Filipinas Systems, Inc. vs. NLRC

The posting of a cash or surety bond within the ten (10)-day reglementary period is a jurisdictional requisite for the perfection of an employer's appeal to the NLRC; late filing of the bond divests the NLRC of jurisdiction over the appeal. Relaxation of this rule is allowed only in rare instances upon a showing of substantial compliance and to prevent patent injustice, neither of which attended the employers' case.

Petitioners Filipinas (Pre-Fabricated Bldg.) Systems "FILSYSTEMS," Inc. and its president Felipe A. Cruz, Jr. employed respondents Cresenciano Bebanco, Juanito R. Benzon, Rey Nualla, Bonifacio Torres, Ernesto Sinconeque and Emilio Aneano, who were assigned to the Jaka Tower I project. The dispute concerns the termination of these workers and their monetary claims for service incentive leave, 13th month pay and night shift differential under the Labor Code, cognizable through the mandatory grievance machinery of the NLRC: compulsory conciliation before a Labor Arbiter, appeal to the NLRC, and review by the Court of Appeals under Rule 65 of the 1997 Rules on Civil Procedure.

A complaint for illegal dismissal and monetary claims for service incentive leave, 13th month pay and night shift differential was filed by respondents Cresenciano Bebanco, Juanito R. Benzon, Rey Nualla, Bonifacio Torres, Ernesto Sinconeque and Emilio Aneano against petitioners Filipinas (Pre-Fabricated Bldg.) Systems "FILSYSTEMS," Inc. and Felipe A. Cruz, Jr. before the National Labor Relations Commission. The complaint was assigned to Labor Arbiter Donato G. Quinto, Jr., who ordered the parties to file their position papers. Respondents complied, but petitioners did not, despite several warnings and time extensions; their inaction was construed as a waiver of their right to present evidence.

The Labor Arbiter decided the complaint on the merits in favor of respondents. He sustained their claim of illegal dismissal because petitioners failed to adduce contrary evidence, ordered petitioners to reinstate respondents, and granted their monetary claims. Petitioners received a copy of the Arbiter's decision on October 31, 1998.

Petitioners appealed to the NLRC. For the first time, they submitted evidence that respondents were project employees and that their dismissal was due to the discontinuation of the Jaka Tower I project where they were assigned. Their memorandum of appeal was dated November 9, 1998, but the appeal bond to stay execution of the decision was executed only on November 17, 1998 — seven days beyond the ten-day reglementary period — with no partial payment of the bond made during the reglementary period and no explanation offered for its late filing. Respondents assailed the NLRC's jurisdiction over the appeal for the late filing of the appeal bond and contended that it was too late for petitioners to present evidence before the NLRC. The NLRC nevertheless assumed jurisdiction and, because of the evidence on the issue of illegal dismissal, remanded the case to the Labor Arbiter for further proceedings; respondents' motion for reconsideration was denied.

Respondents then went to the Court of Appeals on a petition for certiorari. The appellate court ruled that the NLRC did not have jurisdiction over the appeal since the appeal bond was filed out of time, and it reinstated the Labor Arbiter's decision. Petitioners' motion for reconsideration was denied on October 31, 2001, after which an entry of judgment was made, no petition having been filed before the SC. Atty. Rodolfo P. Orticio, petitioners' new counsel, moved for the cancellation of the entry of judgment on the ground that he received a copy of the denial only on June 19, 2002 and that his request was filed within the allowable period. In a resolution dated August 20, 2002, the CA denied the request, finding that the resolution denying the motion for reconsideration was properly received on November 9, 2001 by petitioners' former counsel, Atty. Louis Acosta, and that Atty. Orticio filed his notice of appearance only on November 23, 2001; the judgment therefore had become final and executory. Petitioners filed an extension of time to file the present petition on June 16, 2002, alleging that they had a new counsel, but the records showed they had obtained the services of present counsel on November 23, 2001.

• Jurisdiction over the Appeal: Petitioners argued that the CA erred and committed grave abuse of discretion in ruling that the NLRC did not acquire jurisdiction over their appeal merely because the appeal bond was submitted seven days beyond the ten-day reglementary period.
• Remand to the Labor Arbiter: Petitioners argued that the CA erred in faulting the NLRC's remand of the case to the Labor Arbiter, contending that to insist on remanding a case each time conflicting claims arise would be an abdication of the NLRC's duty, since conflicts are inherent and integral in all disputes.
• Due Course of the Certiorari Petition: Petitioners argued that the CA erred in giving due course to respondents' petition for certiorari under Rule 65 of the 1997 Rules on Civil Procedure and in annulling the NLRC Resolutions and reinstating the Labor Arbiter's decision.
• Cancellation of Entry of Judgment: Petitioners' new counsel, Atty. Rodolfo P. Orticio, moved for the cancellation of the entry of judgment on the ground that he was the new counsel and received a copy of the denial of the motion for reconsideration only on June 19, 2002, and that his request was filed within the allowable period.

