RONALDO NICOL, ET AL.,* G.R. No.

159372
Petitioners,
Present:

QUISUMBING, J.,
Chairperson,
- versus - CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
FOOTJOY INDUSTRIAL CORP.,
ANTONIO TAN, ROBERT LIM,
TERESITA GAMBOA, DANILO
DOMINGO and CHUEN FONG HUI, Promulgated:
Respondents.
July 27, 2007

x --------------------------------------------------------------------------------------- x

DECISION

CARPIO MORALES, J.:

Two hundred seventeen (217) former rank-and-file employees of respondent Footjoy Industrial
Corporation (Footjoy or the company)[1] bring this petition for review on certiorari, assailing the
November 29, 2002 Decision[2] and the August 4, 2003[3] Resolution of the Court of Appeals
(CA) in CA G.R. SP No. 71126.

The assailed CA Decision annulled and set aside the March 25, 2002 Resolution[4] of the
National Labor Relations Commission (NLRC) which denied herein respondentsmotion to
reduce their appeal bond and consequently dismissed their appeal for non-perfection. The
assailed CA Resolution, on the other hand, denied petitioners motion for reconsideration.

The present controversy dates back to February 2, 2001, when news of a temporary shutdown of
operations was first announced by Footjoy to its employees effective the following day, February
3, 2001, until February 10, 2001.[5] The true reason for the announced closure remains an
issue. Two days after the temporary shutdown, however, a fire razed the company and its
premises.
 In a Memorandum of February 12, 2001,[6] the company declared the total closure and
cessation of its business operations allegedly because of severe losses and financial reverses. It
gave notice to the workers that their employment would be terminated 30 days from that date.

On March 19, 2001, Footjoys former employees filed with the NLRC Regional
Arbitration Branch in San Fernando, Pampanga two separate complaints[7] for illegal closure
resulting in illegal dismissal as well as for nonpayment of wage increase per Wage Order No. 8
against herein respondents.[8] Prior to the severance of their employment from Footjoy,
petitioners had served the company for periods ranging from one year to 15 years.

In their Complaints, petitioners contended that the February 2, 2001 announcement of

closure was made after negotiations between the union and management were deadlocked on the
latters proposal to consolidate the workforce of Footjoy Main and three other factory
annexes[9] allegedly being operated by Footjoy also in Guiguinto, Bulacan.

Petitioners likewise contended that the proposed consolidation was rejected by the union
which saw it as a scheme to terminate the majority, if not all, of its officers and members who
were long time regular employees of Footjoy Main and Footjoy-Annex A. They thus averred that
the fire that burned down the main plant was a convenient excuse for the permanent closure of
the company.

With respect to the claim for wage differential, the workers maintained that they were
paid only P192 a day, which was below the P208 per day minimum wage prescribed under the
aforementioned wage order.

By Decision of November 29, 2001, the labor arbiter[10] found for petitioners. He held that
the determination of whether the intended permanent closure of the company was valid on the
ground of business losses was not called for considering that the same did not take place, nor was
it ever implemented because of the fire which occurred on February 5, 2001. He thus concluded
that the burning down of the company premises proximately caused the total closure of the
company, hence, the employees may be considered as constructively terminated by reason
thereof.

Respondents were accordingly ordered to jointly pay petitioners separation pay

(computed on the basis of one month salary per year of service, a fraction of six months to be
considered as one year) until October 31, 2001.
 Noting respondents failure to deny the allegation of nonpayment of wage increase or to
submit proof of due compliance with Wage Order No. 8, they were further adjudged to pay the
dismissed workers wage differentials of P16 a day effective November 16, 2000 to December 31,
2001, as well as back wages from February 5, 2000 to October 31, 2001, plus 10 percent of the
total monetary award as attorneys fees. The total award amounted to Fifty One Million Nine
Hundred Fifty Six Thousand and Three Hundred Fourteen Pesos (P51,956,314).

On December 14, 2001, respondents appealed the labor arbiters Decision to the NLRC
with a Manifestation and Motion[11] to reduce the bond to P10 million, for which they posted a
surety bond, because of their allegedly dire financial condition.

Petitioners countered by filing a Manifestation with Motion to Require Appellants (herein

respondents) To Complete Bond, with an alternative prayer for the dismissal of the appeal for
non-filing of the required bond equivalent to the monetary award of P51,956,314.

The NLRC, by Order of March 25, 2002, denied respondents motion for the reduction of
its appeal bond, it holding that the motion could not be decided without passing upon the issue of
the financial status of the corporation which was intertwined with the merits of the case.
The NLRC thus ordered respondents to post an additional appeal bond in the amount
of P41,956,314 in cash or surety within an inextendible period of 10 days upon receipt of the
Order, failing which the appeal would be dismissed for not having been duly perfected.
From the foregoing Order, respondents filed a Motion for Reconsideration. They argued
that when the reduction of the bond can be determined by looking at the veracity of the financial
status of the beleaguered respondent company or even when it is intertwined with the disposition
of the main case, the motion should not in the first place be denied.

Likewise, respondents manifested to the NLRC that during the pendency of the appeal,
the claims of 153 individual complainants had already been settled for which they had executed
quitclaims in favor of petitioners; and that 795 other former employees had received their
separation pay/financial assistance, leaving only about 241 workers with claims yet to be
satisfied.

By Order of May 6, 2002,[12] respondents Motion for Reconsideration was denied by the
NLRC.
 On the quitclaims and release papers of the employees mentioned by Footjoy, the NLRC
held that although the documents appeared to have been notarized, they were not subscribed
before the labor arbiter. The complainants who executed the release documents should have, the
NLRC declared, been presented before it for verification of the signatures and the legitimacy of
the settlement.
Finally, the NLRC noted that respondents failed to address the allegation that they were
operating several run-away factories in Guiguinto and Pulilan, Bulacan,[13] hiring thousands of
workers on a contractual basis, and using machineries pulled out from the burned-down factory.

As Footjoy failed to post the additional P41 million plus bond within the period allowed by its
previous Order, the NLRC dismissed respondents appeal for non-perfection thereof.

Respondents assailed the NLRC dismissal of their appeal before the CA via
certiorari[14] with prayer for the issuance of a temporary restraining order (TRO) and/or writ of
preliminary injunction.

By Resolution of July 1, 2002,[15] the CA granted respondents plea for a TRO, thereby
enjoining the NLRC from enforcing its order.

Subsequently, by the assailed Decision, the CA gave due course to respondents petition,
annulling and setting aside the challenged Resolution and Order of the NLRC.

In the assailed Decision, the CA held that the NLRC could have determined the truth or
falsity and merit of respondents grounds for the reduction of its appeal bond through the
reception of evidence; and that the NLRC should not have just insisted on requiring respondents
to put up a bond in the equivalent amount of the award without any regard to the reasons and
arguments of respondents and without determining for itself what amount would be reasonable
under the circumstances.

Citing several cases[16] in which the Supreme Court relaxed the requirement of a
supersedeas bond to bring about a resolution of controversies on the merits, the appellate court
held that respondents had substantially complied with the rule because both their Appeal and the
Motion to Reduce Bond were filed seasonably, and the amount of P10 million, which was not
minimal, was tendered with due explanation and justification therefor.
 The CA thus directed the NLRC to consider [respondents] motion to reduce bond after
receiving evidence thereon and upon the putting up of the required reasonable supersedeas bond
within the period provided, to give due course to the appeal and to determine the merits of the
case thereof.[17]

Petitioners moved for reconsideration of the above Decision, which motion was denied
by the CA by Resolution of August 4, 2003.

Hence, this present petition for review on certiorari.

In issue is whether a motion to reduce the appeal bond can be given due course even if it
is not accompanied by a bond in a reasonable amount; and whether this Courts ruling in Mers
Shoes Manufacturing v. NLRC[18] is applicable to the present case.

The petition fails.

Article 223 of the Labor Code, as amended, clearly 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.
Such appeal may be entertained only on any of the following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the
Labor Arbiter;
(b) If the decision, order or award was secured through fraud or coercion,
including graft and corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the finding of facts are raised which would cause
grave or irreparable damage or injury to the appellant.

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 underscoring supplied)

Similarly, Sections 4(a) and 6 of Rule VI of the New Rules of Procedure of the NLRC, as
amended, provide:
 SECTION 4. 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 verified by appellant himself in accordance with Section
4, Rule 7 of the Rules of Court, with proof of payment of the required appeal
fee and the posting of a cash or surety bond as provided in Section 6 of this
Rule; shall be accompanied by a memorandum of appeal in three (3) legibly
typewritten copies 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, resolution or order and a certificate of
non-forum shopping with proof of service on the other party of such appeal. A
mere notice of appeal without complying with the other requisites aforestated
shall not stop the running of the period of perfecting an appeal.

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 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 and underscoring supplied)

The necessary import of the foregoing provisions is that in the case of an employer
appealing the labor arbiters decision to the NLRC, the posting of a cash or surety bond to perfect
an appeal of a monetary judgment is not only mandatory but also jurisdictional, non-compliance
with which has the effect of rendering the judgment final and executory. [19] Ong v. Court of
Appeals[20] stressed:

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.[21]
 Be that as it may, Section 6 of Rule VI of the New Rules of Procedure of the NLRC, as
amended, allows the reduction of the appeal bond. This practice-evolved rule[22]has been made
explicit by Resolution 01-02, series of 2002,[23] 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.

There is no dispute that respondents filed a Notice of Appeal and complied with the other
requirements for perfecting an appeal, save for the posting of the full amount of the bond, on
December 20, 2001 or nine days after receipt of the labor arbiters decision. And admittedly,
respondents Motion to Reduce Bond was accompanied by an actual tender of a P10 million
surety bond executed by the Security Pacific Assurance Corporation.[24]

Was the P10 million surety bond posted by the employer Footjoy a reasonable amount in
relation to the monetary award of about P51 million so as to perfect an appeal before the
NLRC? Revolving around this question is petitioners contention that P10 million, which is
roughly 20% or one-fifth of the total award, is a pittance; [25] and respondents submission that it
was sizable and sufficient given their dire economic condition.

This Court rules at the outset that the CA committed no error in ruling that the NLRC committed
grave abuse of discretion when it denied the motion to reduce the bond peremptorily without
considering evidence to justify the reduction.

This Court notes in particular the NLRCs precipitate haste in dismissing the quitclaims and
release documents presented by respondents to support the reduction of the monetary award due
(and consequently, the amount of the appeal bond) when it could easily have required the
verification of the signatures and of the legitimacy of the settlement.

The purpose of the appeal bond, being to assure the payment of workers claims in the event of
their victory on appeal,[26] the verification of the legitimacy of the alleged settlements was clearly
material in determining the merit of reducing the bond to an amount sufficient to cover the award
still owing or, at the very least, to a reasonable level.

Upon the other hand, while respondents motion to reduce the bond hinged on the purportedly
unhealthy state of their finances due to business reverses, the NLRC was not precluded from
making a preliminary determination of their financial capability to post the required bond,
without necessarily passing upon the merits. Since the intention is merely to give the NLRC an
idea of the justification for the reduced bond, the evidence for the purpose would necessarily be
less than the evidence required for a ruling on the merits.

Indeed, it only bears stressing that the NLRC is not precluded from receiving evidence on appeal
as technical rules of evidence are not binding in labor cases. [27] On the contrary, the Labor Code
explicitly mandates it to use every and all reasonable means to ascertain the facts in each case
speedily and objectively, without regard to technicalities of law or procedure, all in the interest of
due process.[28]

Moreover, implicit in Section 6, Rule VI of the NLRC New Rules of Procedure of the NLRC is
its authority to determine whether the motion to reduce bond is based on meritorious grounds
and whether the amount offered or tendered is reasonable in relation to the award.

Admittedly, reduction of the bond is not a matter of right on the part of the movant. Its grant lies
within the sound discretion of the NLRC upon showing of meritorious grounds [29] and the
reasonableness of the bond tendered under the circumstances.

