13. MANILA MINING CORPORATION v.

LOWITO AMOR

DOCTRINE: Although appeal is an essential part of our judicial process, it has been held, time and again,
that the right thereto is not a natural right or a part of due process but is merely a statutory privilege.
Thus, the perfection of an appeal in the manner and within the period prescribed by law is not only
mandatory but also jurisdictional and failure of a party to conform to the rules regarding appeal will
render the judgment final and executory.

FACTS: Respondents Lowito Amor, Rollybie Ceredon, Julius Cesar, Ronito Martinez and Fermin Tabili, Jr.
were regular employees of petitioner Manila Mining Corporation. When the mine tailings being pumped
into TP No. 7 reached the maximum level in December 2000, petitioner temporarily shut down its
mining operations pending approval of its application to increase said facilty’s capacity by the
Department of Environment and Natural Resources-Environment Management Bureau (DENR-EMB).

On 27 July 2001, petitioner served a notice, informing its employees and the Department of Labor and
Employment Regional Office No. XII (DOLE) of the temporary suspension of its operations for six months
and the temporary lay-off of two-thirds of its employees. After the lapse of said period, petitioner
notified the DOLE on 11 December 2001 that it was extending the temporary shutdown of its operations
for another six months. Respondents filed the complaint for constructive dismissal and monetary claims.
Executive Labor Arbiter Benjamin E. Pelaez rendered a Decision holding petitioner liable for constructive
dismissal in view of the suspension of its operations beyond the six-month period.

Aggrieved, petitioner filed its memorandum of appeal before the NLRC and moved for the reduction of
the appeal bond to ₱100,000.00, on the ground that its financial losses in the preceding years had
rendered it unable to put up one in cash and/or surety equivalent to the monetary award. In opposition,
respondents moved for the dismissal of the appeal in view of the fact that, despite receipt of the
appealed decision on 24 November 2004, petitioner mailed their copy of the memorandum of appeal
only on 7 February 2005. NLRC ruled that, under Article 283 of the Labor Code, respondents were not
even entitled to separation pay considering the eventual closure of their employer’s business due to
serious business losses or financial reverses. CA ruled that petitioner failed to perfect its appeal
therefrom considering that the copy of its 3 December 2004 Memorandum of Appeal intended for
respondents was served the latter by registered mail only on 7 February 2005. Aside from posting an
unusually smaller sum as appeal bond, petitioner was likewise faulted for replenishing the check it
issued only on 1 April 2005 or 24 days before the rendition of the assailed NLRC Decision.

ISSUE: Whether the petitioners’ appeal filed with the NLRC was fatally defective. YES

HELD: Insofar as appeals from decisions of the Labor Arbiter are concerned, Article 223 of the Labor
Code of the Philippines provides that, "decisions, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the [NLRC] by any or both parties within ten (10) calendar days from the
receipt of such decisions, awards or orders." In case of a judgment involving a monetary award, the
same provision mandates that, "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 [NLRC] in the
amount equivalent to the monetary award in the judgment appealed from." Alongside the requirement
that "the appellant shall furnish a copy of the memorandum of appeal to the other party."
Having received the Labor Arbiter’s Decision on 24 November 2004, petitioner had ten (10) calendar
days or until 4 December 2004 within which to perfect an appeal. Considering that the latter date fell on
a Saturday, petitioner had until the next working day, 6 December 2004, within which to comply with
the requirements for the perfection of its appeal. Our perusal of the record shows that, despite bearing
the date 3 December 2004, petitioner’s memorandum of appeal was subscribed before Notary Public
Ronald Rex Recidoro only on 6 December 2004. Without proof as to the actual date of filing of said
pleading being presented by both parties, the CA discounted the timeliness of its filing in light of the
established fact that the copy thereof intended for respondents was only served by registered mail on 7
February 2005.

As allegation is not evidence, however, the rule is settled that the burden of evidence lies with the party
who asserts the affirmative of an issue. As the parties claiming the non-perfection of petitioner’s appeal,
it was, therefore, respondents who had the burden of proving that said memorandum of appeal was,
indeed, filed out of time. By and of itself, the fact that the copy of memorandum of appeal intended for
respondents was served upon them by registered mail only on 7 February 2005 does not necessarily
mean that petitioner’s appeal from the Labor Arbiter’s decision was filed out of time. On the principle
that justice should not be sacrificed for technicality, it has been ruled that the failure of a party to serve
a copy of the memorandum to the opposing party is not a jurisdictional defect and does not bar the
NLRC from entertaining the appeal. Considering that such an omission is merely regarded as a formal
lapse or an excusable neglect, the CA reversibly erred in ruling that, under the circumstances, petitioner
could not have filed its appeal earlier than 7 February 2005.

The question regarding the appeal bond rises from the record which shows that, in addition to its
memorandum of appeal, petitioner filed a 6 December 2004 motion for the reduction of the appeal
bond on the ground that the cash equivalent of the monetary award and/or cost of the surety bond
have proven to be prohibitive in view of the tremendous business losses it allegedly sustained. As
supposed measure of its good faith in complying with the Rules, petitioner attached to its motion Philam
Bank Check No. 0000627153, dated 6 December2004, in the amount of ₱100,000.00 only. Respondent
correctly called attention to the fact that the check submitted by petitioner was dishonored upon
presentment for payment, thereby rendering the tender thereof ineffectual.
145. LEPANTO CONSOLIDATED MINING CORPORATION v. BELIO ICAO

G.R. No. 196047 January 15, 2014

SERENO, CJ:

ART. 223 JURISDICTION OF THE LABOR ARBITERS AND THE COMMISSION

DOCTRINE:

The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an
appeal by the employer, is clearly limned in 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.

FACTS:

A complaint for illegal dismissal and damages was filed by private respondent Icao against petitioners
Lepanto Consolidated Mining Company (LCMC) and its CEO Felipe U. Yap before the Arbitration Branch
of the NLRC. Icao essentially alleged in his complaint that he was an employee of petitioner LCMC
assigned as a lead miner in its underground mine in Paco, Mankayan, Benguet. On January 4, 2008,
private respondent reported for work. While waiting for the time to ignite their round, one of his co-
workers shouted to prepare the explosives for blasting, prompting private respondent to run to the
adjacent panels and warn the other miners. Thereafter, he decided to take a bath and proceeded to the
bathing station where 4 of his co-workers were also present. Before he could join them, he heard a
voice at his back and saw Security Guard (SG) Larry Bulwayan instructing his companion SG Dale Papsa-
ao to frisk him. As private respondent was removing his boots, SG Bulwayan forcibly pulled his
skullguard from his head causing it to fall to the ground including its harness and his detergent soap
which was inserted in the skullguard harness. A few minutes later, private respondent saw SG Bulwayan
pick up a wrapped object at the bathing station and gave it to his companion. SGs Bulwayan and Papsa-
ao invited the private respondent to go with them at the investigation office to answer questions
regarding the wrapped object. He was then charged with "highgrading" or the act of concealing,
possessing or unauthorized extraction of highgrade material/ore without proper authority. Private
respondent vehemently denied the charge. Consequently, he was dismissed from his work.

LA RULING: That petitioner and its CEO are liable for illegal dismissal and ordered them to pay
respondent Icao P345,879.45, representing his full backwages and separation pay. The alleged
highgrading attributed by LCMC’s security guards was found to have been fabricated; consequently,
there was no just cause for the dismissal of respondent.

On 8 December 2008, petitioner and its CEO filed an Appearance with Memorandum of Appeal before
the NLRC. Instead of posting the required appeal bond in the form of a cash bond or a surety bond in an
amount equivalent to the monetary award adjudged in favor of Icao, they filed a Consolidated Motion
For Release Of Cash Bond And To Apply Bond Subject For Release As Payment For Appeal Bond
(Consolidated Motion).

NLRC RULING: NLRC dismissed the appeal of petitioner and the latter’s CEO for non-perfection. It found
that
they had failed to post the required appeal bond. equivalent to the monetary award of P345,879.45. It
explained that their Consolidated Motion for the release of the cash bond in another case (Dangiw
Siggaao), for the purpose of applying the same bond to the appealed case before it, could not be
considered as compliance with the requirement to post the required appeal bond. Consequently, it
declared the labor arbiter’s Decision to be final and executory. Petitioner and its CEO filed a Motion for
Reconsideration. They emphasized therein that they had tried to comply in good faith with the requisite
appeal bond by trying to produce a cash bond anew and also to procure a new surety bond. However,
after canvassing several bonding companies, the costs have proved to be prohibitive. Hence, they
resorted to using the cash bond they posted in Dangiw Siggaao because the bond was now free,
unencumbered and could rightfully be withdrawn and used by them. Their motion was denied. Hence,
they filed a Petition for Certiorari with the CA.

