LABOR ARBITER & NLRC RULES OF PROCEDURE

Lockheed Detective and Watchman Agency, INC vs.
University of the Philippines
Doctrine: for a claim against a government instrumentality to be
valid (such as UP), the agency should process its claims before
COA after the judgement has been final and executory because
the garnishment involves public funds
This Court finds that the CA correctly applied the NEA case.
Like NEA, UP is a juridical personality separate and distinct
from the government and has the capacity to sue and be sued.
Thus, also like NEA, it cannot evade execution, and its funds
may be subject to garnishment or levy. However, before
execution may be had, a claim for payment of the judgment
award must first be filed with the COA.

Facts: Petitioner Lockheed Detective and Watchman Agency,
Inc. (Lockheed) entered into a contract for security services with
respondent
In 1998, several security guards assigned to UP filed separate
complaints against Lockheed and UP for payment of underpaid
wages, 25% overtime pay, premium pay for rest days and
special holidays, holiday pay, service incentive leave pay, night
shift differentials, 13th month pay, refund of cash bond, refund
of deductions for the Mutual Benefits Aids System (MBAS),
unpaid wages from December 16-31, 1998, and attorney’s fees.
The LA held Lockheed and UP as solidarily liable to
complainants. As the parties did not appeal the NLRC decision,
the same became final and executory. A writ of execution was
then issued but later quashed by the Labor Arbiter upon motion
of UP due to disputes regarding the amount of the award. Later,
however, said order quashing the writ was reversed by the
NLRC.
The NLRC order and resolution having become final, Lockheed
filed a motion for the issuance of an alias writ of execution
which was subsequently granted. A Notice of Garnishment was
issued to Philippine National Bank (PNB) UP Diliman Branch for
the satisfaction of the award.
UP filed an Urgent Motion to Quash Garnishment. UP
contended that the funds being subjected to garnishment at
PNB are government/public funds. The Labor Arbiter, however,
dismissed the urgent motion for lack of merit. UP filed a petition
for certiorari before the CA. The CA held that although the
subject funds do not constitute public funds, in light of the ruling
in the case of National Electrification Administration v. Morales
mandates that all money claims against the government must
first be filed with the Commission on Audit (COA). Hence,
petitioner filed this petition before the SC.
Under Commonwealth Act No. 327, as amended by Section 26
of P.D. No. 1445, it is the COA which has primary jurisdiction to
examine, audit and settle "all debts and claims of any sort" due
from or owing the Government or any of its subdivisions,
agencies and instrumentalities, including government- owned or
controlled corporations and their subsidiaries. With respect to
money claims arising from the implementation of Republic Act
No. 6758,their allowance or disallowance is for COA to decide,
subject only to the remedy of appeal by petition for certiorari to
this Court.
A reading of the pertinent Commonwealth Act provision clearly
shows that it does not make any distinction as to which
of the government subdivisions, agencies and instrumentalities,
including government-owned or controlled corporations and
their subsidiaries whose debts should be filed before the COA.
As to the fait accompli argument of Lockheed, contrary to its
claim that there is nothing that can be done since the funds of
UP had already been garnished, since the garnishment was
erroneously carried out and did not go through the proper
procedure (the filing of a claim with the COA), UP is entitled to
reimbursement of the garnished funds plus interest of 6% per
annum, to be computed from the time of judicial demand to be
reckoned from the time UP filed a petition for certiorari before
the CA which occurred right after the withdrawal of the
garnished funds from PNB.

Issue: Whether or not the garnishment is against the funds of

UP is valid.

Ruling: No

Political Law Doctrine: It is the COA which has primary

jurisdiction to examine, audit and settle "all debts and claims of
any sort" due from or owing the Government or any of its
subdivisions, agencies and instrumentalities, including
government- owned or controlled corporations and their
subsidiaries.

E.R.D.DIMAUNAHAN – EH409 1
 LABOR ARBITER & NLRC RULES OF PROCEDURE

Portillo vs. Rudolf Lietz, Inc. et al.

Doctrine:
1. not all disputes between an employer and his
employee(s) fall within the jurisdiction of the labor
2. tribunals. We differentiated between abandonment per
se and the manner and consequent effects of such
abandonment and ruled that the first, is a labor case,
while the second, is a civil law case.
3. A complaint is grounded not on dismissal per se, as in
fact the employee does not ask for reinstatement or
backwages, but on the manner of his dismissal and the
consequent effects of such dismissal is under the
jurisdiction of regular courts
Facts: Marietta was hired by Rudolf Lietz, Inc. The terms and
conditions provided for liquidated damages in case Marietta will
engage in any gainful employment with any other company
directly or indirectly without the written consent of the company.
After 10 years, she was promoted and her salary raised. This
time, she signed another letter agreement which contained a
“Goodwill Clause” providing for liquidated damages in favour of
the company if she will engage directly to indirectly in any
capacity in a business similar or competitive to that of the
company within 3 years. After 3 years, Marietta resigned from
the company, for the reason that she intend to engage in a rice
dealership business.
Again, the company reminded her of the non-compete clause,
but she jotted a note that the latests contract she signed in 2004
did not contain a “Goodwill Clause” The company wrote back,
informing her that it is standard prescription for a resigned
employee not to engage in a company that competes with the
company’s business, and the document she was alluding to
pertain to an internal memorandum on salary increase.
Subsequently, Lietz learned that Marietta was hired by Ed Keller
Philippines, Limited, a company that directly engaged in
competition with Lietz. When Marietta demanded the payment
of her remaining salaries from Lietz, she was given the run
around, hence, she filed a case for money claims against Lietz,
which in turn answered that it indeed owes Marietta the amount
but that legal compensation applied because she owes the
company liquidated damages due to her violation of the
“Goodwill Clause”.
Ruling: Yes.
There is no causal connection between the petitioner
employees’ claim for unpaid wages and the respondent
employers’ claim for damages for the alleged “Goodwill Clause”
violation. Portillo’s claim for unpaid salaries did not have
anything to do with her alleged violation of the employment
contract as, in fact, her separation from employment is not
“rooted” in the alleged contractual violation. She resigned from
her employment. She was not dismissed.
Portillo’s entitlement to the unpaid salaries is not even
contested. Indeed, Lietz Inc.’s argument about legal
compensation necessarily admits that it owes the money
claimed by Portillo. The alleged contractual violation did not
arise during the existence of the employer-employee
relationship. It was a post-employment matter, a post-
employment violation
When, as here, the cause of action is based on a quasi-delict or
tort, which has no reasonable causal connection with any of the
claims provided for in Article 217, jurisdiction over the action is
with the regular courts. As it is, petitioner does not ask for any
relief under the Labor Code. It merely seeks to recover
damages based on the parties’ contract of employment as
redress for respondent’s breach thereof. Such cause of action is
within the realm of Civil Law, and jurisdiction over the
controversy belongs to the regular courts. More so must this be
in the present case, what with the reality that the stipulation
refers to the post employment relations of the parties.
For sure, a plain and cursory reading of the complaint will
readily reveal that the subject matter is one of claim for
damages arising from a breach of contract, which is within the
ambit of the regular court’s jurisdiction.

