McBurnie vs Ganzon

The NLRC, acting on the CA order of remand,

Facts: accepted the appeal from the LA decision and
reversed and set aside the decision of the LA, and
McBurnie, an Australian national, instituted a entered a new on dismissing McBurnie complaint.
complaint for illegal dismissal and other monetary
claims against the respondents. He claimed that on On September 18, 2009, the third division of this
May 11, 1999 he signed a 5-year employment court rendered its decision granting respondents
agreement with the company EGI as an Executive VP. motion to reduce appeal bond. This Court also
He worked for the company until November 1999 reinstated and affirmed the NLRC decision dismissing
when he met an accident that compelled him to go respondent's appeal for failure to perfect an appeal
back to Australia while recuperating. While in and denying their motion for reconsideration. The
Australia, he was informed by respondent Ganzon aforementioned decision became final and executor
that his services were no longer needed. on March 14, 2012.

The respondents opposed the complaint, contending The respondents filed a Motion for Leave to File
that their agreement with McBurnie was to jointly Attached Third Motion for Reconsideration, with an
invest in and establish a company for the attached Motion for Reconsideration with Motion to
management of hotels. They did not intend to create Refer These Cases to the Honorable Court En Banc.
an employer-employee relationship, and the The Court En Banc accepted the case from the third
execution of the employment contract that was being division and issued a temporary restraining order
invoked by McBurnie was solely for the purpose of (TRO) enjoining the implementation of the LA
allowing McBurnie to obtain an alien work permit in Decision. McBurnie filed a Motion for Reconsideration
the Philippines. But petitioner had not yet obtained a where he invoked that the Court September 18, 2009
work permit. decision had become final and executor.

