Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 152494             September 22, 2004

MARIANO ONG, doing business under the name and style MILESTONE METAL
MANUFACTURING, petitioner,
vs.
THE COURT OF APPEALS, CONRADO DABAC, BERNABE TAYACTAC, MANUEL
ABEJUELLA, LOLITO ABELONG, RONNIE HERRERO, APOLLO PAMIAS, JAIME
ONGUTAN, NOEL ATENDIDO, CARLOS TABBAL, JOEL ATENDIDO, BIENVENIDO
EBBER, RENATO ABEJUELLA, LEONILO ATENDIDO, JR., LODULADO FAA and JAIME
LOZADA, respondents.

DECISION

YNARES-SANTIAGO, J.:

This is a petition for review on certiorari assailing the decision1 of the Court of Appeals in CA-
G.R. SP No. 62129, dated October 10, 2001, which dismissed the petition for certiorari for
lack of merit, as well as the resolution,2 dated March 7, 2002, denying the motion for
reconsideration.

Petitioner is the sole proprietor of Milestone Metal Manufacturing (Milestone), which

manufactures, among others, wearing apparels, belts, and umbrellas.3 Sometime in May
1998, the business suffered very low sales and productivity because of the economic crisis in
the country. Hence, it adopted a rotation scheme by reducing the workdays of its
employees to three days a week or less for an indefinite period.4

On separate dates, the 15 respondents filed before the National Labor Relations Commission
(NLRC) complaints for illegal dismissal, underpayment of wages, non-payment of overtime
pay, holiday pay, service incentive leave pay, 13th month pay, damages, and attorney’s fees
against petitioner. These were consolidated and assigned to Labor Arbiter Manuel Manasala.

Petitioner claimed that 9 of the 15 respondents were not employees of Milestone but of
Protone Industrial Corporation which, however, stopped its operation due to business losses.
Further, he claims that respondents Manuel Abuela, Lolita Abelong, Ronnie Herrero, Carlos
Tabbal, Conrado Dabac, and Lodualdo Faa were not dismissed from employment; rather,
they refused to work after the rotation scheme was adopted. Anent their monetary
claims, petitioner presented documents showing that he paid respondents’ minimum wage,
13th month pay, holiday pay, and contributions to the SSS, Medicare, and Pag-Ibig Funds. 5

On November 25, 1999, the Labor Arbiter rendered a decision awarding to the respondents
the aggregate amount of P1,111,200.40 representing their wage differential, holiday pay,
service incentive leave pay and 13th month pay, plus 10% thereof as attorney’s fees. Further,
petitioner was ordered to pay the respondents separation pay equivalent to ½ month salary
for every year of service due to the indefiniteness of the rotation scheme and strained
relations caused by the filing of the complaints.6

Petitioner filed with the NLRC a notice of appeal with a memorandum of appeal and paid the
docket fees therefor. However, instead of posting the required cash or surety bond, he
filed a motion to reduce the appeal bond. The NLRC, in a resolution dated April 28, 2000,
denied the motion to reduce bond and dismissed the appeal for failure to post cash or
surety bond within the reglementary period.7 Petitioner’s motion for reconsideration was
likewise denied.8
Petitioner filed a petition for certiorari with the Court of Appeals alleging that the NLRC acted
with grave abuse of discretion in dismissing the appeal for non-perfection of appeal although
a motion to reduce appeal bond was seasonably filed. However, the petition was dismissed
and thereafter the motion for reconsideration was likewise dismissed for lack of merit.9

Hence, this petition for review on the following assignment of errors:

I.

PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR

AND GRAVE ABUSE OF DISCRETION IN AFFIRMING THE DECISION OF THE
NLRC DISMISSING THE APPEAL OF PETITIONERS (sic) FOR NON-PERFECTION
WHEN A MOTION TO REDUCE APPEAL BOND WAS SEASONABLY FILED
WHICH IS ALLOWED BY THE RULES OF PROCEDURE OF THE NLRC.

