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Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 168501

January 31, 2011

ISLRIZ TRADING/VICTOR HUGO LU, Petitioner,


vs.
EFREN CAPADA, LAURO LICUP, NORBERTO NIGOS, RONNIE ABEL, GODOFREDO
MAGNAYE, ARNEL SIBERRE, EDMUNDO CAPADA, NOMERLITO MAGNAYE and
ALBERTO DELA VEGA, Respondents.
DECISION
DEL CASTILLO, J.:
We reiterate in this petition the settled view that employees are entitled to their accrued salaries during the
period between the Labor Arbiters order of reinstatement pending appeal and the resolution of the National
Labor Relations Commission (NLRC) overturning that of the Labor Arbiter. Otherwise stated, even if the
order of reinstatement of the Labor Arbiter is reversed on appeal, the employer is still obliged to reinstate
and pay the wages of the employee during the period of appeal until reversal by a higher court or tribunal.
In this case, respondents are entitled to their accrued salaries from the time petitioner received a copy of the
Decision of the Labor Arbiter declaring respondents termination illegal and ordering their reinstatement up
to the date of the NLRC resolution overturning that of the Labor Arbiter.
This Petition for Review on Certiorari assails the Decision1 dated March 18, 2005 of the Court of Appeals
(CA) in CA-G.R. SP No. 84744 which dismissed the petition for certiorari before it, as well as the
Resolution2 dated June 16, 2005 which denied the motion for reconsideration thereto.
Factual Antecedents
Respondents Efren Capada, Lauro Licup, Norberto Nigos and Godofredo Magnaye were drivers while
respondents Ronnie Abel, Arnel Siberre, Edmundo Capada, Nomerlito Magnaye and Alberto Dela Vega
were helpers of Islriz Trading, a gravel and sand business owned and operated by petitioner Victor Hugo
Lu. Claiming that they were illegally dismissed, respondents filed a Complaint3 for illegal dismissal and
non-payment of overtime pay, holiday pay, rest day pay, allowances and separation pay against petitioner
on August 9, 2000 before the Labor Arbiter. On his part, petitioner imputed abandonment of work against
respondents.
Proceedings before the Labor Arbiter and the NLRC
On December 21, 2001, Labor Arbiter Waldo Emerson R. Gan (Gan) rendered a Decision4 in this wise:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. Declaring respondent ISLRIZ TRADING guilty of illegal dismissal.
2. Ordering respondent to reinstate complainants to their former positions without loss of seniority
rights and the payment of full backwages from date of dismissal to actual reinstatement which are
computed as follows: (As of date of decision);

1. EFREN CAPADA
2. LAURO LICUP
3. NORBERTO NIGOS
4. RONNIE ABEL
5. GODOFREDO MAGNAYE
6. ARNEL SIBERRE
7. EDMUNDO CAPADA
8. NOMERLITO MAGNAYE
9. ALBERTO DELA VEGA

P 102,400.00 (6,400.00X16)
87,040.00 (5,440.00X16)
87,040.00 (5,440.00X16)
76,800.00 (4,800.00X16)
102,400.00 (6,400.00X16)
51,200.00 (3,200.00X16)
76,800.00 (4,800.00X16)
76,800.00 (4,800.00X16)
51,200.00 (3,200.00X16)

3. Ordering respondent to pay complainants 10% of the total monetary award as attorneys fees.
All other claims are dismissed for lack of merit.
SO ORDERED.5
Aggrieved, petitioner appealed6 to the NLRC which granted the appeal. The NLRC set aside the Decision
of Labor Arbiter Gan in a Resolution7 dated September 5, 2002. Finding that respondents failure to
continue working for petitioner was neither caused by termination nor abandonment of work, the NLRC
ordered respondents reinstatement but without backwages. The dispositive portion of said Resolution reads
as follows:
WHEREFORE, premises considered, the appeal is GRANTED and the Decision dated 21 December 2001
is hereby ordered SET ASIDE.
A New Decision is hereby rendered finding that the failure to work of complainants-appellees is neither
occasioned by termination (n)or abandonment of work, hence, respondents-appellants shall reinstate
complainants-appellees to their former positions without backwages within ten (10) days from receipt of
this Resolution.
SO ORDERED.8
Respondents filed a Motion for Reconsideration9 thereto but same was likewise denied in a Resolution10
dated November 18, 2002. This became final and executory on December 7, 2002.11
On December 9, 2003, however, respondents filed with the Labor Arbiter an Ex-Parte Motion to Set Case
for Conference with Motion.12 They averred therein that since the Decision of Labor Arbiter Gan ordered
their reinstatement, a Writ of Execution13 dated April 22, 2002 was already issued for the enforcement of its
reinstatement aspect as same is immediately executory even pending appeal. But this notwithstanding and
despite the issuance and subsequent finality of the NLRC Resolution which likewise ordered respondents
reinstatement, petitioner still refused to reinstate them. Thus, respondents prayed that in view of the orders
of reinstatement, a computation of the award of backwages be made and that an Alias Writ of Execution for
its enforcement be issued.
The case was then set for pre-execution conference on January 29, February 24 and March 5, 2004. Both
parties appeared thereat but failed to come to terms on the issue of the monetary award. Hence, the office of
the Labor Arbiter through Fiscal Examiner II Ma. Irene T. Trinchera (Fiscal Examiner Trinchera) issued an
undated Computation14 of respondents accrued salaries from January 1, 2002 to January 30, 2004 or for a
total of 24.97 months in the amount of P1,110,665.60 computed as follows:
Accrued Salary from January 1, 2002 to January 30, 2004 = 24.97 months

1. Efren Capada P 6,400.00 x 24.97 months

P 159,808.00

2. Lauro Licup P 5,440.00 x 24.97 months

P 135,836.80

3. Norberto Nigos P 5,440.00 x 24.97 months

P 135,836.80

4. Ronnie Abel P 4,800.00 x 24.97 months

P 119,856.00

5. Godofredo Magnaye P 6,400.00 x 24.97 months

P 159,808.00

6. Arnel Siberre P 3,200.00 x 24.97 months

P 79, 904.00

7. Edmundo Capada P 4,800.00 x 24.97 months

P 119, 856.00

8. Nomerlito Magnaye P 4,800.00 x 24.97 months

P 119, 856.00

9. Alberto de la Vega P 3,200.00 x 24.97 months


Total

P 79, 904.00

P 1,110,665.60

Petitioner questioned this computation in his Motion/Manifestation15 claiming that said computation was
without any factual or legal basis considering that Labor Arbiter Gans Decision had already been reversed
and set aside by the NLRC and that therefore there should be no monetary award.
Nevertheless, Labor Arbiter Danna M. Castillon (Castillon) still issued a Writ of Execution16 dated March
9, 2004 to enforce the monetary award in accordance with the abovementioned computation. Accordingly,
the Sheriff issued a Notice of Sale/Levy on Execution of Personal Property17 by virtue of which petitioners
properties were levied and set for auction sale on March 29, 2004. In an effort to forestall this impending
execution, petitioner then filed a Motion to Quash Writ of Execution with Prayer to Hold in Abeyance of
Auction Sale18 and a Supplemental Motion to Quash/Stop Auction Sale.19 He also served upon the Sheriff a
letter of protest.20 All of these protest actions proved futile as the Sheriff later submitted his Report dated
March 30, 2004 informing the Labor Arbiter that he had levied some of petitioners personal properties and
sold them in an auction sale where respondents were the only bidders. After each of the respondents
entered a bid equal to their individual shares in the judgment award, the levied properties were awarded to
them.
Later, respondents claimed that although petitioners levied properties were already awarded to them, they
could not take full control, ownership and possession of said properties because petitioner had allegedly
padlocked the premises where the properties were situated. Hence, they asked Labor Arbiter Castillon to
issue a break-open order.21 For his part and in a last ditch effort to nullify the writ of execution, petitioner
filed a Motion to Quash Writ of Execution, Notice of Sale/Levy on Execution of Personal Property and
Auction Sale on Additional Grounds.22 He reiterated that since the NLRC Resolution which reversed the
Decision of the Labor Arbiter ordered respondents reinstatement without payment of backwages or other
monetary award, only the execution of reinstatement sans any backwages or monetary award should be
enforced. It is his position that the Writ of Execution dated March 9, 2004 ordering the Sheriff to collect
respondents accrued salaries of P1,110,665.60 plus P1,096.00 execution fees or the total amount of
P1,111,761.60, in effect illegally amended the said NLRC Resolution; hence, said writ of execution is null
and void. And, as the writ is null and void, it follows that the Labor Arbiter cannot issue a break-open
order. In sum, petitioner prayed that the Writ of Execution be quashed and all proceedings subsequent to it
be declared null and void and that respondents Urgent Motion for Issuance of Break Open Order be denied
for lack of merit.

Both motions were resolved in an Order23 dated June 3, 2004. Labor Arbiter Castillon explained therein
that the monetary award subject of the questioned Writ of Execution refers to respondents accrued salaries
by reason of the reinstatement order of Labor Arbiter Gan which is self-executory pursuant to Article 22324
of the Labor Code. The Order cited Roquero v. Philippine Airlines Inc.25 where this Court ruled that
employees are still entitled to their accrued salaries even if the order of reinstatement has been reversed on
appeal. As to the application for break open order, Labor Arbiter Castillon relied on the Sheriffs report that
there is imminent danger that petitioners properties sold at the public auction might be transferred or
removed, as in fact four of said properties were already transferred. Thus, she deemed it necessary to grant
respondents request for a break open order to gain access to petitioners premises. The dispositive portion
of said Order reads:
WHEREFORE, premises considered, the Motion to Quash Writ of Execution [and] Notice of Sale/Levy on
Execution Sale filed by the respondent(s) [are] hereby DENIED. In view of the refusal of the respondents
entry to its premises, Deputy Sheriff S. Diega of this Office is hereby ordered to break-open the entrance of
the premises of respondent wherein the properties are located.
For this purpose, he may secure the assistance of the local police officer having jurisdiction over the
locality where the said properties are located.
SO ORDERED.26
Undeterred, petitioner brought the matter to the CA through a Petition for Certiorari.
Proceedings before the Court of Appeals
Before the CA, petitioner imputed grave abuse of discretion amounting to lack or excess of jurisdiction
upon Labor Arbiter Castillon for issuing the questioned Writ of Execution and the Order dated June 3,
2004. He maintained that since the December 21, 2001 Decision of Labor Arbiter Gan has already been
reversed and set aside by the September 5, 2002 Resolution of the NLRC, the Writ of Execution issued by
Labor Arbiter Castillon should have confined itself to the said NLRC Resolution which ordered
respondents reinstatement without backwages. Hence, when Labor Arbiter Castillon issued the writ
commanding the Sheriff to satisfy the monetary award in the amount of P1,111,761.60, she acted with
grave abuse of discretion amounting to lack or excess of jurisdiction. For the same reason, her issuance of
the Order dated June 3, 2004 denying petitioners Motion to Quash Writ of Execution with Prayer to Hold
in Abeyance Auction Sale and granting respondents Urgent Motion for Issuance of Break Open Order is
likewise tainted with grave abuse of discretion. Aside from these, petitioner also questioned the conduct of
the auction sale. He likewise claimed that he was denied due process because he was not given the
opportunity to file a motion for reconsideration of the Order denying his Motion to Quash Writ of
Execution considering that a break-open order was also made in the same Order. For their part, respondents
posited that since they have already disposed of petitioners levied properties, the petition has already
become moot.
In a Decision27 dated March 18, 2005, the CA quoted the June 3, 2004 Order of Labor Arbiter Castillon and
agreed with her ratiocination that pursuant to Article 223 of the Labor Code, what is sought to be enforced
by the subject Writ of Execution is the accrued salaries owing to respondents by reason of the reinstatement
order of Labor Arbiter Gan. The CA also found as unmeritorious the issues raised by petitioner with regard
to the conduct of the auction sale. Moreover, it did not give weight to petitioners claim of lack of due
process considering that a motion for reconsideration of a Writ of Execution is not an available remedy.
Thus, the CA dismissed the petition. Petitioners Motion for Reconsideration28 suffered the same fate as it
was also denied in a Resolution29 dated June 16, 2005.
Hence, petitioner is now before this Court through this Petition for Review on Certiorari where he presents
the following issues:

1. Whether the provision of Article 223 of the Labor Code is applicable to this case x x x.
2. Whether x x x the Decision dated March 18, 2005 and the Resolution dated June 16, 2005 of the
Court of Appeals are contrary to law and jurisprudence[.]
3. Whether x x x the award of accrued salaries has legal and factual bases[.]30
The Parties Arguments
Petitioner contends that the assailed Decision and Resolution of the CA are contrary to law and
jurisprudence. This is because in upholding the issuance of the questioned Writ of Execution for the
enforcement of respondents accrued salaries, said Decision and Resolution, in effect, altered the NLRC
Resolution which only decreed respondents reinstatement without backwages. Moreover, he
posits that Article 223 of the Labor Code only applies when an employee has been illegally dismissed from
work. And since in this case the NLRC ruled that respondents failure to continue working for petitioner
was not occasioned by termination, there is no illegal dismissal to speak of, hence, said provision of the
Labor Code does not apply. Lastly, petitioner claims that the computation of respondents accrued salaries
in the total amount of P1,110,665.60 has no legal and factual bases since as repeatedly pointed out by him,
the NLRC Resolution reversing the Labor Arbiters Decision has already ordered respondents
reinstatement without backwages after it found that there was no illegal termination.
Respondents, on the other hand, maintain that the CA did not err in applying Article 223 of the Labor Code
to the instant case. They thus contend that the computation of their accrued salaries covering the period
during which they were supposed to have been reinstated or from January 1, 2002 to January 30, 2004,
should be upheld since same merely applied Article 223. In sum, respondents believe that the assailed
Decision and Resolution of the CA are in accord with law and jurisprudence.
Our Ruling
The petition is not meritorious.
The core issue to be resolved in this case is similar to the one determined in Garcia v. Philippine Airlines
Inc.,31 that is, whether respondents may collect their wages during the period between the Labor Arbiters
order of reinstatement pending appeal and the NLRC Resolution overturning that of the Labor Arbiter.
In order to provide a thorough discussion of the present case, an overview of Garcia is proper.
In Garcia, petitioners therein were dismissed by Philippine Airlines Inc. (PAL) after they were allegedly
caught in the act of sniffing shabu during a raid at the PAL Technical Centers Toolroom Section. They
thus filed a complaint for illegal dismissal. In the meantime, PAL was placed under an interim
rehabilitation receivership because it was then suffering from severe financial losses. Thereafter, the Labor
Arbiter ruled in petitioners favor and ordered PAL to immediately comply with the reinstatement aspect of
the decision. PAL appealed to the NLRC. The NLRC reversed the Labor Arbiters Decision and dismissed
petitioners complaint for lack of merit. As petitioners Motion for Reconsideration thereto was likewise
denied, the NLRC issued an Entry of Judgment. Notably, PALs Interim Rehabilitation Receiver was
replaced by a Permanent Rehabilitation Receiver during the pendency of its appeal with the NLRC. A writ
of execution with respect to the reinstatement aspect of the Labor Arbiters Decision was then issued and
pursuant thereto, a Notice of Garnishment was likewise issued. To stop this, PAL filed an Urgent Petition
for Injunction with the NLRC. While the NLRC suspended and referred the action to the rehabilitation
receiver, it however, likewise affirmed the validity of the writ so that PAL appealed to the CA. Fortunately
for PAL, the CA nullified the assailed NLRC Resolutions on the grounds that (1) a subsequent finding of a
valid dismissal removes the basis for the reinstatement aspect of a labor arbiters decision and, (2) the

impossibility to comply with the reinstatement order due to corporate rehabilitation justifies PALs failure
to exercise the options under Article 223 of the Labor Code. When the case reached this Court, we partially
granted the petition in a Decision dated August 29, 2007 and effectively reinstated the NLRC Resolutions
insofar as it suspended the proceedings. But as PAL later manifested that the rehabilitation proceedings
have already been terminated, the court proceeded to determine the remaining issue, which is, as earlier
stated, whether petitioners therein may collect their wages during the period between the Labor Arbiters
order of reinstatement pending appeal and the NLRC Resolution overturning that of the Labor Arbiter.
In resolving the case, the Court examined its conflicting rulings with respect to the application of paragraph
3 of Article 223 of the Labor Code, viz:
At the core of the seeming divergence is the application of paragraph 3 of Article 223 of the Labor Code
which reads:
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as
the reinstatement aspect is concerned, shall immediately be executory, pending appeal. The employee
shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal
or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by
the employer shall not stay the execution for reinstatement provided herein.
The view as maintained in a number of cases is that:
x x x [E]ven if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory
on the part of the employer to reinstate and pay the wages of the dismissed employee during the
period of appeal until reversal by the higher court. On the other hand, if the employee has been
reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is
not required to reimburse whatever salary he received for he is entitled to such, more so if he actually
rendered services during the period.
In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to
receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a
restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is
mandatory on the employer to comply therewith.
The opposite view is articulated in Genuino which states:
If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal
is valid, then the employer has the right to require the dismissed employee on payroll reinstatement to
refund the salaries s/he received while the case was pending appeal, or it can be deducted from the
accrued benefits that the dismissed employee was entitled to receive from his/her employer under existing
laws, collective bargaining agreement provisions, and company practices. However, if the employee was
reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation
received for actual services rendered without need of refund.
x x x x
It has thus been advanced that there is no point in releasing the wages to petitioners since their dismissal
was found to be valid, and to do so would constitute unjust enrichment." (Emphasis, italics and
underscoring in the original; citations omitted.)32
The Court then stressed that as opposed to the abovementioned Genuino v. National Labor Relations
Commission,33 the social justice principles of labor law outweigh or render inapplicable the civil law

doctrine of unjust enrichment. It then went on to examine the precarious implication of the "refund
doctrine" as enunciated in Genuino, thus:
[T]he "refund doctrine" easily demonstrates how a favorable decision by the Labor Arbiter could harm,
more than help, a dismissed employee. The employee, to make both ends meet, would necessarily have to
use up the salaries received during the pendency of the appeal, only to end up having to refund the sum in
case of a final unfavorable decision. It is mirage of a stop-gap leading the employee to a risky cliff of
insolvency.
Advisably, the sum is better left unspent. It becomes more logical and practical for the employee to refuse
payroll reinstament and simply find work elsewhere in the interim, if any is available. Notably, the option
of payroll reinstatement belongs to the employer, even if the employee is able and raring to return to work.
Prior to Genuino, it is unthinkable for one to refuse payroll reinstatement. In the face of the grim
possibilities, the rise of concerned employees declining payroll reinstatement is on the horizon.
Further, the Genuino ruling not only disregards the social justice principles behind the rule, but also
institutes a scheme unduly favorable to management. Under such scheme, the salaries dispensed pendente
lite merely serve as a bond posted in installment by the employer. For in the event of a reversal of the
Labor Arbiters decision ordering reinstatement, the employer gets back the same amount without having to
spend ordinarily for bond premiums. This circumvents, if not directly contradicts, the proscription that the
"posting of a bond [even a cash bond] by the employer shall not stay the execution for reinstatement.
[Underscoring in the original]34
In view of this, the Court held this stance in Genuino as a stray posture and realigned the proper course of
the prevailing doctrine on reinstatement pending appeal vis--vis the effect of a reversal on appeal, that is,
even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the
part of the employer to reinstate and pay the wages of the dismissed employee during the period of
appeal until reversal by the higher court or tribunal. It likewise settled the view that the Labor
Arbiters order of reinstatement is immediately executory and the employer has to either re-admit
them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate
them in the payroll, and that failing to exercise the options in the alternative, employer must pay the
employees salaries.
The discussion, however, did not stop there. The court went on to declare that after the Labor Arbiters
decision is reversed by a higher tribunal, the employee may be barred from collecting the accrued
wages, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault
on the part of the employer. It then provided for the two-fold test in determining whether an employee is
barred from recovering his accrued wages, to wit: (1) there must be actual delay or that the order of
reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to the
employers unjustified act or omission. If the delay is due to the employers unjustified refusal, the
employer may still be required to pay the salaries notwithstanding the reversal of the Labor Arbiters
Decision. In Garcia, after it had been established that there was clearly a delay in the execution of the
reinstatement order, the court proceeded to ascertain whether same was due to PALs unjustified act or
omission. In so doing, it upheld the CAs finding that the peculiar predicament of a corporate rehabilitation
rendered it impossible for PAL, under the circumstances, to exercise its option under Article 223 of the
Labor Code. The suspension of claims dictated by rehabilitation procedure therefore constitutes a
justification for PALs failure to exercise the alternative options of actual reinstatement or payroll
reinstatement. Because of this, the Court held that PALs obligation to pay the salaries pending appeal, as
the normal effect of the non-exercise of the options, did not attach. Simply put, petitioners cannot anymore
collect their accrued salaries during the period between the Labor Arbiters order of reinstatement pending
appeal and the NLRC Resolution overturning that of the Labor Arbiter because PALs failure to actually
reinstate them or effect payroll reinstatement was justified by the latters situation of being under corporate
rehabilitation.

Application of the Two-Fold Test to the present case


As previously mentioned, the vital question that needs to be answered in the case at bar is: Can respondents
collect their accrued salaries for the period between the Labor Arbiters order of reinstatement pending
appeal and the NLRC Resolution overturning that of the Labor Arbiter? If in the affirmative, the assailed
CA Decision and Resolution which affirmed the June 3, 2004 Order of Labor Arbiter Castillon denying the
Motion to Quash Writ of Execution and ordering the break-open of petitioners premises as well as the
issuance of the subject Writ of Execution itself, have to be upheld. Otherwise, they need to be set aside as
what petitioner would want us to do.
To come up with the answer to said question, we shall apply the two-fold test used in Garcia.
Was there an actual delay or was the order of reinstatement pending appeal executed prior to its reversal?
As can be recalled, Labor Arbiter Gan issued his Decision ordering respondents reinstatement on
December 21, 2001, copy of which was allegedly received by petitioner on February 21, 2002.35 On March
4, 2002, petitioner appealed said decision to the NLRC. A few days later or on March 11, 2002,
respondents filed an Ex-Parte Motion for Issuance of Writ of Execution relative to the implementation of
the reinstatement aspect of the decision.36 On April 22, 2002, a Writ of Execution was issued by Labor
Arbiter Gan. However, until the issuance of the September 5, 2002 NLRC Resolution overturning Labor
Arbiter Gans Decision, petitioner still failed to reinstate respondents or effect payroll reinstatement in
accordance with Article 223 of the Labor Code. This was what actually prompted respondents to file an ExParte Motion to Set Case for Conference with Motion wherein they also prayed for the issuance of a
computation of the award of backwages and Alias Writ of Execution for its enforcement. It cannot
therefore be denied that there was an actual delay in the execution of the reinstatement aspect of the
Decision of Labor Arbiter Gan prior to the issuance of the NLRC Resolution overturning the same.
Now, the next question is: Was the delay not due to the employers unjustified act or omission? Unlike in
Garcia where PAL, as the employer, was then under corporate rehabilitation, Islriz Trading here did not
undergo rehabilitation or was under any analogous situation which would justify petitioners non-exercise
of the options provided under Article 223 of the Labor Code. Notably, what petitioner gave as reason in not
immediately effecting reinstatement after he was served with the Writ of Execution dated April 22, 2002
was that he would first refer the matter to his counsel as he could not effectively act on the order of
execution without the latters advice.37 He gave his word that upon conferment with his lawyer, he will
inform the Office of the Labor Arbiter of his action on the writ. Petitioner, however, without any
satisfactory reason, failed to fulfill this promise and respondents remained to be not reinstated until the
NLRC resolved petitioners appeal. Evidently, the delay in the execution of respondents reinstatement was
due to petitioners unjustified refusal to effect the same.
Hence, the conclusion is that respondents have the right to collect their accrued salaries during the period
between the Labor Arbiters Decision ordering their reinstatement pending appeal and the NLRC
Resolution overturning the same because petitioners failure to reinstate them either actually or through
payroll was due to petitioners unjustified refusal to effect reinstatement. In order to enforce this, Labor
Arbiter Castillon thus correctly issued the Writ of Execution dated March 9, 2004 as well as the Order
dated June 3, 2004 denying petitioners Motion to Quash Writ of Execution and granting respondents
Urgent Motion for Issuance of Break-Open Order. Consequently, we find no error on the part of the CA in
upholding these issuances and in dismissing the petition for certiorari before it.
Having settled this, we find it unnecessary to discuss further the issues raised by petitioner except the one
with respect to the computation of respondents accrued salaries.
Correctness of the Computation of Respondents Accrued Salaries

Petitioner contends that respondents accrued salaries in the total amount of P1,110,665.60 have no factual
and legal bases. This is because of his obstinate belief that the NLRCs reversal of Labor Arbiter Gans
Decision has effectively removed the basis for such award.
Although we do not agree with petitioners line of reasoning, we, however, find incorrect the computation
made by Fiscal Examiner Trinchera.
In Kimberly Clark (Phils.), Inc., v. Facundo,38 we held that:
[T]he Labor Arbiters order of reinstatement was immediately executory. After receipt of the Labor
Arbiters decision ordering private respondents reinstatement, petitioner has to either re-admit them to
work under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the
payroll. Failing to exercise the options in the alternative, petitioner must pay private respondents
salaries which automatically accrued from notice of the Labor Arbiters order of reinstatement until
its ultimate reversal of the NLRC.
xxxx
x x x [S]ince private respondents reinstatement pending appeal was effective only until its reversal
by the NLRC on April 28, 1999, they are no longer entitled to salaries from May 1, 1999 to March 15,
2001, as ordered by the Labor Arbiter. (Emphasis supplied)
To clarify, respondents are entitled to their accrued salaries only from the time petitioner received a copy of
Labor Arbiter Gans Decision declaring respondents termination illegal and ordering their reinstatement
up to the date of the NLRC Resolution overturning that of the Labor Arbiter. This is because it is only
during said period that respondents are deemed to have been illegally dismissed and are entitled to
reinstatement pursuant to Labor Arbiter Gans Decision which was the one in effect at that time. Beyond
that period, the NLRC Resolution declaring that there was no illegal dismissal is already the one prevailing.
From such point, respondents salaries did not accrue not only because there is no more illegal dismissal to
speak of but also because respondents have not yet been actually reinstated and have not rendered services
to petitioner.
Fiscal Examiner Trincheras computation of respondents accrued salaries covered the period January 1,
2002 to January 30, 2004. As there was no showing when petitioner actually received a copy of Labor
Arbiter Gans decision except for petitioners self-serving claim that he received the same on February 21,
2002,39 we are at a loss as to how Fiscal Examiner Trinchera came up with January 1, 2002 as the
reckoning point for computing respondents accrued wages. We likewise wonder why it covered the period
up to January 30, 2004 when on September 5, 2002, the NLRC already promulgated its Resolution
reversing that of the Labor Arbiter. Hence, we deem it proper to remand the records of this case to the
Labor Arbiter for the correct computation of respondents accrued wages which shall commence from
petitioners date of receipt of the Labor Arbiters Decision ordering reinstatement up to the date of the
NLRC Resolution reversing the same. Considering, however, that petitioners levied properties have
already been awarded to respondents and as alleged by the latter, have also already been sold to third
persons, respondents are ordered to make the proper restitution to petitioner for whatever excess amount
received by them based on the correct computation.
As a final note, since it appears that petitioner still failed to reinstate respondents pursuant to the final and
executory Resolution of the NLRC, respondents proper recourse now is to move for the execution of the
same. It is worthy to note that Labor Arbiter Castillon stated in her questioned Order of June 3, 2004 that
the Writ of Execution she issued is for the sole purpose of enforcing the wages accruing to respondents by
reason of Labor Arbiter Gans order of reinstatement. Indeed, the last paragraph of said writ provides only
for the enforcement of said monetary award and nothing on reinstatement, viz:

NOW THEREFORE, you are commanded to proceed to the premises of respondents Islriz Trading/Victor
Hugo C. Lu located at Brgy. Luciano Trece Martires[,] Cavite City or wherever it may be found to collect
the amount of One Million One Hundred Eleven Thousand Seven Hundred Sixty One pesos & 60/100
(P1,111,761.60) inclusive [of] P1,096.00 as execution fees and turn over the said amount to the NLRC
Cashier for further disposition. In case you fail to collect the said amount in cash, you are directed to cause
the satisfaction of the same out of respondents chattels, movable/immovable properties not exempt from
execution. You are directed to return these Writ One Hundred Eighty (180) days from receipt hereof,
together with the report of compliance.
SO ORDERED.40
WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed March 18, 2005 Decision
and June 16, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 84744 are AFFIRMED. The
records of this case are ordered REMANDED to the Office of the Labor Arbiter for the correct computation
of respondents accrued salaries covering the date of petitioners receipt of the December 21, 2001
Decision of the Labor Arbiter up to the issuance of the NLRC Resolution on September 5, 2002.
Respondents are ordered to make the proper restitution to petitioner for whatever excess amount which may
be
determined to have been received by them based on the correct computation.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 196830

February 29, 2012

CESAR V. GARCIA, CARLOS RAZON, ALBERTO DE GUZMAN, TOMAS RAZON, OMER E.


