Gonzales v. Solid Cement Corp.
REITERATIONFacts
The Antecedents: Leo Gonzales (petitioner) was terminated by Solid Cement Corporation (respondent) on October 5, 1999. On December 12, 2000, the Labor Arbiter (LA) declared the dismissal illegal and ordered Gonzales' reinstatement with full backwages. Consequently, the company reinstated Gonzales in the payroll on January 22, 2001. The case proceeded through appeals to the National Labor Relations Commission (NLRC) and the Court of Appeals (CA), both of which largely affirmed the illegal dismissal ruling. The Supreme Court (SC) eventually denied Solid Cement's petition for review, and the judgment became final with entry of judgment recorded on July 12, 2005. Gonzales was actually reinstated to his former position on July 15, 2008. Procedural History: During the execution stage, the LA issued an order on August 18, 2009, computing the total award at P965,014.15. On appeal, the NLRC modified this order to include additional backwages for the period between the LA decision and payroll reinstatement, salary differentials, 13th month pay differentials, and 12% interest from the date of finality. However, the CA, acting on a Rule 65 petition, set aside the NLRC's modification and reinstated the LA's order, invoking the doctrine of immutability of final judgments. The SC initially denied Gonzales' Rule 45 petition and his subsequent first motion for reconsideration. The Petition: Gonzales filed a Second Motion for Reconsideration and a Motion to Refer the Case to the Court En Banc. He argued that the CA acted outside its jurisdiction and with grave abuse of discretion by deleting the monetary awards properly granted by the NLRC. He contended that the CA's rigid application of the immutability doctrine effectively varied the final and executory judgment in the original case, which had already affirmed his entitlement to full backwages and benefits.
Issue(s)
Whether the Court may entertain a Second Motion for Reconsideration, which is generally a prohibited pleading. Whether the re-computation of monetary awards during the execution of a final illegal dismissal decision violates the principle of immutability of judgments. Whether the petitioner is entitled to 12% legal interest on the total judgment award from the date of finality.
Ruling
The Supreme Court PARTIALLY GRANTED the petition. It vacated its Minute Resolutions of November 16, 2011, and February 27, 2012, and DIRECTED the payment of: (1) 13th month pay for the years 2000 and 2001; (2) additional backwages from December 13, 2000, until January 21, 2001; and (3) 12% interest on the total judgment award from the time of the judgment's finality on July 12, 2005, until the total award is fully paid. The Labor Arbiter was directed to issue the appropriate writ of execution incorporating these additional awards.
Ratio Decidendi
On Issue 1: While a second motion for reconsideration is generally prohibited under Rule 37, Section 5 of the Rules of Court, the Court may entertain it in the interest of justice, especially when the assailed resolution effectively perpetuates a void judgment. The Court noted that the Court of Appeals (CA) acted outside its jurisdiction by varying a final and executory judgment, rendering its decision void. A void decision can never become final and is one of the recognized exceptions to the rule on immutability. Therefore, the Court vacated its previous minute resolutions to correct the jurisdictional error. This corrective action is a duty of the Court under Section 1, Article VIII of the Constitution to ensure the proper administration of justice. On Issue 2: Applying Session Delights Ice Cream and Fast Foods v. Court of Appeals, the Court held that re-computation of backwages is a necessary consequence of an illegal dismissal finding. Article 279 of the Labor Code mandates that reliefs continue to accrue until full satisfaction or actual reinstatement. Such re-computation does not constitute an alteration of the final decision because the finding of illegal dismissal remains untouched; only the mathematical computation of the consequences is updated. The CA erred in using the immutability doctrine to block the inclusion of 13th month pay and backwages for the period between the LA decision and payroll reinstatement. Consequently, the NLRC's inclusion of these items was legally sound as they were part of the original judgment's scope. On Issue 3: Following Eastern Shipping Lines, Inc. v. Court of Appeals and BPI Employees Union-Metro Manila v. BPI, a final and executory judgment awarding a sum of money earns interest at 12% per annum from the date of finality until full satisfaction. This interest is considered a forbearance of credit and is a natural consequence of a final judgment. The LA's failure to include this in the initial execution order was a mistake that the NLRC correctly rectified on appeal. The CA's deletion of this interest based on a rigid application of the immutability doctrine was a grave abuse of discretion as it ignored established jurisprudence on legal interest. The Court emphasized that this interest applies even if the parties are at variance regarding the exact computation of the principal amount.
Main Doctrine
A decision that has acquired finality becomes immutable and unalterable, but this rule admits three recognized exceptions: (1) the correction of clerical errors, (2) the so-called nunc pro tunc entries which cause no prejudice to any party, and (3) void judgments. In illegal dismissal cases, the re-computation of monetary consequences (such as backwages) during the execution stage does not constitute an alteration or amendment of the final decision being implemented. Because the reliefs continue to add on until full satisfaction under Article 279 of the Labor Code, an updated computation is a necessary consequence that flows from the nature of the illegality of dismissal declared in the decision. Additionally, when a judgment awarding a sum of money becomes final and executory, it earns legal interest at the rate of 12% per annum from such finality until its satisfaction.