II.

PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR

AND GRAVE ABUSE OF DISCRETION IN AFFIRMING THE DISMISSAL BY NLRC
OF PETITIONER’S APPEAL AND IN EFFECT UPHOLDING THE ERRONEOUS
DECISION OF THE LABOR ARBITER AWARDING SEPARATION PAY TO
PRIVATE RESPONDENTS DESPITE THE FINDING THAT THERE WAS NO
ILLEGAL DISMISSAL MADE BY MILESTONE.

III.

PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN

AFFIRMING THE NLRC’S DISMISSAL OF PETITIONER’S APPEAL AND IN
EFFECT UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER
THAT PETITIONER MILESTONE HAS VIOLATED THE MINIMUM WAGE LAW AND
THAT PRIVATE RESPONDENTS WERE UNDERPAID.

IV.

PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN

AFFIRMING THE NLRC’S DISMISSAL OF PETITIONER’S APPEAL AND IN
EFFECT UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER
THAT PETITIONER MILESTONE HAS NOT PAID PRIVATE RESPONDENTS
THEIR SERVICE INCENTIVE LEAVE PAY, 13th MONTH PAY, AND HOLIDAY PAY.

V.

PUBLIC RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN

AFFIRMING THE NLRC’S DISMISSAL OF PETITIONER’S APPEAL AND IN
EFFECT UPHOLDING THE ERRONEOUS DECISION OF THE LABOR ARBITER
THAT THE EVIDENCE SUBMITTED BY PRIVATE RESPONDENTS IN SUPPORT
OF THEIR CLAIMS ARE NOT SELF-SERVING, IRRELEVANT AND IMMATERIAL
TO THE FACTS AND LAW IN ISSUE IN THIS CASE.10

The petition lacks merit.

Time 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.11
Article 223 of the Labor Code, as amended, sets forth the rules on appeal from the Labor
Arbiter’s monetary award:

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.

xxx     xxx     xxx

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 ours)

The pertinent provisions of Rule VI of the New Rules of Procedure of the NLRC, 12 which were
in effect when petitioner filed his appeal, provide:

Section 1. 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.

xxx     xxx     xxx

Section 3. 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 such appeal.

A mere notice of appeal without complying with the other requisite aforestated
shall not stop the running of the period for perfecting an appeal.

xxx     xxx     xxx

Section 6. 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.

The employer, his counsel, as well as the bonding company, shall submit a joint declaration
under oath attesting that the surety bond posted is genuine.

The 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 perfect appeal. (Emphasis ours)

In the case at bar, petitioner received the decision of the Labor Arbiter on January 6, 2000.
He filed his notice of appeal with memorandum of appeal and paid the corresponding appeal
fees on January 17, 2000, the last day of filing the appeal. However, in lieu of the required
cash or surety bond, he filed a motion to reduce bond alleging that the amount of
P1,427,802,04 as bond is "unjustified and prohibitive" and prayed that the same be reduced
to a "reasonable level." The NLRC denied the motion and consequently dismissed the appeal
for non-perfection. Petitioner now contends that he was deprived of the chance to post bond
because the NLRC took 102 days to decide his motion.

Petitioner’s argument is unavailing.

While, Section 6, Rule VI of the NLRC’s New Rules of Procedure allows the Commission to
reduce the amount of the bond, the 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 of meritorious
grounds.13 Petitioner’s motion reads:

1. The appeal bond which respondents-appellants will post in this case is

P1,427,802.04. They are precisely questioning this amount as being unjustified and
prohibitive under the premises.

2. The amount of this appeal bond must be reduced to a reasonable level by this
Honorable Office.

WHEREFORE, in view thereof, it is respectfully prayed of this Honorable Office that

the appeal bond of P1,427,802.04 be reduced.14

After careful scrutiny of the motion to reduce appeal bond, we agree with the Court of Appeals
that the NLRC did not act with grave abuse of discretion when it denied petitioner’s motion
for the same failed to either elucidate why the amount of the bond was "unjustified and
prohibitive" or to indicate what would be a "reasonable level."15

In Calabash Garments, Inc. v. NLRC,16 it was held that "a substantial monetary award, even
if it runs into millions, does not necessarily give the employer-appellant a "meritorious case"
and does not automatically warrant a reduction of the appeal bond."

