By J. Vicente Q. Roxas
Is there a shift
from strict to liberal policy, under Art. 223 of the Labor
Code, in granting the NLRC the discretion to reduce appeal bonds?
Stated differently, is the power of the NLRC to reduce the appeal
bond, absolute? Negative to both questions.
discretion given to the NLRC to reduce the amount of appeal bond is
not a blanket power to the NLRC. The discretion of the NLRC is
not unbridled and is subjected by the Supreme Court to strict
guidelines because Art. 223 of the Labor Code is a rule
of jurisdiction, not a rule of procedure, that affords little leeway
for liberal interpretation.
The reduction must
be reasonable according to the special circumstance and the reduction
must have a factual basis.
Article 223 of the Labor Code expressly provided that perfection of
an appeal would be “only upon the posting of a cash or surety
bond”, the lawmakers had no other intention but to require that
the posting of the bond would be an indispensable requirement for
perfection of an employer’s appeal.
Article 223 of the Labor Code expressly provided that the cash or
surety bond to be posted must be equivalent to the amount of the
award of the Labor Arbiter whose award is on review with the NLRC,
the lawmakers had no other intention but to require that the amount
to be posted must be the whole amount of the Labor Arbiter’s
award, excluding of course, damages and attorney’s fees.
revision which allowed the NLRC to reduce the amount of the
bond is a discretionary power but that discretionary power is not
unbridled and is subject to strict guidelines as set forth in several
decisions of the Supreme Court.
reduction of the appeal bond must be reasonable and must be
restricted to justifiable cases. Thus, without proof and on the
mere allegation that the decision sought to be appealed is
purportedly erroneous in fact or in law, would be inadequate.
expressly stated by the law, a mere motion to reduce appeal bond
cannot serve to mitigate the appeal bond requirement, nor could the
allegation that the monetary award was too large or too harsh or
unfounded or unsettled, be proper grounds to reduce the appeal bond.
Even if the monetary award to be paid as appeal bond runs into
millions or billions of pesos, this does not
automatically give the employer-appellant a “meritorious case”
to reduce the appeal bond.
is the rule that Article 223 of the Labor Code, which
prescribes the appeal bond requirement, is a rule of
jurisdiction and not a rule of procedure
that could be treated liberally. Being a rule of
jurisdiction, it is strictly construed. There
is little leeway for condoning a liberal interpretation thereof, and
certainly none premised on the ground that its requirements are
mere technicalities. The requirement for posting the
surety bond is not merely procedural but jurisdictional
and cannot be trifled with.
underlying purpose for the strict construction, other than the fact
that Art. 223 of the Labor Code is a rule of jurisdiction, not a rule
of procedure, and being a rule of jurisdiction, it is strictly
construed, is that the appeal bond was intended by the lawmakers as a
safeguard to ensure that the employee can target properties of the
employer on which he or she can execute upon in the event of a final,
providential award against the employer. It was intended to
discourage employers from using an appeal as a means to delay, or
even evade, their obligation to satisfy their employees’
just and lawful claims. The non-payment or woefully
insufficient payment of the appeal bond by the employer frustrates
and again, it has been held that the right to appeal is not a natural
right or a part of due process, it is merely a statutory privilege,
and may be exercised only in the manner and in accordance with the
provisions of law. The party who seeks to avail of the same
must comply with the requirements of the rules. Failing to do
so, the right to appeal is lost.
223 of the Labor Code, as amended, must be strictly construed, and
the NLRC would have gravely abused its discretion if it reduced the
appeal bond to be deposited, if a cash bond, or posted, if a surety
bond, by the employers, in order to perfect their appeal from
decision of the Labor Arbiter, without factual basis or if
unreasonably low depending on the circumstances of the case.
Constitution commands that labor must be protected, because it is the
declared policy of the State to protect the rights of workers
and promote their welfare and the State has a duty to afford labor
full protection in regard to assuring each employee who has
been benefited with an award of the Labor Arbiter, that that award be
substantiated with either ready cash to be deposited by the employer
in the case of a cash bond, or reliable and liquid surety
capable of paying the Labor Arbiter’s award, in the case of a
surety bond, if the Labor Arbiter’s award is sustained by the
lawmakers have taken into consideration the situation when employees
who have been benefited with a favorable award by the Labor Arbiter
because of alleged illegal dismissal would find themselves laid-off,
with the employer’s business already closed down
and the employer’s assets already in the process of being
scuttled, with the added scenario that the
employer’s business may have already been taken over by an
affiliate, subsidiary or business associate, in derogation of their
rights to security of tenure, and ruining their hopes for the company
ever to open again, so that any appeal could endanger the award
of the Labor Arbiter with every day that passes while the company is
being liquidated. The unpaid appeal bond becomes even more
obscure if the employer would be permitted to subsequently employ
artifices to evade execution of judgment.
