Paulino Ungos III

Lawyer | Law Professor | Author

Tag: reduction of appeal bond

  • But My Motion to Reduce Bond was Impliedly Approved by the NLRC

    Pacific Royal Basic Foods, Inc. (Pacific Royal) is a company that makes, processes, and sells coconut goods for export. It hired Violeta and a few other people as coconut parers.

    Pacific Royal received complaints about a product contamination incident from some of its clients. In response to the complaints, Pacific Royal sent letters to Violeta and her group.

    Violeta and some of her co-employees said they had nothing to do with product contamination when they answered Pacific Royal’s letters.

    Pacific Royal still dismissed Violeta and her group from employment, which prompted the latter to file a complaint against Pacific Royal for illegal dismissal.

    The Office of the Labor Arbiter ruled that Violeta and her group were regular employees who were illegally dismissed from employment. According to the Office of the Labor Arbiter, Pacific Royal failed to establish specific circumstances of the infractions allegedly committed by Violeta and her group. The said Office also found that Violeta and her group were likewise not informed of, and given opportunity to, explain their alleged violation of company policies and regulations on quality control, poor work performance, and repeated defiance of lawful orders of their supervisors. The Office of the Labor Arbiter directed the reinstatement of Violeta and her group. They were also awarded backwages and attorney’s fees.

    Pacific Royal appealed the Decision of the Office of the Labor Arbiter.

    The National Labor Relations Commission reversed the ruling of the Office of the Labor Arbiter.

    Record showed that Pacific Royal filed a Motion to Reduce Bond before the National Labor Relations Commission. However, the Commission did not act on the same.

    The Commission, nonetheless, resolved Pacific Royal’s appeal and found that Violeta and her group failed to dispute the fact of product contamination and was unable to show any ill motive on Pacific Royal’s part in charging them with causing such contamination. The Commission considered the difficulties of a food product export industry, which demanded a higher degree of cooperation and concern from the employees. According to the Commission, Violeta and her group were indifferent to such difficulties of Pacific Royal. In fact, some of them did not even participate in the investigation when they opted not to respond to the letters sent to them. The Commission classified Violeta and her group’s conduct as gross negligence, as they were not new to their jobs and were expected to know fully well the consequences of food product contamination to the company, its employees, and public health.

    Violeta and her group filed a Petition for Certiorari before the Court of Appeals. They imputed grave abuse of discretion on the part of the Commission for entertaining Pacific Royal’s appeal. In addition to their assertion of illegality of their dismissal from employment, Violeta and her group pointed out that Pacific Royal failed to timely post the requisite appeal bond as the same was posted only almost a month after the appeal period had lapsed.

    The Court of Appeals granted the petition of Violeta and her group. It found that Pacific Royal did not find any proof of compliance with the required posting of an appeal bond. According to the Court of Appeals, Pacific Royal’s appeal before the Commission should have been deemed not perfected, and such Commission did not acquire jurisdiction over Pacific Royal’s appeal. The Court of Appeals stressed that Pacific Royal cannot rely on the presumption of regularity in the Commission’s performance of official duties.

    Pacific Royal filed before the Supreme Court its petition for review on certiorari to assail the decision of the Court of Appeals. Pacific Royal asserted, among others, that the inaction of the National Labor Relations Commission on its Motion to Reduce Bond, coupled with the Commission’s resolution of the case on all its substantial points, was tantamount to an implied affirmance of the perfection of the appeal.

    The Supreme Court was confronted with the issue of whether there is a need for the Commission to expressly rule on motions filed by the employer to reduce the appeal bond. Or could an implied approval of such motion to reduce bond by way of the disposal of the appeal by final decision, order, or resolution suffice as a grant of the employer’s motion to reduce bond?

    The Supreme Court in this case emphasized the need for an express ruling by the National Labor Relations Commission on the appellant’s motion to reduce bond.

    The Court reiterated established principles as follows:

    Appeals by an employer before the National Labor Relations Commission of decisions by the Office of the Labor Arbiter that involve monetary awards to an employee must be secured by a cash or surety bond in the full amount of the monetary award.

    By way of exception, the payment of this full amount may be excused if the appealing employer files a motion to reduce bond showing meritorious grounds, and upon posting of a bond in a reasonable amount.

