Sampaguita Garments Corporation vs. NLRC

A final and executory judgment may still be modified, or its execution suspended, where a supervening event renders execution impossible or unjust, and the NLRC's power to issue a writ of execution carries with it the right to look into the correctness of the execution and to consider supervening events that may affect it. An employee's final conviction for theft of property belonging to the employer — the very offense for which she was dismissed — is such a supervening event, and because the offense involves moral turpitude, she is disqualified from separation pay and back wages, leaving the employer liable only for an indemnity for non-compliance with the procedural requirements of due process.

Sampaguita Garments Corporation employed Emilia B. Santos. The Omnibus Rules Implementing the Labor Code, through Sections 2 and 5 of Rule XIV, Book V, prescribe the procedural requirements an employer must observe before effecting a dismissal, and the labor tribunals and the regular courts exercise separate jurisdictions over the administrative and criminal consequences of the same act. Circular No. 28-91, which took effect on January 1, 1992 and required a certification against forum-shopping in petitions filed with the Supreme Court, supplies the procedural backdrop against which the timeliness of the present petition was measured.

Emilia B. Santos was an employee of Sampaguita Garments Corporation. It was alleged in both the labor and the criminal proceedings subsequently brought against her that on April 14, 1987, she attempted to bring out of the company premises, without authorization or permission, a piece of cloth belonging to the corporation.

Sampaguita dismissed her on that ground. Santos filed a complaint for illegal dismissal, but the labor arbiter sustained the company. On appeal, the NLRC reversed the labor arbiter and ordered her reinstatement with back wages from the time of her illegal suspension until her actual reinstatement.

In the meantime, Sampaguita had also filed a criminal action against Santos for the same offense in the Municipal Trial Court of Caloocan City. After trial, she was found guilty and sentenced to an indeterminate penalty of 1 month and 1 day of arresto mayor as minimum to 4 months of arresto mayor as maximum. The Regional Trial Court of Caloocan City affirmed that decision.

The two proceedings then reached the Supreme Court on separate tracks. In G.R. No. 89323, the petition for certiorari against the NLRC decision was dismissed for lack of a showing that the NLRC had acted with grave abuse of discretion; in G.R. No. 100929, no reversible error was found in the Court of Appeals decision sustaining the conviction by the Municipal Trial Court as affirmed by the Regional Trial Court. Both decisions became final and executory, and the corresponding entries of judgment were eventually made.

Santos thereafter moved for execution of the NLRC decision. Sampaguita opposed the motion, invoking her conviction in the criminal case, but the NLRC sustained her on the ground that its decision had been affirmed by the Supreme Court and had long become final and executory. The petitioner then came to the Supreme Court for relief.

• Conviction as Bar to Execution: Petitioner asserted that, in view of the private respondent's conviction, the NLRC decision calling for her reinstatement and the payment to her of P63,908.00 in back wages should not be enforced, since otherwise she would in effect be undeservedly rewarded when she should instead be punished for her offense.
• Separation Pay as Reward for Wrongdoing: Petitioner argued that granting separation pay to an employee validly dismissed for an offense involving moral turpitude would have the effect of rewarding rather than punishing the erring employee for his offense.

• Independence and Finality of the NLRC Decision: Private respondent argued that the decision of the NLRC is independent of the criminal case and, in any event, can no longer be modified or reversed after having become final and executory on August 7, 1990.
• Lack of Certification Against Forum-Shopping: Private respondent contended that the petition should be dismissed for lack of the certification on forum-shopping required under Circular No. 28-91.

• Supervening Event and Execution of the Final Labor Decision: Whether the private respondent's conviction for theft, rendered after the NLRC decision had become final and executory, constitutes a supervening event that justifies setting aside or suspending the execution of the NLRC decision ordering her reinstatement with back wages.
• Separation Pay: Whether separation pay may be awarded to the private respondent in lieu of reinstatement.
• Back Wages: Whether the award of back wages in her favor may be enforced notwithstanding her conviction.
• Procedural Due Process and Indemnity: Whether the petitioner remains liable for its failure to comply with the procedural requirements of due process in effecting the dismissal.
• Certification Against Forum-Shopping: Whether the petition should be dismissed for lack of the certification on forum-shopping required under Circular No. 28-91.

