Quantum Foods, Inc. v. Esloyo PDF
Quantum Foods, Inc. v. Esloyo PDF
Quantum Foods, Inc. v. Esloyo PDF
DECISION
PERLAS-BERNABE , J : p
Assailed in this petition for review on certiorari 1 are the Decision 2 dated January
18, 2011 and the Resolution 3 dated July 4, 2014 of the Court of Appeals, Cebu City
(CA) in CA-G.R. CEB-SP No. 04622, which reversed and set aside the Decision 4 dated
February 20, 2009 and the Resolution 5 dated July 10, 2009 of the National Labor
Relations Commission (NLRC) in NLRC VAC No. 08-000526-2008, thereby reinstating
the Decision 6 dated December 27, 2007 of the Labor Arbiter (LA), nding respondents
Marcelino Esloyo (Esloyo) and Glen Magsila (Magsila) to have been illegally dismissed.
The Facts
Petitioner Quantum Foods, Inc. (QFI) is a domestic corporation engaged in the
distribution and selling of food products nationwide, with principal o ce located in
Brgy. Merville, Parañaque City. It hired Esloyo as Major Accounts Representative on
December 14, 1998, whose consistent good performance led to successive
promotions, until his promotion to the position of Regional Sales Manager for Visayas
and Mindanao in 2004. 7 On the other hand, it hired Magsila as Key Accounts
Representative for the Panay Area on March 1, 2005 on a probationary status and gave
him a "permanent" status on August 31, 2005. 8 In the course of their employment,
Esloyo and Magsila were each required to post a cash bond in the amount of
P10,000.00 and P7,000.00, respectively. 9
In 2006, QFI decided to reorganize its sales force nationwide following a drastic
drop in net income in 2005, and Magsila was among those retrenched. 10 In a letter 11
dated February 13, 2006, Magsila was informed of his termination effective March 31,
2006, given the option not to report for work beginning February 27, 2006, and advised
to turn over his responsibilities and clear his accountabilities to facilitate the release of
his nal pay. The corresponding Establishment Termination Report 12 of the retrenched
employees was likewise submitted to the Department of Labor and Employment.
However, Magsila's nal pay and other bene ts were not released due to alleged
discovery of unauthorized/undocumented deductions, which he purportedly failed to
explain. 13 ICHDca
Respondents led a motion to dismiss the appeal for QFI's failure: (a) to attach a
Veri cation and Certi cation of Non-Forum Shopping as required by the New Rules and
Procedure of the NLRC; and (b) to post a bond in an amount equivalent to the monetary
judgment as mandated by law. 34
QFI thereafter moved to admit its Veri cation/Certi cation for Non-Forum
Shopping and related documents, explaining that the failure to attach said documents
was due to the inadvertence of its counsel who was just recovering from the open
cholecystectomy performed on him, and that the appeal was based on meritorious
grounds. Subsequently, but before the NLRC could act on the Motion to Reduce Bond, it
posted a surety bond from an accredited insurance company fully covering the
monetary judgment, which respondents vehemently opposed. 35
The NLRC Ruling
In a Decision 36 dated February 20, 2009, the NLRC denied respondents' motion
to dismiss and gave due course to QFI's appeal, holding that: (a) the lack of veri cation
was a formal defect that could be cured by requiring an oath; 37 (b) the belated ling of
the certi cate of non-forum shopping may be allowed under exceptional circumstances
as technical rules of procedure should be used to promote, not frustrate justice; 38 and
(c) there was substantial compliance with the bond requirement, and merit in QFI's
appeal that would justify a liberal application of the requirement on the timely ling of
the appeal bond. 39
Contrary to the LA's ruling, the NLRC held that respondents were not illegally
dismissed. 40 It gave credence to the audit report which showed the various infractions
committed by Esloyo in violation of the company rules and regulations, and in breach of
the con dence reposed on him, warranting his dismissal. 41 It also found substantial
evidence to support the losses suffered by QFI, and thus, declared Magsila's dismissal
to prevent losses as a valid exercise of the management's prerogative. 42 ASEcHI
Consequently, the NLRC deleted the awards of backwages, 13th month pay, and
attorney's fees in favor of respondents for lack of basis, but sustained: (a) the award of
separation pay in favor of Magsila who was dismissed for an authorized cause; and (b)
the refund of respondents' cash bonds in the absence of proof that the same had been
returned by QFI. 43
Respondents led a motion for reconsideration, 44 which was denied in a
Resolution 45 dated July 10, 2009, prompting them to elevate the matter on certiorari
before the CA. 46
The CA Ruling
In a Decision 47 dated January 18, 2011, the CA reversed and set aside the
NLRC's ruling and reinstated the LA's Decision. It ruled that QFI's failure to post the
required bond in an amount equivalent to the monetary judgment impeded the
perfection of its appeal, and rendered the LA's Decision nal and executory. 48 Thus, the
NLRC was bereft of jurisdiction and abused its discretion in entertaining the appeal. 49
It also held that the posting of the partial bond together with the Motion to Reduce
Bond did not stop the running of the period to perfect the appeal, considering that: (a)
the grounds relied upon by QFI are not meritorious; and (b) the partial bond posted was
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not reasonable in relation to the monetary judgment. 50
The CA further observed that the appeal led on February 8, 2008 was plagued
with several in rmities that effectively prevented its perfection, noting that: (a) there
was no showing that de la Cruz, who led/signed the petition, was authorized to
represent QFI and sign the verification; and (b) it was unaccompanied by a certi cate of
non-forum shopping. Accordingly, it found no compelling reason to justify the relaxation
of the rules. 51
Undeterred, QFI led a motion for reconsideration 52 which was denied in a
Resolution 53 dated July 4, 2014; hence, this petition.