CA RULING: CA affirmed the Order of the NLRC, which had dismissed the appeal of petitioner and the
latter’s CEO for failure to comply with the requirements of law and consequently lost the right to appeal.
CA said that since the payment of appeal fees and the posting of an appeal bond are indispensable
jurisdictional requirements, noncompliance with them resulted in petitioner’s failure to perfect its
appeal. Consequently, the labor arbiter’s Decision became final and executory and, hence, binding upon
the appellate court.

ISSUE: Did the petitioner’s Consolidated Motion to release the cash bond it posted in a previous case, for
application to the present case, constitute compliance with the appeal bond requirement under the
Labor Code?

SC RULING:

YES. The Court finds that petitioner substantially complied with the appeal bond requirement. In appeals
from any decision or order of the labor arbiter, the posting of an appeal bond is required under Article
223 of the Labor Code, which reads:

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 (10) calendar days from receipt of such
decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds:

xxxx

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.

The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an
appeal by the employer, is clearly limned in 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.

First, there is no question that the appeal was filed within the 10-day reglementary period. Except for
the alleged failure to post an appeal bond, the appeal to the NLRC was therefore in order.
Second, it is also undisputed that petitioner has an unencumbered amount of money in the form of cash
in the custody of the NLRC. To reiterate, petitioner had posted a cash bond of P401,610.84 in the
separate case Dangiw Siggaao, which was earlier decided in its favor. As claimed by petitioner and
confirmed by the Judgment Division of the Judicial Records Office of this Court, the Decision in Dangiw
Siggaao had become final and executory as of 28 April 2008, or more than seven months before
petitioner had to file its appeal in the present case. This fact is shown by the Entry of Judgment on file
with the aforementioned office. Hence, the cash bond in that case ought to have been released to
petitioner then.

Third, the cash bond in the amount of P401,610.84 posted in Dangiw Siggaao is more than enough to
cover the appeal bond in the amount of P345,879.45 required in the present case.

Fourth, this ruling remains faithful to the spirit behind the appeal bond requirement which is to ensure
that workers will receive the money awarded in their favor when the employer’s appeal eventually fails.
There was no showing at all of any attempt on the part of petitioner to evade the posting of the appeal
bond. On the contrary, petitioner’s move showed a willingness to comply with the requirement. Hence,
the welfare of Icao is adequately protected.

The Court found exceptional circumstances that warranted an extraordinary exercise of its power to
exempt a party from the rules on appeal bond, there is all the more reason in the present case to find
that petitioner substantially complied with the requirement. Having complied with the appeal bond
requirement, petitioner s appeal before the NLRC must therefore be reinstated.
Sara Lee v. Macatlang

G.R. No. 180147

Jan. 14, 2015

Perez, J.:

DOCTRINE: A compromise must not be contrary to law, morals, good customs and public policy; and
must have been freely and intelligently executed by and between the parties. The 10% requirement set
in McBurniz v. Ganzon pertains to the reasonable amount which the NLRC would accept as the minimum
of the bond that should accompany the motion to reduce bond in order to suspend the period to perfect
an appeal under the NLRC rules. The 10% is based on the judgment award and should in no case be
construed as the minimum amount of bond to be posted in order to perfect appeal.

FACTS: This case arises from a motion for reconsideration filed by Sara Lee from a judgment rendered by
the Supreme Court. Aris Philippines permanently ceased operations on 9 October 1995 displacing 5,984
rank- and-file employees. On 26 October 1995, Fashion Accessories Phils. Inc. (FAPI) was incorporated
prompting former Aris employees to file a case for illegal dismissal on the allegations that FAPI was a
continuing business of Aris. Sara Lee Corporations, Sara Lee Philippines and Cesar Cruz were impleaded
as defendants being major stockholders of FAPI and officers of Aris, respectively.

LA RULING: Found the dismissals to be illegal and awarded monetary benefits amounting to P3.4
BILLION pesos. The Petitioner Corporations filed a Notice of Appeal together with a Motion to Reduce
Appeal Bond. The amount of 4.5 million was accepted with an order to post an additional 4.5 million
bond.

CA RULING: The Aris employees filed a Petition for Review before the Court of Appeals raising that the
amount should have been an equivalent of the monetary award. The CA changed the amount to 1
BILLION- later reduced 725 Million by the Supreme Court. APPEAL TO THE SC Petitioner’s Argument:
Seek to enforce the 10% minimum bond amount in the McBurnie v. Ganzon case; enforce a compromise
agreement denominated as a “Motion to Admit Confession of Judgment” Respondent’s Argument:
Sustains rulings of the Court.

ISSUES:

1. Whether or not there is merit in claiming the 10% bond amount.

2. Whether or not there the compromise is valid.

RULING: 1. NO. The Corporations gravely misappreciated the ruling in McBurnie. The 10% requirement
pertains to the reasonable amount which the NLRC would accept as the minimum of the bond that
should accompany the motion to reduce bond in order to suspend the period to perfect an appeal under
the NLRC rules. The 10% is based on the judgment award and should in no case be construed as the
minimum amount of bond to be posted in order to perfect appeal. There is no room for a different
interpretation when McBurniemade it clear that the percentage of bond set is provisional, thus: The
foregoing shall not be misconstrued to unduly hinder the NLRC's exercise of its discretion, given that the
percentage of bond that is set by this guideline shall be merely provisional. The NLRC retains its
authority and duty to resolve the motion and determine the final amount of bond that shall be posted
by the appellant, still in accordance with the standards of "meritorious grounds" and "reasonable
amount." Should the NLRC, after considering the motion's merit, determine that a greater amount or
the full amount of the bond needs to be posted by the appellant, then the party shall comply
accordingly. The appellant shall be given a period of 10 days from notice of the NLRC order within which
to perfect the appeal by posting the required appeal bond.

2. NO. A compromise must not be contrary to law, morals, good customs and public policy; and must
have been freely and intelligently executed by and between the parties. A compromise agreement is
valid as long as the consideration is reasonable and the employee signed the waiver voluntarily, with a
full understanding of what he was entering into. A review of the compromise agreement shows a gross
disparity between the amount offered by the Corporations compared to the judgment award. The
judgment award is P3,453,664,710.86 or each employee is slated to receive P577,149.85. On the other
hand, the P342,284,800.00 compromise is to be distributed among 5,984 employees which would
translate to only P57,200.00 per employee. From this amount, P8,580.00 as attorney's fees will be
deducted, leaving each employee with a measly P48,620.00. In fact, the compromised amount roughly
comprises only 10% of the judgment award. We note that the compromise is a mere 6% of the
contingent sum that may be received by petitioners and the minuscule amount is certainly questionable
because it does not represent a true and fair amount which a reasonable agent may bargain for his
principal.
Mcburnie v. Ganzon

G.R. Nos. 178034 & 178117, G R. Nos. 186984-85, October 17, 2013

Reyes, J.

Doctrine:

Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as provided
in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby RESOLVES that henceforth,
the following guidelines shall be observed:

(a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC subject to the
following conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is posted;

(b) For purposes of compliance with condition no. (2), a motion shall be accompanied by the posting of a
provisional cash or surety bond equivalent to ten percent (10,) of the monetary award subject of the
appeal, exclusive of damages and attorney's fees;

(c) Compliance with the foregoing conditions shall suffice to suspend the running of the 1 0-day
reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;

(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final
amount of bond that shall be posted by the appellant, still in accordance with the standards of
meritorious grounds and reasonable amount; and

(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the
amount of the provisional bond, the appellant shall be given a fresh period of ten 1 0) days from notice
of the NLRC order within which to perfect the appeal by posting the required appeal bond.

Facts:

McBurnie instituted a complaint for illegal dismissal and other monetary claims against the respondents.
McBurnie claimed that on May 11, 1999, he signed a five-year employment agreement with the
company EGI as an Executive Vice-President. He performed work for the company until sometime in
November 1999, when he figured in an accident that compelled him to go back to Australia. While in
Australia, he was informed by respondent Ganzon that his services were no longer needed.

The respondents opposed the complaint, contending that their agreement with McBurnie was to jointly
invest in and establish a company for the management of hotels. They did not intend to create an
employer-employee relationship.

