ANDREW JAMES
MCBURNIE, G.R.
Nos. 178034 & 178117;
Petitioner, G.R. Nos. 186984-85
Present:
Ynares-Santiago, J. (Chairperson),
- versus - Chico-Nazario,
Velasco, Jr.,
Nachura, and
Peralta, JJ.
EULALIO GANZON, EGI-MANAGERS,
INC.
and E. GANZON, INC., Promulgated:
Respondents.
September 18, 2009
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YNARES-SANTIAGO,
J.:
Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court is the October
27, 2008 Decision[1] of the Court of Appeals in
CA-G.R. SP Nos. 90845 and 95916, granting respondents’ Motion to Reduce Appeal
Bond; directing them to post a bond of P10 Million; and ordering the National
Labor Relations Commission (NLRC), to give due course to their appeal and to
conduct further proceedings. Also
assailed is the Resolution[2]
dated March 3, 2009 denying the motion for reconsideration.
On May 11, 1999, petitioner Andrew
James McBurnie, an Australian national, signed a five-year employment contract
as Executive Vice-President of respondent EGI Manager’s, Inc. (EGI), through
its President respondent Eulalio Ganzon.[3] McBurnie’s responsibilities were to oversee
the general management of the company’s hotels and resorts within the
Philippines, supervise the present and future constructions of its hotel and
resort properties; review the operational performance of the hotels and
resorts; and make recommendations to improve profitability, efficiency and
reputation, and to engage other hotel management groups, if necessary.[4]
On June 7, 1999, McBurnie furnished Manjo
Martinez, EGI’s Vice President, a concept paper regarding the management
philosophy and structure of Leisure Experts International, with its staffing
budget, timeline and office layout.[5] On September 8, 1999, he submitted to
respondent Ganzon his ten-year financial projection with debt servicing for the
On November 1, 1999, petitioner featured
in an accident that fractured his skull and necessitated his confinement at the
Thus,
on October 4, 2002, petitioner filed a complaint for illegal dismissal with
prayer for the payment of his salary and benefits for the unexpired term of the
contract, damages and attorney’s fees.[11]
In
their Position Paper, respondents contended that there never existed an
employer-employee relationship between them and petitioner; that petitioner was
employed at Pan Pacific Hotel when he proposed to respondent Ganzon to jointly
put up and invest in a company that will professionally manage hotels; that they
agreed in principle with no assurance as to its funding; that after petitioner
left Pan Pacific Hotel, he requested respondent Ganzon to be his sponsor for
his alien work permit; that the Employment Contract was executed with the
understanding that the same shall be used only for alien work permit and visa
applications; and considering that no permit was issued to petitioner, he left
for Australia for medical treatment and never returned.[12]
On
September 30, 2004, Labor Arbiter Salithmar Nambi rendered a decision declaring
petitioner’s dismissal illegal and ordering respondents to pay US$985,162.00 as
salary and benefits for the unexpired term of the contract, P2,000,000.00 as
moral and exemplary damages, and attorney’s fees equivalent to 10% of the total
monetary award.[13]
On
November 5, 2004, or 10 days after receipt of the Labor Arbiter’s decision,
respondents filed before the NLRC a Memorandum of Appeal[14]
and Motion to Reduce Bond,[15]
and posted as bond the amount of P100,000.00.
They argued that the awards of the Labor Arbiter were null and
excessive, with the premeditated
intention to render the employer incapable of posting an appeal bond and
consequently deprive him of the right to appeal.[16]
In
an Order[17] dated March 31, 2005, the
NLRC denied the motion to reduce bond and ordered respondents to post an
additional bond of P54,083,910.00 together with the other requirements under
Section 6, Rule VI of the NLRC Rules of Procedure within a non-extendible period
of 10 days from receipt thereof, otherwise the appeal shall be dismissed. Respondents moved for reconsideration but it
was denied in an Order[18]
dated July 15, 2005; respondents were again ordered to post the additional
appeal bond within another non-extendible period of 10 days from receipt
thereof.
