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MOTION TO REDUCE BOND IN LABOR CASES
If an employer loses a labor case and there is a judgment award involving the monetary claims of the employee, the employer has to post a bond in order to perfect an appeal. It is called supersedeas bond.
Under Section 6, Rule IV of the 2011 NLRC Rules of Procedure, 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.
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.
The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the Labor Arbiter. The lawmakers clearly intended to make the bond a mandatory requisite for the perfection of an appeal by the employer as inferred from 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 clear that the posting of a cash or surety bond by the employer is the essential and exclusive means by which an employer’s appeal may be perfected.
Moreover, the filing of the bond is not only mandatory but a jurisdictional requirement as well, that must be complied with in order to confer jurisdiction upon the NLRC. Non-compliance therewith renders the decision of the Labor Arbiter 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.
Nothing in the Labor Code or the NLRC Rules of Procedure authorizes the posting of a bond that is less than the monetary award in the judgment, or would deem such insufficient posting as sufficient to perfect the appeal.
While the bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the appellant, otherwise the filing of the motion to reduce
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bond shall not stop the running of the period to perfect an appeal.
The qualification effectively requires that unless the NLRC grants the reduction of the cash bond within the 10-day reglementary period, the employer is still expected to post the cash or surety bond securing the full amount within the said 10-day period. If the NLRC does eventually grant the motion for reduction after the reglementary period has elapsed, the correct relief would be to reduce the cash or surety bond already posted by the employer within the 10-day period.
In the case of McBurnie vs. Ganzon [G.R. Nos. 178034 & 178117 G R. Nos. 186984-85, October 17, 2013] the SC held that the jurisprudence that provides that the filing of a motion to reduce bond, coupled with compliance with the two conditions emphasized in Garcia v. KJ Commercial for the grant of such motion, namely, (1) a meritorious ground, and (2) posting of a bond in a reasonable amount, shall suffice to suspend the running of the period to perfect an appeal from the labor arbiter’s decision to the NLRC.
The SC held further that to require the full amount of the bond within the 10-day reglementary period would only render nugatory the legal provisions which allow an appellant to seek a reduction of the bond. The filing of a motion to reduce bond and compliance with the two conditions stop the running of the period to perfect an appeal.
The NLRC has full discretion to grant or deny the motion to reduce bond, and it may rule on the motion beyond the 10-day period within which to perfect an appeal. Obviously, at the time of the filing of the motion to reduce bond and posting of a bond in a reasonable amount, there is no assurance whether the appellant’s motion is indeed based on “meritorious ground” and whether the bond he or she posted is of a “reasonable amount.” Thus, the appellant always runs the risk of failing to perfect an appeal.
In any case, the SC ruled that the filing of a motion to reduce bond shall not stop the running of the period to perfect an appeal is not absolute. The Court may relax the rule. Citing Intertranz Container Lines, Inc. v. Bautista, the SC held that in labor cases, an appeal from a decision involving a monetary award may be perfected only upon the posting of cash or surety bond. The Court, however, has relaxed this requirement under certain exceptional circumstances in order to resolve controversies on their merits.
These circumstances include: (1) fundamental consideration of substantial justice; (2) prevention of miscarriage of justice or of unjust enrichment; and (3) special circumstances of the case combined with its legal merits, and the amount and the issue involved.”
Although the general rule provides that an appeal in labor cases from a decision involving a monetary award may be perfected only upon the posting of a cash or surety bond, the SC has relaxed this requirement under certain exceptional circumstances in order to resolve controversies on their merits. These circumstances include: (1) the fundamental consideration of substantial justice; (2) the prevention of miscarriage of justice or of unjust enrichment; and (3) special circumstances of the case combined with its legal merits, and the amount and the issue involved.
Guidelines that are applicable in the reduction of appeal bonds were also explained in Nicol v. Footjoy Industrial Corporation. The bond requirement in appeals involving monetary awards has been and may be relaxed in meritorious cases, including 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.