LA and NLRC Ruling:

The LA declared McBurnie as having been illegally dismissed from employment, and thus entitled to
receive from the respondents the following amounts: (a) US$985,162.00 as salary and benefits for the
unexpired term of their employment contract, (b) ₱2,000,000.00 as moral and exemplary damages, and
(c) attorney’s fees equivalent to 10% of the total monetary award. Respondents appealed the LA’s
Decision to the NLRC.
On November 5, 2004, they filed their Memorandum of Appeal and Motion to Reduce Bond, and posted
an appeal bond in the amount of ₱100,000.00. The respondents contended in their Motion to Reduce
Bond, inter alia, that the monetary awards of the LA were null and excessive, allegedly with the
intention of rendering them incapable of posting the necessary appeal bond.

On March 31, 2005, the NLRC denied the motion to reduce bond, explaining that "in cases involving
monetary award, an employer seeking to appeal the [LA’s] decision to the Commission is unconditionally
required by Art. 223, Labor Code to post bond in the amount equivalent to the monetary award x x x."
Thus, the NLRC required from the respondents the posting of an additional bond in the amount of
₱54,083,910.00.

When their motion for reconsideration was denied, the respondents decided to elevate the matter to
the Court of Appeals (CA) via the Petition for Certiorari and Prohibition.

In the meantime, in view of the respondents’ failure to post the required additional bond, the NLRC
dismissed their appeal. The respondents’ motion for reconsideration was denied. This prompted the
respondents to file with the CA the Petition for Certiorari.

CA Ruling:

The CA rendered its Decision allowing the respondents’ motion to reduce appeal bond and directing the
NLRC to give due course to their appeal

On the issue of the NLRC’s denial of the respondents’ motion to reduce appeal bond, the CA ruled that
the NLRC committed grave abuse of discretion in immediately denying the motion without fixing an
appeal bond in an amount that was reasonable, as it denied the respondents of their right to appeal
from the decision of the LA.

On the issue of the NLRC’s dismissal of the appeal on the ground of the respondents’ failure to post the
additional appeal bond, the CA also found grave abuse of discretion on the part of the NLRC, explaining
that an appeal bond in the amount of ₱54,083,910.00 was prohibitive and excessive.

McBurnie filed a motion for reconsideration. At the same time, the respondents moved that the appeal
be resolved on the merits by the CA. The CA issued a Resolution denied both motions. McBurnie then
filed with the Court the Petition for Review on Certiorari.

In the meantime, the NLRC, acting on the CA’s order of remand, accepted the appeal from the LA’s
decision. It reversed and set aside the Decision of the LA, and entered a new one dismissing McBurnie’s
complaint. Hence, McBurnie went to the SC.

SC Ruling:

The SC explained that the respondents’ failure to post a bond equivalent in amount to the LA’s
monetary award was fatal to the appeal. Although an appeal bond may be reduced upon motion by an
employer, the following conditions must first be satisfied: (1) the motion to reduce bond shall be based
on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the
appellant. Unless the NLRC grants the motion to reduce the cash bond within the 10-day reglementary
period to perfect an appeal from a judgment of the LA, the employer is mandated to post the cash or
surety bond securing the full amount within the said 10-day period. The respondents’ initial appeal bond
of ₱100,000.00 was grossly inadequate compared to the LA’s monetary award.

The Court’s Decision became final and executory. On March 27, 2012, the respondents filed a Motion for
Leave to File Attached Third Motion for Reconsideration, with an attached Motion for Reconsideration
with Motion to Refer These Cases to the Honorable Court En Banc.

Issue:

 WON the respondent is entitled to a reduction of appeal bond. YES -Reduced to 10 million bond from
60 Million

Held:

 To clarify, the prevailing jurisprudence on the matter provides that the filing of a motion to reduce
bond, coupled with compliance with the two conditions emphasized in Garcia v. KJ Commercial78 for
the grant of such motion, namely, (1) a meritorious ground, and (2) posting of a bond in a reasonable
amount, shall suffice to suspend the running of the period to perfect an appeal from the labor arbiter’s
decision to the NLRC. To require the full amount of the bond within the 10-day reglementary period
would only render nugatory the legal provisions which allow an appellant to seek a reduction of the
bond.

The NLRC has full discretion to grant or deny the motion to reduce bond, and it may rule on the motion
beyond the 10-day period within which to perfect an appeal. Obviously, at the time of the filing of the
motion to reduce bond and posting of a bond in a reasonable amount, there is no assurance whether
the appellant’s motion is indeed based on "meritorious ground" and whether the bond he or she posted
is of a "reasonable amount." Thus, the appellant always runs the risk of failing to perfect an appeal.

In order to give full effect to the provisions on motion to reduce bond, the appellant must be allowed to
wait for the ruling of the NLRC on the motion even beyond the 10-day period to perfect an appeal. If the
NLRC grants the motion and rules that there is indeed meritorious ground and that the amount of the
bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, the appellant
may still file a motion for reconsideration as provided under Section 15, Rule VII of the Rules. If the NLRC
grants the motion for reconsideration and rules that there is indeed meritorious ground and that the
amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion,
then the decision of the labor arbiter becomes final and executory.

 As the Court, nonetheless, remains firm on the importance of appeal bonds in appeals from monetary
awards of LAs, we stress that the NLRC, pursuant to Section 6, Rule VI of the NLRC Rules of Procedure,
shall only accept motions to reduce bond that are coupled with the posting of a bond in a reasonable
amount. Time and again, we have explained that the bond requirement imposed upon appellants in
labor cases is intended to ensure the satisfaction of awards that are made in favor of appellees, in the
event that their claims are eventually sustained by the courts. On the part of the appellants, its posting
may also signify their good faith and willingness to recognize the final outcome of their appeal.

It is in this light that the Court finds it necessary to set a parameter for the litigants’ and the NLRC’s
guidance on the amount of bond that shall hereafter be filed with a motion for a bond’s reduction. To
ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the
chance to seek a reduction of the appeal bond are effectively carried out, without however defeating
the benefits of the bond requirement in favor of a winning litigant, all motions to reduce bond that are
to be filed with the NLRC shall be accompanied by the posting of a cash or surety bond equivalent to
10% of the monetary award that is subject of the appeal, which shall provisionally be deemed the
reasonable amount of the bond in the meantime that an appellant’s motion is pending resolution by the
Commission. In conformity with the NLRC Rules, the monetary award, for the purpose of computing the
necessary appeal bond, shall exclude damages and attorney’s fees. Only after the posting of a bond in
the required percentage shall an appellant’s period to perfect an appeal under the NLRC Rules be
deemed suspended.

The foregoing shall not be misconstrued to unduly hinder the NLRC’s exercise of its discretion, given that
the percentage of bond that is set by this guideline shall be merely provisional. The NLRC retains its
authority and duty to resolve the motion and determine the final amount of bond that shall be posted
by the appellant, still in accordance with the standards of "meritorious grounds" and "reasonable
amount". Should the NLRC, after considering the motion’s merit, determine that a greater amount or
the full amount of the bond needs to be posted by the appellant, then the party shall comply
accordingly. The appellant shall be given a period of 10 days from notice of the NLRC order within which
to perfect the appeal by posting the required appeal bond.

 The requirement on the existence of a "meritorious ground" delves on the worth of the parties’
arguments, taking into account their respective rights and the circumstances that attend the case. The
condition was emphasized in University Plans Incorporated v. Solano,95 wherein the Court held that
while the NLRC’s Revised Rules of Procedure "allows the [NLRC] 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 a showing of meritorious grounds."96 By jurisprudence, the merit referred
to may pertain to an appellant’s lack of financial capability to pay the full amount of the bond,the merits
of the main appeal such as when there is a valid claim that there was no illegal dismissal to justify the
award,98 the absence of an employer-employee relationship, prescription of claims, and other similarly
valid issues that are raised in the appeal. For the purpose of determining a "meritorious ground", the
NLRC is not precluded from receiving evidence, or from making a preliminary determination of the
merits of the appellant’s contentions.

 As regards the requirement on the posting of a bond in a "reasonable amount," the Court holds that
the final determination thereof by the NLRC shall be based primarily on the merits of the motion and the
main appeal.

Given the circumstances in this case and the merits of the respondents’ arguments before the NLRC, the
Court holds that the respondents had posted a bond in a "reasonable amount", and had thus complied
with the requirements for the perfection of an appeal from the LA’s decision.

 Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as
provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby RESOLVES that
henceforth, the following guidelines shall be observed:

(a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC subject to the
following conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is posted;
(b) For purposes of compliance with condition no. (2), a motion shall be accompanied by the posting of a
provisional cash or surety bond equivalent to ten percent (10,) of the monetary award subject of the
appeal, exclusive of damages and attorney's fees;

(c) Compliance with the foregoing conditions shall suffice to suspend the running of the 1 0-day
reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;

(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final
amount of bond that shall be posted by the appellant, still in accordance with the standards of
meritorious grounds and reasonable amount; and

(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the
amount of the provisional bond, the appellant shall be given a fresh period of ten 1 0) days from notice
of the NLRC order within which to perfect the appeal by posting the required appeal bond.
Islriz Trading v Capada et. al.

GR No: 168501 Date: January 31, 2011

Ponente: DEL CASTILLO, J.:

Doctrine: We reiterate in this petition the settled view that employees are entitled to their accrued
salaries during the period between the Labor Arbiters order of reinstatement pending appeal and the
resolution of the National Labor Relations Commission (NLRC) overturning that of the Labor Arbiter.
Otherwise stated, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, the
employer is still obliged to reinstate and pay the wages of the employee during the period of appeal
until reversal by a higher court or tribunal.

FACTS:

Respondents were drivers and helpers of Islriz Trading, a gravel and sand business owned and operated
by petitioner Victor Hugo Lu. Claiming that they were illegally dismissed, respondents filed a Complaint
for illegal dismissal and non-payment of overtime pay, holiday pay, rest day pay, allowances and
separation pay against petitioner on August 9, 2000 before the Labor Arbiter. On his part, petitioner
imputed abandonment of work against respondents.

LA/RTC/NLRC RULING:

LA ruled that ISLRIZ TRADING was guilty of illegal dismissal and ordered the reinstatement of
complainants to their former positions without loss of seniority rights and the payment of full
backwages from date of dismissal to actual reinstatement.

Upon appeal, the NLRC ordered respondents reinstatement but without backwages because
respondents failure to continue working for petitioner was neither caused by termination nor
abandonment of work.

Upon refusal of petitioner to reinstate the respondents, respondents prayed for computation of award
of backwages and that an Alias Writ of Execution for its enforcement be issued. Thereafter, the personal
properties of petitioner were levied to satisfy the writ of execution issued.

CA RULING:

The CA quoted the June 3, 2004 Order of Labor Arbiter Castillon and agreed with her ratiocination that
pursuant to Article 223(now 229) of the Labor Code, what is sought to be enforced by the subject Writ
of Execution is the accrued salaries owing to respondents by reason of the reinstatement order of the
Labor Arbiter.

APPEAL TO THE SC:

Petitioner contends that the assailed Decision and Resolution of the CA are contrary to law and
jurisprudence. This is because in upholding the issuance of the questioned Writ of Execution for the
enforcement of respondents accrued salaries, said Decision and Resolution, in effect, altered the NLRC
Resolution which only decreed respondents reinstatement without backwages. Moreover, he posits that
Article 223(now 229) of the Labor Code only applies when an employee has been illegally dismissed
from work. And since in this case the NLRC ruled that respondents failure to continue working for
petitioner was not occasioned by termination, there is no illegal dismissal to speak of, hence, said
provision of the Labor Code does not apply. Lastly, petitioner claims that the computation of
respondents accrued salaries in the total amount of P1,110,665.60 has no legal and factual bases since
as repeatedly pointed out by him, the NLRC Resolution reversing the Labor Arbiters Decision has already
ordered respondents reinstatement without backwages after it found that there was no illegal
termination.

Respondents, on the other hand, maintain that the CA did not err in applying Article 223(now 229) of
the Labor Code to the instant case. They thus contend that the computation of their accrued salaries
covering the period during which they were supposed to have been reinstated or from January 1, 2002
to January 30, 2004, should be upheld since same merely applied Article 223(now 229). In sum,
respondents believe that the assailed Decision and Resolution of the CA are in accord with law and
jurisprudence.

ISSUE/S:

1. Whether respondents may collect their wages during the period between the Labor Arbiters order of
reinstatement pending appeal and the NLRC Resolution overturning that of the Labor Arbiter.

HELD:

1. Yes, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on
the part of the employer to reinstate and pay the wages of the dismissed employee during the period of
appeal until reversal by the higher court or tribunal. It likewise settled the view that the Labor Arbiters
order of reinstatement is immediately executory and the employer has to either re-admit them to work
under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the
payroll, and that failing to exercise the options in the alternative, employer must pay the employees
salaries.

It then provided for the two-fold test in determining whether an employee is barred from recovering his
accrued wages, to wit: (1) there must be actual delay or that the order of reinstatement pending appeal
was not executed prior to its reversal; and (2) the delay must not be due to the employers unjustified
act or omission. If the delay is due to the employers unjustified refusal, the employer may still be
required to pay the salaries notwithstanding the reversal of the Labor Arbiters Decision.

To apply the two-fold test:

Was there an actual delay or was the order of reinstatement pending appeal executed prior to its
reversal? As can be recalled, Labor Arbiter Gan issued his Decision ordering respondents reinstatement
on December 21, 2001. Then, petitioner appealed said decision to the NLRC. On April 22, 2002, a Writ of
Execution was issued by Labor Arbiter Gan. However, until the issuance of the September 5, 2002 NLRC
Resolution overturning Labor Arbiter Gan’s Decision, petitioner still failed to reinstate respondents or
effect payroll reinstatement in accordance with Article 223(now 229) of the Labor Code. It cannot
therefore be denied that there was an actual delay in the execution of the reinstatement aspect of the
Decision of Labor Arbiter Gan prior to the issuance of the NLRC Resolution overturning the same.

Now, the next question is: Was the delay not due to the employers unjustified act or omission? Islriz
Trading did not undergo rehabilitation or was under any analogous situation which would justify
petitioners non-exercise of the options provided under Article 223(now 229) of the Labor Code. Notably,
what petitioner gave as reason in not immediately effecting reinstatement after he was served with the
Writ of Execution dated April 22, 2002 was that he would first refer the matter to his counsel as he could
not effectively act on the order of execution without the latter’s advice. Petitioner, however, without
any satisfactory reason, failed to fulfill this promise and respondents remained to be not reinstated until
the NLRC resolved petitioners appeal. Evidently, the delay in the execution of respondents
reinstatement was due to petitioner’s unjustified refusal to effect the same.

Hence, the conclusion is that respondents have the right to collect their accrued salaries during the
period between the Labor Arbiters Decision ordering their reinstatement pending appeal and the NLRC
Resolution overturning the same because petitioner’s failure to reinstate them either actually or
through payroll was due to petitioners unjustified refusal to effect reinstatement.
BUENAOBRA vs LIM KING GUAN

G.R. No. 150147; January 20, 2004

Corono, J.

DOCTRINE: The provision of Article 223 (now 229) of the Labor Code requiring the posting of bond on
appeals involving monetary awards must be given liberal interpretation in line with the desired objective
of resolving controversies on the merits. If only to achieve substantial justice, strict observance of the
reglementary periods may be relaxed if warranted

FACTS: Petitioners (Buenaobra et al) were employees of private respondent Unix International Export
Corporation (UNIX), a corporation engaged in the business of manufacturing bags, wallets and the like.

Sometime in 1991 and 1992, petitioners filed several cases against UNIX and its incorporators and
officers for unfair labor practice, illegal lockout/dismissal, underpayment of wages, holiday pay,
proportionate 13th month pay, unpaid wages, interest, moral and exemplary damages and attorneys
fees.

Labor Arbiter Patis rendered a decision ordering respondent Unix Export Corporation to pay
complainants backwages, separation pay, wage differentials, regular holiday pay differentials; and
proportionate 13th month pay for 1990.

There being no appeal by respondents or petitioners, the decision of labor arbiter eventually became
final and executory. However, petitioners complained that the decision could not be executed because
UNIX allegedly diverted, invested and transferred all its money, assets and properties to respondent Fuji
Zipper Manufacturing Corporation (FUJI) whose stockholders and officers were also those of UNIX.

Petitioners filed another complaint against respondents UNIX, its corporate officers and stockholders of
record, and FUJI. Petitioners mainly prayed that respondents UNIX and FUJI be held jointly and severally
held liable for the payment of the monetary awards ordered by labor arbiter de Vera.

