G.R. No. L-74191, December 21, 1987
The Insular Life Assurance Company, Ltd., and FGU Insurance Group, petitioners, vs. National Labor Relations Commission, Hon. Antonio Tria Tirona, Labor Arbiter of the Execution Arm of the National Labor Relations Commission, The Insular Life Assurance Company Employees Association-NATU, FGU Insurance Group Workers & Employees Association-NATU, and Insular Life Building Employees Association-NATU, respondents.

FACTS

This case stems from a protracted labor dispute originating in 1958. Following a strike, petitioners refused to readmit certain union members, leading to an unfair labor practice complaint. In G.R. No. L-25291, this Court ultimately found petitioners guilty and ordered the reinstatement with backwages of the discriminatorily dismissed employees. A 1977 resolution fixed backwages at three years’ worth, computed at the rate received at the time of dismissal in 1958. The decision became final.
During execution, a dispute arose concerning the claims of several employees who had reached retirement age during the long pendency of the case and others who had been reinstated. The NLRC, in a 1978 resolution, ordered petitioners to pay differential salaries based on current pay rates of comparable employees and to pay certain retirement benefits. Petitioners challenged this in G.R. No. L-49071. This Court, in 1985, affirmed the NLRC but set aside the contempt finding. The case was remanded for computation of monetary awards, leading to the Labor Arbiter’s 1986 order, which petitioners now assail for allegedly deviating from the final 1977 judgment.

ISSUE

Whether the National Labor Relations Commission and the Labor Arbiter committed grave abuse of discretion in awarding monetary benefits that contravened the final and executory judgment in G.R. No. L-25291.

RULING

Yes. The Supreme Court granted the petition. The core legal principle is the immutability of final judgments. The Court’s 1977 resolution in G.R. No. L-25291 constituted a final judgment on the merits, specifically fixing the award of backwages at three years computed at the June 2, 1958 pay rate. Neither the NLRC nor the Labor Arbiter could modify this definitive ruling. Any order granting salary differentials or adjustments based on subsequent wage increases effectively altered this final judgment and was therefore issued with grave abuse of discretion.
Regarding retirement benefits, the Court ruled they must be computed based on the employee’s actual years of service from hiring until their 60th birthday, pursuant to existing company policy or collective bargaining agreements—not from a fictional continuity of service. Employees who reached age 60 before the finality of the reinstatement order (May 5, 1977) were entitled to retirement benefits; those who did not were not. Similarly, service award differentials were governed by company policy, requiring completed years of service divisible by five from the date of actual reinstatement. The awards for allowances and leave benefits were set aside for lack of legal basis. The Court ordered compliance strictly in accordance with its 1977 final judgment and the clarifications set forth in this decision.