The Supreme Court clarified that a petition for certiorari filed within the extended 60-day period under Rule 65 of the Rules of Court allows the Court of Appeals to review and modify decisions of the National Labor Relations Commission (NLRC), even if the NLRC decision has already been entered as final. This ruling ensures that parties have a full opportunity for judicial review, preventing premature finality from undermining the appellate process. The decision underscores the importance of adhering to procedural timelines while safeguarding the right to seek certiorari when grave abuse of discretion is alleged.

The Case of the Delayed Appeal: Can a Final NLRC Decision Still Be Modified?

Eastern Shipping Lines, Inc. sought to overturn a Court of Appeals decision that modified an NLRC ruling in favor of Julio C. Canja, an employee who claimed illegal dismissal. The petitioners argued that because the NLRC’s decision had already become final and executory, the appellate court lacked the authority to modify it. The central legal question revolved around the interplay between the finality of an NLRC decision and the right to judicial review via a petition for certiorari. This case highlights the importance of understanding the timelines and procedures for appealing labor-related decisions, especially when challenging potential abuses of discretion by administrative bodies.

The dispute began when Julio C. Canja filed a complaint against Eastern Shipping Lines, Inc., alleging illegal dismissal and various labor law violations. Canja claimed that after years of service, he was abruptly told not to report for work, effectively terminating his employment. The company countered that Canja had abandoned his job. The Labor Arbiter ruled in favor of Canja, finding that the company failed to prove abandonment. The NLRC affirmed this decision.

Dissatisfied, Eastern Shipping Lines filed a petition for certiorari with the Court of Appeals, arguing that the NLRC had committed grave abuse of discretion. The Court of Appeals ultimately affirmed the NLRC’s decision but modified the award of separation pay and backwages, increasing the separation pay to one month’s salary for every year of service and specifying the computation period for backwages. This modification prompted Eastern Shipping Lines to elevate the case to the Supreme Court, questioning the appellate court’s authority to alter a supposedly final NLRC decision.

At the heart of the Supreme Court’s analysis was the procedural timeline for seeking judicial review of NLRC decisions. The Court cited Philippine Transmarine Carriers, Inc. v. Legaspi, which clarified that while NLRC decisions become final and executory after ten calendar days from receipt, parties still have sixty days under Rule 65 of the Rules of Court to file a petition for certiorari with the Court of Appeals.

Section 14, Rule VII of the 2011 NLRC Rules of Procedure provides that decisions, resolutions or orders of the NLRC shall become final and executory after ten (10) calendar days from receipt thereof by the parties, and entry of judgment shall be made upon the expiration of the said period. In St. Martin Funeral Home v. NLRC, however, it was ruled that judicial review of decisions of the NLRC may be sought via a petition for certiorari before the CA under Rule 65 of the Rules of Court; and under Section 4 thereof, petitioners are allowed sixty (60) days from notice of the assailed order or resolution within which to file the petition.

The Supreme Court emphasized the distinction between the NLRC’s internal rules on finality and the broader framework for judicial review established by the Rules of Court. The Court reasoned that if a petition for certiorari is filed within the 60-day period, the Court of Appeals retains the power to review, modify, or even reverse the NLRC’s decision, notwithstanding the entry of judgment. In this case, Eastern Shipping Lines filed their petition for certiorari within the prescribed period, giving the Court of Appeals jurisdiction to act on the petition.

The Supreme Court also addressed the substantive issues, affirming the Court of Appeals’ modification of the separation pay and backwages. Citing Bani Rural Bank, Inc. v. De Guzman, the Court reiterated the principle that illegally dismissed employees are entitled to both backwages and reinstatement (or separation pay if reinstatement is not feasible). The correct computation for separation pay is one month’s salary for every year of service, aligning with established jurisprudence and Article 279 of the Labor Code. This clarified the proper remedies available to employees who have been unjustly terminated.

Under Article 279 of the Labor Code and as held in a catena of cases, an employee who is dismissed without just cause and without due process is entitled to backwages and reinstatement or payment of separation pay in lieu thereof:

Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of backwages.

This decision underscores the importance of understanding the interplay between administrative procedures and judicial remedies in labor disputes. While NLRC decisions have a defined process for finality, the right to seek certiorari ensures that potential abuses of discretion can be reviewed by the courts. Moreover, the clarification on the computation of separation pay and backwages provides valuable guidance for both employers and employees in cases of illegal dismissal. The Supreme Court’s ruling in Eastern Shipping Lines, Inc. v. Canja reinforces the principles of due process and fair labor practices.

FAQs

What was the key issue in this case?	The key issue was whether the Court of Appeals could modify an NLRC decision that had already become final and executory. The Supreme Court clarified the relationship between the NLRC’s rules on finality and the right to judicial review through a petition for certiorari.
What is a petition for certiorari?	A petition for certiorari is a legal remedy used to challenge decisions made by lower courts or administrative bodies, alleging grave abuse of discretion. It allows a higher court to review the proceedings and correct any errors that may have been committed.
How long do parties have to file a petition for certiorari after an NLRC decision?	Parties have sixty (60) days from the date of notice of the NLRC decision (or the denial of a motion for reconsideration) to file a petition for certiorari with the Court of Appeals. This timeframe is established under Rule 65 of the Rules of Court.
What is the correct computation for separation pay in cases of illegal dismissal?	The correct computation for separation pay is one (1) month’s salary for every year of service. This is in addition to the payment of backwages from the time of illegal dismissal until the finality of the decision.
What happens if reinstatement is no longer feasible in an illegal dismissal case?	If reinstatement is no longer viable due to strained relations or other valid reasons, the employee is entitled to separation pay as an alternative. This separation pay serves as compensation for the loss of employment.
What is the significance of the St. Martin Funeral Home v. NLRC case?	The St. Martin Funeral Home v. NLRC case established that judicial review of NLRC decisions can be sought through a petition for certiorari with the Court of Appeals. This case clarified the proper procedure for appealing labor-related decisions.
What is considered grave abuse of discretion?	Grave abuse of discretion refers to a situation where a court or administrative body acts in a capricious, whimsical, or arbitrary manner, exceeding its jurisdiction or disregarding established legal principles. It is a ground for seeking certiorari.
Can an employer claim abandonment if the employee files an illegal dismissal case?	Filing an illegal dismissal case is generally inconsistent with the claim of abandonment. To prove abandonment, the employer must show a clear and deliberate intent on the part of the employee to sever the employment relationship.

In conclusion, the Supreme Court’s decision in Eastern Shipping Lines, Inc. v. Julio C. Canja provides valuable clarity on the procedures for appealing NLRC decisions and the remedies available to illegally dismissed employees. The ruling underscores the importance of adhering to procedural timelines while safeguarding the right to seek judicial review when grave abuse of discretion is alleged.

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: EASTERN SHIPPING LINES, INC. VS. JULIO C. CANJA, G.R. No. 193990, October 14, 2015