Instead
of complying with the order of the NLRC, respondents filed on August 12, 2005, a
petition for certiorari and
prohibition with the Court of Appeals with prayer for issuance of a preliminary
injunction and/or temporary restraining order, (TRO)[19]
which was docketed as CA-G.R. SP No.
90845.[20]
On
September 8, 2005, a TRO effective for 60 days
was issued enjoining the NLRC from enforcing its March 31, 2005 and July
15, 2005 Orders.[21]
Meanwhile,
on March 8, 2006, after the TRO expired and respondents still failed to post
additional bond, the NLRC dismissed their appeal, thus:
WHEREFORE, in
view of the foregoing, respondents’ appeal is hereby DISMISSED for failure to
post additional bond as directed by the Commission and as mandated by law. Complainant’s Ex-Parte Motion for Entry of
Judgment and to Remand the Records to the Labor Arbitration Branch of origin is
DENIED for being premature.
SO ORDERED.[22]
Following
the denial by the NLRC of their motion for reconsideration,[23]
respondents filed with the Court of Appeals a petition for certiorari with prayer for issuance of TRO and/or writ of
preliminary injunction, which was docketed as CA-G.R. SP No. 95916 and was
ordered consolidated with CA-G.R. SP No.
90845.[24]
On
December 8, 2006, the Court of Appeals issued a TRO enjoining the NLRC from
enforcing its March 8, 2006 Resolution dismissing respondents’ appeal, and its
June 30, 2006 Resolution denying the motion for reconsideration thereof.[25] On
May 29, 2007, it issued a Writ of Preliminary Injunction after respondents
posted an injunction bond of P10,000,000.00.[26]
Petitioner
assailed the issuance of the writ before the Supreme Court, which was docketed
as G.R. Nos. 178034 & 178117.
However, it was dismissed for submitting an affidavit of service which
failed to show a competent evidence of affiant’s identity.[27]
Meanwhile,
on October 27, 2008, the Court of Appeals rendered the assailed Decision granting
respondents’ Motion to Reduce Appeal Bond and directing them to post an appeal
bond of P10,000,000.00 with the NLRC, which was likewise ordered to give due
course to the appeal and to conduct further proceedings, thus:
WHEREFORE, in
view of the foregoing, the petition for certiorari and prohibition docketed as
CA GR SP No. 90845 and the petition for certiorari docketed as CA GR SP No.
95916 are GRANTED. Petitioners Motion to
Reduce Appeal Bond is GRANTED.
Petitioners are hereby DIRECTED to post appeal bond in the amount of
P10,000,000.00. The NLRC is hereby
DIRECTED to give due course to petitioners’ appeal in CA GR SP No. 95916 which
is ordered REMANDED to the NLRC for further proceedings.
SO ORDERED.[28]
Petitioner’s
motion for reconsideration was denied in a Resolution[29]
dated March 3, 2009.
Hence,
this petition for review on certiorari
raising the sole issue of:
WHETHER OR NOT
THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN FINDING THAT THE
NLRC COMMITTED GRAVE ABUSE OF DISCRETION WHEN IN FACT IT MERELY FOLLOWED AND
IMPLEMENTED THE VALID, CLEAR AND UNQUESTIONED PROVISION OF THE LABOR CODE,
SPECIFICALLY ARTILE 223 AND SEC. 6, RULE VI OF THE NLRC RULES OF PROCEDURE
WHICH IMPLEMENTATION IS IN ACCORD WITH THE JURISPRUDENCE SET BY THE SUPREME
COURT IN THE PERFECTION OF APPEALS IN LABOR CASES.[30]
Petitioner
contends a) that the Court of Appeals erred in holding that the NLRC committed
grave abuse of discretion when it outrightly dismissed the motion to reduce
appeal bond without fixing a reasonable amount therefor, thus depriving the
respondents their right to appeal the Labor Arbiter’s decision; b) that the
rules on perfection of appeals must be strictly applied; c) that the period for
posting the bond cannot be made to depend on the discretion of the party; d) that
respondents not only refused to post appeal bond within the prescribed period
but the ground relied upon for the reduction thereof, to wit: the awards were
patent nullity and excessive, was not meritorious.