PALO, RIZALDE VALENCIA, ALLAN BASA, JESSIE GARCIA,JUANITO PARAS,
ALEJANDRO ORAG, ROMMEL PANGAN, RUEL SOLIMAN, and CENEN CANLAPAN,
represented by SERENO, and CESAR V. GARCIA, Petitioners,
vs.
KJ COMMERCIAL and REYNALDO QUE, Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition1 for review on certiorari under Rule 45 of the Rules of Court. The petition challenges the
29 April 2011 Decision2 of the Court of Appeals in CA-G.R. SP No. 115851, affirming the 8 February3 and
25 June4 2010 Resolutions of the National Labor Relations Commission (NLRC) in NLRC-LAC-No. 12004061-08. The NLRC set aside the 30 October 2008 Decision5 of the Labor Arbiter in NLRC Case No.
RAB-III-02-9779-06.
The Facts

Respondent KJ Commercial is a sole proprietorship. It owns trucks and engages in the business of
distributing cement products. On different dates, KJ Commercial employed as truck drivers and truck
helpers petitioners Cesar V. Garcia, Carlos Razon, Alberto De Guzman, Tomas Razon, Omer E. Palo,
Rizalde Valencia, Allan Basa, Jessie Garcia, Juanito Paras, Alejandro Orag, Rommel Pangan, Ruel
Soliman, and Cenen Canlapan (petitioners).
On 2 January 2006, petitioners demanded for a P40 daily salary increase. To pressure KJ Commercial to
grant their demand, they stopped working and abandoned their trucks at the Northern Cement Plant Station
in Sison, Pangasinan. They also blocked other workers from reporting to work.
On 3 February 2006, petitioners filed with the Labor Arbiter a complaint6 for illegal dismissal,
underpayment of salary and non-payment of service incentive leave and thirteenth month pay.
The Labor Arbiters Ruling
In his 30 October 2008 Decision, the Labor Arbiter held that KJ Commercial illegally dismissed
petitioners. The Labor Arbiter held:
After a careful examination and evaluation of the facts and evidences adduced by both parties, we find
valid and cogent reasons to declare that these complainants were illegally dismissed from their work to be
entitled to their separation in lieu of reinstatement equivalent to their salary for one (1) month for every
year of service and backwages from the time that they were terminated on January 2, 2006 up to the date of
this Decision.
We carefully examined the defense set up by the respondents that these complainants were not terminated
from their employment but were the one [sic] who abandoned their work by staging strike and refused to
perform their work as drivers of the trucks owned by the respondents on January 2, 2006, vis--vis, he [sic]
allegations and claims of the complainants that when they asked for an increase of their salary for P40.00,
they were illegally dismissed from their employment without due process, and we gave more credence and
value to the allegations of the complainants that they were illegally dismissed from their employment
without due process and did not abandoned [sic] their work as the respondents wanted to project. We
examined the narration of facts of the respondents in their Position Paper and Supplemental Position Paper
and we concluded that these complainants were actually terminated on January 2, 2006 and did not
abandoned [sic] their jobs as claimed by the respondents when the respondents, in their Position Paper,
admitted that their cement plant was shutdown on January 3, 2006 and when it resumed its operation on
January 7, 2006, they ordered the other drivers to get the trucks in order that the hauling of the cements will
not incur further delay and that their business will not be prejudiced.
Granting for the sake of discussion that indeed these complainants abandoned their work on January 2,
2006, why then that [sic] the cement plant was shutdown on January 3, 2006 and resumed operation on
January 7, 2006, when there are fifty (50) drivers of the respondents and only thirteen (13) of them were
allegedly stopped from working. Further, if these complainants actually abandoned their work, as claimed
by the respondents, they miserably failed to show by substantial evidence that these complainants
deliberately and unjustifiably refused to resume their employment.
xxxx
The acts of these complainants in filing this instant case a month after they were terminated from their
work is more than sufficient evidence to prove and show that they do not have the intention of abandoning
their work. While we acknowledged the offer of the respondents for these complainants to return back to
work during the mandatory conference, the fact that these complainants were illegally terminated and
prevented from performing their work as truck drivers of the respondents and that there was no compliance
with the substantive and procedural due process of terminating an employee, their subsequent offer to

return to work will not cure the defect that there was already illegal dismissal committed against these
complainants.7
KJ Commercial appealed to the NLRC. It filed before the NLRC a motion to reduce bond and posted a
P50,000 cash bond.
The NLRCs Ruling
In its 9 March 2009 Decision,8 the NLRC dismissed the appeal. The NLRC held:
Filed with respondents-appellants Appeal Memorandum is a Motion to Reduce Appeal Bond and a cash
bond of P50,000.00 only. x x x
We find no merit on [sic] the respondents-appellants Motion. It must be stressed that under Section 6, Rule
VI of the 2005 Revised Rules of this Commission, a motion to reduce bond shall only be entertained when
the following requisites concur:
1. The motion is founded on meritorious ground; and
2. A bond of reasonable amount in relation to the monetary award is posted.
We note that while respondents-appellants claim that they could not possibly produce enough cash for the
required appeal bond, they are unwilling to at least put up a property to secure a surety bond.
Understandably, no surety agency would normally accept a surety obligation involving a substantial
amount without a guarantee that it would be indemnified in case the surety bond posted is forfeited in favor
of a judgment creditor. Respondents-appellants insinuation that no surety company can finish the
processing of a surety bond in ten days time is not worthy of belief as it is contrary to ordinary business
experience. What is obvious is that respondents-appellants are not willing to accept the usual conditions of
a surety agreement that is why no surety bond could be processed. The reduction of the required bond is not
a matter of right o[n] the part of the movant but lies within the sound discretion of the NLRC upon showing
of meritorious grounds x x x. In this case, we find that the instant motion is not founded on a meritorious
ground. x x x Moreover, we note that the P50,000.00 cash bond posted by respondents-appellants which
represents less than two (2) percent of the monetary award is dismally disproportionate to the monetary
award of P2,612,930.00 and that the amount of bond posted by respondents-appellants is not reasonable in
relation to the monetary award. x x x A motion to reduce bond that does not satisfy the conditions required
under NLRC Rules shall not stop the running of the period to perfect an appeal x x x.
Conversely, respondents-appellants failed to perfect an appeal for failure to post the required bond.9
KJ Commercial filed a motion10 for reconsideration and posted a P2,562,930 surety bond. In its 8 February
2010 Resolution, the NLRC granted the motion and set aside the Labor Arbiters 30 October 2008
Decision. The NLRC held:
x x x [T]his Commission opts to resolve and grant the Motion for Reconsideration filed by respondentappellant seeking for reconsideration of Our Decision promulgated on March 9, 2009 dismissing the
Appeal for non-perfection, there being an honest effort by the appellants to comply with putting up the full
amount of the required appeal bond. Moreover, considering the merit of the appeal, by granting the motion
for reconsideration, the paramount interest of justice is better served in the resolution of this case.
xxxx
Going over the record of the case, this Commission noted that in respondents Supplemental Position
Paper, in denying complainants imputation of illegal dismissal, respondents categorically alleged "..[.] that

complainants were not illegally dismissed but on January 2, 2006, they abandoned their work by means of
[]work stoppage[] or they engaged in an []illegal strike[] when they demanded for a higher rate..[.] that
while their respective assigned trucks were all in the cement plant ready to be loaded, complainants
paralyzed respondents hauling or trucking operation by staging a work stoppage at the premises of KJ
Commercial compound by further blocking their co-drivers not to report for work." We have observed that
despite these damaging allegations, complainants never bothered to dispute nor contradicted these material
allegations. Complainants silence on these material allegations consequently lends support to respondentsappellants[] contention that complainants were never dismissed at all but had stopped driving the hauler
truck assigned to each of them when their demand for salary increase in the amount they wish was not
granted by respondents-appellants.
Moreover, contrary to the findings of the Labor Arbiter, the purported shutdown of the cement plant being
cited by the Labor Arbiter a quo as the principal cause of complainants purported dismissal cannot be
attributed to respondents because it was never established by evidence that respondents were the owner
[sic] of the cement plant where complainants as truck drivers were hauling cargoes of cement with trucks
owned by respondents whose business is confined to that of a cement distributor and cargo truck hauler.
Based on the undisputed account of respondents-appellants, it appears that the cement plant was compelled
to shut down because the hauling or trucking operation was paralyzed due to complainants resort to work
stoppage by refusing to drive their hauler trucks despite the order of the management for them to get the
trucks which blockaded the cement plant.
Furthermore, a perusal of the complainants position paper and amended position paper failed to allege the
overt acts showing how they were in fact dismissed on 02 January 2006. The complainants had not even
alleged that they were specifically told that they were dismissed after they demanded for a salary increase
or any statement to that effect. Neither had they alleged that they were prevented from reporting for work.
This only shows there was never a dismissal to begin with.
xxxx
We cannot affirm the Labor Arbiters conclusions absent showing a fact of termination or circumstances
under which the dismissal was effected. Though only substantial evidence is required in proceedings before
the Labor Arbiter to support a litigants claim, the same still requires evidence separate and different, and
something which supports the allegations affirmatively made. The complainants claim that they were
dismissed on 02 January 2006, absent proof thereof or any supporting evidence thereto is at best self
serving.11
Petitioners filed a motion for reconsideration. In its 25 June 2010 Resolution, the NLRC denied the motion
for lack of merit. The NLRC held:
We stress that it is within the power and discretion of this Commission to grant or deny a motion to reduce
appeal bond. Having earlier denied the motion to reduce bond of the respondents-appellants, this
Commission is not precluded from reconsidering its earlier Decision on second look when it finds
meritorious ground to serve the ends of justice. Settled is the norm in the matter of appeal bonds that letterperfect rules must yield to the broader interest of substantial justice x x x. In this case, the Decision of the
Labor Arbiter had not really become final and executory as respondents timely filed a Memorandum of
Appeal with a Motion to Reduce Appeal Bond and a partial appeal bond. Although the respondents[]
appeal was dismissed, in the earlier decision, the same Decision was later reconsidered on considerations
that the Labor Arbiter committed palpable errors in his findings and the monetary awards to the appellees
are secured by a partial bond and then later, by an appeal bond for the full amount of the monetary
awards.12
Petitioners filed with the Court of Appeals a petition13 for certiorari under Rule 65 of the Rules of Court.
The Court of Appeals Ruling

In its 29 April 2011 Decision, the Court of Appeals dismissed the petition and affirmed the NLRCs 8
February and 25 June 2010 Resolutions. The Court of Appeals held:
After scrupulously examining the contrasting positions of the parties, and the conflicting decisions of the
labor tribunals, We find the records of the case bereft of evidence to substantiate the conclusions reached
by the Labor Arbiter that petitioners were illegally dismissed from employment.
While petitioners vehemently argue that they were unlawfully separated from work, records are devoid of
evidence to show the fact of dismissal. Neither was there any evidence offered by petitioners to prove that
they were no longer allowed to perform their duties as truck drivers or they were prevented from entering
KJ Commercials premises, except for their empty and general allegations that they were illegally
dismissed from employment. Such bare and sweeping statement contains nothing but empty imputation of a
fact that could hardly be given any evidentiary weight by this Court. At the very least, petitioners should
have detailed or elaborated the circumstances surrounding their dismissal or substantiate their claims by
submitting evidence to butress such contention. Without a doubt, petitioners allegation of illegal dismissal
has no leg to stand on. Accordingly, they should not expect this Court to swallow their asseveration hook,
line and sinker in the absence of supporting proof. Allegation that one was illegally dismissed from work is
not a magic word that once invoked will automatically sway this Court to rule in favor of the party
invoking it. There must first be substantial evidence to prove that indeed there was illegal dismissal before
the employer bears the burden to prove the contrary.14
Hence, the present petition.
The Issue
Petitioners raise as issue that the Labor Arbiters 30 October 2008 Decision became final and executory;
thus, the NLRCs 8 February and 25 June 2010 Resolutions and the Court of Appeals 29 April 2011
Decision are void for lack of jurisdiction. Petitioners claim that KJ Commercial failed to perfect an appeal
since the motion to reduce bond did not stop the running of the period to appeal.
The Courts Ruling
The petition is unmeritorious.
When petitioners filed with the Court of Appeals a petition for certiorari, they did not raise as issue that the
Labor Arbiters 30 October 2008 Decision had become final and executory. They enumerated the issues in
their petition:
GROUNDS FOR THE PETITION
I.
THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK
OR EXCESS OF JURISDICTION WHEN IT REVERSED THE DECISION OF THE LABOR
ARBITER A QUO AND PRONOUNCED THAT THE PETITIONERS WERE NOT
ILLEGALLY DISMISSED DESPITE CLEAR AND SUBSTANTIAL EVIDENCE ON THE
RECORDS SHOWING THAT COMPLAINANTS WERE REGULAR EMPLOYEES TO BE
ENTITLED TO SECURITY OF TENURE AND WERE ILLEGALLY DISMISSED FROM
THEIR EMPLOYMENT.
II.

THE NLRC HAS COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO


LACK OR EXCESS OF JURISDICTION WHEN IT GIVE [sic] MUCH WEIGHT TO PRIVATE
RESPONDENTS[] BASELESS ALLEGATIONS IN ITS [sic] MOTION FOR
RECONSIDERATION WHEN IT [sic] ALLEGED THAT COMPLAINANTS HAD
ABANDONED THEIR WORK BY MEANS OF "WORK STOPPAGE" OR THEY ENGAGED
IN AN "ILLEGAL STRIKE" WHEN THEY DEMANDED FOR A HIGHER RATE.
III.
THE NLRC GRAVELY ERRED TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION
WHEN IT CONCLUDED THAT "COMPLAINANTS PARALYZED HAULING OR
TRUCKING OPERATION BY STAGING A WORK STOPPAGE AT THE PREMISES OF KJ
COMMERCIAL COMPOUND BY FURTHER BLOCKING THEIR CO-DRIVERS NOT TO
REPORT FOR WORK" WITHOUT A SINGLE EVIDENCE TO SUPPORT SUCH
ALLEGATIONS OF PRIVATE RESPONDENTS.
IV.
THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT THE PRINCIPAL CAUSE
OF COMPLAINANTS DISMISSAL WAS DUE TO THE PURPORTED SHUTDOWN OF THE
CEMENT PLANT CITED BY THE LABOR ARBITER IN HIS DECISION.15
Accordingly, the Court of Appeals limited itself to the resolution of the enumerated issues. In its 29 April
2011 Decision, the Court of Appeals held:
Hence, petitioners seek recourse before this Court via this Petition for Certiorari challenging the NLRC
Resolutions and raising the following issues:
I.
THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK
OR EXCESS OF JURISDICTION WHEN IT REVERSED THE DECISION OF THE LABOR
ARBITER A QUO AND PRONOUNCED THAT PETITIONERS WERE NOT ILLEGALLY
DISMISSED DESPITE CLEAR AND SUBSTANTIAL EVIDENCE ON THE RECORDS
SHOWING THAT PETITIONERS WERE REGULAR EMPLOYEES TO BE ENTITLED TO
SECURITY OF TENURE AND WERE ILLEGALLY DISMISSED FROM THEIR
EMPLOYMENT.
II.
THE NLRC HAS COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO
LACK OR EXCESS OF JURISDICTION WHEN IT GAVE MUCH WEIGHT TO PRIVATE
RESPONDENTS BASELESS ALLEGATIONS IN ITS [sic] MOTION FOR
RECONSIDERATION WHEN IT [sic] ALLEGED THAT PETITIONERS HAD ABANDONED
THEIR WORK BY MEANS OF "WORK STOPPAGE" OR THEY ENGAGED IN AN
"ILLEGAL STRIKE" WHEN THEY DEMANDED FOR A HIGHER RATE.
III.
THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT "PETITIONERS
PARALYZED HAULING AND TRUCKING OPERATION BY STAGING A WORK
STOPPAGE AT THE PREMISES OF KJ COMMERCIAL COMPOUND BY FURTHER

BLOCKING THEIR CO-DRIVERS NOT TO REPORT FOR WORK" WITHOUT A SINGLE


EVIDENCE TO SUPPORT SUCH ALLEGATIONS OF PRIVATE RESPONDENTS.
IV.
THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT THE PRINCIPAL CAUSE
OF PETITIONERS DISMISSAL WAS DUE TO THE PURPORTED SHUTDOWN OF THE
CEMENT PLANT CITED BY THE LABOR ARBITER IN HIS DECISION.16
Petitoners cannot, for the first time, raise as issue in their petition filed with this Court that the Labor
Arbiters 30 October 2008 Decision had become final and executory. Points of law, theories and arguments
not raised before the Court of Appeals will not be considered by this Court. Otherwise, KJ Commercial will
be denied its right to due process. In Tolosa v. National Labor Relations Commission,17 the Court held:
Petitioner contends that the labor arbiters monetary award has already reached finality, since private
respondents were not able to file a timely appeal before the NLRC.
This argument cannot be passed upon in this appeal, because it was not raised in the tribunals a quo.
Well-settled is the rule that issues not raised below cannot be raised for the first time on appeal.
Thus, points of law, theories, and arguments not brought to the attention of the Court of Appeals
need not and ordinarily will not be considered by this Court. Petitioners allegation cannot be
accepted by this Court on its face; to do so would be tantamount to a denial of respondents right to
due process.
Furthermore, whether respondents were able to appeal on time is a question of fact that cannot be
entertained in a petition for review under Rule 45 of the Rules of Court. In general, the jurisdiction of this
Court in cases brought before it from the Court of Appeals is limited to a review of errors of law allegedly
committed by the court a quo.18 (Emphasis supplied)
KJ Commercials filing of a motion to reduce bond and delayed posting of the P2,562,930 surety bond did
not render the Labor Arbiters 30 October 2008 Decision final and executory. The Rules of Procedure of
the NLRC allows the filing of a motion to reduce bond subject to two conditions: (1) there is meritorious
ground, and (2) a bond in a reasonable amount is posted. Section 6 of Article VI states:
No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a
bond in a reasonable amount in relation to the monetary award.
The mere filing of the motion to reduce bond without compliance with the requisites in the preceding
paragraph shall not stop the running of the period to perfect an appeal.
The filing of a motion to reduce bond and compliance with the two conditions stop the running of the
period to perfect an appeal. In McBurnie v. Ganzon,19 the Court held:
x x x [T]he bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the
motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to
the monetary award is posted by the appellant, otherwise the filing of the motion to reduce bond shall not
stop the running of the period to perfect an appeal.20
The NLRC has full discretion to grant or deny the motion to reduce bond,21 and it may rule on the motion
beyond the 10-day period within which to perfect an appeal. Obviously, at the time of the filing of the
motion to reduce bond and posting of a bond in a reasonable amount, there is no assurance whether the
appellants motion is indeed based on "meritorious ground" and whether the bond he or she posted is of a
"reasonable amount." Thus, the appellant always runs the risk of failing to perfect an appeal.

Section 2, Article I of the Rules of Procedure of the NLRC states that, "These Rules shall be liberally
construed to carry out the objectives of the Constitution, the Labor Code of the Philippines and other
relevant legislations, and to assist the parties in obtaining just, expeditious and inexpensive resolution and
settlement of labor disputes." In order to give full effect to the provisions on motion to reduce bond, the
appellant must be allowed to wait for the ruling of the NLRC on the motion even beyond the 10-day period
to perfect an appeal. If the NLRC grants the motion and rules that there is indeed meritorious ground and
that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the
motion, the appellant may still file a motion for reconsideration as provided under Section 15, Rule VII of
the Rules. If the NLRC grants the motion for reconsideration and rules that there is indeed meritorious
ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC
denies the motion, then the decision of the labor arbiter becomes final and executory.
In the present case, KJ Commercial filed a motion to reduce bond and posted a P50,000 cash bond. When
the NLRC denied its motion, KJ Commercial filed a motion for reconsideration and posted the full
P2,562,930 surety bond. The NLRC then granted the motion for reconsideration.
In any case, the rule that the filing of a motion to reduce bond shall not stop the running of the period to
perfect an appeal is not absolute. The Court may relax the rule. In Intertranz Container Lines, Inc. v.
Bautista,22 the Court held:
Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award may be
perfected only upon the posting of a cash or surety bond. The Court, however, has relaxed this requirement
under certain exceptional circumstances in order to resolve controversies on their merits. These
circumstances include: (1) fundamental consideration of substantial justice; (2) prevention of miscarriage
of justice or of unjust enrichment; and (3) special circumstances of the case combined with its legal merits,
and the amount and the issue involved.23
In Rosewood Processing, Inc. v. NLRC,24 the Court held:
The perfection of an appeal within the reglementary period and in the manner prescribed by law is
jurisdictional, and noncompliance with such legal requirement is fatal and effectively renders the judgment
final and executory. The Labor Code provides:
ART. 223. Appeal. Decisions, awards or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders.
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from.
Indisputable is the legal doctrine that the appeal of a decision involving a monetary award in labor cases
may be perfected "only upon the posting of a cash or surety bond." The lawmakers intended the posting of
the bond to be an indispensable requirement to perfect an employers appeal.
However, in a number of cases, this Court has relaxed this requirement in order to bring about the
immediate and appropriate resolution of controversies on the merits. Some of these cases include: "(a)
counsels reliance on the footnote of the notice of the decision of the labor arbiter that the aggrieved party
may appeal within ten (10) working days; (b) fundamental consideration of substantial justice; (c)
prevention of miscarriage of justice or of unjust enrichment, as where the tardy appeal is from a decision
granting separation pay which was already granted in an earlier final decision; and (d) special
circumstances of the case combined with its legal merits or the amount and the issue involved."

In Quiambao vs. National Labor Relations Commission, this Court ruled that a relaxation of the appeal
bond requirement could be justified by substantial compliance with the rule.
In Globe General Services and Security Agency vs. National Labor Relations Commission, the Court
observed that the NLRC, in actual practice, allows the reduction of the appeal bond upon motion of the
appellant and on meritorious grounds; hence, petitioners in that case should have filed a motion to reduce
the bond within the reglementary period for appeal.
That is the exact situation in the case at bar. Here, petitioner claims to have received the labor arbiters
Decision on April 6, 1993. On April 16, 1993, it filed, together with its memorandum on appeal and notice
of appeal, a motion to reduce the appeal bond accompanied by a surety bond for fifty thousand pesos issued
by Prudential Guarantee and Assurance, Inc. Ignoring petitioners motion (to reduce bond), Respondent
Commission rendered its assailed Resolution dismissing the appeal due to the late filing of the appeal bond.
The solicitor general argues for the affirmation of the assailed Resolution for the sole reason that the appeal
bond, even if it was filed on time, was defective, as it was not in an amount "equivalent to the monetary
award in the judgment appealed from." The Court disagrees.
We hold that petitioners motion to reduce the bond is a substantial compliance with the Labor Code. This
holding is consistent with the norm that letter-perfect rules must yield to the broader interest of substantial
justice.25
In Ong v. Court of Appeals,26 the Court held that the bond requirement on appeals may be relaxed when
there is substantial compliance with the Rules of Procedure of the NLRC or when the appellant shows
willingness to post a partial bond. The Court held that, "While the bond requirement on appeals involving
monetary awards has been relaxed in certain cases, this can only be done where there was substantial
compliance of the Rules or where the appellants, at the very least, exhibited willingness to pay by posting a
partial bond."27
In the present case, KJ Commercial showed willingness to post a partial bond.1wphi1 In fact, it posted a
P50,000 cash bond. In Ong, the Court held that, "Petitioner in the said case substantially complied with the
rules by posting a partial surety bond of fifty thousand pesos issued by Prudential Guarantee and
Assurance, Inc. while his motion to reduce appeal bond was pending before the NLRC."28
Aside from posting a partial bond, KJ Commercial immediately posted the full amount of the bond when it
filed its motion for reconsideration of the NLRCs 9 March 2009 Decision. In Dr. Postigo v. Philippine
Tuberculosis Society, Inc.,29 the Court held:
x x x [T]he respondent immediately submitted a supersedeas bond with its motion for reconsideration of
the NLRC resolution dismissing its appeal. In Ong v. Court of Appeals, we ruled that the aggrieved party
may file the appeal bond within the ten-day reglementary period following the receipt of the resolution of
the NLRC to forestall the finality of such resolution. Hence, while the appeal of a decision involving a
monetary award in labor cases may be perfected only upon the posting of a cash or surety bond and the
posting of the bond is an indispensable requirement to perfect such an appeal, a relaxation of the appeal
bond requirement could be justified by substantial compliance with the rule.30
WHEREFORE, the Court DENIES the petition and AFFIRMS the 29 April 2011 Decision of the Court
of Appeals in CA-G.R. SP No. 115851.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 152494

September 22, 2004

MARIANO ONG, doing business under the name and style MILESTONE METAL
MANUFACTURING, petitioner,
vs.
THE COURT OF APPEALS, CONRADO DABAC, BERNABE TAYACTAC, MANUEL
ABEJUELLA, LOLITO ABELONG, RONNIE HERRERO, APOLLO PAMIAS, JAIME
ONGUTAN, NOEL ATENDIDO, CARLOS TABBAL, JOEL ATENDIDO, BIENVENIDO EBBER,
RENATO ABEJUELLA, LEONILO ATENDIDO, JR., LODULADO FAA and JAIME LOZADA,
respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari assailing the decision1 of the Court of Appeals in CA-G.R. SP No.
62129, dated October 10, 2001, which dismissed the petition for certiorari for lack of merit, as well as the
resolution,2 dated March 7, 2002, denying the motion for reconsideration.
Petitioner is the sole proprietor of Milestone Metal Manufacturing (Milestone), which manufactures,
among others, wearing apparels, belts, and umbrellas.3 Sometime in May 1998, the business suffered very
low sales and productivity because of the economic crisis in the country. Hence, it adopted a rotation
scheme by reducing the workdays of its employees to three days a week or less for an indefinite period.4
On separate dates, the 15 respondents filed before the National Labor Relations Commission (NLRC)
complaints for illegal dismissal, underpayment of wages, non-payment of overtime pay, holiday pay,
service incentive leave pay, 13th month pay, damages, and attorneys fees against petitioner. These were
consolidated and assigned to Labor Arbiter Manuel Manasala.
Petitioner claimed that 9 of the 15 respondents were not employees of Milestone but of Protone Industrial
Corporation which, however, stopped its operation due to business losses. Further, he claims that
respondents Manuel Abuela, Lolita Abelong, Ronnie Herrero, Carlos Tabbal, Conrado Dabac, and
Lodualdo Faa were not dismissed from employment; rather, they refused to work after the rotation scheme
was adopted. Anent their monetary claims, petitioner presented documents showing that he paid
respondents minimum wage, 13th month pay, holiday pay, and contributions to the SSS, Medicare, and
Pag-Ibig Funds.5
On November 25, 1999, the Labor Arbiter rendered a decision awarding to the respondents the aggregate
amount of P1,111,200.40 representing their wage differential, holiday pay, service incentive leave pay and
13th month pay, plus 10% thereof as attorneys fees. Further, petitioner was ordered to pay the respondents
separation pay equivalent to month salary for every year of service due to the indefiniteness of the
rotation scheme and strained relations caused by the filing of the complaints.6
Petitioner filed with the NLRC a notice of appeal with a memorandum of appeal and paid the docket fees
therefor. However, instead of posting the required cash or surety bond, he filed a motion to reduce the
appeal bond. The NLRC, in a resolution dated April 28, 2000, denied the motion to reduce bond and

dismissed the appeal for failure to post cash or surety bond within the reglementary period.7 Petitioners
motion for reconsideration was likewise denied.8
Petitioner filed a petition for certiorari with the Court of Appeals alleging that the NLRC acted with grave
abuse of discretion in dismissing the appeal for non-perfection of appeal although a motion to reduce
appeal bond was seasonably filed. However, the petition was dismissed and thereafter the motion for
reconsideration was likewise dismissed for lack of merit.9
Hence, this petition for review on the following assignment of errors:
I.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR AND
GRAVE ABUSE OF DISCRETION IN AFFIRMING THE DECISION OF THE NLRC
DISMISSING THE APPEAL OF PETITIONERS (sic) FOR NON-PERFECTION WHEN A
MOTION TO REDUCE APPEAL BOND WAS SEASONABLY FILED WHICH IS ALLOWED
BY THE RULES OF PROCEDURE OF THE NLRC.
II.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR AND
GRAVE ABUSE OF DISCRETION IN AFFIRMING THE DISMISSAL BY NLRC OF
PETITIONERS APPEAL AND IN EFFECT UPHOLDING THE ERRONEOUS DECISION OF
THE LABOR ARBITER AWARDING SEPARATION PAY TO PRIVATE RESPONDENTS
DESPITE THE FINDING THAT THERE WAS NO ILLEGAL DISMISSAL MADE BY
MILESTONE.
III.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN
AFFIRMING THE NLRCS DISMISSAL OF PETITIONERS APPEAL AND IN EFFECT
UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER THAT
PETITIONER MILESTONE HAS VIOLATED THE MINIMUM WAGE LAW AND THAT
PRIVATE RESPONDENTS WERE UNDERPAID.
IV.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN
AFFIRMING THE NLRCS DISMISSAL OF PETITIONERS APPEAL AND IN EFFECT
UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER THAT
PETITIONER MILESTONE HAS NOT PAID PRIVATE RESPONDENTS THEIR SERVICE
INCENTIVE LEAVE PAY, 13th MONTH PAY, AND HOLIDAY PAY.
V.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN
AFFIRMING THE NLRCS DISMISSAL OF PETITIONERS APPEAL AND IN EFFECT
UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER THAT THE
EVIDENCE SUBMITTED BY PRIVATE RESPONDENTS IN SUPPORT OF THEIR CLAIMS
ARE NOT SELF-SERVING, IRRELEVANT AND IMMATERIAL TO THE FACTS AND LAW
IN ISSUE IN THIS CASE.10
The petition lacks merit.

Time and again it has been held that the right to appeal is not a natural right or a part of due process, it is
merely a statutory privilege, and may be exercised only in the manner and in accordance with the
provisions of law. The party who seeks to avail of the same must comply with the requirements of the rules.
Failing to do so, the right to appeal is lost.11
Article 223 of the Labor Code, as amended, sets forth the rules on appeal from the Labor Arbiters
monetary award:
ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders. x x x.
xxx

xxx

xxx

In case of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in the judgment
appealed from. (Emphasis ours)
The pertinent provisions of Rule VI of the New Rules of Procedure of the NLRC,12 which were in effect
when petitioner filed his appeal, provide:
Section 1. Periods of Appeal. Decisions, awards or orders of the Labor Arbiter and the POEA
Administrator shall be final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions, awards or orders of the Labor
Arbiter x x x.
xxx

xxx

xxx

Section 3. Requisites for Perfection of Appeal. (a) The appeal shall be filed within the
reglementary period as provided in Section 1 of this Rule; shall be under oath with proof of
payment of the required appeal fee and the posting of a cash or surety bond as provided in Section
5 of this Rule; shall be accompanied by a memorandum of appeal which shall state the grounds
relied upon and the arguments in support thereof; the relief prayed for; and a statement of the date
when the appellant received the appealed decision, order or award and proof of service on the
other party of such appeal.
A mere notice of appeal without complying with the other requisite aforestated shall not stop the
running of the period for perfecting an appeal.
xxx

xxx

xxx

Section 6. Bond. In case the decision of the Labor Arbiter, the Regional Director or his duly
authorized Hearing Officer involves a monetary award, an appeal by the employer shall be
perfected only upon the posting of a cash or surety bond, which shall be in effect until final
disposition of the case, issued by a reputable bonding company duly accredited by the
Commission or the Supreme Court in an amount equivalent to the monetary award, exclusive of
damages and attorneys fees.
The employer, his counsel, as well as the bonding company, shall submit a joint declaration under oath
attesting that the surety bond posted is genuine.

