35. Postigo vs. Philippine Tuberculosis Society, Inc.

(PTSI) AUTHOR: Gojar

G.R. No. 155146. January 24, 2006. Notes:
TOPIC: Recruitment & Placement (under this topic sa syllabus IDK why naka assign siya under RECRUITMENT & placement. This
but see yung notes sa right side) case is mostly about relaxation of the rule on appeal bond and
also about retirement benefits.
 Maybe under ‘to ng (1) Rule-making power; OR (2)
Scope/Application. (see syllabus, p.4)
CASE LAW/ DOCTRINE:
As to the relaxation of the rule on appeal bond:
 While the appeal of a decision involving a monetary award in labor cases may be perfected only upon the posting of a cash
or surety bond and the posting of the bond is an indispensable requirement to perfect such an appeal, a relaxation of the
appeal bond requirement could be justified by substantial compliance with the rule.
 Sec. 6, Rule VI of the New Rules of Procedure of the NLRC provides that the Commission may, in justifiable cases & upon
motion of the aggrieved party, reduce the amount of the bond. The bond requirement on appeals involving awards is
sometimes given a liberal interpretation in line with the desired objective of resolving controversies on the merits.

Regarding retirement benefits:

 There are 2 classes of Corp under the 1987 Consti.
o 1st: Private corp created under a general law
o 2nd: GOCCs created by special charters.
 In Juco v. NLRC:
o EEs of GOCCs w/ special charters are covered under the Civil Service Law.
o EEs of GOCCs under Corp Code are governed by the Labor Code.

EMERGENCY RECIT: Petitioners are EEs of PTSI. At the time they retired, they were compulsory members of GSIS & got retirement
benefits from there. Also, upon retirement, a law was passed (RA 7641) granting to those without any retirement plan in the private
sector a retirement pay to qualified EEs. Petitioners were claiming that they should be granted those benefits under the said law but
PTSI refused. LA said they were entitled to the benefits & granted them monetary award. PTSI appealed, but instead of filing the
appeal bond equivalent to the monetary award ordered by the LA, it filed a Motion to Reduce the Bond arguing that LA erroneously
computed for the benefits. PTSI also argued that as an ER in the public sector, it is not covered by the said law. SC held that a
relaxation of the appeal bond requirement could be justified by substantial compliance w/ the rule. In this case, PTSI deferred the
posting of the surety bond due to the mathematical error in the computation of the monetary award. Furthermore, PTSI
immediately submitted a supersedeas bond w/ its MR of the NLRC resolution w/c dismissed its appeal. As to the retirement benefits,
PTSI is considered a private corporation since it was incorporated under the Corporation Code, hence, its EEs are in the private
sector and entitled to the benefits of RA 7641.
FACTS:

 Dr. Postigo & other petitioners were regular EEs of Philippine Tuberculosis Society, Inc. (PTSI. They retired on diff. dates
from 1996-1998. When they retired, some of them were compulsory members of GSIS & obtained retirement benefits from
GSIS.
o When they retired, Art. 287 of the LC was amended by RA 7641 (Retirement Pay Law), which granted retirement
pay to qualified EEs in the PRIVATE sector if they don’t have any retirement plane.
o And since PTSI doesn’t have one for its EEs aside from the mere contribution to the GSIS, petitioners now claim
from PTSI their retirements benefits under the said law but this was denied by PTSI on the ground that the
accommodation extended by the GSIS to petitioners removed them from the coverage of the law.
 LA: entitled to benefits of RA 7641 but Petitioner Tan who was awarded her terminal pay wasn’t included in the award of
the retirement benefits.
 PTSI appealed to the NLRC but instead of posting the required cash/surety bond equivalent to the amount of the award,
PTSI filed a Motion to Reduce Bond on the ground that the amount awarded by the LA was erroneous.
 NLRC: Dismissed the appeal for failure to post the required cash/surety bond.
 CA: Reversed NLRC. On several occasions, SC cautioned the NLRC that the provision requiring a bond on appeals involving
monetary award be given a liberal interpretation in line w/ the desired objective of resolving controversies on the merits.
The timeliness of the filing of the Motion to Reduce the appeal bond has been substantially complied with.
 Petitioner’s argument as to the 1st issue regarding the appeal bond:
a) Errors in computation of the monetary award are properly subject of appeal but should be ventilated at the
appropriate time and not a mere motion to reduce the bond
b) posting of a bond is an indispensable requirement to perfect and ER’s appeal
 Petitioner’s argument as to the 2nd issue regarding the retirement benefits:
 o They are covered by RA 7641 since PTSI is registered w/ SEC as non-stock & non-profit corp; hence a private entity
& its EEs are in the private sector

