G.R. No. 172149 ; February 8, 2010
SESSION DELIGHTS ICE CREAM AND FAST FOODS, Petitioner, vs. THE HON. COURT OF APPEALS (Sixth Division), HON. NATIONAL LABOR RELATIONS COMMISSION (Second Division) and ADONIS ARMENIO M. FLORA, Respondents.

FACTS

Private respondent Adonis Armenio M. Flora filed a complaint for illegal dismissal against petitioner Session Delights Ice Cream and Fast Foods. On February 8, 2001, the Labor Arbiter decided in favor of Flora, declaring his dismissal illegal and awarding him specific amounts for backwages, proportional 13th month pay, separation pay, indemnity for due process violation, and attorney’s fees, as detailed in the dispositive portion of the decision. The NLRC affirmed this decision on appeal. Petitioner then filed a petition for certiorari before the Court of Appeals (CA-G.R. SP No. 74653). On July 4, 2003, the CA dismissed the petition and affirmed the NLRC decision with modification, deleting the awards for proportional 13th month pay and indemnity. This CA decision became final on July 29, 2003.
During execution proceedings in January 2004, the Labor Arbiter’s Finance Analyst submitted an updated computation of monetary awards, including additional backwages and separation pay computed from March 1, 2001, to September 17, 2003, and a proportionate 13th month pay. The Labor Arbiter approved this recomputation on March 25, 2004. Petitioner objected, arguing the recomputation was inconsistent with the final and executory Labor Arbiter decision as modified by the CA. The NLRC affirmed the Labor Arbiter’s order. Petitioner sought certiorari from the CA, which partially granted the petition in its December 19, 2005 decision, deleting the awarded proportionate 13th month pay but directing the Labor Arbiter to recompute: (a) backwages from the time salary was withheld up to July 29, 2003 (finality of the CA decision); (b) separation pay from July 31, 2000, up to July 29, 2003; and (c) attorney’s fees equivalent to 10% of the total monetary claims from (a) and (b), with legal interest from July 29, 2003, until fully paid. The CA denied petitioner’s motion for reconsideration.

ISSUE

Whether a final and executory decision (the Labor Arbiter’s decision of February 8, 2001, as affirmed with modification by the CA) may be enforced beyond the terms decreed in its dispositive portion, specifically through a recomputation of monetary awards accruing during the pendency of appeals.

RULING

The Supreme Court dismissed the petition and affirmed the CA decision. The Court held that while the general rule is that a final judgment must be executed according to the strict terms of its dispositive portion, and is immutable save for recognized exceptions, the peculiar nature of illegal dismissal cases and the specific provisions of the Labor Code and NLRC Rules justify the recomputation.
The Court explained that in illegal dismissal cases, an employee is entitled to reinstatement and full backwages inclusive of allowances and benefits from the time compensation was withheld until actual reinstatement. If reinstatement is no longer feasible, backwages are computed up to the finality of the decision. The separation pay awarded in lieu of reinstatement is computed up to that same date of finality. The Labor Arbiter’s original computation in the February 8, 2001 decision was only a preliminary determination based on the circumstances at the time of the decision. The awards for backwages and separation pay, by their very nature, are not static and final amounts but continue to accrue until the judgment becomes final and executory. The execution of such continuing awards is expressly provided for under the NLRC Rules of Procedure, which mandate further computation when necessary. Therefore, the CA correctly ordered a recomputation to determine the correct amounts due from the time of illegal dismissal up to the finality of the judgment (July 29, 2003), as this was in accordance with substantive labor law and procedural rules, and did not constitute an alteration of the final judgment’s dispositive portion but a proper execution of its inherent directive.