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QUANTUM FOODS v. MARCELINO ESLOYO

FACTS:

This case involves Quantum Foods, Inc. (QFI), Marcelino Esloyo, and Glen Magsila. Esloyo was hired as a Major Accounts Representative and later promoted to Regional Sales Manager, while Magsila was hired as a Key Accounts Representative on a probationary status and was later given permanent status. In 2006, QFI decided to reorganize its sales force and Magsila was among those retrenched. Esloyo, on the other hand, was subjected to an audit/investigation due to anonymous complaints against him. After submitting a written explanation, Esloyo was terminated due to loss of trust and confidence.

Esloyo and Magsila separately filed complaints for illegal dismissal against QFI. Esloyo argued that his dismissal was illegal because the charges against him were fabricated and he was not given the opportunity to confront his accusers. Magsila claimed that there was no valid retrenchment and he was merely replaced.

The Labor Arbiter ruled in favor of Esloyo and Magsila, finding their dismissals to be illegal. The LA ordered QFI to pay them backwages, 13th month pay, unpaid salaries, separation pay, and refund of their cash bonds. The LA found that Esloyo's dismissal was tainted with malice and bad faith and that there was no substantial evidence to support the charges against him. The LA also found Magsila's dismissal to be illegal, as there was no valid retrenchment and he was replaced even before his dismissal took effect.

QFI appealed the decision of the LA to the National Labor Relations Commission (NLRC). The employees filed a motion to dismiss the appeal for QFI's failure to comply with procedural requirements. The NLRC denied the employees' motion to dismiss and gave due course to QFI's appeal, ruling that the employees were not illegally dismissed. The NLRC deleted the awards of backwages, 13th month pay, and attorney's fees but upheld the award of separation pay and the refund of cash bonds.

The employees filed a motion for reconsideration, which was denied. The Court of Appeals (CA) reversed the NLRC's ruling and reinstated the LA's decision, stating that QFI's failure to post the required bond rendered the appeal not perfected. QFI filed a motion for reconsideration, which was denied. The issue before the Supreme Court is whether or not the CA erred in finding grave abuse of discretion on the part of the NLRC in giving due course to QFI's appeal.

ISSUES:

  1. Whether or not the appeal filed by the petitioner complied with the requisites for perfection of appeal.

  2. Whether or not the NLRC was justified in relaxing the verification and certification requirements of the appeal.

  3. Whether the partial bond posted by QFI is reasonable in relation to the monetary judgment.

  4. Whether there are meritorious grounds to reduce the bond requirement.

  5. Whether or not the NLRC had jurisdiction over the appeal filed by QFI.

RULING:

  1. The appeal filed by the petitioner did not comply with the requisites for perfection of appeal. It was not accompanied by a bond in an amount equivalent to the monetary judgment. Additionally, the verification was signed by an unauthorized person and it was unaccompanied by a Certificate of Non-Forum Shopping.

  2. The NLRC was justified in relaxing the verification and certification requirements of the appeal. The subsequent submission of proof of authority to act on behalf of the petitioner corporation justified the relaxation of the rules. The certification requirement, although obligatory, is not jurisdictional and the Court has relaxed it under justifiable circumstances. The NLRC, in the interest of substantial justice, can relax its own rules.

  3. The Court held that the partial bond posted by QFI is reasonable in relation to the monetary judgment. QFI posted a cash bond of P400,000.00, which is more than 20% of the monetary judgment, within the reglementary period to appeal. The posting of this partial bond, coupled with the subsequent posting of a surety bond covering the full judgment award, signifies QFI's good faith and willingness to recognize the final outcome of its appeal.

  4. The NLRC has the discretion to grant or deny a motion to reduce the bond, and its ruling will not be disturbed unless tainted with grave abuse of discretion. In this case, the NLRC found that there are meritorious grounds to reduce the bond requirement due to the substantial compliance of QFI with the bond requirement and the presence of merit in QFI's appeal. The Court noted that a liberal application of the requirement on the timely filing of the appeal bond is justified in this case.

  5. The Supreme Court held that the NLRC had jurisdiction over the appeal filed by QFI. It ruled that the NLRC correctly preferred substantial justice over the rigid and stringent application of procedural rules. Therefore, there was no grave abuse of discretion on the part of the NLRC. The Court reversed the decision of the Court of Appeals and remanded the case for appropriate action.

PRINCIPLES:

  • In labor cases, the law governing appeals from the Labor Arbiter's ruling to the NLRC is Article 229 of the Labor Code, which provides grounds for appeal.

  • The appeal in labor cases must comply with the requisites for perfection of appeal, as enumerated in Section 4, Rule VI of the 2005 Revised Rules of Procedure of the NLRC.

  • The verification of a pleading is a formal, not a jurisdictional, requirement and may be corrected or waived by the court or tribunal.

  • The certification requirement is rooted in the principle of not allowing simultaneous remedies in different fora, but it may be relaxed under justifiable circumstances.

  • Labor officials are enjoined to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, in the interest of due process.

  • The posting of a cash or surety bond is indispensable to the perfection of an appeal in labor cases involving monetary awards, but the court may relax this requirement when justified.

  • The reduction of the bond requirement is not a matter of right and is subject to the discretion of the NLRC based on meritorious grounds and the reasonableness of the bond tendered.

  • The merits referred to for justifying the reduction of the bond may pertain to the appellant's lack of financial capability or the merits of the main appeal.

  • A partial bond, even if it does not cover the full monetary judgment, may still be considered reasonable in relation to the judgment if it constitutes substantial compliance and is accompanied by a motion to reduce bond.

  • The posting of a partial bond, coupled with the subsequent posting of a surety bond covering the full judgment award, signifies the appellant's good faith and willingness to recognize the final outcome of the appeal.

  • The NLRC has the discretion to grant or deny a motion to reduce bond, and its ruling will not be disturbed unless tainted with grave abuse of discretion.

  • The NLRC has jurisdiction over appeals filed before it.

  • The preference for substantial justice may outweigh the strict application of procedural rules.

  • Grave abuse of discretion is necessary for the issuance of a writ of certiorari.