A review of jurisprudence[30] which could shed light on the bond requirement for perfecting an
appeal before the NLRC is in order.

The case of Star Angel Handicraft v. NLRC,[31] which respondents cited in support of their
Motion to Reduce Bond, arose from the dismissal by the NLRC of an employers appeal for
failure to put up a bond, the amount of which was contested because the monetary award of the
labor arbiter was based allegedly on an erroneous daily-minimum wage. In dismissing the
appeal, the NLRC held that the appeal bond must first be posted before the Commission could
act on the motion to reduce it.

Reversing the NLRC, this Court ruled:

Inasmuch as the NLRC in practice allowed the reduction of the appeal

bond upon motion of appellant and on meritorious grounds, it follows that a
motion to that effect may be filed within the reglementary period for
appealing. Such motion may be filed in lieu of a bond which amount is being
contested. In the meantime, the appeal is not deemed perfected and the Labor
 Arbiter retains jurisdiction over the case until the NLRC has acted on the motion
and appellant had filed the bond as fixed by the NLRC.[32] (Underscoring
supplied)

The distinction made in Star Angel between the filing of an appeal within the reglementary
period and its perfection is now invoked by respondents to excuse the posting of the required
bond within the period allowed by the NLRC. Apropos are this Courts following observations
in Computer Innovations Center v. NLRC:[33]

x x x [T]he reference in Star Angel to the distinction between the period to

file the appeal and to perfect the appeal has been pointedly made only once by
this Court in Gensoli v. NLRC[34] thus, it has not acquired the sheen of
venerability reserved for repeatedly-cited cases. The distinction, if any, is not
particularly evident or material in the Labor Code; hence, the reluctance of the
Court to adopt such doctrine. Moreover, the present provision in the NLRC
Rules of Procedure, that the filing of a motion to reduce bond shall not stop
the running of the period to perfect appeal flatly contradicts the notion
expressed in Star Angel that there is a distinction between the filing an
appeal and perfecting an appeal.

Ultimately, the disposition of Star Angel was premised on the ruling that a
motion for reduction of the appeal bond necessarily stays the period for perfecting
the appeal, and that the employer cannot be expected to perfect the appeal by
posting the proper bond until such time the said motion for reduction is
resolved. The unduly stretched-out distinction between the period to file an
appeal and to perfect an appeal was not material to the resolution of Star
Angel, and this could be properly considered as obiter dictum. (Emphasis and
underscoring supplied)

The dismissal of an appeal for failure to post an appeal bond was likewise assailed
in Rural Bank of Coron (Palawan), Inc. v. Cortes.[35] Notably, while this Court upheld the
dismissal, it made the following pronouncement:

It bears emphasis that all that is required to perfect the appeal is the
posting of a bond to ensure that the award is eventually paid should the appeal be
dismissed. Petitioners should thus have posted a bond, even if it were only
partial, but they did not. No relaxation of the Rule may thus be considered.
(Emphasis supplied)
 In the recent case of Postigo v. Philippine Tuberculosis Society, Inc. (PTSI),[36] this Court
sustained the ruling of the CA that PTSI substantially complied with the required posting of a
cash or surety bond not only because the filing of its motion for reduction of the bond was
justified, but also because it immediately submitted a bond which it attached to its motion for
reconsideration of the NLRC resolution dismissing its appeal.

PTSI had initially deferred the posting of the surety bond in view of the alleged erroneous
computation of the monetary award.

At issue in Rosewood Processing, Inc. v. NLRC[37] was a motion to reduce the required bond
amounting to P789,154.39. Ruling that the posting of a partial surety bond of P50,000 during the
pendency before the NLRC of the employers motion to reduce appeal bond was substantial
compliance. This Court stressed that the letter perfect rules must yield to the broader interest of
substantial justice.

This ruling reiterated earlier pronouncements in Blancaflor v. NLRC,[38] Rada v. NLRC,

[39]
and YBL (Your Bus Line) v. NLRC,[40] in which the NLRC was cautioned to give Article 223 of
the Labor Code, particularly the provisions on requiring a bond on appeals involving monetary
awards, a liberal interpretation in line with the desired objective of resolving controversies on the
merits.

The case of Nationwide Security and Allied Services, Inc. v. NLRC,[41] meanwhile, arose
from the denial by the NLRC of a motion to reduce the appeal bond in the amount which the
therein petitioner was ordered to jointly and severally pay the complainant therein. Ruling out
grave abuse of discretion on the part of the NLRC, this Court held that the therein petitioners
contentions that it cannot afford to post the bond of P397,990.19 because it does not have that
sum earned from the business with Guani Marketing, Inc. and that to use the funds from sources
other than that earned from Guani Marketing, Inc. would not be a sound business judgment,
constituted an admission that it had funds to post the required bond, although not from its
business with Guani Marketing, Inc. [42]
In lieu of the required cash or surety bond, the petitioner in Ong v. Court of Appeals[43] filed a
motion to reduce bond. Alleging that the posting of the full amount of the award
of P1,427,802,04 was unjustified and prohibitive, petitioner prayed that the same be reduced to a
reasonable level.
Sustaining the CA, this Court ruled that the NLRC did not act with grave abuse of discretion
when it denied petitioners motion because 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. In
addition, we observed that 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.
[44]
(Emphasis supplied)

In Calabash Garments, Inc. v. NLRC,[45] 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.

Similarly, we ruled in Biogenerics Marketing and Research Corporation v. NLRC[46] that since
the filing of a bond for the perfection of an appeal is mandatory, it was not an excuse that the
over P2 million award is too much for a small business enterprise, like the petitioner company, to
shoulder for the law does not require its outright payment, but only the payment of a moderate
and reasonable sum for the premium for the bond.

Ciudad Fernandina Food Corporation (CFFC) Employees Union-Associated Labor

Unions v. Court of Appeals[47] presented a challenge to a CA Decision setting aside the NLRCs
dismissal of CCFCs appeal, which was filed alongside its Motion for Reduction of Supersedeas
Bond.

Distinguishing CCFCS case with other cases in which the Court relaxed the requirement
on the posting of the supersedeas bond, the Court noted that CCFC absolutely failed to comply
with the compulsory and explicit requirement of posting an appeal bond. Having merely alleged
the satisfaction of the workers claims, closure of the business and substantial justice, without
more, CCFC failed to convince the Court that meritorious grounds existed for the relaxation of
the rule regarding posting of an appeal bond.[48]

ALL TOLD, the bond requirement on appeals involving monetary awards has been and
may be relaxed in meritorious cases.[49] These cases include 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.
 Conversely, the reduction of the bond is not warranted when no meritorious ground is
shown to justify the same; the appellant absolutely failed to comply with the requirement of
posting a bond, even if partial; or when circumstances show the employers unwillingness to
ensure the satisfaction of its workers valid claims.

By the above guidelines must NLRC exercise its discretion in considering herein
petitioners motion for reduction of its bond. A remand of the case to it for determination of the
merits of the motion is thus in order.
The other question presented in the present petition is the applicability of Mers Shoes
Manufacturing v. NLRC.[50] To recall, the aggrieved employer in that case simultaneously filed
before the NLRC an appeal and a motion to reduce the bond (which at the equivalent amount of
the monetary award would have totaled P806,252.40) to P200,000.

The Commission partially granted the motion by an Order directing the therein
petitioners to post a cash or surety bond of P403,126.20, or half the amount of the required bond,
within ten days from receipt of its Order.

Instead, however, of posting the reduced bond, the employer filed a motion for
reconsideration from the above Order, which the NLRC treated as a motion for extension of time
to perfect an appeal, a prohibited pleading under the New Rules of Procedure of the
NLRC. Consequently, ruling that the 10-day reglementary period within which to post the appeal
bond had lapsed, the NLRC dismissed the employers appeal.

Upholding the NLRCs dismissal of the employers appeal in Mers Shoes, this Court ruled
that perfection of an appeal within the period and in the manner prescribed by Article 223 of the
Labor Code is jurisdictional, non-compliance with which is fatal and has the effect of rendering
the judgment final and executory.

The factual milieus of the instant case and that of Mers Shoes are significantly different in
a number of points. For one, while both cases pertained to motions for reduction of the appeal
bond, the motion in Mers Shoes was partially granted by the NLRC as it allowed a 50%
reduction of the required bond; whereas herein petitioners motion was totally denied.
 Furthermore, there was no showing in Mers Shoes that the employer had posted an appeal
bond in any amount, while herein petitioners motion to reduce the bond was accompanied by
a P10 million surety bond.

More importantly, no grave abuse of discretion was found to have attended the dismissal
of the appeal in Mers Shoes for the employers failure to post the reduced amount of the bond. In
sharp contrast, the NLRC in the present case gravely abused its discretion when it dismissed
Footjoys appeal, without even receiving evidence from which it could have determined the merit
or lack of it of the motion to reduce the appeal bond.

The inapplicability of Mers Shoes to the instant case having been ruled, respondents
invocation of it for a ruling herein that petitioners motion for reconsideration should also be
treated as a motion for extension of time to perfect an appeal deserves short shrift.

It suffices to emphasize that in labor cases, rules of procedure should not be applied in a
very rigid and technical sense especially when their strict application would result in the
frustration rather than promotion of substantial justice. [51] Moreover, Section 14 of Rule VII of
the New Rules of Procedure of the NLRC specifically provides that the aggrieved party may file
a motion for reconsideration within ten (10) calendar days from receipt of any order, resolution,
or decision of the NLRC.

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals

is AFFIRMED.

Costs against petitioners.

SO ORDERED.

[G.R. No. 110419. March 3, 1997]

UERM-MEMORIAL MEDICAL CENTER and DR. ISIDRO CARINO, petitioners, vs.
National Labor Relations Commission and UERM Employees ASSOCIATION,
Priscillo Dalogdog and 516 Members-Employees of UERM Hospital, respondents.

DECISION
PUNO, J.:

The question presented in this petition for certiorari under Rule 65 is whether or not in
perfecting an appeal to the National Labor Relations Commission (NLRC) a property bond is
excluded by the two forms of appeal bond cash or surety as enumerated in Article 223 of the
Labor Code.
The facts show that on 14 December 1987 Republic Act No. 6640 took effect which
mandated a ten (P10.00) peso increase on the prevailing daily minimum wage of P54.00. In
applying said law, the petitioners granted salary increases to their employees based on the
following computation, to wit:

"1.To members of the faculty who are non-union members, P304.17 per month; and

2.To rank-and-file employees (individual complainants who are union members), P209.17 per
month."

There was a difference of P95.00 in the salaries of the two classes of employees. Private
respondents who are rank and file employees demanded payment of the difference. Before the
parties could settle their dispute, Republic Act No. 6727 took effect on 1 July 1989 which again
increased the daily minimum wage in the private sector (whether agricultural or non-agricultural)
by P25.00. In compliance, petitioners paid their employees using the following computation, to
wit:

"1.To members of the faculty who are non-union members, P760.42 a month; and

2.To rank-and-file employees (individual complainants who are union members), P523.00 a
month."

Again, there was a difference of P237.42 per month between the salaries of union members and
non-union members. In September 1987, petitioners increased the hiring rate of the new
employees to P188.00 per month. Private respondents once more demanded from the petitioners
payment of the salary differential mandated by RA No. 6727 and correction of the wage
distortion brought about by the increase in the hiring rate of new employees.
On 12 April 1988, Policy Instruction No. 54 was issued by the then Secretary of Labor
Franklin Drilon, the pertinent provision of which reads:

"x x x the personnel in subject hospitals and clinics are entitled to a full weekly wage of seven
days if they have completed the 40-hour/5-day workweek in any given workweek.
All enforcement and adjudicatory agencies of this Department shall be guided by this issuance in
the disposition of cases involving the personnel of covered hospitals and clinics.