• Supervening Event and Execution of the Final Labor Decision: Yes. The affirmance of the private respondent's conviction for theft is a supervening cause that rendered unjust and inequitable the decision mandating her reinstatement with back wages, and the NLRC's power to issue a writ of execution carries with it the right to consider supervening events affecting such execution.
• Separation Pay: No. Santos was found guilty of a crime involving moral turpitude and is disqualified from separation pay under the ruling in PLDT vs. NLRC.
• Back Wages: No. The same rationale that bars separation pay likewise bars enforcement of the award of back wages in her favor.
• Procedural Due Process and Indemnity: Yes, but only to the extent of P1,000.00. The petitioner failed to accord the private respondent the right to an administrative investigation in conformity with the procedural requirements of due process.
• Certification Against Forum-Shopping: No. The petition was filed on December 5, 1991, before Circular No. 28-91 took effect on January 1, 1992.

• Supervening Event and Execution of the Final Labor Decision: The general rule is that once a judgment has become final and executory, it can no longer be disturbed except only for the correction of clerical errors or where supervening events render its execution impossible or unjust; in the latter event, the interested party may ask the court to modify the judgment to harmonize it with justice and the facts. It was undisputed that the NLRC decision ordering reinstatement with back wages had become final and executory, yet the subsequent developments warranted a different course. In Heirs of Francisco Guballa, Sr. vs. Court of Appeals, the Court held that the power of the NLRC to issue a writ of execution carries with it the right to look into the correctness of the execution of the decision and to consider supervening events that may affect such execution. The affirmance by the Regional Trial Court and the Court of Appeals of the private respondent's conviction for theft — itself upheld by the Supreme Court in G.R. No. 100929 — is justification enough for the NLRC to exercise this authority and suspend the execution of its decision. That conviction is a supervening cause that rendered unjust and inequitable the decision mandating the private respondent's reinstatement, and with back wages to boot.

• Separation Pay: The Solicitor General, agreeing that reinstatement was no longer feasible in view of the subsequent conviction and the already strained relationship between the parties, suggested instead the grant of separation pay. That suggestion was rejected: even this award is not justifiable because Santos was found guilty of a crime involving moral turpitude and so is disqualified from this benefit under PLDT vs. NLRC, which laid down the rule that separation pay shall henceforth be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. A contrary rule would, as the petitioner correctly argued, have the effect of rewarding rather than punishing the erring employee for his offense; the punishment is not his dismissal alone, and the separation pay has everything to do with the wrong he has committed. An employee who steals from the company and is nonetheless granted separation pay may commit a similar offense in his next employment, expecting the same leniency, and such misplaced compassion would encourage the infiltration of labor's ranks by those who do not deserve the protection and concern of the Constitution.

• Back Wages: The same rationale exists for not enforcing the respondent Commission's award of back wages in favor of the private respondent. Conformably to Wenphil Corporation vs. NLRC and subsequent cases, the only award to which the private respondent may be entitled is the amount of P1,000.00, to be paid to her by the petitioner as a penalty for effecting her dismissal without complying with the procedural requirements laid down in Sections 2 and 5 of Rule XIV, Book V, of the Omnibus Rules Implementing the Labor Code.

• Certification Against Forum-Shopping: The contention that the petition should be dismissed for lack of the certification on forum-shopping required under Circular No. 28-91 is not well taken. The petition was filed on December 5, 1991, before the circular took effect on January 1, 1992, and the certification requirement therefore had no application to it.