The Commission may, in justifiable cases and upon Motion of the Appellant, reduce the amount of
the bond. The filing of the motion to reduce bond shall not stop the running of the period to
perfect appeal. (Emphasis ours)
In the case at bar, petitioner received the decision of the Labor Arbiter on January 6, 2000. He filed his
notice of appeal with memorandum of appeal and paid the corresponding appeal fees on January 17, 2000,
the last day of filing the appeal. However, in lieu of the required cash or surety bond, he filed a motion to
reduce bond alleging that the amount of P1,427,802,04 as bond is "unjustified and prohibitive" and prayed
that the same be reduced to a "reasonable level." The NLRC denied the motion and consequently dismissed
the appeal for non-perfection. Petitioner now contends that he was deprived of the chance to post bond
because the NLRC took 102 days to decide his motion.
Petitioners argument is unavailing.
While, Section 6, Rule VI of the NLRCs New Rules of Procedure allows the Commission to reduce the
amount of the bond, the exercise of the authority is not a matter of right on the part of the movant but lies
within the sound discretion of the NLRC upon showing of meritorious grounds.13 Petitioners motion reads:
1. The appeal bond which respondents-appellants will post in this case is P1,427,802.04. They are
precisely questioning this amount as being unjustified and prohibitive under the premises.
2. The amount of this appeal bond must be reduced to a reasonable level by this Honorable Office.
WHEREFORE, in view thereof, it is respectfully prayed of this Honorable Office that the appeal
bond of P1,427,802.04 be reduced.14
After careful scrutiny of the motion to reduce appeal bond, we agree with the Court of Appeals that the
NLRC did not act with grave abuse of discretion when it denied petitioners motion for the same failed to
either elucidate why the amount of the bond was "unjustified and prohibitive" or to indicate what would be
a "reasonable level."15
In Calabash Garments, Inc. v. NLRC,16 it was held that "a substantial monetary award, even if it runs into
millions, does not necessarily give the employer-appellant a "meritorious case" and does not automatically
warrant a reduction of the appeal bond."
Even granting arguendo that petitioner has meritorious grounds to reduce the appeal bond, the result would
have been the same since he failed to post cash or surety bond within the prescribed period.
The above-cited provisions explicitly provide that an appeal from the Labor Arbiter to the NLRC must be
perfected within ten calendar days from receipt of such decisions, awards or orders of the Labor Arbiter. In
a judgment involving a monetary award, the appeal shall be perfected only upon (1) proof of payment of
the required appeal fee; (2) posting of a cash or surety bond issued by a reputable bonding company; and
(3) filing of a memorandum of appeal. A mere notice of appeal without complying with the other requisites
mentioned shall not stop the running of the period for perfection of appeal.17 The posting of cash or surety
bond is not only mandatory but jurisdictional as well, and non-compliance therewith is fatal and has the
effect of rendering the judgment final and executory.18 This requirement is intended to discourage
employers from using the appeal to delay, or even evade, their obligation to satisfy their employees just
and lawful claims.19
The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal
by the employer is underscored by the provision that an appeal by the employer may be perfected only
upon the posting of a cash or surety bond. The word "only" makes it perfectly clear that the lawmakers

intended the posting of a cash or surety bond by the employer to be the exclusive means by which an
employers appeal may be perfected.20
The fact that the NLRC took 102 days to resolve the motion will not help petitioners case. The NLRC
Rules clearly provide that "the filing of the motion to reduce bond shall not stop the running of the period
to perfect appeal." Petitioner should have seasonably filed the appeal bond within the ten-day reglementary
period following the receipt of the order, resolution or decision of the NLRC to forestall the finality of such
order, resolution or decision. In the alternative, he should have paid only a moderate and reasonable sum
for the premium, as was held in Biogenerics Marketing and Research Corporation v. NLRC,21 to wit:
x x x The mandatory filing of a bond for the perfection of an appeal is evident from the
aforequoted provision that the appeal may be perfected only upon the posting of cash or surety
bond. It is not an excuse that the over P2 million award is too much for a small business
enterprise, like the petitioner company, to shoulder. The law does not require its outright
payment, but only the posting of a bond to ensure that the award will be eventually paid
should the appeal fail. What petitioners have to pay is a moderate and reasonable sum for
the premium for such bond. (Emphasis ours)
While the bond requirement on appeals involving monetary awards has been relaxed in certain cases, this
can only be done where there was substantial compliance of the Rules or where the appellants, at the very
least, exhibited willingness to pay by posting a partial bond.22 Petitioners reliance on the case of Rosewood
Processing, Inc. v. NLRC23 is misplaced. Petitioner in the said case substantially complied with the rules by
posting a partial surety bond of fifty thousand pesos issued by Prudential Guarantee and Assurance, Inc.
while his motion to reduce appeal bond was pending before the NLRC.
In the case at bar, petitioner did not post a full or partial appeal bond within the prescribed period, thus, no
appeal was perfected from the decision of the Labor Arbiter. For this reason, the decision sought to be
appealed to the NLRC had become final and executory and therefore immutable. Clearly, then, the NLRC
has no authority to entertain the appeal, much less to reverse the decision of the Labor Arbiter. Any
amendment or alteration made which substantially affects the final and executory judgment is null and void
for lack of jurisdiction, including the entire proceeding held for that purpose.24
WHEREFORE, in view of the foregoing, the petition is DENIED. The assailed decision of the Court of
Appeals in CA-G.R. SP No. 62129, dated October 10, 2001, dismissing the petition for certiorari for lack of
merit, is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 152494

September 22, 2004

MARIANO ONG, doing business under the name and style MILESTONE METAL
MANUFACTURING, petitioner,
vs.
THE COURT OF APPEALS, CONRADO DABAC, BERNABE TAYACTAC, MANUEL
ABEJUELLA, LOLITO ABELONG, RONNIE HERRERO, APOLLO PAMIAS, JAIME

ONGUTAN, NOEL ATENDIDO, CARLOS TABBAL, JOEL ATENDIDO, BIENVENIDO EBBER,


RENATO ABEJUELLA, LEONILO ATENDIDO, JR., LODULADO FAA and JAIME LOZADA,
respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari assailing the decision1 of the Court of Appeals in CA-G.R. SP No.
62129, dated October 10, 2001, which dismissed the petition for certiorari for lack of merit, as well as the
resolution,2 dated March 7, 2002, denying the motion for reconsideration.
Petitioner is the sole proprietor of Milestone Metal Manufacturing (Milestone), which manufactures,
among others, wearing apparels, belts, and umbrellas.3 Sometime in May 1998, the business suffered very
low sales and productivity because of the economic crisis in the country. Hence, it adopted a rotation
scheme by reducing the workdays of its employees to three days a week or less for an indefinite period.4
On separate dates, the 15 respondents filed before the National Labor Relations Commission (NLRC)
complaints for illegal dismissal, underpayment of wages, non-payment of overtime pay, holiday pay,
service incentive leave pay, 13th month pay, damages, and attorneys fees against petitioner. These were
consolidated and assigned to Labor Arbiter Manuel Manasala.
Petitioner claimed that 9 of the 15 respondents were not employees of Milestone but of Protone Industrial
Corporation which, however, stopped its operation due to business losses. Further, he claims that
respondents Manuel Abuela, Lolita Abelong, Ronnie Herrero, Carlos Tabbal, Conrado Dabac, and
Lodualdo Faa were not dismissed from employment; rather, they refused to work after the rotation scheme
was adopted. Anent their monetary claims, petitioner presented documents showing that he paid
respondents minimum wage, 13th month pay, holiday pay, and contributions to the SSS, Medicare, and
Pag-Ibig Funds.5
On November 25, 1999, the Labor Arbiter rendered a decision awarding to the respondents the aggregate
amount of P1,111,200.40 representing their wage differential, holiday pay, service incentive leave pay and
13th month pay, plus 10% thereof as attorneys fees. Further, petitioner was ordered to pay the respondents
separation pay equivalent to month salary for every year of service due to the indefiniteness of the
rotation scheme and strained relations caused by the filing of the complaints.6
Petitioner filed with the NLRC a notice of appeal with a memorandum of appeal and paid the docket fees
therefor. However, instead of posting the required cash or surety bond, he filed a motion to reduce the
appeal bond. The NLRC, in a resolution dated April 28, 2000, denied the motion to reduce bond and
dismissed the appeal for failure to post cash or surety bond within the reglementary period.7 Petitioners
motion for reconsideration was likewise denied.8
Petitioner filed a petition for certiorari with the Court of Appeals alleging that the NLRC acted with grave
abuse of discretion in dismissing the appeal for non-perfection of appeal although a motion to reduce
appeal bond was seasonably filed. However, the petition was dismissed and thereafter the motion for
reconsideration was likewise dismissed for lack of merit.9
Hence, this petition for review on the following assignment of errors:
I.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR AND
GRAVE ABUSE OF DISCRETION IN AFFIRMING THE DECISION OF THE NLRC

DISMISSING THE APPEAL OF PETITIONERS (sic) FOR NON-PERFECTION WHEN A


MOTION TO REDUCE APPEAL BOND WAS SEASONABLY FILED WHICH IS ALLOWED
BY THE RULES OF PROCEDURE OF THE NLRC.
II.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR AND
GRAVE ABUSE OF DISCRETION IN AFFIRMING THE DISMISSAL BY NLRC OF
PETITIONERS APPEAL AND IN EFFECT UPHOLDING THE ERRONEOUS DECISION OF
THE LABOR ARBITER AWARDING SEPARATION PAY TO PRIVATE RESPONDENTS
DESPITE THE FINDING THAT THERE WAS NO ILLEGAL DISMISSAL MADE BY
MILESTONE.
III.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN
AFFIRMING THE NLRCS DISMISSAL OF PETITIONERS APPEAL AND IN EFFECT
UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER THAT
PETITIONER MILESTONE HAS VIOLATED THE MINIMUM WAGE LAW AND THAT
PRIVATE RESPONDENTS WERE UNDERPAID.
IV.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN
AFFIRMING THE NLRCS DISMISSAL OF PETITIONERS APPEAL AND IN EFFECT
UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER THAT
PETITIONER MILESTONE HAS NOT PAID PRIVATE RESPONDENTS THEIR SERVICE
INCENTIVE LEAVE PAY, 13th MONTH PAY, AND HOLIDAY PAY.
V.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN
AFFIRMING THE NLRCS DISMISSAL OF PETITIONERS APPEAL AND IN EFFECT
UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER THAT THE
EVIDENCE SUBMITTED BY PRIVATE RESPONDENTS IN SUPPORT OF THEIR CLAIMS
ARE NOT SELF-SERVING, IRRELEVANT AND IMMATERIAL TO THE FACTS AND LAW
IN ISSUE IN THIS CASE.10
The petition lacks merit.
Time and again it has been held that the right to appeal is not a natural right or a part of due process, it is
merely a statutory privilege, and may be exercised only in the manner and in accordance with the
provisions of law. The party who seeks to avail of the same must comply with the requirements of the rules.
Failing to do so, the right to appeal is lost.11
Article 223 of the Labor Code, as amended, sets forth the rules on appeal from the Labor Arbiters
monetary award:
ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders. x x x.
xxx

xxx

xxx

In case of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in the judgment
appealed from. (Emphasis ours)
The pertinent provisions of Rule VI of the New Rules of Procedure of the NLRC,12 which were in effect
when petitioner filed his appeal, provide:
Section 1. Periods of Appeal. Decisions, awards or orders of the Labor Arbiter and the POEA
Administrator shall be final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions, awards or orders of the Labor
Arbiter x x x.
xxx

xxx

xxx

Section 3. Requisites for Perfection of Appeal. (a) The appeal shall be filed within the
reglementary period as provided in Section 1 of this Rule; shall be under oath with proof of
payment of the required appeal fee and the posting of a cash or surety bond as provided in Section
5 of this Rule; shall be accompanied by a memorandum of appeal which shall state the grounds
relied upon and the arguments in support thereof; the relief prayed for; and a statement of the date
when the appellant received the appealed decision, order or award and proof of service on the
other party of such appeal.
A mere notice of appeal without complying with the other requisite aforestated shall not stop the
running of the period for perfecting an appeal.
xxx

xxx

xxx

Section 6. Bond. In case the decision of the Labor Arbiter, the Regional Director or his duly
authorized Hearing Officer involves a monetary award, an appeal by the employer shall be
perfected only upon the posting of a cash or surety bond, which shall be in effect until final
disposition of the case, issued by a reputable bonding company duly accredited by the
Commission or the Supreme Court in an amount equivalent to the monetary award, exclusive of
damages and attorneys fees.
The employer, his counsel, as well as the bonding company, shall submit a joint declaration under oath
attesting that the surety bond posted is genuine.
The Commission may, in justifiable cases and upon Motion of the Appellant, reduce the amount of
the bond. The filing of the motion to reduce bond shall not stop the running of the period to
perfect appeal. (Emphasis ours)
In the case at bar, petitioner received the decision of the Labor Arbiter on January 6, 2000. He filed his
notice of appeal with memorandum of appeal and paid the corresponding appeal fees on January 17, 2000,
the last day of filing the appeal. However, in lieu of the required cash or surety bond, he filed a motion to
reduce bond alleging that the amount of P1,427,802,04 as bond is "unjustified and prohibitive" and prayed
that the same be reduced to a "reasonable level." The NLRC denied the motion and consequently dismissed
the appeal for non-perfection. Petitioner now contends that he was deprived of the chance to post bond
because the NLRC took 102 days to decide his motion.
Petitioners argument is unavailing.

While, Section 6, Rule VI of the NLRCs New Rules of Procedure allows the Commission to reduce the
amount of the bond, the exercise of the authority is not a matter of right on the part of the movant but lies
within the sound discretion of the NLRC upon showing of meritorious grounds.13 Petitioners motion reads:
1. The appeal bond which respondents-appellants will post in this case is P1,427,802.04. They are
precisely questioning this amount as being unjustified and prohibitive under the premises.
2. The amount of this appeal bond must be reduced to a reasonable level by this Honorable Office.
WHEREFORE, in view thereof, it is respectfully prayed of this Honorable Office that the appeal
bond of P1,427,802.04 be reduced.14
After careful scrutiny of the motion to reduce appeal bond, we agree with the Court of Appeals that the
NLRC did not act with grave abuse of discretion when it denied petitioners motion for the same failed to
either elucidate why the amount of the bond was "unjustified and prohibitive" or to indicate what would be
a "reasonable level."15
In Calabash Garments, Inc. v. NLRC,16 it was held that "a substantial monetary award, even if it runs into
millions, does not necessarily give the employer-appellant a "meritorious case" and does not automatically
warrant a reduction of the appeal bond."
Even granting arguendo that petitioner has meritorious grounds to reduce the appeal bond, the result would
have been the same since he failed to post cash or surety bond within the prescribed period.
The above-cited provisions explicitly provide that an appeal from the Labor Arbiter to the NLRC must be
perfected within ten calendar days from receipt of such decisions, awards or orders of the Labor Arbiter. In
a judgment involving a monetary award, the appeal shall be perfected only upon (1) proof of payment of
the required appeal fee; (2) posting of a cash or surety bond issued by a reputable bonding company; and
(3) filing of a memorandum of appeal. A mere notice of appeal without complying with the other requisites
mentioned shall not stop the running of the period for perfection of appeal.17 The posting of cash or surety
bond is not only mandatory but jurisdictional as well, and non-compliance therewith is fatal and has the
effect of rendering the judgment final and executory.18 This requirement is intended to discourage
employers from using the appeal to delay, or even evade, their obligation to satisfy their employees just
and lawful claims.19
The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal
by the employer is underscored by the provision that an appeal by the employer may be perfected only
upon the posting of a cash or surety bond. The word "only" makes it perfectly clear that the lawmakers
intended the posting of a cash or surety bond by the employer to be the exclusive means by which an
employers appeal may be perfected.20
The fact that the NLRC took 102 days to resolve the motion will not help petitioners case. The NLRC
Rules clearly provide that "the filing of the motion to reduce bond shall not stop the running of the period
to perfect appeal." Petitioner should have seasonably filed the appeal bond within the ten-day reglementary
period following the receipt of the order, resolution or decision of the NLRC to forestall the finality of such
order, resolution or decision. In the alternative, he should have paid only a moderate and reasonable sum
for the premium, as was held in Biogenerics Marketing and Research Corporation v. NLRC,21 to wit:
x x x The mandatory filing of a bond for the perfection of an appeal is evident from the
aforequoted provision that the appeal may be perfected only upon the posting of cash or surety
bond. It is not an excuse that the over P2 million award is too much for a small business
enterprise, like the petitioner company, to shoulder. The law does not require its outright
payment, but only the posting of a bond to ensure that the award will be eventually paid

should the appeal fail. What petitioners have to pay is a moderate and reasonable sum for
the premium for such bond. (Emphasis ours)
While the bond requirement on appeals involving monetary awards has been relaxed in certain cases, this
can only be done where there was substantial compliance of the Rules or where the appellants, at the very
least, exhibited willingness to pay by posting a partial bond.22 Petitioners reliance on the case of Rosewood
Processing, Inc. v. NLRC23 is misplaced. Petitioner in the said case substantially complied with the rules by
posting a partial surety bond of fifty thousand pesos issued by Prudential Guarantee and Assurance, Inc.
while his motion to reduce appeal bond was pending before the NLRC.
In the case at bar, petitioner did not post a full or partial appeal bond within the prescribed period, thus, no
appeal was perfected from the decision of the Labor Arbiter. For this reason, the decision sought to be
appealed to the NLRC had become final and executory and therefore immutable. Clearly, then, the NLRC
has no authority to entertain the appeal, much less to reverse the decision of the Labor Arbiter. Any
amendment or alteration made which substantially affects the final and executory judgment is null and void
for lack of jurisdiction, including the entire proceeding held for that purpose.24
WHEREFORE, in view of the foregoing, the petition is DENIED. The assailed decision of the Court of
Appeals in CA-G.R. SP No. 62129, dated October 10, 2001, dismissing the petition for certiorari for lack of
merit, is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. Nos. 116476-84 May 21, 1998


ROSEWOOD PROCESSING, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, NAPOLEON C. MAMON, ARSENIO GAZZINGAN, ROMEO C. VELASCO,
ARMANDO L. BALLON, VICTOR E. ALDEZA, JOSE L. CABRERA, VETERANS PHILIPPINE SCOUT SECURITY AGENCY,
and/or ENGR. SERGIO JAMILA IV, respondents.

PANGANIBAN, J.:
Under the Labor Code, an employer is solidarily liable for legal ages due security guards for the period of time they were assigned
to it by its contracted security agency. However, in the absence of proof that the employer itself committed the acts constitutive of
illegal dismissal or conspired with the security agency in the performance of such acts, the employer shall not be liable for back
wages and/or separation pay arising as a consequence of such unlawful termination.
The Case
These are the legal principles on which this Court bases its resolution of this special civil action for certiorari, seeking the
nullification of the April 28, 1994 Resolution and the July 12, 1994 Order of the National Labor Relations Commission, which
dismissed petitioner's appeal from the labor arbiter's Decision and denied its Motion for Reconsideration, respectively, in NLRC
NCR Case Nos. 00-05-02834-91, 00-08-04630-91, 00-07-03966-91, 00-09-05617-91, 00-07-03967-91, 00-07-04455-91, 00-0805030-91, 00-11-06389-91, and 00-03-01642-92.

On May 13, 1991, a complaint for illegal dismissal; underpayment of wages; and for nonpayment of overtime pay, legal holiday
pay, premium pay for holiday and rest day, thirteenth month pay, cash bond deposit, unpaid wages and damages was filed
against Veterans Philippine Scout Security Agency and/or Sergio Jamila IV (collectively referred to as the "security agency," for
brevity). Thereafter, petitioner was impleaded as a third-party respondent by the security agency. In due course, Labor Arbiter
Ricardo C. Nora rendered a consolidated Decision dated March 26, 1993, which disposed as follows:

IN VIEW OF ALL THE FOREGOING, respondents Veterans Philippine Scout


Security Agency, Sergio Jamila IV, and third-party respondent Rosewood
Processing, Inc. are hereby ordered to pay jointly and severally complainants the
following amounts, to wit:
1. Napoleon Mamon P126,411.10
2. Arsenio Gazzingan 128,639.71
3. Rodolfo Velasco 147,114.43
4. Armando Ballon 116,894.70
5. Jose L. Cabrera 133,047.81
6. Victor Aldeza 137,046.64
__________
TOTAL P789,154.39
=========
representing their monetary benefits in the amount of SEVEN HUNDRED
EIGHTY NINE THOUSAND ONE HUNDRED FIFTY FOUR PESOS AND 39/100
CENTAVOS (P789,154.39).
Respondents are likewise ordered to pay attorney's fees in the amount of
P78,915.43 within ten (10) days from receipt of this Decision.
All other issues are hereby [d]ismissed for failure of the complainants to fully
substantiate their claims.
2

The appeal filed by petitioner was dismissed by the National Labor Relations Commission in its
Resolution promulgated April 28, 1994, for failure of the petitioner to file the required appeal bond
3
within the reglementary period. Pertinent portions of the challenged Resolution are herewith
quoted:
It appears on record that [petitioner] received their copy of the [labor arbiter's]
decision on April 2, 1993 and subsequently filed a "Notice of Appeal with
Memorandum of Appeal" on April 26, 1993, in violation of Rule VI, Section 1, 3,
and 6 of the 1990 New Rules of Procedure of the NLRC . . . .
xxx xxx xxx
Clearly, the appeal filed by the [petitioners] on April 12, 1993 was not perfected
within the reglementary period, and the decision dated March 26, 1993 became
final and executory as of April 23, 1993.
WHEREFORE, the appeal is hereby DISMISSED.
In its motion for reconsideration, petitioner contended that it received a copy of the labor arbiter's
Decision only on April 6, 1993, and that it filed on April 16, 1993 within the prescribed time a
Notice of Appeal with a Memorandum on Appeal, a Motion to Reduce Appeal Bond and a surety
4
bond issued by Prudential Guarantee and Assurance, Inc. in the amount of P50,000. Though

not opposed by the complainants and the security agency, the arguments stated in the motion
were not taken up by Respondent Commission. Reconsideration was nonetheless denied by
5
Respondent Commission in its Order of July 12, 1994, quoted below:
Section 14, Rule VII of the NLRC New Rules of Procedure allows [u]s to entertain
a motion for reconsideration only on "palpable or patent" errors [w]e may have
committed in [o]ur disputed April 28, 1994 resolution.
There being no such assignment here, [petitioner's] motion for reconsideration
dated May 19, 1994 is hereby DENIED for lack of merit.
Hence, this recourse.

In a Resolution dated March 20, 1995, this Court issued a temporary restraining order enjoining
the respondents and their agents from implementing and enforcing the assailed Resolution and
7
Order until further notice.
The Facts
Undisputed are the facts of this case, narrated by the labor arbiter as follows:
All the complainants were employed by the [security agency] as security guards:
Napoleon Mamon on October 7, 1989; Arsenio Gazzingan on September 25,
1988; Rodolfo C. Velasco on January 5, 1987; Armando Ballon on June 28,
1990; Victor Aldeza on March 21, 1990; and Jose L. Cabrera [in] January 1988.
Napoleon Mamon started working for the [security agency] on October 7, 1989
and was assigned as office guard for three (3) days without any pay nor
allowance as it was allegedly an on[-the-]job training so there [was] no pay[.] On
October 10, 1989, he was transferred to the residence of Mr. Benito Ong with 12
hours duty a day receiving a salary very much less than the minimum wage for
eight (8) hours work until February 3, 1990 when he received an order
transferring him to Rosewood Processing, Inc. effective that date . . . ; [a]t
Rosewood Processing, Inc., he was required to render also 12 hours duty every
day with a salary of P2,600.00/month. He was not given his pay for February 1
and 2 by the paymaster of [the security agency] allegedly because the payroll
could not be located so after 3 to 4 times of going back and forth to [the security
agency's] office to get his salary[;] [after] . . . two (2) days he gave up because he
was already spending more than what he could get thru transportation alone. On
May 16, 1991, Rosewood Processing, Inc. asked for the relief of Mamon and
other guards at Rosewood because they came to know that complainants filed a
complaint for underpayment on May 13, 1991 with the National Labor Relations
Commission[.] On May 18 to 19, 1991, [the security agency] assigned him to
their [m]ain [o]ffice. After that, complainant was floated until May 29, 1991 when
he was assigned to Mead Johnson Philippines Corporation. [A]t about a week
later, [the security agency] received summons on complainant's complaint for
underpayment and he was called to [the security agency's] office. When he
reported, he was told to sign a "Quitclaim and Waiver['] by Lt. R. Rodriguez
because according to the latter, he [could] only get a measly sum from his
complaint with the NLRC and if he (complainant) [signed] the quitclaim and
waiver he [would] be retained at his present assignment which [was] giving quite
a good salary and other benefits but if he [did] not sign the quitclaim and waiver,
he [would] be relieved from his post and [would] no longer be given any
assignment. . . . He was given up to the end of July 1991 to think it over. At the

end of July 1991, h[e] was approached by the Security in Charge A. Azuela and
asked him to sign the quitclaim and waiver and when he refused to sign, he was
told that the following day August 1, 1991, he [would have] no more assignment
and should report to their office. Thinking that it was only a joke, he reported the
following day to the detachment commander Mr. A. Yadao and he was told that
the main office . . . relieved him because he did not sign the quitclaim and waiver.
He reported to their office asking for an assignment but he was told by R.
Rodriguez that "I no longer can be given an assignment so I had better resign".
He went back several times to the office of the [security agency] but every time
the answer was the same[:] that he better tender his resignation because he
cannot be given any assignment although respondent was recruiting new guards
and posting them.
Arsenio Gazzingan started to work for the [security agency] on September 29,
1988. [Note: the introductory paragraph stated September 25, 1988.] He was
assigned to Purefoods Breeding Farm at Calauan, Laguna and given a salary of
P54.00 a day working eight (8) hours. After three (3) months, he was given an
examination and passed the same. On December 26, 1988, he was given an
increase and was paid P64.00/day working eight (8) hours; [h]e remained at the
same post for 8 months and transferred to Purefoods Feed Mill at Sta. Rosa,
Laguna, with the same salary and the same tour of duty, 8 hours[.] After four (4)
months, he was transferred to Purefoods Grand Perry at Sta. Rosa, Laguna, and
after eleven (11) days on June 1989, he was transferred to Rosewood
Processing, Inc. at Meycauayan, Bulacan and required to work for 12 hours at a
salary of P94.00/day for one year. [In] June 1990, he was assigned at Purefoods
DELPAN [to] guard . . . a barge loaded with corn and rendered 12 hours
work/day with a salary of only P148.00/day and after 24 days, he was floated for
one month. He reported to [the security agency's] office and was assigned to
Purefoods Breeder Farm in Canlubang rendering 8 hours work per day receiving
only P178.00/day. After 11 days, he asked to be transferred to Manila[.]
[B]ecause of the distance from his home . . . the transfer was approved but
instead of being transferred to Manila, he was assigned to Purefoods B-F-4 in
Batangas rendering 12 hours duty/day and receiving only P148.00 per day until
January 28, 1991[;] and again he requested for transfer which was also approved
by the [security agency's] office[,] but since then he was told to come back again
and again. [U]p to the present he has not been given any assignment. Because
of the fact that his family [was] in danger of going hungry, he sought relief from
the NLRC-NCR-Arbitration Branch.
Rodolfo Velasco started working for the [security agency] on January 5, 1987. He
was assigned to PCI Bank Elcano, Tondo Branch, as probationary, and [for]
working 8 hours a day for 9 days he received only P400.00. On January 16,
1987, he was assigned to [the security agency's] headquarters up to January 31,
1987, working 12 hours a day[; he] received only P650.00 for the 16 days. On
September 1, 1988, he was assigned to Imperial Synthetic Rubber Products
rendering 12 hours duty per day until December 31, 1988 and was given a salary
of P1,600.00/month. He was later transferred to various posts like Polypaper
Products working 12 hours a day given a salary of P1,800.00 a month;
Paramount Electrical, Inc. working 12 hours a day given P1,100.00 for 15 days;
Rosewood Processing, Inc., rendering 12 hours duty per day receiving
P2,200.00/month until May 16, 1991[;] Alen Engineering rendering 12 hours
duty/day receiving P1,100/month; Purefoods Corporation on Delta II rendering 12
hours duty per day received P4,200.00 a month. He was relieved on August 24
and his salary for the period August 20 to 23 has not been paid by [the security
agency.] He was suspended for no cause at all.

Armando Ballon started as security guard with [the security agency] July 1990
[Note: the introductory paragraph stated June 28, 1990] and was assigned to
Purefoods Corporation in Marikina for five (5) months and received a salary of
P50.00 per day for 8 hours. He was transferred to Rosewood Processing, Inc. on
November 6, 1990 rendering 12 hours duty as [d]etachment [c]ommander and a
salary of P2,700.00/month including P200.00 officer's allowance until May 15,
1991. On May 16, 1991, he applied for sick leave on orders of his doctor for 15
days but the HRM, Miss M. Andres[,] got angry and crumpled his application for
sick leave, that [was] why he was not able to forward it to the SSS. After 15 days,
he came back to the office of [the security agency] asking for an assignment and
he was told that he [was] already terminated. Complainant found out that the
reason why Miss Andres crumpled his application for sick leave was because of
the complaint he previously filed and was dismissed for failure to appear. He then
refiled this case to seek redress from this Office.
Jose L. Cabrera started working for the [security agency] as security guard
January, 1988 and was assigned to Alencor Residence rendering 12 hours duty
per day and received a salary of P2,400.00 a month for 3 months[.] [I]n May,
1988, he was transferred to E & L Restaurant rendering 12 hours duty per day
and receiv[ing] a salary of P1,500.00 per month for 6 months[.] [I]n January,
1989, he was transferred to Paramount rendering 12 hours duty per day
receiving only P1,800.00 per month for 6 months[.] [I]n July 1989, he was
transferred to Benito Ong['s] residence rendering 12 hours duty per day and
receiving a salary of P1,400.00 per month for 4 months[.] [I]n December, 1989,
he was transferred to Sea Trade International rendering . . . 12 hours duty per
day and receiving a salary of P1,900 per month for 6 months[.] [I]n July, 1990, he
was transferred to Holland Pacific & Paper Mills rendering 8 hours duty per day
and receiving a salary of P2,400.00 per month until September 1990[.] [In]
October 1990, he was transferred to RMG residence rendering 12 hours duty per
day receiving a salary of P2,200.00 per month for 3 months[.] [In] February 1991,
he was transferred to Purefoods Corporation at Mabini, Batangas rendering 12
hours duty per day with a salary of P3,600.00 per month for only one month
because he was hospitalized due to a stab wound inflicted by his [d]etachment
[c]ommander. When he was discharged from the hospital and after he was
examined and declared "fit to work" by the doctor, he reported back to [the
security agency's] office but was given the run-around [and was told to] "come
back tomorrow[.]" [H]e [could] see that [the agency was] posting new recruits. He
then complained to this Honorable Office to seek redress, hiring the services of a
counsel.
Victor Aldeza started working for the [security agency] on March 21, 1990 and
was assigned to Meridian Condominium, rendering 12 hours work per day and
receiving a salary of P1,500.00 per month. Although he knew that the salary was
below minimum yet he persevered because he had spent much to get this job
and stayed on until October 15, 1990[.] On October 16, 1990, he was transferred
to Rosewood Processing, Inc., rendering 12 hours duty per day and receiving a
salary of P2,600.00 per month up to May 15, 1991[.] On the later part of May
1991, he was assigned to UPSSA (Sandoval Shipyard) rendering 12 hours duty
per day receiving a salary of P3,200.00 per month. [Aldeza] complained to [the
security agency] about the salary but [the agency] did not heed him; thus, he filed
his complaint for underpayment[.] [The agency] upon complainant's complaint for
underpayment . . . , instead of adjusting his salary to meet the minimum
prescribed by law[,] relieved him and left him floating[.] . . . When he complained
of the treatment, he was told to resign because he could no longer be given any

assignment. Because of this, complainant was forced to file another complaint for
illegal dismissal.
Labor Arbiter's Ruling
The labor arbiter noted the failure of the security agency to present evidence to refute the
complainants' allegation. Instead, it impleaded the petitioner as third-party respondent,
contending that its actions were primarily caused by petitioner's noncompliance with its
obligations under the contract for security services, and the subsequent cancellation of the said
contract.
The labor arbiter held petitioner jointly and severally liable with the security agency as the
complainants' indirect employer under Articles 106, 107 and 109 of the Labor Code, citing the
8
case of Spartan Security & Detective Agency, Inc. vs. National Labor Relations Commission.
Although the security agency could lawfully place the complainants on floating status for a period
not exceeding six months, the act was "illegal" because the former had issued a newspaper
advertisement for new security guards. Since the relation between the complainants and the
agency was already strained, the labor arbiter ordered the payment of separation pay in lieu of
reinstatement.
The award for wage differential, limited back wages and separation pay contained the following
details:
1. Napoleon Mamon
Wage Differentials P45,959.02
Backwages 72,764.38
Separation Pay 7,687.70 P126,411.10
_________
2. Arsenio Gazzingan
Wage Differentials P24,855.76
Backwages 96,096.25
Separation Pay 7,687.70 P128,639.71
__________
3. Rodolfo Velasco
Wage Differentials P66,393.58
Backwages 69,189.30
Separation Pay 11,531.55 P147,114.43
__________
4. Armando Ballon
Wage Differentials P31,176.85
Backwages 81,874.00
Separation Pay 3,843.85 P116,894.70
__________
5. Jose Cabrera

Wage Differentials P30,032.63


Backwages 91,483.63
Separation Pay 11,531.55 P133,047.81
__________
6. Victor Aldeza
Wage Differentials P49,406.86
Backwages 83,795.93
Separation Pay 3,843.85 P137,046.64
__________
P789, 154.39
==========
Ruling of Respondent Commission
As earlier stated, Respondent Commission dismissed petitioner's appeal, because it was
allegedly not perfected within the reglementary ten-day period. Petitioner received a copy of the
labor arbiter's Decision on April 2, 1993, and it filed its Memorandum of Appeal on April 12, 1993.
However, it submitted the appeal bond on April 26, 1993, or twelve days after the expiration of the
period for appeal per Rule VI, Section 1, 3 and 6 of the 1990 Rules of Procedure of the National
Labor Relations Commission. Thus, it ruled that the labor arbiter's Decision became final and
executory on April 13, 1993.
In the assailed Order, Respondent Commission denied reconsideration, because petitioner
allegedly failed to raise any palpable or patent error committed by said commission.
Assignment of Errors
Petitioner imputes the following errors to Respondent Commission:
Respondent NLRC committed grave abuse of discretion amounting to lack of
jurisdiction when it dismissed petitioner's appeal despite the fact that the same
was perfected within the reglementary period provided by law.
Respondent NLRC committed grave abuse of discretion amounting to lack of
jurisdiction when it dismissed petitioner's appeal despite the clearly meritorious
grounds relied upon therein.
Otherwise stated, the petition raises these two issues: first, whether the appeal from the labor
arbiter to the NLRC was perfected on time; and second, whether petitioner is solidarily liable with
the security agency for the payment of back wages, wage differential and separation pay.
The Court's Ruling
The petition is impressed with some merit and deserves partial grant.
First Issue: Substantial Compliance with the
Appeal Bond Requirement
The perfection of an appeal within the reglementary period and in the manner prescribed by law
is jurisdictional, and noncompliance with such legal requirement is fatal and effectively renders
9
the judgment final and executory. The Labor Code provides:

Art. 223. Appeal. Decisions, awards or orders of the Labor Arbiter are final
and executory unless appealed to the Commission by any or both parties within
ten (10) calendar days from receipt of such decisions, awards, or orders. . . .
xxx xxx xxx
In case of a judgment involving a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the Commission in the amount
equivalent to the monetary award in the judgment appealed from.
xxx xxx xxx
Indisputable is the legal doctrine that the appeal of a decision involving a monetary award in labor
10
cases may be perfected "only upon the posting of a cash or surety bond." The lawmakers
intended the posting of the bond to be an indispensable requirement to perfect an employer's
11
appeal.
However, in a number of cases, this Court has relaxed this requirement in order to bring about
12
the immediate and appropriate resolution of controversies on the merits. Some of these cases
include: "(a) counsel's reliance on the footnote of the notice of the decision of the labor arbiter
that the aggrieved party may appeal . . . within ten (10) working days; (b) fundamental
consideration of substantial justice; (c) prevention of miscarriage of justice or of unjust
enrichment, as where the tardy appeal is from a decision granting separation pay which was
already granted in an earlier final decision; and (d) special circumstances of the case combined
13
with its legal merits or the amount and the issue involved."
14

In Quiambao vs. National Labor Relations Commission, this Court ruled that a relaxation of the
appeal bond requirement could be justified by substantial compliance with the rule.
15