Even granting arguendo that petitioner has meritorious grounds to reduce the appeal bond,
the result would have been the same since he failed to post cash or surety bond within
the prescribed period.

The above-cited provisions explicitly provide that an appeal from the Labor Arbiter to the
NLRC must be perfected within ten calendar days from receipt of such decisions, awards
or orders of the Labor Arbiter. In a judgment involving a monetary award, the appeal shall be
perfected only upon (1) proof of payment of the required appeal fee; (2) posting of a cash or
surety bond issued by a reputable bonding company; and (3) filing of a memorandum of
appeal. A mere notice of appeal without complying with the other requisites mentioned shall
not stop the running of the period for perfection of appeal. 17 The posting of cash or surety
bond is not only mandatory but jurisdictional as well, and non-compliance therewith is fatal
and has the effect of rendering the judgment final and executory.18 This requirement is
intended to discourage employers from using the appeal to delay, or even evade, their
obligation to satisfy their employee’s just and lawful claims. 19

The intention of the lawmakers to make the bond an indispensable requisite for the perfection
of an appeal by the employer is underscored by 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
perfectly clear that the lawmakers intended the posting of a cash or surety bond by the
employer to be the exclusive means by which an employer’s appeal may be perfected. 20

The fact that the NLRC took 102 days to resolve the motion will not help petitioner’s case.
The NLRC Rules clearly provide that "the filing of the motion to reduce bond shall not
stop the running of the period to perfect appeal." Petitioner should have seasonably filed
the appeal bond within the ten-day reglementary period following the receipt of the order,
resolution or decision of the NLRC to forestall the finality of such order, resolution or decision.
In the alternative, he should have paid only a moderate and reasonable sum for the premium,
as was held in Biogenerics Marketing and Research Corporation v. NLRC,21 to wit:

x x x The mandatory filing of a bond for the perfection of an appeal is evident from the
aforequoted provision that the appeal may be perfected only upon the posting of cash
or surety bond. It is not an excuse that the over P2 million award is too much for a
small business enterprise, like the petitioner company, to shoulder. The law does not
require its outright payment, but only the posting of a bond to ensure that the
award will be eventually paid should the appeal fail. What petitioners have to
pay is a moderate and reasonable sum for the premium for such bond.
(Emphasis ours)

While the bond requirement on appeals involving monetary awards has been relaxed in
certain cases, this can only be done where there was substantial compliance of the Rules or
where the appellants, at the very least, exhibited willingness to pay by posting a partial
bond.22 Petitioner’s reliance on the case of Rosewood Processing, Inc. v. NLRC23 is
misplaced. Petitioner in the said case substantially complied with the rules by posting a partial
surety bond of fifty thousand pesos issued by Prudential Guarantee and Assurance, Inc. while
his motion to reduce appeal bond was pending before the NLRC.

In the case at bar, petitioner did not post a full or partial appeal bond within the prescribed
period, thus, no appeal was perfected from the decision of the Labor Arbiter. For this reason,
the decision sought to be appealed to the NLRC had become final and executory and
therefore immutable. Clearly, then, the NLRC has no authority to entertain the appeal, much
less to reverse the decision of the Labor Arbiter. Any amendment or alteration made which
substantially affects the final and executory judgment is null and void for lack of jurisdiction,
including the entire proceeding held for that purpose. 24

WHEREFORE, in view of the foregoing, the petition is DENIED. The assailed decision of the
Court of Appeals in CA-G.R. SP No. 62129, dated October 10, 2001, dismissing the petition
for certiorari for lack of merit, is AFFIRMED.

No pronouncement as to costs.

SO ORDERED.