523 Phil. 781
CHICO-NAZARIO, J.:
WHEREFORE, in view of all the foregoing considerations, let the Decision of October 2, 1990 be, as it is hereby, SET ASIDE, and a new one ENTERED declaring the dismissal of the complainant as illegal, and consequently ordering the respondents jointly and severally to reinstate him to his former position as bank Vice-President and General Counsel without loss of seniority rights and other privileges, and to pay him full backwages and other benefits from the time his compensation was withheld to his actual reinstatement, as well as moral damages of P100,000.00, exemplary damages of P50,000.00, and attorney's fees equivalent to Ten Percent (10%) of the monetary award. Should reinstatement be no longer possible due to strained relations, the respondents are ordered likewise jointly and severally to grant separation pay at one (1) month per year of service in the total sum of P293,650.00 with backwages and other benefits from November 16, 1989 to September 15, 1991 (cut off date, subject to adjustment) computed at P1,055,740.48, plus damages of P100,000.00 (moral damages), P50,000.00 (exemplary damages) and attorney's fees equal to Ten Percent (10%) of all the monetary award, or a grand total of P1,649,329.53.[7]Petitioner Bank came to us for the first time via a Special Civil Action for Certiorari assailing the NLRC Resolution of 24 September 1991 in Equitable Banking Corporation v. National Labor Relations Commission, docketed as G.R. No. 102467.[8]
WHEREFORE, the herein questioned Resolution of the NLRC is AFFIRMED with the following MODIFICATIONS: That private respondent shall be entitled to backwages from termination of employment until turning sixty (60) years of age (in 1995) and, thereupon, to retirement benefits in accordance with law; that private respondent shall be paid an additional amount of P5,000.00; that the award of moral and exemplary damages are deleted; and that the liability herein pronounced shall be due from petitioner bank alone, the other petitioners being absolved from solidary liability. No costs.[11]On 28 July 1997, our Decision in G.R. No. 102467 dated 13 June 1997 became final and executory.[12]
WHEREFORE, in view of al (sic) the foregoing, let an "ALIAS" Writ of Execution be issued commanding the Sheriff, this Branch, to collect from respondent Bank the amount of Ph6,342,307.00 representing the backwages with 12% interest per annum due complainant.[23]Petitioner Bank interposed an appeal with the NLRC, which reversed the Labor Arbiter in a Resolution,[24] promulgated on 28 March 2001. It ratiocinated that the doctrine on general increases as component in computing backwages in Sigma Personnel Services and St. Louis was merely obiter dictum. The NLRC found East Asiatic Co., Ltd. inapplicable on the ground that the original circumstances therein are not only peculiar to the said case but also completely strange to the case of respondent Sadac. Further, the NLRC disallowed respondent Sadac's claim to check-up benefit ratiocinating that there was no clear and substantial proof that the same was being granted and enjoyed by other employees of petitioner Bank. The award of attorney's fees was similarly deleted.
WHEREFORE, the instant appeal is considered meritorious and accordingly, the computation prepared by respondent Equitable Banking Corporation on the award of backwages in favor of complainant Ricardo Sadac under the decision promulgated by the Supreme Court on June 13, 1997 in G.R. No. 102476 in the aggregate amount of P2,981,442.98 is hereby ordered.[25]Respondent Sadac's Motion for Reconsideration thereon was denied by the NLRC in its Resolution,[26] promulgated on 24 September 2002.
Finding for respondent Sadac (therein petitioner), the Court of Appeals rendered a Decision on 6 April 2004, the dispositive portion of which is quoted hereunder:
(1) Whether periodic general increases in basic salary, check-up benefit, clothing allowance, and cash conversion of vacation leave are included in the computation of full backwages for illegally dismissed employees;(2) Whether respondent is entitled to attorney's fees; and(3) Whether respondent is entitled to twelve percent (12%) per annum as interest on all accounts outstanding until full payment thereof.