Citing Blancaflor vs. NLRC, the SC also emphasized that while Article 223 of the Labor Code, as amended by Republic Act No. 6715, which requires a cash or surety bond in an amount equivalent to the monetary award in the judgment appealed from may be considered a jurisdictional requirement for the perfection of an appeal, nevertheless, adhering to the principle that substantial justice is better served by allowing the appeal on the merits to be threshed out by the NLRC, the foregoing requirement of the law should be given a liberal interpretation.
For the SC however, the NLRC, pursuant to Section 6, Rule VI of the NLRC Rules of Procedure, shall only accept motions to reduce bond that are coupled with the posting of a bond in a reasonable amount. Time and again, we have explained that the bond requirement imposed upon appellants in labor cases is intended to ensure the satisfaction of awards that are made in favor of appellees, in the event that their claims are eventually sustained by the courts. On the part of the appellants, its posting may also signify their good faith and willingness to recognize the final outcome of their appeal.
At the time of a motion to reduce appeal bond’s filing, the question of what constitutes “a reasonable amount of bond” that must accompany the motion may be subject to differing interpretations of litigants. The judgment of the NLRC which has the discretion under the law to determine such amount cannot as yet be invoked by litigants until after their motions to reduce appeal bond are accepted.
Given these limitations, it is not uncommon for a party to unduly forfeit his opportunity to seek a reduction of the required bond and thus, to appeal, when the NLRC eventually disagrees with the party’s assessment. These have also resulted in the filing of numerous petitions against the NLRC, citing an alleged grave abuse of discretion on the part of the labor tribunal for its finding on the sufficiency or insufficiency of posted appeal bonds.
It is in this light that the Court finds it necessary to set a parameter for the litigants’ and the NLRC’s guidance on the amount of bond that shall hereafter be filed with a motion for a bond’s reduction. To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the chance to seek a reduction of the appeal bond are effectively carried out, without however defeating the benefits of the bond requirement in favor of a winning litigant, all motions to reduce bond that are to be filed with the NLRC shall be accompanied by the posting of a cash or surety bond equivalent to 10% of the monetary award that is subject of the appeal, which shall provisionally be deemed the reasonable amount of the bond in the meantime that an appellant’s motion is pending resolution by the Commission.
In conformity with the NLRC Rules, the monetary award, for the purpose of computing the necessary appeal bond, shall exclude damages and attorney’s fees. Only after the posting of a bond in the required percentage shall an appellant’s period to perfect an appeal under the NLRC Rules be deemed suspended.
The foregoing shall not be misconstrued to unduly hinder the NLRC’s exercise of its discretion, given that the percentage of bond that is set by this guideline shall be merely provisional. The NLRC retains its authority and duty to resolve the motion and determine the final amount of bond that shall be posted by the appellant, still in accordance with the standards of “meritorious grounds” and “reasonable amount”.
Should the NLRC, after considering the motion’s merit, determine that a greater amount or the full amount of the bond needs to be posted by the appellant, then the party shall comply accordingly. The appellant shall be given a period of 10 days from notice of the NLRC order within which to perfect the appeal by posting the required appeal bond.
In the McBurnie case, the SC pronounced that the matter of the filing and acceptance of motions to reduce appeal bond, as provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court
hereby RESOLVES that henceforth, the following guidelines shall be observed:
(a) The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject to the following conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is posted;
(b) For purposes of compliance with condition no. (2), a motion shall be accompanied by the posting o a provisional cash or surety bond equivalent to ten percent (10%) of the monetary award subject o the appeal, exclusive of damages and attorney’s fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running of the 10-day reglementary period to perfect an appeal from the labor arbiter’s decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final amount of bond that shall be posted by the appellant, still in accordance with the standards of meritorious grounds and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the amount of the provisional bond, the appellant shall be given a fresh period of ten 10) days from notice of the NLRC order within which to perfect the appeal by posting the required appeal bond.
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