In computing the backwages and benefits awarded to the employees, the reckoning period is not interrupted by the NLRC’s reversal of the Labor Arbiter’s finding of illegal dismissal.

G.R. No. 211228, 12 November 2014

Complainants Sps. Florentino and Nilda Hernandez initiated a complaint for illegal dismissal against their employer defendant University of Pangasinan Inc. (UPI), and certain concerned officers. The labor arbiter ruled in favor of complainants who were removed without just and valid cause. The NLRC initially affirmed the labor arbiter’s decision; however, on motion for reconsideration, the decision was reversed and the complaint was dismissed. On appeal, the Court of Appeals reversed the NLRC and reinstated the labor arbiter’s decision. The Supreme Court denied with finality the school’s petition.

Afterwards, complainants moved for a re-computation of their award to include their backwages and other benefits reckoned from the labor arbiter’s decision to the finality of the decision. The school challenged the re-computation and inclusion of 13th month pay (which did not appear on the original decision) on the ground that the finality of the decision prevents the labor arbiter from changing the award (rule on immutability).

HELD: The employer was liable and the re-computation was valid. Regarding the claim of violating the rule on immutability of a final and executory judgment, “updating the computation of awards to include as well backwages and separation pay corresponding to the period  after the rendition of  LA Gambito’s decision on November 6, 2000  up to its finality on July 11, 2005 is not violative of the principle of immutability of a final and executory judgment.”

Even if not expressly provided in the appellate court’s decision, the inclusion by the Labor Arbiter of the 13th month pay is proper. “Presidential Decree No. 85129 (P.D. No. 851) is the law directing the 13th month payment. On the other hand, Article 279 of the Labor Code in part provides that an illegally-dismissed employee shall be entitled to full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time compensation was withheld up to the time of actual reinstatement.”

The computation is never interrupted by the NLRC’s reversal of the Labor Arbiter. “In computing the backwages and benefits awarded to the respondents, the reckoning period is not interrupted by the NLRC’s reversal of LA Gambito’s finding of illegal dismissal.”

Further, the 6% legal interest upon the total monetary award reckoned from the Entry of Judgment on July 11, 2005 until full satisfaction is proper. “In the case at bar, the CA properly imposed the legal interest upon the total monetary award even if none was explicitly included in the fine print of LA Gambito’s decision and LA Flores’ order.  The imposition of legal interest is not to be considered as an alteration of the final judgment to be executed.  The legal interest is already deemed read into the decision.”

Citing jurisprudence, “the judgments finding that the employees were illegally dismissed became final and executory before July 1, 2013.  In both cases too, the said judgments did not explicitly include the imposition of the legal interest upon the total adjudged award.  In the case of Florentino and Nilda, it was the CA, which first expressly included the legal interest in the equation. In Nacar, this Court made the explicit inclusion and pegged the rate at 12% from the date of the Entry of Judgment up to June 30, 2013, and at 6% from July 1, 2013 until full satisfaction thereof.  The circumstances in the instant petition are similar to the foregoing, hence, Nacar finds application.  Consequently, the Court imposes upon the total adjudged award an interest of 12% interest per annum reckoned from July 11, 2005 until June 30, 2013.  The interest of 6% per annum is imposed from July 1, 2013 until full satisfaction of the judgment award.”