    Mcburnie v. Ganzon1G.R. Nos. 178034, 178117 & 186984-85, October 17, 2013, 719 PHIL 680-728 has already set the “reasonable amount” of the provisional reduced bond at a percentage of 10% of the monetary award, excluding the amount of damages and attorney’s fees, if any.

    The Court stated that Mcburnie requires the concurrence of the following conditions before an aggrieved employer appealing before the National Labor Relations Commission may be allowed to post a bond in a reduced amount:

    • The employer-appellant files a motion to reduce bond;
    • The motion to reduce bond shall be based on meritorious grounds;
    • The employer-appellant posts the provisional percentage of at least 10% of the monetary award, excluding therefrom the award of damages and attorney’s fees;
    • The provisional bond must be posted within the reglementary period for appeal; and
    • If the National Labor Relations Commission eventually determines that a greater or the full amount of the bond shall be posted, the employer-appellant shall comply accordingly within ten (10) days from notice of the order issued by the Commission directing such posting of the increased or full amount of the bond.

    Once these are complied with, the aggrieved employer’s appeal of the Office of the Labor Arbiter’s decision before the National Labor Relations Commission shall be deemed perfected.

    The Court further noted that the requisites laid out by Mcburnie also presupposes a sixth requirement: that the National Labor Relations Commission issue an express ruling on the appellant’s motion to reduce bond.

    In the present case, the Supreme Court found that Pacific Royal’s Motion to Reduce Bond was never acted upon by the National Labor Relations Commission. Still, the Commission resolved Pacific Royal’s appeal of the Labor Arbiter’s Decision on the merits and issued its own resolutions thereon.

    However, the Court stressed that Section 6, Rule VI of the 2011 NLRC Rules of Procedure, as amended, provides that an appeal may be perfected by the appellant-employer only by the posting of a bond in the equivalent amount of the full monetary award granted to the appellee-employee. The Court then repeated that the perfection of an appeal in the manner and within the period set by law is not only mandatory but jurisdictional.2Boardwalk Business Ventures, Inc. v. Villareal, G.R. No. 181182, April 10, 2013, 708 PHIL 443-457

    Consequently, for the Court, there should be no implied approval of a jurisdictional requirement that has not been complied with. Otherwise, the Court said, the ground of lack of jurisdiction becomes a waivable defect in procedure. Whether the National Labor Relations Commission accepts or rejects the appellant’s motion to reduce bond, the ruling must be unequivocal, and such ruling must be issued before or at the time the Commission resolves the appeal by final judgment. Failure to do so shall render the National Labor Relations Commission liable for grave abuse of discretion for having ruled on an appeal without acquiring jurisdiction over the same, and the judgment it had issued shall be vacated as null and void.

    The Court further stated that Pacific Royal could not rely on the mere presumption of regularity in the performance of official duties in favor of the National Labor Relations Commission when the latter gave due course to its appeal; not when it is faced with a serious imputation of non-compliance from Violeta and her group. Considering that the requirements provided under the Labor Code of the Philippines and its Implementing Rules are mandatory for purposes of perfecting an appeal, the rule on presumption of regularity cannot apply.

    The Supreme Court affirmed the Decision of the Court of Appeals and explained that in setting aside the ruling of the National Labor Relations Commission, it is merely exercising prudence in applying the provisions of the law.

    Further reading:

    • Pacific Royal Basic Foods, Inc. v. Noche, G.R. No. 202392, October 4, 2021.

  • Just a Lessor; Not an Employer

    Albina and several persons alleged that Abelardo, Quirino, and Lucia employed them for various years, as lady keeper, waitress, receptionist, dispatcher, bus boy, DJ, entertainer, cook, and cashier in the latter’s restaurant.

    Albina and her group narrated that in June 2006, restaurant management began harassing them after they formed a union. Albina and her group further stated that on June 30, 2006, Lucia informed them of the termination of their employment since the restaurant will be closing due to bankruptcy.

    Aggrieved by the development, Albina and her group filed a complaint for unfair labor practice, illegal dismissal, and money claims against Abelardo, Quirino, and Lucia before the Office of the Labor Arbiter. Albina and her group asserted therein that the restaurant was financially stable and that the claim of serious business losses was merely a ruse to terminate their employment.

    On the other hand, Abelardo denied the existence of an employment relationship with Albina and her group. Abelardo argued that he was not the owner of the restaurant since he was merely the lessor of the building where the said restaurant operated.