LA Ruling: Ordered a judgment of piercing the veil of corporate fiction of the two respondent sister
corporations which by virtue of this Decision are now considered as mere associations of persons jointly
and severally pay the subject amount of P8,233,880.30 out of the properties and unpaid subscription on
subscribed Capital Stock of the Board of Directors, Corporate Officers, Incorporators and Stockholders of
said respondent corporations, plus the amount of P3,000,000.00 and P1,000,000.00 in the form of moral
and exemplary damages, respectively, as well as 10% attorneys fees from any recoverable amounts.

RESPONDENT’S ARGUMENT: Private respondents FUJI filed a memorandum on appeal and a motion to
dispense with the posting of a cash or surety appeal bond on the ground that they were not the
employers of petitioners. They alleged that they could not be held responsible for petitioners claims and
to require them to post the bond would be unjust and unfair, and not sanctioned by law.

NLRC RULING: NLRC denied respondent’s motion to be exempted from posting appeal bond.
Respondents are hereby directed to post cash or surety bond within an unextendible period of ten (10)
days upon receipt. Otherwise the appeal shall be dismissed.
Petitioners filed a petition in the Court of Appeals imputing grave abuse of discretion to the NLRC, Third
Division when it allowed private respondents to post the mandated cash or surety bond four months
after the filing of their memorandum on appeal.

COURT OF APPEALS RULING: Court of Appeals dismissed the petition for lack of merit.

ISSUE: Whether or not the posting of a bond beyond the reglementary period to perfect appeal may be
allowed

SC RULING:

YES. The provision of Article 223 (now 229) of the Labor Code requiring the posting of bond on appeals
involving monetary awards must be given liberal interpretation in line with the desired objective of
resolving controversies on the merits. If only to achieve substantial justice, strict observance of the
reglementary periods may be relaxed if warranted. The NLRC, Third Division could not be said to have
abused its discretion in requiring the posting of bond after it denied private respondents motion to be
exempted therefrom.

It is true that the perfection of an appeal in the manner and within the period prescribed by law is not
only mandatory but jurisdictional, and failure to perfect an appeal has the effect of making the judgment
final and executory. However, technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties. We have allowed appeals from the
decisions of the labor arbiter to the NLRC, even if filed beyond the reglementary period, in the interest
of justice. The facts and circumstances of the instant case warrant liberality considering the amount
involved and the fact that petitioners already obtained a favorable judgment on February 23, 1993
against their employer UNIX.

It is only fair and just that respondent FUJI be afforded the opportunity to be heard on appeal before the
NLRC, specially in the light of labor arbiter Patis later decision holding FUJI jointly and severally liable
with UNIX in the payment of the monetary awards adjudged by labor arbiter de Vera against UNIX.
Bergonio vs. SEAIR (South East Asian Airlines)

GR No: 195227 Date: April 21, 2014

Ponente: Brion, J.

DOCTRINE: Payment of accrued wages despite reversal of decision: An employer, who, despite the
Labor Arbiter’s order of reinstatement, did not reinstate the employee during the pendency of the
appeal up to the reversal by a higher tribunal may still be held liable for the accrued wages of the
employee, i.e., the unpaid salary accruing up to the time the higher tribunal reverses the decision. The
rule, therefore, is that an employee may still recover the accrued wages up to and despite the reversal
by the higher tribunal. This entitlement of the employee to the accrued wages proceeds from the
immediate and self-executory nature of the reinstatement aspect of the LA’s decision. Exception. By way
of exception to the above rule, an employee may be barred from collecting the accrued wages if shown
that the delay in enforcing the reinstatement pending appeal was without fault on the part of the
employer. To determine whether an employee is thus barred, two tests must be satisfied: (1) actual
delay or the fact that the order of reinstatement pending appeal was not executed prior to its reversal;
and (2) the delay must not be due to the employer’s unjustified act or omission. Note that under the
second test, the delay must be without the employer’s fault. If the delay is due to the employer’s
unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of
the LA’s decision.

FACTS: On April 30, 2004, a complaint before the Labor Arbiter (LA) for illegal dismissal and illegal
suspension was filed by the petitioners against respondents South East Asian Airlines (SEAIR) and Irene
Dornier as SEAIR’s President. On May 31, 2005, the LA found the petitioners illegally dismissed and
ordered the respondents to reinstate the petitioners with full back wages. There was failure on the part
of the Respondent to reinstate the said employees, prompting the application for the Writ of Execution,
the latter was subsequently granted by the court in favor of the petitioners. On February 21, 2006,
respondents issued a Memorandum directing the petitioners to report on work before February 24,
2006. However, petitioners failed to report to work alleging that only one of them received the
Memorandum on February 23, 2005. The Memorandum also instructed them to report to Clark,
Pampanga instead of NAIA-Domestic Airport in Pasay which according to the petitioners was a violation
of Art. 223 (par.3) of the Labor Code as it changes the terms and conditions of the petitioners’
employment prior to the dismissal. On May 31, 2005, respondents appealed to the NLRC which was
subsequently dismissed for failure to perfect an appeal. Respondents then filed a petition for certiorari
which was granted by the Court of Appeals (CA), the latter ruling in favor of the respondents and
declaring the dismissal valid. The CA also ruled that the delay of the execution of the reinstatement
order was not due to the respondent’s unjustified act but to petitioners’ refusal to comply with the
February 21, 2006 Memorandum of return-to-work. This led the petitioners to file a petition for review
in the Supreme Court.

LA/RTC/NLRC RULING: LA granted the petitioners' motion; it directed Metrobank-San Lorenzo to release
the P1,900,000.00 garnished amount. The LA found valid and meritorious the respondents' claim for
accrued wages in view of the respondents' refusal to reinstate the petitioners despite the final and
executory nature of the reinstatement aspect of its (LA's) May 31, 2005 decision. The LA noted that as of
the December 18, 2007 CA decision (that reversed the illegal dismissal findings of the LA), the
petitioners' accrued wages amounted to P3,078,366.33. In its July 16, 2008 resolution, the NLRC
affirmed in toto the LA's March 13, 2008 order. The NLRC afterwards denied the respondents' motion
for reconsideration for lack of merit.

CA RULING: The CA agreed that the reinstatement aspect of the LA's decision is immediately executory
even pending appeal, such that the employer is obliged to reinstate and pay the wages of the dismissed
employee during the period of appeal until the decision (finding the employee illegally dismissed
including the reinstatement order) is reversed by a higher court.

Petitioner’s Contention: petitioners argue that the computation of their accrued wages stopped when
they failed to report for work on February 24, 2006. Petitioners point out that the February 21, 2006
Memorandum directed them to report for work at Clark Field, Angeles, Pampanga instead of at the
NAIA-Domestic Airport in Pasay City where they had been assigned. Petitioners claim that the delay in
their reinstatement was in fact due to the respondents' unjustified acts and that the respondents never
really complied with the LA's reinstatement order

Petitioner’s Contention: Respondents maintain that the petitioners were validly dismissed and that they
complied with the LA's reinstatement order when it directed the petitioners to report back to work,
which directive the petitioners did not heed. Respondents point out that their relationship had been so
strained that reinstatement was no longer possible. Despite this strained relationship, the respondents
point out that they still required the petitioners to report back to work if only to comply with the LA's
reinstatement order. Instead of reporting for work as directed, the petitioners, however, insisted for a
payroll reinstatement, which option the law grants to them (the respondents) as employer. Also,
contrary to the petitioners' claim, the Memorandum directed them to report at Clark Field, Pampanga
only for a re-orientation of their respective duties and responsibilities. Respondents claim that the delay
in the petitioners' reinstatement was in fact due to the latter's refusal to report for work after the
issuance of the February 21, 2006 Memorandum in addition to their strained relationship.