In Globe General Services and Security Agency vs. National Labor Relations Commission, the
Court observed that the NLRC, in actual practice, allows the reduction of the appeal bond upon
motion of the appellant and on meritorious grounds; hence, petitioners in that case should have
filed a motion to reduce the bond within the reglementary period for appeal.
That is the exact situation in the case at bar. Here, petitioner claims to have received the labor
16
arbiter's Decision on April 6, 1993. On April 16, 1993, it filed, together with its memorandum on
17
18
appeal and notice of appeal, a motion to reduce the appeal bond accompanied by a surety
19
bond for fifty thousand pesos issued by prudential Guarantee and Assurance, Inc. Ignoring
petitioner's motion (to reduce bond), Respondent Commission rendered its assailed Resolution
dismissing the appeal due to the late filing of the appeal bond.
The solicitor general argues for the affirmation of the assailed Resolution for the sole reason that
the appeal bond, even if it was filed on time, was defective, as it was not in an amount "equivalent
to the monetary award in the judgment appealed from." The Court disagrees.
We hold that petitioner's motion to reduce the bond is a substantial compliance with the Labor
Code. This holding is consistent with the norm that letter-perfect rules must yield to the broader
20
interest of substantial justice.
Where a decision may be made to rest on informed judgment rather than rigid rules, the equities
of the case must be accorded their due weight because labor determinations should not only be
21
"secundum rationem but also secundum caritatem." A judicious reading of the memorandum of

appeal would have made it evident to Respondent Commission that the recourse was
meritorious. Respondent Commission acted with grave abuse of discretion in peremptorily
dismissing the appeal without passing upon in fact, ignoring the motion to reduce the
appeal bond.
We repeat: Considering the clear merits which appear, res ipsa loquitur, in the appeal from the
labor arbiter's Decision, and the petitioner's substantial compliance with rules governing appeals,
we hold that the NLRC gravely abused its discretion in dismissing said appeal and in failing to
pass upon the grounds alleged in the Motion for Reconsideration.
Second Issue: Liability of an Indirect Employer
The overriding premise in the labor arbiter's Decision holding the security agency and the
petitioner liable was that said parties offered no evidence refuting or rebutting the complainants'
computation of their monetary claims. The arbiter ruled that petitioner was liable in solidum with
the agency for salary differentials based on Articles 106, 107 and 109 of the Labor Code which
hold an employer jointly and severally liable with its contractor or subcontractor, as if it is the
direct employer. We quote said provisions below:
Art. 106. Contractor or subcontractor. Whenever an employer enters into a
contract with another person for the performance of the former's work, the
employees of the contractor and of the latter's subcontractor, if any, shall be paid
in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and
severally liable with his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him.
xxx xxx xxx
Art. 107. Indirect employer. The provisions of the immediately preceding
Article shall likewise apply to any person, partnership, association or corporation
which, not being an employer, contracts with an independent contractor for the
performance of any work, task, job or project.
Art. 109. Solidary liability. The provisions of existing laws to the contrary
notwithstanding, every employer or indirect employer shall be held responsible
with his contractor or subcontractor for any violation of any provision of this
Code. For purposes of determining the extent of their civil liability under this
Chapter, they shall be considered as direct employers.
Upon the other hand, back wages and separation pay were awarded because the complainants
were constructively and illegally dismissed by the security agency, which placed them on floating
status and at the same time gave assignments to newly hired security guards. Noting that the
relationship between the security agency and the complainants was already strained, the labor
arbiter granted separation pay in lieu of reinstatement.
In its memorandum of appeal, petitioner controverts its liability for the mentioned monetary
22
awards on the following grounds:

A. Complainant Jose Cabrera never rendered security services to [petitioner] or


was [n]ever assigned as security guard [for] the latter's business establishment;
B. Complainants Napoleon Mamon, Arsenio Gazzingan, Rodolfo Velasco,
Armando Ballon and Victor Aldeza rendered security services to [petitioner] for a
fixed period and were thereafter assigned to other entities or establishments or
were floated or recalled to the headquarters of Veterans; and,
C. The relationship between [petitioner] and Veterans was governed by a
Contract for Guard Services under which [petitioner] dutifully paid a contract price
of P3,500.00 a month for 12 hour duty per guard and later increased to
P4,250.00 a month for 12 hour duty per guard which are within the prevailing
rates in the industry and in accordance with labor standard laws.
The first two grounds are meritorious. Legally untenable, however, is the contention that
petitioner is not liable for any wage differential for the reason that it paid the employees in
accordance with the contract for security services which it had entered into with the
security agency. Notwithstanding the service contract between the petitioner and the
security agency, the former is still solidarily liable to the employees, who were not privy to
said contract, pursuant to the aforecited provisions of the Code. Labor standard
legislations are enacted to alleviate the plight of workers whose wages barely meet the
spiraling costs of their basic needs. They are considered written in every contract, and
stipulations in violation thereof are considered not written. Similarly, legislated wage
increases are deemed amendments to the contract. Thus, employers cannot hide behind
their contracts in order to evade their or their contractors' or subcontractors' liability for
noncompliance with the statutory minimum wage.
The joint and several liability of the employer or principal was enacted to ensure compliance with
the provisions of the Code, principally those on statutory minimum wage. The contractor or
subcontractor is made liable by virtue of his or her status as a direct employer, and the principal
as the indirect employer of the contractor's employees. This liability facilitates, if not guarantees,
payment of the workers' compensation, thus, giving the workers ample protection as mandated
23
by the 1987 Constitution. This is not unduly burdensome to the employer. Should the indirect
employer be constrained to pay the workers, it can recover whatever amount it had paid in
24
accordance with the terms of the service contract between itself and the contractor.
Withal, fairness likewise dictates that the petitioner should not, however, be held liable for wage
differentials incurred while the complainants were assigned to other companies. Under these
cited provisions of the Labor Code, should the contractor fail to pay the wages of its employees in
accordance with law, the indirect employer (the petitioner in this case), is jointly and severally
liable with the contractor, but such responsibility should be understood to be limited to the extent
of the work performed under the contract, in the same manner and extent that he is liable to the
employees directly employed by him. This liability of petitioner covers the payment of the workers'
performance of any work, task, job or project. So long as the work, task, job or project has been
performed for petitioner's benefit or on its behalf, the liability accrues for such period even if, later
on, the employees are eventually transferred or reassigned elsewhere.
We repeat: The indirect employer's liability to the contractor's employees extends only to the
period during which they were working for the petitioner, and the fact that they were reassigned to
another principal necessarily ends such responsibility. The principal is made liable to his indirect
employees, because it can protect itself from irresponsible contractors by withholding such sums
and paying them directly to the employees or by requiring a bond from the contractor or
subcontractor for this purpose.

Similarly, the solidary liability for payment of back wages and separation pay is limited, under
Article 106, "to the extent of the work performed under the contract"; under Article 107, to "the
performance of any work, task, job or project"; and under Article 109, to "the extent of their civil
liability under this Chapter [on payment of wages]."
These provisions cannot apply to petitioner, considering that the complainants were no longer
working for or assigned to it when they were illegally dismissed. Furthermore, an order to pay
back wages and separation pay is invested with a punitive character, such that an indirect
employer should not be made liable without a finding that it had committed or conspired in the
illegal dismissal.
The liability arising from an illegal dismissal is unlike an order to pay the statutory minimum wage,
because the workers' right to such wage is derived from law. The proposition that payment of
back wages and separation pay should be covered by Article 109, which holds an indirect
employer solidarily responsible with his contractor or subcontractor for "any violation of any
provision of this Code," would have been tenable if there were proof there was none in this
case that the principal/employer had conspired with the contractor in the acts giving rise to the
illegal dismissal.
With the foregoing discussion in mind, we now take up in detail the petitioner's liability to each of
the complainants.
Case No. NCR-00-08-04630-91
Mamon worked for petitioner for a period of a little more than one year beginning February 3,
1990 until May 16, 1991. Inasmuch as petitioner was his indirect employer during such rime, it
should thus be severally liable for wage differential from the time of his employment until his relief
from duty. He was relieved upon the request of petitioner, after it had learned of the complaint for
underpayment of wages filed by Mamon and several other security guards.
However, this was not a dismissal from work because Mamon was still working for the security
agency and was immediately assigned, on May 29, 1991, to its other client, Mead Johnson
Philippines. His dismissal came about later, when he refused to sign a quitclaim and waiver in
favor of the security agency. Thus, he was illegally dismissed by the agency when he was no
longer employed by petitioner, which cannot thus be held liable for back wages and separation
pay in his case.
Napoleon Mamon . . . received an order transferring him to Rosewood
Processing, Inc. effective . . . February 3, 1990; . . . . On May 16, 1991,
Rosewood Processing, Inc. asked for the relief of Mamon and other guards at
Rosewood because they came to know that complainants filed a complaint for
underpayment on May 13, 1991 with the National Labor Relations Commission[,]
. . . After that, complainant was floated until May 29, 1991 when he was assigned
to Mead Johnson Philippines Corporation. . . . [A] week later, [the security
agency] received summons on complainant's complaint for underpayment and he
was called to [the security agency] office. When he reported, he was told to sign
a "Quitclaim and Waiver['] by Lt. R. Rodriguez . . . and . . . if he [did] not sign the
quitclaim and waiver, he [would] be relieved from his post and [would] no longer
be given any assignment. . . . At the end of July 1991, he was approached by the
Security in Charge, A. Azuela, . . . [for him] to sign the quitclaim and waiver[,] and
when he refused to sign, he was told that . . . he ha[d] no more assignment and
should report to their office. . . . [H]e reported the following day to the detachment
commander, Mr. A. Yadao and he was told that the main office ha[d] relieved him
. . . . He reported to their office asking for an assignment but he was told by R.

Rodriguez that "I no longer can be given an assignment so I had better resign."
He went back several times to the office of the [security agency] but every time
the answer was the same . . . although respondent was recruiting new guards
25
and posting them.
Case No. NCR-00-07-03966-91
Gazzingan was assigned to petitioner as a security guard for a period of one year. For said
period, petitioner is solidarily liable with the agency for underpayment of wages based on Articles
106, 107 and 109 of the Code.
Arsenio Gazzingan . . . after eleven (11) days on June 1989, . . . was transferred
to Rosewood Processing, Inc. . . . . [I]n June 1990, he was assigned at
Purefoods DELPAN . . . . After 11 days, he asked to be transferred to Manila
because of the distance from his home and the transfer was approved but
instead of being transferred to Manila, he was assigned to Purefoods B-F-4 in
Batangas . . . again he requested for transfer which was also approved by the
[security agency] office but since then he was told to come back again and again
26
and up to the present he has not been given any assignment. . . . .
His dismissal cannot be blamed on the petitioner. Like Mamon, Gazzingan had already been
assigned to another client of the agency when he was illegally dismissed. Thus, Rosewood
cannot be held liable, jointly and severally with the agency, for back wages and separation pay.
Case No. NCR-00-07-03967-91
Rodolfo Velasco was assigned to petitioner from December 31, 1988 until May 16, 1991. Thus,
petitioner is solidarily liable for wage differentials during such period. Petitioner is not, however,
liable for back wages and separation pay, because Velasco was no longer working for petitioner
at the time of his illegal dismissal.
Rodolfo Velasco started working for the [security agency] on January 5, 1987. . .
. [On] December 31, 1988 . . . he was . . . transferred to various posts like . . .
Rosewood Processing, Inc., . . . until May 16, 1991 . . . . He was relieved on
August 24 and his salary for the period August 20 to 23 has not been paid by [the
27
security agency]; [h]e was suspended for no cause at all.
Case No. NCR-00-07-0445-91
Petitioner was the indirect employer of Ballon during the period beginning November 6, 1990 until
May 15, 1991; thus, it is liable for wage differentials for said period. However, it is not liable for
back wages and separation pay, as there was no evidence presented to show that it participated
in Ballon's illegal dismissal.
. . . [H]e [Armando Ballon] was transferred to Rosewood Processing, Inc. on
November 6, 1990 rendering 12 hours duty as [d]etachment [c]ommander and
received a salary of P2,700.00/month including P200.00 officer's allowance until
May 15, 1991. On May 16, 1991, he applied for sick leave on orders of his doctor
for 15 days but the HRM, Miss M. Andres[,] got angry and crumpled his
application for sick leave that is why he was not able to forward it to the SSS.
After 15 days, he came back to the office of [the security agency] asking for an
assignment and he was told that he [was] already terminated. Complainant found
out that the reason why Miss Andres crumpled his application for sick leave was

because of the complaint he previously filed and was dismissed for failure to
28
appear. He then refiled this case to seek redress from this Office.
Case No. NCR-00-08-05030-91
Petitioner is liable for wage differentials in favor of Aldeza during the period he worked with
petitioner, that is, October 16, 1990 until May 15, 1991.
. . . On October 16, 1990, he [Aldeza] was transferred to Rosewood Processing,
Inc., . . . up to May 15, 1991[.] On the later part of May 1991, he was assigned to
UPSSA (Sandoval Shipyard) . . . . Complainant [sic] complained to [the security
agency] about the salary but [the security agency] did not heed him; thus, he filed
his complaint for underpayment[.] [The security agency] upon complainant's
complaint for underpayment reacted . . . , instead of adjusting his salary to meet
the minimum prescribed by law[,] relieved him and left him floating[;] and when
he complained of the treatment, he was told to resign because he could no
longer be given any assignment. Because of this, complainant was forced to file
29
another complaint for illegal dismissal.
The cause of Aldeza's illegal dismissal is imputable, not to petitioner, but solely to the security
agency. In Aldeza's case, the solidary liability for back wages and separation pay arising from
Articles 106, 107 and 109 of the Code has no application.
Case No. NCR-00-09-05617-91
Cabrera was an employee of the security agency, but he never rendered security services to
petitioner. This fact is evident in the labor arbiter's findings:
Jose L. Cabrera started working for the [security agency] as [a] security guard on
January, 1988 and was assigned to Alencor Residence . . . . [I]n May, 1988, he
was transferred to E & L, Restaurant . . . [.] [I]n January, 1989, he was
transferred to Paramount . . . [.] [I]n July 1989, he was transferred to Benito
Ong['s] residence . . . [.] [I]n December, 1989, he was transferred to Sea Trade
International . . . [.] [I]n July, 1990, he was transferred to Holland Pacific & Paper
Mills . . . [.] [I]n October 1990, he was transferred to RMG [R]esidence . . . [.] [I]n
February 1991, he was transferred to Purefoods Corporation at Mabini, Batangas
. . . . When he was discharged from the hospital and after he was examined and
declared "fit to work" by the doctor, he reported back to [the security agency]
office but was given the run-around [and was told to] "come back tomorrow[,]"
although he [could] see that [it was] posting new recruits. He then complained to
30
this Honorable Office to seek redress, hiring the services of a counsel.
Hence, petitioner is not liable to Cabrera for anything.
In all these cases, however, the liability of the security agency is without question, as it did not
appeal from the Decisions of the labor arbiter and Respondent Commission.
WHEREFORE, the petition is partially GRANTED. The assailed Decision is hereby MODIFIED,
such that petitioner, with the Security agency, is solidarily liable to PAY the complainants only
wage differentials during the period that the complainants were actually under its employ, as
above detailed. Petitioner is EXONERATED from the payment of back wages and separation
pay.

The temporary restraining order issued earlier is LIFTED, but the petitioner is deemed liable only
for the aforementioned wage differentials, which Respondent Commission is required to
RECOMPUTE within fifteen days from the finality of this Decision. No costs.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 153859

December 11, 2003

FILIPINAS (Pre-fabricated Bldg.) SYSTEMS "FILSYSTEMS," INC. and FELIPE A. CRUZ, JR.,
petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and CRESENCIANO BEBANCO, JUANITO
R. BENZON, REY NUALLA, BONIFACIO TORRES, ERNESTO SINCONEQUE and EMILIO
ANEANO, respondents.
DECISION
PUNO, J.:
The facts reveal that a complaint for illegal dismissal and monetary claims for service incentive leave, 13th
month pay and night shift differential was filed by respondents against petitioners before the National
Labor Relations Commission.1 The complaint was assigned to Labor Arbiter Donato G. Quinto, Jr. who
ordered the parties to file their position paper. Respondents complied, but not the petitioners despite several
warnings and time extensions. The inaction was construed as a waiver by petitioners of their right to
present evidence.2
The Labor Arbiter decided the complaint on the merit and ruled in favor of respondents. He sustained their
claim of illegal dismissal as petitioners failed to adduce contrary evidence. Petitioners were ordered to
reinstate respondents. The monetary claims of the respondents were likewise granted.3
Petitioners appealed to the National Labor Relations Commission. For the first time, they submitted
evidence that respondents were project employees and that their dismissal was due to the discontinuation of
the Jaka Tower I project where they were assigned. Respondents, however, assailed the jurisdiction of the
NLRC over the appeal for failure of the petitioners to file the appeal bond within the ten (10)-day
reglementary period. They further contended that it was too late for petitioners to present evidence in the
NLRC.
The NLRC nevertheless assumed jurisdiction over the appeal. Due to the evidence presented by petitioners
on the issue of illegal dismissal, it remanded the case to the Labor Arbiter for further proceedings.4
Respondents motion for reconsideration was denied.5
Respondents then repaired to the Court of Appeals on a Petition for Certiorari. The appellate court ruled
that the NLRC did not have jurisdiction over the appeal since the appeal bond of the petitioners was filed
out of time. It reinstated the decision of the Labor Arbiter.6 Petitioners motion for reconsideration proved
futile.

Hence this petition where petitioners raise the following issues:


1. Whether or not the Court of Appeals erred and committed grave abuse of discretion in finding
and ruling that the NLRC has not acquired jurisdiction on the appeal of the petitioners for
submitting an appeal bond seven (7) days beyond the ten (10)-day reglamentary (sic) period in
perfecting an appeal;
2. Whether or not the Court of Appeals erred and committed grave abuse of discretion in finding
and ruling that:
"The remand of the case to the Labor Arbiter due to the conflicting claims of the parties, comes as
a surprise to us. As a quasi-judicial agency vested with jurisdiction to resolve labor disputes, it is
but natural for the NLRC to encounter conflicting claims while discharging its mandate. To insist
on a policy of remanding a case to the Labor Arbiter each time conflicting claims arise in a case
would be an abdication of duty by the NLRC as conflicts are inherent and integral in all disputes,
whether labor or otherwise.
xxx

xxx

x x x"

3. Whether or not the Court a quo erred and committed grave abuse of discretion in giving due
course to the private respondents petition for certiorari under Rule 65 of the 1997 Rules on Civil
Procedure; and in annulling and setting aside the Resolutions (of) the NLRC, and reinstating the
Decision of the Labor Arbiter ordering the reinstatement of the private respondents, with full
backwages, and monetary awards for 13th month pay and Service Incentive Leave pay.7
We affirm. The Labor Code provides a ten (10)-day period from receipt of the decision of the Arbiter for
the filing of an appeal together with an appeal bond if the decision involves a monetary award in favor of
the employees, viz:
ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders. x x x
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from.
xxx

xxx

xxx

(emphasis supplied)
The NLRC Rules of Procedure8 likewise require the appeal and the appeal bond to be filed within the ten
(10)-day reglementary period:
Section 1. Periods of Appeal. Decisions, awards, or orders of the Labor Arbiter and the POEA
Administrator shall be final and executory unless appealed to the Commission by any or both parties within
ten (10) calendar days from receipt of such decisions, awards, or orders of the Labor Arbiter or of the
Administrator, and in case of a decision or of the Regional Director or his duly authorized Hearing Officer
within five (5) calendar days from receipt of such decisions, awards or orders. If the 10th or 5th day, as the
case may be, falls on a Saturday, Sunday or a holiday, the last day to perfect the appeal shall be the next
working day.
xxx

xxx

xxx

Section 3. Requisites for Perfection of Appeal. (a) The appeal shall be filed within the reglementary
period as provided in Section 1 of this Rule; shall be under oath with proof of payment of the required
appeal fee and the posting of a cash surety bond as provided in Section 5 of this Rule (which provides how
much and where the appeal fee is to be paid); shall be accompanied by a memorandum of appeal which
shall state the grounds relied upon and the arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the appealed decision, order or award and proof of
service on the other party of such appeal.
A mere notice of appeal without complying with the other requisite aforestated shall not stop the running of
the period for perfecting an appeal.
xxx

xxx

xxx

Section 7. No Extension of Period. No motion or request for extension of the period within which to
perfect an appeal shall be allowed.
xxx

xxx

xxx

We have consistently ruled that payment of the appeal bond is a jurisdictional requisite for the perfection of
an appeal to the NLRC.9 It is only in rare instances that the court relaxes the rule upon a showing of
substantial compliance with it and to prevent patent injustice.
In the case at bar, petitioners alleged that they received a copy of the Arbiters decision on October 31,
1998.10 Their memorandum of appeal was dated November 9, 1998, but their appeal bond to stay execution
of the decision was executed only on November 17, 1998.11 The records show no partial payment of the
bond was made during the reglementary period nor was there any explanation for its late filing. Given these
facts, the late filing of the bond divested the NLRC of its jurisdiction to entertain petitioners appeal.
Likewise, we cannot countenance the late submission of petitioners evidence with the NLRC.1wphi1
Petitioners should have adduced their evidence on the issue of illegal dismissal before the Labor Arbiter.
They failed to do so despite the opportunities given to them by the Arbiter. It was only when an adverse
decision was rendered against them by the Arbiter that they offered to submit their evidence before the
NLRC refuting respondents complaint of illegal dismissal. Such a practice cannot be tolerated for it will
defeat the speedy administration of justice involving our poor workers. Moreover, it smacks of unfairness.
Yet, this is not all. Petitioners likewise ran roughshod of the procedural rules of the appellate court.
Respondents comment alleges that the appellate court already declared its judgment final and executory.
An entry of judgment was made after petitioners motion for reconsideration of the appellate courts
decision was denied on October 31, 2001 and no petition was filed before this Court. Atty. Rodolfo P.
Orticio, however, moved for cancellation of the entry of judgment on the ground that he is the new counsel
of the petitioners and that he received a copy of the denial of their motion for reconsideration only on June
19, 2002. He contended that his request for cancellation was filed within the allowable period. In a
resolution dated August 20, 2002 denying the request, the Court of Appeals ruled that:
From the records, it appears that when the decision and resolution denying the Motion for Reconsideration
dated 31 October 2001 were received, Atty. Orticio was not yet the counsel for private respondent. In fact,
he filed his notice of appearance on 23 November 2001 after receipt on 9 November 2001 by private
respondents former counsel, Atty. Louis Acosta, of the resolution denying the motion for reconsideration.
A judgment becomes final provided there was proper service of notice thereof. In this case, the records
clearly show there was such proper service upon private respondents former counsel, Atty. Louis Acosta.
Therefore, the decision of 2 April 2001 did become final and executory, leaving Us no more discretion to
recall the entry of judgment.12

It is thus contended by respondents that the petition at bar should not be allowed as the decision of the
appellate court has already become final.
Again, we agree. Petitioners should have filed the present petition within fifteen days under Rule 45 of the
Rules of Court, viz:
SECTION 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a
judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court
or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review
on certiorari. The petition shall raise only questions of law which must be distinctly set forth.
SECTION 2. Time for filing. The petition shall be filed within fifteen (15) days from notice of the
judgment or final order or resolution appealed from, or of the denial of the petitioners motion for new trial
or reconsideration filed in due time after notice of the judgment. x x x.
Petitioners received a copy of the denial of their motion for reconsideration of the Court of Appeals
decision on November 9, 2001. They filed an extension of time to file the petition at bar on June 16, 2002,
alleging that they have a new counsel. We note, however, that petitioners obtained the services of present
counsel on November 23, 2001. Thus, there was ample time for their counsel to appeal to this Court the
adverse ruling of the appellate court. The appeal was not seasonably made by said counsel and such
procedural lapse is binding on petitioners.
IN VIEW WHEREOF, the petition is dismissed. The decision of the Labor Arbiter is reinstated with the
modification that if reinstatement of respondents is not feasible, they should be paid separation pay in
accordance with law.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 150147

January 20, 2004

LYDIA BUENAOBRA, JOSIELYN FIEL, MARGIE MADRID, ROWENA MIRANDA, JUVY


ENDAYA, JUDY CARONAN, JOSEPHINE BARTOLOME, LITA MACALINAO, MARLITA
AMBIL, RIZA AMBIL, ANENCIA RECANA, LORENA REYES, JULIO BALAGTAS,
SALVACION FELISMENA, GINA SINLAO, MARITA CHAVEZ, JIMENA DRADA, YOLANDA
ROLDAN, RAFAELA OLICIA, ANGELEO FUENTES, EUFROCINA ALMERA, FELICISIMA
DE GUZMAN, ADELINA CALIM, SUSANITA SULAPAS, LOLITA MALICDEM, TERESITA
BORLAZA, ESTER OVERIO, IMELDA AGUIRRE, MARIBEL BELTRAN, MYLENE TAMAYO,
ANNIE GREGORIO, TERESA CLARINO, TERESA VILLANUEVA, MARIETTA ARCAYA,
MILAGROS DAGDAGAN, PAULINO PREALDE, MONINA VALLEJO, RITA MAGSINO,
SOLIDAD LABAY, MARIA BINARAO, MELCHORA DELA CRUZ, SUSAN BITAS, EMELY
CAYETANO, EMILY DELA CRUZ, ZENAIDA SALAS, BITUIN VALDEZ, AFRICA
GUEVARRA, NELIA MORALES, ELOISA REYES, AIDA CAYETANO, BENITA CAMPOSANO,
ADELIA IGNACIO, NENITA SARCIA, VIOLETA RONCAL, DOROTEA ALASKA, BLISELDA
GALONGAN, SHIRLEY JOCSON, MARITES VELOZ, ROGELIO CAPUZ, MARDIOLINA
ALIOC, MARIETTA MADRID, LOURDES MERCADO, ARACELLY CERDENOLA,
REMEDIOS TAGNONG, MARISSA SANTOS, JOSEFINA CANALDA, ZENAIDA
DAMANDANTE, CONCHITA BELARMINO, MARIVIC TRINIDAD, MARGARITA GUMBAN,

ANGELES FERNANDEZ, MARIA BERNAL, MORALINDA DUARTE, IMELDA TUNGOL,


ALONA INNOCENCIO, MA. TERESA CRUZ, ANALIZA GABRIEL, MELODIEN
CARANDANG, CRESENCIA ACEBO, MARILYN CASIM, HERMINIA PINEDA, NORIE
TORINO, ERLINDA TADEO, CECILIA LLAVORE, ANA GINA GALMAN, IMELDA
SALARDA, LUISA SAROL, LOLITA MALICSE, AILEEN PAPANIO, EDITHA GANAL, RESTIE
VISTAL, LUCELYN QUISOY, ESTELA PABIO BRIONES, AUREA TUBIS, SAMUEL MALICSE,
AURORA MISSION, ANALYN CALICA, LEILANI ALEJAGA, LILIA BRIZUELA, ROSITA
FACTOR, MERCEDES MENDOZA, WARLITO COLOMA, PERLEEN MUI, JOSEPHINE
BALDRES, ELENA MAGDANGAL, IRMA BENGCO, CRISTITA GERALDEZ, ROMEO PANDO,
ESTRELLITA ZILMAR, ANGELITA SANDIG, NENITA LARIOSA, MARITA PANTI, AURORA
HERNANDEZ, DINNA SILVA, EVANGELINE CASIM, LUISA SOLAYAO, ANNABELLE SY,
MARINA REBLENCA, MARITESS GERANDOY, ELENA AGUDA, PERCY GARCIA,
GERARDO TAPIT, AMADOR HADE, MYRA BORJA, ELVIRA ALBAY, LELIOSA MORANO,
VERONICA GUINDAY, JULIETA ALMAYDA, VILMA SALDO, MAY ANN REPAYO, GLENDA
SARAO, NELLY CARAGA, JOSEPHINE TAQUIQUI, TRINIDAD BARROCA, DULCE
ENDAYA, RIZA TADLIP, NENITA LAGAMAYO, EUFRENCINA ROLDAN, ELENA
VELASQUEZ, MARIVIC DEPANTI, MONINA LOCSIN, ANA RAMOS, ANICIA LEUTIEJA,
JOSEFINA MANUEL, AMALIA DAEP, JULIE MANGANAAN, ROWENA ANYAYA,
LUNINGNING ANYAYA, CARMENCITA ANYAYA, ROWENA FIEL, VENAMEL BEA, NIDA
PABLO, LOLITA BLANCO, ROSEMARIE MORALES, NATIVIDAD CANETE, CORAZON
GOROSPE, MADONNA RAGONOT, GEMMA DACAL, and CLARITA MENDOZA, Petitioners,
vs.
LIM KING GUAN, JOHNNY LIM, NGO CHAP, CRISTINA NGO, GILBERTO LIM, CHENG
SEN WANG, HUNG PANG CHING, CHEN HSIU TSUNG as corporate officers of UNIX
INTERNATIONAL EXPORT CORPORATION, and CHEN HSIU TSUNG, LIM KING GUAN,
HUNG PANG CHING, WANG CHENG SEN, JOHNNY LIM, GILBERTO LIM, NGO CHIAP,
CRISTINA NGO, KATLEEN LIM, MARIE SOLEDAD CLEMENTE, ROSALINA N. LO, KIM PO
GONZALES, and AMELIA NGA as stockholders of record of UNIX INTERNATIONAL EXPORT
CORPORATION, and FUJI ZIPPER MANUFACTURING CORPORATION, Respondents.
DECISION
CORONA, J.:
This is a petition for review seeking for the reversal of the decision1 of the Court of Appeals dated May 29,
2001, dismissing the petition for certiorari of Lydia Buenaobra, et. al. and affirming the orders of the
National Labor Relations Commission (NLRC), Third Division, dated November 27, 1998 and February
15, 1999, which respectively directed private respondents to post a cash or surety bond and dismissed
petitioners motion for reconsideration.
The facts follow.
Petitioners were employees of private respondent Unix International Export Corporation (UNIX), a
corporation engaged in the business of manufacturing bags, wallets and the like.
Sometime in 1991 and 1992, petitioners filed several cases against UNIX and its incorporators and officers
for unfair labor practice, illegal lockout/dismissal, underpayment of wages, holiday pay, proportionate 13th
month pay, unpaid wages, interest, moral and exemplary damages and attorneys fees.
The cases were consolidated and tried jointly. On February 23, 1993, labor arbiter Jose S. de Vera rendered
a decision:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered ordering
respondent Unix Export Corporation to pay complainants, as follows:

1. P5,821,838.40 as backwages;
2. P1,484,912.00 as separation pay;
3. P527,748.00 as wage differentials;
4. P33,830.00 as regular holiday pay differentials; and
5. P365,551.95 as proportionate 13th month pay for 1990.
All other claims of the complainants are hereby dismissed for lack of merit. Likewise, the complaint of
Angelina Dimasin is dismissed with prejudice.
There being no appeal by respondents or petitioners, the decision of labor arbiter de Vera eventually
became final and executory. However, petitioners complained that the decision could not be executed
because UNIX allegedly diverted, invested and transferred all its money, assets and properties to
respondent Fuji Zipper Manufacturing Corporation (FUJI) whose stockholders and officers were also those
of UNIX.
Thus, on March 25, 1997, petitioners filed another complaint against respondents UNIX, its corporate
officers and stockholders of record, and FUJI. Petitioners mainly prayed that respondents UNIX and FUJI
be held jointly and severally held liable for the payment of the monetary awards ordered by labor arbiter de
Vera.
On May 31, 1998, labor arbiter Felipe Pati rendered a decision on the second complaint:
WHEREFORE, judgment is hereby rendered piercing the veil of corporate fiction of the two respondent
sister corporations which by virtue of this Decision are now considered as mere associations of persons
jointly and severally pay the subject amount of P8,233,880.30 out of the properties and unpaid subscription
on subscribed Capital Stock of the Board of Directors, Corporate Officers, Incorporators and Stockholders
of said respondent corporations, plus the amount of P3,000,000.00 and P1,000,000.00 in the form of moral
and exemplary damages, respectively, as well as 10% attorneys fees from any recoverable amounts.
Other claims are hereby dismissed for lack of merit.
On July 30, 1998, private respondents FUJI, its officers and stockholders filed a memorandum on appeal
and a motion to dispense with the posting of a cash or surety appeal bond on the ground that they were not
the employers of petitioners. They alleged that they could not be held responsible for petitioners claims
and to require them to post the bond would be unjust and unfair, and not sanctioned by law.
On November 27, 1998, the NLRC, Third Division rendered the first assailed order2:
PREMISES CONSIDERED, instant motion to exempt from filing appeal bond is hereby DENIED for lack
of merit. Respondents are hereby directed to post cash or surety bond in the amount of P8,233,880.30
within an unextendible period of ten (10) days upon receipt. Otherwise the appeal shall be dismissed.
Petitioners moved for reconsideration of the said order, arguing that the timely posting of an appeal bond is
mandatory for the perfection of an appeal and should be complied with.
On February 15, 1999, the NLRC, Third Division rendered the second assailed order:

