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G.R. No. 178034, G.R. No. 178117 and G.R. NOS. 186984-85 - Andrew Jame Mcburne v. Eulalio Ganzon, et al.

G.R. No. 178034, G.R. No. 178117 and G.R. NOS. 186984-85 - Andrew Jame Mcburne v. Eulalio Ganzon, et al.

PHILIPPINE SUPREME COURT DECISIONS

THIRD DIVISION

[G.R. NOS. 178034 & 178117; G.R. NOS. 186984-85 : September 18, 2009]

ANDREW JAMES MCBURNIE, Petitioner, v. EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC., Respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court is the October 27, 2008 Decision1 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 Resolution2 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 Coronado Beach - Cebu.6 He also completed the audit of the EGI Maribago Resort - Cebu and requested that he be given access to the general ledgers to verify the findings.7 Lastly, on September 29, 1999, he furnished respondent Ganzon the Monthly Profit and Loss Statement of EGI for the year 2000; he also expressed his concern on the failure of EGI to release funds for the proper operation of the business; and likewise informed respondents that he had already used his personal money to finance the operation.8

On November 1, 1999, petitioner featured in an accident that fractured his skull and necessitated his confinement at the Makati Medical Center.9 While recuperating from his injuries in Australia, petitioner was informed by respondent Ganzon that his services were no longer needed since the project had been permanently discontinued.10

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 Appeal14 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 Order17 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 Order18 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 Resolution29 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

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)cralawlibrary

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

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

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)cralawlibrary

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)ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

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 NCR CA NO. 042913-05 dismissing respondents' appeal for failure to perfect an appeal and denying their motion for reconsideration, respectively, are REINSTATED and AFFIRMED.

SO ORDERED.

Endnotes:


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 Id. at 44-45.

3 Id. at 165-169.

4 Id. at 166.

5 Id. at 170-175.

6 Id. at 176-179.

7 Id. at 181.

8 Id. at 182-187.

9 Id. at 188.

10 Id. at 158.

11 Id. at 145.

12 Id. at 148-153.

13 Id. at 214-215.

14 Rollo, G.R. NOS. 178034 & 178117, pp. 65-105.

15 Rollo, G.R. NOS. 186984-85, pp. 216-227.

16 Id. at 217.

17 Id. at 437.

18 Id. at 443.

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 Id. at 123-124.

23 Id. at 128.

24 Id. at 247.

25 Id. at 248-249.

26 Id. at 266-267.

27 Id. at 297.

28 Rollo, G.R. NOS. 186984-85, p. 70.

29 Id. at 45.

30 Id. at 7.

31 Accessories Specialist, Inc. v. Albanza, G.R. No. 168985, July 23, 2008, 559 SCRA 550, 560-561.

32 Id. at 561-562.

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 Id.

38 Id. at 194.

39 Id. at 191-192.

40 Land Bank of the Philippines v. Natividad, G.R. No. 127198, May 16, 2005, 458 SCRA 441, 449-450.

41 Air France Philippines v. Leachon, G.R. No. 134113, October 12, 2005, 472 SCRA 439, 442-443.

42 Id. at 443.

43 Tan v. Court of Appeals, G.R. No. 157194, June 20, 2006, 491 SCRA 452, 459.

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