• Late Appeal Bond: Respondents contended that the NLRC had no jurisdiction over petitioners' appeal because petitioners failed to file the appeal bond within the ten (10)-day reglementary period.
• Belated Evidence: Respondents contended that it was too late for petitioners to present evidence before the NLRC, their evidence having been withheld before the Labor Arbiter despite the opportunities given to them.
• Finality of the CA Judgment: Respondents contended that the present petition should not be allowed because the decision of the appellate court had already become final and executory, an entry of judgment having been made after the denial of petitioners' motion for reconsideration and no petition having been filed before the SC.

• Perfection of Appeal: Whether the NLRC acquired jurisdiction over petitioners' appeal despite the filing of the appeal bond seven days beyond the ten (10)-day reglementary period.
• Belated Submission of Evidence: Whether the NLRC may entertain evidence first submitted on appeal that petitioners failed to adduce before the Labor Arbiter despite the opportunities given.
• Finality of the CA Judgment: Whether the present petition may be given due course notwithstanding that the CA's decision had become final and executory and an entry of judgment had been made.

• Perfection of Appeal: No. Payment of the appeal bond is a jurisdictional requisite for the perfection of an appeal to the NLRC under Art. 223 of the Labor Code and the NLRC Rules of Procedure, and the bond was executed seven days late with no explanation or partial payment. The late filing divested the NLRC of jurisdiction to entertain the appeal.
• Belated Submission of Evidence: No. Petitioners should have adduced their evidence on illegal dismissal before the Labor Arbiter and failed to do so despite the opportunities given. The practice of withholding evidence until an adverse decision and offering it only on appeal cannot be tolerated because it defeats the speedy administration of justice involving workers and smacks of unfairness.
• Finality of the CA Judgment: No. The petition should have been filed within fifteen days under Rule 45 of the Rules of Court. Petitioners obtained their present counsel on November 23, 2001, so there was ample time to appeal the CA's adverse ruling; the counsel's failure to appeal seasonably binds the petitioners.

• Perfection of Appeal: Art. 223 of the Labor Code provides that decisions of the Labor Arbiter are final and executory unless appealed to the Commission within ten (10) calendar days from receipt, and 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. The NLRC Rules of Procedure (Rule VI) likewise require the appeal and the appeal bond to be filed within the ten-day reglementary period, allow no extension of the period, and provide that a mere notice of appeal without complying with the other requisites shall not stop the running of the period. The SC has consistently ruled that payment of the appeal bond is a jurisdictional requisite for the perfection of an appeal to the NLRC, citing Santos vs. Velarde, and that the rule is relaxed only in rare instances upon a showing of substantial compliance and to prevent patent injustice. Applying these rules, petitioners received the Arbiter's decision on October 31, 1998, their memorandum of appeal was dated November 9, 1998, but the appeal bond was executed only on November 17, 1998; the records showed no partial payment during the reglementary period and no explanation for the late filing. Given these facts, the late filing of the bond divested the NLRC of jurisdiction to entertain the appeal.
• Belated Submission of Evidence: Petitioners should have adduced their evidence on the issue of illegal dismissal before the Labor Arbiter but failed to do so despite the opportunities given by the Arbiter; only after an adverse decision was rendered did they offer to submit their evidence before the NLRC refuting respondents' complaint. The SC held that such a practice cannot be tolerated because it will defeat the speedy administration of justice involving poor workers, and that it smacks of unfairness.
• Finality of the CA Judgment: Under Rule 45 of the Rules of Court, a petition for review on certiorari must be filed within fifteen (15) days from notice of the judgment or of the denial of the motion for reconsideration. Petitioners received a copy of the denial of their motion for reconsideration on November 9, 2001, but filed an extension of time only on June 16, 2002, alleging they had a new counsel. The SC noted that petitioners obtained the services of present counsel on November 23, 2001, so there was ample time for counsel to appeal the adverse ruling of the appellate court; the appeal was not seasonably made, and such procedural lapse is binding on petitioners. The CA had likewise ruled that a judgment becomes final provided there was proper service of notice, and the records showed proper service upon petitioners' former counsel, Atty. Louis Acosta, on November 9, 2001, leaving the CA no discretion to recall the entry of judgment.