WHEREFORE, premises considered, complainants Motion for Reconsideration is hereby DISMISSED for
lack of merit. Respondents Supplemental Memorandum of Appeal is admitted. Respondents and counsel
are likewise hereby directed to submit a joint declaration under oath within five (5) days upon receipt.
Otherwise the appeal shall be dismissed.
Petitioners filed a petition in the Court of Appeals imputing grave abuse of discretion to the NLRC, Third
Division when it allowed private respondents to post the mandated cash or surety bond four months after
the filing of their memorandum on appeal.
On May 29, 2001, the Court of Appeals dismissed the petition for lack of merit. Hence, this petition under
Rule 45 of the Rules of Court, seeking to set aside the decision of the Court of Appeals and praying that the
orders dated February 15, 1999 and November 27, 1998 of the NLRC, Third Division be set aside for
having been issued without or in excess of its jurisdiction and with grave abuse of discretion.
The petition has no merit.
The provision of Article 223 of the Labor Code requiring the posting of bond on appeals involving
monetary awards must be given liberal interpretation in line with the desired objective of resolving
controversies on the merits.3 If only to achieve substantial justice, strict observance of the reglementary
periods may be relaxed if warranted. The NLRC, Third Division could not be said to have abused its
discretion in requiring the posting of bond after it denied private respondents motion to be exempted
therefrom.
It is true that the perfection of an appeal in the manner and within the period prescribed by law is not only
mandatory but jurisdictional, and failure to perfect an appeal has the effect of making the judgment final
and executory. However, technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties.4 We have allowed appeals from the decisions
of the labor arbiter to the NLRC, even if filed beyond the reglementary period, in the interest of justice. The
facts and circumstances of the instant case warrant liberality considering the amount involved and the fact
that petitioners already obtained a favorable judgment on February 23, 1993 against their employer
UNIX.1wphi1
In the same decision which has already become final and executory, labor arbiter de Vera held:
This Branch upholds and maintains in the absence of substantial evidence to the contrary that both
respondent corporations have legitimate distinct and separate juridical personalities. Thus, respondent Fuji
Zipper Manufacturing, Inc. has been erroneously impleaded in this case.5
It is only fair and just that respondent FUJI be afforded the opportunity to be heard on appeal before the
NLRC, specially in the light of labor arbiter Patis later decision holding FUJI jointly and severally liable
with UNIX in the payment of the monetary awards adjudged by labor arbiter de Vera against UNIX.
In the absence of any showing that the NLRC committed grave abuse of discretion, or otherwise acted
without or in excess of jurisdiction, this Court is bound by its findings. Furthermore, the Court of Appeals
upheld the assailed orders of the said Commission.
WHEREFORE, the petition is hereby DENIED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION
G.R. No. 196047

January 15, 2014

LEPANTO CONSOLIDATED MINING CORPORATION, Petitioner,


vs.
BELIO ICAO, Respondent.
DECISION
SERENO, CJ:
This Petition under Rule 45 of the Rules of Court seeks to annul and set aside the Court of Appeals (CA)
Decision dated 27 September 2010 and the Resolution dated 11 March 2011 in CA-G.R. SP. No. 113095.1
In the assailed Decision and Resolution, the CA upheld the Order of the National Labor and Relations
Commission (NLRC) First Division dismissing petitioner s appeal for allegedly failing to post an appeal
bond as required by the Labor Code. Petitioner had instead filed a motion to release the cash bond it posted
in another NLRC case which had been decided with finality in its favor with a view to applying the bond to
the appealed case before the NLRC First Division. Hence, the Court is now asked to rule whether petitioner
had complied with the appeal bond requirement. If it had, its appeal before the NLRC First Division should
be reinstated.
The Facts
We quote the CA s narration of facts as follows:
The instant petition stemmed from a complaint for illegal dismissal and damages filed by private
respondent Belio C. Icao [Icao] against petitioners Lepanto Consolidated Mining Company (LCMC) and its
Chief Executive Officer [CEO] Felipe U. Yap [Yap] before the Arbitration Branch of the NLRC.
Private respondent essentially alleged in his complaint that he was an employee of petitioner LCMC
assigned as a lead miner in its underground mine in Paco, Mankayan, Benguet. On January 4, 2008, private
respondent reported for the 1st shift of work (11:00 p.m. to 7:00 a.m.) and was assigned at 248-8M2, 750
Level of the mining area. At their workplace, private respondent did some barring down, installed five (5)
rock bolt support, and drilled eight (8) blast holes for the mid-shift blast. They then had their meal break.
When they went back to their workplace, they again barred down loose rocks and drilled eight (8) more
blast holes for the last round of blast. While waiting for the time to ignite their round, one of his co-workers
shouted to prepare the explosives for blasting, prompting private respondent to run to the adjacent panels
and warn the other miners. Thereafter, he decided to take a bath and proceeded at [sic] the bathing station
where four (4) of his co-workers were also present. Before he could join them, he heard a voice at his back
and saw Security Guard (SG) Larry Bulwayan instructing his companion SG Dale Papsa-ao to frisk him.
As private respondent was removing his boots, SG Bulwayan forcibly pulled his skullguard from his head
causing it to fall down [sic] to the ground including its harness and his detergent soap which was inserted in
the skullguard harness. A few minutes later, private respondent saw SG Bulwayan [pick] up a wrapped
object at the bathing station and gave it to his companion. SGs Bulwayan and Papsa-ao invited the private
respondent to go with them at the investigation office to answer questions regarding the wrapped object. He
was then charged with "highgrading" or the act of concealing, possessing or unauthorized extraction of
highgrade material/ore without proper authority. Private respondent vehemently denied the charge.
Consequently, he was dismissed from his work.
Private respondent claimed that his dismissal from work was without just or authorized cause since
petitioners failed to prove by ample and sufficient evidence that he stole gold bearing highgrade ores from
the company premises. If private respondent was really placing a wrapped object inside his boots, he

should have been sitting or bending down to insert the same, instead of just standing on a muckpile as
alleged by petitioners. Moreover, it is beyond imagination that a person, knowing fully well that he was
being chased for allegedly placing wrapped ore inside his boots, will transfer it to his skullguard. The
tendency in such situation is to throw the object away. As such, private respondent prayed that petitioners
be held liable for illegal dismissal, to reinstate him to his former position without loss of seniority rights
and benefits, and to pay his full backwages, damages and attorneys fees.
For their defense, petitioners averred that SG Bulwayan saw private respondent standing on a muckpile and
inserting a wrapped object inside his right rubber boot. SG Bulwayan immediately ran towards private
respondent, but the latter ran away to escape. He tried to chase private respondent but failed to capture him.
Thereafter, while SG Bulwayan was on his way to see his co-guard SG Papsa-ao, he saw private respondent
moving out of a stope. He then shouted at SG Papsa-ao to intercept him. When private respondent was
apprehended, SG Bulwayan ordered him to remove his skullguard for inspection and saw a wrapped object
placed inside the helmet. SG Bulwayan grabbed it, but the harness of the skullguard was also detached
causing the object to fall on the ground. Immediately, SG Bulwayan recovered and inspected the same
which turned out to be pieces of stone ores. Private respondent and the stone ores were later turned over to
the Mankayan Philippine National Police where he was given a written notice of the charge against him.
On January 9, 2008, a hearing was held where private respondent, together with the officers of his union as
well as the apprehending guards appeared. On February 4, 2008, private respondent received a copy of the
resolution of the company informing him of his dismissal from employment due to breach of trust and
confidence and the act of highgrading.2
THE LABOR ARBITERS RULING THAT
PETITIONER LCMC IS LIABLE FOR ILLEGAL DISMISSAL
On 30 September 2008, the labor arbiter rendered a Decision holding petitioner and its CEO liable for
illegal dismissal and ordering them to pay respondent Icao P345,879.45, representing his full backwages
and separation pay.3 The alleged highgrading attributed by LCMCs security guards was found to have
been fabricated; consequently, there was no just cause for the dismissal of respondent. The labor arbiter
concluded that the claim of the security guards that Icao had inserted ores in his boots while in a standing
position was not in accord with normal human physiological functioning.4
The labor arbiter also noted that it was inconsistent with normal human behavior for a man, who knew that
he was being chased for allegedly placing wrapped ore inside his boots, to then transfer the ore to his
skullguard, where it could be found once he was apprehended.5 To further support the improbability of the
allegation of highgrading, the labor arbiter noted that throughout the 21 years of service of Icao to LCMC,
he had never been accused of or penalized for highgrading or any other infraction involving moral turpitude
until this alleged incident.6
THE NLRC ORDER DISMISSING THE APPEAL
OF PETITIONER LCMC FOR FAILURE TO POST THE APPEAL BOND
On 8 December 2008, petitioner and its CEO filed an Appearance with Memorandum of Appeal7 before
the NLRC. Instead of posting the required appeal bond in the form of a cash bond or a surety bond in an
amount equivalent to the monetary award of P345,879.45 adjudged in favor of Icao, they filed a
Consolidated Motion For Release Of Cash Bond And To Apply Bond Subject For Release As Payment For
Appeal Bond (Consolidated Motion).8 They requested therein that the NLRC release the cash bond of
P401,610.84, which they had posted in the separate case Dangiw Siggaao v. LCMC,9 and apply that same
cash bond to their present appeal bond liability. They reasoned that since this Court had already decided
Dangiw Siggaao in their favor, and that the ruling therein had become final and executory, the cash bond
posted therein could now be released.10 They also cited financial difficulty as a reason for resorting to this
course of action and prayed that, in the interest of justice, the motion be granted.

In its Order dated 27 February 2009, the NLRC First Division dismissed the appeal of petitioner and the
latters CEO for non-perfection.11 It found that they had failed to post the required appeal bond equivalent
to the monetary award of P345,879.45. It explained that their Consolidated Motion for the release of the
cash bond in another case (Dangiw Siggaao), for the purpose of applying the same bond to the appealed
case before it, could not be considered as compliance with the requirement to post the required appeal
bond. Consequently, it declared the labor arbiters Decision to be final and executory. The pertinent
portions of the assailed Order are quoted below:
The rules are clear. Appeals from decision involving a monetary award maybe [sic] perfected only upon
posting of a cash or surety-bond within the ten (10) day reglementary period for filing an appeal. Failure to
file and post the required appeal bond within the said period results in the appeal not being perfected and
the appealed judgment becomes final and executory. Thus, the Commission loses authority to entertain or
act on the appeal much less reverse the decision of the Labor Arbiter (Gaudia vs. NLRC, 318 SCRA 439).
In this case, respondents failed to post the required appeal bond equivalent to the monetary award of
P345,879.45. The Consolidated Motion for Release of Cash Bond (posted as appeal bond in another case)
with prayer to apply the bond to be released as appeal bond may not be considered as compliance with the
jurisdictional requirement, as the application or posting is subject to the condition that the cash bond would
be released. Besides, even if the motion for release is approved, the ten (10) day period has long expired,
rendering the statutory right to appeal forever lost.
WHEREFORE, respondents appeal is hereby DISMISSED for non-perfection and the questioned decision
is declared as having become final and executory. Let the Motion for Release of Cash bond be forwarded to
the Third Division, this Commission, for appropriate action.
SO ORDERED.12 (Emphasis supplied)
Petitioner and its CEO filed a Motion for Reconsideration. They emphasized therein that they had tried to
comply in good faith with the requisite appeal bond by trying to produce a cash bond anew and also to
procure a new surety bond. However, after canvassing several bonding companies, the costs have proved to
be prohibitive.13 Hence, they resorted to using the cash bond they posted in Dangiw Siggaao because the
bond was now free, unencumbered and could rightfully be withdrawn and used by them.14 Their motion
was denied in a Resolution dated 27 November 2009. Hence, they filed a Petition for Certiorari with the
CA.
THE CA RULING AFFIRMING THE ORDER OF THE NLRC
On 27 September 2010, the CA issued its assailed Decision15 affirming the Order of the NLRC First
Division, which had dismissed the appeal of petitioner and the latters CEO. According to the CA, they
failed to comply with the requirements of law and consequently lost the right to appeal.16
The CA explained that under Article 223 of the Labor Code, an appeal from the labor arbiters Decision
must be filed within 10 calendar days from receipt of the decision. In case of a judgment involving a
monetary award, the posting of a cash or surety bond in an amount equivalent to the monetary award is
mandatory for the perfection of an appeal. In the instant case, the CA found that petitioner and its CEO did
not pay the appeal fees and the required appeal bond equivalent to P345,879.45. Instead, it filed a
Consolidated Motion praying that the cash bond it had previously posted in another labor case be released
and applied to the present one. According to the CA, this arrangement is not allowed under the rules of
procedure of the NLRC.17
Furthermore, the CA said that since the payment of appeal fees and the posting of an appeal bond are
indispensable jurisdictional requirements, noncompliance with them resulted in petitioners failure to
perfect its appeal. Consequently, the labor arbiters Decision became final and executory and, hence,
binding upon the appellate court.18

Nevertheless, the CA ruled that the CEO of petitioner LCMC should be dropped as a party to this case.19
No specific act was alleged in private respondents pleadings to show that he had a hand in Icaos illegal
dismissal; much less, that he acted in bad faith. In fact, the labor arbiter did not cite any factual or legal
basis in its Decision that would render the CEO liable to respondent. The rule is that in the absence of bad
faith, an officer of a corporation cannot be made personally liable for corporate liabilities.
THE ISSUE
The sole issue before the Court is whether or not petitioner complied with the appeal bond requirement
under the Labor Code and the NLRC Rules by filing a Consolidated Motion to release the cash bond it
posted in another case, which had been decided with finality in its favor, with a view to applying the same
cash bond to the present case.
OUR RULING
The Petition is meritorious. The Court finds that petitioner substantially complied with the appeal bond
requirement.
Before discussing its ruling, however, the Court finds it necessary to emphasize the well-entrenched
doctrine that an appeal is not a matter of right, but is a mere statutory privilege. It may be availed of only in
the manner provided by law and the rules. Thus, a party who seeks to exercise the right to appeal must
comply with the requirements of the rules; otherwise, the privilege is lost.20
In appeals from any decision or order of the labor arbiter, the posting of an appeal bond is required under
Article 223 of the Labor Code, which reads:
Article 223. APPEAL. Decisions, awards, or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds:
xxxx
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from. (Emphasis
and underlining supplied)
The 2011 NLRC Rules of Procedure (NLRC Rules) incorporates this requirement in Rule VI, Section 6,
which provides:
SECTION 6. Bond. In case the decision of the Labor Arbiter or the Regional Director involves a
monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which shall
either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive
of damages and attorneys fees. (Emphases and underlining supplied)
In Viron Garments Manufacturing Co., Inc. v. NLRC,21 the Court explained the mandatory nature of this
requirement as follows:
The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal
by the employer, is clearly limned in the provision that an appeal by the employer may be perfected "only
upon the posting of a cash or surety bond." The word "only" makes it perfectly clear, that the lawmakers
intended the posting of a cash or surety bond by the employer to be the exclusive means by which an
employer's appeal may be perfected. (Emphases supplied)

We now turn to the main question of whether petitioners Consolidated Motion to release the cash bond it
posted in a previous case, for application to the present case, constitutes compliance with the appeal bond
requirement. While it is true that the procedure undertaken by petitioner is not provided under the Labor
Code or in the NLRC Rules, we answer the question in the affirmative. We reiterate our pronouncement in
Araneta v. Rodas,22 where the Court said that when the law does not clearly provide a rule or norm for the
tribunal to follow in deciding a question submitted, but leaves to the tribunal the discretion to determine the
case in one way or another, the judge must decide the question in conformity with justice, reason and
equity, in view of the circumstances of the case. Applying this doctrine, we rule that petitioner substantially
complied with the mandatory requirement of posting an appeal bond for the reasons explained below.
First, there is no question that the appeal was filed within the 10-day reglementary period.23 Except for the
alleged failure to post an appeal bond, the appeal to the NLRC was therefore in order.
Second, it is also undisputed that petitioner has an unencumbered amount of money in the form of cash in
the custody of the NLRC. To reiterate, petitioner had posted a cash bond of P401,610.84 in the separate
case Dangiw Siggaao, which was earlier decided in its favor. As claimed by petitioner and confirmed by
the Judgment Division of the Judicial Records Office of this Court, the Decision of the Court in Dangiw
Siggaao had become final and executory as of 28 April 2008, or more than seven months before petitioner
had to file its appeal in the present case. This fact is shown by the Entry of Judgment on file with the
aforementioned office. Hence, the cash bond in that case ought to have been released to petitioner then.
Under the Rule VI, Section 6 of the 2005 NLRC Rules, "[a] cash or surety bond shall be valid and effective
from the date of deposit or posting, until the case is finally decided, resolved or terminated, or the award
satisfied." Hence, it is clear that a bond is encumbered and bound to a case only for as long as 1) the case
has not been finally decided, resolved or terminated; or 2) the award has not been satisfied. Therefore, once
the appeal is finally decided and no award needs to be satisfied, the bond is automatically released. Since
the money is now unencumbered, the employer who posted it should now have unrestricted access to the
cash which he may now use as he pleases as appeal bond in another case, for instance. This is what
petitioner simply did. Third, the cash bond in the amount of P401,610.84 posted in Dangiw Siggaao is more
than enough to cover the appeal bond in the amount of P345,879.45 required in the present case.
Fourth, this ruling remains faithful to the spirit behind the appeal bond requirement which is to ensure that
workers will receive the money awarded in their favor when the employers appeal eventually fails.24
There was no showing at all of any attempt on the part of petitioner to evade the posting of the appeal bond.
On the contrary, petitioners move showed a willingness to comply with the requirement. Hence, the
welfare of Icao is adequately protected.
Moreover, this Court has liberally applied the NLRC Rules and the Labor Code provisions on the posting
of an appeal bond in exceptional cases. In Your Bus Lines v. NLRC,25 the Court excused the appellants
failure to post a bond, because it relied on the notice of the decision. While the notice enumerated all the
other requirements for perfecting an appeal, it did not include a bond in the list. In Blancaflor v. NLRC,26
the failure of the appellant therein to post a bond was partly caused by the labor arbiters failure to state the
exact amount of monetary award due, which would have been the basis of the amount of the bond to be
posted. In Cabalan Pastulan Negrito Labor Association v. NLRC27 petitioner-appellant was an association
of Negritos performing trash-sorting services in the American naval base in Subic Bay. The plea of the
association that its appeal be given due course despite its non-posting of a bond, on account of
its insolvency and poverty, was granted by this Court. In UERM-Memorial Medical Center v. NLRC28 we
allowed the appellant-employer to post a property bond in lieu of a cash or surety bond. The assailed
judgment involved more than P17 million; thus, its execution could adversely affect the economic survival
of the employer, which was a medical center.
If n the above-cited cases, the Court found exceptional circumstances that warranted an extraordinary
exercise of its power to exempt a party from the rules on appeal bond, there is all the more reason in the

present case to find that petitioner substantially complied with the requirement. We emphasize that in this
case we are not even exempting petitioner from the rule, as in fact we are enforcing compliance with the
posting of an appeal bond. We are simply liberally applying the rules on what constitutes compliance with
the requirement, given the special circumstances surrounding the case as explained above.
Having complied with the appeal bond requirement, petitioner s appeal before the NLRC must therefore be
reinstated.1wphi1
Finally, a word of caution. Lest litigants be misled into thinking that they may now wantonly disregard the
rules on appeal bond in labor cases, we reiterate the mandatory nature of the requirement. The Court will
liberally apply the rules only in very highly exceptional cases such as this, in keeping with the dictates of
justice, reason and equity.
WHEREFORE, premises considered, the instant Rule 45 Petition is GRANTED. The Court of Appeals
Decision dated 27 September 2010 and its Resolution dated March 2011 in CA-G.R. SP. No. 113095,
which dismisse4 petitioner s Rule 65 Petition, are hereby REVERSED. Finally, the National Labor
Relations Commission Resolutions dated 27 February 2009 and 27 November 2009 are SET ASIDE and
the appeal of petitioner before it is hereby REINSTATED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Baguio City
SECOND DIVISION
G.R. No. 195227

April 21, 2014

FROILAN M. BERGONIO, JR., DEAN G. PELAEZ, CRISANTO O. GEONGO, WARLITO O.


JANAYA, SALVADOR VILLAR, JR., RONALDO CAFIRMA, RANDY LUCAR, ALBERTO
ALBUERA, DENNIS NOPUENTE and ALLAN SALVACION, Petitioners,
vs.
SOUTH EAST ASIAN AIRLINES and IRENE DORNIER, Respondents.
DECISION
BRION, J.:
We resolve in this petition for review on certiorari1 the challenge to the September 30, 2010 decision2 and
the January 13, 2011 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 112011.
This CA decision reversed the July 16, 2008 decision4 of the National Labor Relations Commission
(NLRC), which, in turn, affirmed the March 13, 2008 order5 of the Labor Arbiter (LA) in NLRC Case No.
00-04-05469- 2004. The LA granted the Motion filed by petitioners Froilan M. Bergonio, Jr., Dean G.
Pelaez, et.al., (collectively, the petitioners) for the release of the garnished amount to satisfy the petitioners
accrued wages.
The Factual Antecedents
On April 30, 2004, the petitioners filed before the LA a complaint for illegal dismissal and illegal
suspension with prayer for reinstatement against respondents South East Asian Airlines (SEAIR) and Irene
Dornier as SEAIRs President (collectively, the respondents).

In a decision dated May 31, 2005, the LA found the petitioners illegally dismissed and ordered the
respondents, among others, to immediately reinstate the petitioners with full backwages. The respondents
received their copy of this decision on July 8, 2005.6
On August 20, 2005, the petitioners filed before the LA a Motion for issuance of Writ of Execution for
their immediate reinstatement.
During the scheduled pre-execution conference held on September 14, 2005, the respondents manifested
their option to reinstate the petitioners in the payroll. The payroll reinstatement, however, did not
materialize. Thus, on September 22, 2005, the petitioners filed before the LA a manifestation for their
immediate reinstatement.
On October 3, 2005, the respondents filed an opposition to the petitioners motion for execution.7 They
claimed that the relationship between them and the petitioners had already been strained because of the
petitioners threatening text messages, thus precluding the latters reinstatement.
On October 7, 2005, the LA granted the petitioners motion and issued a writ of execution.8
The respondents moved to quash the writ of execution with a prayer to hold in abeyance the
implementation of the reinstatement order.9 They maintained that the relationship between them and the
petitioners had been so strained that reinstatement was no longer possible.
The October 7, 2005 writ of execution was returned unsatisfied. In response, the petitioners filed a motion
for re-computation of accrued wages, and, on January 25, 2006, a motion for execution of the re-computed
amount. On February 16, 2006, the LA granted this motion and issued an alias writ of execution.10
On February 21, 2006, the respondents issued a Memorandum11 directing the petitioners to report for work
on February 24, 2006. The petitioners failed to report for work on the appointed date. On February 28,
2006, the respondents moved before the LA to suspend the order for the petitioners reinstatement.12
Meanwhile, the respondents appealed with the NLRC the May 31, 2005 illegal dismissal ruling of the LA.
In an order dated August 15, 2006,13 the NLRC dismissed the respondents appeal for non-perfection. The
NLRC likewise denied the respondents motion for reconsideration in its November 29, 2006 resolution,
prompting the respondents to file before the CA a petition for certiorari.
The NLRC issued an Entry of Judgment on February 6, 2007 declaring its November 29, 2006 resolution
final and executory. The petitioners forthwith filed with the LA another motion for the issuance of a writ of
execution, which the LA granted on April 24, 2007. The LA also issued another writ of execution.14 A
Notice of Garnishment was thereafter issued to the respondents depositary bank Metrobank-San Lorenzo
Village Branch, Makati City in the amount of P1,900,000.00 on June 6, 2007.
On December 18, 2007, the CA rendered its decision (on the illegal dismissal ruling of the LA) partly
granting the respondents petition. The CA declared the petitioners dismissal valid and awarded them
P30,000.00 as nominal damages for the respondents failure to observe due process.
The records show that the petitioners appealed the December 18, 2007 CA decision with this Court. In a
resolution dated August 4, 2008, the Court denied the petition. The Court likewise denied the petitioners
subsequent motion for reconsideration, and thereafter issued an Entry of Judgment certifying that its
August 4, 2008 resolution had become final and executory on March 9, 2009.
On January 31, 2008, the petitioners filed with the LA an Urgent Ex-Parte Motion for the Immediate
Release of the Garnished Amount.

In its March 13, 2008 order,15 the LA granted the petitioners motion; it directed Metrobank-San Lorenzo
to release the P1,900,000.00 garnished amount. The LA found valid and meritorious the respondents claim
for accrued wages in view of the respondents refusal to reinstate the petitioners despite the final and
executory nature of the reinstatement aspect of its (LAs) May 31, 2005 decision. The LA noted that as of
the December 18, 2007 CA decision (that reversed the illegal dismissal findings of the LA), the petitioners
accrued wages amounted to P3,078,366.33.
In its July 16, 2008 resolution,16 the NLRC affirmed in toto the LAs March 13, 2008 order. The NLRC
afterwards denied the respondents motion for reconsideration for lack of merit.17
The respondents assailed the July 16, 2008 decision and September 29, 2009 resolution of the NLRC via a
petition for certiorari filed with the CA.
The CAs ruling
The CA granted the respondents petition.18 It reversed and set aside the July 16, 2008 decision and the
September 29, 2009 resolution of the NLRC and remanded the case to the Computation and Examination
Unit of the NLRC for the proper computation of the petitioners accrued wages, computed up to February
24, 2006.
The CA agreed that the reinstatement aspect of the LAs decision is immediately executory even pending
appeal, such that the employer is obliged to reinstate and pay the wages of the dismissed employee during
the period of appeal until the decision (finding the employee illegally dismissed including the reinstatement
order) is reversed by a higher court. Applying this principle, the CA noted that the petitioners accrued
wages could have been properly computed until December 18, 2007, the date of the CAs decision finding
the petitioners validly dismissed.
The CA, however, pointed out that when the LAs decision is "reversed by a higher tribunal, an employee
may be barred from collecting the accrued wages if shown that the delay in enforcing the reinstatement
pending appeal was without fault" on the employers part. In this case, the CA declared that the delay in the
execution of the reinstatement order was not due to the respondents unjustified act or omission. Rather, the
petitioners refusal to comply with the February 21, 2006 return-to-work Memorandum that the
respondents issued and personally delivered to them (the petitioners) prevented the enforcement of the
reinstatement order.
Thus, the CA declared that, given this peculiar circumstance (of the petitioners failure to report for work),
the petitioners accrued wages should only be computed until February 24, 2006 when they were supposed
to report for work per the return-to-work Memorandum. Accordingly, the CA reversed, for grave abuse of
discretion, the NLRCs July 16, 2008 decision that affirmed the LAs order to release the garnished
amount.
The Petition
The petitioners argue that the CA gravely erred when it ruled, contrary to Article 223, paragraph 3 of the
Labor Code, that the computation of their accrued wages stopped when they failed to report for work on
February 24, 2006. They maintain that the February 21, 2006 Memorandum was merely an afterthought on
the respondents part to make it appear that they complied with the LAs October 7, 2005 writ of execution.
They likewise argue that had the respondents really intended to have them report for work to comply with
the writ of execution, the respondents could and should have issued the Memorandum immediately after
the LA issued the first writ of execution. As matters stand, the respondents issued the Memorandum more
than four months after the issuance of this writ and only after the LA issued the alias writ of execution on
February 16, 2006.

Additionally, the petitioners direct the Courts attention to the several pleadings that the respondents filed
to prevent the execution of the reinstatement aspect of the LAs May 31, 2005 decision, i.e., the Opposition
to the Issuance of the Writ of Execution, the Motion to Quash the Writ of Execution and the Motion to
Suspend the Order of Reinstatement. They also point out that in all these pleadings, the respondents
claimed that strained relationship barred their (the petitioners) reinstatement, evidently confirming the
respondents lack of intention to reinstate them.
Finally, the petitioners point out that the February 21, 2006 Memorandum directed them to report for work
at Clark Field, Angeles, Pampanga instead of at the NAIA-Domestic Airport in Pasay City where they had
been assigned. They argue that this directive to report for work at Clark Field violates Article 223,
paragraph 3 of the Labor Code that requires the employees reinstatement to be under the same terms and
conditions prevailing prior to the dismissal. Moreover, they point out that the respondents handed the
Memorandum only to Pelaez, who did not act in representation of the other petitioners, and only in the
afternoon of February 23, 2006.
Thus, the petitioners claim that the delay in their reinstatement was in fact due to the respondents
unjustified acts and that the respondents never really complied with the LAs reinstatement order.
The Case for the Respondents
The respondents counter, in their comment,19 that the issues that the petitioners raise in this petition are all
factual in nature and had already considered and explained in the CA decision. In any case, the respondents
maintain that the petitioners were validly dismissed and that they complied with the LAs reinstatement
order when it directed the petitioners to report back to work, which directive the petitioners did not heed.
The respondents add that while the reinstatement of an employee found illegally dismissed is immediately
executory, the employer is nevertheless not prohibited from questioning this rule especially when the latter
has valid and legal reasons to oppose the employees reinstatement. In the petitioners case, the respondents
point out that their relationship had been so strained that reinstatement was no longer possible. Despite this
strained relationship, the respondents point out that they still required the petitioners to report back to work
if only to comply with the LAs reinstatement order. Instead of reporting for work as directed, the
petitioners, however, insisted for a payroll reinstatement, which option the law grants to them (the
respondents) as employer. Also, contrary to the petitioners claim, the Memorandum directed them to
report at Clark Field, Pampanga only for a re-orientation of their respective duties and responsibilities.
Thus, relying on the CAs ruling, the respondents claim that the delay in the petitioners reinstatement was
in fact due to the latters refusal to report for work after the issuance of the February 21, 2006
Memorandum in addition to their strained relationship.
The Courts Ruling
We GRANT the petition.
Preliminary considerations: jurisdictional
limitations of the Courts Rule 45 review of
the CAs Rule 65 decision in labor cases
In a Rule 45 petition for review on certiorari, what we review are the legal errors that the CA may have
committed in the assailed decision, in contrast with the review for jurisdictional errors that we undertake in
an original certiorari action. In reviewing the legal correctness of the CA decision in a labor case taken
under Rule 65 of the Rules of Court, we examine the CA decision in the context that it determined the
presence or the absence of grave abuse of discretion in the NLRC decision before it and not on the basis of
whether the NLRC decision, on the merits of the case, was correct. Otherwise stated, we proceed from the
premise that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged

before it. Within this narrow scope of our Rule 45 review, the question that we ask is: Did the CA correctly
determine whether the NLRC committed grave abuse of discretion in ruling on the case?20
In addition, the Courts jurisdiction in a Rule 45 petition for review on certiorari is limited to resolving only
questions of law.
The present petition essentially raises the question whether the petitioners may recover the accrued wages
prior to the CAs reversal of the LAs May 31, 2005 decision. This is a question of law that falls well
within the Courts power in a Rule 45 petition.
Resolution of this question of law, however, is inextricably linked with the largely factual issue of whether
the accrued wages should be computed until December 17, 2008 when the CA reversed the illegal dismissal
findings of the LA or only until February 24, 2006 when the petitioners were supposed to report for work
per the February 21, 2006 Memorandum. In either case, the determination of this factual issue presupposes
another factual issue, i.e., whether the delay in the execution of the reinstatement order was due to the
respondents fault. As questions of fact, they are proscribed by our Rule 45 jurisdiction; we generally
cannot address these factual issues except to the extent necessary to determine whether the CA correctly
found the NLRC in grave abuse of discretion in affirming the release of the garnished amount despite the
respondents issuance of and the petitioners failure to comply with the February 21, 2006 return-to-work
Memorandum.
The jurisdictional limitations of our Rule 45 review of the CAs Rule 65 decision in labor cases,
notwithstanding, we resolve this petitions factual issues for we find legal errors in the CAs decision. Our
consideration of the facts taken within this narrow scope of our factual review power convinced us, as our
subsequent discussion will show, that no grave abuse of discretion attended the NLRC decision.
Nature of the reinstatement aspect of the
LAs decision on a finding of illegal
dismissal
Article 223 (now Article 229)21 of the Labor Code governs appeals from, and the execution of, the LAs
decision. Pertinently, paragraph 3, Article 223 of the Labor Code provides:
Article 223. APPEAL
xxxx
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the
reinstatement aspect is concerned, shall immediately be executory, pending appeal. The employee shall
either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or
separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the
employer shall not stay the execution for reinstatement provided herein. [Emphasis and underscoring
supplied]
Under paragraph 3, Article 223 of the Labor Code, the LAs order for the reinstatement of an employee
found illegally dismissed is immediately executory even during pendency of the employers appeal from
the decision. Under this provision, the employer must reinstate the employee either by physically
admitting him under the conditions prevailing prior to his dismissal, and paying his wages; or, at the
employers option, merely reinstating the employee in the payroll until the decision is reversed by the
higher court.22 Failure of the employer to comply with the reinstatement order, by exercising the options in
the alternative, renders him liable to pay the employees salaries.23

