AFTER the finality of the resolution in his favor, respondent Rogel N. Zaragoza (Rogel) moved for the issuance of an alias writ of execution against petitioner Consolidated Distillers of the Far East Inc. (Condis).
Condis opposed the motion and argued that its execution of the asset purchase agreement with Emperador Distillers Inc. (EDI) was a supervening event that made it impossible to reinstate Rogel to his former position.
The labor arbiter (LA) ruled in favor of Rogel and directed Condis to pay backwages from the date of his illegal dismissal to the date of the LA resolution.
The National Labor Relations Commission (NLRC) reversed the LA resolution and ruled that the backwages should be computed until the finality of the Supreme Court’s resolution in the illegal dismissal case. The Court of Appeals (CA) ruled that the backwages should be computed from the date of illegal dismissal until the finality of the decision of the CA, and separation pay from the date of employment until finality of the CA decision.
Which computation is more justified?
Ruling: That of the CA.
The Court agrees with the CA that Condis is liable for backwages and separation pay until the finality of the decision awarding separation pay, as ruled in Bani Rural Bank, Inc. v. De Guzman, 721 Phil. 84 (2013).
In Bani, the decision finding that the employee was illegally dismissed and directing his reinstatement had also already attained finality. During the execution proceedings, since the employees manifested that they no longer wanted to be reinstated, the LA directed that separation pay be given to them in lieu of reinstatement. On appeal, the NLRC affirmed the payment of separation pay but modified the basis of the computation. This also became final and executory.
The LA then recomputed the award and ruled that backwages should only be paid until the date that the employees manifested that they no longer wanted to be reinstated. The NLRC and the CA, however, both ruled that the backwages should be counted until the finality of the NLRC decision awarding separation pay. The Supreme Court held that when there is a supervening event that renders reinstatement impossible, backwages are computed from the time of dismissal until the finality of the decision ordering separation pay, thus:
x x x
When separation pay is ordered after the finality of the decision ordering the reinstatement by reason of a supervening event that makes the award of reinstatement no longer possible (as in the case), backwages is computed from the time of dismissal until the finality of the decision ordering separation pay.
The reason for this, as the Court explained in Bani, is that “when there is an order of separation pay (in lieu of reinstatement or when the reinstatement aspect is waived or subsequently ordered in light of a supervening event making the award of reinstatement no longer possible), the employment relationship is terminated only upon the finality of the decision ordering the separation pay. The finality of the decision cuts-off the employment relationship and represents the final settlement of the rights and obligations of the parties against each other.”
Here, the award of separation pay in lieu of reinstatement, which Condis does not question, was made subsequent to the finality of the decision in the illegal dismissal case (G.R.196038). Condis cannot therefore evade its liability to Rogel for backwages and separation pay computed until the finality of this decision, which affirms the order granting separation pay (Consolidated Distillers of the Far East, Inc. vs. Rogel N. Zaragoza, G.R. No. 229302, June 20, 2018).