C-E CONSTRUCTION CORPORATION, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND RAYMUNDO HERNANDEZ, RESPONDENTS.

C-E Construction versus National Labor Relations Commission

The Case

This is a petition for review on certiorari brought by C-E Construction Corporation against the National Labor Relations Commission and its former worker, Raymundo Hernandez. The company asks the Supreme Court to overturn the ruling of the Court of Appeals, which had refused to disturb an order of execution computing the backwages owed to Hernandez after he was found to have been illegally dismissed. The case matters because it is a clean illustration of the doctrine of immutability of final judgments in labor cases, and because it settles, for purposes of execution, whether a worker hired under a project employment contract may nonetheless be treated as a regular employee whose backwages run beyond the life of the project.

Procedural History

Hernandez filed a complaint for illegal dismissal with the labor arbiter. The labor arbiter ruled in his favor, ordering reinstatement without loss of seniority rights, full backwages, moral damages, and attorney's fees. The company appealed to the National Labor Relations Commission, which partially reversed the labor arbiter by deleting the awards of moral damages and attorney's fees but sustaining the finding of illegal dismissal. The company then went up to the Court of Appeals on certiorari, and the appellate court denied the petition, finding no evidence that the project phase had been completed and noting that no notice or hearing had been given to Hernandez. The company elevated the matter to the Supreme Court, which denied the petition and later denied the motion for reconsideration. The decision became final and executory, and entry of judgment was made.

Thereafter, Hernandez moved before the labor arbiter for a recomputation of the judgment award and for the issuance of a writ of execution. The labor arbiter issued an order awarding additional backwages. The company appealed that order to the National Labor Relations Commission, which affirmed it; the commission also denied reconsideration. The company then filed a petition for certiorari with the Court of Appeals, which dismissed the petition for lack of merit, holding that the correctness of the computation of backwages is a factual question not proper for certiorari and that no grave abuse of discretion was shown. Hence this petition before the Supreme Court.

Facts

C-E Construction Corporation, a general contract construction firm, hired Raymundo Hernandez as an electrician and carpenter on January 17, 1996, for its Filinvest Festival Supermall project. The employment contract they signed provided that Hernandez's employment would be co-terminus with the project. On December 17, 1996, the company dismissed Hernandez, allegedly because the initial phase of the project had been completed.

Hernandez immediately filed a complaint for illegal dismissal, praying for reinstatement, backwages, and attorney's fees. The company insisted that he was a project employee whose services ended when the phase for which he was hired was finished, so there was no illegal dismissal. The labor arbiter disagreed and declared the dismissal illegal, ordering reinstatement and payment of backwages, moral damages, and attorney's fees. On appeal, the National Labor Relations Commission deleted the moral damages and attorney's fees but affirmed the finding of illegal dismissal. The Court of Appeals and later the Supreme Court both denied the company's challenges, and the ruling became final.

When Hernandez sought execution and recomputation, the labor arbiter issued an order awarding additional backwages, bringing the total to 329,554 pesos and 29 centavos. The company questioned this before the National Labor Relations Commission and then the Court of Appeals, both of which affirmed. Before the Supreme Court, the company abandoned its earlier arguments and focused on its claim that the backwages of an illegally dismissed project employee should cover only the unexpired portion of the project. Hernandez countered that both the labor arbiter and the commission had found him to be a regular employee.

Issues

• Whether or not the backwages awarded to Hernandez, an illegally dismissed worker, should be limited to the unexpired portion of the project for which he was engaged.
• Whether or not the order of execution issued by the labor arbiter, which computed backwages beyond the completion of the project, may still be modified or set aside after the judgment had become final and executory.

Applicable Provisions

The decision does not quote a specific statutory provision in full, but it rests on the settled rule on finality of judgments, which the Court states in these words:

Final and executory judgments can neither be amended nor altered except for correction of clerical errors, even if the purpose is to correct erroneous conclusions of fact or of law.

This rule governs the entire disposition, because the company's arguments all amount to an indirect attack on a judgment that had already become final.

The Court also invokes the principle that what is enforceable by a writ of execution is the dispositive portion of the decision, expressed as follows:

What is enforceable by a writ of execution is the dispositive portion of the decision.

This bears on the case because the Court of Appeals had mentioned in the body of its decision that Hernandez was a project employee, but that statement was not in the dispositive portion and so could not change the final award.

Ruling

On the first issue, the Court held that the company's argument must fail because the finding that Hernandez was a regular employee had already become a settled matter. Both the labor arbiter and the National Labor Relations Commission had ruled that he became a regular employee entitled to security of tenure despite the individual project employment contract, and the commission described him as a work pool worker whose job would actually be continuous and ongoing. The Court of Appeals affirmed that decision without modification. Although the appellate court mentioned in its discussion that Hernandez was a project employee, that statement appeared only in the body and not in the dispositive portion, so it was at most an obiter dictum. Since the company failed to overturn the ruling, what had to be enforced was the dispositive portion of the labor arbiter's decision as affirmed. The writ of execution did not vary from but was completely consistent with that final decision, so the order of execution was beyond challenge.

On the second issue, the Court stressed that once a judgment becomes final and executory, the prevailing party should not be denied the fruits of victory by some subterfuge devised by the losing party. Trial and execution proceedings constitute one whole action, so a case in which execution has been issued is regarded as still pending. The Court reiterated the rule it applied:

Final and executory judgments can neither be amended nor altered except for correction of clerical errors, even if the purpose is to correct erroneous conclusions of fact or of law.

It added that the final judgment may no longer be reviewed or modified, directly or indirectly, by a higher court, not even by the Supreme Court. The Court therefore found no merit in the petition.

Doctrine

A judgment that has become final and executory can no longer be amended or altered, except for the correction of clerical errors, even if the purpose is to correct erroneous conclusions of fact or of law. This is the rule of immutability of final judgments, and it applies with full force in labor cases, where delay in the enforcement of the labor arbiter's decision is disfavored.

What is enforceable by a writ of execution is the dispositive portion of the decision, not statements found only in the body of the opinion. A remark in the discussion that conflicts with the dispositive portion is at most an obiter dictum and cannot be used to defeat the final award.

Where a worker hired under a project employment contract is found by the labor arbiter and the National Labor Relations Commission to be a regular employee, and that finding is affirmed and becomes final, the employer can no longer relitigate the worker's status at the execution stage. The backwages are then computed in accordance with the final judgment, and the employer cannot limit them to the unexpired portion of the project.

Disposition

The petition was denied, and the decision of the Court of Appeals dated February 28, 2006, together with its resolution dated October 24, 2007, was affirmed. Hernandez prevailed and was entitled to enforce the full award of backwages as computed.

Remember This

The one line to memorize is that a final and executory judgment can neither be amended nor altered except for correction of clerical errors, even to correct erroneous conclusions of fact or law. Examiners like to use this case to test the immutability of final judgments at the execution stage, and to ask whether a project employee found to be regular may still have his backwages trimmed to the life of the project.