Otherwise stated, a dismissed employee whose case was favorably decided by the LA is entitled to receive
wages pending appeal upon reinstatement, which reinstatement is immediately executory.24 Unless the
appellate tribunal issues a restraining order, the LA is duty bound to implement the order of reinstatement
and the employer has no option but to comply with it.25
Moreover, and equally worth emphasizing, is that an order of reinstatement issued by the LA is selfexecutory, i.e., the dismissed employee need not even apply for and the LA need not even issue a writ of
execution to trigger the employers duty to reinstate the dismissed employee.
In Pioneer Texturizing Corp. v. NLRC, et. al.,26 decided in 1997, the Court clarified once and for all this
self-executory nature of a reinstatement order. After tracing back the various Court rulings interpreting the
amendments introduced by Republic Act No. 671527 on the reinstatement aspect of a labor decision under
Article 223 of the Labor Code, the Court concluded that to otherwise "require the application for and
issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly
betray and run counter to the very object and intent of Article 223, i.e., the immediate execution of a
reinstatement order."28
In short, therefore, with respect to decisions reinstating employees, the law itself has determined a
sufficiently overwhelming reason for its immediate and automatic execution even pending appeal.29 The
employer is duty-bound to reinstate the employee, failing which, the employer is liable instead to pay the
dismissed employees salary. The Courts consistent and prevailing treatment and interpretation of the
reinstatement order as immediately enforceable, in fact, merely underscores the right to security of tenure
of employees that the Constitution30 protects.
The employer is obliged to pay the
dismissed employees salary if he
refuses to reinstate until actual
reinstatement or reversal by a higher
tribunal; circumstances that may bar an
employee from receiving the accrued wages
As we amply discussed above, an employer is obliged to immediately reinstate the employee upon the LAs
finding of illegal dismissal; if the employer fails, it is liable to pay the salary of the dismissed employee. Of
course, it is not always the case that the LAs finding of illegal dismissal is, on appeal by the employer,
upheld by the appellate court. After the LAs decision is reversed by a higher tribunal, the employers duty
to reinstate the dismissed employee is effectively terminated. This means that an employer is no longer
obliged to keep the employee in the actual service or in the payroll. The employee, in turn, is not required
to return the wages that he had received prior to the reversal of the LAs decision.31
The reversal by a higher tribunal of the LAs finding (of illegal dismissal), notwithstanding, an employer,
who, despite the LAs order of reinstatement, did not reinstate the employee during the pendency of the
appeal up to the reversal by a higher tribunal may still be held liable for the accrued wages of the employee,
i.e., the unpaid salary accruing up to the time the higher tribunal reverses the decision.32 The rule,
therefore, is that an employee may still recover the accrued wages up to and despite the reversal by the
higher tribunal. This entitlement of the employee to the accrued wages proceeds from the immediate and
self-executory nature of the reinstatement aspect of the LAs decision.
By way of exception to the above rule, an employee may be barred from collecting the accrued wages if
shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the
employer. To determine whether an employee is thus barred, two tests must be satisfied: (1) actual delay or
the fact that the order of reinstatement pending appeal was not executed prior to its reversal; and (2) the
delay must not be due to the employers unjustified act or omission. Note that under the second test, the
delay must be without the employers fault. If the delay is due to the employers unjustified refusal, the
employer may still be required to pay the salaries notwithstanding the reversal of the LAs decision.33

Application of the two-fold test; the


petitioners are entitled to receive their
accrued salaries until December 18, 2007
As we earlier pointed out, the core issue to be resolved is whether the petitioners may recover the accrued
wages until the CAs reversal of the LAs decision. An affirmative answer to this question will lead us to
reverse the assailed CA decision for legal errors and reinstate the NLRCs decision affirming the release of
the garnished amount. Otherwise, we uphold the CAs decision to be legally correct. To resolve this
question, we apply the two-fold test.
First, the existence of delay - whether there was actual delay or whether the order of reinstatement pending
appeal was not executed prior to its reversal? We answer this test in the affirmative.
To recall, on May 31, 2005, the LA rendered the decision finding the petitioners illegally dismissed and
ordering their immediate reinstatement. Per the records, the respondents received copy of this decision on
July 8, 2005. On August 20, 2005, the petitioners filed before the LA a Motion for Issuance of Writ of
Execution for their immediate reinstatement. The LA issued the Writ of Execution on October 7, 2005.
From the time the respondents received copy of the LAs decision, and the issuance of the writ of
execution, until the CA reversed this decision on December 17, 2008, the respondents had not reinstated the
petitioners, either by actual reinstatement or in the payroll. This continued non-execution of the
reinstatement order in fact moved the LA to issue an alias writ of execution on February 16, 2006 and
another writ of execution on April 24, 2007.
From these facts and without doubt, there was actual delay in the execution of the reinstatement aspect of
the LAs May 31, 2005 decision before it was reversed in the CAs decision.
Second, the cause of the delay whether the delay was not due to the employers unjustified act or
omission. We answer this test in the negative; we find that the delay in the execution of the reinstatement
pending appeal was due to the respondents unjustified acts.
In reversing, for grave abuse of discretion, the NLRCs order affirming the release of the garnished amount,
the CA relied on the fact of the issuance of the February 21, 2006 Memorandum and of the petitioners
failure to comply with its return-to-work directive. In other words, with the issuance of this Memorandum,
the CA considered the respondents as having sufficiently complied with their obligation to reinstate the
petitioners. And, the subsequent delay in or the non-execution of the reinstatement order was no longer the
respondents fault, but rather of the petitioners who refused to report back to work despite the directive.
Our careful consideration of the facts and the circumstances that surrounded the case convinced us that the
delay in the reinstatement pending appeal was due to the respondents fault. For one, the respondents filed
several pleadings to suspend the execution of the LAs reinstatement order, i.e., the opposition to the
petitioners motion for execution filed on October 3, 2005; the motion to quash the October 7, 2005 writ of
execution with prayer to hold in abeyance the implementation of the reinstatement order; and the motion to
suspend the order for the petitioners reinstatement filed on February 28, 2006 after the LA issued the
February 16, 2006 alias writ of execution. These pleadings, to our mind, show a determined effort on the
respondents part to prevent or suspend the execution of the reinstatement pending appeal.
Another reason is that the respondents, contrary to the CAs conclusion, did not sufficiently notify the
petitioners of their intent to actually reinstate them; neither did the respondents give them ample
opportunity to comply with the return-to-work directive. We note that the respondents delivered the
February 21, 2006 Memorandum (requiring the petitioners to report for work on February 24, 2006) only in
the afternoon of February 23, 2006. Worse, the respondents handed the notice to only one of the petitioners
Pelaez who did not act in representation of the others. Evidently, the petitioners could not reasonably be
expected to comply with a directive that they had no or insufficient notice of.

Lastly, the petitioners continuously and actively pursued the execution of the reinstatement aspect of the
LAs decision, i.e., by filing several motions for execution of the reinstatement order, and motion to cite the
respondents in contempt and re-computation of the accrued wages for the respondents continued failure to
reinstate them.
These facts altogether show that the respondents were not at all sincere in reinstating the petitioners. These
facts when taken together with the fact of delay reveal the respondents obstinate resolve and willful
disregard of the immediate and self-executory nature of the reinstatement aspect of the LAs decision.
A further and final point that we considered in concluding that the delay was due to the respondents fault
is the fact that per the 2005 Revised Rules of Procedure of the NLRC (2005 NLRC Rules),34 employers
are required to submit a report of compliance within ten (10) calendar days from receipt of the LAs
decision, noncompliance with which signifies a clear refusal to reinstate. Arguably, the 2005 NLRC Rules
took effect only on January 7, 2006; hence, the respondents could not have been reasonably expected to
comply with this duty that was not yet in effect when the LA rendered its decision (finding illegal
dismissal) and issued the writ of execution in 2005. Nevertheless, when the LA issued the February 16,
2006 alias writ of execution and the April 24, 2007 writ of execution, the 2005 NLRC Rules was already in
place such that the respondents had become duty-bound to submit the required compliance report; their
noncompliance with this rule all the more showed a clear and determined refusal to reinstate.
All told, under the facts and the surrounding circumstances, the delay was due to the acts of the respondents
that we find were unjustified. We reiterate and emphasize, Article 223, paragraph 3, of the Labor Code
mandates the employer to immediately reinstate the dismissed employee, either by actually reinstating
him/her under the conditions prevailing prior to the dismissal or, at the option of the employer, in the
payroll. The respondents' failure in this case to exercise either option rendered them liable for the
petitioners' accrued salary until the LA decision was reversed by the CA on December 17, 2008. We,
therefore, find that the NLRC, in affirming the release of the garnished amount, merely implemented the
mandate of Article 223; it simply recognized as immediate and self-executory the reinstatement aspect of
the LA's decision.
Accordingly, we reverse for legal errors the CA decision.1wphi1 We find no grave abuse of discretion
attended the NLRC's July 16, 2008 resolution that affirmed the March 13, 2008 decision of the LA granting
the release of the garnished amount.
WHEREFORE, in light of these considerations, we hereby GRANT the petition. We REVERSE and SET
ASIDE the September 30, 2010 decision and the January 13, 2011 resolution of the Court of Appeals (CA)
in CA-G.R. Sp No. 112011. Accordingly, we REINSTATE the July 16, 2008 decision of the National
Labor Relations Commission (NLRC) affirming the March 13, 2008 order of the Labor Arbiter in NLRC
Case No. 00-04-05469-2004.
Costs against the respondents South East Asian Airlines and Irene Dornier.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 189404

December 11, 2013

WILGEN LOON, JERRY ARCILLA, ALBERTPEREYE, ARNOLD PEREYE, EDGARDO


OBOSE, ARNEL MALARAS, PATROCINO TOETIN, EVELYN LEONARDO, ELMER
GLOCENDA, RUFO CUNAMAY, ROLANDOSAJOL, ROLANDO ABUCAYON, JENNIFER
NATIVIDAD, MARITESS TORION, ARMANDO LONZAGA, RIZAL GELLIDO, EVIRDE
HAQUE,1 MYRNA VINAS, RODELITO AYALA, WINELITO OJEL, RENATO RODREGO,
NENA ABINA, EMALYN OLIVEROS, LOUIE ILAGAN, JOEL ENTIG, ARNEL ARANETA,
BENJAMIN COSE, WELITO LOON and WILLIAM ALIPAO, Petitioners,
vs.
POWER MASTER, INC., TRI-C GENERAL SERVICES, and SPOUSES HOMER and CARINA
ALUMISIN, Respondents.
DECISION
BRION, J.:
We resolve the petition for review on certiorari,2 filed by petitioners Wilgen Loon, Jerry Arcilla, Albert
Pereye, Arnold Pereye, Edgardo Obose, Arnel Malaras, Patrocino Toetin, Evelyn Leonardo, Elmer
Glocenda, Rufo Cunamay, Rolando Sajol, Rolando Abucayon, Jennifer Natividad, Maritess Torion,
Armando Lonzaga, Rizal Gellido, Evirde Haque, Myrna Vinas, Rodelito Ayala, Winelito Ojel, Renato
Rodrego, Nena Abina, Emalyn Oliveros, Louie Ilagan, Joel Entig, Arnel Araneta, Benjamin Cose, Welito
Loon, William Alipao (collectively, the petitioners), to challenge the June 5, 2009 decision3 and the
August 28, 2009 resolution4 of the Court of Appeals (CA) in CA-G.R. SP No. 95182.
The Factual Antecedents
Respondents Power Master, Inc. and Tri-C General Services employed and assigned the petitioners as
janitors and leadsmen in various Philippine Long Distance Telephone Company (PLDT) offices in Metro
Manila area. Subsequently, the petitioners filed a complaint for money claims against Power Master, Inc.,
Tri-C General Services and their officers, the spouses Homer and Carina Alumisin (collectively, the
respondents). The petitioners alleged in their complaint that they were not paid minimum wages, overtime,
holiday, premium, service incentive leave, and thirteenth month pays. They further averred that the
respondents made them sign blank payroll sheets. On June 11, 2001, the petitioners amended their
complaint and included illegal dismissal as their cause of action. They claimed that the respondents
relieved them from service in retaliation for the filing of their original complaint.
Notably, the respondents did not participate in the proceedings before the Labor Arbiter except on April
19, 2001 and May 21, 2001 when Mr. Romulo Pacia, Jr. appeared on the respondents behalf.5 The
respondents counsel also appeared in a preliminary mandatory conference on July 5, 2001.6
However, the respondents neither filed any position paper nor proffered pieces of evidence in their defense
despite their knowledge of the pendency of the case.
The Labor Arbiters Ruling
In a decision7 dated March 15, 2002, Labor Arbiter (LA) Elias H. Salinas partially ruled in favor of the
petitioners. The LA awarded the petitioners salary differential, service incentive leave, and thirteenth
month pays. In awarding these claims, the LA stated that the burden of proving the payment of these
money claims rests with the employer. The LA also awarded attorneys fees in favor of the petitioners,
pursuant to Article 111 of the Labor Code.8
However, the LA denied the petitioners claims for backwages, overtime, holiday, and premium pays.
The LA observed that the petitioners failed to show that they rendered overtime work and worked on
holidays and rest days without compensation. The LA further concluded that the petitioners cannot be
declared to have been dismissed from employment because they did not show any notice of termination of
employment. They were also not barred from entering the respondents premises.

The Proceedings before the NLRC


Both parties appealed the LAs ruling with the National Labor Relations Commission. The petitioners
disputed the LAs denial of their claim for backwages, overtime, holiday and premium pays. Meanwhile,
the respondents questioned the LAs ruling on the ground that the LA did not acquire jurisdiction over their
persons.
The respondents insisted that they were not personally served with summons and other processes. They
also claimed that they paid the petitioners minimum wages, service incentive leave and thirteenth month
pays. As proofs, they attached photocopied and computerized copies of payroll sheets to their
memorandum on appeal.9 They further maintained that the petitioners were validly dismissed. They
argued that the petitioners repeated defiance to their transfer to different workplaces and their violations of
the company rules and regulations constituted serious misconduct and willful disobedience.10
On January 3, 2003, the respondents filed an unverified supplemental appeal. They attached photocopied
and computerized copies of list of employees with automated teller machine (ATM) cards to the
supplemental appeal. This list also showed the amounts allegedly deposited in the employees ATM
cards.11 They also attached documentary evidence showing that the petitioners were dismissed for
cause and had been accorded due process.
On January 22, 2003, the petitioners filed an Urgent Manifestation and Motion12 where they asked for
the deletion of the supplemental appeal from the records because it allegedly suffered from infirmities.
First, the supplemental appeal was not verified. Second, it was belatedly filed six months from the filing of
the respondents notice of appeal with memorandum on appeal. The petitioners pointed out that they only
agreed to the respondents filing of a responsive pleading until December 18, 2002.13 Third the attached
documentary evidence on the supplemental appeal bore the petitioners forged signatures.
They reiterated these allegations in an Urgent Motion to Resolve Manifestation and Motion (To
Expunge from the Records Respondents Supplemental Appeal, Reply and/or Rejoinder) dated
January 31, 2003.14 Subsequently, the petitioners filed an Urgent Manifestation with Reiterating
Motion to Strike-Off the Record Supplemental Appeal/Reply, Quitclaims and Spurious Documents
Attached to Respondents Appeal dated August 7, 2003.15 The petitioners argued in this last motion that
the payrolls should not be given probative value because they were the respondents fabrications. They
reiterated that the genuine payrolls bore their signatures, unlike the respondents photocopies of the
payrolls. They also maintained that their signatures in the respondents documents (which showed their
receipt of thirteenth month pay) had been forged.
The NLRC Ruling
In a resolution dated November 27, 2003, the NLRC partially ruled in favor of the respondents.16 The
NLRC affirmed the LAs awards of holiday pay and attorneys fees. It also maintained that the LA
acquired jurisdiction over the persons of the respondents through their voluntary appearance.
However, it allowed the respondents to submit pieces of evidence for the first time on appeal on the
ground that they had been deprived of due process. It found that the respondents did not actually receive
the LAs processes. It also admitted the respondents unverified supplemental appeal on the ground that
technicalities may be disregarded to serve the greater interest of substantial due process. Furthermore, the
Rules of Court do not require the verification of a supplemental pleading.
The NLRC also vacated the LAs awards of salary differential, thirteenth month and service incentive
leave pays. In so ruling, it gave weight to the pieces of evidence attached to the memorandum on appeal
and the supplemental appeal. It maintained that the absence of the petitioners signatures in the payrolls
was not an indispensable factor for their authenticity. It pointed out that the payment of money claims was

further evidenced by the list of employees with ATM cards. It also found that the petitioners signatures
were not forged. It took judicial notice that many people use at least two or more different signatures.
The NLRC further ruled that the petitioners were lawfully dismissed on grounds of serious misconduct
and willful disobedience. It found that the petitioners failed to comply with various memoranda directing
them to transfer to other workplaces and to attend training seminars for the intended reorganization and
reshuffling.
The NLRC denied the petitioners motion for reconsideration in a resolution dated April 28, 2006.17
Aggrieved, the petitioners filed a petition for certiorari under Rule 65 of the Rules of Court before the
CA.18
The CA Ruling
The CA affirmed the NLRCs ruling. The CA held that the petitioners were afforded substantive and
procedural due process. Accordingly, the petitioners deliberately did not explain their side. Instead, they
continuously resisted their transfer to other PLDT offices and violated company rules and regulations. It
also upheld the NLRCs findings on the petitioners monetary claims.
The CA denied the petitioners motion for reconsideration in a resolution dated August 28, 2009,
prompting the petitioners to file the present petition.19
The Petition
In the petition before this Court, the petitioners argue that the CA committed a reversible error when it did
not find that the NLRC committed grave abuse of discretion. They reiterate their arguments before the
lower tribunals and the CA in support of this conclusion. They also point out that the respondents posted a
bond from a surety that was not accredited by this Court and by the NLRC. In effect, the respondents failed
to perfect their appeal before the NLRC. They further insist that the NLRC should not have admitted the
respondents unverified supplemental appeal.20
The Respondents Position
In their Comments, the respondents stress that the petitioners only raised the issue of the validity of the
appeal bond for the first time on appeal. They also reiterate their arguments before the NLRC and the CA.
They additionally submit that the petitioners arguments have been fully passed upon and found
unmeritorious by the NLRC and the CA.21
The Issues
This case presents to us the following issues:
1) Whether the CA erred when it did not find that the NLRC committed grave abuse of discretion
in giving due course to the respondents appeal;
a) Whether the respondents perfected their appeal before the NLRC; and
b) Whether the NLRC properly allowed the respondents supplemental appeal
2) Whether the respondents were estopped from submitting pieces of evidence for the first time on
appeal;

3) Whether the petitioners were illegally dismissed and are thus entitled to backwages;
4) Whether the petitioners are entitled to salary differential, overtime, holiday, premium, service
incentive leave, and thirteenth month pays; and
5) Whether the petitioners are entitled to attorneys fees.
The Courts Ruling
The respondents perfected their
appeal with the NLRC because the
revocation of the bonding company's
authority has a prospective
application
Paragraph 2, Article 223 of the Labor Code provides that "[i]n case of a judgment involving a monetary
award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued
by a reputable bonding company duly accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from."
Contrary to the respondents claim, the issue of the appeal bonds validity may be raised for the first time
on appeal since its proper filing is a jurisdictional requirement.22 The requirement that the appeal bond
should be issued by an accredited bonding company is mandatory and jurisdictional. The rationale of
requiring an appeal bond is to discourage the employers from using an appeal to delay or evade the
employees' just and lawful claims. It is intended to assure the workers that they will receive the money
judgment in their favor upon the dismissal of the employers appeal.23
In the present case, the respondents filed a surety bond issued by Security Pacific Assurance Corporation
(Security Pacific) on June 28, 2002. At that time, Security Pacific was still an accredited bonding company.
However, the NLRC revoked its accreditation on February 16, 2003.24 Nonetheless, this subsequent
revocation should not prejudice the respondents who relied on its then subsisting accreditation in good
faith. In Del Rosario v. Philippine Journalists, Inc.,25 we ruled that a bonding companys revocation of
authority is prospective in application.
However, the respondents should post a new bond issued by an accredited bonding company in compliance
with paragraph 4, Section 6, Rule 6 of the NLRC Rules of Procedure. This provision states that "[a] cash or
surety bond shall be valid and effective from the date of deposit or posting, until the case is finally
decided, resolved or terminated or the award satisfied."
The CA correctly ruled that the
NLRC properly gave due course to
the respondents supplemental
appeal
The CA also correctly ruled that the NLRC properly gave due course to the respondents supplemental
appeal. Neither the laws nor the rules require the verification of the supplemental appeal.26 Furthermore,
verification is a formal, not a jurisdictional, requirement. It is mainly intended for the assurance that the
matters alleged in the pleading are true and correct and not of mere speculation.27 Also, a supplemental
appeal is merely an addendum to the verified memorandum on appeal that was earlier filed in the present
case; hence, the requirement for verification has substantially been complied with.
The respondents also timely filed their supplemental appeal on January 3, 2003. The records of the case
show that the petitioners themselves agreed that the pleading shall be filed until December 18, 2002. The

NLRC further extended the filing of the supplemental pleading until January 3, 2003 upon the respondents
motion for extension.
A party may only adduce evidence
for the first time on appeal if he
adequately explains his delay in the
submission of evidence and he
sufficiently proves the allegations
sought to be proven
In labor cases, strict adherence to the technical rules of procedure is not required. Time and again, we have
allowed evidence to be submitted for the first time on appeal with the NLRC in the interest of substantial
justice.28 Thus, we have consistently supported the rule that labor officials should use all reasonable means
to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or
procedure, in the interest of due process.29
However, this liberal policy should still be subject to rules of reason and fairplay. The liberality of
procedural rules is qualified by two requirements: (1) a party should adequately explain any delay in
the submission of evidence; and (2) a party should sufficiently prove the allegations sought to be
proven.30 The reason for these requirements is that the liberal application of the rules before quasi-judicial
agencies cannot be used to perpetuate injustice and hamper the just resolution of the case. Neither is the
rule on liberal construction a license to disregard the rules of procedure.31
Guided by these principles, the CA grossly erred in ruling that the NLRC did not commit grave abuse of
discretion in arbitrarily admitting and giving weight to the respondents pieces of evidence for the first time
on appeal.
A. The respondents failed to
adequately explain their delay
in the submission of evidence
We cannot accept the respondents cavalier attitude in blatantly disregarding the NLRC Rules of Procedure.
The CA gravely erred when it overlooked that the NLRC blindly admitted and arbitrarily gave probative
value to the respondents evidence despite their failure to adequately explain their delay in the submission
of evidence. Notably, the respondents delay was anchored on their assertion that they were oblivious of the
proceedings before the LA. However, the respondents did not dispute the LAs finding that Mr. Romulo
Pacia, Jr. appeared on their behalf on April 19, 2001 and May 21, 2001.32 The respondents also failed to
contest the petitioners assertion that the respondents counsel appeared in a preliminary mandatory
conference on July 5, 2001.33
Indeed, the NLRC capriciously and whimsically admitted and gave weight to the respondents evidence
despite its finding that they voluntarily appeared in the compulsory arbitration proceedings. The NLRC
blatantly disregarded the fact that the respondents voluntarily opted not to participate, to adduce evidence
in their defense and to file a position paper despite their knowledge of the pendency of the proceedings
before the LA. The respondents were also grossly negligent in not informing the LA of the specific
building unit where the respondents were conducting their business and their counsels address despite their
knowledge of their non-receipt of the processes.34
B. The respondents failed to
sufficiently prove the
allegations sought to be
proven

Furthermore, the respondents failed to sufficiently prove the allegations sought to be proven. Why the
respondents photocopied and computerized copies of documentary evidence were not presented at the
earliest opportunity is a serious question that lends credence to the petitioners claim that the respondents
fabricated the evidence for purposes of appeal. While we generally admit in evidence and give probative
value to photocopied documents in administrative proceedings, allegations of forgery and fabrication
should prompt the adverse party to present the original documents for inspection.35 It was incumbent
upon the respondents to present the originals, especially in this case where the petitioners had submitted
their specimen signatures. Instead, the respondents effectively deprived the petitioners of the opportunity to
examine and controvert the alleged spurious evidence by not adducing the originals. This Court is thus left
with no option but to rule that the respondents failure to present the originals raises the presumption that
evidence willfully suppressed would be adverse if produced.36
It was also gross error for the CA to affirm the NLRCs proposition that "[i]t is of common knowledge that
there are many people who use at least two or more different signatures."37 The NLRC cannot take judicial
notice that many people use at least two signatures, especially in this case where the petitioners themselves
disown the signatures in the respondents assailed documentary evidence.38 The NLRCs position is
unwarranted and is patently unsupported by the law and jurisprudence.
Viewed in these lights, the scales of justice must tilt in favor of the employees. This conclusion is
consistent with the rule that the employers cause can only succeed on the strength of its own evidence and
not on the weakness of the employees evidence.39
The petitioners are entitled to
backwages
Based on the above considerations, we reverse the NLRC and the CAs finding that the petitioners were
terminated for just cause and were afforded procedural due process. In termination cases, the burden of
proving just and valid cause for dismissing an employee from his employment rests upon the employer.
The employers failure to discharge this burden results in the finding that the dismissal is unjustified.40
This is exactly what happened in the present case.
The petitioners are entitled to salary
differential, service incentive,
holiday, and thirteenth month pays
We also reverse the NLRC and the CAs finding that the petitioners are not entitled to salary differential,
service incentive, holiday, and thirteenth month pays. As in illegal dismissal cases, the general rule is that
the burden rests on the defendant to prove payment rather than on the plaintiff to prove non-payment of
these money claims.41 The rationale for this rule is that the pertinent personnel files, payrolls, records,
remittances and other similar documents which will show that differentials, service incentive leave and
other claims of workers have been paid are not in the possession of the worker but are in the custody and
control of the employer.42
The petitioners are not entitled to
overtime and premium pays
However, the CA was correct in its finding that the petitioners failed to provide sufficient factual basis for
the award of overtime, and premium pays for holidays and rest days. The burden of proving entitlement to
overtime pay and premium pay for holidays and rest days rests on the employee because these are not
incurred in the normal course of business.43 In the present case, the petitioners failed to adduce any
evidence that would show that they actually rendered service in excess of the regular eight working hours a
day, and that they in fact worked on holidays and rest days.

The petitioners are entitled to


attorneys fees
The award of attorneys fees is also warranted under the circumstances of this case.1wphi1 An employee
is entitled to an award of attorneys fees equivalent to ten percent (10%) of the amount of the wages in
actions for unlawful withholding of wages.44
As a final note, we observe that Rodelito Ayala, Winelito Ojel, Renato Rodrego and Welito Loon are also
named as petitioners in this case. However, we deny their petition for the reason that they were not part of
the proceedings before the CA. Their failure to timely seek redress before the CA precludes this Court from
awarding them monetary claims.
All told, we find that the NLRC committed grave abuse of discretion in admitting and giving probative
value to the respondents' evidence on appeal, which errors the CA replicated when it upheld the NLRC
rulings.
WHEREFORE, based on these premises, we REVERSE and SET ASIDE the decision dated June 5,
2009, and the resolution dated August 28, 2009 of the Court of Appeals in CA-G.R. SP No. 95182. This
case is REMANDED to the Labor Arbiter for the sole purpose of computing petitioners' (Wilgen Loon,
Jerry Arcilla, Albert Pereye, Arnold Pereye, Edgardo Obose, Arnel Malaras, Patrocino Toetin, Evelyn
Leonardo, Elmer Glocenda, Rufo Cunamay, Rolando Sajol, Rolando Abucayon, Jennifer Natividad,
Maritess Torion, Ammndo Lonzaga, Rizal Gellido, Evirdly Haque, Myrna Vinas, Nena Abina, Emalyn
Oliveros, Louie Ilagan, Joel Entig, Amel Araneta, Benjamin Cose and William Alipao) full backwages
(computed from the date of their respective dismissals up to the finality of this decision) and their salary
differential, service incentive leave, holiday, thirteenth month pays, and attorney's fees equivalent to ten
percent (10%) of the withheld wages. The respondents are further directed to immediately post a
satisfactory bond conditioned on the satisfaction of the awards affirmed in this Decision.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. Nos. 178034 & 178117 G R. Nos. 186984-85

October 17, 2013

ANDREW JAMES MCBURNIE, Petitioner,


vs.
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC., Respondents.
RESOLUTION
REYES, J.:
For resolution are the
(1) third motion for reconsideration1 filed by Eulalio Ganzon (Ganzon), EGI-Managers, Inc. (EGI)
and E. Ganzon, Inc. (respondents) on March 27, 2012, seeking a reconsideration of the Courts
Decision2 dated September 18, 2009 that ordered the dismissal of their appeal to the National
Labor Relations Commission (NLRC) for failure to post additional appeal bond in the amount of
P54,083,910.00; and

(2) motion for reconsideration3 filed by petitioner Andrew James McBurnie (McBurnie) on
September 26, 2012, assailing the Court en bancs Resolution4 dated September 4, 2012 that (1)
accepted the case from the Courts Third Division and (2) enjoined the implementation of the
Labor Arbiters (LA) decision finding him to be illegally dismissed by the respondents.
Antecedent Facts
The Decision dated September 18, 2009 provides the following antecedent facts and proceedings
On October 4, 2002, McBurnie, an Australian national, instituted a complaint for illegal dismissal and other
monetary claims against the respondents. McBurnie claimed that on May 11, 1999, he signed a five-year
employment agreement5 with the company EGI as an Executive Vice-President who shall oversee the
management of the companys hotels and resorts within the Philippines. He performed work for the
company until sometime in November 1999, when he figured in an accident that compelled him to go back
to Australia while recuperating from his injuries. While in Australia, he was informed by respondent
Ganzon that his services were no longer needed because their intended project would no longer push
through.
The respondents opposed the complaint, contending that their agreement with McBurnie was to jointly
invest in and establish a company for the management of hotels. They did not intend to create an employeremployee relationship, and the execution of the employment contract that was being invoked by McBurnie
was solely for the purpose of allowing McBurnie to obtain an alien work permit in the Philippines. At the
time McBurnie left for Australia for his medical treatment, he had not yet obtained a work permit.
In a Decision6 dated September 30, 2004, the LA declared McBurnie as having been illegally dismissed
from employment, and thus entitled to receive from the respondents the following amounts: (a)
US$985,162.00 as salary and benefits for the unexpired term of their employment contract, (b)
P2,000,000.00 as moral and exemplary damages, and (c) attorneys fees equivalent to 10% of the total
monetary award.
Feeling aggrieved, the respondents appealed the LAs Decision to the NLRC.7 On November 5, 2004, they
filed their Memorandum of Appeal8 and Motion to Reduce Bond9, and posted an appeal bond in the amount
of P100,000.00. The respondents contended in their Motion to Reduce Bond, inter alia, that the monetary
awards of the LA were null and excessive, allegedly with the intention of rendering them incapable of
posting the necessary appeal bond. They claimed that an award of "more than P60 Million Pesos to a single
foreigner who had no work permit and who left the country for good one month after the purported
commencement of his employment" was a patent nullity.10 Furthermore, they claimed that because of their
business losses that may be attributed to an economic crisis, they lacked the capacity to pay the bond of
almost P60 Million, or even the millions of pesos in premium required for such bond.
On March 31, 2005, the NLRC denied11 the motion to reduce bond, explaining that "in cases involving
monetary award, an employer seeking to appeal the [LAs] decision to the Commission is unconditionally
required by Art. 223, Labor Code to post bond in the amount equivalent to the monetary award x x x."12
Thus, the NLRC required from the respondents the posting of an additional bond in the amount of
P54,083,910.00.
When their motion for reconsideration was denied,13 the respondents decided to elevate the matter to the
Court of Appeals (CA) via the Petition for Certiorari and Prohibition (With Extremely Urgent Prayer for
the Issuance of a Preliminary Injunction and/or Temporary Restraining Order)14 docketed as CA-G.R. SP
No. 90845.
In the meantime, in view of the respondents failure to post the required additional bond, the NLRC
dismissed their appeal in a Resolution15 dated March 8, 2006. The respondents motion for reconsideration
was denied on June 30, 2006.16 This prompted the respondents to file with the CA the Petition for Certiorari

