MANILA SOURCES CORPORATION AND GARY L. SO, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION (FIFTH DIVISION) AND RICARDO DEQUINA, RESPONDENTS.

Manila Sources Corporation versus National Labor Relations Commission

The Case

This is a petition for certiorari brought by Manila Sources Corporation and its Operations Manager, Gary So, against the National Labor Relations Commission and Ricardo Dequina. The petitioners ask the Supreme Court to annul the Commission's resolutions dismissing their appeal from a Labor Arbiter's decision that found Dequina illegally dismissed and awarded him money. The case matters because it fixes the rule that an employer's appeal in a case involving a monetary award is perfected only upon the posting of a cash or surety bond, and that the failure to post that bond renders the Labor Arbiter's decision final and executory.

Procedural History

Ricardo Dequina filed a complaint for illegal dismissal and money claims against the petitioners before the Labor Arbiter in Quezon City. After a mandatory conciliation conference failed to produce a settlement, the parties filed their position papers, and Labor Arbiter Lilia Savari rendered a decision in Dequina's favor, declaring him illegally dismissed and ordering his reinstatement with backwages, plus salary differentials, service incentive leave pay, and thirteenth month pay.

Dissatisfied, the petitioners filed a notice of appeal, an appellant's brief, and a very urgent ex parte motion for reduction of the supersedeas bond, but they posted no cash or surety bond, whether in full or in part. The National Labor Relations Commission, through its Fifth Division, denied the motion for reduction and dismissed the appeal for non-perfection. The petitioners moved for reconsideration, which was denied. The petitioners then went to the Supreme Court by petition for certiorari under Rule 65, assigning grave abuse of discretion on the part of the Commission.

Facts

Manila Sources Corporation is a domestic corporation engaged in the sale and installation of air-conditioning units, and Gary So is its Operations Manager. On June 2, 2009, the corporation hired Ricardo Dequina as maintenance and painter at a daily salary of 350 pesos, working from Monday to Saturday. Aside from maintenance work, he was occasionally assigned as company collector and was tasked to assist in deliveries and installations in Metro Manila and nearby provinces.

In the later part of 2011, Dequina began asking his co-employees about the benefits that go with employment, such as Social Security System coverage, Medicare, the minimum salary, and thirteenth month pay. Word of these queries reached Gary So, and the respondent became very strict with him. In the third week of January 2012, Dequina was assigned to repair a ceiling in a house in Taguig City, and after being advised by the architect he returned to the office to report what had transpired. Gary So got angry, told him he was hard-headed for not following instructions, and told him point blank that he would not be given any assignment anymore. Dequina returned several times to ask for work, but his pleas fell on deaf ears.

Dequina then filed his complaint for illegal dismissal, underpayment of salaries and wages, non-payment of overtime pay, holiday pay, holiday premium, service incentive leave, thirteenth month pay, separation pay, and illegal deduction. The Labor Arbiter ruled for him. On appeal, the petitioners sought a reduction of the supersedeas bond but posted no bond at all, and the Commission dismissed their appeal for non-perfection.

Issues

• Whether or not the National Labor Relations Commission committed grave abuse of discretion amounting to lack or excess of jurisdiction when it denied the petitioners' motion for reduction of the supersedeas bond.
• Whether or not the Commission committed grave abuse of discretion when it dismissed the petitioners' appeal for non-perfection on account of their failure to post a cash or surety bond.

Applicable Provisions

Article 223 of the Labor Code provides:

Article 223. In case of judgment involving a monetary award an appeal by the employer may only be perfected upon the posting of 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.

This is the governing rule: the bond is not a mere procedural nicety but the very act that perfects the employer's appeal where a monetary award is involved.

Section 6 of Rule VI of the 2011 National Labor Relations Commission Rules of Procedure provides:

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 bond, which shall either be in the form of cash deposit or surety bond equivalent in the amount to the monetary award, exclusive of damages and attorney's fees.

This fixes the amount and form of the bond and confirms that posting it is indispensable to perfection.

Ruling

On the first issue, the Court held that the Commission did not gravely abuse its discretion in denying the motion for reduction of the bond. The petitioners merely alleged that the awards were unreasonable, unjustified, and utterly baseless because Dequina was not their employee, but they did not explain why the amount was unjustified or prohibitive, nor did they indicate what a reasonable level would be. Following the ruling in Ong versus Court of Appeals, the Court stressed that the motion must rest on meritorious grounds and must be accompanied by the posting of a reasonable amount in relation to the monetary award. The petitioners did neither.

On the second issue, the Court held that the dismissal of the appeal for non-perfection was correct. The petitioners failed to post a cash or surety bond, whether fully or partially, and by no overt act showed substantial compliance or an intent to comply. The Court quoted the settled rule:

The rule is settled. Appeals involving monetary awards are perfected only upon compliance with the following mandatory requisites: (a) payment of the appeal fees (b) Filing of the memorandum of appeal (c) Payment of the required cash or surety bond

Because the appeal was never perfected, the Labor Arbiter's decision became final and executory and therefore immutable, and the Commission had no authority to entertain the appeal, much less reverse the Labor Arbiter. The Court also reminded that certiorari reaches only grave abuse of discretion, meaning a capricious and whimsical exercise of judgment equivalent to an excess or lack of jurisdiction, and found no such abuse here.

Doctrine

An employer's appeal from a judgment involving a monetary award is perfected only upon the posting of a cash or surety bond equivalent to the monetary award, exclusive of damages and attorney's fees. The posting of the bond is mandatory and jurisdictional; non-compliance renders the Labor Arbiter's decision final and executory. A motion to reduce the bond is generally not entertained, and may be granted only on meritorious grounds and only upon the posting of a reasonable amount in relation to the monetary award. Certiorari under Rule 65 lies only for grave abuse of discretion amounting to lack or excess of jurisdiction, not for errors of judgment.

Disposition

The Supreme Court denied the petition, sustained the Commission's resolutions, and left the Labor Arbiter's decision in favor of Ricardo Dequina final and executory.

Remember This

Memorize this line: no cash or surety bond, no perfected appeal, and the Labor Arbiter's decision becomes final and immutable. Examiners use this case to test the mandatory and jurisdictional character of the appeal bond under Article 223 of the Labor Code and the strict standards for a motion to reduce it.