WHEREFORE, premises considered, the March 28, 2001 and the September 24, 2002 Resolutions of the National Labor Relations Commissions (sic) are REVERSED and SET ASIDE and the August 2, 1999 Order of the Labor Arbiter is REVIVED to the effect that private respondent is DIRECTED TO PAY petitioner the sum of PhP6,342,307.00, representing full back wages (sic) which sum includes annual general increases in basic salary, check-up benefit, clothing allowance, cash conversion of vacation leave and other sundry benefits plus 12% per annum interest on outstanding balance from July 28, 1997 until full payment.The Court of Appeals, citing East Asiatic held that respondent Sadac's general increases should be added as part of his backwages. According to the appellate court, respondent Sadac's entitlement to the annual general increases has been duly proven by substantial evidence that the latter, in fact, enjoyed an annual increase of more or less 15 percent (15%). Respondent Sadac's check-up benefit, clothing allowance, and cash conversion of vacation leave were similarly ordered added in the computation of respondent Sadac's basic wage.
Costs against private respondent.[27]
(a) The Hon. Court of Appeals erred in ruling that general salary increases should be included in the computation of full backwages.Meanwhile, on 26 October 2004, the Court of Appeals rendered a Supplemental Decision granting respondent Sadac's Partial Motion for Reconsideration and amending the dispositive portion of the 6 April 2004 Decision in this wise, viz.:
(b) The Hon. Court of Appeals erred in ruling that the applicable authorities in this case are: (i) East Asiatic, Ltd. v. CIR, 40 SCRA 521 (1971); (ii) St. Louis College of Tuguegarao v. NLRC, 177 SCRA 151 (1989); (iii) Sigma Personnel Services v. NLRC, 224 SCRA 181 (1993); and (iv) Millares v. NLRC, 305 SCRA 500 (1999) and not (i) Art. 279 of the Labor Code; (ii) Paramount Vinyl Corp. v. NLRC, 190 SCRA 525 (1990); (iii) Evangelista v. NLRC, 249 SCRA 194 (1995); and (iv) Espejo v. NLRC, 255 SCRA 430 (1996).
(c) The Hon. Court of Appeals erred in ruling that respondent is entitled to check-up benefit, clothing allowance and cash conversion of vacation leaves notwithstanding that respondent did not present any evidence to prove entitlement to these claims.
(d) The Hon. Court of Appeals erred in ruling that respondent is entitled to be paid legal interest even if the principal amount due him has not yet been correctly and finally determined.[31]
WHEREFORE, premises considered, the March 24 (sic), 2001 and the September 24, 2002 Resolutions of the National Labor Relations Commission are hereby REVERSED and SET ASIDE and the August 2, 1999 Order of the Labor Arbiter is hereby REVIVED to the effect that private respondent is hereby DIRECTED TO PAY petitioner the sum of P6,342,307.00, representing full backwages which sum includes annual general increases in basic salary, check-up benefit, clothing allowance, cash conversion of vacation leave and other sundry benefits "and attorney's fees equal to TEN PERCENT (10%) of all the monetary award" plus 12% per annum interest on all outstanding balance from July 28, 1997 until full payment.On 22 November 2004, petitioner Bank filed a Supplement to Petition for Review[33] contending in the main that the Court of Appeals erred in issuing the Supplemental Decision by directing petitioner Bank to pay an additional amount to respondent Sadac representing attorney's fees equal to ten percent (10%) of all the monetary award.