(With Urgent Prayers for the Immediate Issuance of a Temporary Restraining Order and a Writ of
Preliminary Injunction)17 docketed as CA-G.R. SP No. 95916, which was later consolidated with CA-G.R.
SP No. 90845.
CA-G.R. SP Nos. 90845 and 95916
On February 16, 2007, the CA issued a Resolution18 granting the respondents application for a writ of
preliminary injunction. It directed the NLRC, McBurnie, and all persons acting for and under their
authority to refrain from causing the execution and enforcement of the LAs decision in favor of McBurnie,
conditioned upon the respondents posting of a bond in the amount of P10,000,000.00. McBurnie sought
reconsideration of the issuance of the writ of preliminary injunction, but this was denied by the CA in its
Resolution19 dated May 29, 2007.
McBurnie then filed with the Court a Petition for Review on Certiorari20 docketed as G.R. Nos. 178034 and
178117, assailing the CA Resolutions that granted the respondents application for the injunctive writ. On
July 4, 2007, the Court denied the petition on the ground of McBurnies failure to comply with the 2004
Rules on Notarial Practice and to sufficiently show that the CA committed any reversible error.21 A motion
for reconsideration was denied with finality in a Resolution22 dated October 8, 2007.
Unyielding, McBurnie filed a Motion for Leave (1) To File Supplemental Motion for Reconsideration and
(2) To Admit the Attached Supplemental Motion for Reconsideration,23 which was treated by the Court as a
second motion for reconsideration, a prohibited pleading under Section 2, Rule 56 of the Rules of Court.
Thus, the motion for leave was denied by the Court in a Resolution24 dated November 26, 2007. The
Courts Resolution dated July 4, 2007 then became final and executory on November 13, 2007;
accordingly, entry of judgment was made in G.R. Nos. 178034 and 178117.25
In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 and
rendered its Decision26 dated October 27, 2008, allowing the respondents motion to reduce appeal bond
and directing the NLRC to give due course to their appeal. The dispositive portion of the CA Decision
reads:
WHEREFORE, in view of the foregoing, the petition for certiorari and prohibition docketed as CA GR SP
No. 90845 and the petition for certiorari docketed as CA GR SP No. 95916 are GRANTED. Petitioners
Motion to Reduce Appeal Bond is GRANTED. Petitioners are hereby DIRECTED to post appeal bond in
the amount of P10,000,000.00. The NLRC is hereby DIRECTED to give due course to petitioners appeal
in CA GR SP No. 95916 which is ordered remanded to the NLRC for further proceedings.
SO ORDERED.27
On the issue28 of the NLRCs denial of the respondents motion to reduce appeal bond, the CA ruled that
the NLRC committed grave abuse of discretion in immediately denying the motion without fixing an
appeal bond in an amount that was reasonable, as it denied the respondents of their right to appeal from the
decision of the LA.29 The CA explained that "(w)hile Art. 223 of the Labor Code requiring bond equivalent
to the monetary award is explicit, Section 6, Rule VI of the NLRC Rules of Procedure, as amended,
recognized as exception a motion to reduce bond upon meritorious grounds and upon posting of a bond in a
reasonable amount in relation to the monetary award."30
On the issue31 of the NLRCs dismissal of the appeal on the ground of the respondents failure to post the
additional appeal bond, the CA also found grave abuse of discretion on the part of the NLRC, explaining
that an appeal bond in the amount of P54,083,910.00 was prohibitive and excessive. Moreover, the
appellate court cited the pendency of the petition for certiorari over the denial of the motion to reduce bond,
which should have prevented the NLRC from immediately dismissing the respondents appeal.32

Undeterred, McBurnie filed a motion for reconsideration. At the same time, the respondents moved that the
appeal be resolved on the merits by the CA. On March 3, 2009, the CA issued a Resolution33 denying both
motions. McBurnie then filed with the Court the Petition for Review on Certiorari34 docketed as G.R. Nos.
186984-85.
In the meantime, the NLRC, acting on the CAs order of remand, accepted the appeal from the LAs
decision, and in its Decision35 dated November 17, 2009, reversed and set aside the Decision of the LA, and
entered a new one dismissing McBurnies complaint. It explained that based on records, McBurnie was
never an employee of any of the respondents, but a potential investor in a project that included said
respondents, barring a claim of dismissal, much less, an illegal dismissal. Granting that there was a contract
of employment executed by the parties, McBurnie failed to obtain a work permit which would have
allowed him to work for any of the respondents.36 In the absence of such permit, the employment
agreement was void and thus, could not be the source of any right or obligation.
Court Decision dated September 18, 2009
On September 18, 2009, the Third Division of this Court rendered its Decision37 which reversed the CA
Decision dated October 27, 2008 and Resolution dated March 3, 2009. The dispositive portion reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP Nos.
90845 and 95916 dated October 27, 2008 granting respondents Motion to Reduce Appeal Bond and
ordering the National Labor Relations Commission to give due course to respondents appeal, and its
March 3, 2009 Resolution denying petitioners motion for reconsideration, are REVERSED and SET
ASIDE. The March 8, 2006 and June 30, 2006 Resolutions of the National Labor Relations Commission in
NLRC NCR CA NO. 042913-05 dismissing respondents appeal for failure to perfect an appeal and
denying their motion for reconsideration, respectively, are REINSTATED and AFFIRMED.
SO ORDERED.38
The Court explained that the respondents failure to post a bond equivalent in amount to the LAs monetary
award was fatal to the appeal.39 Although an appeal bond may be reduced upon motion by an employer, the
following conditions must first be satisfied: (1) the motion to reduce bond shall be based on meritorious
grounds; and (2) a reasonable amount in relation to the monetary award is posted by the appellant. Unless
the NLRC grants the motion to reduce the cash bond within the 10-day reglementary period to perfect an
appeal from a judgment of the LA, the employer is mandated to post the cash or surety bond securing the
full amount within the said 10-day period.40 The respondents initial appeal bond of P100,000.00 was
grossly inadequate compared to the LAs monetary award.
The respondents first motion for reconsideration41 was denied by the Court for lack of merit via a
Resolution42 dated December 14, 2009.
Meanwhile, on the basis of the Courts Decision, McBurnie filed with the NLRC a motion for
reconsideration with motion to recall and expunge from the records the NLRC Decision dated November
17, 2009.43 The motion was granted by the NLRC in its Decision44 dated January 14, 2010.45
Undaunted by the denial of their first motion for reconsideration of the Decision dated September 18, 2009,
the respondents filed with the Court a Motion for Leave to Submit Attached Second Motion for
Reconsideration46 and Second Motion for Reconsideration,47 which motion for leave was granted in a
Resolution48 dated March 15, 2010. McBurnie was allowed to submit his comment on the second motion,
and the respondents, their reply to the comment. On January 25, 2012, however, the Court issued a
Resolution49 denying the second motion "for lack of merit," "considering that a second motion for
reconsideration is a prohibited pleading x x x."50

The Courts Decision dated September 18, 2009 became final and executory on March 14, 2012. Thus,
entry of judgment51 was made in due course, as follows:
ENTRY OF JUDGMENT
This is to certify that on September 18, 2009 a decision rendered in the above-entitled cases was filed in
this Office, the dispositive part of which reads as follows:
xxxx
and that the same has, on March 14, 2012 become final and executory and is hereby recorded in the Book
of Entries of Judgments.52
The Entry of Judgment indicated that the same was made for the Courts Decision rendered in G.R. Nos.
186984-85.
On March 27, 2012, the respondents filed a Motion for Leave to File Attached Third Motion for
Reconsideration, with an attached Motion for Reconsideration (on the Honorable Courts 25 January 2012
Resolution) with Motion to Refer These Cases to the Honorable Court En Banc.53 The third motion for
reconsideration is founded on the following grounds:
I.
THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE COURT ACTUALLY
GRANTED RESPONDENTS "MOTION FOR LEAVE TO SUBMIT A SECOND MOTION FOR
RECONSIDERATION."
HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE SUBSEQUENT 25 JANUARY
2012 RESOLUTION CANNOT DENY THE " SECOND MOTION FOR RECONSIDERATION " ON
THE GROUND THAT IT IS A PROHIBITED PLEADING. MOREOVER, IT IS RESPECTFULLY
CONTENDED THAT THERE ARE VERY PECULIAR CIRCUMSTANCES AND NUMEROUS
IMPORTANT ISSUES IN THESE CASES THAT CLEARLY JUSTIFY GIVING DUE COURSE TO
RESPONDENTS "SECOND MOTION FOR RECONSIDERATION," WHICH ARE:
II.
THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE WITH THE OCTOBER
27, 2008 DECISION OF THE COURT OF APPEALS IS A SUBSTANTIAL AND SPECIAL
MERITORIOUS CIRCUMSTANCE TO MERIT RECONSIDERATION OF THIS APPEAL.
III.
THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES THAT WITH RESPECT
TO ARTICLE 223 OF THE LABOR CODE, THE REQUIREMENTS OF THE LAW SHOULD BE
GIVEN A LIBERAL INTERPRETATION, ESPECIALLY IF THERE ARE SPECIAL MERITORIOUS
CIRCUMSTANCES AND ISSUES.
IV. THE LAS JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS MORE THAN P60
MILLION PESOS TO A SINGLE FOREIGNER WHO HAD NO WORK PERMIT, AND NO WORKING
VISA.
V.

PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR RELATIONS


COMMISSION (NLRC) IN HIS APPEAL HEREIN, MAKING THE APPEAL INEFFECTIVE AGAINST
THE NLRC.
VI.
NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE IN ITS NOVEMBER 17,
2009 DECISION.
VII.
THE HONORABLE COURTS 18 SEPTEMBER 2009 DECISION WAS TAINTED WITH VERY
SERIOUS IRREGULARITIES.
VIII.
GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED IN THIS CASE.
IX.
THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER VERY MERITORIOUS
ARGUMENTS OF THE RESPONDENTS WHICH ARE AS FOLLOWS:
(A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS BEFORE THE [LA]
(WHEN 2 MISSED HEARINGS MEAN DISMISSAL).
(B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF LEISURE EXPERTS, INC.,
BUT NOT OF ANY OF THE RESPONDENTS.
(C) PETITIONERS POSITIVE LETTER TO RESPONDENT MR. EULALIO GANZON
CLEARLY SHOWS THAT HE WAS NOT ILLEGALLY DISMISSED NOR EVEN
DISMISSED BY ANY OF THE RESPONDENTS AND PETITIONER EVEN PROMISED TO
PAY HIS DEBTS FOR ADVANCES MADE BY RESPONDENTS.
(D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE RESPONDENTS.
PETITIONER PRESENTED WORK FOR CORONADO BEACH RESORT WHICH IS
[NEITHER] OWNED NOR CONNECTED WITH ANY OF THE RESPONDENTS.
(E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED EVEN IF THERE WAS
ABSOLUTELY NO EVIDENCE AT ALL PRESENTED THAT PETITIONER WAS
DISMISSED BY THE RESPONDENTS.
(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST 2 MONTHS AFTER
THE START OF THE ALLEGED EMPLOYMENT AGREEMENT, AND HAS STILL NOT
RETURNED TO THE PHILIPPINES AS CONFIRMED BY THE BUREAU OF
IMMIGRATION.
(G) PETITIONER COULD NOT HAVE SIGNED AND PERSONALLY APPEARED BEFORE
THE NLRC ADMINISTERING OFFICER AS INDICATED IN THE COMPLAINT SHEET
SINCE HE LEFT THE COUNTRY 3 YEARS BEFORE THE COMPLAINT WAS FILED AND
HE NEVER CAME BACK.54

On September 4, 2012, the Court en banc55 issued a Resolution56 accepting the case from the Third
Division. It also issued a temporary restraining order (TRO) enjoining the implementation of the LAs
Decision dated September 30, 2004. This prompted McBurnies filing of a Motion for Reconsideration,57
where he invoked the fact that the Courts Decision dated September 18, 2009 had become final and
executory, with an entry of judgment already made by the Court.
Our Ruling
In light of pertinent law and jurisprudence, and upon taking a second hard look of the parties arguments
and the records of the case, the Court has ascertained that a reconsideration of this Courts Decision dated
September 18, 2009 and Resolutions dated December 14, 2009 and January 25, 2012, along with the lifting
of the entry of judgment in G.R. No. 186984-85, is in order.
The Courts acceptance of the
third motion for reconsideration
At the outset, the Court emphasizes that second and subsequent motions for reconsideration are, as a
general rule, prohibited. Section 2, Rule 52 of the Rules of Court provides that "no second motion for
reconsideration of a judgment or final resolution by the same party shall be entertained." The rule rests on
the basic tenet of immutability of judgments. "At some point, a decision becomes final and executory and,
consequently, all litigations must come to an end."58
The general rule, however, against second and subsequent motions for reconsideration admits of settled
exceptions. For one, the present Internal Rules of the Supreme Court, particularly Section 3, Rule 15
thereof, provides:
Sec. 3. Second motion for reconsideration. The Court shall not entertain a second motion for
reconsideration, and any exception to this rule can only be granted in the higher interest of justice by the
Court en banc upon a vote of at least two-thirds of its actual membership. There is reconsideration "in the
higher interest of justice" when the assailed decision is not only legally erroneous, but is likewise patently
unjust and potentially capable of causing unwarranted and irremediable injury or damage to the parties. A
second motion for reconsideration can only be entertained before the ruling sought to be reconsidered
becomes final by operation of law or by the Courts declaration.
x x x x (Emphasis ours)
In a line of cases, the Court has then entertained and granted second motions for reconsideration "in the
higher interest of substantial justice," as allowed under the Internal Rules when the assailed decision is
"legally erroneous," "patently unjust" and "potentially capable of causing unwarranted and irremediable
injury or damage to the parties." In Tirazona v. Philippine EDS Techno-Service, Inc. (PET, Inc.),59 we also
explained that a second motion for reconsideration may be allowed in instances of "extraordinarily
persuasive reasons and only after an express leave shall have been obtained."60 In Apo Fruits Corporation v.
Land Bank of the Philippines,61 we allowed a second motion for reconsideration as the issue involved
therein was a matter of public interest, as it pertained to the proper application of a basic constitutionallyguaranteed right in the governments implementation of its agrarian reform program. In San Miguel
Corporation v. NLRC,62 the Court set aside the decisions of the LA and the NLRC that favored claimantssecurity guards upon the Courts review of San Miguel Corporations second motion for reconsideration. In
Vir-Jen Shipping and Marine Services, Inc. v. NLRC, et al.,63 the Court en banc reversed on a third motion
for reconsideration the ruling of the Courts Division on therein private respondents claim for wages and
monetary benefits.

It is also recognized that in some instances, the prudent action towards a just resolution of a case is for the
Court to suspend rules of procedure, for "the power of this Court to suspend its own rules or to except a
particular case from its operations whenever the purposes of justice require it, cannot be questioned."64 In
De Guzman v. Sandiganbayan,65 the Court, thus, explained:
The rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their
strict and rigid application, which would result in technicalities that tend to frustrate rather than promote
substantial justice, must always be avoided. Even the Rules of Court envision this liberality. This power to
suspend or even disregard the rules can be so pervasive and encompassing so as to alter even that which
this Court itself has already declared to be final, as we are now compelled to do in this case. x x x.
xxxx
The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation of justice but
not to bind and chain the hand that dispenses it, for otherwise, courts will be mere slaves to or robots of
technical rules, shorn of judicial discretion. That is precisely why courts in rendering real justice have
always been, as they in fact ought to be, conscientiously guided by the norm that when on the balance,
technicalities take a backseat against substantive rights, and not the other way around. Truly then,
technicalities, in the appropriate language of Justice Makalintal, "should give way to the realities of the
situation." x x x.66 (Citations omitted)
Consistent with the foregoing precepts, the Court has then reconsidered even decisions that have attained
finality, finding it more appropriate to lift entries of judgments already made in these cases. In Navarro v.
Executive Secretary,67 we reiterated the pronouncement in De Guzman that the power to suspend or even
disregard rules of procedure can be so pervasive and compelling as to alter even that which this Court itself
has already declared final. The Court then recalled in Navarro an entry of judgment after it had determined
the validity and constitutionality of Republic Act No. 9355, explaining that:
Verily, the Court had, on several occasions, sanctioned the recall of entries of judgment in light of attendant
extraordinary circumstances. The power to suspend or even disregard rules of procedure can be so
pervasive and compelling as to alter even that which this Court itself had already declared final. In this
case, the compelling concern is not only to afford the movants-intervenors the right to be heard since they
would be adversely affected by the judgment in this case despite not being original parties thereto, but also
to arrive at the correct interpretation of the provisions of the [Local Government Code (LGC)] with respect
to the creation of local government units. x x x.68 (Citations omitted)
In Munoz v. CA,69 the Court resolved to recall an entry of judgment to prevent a miscarriage of justice.
This justification was likewise applied in Tan Tiac Chiong v. Hon. Cosico,70 wherein the Court held that:
The recall of entries of judgments, albeit rare, is not a novelty. In Muoz v. CA , where the case was
elevated to this Court and a first and second motion for reconsideration had been denied with finality , the
Court, in the interest of substantial justice, recalled the Entry of Judgment as well as the letter of transmittal
of the records to the Court of Appeals.71 (Citation omitted)
In Barnes v. Judge Padilla,72 we ruled:
A final and executory judgment can no longer be attacked by any of the parties or be modified, directly or
indirectly, even by the highest court of the land.
However, this Court has relaxed this rule in order to serve substantial justice considering (a) matters of life,
liberty, honor or property, (b) the existence of special or compelling circumstances, (c) the merits of the
case, (d) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of

the rules, (e) a lack of any showing that the review sought is merely frivolous and dilatory, and (f) the other
party will not be unjustly prejudiced thereby.73 (Citations omitted)
As we shall explain, the instant case also qualifies as an exception to, first, the proscription against second
and subsequent motions for reconsideration, and second, the rule on immutability of judgments; a
reconsideration of the Decision dated September 18, 2009, along with the Resolutions dated December 14,
2009 and January 25, 2012, is justified by the higher interest of substantial justice.
To begin with, the Court agrees with the respondents that the Courts prior resolve to grant , and not just
merely note, in a Resolution dated March 15, 2010 the respondents motion for leave to submit their second
motion for reconsideration already warranted a resolution and discussion of the motion for reconsideration
on its merits. Instead of doing this, however, the Court issued on January 25, 2012 a Resolution74 denying
the motion to reconsider for lack of merit, merely citing that it was a "prohibited pleading under Section 2,
Rule 52 in relation to Section 4, Rule 56 of the 1997 Rules of Civil Procedure, as amended."75 In League of
Cities of the Philippines (LCP) v. Commission on Elections,76 we reiterated a ruling that when a motion for
leave to file and admit a second motion for reconsideration is granted by the Court, the Court therefore
allows the filing of the second motion for reconsideration. In such a case, the second motion for
reconsideration is no longer a prohibited pleading. Similarly in this case, there was then no reason for the
Court to still consider the respondents second motion for reconsideration as a prohibited pleading, and
deny it plainly on such ground. The Court intends to remedy such error through this resolution.
More importantly, the Court finds it appropriate to accept the pending motion for reconsideration and
resolve it on the merits in order to rectify its prior disposition of the main issues in the petition. Upon
review, the Court is constrained to rule differently on the petitions. We have determined the grave error in
affirming the NLRCs rulings, promoting results that are patently unjust for the respondents, as we consider
the facts of the case, pertinent law, jurisprudence, and the degree of the injury and damage to the
respondents that will inevitably result from the implementation of the Courts Decision dated September
18, 2009.
The rule on appeal bonds
We emphasize that the crucial issue in this case concerns the sufficiency of the appeal bond that was posted
by the respondents. The present rule on the matter is Section 6, Rule VI of the 2011 NLRC Rules of
Procedure, which was substantially the same provision in effect at the time of the respondents appeal to
the NLRC, and which reads:
RULE VI
APPEALS
Sec. 6. BOND. In case the decision of the Labor Arbiter or the Regional Director involves a monetary
award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond. The
appeal bond shall either be in cash or surety in an amount equivalent to the monetary award, exclusive of
damages and attorneys fees.
xxxx
No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a
bond in a reasonable amount in relation to the monetary award.
The filing of the motion to reduce bond without compliance with the requisites in the preceding paragraph
shall not stop the running of the period to perfect an appeal. (Emphasis supplied)

While the CA, in this case, allowed an appeal bond in the reduced amount of P10,000,000.00 and then
ordered the cases remand to the NLRC, this Courts Decision dated September 18, 2009 provides
otherwise, as it reads in part:
The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards
from the decision of the Labor Arbiter. The lawmakers clearly intended to make the bond a mandatory
requisite for the perfection of an appeal by the employer as inferred from the provision that an appeal by
the employer may be perfected "only upon the posting of a cash or surety bond." The word "only" makes it
clear that the posting of a cash or surety bond by the employer is the essential and exclusive means by
which an employers appeal may be perfected. x x x.
Moreover, the filing of the bond is not only mandatory but a jurisdictional requirement as well, that must be
complied with in order to confer jurisdiction upon the NLRC. Non-compliance therewith renders the
decision of the Labor Arbiter final and executory. This requirement is intended to assure the workers that if
they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the
employers appeal. It is intended to discourage employers from using an appeal to delay or evade their
obligation to satisfy their employees just and lawful claims.
xxxx
Thus, it behooves the Court to give utmost regard to the legislative and administrative intent to strictly
require the employer to post a cash or surety bond securing the full amount of the monetary award within
the 10[-]day reglementary period. Nothing in the Labor Code or the NLRC Rules of Procedure authorizes
the posting of a bond that is less than the monetary award in the judgment, or would deem such insufficient
posting as sufficient to perfect the appeal.
While the bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the
motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to
the monetary award is posted by the appellant, otherwise the filing of the motion to reduce bond shall not
stop the running of the period to perfect an appeal. The qualification effectively requires that unless the
NLRC grants the reduction of the cash bond within the 10-day reglementary period, the employer is still
expected to post the cash or surety bond securing the full amount within the said 10-day period. If the
NLRC does eventually grant the motion for reduction after the reglementary period has elapsed, the correct
relief would be to reduce the cash or surety bond already posted by the employer within the 10-day
period.77 (Emphasis supplied; underscoring ours)
To begin with, the Court rectifies its prior pronouncement the unqualified statement that even an
appellant who seeks a reduction of an appeal bond before the NLRC is expected to post a cash or surety
bond securing the full amount of the judgment award within the 10-day reglementary period to perfect the
appeal.
The suspension of the period to
perfect the appeal upon the filing of
a motion to reduce bond
To clarify, the prevailing jurisprudence on the matter provides that the filing of a motion to reduce bond,
coupled with compliance with the two conditions emphasized in Garcia v. KJ Commercial78 for the grant of
such motion, namely, (1) a meritorious ground, and (2) posting of a bond in a reasonable amount, shall
suffice to suspend the running of the period to perfect an appeal from the labor arbiters decision to the
NLRC.79 To require the full amount of the bond within the 10-day reglementary period would only render
nugatory the legal provisions which allow an appellant to seek a reduction of the bond. Thus, we explained
in Garcia:

The filing of a motion to reduce bond and compliance with the two conditions stop the running of the
period to perfect an appeal. x x x
xxxx
The NLRC has full discretion to grant or deny the motion to reduce bond, and it may rule on the motion
beyond the 10-day period within which to perfect an appeal. Obviously, at the time of the filing of the
motion to reduce bond and posting of a bond in a reasonable amount, there is no assurance whether the
appellants motion is indeed based on "meritorious ground" and whether the bond he or she posted is of a
"reasonable amount." Thus, the appellant always runs the risk of failing to perfect an appeal.
x x x In order to give full effect to the provisions on motion to reduce bond, the appellant must be allowed
to wait for the ruling of the NLRC on the motion even beyond the 10-day period to perfect an appeal. If the
NLRC grants the motion and rules that there is indeed meritorious ground and that the amount of the bond
posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, the appellant may still
file a motion for reconsideration as provided under Section 15, Rule VII of the Rules. If the NLRC grants
the motion for reconsideration and rules that there is indeed meritorious ground and that the amount of the
bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, then the decision of
the labor arbiter becomes final and executory.
xxxx
In any case, the rule that the filing of a motion to reduce bond shall not stop the running of the period to
perfect an appeal is not absolute. The Court may relax the rule. In Intertranz Container Lines, Inc. v.
Bautista, the Court held:
"Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award may be
perfected only upon the posting of cash or surety bond. The Court, however, has relaxed this requirement
under certain exceptional circumstances in order to resolve controversies on their merits. These
circumstances include: (1) fundamental consideration of substantial justice; (2) prevention of miscarriage
of justice or of unjust enrichment; and (3) special circumstances of the case combined with its legal merits,
and the amount and the issue involved."80 (Citations omitted and emphasis ours)
A serious error of the NLRC was its outright denial of the motion to reduce the bond, without even
considering the respondents arguments and totally unmindful of the rules and jurisprudence that allow the
bonds reduction. Instead of resolving the motion to reduce the bond on its merits, the NLRC insisted on an
amount that was equivalent to the monetary award, merely explaining:
We are constrained to deny respondents motion for reduction. As held by the Supreme Court in a recent
case, in cases involving monetary award, an employer seeking to appeal the Labor Arbiters decision to the
Commission is unconditionally required by Art. 223, Labor Code to post bond in the amount equivalent to
the monetary award (Calabash Garments vs. NLRC, G.R. No. 110827, August 8, 1996). x x x81 (Emphasis
ours)
When the respondents sought to reconsider, the NLRC still refused to fully decide on the motion. It refused
to at least make a preliminary determination of the merits of the appeal, as it held:
We are constrained to dismiss respondents Motion for Reconsideration. Respondents contention that the
appeal bond is excessive and based on a decision which is a patent nullity involves the merits of the case. x
x x82
Prevailing rules and jurisprudence
allow the reduction of appeal bonds.

By such haste of the NLRC in peremptorily denying the respondents motion without considering the
respondents arguments, it effectively denied the respondents of their opportunity to seek a reduction of the
bond even when the same is allowed under the rules and settled jurisprudence. It was equivalent to the
NLRCs refusal to exercise its discretion, as it refused to determine and rule on a showing of meritorious
grounds and the reasonableness of the bond tendered under the circumstances.83 Time and again, the Court
has cautioned the NLRC to give Article 223 of the Labor Code, particularly the provisions requiring bonds
in appeals involving monetary awards, a liberal interpretation in line with the desired objective of resolving
controversies on the merits.84 The NLRCs failure to take action on the motion to reduce the bond in the
manner prescribed by law and jurisprudence then cannot be countenanced. Although an appeal by parties
from decisions that are adverse to their interests is neither a natural right nor a part of due process, it is an
essential part of our judicial system. Courts should proceed with caution so as not to deprive a party of the
right to appeal, but rather, ensure that every party has the amplest opportunity for the proper and just
disposition of their cause, free from the constraints of technicalities.85 Considering the mandate of labor
tribunals, the principle equally applies to them.
Given the circumstances of the case, the Courts affirmance in the Decision dated September 18, 2009 of
the NLRCs strict application of the rule on appeal bonds then demands a re-examination. Again, the
emerging trend in our jurisprudence is to afford every party-litigant the amplest opportunity for the proper
and just determination of his cause, free from the constraints of technicalities.86 Section 2, Rule I of the
NLRC Rules of Procedure also provides the policy that "the Rules shall be liberally construed to carry out
the objectives of the Constitution, the Labor Code of the Philippines and other relevant legislations, and to
assist the parties in obtaining just, expeditious and inexpensive resolution and settlement of labor
disputes."87
In accordance with the foregoing, although the general rule provides that an appeal in labor cases from a
decision involving a monetary award may be perfected only upon the posting of a cash or surety bond, the
Court has relaxed this requirement under certain exceptional circumstances in order to resolve
controversies on their merits. These circumstances include: (1) the fundamental consideration of substantial
justice; (2) the prevention of miscarriage of justice or of unjust enrichment; and (3) special circumstances
of the case combined with its legal merits, and the amount and the issue involved.88 Guidelines that are
applicable in the reduction of appeal bonds were also explained in Nicol v. Footjoy Industrial
Corporation.89 The bond requirement in appeals involving monetary awards has been and may be relaxed in
meritorious cases, including instances in which (1) there was substantial compliance with the Rules, (2)
surrounding facts and circumstances constitute meritorious grounds to reduce the bond, (3) a liberal
interpretation of the requirement of an appeal bond would serve the desired objective of resolving
controversies on the merits, or (4) the appellants, at the very least, exhibited their willingness and/or good
faith by posting a partial bond during the reglementary period.90
In Blancaflor v. NLRC,91 the Court also emphasized that while Article 22392 of the Labor Code, as
amended by Republic Act No. 6715, which requires a cash or surety bond in an amount equivalent to the
monetary award in the judgment appealed from may be considered a jurisdictional requirement for the
perfection of an appeal, nevertheless, adhering to the principle that substantial justice is better served by
allowing the appeal on the merits to be threshed out by the NLRC, the foregoing requirement of the law
should be given a liberal interpretation.
As the Court, nonetheless, remains firm on the importance of appeal bonds in appeals from monetary
awards of LAs, we stress that the NLRC, pursuant to Section 6, Rule VI of the NLRC Rules of Procedure,
shall only accept motions to reduce bond that are coupled with the posting of a bond in a reasonable
amount. Time and again, we have explained that the bond requirement imposed upon appellants in labor
cases is intended to ensure the satisfaction of awards that are made in favor of appellees, in the event that
their claims are eventually sustained by the courts.93 On the part of the appellants, its posting may also
signify their good faith and willingness to recognize the final outcome of their appeal.
At the time of a motion to reduce appeal bonds filing, the question of what constitutes "a reasonable
amount of bond" that must accompany the motion may be subject to differing interpretations of litigants.

The judgment of the NLRC which has the discretion under the law to determine such amount cannot as yet
be invoked by litigants until after their motions to reduce appeal bond are accepted.
Given these limitations, it is not uncommon for a party to unduly forfeit his opportunity to seek a reduction
of the required bond and thus, to appeal, when the NLRC eventually disagrees with the partys assessment.
These have also resulted in the filing of numerous petitions against the NLRC, citing an alleged grave
abuse of discretion on the part of the labor tribunal for its finding on the sufficiency or insufficiency of
posted appeal bonds.
It is in this light that the Court finds it necessary to set a parameter for the litigants and the NLRCs
guidance on the amount of bond that shall hereafter be filed with a motion for a bonds reduction. To
ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the
chance to seek a reduction of the appeal bond are effectively carried out, without however defeating the
benefits of the bond requirement in favor of a winning litigant, all motions to reduce bond that are to be
filed with the NLRC shall be accompanied by the posting of a cash or surety bond equivalent to 10% of the
monetary award that is subject of the appeal, which shall provisionally be deemed the reasonable amount of
the bond in the meantime that an appellants motion is pending resolution by the Commission. In
conformity with the NLRC Rules, the monetary award, for the purpose of computing the necessary appeal
bond, shall exclude damages and attorneys fees.94 Only after the posting of a bond in the required
percentage shall an appellants period to perfect an appeal under the NLRC Rules be deemed suspended.
The foregoing shall not be misconstrued to unduly hinder the NLRCs exercise of its discretion, given that
the percentage of bond that is set by this guideline shall be merely provisional. The NLRC retains its
authority and duty to resolve the motion and determine the final amount of bond that shall be posted by the
appellant, still in accordance with the standards of "meritorious grounds" and "reasonable amount". Should
the NLRC, after considering the motions merit, determine that a greater amount or the full amount of the
bond needs to be posted by the appellant, then the party shall comply accordingly. The appellant shall be
given a period of 10 days from notice of the NLRC order within which to perfect the appeal by posting the
required appeal bond.
Meritorious ground as a condition
for the reduction of the appeal bond
In all cases, the reduction of the appeal bond shall be justified by meritorious grounds and accompanied by
the posting of the required appeal bond in a reasonable amount.
The requirement on the existence of a "meritorious ground" delves on the worth of the parties arguments,
taking into account their respective rights and the circumstances that attend the case. The condition was
emphasized in University Plans Incorporated v. Solano,95 wherein the Court held that while the NLRCs
Revised Rules of Procedure "allows the [NLRC] to reduce the amount of the bond, the exercise of the
authority is not a matter of right on the part of the movant, but lies within the sound discretion of the NLRC
upon a showing of meritorious grounds."96 By jurisprudence, the merit referred to may pertain to an
appellants lack of financial capability to pay the full amount of the bond,97 the merits of the main appeal
such as when there is a valid claim that there was no illegal dismissal to justify the award,98 the absence of
an employer-employee relationship,99 prescription of claims,100 and other similarly valid issues that are
raised in the appeal.101 For the purpose of determining a "meritorious ground", the NLRC is not precluded
from receiving evidence, or from making a preliminary determination of the merits of the appellants
contentions.102
In this case, the NLRC then should have considered the respondents arguments in the memorandum on
appeal that was filed with the motion to reduce the requisite appeal bond. Although a consideration of said
arguments at that point would have been merely preliminary and should not in any way bind the eventual
outcome of the appeal, it was apparent that the respondents defenses came with an indication of merit that
deserved a full review of the decision of the LA. The CA, by its Resolution dated February 16, 2007, even

found justified the issuance of a preliminary injunction to enjoin the immediate execution of the LAs
decision, and this Court, a temporary restraining order on September 4, 2012.
Significantly, following the CAs remand of the case to the NLRC, the latter even rendered a Decision that
contained findings that are inconsistent with McBurnies claims. The NLRC reversed and set aside the
decision of the LA, and entered a new one dismissing McBurnies complaint. It explained that McBurnie
was not an employee of the respondents; thus, they could not have dismissed him from employment. The
purported employment contract of the respondents with the petitioner was qualified by the conditions set
forth in a letter dated May 11, 1999, which reads:
May 11, 1999
MR. ANDREW MCBURNIE
Re: Employment Contract
Dear Andrew,
It is understood that this Contract is made subject to the understanding that it is effective only when the
project financing for our Baguio Hotel project pushed through.
The agreement with EGI Managers, Inc. is made now to support your need to facilitate your work permit
with the Department of Labor in view of the expiration of your contract with Pan Pacific.
Regards,
Sgd. Eulalio Ganzon (p. 203, Records)103
For the NLRC, the employment agreement could not have given rise to an employer-employee relationship
by reason of legal impossibility. The two conditions that form part of their agreement, namely, the
successful completion of the project financing for the hotel project in Baguio City and McBurnies
acquisition of an Alien Employment Permit, remained unsatisfied.104 The NLRC concluded that McBurnie
was instead a potential investor in a project that included Ganzon, but the said project failed to pursue due
to lack of funds. Any work performed by McBurnie in relation to the project was merely preliminary to the
business venture and part of his "due diligence" study before pursuing the project, "done at his own
instance, not in furtherance of the employment contract but for his own investment purposes."105 Lastly, the
alleged employment of the petitioner would have been void for being contrary to law, since it is undisputed
that McBurnie did not have any work permit. The NLRC declared:
Absent an employment permit, any employment relationship that McBurnie contemplated with the
respondents was void for being contrary to law. A void or inexistent contract, in turn, has no force and
effect from the beginning as if it had never been entered into. Thus, without an Alien Employment Permit,
the "Employment Agreement" is void and could not be the source of a right or obligation. In support
thereof, the DOLE issued a certification that McBurnie has neither applied nor been issued an Alien
Employment Permit (p. 204, Records).106
McBurnie moved to reconsider, citing the Courts Decision of September 18, 2009 that reversed and set
aside the CAs Decision authorizing the remand. Although the NLRC granted the motion on the said
ground via a Decision107 that set aside the NLRCs Decision dated November 17, 2009, the findings of the
NLRC in the November 17, 2009 decision merit consideration, especially since the findings made therein
are supported by the case records.

