RONALDO NICOL VS FOOT JOY INDUSTRIAL CORP

RONALDO NICOL  

VS

FOOT JOY INDUSTRIAL CORP
528 SCRA 300 (2007)

The New Rules of Procedure of the NLRC, as amended, allows the reduction of the appeal bond.

News of a temporary shutdown of respondent Foot Joy Industrial Corp. came about on February 2, 2001. Two days after, a fire razed the company and its premises. Subsequently, the employees filed with the National Labor Relations Commission (NLRC) two separate complaints for illegal closure resulting to illegal dismissal and nonpayment of wage increase. The company declared the total closure and cessation of its business operations allegedly because of severe losses and notified the employees that they shall be terminated from employment. The Labor Arbiter (LA) found Ronaldo Nicol, et al. were constructively dismissed and awarded them separation pay.

Foot Joy filed a Motion to Reduce Bond with their appeal to the NLRC but the Motion was denied. As Foot Joy failed to post the additional bond the NLRC dismissed Foot Joy’s appeal for non-perfection thereof.

On appeal, the Court of Appeals (CA) reversed the NLRC.

ISSUE:
Whether or not a motion to reduce the appeal bond can be given due course even if it is not accompanied by a bond in a reasonable amount

HELD:
It is provided in Article 223 of the Labor Code that 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.

Also, Sections 4(a) of Rule VI of the New Rules of Procedure of the NLRC the states that one of the requisites for perfection of appeal is that it shall be filed with proof of payment of the required appeal fee and surety bond as provided in Section 6 of the Rule. Section 6 provides that 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.

The necessary import of the foregoing provisions is that in the case of an employer appealing the labor arbiter’s decision to the NLRC, the posting of a cash or surety bond to perfect an appeal of a monetary judgment is not only mandatory but also jurisdictional, non-compliance with which has the effect of rendering the judgment final and executory.

As stressed in Ong v. Court of Appeals, it is the intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by the employer.

Be that as it may, Section 6 of Rule VI of the New Rules of Procedure of the NLRC, as amended, allows the reduction of the appeal bond. This practice-evolved rule has been made explicit by Resolution 01-02, series of 2002, 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.

There is no dispute that respondents filed a Notice of Appeal and complied with the other requirements for perfecting an appeal, save for the posting of the full amount of the bond, on December 20, 2001 or nine days after receipt of the labor arbiter’s decision. And admittedly, respondents’ Motion to Reduce Bond was accompanied by an actual tender of a P10 million surety bond executed by the Security Pacific Assurance Corporation.