Costs against private respondent.[32]
The Court deems it appropriate, however, to reconsider such earlier ruling on the computation of backwages as enunciated in said Pines City Educational Center case, by now holding that conformably with the evident legislative intent as expressed in Rep. Act No. 6715, above-quoted, backwages to be awarded to an illegally dismissed employee, should not, as a general rule, be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal. The underlying reason for this ruling is that the employee, while litigating the legality (illegality) of his dismissal, must still earn a living to support himself and family, while full backwages have to be paid by the employer as part of the price or penalty he has to pay for illegally dismissing his employee. The clear legislative intent of the amendment in Rep. Act No. 6715 is to give more benefits to workers than was previously given them under the Mercury Drug rule or the "deduction of earnings elsewhere" rule. Thus, a closer adherence to the legislative policy behind Rep. Act No. 6715 points to "full backwages" as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. In other words, the provision calling for "full backwages" to illegally dismissed employees is clear, plain and free from ambiguity and, therefore, must be applied without attempted or strained interpretation. Index animi sermo est.[41]Verily, jurisprudence has shown that the definition of full backwages has forcefully evolved. In Mercury Drug Co., Inc. v. Court of Industrial Relations,[42] the rule was that backwages were granted for a period of three years without qualification and without deduction, meaning, the award of backwages was not reduced by earnings actually earned by the dismissed employee during the interim period of the separation. This came to be known as the Mercury Drug rule.[43] Prior to the Mercury Drug ruling in 1974, the total amount of backwages was reduced by earnings obtained by the employee elsewhere from the time of the dismissal to his reinstatement. The Mercury Drug rule was subsequently modified in Ferrer v. National Labor Relations Commission[44] and Pines City Educational Center v. National Labor Relations Commission,[45] where we allowed the recovery of backwages for the duration of the illegal dismissal minus the total amount of earnings which the employee derived elsewhere from the date of dismissal up to the date of reinstatement, if any. In Ferrer and in Pines, the three-year period was deleted, and instead, the dismissed employee was paid backwages for the entire period that he was without work subject to the deductions, as mentioned. Finally came our ruling in Bustamante which superseded Pines City Educational Center and allowed full recovery of backwages without deduction and without qualification pursuant to the express provisions of Article 279 of the Labor Code, as amended by Rep. Act No. 6715, i.e., without any deduction of income the employee may have derived from employment elsewhere from the date of his dismissal up to his reinstatement, that is, covering the entirety of the period of the dismissal.
The Supreme Court held in East Asiatic, Ltd. v. Court of Industrial Relations, 40 SCRA 521 (1971) that "general increases" should be added as a part of full backwages, to wit:We do not agree.In other words, the just and equitable rule regarding the point under discussion is this: It is the obligation of the employer to pay an illegally dismissed employee or worker the whole amount of the salaries or wages, plus all other benefits and bonuses and general increases, to which he would have been normally entitled had he not been dismissed and had not stopped working, but it is the right, on the other hand of the employer to deduct from the total of these, the amount equivalent to the salaries or wages the employee or worker would have earned in his old employment on the corresponding days he was actually gainfully employed elsewhere with an equal or higher salary or wage, such that if his salary or wage in his other employment was less, the employer may deduct only what has been actually earned.The doctrine in East Asiatic was subsequently reiterated, in the cases of St. Louis College of Tugueg[a]rao v. NLRC, 177 SCRA 151 (1989); Sigma Personnel Services v. NLRC, 224 SCRA 181 (1993) and Millares v. National Labor Relations Commission, 305 SCRA 500 (1999).
Private respondent, in opposing the petitioner's contention, alleged in his Memorandum that only the wage rate at the time of the employee's illegal dismissal should be considered - private respondent citing the following decisions of the Supreme Court: Paramount Vinyl Corp. v. NLRC 190 SCRA 525 (1990); Evangelista v. NLRC, 249 SCRA 194 (1995); Espejo v. NLRC, 255 SCRA 430 (1996) which rendered obsolete the ruling in East Asiatic, Ltd. v. Court of Industrial Relations, 40 SCRA 521 (1971).
We are not convinced.
The Supreme Court had consistently held that payment of full backwages is the price or penalty that the employer must pay for having illegally dismissed an employee.
In Ala Mode Garments, Inc. v. NLRC 268 SCRA 497 (1997) and Bustamante v. NLRC and Evergreen Farms, Inc. 265 SCRA 61 (1996) the Supreme Court held that the clear legislative intent in the amendment in Republic Act 6715 was to give more benefits to workers than was previously given them under the Mercury Drug rule or the "deductions of earnings elsewhere" rule.