In addition to the apparent merit of the respondents appeal, the Court finds the reduction of the appeal
bond justified by the substantial amount of the LAs monetary award. Given its considerable amount, we
find reason in the respondents claim that to require an appeal bond in such amount could only deprive
them of the right to appeal, even force them out of business and affect the livelihood of their employees.108
In Rosewood Processing, Inc. v. NLRC,109 we emphasized: "Where a decision may be made to rest on
informed judgment rather than rigid rules, the equities of the case must be accorded their due weight
because labor determinations should not be secundum rationem but also secundum caritatem."110
What constitutes a reasonable
amount in the determination of the
final amount of appeal bond
As regards the requirement on the posting of a bond in a "reasonable amount," the Court holds that the final
determination thereof by the NLRC shall be based primarily on the merits of the motion and the main
appeal.
Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI thereof, provides that the bond
to be posted shall be "in a reasonable amount in relation to the monetary award ," the merit of the motion
shall always take precedence in the determination. Settled is the rule that procedural rules were conceived,
and should thus be applied in a manner that would only aid the attainment of justice. If a stringent
application of the rules would hinder rather than serve the demands of substantial justice, the former must
yield to the latter.111
Thus, in Nicol where the appellant posted a bond of P10,000,000.00 upon an appeal from the LAs award
of P51,956,314.00, the Court, instead of ruling right away on the reasonableness of the bonds amount
solely on the basis of the judgment award, found it appropriate to remand the case to the NLRC, which
should first determine the merits of the motion. In University Plans,112 the Court also reversed the outright
dismissal of an appeal where the bond posted in a judgment award of more than P30,000,000.00 was
P30,000.00. The Court then directed the NLRC to first determine the merit, or lack of merit, of the motion
to reduce the bond, after the appellant therein claimed that it was under receivership and thus, could not
dispose of its assets within a short notice. Clearly, the rule on the posting of an appeal bond should not be
allowed to defeat the substantive rights of the parties.113
Notably, in the present case, following the CAs rendition of its Decision which allowed a reduced appeal
bond, the respondents have posted a bond in the amount of P10,000,000.00. In Rosewood, the Court
deemed the posting of a surety bond of P50,000.00, coupled with a motion to reduce the appeal bond, as
substantial compliance with the legal requirements for an appeal from a P789,154.39 monetary award
"considering the clear merits which appear, res ipsa loquitor, in the appeal from the LAs Decision, and the
petitioners substantial compliance with rules governing appeals."114 The foregoing jurisprudence strongly
indicate that in determining the reasonable amount of appeal bonds, the Court primarily considers the
merits of the motions and appeals.
Given the circumstances in this case and the merits of the respondents arguments before the NLRC, the
Court holds that the respondents had posted a bond in a "reasonable amount", and had thus complied with
the requirements for the perfection of an appeal from the LAs decision. The CA was correct in ruling that:
In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees Association, President
Rodolfo Jimenez, and members, Reynaldo Fajardo, et al. vs. NLRC, Nueva Ecija I Electric Cooperative,
Inc. (NEECO I) and Patricio de la Pea (GR No. 116066, January 24, 2000), the Supreme Court recognized
that: "the NLRC, in its Resolution No. 11-01-91 dated November 7, 1991 deleted the phrase "exclusive of
moral and exemplary damages as well as attorneys fees in the determination of the amount of bond, and
provided a safeguard against the imposition of excessive bonds by providing that "(T)he Commission may
in meritorious cases and upon motion of the appellant, reduce the amount of the bond."

In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:
"The unreasonable and excessive amount of bond would be oppressive and unjust and would have the
effect of depriving a party of his right to appeal."
xxxx
In dismissing outright the motion to reduce bond filed by petitioners, NLRC abused its discretion. It should
have fixed an appeal bond in a reasonable amount. Said dismissal deprived petitioners of their right to
appeal the Labor Arbiters decision.
xxxx
NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec. 6, Rule VI, NLRC Rules of
Procedure). This Court finds the appeal bond in the amount of P54,083,910.00 prohibitive and excessive,
which constitutes a meritorious ground to allow a motion for reduction thereof.115
The foregoing declaration of the Court requiring a bond in a reasonable amount, taking into account the
merits of the motion and the appeal, is consistent with the oft-repeated principle that letter-perfect rules
must yield to the broader interest of substantial justice.116
The effect of a denial of the appeal
to the NLRC
In finding merit in the respondents motion for reconsideration, we also take into account the unwarranted
results that will arise from an implementation of the Courts Decision dated September 18, 2009. We
emphasize, moreover, that although a remand and an order upon the NLRC to give due course to the appeal
would have been the usual course after a finding that the conditions for the reduction of an appeal bond
were duly satisfied by the respondents, given such results, the Court finds it necessary to modify the CAs
order of remand, and instead rule on the dismissal of the complaint against the respondents.
Without the reversal of the Courts Decision and the dismissal of the complaint against the respondents,
McBurnie would be allowed to claim benefits under our labor laws despite his failure to comply with a
settled requirement for foreign nationals.
Considering that McBurnie, an Australian, alleged illegal dismissal and sought to claim under our labor
laws, it was necessary for him to establish, first and foremost, that he was qualified and duly authorized to
obtain employment within our jurisdiction. A requirement for foreigners who intend to work within the
country is an employment permit, as provided under Article 40, Title II of the Labor Code which reads:
Art. 40. Employment permit for non-resident aliens. Any alien seeking admission to the Philippines for
employment purposes and any domestic or foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment permit from the Department of Labor.
In WPP Marketing Communications, Inc. v. Galera,117 we held that a foreign nationals failure to seek an
employment permit prior to employment poses a serious problem in seeking relief from the Court.118 Thus,
although the respondent therein appeared to have been illegally dismissed from employment, we explained:
This is Galeras dilemma: Galera worked in the Philippines without proper work permit but now wants to
claim employees benefits under Philippine labor laws.

xxxx
The law and the rules are consistent in stating that the employment permit must be acquired prior to
employment. The Labor Code states: "Any alien seeking admission to the Philippines for employment
purposes and any domestic or foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of Labor." Section 4, Rule XIV, Book
I of the Implementing Rules and Regulations provides:
"Employment permit required for entry. No alien seeking employment, whether as a resident or nonresident, may enter the Philippines without first securing an employment permit from the Ministry. If an
alien enters the country under a non-working visa and wishes to be employed thereafter, he may be allowed
to be employed upon presentation of a duly approved employment permit."
Galera cannot come to this Court with unclean hands. To grant Galeras prayer is to sanction the violation
of the Philippine labor laws requiring aliens to secure work permits before their employment. We hold that
the status quo must prevail in the present case and we leave the parties where they are. This ruling,
however, does not bar Galera from seeking relief from other jurisdictions.119 (Citations omitted and
underscoring ours)
Clearly, this circumstance on the failure of McBurnie to obtain an employment permit, by itself,
necessitates the dismissal of his labor complaint.
Furthermore, as has been previously discussed, the NLRC has ruled in its Decision dated November 17,
2009 on the issue of illegal dismissal. It declared that McBurnie was never an employee of any of the
respondents.120 It explained:
All these facts and circumstances prove that McBurnie was never an employee of Eulalio Ganzon or the
respondent companies, but a potential investor in a project with a group including Eulalio Ganzon and
Martinez but said project did not take off because of lack of funds.
McBurnie further claims that in conformity with the provision of the employment contract pertaining to the
obligation of the respondents to provide housing, respondents assigned him Condo Unit # 812 of the
Makati Cinema Square Condominium owned by the respondents. He was also allowed to use a Hyundai
car. If it were true that the contract of employment was for working visa purposes only, why did the
respondents perform their obligations to him?
There is no question that respondents assigned him Condo Unit # 812 of the MCS, but this was not free of
charge. If it were true that it is part of the compensation package as employee, then McBurnie would not be
obligated to pay anything, but clearly, he admitted in his letter that he had to pay all the expenses incurred
in the apartment.
Assuming for the sake of argument that the employment contract is valid between them, record shows that
McBurnie worked from September 1, 1999 until he met an accident on the last week of October. During the
period of employment, the respondents must have paid his salaries in the sum of US$26,000.00, more or
less.
However, McBurnie failed to present a single evidence that [the respondents] paid his salaries like payslip,
check or cash vouchers duly signed by him or any document showing proof of receipt of his compensation
from the respondents or activity in furtherance of the employment contract. Granting again that there was a
valid contract of employment, it is undisputed that on November 1, 1999, McBurnie left for Australia and
never came back. x x x.121 (Emphasis supplied)

Although the NLRCs Decision dated November 17, 2009 was set aside in a Decision dated January 14,
2010, the Courts resolve to now reconsider its Decision dated September 18, 2009 and to affirm the CAs
Decision and Resolution in the respondents favor effectively restores the NLRCs basis for rendering the
Decision dated November 17, 2009.
More importantly, the NLRCs findings on the contractual relations between McBurnie and the respondents
are supported by the records.
First, before a case for illegal dismissal can prosper, an employer-employee relationship must first be
established.122 Although an employment agreement forms part of the case records, respondent Ganzon
signed it with the notation "per my note."123 The respondents have sufficiently explained that the note refers
to the letter124 dated May 11, 1999 which embodied certain conditions for the employments effectivity. As
we have previously explained, however, the said conditions, particularly on the successful completion of
the project financing for the hotel project in Baguio City and McBurnies acquisition of an Alien
Employment Permit, failed to materialize. Such defense of the respondents, which was duly considered by
the NLRC in its Decision dated November 17, 2009, was not sufficiently rebutted by McBurnie.
Second, McBurnie failed to present any employment permit which would have authorized him to obtain
employment in the Philippines. This circumstance negates McBurnies claim that he had been performing
work for the respondents by virtue of an employer-employee relationship. The absence of the employment
permit instead bolsters the claim that the supposed employment of McBurnie was merely simulated, or did
not ensue due to the non-fulfillment of the conditions that were set forth in the letter of May 11, 1999.
Third, besides the employment agreement, McBurnie failed to present other competent evidence to prove
his claim of an employer-employee relationship. Given the parties conflicting claims on their true intention
in executing the agreement, it was necessary to resort to the established criteria for the determination of an
employer-employee relationship, namely: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct.125 The
rule of thumb remains: the onus probandi falls on the claimant to establish or substantiate the claim by the
requisite quantum of evidence. Whoever claims entitlement to the benefits provided by law should establish
his or her right thereto.126 McBurnie failed in this regard.1wphi1 As previously observed by the NLRC,
McBurnie even failed to show through any document such as payslips or vouchers that his salaries during
the time that he allegedly worked for the respondents were paid by the company. In the absence of an
employer-employee relationship between McBurnie and the respondents, McBurnie could not successfully
claim that he was dismissed, much less illegally dismissed, by the latter. Even granting that there was such
an employer-employee relationship, the records are barren of any document showing that its termination
was by the respondents dismissal of McBurnie.
Given these circumstances, it would be a circuitous exercise for the Court to remand the case to the NLRC,
more so in the absence of any showing that the NLRC should now rule differently on the cases merits. In
Medline Management, Inc. v. Roslinda,127 the Court ruled that when there is enough basis on which the
Court may render a proper evaluation of the merits of the case, the Court may dispense with the timeconsuming procedure of remanding a case to a labor tribunal in order "to prevent delays in the disposition
of the case," "to serve the ends of justice" and when a remand "would serve no purpose save to further
delay its disposition contrary to the spirit of fair play."128 In Real v. Sangu Philippines, Inc.,129 we again
ruled:
With the foregoing, it is clear that the CA erred in affirming the decision of the NLRC which dismissed
petitioners complaint for lack of jurisdiction. In cases such as this, the Court normally remands the case to
the NLRC and directs it to properly dispose of the case on the merits. "However, when there is enough
basis on which a proper evaluation of the merits of petitioners case may be had, the Court may dispense
with the time-consuming procedure of remand in order to prevent further delays in the disposition of the
case." "It is already an accepted rule of procedure for us to strive to settle the entire controversy in a single
proceeding, leaving no root or branch to bear the seeds of litigation. If, based on the records, the pleadings,

and other evidence, the dispute can be resolved by us, we will do so to serve the ends of justice instead of
remanding the case to the lower court for further proceedings." x x x.130 (Citations omitted)
It bears mentioning that although the Court resolves to grant the respondents motion for reconsideration,
the other grounds raised in the motion, especially as they pertain to insinuations on irregularities in the
Court, deserve no merit for being founded on baseless conclusions. Furthermore, the Court finds it
unnecessary to discuss the other grounds that are raised in the motion, considering the grounds that already
justify the dismissal of McBurnies complaint.
All these considered, the Court also affirms its Resolution dated September 4, 2012; accordingly,
McBurnies motion for reconsideration thereof is denied.
WHEREFORE, in light of the foregoing, the Court rules as follows:
(a) The motion for reconsideration filed on September 26, 2012 by petitioner Andrew James
McBurnie is DENIED;
(b) The motion for reconsideration filed on March 27, 2012 by respondents Eulalio Ganzon, EGIManagers, Inc. and E. Ganzon, Inc. is GRANTED.
(c) The Entry of Judgment issued in G.R. Nos. 186984-85 is LIFTED. This Courts Decision dated
September 18, 2009 and Resolutions dated December 14, 2009 and January 25, 2012 are SET
ASIDE. The Court of Appeals Decision dated October 27, 2008 and Resolution dated March 3,
2009 in CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 are AFFIRMED WITH
MODIFICATION. In lieu of a remand of the case to the National Labor Relations Commission,
the complaint for illegal dismissal filed by petitioner Andrew James McBurnie against
respondents Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc. is DISMISSED.
Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as provided in
Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby RESOLVES that henceforth,
the following guidelines shall be observed:
(a) The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject to the
following conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is
posted;
(b) For purposes o compliance with condition no. (2), a motion shall be accompanied by the
posting o a provisional cash or surety bond equivalent to ten percent (10,) of the monetary award
subject o the appeal, exclusive o damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running o the 1 0-day
reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine
the final amount o bond that shall be posted by the appellant, still in accordance with the standards
o meritorious grounds and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds
the amount o the provisional bond, the appellant shall be given a fresh period o ten 1 0) days from
notice o the NLRC order within which to perfect the appeal by posting the required appeal bond.
SO ORDERED.

G.R. No. 197556, March 25, 2015


WATERFRONT CEBU CITY CASINO HOTEL, INC. AND MARCO PROTACIO, Petitioners, v.
ILDEBRANDO LEDESMA, Respondent.
DECISION
VILLARAMA, JR., J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended,
seeking to set aside the Decision1 dated March 17, 2011 and Resolution2 dated June 21, 2011 of the Court
of Appeals (CA) in CA-G.R. CEB SP No. 05071. The CA reversed the Decision3 dated November 27,
2009 and Resolution4 dated February 22, 2010 of the National Labor Relations Commission (NLRC) and
reinstated the Decision5 dated April 29, 2009 of the Labor Arbiter (LA). The LA declared that respondent
Ildebrando Ledesma was illegally dismissed from his employment by petitioner Waterfront Cebu City
Casino Hotel, Inc. (Waterfront).
The factual antecedents follow:
Respondent was employed as a House Detective at Waterfront located at Salinas Drive, Cebu City.
On the basis of the complaints filed before Waterfront by Christe6 Mandal, a supplier of a concessionaire of
Waterfront, and Rosanna Lofranco, who was seeking a job at the same hotel, Ledesma was dismissed from
employment.7 From the affidavits8 and testimonies9 of Christe Mandal and Rosanna Lofranco during the
administrative hearings conducted by Waterfront, the latter found, among others, that Ledesma kissed and
mashed the breasts of Christe Mandal inside the hotels elevator, and exhibited his penis and asked
Rosanna Lofranco to masturbate him at the conference room of the hotel.
On August 12, 2008, Ledesma filed a complaint10 for illegal dismissal which was docketed as NLRC RABVII Case No. 08-1887-08. The LA found that the allegations leveled against Ledesma are mere
concoctions, and concluded that Ledesma was illegally dismissed. The dispositive portion of the April 29,
2009 Decision of the LA, reads:
WHEREFORE, in view of the foregoing, a decision is hereby rendered declaring the suspension as well as
the dismissal of herein complainant illegal. Consequently, respondent Waterfront Cebu City Hotel is
ordered to reinstate complainant Ildebrando Ledesma to his former position without loss of seniority right
and with full backwages reckoned from the date of the suspension up to actual reinstatement.
Herein respondent is likewise ordered to pay complainant Ledesma service incentive leave pay in the
amount of THREE THOUSAND NINE HUNDRED TEN PESOS AND FIFTY CENTAVOS (P3,910.50)
plus ten percent (10%) of the total monetary award as attorneys fees.
All other claims are DISMISSED for lack of merit.
SO ORDERED.11
On appeal to the NLRC, the latter reversed the ruling of the LA and held that Ledesmas acts of sexual
overtures to Christe Mandal and Rosanna Lofranco constituted grave misconduct justifying his dismissal
from employment. The fallo of the November 27, 2009 Decision of the NLRC reads:
WHEREFORE, premises considered, the appealed Decision is hereby REVERSED and SET
ASIDE. Another one is entered declaring the dismissal of complainant as valid.
SO ORDERED.12

The NLRC denied Ledesmas motion for reconsideration in a Resolution dated February 22, 2010. A copy
of the said Resolution was received by Atty. Gines Abellana (Atty. Abellana), Ledesmas counsel of
record, on March 15, 2010.13
On May 17, 2010,14 or sixty-three (63) days after Atty. Abellana received a copy of the NLRCs Resolution
denying the motion for reconsideration, said counsel filed before the CA a petition for certiorari under Rule
65 of the Rules of Court.
In its Comment,15 Waterfront prayed for the outright dismissal of the petition on the ground that it was
belatedly filed.
On August 5, 2010, Ledesma, now assisted by a new counsel, filed a motion for leave to file amended
petition,16 and sought the admission of his Amended Petition for Certiorari.17 In the amended petition,
Ledesma contended that his receipt on March 24, 2010 (and not the receipt on March 15, 2010 by Atty.
Abellana), is the reckoning date of the 60-day reglementary period within which to file the petition. Hence,
Ledesma claims that the petition was timely filed on May 17, 2010.18
By its Resolution19 dated August 27, 2010, the CA granted leave of court to Ledesma and admitted his
amended petition for certiorari. The CA, thereafter, rendered a Decision dated March 17, 2011, reversing
the Decision of the NLRC and reinstating the ruling of the LA. The fallo of the assailed CA Decision
reads:
IN LIGHT OF ALL THE FOREGOING, this petition is GRANTED. The 27 November 2009 NLRC
Decision and 22 February 2010 Resolution in NLRC Case No. VAC-09-000912-2009 is REVERSED and
SET ASIDE and the 29 April 2009 Decision of the Labor Arbiter is hereby REINSTATED.
No pronouncement as to costs.
SO ORDERED.20
The CA denied the motion for reconsideration filed by Waterfront in a Resolution dated June 21,
2011. Thus, the present petition for review on certiorari where Waterfront raised the main issue of whether
the petition for certiorari was timely filed with the CA.21
In his Comment,22 Ledesma sought the dismissal of the instant petition of Waterfront on the basis of the
following formal infirmities: (1) the presentation of Gaye Maureen Cenabre, the representative of
Waterfront, of a Community Tax Certificate before the Notary Public to prove her identity, violated A.M.
No. 02-8-13-SC, and rendered the jurat in the verification and certification on non-forum shopping of the
petition as defective; and (2) no certified true copy of the August 10, 2011 Board Resolution quoted in the
Secretarys Certificate was attached to the petition.
The Court finds Waterfronts petition to be meritorious.
The procedural infirmities23 pointed out by Ledesma are not adequate to cause the dismissal of the present
petition. Gaye Maureen Cenabre presented to the Notary Public a Community Tax Certificate numbered
27401128 to prove her identity instead of a current identification document issued by an official agency
bearing her photograph and signature as required by A.M. No. 02-8-13-SC. This rendered the jurat in the
verification/certification of non-forum shopping of Waterfront as defective. Nonetheless, any flaw in the
verification, being only a formal, not a jurisdictional requirement, is not a fatal defect.24 In like manner,
there is no need to attach the certified true copy of the Board Resolution quoted in the Secretarys
Certificate attached to the petition. Only the judgment, order or resolution assailed in the petition are the
attachments required under Section 4,25 Rule 45 of the Rules of Court to be duplicate originals or certified
true copies.
On the main issue, the unjustified failure of Ledesma to file his petition for certiorari before the CA within

the 60-day period is a ground for the outright dismissal of said petition.
Section 4, Rule 65 of the Rules of Court, as amended by A.M. No. 07-7-12-SC, reads:
SEC. 4. When and where to file the petition. The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed,
whether such motion is required or not, the petition shall be filed not later than sixty (60) days counted
from the notice of the denial of the motion.
If the petition relates to an act or an omission of a municipal trial court or of a corporation, a board, an
officer or a person, it shall be filed with the Regional Trial Court exercising jurisdiction over the territorial
area as defined by the Supreme Court. It may also be filed with the Court of Appeals or with the
Sandiganbayan, whether or not the same is in aid of the courts appellate jurisdiction. If the petition
involves an act or an omission of a quasi-judicial agency, unless otherwise provided by law or these rules,
the petition shall be filed with and be cognizable only by the Court of Appeals.
In election cases involving an act or an omission of a municipal or a regional trial court, the petition shall
be filed exclusively with the Commission on Elections, in aid of its appellate jurisdiction.
In Laguna Metts Corporation v. Court of Appeals,26 we categorically ruled that the present rule now
mandatorily requires compliance with the reglementary period. The period can no longer be extended as
previously allowed before the amendment, thus:
As a rule, an amendment by the deletion of certain words or phrases indicates an intention to change its
meaning. It is presumed that the deletion would not have been made if there had been no intention to effect
a change in the meaning of the law or rule. The amended law or rule should accordingly be given a
construction different from that previous to its amendment.
If the Court intended to retain the authority of the proper courts to grant extensions under Section 4 of Rule
65, the paragraph providing for such authority would have been preserved. The removal of the said
paragraph under the amendment by A.M. No. 07-7-12-SC of Section 4, Rule 65 simply meant that there
can no longer be any extension of the 60-day period within which to file a petition for certiorari.
The rationale for the amendments under A.M. No. 07-7-12-SC is essentially to prevent the use (or abuse) of
the petition for certiorari under Rule 65 to delay a case or even defeat the ends of justice. Deleting the
paragraph allowing extensions to file petition on compelling grounds did away with the filing of such
motions. As the Rule now stands, petitions for certiorari must be filed strictly within 60 days from
notice of judgment or from the order denying a motion for reconsideration.27 (Additional emphasis
and underscoring supplied)
In the subsequent case of Domdom v. Third & Fifth Divisions of the Sandiganbayan,28 the absence of a
specific prohibition in Section 4 of Rule 65, as amended, for the extension of the 60-day period to file a
petition for certiorari was construed as a discretionary authority of the courts to grant an extension.
Republic v. St. Vincent De Paul Colleges, Inc.29 clarified the conflict between the rulings in Laguna Metts
Corporation30 and Domdom,31 in that the former is the general rule while the latter is the exception, thus:
What seems to be a conflict is actually more apparent than real. A reading of the foregoing rulings leads
to the simple conclusion that Laguna Metts Corporation involves a strict application of the general rule that
petitions for certiorari must be filed strictly within sixty (60) days from notice of judgment or from
the order denying a motion for reconsideration. Domdom, on the other hand, relaxed the rule and
allowed an extension of the sixty (60)-day period subject to the Courts sound discretion.32 (Emphasis
in the original)
In relaxing the rules and allowing an extension, Thenamaris Philippines, Inc. v. Court of Appeals33

reiterated the necessity for the party invoking liberality to advance a reasonable or meritorious
explanation34 for the failure to file the petition for certiorari within the 60-day period.
The petition for certiorari was filed with
the CA beyond the 60-day period
Atty. Abellana, Ledesmas counsel, admittedly received a copy of the NLRC Resolution denying the
Motion for Reconsideration on March 15, 2010 while Ledesma received his copy on March 24, 2010.
Ledesma erroneously asserted in his petition for certiorari filed before the CA, that the 60th day is May 15,
2010, counted from March 15, 2010.35 In computing a period, the first day shall be excluded, and the last
included;36 hence, the last day to file his petition for certiorari is on May 14, 2010, a Friday. Ledesma
therefore belatedly filed his petition on May 17, 2010.
Realizing his procedural faux pas, Ledesma filed an amended petition where he contended that he timely
filed his petition for certiorari on May 17, 2010 counted from his receipt of the NLRC Resolution denying
his motion for reconsideration on March 24, 2010.37 This stance is bereft of any legal basis. When a party
to a suit appears by counsel, service of every judgment and all orders of the court must be sent to the
counsel. This is so because notice to counsel is an effective notice to the client, while notice to the client
and not his counsel is not notice in law.38 Receipt of notice by the counsel of record is the reckoning point
of the reglementary period.39
The negligence of Atty. Abellana in the computation of the 60-day period, and reckoning such period from
the partys receipt of the assailed NLRC resolution were similar arguments rejected in Labao v.
Flores.40 In the Labao case,41 the respondents maintained that they should not suffer the negligence of their
counsel in the late filing of their petition for certiorari, and the 60-day period be reckoned from their own
notice of the NLRCs denial of their motion for reconsideration. In rejecting said arguments we ruled as
follows:
The general rule is that a client is bound by the acts, even mistakes, of his counsel in the realm of
procedural technique. The exception to this rule is when the negligence of counsel is so gross, reckless and
inexcusable that the client is deprived of his day in court. The failure of a partys counsel to notify him on
time of the adverse judgment, to enable him to appeal therefrom, is negligence that is not excusable. We
have repeatedly held that notice sent to counsel of record is binding upon the client, and the neglect or
failure of counsel to inform him of an adverse judgment resulting in the loss of his right to appeal is not a
ground for setting aside a judgment valid and regular on its face.42 (Emphasis omitted)
With the expiration of the 60-day period to file a petition for certiorari, a review of the Resolution of the
NLRC will be beyond the jurisdiction of any court.43 No longer assailable, the NLRC Resolution could not
be altered or modified, as previously held in Labao v. Flores:44
The NLRCs resolution became final ten (10) days after counsels receipt, and the respondents failure to
file the petition within the required (60)-day period rendered it impervious to any attack through a Rule 65
petition for certiorari. Thus, no court can exercise jurisdiction to review the resolution.
Needless to stress, a decision that has acquired finality becomes immutable and unalterable and may no
longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact
or law and whether it will be made by the court that rendered it or by the highest court of the land. All the
issues between the parties are deemed resolved and laid to rest once a judgment becomes final and
executory; execution of the decision proceeds as a matter of right as vested rights are acquired by the
winning party. Just as a losing party has the right to appeal within the prescribed period, the winning party
has the correlative right to enjoy the finality of the decision on the case. After all, a denial of a petition for
being time-barred is tantamount to a decision on the merits. Otherwise, there will be no end to litigation,
and this will set to naught the main role of courts of justice to assist in the enforcement of the rule of law
and the maintenance of peace and order by settling justiciable controversies with finality.

Ledesma did not attempt to justify


the belated filing of his petition for
certiorari
The relaxation of procedural rules may be allowed only when there are exceptional circumstances to justify
the same.45 There should be an effort on the part of the party invoking liberality to advance a reasonable or
meritorious explanation for his/her failure to comply with the rules.46 Moreover, those who seek exemption
from the application of a procedural rule have the burden of proving the existence of exceptionally
meritorious reason warranting such departure.47 In Philippine National Bank v. Commissioner of Internal
Revenue,48 we said:
It is an accepted tenet that rules of procedure must be faithfully followed except only when, for persuasive
and weighting reasons, they may be relaxed to relieve a litigant of an injustice commensurate with his
failure to comply with the prescribed procedure. Concomitant to a liberal interpretation of the rules of
procedure, however, should be an effort on the part of the party invoking liberality to adequately
explain his failure to abide by the rules. (Emphasis supplied)
Both in his petition and amended petition, Ledesma never invoked the liberality of the CA nor endeavored
to justify the belated filing of his petition. On the contrary, Ledesma remained firm that his petition was
filed with the CA within the reglementary period.49 Absent valid and compelling reasons for the procedural
lapse, the desired leniency cannot be accorded to Ledesma.50
In sum, the late filing by Ledesma of his petition for certiorari, and his failure to justify his procedural lapse
to merit a lenient application of the rules divested the CA of jurisdiction to entertain the petition.51
Assuming for a moment that the petition for certiorari was timely filed with the CA, said recourse should
suffer the same fate of dismissal for lack of merit. Otherwise stated, there is no substantial justice that may
be served here in disregarding the procedural flaw committed by Ledesma because the NLRC correctly
found him guilty of misconduct or improper behavior in committing lascivious conduct and demanding
sexual favors from Christe Mandal and Rosanna Lofranco.
The CA ruled in favor of Ledesma since it believed his version that the complainants merely invented the
accusations against him because Waterfront failed to present as evidence the CCTV footages of the alleged
lascivious conduct of Ledesma inside the elevator and the conference room. But this argument was not
even raised by Ledesma himself and it was only the CA which utilized this as a justification to bolster its
findings that Ledesma did not commit any infraction. This being a labor case, the evidence required is only
substantial evidence which was adequately established here by the positive and credible testimonies of the
complainants.
Notably, Ledesma never refuted, at the administrative investigation level at Waterfront, and even at the
proceedings before the LA, NLRC, and the CA, the allegations leveled against him by Rosanna Lofranco
that, after deluding her to perform a massage on him, Ledesma exhibited to her his penis and requested that
he be masturbated while inside the conference room of the hotel. If not for the position of Ledesma as a
House Detective, he will not have access to the conference room nor will he know that the premises is not
monitored through a closed-circuit television,52 thus giving him the untrammeled opportunity to accomplish
his lewd design on the unsuspecting victim. Such acts of Ledesma constituted misconduct or improper
behavior53 which is a just cause for his dismissal.
WHEREFORE, the petition for review on certiorari is GRANTED. The March 17, 2011 Decision and
June 21, 2011 Resolution of the Court of Appeals in CA-G.R. CEB SP No. 05071 are REVERSED and
SET ASIDE. The November 27, 2009 Decision and February 22, 2010 Resolution of the National Labor
Relations Commission which found as valid the dismissal from employment of Ildebrando Ledesma are
REINSTATED.
No pronouncement as to costs.

SO ORDERED.