Labor Arbiter (LA) declared McBurnie as having been ISSUE: Whether or not McBurnie was illegally
illegally dismissed from employment, and thus dismissed?
entitled to receive from the respondents damages.
HELD: There was no employer-employee relationship.
The respondents appealed the LAs Decision to the
NLRC claiming that the monetary awards of the LA (1) Sufficiency of the appeal bond. The present
were null and excessive, allegedly with the intention rule on the matter is Sec. 6, Rule VI of the 2011 NLRC
of rendering them incapable of posting the necessary Rules of Procedure, which was substantially the same
appeal bond. They claimed that the award P60M to a provision in effect at the time of the respondents
single foreigner who had no work permit is patent appeal to the NLRC, and which reads: No motion to
nullity and that they lacked the capacity to pay the reduce bond shall be entertained except on
bond of almost P60 M. meritorious grounds and upon the posting of a bond
in a reasonable amount in relation to the monetary
Respondents appeal was denied by NLRC ruling that award. The filing of the motion to reduce bond
in cases involving monetary award, an employer without compliance with the requisites in the
seeking to appeal the [LAs] decision to the preceding paragraph shall not stop the running of the
Commission is unconditionally required by Art. 223, period to perfect an appeal.
Labor Code to post bond in the amount equivalent to
the monetary award. While the CA, allowed an appeal bond in the reduced
amount of P10,000,000.00 and then ordered the case
MR was filed by respondent but was denied. NLRC remand to the NLRC, this Court Decision dated
dismissed the appeal filed respondent due to failure September 18, 2009 provides otherwise, as it reads in
to They elevated the case to CA. part: While the bond may be reduced upon motion by
the employer, this is subject to the conditions that (1)
CA issued a Resolution granting the respondents the motion to reduce the bond shall be based on
application for a writ of preliminary injunction to meritorious grounds; and (2) a reasonable amount in
refrain from causing the execution and enforcement relation to the monetary award is posted by the
of the LAs decision in favor of McBurnie. McBurnie appellant, otherwise the filing of the motion to reduce
filed MR with CA but was denied. bond shall not stop the running of the period to
perfect an appeal.The qualification effectively
McBurnie then filed with the Court a Petition for requires that unless the NLRC grants the reduction of
Review on Certiorari assailing the resolutions of CA. the cash bond within the 10-day reglementary period,
SC denied the petition on the ground that petitioners the employer is still expected to post the cash or
failure to sufficiently show that the CA committed any surety bond securing the full amount within the said
reversible error. SC filed MR but was denied. 10-day period.If the NLRC does eventually grant the
motion for reduction after the reglementary period
McBurnie filed a supplemental MR, treated as second has elapsed, the correct relief would be to reduce the
MR which is a prohibited pleading thus was denied cash or surety bond already posted by the employer
again. within the 10-day period.
 All motions to reduce bond that are to be filed with
To begin with, the Court rectifies its prior the NLRC shall be accompanied by the posting of a
pronouncement the unqualified statement that even cash or surety bond equivalent to 10% of the
an appellant who seeks a reduction of an appeal bond monetary award that is subject of the appeal, which
before the NLRC is expected to post a cash or surety shall provisionally be deemed the reasonable amount
bond securing the full amount of the judgment award of the bond in the meantime that an appellant motion
within the 10-day reglementary period to perfect the is pending resolution by the Commission. In
appeal. conformity with the NLRC Rules, the monetary award,
for the purpose of computing the necessary appeal
(2) suspension of the period to perfect the appeal bond, shall exclude damages and attorney fees. Only
upon the filing of a motion to reduce bond after the posting of a bond in the required percentage
shall an appellant period to perfect an appeal under
Filing of a motion to reduce bond, coupled with the NLRC Rules be deemed suspended.
compliance with the two conditions (1) a meritorious
ground, and (2) posting of a bond in a reasonable NLRCs discretion is not hindered, given that the
amount, shall suffice to suspend the running of the percentage of bond that is set by this guideline shall
period to perfect an appeal from the labor arbiter be merely provisional. NLRC retains its authority and
decision to the NLRC. To require the full amount of the duty to resolve the motion and determine the final
bond within the 10-day reglementary period would amount of bond that shall be posted by the appellant,
only render nugatory the legal provisions which allow still in accordance with the standards of meritorious
an appellant to seek a reduction of the bond. grounds and reasonable amount Should the NLRC,
after considering the motion merit, determine that a
The rule that the filing of a motion to reduce bond greater amount or the full amount of the bond needs
shall not stop the running of the period to perfect an to be posted by the appellant, then the party shall
appeal is not absolute. The Court may relax the rule comply accordingly.
where an appeal from a decision involving a monetary
award may be perfected only upon the posting of (4) Employment permit for non-resident aliens;
cash or surety bond. The Court, has relaxed this illegal dismissal
requirement under certain exceptional circumstances
in order to resolve controversies on their merits. Considering that McBurnie, an Australian, alleged
These circumstances include: (1) fundamental illegal dismissal and sought to claim under our labor
consideration of substantial justice; (2) prevention of laws, it was necessary for him to establish, first and
miscarriage of justice or of unjust enrichment; and (3) foremost, that he was qualified and duly authorized to
special circumstances of the case combined with its obtain employment within our jurisdiction.A
legal merits, and the amount and the issue involved. requirement for foreigners who intend to work within
the country is an employment permit.
A serious error of the NLRC was its outright denial of
the motion to reduce the bond, without even A foreign nationals failure to seek an employment
considering the respondent's arguments and totally permit prior to employment poses a serious problem
unmindful of the rules and jurisprudence that allow in seeking relief from the Court. Clearly, this
the bond reduction.Instead of resolving the motion to circumstance on the failure of McBurnie to obtain an
reduce the bond on its merits, the NLRC insisted on employment permit, by itself, necessitates the
an amount that was equivalent to the monetary dismissal of his labor complaint. This circumstance
award. negates McBurnie claim that he had been performing
work for the respondents by virtue of an employer-
When the respondents sought to reconsider, the NLRC employee relationship. The absence of the
still refused to fully decide on the motion.It refused to employment permit instead bolsters the claim that
at least make a preliminary determination of the the supposed employment of McBurnie was merely
merits of the appeal. simulated,
(3) Allowance of the reduction of appeal bonds McBurnie failed to present other competent evidence
to prove his claim of an employer-employee
The bond requirement in appeals involving monetary relationship. iven the parties conflicting claims on
awards has been and may be relaxed in meritorious their true intention in executing the agreement, it was
cases, including instances in which (1) there was necessary to resort to the established criteria for the
substantial compliance with the Rules, (2) determination of an employer-employee relationship,
surrounding facts and circumstances constitute namely: (1) the selection and engagement of the
meritorious grounds to reduce the bond, (3) a liberal employee; (2) the payment of wages; (3) the power of
interpretation of the requirement of an appeal bond dismissal; and (4) the power to control the employee
would serve the desired objective of resolving conduct.
controversies on the merits, or (4) the appellants, at
the very least, exhibited their willingness and/or good The rule of thumb remains: the onus probandi falls on
faith by posting a partial bond during the the claimant to establish or substantiate the claim by
reglementary period. the requisite quantum of evidence.Whoever claims
entitlement to the benefits provided by law should
establish his or her right thereto. McBurnie failed in relationship, the records are barren of any document
this regard. showing that its termination was by the
respondentsdismissal of McBurnie.
In the absence of an employer-employee relationship
between McBurnie and the respondents, McBurnie
could not successfully claim that he was dismissed,
much less illegally dismissed, by the latter.Even
granting that there was such an employer-employee