GR 90500; (October, 1990) (Digest)
G.R. No. 90500, October 5, 1990
SEALAND SERVICE, INC., RAMON ASCUE and RODNEY MILLER, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER EVANGELINE LUBATON and BIENVENIDO A. JUAN, respondents.
FACTS
The National Labor Relations Commission (NLRC) affirmed a Labor Arbiter’s decision declaring the suspension and dismissal of private respondent Bienvenido A. Juan illegal. It ordered his reinstatement with backwages from September 26, 1984, until actual reinstatement. This decision was affirmed by the Supreme Court in G.R. No. 75066, and the resolution became final and executory. The NLRC subsequently computed Juan’s backwages from September 26, 1984, to December 31, 1988, amounting to P643,388.76, deducting his earnings elsewhere. Petitioners opposed the execution, arguing Juan’s subsequent employment rendered reinstatement moot and that backwages should be computed only until April 1986 when he started his new job. The Labor Arbiter and the NLRC ordered execution based on the full computed amount.
ISSUE
Whether the NLRC committed grave abuse of discretion in ordering the execution of a final judgment awarding backwages beyond the three-year limit and in ordering reinstatement despite the employee’s subsequent employment.
RULING
Yes. The Supreme Court granted the petition and nullified the writs of execution. The legal logic is anchored on the established policy limiting backwages for illegally dismissed employees to three years without qualification or deduction, as reiterated in a line of cases including Mercury Drug Co., Inc. vs. Court of Industrial Relations. This policy applies even to final decisions that omitted this restriction; such omission is considered a clerical error, and the three-year limit is deemed written into the judgment. Consequently, the computation of backwages from 1984 to 1988 was excessive. Furthermore, reinstatement was no longer viable as Juan had obtained a substantially equivalent and regular position elsewhere, a fact which petitioners belatedly raised but which the Court considered in the interest of justice to prevent unjust enrichment. The appropriate remedy was to award separation pay in lieu of reinstatement. The NLRC’s insistence on executing the unmodified monetary award and reinstatement order, contrary to settled jurisprudence, constituted a grave abuse of discretion. The Court modified the final judgment to reflect the three-year backwages limit and the grant of separation pay.