ISSUE: WON the respondent SEAIR complied with the LA decision on the reinstatement of employees
which will negate petitioners’ claim for accrued back wages? NO

HELD: No. As provided for in Art. 223(3) of the Labor Code, the reinstatement of an employee found
illegally dismissed is immediately executory even during the pendency of the employer’s appeal from
the decision. Under this provision, the employer must reinstate the employee – either by physically
admitting him under the conditions prevailing prior to his dismissal, and paying his wages, or within the
option of the employer to reinstate him in the payroll. A dismissed employee whose case was favored by
the LA is entitled to receive wages pending appeal upon reinstatement, which reinstatement is
immediately executory. Unless the appellate tribunal issues a restraining order, the LA is duty bound to
implement the order of reinstatement and the employer has no option but to comply with it. Moreover,
and equally worth emphasizing, is that an order of reinstatement issued by the LA is self-executory, i.e.,
the dismissed employee need not even apply for and the LA need not even issue a writ of execution to
trigger the employer's duty to reinstate the dismissed employee. The employer is duty-bound to
reinstate the employee, failing which, the employer is liable instead to pay the dismissed employee's
salary. The Court's consistent and prevailing treatment and interpretation of the reinstatement order as
immediately enforceable, in fact, merely underscores the right to security of tenure of employees that
the Constitution protects. The employer is obliged to pay the dismissed employee's salary if he refuses
to reinstate until actual reinstatement or reversal by a higher tribunal; circumstances that may bar an
employee from receiving the accrued wages.
As we amply discussed above, an employer is obliged to immediately reinstate the employee upon the
LA's finding of illegal dismissal; if the employer fails, it is liable to pay the salary of the dismissed
employee. Of course, it is not always the case that the LA's finding of illegal dismissal is, on appeal by the
employer, upheld by the appellate court. After the LA's decision is reversed by a higher tribunal, the
employer's duty to reinstate the dismissed employee is effectively terminated. This means that an
employer is no longer obliged to keep the employee in the actual service or in the payroll. The
employee, in turn, is not required to return the wages that he had received prior to the reversal of the
LA's decision.
Turks Shawarma Company and Gem Zeñaros v. Pajaron

G.R. No. 207156

Jan. 16, 2017

Del Castillo, J.:

DOCTRINE: the reduction of the appeal bond is allowed, subject to the following conditions: (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. Compliance with these two conditions will
stop the running of the period to perfect an appeal. ETHIDa

FACTS: Petitioners hired Feliciano Pajaron and Larry Carbonilla in 2007 as service crew and head crew,
respectively. In April 2015, both would file complaints their respective complaints against their
employers for constructive and actual illegal dismissal, non-payment of overtime pay, holiday pay,
holiday premium, rest day premium, service incentive leave pay and 13th month pay against petitioners.
Both Complaints were consolidated. Pajaron alleged that Zeñarosa asked him to sign a piece of paper
stating that he was receiving the correct amount of wages and that he had no claim against petitioners.
He refused to sign the same and that that caused his dismissal. As for Carbonilla he had an altercation
with his supervisor, causing his immediate termination. He was also asked to sign a piece of paper
acknowledging a debt of 7000php. Both Pajaron and Carbonilla claim that there was no just or
authorized cause for their dismissal. Petitioners on the other hand claim that both abandoned their
work, with Pajaron being a habitual absentee for extended periods and that he was simply rehired on
the spot; while Carbonilla habitually misbehaved and left employment without settling an unpaid
obligation of 78,900php, prompting the filing of the charge of estafa against him.

LA RULING: Ruled in favor of both Pajaron and Carbonilla, awarding respectively the amounts of about
148k and 49k. NLRC PROCEEDINGS+RULING: Due to alleged unavailability of counsel, Zeñarosa filed on
his own a Notice of Appeal with Memorandum, with a Motion to Reduce Bond. He posted a 15,000php
bond maintaining that he cannot pay the full amount as he was a mere backyard entrepreneur. The
NLRC denied the motion and ruled that financial difficulty was not a ground for reduction, and that the
same was unsubstantiated. Petitioners thru new counsel questioned the harsh outright dismissal of their
Motion and filed a new Motion for Reconsideration. The NLRC denied the Motion for Reconsideration
and that the posting of the remaining balance would amount to extending the period allowed by the
rules into 3 months.

CA RULING: Dismissed a Petition for Certiorari and ruled that there was no grave abuse of discretion on
the part of the NLRC.

ISSUE: Whether the refusal to grant the motion amounted to grave abuse.

RULING: NO. The Supreme Court cited Secs. 4 and 6 of the NLRC Rules of Procedure, with the latter
providing: No motion to reduce bond shall be entertained except on meritorious grounds, and upon the
posting of a bond in a reasonable amount. The mere fiing of a motion to reduce bond without complying
with the requisites in the preceding paragraphs shall not stop the running of the period to perfect an
appeal. "It is clear from both the Labor Code and the NLRC Rules of Procedure that there is legislative
and administrative intent to strictly apply the appeal bond requirement, and the Court should give
utmost regard to this intention." The posting of cash or surety bond is therefore mandatory and
jurisdictional; failure to comply with this requirement renders the decision of the Labor Arbiter final and
executory. the reduction of the appeal bond is allowed, subject to the following conditions: (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. Compliance with these two conditions will
stop the running of the period to perfect an appeal. The NLRC correctly held that the supposed ground
cited in the motion is not well-taken for there was no evidence to prove Zen arosa's claim that the
payment of the full amount of the award would greatly affect his business due.
Pioneer Texturizing Corporation v. NLRC
GR No: 118651 Date: Oct. 16, 1997
Ponente: Francisco, J.
Doctrine:
Loss of confidence as a ground: To be a valid ground, it must be shown that the
employee concerned is responsible for the misconduct or infraction and that the nature
of his participation therein rendered him absolutely unworthy of the trust and confidence
demanded by his position.
Immediately executory judgement of reinstatement: The provision of Article 223 is clear
that an award for reinstatement shall be immediately executory even pending appeal and
the posting of a bond by the employer shall not stay the execution for reinstatement. The
legislative intent is quite obvious, i.e., to make an award of reinstatement immediately
enforceable, even pending appeal.
FACTS:
Private respondent Lourdes A. de Jesus is petitioners' reviser/trimmer since 1980. As
reviser/trimmer, de Jesus based her assigned work on a paper note posted by petitioners.
De Jesus mistakenly trimmed the cloths’ ribs on P.O. Number 3853 to which herein petitioner
suspended her for 30 days and required her to explain why no disciplinary action should be
taken against her for dishonesty and tampering of official records and documents with the
intention of cheating as P.O. No. 3853 allegedly did not require trimming. De Jesus explained
that she merely committed a mistake as P.O. 3853 has the same style as P.O. 3824 which has
an attached price list for trimming the ribs and admitted that she may have been negligent in
presuming that the same work has to be done, but not for dishonesty or tampering.
Nevertheless, De Jesus was terminated by petitioner’s personnel on Sept. 18, 1992.
On September 22, 1992, de Jesus filed a complaint for illegal dismissal against petitioners.
LA/RTC/NLRC RULING:
LA: The Labor Arbiter who heard the case noted that de Jesus was amply accorded procedural
due process in her termination from service. Nevertheless, after observing that de Jesus made
some further trimming on P.O. No. 3853 and that her dismissal was not justified, the Labor
Arbiter held petitioners guilty of illegal dismissal. Petitioners were accordingly ordered to
reinstate de Jesus to her previous position without loss of seniority rights and with full
backwages from the time of her suspension on August 19, 1992.
NLRC: The NLRC declared that the status quo between them should be maintained and
affirmed the Labor Arbiter's order of reinstatement, but without backwages.
APPEAL TO THE SC:
Petitioner's Contention: Petitioners insist that the NLRC gravely abused its discretion in
holding that de Jesus is entitled to reinstatement to her previous position for she was not
illegally dismissed in the first place. In support thereof, petitioners quote portions of the NLRC
decision which stated that "respondents [petitioners herein] cannot be entirely faulted for
dismissing the complainant" and that there was "no illegal dismissal to speak of in the case at
bar".
ISSUE/S:
1. Whether or not de Jesus was illegally dismissed
2. Whether or not an order for reinstatement needs a writ of execution.
HELD:
1. No. Petitioners simply failed, both before the Labor Arbiter and the NLRC, to discharge the
burden of proof and to validly justify de Jesus' dismissal from service. The law, in this light,
directs the employers, such as herein petitioners, not to terminate the services of an employee
except for a just or authorized cause under the Labor Code. Lack of a just cause in the
dismissal from service of an employee, as in this case, renders the dismissal illegal, despite the
employer's observance of procedural due process. And while the NLRC stated that "there was
no illegal dismissal to speak of in the case at bar" and that petitioners cannot be entirely faulted
therefor, said statements are inordinate pronouncements which did not remove the assailed
dismissal from the realm of illegality. Neither can these pronouncements preclude us from
holding otherwise.
We also find the imposition of the extreme penalty of dismissal against de Jesus as certainly
harsh and grossly disproportionate to the negligence committed, especially where said
employee holds a faithful and an untarnished twelve-year service record.
Equally unmeritorious is petitioners' assertion that the dismissal is justified on the basis of loss
of confidence. To be a valid ground, it must be shown that the employee concerned is
responsible for the misconduct or infraction and that the nature of his participation
therein rendered him absolutely unworthy of the trust and confidence demanded by his
position. In this case, petitioners were unsuccessful in establishing their accusations of
dishonesty and tampering of records with intention of cheating. Indeed, even if petitioners'
allegations against de Jesus were true, they just the same failed to prove that her position
needs the continued and unceasing trust of her employers. The breach of trust must be related
to the performance of the employee's functions. Surely, de Jesus who occupies the position of a
reviser/trimmer does not require the petitioners' perpetual and full confidence.