The
petition is impressed with merit.
Article
223 of the Labor Code provides:
Article 223. Appeal.— Decisions, awards, or orders of
the Labor Arbiter are final and executory unless appealed to the Commission by
any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders. x x x
x x x x
In case of a
judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a
cash or surety bond issued by a reputable bonding company duly accredited
by the Commission in the amount equivalent to the monetary award in the
judgment appealed from. (Emphasis supplied)
The posting of a bond is
indispensable to the perfection of an appeal in cases involving monetary awards
from the decision of the Labor Arbiter.
The lawmakers clearly intended to make the bond a mandatory requisite
for the perfection of an appeal by the employer as inferred from the provision
that an appeal by the employer may be perfected “only upon the posting of a cash or surety bond.” The word “only”
makes it clear that the posting of a cash or surety bond by the employer is the
essential and exclusive means by which an employer’s appeal may be perfected. On the other hand, the word “may” refers to the perfection of an
appeal as optional on the part of the defeated party, but not to the compulsory
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 used, then there is no
room for construction.[31]
Moreover, the filing of the bond is not only mandatory but a
jurisdictional requirement as well, that must be complied with in order to
confer jurisdiction upon the NLRC. Non-compliance
therewith renders the decision of the Labor Arbiter final and executory. This requirement is intended to assure the workers that if they
prevail in the case, they will receive the money judgment in their favor upon
the dismissal of the employer’s appeal.
It is intended to discourage employers from using an appeal to delay or
evade their obligation to satisfy their employees' just and lawful claims.[32]
The
jurisdictional principle and the mandatory nature of the appeal bond posted
within the 10-day reglementary period are reaffirmed by the New Rules of
Procedure of the NLRC.[33] The pertinent provisions state:
RULE VI
APPEALS
SECTION 1. PERIODS OF APPEAL. – Decisions, resolutions or orders of the Labor Arbiter shall be final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, resolutions or orders of the Labor Arbiter and in case of a decision of the Regional Director within five (5) calendar days from receipt of such decisions, resolutions, or orders. If the 10th or 5th day, as the case may be, falls on a Saturday, Sunday or a holiday, the last day to perfect the appeal shall be the next working day.
x x x x
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 attorney’s
fees.
x x x x
No
motion to reduce bond shall be entertained except on meritorious grounds and upon the
posting of a bond in a reasonable amount in relation to the monetary award.
The
filing of the motion to reduce bond without compliance with the requisites in
the preceding paragraph shall not stop
the running of the period to perfect an appeal. (Emphasis supplied)
Thus,
it behooves the Court to give utmost regard to the legislative and
administrative intent to strictly require the employer to post a cash or surety
bond securing the full amount of the monetary award within the 10 day
reglementary period. Nothing in the Labor Code or the NLRC Rules
of Procedure authorizes the posting of a bond that is less than the monetary award in the judgment, or would deem such
insufficient posting as sufficient to perfect the appeal.[34]
While
the bond may be reduced upon motion by the employer, this is subject to the conditions that (1)
the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable
amount in relation to the monetary award is posted by the appellant,
otherwise the filing of the motion to reduce bond shall not stop the running of
the period to perfect an appeal.[35] The qualification
effectively requires that unless the NLRC grants the reduction of the cash bond
within the 10 day reglementary period, the
employer is still expected to post the cash or surety bond securing the full amount within the said 10-day
period. If the NLRC does eventually grant the motion for reduction
after the reglementary period has elapsed, the correct relief would be to
reduce the cash or surety bond already posted by the employer within the 10-day
period.[36]
Records show that respondents filed their
Memorandum of Appeal and Motion to Reduce Appeal Bond on the 10th or last day of
the reglementary period. Although they
posted an initial appeal bond of P100,000.00, the same was grossly inadequate
compared to the monetary awards of US$985,162.00 representing salaries and
benefits for the unexpired portion of the contract, P2,000,000 as moral and
exemplary damages and attorney’s fees equivalent to the total monetary award. Further, there is no basis in respondents’
contention that the awards of the Labor Arbiter were null and
excessive, and with premeditated intention to render respondents incapable of posting
an appeal bond and deprive them of the right to appeal.