Labor Arbiter’s award which takes the form of an appeal bond as
envisioned by the framers of the law, could turn out to be merely an
illusion, with the passage of time, during employer’s appeal.
If there were no appeal bond required that is equivalent to the Labor
Arbiter’s award, even if the workers win the case appealed by
the employer, there could be no money to pay for the Labor Arbiter’s
award that may have been affirmed by the NLRC so that each employee
who has lost his livelihood, would have nothing to tidy him over for
the loss of his livelihood. The framers of the law intended
that the appeal bond would assure the winning workers that at the end
of the appeal by the employer, there would still be money to pay off
223 of the Labor Code expressly provides the rules on appeal
from the rules on appeal from the Labor Arbiter’s monetary
award, as follows:
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. x x x. >
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.
provisions of Rule VI of the New Rules of Procedure of the NLRC
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 x x x.
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
A mere notice of appeal without complying with the other requisite
aforestated shall not stop the running of the period for perfecting
an appeal. x x x
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.
employer, his counsel, as well as the bonding company, shall submit a
joint declaration under oath attesting that the surety bond posted is
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
are three (3) emphatic words that dictate a strict reading and
application of the Labor Code and the rules: first,
the word “only” makes it perfectly
clear that the lawmakers intended the posting of a cash or surety
bond by the employer to the exclusive means by which an employer’s
appeal may be perfected. The intention of the lawmakers to make
the bond an indispensable requisite for the perfection of an appeal
is clearly limned in the provision that the appeal by the employer
may be perfected only upon the posting of a cash or surety bond.
Second, although the rules allow the NLRC to
reduce the appeal bond, the law uses the word “justifiable”
to modify the word “cases” – meaning that an
exception to the rule is rare and this exception refers only to
special cases where the movant in the motion to reduce bond has
proven through factual and legal grounds that such employer is
entitled to reduction of the appeal bond. Third,
the rules provide that: not even the filing of a motion to
reduce bond is deemed to stay the period for requiring an appeal.
The words “not even” emphasize that
a posting of an insufficient amount as appeal bond, less than
the monetary award in the judgment, or even the use of insufficient
postage in mailing in the manager’s check to serve
as appeal bond, for that matter, would be sufficient to perfect the
appeal – thus emphasizing the strictness of the provision.
The exception of justifiable cases does not kick-in as a matter of
course by mere allegation. Movant must prove reduction of
appeal bond is meritorious.
in the word “justifiable” is that the NLRC’s discretion
to reduce the appeal bond must be “reasonable”.
There ought to be no gross disparity between the
Labor Arbiter’s monetary award from what the NLRC’s
reduced amount of appeal bond.
Section 6, Rule VI of the NLRC’s New Rules of Procedure allows
the Commission to reduce the amount of the bond, such 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 by the movant of meritorious grounds.
NLRC should also have factual basis as “justifiable”
grounds for the reduction of the appeal bond. The NLRC is
obligated to make an in-depth analysis of the evidence to make sure
that the findings of fact of the NLRC, is well supported by
evidence on record and that the NLRC does not suffer from
any misapprehension of the facts.
NLRC’s discretion to reduce appeal bond based on bare
allegations and emotions without factual basis is grave abuse of
discretion tantamount to lack of or excess of jurisdiction. The
mere allegation of the Labor Arbiter’s
decision as purportedly erroneous in fact or in law or words of the
NLRC to the effect that: (1) “monetary
award was too harsh or unfounded or unsettled ”
or (2) “that the amount of the required appeal bond is
enormous”, or (3) “that the monetary award was too
harsh and unfounded” – cannot serve to mitigate
the appeal bond requirement, absent concrete proof.
Just about any aggrieved employer can invoke such grounds.
should be circumspect in the exercise of its discretion to
reduce the amount of bond by conducting an investigation on the
matter in accordance with its power under Art. 218(e) of the Labor
Code. This is more in keeping with the declared policy of the
State to protect the rights of workers and promote their welfare,
and to afford labor full protection.