The Paramount Vinyl, Evangelista, and Espejo cases cited by private respondent are inapplicable to the case at bar. The doctrines therein came about as a result of the old Mercury Drug rule, which was repealed with the passage of Republic Act 6715 into law. It was in Alex Ferrer v. NLRC 255 SCRA 430 (1993) when the Supreme Court returned to the doctrine in East Asiatic, which was soon supplanted by the case of Bustamante v. NLRC and Evergreen Farms, Inc., which held that the backwages to be awarded to an illegally dismissed employee, should not, as a general rule, be diminished or reduced by the earnings derived from him during the period of his illegal dismissal. Furthermore, the Mercury Drug rule was never meant to prejudice the workers, but merely to speed the recovery of their backwages.
Ever since Mercury Drug Co. Inc. v. CIR 56 SCRA 694 (1974), it had been the intent of the Supreme Court to increase the backwages due an illegally dismissed employee. In the Mercury Drug case, full backwages was to be recovered even though a three-year limitation on recovery of full backwages was imposed in the name of equity. Then in Bustamante, full backwages was interpreted to mean absolutely no deductions regardless of the duration of the illegal dismissal. In Bustamante, the Supreme Court no longer regarded equity as a basis when dealing with illegal dismissal cases because it is not equity at play in illegal dismissals but rather, it is employer's obligation to pay full back wages (sic). It is an obligation of the employer because it is "the price or penalty the employer has to pay for illegally dismissing his employee."
The applicable modern definition of full backwages is now found in Millares v. National Labor Relations Commission 305 SCRA 500 (1999), where although the issue in Millares concerned separation pay - separation pay and backwages both have employee's wage rate at their foundation.x x x The rationale is not difficult to discern. It is the obligation of the employer to pay an illegally dismissed employee the whole amount of his salaries plus all other benefits, bonuses and general increases to which he would have been normally entitled had he not been dismissed and had not stopped working. The same holds true in case of retrenched employees. x x xx x x x
x x x Annual general increases are akin to "allowances" or "other benefits." [46] (Italics ours.)
ART. 279. Security of Tenure. - In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. (Emphasis supplied.)Article 279 mandates that an employee's full backwages shall be inclusive of allowances and other benefits or their monetary equivalent. Contrary to the ruling of the Court of Appeals, we do not see that a salary increase can be interpreted as either an allowance or a benefit. Salary increases are not akin to allowances or benefits, and cannot be confused with either. The term "allowances" is sometimes used synonymously with "emoluments," as indirect or contingent remuneration, which may or may not be earned, but which is sometimes in the nature of compensation, and sometimes in the nature of reimbursement.[47] Allowances and benefits are granted to the employee apart or separate from, and in addition to the wage or salary. In contrast, salary increases are amounts which are added to the employee's salary as an increment thereto for varied reasons deemed appropriate by the employer. Salary increases are not separate grants by themselves but once granted, they are deemed part of the employee's salary. To extend the coverage of an allowance or a benefit to include salary increases would be to strain both the imagination of the Court and the language of law. As aptly observed by the NLRC, "to otherwise give the meaning other than what the law speaks for by itself, will open the floodgates to various interpretations."[48] Indeed, if the intent were to include salary increases as basis in the computation of backwages, the same should have been explicitly stated in the same manner that the law used clear and unambiguous terms in expressly providing for the inclusion of allowances and other benefits.
A full discernment of the pertinent portion of the judgment sought to be executed in East Asiatic Co., Ltd. would reveal as follows:In the same vein, we cannot accept the Court of Appeals' reliance on the doctrine as espoused in Millares. It is evident that Millares concerns itself with the computation of the salary base used in computing the separation pay of petitioners therein. The distinction between backwages and separation pay is elementary. Separation pay is granted where reinstatement is no longer advisable because of strained relations between the employee and the employer. Backwages represent compensation that should have been earned but were not collected because of the unjust dismissal. The bases for computing the two are different, the first being usually the length of the employee's service and the second the actual period when he was unlawfully prevented from working.[51]"x x x to reinstate Soledad A. Dizon immediately to her former position with backwages from September 1, 1958 until actually reinstated with all the rights and privileges acquired and due her, including seniority and such other terms and conditions of employment AT THE TIME OF HER LAY-OFF"The basis on which this doctrine was laid out was summed up by the Supreme Court which ratiocinated in this light. To quote:"x x x on the other hand, of the employer to deduct from the total of these, the amount equivalent to these salaries or wages the employee or worker would have earned in his old employment on the corresponding days that he was actually gainfully employed elsewhere with an equal or higher salary or wage, such that if his salary or wage in his other employment was less, the employer may deduct only what has been actually earned x x x" (Ibid, pp. 547-548).But the Supreme Court, in the instant case, pronounced a clear but different judgment from that of East Asiatic Co. decretal portion, in this wise:"WHEREFORE, the herein questioned Resolution of the NLRC is AFFIRMED with the following MODIFICATIONS: that private respondent shall be entitled to backwages from termination of employment until turning sixty (60) years of age (in 1995) and, thereupon, to retirement benefits in accordance with law; xxx"Undisputably (sic), it was decreed in plain and unambiguous language that complainant Sadac "shall be entitled to backwages." No more, no less.
