Is a bank deposit coupled with a deed of assignment executed by an appellant-employer in favor of the employee substantial compliance with the requirement of appeal bond?

“The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the LA. The intention of the lawmakers to make the bond a mandatory requisite for the perfection of an appeal by the employer is clearly limned in the provision that an appeal by the employer may be perfected "only upon the posting of a cash or surety bond." The word "only" makes it perfectly 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 employer's appeal may be perfected. The Labor Code requires an employer who wishes to appeal from the decision, which includes a monetary award, of a labor arbiter to post cash or surety bond, in order to perfect the appeal.” xxx

In the case discussed below, the Petitioner (employer), in complying with the requirement of the appeal it filed assailing the decision of the Labor Arbiter, made a deposit for the amount of the award with its bank, and surrendered to the NLRC the passbook representing the deposit and a deed of assignment in favour of the employee.

The question that the employee took to the Court is whether the said deposit secured in a passbook account along with a deed of assignment constitute substantial compliance with the requirement of the law, thus employer has perfected its appeal. Otherwise, the decision appealed from would have become final and executory, because not having complied with the statutory jurisdictional requirement in perfecting an appeal, the Commission had not acquired jurisdiction, and the period within which to perfect an appeal did not stop by the filing of the defective appeal.

The Court held:

The petition is bereft of merit.

Article 223¹¹ of the Labor Code provides that an appeal by the employer to the NLRC from a judgment of a labor arbiter which involves a monetary award 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 an amount equivalent to the monetary award in the judgment appealed from. Section 4 of the New Rules of Procedure of the NLRC echoes the provision, viz.:

SECTION 4. REQUISITES FOR PERFECTION OF APPEAL. a) The appeal shall be filed within the reglementary period as provided in Section 1 of this Rule; shall be verified by appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, with proof of payment of the required appeal fee and the posting of a cash or surety bond as provided in Section 6 of this Rule; shall be accompanied by memorandum of appeal in three (3) legibly typewritten copies which shall state the grounds relied upon and the arguments in support thereof; the relief prayed for, and a statement of the date when the appellant received the appealed decision, resolution or order and a certificate of non-forum shopping with proof of service on the other party of such appeal. A mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal.

b) The appellee may file with the Regional Arbitration Branch or Regional Office where the appeal was filed, his answer or reply to appellant’s memorandum of appeal, not later than ten (10) calendar days from receipt thereof. Failure on the part of the appellee who was properly furnished with a copy of the appeal to file his answer or reply within the said period may be construed as a waiver on his part to file the same.

c) Subject to the provisions of Article 218, once the appeal is perfected in accordance with these Rules, the Commission shall limit itself to reviewing and deciding specific issues that were elevated on appeal. (emphasis supplied)

Further, Sec. 6 of the same Rules provides:

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 cash or surety bond. The appeal bond shall either be in cash or surety in an amount equivalent to the monetary award, exclusive of damages and attorney’s fees.

In case of surety bond, the same shall be issued by a reputable bonding company duly accredited by the Commission or the Supreme Court, and shall be accompanied by:

a) a joint declaration under oath by the employer, his counsel, and the bonding company, attesting that the bond posted is genuine, and shall be in effect until final disposition of the case.

b) a copy of the indemnity agreement between the employer-appellant and bonding company; and

c) a copy of security deposit or collateral securing the bond.

A certified true copy of the bond shall be furnished by the appellant to the appellee who shall verify the regularity and genuineness thereof and immediately report to the Commission any irregularity.

Upon verification by the Commission that the bond is irregular or not genuine, the Commission shall cause the immediate dismissal of the appeal.

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. (emphasis and underscoring supplied)

Clearly, an appeal from a judgment as that involved in the present case is perfected "only" upon the posting of a cash or surety bond. Accessories Specialist, Inc. v. Alabanza enlightens:¹²

The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the LA. The intention of the lawmakers to make the bond a mandatory requisite for the perfection of an appeal by the employer is clearly limned in the provision that an appeal by the employer may be perfected "only upon the posting of a cash or surety bond." The word "only" makes it perfectly 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 employer's 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.1avvphi1

The filing of the bond is not only mandatory but also a jurisdictional requirement that must be complied with in order to confer jurisdiction upon the NLRC. Non-compliance therewith renders the decision of the LA final and executory. This requirement is intended 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. It is intended to discourage employers from using an appeal to delay or evade their obligation to satisfy their employees' just and lawful claims. (citations omitted, italics in the original; emphasis and underscoring supplied)

"Cash," means a sum of money; cash bail (the sense in which the term "cash bond" is used) is a sum of money posted by a criminal defendant to ensure his presence in court, used in place of a surety bond and real estate.¹³

In the present case, the Deed of Assignment, as well as the passbook, which petitioner submitted to the NLRC is neither a cash nor a surety bond. Petitioner’s appeal to the NLRC was thus not duly perfected, thereby rendering the Labor Arbiter’s Decision final and executory.

WHEREFORE, the petition is DENIED.

SO ORDERED.

Mindanao Times Corporation vs. Mitchel R. Confesor, G.R. No. 183417 February 5, 2010

Read the full text of the case here.