Done in the City of Manila, this 12th day of April, 1988.

(Sgd) FRANKLIN M. DRILON

Secretary"
Petitioners challenged the validity of said Policy Instruction and refused to pay the salaries
of the private respondents for Saturdays and Sundays.
Consequently, a complaint was filed by the private respondents, represented by the
Federation of Free Workers (FFW), claiming salary differentials under Republic Act Nos. 6640
and 6727, correction of the wage distortion and the payment of salaries for Saturdays and
Sundays under Policy Instruction No. 54.
Labor Arbiter Nieves de Castro sustained the private respondents except for their claim of
wage distortion. The dispositive portion of the decision reads:

"PREMISES CONSIDERED, respondents are hereby directed to pay the 517 individual
complainants:

(1)Their Salary Differentials, to wit:

1.1 Under RA 6640 - P1,743,582.50

1.2 Under RA 6727 - P3,559,613.06
1.3 Policy Instruction 54 - P11,779,328.00
Total P17,082,448.56

(2) Exemplary Damages of P2,000.00 each.

SO ORDERED."[1]

Within the reglementary period for appeal, the petitioners filed their Notice and
Memorandum of Appeal with a Real Estate Bond consisting of land and various improvements
therein worth P102,345,650.[2]The private respondents moved to dismiss the appeal on the
ground that Article 223 of the Labor Code, as amended, requires the posting of a cash or surety
bond. The NLRC directed petitioners to post a cash or surety bond of P17,082,448.56 with a
warning that failure to do so would cause the dismissal of the appeal. The petitioners filed a
Motion for Reconsideration alleging it is not in a viable financial condition to post a cash bond
nor to pay the annual premium of P700,000.00 for a surety bond. On 6 October 1992, the NLRC
dismissed petitioners' appeal. Petitioners' Motion for Reconsideration was also denied by the
NLRC in a resolution[3] dated 7 June 1993.
Hence, this petition assailing the two resolutions as having been issued with grave abuse of
discretion. On 28 June 1993, we temporarily enjoined the NLRC from implementing the
questioned resolutions and from executing the decision of the Labor Arbiter.
 The applicable law is Article 223 of the Labor Code, as amended by Republic Act No. 6715,
which provides:

"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."

We have given a liberal interpretation to this provision. In YBL (Your Bus Line) v. NLRC[4] we
ruled:
"x x x that while Article 223 of the Labor Code, as amended by Republic Act No.
6715, requiring a cash or surety bond in the amount equivalent to the monetary award in
the judgment appealed from for the appeal to be perfected, may be considered a
jurisdictional requirement, nevertheless, adhering to the principle that substantial justice
is better served by allowing the appeal on the merits threshed out by the NLRC, the
Court finds and so holds that the foregoing requirement of the law should be given a
liberal interpretation."
Then too, in Oriental Mindoro Electric Cooperative, Inc. v. National Labor Relations
Commission[5] we held:

"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 employer's appeal may be perfected. The requirement is
intended to discourage employers from using an appeal to delay, or even evade, their obligation
to satisfy their employees' just and lawful claims.

Considering, however, that the current policy is not to strictly follow technical rules but rather to
take into account the spirit and intention of the Labor Code, it would be prudent for us to look
into the merits of the case, especially since petitioner disputes the allegation that private
respondent was illegally dismissed."

We reiterate this policy which stresses the importance of deciding cases on the basis of their
substantive merit and not on strict technical rules. In the case at bar, the judgment involved is
more than P17 million and its precipitate execution can adversely affect the existence of
petitioner medical center. Likewise, the issues involved are not insignificant and they deserve a
full discourse by our quasi-judicial and judicial authorities. We are also confident that the real
property bond posted by the petitioners sufficiently protects the interests of private respondents
should they finally prevail. It is not disputed that the real property offered by petitioners is
worth P102,345,650. The judgment in favor of private respondent is only a little more than P17
million.
IN VIEW WHEREOF, the resolutions dated October 6, 1992 and June 7, 1993 of the
public respondent are set aside. The case is remanded to the NLRC for continuation of
proceedings. No costs.
 SO ORDERED.

G.R. No. 110827 August 8, 1996

CALABASH GARMENTS, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, CALABASH WORKERS UNION-
ASSOCIATED LABOR UNION-TUCP AND G.G. SPORTSWEAR MANUFACTURING
CORPORATION, respondents.

KAPUNAN, J.:p

This is a petition for a certiorari under Rule 65 of the Revised Rules of Court to set aside
two orders of the respondent National Labor Relations Commission (NLRC) dated 31,
May 1993, and 29 June 1993, respectively.

The facts of the case are as follows:

On 19 June 1991, respondent Calabash Workers Union-Associated Labor Union-TUCP

(Union) filed a complaint against petitioner for illegal lockout before the NLRC docketed
as NLRC NCR Case No. 00-06-03552-91. 1 On 2 September 1991, the complaint was
amended to include G.G. Sportswear Manufacturing Corporation (G.G. Sportswear) as
co-respondent, alleging that petitioner was its subcontractor and therefore under Article
106 of the Labor Code, G.G. Sportswear was likewise liable. 2

After requiring the parties to submit their respective position papers, Labor Arbiter Pablo
C. Espiritu. Jr. issued an order on 12 December 1991 setting the said controversy for
clarificatory questions in conformity with Rule V, Sections 4 and 5(a) of the New Rules
of Procedure of the NLRC.3

On the date of the clarificatory hearing, petitioner manifested on record its intention to
waive the presence of Mr. Roberto Palomar, the president of petitioner corporation and
have the case, insofar as Calabash Garments, Inc. is concerned, submitted for
decision. 4 No objections were raised, hence, the parties were required to submit their
memoranda and the case was considered submitted for resolution. 5

On 23 March 1992, petitioner filed a Motion for Trial on the Merits and for Inhibition
with the Labor Arbiter praying that a trial on the merits be conducted in view of the
alleged conflicting allegations of facts by the parties and their witnesses and that Labor
Arbiter Pablo C. Espiritu, Jr. inhibit himself from trying the case on grounds of
prejudment. 6 The motion was denied in an order dated 1 April 1992 for lack of merit, on
the following reasons:
To refresh the memory of respondent Calabash Garments, Inc., it was precisely
the reason for not deciding the case based solely on the pleading, that this
Arbitration Branch decided to conduct clarificatory question on both
complainants' and respondent' witnesses (Calabash Garments Inc. And G.G.
Sportswear Inc.) in an Order dated 12 December 1991 duly received and
acknowledge by both parties in this case. It is to be stressed that neither party
appealed the order of this Arbiration Branch.

Consequently, after conducting clarificatory questions, this case was considered

submitted for resolution giving the parties ample opportunity (30 days) within
which to file their respective memorandum (see minutes of proceedings dated 26
February 1992 and transcript of stenographic notes pp. 96-97, 11, February 1992).

It should likewise be stressed that this Arbitration Branch decided to conduct

clarificatory questions based on Section 4, Rule V of the New Rules of Procedure
of the National Labor Relations Commission which clearly provide(s) the rules in
the determination of necessity of hearing;

Sec. 4. Determination of Necessity of Hearing. —

Immediately after the submission by the parties of their
position papers/memorandum, the Labor Arbiter shall motu
proprio determine whether there is need for a formal trial
or hearing. At this stage, he may, at his discretion and for
the purpose of making such determination, ask
clarificatory questions to further alicit facts or
information, including but not limited to the subpoena of
relevant documentary evidence, if any from any party or
witness.

Hence, after eliciting enough facts and relevant evidence from the parties. this
Arbitration Branch in conformity with Section 5(a) Rule V of the New Rules of
Procedure of the National Labor relations Commission and in the sound exercise
of discretion informed the parties that the case is now considered submitted for
resolution (TSN, pp. 96-97, 11 February 92 and Minutes of proceeding 26
February 92).

Instead of filing a memorandum, respondent Calabash Garments, Inc. now seek(s)

to have the case for trial and worse moving that this Arbiter inhibit himself on
flimsy and unsubstantiated grounds.

As a Labor Arbiter, the undersigned is tasked to draw up decisions and resolutions

with due care, and make certain that they truly and accurately reflect their
conclusions and equally as importantly, their final disposition, if in his quest for
the truth the wheels of justice will be hampered by a nonexistent ground for
inhibition and all probability Respondent Calabash Garments, Inc., is engaging in
 deliberate dilatory proceedings and forum shopping to which this Arbitration
Branch will not accede.

xxx xxx xxx

(Corrections in parenthesis ours)

On 14 April 1992, petitioner interposed an appeal from the above order to the NLRC. 8

Meanwhile, on 1 September 1992, Labor Arbiter Pablo C. Espiritu, Jr. rendered his
decision 9 holding petitioner and G.G. Sportswear solidarity liable to respondent Union,
as follows:

WHEREFORE, in conformity with the above premises, judgment is hereby

rendered:

a.) Declaring CGI guilty of unfair labor practice;

b.) Declaring CGI guilty of illegal lock out;

c.) Declaring CGI to be a labor only contractor of GGSMC;

d.) Ordering respondent CGI and GGSMC to pay jointly and solidarity
complainants:

1. Fourteen and one half (14.5) month backwages for each

union member from the time of their illegal dismissal by
virtue of Respondents illegal lock out and for non
observance of the required one (1) month prior notice under
Art. 283 of the Labor Code from June 17, 1991 till
promulgation of this decision, August 31, 1992, considering
that reinstatement is no longer decreed by virtue of the total
closure of the company in the total amount of
P6,672,900.00;

2. Three (3) months salary for each union member

representing one (1) month salary for every year of service
(from December, 1989-August 31, 1992) as separation pay
in lieu of reinstatement based on the minimum wage in the
total amount of P1,380,600,00;

3. P500,000.00 moral damages and P500,000.00 exemplary

damages.

4. Attorneys fees in the amount of P905,350.00,

representing 10% of the total judgment award of
P9,053,500.00, under Art. 111 of the Labor Code.
 All other claims of the complainants whether monetary or otherwise are herein
disallowed for lack of merit.

SO ORDERED. 10

From above decision, on 1 October 1992, petitioner filed an Appeal with Motion for
Reduction of Appeal Bond with the NLRC. 11

On 31, May 1993, the NLRC issued an order, the dispositive portion of which reads:

WHEREFORE, the twin motions for reduction of bond are hereby denied. The
respondent are hereby directed to JOINTLY post a surety bond in the amount of
P8,053,500.00 within ten (10) days from their receipt of this order, with the
warning that should they fail to so post said bond, their appeal will be dismissed
for their failure to perfect the same in accordance with the provision of Article
223 of the Labor Code, as amended.

SO ORDERED. 12

The motions for reconsideration filed by petitioner and G.G. Sportswear dated 8 June
1993 and 10 June 1993, respectively, 13 were denied by the NLRC in its order dated 29
June 1993. 14

Hence, this petition wherein it is argued that:

THE NLRC GRAVELY ABUSED ITS DISCRETION IN THE EXERCISE OF

ITS QUASI-JUDICIAL AUTHORITY IN DENYING PETITIONER'S MOTION
FOR REDUCTION OF APPEAL BOND, ALTHOUGH THE SAME IS
SANCTIONED BY SECTION 6, RULE VI OF THE NLRC RULES OF
PROCEDURE, THEREBY LEAVING PETITIONER WITH NO REMEDY
FROM THE DECISION OF LABOR ARBITER PABLO ESPIRITU, WHICH IS
PATENTLY ON THE FACTS AND THE LAW ERRONEOUS. 15

We find no merit in the petition.

In case involving a monetary award, an employer seeking to appeal the decision of the
Labor Arbiter to the NLRC is unconditionally required by Art. 223 of the Labor
Code 16 to post a cash or surety bond equivalent to the amount of the monetary award
adjudged.

