University Plans v. Solano (G.R. No. 170416; June 22, 2011)

CASE DIGEST: UNIVERSITY PLANS INCORPORATED, Petitioner, v. BELINDA P. SOLANO, TERRY A. LAMUG, GLENDA S. BELGA, MELBA S. ALVAREZ, WELMA R. NAMATA, MARIETTA D. BACHO and MANOLO L. CENIDO, Respondents.

FACTS: Respondents filed before the Labor Arbiter complaints for illegal dismissal, illegal deductions, overriding commissions, unfair labor practice, moral and exemplary damages, and actual damages against petitioner University Plans Incorporated.

The Labor Arbiter found petitioner guilty of illegal dismissal and ordered respondents reinstatement as well as the payment of their full backwages, proportionate 13th month pay, moral/exemplary damages, and attorney's fees.

On appeal, petitioner likewise Motion to Reduce Bond alleging that it was under receivership and that it cannot dispose of its assets at such a short notice.Because of this, it could not post the required bond.Nevertheless, it has P30,000.00 available for immediate disposition and thus prayed that said amount be deemed sufficient to satisfy the required bond for the perfection of its appeal. But the NLRC denied petitioners Motion to Reduce Bond and directed it to post an additional appeal bond in the amount ofP3,013,599.50 within a non-extendible period of 10 days from notice, otherwise the appeal shall be dismissed for non-perfection pursuant to Article 223 of the Labor Code.

Petitioner filed a Motion for Reconsideration Insisting that the NLRC has the discretion to reduce the appeal bond upon motion of appellant and on meritorious grounds. The NLRC, however, denied the same.It ruled that while it has the discretion to reduce the appeal bond, it is nevertheless not persuaded that petitioner was incapable of posting the required bond.It noted that petitioner failed to submit any financial statement or provide details anent its alleged receivership or its sources of income.

On review, the CA held that the NLRC in meritorious cases and upon motion by the appellant may reduce the amount of the bond.However, in order for the NLRC to exercise this discretion, it is imperative for the petitioner to show veritable proof that it is entitled to the same.Since petitioner failed to provide the NLRC with sufficient basis to determine its incapacity to post the required appeal bond, the CA opined that the NLRC's denial of petitioner's Motion to Reduce Bond was justified.Hence, this petition.

ISSUE: Did the NLRC and CA err when it denied petitioners motion to reduce bond?

HELD: Posting of bond is indispensable to the perfection of an appeal in cases involving monetary awards from the Decision of the Labor Arbiter pursuant to Art 223 of the Labor Code in relation to Sections 4 and 6, Rule VI of the Revised Rules of Procedure of the NLRC.

The law highlights the importance of posting a cash or surety bond in the perfection of an appeal to the NLRC from the Labor Arbiters judgment involving a monetary award.

Under the Rules, appeals involving monetary awards are perfected only upon compliance with the following mandatory requisites, namely: (1) payment of the appeal fees; (2) filing of the memorandum of appeal; and (3) payment of the required cash or surety bond.

The intention of the lawmakers to make the bond a mandatory requisite for the perfection of an appeal by the employer is clearly expressed 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" in Article 223 of the Labor Code makes it unmistakably plain that the lawmakers intended the posting of a cash or surety bond by the employer to be the essential and exclusive means by which an employers appeal may be perfected. The word "may" refers to the perfection of an appeal as optional on the part of the defeated party, but not to the compulsory posting of an appeal bond, if he desires to appeal. The meaning and the intention of the legislature in enacting a statute must be determined from the language employed; and where there is no ambiguity in the words used, then there is no room for construction. (Ramirez v. Court of Appeals,G.R. No. 182626, December 4, 2009)Notably, however, under Section 6, Rule VI of the NLRC's Revised Rules of Procedure, the bond may be reduced albeit only on meritorious grounds and upon posting of a partial bond in a reasonable amount in relation to the monetary award. Suffice it to state that while said Rules allows the Commission to reduce the amount of the bond, the exercise of the authority is not a matter of right on the part of the movant, but lies within the sound discretion of the NLRC upon a showing of meritorious grounds.

Petitioner attached to its Motion to Reduce Bond the SEC Orders dated August 23, 1999 and May 23, 2000. From the said SEC Orders, it is unmistakable that petitioner was under receivership. And from the tenor and contents of said Orders, it is possible that petitioner has no liquid asset which it could use to post the required amount of bond.Also, it is quite understandable that because of petitioners financial state, it cannot raise the amount of more than P3 million within a period of 10 days from receipt of the Labor Arbiters judgment.

However, the NLRC ignored petitioners allegations and instead remained adamant that since the amount of bond is fixed by law, petitioner must post an additional bond of more thanP3 million. It is an utter disregard of the provision of the Labor Code and of the NLRC Revised Rules of Procedure allowing the reduction of bond in meritorious cases. While the NLRC tried to correct this error in its March 21, 2003 Resolution by further explaining that it was not persuaded by petitioners alleged incapability of posting the required amount of bond for failure to submit financial statement, list of sources of income and other details with respect to the alleged receivership, we still find the hasty denial of the motion to reduce bond not proper.

Notwithstanding petitioner's failure to submit its financial statement and list of sources of income and to give more details relative to its receivership, it was nevertheless able to show through the above-mentioned SEC Orders that it was indeed under a state of receivership.This should have been sufficient reason for the NLRC to not outrightly deny petitioners motion. Here, considering the clear showing of petitioners state of receivership, the NLRC should have conducted such preliminary determination and therein require the submission of said documents and other necessary evidence before proceeding to resolve the subject motion.

After all, the present case falls under those cases where the bond requirement on appeal may be relaxed considering that (1) there was substantial compliance with the Rules; (2) the surrounding facts and circumstances constitute meritorious grounds to reduce the bond; and (3) the petitioner, at the very least, exhibited its willingness and/or good faith by posting a partial bond during the reglementary period. Thus, it was an error on the part of the NLRC when it denied petitioners Motion to Reduce Bond and likewise on the part of the CA when it affirmed said denial.