2. No writ of execution is required for an order for reinstatement under Article 223. Article 224 states
that the need for a writ of execution applies only within five (5) years from the date a decision, an order
or award becomes final and executory. It cannot relate to an award or order of reinstatement still to be
appealed or pending appeal which Article 223 contemplates. The provision of Article 223 is clear that
an award for reinstatement shall be immediately executory even pending appeal and the posting of a
bond by the employer shall not stay the execution for reinstatement. The legislative intent is quite
obvious, i.e., to make an award of reinstatement immediately enforceable, even pending appeal. To
require the application for and issuance of a writ of execution as prerequisites for the execution of a
reinstatement award would certainly betray and run counter to the very object and intent of Article
223, i.e., the immediate execution of a reinstatement order. The reason is simple. An application for a
writ of execution and its issuance could be delayed for numerous reasons. A mere continuance or
postponement of a scheduled hearing, for instance, or an inaction on the part of the Labor Arbiter or the
NLRC could easily delay the issuance of the writ thereby setting at naught the strict mandate and noble
purpose envisioned by Article 223. In other words, if the requirements of Article 224 were to govern, as
we so declared in Maranaw, then the executory nature of a reinstatement order or award contemplated
by Article 223 will be unduly circumscribed and rendered ineffectual.
Alejandro Roquero v. Philippine Airlines, Inc.
GR No: 152329 Date: April 22, 2003
Ponente: J. Puno
Doctrines:
An employee instigated to take drugs has no right to be reinstated to his position. He took the drugs
fully knowing that he was on duty and more so that it is prohibited by company rules. Instigation is only
a defense against criminal liability. It cannot be used as a shield against dismissal from employment
especially when the position involves the safety of human lives.
The order of reinstatement is immediately executory. The unjustified refusal of the employer to
reinstate a dismissed employee entitles him to payment of his salaries effective from the time the
employer failed to reinstate him despite the issuance of a writ of execution. Unless there is a restraining
order issued, it is ministerial upon the Labor Arbiter to implement the order of reinstatement

FACTS:
Alejandro Roquero, along with Rene Pabayo, were ground equipment mechanics of respondent
Philippine Airlines, Inc. (PAL). From the evidence on record, it appears that Roquero and
Pabayo were caught red-handed possessing and using Methampethamine Hydrochloride or
shabu in a raid conducted by PAL security officers and NARCOM personnel.
Roquero and Pabayo received a notice of administrative charge for violating the PAL Code of
Discipline. They assailed their arrest and asserted that they were instigated by PAL to take the
drugs. Roquero and Pabayo were dismissed by PAL. Thus, they filed a case for illegal
dismissal.
LA/RTC/NLRC RULING:
The Labor Arbiter upheld the dismissal of Roquero and Pabayo. It found both parties at fault,
PAL for applying means to entice the complainants into committing the infraction and the
complainants for giving in to the temptation and eventually indulging in the prohibited activity.
Nonetheless, the Labor Arbiter awarded separation pay and attorney’s fees to the complainants.
While the case was on appeal with the NLRC, the complainants were acquitted by the RTC in
the criminal case which charged them with conspiracy for possession and use of a regulated
drug in violation of Section 16, Article III of Republic Act 6425, on the ground of instigation.
The NLRC ruled in favor of complainants as it likewise found PAL guilty of instigation. It ordered
reinstatement to their former positions but without backwages. Complainants did not appeal
from the decision but filed a motion for a writ of execution of the order of reinstatement. The
Labor Arbiter granted the motion but PAL refused to execute the said order on the ground that
they have filed a Petition for Review before the Supreme Court. In accordance with the case of
St. Martin Funeral Home vs. NLRC and Bienvenido Aricayos, PAL’s petition was referred to the
Court of Appeals.
CA RULING:
PAL and Pabayo filed a Motion to Withdraw/Dismiss the case with respect to Pabayo, after they
voluntarily entered into a compromise agreement.
The Court of Appeals later reversed the decision of the NLRC and reinstated the decision of the
Labor Arbiter insofar as it upheld the dismissal of Roquero. However, it denied the award of
separation pay and attorney’s fees to Roquero on the ground that one who has been validly
dismissed is not entitled to those benefits.
APPEAL TO THE SC:
Petition for Review on Certiorari under Rule 45
ISSUE/S:
1. Whether or not the instigated employee shall be solely responsible for an action arising from
the instigation perpetrated by the employer and shall not be reinstated.
2. Can the executory nature of the decision, more so the reinstatement aspect of a labor
tribunals order be halted by a petition having been filed in higher courts without any restraining
order or preliminary injunction having been ordered in the meantime?
3. Would the employer who refused to reinstate an employee despite a writ duly issued be held
liable to pay the salary of the subject employee from the time that he was ordered reinstated up
to the time that the reversed decision was handed down?

HELD:
1. Yes. Even if Petitioner was instigated to take drugs he has no right to be reinstated to his
position. He took the drugs fully knowing that he was on duty and more so that it is prohibited by
company rules. Instigation is only a defense against criminal liability. It cannot be used as a
shield against dismissal from employment especially when the position involves the safety of
human lives.
There is also no question that petitioner Roquero is guilty of serious misconduct for possessing
and using shabu. He violated Chapter 2, Article VII, section 4 of the PAL Code of Discipline.
2. No. Article 223 (3rd paragraph) of the Labor Code, as amended by Section 12 of Republic Act
No. 6715, and Section 2 of the NLRC Interim Rules on Appeals under RA No. 6715, Amending
the Labor Code, provide that an order of reinstatement by the Labor Arbiter is immediately
executory even pending appeal.
3. Yes. The order of reinstatement is immediately executory. The unjustified refusal of the
employer to reinstate a dismissed employee entitles him to payment of his salaries effective
from the time the employer failed to reinstate him despite the issuance of a writ of execution.
Unless there is a restraining order issued, it is ministerial upon the Labor Arbiter to implement
the order of reinstatement. In the case at bar, no restraining order was granted. Thus, it was
mandatory on PAL to actually reinstate Roquero or reinstate him in the payroll. Having failed to
do so, PAL must pay Roquero the salary he is entitled to, as if he was reinstated, from the time
of the decision of the NLRC until the finality of the decision of this Court.
Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on
the part of the employer to reinstate and pay the wages of the dismissed employee during the
period of appeal until reversal by the higher court. On the other hand, if the employee has been
reinstated during the appeal period and such reinstatement order is reversed with finality, the
employee is not required to reimburse whatever salary he received for he is entitled to such,
more so if he actually rendered services during the period
Juanito Garcia and Alberto Dumago vs PAL
GR No: Date:
Ponente: CARPIO-MORALES, J :
Doctrine:
FACTS:
Petitioners Alberto J. Dumago and Juanito A. Garcia were Aircraft Furnishers Master "C" and
Aircraft Inspector, respectively, assigned in the PAL Technical Center. They were allegedly
caught in the act of sniffing shabu when a team of company security personnel and law
enforcers raided the PAL Technical Center's Toolroom. Thus, after due notice, they were
dismissed for violating PAL's Code of Discipline.
Before the promulgation of the LA's decision, the SEC placed PAL, which was suffering from
severe financial losses, under Receivership.
LA RULING:
The LA ruled in favor of the petitioners, thus ordering PAL to, inter alia, to immediately comply
with the reinstatement aspect of the decision.
NLRC RULING:
Upon appeal to the NLRC, it reversed the LA decision and dismissed petitioners' complaint for
lack of merit.
Petitioners' Motion for Reconsideration was denied and an Entry of Judgment was issued.
Subsequently, the LA issued a Writ of Execution respecting the reinstatement aspect of his
Decision, and subsequently he issued a Notice of Garnishment. Respondent thereupon moved
to quash the Writ and to lift the Notice while petitioners moved to release the garnished amount.
CA RULING:
The CA nullified the NLRC Resolutions on two grounds, that: (1) a subsequent finding of a valid
dismissal removes the basis for implementing the reinstatement aspect of a labor arbiter's
decision, and (2) the impossibility to comply with the reinstatement order due to corporate
rehabilitation provides a reasonable justification for the failure to exercise the options under
Article 223 of the Labor Code.
APPEAL TO THE SC:
Petitioner's Contention:\Respondent's Contention:
ISSUE/S:
1. Does the subsequent finding of a valid dismissal removes the basis for implementing
the reinstatement aspect of a LA's decision? - No
2. If there is a reversal of the LA's decision, may the employee still collect the accrued wages if it is
shown that delay to reinstate was without fault of the employer?- No.

