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IMPORTANCE OF APPEAL BOND TO PERFECT APPEAL IN LABOR CASES

Article 223 of the Labor Code, which sets forth the rules on appeal from the Labor Arbiter's monetary award, provides:

ART. 223. Appeal. --- Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any off the following grounds:

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
(b) If the decision, order or award was secured through fraud or coercion, including graft and corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the finding of facts are raised which would cause grave or irreparable damage or injury to the appellant.

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.

x x x x. (Emphasis supplied)

Meanwhile, Sections 4 and 6 of Rule VI of the 2005 Revised Rules of Procedure of the NLRC, which were in effect when petitioners filed their appeal, provide:

Section 4. Requisites for perfection of appeal. - 

(a) The Appeal shall be: 1) filed within the reglementary period as provided in Section 1 of this Rule; 2) verified by the appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, as amended; 3) in the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof: the relief prayed for, and with a statement of the date the appellant received the appealed decision, resolution or order; 4) in three (3) legibly typewritten or printed copies; and 5) accompanied by i) proof of payment of the required appeal fee; ii) posting of a cash or surety bond as provided in Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv) proof of service upon the other parties.

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

x x x x

Section 6. Bond. - - - 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.

x x x x

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 filing 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. 

This indispensable requisite for the perfection of an appeal ''is to assure the workers that if they finally prevail in the case[,] the monetary award will be given to them upon the dismissal of the employer's appeal [and] is further meant to discourage employers from using the appeal to delay or evade payment of their obligations to the employees."

However, the Court, in special and justified circumstances, has relaxed the requirement of posting a supersedeas bond for the perfection of an appeal on technical considerations to give way to equity and justice. Thus, under Section 6 of Rule VI of the 2005 NLRC Revised Rules of Procedure, 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 exercises full discretion in resolving a motion for the reduction of bond in accordance with the standards of meritorious grounds and reasonable amount. The "reduction of the bond is not a matter of right on the part of the movant [but] lies within the sound discretion of the NLRC x x x."
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. G.R. No. 207156, TURKS SHAWARMA COMPANY/GEM ZEÑAROSA v. FELICIANO Z. PAJARON and LARRY A. CARBONILLA , January 16, 2017

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