Thus, this decree for Sadac cannot be considered in any way, substantially in essence, with the award of backwages as pronounced for Ms. Dizon in the case of East Asiatic Co. Ltd.[50]
The determination of the salary base for the computation of backwages requires simply an application of judicial precedents defining the term "backwages". Unfortunately, the Labor Arbiter erred in this regard. An unqualified award of backwages means that the employee is paid at the wage rate at the time of his dismissal [Davao Free Worker Front v. Court of Industrial Relations, G.R. No. L-29356, October 27, 1975, 67 SCRA 418; Capital Garments Corporation v. Ople, G.R. No. 53627, September 30, 1982, 117 SCRA 473; Durabilt Recapping Plant & Company v. NLRC, G.R. No. 76746, July 27, 1987, 152 SCRA 328]. And the Court has declared that the base figure to be used in the computation of backwages due to the employee should include not just the basic salary, but also the regular allowances that he had been receiving, such as the emergency living allowances and the 13th month pay mandated under the law [See Pan-Philippine Life Insurance Corporation v. NLRC, G.R. No. 53721, June 29, 1982, 144 SCRA 866; Santos v. NLRC, G.R. No. 76721, September 21, 1987, 154 SCRA 166; Soriano v. NLRC, G.R. No. 75510, October 27, 1987, 155 SCRA 124; Insular Life Assurance Co., Ltd. v. NLRC, supra.][54] (Emphasis supplied.)There is no ambivalence in Paramount, that the base figure to be used in the computation of backwages is pegged at the wage rate at the time of the employee's dismissal, inclusive of regular allowances that the employee had been receiving such as the emergency living allowances and the 13th month pay mandated under the law.
As explicitly declared in Paramount Vinyl Products Corp. vs. NLRC, the determination of the salary base for the computation of backwages requires simply an application of judicial precedents defining the term "backwages." An unqualified award of backwages means that the employee is paid at the wage rate at the time of his dismissal. Furthermore, the award of salary differentials is not allowed, the established rule being that upon reinstatement, illegally dismissed employees are to be paid their backwages without deduction and qualification as to any wage increases or other benefits that may have been received by their co-workers who were not dismissed or did not go on strike.[56]The case of Paramount was relied upon by the Court in the latter case of Espejo v. National Labor Relations Commission,[57] where we reiterated that the computation of backwages should be based on the basic salary at the time of the employee's dismissal plus the regular allowances that he had been receiving. Further, the clarification made by the Court in General Baptist Bible College v. National Labor Relations Commission,[58] settles the issue, thus:
We also want to clarify that when there is an award of backwages this actually refers to backwages without qualifications and deductions. Thus, We held that:Indeed, even a cursory reading of the dispositive portion of the Court's Decision of 13 June 1997 in G.R. No. 102467, awarding backwages to respondent Sadac, readily shows that the award of backwages therein is unqualified, ergo, without qualification of the wage as thus fixed at the time of the dismissal and without deduction."The term 'backwages without qualification and deduction' means that the workers are to be paid their backwages fixed as of the time of the dismissal or strike without deduction for their earnings elsewhere during their layoff and without qualification of their wages as thus fixed; i.e., unqualified by any wage increases or other benefits that may have been received by their co-workers who are not dismissed or did not go on strike. Awards including salary differentials are not allowed. The salary base properly used should, however, include not only the basic salary but also the emergency cost of living allowances and also transportation allowances if the workers are entitled thereto."[59] (Italics supplied.)