The significance of this requisite comes to light upon appreciation of the rationale behind
it, which, in Viron Garments Manufacturing Co., Inc., et al v. NLRC, et al., 17 we
explained in this wise:

The requirement that the employer post a cash or surety bond to perfect its/his
appeal is apparently 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
employer's appeal. It was intended to discourage employers from using an appeal
to delay, or even evade, their obligation to satisfy their employee's just and lawful
claims.

Implementing the aforementioned provision, the NLRC, in Section 6, Rule VI of its New
Rules of procedure incorporated, in addition, the following:

Sec. 6. BOND. — In case the decision of a Labor Arbiter, POEA Administrator

and 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 cash
or surety bond 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 moral and exemplary damages and attorney's fees.

The employer as well as counsel shall submit a joint declaration under oath
attesting that the surety bond posted is genuine and that it shall be in effect until
final disposition of the case.

The Commission may in meritorious cases and upon Motion of the Appellant,
reduce the amount of the bond. (As amended on November 5, 1993). (Emphasis
ours.)

Petitioner anchors its arguments on the Commission's power to reduce the amount of the
bond in meritorious cases and stubbornly contends that the NLRC gravely abused its
discretion when it denied the motion for reduction of appeal bond filed by petitioner
although such a reduction is sanctioned under the aforecited NLRC rule.

Petitioner remains adamant in its argument that the P8,053,500.00 awarded by the Labor
Arbiter is "way, way out of line" and would be a "very onerous financial burden" on its
part. 18 Petitioner complains that:

The amount of the appeal bond, P8,053,500.00, is substantial and enormous. It is

a huge amount from any angle. For the premium alone, petitioner has to shell out
no less than P800,000.00 at the prevailing rate of 10%. Petitioner has also to put
up a collateral, either in real estate mortgage or cash or time deposit with the
bonding company. The premium once paid could no longer be recovered. 19

We find petitioner's contentions unconvincing. 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. Moreover, petitioner's
fear of paying an allegedly staggering amount as appeal bond is unfounded. We fully
concur with the findings of the NLRC, thus:

xxx xxx xxx

 The least that We expected from respondent relative to their asking for a reduction
of bond is for them to be candid because without such candor, We can never find
their posturing here credible.

Respondent G.G. Sportswear, for example, is aware (as Calabash has been so
aware) that the bond it is required to post amounts only to P8,053,500.00 [moral
and exemplary damages, as well as attorney's fees, being excluded by our rules in
the computation of the bond an appellant has to post (Sec. 6, Rule VI, New Rules
of the NLRC)]. Yet, in an attempt to overwhelm us, G.G. Sportswear made it
appear as aforequoted that it is being required to put up a bond in the amount of
"P9,958,850.00."

Anyway, by virtue of the authority given us by Article 218(c) of the Labor Code,
We checked with Phoenix Insurance, one of the surety companies accredited by
this Commission (with address at Phoenix Bldg., Recoletos St., Intramuros,
Manila) and talking to Mr. Bobby Salaver of its Claims Department, We got the
information that for the subject monetary award of P8,053,500.00 and pursuant to
the rates set by the Insurance Commission, all that the appellant will have "to
shell out" is P30,248.98, broken down as follows:

P26,746.08 — Cost of premium

2,015.60 — Documentary tax
1,337.30 — Premium tax
75.00 — Service Fee
75.00 — Notarial Fee
————
P30,248.98 — Total

xxx xxx xxx20

Undauted, petitioner insists that:

. . . Although the appeal bond could be paid thr(ough) a surety company, the
surety company however require(s) the posting of a cash deposit of
(P8,053,500.00) or an unencumbered real property with such value, by way of
collateral. If this collateral could not be posted, the surety company would charge
at least 10% premium, in this case the sum of P800,000.00 per
year. . . . 21 (Corrections in parenthesis ours.)

Petitioner's insistence comes to naught. This same argument was sufficiently address by the
NLRC in its assailed order

xxx xxx xxx

Of course, Mr. Salaver explains, the appellant will have to put up a collateral
equivalent to the amount being assured, but this does not mean that such collateral
 is part of an expense. He informed us that even on a Time Deposit that may serve
as a collateral, the interest eranings said deposit will generate will not go to the
insurance company but rather to the appellant securing the surety bond.

xxx xxx xxx22

Petitioner's burden is further eased by the NLRC'S order that appeal bond be jointly posted by
petitioner and respondent G.G. Sportswear. 23

While, admittedly, Section 6, Rule VI of the NLRC's New Rules of Procedure allows the
Commission to reduce the amount of the bond, the exercise of the authority is discretionary and
only in meritorious cases. Petitioner has not amply demonstrated that its case is meritorious or
that the Commission's ruling is tainted with arbitrariness.

WHEREFORE, finding no grave abuse of discretion committed by the NLRC, we DISMISS the
petition.

SO ORDERED.

G.R. No. 163786 February 16, 2005

TIMES TRANSPORTATION COMPANY, INC., petitioner,

vs.
SANTOS SOTELO, CONRADO B. SALONGA, SAMSON C. SOLIVEN, BIENVENIDO
F. MALANA, JR., JOVITO V. ALCAUSIN, EFREN A. RAMOS, RODRIGO P.
CABUSAO, JR., EDGAR G. PONCE, RONALD ALLAN PARINAS, RODEL PALO,
REYNALDO R. RAGUCOS, MARIO T. TOLEDO, BERNARDINO PADUA, DOMINGO
P. BILAN, ARNEL VALLEDORES, RAMON RETUTA, JR., PANTALEON TABANGIN,
ALBERTO PANDO, VIRGILIO E. OBAR, EULOGIO D. DIGA, SR., DANIEL LLADO,
RONILO BALTAZAR, MARITO PANDO, LEOPOLDO FUNTILA, GERRY B.
CARRIDO, WILLIAM A. TABUCOL, ANTONIO L. RAMOS, SR., PABLO P. PADRE,
HENRY B. GANIR, TEOTIMO R. REQUILMAN, CIPRIANO ULPINDO, ROGER
BABIDA, SAMUEL PERALTA, BONIFACIO TUMALIP, EDGAR ABLOG, EFREN
ABELLA, RODRIGO RABOY, RENATO SILVA, GEORGE PERALTA, RONILO
BARBOSA, JULIAN BUENAFE, FLORENCIO CARIÑO, BERNIE TUMBAGA,
RODRIGO CABAÑERO, ELMER TAMO, LEOPOLDO NANA, NELIE BOSE,
DEMETRIO HERRERA, RODOLFO ABELLA, ALVIN ELEFANTE, REDENTOR
GARCIA, JERRY PALACPAC, JOSE PAET, ARTHUR IBEA, ELIZER BORJA,
EDMUNDO ASPIRAS, JOSE V. PESCADOR, WILLIAM GARCIA, ERNESTO P.
MANGULABNAN, BENJAMIN B. BLAZA, JOSELITO P. CACABELOS, LEON R.
GALANTA, JR., MARIANO P. TEJADA, PEDRITO C. ORTIZ, JR., NESTOR E.
BALCITA, FLOR BURBANO, HERNANDO A. PIMENTEL, ALEX A. GOMEZ,
ARNALDO P. BOSE, NAPOLEON BALDERAS, CARLINO V. RULLODA, JR., RANDY
R. AMODO, CORNELIO R. RAGUINI, ROBERT CERIA, JUANITO U. UGALDE,
ALBERTO PAJO, ALFREDO VALOROSO, RUFINO ADRIATICO, BARTOLOME C.
EDROSOLAN, JR., REYNANTE A. ALCAIN, NOELITO SUSA and VICENTE
NAVA, respondents.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the decision of the Court of Appeals dated January
30, 2004 in CA-G.R. SP No. 75291,1 which set aside the decision and resolution of the National
Labor Relations Commission, and its resolution dated May 24, 20042 denying reconsideration
thereof.

Petitioner Times Transportation Company, Inc. (Times) is a corporation engaged in the business
of land transportation. Prior to its closure in 1997, the Times Employees Union (TEU) was
formed and issued a certificate of union registration. Times challenged the legitimacy of TEU by
filing a petition for the cancellation of its union registration.

On March 3, 1997, TEU held a strike in response to Times’ alleged attempt to form a rival union
and its dismissal of the employees identified to be active union members. Upon petition by
Times, then Labor Secretary, and now Associate Justice of this Court, Leonardo A. Quisumbing,
assumed jurisdiction over the case and referred the matter to the NLRC for compulsory
arbitration. The case was docketed as NLRC NCR CC-000134-97. A return-to-work order was
likewise issued on March 10, 1997.

In a certification election held on July 1, 1997, TEU was certified as the sole and exclusive
collective bargaining agent in Times. Consequently, TEU’s president wrote the management of
Times and requested for collective bargaining. Times refused on the ground that the decision of
the Med-Arbiter upholding the validity of the certification election was not yet final and
executory.

TEU filed a Notice of Strike on August 8, 1997. Another conciliation/mediation proceeding was
conducted for the purpose of settling the brewing dispute. In the meantime, Times’ management
implemented a retrenchment program and notices of retrenchment dated September 16, 1997
were sent to some of its employees, including the respondents herein, informing them of their
retrenchment effective 30 days thereafter.

On October 17, 1997, TEU held a strike vote on grounds of unfair labor practice on the part of
Times. For alleged participation in what it deemed was an illegal strike, Times terminated all the
123 striking employees by virtue of two notices dated October 26, 1997 and November 24,
1997.3 On November 17, 1997, then DOLE Secretary Quisumbing issued the second return-to-
work order certifying the dispute to the NLRC. While the strike was ended, the employees were
no longer admitted back to work.

In the meantime, by December 12, 1997, Mencorp Transport Systems, Inc. (Mencorp) had
acquired ownership over Times’ Certificates of Public Convenience and a number of its bus units
by virtue of several deeds of sale.4 Mencorp is controlled and operated by Mrs. Virginia
Mendoza, daughter of Santiago Rondaris, the majority stockholder of Times.

On May 21, 1998, the NLRC rendered a decision5 in the cases certified to it by the DOLE, the
dispositive portion of which read:

WHEREFORE, the respondents’ first strike, conducted from March 3, 1997 to March 12, 1997,
is hereby declared LEGAL; its second strike, which commenced on October 17, 1997, is hereby
declared ILLEGAL. Consequently, those … 23 persons who participated in the illegal strike …
are deemed to have lost their employment status and were therefore validly dismissed from
employment: …

The respondents’ "Motion to Implead Mencorp Transport Systems, Inc. and/or Virginia Mendoza
and/or Santiago Rondaris" is hereby DENIED for lack of merit.

SO ORDERED.6

Times and TEU both appealed the decision of the NLRC, which the Court of Appeals affirmed
on November 17, 2000.7 Upon denial of its motion for reconsideration, Times filed a petition for
review on certiorari,8 docketed as G.R. Nos. 148500-01, now pending with the Third Division of
this Court. TEU likewise appealed but its petition was denied due course.

