise denied.
Respondents then sought relief before the Supreme Court. Finding no reversible
error on the part of the CA, this Court denied the petition in the Resolution dated
April 17, 2002.
An Entry of Judgment was later issued certifying that the resolution became final
and executory on May 27, 2002. The case was, thereafter, referred back to the
Labor Arbiter for execution. Petitioner filed a Motion for Correct Computation,
praying that his backwages be computed from the date of his dismissal on
January 24, 1997 up to the finality of the Resolution of the Supreme Court on
May 27, 2002. Upon recomputation, the Computation and Examination Unit of
the NLRC arrived at an updated amount in the sum ofP471,320.31.
Respondents filed a Motion to Quash Writ of Execution, arguing, among other
things, that since the Labor Arbiter awarded separation pay ofP62,986.56 and
limited backwages ofP95,933.36, no more recomputation is required to be made
of the said awards. They claimed that after the decision becomes final and
executory, the same cannot be altered or amended anymore. LA denied the
motion but the decision was reversed by the NLRC on appeal.
Petitioner appealed to the CA but was denied, stating that since petitioner no
longer appealed the October 15, 1998 Decision of the Labor Arbiter, which
already became final and executory, a belated correction thereof is no longer
allowed. The CA stated that there is nothing left to be done except to enforce the
said judgment. Consequently, it can no longer be modified in any respect, except
to correct clerical errors or mistakes. Thus, petitioner filed this petition for review
on certiorari.
ISSUE: Whether or not a re-computation in the course of execution of the labor
arbiter's original computation of the awards made is legally proper.
HELD: Yes.
Labor Law- computation of backwages
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.
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, 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. 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.
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. That the amount respondents
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.
Nacar v. Gallery Frames
G.R. No. 189871, August 13, 2013, 703 SCRA 439
FACTS:
Dario Nacar filed a labor case against Gallery Frames and its owner Felipe Bordey, Jr. Nacar
alleged that he was dismissed without cause by Gallery Frames on January 24, 1997. On October
15, 1998, the Labor Arbiter (LA) found Gallery Frames guilty of illegal dismissal hence the Arbiter
awarded Nacar P158,919.92 in damages consisting of backwages and separation pay.
Gallery Frames appealed all the way to the Supreme Court (SC). The Supreme Court affirmed the
decision of the Labor Arbiter and the decision became final on May 27, 2002. After the finality of the
SC decision, Nacar filed a motion before the LA for recomputation as he alleged that his backwages
should be computed from the time of his illegal dismissal (January 24, 1997) until the finality of the
SC decision (May 27, 2002) with interest. The LA denied the motion as he ruled that the reckoning
point of the computation should only be from the time Nacar was illegally dismissed (January 24,
1997) until the decision of the LA (October 15, 1998). The LA reasoned that the said date should be
the reckoning point because Nacar did not appeal hence as to him, that decision became final and
executory.
ISSUE:
Whether or not the Labor Arbiter is correct.
RULING:
No. There are two parts of a decision when it comes to illegal dismissal cases (referring to cases
where the dismissed employee wins, or loses but wins on appeal). The first part is the ruling that the
employee was illegally dismissed. This is immediately final even if the employer appeals – but will be
reversed if employer wins on appeal. The second part is the ruling on the award of backwages
and/or separation pay. For backwages, it will be computed from the date of illegal dismissal until the
date of the decision of the Labor Arbiter. But if the employer appeals, then the end date shall be
extended until the day when the appellate court’s decision shall become final. Hence, as a
consequence, the liability of the employer, if he loses on appeal, will increase – this is just but a risk
that the employer cannot avoid when it continued to seek recourses against the Labor Arbiter’s
decision. This is also in accordance with Article 279 of the Labor Code.
Anent the issue of award of interest in the form of actual or compensatory damages, the Supreme
Court ruled that the old case of Eastern Shipping Lines vs CA is already modified by the
promulgation of the Bangko Sentral ng Pilipinas Monetary Board Resolution No. 796 which lowered
the legal rate of interest from 12% to 6%. Specifically, the rules on interest are now as follows:
1. Monetary Obligations ex. Loans:
a. If stipulated in writing:
a.1. shall run from date of judicial demand (filing of the case)
a.2. rate of interest shall be that amount stipulated
b. If not stipulated in writing
b.1. shall run from date of default (either failure to pay upon extra-judicial demand or upon judicial
demand whichever is appropriate and subject to the provisions of Article 1169 of the Civil Code)
b.2. rate of interest shall be 6% per annum
2. Non-Monetary Obligations (such as the case at bar)
a. If already liquidated, rate of interest shall be 6% per annum, demandable from date of judicial or
extra-judicial demand (Art. 1169, Civil Code)
b. If unliquidated, no interest
Except: When later on established with certainty. Interest shall still be 6% per annum demandable
from the date of judgment because such on such date, it is already deemed that the amount of
damages is already ascertained.
3. Compounded Interest– This is applicable to both monetary and non-monetary obligations– 6% per
annum computed against award of damages (interest) granted by the court. To be computed from
the date when the court’s decision becomes final and executory until the award is fully satisfied by
the losing party.
4. The 6% per annum rate of legal interest shall be applied prospectively:– Final and executory
judgments awarding damages prior to July 1, 2013 shall apply the 12% rate;– Final and executory
judgments awarding damages on or after July 1, 2013 shall apply the 12% rate for unpaid
obligations until June 30, 2013; unpaid obligations with respect to said judgments on or after July 1,
2013 shall still incur the 6% rate.