In
Computer Innovations Center v. National
Labor Relations Commission,[37]
the Court held, thus:
The grounds
cited for reduction of the appeal bond were “the great possibility of the
reversal of the [Labor Arbiter’s] decision in the light of the serious errors
in the findings of fact and in the application of the law,” and that the
monetary award was too harsh and unfounded.
Just about any aggrieved employer can invoke such grounds. Indeed, the mere
allegation of the decision as purportedly erroneous in fact or in law cannot
serve to mitigate the appeal bond requirement. Neither could the allegation
that the monetary award was too harsh or unfounded unsettle the appeal bond
requirement absent concrete proof, especially if, as in this case, the alleged
“harshness” of the award is not self-evident.[38]
It
was further held therein that:
Admittedly,
these rules as embodied in the Labor Code and the NLRC Rules of Procedure
impose a burden on the employer intending to appeal the decision of the labor
arbiter. Within the ten (10)-day reglementary period, the employer has to
prepare a memorandum of appeal and to secure a cash or surety bond equivalent
to the monetary award in the judgment appealed from. The facility in obtaining
the bond is highly dependent on circumstances particular to the employer. Yet
it is highly probable that should the employer take the effort to secure the
cash or surety bond immediately upon receipt of the decision of the Labor Arbiter,
such bond would be available within the ten (10)-day reglementary period.
It also does not
escape judicial notice that the cash/surety bond requirement does not
necessitate the employer to physically surrender the entire amount of the
monetary judgment. The usual procedure is for the employer to obtain the
services of a bonding company, which will then require the employer to pay a
percentage of the award in exchange for a bond securing the full amount. This
observation undercuts the notion of financial hardship as a justification for
the inability to timely post the required bond.
At the same
time, the Court understands that especially in cases wherein the monetary award
is significant in relation to the employer’s assets, it might be difficult to
immediately obtain the required bond pending ascertainment by the bonding
company that the employer holds sufficient security in case the bond is
subsequently executed. It is under
these premises that petitioners’ arguments should bear scrutiny.[39] (Emphasis
supplied)
The failure of the respondents to
comply with the requirement of posting a bond equivalent in amount to the
monetary award is fatal to their appeal.
For filing their motion only on the final day within which to perfect an
appeal, respondents cannot be allowed to seek refuge in a liberal application
of the rules. Under such circumstance,
there is neither way for the NLRC to exercise its discretion to grant or deny
the motion, nor for the respondents to post the full amount of the bond, without
risk of summary dismissal for non-perfection of appeal.
While in certain instances, we allow
a relaxation in the application of the rules, we never intend to forge a weapon
for erring litigants to violate the rules with impunity. The liberal
interpretation and application of rules apply only in proper cases of
demonstrable merit and under justifiable causes and circumstances,[40]
but none obtains in this case. The NLRC
had, therefore, the full discretion to grant or deny their motion to reduce the
amount of the appeal bond. The finding
of the labor tribunal that respondents did not present sufficient justification
for the reduction thereof cannot be said to have been done with grave abuse of
discretion.