In 1998, and after the closure of Times, the retrenched employees, including practically all the
respondents herein, filed cases for illegal dismissal, money claims and unfair labor practices
against Times before the Regional Arbitration Branch in San Fernando City, La Union. Times
filed a Motion to Dismiss but on October 30, 1998, the arbitration branch ordered the archiving
of the cases pending resolution of G.R. Nos. 148500-01.9

The dismissed employees did not interpose an appeal from said Order. Instead, they withdrew
their complaints with leave of court and filed a new set of cases before the National Capital
Region Arbitration Branch. This time, they impleaded Mencorp and the Spouses Reynaldo and
Virginia Mendoza. Times sought the dismissal of these cases on the ground of litis pendencia and
forum shopping. On January 31, 2002, Labor Arbiter Renaldo O. Hernandez rendered a decision
stating:

WHEREFORE, premises considered, judgment is hereby entered FINDING that the dismissals
of complainants, excluding the expunged ones, by respondent Times Transit (sic) Company, Inc.
effected, participated in, authorized or ratified by respondent Santiago Rondaris constituted the
prohibited act of unfair labor practice under Article 248(a) and (e) of the Labor Code, as
amended and hence, illegal and that the sale of said respondent company to respondents
Mencorp Transport Systems Company (sic), Inc. and/or Virginia Mendoza and Reynaldo
Mendoza was simulated and/or effected in bad faith, ORDERING:

1. respondents Times Transit (sic) Company, Inc. and Santiago Rondaris as the officer
administratively held liable of the unfair labor practice herein to CEASE AND DESIST
therefore (sic);
 2. respondents Times Transit (sic) Company, Inc. and/or Santiago Rondaris and Mencorp
Transport Systems Company, Inc. and/or Virginia Mendoza and Reynaldo Mendoza to
cause the reinstatement therein of complainants to their former positions without loss of
seniority rights and benefits and to pay jointly and severally said complainants full back
wages reckoned from their respective dates of illegal dismissal as above-indicated, until
actually reinstated or in lieu of such reinstatement, at the option of said complainants,
payment of their separation pay of one (1) month pay per year of service, reckoned from
their date of hire as above-indicated, until actual payment and/or finality of this decision;

3. and finally for respondents Times Transit (sic) Company, Inc. and/or Santiago
Rondaris to pay jointly and severally said complainants as moral and exemplary damages
the combined amount of P75,000.00 and 5% of the total award as attorney’s fees.

All other claims of complainants are dismissed for lack of merit.

….

SO ORDERED.10

The monetary award amounted to P43,347,341.69. On March 4, 2002, Times, Mencorp and the
Spouses Mendoza submitted their respective memorandum of appeal to the NLRC with motions
to reduce the bond. Mencorp posted a P5 million bond issued by Security Pacific Assurance
Corp. (SPAC). On April 30, 2002, the NLRC issued an order disposing of the said motion, thus:

WHEREFORE, premises considered, the Urgent Motion for Reduction of Bond is denied for
lack of merit. Respondents are hereby ordered to complete the bond equivalent to the monetary
award in the Labor Arbiter’s Decision, within an unextendible period of ten (10) days from
receipt hereof, otherwise, the appeal shall be dismissed for non-perfection thereof.

SO ORDERED.11

On May 18, 2002, Times moved to reconsider said order arguing mainly that it did not have
sufficient funds to put up the required bond. On July 26, 2002, Mencorp and the Spouses
Mendoza posted an additional P10 million appeal bond. Thus far, the total amount of bond
posted was P15 million. On August 7, 2002, the NLRC granted the Motion for Reduction of
Bond and approved the P10 million additional appeal bond.12

On September 17, 2002, the NLRC rendered its decision, stating:

WHEREFORE, the foregoing premises duly considered, the decision appealed from is hereby
VACATED. The records of these consolidated cases are hereby ordered REMANDED to the
Arbitration Branch of origin for disposition and for the conduct of appropriate proceedings for a
decision to be rendered with dispatch.

SO ORDERED.13
Reconsideration thereof was denied by the NLRC on October 30, 2002. Thus, the respondents
appealed to the Court of Appeals by way of a petition for certiorari, attributing grave abuse of
discretion on the NLRC for: (1) not dismissing the appeals of Times, Mencorp and the Spouses
Mendoza despite their failure to post the required bond; (2) remanding the case for further
proceedings despite the sufficiency of the evidence presented by the parties; (3) not sustaining
the labor arbiter’s ruling that they were illegally dismissed; (4) not affirming the labor arbiter’s
ruling that there was no litis pendencia; and (5) not ruling that Times and Mencorp are one and
the same entity.1ªvvphi1.nét

On January 30, 2004, the Court of Appeals rendered the decision now assailed in this petition,
the decretal portion of which states:

WHEREFORE, based on the foregoing, the instant petition is hereby GRANTED. The assailed
Decision and Resolution of the NLRC are hereby SET ASIDE. The Decision of the Labor
Arbiter dated January 31, 2002 is hereby REINSTATED.

SO ORDERED.14

Times, Mencorp and the Spouses Mendoza filed Motions for Reconsideration, which were
denied in a resolution promulgated on May 24, 2004. Hence, this petition for review based on the
following grounds:

I. Petitioner respectfully maintains that the Honorable Court a quo, in not dismissing the
complaints against the petitioner on the ground of lis pendens, decided the matter in a
way not in accord with existing laws and applicable decisions of this Honorable Court.

II. Petitioner, further, respectfully maintains that the Honorable Court a quo, in
determining that herein petitioners hitherto lost their right to appeal to the NLRC on
account of their purported failure to post an adequate appeal bond, radically departed
from the accepted and usual course of judicial proceedings, not to mention resolved said
issue in a manner and fashion antithetical to existing jurisprudence.

III. Petitioner, furthermore, respectfully maintains that the Honorable Court a quo, in
applying wholesale the doctrine of piercing the veil of corporate fiction and finding
Times’ co-petitioners liable for the former’s obligations, resolved the matter in a manner
contradictory to existing applicable laws and dispositions of this Honorable Court, and
departed from the accepted and usual course of judicial proceedings with regard to
admitting evidence to sustain the application of such principle.15

The petition lacks merit.

As to the first issue, Times argues that there exists an identity of issues, rights asserted, relief
sought and causes of action between the present case and the one concerning the legality of the
second strike, which is now pending with the Third Division of this Court. As such, the Court of
Appeals erred in not dismissing the case at bar on the ground of litis pendencia.
Litis pendencia as a ground for dismissal of an action refers to that situation wherein another
action is pending between the same parties for the same cause of action and the second action
becomes unnecessary and vexatious.16 We agree with the findings of the Court of Appeals that
there is no litis pendencia as the two cases involve dissimilar causes of action. The first case,
now pending with the Third Division, pertains to the alleged error of the NLRC in not upholding
the dismissal of all the striking employees (not only of the 23 strikers so declared to have lost
their employment) in spite of the latter’s ruling that the second strike was illegal. None of the
respondents herein were among those deemed terminated by virtue of the NLRC decision.

In the instant case, the issue is the validity of the retrenchment implemented by Times prior to
the second strike and the subsequent dismissal of the striking employees. As such, there can be
no question that respondents were still employees of Times when they were retrenched. In short,
the outcome of this case does not hinge on the legality of the second strike or the validity of the
dismissal of the striking employees, which issues are yet to be resolved in G.R. Nos. 148500-01.
Consequently, litis pendencia does not arise.

Anent the issue on whether Times perfected its appeal to the NLRC, the right to appeal is a
statutory right and one who seeks to avail of the right must comply with the statute or rules. The
rules for perfecting an appeal must be strictly followed as they are considered indispensable
interdictions against needless delays and for orderly discharge of judicial business.17 Section 3(a),
Rule VI of the NLRC Rules of Procedure outlines the requisites for perfecting an appeal, to wit:

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 and 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 6 of this Rule; shall be accompanied by 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 requisites aforestated shall not stop the
running of the period for perfecting an appeal. (Emphasis supplied)

Article 223 of the Labor Code provides that 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 NLRC in the amount equivalent
to the monetary award in the judgment appealed from. The perfection of an appeal in the manner
and within the period prescribed by law is not only mandatory but also jurisdictional, and failure
to perfect an appeal has the effect of making the judgment final and executory.18 However, in
several cases, we have relaxed the rules regarding the appeal bond especially where it must
necessarily yield to the broader interest of substantial justice.19 The Rules of Procedure of the
NLRC allows for the reduction of the appeal bond upon motion of the appellant and on
meritorious grounds.20 It is required however that such motion is filed within the reglementary
period to appeal.
The records reveal that Times, Mencorp and the Spouses Mendoza’s motion to reduce the bond
was denied and the NLRC ordered them to post the required amount within an unextendible
period of ten (10) days.21 However, instead of complying with the directive, Times filed another
motion for reconsideration of the order of denial. Several weeks later, Mencorp posted an
additional bond, which was still less than the required amount. Three (3) months after the filing
of the motion for reconsideration, the NLRC reversed its previous order and granted the motion
for reduction of bond.1awphi1.nét

We agree with the Court of Appeals that the foregoing constitutes grave abuse of discretion on
the part of the NLRC. By delaying the resolution of Times’ motion for reconsideration, it has
unnecessarily prolonged the period of appeal. We have held that to extend the period of appeal is
to prolong the resolution of the case, a circumstance which would give the employer the
opportunity to wear out the energy and meager resources of the workers to the point that they
would be constrained to give up for less than what they deserve in law.22 The NLRC is well to
take notice of our pronouncement in Santos v. Velarde:23

The Court is aware that the NLRC is not bound by the technical rules of procedure and is
allowed to be liberal in the interpretation of rules in deciding labor cases. However, such
liberality should not be applied in the instant case as it would render futile the very purpose for
which the principle of liberality is adopted. … From the decision of the Labor Arbiter, it took the
NLRC four months to rule on the "motion" for exemption to pay bond and another four months
to decide the merits of the case. This Court has repeatedly ruled that delay in the settlement of
labor cases cannot be countenanced. Not only does it involve the survival of an employee and his
loved ones who are dependent on him…, it also wears down the meager resources of the
workers...24 (Emphasis supplied)

The NLRC’s reversal of its previous order of denial lacks basis. In the first motion, Mencorp and
Spouses Mendoza moved for the reduction of the appeal bond on the ground that the
computation of the monetary award was highly suspicious and anomalous. In their motion for
reconsideration of the NLRC’s denial, Mencorp and the Spouses Mendoza cited financial
difficulties in completing the appeal bond. Neither ground is well-taken.

Times and Mencorp failed to substantiate their allegations of errors in the computation of the
monetary award. They merely asserted "inaccuracies" without specifying which aspect of the
computation was inaccurate. If Times and Mencorp truly believed that there were errors in the
computation, they could have presented their own computation for comparison. As to the claim
of financial difficulties, suffice it to say that the law does not require outright payment of the
total monetary award, but only the posting of a bond to ensure that the award will be eventually
paid should the appeal fail.l^vvphi1.net What Times has to pay is a moderate and reasonable sum
for the premium for such bond.25 The impression thus created was that Times, Mencorp and the
Spouses Mendoza were clearly circumventing, if not altogether dodging, the rules on the posting
of appeal bonds.

On the propriety of the piercing of the corporate veil, Times claims that "to drag Mencorp,
[Spouses] Mendoza and Rondaris into the picture on the purported ground that a fictitious sale of
Times’ assets in their favor was consummated with the end in view of frustrating the ends of
justice and for purposes of evading compliance with the judgment is … the height of judicial
arrogance."26 The Court of Appeals believes otherwise and reckons that Times and Mencorp
failed to adduce evidence to refute allegations of collusion between them.

We have held that piercing the corporate veil is warranted only in cases when the separate legal
entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, such
that in the case of two corporations, the law will regard the corporations as merged into one.27 It
may be allowed only if the following elements concur: (1) control—not mere stock control, but
complete domination—not only of finances, but of policy and business practice in respect to the
transaction attacked; (2) such control must have been used to commit a fraud or a wrong to
perpetuate the violation of a statutory or other positive legal duty, or a dishonest and an unjust act
in contravention of a legal right; and (3) the said control and breach of duty must have
proximately caused the injury or unjust loss complained of.28

The following findings of the Labor Arbiter, which were cited and affirmed by the Court of
Appeals, have not been refuted by Times, to wit:

1. The sale was transferred to a corporation controlled by V. Mendoza, the daughter of

respondent S. Rondaris of [Times] where she is/was also a director, as proven by the
articles of incorporation of [Mencorp];

2. All of the stockholders/incorporators of [Mencorp]: Reynaldo M. Mendoza, Virginia R.

Mendoza, Vernon Gerard R. Mendoza, Vivian Charity R. Mendoza, Vevey Rosario R.
Mendoza are all relatives of respondent S. Rondaris;

3. The timing of the sale evidently was to negate the employees/complainants/members’

right to organization as it was effected when their union (TEU) was just
organized/requesting [Times] to bargain;

5. [Mencorp] never obtained a franchise since its supposed incorporation in 10 May 1994
but at present, all the buses of [Times] are already being run/operated by respondent
[Mencorp], the franchise of [Times] having been transferred to it.29

We uphold the findings of the labor arbiter and the Court of Appeals. The sale of Times’
franchise as well as most of its bus units to a company owned by Rondaris’ daughter and family
members, right in the middle of a labor dispute, is highly suspicious. It is evident that the
transaction was made in order to remove Times’ remaining assets from the reach of any judgment
that may be rendered in the unfair labor practice cases filed against it.