    As supporting evidence, Abelardo submitted contracts of lease and tax returns showing that he earned income from rentals. Abelardo likewise presented the restaurant’s certificate of registration of business name, mayor’s permit, and certificate of registration with the Bureau of Internal Revenue which were all issued in Lucia’s name.

    The Office of the Labor Arbiter found that the presented contracts of lease were inconclusive to disavow any employment relationship between Abelardo and Albina and her group. Said Office ruled that Albina and her group were illegally dismissed from employment. Abelardo, Lucia, and Quirino were held solidarily liable to pay the awards in the total amount of Three Million Six Hundred Eighty Three Thousand Three Hundred Ninety Four Pesos and Forty Five Centavos (Php3,683,394.45). Record showed that the Decision of the Office of the Labor Arbiter was received by Abelardo on March 23, 2007.

    On March 30, 2007, or seven days after receiving the Office of the Labor Arbiter’s Decision, Abelardo filed his appeal with the National Labor Relations Commission. He posted a cash bond of Five Hundred Thousand Pesos (Php500,000.00). Abelardo also moved to reduce the bond.

    On April 2, 2007, or the last day within which to file his appeal, Abelardo posted a surety bond in the amount of Three Million One Hundred Thousand Pesos (Php3,100,000.00).

    Thereafter, Abelardo moved to substitute the cash bond earlier posted in the amount of Five Hundred Thousand Pesos (Php500,000.00) with a surety bond of the same amount. The National Labor Relations Commission granted the motion and ordered Abelardo to post the surety bond. Abelardo complied with the order.

    Later, the National Labor Relations Commission exonerated Abelardo from liability as it found no substantial evidence of employment relationship with Albina and her group.

    Albina and her group elevated the case to the Court of Appeals and asserted that the National Labor Relations Commission committed grave abuse of discretion in giving due course to Abelardo’s appeal despite his failure to post a bond equivalent to the monetary award.

    The Court of Appeals granted the petition. It ruled that Abelardo failed to perfect his Appeal to the National Labor Relations Commission, and it reinstated the decision of the Office of the Labor Arbiter. According to the Court of Appeals, only the amount of Five Hundred Thousand Pesos (Php500,000.00) was posted as bond when Abelardo filed his appeal. The Court of Appeals added that Abelardo’s Motion to Reduce Bond was deemed denied since the same was not acted upon by the National Labor Relations Commission and since no meritorious ground supported the same.

    For the Court of Appeals, the full amount of the appeal bond should have been posted by Abelardo when he filed his appeal. For failure to comply with the mandatory and jurisdictional appeal bond requirement and in the absence of substantial proof to the contrary, the Court of Appeals ruled that Abelardo’s appeal was never perfected and that the National Labor Relations Commission did not acquire jurisdiction over the case.

    Abelardo filed his petition with the Supreme Court and pointed out the following:

    • He posted a cash bond of Five Hundred Thousand Pesos (Php500,000.00) on March 30, 2007, within the period to file an Appeal;
    • Such cash bond was subsequently substituted by a surety bond of the same amount; and
    • He then posted a surety bond in the amount of Three Million One Hundred Thousand Pesos (Php3,100,000.00).

    Abelardo also insisted that Albina and her group failed to establish their employment relationship with him. Abelardo stressed that Albina and her group even alleged in their position paper that it was Lucia who dismissed them.

    In their comment, Albina and her group retorted with three points:

    • There was no evidence that Abelardo posted the appeal bond within the reglementary period;
    • The indemnity agreement between Abelardo and the bonding company did not provide the effectivity period and the amount of premium paid; and
    • Through the affidavit of the restaurant’s former manager, it was shown that Abelardo had the final authority in the hiring of employees and their work assignments.

    Was Abelardo’s appeal perfected?

    The Supreme Court ruled in the affirmative.

    The Court reiterated the principle that the right to appeal is a mere statutory privilege exercised only in the manner and in accordance with the requirements of the law.

    With regard to appeals to the National Labor Relations Commission from decisions, awards, or orders of the Office of the Labor Arbiter, the Supreme Court pointed to Article 229 of the Labor Code of the Philippines, which provides 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.

    The Supreme Court also referred to Section 6 of Rule VI of the 2005 Revised Rules of Procedure of the NLRC, which was effective at the time Abelardo questioned the Office of the Labor Arbiter’s Decision. Relevant portion of the provision states:

    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 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.

