G.R. No. 220506 , January 18, 2017
C.I.C.M. Mission Seminaries (Maryhurst, Maryheights, Maryshore and Maryhill) School of Theology, Inc., and Fr. Romeo Nimez, CICM vs. Maria Veronica C. Perez

FACTS

This case involves the execution of a final judgment in an illegal dismissal case. The Labor Arbiter (LA) initially ordered petitioners to pay respondent Perez backwages and separation pay. This decision was affirmed with finality by the Supreme Court. Upon finality, the LA recomputed the monetary award, updating the backwages and separation pay to cover the period until the date of the Supreme Court’s finality of judgment, resulting in a total award of ₱1,847,088.89. After deducting a previously released cash bond, a balance of ₱1,575,751.84 was ordered executed.
Petitioners contested the recomputation, arguing that the computation should have stopped only at the date of the LA’s original decision in 2008, not at the later date of final judgment by the Supreme Court in 2012. They claimed that since the employee (respondent) had appealed the aspect of reinstatement, any delay in finality was attributable to her, and thus the additional accruals should not be charged to them. The National Labor Relations Commission (NLRC) and the Court of Appeals upheld the LA’s recomputation.

ISSUE

Whether the recomputation of backwages and separation pay in an illegal dismissal case, where reinstatement was not ordered, should be computed only up to the date of the Labor Arbiter’s decision or up to the finality of the Supreme Court’s judgment.

RULING

The Supreme Court denied the petition and affirmed the rulings of the lower tribunals. The legal logic is anchored on the nature and purpose of the remedies for illegal dismissal. When an employee is illegally dismissed and reinstatement is not decreed, the award of separation pay and backwages serves as the relief. Backwages are granted to compensate for earnings lost due to the unlawful dismissal. Jurisprudence consistently holds that such backwages, as well as separation pay in lieu of reinstatement, must be computed up to the date of the finality of the judgment, not merely the date of the Labor Arbiter’s decision. This rule applies regardless of which party appealed, as the employer’s obligation to pay these statutory remedies continues to accrue until the case is fully resolved with finality.
The Court rejected petitioners’ argument that the employee’s appeal for reinstatement should halt the accrual. The filing of an appeal is a legitimate exercise of a party’s right. The employer’s liability for full backwages and separation pay persists until the litigation is conclusively terminated. The recomputation to update the amounts is a mere arithmetic consequence of the final illegal dismissal ruling; it does not alter the essence of the final judgment but merely ensures its proper execution. Therefore, the LA correctly computed the awards until October 4, 2012, the date the Court’s decision became final and executory.