G.R. No. 213729, September 02, 2015
Philippine Airlines, Inc., Petitioner, vs. Alexander P. Bichara, Respondent.

FACTS

Respondent Alexander P. Bichara was hired by petitioner Philippine Airlines, Inc. (PAL) on October 28, 1968, as a flight attendant. He voluntarily resigned in April 1971 during a retrenchment program and was rehired on May 15, 1975. In August 1993, he was included in PAL’s Purser Upgrading Program but failed two required check rides, leading to his demotion to flight steward on March 21, 1994. Bichara filed a complaint for illegal demotion. On June 16, 1997, Labor Arbiter Ricardo C. Nora declared the demotion illegal and ordered PAL to reinstate Bichara as flight purser. This decision became final and executory on February 5, 2004, after PAL’s appeals to the NLRC and CA were unsuccessful.
During the pendency of the illegal demotion case before the CA, PAL implemented a retrenchment program on July 15, 1998, which terminated Bichara’s employment. Bichara, along with other retrenched flight attendants represented by FASAP, filed a separate complaint for illegal retrenchment (NLRC-NCR Case No. 06-05100-98), which was appealed to the Supreme Court (G.R. No. 178083, the FASAP case) and remained pending at the time of this decision. Bichara reached the compulsory retirement age of 60 under the PAL-FASAP CBA on July 9, 2005.
On January 31, 2008, Bichara filed a motion for execution of the June 16, 1997 Decision. Labor Arbiter Antonio R. Macam granted the motion in an Order dated February 4, 2009, directing the issuance of a writ of execution for separation pay in lieu of reinstatement, equivalent to one month’s pay for every year of service (35 years), and attorney’s fees. PAL appealed to the NLRC, which reversed the Labor Arbiter’s order in a Decision dated November 23, 2010, denying the motion for execution as moot and academic due to Bichara’s compulsory retirement in 2005, without prejudice to his entitlement to backwages and retirement benefits pending the outcome of the FASAP case. Bichara elevated the case to the CA, which reversed the NLRC in a Decision dated January 24, 2014, ordering PAL to pay Bichara salary differentials, backwages, and retirement benefits. PAL’s motion for reconsideration was denied, prompting this petition.

ISSUE

Whether or not the Court of Appeals erred in reversing the NLRC’s Decision and thereby awarding Bichara salary differentials, backwages, and retirement benefits.

RULING

The petition is partly meritorious. The Supreme Court held that the Labor Arbiter exceeded his authority in awarding separation pay in lieu of reinstatement, as the final judgment (June 16, 1997 Decision) only ordered reinstatement to the position of flight purser and did not contemplate such monetary award. The principle of immutability of final judgments dictates that a writ of execution must conform strictly to the dispositive portion of the decision. However, supervening events—specifically, Bichara’s retrenchment in 1998 and compulsory retirement in 2005—rendered the reinstatement ordered in the 1997 Decision impossible. Consequently, the execution of that judgment became unjust and inequitable.
The Court ruled that Bichara is entitled to back salaries equivalent to the salary of a flight purser from the date of his illegal demotion (March 21, 1994) until his retrenchment (July 15, 1998), as a consequence of the final and executory illegal demotion ruling. Regarding the period after his retrenchment, the Court held that any entitlement to backwages and retirement benefits must await the final outcome of the separate FASAP case (G.R. No. 178083), which directly addresses the legality of his termination. The CA’s award of backwages up to his retirement and retirement benefits was therefore premature. The case was remanded to the Labor Arbiter for computation of the salary differentials due for the period from March 21, 1994, to July 15, 1998.