    The Supreme Court explained that the purpose of the posting of cash or surety bond is to assure the employees that they will receive the monetary award granted them if they finally prevail in the case. The bond also serves to discourage employers from using the appeal to delay, or even evade, their obligation to satisfy the judgment. Notably, the Court added, the posting of appeal bond is not only mandatory but jurisdictional as well. Non-compliance with the bond requirement is fatal and has the effect of rendering the judgment final and executory.

    The Supreme Court clarified that in exceptional cases, however, the bond requirement may be relaxed, provided that:

    • There is substantial compliance with the rules;
    • Surrounding facts and circumstances constitute meritorious grounds to reduce the bond;
    • A liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving controversies on the merits; or
    • The appellants, at the very least, exhibited their willingness and/or good faith by posting a partial bond during the reglementary period.

    The Supreme Court continued that the reduction of the bond is not warranted when:

    • No meritorious ground is shown to justify the same;
    • The appellant absolutely failed to comply with the requirement of posting a bond, even if partial; or
    • When circumstances show the employer’s unwillingness to ensure the satisfaction of its workers’ valid claims.

    In the present case, the Supreme Court ruled that the Court of Appeals erred in dismissing Abelardo’s Appeal for non-perfection. The Supreme Court found that Abelardo received on March 23, 2007 the Office of the Labor Arbiter’s Decision and that he had until April 2, 2007 (or the tenth [10th] day from his receipt of such Decision) to file an appeal. On March 30, 2007, Abelardo appealed and moved to reduce the bond. At the same time, Abelardo deposited a cashier’s check in the amount of Five Hundred Thousand Pesos (Php500,000.00) in favor of Albina and her group. On April 2, 2007 (or the last day of the period to appeal) Abelardo posted a surety bond in the amount of Three Million One Hundred Thousand Pesos (Php3,100,000.00). Subsequently, with the approval of the National Labor Relations Commission, Abelardo replaced the Five Hundred Thousand Peso (Php500,000.00) check deposit with a surety bond of the same amount. For the Supreme Court, Abelardo posted a total of Three Million Six Hundred Thousand Pesos (Php3,600,000.00) within the reglementary period, which substantially covered the total monetary award of Three Million Six Hundred Eighty Three Thousand Three Hundred Ninety Four Pesos and Forty Five Centavos (Php3,683,394.45). The Supreme Court considered such amount as substantial compliance and the same demonstrated Abelardo’s willingness to abide with the rules on perfection of appeals.

    The Supreme Court found no merit to the assertions of Albina and her group regarding the failure of the indemnity agreement to indicate the effectivity period and the amount of premium paid. This is because such aspects do not affect the validity of the surety bond and since the Rules of Procedure of the National Labor Relations Commission does not require such formalities with respect to the contents of the indemnity agreement. The Court stressed that in any case, the rules are explicit that a cash or surety bond shall be valid and effective from the date of deposit or posting, until the case is finally decided, resolved or terminated, or the award satisfied. This condition shall be deemed incorporated in the terms and conditions of the surety bond and shall be binding on the appellants and the bonding company.

    The Supreme Court accordingly ruled that the Court of Appeals should have considered the merits of the case given that the labor adjudication system rests on the norm that rules of technicality must yield to the broader interest of substantial justice.

    In this regard, while the Supreme Court remarked that it could have remanded the case to the Court of Appeals for proper disposition on the merits, the Supreme Court deemed it more appropriate and practical to resolve the question of the existence of the employment relationship in order to avoid further delay.

    Did an employer-employee relationship exist between Abelardo and Albina and her group?

    For this issue, the Supreme Court ruled in the negative.

    The Supreme Court enumerated the four-fold test of employment relationship, namely:

    • Selection and engagement of the employee or the power to hire;
    • Payment of wages;
    • Power to dismiss; and
    • Power to control the employee.

    Applying such test, the Supreme Court declared that Abelardo was not the employer of Albina and her group. This was based on the following findings:

    First, there was no substantial evidence that Abelardo participated in the selection of the restaurant employees. Although the Supreme Court noted the affidavit of the restaurant’s former manager which was presented by Albina and her group, it ruled that the same was not substantial proof absent supporting evidence such as pre-employment records, appointment letters or engagement contracts indicating Abelardo’s involvement in the recruitment process.

    Second, Albina and her group did not present any payslip showing that they directly received their premiums and salaries from Abelardo.

