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SECRETARY OF LABOR v. PANAY VETERAN'S SECURITY

FACTS:

Petitioners Edgardo M. Agapay and Samillano A. Alonso, Jr. were hired as security guards by respondent Panay Veteran's Security and Investigation Agency, Inc. They were stationed at the plant site of Food Industries, Inc. (FII) until FII terminated its contract with respondent security agency. After termination, petitioners were not given new assignments and their benefits were withheld. Petitioners filed a complaint with the Department of Labor and Employment (DOLE) for violation of labor standards. DOLE conducted an inspection and found that the security agency failed to present payroll and time records. Respondents were ordered to pay the unpaid benefits within 10 days. Respondents filed an appeal to the Secretary of Labor and Employment, but it was dismissed since they failed to post a bond. Respondents appealed the dismissal to the Court of Appeals (CA), which initially dismissed the appeal but later granted a motion to reconsider and allowed respondents to pursue their appeal. The Secretary of Labor and Employment filed a petition for review before the Supreme Court.

ISSUES:

  1. Whether the failure to post the required appeal bond renders the order final and executory.

  2. Whether the Secretary of Labor and Employment correctly dismissed the appeal for failure to post the appeal bond.

  3. Whether the motion to reduce the appeal bond is allowed in appeals to the Secretary of Labor.

  4. Whether or not the Court of Appeals had the power to apply the ruling in Star Angel Handicraft by analogy to appeals to the Secretary of Labor and Employment in cases involving his visitorial and enforcement powers.

  5. Whether or not the monetary award is subject to legal interest.

RULING:

  1. Yes, the failure to post the required appeal bond renders the order final and executory.

  2. Yes, the Secretary of Labor and Employment correctly dismissed the appeal for failure to post the appeal bond.

  3. No, the motion to reduce the appeal bond is not allowed in appeals to the Secretary of Labor.

  4. The Court held that the Court of Appeals did not have the power to apply the ruling in Star Angel Handicraft by analogy to appeals to the Secretary of Labor and Employment. The Court emphasized that this power can only be exercised by the Court en banc. Therefore, the amended decision of the Court of Appeals was invalid as it was rendered in excess of its jurisdiction.

  5. The Court applied the guidelines laid down in Eastern Shipping Lines, Inc. v. Court of Appeals. It ruled that the monetary award, which did not constitute a loan or forbearance of money, was subject to legal interest at the rate of 6% per annum from the date the obligation was established with reasonable certainty until the order of the DOLE-NCR Regional Director attained finality. Thereafter, the monetary award would earn 12% legal interest per annum until full satisfaction.

PRINCIPLES:

  • The appeal bond is an indispensable requisite for the perfection of an appeal by the employer.

  • An appeal by the employer may be perfected only upon the posting of a cash or surety bond.

  • The posting of an appeal bond serves to assure the employee that, if he finally prevails, the monetary award will be given to him and to discourage the employer from using the appeal to delay or evade payment of his obligations to the employee.

  • The rules of procedure of the NLRC do not apply to cases cognizable by the Secretary of Labor and Employment.

  • The rules governing the proceedings in labor disputes should be interpreted in favor of the worker.

  • The Court of Appeals does not have the power to apply a ruling by analogy to appeals to the Secretary of Labor and Employment involving his visitorial and enforcement powers.

  • The rate of interest and its accrual on an obligation depends on the nature of the obligation breached.

  • When the obligation consists of the payment of a sum of money, the interest due shall be that which may have been stipulated in writing. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from the time of default. The interest due shall itself earn legal interest from the time it is judicially demanded.

  • When an obligation other than a loan or forbearance of money is breached, the court may impose interest on the amount of damages awarded at the rate of 6% per annum. No interest shall be adjudged on unliquidated claims or damages until the demand can be established with reasonable certainty. The interest shall begin to run from the time the demand is made judicially or extrajudicially, or from the date the judgment of the court is made when the quantification of damages can be reasonably ascertained.