9 Nacar Vs Frames

Dario Nacar vs.
Gallery Frames
Facts:
On October 15, 1998, the Labor Arbiter rendered a Decision in favor of petitioner and
found that he was dismissed from employment without a valid or just cause. Thus,
petitioner was awarded backwages and separation pay in lieu of reinstatement in the
amount ofP158,919.92.
Respondents appealed to the NLRC, but it was dismissed for lack of merit. Accordingly,
the NLRC sustained the decision of the Labor Arbiter. Respondents filed a motion for
reconsideration, but it was denied. Dissatisfied, respondents filed a Petition for Review
on Certiorari before the CA but it was likewise denied. Respondents then sought relief
before the Supreme Court. Finding no reversible error on the part of the CA, this Court
denied the petition in the Resolution dated April 17, 2002.
An Entry of Judgment was later issued certifying that the resolution became final and
executory on May 27, 2002. The case was, thereafter, referred back to the Labor
Arbiter for execution. Petitioner filed a Motion for Correct Computation, praying that his
backwages be computed from the date of his dismissal on January 24, 1997 up to the
finality of the Resolution of the Supreme Court on May 27, 2002. Upon recomputation,
the Computation and Examination Unit of the NLRC arrived at an updated amount in
the sum ofP471,320.31.
Respondents filed a Motion to Quash Writ of Execution, arguing, among other things,
that since the Labor Arbiter awarded separation pay of P62,986.56 and limited
backwages of P95,933.36, no more recomputation is required to be made of the said
awards. They claimed that after the decision becomes final and executory, the same
cannot be altered or amended anymore. LA denied the motion but the decision was
reversed by the NLRC on appeal.
Petitioner appealed to the CA but was denied, stating that since petitioner no longer
appealed the October 15, 1998 Decision of the Labor Arbiter, which already became
final and executory, a belated correction thereof is no longer allowed. The CA stated
that there is nothing left to be done except to enforce the said judgment. Consequently,
it can no longer be modified in any respect, except to correct clerical errors or mistakes.
Thus, petitioner filed this petition for review on certiorari.
ISSUE: Whether or not a re-computation in the course of execution of the labor

arbiter's original computation of the awards made is legally proper.
HELD: Yes.
Labor Law- computation of backwages

A source of misunderstanding in implementing the final decision in this case proceeds
from the way the original labor arbiter framed his decision. The decision consists
essentially of two parts.
The first is that part of the decision that cannot now be disputed because it has been
confirmed with finality. This is the finding of the illegality of the dismissal and the
awards of separation pay in lieu of reinstatement, backwages, attorney's fees, and legal
interests. The second part is the computation of the awards made.
By the nature of an illegal dismissal case, the reliefs continue to add up until full
satisfaction, as expressed under Article 279 of the Labor Code. The recomputation of
the consequences of illegal dismissal upon execution of the decision does not constitute
an alteration or amendment of the final decision being implemented. The illegal
dismissal ruling stands; only the computation of monetary consequences of this
dismissal is affected, and this is not a violation of the principle of immutability of final
judgments. That the amount respondents shall now pay has greatly increased is a
consequence that it cannot avoid as it is the risk that it ran when it continued to seek
recourses against the Labor Arbiter's decision.
Furthermore, the interest due shall itself earn legal interest from the... time it is
judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per
annum to be computed from default, i.e., from judicial or extrajudicial demand under
and subject to the provisions of Article 1169 of the Civil Code.
When the obligation is breached, and it consists in the payment of a sum of money,
i.e., a loan or forbearance of money, the interest due should be that which may have
been stipulated in writing. Furthermore, the interest due shall itself earn legal interest
from the time it... is judicially demanded. In the absence of stipulation, the rate of
interest shall be 6% per annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
When an obligation, not constituting a loan or forbearance of money, is breached, an

interest on the amount of damages awarded may be imposed at the discretion of the
court at the rate of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or... damages, except when or until the demand can be established
with reasonable certainty. Accordingly, where the demand is established with
reasonable certainty, the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code),... but when such certainty cannot be
so reasonably established at the time the demand is made, the interest shall begin to
run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The...
actual base for the computation of legal interest shall, in any case, be on the amount
finally adjudged.
When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this
interim period being deemed... to be by then an equivalent to a forbearance of credit.

9 Nacar Vs Frames

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Dario Nacar vs.

ISSUE: Whether or not a re-computation in the course of execution of the labor

Labor Law- computation of backwages

When an obligation, not constituting a loan or forbearance of money, is breached, an

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