The Labor Arbiter ruled in favour of Marietta, and the same

affirmed by the NLRC and the Court of Appeals. On motion for
reconsideration, however, the CA reversed itself and found
Marietta liable for liquidated damages and applied set-off or
compensation, ruling that there was ostensible causal
connection between the unpaid salaries claim of Marietta and
the claim for liquidated damages claimed by Lietz, as they arose
out of the same employment relations. Marietta thus appealed
to the Supreme Court by way of petition for certiorari.

Issue: WON the case should be filed on a regular court

E.R.D.DIMAUNAHAN – EH409 2
 LABOR ARBITER & NLRC RULES OF PROCEDURE

Building Care Corp. vs Macaraeg
Doctrine: The perfection of an appeal within the period and in
the manner prescribed by law is jurisdictional and non-
compliance with such legal requirements is fatal and has the
effect of rendering the judgment final and executory.
timely taking all the proper recourses from the judgment. To
justify an override, the counsel’s negligence must not only be
gross but must also be shown to have deprived the party the
right to due process.

Facts: Petitioners hired respondent as a security guard,

assigning her in Caloocan City. 8 years later, she was re-
assigned to Bayview Park Hotel for 4 days, but after said period,
she was allegedly no longer given any assignment. Conciliation
and mediation proceedings failed.

Respondent then filed an administrative complaint for illegal

dismissal with the PNP-Security Agencies and Guard
Supervision Division, but she did not attend the conference
hearings for said case.

Larbor Arbiter dismissed the complaint. NLRC affirmed LA; the

appeal having been filed out of time, LA’s decision became final
and executory.

CA reversed both LA and NLRC; ruling that Macaraeg was

illegally dismissed and ordered her reinstatement and payment
of backwages and benefits

Issue: W/N CA erred in liberally applying the rules of procedure

and ruling that respondent's appeal should be allowed and
resolved on the merits despite having been filed out of time.

Ruling: Yes

The resort to a liberal application, or suspension of the

application of procedural rules, must remain as the exception to
the well-settled principle that rules must be complied with for the
orderly administration of justice.

To be sure, the relaxation of procedural rules cannot be made

without any valid reasons proffered for or underpinning it. To
merit liberality, petitioner must show reasonable cause justifying
its non-compliance with the rules and must convince the Court
that the outright dismissal of the petition would defeat the
administration of substantial justice. The desired leniency
cannot be accorded absent valid and compelling reasons for
such a procedural lapse.

The perfection of an appeal within the period and in the manner

prescribed by law is jurisdictional and non-compliance with such
legal requirements is fatal and has the effect of rendering the
judgment final and executory. The limitation on the period of
appeal is not without reason. They must be strictly followed as
they are considered indispensable to forestall or avoid
unreasonable delays in the administration of justice, to ensure
an orderly discharge of judicial business, and to put an end to
controversies.

