EN BANC

[G.R. Nos. 178034 & 178117 & G.R. Nos. 186984-85. October 17, 2013.]

ANDREW JAMES MCBURNIE , petitioner, vs . EULALIO GANZON, EGI-

MANAGERS, INC. and E. GANZON, INC. , respondents.

RESOLUTION

REYES , J : p

For resolution are the —

(1) third motion for reconsideration 1 led by Eulalio Ganzon (Ganzon),
EGI-Managers, Inc. (EGI) and E. Ganzon, Inc., (respondents) on March
27, 2012, seeking a reconsideration of the Court's Decision 2 dated
September 18, 2009 that ordered the dismissal of their appeal to the
National Labor Relations Commission (NLRC) for failure to post
additional appeal bond in the amount of P54,083,910.00; and
(2) motion for reconsideration 3 led by petitioner Andrew James
McBurnie (McBurnie) on September 26, 2012, assailing the Court en
banc's Resolution 4 dated September 4, 2012 that (1) accepted the
case from the Court's Third Division and (2) enjoined the
implementation of the Labor Arbiter's (LA) decision nding him to be
illegally dismissed by the respondents.
Antecedent Facts
The Decision dated September 18, 2009 provides the following antecedent facts and
proceedings —
On October 4, 2002, McBurnie, an Australian national, instituted a complaint for illegal
dismissal and other monetary claims against the respondents. McBurnie claimed that on
May 11, 1999, he signed a ve-year employment agreement 5 with the company EGI as an
Executive Vice-President who shall oversee the management of the company's hotels and
resorts within the Philippines. He performed work for the company until sometime in
November 1999, when he figured in an accident that compelled him to go back to Australia
while recuperating from his injuries. While in Australia, he was informed by respondent
Ganzon that his services were no longer needed because their intended project would no
longer push through.
The respondents opposed the complaint, contending that their agreement with McBurnie
was to jointly invest in and establish a company for the management of hotels. They did
not intend to create an employer-employee relationship, and the execution of the
employment contract that was being invoked by McBurnie was solely for the purpose of
allowing McBurnie to obtain an alien work permit in the Philippines. At the time McBurnie
left for Australia for his medical treatment, he had not yet obtained a work permit. TIESCA

In a Decision 6 dated September 30, 2004, the LA declared McBurnie as having been
illegally dismissed from employment, and thus entitled to receive from the respondents
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 the following amounts: (a) US$985,162.00 as salary and bene ts for the unexpired term of
their employment contract, (b) P2,000,000.00 as moral and exemplary damages, and (c)
attorney's fees equivalent to 10% of the total monetary award.
Feeling aggrieved, the respondents appealed the LA's Decision to the NLRC. 7 On
November 5, 2004, they filed their Memorandum of Appeal 8 and Motion to Reduce Bond, 9
and posted an appeal bond in the amount of P100,000.00. The respondents contended in
their Motion to Reduce Bond, inter alia, that the monetary awards of the LA were null and
excessive, allegedly with the intention of rendering them incapable of posting the
necessary appeal bond. They claimed that an award of "more than P60 Million Pesos to a
single foreigner who had no work permit and who left the country for good one month
after the purported commencement of his employment" was a patent nullity. 1 0
Furthermore, they claimed that because of their business losses that may be attributed to
an economic crisis, they lacked the capacity to pay the bond of almost P60 Million, or even
the millions of pesos in premium required for such bond.
On March 31, 2005, the NLRC denied 1 1 the motion to reduce bond, explaining that "in
cases involving monetary award, an employer seeking to appeal the [LA's] decision to the
Commission is unconditionally required by Art. 223, Labor Code to post bond in the
amount equivalent to the monetary award . . . ." 1 2 Thus, the NLRC required from the
respondents the posting of an additional bond in the amount of P54,083,910.00.
When their motion for reconsideration was denied, 1 3 the respondents decided to elevate
the matter to the Court of Appeals (CA) via the Petition for Certiorari and Prohibition (With
Extremely Urgent Prayer for the Issuance of a Preliminary Injunction and/or Temporary
Restraining Order) 1 4 docketed as CA-G.R. SP No. 90845.
In the meantime, in view of the respondents' failure to post the required additional bond,
the NLRC dismissed their appeal in a Resolution 1 5 dated March 8, 2006. The respondents'
motion for reconsideration was denied on June 30, 2006. 1 6 This prompted the
respondents to le with the CA the Petition for Certiorari (With Urgent Prayers for the
Immediate Issuance of a Temporary Restraining Order and a Writ of Preliminary Injunction)
1 7 docketed as CA-G.R. SP No. 95916, which was later consolidated with CA-G.R. SP
No. 90845.
CA-G.R. SP Nos. 90845 and 95916
On February 16, 2007, the CA issued a Resolution 1 8 granting the respondents' application
for a writ of preliminary injunction. It directed the NLRC, McBurnie, and all persons acting
for and under their authority to refrain from causing the execution and enforcement of the
LA's decision in favor of McBurnie, conditioned upon the respondents' posting of a bond in
the amount of P10,000,000.00. McBurnie sought reconsideration of the issuance of the
writ of preliminary injunction, but this was denied by the CA in its Resolution 1 9 dated May
29, 2007. HISAET