    Third, as to the power to dismiss, Albina and her group admitted that it was Lucia who terminated their services. There was no evidence that Abelardo wielded such authority.

    Fourth, concerning the power of control, there was no proof that Abelardo issued orders and instructions to Albina and her group, or that he supervised and monitored the proper performance of their work.

    On the other hand, the Supreme Court found that Abelardo substantiated his claim that he was a mere lessor of the restaurant. Abelardo submitted contracts of lease and tax returns showing that he earned income solely from building rentals. Abelardo likewise presented the certificate of registration of business name, mayor’s permit, and certificate of registration with the Bureau of Internal Revenue which were all issued in Lucia’s name. The Supreme Court considered such certifications as executed in the performance of official duty of the government agencies concerned and can be relied upon as evidence of the facts stated therein. Furthermore, such documents enjoy the presumption of regularity unless the contrary is proved. The Supreme Court thus ruled that Albina and her group’s idle implication that Abelardo used these documents as subterfuge to evade liability deserved scant consideration.

    In sum, the Court reiterated that the quantum of proof in labor cases is substantial evidence or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. The burden of proof rests upon the party who asserts the affirmative of an issue. In the present case, the Supreme Court found that Albina and her group utterly failed to establish with substantial evidence their supposed employment relationship with Abelardo. The Supreme Court concluded that their case for illegal dismissal cannot prosper absent employment relationship between the parties.

    The Supreme Court thus granted Abelardo’s petition and reinstated the Decision of the National Labor Relations Commission.

    Further reading:

    • Salazar v. Simbajon, G.R. No. 202374, June 30, 2021.

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  • Genuine Loss of Trust and Confidence

    Noel alleged that on January 2, 2013, he was hired as Assistant Vice President for Mining Services by Delta Earthmoving to take charge of the company’s human resources department and to perform other administrative functions. In June 2013, the company assigned him to work as Officer-in-Charge of the Oceana Gold Philippines, Inc. — Didipio Gold Project to assist in the operations while his immediate supervisor, Ian, was on roster break.

    Noel claimed that on December 29, 2013, Ian instructed him to pack his things and to not report back to work since his employment was already terminated. On January 6, 2014, Noel confirmed from Ed, who was Delta Earthmoving’s Executive Vice President and Chief Operating Officer, the termination of his employment.

    Noel stated that he was also asked to tender his resignation, but he refused. Instead, he filed the present complaint.

    Delta Earthmoving maintained that Noel was validly dismissed due to poor performance, resulting in loss of trust and confidence.

    To prove the just cause for the dismissal, Delta Earthmoving pointed to the Performance Evaluation and various memoranda indicating gross neglect of duty and inefficiency on the part of Noel, as follows:

    • neglecting instructions from his superiors, such as truck hauling and volume studies;
    • failing to improve KM 20 to serve as employees’ accommodation;
    • failing to submit 2013 mine operations budget;
    • delaying the submission of cost reports and billings, which delayed collection; and
    • failing to perform his duties despite constant reminders.

    Delta Earthmoving stated that Noel refused to receive the performance evaluation as he insisted on having performed his job well.

    Aside from the presence of just cause, Delta Earthmoving also claimed to have complied with the requirements of procedural due process in terminating Noel’s employment.

    The Office of the Labor Arbiter found that Noel was illegally dismissed, and it held Delta Earthmoving liable for payment of the awards.

    Delta Earthmoving filed an appeal with an urgent motion to reduce appeal bond before the National Labor Relations Commission.

    The Commission issued a Resolution, granting the prayer for reduction of appeal bond after considering Delta Earthmoving’s posting of a bond equivalent to ten percent (10%) of the monetary award to be reasonable and finding the grounds raised in the appeal to be meritorious.

    On the main issue of illegal dismissal, the Commission held in the same Resolution that Noel was validly dismissed by reason of loss of trust and confidence. According to the Commission, Delta Earthmoving received reports of Noel’s failure to perform various tasks, and this led to the issuance of six memoranda relative to his work assignments. Delta Earthmoving conducted a performance evaluation, which Noel failed. While Noel denied these allegations, he did not present any proof that he turned in the required reports, or that he completed the assigned tasks.

    On the procedural aspect of Noel’s dismissal from employment, the Commission ruled that Noel was afforded due process as his adamant refusal to submit a written explanation should not be taken against Delta Earthmoving.