The Court will not override the finality and immutability of a

judgment based only on the negligence of a party’s counsel in

E.R.D.DIMAUNAHAN – EH409 3
 LABOR ARBITER & NLRC RULES OF PROCEDURE
McBurnie vs Ganzon, EGI-Managers Inc.
Doctrine: Two conditions for a Motion to Reduce Bond to be
effectual; Filing of a motion to reduce bond shall not stop the
running of the period to perfect an appeal is not absolute
(exceptional circumstances)
Facts: McBurnie, an Australian national, instituted a complaint
for illegal dismissal and other monetary claims against
respondents. He claimed that he signed a 5-year employment
agreement with EGI as an Executive Vice-President who shall
oversee the management of the company hotels and resorts
within the Philippines. He worked for 6 months until he figured in
an accident that compelled him to go back to Australia while
recuperating from his injuries. While in Australia, he was
informed by respondent Ganzon that his services were no
longer needed because their intended project would no longer
push through.
Labor Arbiter declared McBurnie as having been illegally
dismissed from employment. The respondents filed their
Memorandum of Appeal and Motion to Reduce Bond, since it
was P60 Million, and posted an appeal bond in the amount of
P100,000.
NLRC denied the motion explaining that in cases involving
monetary award, an employer seeking to appeal the LA
decision to the Commission is unconditionally required by Art.
223 Labor Code to post bond equivalent to the monetary award.
NLRC also required them to post an additional bond of P54
Million. It eventually dismissed respondents’ appeal for failure to
post the appeal bond.
CA granted respondents’ petition for certiorari. It 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. "While Art. 223 requiring
bond equivalent to the monetary award is explicit, Section 6,
Rule VI of the NLRC Rules of Procedure recognized as
exception a motion to reduce bond upon meritorious grounds
and upon posting of a bond in a reasonable amount in relation
to the monetary award." The appeal bond was prohibitive and
excessive.
Issue: W/N the appeal bond posted by respondents was
sufficient
Ruling:
Rule on appeal bonds: Section 6, Rule VI of the 2011 NLRC
Rules of Procedure: No motion to reduce bond shall be
entertained except on meritorious grounds and upon the posting
of a bond in a reasonable amount in relation to the monetary
award. The filing of the motion to reduce bond without
compliance with the requisites in the preceding paragraph shall
not stop the running of the period to perfect an appeal.
E.R.D.DIMAUNAHAN – EH409
While the CA, in this case, allowed an appeal bond in the
reduced amount of P10,000,000.00 and then ordered the case
remand to the NLRC, this Court Decision dated September 18,
2009 provides otherwise, as it reads in part: While the bond
may be reduced upon motion by the employer, this is subject to
the conditions that (1) the motion to reduce the bond shall be
based on meritorious grounds; and (2) a reasonable amount in
relation to the monetary award is posted by the appellant,
otherwise the filing of the motion to reduce bond shall not stop
the running of the period to perfect an appeal. The qualification
effectively requires that unless the NLRC grants the reduction of
the cash bond within the 10-day reglementary period, the
employer is still expected to post the cash or surety bond
securing the full amount within the said 10-day period. If the
NLRC does eventually grant the motion for reduction after the
reglementary period has elapsed, the correct relief would be to
reduce the cash or surety bond already posted by the employer
within the 10-day period.
Suspension of the period to perfect the appeal upon the filing of
a motion to reduce bond. 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 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
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 rule that the filing of a motion to reduce bond shall not stop
the running of the period to perfect an appeal is not absolute.
The Court may relax the rule. An appeal from a decision
involving a monetary award may be perfected only upon the
posting of cash or surety bond. The Court, however, has
relaxed this requirement under certain exceptional
circumstances in order to resolve controversies on their merits.
These are: (1) fundamental consideration of substantial justice;
(2) prevention of miscarriage of justice or of unjust enrichment;
and (3) special circumstances of the case combined with its
legal merits, and the amount and the issue involved.
A serious error of the NLRC was its outright denial of the motion
to reduce the bond, without even considering the respondent's
arguments and totally unmindful of the rules and jurisprudence
that allow the bond reduction. Instead of resolving the motion to
reduce the bond on its merits, the NLRC insisted on an amount
that was equivalent to the monetary award.
When the respondents sought to reconsider, the NLRC still
refused to fully decide on the motion. It refused to at least make
a preliminary determination of the merits of the appeal.
Time and again, the Court has cautioned the NLRC to give
Article 223 of the Labor Code, particularly the provisions
requiring bonds in appeals involving monetary awards, a liberal
interpretation in line with the desired objective of resolving
controversies on the merits.
4
 LABOR ARBITER & NLRC RULES OF PROCEDURE

Although the general rule provides that an appeal in labor cases

from a decision involving a monetary award may be perfected
only upon the posting of a cash or surety bond, the Court has
relaxed this requirement under certain exceptional
circumstances (see above) in order to resolve controversies on
their merits. The bond requirement in appeals involving
monetary awards has been and may be relaxed in meritorious
cases, including instances in which (1) there was substantial
compliance with the Rules, (2) surrounding facts and
circumstances constitute meritorious grounds to reduce the
bond, (3) a liberal interpretation of the requirement of an appeal
bond would serve the desired objective of resolving
controversies on the merits, or (4) the appellants, at the very
least, exhibited their willingness and/or good faith by posting a
partial bond during the reglementary period.

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 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 fees. Only after the
posting of a bond in the required percentage shall an appellant
period to perfect an appeal under the NLRC Rules be deemed
suspended.

