Paulino Ungos III

Lawyer | Law Professor | Author

Tag: execution

  • Recomputation of Accrued Benefits and Immutability of Judgment

    Execution is the final stage of litigation, the end of the suit. 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 the employer actually implements the reinstatement aspect of the final judgment or fully satisfies the monetary award in case reinstatement is no longer possible.1Mt. Carmel College v. Resuena, G.R. No. 173076, October 10, 2007, 561 PHIL 620-646.

    In one case, the Office of the Labor Arbiter rendered a Decision dated 12 September 2003 declaring the employer liable for illegal dismissal of the employee, with separation pay, backwages, service incentive leave pay, 13th month pay, moral and exemplary damages, and attorney’s fees.

    On 29 July 2004, the National Labor Relations Commission affirmed the illegality of the employee’s dismissal from employment, as well as the monetary award, when it dismissed the appeal of the employer for non-perfection. This Decision became final and executory on 10 January 2005. As soon as an entry of judgment thereon was issued on 17 January 2005, the corresponding writ of execution was implemented and satisfied in full.

    This, notwithstanding, the employer opted elevate the case before the Court of Appeals and later, before the Supreme Court. However, the employer lost in both fora. The Supreme Court’s Resolution dated 23 June 2008 dismissing the employer’s petition became final and executory on 21 August 2008.

    On 3 November 2008, the employee sought for additional increments to her monetary award. She posited that her backwages, separation pay, and other benefits should be computed up to 21 August 2008 when the resolution of the Supreme Court became final and executory.

    May the employee be granted a recomputation of accrued backwages, separation pay, and other benefits?

    The Supreme Court ruled in the negative, since the employee was no longer entitled to a recomputation or increase of the monetary award already paid her.

    While the Court noted that the employer formally opposed the employee’s claims, record, nonetheless, shows that the judgment was executed way back in 2005. For the Court, the employer had already satisfied the final monetary benefits awarded to the employee. Corollary, “the latter may not ask for another round of execution, lest, it violates the principle against unjust enrichment.” There was no additional increment which accrued to the employee by reason of the Supreme Court’s Resolution dated 23 June 2008 which did not modify, let alone, alter the long executed judgment of the National Labor Relations Commission.

    Jurisprudence2Mercury Drug Corp. v. Spouses Huang, G.R. No. 197654, August 30, 2017, 817 PHIL 434-464 dictates 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.

    The Court stressed that the employee’s receipt of full backwages, separation pay, and other benefits in 2005 effectively severed the employer-employee relationship between her and the employer. From that point up until the finality of the Court’s Resolution dated 23 June 2008, the employee no longer had a right to demand further benefits as such.

    The Court stated that “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.”

    Further reading:

    • Tan v. Dagpin, G.R. No. 212111, January 15, 2020.

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  • We Can’t. There is No Order of Restitution Yet.

    The seafarer in this case had earlier obtained a favorable judgment from the Office of the Labor Arbiter. The National Labor Relations Commission denied the employers’ appeal. This decision of the Commission became final and a corresponding writ of execution was thereafter issued. The employers paid the judgment award consisting of the seafarer’s permanent and total disability benefits.

    Later, the Court of Appeals reversed the rulings of the Office of the Labor Arbiter and the Commission and decided that the seafarer was not entitled to permanent and total disability benefits.

    The seafarer filed a petition to the Supreme Court to assail the decision of the Court of Appeals. The Supreme Court denied the seafarer’s petition. The Supreme Court’s resolution soon became final.

    The employers then filed a motion for issuance of a writ of execution before the Office of the Labor Arbiter seeking the restitution of the judgment award paid to the seafarer.

    The said office issued an order denying employers’ motion for issuance of a writ of execution because the same was prematurely filed. Relying on the provisions of the 2011 NLRC Rules of Procedure, as amended, the said office stated that the employers failed to show that the Court of Appeals had ordered restitution in its decision.

    The employers filed a petition at the National Labor Relations Commission seeking to annul the order of the Office of the Labor Arbiter and execute the Court of Appeals decision.

    The National Labor Relations Commission denied the employers’ petition. According to the Commission, its 2011 NLRC Rules of Procedure, as amended, specifically Section 18 of Rule XI, expressly required that either the Court of Appeals or the Supreme Court must first order restitution before the same could be carried out by the Office of the Labor Arbiter. Since the decision of the Court of Appeals was silent on the propriety of restitution of the judgment, the Commission concluded that it could not grant the employers’ motion.

    Is a higher court’s separate order of restitution or reparation of damages a conditio sine qua non before the Office of the Labor Arbiter could proceed with execution of the same?

    No.

    Order to Restitute Was Necessarily Included in Court of Appeals Decision

    A judgment is not confined to what appears on the face of the decision, but extends as well to those necessarily included therein or necessary thereto. The execution is consequently extended to those matters necessarily included in the judgment.

    In this case, the Decision of the Court of Appeals clearly found that the seafarer was not entitled to the permanent disability benefits awarded. As noted above, said Decision of the Court of Appeals was upheld by the Supreme Court.

    The Supreme Court ruled that the Office of the Labor Arbiter and the National Labor Relations Commission should have determined the true intent and meaning of the Decision of the Court of Appeals, in that the said Decision should have been considered in its entirety. Thus, when the Court of Appeals declared that the disability award to seafarer was invalid, necessarily, the judgment award earlier paid by the employers should have been restituted to them.

    No Supplemental Decision or Separate Order of Restitution Needed

    For context, the rule relied upon by the Office of the Labor Arbiter and the National Labor Relations Commission was Section 18, Rule XI of the 2011 NLRC Rules of Procedure, as amended, which provides:

    “SECTION 18. Restitution. — Where the executed judgment is totally or partially reversed or annulled by the Court of Appeals or the Supreme Court with finality and restitution is so ordered, the Labor Arbiter shall, on motion, issue such order of restitution of the executed award, except reinstatement wages paid pending appeal.”

    After analyzing the said provision, the Supreme Court ruled that the same never required a separate restitution order before actual restitution can take effect.

    First, the phrase “where the executed judgment is totally or partially reversed or annulled by the Court of Appeals or the Supreme Court with finality and restitution is so ordered” did not direct it and the Court of Appeals to include an order of restitution in their judgment, or otherwise restitution shall not take effect.

    Second, the Supreme Court added that it, as well as the Court of Appeals, is not bound by the procedural rules of an administrative tribunal. Once the higher courts have rendered a decision, the lower tribunals have no choice but to execute the same.

    Finally, the Supreme Court noted that the interpretation advanced by the Office of the Labor Arbiter and the National Labor Relations Commission was manifestly prejudicial to the victorious litigant. The Court said:

    “It commands that the party must first secure an order of restitution in the higher courts before there can be a recovery of payment which, to begin with, was improper. There is no assurance that the party could definitely secure the required order of restitution in due time. The winning party will be left at the mercy of the labor tribunals, while the defeated party conveniently sits on top of another man’s earnings. The substantive right of a party to enjoy the fruits of a favorable judgment will be negated by a mere procedural technicality.”

    In sum, the decision of the Supreme Court or the Court of Appeals reversing the executed judgment in this case had attained finality. The Office of the Labor Arbiter should have ordered the restitution of the executed award.

    Further reading:

    • Cabalo v. Net Ship Management, Inc., G.R. No. 212429 (Notice), January 27, 2016.

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