In several cases, the Court had the opportunity to elucidate on the reason for the grant of backwages. Backwages are granted on grounds of equity to workers for earnings lost due to their illegal dismissal from work. They are a reparation for the illegal dismissal of an employee based on earnings which the employee would have obtained, either by virtue of a lawful decree or order, as in the case of a wage increase under a wage order, or by rightful expectation, as in the case of one's salary or wage. The outstanding feature of backwages is thus the degree of assuredness to an employee that he would have had them as earnings had he not been illegally terminated from his employment.Applying Paguio to the case at bar, we are not prepared to accept that this degree of assuredness applies to respondent Sadac's salary increases. There was no lawful decree or order supporting his claim, such that his salary increases can be made a component in the computation of backwages. What is evident is that salary increases are a mere expectancy. They are, by its nature volatile and are dependent on numerous variables, including the company's fiscal situation and even the employee's future performance on the job, or the employee's continued stay in a position subject to management prerogative to transfer him to another position where his services are needed. In short, there is no vested right to salary increases. That respondent Sadac may have received salary increases in the past only proves fact of receipt but does not establish a degree of assuredness that is inherent in backwages. From the foregoing, the plain conclusion is that respondent Sadac's computation of his full backwages which includes his prospective salary increases cannot be permitted.
Petitioner's claim, however, is based simply on expectancy or his assumption that, because in the past he had been consistently rated for his outstanding performance and his salary correspondingly increased, it is probable that he would similarly have been given high ratings and salary increases but for his transfer to another position in the company.
In contrast to a grant of backwages or an award of lucrum cessans in the civil law, this contention is based merely on speculation. Furthermore, it assumes that in the other position to which he had been transferred petitioner had not been given any performance evaluation. As held by the Court of Appeals, however, the mere fact that petitioner had been previously granted salary increases by reason of his excellent performance does not necessarily guarantee that he would have performed in the same manner and, therefore, qualify for the said increase later. What is more, his claim is tantamount to saying that he had a vested right to remain as Head of the Garnet Exchange and given salary increases simply because he had performed well in such position, and thus he should not be moved to any other position where management would require his services.[61]
Broadly, the word "salary" means a recompense or consideration made to a person for his pains or industry in another man's business. Whether it be derived from "salarium," or more fancifully from "sal," the pay of the Roman soldier, it carries with it the fundamental idea of compensation for services rendered. Indeed, there is eminent authority for holding that the words "wages" and "salary" are in essence synonymous (Words and Phrases, Vol. 38 Permanent Edition, p. 44 citing Hopkins vs. Cromwell, 85 N.Y.S.839, 841, 89 App. Div. 481; 38 Am. Jur. 496). "Salary," the etymology of which is the Latin word "salarium," is often used interchangeably with "wage", the etymology of which is the Middle English word "wagen". Both words generally refer to one and the same meaning, that is, a reward or recompense for services performed. Likewise, "pay" is the synonym of "wages" and "salary" (Black's Law Dictionary, 5th Ed). x x x[64] (Italics supplied.)
