Case Digest: Stolt Nielsen Marine Services, Inc. v. NLRC, G.R. No. 147623, December 13, 2005

Labor Law | Appeal

• Ramon Alpino, the private respondent, was employed by Stolt Nielsen Marine Services, Inc. from 1978 to 1984. He was repatriated to the Philippines after being diagnosed with Cardiac Enlargement, Pulmonary Hypertension and Acute Psychotic Reaction and declared unfit for sea duty.
• In 1985, he filed a complaint for recovery of sickness and disability benefits and claim for personal belongings and underpayment of wages against petitioner with the Philippine Overseas and Employment Agency (POEA), which was amicably settled through a "Receipt and Release" executed by him and his sister, Anita Alpino.
• In 1987, Alpino filed another complaint with the POEA for the same cause of action, which was dismissed on the grounds of res judicata.
• In 1989, Alpino filed a case with the Regional Trial Court (RTC) for the annulment of the Receipt and Release, alleging mental incapacity to execute the SPA. 
• In 1993, the RTC dismissed the case and the Court of Appeals affirmed the decision.
• In 1994, Alpino filed another case with the POEA  for sickness and disability benefits, which was transferred to the NLRC due to Republic Act 8042.
• In 1997, Labor Arbiter: Declared the SPA and Receipt and Release as invalid and awarded Alpino sickness and disability benefits.
• Stolt Nielsen Marine Services, Inc. filed an appeal with the NLRC along with an Urgent Motion to Reduce or be Exempted from Filing an Appeal Bond.
• NLRC: Affirmed the Labor Arbiter's decision and denied the motion to reduce the appeal bond. The NLRC ruled that the appeal bond must be posted within the ten-day appeal period, and the filing of a motion to reduce the bond does not stop the running of the appeal period.
• Court of Appeals: Affirmed the NLRC's decision, emphasizing the jurisdictional nature of perfecting an appeal and the importance of complying with the appeal bond requirement. The Court of Appeals noted that the filing of a motion to reduce the bond does not suspend the appeal period, and failure to comply with the appeal bond requirement renders the judgment final and executory.

WoN the Court of Appeals erred affirming the NLRC decision. NO

The petition lacks merit.

Time and again, it has been held that the right to appeal is not a natural right or a part of due process, but merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of the law. The party who seeks to avail of the same must comply with the requirements of the rules, failing in which the right to appeal is lost.

Article 223 of the Labor Code sets forth the rules on appeal from the Labor Arbiter’s monetary award, thus:

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. xxx.

xxx xxx xxx

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

Rule VI of the New Rules of Procedure of the NLRC15 implements the aforequoted Article. The pertinent provisions of Rule VI which were in effect when petitioner filed its appeal on July 25, 1997, provides, inter alia, 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. 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. (As amended on November 7, 1991)

xxx xxx xxx

Section 3. Requisites for Perfection of Appeal. - (a) The appeal shall be filed within the reglementary period as provided in Section 1 of this Rule; shall be under oath with proof of payment of the required appeal fee and the posting of a cash or surety bond as provided on 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.

xxx xxx xxx

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 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. The filing, however, of the motion to reduce bond shall not stop the running of the period to perfect appeal. (As amended on November 5, 1996)

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

Evident it is from the foregoing that an appeal from rulings of the Labor Arbiter to the NLRC must be perfected within ten (10) calendar days from receipt thereof, otherwise the same shall become final and executory. In a judgment involving a monetary award, the appeal shall be perfected only upon (1) proof of payment of the required appeal fee and (2) posting of a cash or surety bond issued by a reputable bonding company and (3) filing of a memorandum of appeal. A mere notice of appeal without complying with the other requisites mentioned shall not stop the running of the period for perfection of appeal.16

Here, petitioner received the decision of the Labor Arbiter on July 18, 1997. From July 18, 1997, petitioner has a limited period of ten (10) days to perfect its appeal. Petitioner filed its memorandum of appeal on July 25, 1997. However, in lieu of the required cash or surety bond, petitioner filed a motion to reduce or be exempted from filing an appeal bond.17 The NLRC denied the motion and consequently dismissed the appeal for non-perfection. Petitioner now insists that its Motion to Reduce Bond constitutes a substantial compliance of the requirement for perfecting an appeal under Article 223 of the Labor Code and the NLRC Rules of Procedure.

We disagree.

The requirement of a cash or surety bond for the perfection of an appeal from the Labor Arbiter’s monetary award is not only mandatory but jurisdictional as well, and non-compliance therewith is fatal and has the effect of rendering the award final and executory.18 The reason therefor is explained by the Court in this language:

… [T]he obvious and logical purpose of an appeal bond is to insure, during the period of appeal, against any occurrence that would defeat or diminish recovery under the judgment if subsequently affirmed; it also validates and justifies, at least prima facie, an interpretation that would limit the amount of the bond to the aggregate of the sums awarded other than in the concept of moral and exemplary damages.

The mandatory filing of a bond for the perfection of an appeal is evident from the aforequoted provision of Article 223 of the Labor Code which explicitly states that the appeal may be perfected only upon the posting of cash or surety bond. The word "only" makes it perfectly clear that the lawmakers intended the posting of a cash or surety bond to be the exclusive means by which an employer’s appeal may be perfected. This requirement is intended to dissuade employers from using the appeal to delay, or even evade, their obligation to satisfy their employee’s just and lawful claims.

Further, the implementing rules of respondent NLRC are unequivocal in saying that "the filing of the motion to reduce bond shall not stop the running of the period to perfect appeal." Thus, petitioner should have seasonably filed the appeal bond within the ten-day reglementary period following its receipt of the decision of Labor Arbiter Ariel Santos in order to forestall the finality of said decision. Since petitioner failed to post an appeal bond within the reglementary period, no appeal was perfected from the decision of Labor Arbiter Santos, for which reason, the decision sought to be appealed to the NLRC had become final and executory and therefore immutable.

It is true that the requirement of posting a bond on appeals involving monetary awards has been given a liberal interpretation in certain cases. However, relaxation of this rule can only be done where there was substantial compliance of the NLRC Rules of Procedure or where the party involved, at the very least, demonstrated willingness to abide by the rules by posting a partial bond.

Petitioner did not post a full or partial appeal bond within the prescribed period. Petitioner could have even paid a moderate and reasonable sum as premium for such bond as the law does not require outright payment but merely the posting of a bond to ensure that the award will be eventually paid should the appeal be dismissed, but still, petitioner failed to do so. Hence, we find no cogent reason to apply the same liberal interpretation in this case.

While, admittedly, Section 6, Rule VI of the NLRC Rules of Procedure allows the reduction of the appeal bond upon motion of the appellant, the exercise of the authority is not a matter of right on the part of the movant but lies within the sound discretion of the NLRC upon showing of meritorious grounds. Nevertheless, even granting arguendo that petitioner has meritorious grounds to reduce the appeal bond, the result would have been the same since it failed to post cash or surety bond within the prescribed period.

As payment of the appeal bond is an indispensable and jurisdictional requisite and not a mere technicality of law or procedure, we find the challenged decision of the Court of Appeals in accordance with law.

WHEREFORE, the petition is DENIED and the assailed decision of the Court of Appeals in CA-G.R. No. 51046 AFFIRMED.