ROGELIO INCIONG, ROMULO R. LICUANAN, CONSTANTE C. LEE, BIENVENIDO S. BAUTISTA, ROMEO R. RIANO, EDUARDO M. SUMAWAY, JOSE LOPEZ, ALBERTO AGA, EDUARDO S. MANGALIMAN, ERNESTO ROSALE…

Inciong versus Procter and Gamble Philippines

The Case

This is a petition for certiorari brought by a group of dismissed workers against Procter and Gamble Philippines and the National Labor Relations Commission. The workers had won a favorable decision from the Labor Arbiter, who declared their dismissal illegal and ordered their reinstatement with backwages. When the company appealed without posting an appeal bond, the workers sought immediate execution of that decision pending appeal. The Commission refused. The case matters because it fixes the precise function of the appeal bond in labor proceedings: the bond stays execution, but its absence does not by itself entitle a winning employee to execution pending appeal, and the rule making reinstatement immediately executory came too late for this decision.

Procedural History

The workers filed a complaint for illegal dismissal before the Labor Arbiter. On December 15, 1988, Labor Arbiter Felipe Pati rendered judgment for the complainants, declaring that the company terminated their employment without just and valid cause and directing reinstatement without loss of seniority rights, payment of full backwages and other benefits, and attorney's fees equivalent to ten per cent of the total amount due, while dismissing the claim for damages for insufficiency of evidence.

On January 6, 1989, the company appealed to the National Labor Relations Commission. On January 26, 1989, the workers asked for immediate execution pending appeal on the ground that the company had not filed an appeal bond. They later filed a motion for computation of the amounts due and, in April 1989, a motion and a supplementary motion for execution. On June 7, 1989, the Commission denied the motion for execution, and it also denied the motion for reconsideration. The workers then came to the Supreme Court by petition for certiorari.

Facts

The petitioners were regular and permanent employees of Procter and Gamble Philippines, a company engaged in the manufacture of soap, toothpaste, and other household products. In 1982 the company formulated a Special Early Retirement Program and a Special Separation Package as an economic recessionary measure to trim its organization, maintain business viability, and ensure competitiveness through increased productivity. The Union President wrote management requesting a dialogue on these programs.

From the later part of 1982 through 1984, on the ground of redundancy, the company terminated the services of many employees, including the ten original complainants, giving them the benefits of the two programs, which they accepted. Problems arose because, after dismissing the petitioners, the company allegedly hired new employees at lower rates of pay, in violation of the petitioners' right to security of tenure.

On September 22, 1986, four years after receiving their special retirement benefits, the petitioners filed a complaint for illegal dismissal, asking for reinstatement with backwages and other benefits, as well as damages and attorney's fees. One hundred forty retired workers later joined as additional complainants and executed a special power of attorney authorizing the ten original petitioners to represent them. The company questioned the authorization and, in its answer, contended that the redundancy program was justified, that the claim had been paid, waived, abandoned, or otherwise extinguished, and that it had acted with due diligence and care.

Issues

• Whether or not, in view of the employer's failure to file an appeal bond, the petitioners are entitled to execution pending appeal of the Labor Arbiter's decision ordering their reinstatement.
• Whether or not the appeal bond under the Omnibus Rules is required to perfect an appeal, so that its absence makes the appealed decision final and executory.
• Whether or not the amendment introduced by Republic Act 6715, making the reinstatement aspect of a Labor Arbiter's decision immediately executory, applies to a decision rendered before that law took effect.

Applicable Provisions

Section 11 of Rule XVI of Book V of the Omnibus Rules Implementing the Labor Code provides:

Section 11. Appeal fee and bond. The interested party appealing any decision, order or award of the lower body or agency shall pay a filing fee of twenty-five pesos with the body or agency of origin except deadlock in negotiation cases wherein the minimum appeal fee shall be fifty pesos. To stay the execution of the decision, order or award, the appealing party shall post an appeal bond to be determined and approved by the Commissioner or Labor Arbiter, Med-Arbiter, Regional Director, or Director of the Bureau of origin, as the case may be.

This is the provision whose second paragraph the petitioners read as making execution follow as a matter of course whenever no appeal bond is posted.

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 calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: (a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; (b) If the decision, order or award was secured through fraud or coercion, including graft and corruption; (c) If made purely on questions of law; and (d) If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant.

This provision supplies the test of finality: a decision timely appealed is not yet final and executory, which is why the appeal bond cannot be the thing that perfects the appeal.

Ruling

On the first issue, the Court held that the petitioners are not entitled to execution pending appeal. The Commission's reading of the second paragraph of Section 11 is correct: that paragraph indubitably refers to the stay of execution of an order, decision, or award, not to the perfection of an appeal. The Commission put the distinction sharply, observing that the rule on appeal speaks of the payment of an appeal fee, not an appeal bond, and that the rule on execution directs the filing of a supersedeas bond to stay execution in specified cases, so that one is not to be confounded with the other.

On the second issue, the Court anchored the Commission's interpretation in Article 223 of the Labor Code. A sensu contrario, that is, reading the provision from the opposite direction, decisions, awards, or orders of the Labor Arbiter that have been appealed to the Commission on time are not yet final and executory. The company's appeal was timely, so the decision was not yet final, and the absence of a bond did not convert it into an immediately executory one.

On the third issue, the Court noted that the Labor Arbiter's decision was rendered in December 1988, three months before Article 223 was amended by Republic Act 6715, which became law on March 21, 1989, and which provides that a decision ordering reinstatement shall be immediately executory insofar as the reinstatement aspect is concerned, and that the posting of an appeal bond by the employer shall not stay such execution. Since the new law contains no provision giving it retroactive effect, the amendment may not be applied to this case.

Doctrine

First, the appeal bond in labor cases is a supersedeas bond. Its office is to stay execution of the appealed decision; it is not a requirement for perfecting the appeal. Failure to post it does not, by itself, entitle the winning party to execution pending appeal.

Second, under Article 223 of the Labor Code, a decision of the Labor Arbiter that is timely appealed is not yet final and executory. Finality is measured by the filing of the appeal within the ten calendar day period, not by the posting of a bond.

Third, the rule introduced by Republic Act 6715, making the reinstatement aspect of a Labor Arbiter's decision immediately executory and providing that the posting of an appeal bond shall not stay such execution, applies only prospectively. It does not govern decisions rendered before its effectivity, absent a provision giving it retroactive effect.

Disposition

The petition for certiorari was dismissed, with costs against the petitioners, the Court finding no grave abuse of discretion in the Commission's denial of immediate execution.

Remember This

Memorize the line: the appeal bond stays execution, it does not perfect the appeal, so its absence alone gives the worker no right to execution pending appeal. Examiners use this case to test the distinction between the appeal fee and the supersedeas bond, and the prospective application of the immediate-execution-of-reinstatement rule under Republic Act 6715.