Primary Holding

Cooperatives are not exempt from posting an appeal bond under Article 223 of the Labor Code when appealing to the NLRC. The exemption in Article 62(7) of the Cooperative Code applies only to appeals from decisions of inferior courts (e.g., municipal or regional trial courts), not quasi-judicial agencies.

Background

Josefina Hipolito-Herrero was hired by Balagtas Multi-Purpose Cooperative in 1991. After closing a branch office in 1994, she resigned and later filed a complaint for illegal dismissal and unpaid benefits. The Labor Arbiter ruled in her favor, ordering Balagtas to pay backwages, separation pay, and 13th-month pay. Balagtas appealed to the NLRC but refused to post the required bond, citing Article 62(7) of the Cooperative Code. The NLRC and Court of Appeals rejected this argument.

Facts

• 1. Josefina worked part-time at Balagtas Cooperative from 1991–1994.
• 2. She took a leave of absence in May 1994 and resigned after her branch closed.
• 3. Nearly nine months later, she filed a labor complaint.
• 4. The Labor Arbiter awarded her P2,000 (13th-month pay), P188,000 (backwages), and P28,000 (separation pay).

Arguments of the Petitioners

• 1. Claimed exemption from appeal bonds under Article 62(7) of the Cooperative Code, arguing "inferior courts" includes quasi-judicial bodies like the NLRC.
• 2. Asserted that judicial liberality should apply to avoid "harsh technicalities."

Arguments of the Respondents

• 1. The exemption in the Cooperative Code applies only to judicial courts, not quasi-judicial agencies.
• 2. The Labor Code’s bond requirement under Article 223 is mandatory for employers.

Issues

• 1. Whether cooperatives are exempt from posting appeal bonds under the Cooperative Code when appealing to the NLRC.
• 2. Whether a certification from the Cooperative Development Authority (CDA) can substitute for a bond.

Ruling

• 1. Issue 1: The Supreme Court ruled that Article 62(7) of the Cooperative Code exempts cooperatives only from bond requirements in appeals from inferior courts (e.g., municipal/regional trial courts). The NLRC, as a quasi-judicial body, is excluded.
• 2. Issue 2: The CDA certification does not substitute for a bond. The Labor Code’s bond requirement ensures protection for employees pending appeal.

Rationale

• 1. Exemptions must be strictly construed and cannot be extended by implication.
• 2. The Cooperative Code’s exemption list under "Tax and Other Exemptions" is exhaustive.
• 3. The Labor Code applies to cooperatives per Article 119 of the Cooperative Code.

Doctrines

• 1. Strict Construction of Exemptions: Exemptions from general rules (e.g., bond requirements) must be explicitly stated.
• 2. Statutory Interpretation: The term "inferior courts" does not include quasi-judicial agencies.
• 3. Labor Protection Priority: The state’s constitutional mandate to protect labor justifies bond requirements.

Key Excerpts

• 1. On Statutory Interpretation: "Exemptions cannot spring out of mere presumptions or deductions."
• 2. On Labor Rights: "The appeal bond insures against any occurrence that would defeat recovery by the employee if the judgment is affirmed."

Precedents Cited

• 1. La Bugal-B’laan Tribal Association, Inc. v. Ramos (2004): Emphasized strict construction of exemptions.
• 2. Aris (Phil.) Inc. v. NLRC (1991): Upheld the appeal bond requirement under the Labor Code.

Statutory and Constitutional Provisions

• 1. 1987 Constitution: Article XIII (Labor Protection).
• 2. Labor Code: Article 223 (Appeal Bond Requirement).
• 3. Cooperative Code: Article 62(7): Exemption from appeal bonds for inferior court decisions.
• 4. Cooperative Code: Article 119: Labor laws apply to cooperatives.