E.R.D.DIMAUNAHAN – EH409 5
 LABOR ARBITER & NLRC RULES OF PROCEDURE
Indophil Textile Mills, Inc. v. Adviento
Doctrine: Claims for damages under Article 217 (a) (4) of
the Labor Code, to be cognizable by the LA, must have
reasonable causal connection with any of the claims
provided for in that article.
Facts: Engr. Adviento consulted a physician due to
recurring weakness and dizziness. Few days later, he
was diagnosed with Chronic Poly Sinusitis, and
thereafter, with moderate, severe and persistent Allergic
Rhinitis. He filed a complaint against his employer,
Indophil Textile Mills, Inc. with the NLRC for alleged
illegal dismissal and for the payment of backwages,
separation pay, actual damages and attorney's fees. The
said case is still pending resolution with the NLRC at the
time the instant petition was filed. Subsequently, he filed
another Complaint with the RTC of Aparri, Cagayan,
alleging that he contracted such occupational disease by
reason of the gross negligence of ITM to provide him with
a safe, healthy and workable environment.
He alleged that as part of his job description, he conducts
regular maintenance check on petitioner's facilities
including its dye house area, which is very hot and emits
foul chemical odor with no adequate safety measures
introduced by the company. He recommended to
management to place roof insulation to minimize, if not,
eradicate the health hazards attendant in the work place.
However, such was turned down due to high cost. He
further suggested to the management that the
engineering office be relocated because of its dent prone
location. This was further aggravated by the installation
of new filters fronting the office. However, no action was
taken by management
He further averred that, being the only breadwinner in the
family, he made several attempts to apply for a new job,
but to his dismay and frustration, employers who knew of
his present health condition discriminated against him
and turned down his application. By reason thereof,
respondent suffered intense moral suffering, mental
anguish, serious anxiety and wounded feelings, praying
for the recovery of moral, exemplary and compensatory
damages.
In reply, ITM filed a Motion to Dismiss on the ground that:
(1) the RTC has no jurisdiction over the subject matter of
the complaint because the same falls under the original
and exclusive jurisdiction of the Labor Arbiter (LA) under
Article 217 (a) (4) of the Labor Code; and (2) there is
another action pending with the Regional Arbitration
Branch of NLRC, involving the same parties for the same
cause.
E.R.D.DIMAUNAHAN – EH409
Issues:
WON the RTC has jurisdiction over the subject matter of
respondent's complaint praying for moral damages,
exemplary damages, compensatory damages, anchored
on petitioner's alleged gross negligence in failing to
provide a safe and healthy working environment for
respondent.
Ruling: Yes
The jurisdiction of the LA and the NLRC is outlined in
Article 217 of the Labor Code, as amended by Section 9
of RA No. 6715. Jurisprudence has evolved the rule that
claims for damages under Article 217 (a) (4) of the Labor
Code, to be cognizable by the LA, must have a
reasonable causal connection with any of the claims
provided for in that article. Only if there is such a
connection with the other claims can a claim for damages
be considered as arising from employer-employee
relations.
In the case at bench, such connection is absent. True,
the maintenance of a safe and healthy workplace is
ordinarily a subject of labor cases. More, the acts
complained of appear to constitute matters involving
employee-employer relations since respondent used to
be the Civil Engineer of petitioner. However, it should be
stressed that respondent's claim for damages is
specifically grounded on petitioner's gross negligence to
provide a safe, healthy and workable environment for its
employees — a case of quasi-delict. It also bears
stressing that respondent is not praying for any relief
under the Labor Code of the Philippines. He neither
claims for reinstatement nor backwages or separation
pay resulting from an illegal termination. The cause of
action herein pertains to the consequence of petitioner's
omission which led to a work-related disease suffered by
respondent, causing harm or damage to his person.
Such cause of action is within the realm of Civil Law, and
jurisdiction over the controversy belongs to the regular
courts. Where the resolution of the dispute requires
expertise, not in labor management relations nor in wage
structures and other terms and conditions of
employment, but rather in the application of the general
civil law, such claim falls outside the area of competence
of expertise ordinarily ascribed to the LA and the NLRC.
6
 LABOR ARBITER & NLRC RULES OF PROCEDURE
Manila Mining Corp. v. Amor
Doctrine: 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:
Amor, et al were regular employees of Manila Mining
Corporation, a domestic corporation which operated a mining
claim. When the mine tailings reached the maximum level, the
corporation temporarily shut down its mining operations. The
corporation served a notice, informing its employees and the
DOLE of the temporary suspension of its operations for 6
months and the temporary lay-off of 2/3 of its employees. After
the lapse of said period, petitioner notified the DOLE that it was
extending the temporary shutdown of its operations for another
6 months. Adversely affected, Amor et al filed the complaint for
constructive dismissal and monetary claims before the Regional
Arbitration Branch of the NLRC.
Executive LA: MMC liable for constructive dismissal in view of
the suspension of its operations beyond the six-month period
allowed under Article 286 of the Labor Code of the Philippines.
MMC – memorandum of appeal before NLRC; motion to reduce
bond to P100,000.00; monetary award is P2,138,190.02.
Amor et al – motion to dismiss the appeal; receipt of the
appealed decision on 24 November 2004; mailed the
memorandum of appeal only on 7 February 2005 (after 65
days); appeal bond tendered was so grossly disproportionate to
the monetary award.
NLRC: Employees are not entitled to separation pay
considering the eventual closure of their employer's business
due to serious business losses or financial reverses.
CA (Rule 65): MMC failed to perfect its appeal.
Issue: WON the decision of LA had already attained finality and,
for said reason, had been placed beyond the NLRC’s power of
review.
Ruling: Yes
Article 223 of the Labor Code of the Philippines provides that
decisions, awards, or orders of the LA are final and executory
unless appealed to the NLRC by any or both parties within 10
calendar days from the receipt of such decisions, awards or
orders. 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 NLRC in the amount equivalent
to the monetary award in the judgment appealed from. No
motion to reduce bond shall be entertained except on
E.R.D.DIMAUNAHAN – EH409
meritorious grounds and upon the posting of a bond in a
reasonable amount in relation to the monetary award. The filing
of the motion to reduce bond without compliance with the
requisites shall not stop the running of the period to perfect an
appeal.
In the case at bar, having received the LA’s Decision on Nov 24,
2004, MMC had 10 calendar days or until Dec 4, 2004 within
which to perfect an appeal. Considering that the latter date fell
on a Saturday, it had until the next working day, Dec 6, 2004,
within which to comply with the requirements for the perfection
of its appeal.
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 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 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 10-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 10 days from notice of the NLRC order within
which to perfect the appeal by posting the required
appeal bond.
In this case, we see that with no proof to substantiate its claim,
MMC moved for a reduction of the appeal bond on the preferred
basis of serious losses and reverses it supposedly sustained in
the years prior to the rendition of the LA's decision. The first
condition may be left for the nonce. As to the second condition,
we may consider that the amount of P100,000.00 supposedly
posted was provisional bond sufficient to suspend the running of
the 10-day reglementary period to perfect an appeal from the
Labor Arbiter's decision. That would however not improve
MMC’s position one bit. Amor correctly called attention to the
fact that the check submitted by petitioner was dishonored upon
presentment for payment, thereby rendering the tender thereof
ineffectual. Although the NLRC chose not to address the issue
of the perfection of the appeal as well as the reduction of the
7
 LABOR ARBITER & NLRC RULES OF PROCEDURE

bond in its Resolution, the record shows that petitioner only

manifested its deposit of the funds for the check 24 days before
the resolution of its appeal or 116 days after its right to appeal
the LA’s decision had expired. Having filed its motion and
memorandum on the very last day of the reglementary period
for appeal, moreover, MMC had no one but itself to blame for
failing to post the full amount pending the NLRC's action on its
motion for reduction of the appeal bond. Since it is the posting
of a cash or surety bond which confers jurisdiction upon the
NLRC, the rule is settled that non-compliance is fatal and has
the effect of rendering the award final and executory. Viewed in
the light of the foregoing considerations, the CA cannot be
faulted for no longer discussing the merits of MMC’s case. 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.

