G.R. No. 140374. November 27, 2002.
JANE C. ABALOS, BERNARDO A. BAMBICO, MANUEL G. MALAG, WILFREDO R. SOTELO, PERCIVAL B. AGRITO, RICHARD M. BALAN-EG, and EDGARDO S. NILLO, petitioners, vs. PHILEX MINING CORPORATION, respondent.

FACTS

Respondent Philex Mining Corporation conducted a manpower audit and found 241 employees redundant, leading to a retrenchment program. Petitioners’ employment was terminated effective June 30, 1993. Petitioners filed a case for illegal dismissal. The case was submitted for arbitration. On March 5, 1994, Voluntary Arbitrator Juan Valdez ordered respondent to reinstate petitioners to their former positions with back wages. Respondent appealed. The Court of Appeals, on July 22, 1997, dismissed the petition, ruling that while there was a valid reason for retrenchment, the means employed were inequitable, and the quitclaims and receipt of separation pay did not estop petitioners from seeking reinstatement. Respondent’s petition for review to the Supreme Court was denied on January 14, 1998, with entry of judgment on April 27, 1998. On August 14, 1998, respondent filed a manifestation and motion before Arbitrator Valdez, offering separation pay in lieu of reinstatement, alleging petitioners’ positions no longer existed and there were strained relations. On December 11, 1998, Arbitrator Valdez granted the motion, ordering respondent to pay back wages and separation pay. Petitioners filed a petition for certiorari with the Court of Appeals, which was dismissed on July 30, 1999, affirming the Arbitrator’s order.

ISSUE

Whether the Court of Appeals committed an error of law in affirming the December 11, 1998 Order of Voluntary Arbitrator Juan B. Valdez altering and modifying his March 5, 1994 Decision which had already become final and executory on April 27, 1998.

RULING

The petition is DENIED. The decision of the Court of Appeals is AFFIRMED. The general rule is that a final and executory judgment becomes immutable and unalterable. However, an exception exists where supervening events transpire after a decision has become executory, rendering its execution unjust and inequitable. The power of a voluntary arbitrator to issue a writ of execution carries with it the power to inquire into the correctness of its execution and to consider supervening events. Both the voluntary arbitrator and the Court of Appeals found that reinstatement was no longer possible due to respondent’s continuous business losses and reduction of employees, leading to the abolition of petitioners’ positions as a cost-cutting measure. There was no showing this abolition was capricious or whimsical. Factual findings of labor officials and the Court of Appeals, when supported by substantial evidence and absent an error of law, are accorded respect and finality. The doctrine of “strained relations” was found inapplicable as petitioners were rank-and-file employees. The supervening events were grave enough to warrant a modification in the execution of the judgment from reinstatement to payment of separation pay.