The records show that after the
motion to reduce appeal bond was denied, the NLRC still allowed respondents a
new period of 10 days from receipt of the order of denial within which to post
the additional bond. Nonetheless, respondents
failed to post the additional bond and instead moved for reconsideration. On this score alone, their appeal should have
been dismissed outright for not having been perfected on time. The NLRC even bent backwards by entertaining
the motion for reconsideration and even granted respondents another 10 days
within which to post the appeal bond.
However, respondents did not take advantage of this liberality when they
persistently failed and refused to post the additional bond despite the
extensions given them.
Time and again, it has been held that
the right to appeal is not a constitutional right, but a mere statutory
privilege. Hence, parties who seek to
avail themselves of it must comply
with the statutes or rules allowing it.[41] To reiterate, perfection of an appeal in the
manner and within the period permitted by law is mandatory and
jurisdictional. The requirements for
perfecting an appeal must, as a rule, be strictly followed. Such requirements are considered
indispensable interdictions against needless delays and are necessary for the
orderly discharge of the judicial business.
Failure to perfect the appeal renders the judgment of the court final
and executory.[42] Just as a losing party has the privilege to
file an appeal within the prescribed period, so does the winner also have the
correlative right to enjoy the finality of the decision.[43] Thus, the propriety
of the monetary awards of the Labor Arbiter is already binding upon this Court,
much more with the Court of Appeals.
WHEREFORE, the
petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP Nos. 90845
and 95916 dated October 27, 2008 granting respondents’ Motion to Reduce Appeal
Bond and ordering the National Labor Relations Commission to give due course to
respondents’ appeal, and its March 3, 2009 Resolution denying petitioner’s
motion for reconsideration, are REVERSED and SET ASIDE. The March 8, 2006 and June 30, 2006 Resolutions
of the National Labor Relations Commission in NLRC
SO ORDERED.
CONSUELO
YNARES-SANTIAGO
Associate Justice
WE CONCUR:
MINITA V. CHICO-NAZARIO
Associate Justice
PRESBITERO J. VELASCO, JR. ANTONIO
EDUARDO B. NACHURA
Associate Justice
Associate Justice
DIOSDADO M. PERALTA
Associate Justice
ATTESTATION
I
attest that the conclusions in the above decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution and the Division Chairperson’s
Attestation, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
[1] Rollo, G.R. Nos. 186984-85, pp. 47-70; penned by Associate Justice Arcangelita M. Romilla-Lontok and concurred in by Associate Justices Mariano C. Del Castillo and Portia Aliño-Hormachuelos.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14] Rollo, G.R. Nos. 178034 & 178117, pp. 65-105.
[15] Rollo, G.R. Nos. 186984-85, pp. 216-227.
[16]
[17]
[18]
[19] Rollo, G.R. Nos. 178034 & 178117, pp. 130-185.
[20] Rollo, G.R. Nos. 186984-85, pp. 58-59.
[21] Rollo, G.R. Nos. 178034 & 178117, pp. 243-245.
[22]
[23]
[24]
[25]
[26]
[27]
[28] Rollo, G.R. Nos. 186984-85, p. 70.
[29]
[30]
[31] Accessories Specialist, Inc. v. Albanza, G.R. No. 168985, July 23, 2008, 559 SCRA 550, 560-561.
[32]
[33] As amended by NLRC Resolution No. 01-02, Series of 2002.
[34] Colby Construction and Management Corporation v. National Labor Relations Commission, G.R. No. 170099, November 28, 2007, 539 SCRA 159, 173.
[35] Nicol v. Footjoy Industrial Corp., G.R. No. 159372, July 27, 2007, 528 SCRA 300, 310.
[36] Computer Innovations Center, Inc. v. National Labor Relations Commission, G.R. No. 152410, June 29, 2005, 462 SCRA 183, 191.
[37]
[38]
[39]
[40] Land Bank of the
[41] Air
[42]
[43] Tan v. Court of Appeals, G.R. No. 157194, June 20, 2006, 491 SCRA 452, 459.