E.R.D.DIMAUNAHAN – EH409 8
 LABOR ARBITER & NLRC RULES OF PROCEDURE
Toyota Alabang Inc. vs. Edwin Games
Doctrine: Appeal bond is required in all decisions of the LA
involving monetary awards; appeal is a mere statutory right and
therefore should be taken in accordance with the rules provided
in the NLRC Rules of Procedure.
Facts: Games, who worked as a foreman for petitioner,
allegedly stole its vehicle lubricants. Subsequently, it charged
him with qualified theft before the trial court. Two years
thereafter, Games filed a Complaint for illegal dismissal,
nonpayment of benefits, and damages against petitioner. The
latter, through counsel, failed to file its Position Paper on the
date set.
Several resettings of the hearings ensued. During one of the
hearings, petitioner manifested that it had failed to file its
Position Paper because its handling lawyer was no longer
connected with the company. Then, in another hearing,
petitioner failed to appear and even reneged on submitting its
pleading. Accordingly, the case was declared submitted for
decision.
LA: Ruled against petitioner and ordered the latter to pay
Games P535,553.07 for his separation pay, back wages,
service incentive leave pay and attorney's fees resulting from
his illegal dismissal. Petitioner did not file a motion for
reconsideration so the LA's ruling became final and executory.
Accordingly, LA issued a Writ of Execution which petitioner
sought to quash. It prayed that the proceedings be reopened,
explaining that it had failed to present evidence because of its
counsel's negligence in filing the appropriate pleadings. LA
denied the claims of petitioner.
NLRC: Denied petitioner’s appeal for failure to show proof of its
security deposit for the appeal bond action must comply with the
requirements of the 2011 NLRC Rules of Procedure as regards
the period, grounds, venue, fees, bonds, and other requisites for
a proper appeal before the NLRC; and in Section 6, Rule VI, the
aforesaid rules prohibit appeals from final and executory
decisions of the Labor Arbiter.
CA: Denied the appeal. First, petitioner failed to comply with the
bond requirement. Second, a final judgment is no longer
appealable. Third, petitioner’s own negligence caused it to lose
its right to appeal.
Issues:
Whether or not the requirement of posting an appeal bond does
not cover an appeal from a decision of the LA denying a motion
to quash writ of execution; and
Whether or not NLRC erred in requiring petitioner to accompany
the appeal bond with proof of a security deposit or collateral
securing the bond.
E.R.D.DIMAUNAHAN – EH409
Ruling: No;
Article 223 of the Labor Code and Section 6, Rule VI of the
2011 NLRC Rules of Procedure, uniformly state thus: In case
the decision of the Labor Arbiter or the Regional Director
involves a monetary award, an appeal by the employer may be
perfected only upon the posting of a bond, which shall either be
in the form of cash deposit or surety bond equivalent in amount
to the monetary award, exclusive of damages and attorney's
fees.
Evidently, the above rules do not limit the appeal bond
requirement only to certain kinds of rulings of the LA. Rather,
these rules generally state that in case the ruling of the LA
involves a monetary award, an employer's appeal may be
perfected only upon the posting of a bond. Therefore, absent
any qualifying terms, so long as the decision of the LA involves
a monetary award, as in this case, that ruling can only be
appealed after the employer posts a bond.
According to the NLRC and the CA, the bonding company's
mere declaration in the Certification of Security Deposit that the
bond is fully secured is not tantamount to a faithful compliance
with the rule, because there must first be an accompanying
assignment of the employer's bank deposit.
Notwithstanding this issue, the NLRC has given a well-founded
reason for refusing to entertain petitioner's appeal, namely, no
appeal may be taken from an order of execution of a final and
executory judgment.
An appeal is not a matter of right, but is a mere statutory
privilege. It may be availed of only in the manner provided by
law and the rules. Thus, a party who seeks to elevate an action
must comply with the requirements of the 2011 NLRC Rules of
Procedure as regards the period, grounds, venue, fees, bonds,
and other requisites for a proper appeal before the NLRC; and
in Section 6, Rule VI, the aforesaid rules prohibit appeals from
final and executory decisions of the Labor Arbiter.
9
 LABOR ARBITER & NLRC RULES OF PROCEDURE
Social Security System vs. Debbie Ubaña
Doctrine: Regular courts have jurisdiction when there is no
employer-employee relationship.
Facts: Debbie Ubana filed a complaint before the RTC of Daet,
Camarines Norte, alleging that she applied for employment with
the SSS. However, after passing the examinations and
accomplishing all the requirements for employment, she was
instead referred to DBP Service Corporation for "transitory
employment." On May 28, 1996, she was made to sign a six-
month Service Contract Agreement by DBP Service Corporation
with a daily wage of only P171.00. On December 16, 2001, she
was transferred to the SSS Retirees Association as Processor
at the Membership Section until her resignation on August 26,
2002. As Processor, she was paid only P229.00 daily or
P5,038.00 monthly, while a regular SSS Processor receives a
monthly salary of P18,622.00 or P846.45 daily wage. Her May
28, 1996 Service Contract Agreement with DBP Service
Corporation was never renewed, but she was required to work
for SSS continuously under different assignments with a
maximum daily salary of only P229.00; at the same time, she
was constantly assured of being absorbed into the SSS
plantilla. Because of the oppressive and prejudicial treatment by
SSS, she was forced to resign on August 26, 2002 as she could
no longer stand being exploited, the agony of dissatisfaction,
anxiety, demoralization, and injustice. She asserted that she
dedicated six years of her precious time faithfully serving SSS,
foregoing more satisfying employment elsewhere, yet she was
merely exploited and given empty and false promises.
SSS’s contention: (1) maintains that there is a direct causal
connection between respondent's claims and her employment,
which brings the subject matter within the jurisdiction of the
NLRC and (2) its existing manpower services agreements with
DBP Service Corporation and SSS Retirees Association are
legitimate; and that some of respondent's claims may not be
entertained since these pertain to benefits enjoyed by
government employees, not by employees contracted via
legitimate manpower service providers.
Debbie’s contention: (1) her case is predicated not on labor
laws but on Articles 19 and 20 of the Civil Code for petitioner's
act of exploiting her and enriching itself at her expense by not
paying her the correct salary commensurate to the position she
held within SSS.
RTC: Dismissed the complaint for lack of jurisdiction at first but
granted respondents motion for reconsideration on the ground
that primary relief sought herein is for moral and exemplary
damages for the abuse of rights under Articles 19 and 20 of the
Civil Code.
CA: Affirmed RTC.
E.R.D.DIMAUNAHAN – EH409
Issue: Whether or not it is the NLRC that has jurisdiction over
the case.
Ruling: No
In her Complaint, respondent acknowledges that she is not
petitioner's employee, but that precisely she was promised that
she would be absorbed into the SSS plantilla after all her years
of service with SSS, and in its pleadings, petitioner denied the
existence of an employer -employee relationship between it and
respondent. Since both parties admit that there is no
employment relation between them, then there is no dispute
cognizable by the NLRC.
There being no employer-employee relation or any other
definite or direct contract between respondent and petitioner,
the latter being responsible to the former only for the proper
payment of wages under Article 19 and 20 of CC. The very
broad Article 19 of the Civil Code requires every person, 'in the
exercise of his rights and in the performance of his duties, [to]
act with justice, give everyone his due, and observe honesty
and good faith'.
It is indeed unfair and unjust that as Processor who has worked
with petitioner for six long years, she was paid only P5,038.00
monthly, or P229.00 daily, while a regular SSS employee with
the same designation and who performs identical functions is
paid a monthly salary of P18,622.00, or P846.45 daily wage.
Petitioner may not hide under its service contracts to deprive
respondent of what is justly due her. As a vital government
entity charged with ensuring social security, it should lead in
setting the example by treating everyone with justice and
fairness.
In this jurisdiction, the long honored legal truism of ‘equal pay
for equal work’ has been impregnably institutionalized; persons
who work with substantially equal qualifications, skill, effort and
responsibility, under similar conditions, should be paid similar
salaries.
10
 LABOR ARBITER & NLRC RULES OF PROCEDURE

