The Supreme Court ruled that once a labor decision becomes final and executory, it cannot be modified, altered, or reversed, even if an error in judgment is suspected. This principle ensures that legal disputes reach a definitive end, preventing endless litigation and upholding the stability of judicial decisions. The Court emphasized that any subsequent actions by a lower body attempting to alter a final judgment are null and void, as they lack jurisdiction.

Reopening Old Wounds: Can Backwages Be Recomputed After Final Judgment?

Nestor Blanco filed a complaint for illegal dismissal against Philippine Automotive Manufacturing Corporation (PAMCOR). The Labor Arbiter initially ruled in Blanco’s favor, ordering PAMCOR to reinstate him and pay backwages. This decision was affirmed with modification by the National Labor Relations Commission (NLRC), and subsequently became final and executory. PAMCOR complied by reinstating Blanco and paying the awarded backwages. However, Blanco later sought a recomputation of his backwages for a later period and requested to be reinstated as a regular employee, leading to further legal disputes. The core legal question revolved around whether the Labor Arbiter had the authority to modify a final and executed judgment by ordering additional backwages and a change in employment status.

The Supreme Court firmly reiterated the principle of finality of judgment, emphasizing that a decision, once final, is immutable and no longer subject to alteration. The Court cited King Integrated Security Services, Inc. vs. Gatan, stating:

The judgment in this case had long become final and had in fact, been executed. It is now beyond the power of the lower court, or of this Court for that matter, to modify the same. Settled is the rule that after a judgment has become final, no additions can be made thereto, and nothing can be done therewith except its execution; otherwise, there would be no end to litigations, thus setting at naught the main role of courts of justice, which is to assist in the enforcement of the rule of law and the maintenance of peace and order, by setting justiciable controversies with finality.

This principle is deeply rooted in the interest of justice, ensuring that parties can rely on the stability of judicial pronouncements. Building on this principle, the Court noted that the NLRC decision ordering PAMCOR to reinstate Blanco and pay backwages had already attained finality, rendering it unchangeable. PAMCOR had complied with the decision by reinstating Blanco and paying the awarded amount. Therefore, the NLRC had lost jurisdiction over the case, making the Labor Arbiter’s subsequent order to pay additional backwages and reinstate Blanco as a regular machinist an act of overreach. This act effectively modified a final decision, which is beyond the Labor Arbiter’s authority. This case underscores the importance of respecting the finality of judgments to maintain the integrity of the legal system.

Furthermore, the Court found that the Labor Arbiter’s order directing PAMCOR to pay additional backwages and reinstate Blanco as a regular machinist was an impermissible modification of a final decision. The Court clarified that once a judgment becomes final, it is beyond the power of any court to alter or amend it, except for purely clerical errors. Any attempt to modify a final judgment undermines the principle of res judicata, which prevents the relitigation of issues already decided by a competent court. The doctrine of res judicata ensures that once a case has been fully and fairly litigated, the matter is settled once and for all. This promotes judicial efficiency and protects parties from the vexation of repeated lawsuits. The Supreme Court emphasized that the Labor Arbiter overstepped his jurisdiction by attempting to modify the NLRC’s final decision.

In this case, the Labor Arbiter’s actions created uncertainty and prolonged the legal dispute, undermining the very purpose of the legal system. The Court’s decision reinforces the importance of adhering to established legal principles and respecting the finality of judgments. This promotes stability and predictability in labor relations. This means that once a labor dispute is resolved and a decision becomes final, both employers and employees can move forward with certainty. The Court’s ruling serves as a reminder that the pursuit of justice must be balanced with the need for finality and closure in legal proceedings.

The Supreme Court ultimately denied both petitions, affirming the Court of Appeals’ decision. The Court emphasized that the NLRC’s original decision had attained finality and was no longer subject to modification. This ruling reinforces the importance of respecting final judgments in labor disputes and ensures that legal proceedings reach a definitive conclusion.

FAQs

What was the key issue in this case?	The key issue was whether a Labor Arbiter could modify a final and executory decision of the NLRC by ordering additional backwages and a change in employment status.
What does ‘final and executory’ mean in this context?	A ‘final and executory’ decision is one that can no longer be appealed or modified, and its terms must be carried out. Once a judgment reaches this stage, it is considered settled and binding on all parties.
What is the principle of res judicata?	Res judicata prevents the relitigation of issues that have already been decided by a competent court. It ensures that once a case has been fully and fairly litigated, the matter is settled once and for all.
Why is the finality of judgment important?	The finality of judgment is crucial for maintaining the stability of the legal system. It ensures that parties can rely on judicial decisions and prevents endless litigation, promoting efficiency and justice.
What was the Court’s ruling regarding the Labor Arbiter’s actions?	The Court ruled that the Labor Arbiter overstepped his jurisdiction by attempting to modify the NLRC’s final decision. The Labor Arbiter’s actions were deemed null and void.
What was the original decision of the NLRC?	The original NLRC decision ordered PAMCOR to reinstate Blanco to his former position and pay his full backwages amounting to P24,398.40.
Did PAMCOR comply with the original NLRC decision?	Yes, PAMCOR complied with the original NLRC decision by reinstating Blanco and paying the awarded backwages.
What happened after PAMCOR complied with the NLRC decision?	Despite PAMCOR’s compliance, Blanco filed a motion seeking a recomputation of his backwages and requesting to be reinstated as a regular employee, leading to further legal disputes.
What was the Court of Appeals’ decision?	The Court of Appeals dismissed Blanco’s petition and declared the NLRC’s second decision null and void for lack of jurisdiction.

In conclusion, this case underscores the significance of respecting the finality of judgments in labor disputes. The Supreme Court’s decision reaffirms that once a labor decision becomes final, it cannot be altered or modified, ensuring stability and predictability in labor relations.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: NESTOR V. BLANCO VS. PHILIPPINE AUTOMOTIVE MFG. CORP., G.R. NO. 147941, March 16, 2005