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.
