G.R. No. L-63286 February 28, 1985
Hope Christian High School, petitioner, vs. National Labor Relations Commission, Labor Arbiter Antonio Tirona and Lily Li Lee, respondents.

FACTS

Private respondent Lily Li Lee was employed by petitioner Hope Christian High School as a Bible teacher on a school-year-to-school-year basis from 1966 to 1976. During the 1975-76 school year, she expressed her intention not to teach the following year due to health reasons and her dislike of the school administration. She subsequently received a letter granting her a one-year leave of absence. When she was not issued an “Invitation to Teach” for the next school year, she filed a complaint for illegal dismissal. The Labor Arbiter initially dismissed her complaint but recommended the renewal of her contract or financial assistance. On appeal, the NLRC modified the decision, ordering her reinstatement or the grant of financial assistance equivalent to three months’ salary at her option. This decision became final and executory.
A writ of execution was issued for her reinstatement as she opted. Petitioner school later filed a motion, arguing reinstatement was no longer feasible as the position was filled and animosity existed, and offered to pay financial assistance instead. The Labor Arbiter ordered the payment of separation pay. The NLRC en banc reversed this order and directed the immediate execution of the reinstatement order. Petitioner’s motion for reconsideration was denied for being filed out of time. Petitioner then filed this petition for certiorari.

ISSUE

Whether the NLRC committed grave abuse of discretion in ordering the reinstatement of private respondent, and whether supervening events justify the modification of the final and executory judgment.

RULING

The Supreme Court resolved to modify the final and executory NLRC decision based on supervening events and in the interest of justice. While the NLRC decision had become final, the Court recognized its inherent power to consider subsequent circumstances that render strict execution inequitable. The Court noted the parties’ attempts at an amicable settlement during the proceedings. Petitioner offered a separation pay of P15,000.00, equivalent to three years’ salary for the respondent, which the Court deemed just and reasonable, citing jurisprudence where such an amount represents the maximum for backwages. In contrast, private respondent’s counter-offer of P75,000.00 was found unconscionable and without legal basis.
Crucially, the Court found that the animosity between the parties, as evidenced by their contentious positions and the respondent’s alleged belligerent attitude, militated against any possibility of a harmonious employer-employee relationship, making reinstatement impracticable. Under these specific circumstances, the payment of separation pay was held to constitute sufficient compliance with the constitutional mandate of social justice. Consequently, the Court directed petitioner to pay private respondent the amount of P15,000.00 in full satisfaction of all her claims, thereby modifying the final judgment to align with equitable considerations and the reality of the deteriorated relationship.