Ilaw Buklod ng Manggawa Nestle Phils. Chapter enforce the same judgment had prescribed by the time they
vs Nestle Phils filed their Motion for Writ of Execution on January 25, 2010.
It is true that there are instances in which this Court allowed
execution by motion even after the lapse of five years upon
Doctrine: A decision or order may be executed on motion within meritorious grounds. However, in instances when this Court
five (5) years from the date it becomes final and executory. allowed execution by motion even after the lapse of five years,
After the lapse of such period, the judgment shall become there is, invariably, only one recognized exception, i.e., when
dormant, and may only be enforced by an independent action the delay is caused or occasioned by actions of the judgment
within a period of ten (10) years from date of its finality. debtor and/or is incurred for his benefit or advantage.14 In the
present case, there is no indication that the delay in the
Facts: Petitioner union staged a strike against herein execution of the MOA, as claimed by petitioners, was caused by
respondent citing as grounds the alleged respondent’s violation respondent nor was it incurred at its instance or for its benefit or
of the CBA, dismissal of union officers and members, advantage
discrimination and other unfair labor practice acts. Respondent
filed with the NLRC a petition for Injunction with Prayer for
issuance of TRO. It was granted. Respondent then filed a
Petition to Declare Strike Illegal. Subsequently, the DOLE
Secretary assumed jurisdiction over the strike and certified the
same to the NLRC, but the petitioner questioned such
assumption. However, after series of conciliation meetings and
discussion between the parties, they arrived at a compromise
and executed a MOA on August 4, 1998 which was approved
by the NLRC on October 12, 1998. On January 25, 2010, or
after a lapse of more than 11 years, petitioners filed with the
NLRC a Motion for Writ of Execution contending that they have
not been paid the amounts they are entitled to in accordance
with the MOA. Respondent filed opposition contending
prescription.

Issue: WON petitioner’s claim is barred by prescription.

Ruling: Yes

The most relevant rule in the instant case is Section 8, Rule XI,
2005 Revised Rules of Procedure of the NLRC which states
that:

Section 8. Execution By Motion or By Independent Action. - A

decision or order may be executed on motion within five (5)
years from the date it becomes final and executory. After the
lapse of such period, the judgment shall become dormant, and
may only be enforced by an independent action within a period
of ten (10) years from date of its finality.

In the present case, the five-and ten-year periods provided by

law and the rules are more than sufficient to enable petitioners
to enforce their right under the subject MOA. In this case, it is
clear that the judgment of the NLRC, having been based on a
compromise embodied in a written contract, was immediately
executory upon its issuance on October 12, 1998. Thus, it could
have been executed by motion within five (5) years. It was not.
Nonetheless, it could have been enforced by an independent
action within the next five (5) years, or within ten (10) years from
the time the NLRC Decision was promulgated. It was not.
Therefore, petitioners' right to have the NLRC judgment
executed by mere motion as well as their right of action to