McBurnie then led with the Court a Petition for Review on Certiorari 2 0 docketed as G.R.
Nos. 178034 and 178117, assailing the CA Resolutions that granted the respondents'
application for the injunctive writ. On July 4, 2007, the Court denied the petition on the
ground of McBurnie's failure to comply with the 2004 Rules on Notarial Practice and to
suf ciently show that the CA committed any reversible error. 2 1 A motion for
reconsideration was denied with finality in a Resolution 2 2 dated October 8, 2007.
Unyielding, McBurnie led a Motion for Leave (1) To File Supplemental Motion for
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 Reconsideration and (2) To Admit the Attached Supplemental Motion for Reconsideration,
2 3 which was treated by the Court as a second motion for reconsideration, a prohibited
pleading under Section 2, Rule 56 of the Rules of Court. Thus, the motion for leave was
denied by the Court in a Resolution 2 4 dated November 26, 2007. The Court's Resolution
dated July 4, 2007 then became nal and executory on November 13, 2007; accordingly,
entry of judgment was made in G.R. Nos. 178034 and 178117 . 2 5
In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R. SP
No. 95916 and rendered its Decision 2 6 dated October 27, 2008, allowing the
respondents' motion to reduce appeal bond and directing the NLRC to give due course to
their appeal. The dispositive portion of the CA Decision reads:
WHEREFORE, in view of the foregoing, the petition for certiorari and prohibition
docketed as CA G.R. SP No. 90845 and the petition for certiorari docketed as CA
G.R. SP No. 95916 are GRANTED. Petitioners['] Motion to Reduce Appeal Bond is
GRANTED. Petitioners are hereby DIRECTED to post appeal bond in the amount of
P10,000,000.00. The NLRC is hereby DIRECTED to give due course to petitioners'
appeal in CA G.R. SP No. 95916 which is ordered remanded to the NLRC for
further proceedings.

SO ORDERED. 2 7

On the issue 2 8 of the NLRC's denial of the respondents' motion to reduce appeal bond, the
CA ruled that the NLRC committed grave abuse of discretion in immediately denying the
motion without xing an appeal bond in an amount that was reasonable, as it denied the
respondents of their right to appeal from the decision of the LA. 2 9 The CA explained that "
(w)hile Art. 223 of the Labor Code requiring bond equivalent to the monetary award is
explicit, Section 6, Rule VI of the NLRC Rules of Procedure, as amended, recognized as
exception a motion to reduce bond upon meritorious grounds and upon posting of a bond
in a reasonable amount in relation to the monetary award." 3 0
On the issue 3 1 of the NLRC's dismissal of the appeal on the ground of the respondents'
failure to post the additional appeal bond, the CA also found grave abuse of discretion on
the part of the NLRC, explaining that an appeal bond in the amount of P54,083,910.00 was
prohibitive and excessive. Moreover, the appellate court cited the pendency of the petition
for certiorari over the denial of the motion to reduce bond, which should have prevented
the NLRC from immediately dismissing the respondents' appeal. 3 2
Undeterred, McBurnie led a motion for reconsideration. At the same time, the
respondents moved that the appeal be resolved on the merits by the CA. On March 3,
2009, the CA issued a Resolution 3 3 denying both motions. McBurnie then led with the
Court the Petition for Review on Certiorari 3 4 docketed as G.R. Nos. 186984-85. EIaDHS

In the meantime, the NLRC, acting on the CA's order of remand, accepted the appeal from
the LA's decision, and in its Decision 3 5 dated November 17, 2009, reversed and set aside
the Decision of the LA, and entered a new one dismissing McBurnie's complaint. It
explained that based on records, McBurnie was never an employee of any of the
respondents, but a potential investor in a project that included said respondents, barring a
claim of dismissal, much less, an illegal dismissal. Granting that there was a contract of
employment executed by the parties, McBurnie failed to obtain a work permit which would
have allowed him to work for any of the respondents. 3 6 In the absence of such permit, the
employment agreement was void and thus, could not be the source of any right or
obligation.
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 Court Decision dated September 18, 2009
On September 18, 2009, the Third Division of this Court rendered its Decision 3 7 which
reversed the CA Decision dated October 27, 2008 and Resolution dated March 3, 2009.
The dispositive portion reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in
CA-G.R. SP Nos. 90845 and 95916 dated October 27, 2008 granting respondents'
Motion to Reduce Appeal Bond and ordering the National Labor Relations
Commission to give due course to respondents' appeal, and its March 3, 2009
Resolution denying petitioner's motion for reconsideration, are REVERSED and
SET ASIDE. The March 8, 2006 and June 30, 2006 Resolutions of the National
Labor Relations Commission in NLRC NCR CA NO. 042913-05 dismissing
respondents' appeal for failure to perfect an appeal and denying their motion for
reconsideration, respectively, are REINSTATED and AFFIRMED.
SO ORDERED . 38

