G.R. No. 202374 , June 30, 2021
ABELARDO SALAZAR, PETITIONER, VS. ALBINA SIMBAJON, GEMMA MAGAHIS, REBECCA OBOZA, MARILOU MARCELINO, FLORIAN EMPREMIADO, JOEBANE ASOMBRADO, ARNOLD LIGOY LIGOY, RAUL GALONIA, LITO ESPEJON, MARINO GAMALONG, MELODY CAGNAYO, WILMA TAN, ANALYN CAGNAYO, ANNALIZA ALIWAG, AND TIRSO LIGOY LIGOY, RESPONDENTS.

FACTS

The respondents (Simbajon, et al.) filed a complaint for illegal dismissal and monetary claims against Q.S.O. Disco Pub & Restaurant and/or Abelardo Salazar, Quirino Ortega, and Lucia Bayang before the Labor Arbiter. They alleged they were employees of the restaurant until their termination in June 2006, which they claimed was due to their union activities and not due to the alleged business closure. Abelardo Salazar denied being an employer, asserting he was merely the lessor of the building where the restaurant operated, and presented contracts of lease, tax returns, and business permits issued in Lucia Bayang’s name as evidence. On February 28, 2007, the Labor Arbiter held Abelardo, Lucia, and Quirino solidarily liable for illegal dismissal and ordered them to pay monetary awards totaling P3,683,394.45. Abelardo appealed to the NLRC and posted a P500,000.00 cash bond. He later moved to reduce the bond and also posted a P3,100,000.00 surety bond. The NLRC granted his motion to substitute the cash bond with a surety bond of the same amount (P500,000.00), which he posted on November 13, 2008. On March 31, 2009, the NLRC exonerated Abelardo, finding no substantial evidence of an employer-employee relationship. The respondents filed a petition for certiorari with the Court of Appeals, arguing Abelardo failed to perfect his appeal due to non-compliance with the mandatory appeal bond requirement (i.e., not posting a bond equivalent to the full monetary award). The CA granted the petition on December 29, 2011, ruling Abelardo did not perfect his appeal, vacated the NLRC decision, and reinstated the Labor Arbiter’s decision. Abelardo filed this Petition for Review on Certiorari.

ISSUE

1. Whether the Court of Appeals erred in ruling that Abelardo Salazar did not perfect his appeal to the NLRC due to non-compliance with the appeal bond requirement.
2. Whether the Court of Appeals erred in reinstating the Labor Arbiter’s Decision holding Abelardo solidarily liable despite the alleged lack of employer-employee relationship.

RULING

The Supreme Court granted the petition, reversing the Court of Appeals.
1. On the perfection of appeal: The Supreme Court held that Abelardo Salazar substantially complied with the appeal bond requirement. The posting of an appeal bond is mandatory and jurisdictional. However, the bond requirement may be relaxed in exceptional cases to resolve controversies on their merits, provided there is substantial compliance. Here, Abelardo posted a P500,000.00 cash bond within the reglementary period, filed a motion to reduce bond, and later posted a P3,100,000.00 surety bond. While the NLRC initially required a P500,000.00 surety bond substitution, which he complied with, his earlier actions demonstrated a willingness to post a bond and constituted substantial compliance. The Court cited precedents (Rosewood Processing, Inc. v. NLRC, Postigo v. PTSI) where substantial compliance was recognized despite not posting the full amount immediately, especially when a motion to reduce bond is filed. The CA erred in strictly applying the bond requirement without considering substantial compliance.
2. On the existence of employer-employee relationship: The Supreme Court held that no employer-employee relationship existed between Abelardo and the respondents. The four-fold test for such a relationship includes: (a) selection and engagement; (b) payment of wages; (c) power of dismissal; and (d) power of control. The respondents failed to substantiate these elements. Their allegations and position paper indicated it was Lucia Bayang who dismissed them. Abelardo presented strong evidence—Contracts of Lease, Tax Returns showing income only from rentals, and business permits under Lucia’s name—to prove he was merely the lessor, not the employer. The affidavit of a former manager alleging Abelardo’s control was deemed insufficient as it was not offered as evidence during the proceedings before the Labor Arbiter. The burden of proof rests on the party alleging the relationship, and the respondents failed to discharge this burden. Therefore, the NLRC correctly exonerated Abelardo from liability.
The Court of Appeals’ Decision was set aside, and the NLRC Decision exonerating Abelardo Salazar was reinstated.