• Appeal bond as a jurisdictional requisite — In an appeal by the employer from a Labor Arbiter's judgment involving a monetary award, the appeal is perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the NLRC, in the amount equivalent to the monetary award, within the ten (10)-day reglementary period. Failure to file the bond on time divests the NLRC of jurisdiction over the appeal. Applied here: the bond was executed on November 17, 1998, seven days beyond the period, with no partial payment and no explanation, so the NLRC never acquired jurisdiction.
• Relaxation of the appeal bond rule — The rule on timely filing of the appeal bond may be relaxed only in rare instances upon a showing of substantial compliance and to prevent patent injustice. Neither substantial compliance nor patent injustice was shown, so relaxation was unwarranted.
• No extension of the period to perfect an appeal — Under Section 7, Rule VI of the NLRC Rules of Procedure, no motion or request for extension of the period to perfect an appeal is allowed, and a mere notice of appeal without compliance with the other requisites does not stop the running of the period.
• Prohibition on belated submission of evidence — A party who fails to adduce evidence before the Labor Arbiter despite given opportunities cannot offer that evidence for the first time on appeal to the NLRC; tolerating the practice would defeat the speedy administration of justice involving workers and is unfair.
• Finality of judgment upon proper service of notice — A judgment becomes final provided there was proper service of notice thereof; service upon the party's counsel of record suffices, and the entry of judgment leaves the court no discretion to recall it. Applied here: notice was properly served on petitioners' former counsel on November 9, 2001, so the CA decision of April 2, 2001 became final and executory.
• Procedural lapse of counsel binds the client — A client is bound by the procedural mistakes of counsel; petitioners' counsel had ample time from November 23, 2001 to appeal but failed to do so seasonably, and the lapse is binding on petitioners.

• "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." — Art. 223 of the Labor Code, the controlling statutory text on the requisites for perfecting an employer's appeal, on which the SC's jurisdictional ruling rests.
• "We have consistently ruled that payment of the appeal bond is a jurisdictional requisite for the perfection of an appeal to the NLRC. It is only in rare instances that the court relaxes the rule upon a showing of substantial compliance with it and to prevent patent injustice." — The SC's canonical formulation of the appeal bond rule and its narrow exception, applied to divest the NLRC of jurisdiction.
• "Such a practice cannot be tolerated for it will defeat the speedy administration of justice involving our poor workers. Moreover, it smacks of unfairness." — The SC's rejection of the employers' tactic of withholding evidence before the Labor Arbiter and offering it only on appeal.
• "A judgment becomes final provided there was proper service of notice thereof. In this case, the records clearly show there was such proper service upon private respondent's former counsel, Atty. Louis Acosta. Therefore, the decision of 2 April 2001 did become final and executory, leaving Us no more discretion to recall the entry of judgment." — The Court of Appeals' ruling, quoted in the decision, on finality of judgment and the irrecallability of the entry of judgment.

• Santos vs. Velarde, G.R. No. 140753, April 30, 2003 — Controlling precedent relied upon for the rule that payment of the appeal bond is a jurisdictional requisite for the perfection of an appeal to the NLRC.

• Article 223, Labor Code — Provides the ten (10)-calendar-day period to appeal Labor Arbiter decisions to the NLRC and requires that an employer's appeal from a monetary award be perfected only upon posting of a cash or surety bond equivalent to the award; applied to hold that the late bond divested the NLRC of jurisdiction.
• Rule VI, Sections 1, 3 and 7, NLRC Rules of Procedure — Section 1 restates the ten-day reglementary period; Section 3 requires filing within the period, under oath, with payment of the appeal fee, posting of the bond, a memorandum of appeal, and proof of service, and provides that a mere notice of appeal does not stop the running of the period; Section 7 prohibits any extension of the period. Applied to confirm the jurisdictional character of the bond requirement.
• Rule 65, 1997 Rules on Civil Procedure — The rule under which respondents filed their petition for certiorari before the Court of Appeals challenging the NLRC's assumption of jurisdiction.
• Rule 45, Sections 1 and 2, Rules of Court — Governs petitions for review on certiorari before the SC and the fifteen-day period for filing from notice of the judgment or of the denial of the motion for reconsideration; applied to hold the present petition unseasonably filed.