May 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected May 2010 rulings of the Supreme Court of the Philippines on labor law and procedure:

Labor law

Illegal dismissal; backwages. The basis for the payment of backwages is different from that for the award of separation pay.  Separation pay is granted where reinstatement is no longer advisable because of strained relations between the employee and the employer.  Backwages represent compensation that should have been earned but were not collected because of the unjust dismissal.  The basis for computing backwages is usually the length of the employee’s service while that for separation pay is the actual period when the employee was unlawfully prevented from working.

As to how both awards should be computed, Macasero v. Southern Industrial Gases Philippines [G.R. No. 178524, January 30, 2009] instructs that the award of separation pay is inconsistent with a finding that there was no illegal dismissal, for under Article 279 of the Labor Code and as held in a catena of cases, an employee who is dismissed without just cause and without due process is entitled to backwages and reinstatement or payment of separation pay in lieu thereof. Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement.  The two reliefs provided are separate and distinct.  Golden Ace Builders and Arnold U. Azur vs. Jose A. Talde, G.R. No. 187200, May 5, 2010.

Illegal dismissal; doctrine of strained relations. Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable.  On one hand, such payment liberates the employee from what could be a highly oppressive work environment.  On the other hand, it releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.

Strained relations must be demonstrated as a fact, however, to be adequately supported by evidence— substantial evidence to show that the relationship between the employer and the employee is indeed strained as a necessary consequence of the judicial controversy.

In the present case, the Labor Arbiter found that actual animosity existed between petitioner Azul and respondent as a result of the filing of the illegal dismissal case.  Such finding, especially when affirmed by the appellate court as in the case at bar, is binding upon the Court, consistent with the prevailing rules that the Court will not try facts anew and that findings of facts of quasi-judicial bodies are accorded great respect, even finality.  Golden Ace Builders and Arnold U. Azul vs. Jose A. Talde, G.R. No. 187200, May 5, 2010.

Illegal dismissal; separation pay. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted.  In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages. The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement.  Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative.  The payment of separation pay is in addition to payment of backwages.

The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer practical or in the best interest of the parties. Separation pay in lieu of reinstatement may likewise be awarded if the employee decides not to be reinstated. Golden Ace Builders and Arnold U. Azur vs. Jose A. Talde, G.R. No. 187200, May 5, 2010.

Labor procedure

Judgment; final and executory. The Labor Arbiter’s decision has long become final and executory and it can no longer be reversed or modified. Nothing is more settled in law than when a final judgment becomes executory, it thereby becomes immutable and unalterable.  The judgment may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of law or fact, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land.  The only recognized exception are the correction of clerical errors or the making of so-called nunc pro tunc entries which cause no injury to any party, and, of course, where the judgment is void.

Once a judgment becomes final and executory, the prevailing party should not be denied the fruits of his victory by some subterfuge devised by the losing party.  Final and executory judgments can neither be amended nor altered except for correction of clerical errors, even if the purpose is to correct erroneous conclusions of fact or of law. Trial and execution proceedings constitute one whole action or suit such that a case in which execution has been issued is regarded as still pending so that all proceedings in the execution are proceedings in the suit.

It is no longer legally feasible to modify the final ruling in this case through the expediency of a petition questioning the order of execution.  Judgments of courts should attain finality at some point lest there be no end in litigation. The final judgment in this case may no longer be reviewed, or in any way modified directly or indirectly, by a higher court, not even by the Supreme Court. The reason for this is that, litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of justice that, once a judgment has become final, the winning party be not deprived of the fruits of the verdict. Courts must guard against any scheme calculated to bring about that result and must frown upon any attempt to prolong controversies. Marmosy Trading, Inc. and Victor Morales vs. Court of Appeals, et al., G.R. No. 170515, May 6, 2010.

(Leslie thanks Bhong Paulo A. Macasaet for assisting in the preparation of this post.)