G.R. No. 203332 , June 18, 2014
FLORENCIO LIBONGCOGON, FELIPE VILLAREAL AND ALFONSO CLAUDIO, PETITIONERS, VS. PHIMCO INDUSTRIES, INC., RESPONDENT.

FACTS

Phimco Industries, Inc. (PHIMCO) is a domestic corporation engaged in match production. Due to a bargaining deadlock, the Phimco Labor Association (PILA) staged a strike on April 21, 1995. The NLRC issued a temporary restraining order on June 23, 1995, but the strike continued. On June 26, 1995, PHIMCO served dismissal notices on the strikers. PILA filed a complaint for illegal dismissal (NLRC NCR Case No. 00-07-04705-95). PILA later discovered that seven dismissed workers, including petitioners Florencio Libongcogon, Felipe Villareal, and Alfonso Claudio, were not included in that complaint. PILA filed another complaint (NLRC NCR Case No. 00-07-04723-97) for their illegal dismissal. The Labor Arbiter dismissed the complaint, a decision affirmed by the NLRC. On petition for certiorari, the Court of Appeals (CA) in CA-G.R. SP No. 57988 ruled on February 27, 2001, that the seven employees were illegally dismissed and ordered their reinstatement with full backwages. This CA decision became final and executory on December 4, 2001. During execution, PHIMCO argued that the petitioners’ positions had been abolished as of June 26, 1995, making reinstatement impossible and limiting its obligation to separation pay. Labor Arbiter Aliman D. Mangandog, in an order dated March 28, 2005, upheld PHIMCO’s position. The NLRC reversed this, declaring LA Mangandog’s order a nullity and ordering execution of the final CA decision. The CA initially denied PHIMCO’s petition. Upon PHIMCO’s motion for reconsideration, citing the Supreme Court’s ruling in G.R. No. 170830 (the “illegal strike case”) which found that the strikers, including the petitioners, committed illegal acts justifying dismissal, the CA amended its decision. The amended decision set aside the reinstatement order and dismissed the illegal dismissal complaint, finding the petitioners’ dismissal was for a just cause based on the final ruling in the illegal strike case.

ISSUE

Whether the Court of Appeals erred in amending its decision to dismiss the illegal dismissal complaint against petitioners based on the supervening final ruling in the related illegal strike case ( G.R. No. 170830 ).

RULING

No, the Court of Appeals did not err. The Supreme Court affirmed the CA’s amended decision. The ruling in G.R. No. 170830 , which became final and executory on November 10, 2010, constituted a supervening event that rendered the execution of the earlier final CA decision (ordering reinstatement) unjust and impossible. In the illegal strike case, the Supreme Court definitively ruled that the strikers, including the petitioners, committed illegal acts during the strike which constituted a valid ground for dismissal under Article 264(e) of the Labor Code. This supervening ruling established that PHIMCO had a just cause for dismissal. A final and executory judgment may be modified or altered when its execution becomes impossible or unjust due to supervening facts. The CA correctly applied this principle to harmonize the execution of the reinstatement order with the demands of justice and the altered circumstances established by the final ruling in the illegal strike case. Therefore, the petitioners were not illegally dismissed and are not entitled to reinstatement or backwages.