    Noel elevated the matter on certiorari to the Court of Appeals.

    In its Decision, the Court of Appeals upheld the Commission’s judgment of Noel’s valid dismissal. Noel sought reconsideration but this too was denied.

    Noel filed his petition before the Supreme Court

    He claimed that Delta Earthmoving’s appeal should not have been given due course as there was no meritorious ground to justify the reduction of the appeal bond.

    As for his dismissal, Noel insisted that the alleged loss of trust and confidence was not proven since he was not even apprised of his superiors’ alleged dissatisfaction with his performance. Noel added that he was not given copies of the memoranda and the Performance Management Form and was therefore deprived of the opportunity to submit his explanation.

    Noel also pointed out that Hansen, his immediate superior, informed him of the good job he did on the mining site. In this regard, Noel contended that the Commission and the Court of Appeals failed to recognize that Hansen, who closely worked with him on-site, was in a better position to evaluate his work performance than his other superiors who were stationed in the Delta Earthmoving main office.

    On the procedural aspect, Noel alleged that his termination was aggravated by Delta Earthmoving’s failure to give the required notices. Noel mentioned that Hansen asked him to leave the company premises after the Christmas break and told him to stop reporting for work upon instruction of Delta Earthmoving’s management. Noel stated that Ed also tried to convince him to execute a letter of resignation in exchange for payment of one month’s salary.

    Was the Commission correct in giving due course to the appeal?

    The Supreme Court ruled in the affirmative.

    The Court cited Article 229 of the Labor Code of the Philippines which governs appeals in labor cases. The law provides that decisions, awards, or orders of the Office 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. 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 Court added that Section 4 (b), Rule VI of the 2011 NLRC Rules of Procedure, as amended, highlights the indispensable nature of the posting of a bond in appeals from the Office of the Labor Arbiter to the National Labor Relations Commission. Such rule states that a mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal.

    The Court explained that the posting by the employer of a cash or surety bond is mandatory to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the employer’s appeal. The requirement was designed to discourage employers from using an appeal to delay, or even evade, their obligation to satisfy their employees’ just and lawful claims.

    In the present case, the Court found that Delta Earthmoving’s appeal was accompanied by a motion to reduce appeal bond, and by an amount equivalent to ten percent (10%) of the judgment award, which was posted as appeal bond.

    The Court stressed that in order to stop the running of the period to perfect an appeal, a motion to reduce bond must comply with two conditions:

    • the motion to reduce bond shall be based on meritorious grounds; and
    • a reasonable amount of bond in relation to the monetary award is posted by the appellant.

    Regarding “meritorious ground” the Court expounded that the same takes into account the respective rights of the parties and the attending circumstances and could pertain to either the appellant’s lack of financial capability to pay the full amount of the bond, the merits of the main appeal, the absence of an employer-employee relationship, prescription of claims, and other similarly valid issues that are raised in the appeal.

    In the present case, the Court found that the Commission made a preliminary determination that Delta Earthmoving had a valid claim as there was no illegal dismissal to justify the award.

    For the Supreme Court, the Commission did not err in giving due course to the appeal. Thus, the Supreme Court did not fault the Court of Appeals in sustaining the Commission’s approval of the motion to reduce the appeal bond, considering that the determination of the presence of a “meritorious ground” is a matter fully within the Commission’s discretion.

    Was the dismissal of Noel from employment valid?

    The Supreme Court ruled that Noel was illegally dismissed from employment.

    The Court stated that Article 297 (c) of the Labor Code of the Philippines allows an employer to terminate an employment for willful breach by the employee of the trust reposed in him by his employer or duly authorized representative.

    The Court explained that an employer cannot be compelled to retain an employee who is guilty of acts inimical to its interests, particularly one who has committed willful breach of trust under Article 297 (c). This is premised on the fact that an employee concerned holds a position where greater trust is placed by management and from whom greater fidelity to duty is correspondingly expected. However, to justify a valid dismissal based on loss of trust and confidence, the concurrence of two (2) conditions must be satisfied:

    • the employee concerned must be holding a position of trust and confidence; and
    • there must be an act that would justify the loss of trust and confidence.

    The Court found that the first requisite was present in that the parties admitted that Noel was a managerial employee, thus held a position of trust and confidence. The Court noted that a great deal of Delta Earthmoving’s business relied on the competence of Noel.