HELD:
1. No. The Court reaffirms the prevailing principle that even if the order of reinstatement of the
Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and
pay the wages of the dismissed employee during the period of appeal until reversal by the
higher court. It settles the view that the Labor Arbiter's order of reinstatement is immediately
executory and the employer has to either re-admit them to work under the same terms and
conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to
exercise the options in the alternative, employer must pay the employee's salaries.

2. No. After the LA's decision is reversed by a higher tribunal, the employee may be barred from
collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending
appeal was without fault on the part of the employer.
The test is two-fold:
(1) there must be actual delay or the fact that the order of reinstatement pending appeal was not
executed prior to its reversal; and
(2) the delay must not be due to the employer's unjustified act or omission. If the delay is due to
the employer's unjustified refusal, the employer may still be required to pay the salaries
notwithstanding the reversal of the LA's decision.

In this case, Respondent was, during the period material to the case, effectively deprived of the
alternative choices under Article 223 of the Labor Code, not only by virtue of the statutory
injunction but also in view of the interim relinquishment of management control to give way to
the full exercise of the powers of the rehabilitation receiver. Had there been no need to
rehabilitate, respondent may have opted for actual physical reinstatement pending appeal to
optimize the utilization of resources. Then again, though the management may think this wise,
the rehabilitation receiver may decide otherwise, not to mention the subsistence of the injunction
on claims.
In sum, the obligation to pay the employee's salaries upon the employer's failure to exercise the
alternative options under Article 223 of the Labor Code is not a hard and fast rule, considering the
inherent constraints of corporate rehabilitation.
160. SMART COMMUNICATIONS, INC. v. SOLIDUM
G.R. No. 204646 April 15, 2015
Carpio, J.:
DOCTRINE:
Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of
the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until
reversal by the higher court.
FACTS:
Smart hired respondent Solidum as Department Head for Smart Buddy Activation. Smart Buddy Activation is under
the Product Marketing Group which is headed by Isla.
Isla gave Solidum a memorandum informing him of alleged acts of dishonesty, directing him to explain why his
employment should not be terminated, and placing him under preventive suspension without pay for 30 days. On
Solidum submitted his written explanation in response to the notice.
Isla gave Solidum a memorandum informing him of a modified set of alleged acts of dishonesty, directing him to
explain why his employment should not be terminated, extending his preventive suspension by 10 days, and inviting
him to an administrative investigation.Isla gave Solidum a memorandum terminating his employment “for fraud or
willful breach of trust, falsification, misrepresentation, conflict of interest, serious misconduct and dishonesty-
related offenses.” Solidum filed against Smart a complaint for illegal dismissal, illegal suspension, non-payment of
salaries, actual, moral and exemplary damages, and attorney’s fees.
The Labor Arbiter found that Solidum’s preventive suspension and dismissal were illegal and that he was
entitled to full back wages, moral and exemplary damages, and attorney’s fees. LA ordered Solidum’s
reinstatement. The Labor Arbiter issued a writ of execution ordering the sheriff to collect from petitioners
Solidum’s accrued salaries, allowances, benefits, incentives and bonuses. Said Labor Arbiter issued seven other alias
writs of execution ordering the sheriff to collect from petitioners Solidum’s accrued salaries, allowances, benefits,
incentives and bonuses.
On January 26, 2009, the NLRC reversed the Labor Arbiter’s Decision and dismissed for lack of merit
Solidum’s complaint. Solidum filed a motion for reconsideration but was denied on May 29, 2009.
Solidum filed with the Labor Arbiter an ex-parte motion praying that an alias writ of execution be issued
directing the sheriff to collect from petitioners Solidum’s accrued salaries, allowances, benefits, incentives
and bonuses.
LA RULING: LA denied the ex-parte motion because “the recent decision of the NLRC reversing the Decision of
this Office prevents any future issuance of any writ of execution on the reinstatement aspect”
NLRC RULING: Reversed the LA ruling. Since Smart failed to reinstate Solidum, it held that pursuant to Article
223 of the Labor Code, as amended, relative to the reinstatement aspect of the Labor Arbiter’s Decision, respondents
are obligated to pay complainant’s salaries and benefits, computed from the date when respondents received a copy
of the Labor Arbiter’s Decision which, among others, ordered the reinstatement of complainant, up to the date of
finality of the Commission’s resolution reversing the Labor
Arbiter’s Decision.
CA RULING: Upheld NLRC. Reaffirmed the prevailing principle that even if the order of reinstatement of the
Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court.
ISSUES:
a) Is Smart obligated to pay Solidum’s salaries and benefits, computed from the date when respondents
received a copy of the Labor Arbiter’s Decision which ordered the reinstatement of complainant, up
to the date of finality of the Commission’s resolution reversing the Labor Arbiter’s Decision?
b) When did the May 29, 2009 NLRC decision become Final and Executory?

SC RULING:
a) Yes. In Bago v. NLRC, the Court held that employees are entitled to their accrued salaries, allowances,
benefits, incentives and bonuses until the NLRC’s reversal of the labor arbiter’s order of reinstatement
becomes final and executory, as shown on the entry of judgment.
b) August 10, 2009. Rule VII, Sec. 14 of the 2005 Revised Rules of Procedure of the NLRC provides: “The
executive clerk or deputy executive clerk shall consider the decision , resolution or order as final and
executory after sixty (60) days from date of mailing in the absence of return cards, certifications from the
post office, or other proof of service to parties.” Since the May 29, 2009 Decision was mailed on 11 June
2009 and in the absence of return cards, the decision became final and executory on 10 August 2009.
5. FILIPINAS SYSTEMS INC. vs NLRC
GR No.: 153850 Date: December 11, 2003
Ponente: Puno, J.
DOCTRINE:
Art. 223 of the Labor Code and Section 1 of the NLRC Rules of Procedure provide a ten (10)
day period from receipt of the decision of the Arbiter to file an appeal together with an appeal
bond if the decision involves a monetary award. The late filing of the bond divested the NLRC of
its jurisdiction to entertain petitioner’s appeal.
FACTS:
A complaint for illegal dismissal and monetary claims were filed by private respondents against
their employer, Filipinas Systems, Inc. (Filsystems for brevity). Filsystems failed to file its
position paper in spite of the order of the Labor Arbiter prompting the Labor Arbiter to decide in
favor of respondents in the illegal dismissal complaints and awarded their monetary claims.
Filsystems appealed to the NLRC submitting for the first time evidence showing that
respondents were project employees whose dismissal was due to the discontinuation of the
project they were assigned. Respondents Questioned the jurisdiction of the NLRC over the
appeal as petitioner belatedly filed the appeal bond however, the NLRC assumed jurisdiction
and remanded the case to the Labor Arbiter for further proceedings. Respondents’ motion for
reconsideration was denied so they appealed to the CA via a petition for Certiorari. The CA Held
that the NLRC lacks jurisdiction over the appeal for late filing of the appeal bond and reinstated
the Labor Arbiter’s decision. Peitioner’s motion for reconsideration was denied.
ISSUE/S:
1. Whether the NLRC acquired jurisdiction over Petitioners’ appeal.

HELD:
NO.
Art.223 of the Labor Code and Section 1 of the NLRC Rules of Procedure provide a ten(10)day
period from receipt of the decision of the Arbiter to file an appeal together with an appeal bond if
the decision involves a monetary award. Records showed that petitioners received a copy of the
Arbiters decision on October 31. Their memorandum of appeal was dated November 9, but their
appeal bond was e1ected only on November 17. No partial payment of the bond was made
within the reglementary period nor did they submit an explanation for its late filing. The late filing
of the bond divested the NLRC of its jurisdiction to entertain petitioner’s appeal.
Further, petitioners failed to submit their evidence to the Labor Arbiter despite opportunities
given them and only submitted the evidence to the NLRC when the decision was adverse to
their interest. The court dismissed the petition and the decision of the Labor Arbiter was
reinstated with the modification that if reinstatement of respondents is not feasible, petitioner
should pay their separation pay in accordance with law.