WHEREFORE, premises considered, the petition is DENIED. The decision of the Court of
Appeals in CA-G.R. SP No. 75291 dated January 30, 2004 and its resolution dated May 24,
2004, are hereby AFFIRMED in toto.

SO ORDERED.
 [G.R. No. 109371. November 18, 1999]

JOSE GAUDIA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,

PANIQUI SUGAR CORPORATION and JOSE ROMASANTA, respondents.

DECISION
PARDO, J.:

The case before the Court is a petition for certiorari[1] assailing as having been issued with
grave abuse of discretion amounting to lack of jurisdiction the decision [2] of the National labor
Relations Commission (NLRC) reversing the labor arbiters decision [3] finding that petitioner Jose
Gaudia was illegally dismissed by his employer, respondent Paniqui Sugar Corporation.
The facts are as follows:
In November 1977, petitioner was employed as company driver of respondent corporation
earning a monthly salary of P2,940.00.
On February 19, 1990, there was found a 45 x 8" iron rail worth P500.00 hidden in
respondents truck driven by Abraham Gaudia as it was about to leave the company
compound. Abraham Gaudia, petitioners nephew, denied any knowledge of the iron rail. He
pointed to his uncle, petitioner herein, as having concealed the iron rail under the truck.
In a memorandum[4] dated February 28, 1990, respondent corporation directed petitioner to
submit within seventy-two (72) hours a written explanation on why he should not be dismissed
from employment for pilferage of company property.
On March 5, 1990, respondent corporation, by Memorandum No. 08,[5] terminated
petitioners employment effective March 6, 1990 for engaging in an act prejudicial to the interests
of the company.
On March 9, 1990, the union president Efren S. Muoz wrote a letter [6] to respondent Jose A.
Romasanta, Assistant Vice-President for Administration of respondent corporation, requesting for
a re-investigation of petitioners dismissal.
Unmoved by the request for a re-investigation, respondent corporation filed with the
Regional Trial Court, Branch 67, Paniqui, Tarlac a complaint against petitioner for qualified
theft.
In a letter[7] dated December 8, 1990, petitioner requested respondent Romasanta to drop the
case for qualified theft. In return, petitioner signified that he was resigning as company driver
with a waiver of all benefits, rights and privileges accorded to an employee being separated from
the service.
On February 28, 1991, the court dismissed the case for qualified theft against petitioner.
On August 9, 1991, petitioner filed with the NLRC Regional Arbitration Branch No. III, San
Fernando, Pampanga a complaint for illegal dismissal against respondents with prayer for
reinstatement without loss of seniority rights, full backwages, privileges, moral and exemplary
damages amounting to P50,000.00 and litigation expenses totalling P10,000.00.
On June 5, 1992, after due hearing, Labor Arbiter Dominador B. Saludares rendered a
decision finding the respondents guilty of illegally dismissing petitioner, the dispositive portion
of which reads:

WHEREFORE, premises considered, judgment is hereby entered, ordering the respondents,

jointly and severally, as follows:

1. To pay the separation pay of complainant in the sum of P38,220.00 without any deduction or
qualification; and

2. To pay moral and exemplary damages in the sum of P25,000.00.

SO DECIDED.

San Fernando, Pampanga, 05 June 1992.

(s/t) DOMINADOR B. SALUDARES

Labor Arbiter[8]

On June 29, 1992, respondents received notice of the Labor Arbiters decision. On July 9,
1992, respondents filed an appeal memorandum[9] with the NLRC, without posting the cash or
surety bond as required under Rule VI, Section 3 of the New Rules of Procedure of the NLRC.
On July 15, 1992, petitioner moved for execution of the Labor Arbiters decision, claiming
that said decision had become final and executory for non-perfection of respondents appeal
brought about by their failure to post the required bond within the ten-day reglementary period.
On July 17, 1992, Labor Arbiter Saludares issued a writ of execution.
On August 6, 1992, private respondents filed with the Labor Arbiters Office an Ex-Parte
Motion to Quash the Writ of Execution.
Meantime, on August 3, 1992, private respondents posted with the Labor Arbiters Office a
surety bond.
On November 20, 1992, the NLRC rendered decision reversing the Labor Arbiters
judgment. It found that there was sufficient cause to dismiss petitioner, but that there was non-
compliance with due process since the dismissal was effective on March 6, 1990 or only a day
after petitioner received the notice of dismissal. Private respondents were thus directed to
indemnify petitioner in the amount of P3,000.00 for failure to comply strictly with the requisites
of due process.[10]
On January 29, 1993, the NLRC denied[11] petitioners motion for reconsideration of its
November 20, 1992 decision.
Hence, this petition.[12]
 Petitioner submits that: (1) the NLRC erred in giving due course to the appeal
notwithstanding private respondents' failure to post the cash or surety bond within the
reglementary period, and (2) the NLRC erred in holding that respondents had sufficient cause to
dismiss petitioner.
On November 13, 1995, we gave due course to the petition.[13]
The petition is impressed with merit.
On the procedural issue involved, petitioner points out that the posting of a cash or surety
bond is a mandatory requirement for the perfection of an appeal to the NLRC from a judgment of
the Labor Arbiter. This is clearly prescribed in Article 223 of the Labor Code and Sections 3 and
6, Rule VI of the New Rules of Procedure of the NLRC which read, respectively:

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.

xxxxxxxxx

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.

x x x x x x x x x.

RULE VI

APPEALS

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 requisites aforestated shall not stop the
running of the period for perfecting an appeal.

x x x.

Section 6. Bond. In case the decision of a Labor Arbiter, POEA Administrator and 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 issued by a reputable
bonding company duly accredited by the Commission or the Supreme Court in an amount
equivalent to the monthly award, exclusive of moral and exemplary damages and attorneys fees.

The employer as well as counsel shall submit a joint declaration under oath attesting that the
surety bond posted is genuine and that it shall be in effect until final disposition of the case.

The Commission may, in meritorious cases and upon motion of the appellant, reduce the amount
of the bond. The filing, however, of the motion to reduce bond shall not stop the running of the
period to perfect appeal. (underscoring supplied.)

In Viron Garments Manufacturing Co., Inc., vs. NLRC, et al.,[14] the Court said:

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 employers appeal may be perfected.

The word may refers to the perfection of an appeal as optional on the part of the defeated party,
but not to the posting of an appeal bond, if he desires to appeal.

The meaning and the intention of the legislature in enacting a statute must be determined from
the language employed, and where there is no ambiguity in the words, there is no room for
construction (Provincial Board of Cebu vs. Presiding Judge of Cebu Court of First Instance,
Branch IV, 171 SCRA 1).

The requirement that the employer post a cash or surety bond to perfect its/his appeal is
apparently 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 was intended to
discourage employers from using an appeal to delay, or even evade, their obligation to satisfy
their employees just and lawful claims.

In this case, respondents filed their notice of appeal within the ten-day period (July 9, 1992),
however, they posted a surety bond only on August 3, 1992, or almost a month after the appeal
period had lapsed. The explanation proferred by respondents that the surety failed to attach the
required Supreme Court certification to the bond is not an excuse for the delay. The duty to
ensure that the bond satisfies all the formal requirements before it is filed within the ten-day
appeal period rests solely on the respondents as appellants.
Having failed to file the required bond within the reglementary period, private respondents'
appeal to the NLRC had not been perfected, thus making the Labor Arbiters decision final and
executory. This is so as 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 as required by the
Rules has the effect of rendering the judgment final and executory. [15] 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.[16]
With the preceding disquisition, it is no longer necessary for the Court to delve into the other
issue raised by petitioner on whether there is sufficient cause to dismiss him. That has been
passed upon in his favor by the Labor Arbiter whose decision was final and executory.
WHEREFORE, the Court GRANTS the petition and SET ASIDE NLRCs decision dated
November 20, 1992 ands resolution dated January 29, 1993 in NLRC CA No. L-000667-92. In
lieu thereof, we declare final and executory Labor Arbiter Dominador B. Salvadores decision
dated June 5, 1992, as follows:

1. to pay the separation pay of petitioner Jose Gaudia in the sum of P38,220.00 without any
deduction or qualification; and

2. to pay moral and exemplary damages in the sum of P25,000.00.

With costs.
SO ORDERED.

INTERTRANZ CONTAINER LINES, G.R. No. 187693

INC. and JOSEFINA F. TUMIBAY,
Petitioners, Present:
*
CARPIO, J.,
*
- versus - BRION, Acting Chairperson,
*
ABAD,
VILLARAMA, JR., and
*
MENDOZA, JJ.
MA. TERESA I. BAUTISTA,
Respondent. -- - Promulgated:
July 13, 2010
x-----------------------------------------------------------------------------------------x

DECISION

BRION, J.:
For resolution is the present Petition for Review on Certiorari[1] which assails the Decision[2] and
the Resolution[3] of the Court of Appeals (CA), rendered on November 26, 2008 and April 29,
2009, respectively, in CA-G.R. SP No. 101611.[4]

The Antecedents

Petitioners Intertranz Container Lines, Inc. and Josefina F. Tumibay (petitioners) are engaged in
local and international freight forwarding services. On February 14, 2002, the petitioners
employed Ma. Teresa I. Bautista as Customs Representative.

On September 10, 2004, Bautista filed a complaint against the petitioners for illegal dismissal,
money claims, moral and exemplary damages and attorneys fees. She stated that as the companys
customs representative, she attended to the processing of import documents of the companys
clients and the delivery of their cargoes. Her daily work schedule was from 8:30 a.m. to 5:30
p.m., but her duties required her to work up to midnight without overtime compensation. Her
monthly salary was increased to P8,000.00 upon her promotion as account officer with the duty
of looking for clients. The company did not give her incentive leave and 13 th month pay. On July
15, 2004, the petitioners terminated her employment without a valid reason and prior
investigation; by reason of her dismissal, she suffered and continues to suffer extreme mental
anguish and serious anxiety. She also claimed that Tumibay shouted at her when she was
dismissed, and threatened to shoot her if she did not leave.

In defense, the petitioners alleged that on July 11, 2004, Bautista was caught red-handed
overcharging the company for truck rental; she requested a cash advance of P6,000.00 to pay for
the rental, but she actually paid the trucking service only P4,500.00, keeping for herself the
balance of P1,500.00.[5] On July 12, 2004, Rhandy Villaflores, the companys Marketing
Manager, asked Bautista to explain her side regarding the truck rental overcharge but she merely
denied the accusation. On July 15, 2004, Villaflores submitted a report on the matter to Tumibay,
who informed Bautista of the findings and asked her to explain her side. Bautista denied any
wrongdoing and justified her taking a share from the truck rental as her referral fee, by claiming
that she was the one coordinating/dealing with the trucking company. Bautistas insolent reply
angered Tumibay who then told Bautista to resign; instead of resigning, she filed the
complaint. On July 19, 2004, Bautista, representing herself as manager of a competitor company,
Ramaga Cargo Express, sent a letter, dated July 18, 2004, to Sandvik Tamrock Phils., Inc.,
soliciting business, an act of moon shining.[6] To avoid being formally charged with a fraudulent
and dishonest act, Bautista opted to leave the company and stopped reporting for work. Since
Bautista, by her acts, intentionally severed her employment with the company, a letter of notice
for her to return to work and a show cause letter would have been a futile exercise. Moreover, the
petitioners maintained that Bautistas dishonest acts constituted a just and valid cause for her
dismissal, pursuant to company rules and regulations.
The petitioners denied liability for Bautistas money claims as they paid her 13 th month benefits
(except in 2004 when Bautista went on absence without leave) and service incentive pay. Her
claim for overtime pay allegedly lacked basis because it was not supported by a pre-approved
overtime schedule and a daily time record; as a member of the marketing department, she had no
regular working hours. The petitioners likewise argued that Bautista cannot claim damages for
mental anguish and anxiety because it was her own fraudulent and dishonest act that caused her
dismissal from the company. In addition, Tumibay cannot be held personally liable for corporate
acts done in her capacity as managing director of the company.