The Issue Before the Court
The central issue for the Court's resolution is whether or not the CA erred in
ascribing grave abuse of discretion on the part of the NLRC in giving due course to
QFI's appeal.
The Court's Ruling
There is merit in the petition.
In labor cases, the law governing appeals from the LA's ruling to the NLRC is
Article 229 54 of the Labor Code which provides:
ART. 229. Appeal. — Decisions, awards, or orders of the Labor Arbiter are
nal 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 of the following grounds:
(a) If there is a 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 ndings 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 .
xxx xxx xxx (Emphasis and underscoring supplied)
In this relation, Section 4, Rule VI of the 2005 Revised Rules of Procedure of the
NLRC (the Rules) enumerates the requisites for the perfection of appeal, viz.:
55
Section 4. Requisites for Perfection of Appeal. — a) The appeal shall be: 1) led
within the reglementary period provided in Section 1 of this Rule; 2) veri ed 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
certi cate of non-forum shopping; and iv) proof of service upon the other
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parties. ITAaHc
In Nicol v. Footjoy Industrial Corp. , 68 the Court summarized the guidelines under
which the NLRC must exercise its discretion in considering an appellant's motion for
reduction of bond in this wise:
"[T]he bond requirement on appeals involving monetary awards has been
and may be relaxed in meritorious cases. These cases include instances in
which (1) there was substantial compliance with the Rules, (2) surrounding
facts and circumstances constitute meritorious grounds to reduce the bond, (3)
a liberal interpretation of the requirement of an appeal bond would serve the
desired objective of resolving controversies on the merits, or (4) the appellants,
at the very least, exhibited their willingness and/or good faith by posting a
partial bond during the reglementary period." 69CHTAIc
Here, QFI posted a partial bond in the amount of P400,000.00, or more than
twenty percent (20%) of the monetary judgment, within the reglementary period to
appeal, together with the Motion to Reduce Bond anchored on its averred di culty in
raising the amount of the bond and searching for an insurance company that can cover
said amount within the short period of time to perfect its appeal. Before the NLRC
could even act on the Motion to Reduce Bond, QFI posted a surety bond from an
accredited insurance company covering fully the judgment award.
However, the CA held that the grounds relied upon by QFI are not meritorious,
and that the partial bond posted was not reasonable in relation to the monetary
judgment.
Case law has held that for purposes of justifying the reduction of the appeal
bond, the merit referred to may pertain to (a) an appellant's lack of nancial
capability to pay the full amount of the bond, or (b) the merits of the main
appeal such as when there is a valid claim that there was no illegal dismissal to justify
the award, the absence of an employer-employee relationship, prescription of claims,
and other similarly valid issues that are raised in the appeal. 70
In this case, the NLRC held that a liberal application of the requirement on the
timely ling of the appeal bond is justi ed, nding that (a) the posting of a P400,000.00
cash bond within the reglementary period to appeal and the subsequent posting of a
surety bond constitute substantial compliance of the bond requirement; and (b) there is
merit in QFI's appeal.
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As to what constitutes "a reasonable amount of bond" that must accompany the
motion to reduce bond in order to suspend the period to perfect an appeal, the Court, in
McBurnie v. Ganzon, 71 pronounced: cHDAIS
7. Id. at 52-53.
8. Id. at 97-98.
9. Id. at 113 and 119.
10. Id. at 98.
11. Id. at 107.
54. Formerly Article 223. Department Advisory No. 01, Series of 2015, on Renumbering of the
Labor Code of the Philippines, as Amended.
55. The applicable NLRC Rules of Procedure as QFI's Notice of Appeal was filed on February
8, 2008.
56. Rollo, p. 143.
64. See Beduya v. Ace Promotion and Marketing Corporation, G.R. No. 195513, June 22, 2015,
citing Grand Asian Shipping Lines, Inc. v. Galvez, G.R. No. 178184, January 29, 2014,
715 SCRA 1; Mendoza v. HMS Credit Corporation, G.R. No. 187232, April 17, 2013,
696 SCRA 794; Pasig Cylinder Manufacturing, Corporation v. Rollo, 644 Phil. 588
(2010); Nicol v. Footjoy Industrial Corporation, 555 Phil. 275 (2007); Nueva Ecija I
Electric Cooperative, Inc. v. NLRC, 380 Phil. 44 (2000); Rosewood Processing, Inc. v.
NLRC, 352 Phil. 1013 (1998); Fernandez v. NLRC, 349 Phil. 65 (1998); and Manila
Mandarin Employees Union v. NLRC, 332 Phil. 354 (1996).
65. Philippine Touristers, Inc. v. MAS Transit Workers Union-Anglo-KMU, supra note 63, at 310.
66. Id.
67. McBurnie v. Ganzon, G.R. Nos. 178034, 178117, and 186984-85, October 17, 2013, 707
SCRA 646, 679.
68. 555 Phil. 275 (2007).
79. See Aujero v. Phil. Communications Satellite Corp., 679 Phil. 463, 477-478 (2012).