WHEREFORE, the herein questioned Resolution of the NLRC is AFFIRMED with the following MODIFICATIONS: That private respondent shall be entitled to backwages from termination of employment until turning sixty (60) years of age (in 1995) and, thereupon, to retirement benefits in accordance with law; that private respondent shall be paid an additional amount of P5,000.00; that the award of moral and exemplary damages are deleted; and that the liability herein pronounced shall be due from petitioner bank alone, the other petitioners being absolved from solidary liability. No costs.[74]The dispositive portion of the 24 September 1991 Decision of the NLRC awards respondent Sadac attorney's fees equivalent to ten percent (10%) of the monetary award, viz:
WHEREFORE, in view of all the foregoing considerations, let the Decision of October 2, 1990 be, as it is hereby, SET ASIDE and a new one ENTERED declaring the dismissal of the complainant as illegal, and consequently ordering the respondents jointly and severally to reinstate him to his former position as bank Vice-President and General Counsel without loss of seniority rights and other privileges, and to pay him full backwages and other benefits from the time his compensation was withheld to his actual reinstatement, as well as moral damages of P100,000.00, exemplary damages of P50,000.00, and attorney's fees equivalent to Ten Percent (10%) of the monetary award. Should reinstatement be no longer possible due to strained relations, the respondents are ordered likewise jointly and severally to grant separation pay at one (1) month per year of service in the total sum of P293,650.00 with backwages and other benefits from November 16, 1989 to September 15, 1991 (cut off date, subject to adjustment) computed at P1,055,740.48, plus damages of P100,000.00 (moral damages), P50,000.00 (exemplary damages) and attorney's fees equal to Ten Percent (10%) of all the monetary award, or a grand total of P1,649,329.53.[75] (Italics Ours.)As can be gleaned from the foregoing, the Court's Decision of 13 June 1997 AFFIRMED with MODIFICATION the NLRC Decision of 24 September 1991, which modification did not touch upon the award of attorney's fees as granted, hence, the award stands. Juxtaposing the decretal portions of the NLRC Decision of 24 September 1991 with that of the Court's Decision of 13 June 1997, we find that what was deleted by the Court was "the award of moral and exemplary damages," but not the award of "attorney's fees equivalent to Ten Percent (10%) of the monetary award." The issue on the grant of attorney's fees to respondent Sadac has been adequately and definitively threshed out and settled with finality when petitioner Bank came to us for the first time on a Petition for Certiorari in Equitable Banking Corporation v. National Labor Relations Commission, docketed as G.R. No. 102467. The Court had spoken in its Decision of 13 June 1997 in the said case which attained finality on 28 July 1997. It is now immutable.
It is obvious that the legal interest of twelve percent (12%) per annum shall be imposed from the time judgment becomes final and executory, until full satisfaction thereof. Therefore, petitioner Bank is liable to pay interest from 28 July 1997, the finality of our Decision in G.R. No. 102467.[78] The Court of Appeals was not in error in imposing the same notwithstanding that the parties were at variance in the computation of respondent Sadac's backwages. What is significant is that the Decision of 13 June 1997 which awarded backwages to respondent Sadac became final and executory on 28 July 1997.
- When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.
- With regard particularly to an award of interest in the concept of actual or compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
- 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 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 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 (Article 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 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.[77]
Sec. 26. Change of Attorneys. - x x x[11] Equitable Banking Corporation v. National Labor Relations Commission, supra note 4 at 569-570.
A client may at any time dismiss his attorney or substitute another in his place, but if the contract between client and attorney has been reduced to writing and the dismissal of the attorney was without justifiable cause, he shall be entitled to recover from the client the full compensation stipulated in the contract. However, the attorney may, in the discretion of the court, intervene in the case to protect his rights. For the payment of his compensation the attorney shall have a lien upon all judgments for the payment of money, and executions issued in pursuance of such judgment, rendered in the case wherein his services had been retained by the client.
Section 33. Special Treatment of Fringe Benefit. - x x x[53] Sigma Personnel Services v. National Labor Relations Commission, supra note 17 at 184.
(B) Fringe Benefit Defined. - For purposes of this Section, the term 'fringe benefit' means any good, service or other benefit furnished or granted in cash or in kind by an employer to an individual employee (except rank and file employees as defined herein) such as, but not limited to, the following:
(1) Housing;
(2) Expense account;
(3) Vehicle of any kind;
(4) Household personnel, such as maid, driver and others;
(5) Interest on loan at less than market rate to the extent of the difference between the market rate and actual rate granted;
(6) Membership fees, dues and other expenses borne by the employer for the employee in social and athletic clubs or other similar organizations;
(7) Expenses for foreign travel;
(8) Holiday and vacation expenses;
(9) Educational assistance to the employee or his dependents; and
(10) Life or health insurance and other non-life insurance premiums or similar amounts in excess of what the law allows.