G.R. No. 201237 , September 3, 2014.
PHILIPPINE TOURISTERS, INC. and/or ALEJANDRO R. YAGUE, JR., Petitioners, vs. MAS TRANSIT WORKERS UNION-ANGLO-KMU and its members, represented by ABRAHAM TUMALA, JR., Respondents.

FACTS

On June 14, 2000, respondent Samahan ng Manggagawa sa Mas Transit-Anglo-KMU (the Union) filed a petition for certification election. On September 15, 2000, MAS Transit, Inc. (MTI) sold its passenger buses and Certificate of Public Convenience to petitioner Philippine Touristers, Inc. (PTI). On March 7, 2001, MTI issued a notice advising employees of the sale and cessation of operations, offering separation benefits and the option to apply with PTI. On March 31, 2001, MTI terminated the individual respondents, citing cessation of business. The Union filed a complaint for illegal dismissal and unfair labor practice (illegal lockout) against MTI and petitioners PTI and its president Alejandro R. Yague, Jr., alleging the sale was intended to frustrate their right to self-organization and that the stockholders of MTI and PTI were the same. The Labor Arbiter ruled in favor of the respondents, finding illegal lockout and holding MTI and petitioners jointly and severally liable. Petitioners appealed to the NLRC, posting a partial surety bond of ₱5,000,000.00 against a monetary award of ₱12,833,210.00, with a motion to reduce bond citing liquidity problems. They later posted an additional bond to cover the full amount and substituted the bonds. The NLRC initially dismissed the appeal for failure to post the full bond on time but later reinstated it upon reconsideration, finding substantial compliance. On the merits, the NLRC modified the Labor Arbiter’s decision, dismissing the complaint against petitioners, finding them separate juridical entities from MTI and the sale valid. The CA annulled the NLRC’s modified ruling, finding grave abuse of discretion in liberally applying the rules on appeal perfection, as the partial bond was defective and the ground for reduction unsubstantiated.

ISSUE

Whether the Court of Appeals erred in annulling the NLRC’s decision which had reinstated petitioners’ appeal and dismissed the complaint against them, specifically on the grounds of improper perfection of appeal and the substantive finding of no joint liability.

RULING

The Supreme Court denied the petition and affirmed the CA decision. The NLRC gravely abused its discretion in reinstating petitioners’ appeal. The posting of a cash or surety bond equivalent to the monetary award is mandatory and jurisdictional for perfecting an appeal in labor cases. Petitioners failed to comply with this requirement within the reglementary period. Their initial partial bond was invalid as it was issued in favor of the wrong party (MTI instead of PTI) and by a bonding company not authorized to transact business in all courts. Their motion to reduce bond, based on alleged liquidity problems, was insufficiently substantiated by the audited financial statements provided. No compelling reason justified a liberal application of the procedural rules. Consequently, the NLRC’s decision reinstating the appeal and modifying the Labor Arbiter’s ruling was void. The Labor Arbiter’s decision, which had become final and executory due to the imperfect appeal, was reinstated. The Court found it unnecessary to rule on the substantive issue of petitioners’ liability, as the procedural lapse was dispositive.