In Philippine labor law, obtaining a favorable decision from a Labor Arbiter or the National Labor Relations Commission (NLRC) is often only half the battle. The definitive victory lies in the actual satisfaction of the judgment—the moment the employee receives the monetary award or is reinstated to their position. When an employer refuses to comply voluntarily, the law provides a compulsory mechanism: the Execution of Judgment.
1. The Principle of Finality
Before a decision can be compelled, it must be final and executory. This occurs when:
- No appeal or Motion for Reconsideration was filed within the 10-calendar-day reglementary period.
- The Supreme Court or Court of Appeals has issued an Entry of Judgment following the exhaustion of all legal remedies.
Once a decision is final, it becomes immutable. It cannot be modified, and the prevailing party is entitled to a Writ of Execution as a matter of right.
2. The Process of Compulsion
The process does not happen automatically upon the lapse of the appeal period; the winning party must take proactive steps.
I. The Motion for Execution
The prevailing party must file a verified Motion for Execution before the Labor Arbiter of origin. In this motion, the movant prays for the issuance of a Writ of Execution to enforce the specific dispositive portion of the decision (e.g., backwages, separation pay, 13th-month pay, and attorney's fees).
II. Pre-Execution Conference
Under the NLRC Rules of Procedure, the Labor Arbiter may conduct a Pre-Execution Conference within 15 days from the filing of the motion. The goal is to:
- Compute the updated award (including legal interest if applicable).
- Encourage a voluntary settlement or a payment scheme to avoid the coercive stage of execution.
III. Issuance of the Writ of Execution
If no settlement is reached, the Labor Arbiter issues the Writ of Execution. This is the formal order directed to the Sheriff of the NLRC, commanding them to satisfy the judgment out of the employer’s properties.
3. Powers of the Sheriff: Modes of Satisfaction
The Sheriff is the primary officer tasked with the "muscle" of the law. They follow a specific hierarchy of enforcement:
| Method | Description |
|---|---|
| Manual Payment | The employer pays the full amount in cash or check directly to the Sheriff or the NLRC Cashier. |
| Garnishment | The Sheriff issues a Notice of Garnishment to banks where the employer holds accounts. The bank is legally required to "freeze" the amount equivalent to the judgment award. |
| Levy on Personalty | If cash is unavailable, the Sheriff seizes movable property (vehicles, office equipment, inventory) to be sold at a public auction. |
| Levy on Realty | As a last resort, the Sheriff can levy real property (land or buildings) owned by the employer. |
4. The "Immediate Execution" Exception
It is important to note that Reinstatement Awards are "immediately executory." Even if the employer appeals the Labor Arbiter's decision to the NLRC, they must either physically reinstate the employee or reinstate them in the payroll. If the employer fails to do this, the employee can move for execution of the reinstatement aspect specifically, regardless of the pending appeal.
5. Lifting the Writ: The Supersedeas Bond
The only way an employer can generally stay (stop) the execution of a monetary award during the appeal stage is by posting a Supersedeas Bond. This bond, equivalent to the monetary award (excluding damages and fees), acts as a guarantee that the money is available should the employee eventually win the case.
6. Liability of Corporate Officers
As a general rule, a corporation has a separate juridical personality. However, the "piercing the veil of corporate fiction" doctrine may apply during execution if:
- The officer acted with malice or bad faith in dismissing the employee.
- The corporation is used as a shield to evade a legal obligation. In such cases, the personal assets of directors or officers may be reached to satisfy the labor award.
7. Common Obstacles and Remedies
- Dissipated Assets: If the company has closed or emptied its bank accounts, the Sheriff may return the writ "unsatisfied." The employee may then need to look for other properties or prove "bad faith" closure to hold owners personally liable.
- Third-Party Claims: If the Sheriff seizes property claimed by someone other than the employer, that person may file a Terceria (Third-Party Claim) to stop the sale.
- Legal Interest: Per Bangko Sentral ng Pilipinas Circular No. 799, final judgments for money bear an interest rate of 6% per annum from the date the judgment becomes final and executory until fully paid.