The Compulsory Arbitration Proceedings

On June 15, 2005, Labor Arbiter Aliman D. Mangandog rendered a decision [7] declaring
Bautistas dismissal illegal. He ordered Bautistas reinstatement and directed the petitioners to pay
her, jointly and severally, P409,262.89 representing backwages and other monetary
benefits, P500,000.00 as moral damages, P300,000.00 as exemplary damages, and P120,926.29
as attorneys fees.

On July 11, 2005, the petitioners filed with the National Labor Relations Commission (NLRC) a
Notice of Appeal, accompanied by a Memorandum of Appeal, an Appeal Bond for P531,000.00,
and a Motion to Reduce Appeal Bond. On July 14, 2005, Bautista moved for the execution of the
reinstatement aspect of the labor arbiters decision. On August 4, 2005, Bautista filed a Motion
for Payroll Reinstatement, which the arbiter granted in an Order dated December 15, 2005,
[8]
despite the petitioners opposition.[9] The petitioners moved for reconsideration of the labor
arbiters payroll reinstatement order.[10]

On April 18, 2006, the NLRC issued an Order[11] directing the petitioners to replace, within ten
(10) days, the appeal bond they posted on July 11, 2005, on the ground that the accreditation of
the bondsman the Summit Guaranty and Insurance Company, Inc. expired on July 31, 2005 and
had not been renewed. On May 8, 2006, the petitioners filed, instead of the required bond, a
Motion for Reconsideration with Motion for Suspension/Extension, [12] asking for a period of one
month to replace the bond. While the motions were pending, the petitioners submitted, on June 1,
2006, a Manifestation with Motion, attached to which was a copy of the newly secured bond.

In a decision dated January 8, 2007, the NLRC dismissed the petitioners appeal for non-
perfection,[13] as they filed the replacement bond beyond the 10-day period. Ten days later or on
January 17, 2007, the NLRC issued a Resolution[14] dismissing the petitioners motion for
reconsideration of the labor arbiters order of December 15, 2005, granting Bautistas payroll
reinstatement. The petitioners filed separate motions for reconsideration of the NLRC decision
dismissing the appeal and the resolution denying the motion for reconsideration of the payroll
reinstatement order. The NLRC denied both motions in a resolution promulgated on October 22,
2007.[15]The NLRC issued an Entry of Judgment on January 8, 2008, [16] the basis for the Writ of
Execution of January 22, 2008.[17]
 Recourse to the CA

The petitioners sought relief from the CA through a petition for certiorari[18] under Rule 65 of the
Rules of Court charging the NLRC with grave abuse of discretion in: (1) denying their appeal for
non-perfection; (2) ordering Bautistas reinstatement in the payroll pending appeal; and (3)
issuing the entry of judgment and the writ of execution without prior notice and service of the
motion, and before the lapse of the appeal period.

In the decision of November 26, 2008,[19] the CA denied the petition and affirmed the assailed
decision and resolution of the NLRC. It found that the NLRC correctly dismissed the petitioners
appeal for non-perfection. The CA noted that the bond that the petitioners posted on July 11,
2005 was valid only until July 31, 2005, the expiry date of the accreditation of the surety firm
that issued the bond. The CA further noted that the petitioners posted a new bond on June 1,
2006, beyond the 10-day period mandated by the NLRC. The appellate court also ruled that
Bautistas payroll reinstatement, the entry of judgment, and the issuance of the writ of execution
were proper since the decision of the labor arbiter had become final and executory.

The petitioners moved for reconsideration of the CA decision, but the CA denied the motion on
April 29, 2009.[20]

The Petition and Related Incidents

The petitioners now seek to reverse the CA decision, contending that the appellate court gravely
abused its discretion in affirming the NLRC decision dismissing their appeal for non-
perfection. They contend that the CA had been too strict in applying the rules on appeal bond
considering that: (1) they perfected their appeal by posting a valid appeal bond on July 11, 2005;
(2) when they were required by the NLRC to file a replacement bond within 10 days from receipt
of its April 18, 2006 order on the matter, they moved for reconsideration, as well as a 30-day
extension to post the new bond; and (3) within the extension period prayed for, or on June 1,
2006, they filed the replacement bond. They objected to Bautistas payroll reinstatement arguing
that she is guilty of dishonesty, a just cause for dismissal.

On July 6, 2009, the Court required respondent Bautista to comment on the petition.[21]

On July 14, 2009, the petitioners moved [22] for a temporary restraining order (TRO)/writ of
injunction to prevent, enjoin, restrain the NLRC Sheriffs from enforcing the 2nd Alias Writ of
Execution dated June 3, 2009,[23]and from conducting the auction sale on July 17, 2009 or
anytime thereafter over the petitioners property, real or personal.[24]

In a Resolution dated July 15, 2009, the Court granted the motion, [25] issued the TRO prayed for,
and required the petitioners to post a cash or surety bond in an amount equivalent to the NLRC
award of P1,330,189.18.[26]
On July 24, 2009, the petitioners filed a Manifestation [27] (of compliance), submitting to the
Court copies of the surety bond issued by a reputable bonding company of indubitable solvency
in the amount equivalent to the NLRC award, with supporting documents.[28]

On September 14, 2009, Bautista filed her Comment,[29] praying that the petition be dismissed for
lack of merit, as it failed to establish any reversible error in the assailed NLRC and CA rulings.

The Courts Ruling

a. The Appeal Bond Issue

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.[30] 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.[31]

Following jurisprudential standards, we find that a relaxation of the rules on the appeal bond
requirement in this case is in order. It is clear from the records that the petitioners never intended
to evade the posting of an appeal bond. They exerted earnest efforts to abide by the law and the
rules on appeal with a notice of appeal, appeal memorandum, and an appeal bond
for P531,000.00. They also moved to reduce the appeal bond. The petitioners might or might not
have been aware that the accreditation of the bonding company expired on July 31, 2005 but
when the bond was posted on July 11, 2005, the bonding companys accreditation and the bond it
issued were still valid. Although the petitioners failed to file a replacement bond within 10 days
from receipt of the NLRC order requiring them to do so, again, it cannot be said that they
intended to ignore the order. With the plea that the 10-day period was too short, they filed a
motion for reconsideration with motion for suspension/extension of time to file the replacement
bond. They asked for 30 days to file a new bond and posted the replacement bond within the
requested extended period.

The NLRC dismissed the petitioners appeal for non-perfection/non-compliance with the appeal
bond requirement without passing upon in fact, completely ignoring the petitioners motion for
time to post the required bond.The NLRC should have granted the motion for extension since
there was no showing that it was intended to delay the resolution of the case. More importantly,
the petitioners exhibited good faith and willingness to post the bond within the period they asked
for which, in fact, they did on June 1, 2006.[32]

It is unfortunate that the NLRC chose to apply the strict letter of the law and the rules on the
appeal bond requirement rather than look at the reasons behind the petitioners plea for a
relaxation of the requirement, with an eye on the interest of substantial justice and the merits of
the case. The NLRC should have noted that Bautista had been charged by the petitioners of very
serious offenses involving acts of dishonesty and engaging in competition with her
employer. The awards made also appeared unusually high and out of line: P500,000.00 in moral
damages, and P300,000.00 as exemplary damages, or double the monetary benefits in Bautistas
favor awards that even this Court does not mete out in labor cases.

We find, under the circumstances, that the NLRC had precipitately dismissed the appeal for non-
perfection. As we held in Phil. Geothermal, Inc. v. National Labor Relations Commission,[33] the
petitioners appeal should have been given due course, in the broader interest of justice and with
the desired objective of deciding the case on the merits.

b. Disposition of the Merits of the Dismissal

We now determine, given our ruling on the bond issue, at what level the dismissal issue should
be resolved considering the length of time that the case has been pending. The case commenced
on September 10, 2004, when Bautista filed the complaint for illegal dismissal. The case is more
than five (5) years old already and needs to be resolved as expeditiously as possible. On this vital
point, the Courts opinion in Roman Catholic Archbishop of Manila v. Court of Appeals [34] is
relevant

[The] remand of the case x x x is not necessary where the Court is in a position to
resolve the dispute based on the records before it. [T]he Court, x x x [will decide]
actions on the merits [in order to expedite the settlement of a controversy and if]
the ends of justice x x x would not be subserved by the remand of the case.

For this same reason, we find that the case should now be resolved without sending it back to the
NLRC or to the CA for disposition. We noted earlier that the petitioners filed a memorandum of
appeal[35] which Bautista opposed.[36] Thus, the issues have been joined and are ready for
adjudication, and should forthwith be resolved in the interest of speedy justice.[37]

c. The Merits of the Dismissal Issue

c.1. The Case for the Petitioners

The petitioners appealed[38] the labor arbiters decision on the main ground that the labor arbiter
committed grave abuse of discretion in making conclusions of fact and law without credible
evidence to support such conclusions which, if not corrected, would cause them grave and
irreparable damage and injury. More specifically, the petitioners assailed the labor arbiters
finding that: [Petitioners] failed to adduce convincing evidence to buttress their claim that
complainant opted to leave her employment and thereafter failed to return to the
company. x x x Her filing of a complaint for illegal dismissal soon after the incident of July 15,
2004 debunks [petitioners] assertion that she abandoned her work. x x x [Petitioners] imputation
to complainant of the commission of certain acts constituting dishonesty is irrelevant considering
that the cause of her separation x x x is abandonment and not for other cause.[39]

The petitioners bewailed the labor arbiters failure to consider the evidence that Bautista
defrauded the company by overcharging the truck rental for her personal gain. They argued that
Bautista admitted that she took the P1,500.00 overcharge from the truck rental and, in ignoring
this clear indication of Bautistas misconduct, the labor official gravely abused his discretion.
They insisted that Bautista left her employment due to the dishonest act imputed against her;
instead of resigning and to pre-empt her employer from dismissing her on grounds of dishonesty
and abandonment, she allegedly filed the illegal dismissal complaint. There was no notice served
on her as it was Bautista, not the petitioners, who severed her employment. They also pointed out
that three days after being confronted with the charge of dishonesty, she was already soliciting
business for a competitor establishment from a client of the company.
On Bautistas money claims, the petitioners contended that the labor arbiter likewise erred when
he ignored the payrolls/time sheets they submitted and found them liable for overtime
compensation and 13th month pay based only on Bautistas disclaimer. Further, the petitioners
assailed the labor arbiters ruling making Tumibay personally liable for Bautistas dismissal based
on Bautistas bare allegation that Tumibay acted in bad faith. They maintained that as managing
director, Tumibay was acting within the bounds of her duty and in the exercise of management
prerogative when, in the course of the confrontation with Bautista, she asked for Bautistas
resignation. Since it was Bautista who left or abandoned her employment, the petitioners argued,
she is not entitled to backwages, damages, and attorneys fees.

Finally, the petitioners claimed that the consequences of the labor arbiters erroneous decision
cannot be overestimated; reinstating an employee who has greatly abused her position in the
company, by grossly flouting its rules and regulations, may cause a breakdown of discipline and
demoralization among the company personnel. Bautistas continuance in the service is patently
inimical to the companys interest.