E.R.D.DIMAUNAHAN – EH409 11
 LABOR ARBITER & NLRC RULES OF PROCEDURE
Quantum Foods vs Esloyo
Doctrine: It is well to emphasize that technical rules are not
binding in cases submitted before the NLRC. In fact, labor
officials are enjoined to use every and reasonable means to
ascertain the facts in each case speedily and objectively,
without regard to technicalities of law or procedure, in the
interest of due process.
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.
Facts: Petitioner, a domestic corporation engaged in the
distribution and selling of food products nationwide, hired
respondents Esloyo and Magsila. However, petitioner later on
decided to reorganize its sales force nationwide following a
drastic drop in net income and Magsila was among those
retrenched. Subsequently, Esloyo was also informed of his
termination from work on the ground of loss of trust and
confidence due to his numerous violations of the company rules
and regulation. Respondents then filed complaint for illegal
dismissal with money claims. LA ruled in favor of the
respondents herein.
Petitioner filed an appeal before the NLRC. However,
respondents filed a motion to dismiss the appeal for petitioner’s
failure: (a) to attach a Verification and Certification of Non-
Forum Shopping as required by the New Rules and Procedure
of the NLRC; and (b) to post a bond in an amount equivalent to
the monetary judgment as mandated by law. Nevertheless,
these were complied with subsequently and before the NLRC
can rule. NLRC reversed the decision of LA and ruled that there
was no illegal dismissal. But the CA reversed the NLRC ruling
and reinstated the LA ruling and further ruling that NLRC acted
with abuse of discretion on upholding the appeal despite its
infirmities.
Issue: WON the CA erred in ascribing grave abuse of discretion
on the part of the NLRC in giving due course to petitioner’s
appeal.
Ruling: Yes
The rule is that in case of a judgment involving a monetary
award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in the
amount equivalent to the monetary award in the judgment
appealed from.
In the line of cases that were decided by the court, it ruled that
subsequent submission of proof of authority to act on behalf of a
E.R.D.DIMAUNAHAN – EH409
petitioner corporation justifies the relaxation of the Rules for the
purpose of allowing its petition to be given due course. That
under justifiable circumstances, the Court has relaxed the rule
requiring the submission of such certification of non-forum
shopping considering that although it is obligatory, it is not
jurisdictional. It is well to emphasize that technical rules are not
binding in cases submitted before the NLRC. In fact, labor
officials are enjoined to use every and reasonable means to
ascertain the facts in each case speedily and objectively,
without regard to technicalities of law or procedure, in the
interest of due process. Consequently, the NLRC cannot be
faulted for relaxing its own rules in the interest of substantial
justice.
Coming now to the bond requirement, while it has been settled
that the posting of a cash or surety bond is indispensable to the
perfection of an appeal in cases involving monetary awards
from the decision of the LA,63 in several cases, the Court has
relaxed this stringent requirement whenever justified. No motion
to reduce bond shall be entertained except on meritorious
grounds, and only upon the posting of a bond in a reasonable
amount in relation to the monetary award.
The bond requirement on appeals involving monetary awards
has been and may be relaxed in meritorious cases. These
cases include instances in which (1) there was substantial
compliance with the Rules, (2) surrounding facts and
circumstances constitute meritorious grounds to reduce the
bond, (3) a liberal interpretation of the requirement of an appeal
bond would serve the desired objective of resolving
controversies on the merits, or (4) the appellants, at the very
least, exhibited their willingness and/or good faith by posting a
partial bond during the reglementary period.
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.
Hence, the posting of a P400,000.00 cash bond equivalent to
more than 20% of the monetary judgment, together with the
Motion to Reduce Bond within the reglementary period was
sufficient to suspend the period to perfect the appeal. The
posting of the said partial bond coupled with the subsequent
posting of a surety bond in an amount equivalent to the
monetary judgment also signified QFI's good faith and
willingness to recognize the final outcome of its appeal.
12
 LABOR ARBITER & NLRC RULES OF PROCEDURE

