SGS Far East Ltd. v. National Labor Relations Commission
REITERATIONFacts
1. The Antecedents: Private respondents, members of the Philippine Social Security Labor Union Federation (PSSLU), filed a complaint against SGS Far East Ltd. for underpayment of wages and violation of labor standard laws. The parties subsequently executed a compromise agreement on August 4, 1982, wherein SGS affirmed the status of thirteen (13) complainants as regular seasonal daily-paid employees and agreed to pay them P50,000.00 in full settlement of all money claims. The agreement also stipulated that there would be no change in their employment terms, they would be given priority for regular monthly-paid positions if qualified, and SGS would comply with all applicable labor laws. The original labor case was dismissed based on this agreement and a signed Deed of Release and Quitclaim. 2. Procedural History: Three years after the compromise, four of the original complainants (Crisanto Ortiz, Mauricio Forbes, Jr., Tony Lim, and Arturo Gallardo) filed a Manifestation and Motion alleging that SGS failed to comply with the agreement by not allowing them to work, not adhering to labor laws and wage orders, not giving them priority for employment, and violating the compromise agreement. Petitioner SGS moved to dismiss, arguing the Labor Arbiter lacked jurisdiction. Labor Arbiter Tumanon denied the motion and ordered SGS to pay the four complainants P20,129.43 each, totaling P80,517.72, and to reinstate them with backwages and other benefits. SGS appealed to the NLRC, which reversed the Labor Arbiter, stating he lacked jurisdiction and a new case should be filed. The NLRC's decision was later set aside by the Supreme Court (First Division) in G.R. No. 101698, which affirmed Labor Arbiter Tumanon's jurisdiction and ordered the execution of his decision. The case was then referred to Labor Arbiter Reyes for execution, who approved the private respondents' computation of P4,806,052.41. SGS appealed this order to the NLRC (Second Division), arguing the award was excessive and varied the judgment. The NLRC dismissed the appeal, holding it had lost jurisdiction as the order was merely for execution of a final judgment. 3. The Petition: Petitioners SGS Far East Ltd., Neil Tovey, and Ramon Go filed a petition for certiorari and prohibition under Rule 65 of the Rules of Court, assailing the NLRC Second Division's resolutions dated December 11, 1995, and January 18, 1996. They argue that the NLRC gravely abused its discretion by refusing to assume jurisdiction over their appeal concerning the writ of execution. Petitioners contend that the NLRC's refusal, based on the principle that execution is ministerial once a judgment is final, was improper because they were challenging the writ of execution for allegedly varying the original judgment and awarding excessive amounts, including 200% monthly basic pay for every year of service, which they claim was not part of the original award. They assert that the NLRC has the authority to review the correctness of the execution and consider if it aligns with the original judgment, citing relevant Supreme Court jurisprudence.
Issue(s)
Whether the NLRC Second Division gravely abused its discretion amounting to lack or excess of jurisdiction in refusing to assume jurisdiction over the appeal assailing the writ of execution. Whether the writ of execution issued by Labor Arbiter Reyes varied the tenor of the decision sought to be executed. Whether the appeal filed by petitioners before the NLRC was the proper remedy to question the writ of execution.
Ruling
The Supreme Court granted the petition. The resolutions of the NLRC Second Division dated December 11, 1995, and January 18, 1996, were set aside, and the case was remanded to the NLRC for further proceedings.
Ratio Decidendi
On the NLRC's refusal to assume jurisdiction over the appeal: The public respondent NLRC gravely abused its discretion in refusing to assume jurisdiction over the appeal of the petitioners. While it is a general rule that an order of execution is final and its execution is a ministerial duty, this rule does not apply when the writ of execution is assailed as having varied the decision sought to be enforced. In this case, petitioners vigorously assailed the correctness of the computation of Labor Arbiter Reyes, alleging it materially altered the decision of Labor Arbiter Tumanon, specifically regarding the salary rate for backwages and the award of 200% monthly basic pay for every year of service. If these contentions were correct, petitioners would be entitled to the remedy of appeal to the NLRC. The NLRC is vested with the authority to look into the correctness of the execution of a decision and to consider supervening events that may affect such execution. To hold otherwise would be to ignore the constitutional provision against depriving a person of property without due process of law, especially when the execution exceeds the judgment it seeks to enforce. On whether the writ of execution varied the judgment: The Supreme Court found merit in the petitioners' contention that the writ of execution issued by Labor Arbiter Reyes varied the tenor of the decision of Labor Arbiter Tumanon. Petitioners argued that the salary rate for the computation of the three (3) years backwages should have been the last salary rate received, and that the award of 200% monthly basic pay for every year of service was not within the purview of the judgment sought to be executed. These specific allegations, if proven correct, demonstrate that the execution went beyond the bounds of the original judgment. The Supreme Court has consistently held that where the execution is not in harmony with the judgment which gives it life and exceeds it, it has pro tanto no validity. Therefore, the NLRC should have entertained the appeal to determine if the execution indeed varied the judgment. On the propriety of the appeal to the NLRC: The appeal filed by petitioners before the NLRC was the proper remedy to question the writ of execution. While an order of execution is generally considered final, an exception exists when the execution itself is alleged to have varied the terms of the judgment. In such instances, the NLRC has the authority to review the execution to ensure it conforms to the original decision. The Supreme Court, in citing Bliss Development Corporation v. NLRC, held that the NLRC is vested with the authority to look into the correctness of the execution of the decision and to consider supervening events that may affect such execution. Therefore, the NLRC erred in dismissing the appeal outright on the ground that it had lost jurisdiction, as it should have passed upon the merits of the allegations that the execution varied the judgment.
Main Doctrine
The NLRC gravely abused its discretion in refusing to assume jurisdiction over an appeal assailing a writ of execution that allegedly varied the judgment sought to be enforced. An appeal is a proper remedy when the execution is not in harmony with the judgment.