Certiorari and Finality: When Courts Can Still Modify NLRC Decisions

A decision of the National Labor Relations Commission (NLRC) generally becomes final and executory after ten calendar days from receipt by the parties. But what happens when a party files a petition for certiorari with the Court of Appeals within the 60-day period under Rule 65? Does the NLRC decision become final in the meantime? In Eastern Shipping Lines, Inc. v. Canja (G.R. No. 193990, October 14, 2015), the Supreme Court settled this question — and clarified the proper computation of separation pay and backwages for illegally dismissed employees.

The Facts of the Case

Julio Canja was hired in 1982 as a maintenance worker by Eastern Shipping Lines, Inc. (ESLI). Over the years, he also worked as a mason, painter, carpenter, and gardener at the residence of Congressman Erwin Chiongbian, ESLI's president. In April 2008, Canja was told not to report for work while the Chiongbian family was on a one-month vacation in the United States. He resumed work in May 2008, but only a week later, he was told to stop reporting because there was no available job.

Canja filed a complaint for illegal dismissal. The Labor Arbiter ruled in his favor, finding that ESLI failed to prove abandonment. The NLRC affirmed this ruling. ESLI then filed a petition for certiorari with the Court of Appeals under Rule 65.

The Issue: Finality vs. Timely Appeal

The central question was whether the Court of Appeals could still modify the NLRC decision after the NLRC had already issued an entry of judgment. ESLI argued that because the NLRC decision had become final and executory, it could no longer be modified.

The Supreme Court disagreed. Citing Philippine Transmarine Carriers, Inc. v. Legaspi, the Court explained that a petition for certiorari is not rendered moot simply because the NLRC decision has been executed. Under the NLRC Rules of Procedure, a decision becomes final after ten days from receipt. However, Rule 65 of the Rules of Court allows a party 60 days from notice of the assailed resolution to file a petition for certiorari with the Court of Appeals.

In this case, the NLRC denied ESLI's motion for reconsideration on January 15, 2010, and ESLI received a copy on February 8, 2010. ESLI filed its petition for certiorari on February 16, 2010 — well within the 60-day period. Because the petition was timely filed, the NLRC decision had not yet attained finality. The issuance of an entry of judgment by the NLRC could not render the petition moot.

The Ruling on Separation Pay and Backwages

The Supreme Court also affirmed the Court of Appeals' modification of the monetary awards. The Labor Arbiter had awarded separation pay at one-half month pay per year of service. The Court of Appeals increased this to one month pay per year of service, citing Bani Rural Bank, Inc. v. De Guzman.

Under Article 279 of the Labor Code, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. When reinstatement is no longer feasible due to strained relations, separation pay is granted instead. The Court clarified that:

• Separation pay is equivalent to one month salary for every year of service, computed from the first day of employment up to the finality of the decision.
• Backwages are computed from the date of illegal dismissal up to the finality of the decision.

The one-half month rate awarded by the Labor Arbiter had no legal basis. The Court also imposed legal interest of six percent per annum on the total monetary awards from the finality of the decision until full satisfaction.

Practical Takeaways

• A timely Rule 65 petition prevents finality. Filing a petition for certiorari with the Court of Appeals within 60 days from notice of the NLRC resolution stops the decision from becoming final and executory, even if the NLRC has already issued an entry of judgment.
• The 10-day and 60-day periods serve different purposes. The 10-day period under the NLRC Rules concerns the decision's effectivity between the parties; the 60-day period under Rule 65 governs the right to seek judicial review.
• Separation pay for illegal dismissal is one month per year of service. The one-half month rate has no basis in law or jurisprudence when reinstatement is no longer viable.
• Backwages and separation pay are separate and distinct. An illegally dismissed employee may receive both — backwages for the period of unlawful prevention from work, and separation pay in lieu of reinstatement.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.