Case Digest: Borja Estate vs. Sps. Ballad, G.R No. 152550, June 8, 2005

   Labor Law | Appeal

• In 1999, Spouses Ballad filed a complaint against Borjas for illegal dismissal and various labor claims with the NLRC.
• The Ballad spouses worked as overseers for the Borja Estate since 1972, appointed in writing by Paula Borja, overseeing agricultural lands and apartments. Their duties included collecting harvest shares, managing rentals, overseeing properties, and working all days, including weekends and holidays. The Ballads alleged they were appointed as attorneys-in-fact for the owners, including handling legal matters during the owners' absence.
• After Francisco Borja's appointment as administrator in 1996, promises of allowances were unfulfilled, and the Ballads were allegedly not paid various benefits for 27 years. In June 1999, the Ballads claimed Francisco Borja dismissed them abruptly, causing shock and various physical and mental injuries.
• The Borjas defended that the Ballads were not employees but allowed to reside as a gesture of gratitude. They cited the defense of prescription for money claims.
• Labor Arbiter: Ruled the Ballads were illegally dismissed.
• The Borjas to appeal to the NLRC with a Motion for Reduction of Bond.
• NLRC: Dismissed the motion and the appeal in April 2000 for failure to post a bond within the prescribed period. The motion for reconsideration was also denied.
• CA: Affirmed the NLRC's decision, emphasizing the mandatory nature of posting a bond for appeal. The Court of Appeals noted the Borjas' late posting of the bond and ruled the Labor Arbiter's decision as final and executory. 

WoN the Court of Appeals erred in agreeing with the NLRC that the posting of a cash or surety bond during the period of time to file an appeal is mandatory and the failure to do so would have the effect of rendering the appealed decision final and executory. NO

There is no merit in the petition.

The appeal bond is required under Article 223 of the Labor Code which provides:

ART. 223. Appeal. - Decisions, awards or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. . . .

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission, in the amount equivalent to the monetary award in the judgment appealed from.

. . . .

Rule VI of the New Rules of Procedure of the NLRC implements this Article with its Sections 1, 3, 5, 6 and 7 providing pertinently as follows:

Section. 1. Periods of Appeal.- Decisions, awards, or orders of the Labor Arbiter and the POEA Administrator shall be final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards or orders of the Labor Arbiter or of the Administrator, and in case of a decision of the Regional Director or his duly authorized Hearing Officer within five (5) calendar days from receipt of such decisions, awards or orders . . .

Section 3. Requisites for Perfection of Appeal.–(a) The appeal shall be filed within the reglementary period as provided in Sec. 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 Sec. 5 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 requisite aforestated shall not stop the running of the period for perfecting an appeal.

Section 5. Appeal Fee.— The appellant shall pay an appeal fee of One hundred (₱100.00) pesos to the Regional Arbitration Branch, Regional Office, or to the Philippine Overseas Employment Administration and the official receipt of such payment shall be attached to the records of the case.

Section 6. Bond.— In case the decision of the Labor Arbiter, the Regional Director or his duly authorized Hearing Officer involves a monetary award, an appeal by the employer shall be perfected only upon the posting of a cash or surety bond, which shall be in effect until final disposition of the case, issued by a reputable bonding company duly accredited by the Commission or the Supreme Court in an amount equivalent to the monetary award, exclusive of damages and attorney’s fees.

. . . .

The Commission may, in justifiable cases and upon Motion of the Appellant, reduce the amount of the bond. The filing of the motion to reduce bond shall not stop the running of the period to perfect appeal.

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

Thus, it is clear from the foregoing that the appeal from any decision, award or order of the Labor Arbiter to the NLRC shall be made within ten (10) calendar days from receipt of such decision, award or order, and must be under oath, with proof of payment of the required appeal fee accompanied by a memorandum of appeal. In case the decision of the Labor Arbiter involves a monetary award, the appeal is deemed perfected only upon the posting of a cash or surety bond also within ten (10) calendar days from receipt of such decision in an amount equivalent to the monetary award.

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 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 considered completed. The law however does not require its outright payment, but only the posting of a bond to ensure that the award will be eventually paid should the appeal fail. What petitioners have to pay is a moderate and reasonable sum for the premium of such bond.

The word "may", on the other hand 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.

Evidently, the posting of a cash or surety bond is mandatory. And the perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but jurisdictional. To extend the period of the appeal is to delay the case, a circumstance which would give the employer the chance to wear out the efforts and meager resources of the worker to the point that the latter is constrained to give up for less than what is due him. As ratiocinated in the case of Viron Garments Mftg. v. NLRC:41

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 employees’ just and lawful claims.

In the case at bar, while the petitioners’ Appeal Memorandum and Motion for Reduction of Bond, which was annexed thereto, were both filed on time,43 the appeal was not perfected by reason of the late filing and deficiency of the amount of the bond for the monetary award with no explanation offered for such delay and inadequacy.

As there was no appeal bond filed together with the Appeal Memorandum within the ten (10)-day period provided by law for the perfection of appeal, it follows that no appeal from the decision of the Labor Arbiter had been perfected.44 Accordingly, the Decision of the Labor Arbiter became final and executory upon the expiration of the reglementary period.

While it is true that this Court has relaxed the application of the rules on appeal in labor cases, it has only done so where the failure to comply with the requirements for perfection of appeal was justified or where there was substantial compliance with the rules. Hence, the Supreme Court has allowed tardy appeals in judicious cases, e.g., where the presence of any justifying circumstance recognized by law, such as fraud, accident, mistake or excusable negligence, properly vested the judge with discretion to approve or admit an appeal filed out of time; where on equitable grounds, a belated appeal was allowed as the questioned decision was served directly upon petitioner instead of her counsel of record who at the time was already dead;45 where the counsel relied on the footnote of the notice of the decision of the labor arbiter that the aggrieved party may appeal . . . within ten (10) working days; in order to prevent a miscarriage of justice or unjust enrichment such as where the tardy appeal is from a decision granting separation pay which was already granted in an earlier final decision; or where there are special circumstances in the case combined with its legal merits or the amount and the issue involved.

Here, no justifiable reason was put forth by the petitioners for the non-filing of the required bond, or the late filing of the defective bond for that matter as in fact the bond they filed late on 17 December 1999 in the amount of Forty Thousand Pesos (₱40,000.00) was not even equivalent to the reduced amount of bond they prayed for in their Motion for Reduction of Bond. The Court then is not prepared to hold that the petitioners’ Motion for Reduction of Bond was substantial compliance with the Labor Code for failure to demonstrate willingness to abide by their prayer in said Motion.

In addition, no exceptional circumstances obtain in the case at bar which would warrant the relaxation of the bond requirement as a condition for perfecting the appeal.

It bears stressing that the bond is sine qua non to the perfection of appeal from the labor arbiter’s monetary award. The requirements for perfecting an appeal must be strictly followed as they are considered indispensable interdictions against needless delays and for orderly discharge of judicial business. The failure of the petitioners to comply with the requirements for perfection of appeal had the effect of rendering the decision of the labor arbiter final and executory and placing it beyond the power of the NLRC to review or reverse it. As a losing party has the right to file an appeal within the prescribed period, so also the winning party has the correlative right to enjoy the finality of the resolution of his/her case.

WHEREFORE, in view of the foregoing considerations, the petition is DENIED for lack of merit. Costs against petitioners.