ISSUE(S):
a) Is posting of a bond an indispensable requirement to perfect an ER’s appeal? Yes, but subject to liberal interpretation
as long as there is substantial compliance w/ the rule.
b) W/N petitioners are entitled to the benefits of the retirement pay? YES. PTSI is a private corporation, hence, petitioner
EEs are in the private sector. The case is remanded to the LA for the computation of the retirement benefits.

CA was correct in holding that there was substantial compliance in the posting of a cash/surety bond.
 In this case, PTSI deferred the posing of the surety bond due to the alleged erroneous computation by the LA. The LA
awarded P5,480,484.25 but according to PTSI’s computation it should only be P5,072,277.73 (almost 408k difference). And
since this is only a pure mathematical error, it can be resolved without going into the merits of the case.
 Also, PTSI immediately filed a SUPERSEDEAS bond w/ its MR of the NLRC resolution dismissing its appeal (appeal + its
motion to reduce the bond).
 In Ong v CA, SC held that the aggrieved party may file the appeal bond within the 10-day reglementary period upon receipt
of the resolution of to forestall the finality of such resolution. While the appeal may be perfected only upon the posting of
a cash/surety bond & posting of the bond is an indispensable requirement to perfect the appeal, a RELAXATION of the
appeal bond requirement could be justified by substantial compliance w/ the rule.
 Also, Sec. 6, Rule VI of the New Rules of Procedure of the NLRC provides that the Commission may, in justifiable cases &
upon motion of the aggrieved party, reduce the amount of the bond. Further, the filing of the motion to reduce bond
doesn’t stop the running of the period to perfect appeal. Hence, the requirement of a bond to perfect an appeal is
sometimes given a liberal interpretation in line w/the desired objective of resolving controversies on the merits.
 The special circumstances in this case, justify the relaxation of the appeal bond requirement. Since the claim was made
since 1999 (this case was decided in the year 2006), the remand to the NLRC will only unduly delay the determination of
their entitlement to such benefits. Also, this case calls for the resolution of the question of law, hence, this must be
resolved rather than be remanded.

2nd issue: Petitioners are entitled to the retirement benefits under RA 7641
 There are 2 classes recognized by the Consti. 1st, private crop created under a general law. 2nd, GOCCs created by special
charters.
 Under Sec 14 of the Corp Code “corporations organized under this Code shall file with the SEC articles of incorp.”
o In this case, PTSI was incorporated on March 11, 1960 as non-profit, non-stock corp under the Corporation Code.
Being created under the general corporation law instead of a special charter, PTSI is a private corp.
o Also, PTSI admitted that although their EEs are compulsory members of the GSIS, said employees are not governed
by the Civil Service Law.
o If PTSI is really a GOCC & petitioners are in the public sector then they should have been covered by the Civil
Service Law (CSL).
o However, since PTSI was organized under the Corporation Code, petitioners are covered by the Labor Code and
not by the CSL. Hence, they are entitled to the benefits under RA 7641.
 Cited the case of Juco v NLRC wherein GOCCs w/ special charters are covered under the Civil Service. While GOCCs under
the Corp Code are governed by provisions of the Labor Code.
o SC held the PTSI belongs to the latter category, hence, covered by RA 7641 w/c is an amendment to the Labor
Code.
 The accommodation extending GSIS coverage to PTSI EEs didn’t take away from petitioners the benefits of RA 7641. Hence,
the benefits under the said law should be considered a separate retirement benefit from that one claimed by petitioner
under the GSIS law.

Note:
There was no bad faith on PTSI’s part. They honestly believed that their compulsory coverage in the GSIS converted it into a public corporation & excluded from the
coverage of the said law. The SC noted that PTSI even filed a supersedeas bond w/ its MR of the NLRC resolution. Such act shows that PTSI filed the appeal in good
faith.