• Final and Executory Judgment; Exceptions — Once a judgment has become final and executory, it can no longer be disturbed except only for the correction of clerical errors or where supervening events render its execution impossible or unjust. In the latter event, the interested party may ask the court to modify the judgment to harmonize it with justice and the facts. The Court applied this exception to set aside the execution of the NLRC decision notwithstanding its finality.
• Supervening Events in the Execution of Labor Decisions — The power of the NLRC to issue a writ of execution carries with it the right to look into the correctness of the execution of the decision and to consider supervening events that may affect such execution. The employee's final conviction for theft of company property, rendered after the labor decision had become final, was held to be such a supervening cause, rendering unjust and inequitable the decision mandating reinstatement with back wages.
• Disqualification from Separation Pay for Dismissals Based on Serious Misconduct or Moral Turpitude — Separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. Because Santos was convicted of theft, she was disqualified from separation pay.
• Wenphil Doctrine — Indemnity for Dismissal Without Procedural Due Process — An employer that effects a dismissal without complying with the procedural requirements laid down in Sections 2 and 5 of Rule XIV, Book V, of the Omnibus Rules Implementing the Labor Code is liable for an indemnity, fixed at P1,000.00, even where the dismissal is for a valid cause. The Court awarded this amount as the only monetary relief due to the private respondent.
• Prospective Application of Circular No. 28-91 — The requirement of a certification against forum-shopping under Circular No. 28-91 governs only petitions filed after its effectivity on January 1, 1992; a petition filed on December 5, 1991 cannot be dismissed for lack of such certification.

• "It is true that once a judgment has become final and executory, it can no longer be disturbed except only for the correction of clerical errors or where supervening events render its execution impossible or unjust." — This states the general rule of finality and its supervening-event exception, the doctrinal hinge on which the petition was resolved in the petitioner's favor.
• "the power of the NLRC to issue a writ of execution carries with it the right to look into the correctness of the execution of the decision and to consider supervening events that may affect such execution." — Quoted from Heirs of Francisco Guballa, Sr. vs. Court of Appeals, this is the controlling formulation of the NLRC's authority that justified suspending execution of its own final decision.
• "We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character." — Quoted from PLDT vs. NLRC, this is the canonical rule disqualifying employees dismissed for offenses involving moral turpitude from separation pay, applied to deny the private respondent both separation pay and back wages.
• "The private respondent's conviction of the crime of theft of property belonging to the petitioner has affirmed the existence of a valid ground for her dismissal and thus removed the justification for the administrative decision ordering her reinstatement with back wages." — This is the ratio decidendi of the disposition, tying the criminal conviction to the dissolution of the factual and legal basis of the labor award.

• Heirs of Francisco Guballa, Sr. vs. Court of Appeals, 168 SCRA 518 — Controlling precedent for the rule that the NLRC's power to issue a writ of execution carries with it the right to look into the correctness of the execution and to consider supervening events affecting it; expressly relied upon to justify suspending execution of the final labor decision.
• PLDT vs. NLRC, 164 SCRA 671 — Controlling precedent for the disqualification from separation pay of employees validly dismissed for serious misconduct or offenses involving moral turpitude; its rule was quoted at length and applied to deny separation pay to Santos.
• Wenphil Corporation vs. NLRC, 170 SCRA 69 — Followed as the basis for awarding the private respondent an indemnity of P1,000.00 for the petitioner's failure to comply with the procedural requirements of due process in effecting the dismissal.
• Presbitero vs. Court of Appeals, 129 SCRA 443; City of Butuan vs. Ortiz, 3 SCRA 659; Sealand Service, Inc. vs. NLRC, 190 SCRA 347; Mabuhay Vinyl Corp. vs. NLRC, 214 SCRA 135 — Cited collectively for the rule on the immutability of final judgments and the exceptions thereto, including supervening events.
• Panelco vs. NLRC, 215 SCRA 669; Kwikway Engineering Works vs. NLRC, 195 SCRA 526; Great Pacific Life Assurance Corp. vs. NLRC, 187 SCRA 694; Rubberworld (Phils.), Inc. vs. NLRC, 183 SCRA 421; Seahorse Maritime Corp. vs. NLRC, 173 SCRA 390 — Cited as the subsequent cases applying the Wenphil rule on the indemnity payable for non-compliance with the procedural requirements of due process.

• Sections 2 and 5, Rule XIV, Book V, Omnibus Rules Implementing the Labor Code — These provisions lay down the procedural requirements for effecting a dismissal. The petitioner's failure to comply with them, notwithstanding the existence of a valid ground for dismissal, made it liable for an indemnity of P1,000.00 in favor of the private respondent.
• Circular No. 28-91 — Requires a certification against forum-shopping in petitions filed with the Supreme Court. The requirement was held inapplicable because the petition was filed on December 5, 1991, before the circular took effect on January 1, 1992.

Davide, Jr., Bellosillo, Quiason and Kapunan, JJ.