The petitioners filed a Supplemental Memorandum on Appeal dated August 27, 2005.
[40]
In support of their position that Bautista abandoned her job, the petitioners pointed out that
Bautista did not only work as Manager of Ramaga Cargo Express, the business competitor of the
company;[41] she also organized an entity engaged in the same business as the petitioners under
the name of Pure Goal Cargo Express which was registered with the Department of Trade and
Industry on July 23, 2004.[42] This confirms, the petitioners argued, that Bautista committed
fraud, used company time, resources, and funds, and pirated its valued clients, preparatory to the
setting up of her own business which competes with that of the company.

On the procedural due process question, the petitioners maintained that it was grave error
for the labor arbiter to rule that the twin-notice requirement was not complied with as the
company asked Bautista to explain her side, but she refused to give an explanation and that she
pre-empted the second notice by filing a complaint for illegal dismissal.

c.2. The Opposition to the Appeal

On August 16, 2005, Bautista opposed the appeal, [43] contending that the petitioners cannot
change their allegation that Bautista was dismissed for abandonment; otherwise, they would be
adopting a new theory on appeal.Her filing of the complaint for illegal dismissal negates the
allegation of abandonment. Had Bautista abandoned her job, the petitioners should have served
her with a termination notice on the ground of abandonment, as required by the rules
implementing the Labor Code. She took exception to the petitioners contention that the labor
arbiter committed grave abuse of discretion, and asserted that the assailed decision was
supported by substantial evidence. She concluded that the petitioners failed to discharge the
burden of showing that her dismissal was for a just cause.

d. Our Ruling on the Dismissal Issue

d.1. The Legality of the Dismissal

The core issue of this case is whether Bautista abandoned her employment or whether she
was illegally dismissed. The petitioners submit that Bautista no longer reported for work after
she was ordered to explain the anomalous truck-rental service she arranged and to liquidate
company funds in her possession; she filed the complaint to pre-empt further investigation on her
dishonest and fraudulent acts, and, ultimately, her dismissal. Bautista, however, claims that she
was unceremoniously dismissed on July 15, 2004, by petitioner Tumibay, prompting her to file
the complaint for illegal dismissal.
 We find it clear from the records that Bautista committed fraud or willful breach of her
employers trust, a just cause for termination of employment under the law. [44] The evidence the
cash voucher for the truck rental transaction [45] proves that Bautista processed the truck rental
with intent to defraud the company; she asked the company for P6,000.00 (as reflected in the
voucher) to cover the truck rental when the actual fee was only P4,500.00. In her Reply, she
admitted that she retained the P1,500.00 difference. She claimed that it was a discount that
pertained to her as she was able to obtain it from the trucking firm. [46] Bautistas allegation
that the P1,500.00 was a discount is not a valid defense; nowhere in the records does it appear
that she was authorized to keep the discount for herself, assuming that it was indeed a discount.

As we stressed earlier, Bautistas continued employment with the petitioners has become
untenable. She provided sufficient cause for her dismissal; her involvement in the anomalous
truck rental transaction defrauded the company, and her dishonest act resulted in the breach of
her employeers trust. In Arlyn D. Bago v. National Labor Relations Commission, we held that an
employee may be dismissed on the ground of fraud or betrayal of trust. [47] Due to the gravity of
her transgressions against the company, Bautista opted to voluntarily severe her employment
with it.

Judging from Bautistas contemporaneous acts during her alleged termination on July 15,
2004, we find that she must have realized the gravity of her involvement in the truck rental
transaction so that, as the company claimed, she no longer reported for work. Petitioners
submitted in evidence the sworn statement dated January 18, 2005 of Virgie Mira, Customer
Service Representative of Sandvik Tamrock Phils., Inc.,[48] stating that Bautista admitted that she
was leaving the company because of her involvement in the truck rental overcharge:

[1.] On June 2004, Ma. Teresa I. Bautista (Bautista) went to our office to ask for
representation fees for the Bureau of Customs of P5,000.00;

[2.] On 12 or 13 July 2004, when Bautista was processing the release of our
cargoes and deliveries from customs, through Intertranz Container Lines,
Inc. (Company), she told me that she is leaving the Company because they
are upset with her for making up the price of a truck rental;
 [3.] She also told me that wala naman masama doon sa ginawa ko. Natural lang
yun. Ako naman nakipag-usap doon sa trucking;

[4.] On or about the same day, Bautista was also trying to offer her personal
services for customs clearance;

[5.] On or about 18 July 2004, Bautista went to our office at Km. 20 West Service
Road, South Super Hi-Way, Muntinlupa City;

[6.] She gave me a formal proposal letter dated 18 July 2004 offering her services
to my company, Sandvik, as broker to release our imported cargoes and
deliver it to our warehouse under a new company, Ramaga Cargo Express,
and not her employer, Intertranz, signed by her as manager[.]

Miras sworn statement also refers to Bautistas solicitation of business similar to that of
her employer, in her capacity as manager of Ramaga Cargo Express, a competitor of the
company, contained in her letter of July 18, 2004,[49] only two days after her confrontation with
Tumibay.

Bautista denied Miras statements claiming that they are all deliberate falsehoods and
therefore worthless.[50] She pointed out that she signed the letter dated July 18, 2004, no longer as
an employee of the petitioners but of Ramaga Cargo Express where she worked from July 17,
2004 to July 31, 2004. She also insisted that she never asked Mira for representation fees for the
Bureau of Customs; it was Enrico L. Diaz, the operations manager of Ramaga Cargo Express,
who made the solicitation. Nevertheless, we find Miras statements to be credible since
Bautista never denied that she wrote the July 18, 2004 letter, wherein she tried to solicit business
from one of the company clients in behalf of a competing company or that she had been involved
in the truck rental transaction. Bautista merely tried to deflect the possible negative implications
of her intention to leave the company by saying she had a family to support and therefore, she
had to find employment elsewhere.[51]

Eight days after her confrontation with Tumibay or on July 23, 2004, Bautista also
registered, with the Department of Trade and Industry, Pure Goal Cargo Express, a sole
proprietorship of which she was listed as owner and which is engaged in providing transport
services and equipment and cargo handling,[52] similar to the services offered by the company.
 In summary, Bautistas actuations within a time span of little over a week again confirmed
Miras statement that Bautista confided to her that she was leaving her employment with the
company because of the truck rental transaction. They also validated the companys submission
that after her confrontation with Tumibay, Bautista did not return for work because she was busy
servicing the companys competitor (Ramaga Cargo Express) and attending to her own business
(Pure Goal Cargo Express), in competition with her former employer, herein petitioners.
The elements of abandonment are present in Bautistas case: (1) the failure to report for
work without valid or justifiable reason and (2) a clear intention on her part to sever the
employer-employee relationship.[53]While as a rule, the immediate filing of a complaint for illegal
dismissal negates abandonment,[54] peculiar circumstances can arise when the immediate filing of
an illegal dismissal complaint does not disprove abandonment of work.[55]
In the first place, Bautista did not immediately file the complaint. She instituted it only on
September 10, 2004, almost two (2) months after the confrontation with Tumibay on July 15,
2004. Bautista claimed that because of her abrupt dismissal, she was subjected to public
humiliation and she suffered and continues to suffer from extreme anxiety and mental anguish.
[56]
Yet, her delay in filing the complaint weakens the plausibility of her claims that she had been
publicly humiliated and made to suffer emotionally. The filing of the illegal dismissal complaint
appears to be an afterthought and a ploy Bautista used as leverage to prevent her employer from
taking further action on her case. As we held in the ARC-Men Food Industries case,
abandonment not having been disproved, the employers dismissal on that ground was held valid.
[57]
We thus find that the labor arbiter committed grave abuse of discretion in ignoring the
evidence that Bautista clearly intended to abandon her work.

Nevertheless, the company itself admits[58] that it failed to serve a notice of Bautistas
termination of employment on the ground of abandonment;[59] the petitioners thus violated
Bautistas right to procedural due process. However, the violation will not nullify the dismissal or
render it illegal, as the dismissal was for a valid cause. In Agabon v. National Labor Relations
Commission, et al.,[60] we held that the violation of the employees right to statutory due process
by the employer warrants the payment of indemnity in the form of nominal damages, the amount
to be addressed to the sound discretion of this Court, taking into account the relevant
circumstances. The petitioners are, therefore, liable to Bautista for nominal damages. Given the
circumstances of the present case, we deem it appropriate to set the nominal damages award to
Bautista at P20,000.00.

Finally, with a valid cause for Bautistas separation from the service, no factual and legal
basis exists for the awards of damages and attorneys fees.

d.2. Bautistas Money Claims

The labor arbiter awarded Bautista overtime pay for every workday of her employment
with the petitioners in the unusually large amount of P304,380.67.[61] The labor arbiter declared
[C]omplainants regular work is from 8:30 am to 5:30 pm but according to her she rendered
overtime work up to midnight everyday after regular work time.[62]

We find no basis for the overtime pay award. The records do not support Bautistas
incredible claim that she worked everyday until midnight during her entire employment with the
petitioners. In the face of the petitioners defense that overtime pay can be claimed only if an
employee has a pre-approved overtime schedule and daily time record, [63] the labor arbiter should
have asked for the production of daily time records and proof that she had been allowed or
required to render overtime work in the manner and to the extent she sweepingly claimed. For
lack of credible evidence supporting the award, the labor arbiter gravely abused his discretion in
the grant he made. A claim for overtime pay, it must be stressed, cannot be granted in the
absence of supporting factual and legal basis.[64]

On Bautistas claim for 13th month pay, we are inclined to sustain the labor arbiters finding
on the matter in light of the contradictory evidence that the petitioners presented on the
matter. They first presented two check vouchers voucher 5636 purporting to show that Bautista
received her 13th month pay for 2002[65] and voucher 5637 showing that Bautista received her
13th month pay for 2003.[66] Bautista averred that her signatures in these vouchers were
forged. She also claimed that those vouchers were spurious as it was highly improbable for her to
sign two vouchers with two consecutive serial numbers in an interval of about twelve months.
[67]
Reacting to Bautistas pointed challenge to the vouchers, the petitioners then presented a
second set of documents to prove payment of Bautistas 13 th month pay for 2002 and 2003 in
cash,[68] which again elicited Bautistas objection for being spurious. [69] These contradictory
evidence can only point to the petitioners failure to establish their payment of Bautistas
13th month benefits. Bautista is therefore entitled to 13th month pay for the years 2002 and 2003,
and for proportionate entitlement for the period January 1, 2004 to July 15, 2004.
Regarding Bautistas claim for service incentive leave pay, the petitioners presented
evidence only for the years 2003 and 2004,[70]when Bautista enjoyed leave benefits. For this
reason, we affirm the labor arbiters award to Bautista of the monetized equivalent of her service
incentive leaves for 2002.

Based on our earlier findings that Bautista abandoned her work and was guilty of
dishonest acts against the company, it is evident that petitioner Tumibay had not caused Bautistas
dismissal nor had she acted in bad faith. Thus, she cannot be held liable for Bautistas claims.

All told, and as qualified above, we find merit in the appeal.

WHEREFORE, premises considered, the decision dated June 15, 2005 of Labor Arbiter
Aliman D. Mangandog is hereby MODIFIED. Accordingly, we DISMISS the complaint for
illegal dismissal in light of the proven valid cause for dismissal. However, petitioner Intertranz
Container Lines, Inc. is directed to pay respondent Ma. Teresa I. Bautista 13 th month pay for
2002 and 2003 and for the period January 1, 2004 to July 15, 2004 and the monetary equivalent
of her service incentive leave for 2002, as well as nominal damages in the amount
of P20,000.00. The NLRC is ordered to recompute Bautistas total monetary award in accordance
with this Decision.
SO ORDERED