    As regards the second requisite, the Court discussed that in terminating managerial employees based on loss of trust and confidence, proof beyond reasonable doubt is not required. The mere existence of a basis for believing that such employee has breached the trust of his employer is enough. This degree of proof differs from that of a rank-and-file employee which requires proof of involvement in the alleged events, and that mere uncorroborated assertions by the employer will be insufficient. Despite the less stringent degree of proof involving managerial employees, jurisprudence is firm that loss of trust and confidence as a ground for dismissal has never been intended to afford an occasion for abuse due to its subjective nature. It must be genuine, not a mere afterthought intended to justify an earlier action taken in bad faith.

    In the present case, the Court doubted the evaluation conducted on Noel’s performance based on the following findings:

    • The date of evaluation and period covered were not indicated;
    • Gaddi, the person who conducted the evaluation, was not competent to conduct the same since he was not Noel’s immediate supervisor;
    • No copy of the evaluation was given to Noel. If Noel really refused to receive the same, Delta Earthmoving should have sent a copy of the same to Noel by registered mail.

    For the Court, the Performance Evaluation was a mere afterthought to justify Noel’s termination from employment due to alleged poor performance.

    On the other hand, the Court found that Ian’s email to Noel was telling in that Noel was commended for all the good work he had done at Didipio Gold Project.

    At the same time, the Court discredited Delta Earthmoving’s memoranda which directed Noel to explain in writing certain acts of negligence because there was no showing that the same were served on Noel. The Court viewed the memoranda as concoctions on the part of the employer to strengthen its position against Noel. The Court emphasized that Delta Earthmoving should have instead submitted records revealing Noel’s dismal work performance. There being no showing of poor performance, gross negligence and inefficiency on Noel’s part, no basis supported the alleged loss of trust and confidence upon him.

    The Court pointed out that loss of trust and confidence, as a ground for dismissal, may not be invoked arbitrarily. Managerial employees could not simply be dismissed on account of their position.

    Moreover, the Court observed that Delta Earthmoving failed to comply with the requirements of procedural due process in the termination of Noel’s employment since the fact of his termination was only relayed to him by his immediate supervisor in the mining site, upon instructions received from Delta Earthmoving’s main office. Noel’s email correspondence with his supervisor even shows that he had to go to Delta Earthmoving’s office in Quezon City to verify for himself if his employment was indeed terminated.

    Noel’s dismissal was thus declared illegal as he was denied his right to substantive and procedural due process.

    The Court reminded employers that the misdeed attributed to the employee must be a genuine and serious breach of the established expectations required by the exigencies of the position regardless of its designation, and not a mere distaste, apathy, or petty misunderstanding. What is at stake are the employee’s reputation, good name, and source of livelihood, at the very least. Employment and tenure cannot be bargained away for the convenience of attaching blame and holding one accountable when no such accountability exists.

    Further reading:

    • Manrique v. Delta Earthmoving, Inc., G.R. No. 229429, November 9, 2020.

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  • Perfection of Appeals and Article 128

    The Supreme Court reiterated the following rule:

    The perfection of an appeal of the Order of the Regional Director involving a monetary award in cases which concern the visitorial and enforcement powers of the Secretary of the Department of Labor and Employment is subject to the requirements prescribed under Article 128, to wit:

    Art. 128. Visitorial and Enforcement Power. — x x x

    An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article may be appealed to the latter. In case said order involves 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 Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from.1Emphasis supplied.

    The Court explained that the jurisdiction of the National Labor Relations Commission is separate and distinct from that of the Secretary of Labor and Employment. In the exercise of their respective jurisdictions, each agency is governed by its own rules of procedure. The rules of procedure of the Commission are thus different from (and do not apply in) cases cognizable by the Secretary of the Department of Labor and Employment.

    The Court added that unlike the 2011 NLRC Rules of Procedure, as amended, no provision in the Rules on the Disposition of Labor Standards Cases governs the filing of a motion for the reduction of the amount of the bond. However, on matters that are not covered by the Rules on the Disposition of Labor Standards Cases, the suppletory application of the Rules of Court (and not the 2011 NLRC Rules of Procedure, as amended) is authorized. In this regard, the Department of Labor and Employment has no authority to accept an appeal under a reduced bond.

    Further reading:

    • Blazing Star Security and Investigation Agency, Inc. v. Miraflor, G.R. No. 196022, January 22, 2020.