REQUIREMENTS FOR REDUCTION OF APPEAL BOND

SECTION 6, RULE VI, 2011 NLRC RULES OF PROCEDURE

“SECTION 6. BOND. - 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 bond, which shall either be in the form of cash deposit
or surety bond equivalent in amount to the monetary award, exclusive of damages
and attorney’s fees.

In case of surety bond, the same shall be issued by a reputable bonding company
duly accredited by the Commission or the Supreme Court, and shall be
accompanied by original or certified true copies of the following:

a) a joint declaration under oath by the employer, his/her

counsel, and the bonding company, attesting that the bond
posted is genuine, and shall be in effect until final disposition
of the case.

b) an indemnity agreement between the employer- appellant

and bonding company;

c) proof of security deposit or collateral securing the bond:

provided, that a check shall not be considered as an
acceptable security;

d) a certificate of authority from the Insurance Commission;

e) certificate of registration from the Securities and

Exchange Commission;

f) certificate of accreditation and authority from the Supreme

Court; and

g) notarized board resolution or secretary’s certificate from

the bonding company showing its authorized signatories and
their specimen signatures.

The Commission through the Chairman may on justifiable grounds blacklist a

bonding company, notwithstanding its accreditation by the Supreme Court.

A cash or surety bond shall be valid and effective from the date of deposit or
posting, until the case is finally decided, resolved or terminated, or the award
 satisfied. This condition shall be deemed incorporated in the terms and conditions
of the surety bond, and shall be binding on the appellants and the bonding company.

The appellant shall furnish the appellee with a certified true copy of the said surety
bond with all the above- mentioned supporting documents. The appellee shall
verify the regularity and genuineness thereof and immediately report any
irregularity to the Commission.

Upon verification by the Commission that the bond is irregular or not genuine, the
Commission shall cause the immediate dismissal of the appeal, and censure the
responsible parties and their counsels, or subject them to reasonable fine or penalty,
and the bonding company may be blacklisted.

No motion to reduce bond shall be entertained except on meritorious grounds, and

only upon the posting of a bond in a reasonable amount in relation to the monetary
award.

The mere filing of a motion to reduce bond without complying with the requisites
in the preceding paragraphs shall not stop the running of the period to perfect an
appeal. (6a)”

XXX
MERITOROUS GROUNDS
(Excerpts from various cases)

1. The failure of the Labor Arbiter to state the exact amount of backwages and separation
pay due. There was therefore no basis for determining the amount of the bond to be filed
by private respondents therein1

2. Petitioner was excused for its failure to give the bond because it was misled by the notice
of the decision which, while stating the requirements for perfecting an appeal, did not
mention that a bond must be filed2

3. However, in a number of recent cases, the Court has eased the requirement of posting a
bond, as a condition for perfection of appeals in labor cases, when to do so would bring
about the immediate and appropriate resolution of controversies on the merits without over-
indulgence in technicalities, ever mindful of the underlying spirit and intention of the Labor
Code to ascertain the facts of each case speedily and objectively without regard to technical
rules of law and procedure, all in the interest of due process. Punctilious adherence to
stringent technical rules may be relaxed in the interest of the working man, and should not
defeat the complete and equitable resolution of the rights and obligations of the parties.3

4. Some of these cases include: (a) counsels reliance on the footnote of the notice of the
decision of the labor arbiter that the aggrieved party may appeal xxx within ten
(10) working days; (b) fundamental consideration of substantial justice; (c) prevention of
miscarriage of justice or of unjust enrichment, as where the tardy appeal is from a decision
granting separation pay which was already granted in an earlier final decision; and (d)
special circumstances of the case combined with its legal merits or the amount and the
issue involved.4

5. This holding is consistent with the norm that letter-perfect rules must yield to the broader
interest of substantial justice. 5

1
Blancaflor v. NLRC
2
Your Bus Line v. NLRC
3
Cabalan vs NLRC
4
PAL vs. NLRC
5
Del Mar Domestic Enterprises vs. National Labor Relations Commission
SC Clarifies NLRC Rules of Procedure on Posting and Reduction of Bond6
Posted Tue, 07/10/2012 - 08:29

In a February 2012 decision, the Supreme Court clarifies that the Rules of Procedure of
the NLRC allows the filing of a motion to reduce bond subject to two conditions: (1) there
is meritorious ground, and (2) a bond in a reasonable amount is posted. 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.

Section 2, Article I of the Rules of Procedure of the NLRC states that, “These Rules
shall be liberally construed to carry out the objectives of the Constitution, the Labor Code
of the Philippines and other relevant legislations, and to assist the parties in obtaining just,
expeditious and inexpensive resolution and settlement of labor disputes.”

In order to give full effect to the provisions on motion to reduce bond, the appellant
must be allowed to wait for the ruling of the NLRC on the motion even beyond the 10-day
period to perfect an appeal. If the NLRC grants the motion and rules that there is indeed
meritorious ground and that the amount of the bond posted is reasonable, then the appeal
is perfected. If the NLRC denies the motion, the appellant may still file a motion for
reconsideration as provided under Section 15, Rule VII of the Rules.

If the NLRC grants the motion for reconsideration and rules that there is indeed
meritorious ground and that the amount of the bond posted is reasonable, then the appeal
is perfected. If the NLRC denies the motion, then the decision of the labor arbiter becomes
final and executory.

In any case, the rule 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.
Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary
award may be perfected only upon the posting of a 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

6
http://nlrc.dole.gov.ph/?q=node/54
enrichment; and (3) special circumstances of the case combined with its legal merits, and
the amount and the issue involved.

In a number of cases, the Court has relaxed the requirement in order to bring about the
immediate and appropriate resolution of controversies on the merits. Some of these cases
include: “(a) counsel’s reliance on the footnote of the notice of the decision of the labor
arbiter that the aggrieved party may appeal within ten (10) working days; (b) fundamental
consideration of substantial justice; (c) prevention of miscarriage of justice or of unjust
enrichment, as where the tardy appeal is from a decision granting separation pay which
was already granted in an earlier final decision; and (d) special circumstances of the case
combined with its legal merits or the amount and the issue involved. (Garcia, et. al. vs. KJ
Commercial and Reynaldo Que, G.R. No. 196830, February 29, 2012)