E.R.D.DIMAUNAHAN – EH409 13
 LABOR ARBITER & NLRC RULES OF PROCEDURE
De la Rosa Liner Inc v. Borela
Doctrine: Forum Shopping. The elements of forum shopping
are: (1) identity of parties; (2) identity of rights asserted and
relief prayed for, the relief being founded on the same facts;
and (3) identity of the 2 preceding particulars such that
judgement rendered in the other action will amount to res
judicata in the other action. The test to determine whether there
is identity in causes of action is whether the same facts or
evidence would support both actions, or whether identity in the
facts is essential to the maintenance of both actions.
Facts: September 23, 2011, respondents Calixto Borela, a bus
driver, and Estelo Amarille, conductor, filed complaints against
petitioners Dela Rosa Liner, a public transport company,
Rosauro Dela Rosa Sr., and Nora Dela Rosa, for
underpayment/non-payment of salaries, holiday pay, overtime
pay, service incentive leave, 13th month pay, sick leave and
vacation leave, night shift differential, illegal deductions, and
violation of Wage Order Nos. 13, 14, 15 and 16.
In a motion dated Oct. 26, 2011, petitioners asked the LA to
dismiss the case for forum shopping. They alleged that on Sept.
28, 2011, the CA 13th Division disposed of a similar case
between the parties after they entered into a compromise
agreement. Respondents opposed the motion, contending that
the causes of action are different.
Ruling on Compulsory Arbitration: Upheld the petitioners’
position and dismissed the complaint on the grounds of forum
shopping. Respondent appealed the LA’s ruling. On July 31
2012, the NLRC 1st Division granted the appeal, reversed LA’s
dismissal order, and reinstated the complaint.
NLRC held that the respondents could not have committed
forum shopping because there was no identity of causes of
action between the two cases. The first complaint charged the
petitioners with illegal dismissal and unfair labor practice, while
the second was based on non-payment/underpayment of
salaries and monetary benefits, and violation of wage orders.
Petitioner moved for reconsideration, but NLRC denied.
CA Decision: CA denied the petitioner. It found no grave abuse
of discretion in the NLRC ruling. The parties resolved the first
case through a compromise agreement, but it had a different
cause of action.
Issue: Whether or not the CA erred in ruling that there was no
forum shopping nor res judicata
Ruling:
Supreme Court ruled that the NLRC did not commit any grave
abuse of discretion when it ruled that the second complaint is
E.R.D.DIMAUNAHAN – EH409
not barred by the rule on forum shopping nor by the principle of
res judicata.
Contrary to petitioners’ submission, respondents’ second
complaint, a money claim, is not a similar case to the first
complaint. Thus, the filing of the second complaint did not
constitute forum shopping and the judgement in the first case is
not a res judicata ruling that bars the second complaint.
The CA established the elements of forum shopping which are:
(1) identity of parties; (2) identity of rights asserted and relief
prayed for, and (3) identity of the two preceding particulars such
that any judgement in one would bar the other on the ground of
res judicata. Supreme Court said that there is no identity of
rights asserted and reliefs prayed for, and the judgement in the
first case does not amount to res judicata.
There is also no identity of causes of action in the first and
second complaint. In Yap v. Chua, it was held that the test to
ascertain whether there is an identity in causes of action is if the
same evidence would support both actions, or whether there is
an identity in the facts essential to the two actions. Under the
circumstances of the case at bar, sufficient basis exists that
there is no identity of causes of action between the 2
complaints. CA was correct in holding that the same
facts/evidence would not support both actions.
The petitioners’ argument that the Compromise Agreement
covered all claims and causes of action cannot be accepted.
The Compromise Agreement expressly stated that no further
actions shall be brought on the same grounds. The phrase
same grounds can only refer to the grounds raised in the first
complaint. The coverage of “covered all claims and causes of
action” cannot be allowed because it is too sweeping and
effectively excludes all other claims by the respondents against
petitioner, including those that cannot be waived without
appropriate consideration.
14
 LABOR ARBITER & NLRC RULES OF PROCEDURE
Fontana Dev. Corp. v. Vukasinovic
Doctrine: Penalty for forum shopping is summary dismissal not
only of the case pending in this Court, but of all cases pending
in the lower courts. Elements of forum shopping: identity of
parties, identity of rights asserted, and identity of the two
preceding particulars.
Facts: Sascha Vukasinovic was hired by petitioner Fontana
Dev. Corp. (FDC) as its Director for Business Development for
one year. His employment was renewed for another year at the
end of his first contract. Sometime in May 2010, he allegedly
received a text message from one Jenny Mallari informing him
that Nestor Dischoso and Chief Hotel Engineer Jaime Villareal,
both officers of FDC, were receiving commission from company
transactions.
Thereafter, respondent met with Mallari and offered her money
in exchange for evidence. She gave him a photocopy of a check
issued to Engr. Villareal, as proof of receiving commission. The
check however, had an alteration so respondent asked Mallari
to execute an affidavit and provide more proof. Mallari was paid
14,000.
Mallari gave respondent 2 invoices issued by suppliers. Again,
there were discrepancies. Consequently, further investigations
were to be made on the alleged corruptions of Engr. Villareal.
On June 15, 2010, Engr. Villareal and Mallari were brought to
the NBI for questioning. Mallari denied that Engr. Villareal asked
for commission from her and said she merely fabricated the
story to ask money from respondent.
Engr. Villareal filed a complaint claiming that respondent paid
Mallari to fabricate a story depicting him as a corrupt employee.
Respondent did not deny the allegations and instead admitted
that he gave money to Mallari because it is practice in Fontana
to give money to informants for vital information. Thus, FDC
terminated respondent’s employment after finding him guilty of
acts of dishonest in the form of bribery. Respondent however,
refused to acknowledge its receipt and instead filed a complaint
for illegal dismissal.
Ruling of the LA: Dismissed the complaint for lack of factual or
legal basis, and ruled that respondent cannot be regularized as
he is an employee with a legal and valid fixed-term employment
and his dismissal was for just cause.
Ruling of the NLRC: Dismissed appeal and affirmed LA.
Ruling of the CA: CA ordered award of unpaid salaries, but
affirmed the decision that it was a valid dismissal.
Issue: Whether or not the CA gravely erred in not dismissing the
petition for forum shopping
E.R.D.DIMAUNAHAN – EH409
Ruling:
Petition is meritorious. Respondent is guilty of forum shopping.
There is forum shopping when a party repetitively avails of
several judicial remedies in different courts, simultaneously or
successively, all substantially founded on the same transactions
and the same essential facts and circumstances, and all raising
similar issues either pending or already resolved.
The test for determining the existence of forum shopping is
whether a final judgment in one case amounts tores judicata in
another or whether the following elements of litis pendentia are
present: (a) identity of parties, or at least such parties as
representing the same interests in both actions; (b) identity of
rights asserted and reliefs prayed for, the relief being founded
on the same facts; and (c) the identity of the two preceding
particulars, such that any judgment rendered in the other action
will, regardless of which party is successful, amount to res
judicata in the action under consideration. Said requisites are
also constitutive of the requisites for auter action pendant or lis
pendens. In this case, there is no doubt that all the elements are
established.
When there is forum shopping, all pending claims on the same
claim must be dismissed. The penalty for forum shopping is
summary dismissal not only of the petition pending before this
Court, but also of the other cases pending in the lower courts.
This is so because twin dismissal is the punitive measure to
those who trifle with the orderly administration of justice.
The rule essentially penalizes the forum shopper by dismissing
all pending actions on the same claim filed in any court.
Because of the severity of the penalty of the rule, an
examination must first be made on the purpose of the rule. The
purpose of the rule is to avoid multiplicity of suits and to prevent
a party from instituting two or more actions or proceeding
involving the same parties for the same cause of action, either
simultaneously or successively, on the supposition that one or
the other court would make a favorable disposition.
What is critical is the vexation brought upon the courts and the
litigants by a party who asks different courts to rule on the
same or related causes and grant the same or substantially the
same reliefs and in the process, creates the possibility of
conflicting decisions being rendered by the different fora upon
the same issues. Willful and deliberate violation of the rule
against forum shopping is a ground for summary dismissal of
the case; it may also constitute direct contempt.
15