The Court explained that the respondents' failure to post a bond equivalent in amount to
the LA's monetary award was fatal to the appeal. 3 9 Although an appeal bond may be
reduced upon motion by an employer, the following conditions must rst be satis ed: (1)
the motion to reduce bond shall be based on meritorious grounds; and (2) a reasonable
amount in relation to the monetary award is posted by the appellant. Unless the NLRC
grants the motion to reduce the cash bond within the 10-day reglementary period to
perfect an appeal from a judgment of the LA, the employer is mandated to post the cash
or surety bond securing the full amount within the said 10-day period. 4 0 The respondents'
initial appeal bond of P100,000.00 was grossly inadequate compared to the LA's
monetary award.
The respondents' rst motion for reconsideration 4 1 was denied by the Court for lack of
merit via a Resolution 4 2 dated December 14, 2009.
Meanwhile, on the basis of the Court's Decision, McBurnie led with the NLRC a motion for
reconsideration with motion to recall and expunge from the records the NLRC Decision
dated November 17, 2009. 4 3 The motion was granted by the NLRC in its Decision 4 4 dated
January 14, 2010. 4 5
Undaunted by the denial of their rst motion for reconsideration of the Decision dated
September 18, 2009, the respondents led with the Court a Motion for Leave to Submit
Attached Second Motion for Reconsideration 4 6 and Second Motion for Reconsideration,
4 7 which motion for leave was granted in a Resolution 4 8 dated March 15, 2010. McBurnie
was allowed to submit his comment on the second motion, and the respondents, their
reply to the comment. On January 25, 2012, however, the Court issued a Resolution 4 9
denying the second motion "for lack of merit," "considering that a second motion for
reconsideration is a prohibited pleading . . . ." 5 0
The Court's Decision dated September 18, 2009 became final and executory on March 14,
2012. Thus, entry of judgment 5 1 was made in due course, as follows: aIcETS

ENTRY OF JUDGMENT
This is to certify that on September 18, 2009 a decision rendered in the above-
entitled cases was filed in this Office, the dispositive part of which reads as
follows:

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 xxx xxx xxx
and that the same has, on March 14, 2012 become final and executory and is
hereby recorded in the Book of Entries of Judgments. 5 2

The Entry of Judgment indicated that the same was made for the Court's Decision
rendered in G.R. Nos. 186984-85.
On March 27, 2012, the respondents filed a Motion for Leave to File Attached Third Motion
for Reconsideration, with an attached Motion for Reconsideration (on the Honorable
Court's 25 January 2012 Resolution) with Motion to Refer These Cases to the Honorable
Court En Banc. 5 3 The third motion for reconsideration is founded on the following
grounds:
I.

THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE COURT

ACTUALLY GRANTED RESPONDENTS' "MOTION FOR LEAVE TO SUBMIT A
SECOND MOTION FOR RECONSIDERATION."
HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE SUBSEQUENT 25
JANUARY 2012 RESOLUTION CANNOT DENY THE "SECOND MOTION FOR
RECONSIDERATION" ON THE GROUND THAT IT IS A PROHIBITED PLEADING.
MOREOVER, IT IS RESPECTFULLY CONTENDED THAT THERE ARE VERY
PECULIAR CIRCUMSTANCES AND NUMEROUS IMPORTANT ISSUES IN THESE
CASES THAT CLEARLY JUSTIFY GIVING DUE COURSE TO RESPONDENTS'
"SECOND MOTION FOR RECONSIDERATION," WHICH ARE:
II.

THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE WITH THE
OCTOBER 27, 2008 DECISION OF THE COURT OF APPEALS IS A SUBSTANTIAL
AND SPECIAL MERITORIOUS CIRCUMSTANCE TO MERIT RECONSIDERATION OF
THIS APPEAL.
III.

THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES THAT WITH
RESPECT TO ARTICLE 223 OF THE LABOR CODE, THE REQUIREMENTS OF THE
LAW SHOULD BE GIVEN A LIBERAL INTERPRETATION, ESPECIALLY IF THERE
ARE SPECIAL MERITORIOUS CIRCUMSTANCES AND ISSUES.

IV.
THE [LA'S] JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS MORE THAN
[P]60 MILLION PESOS TO A SINGLE FOREIGNER WHO HAD NO WORK PERMIT,
AND NO WORKING VISA.
V.

PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR RELATIONS

COMMISSION (NLRC) IN HIS APPEAL HEREIN, MAKING THE APPEAL
INEFFECTIVE AGAINST THE NLRC. AaSHED

VI.

NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE IN ITS

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 NOVEMBER 17, 2009 DECISION.

VII.
THE HONORABLE COURT'S 18 SEPTEMBER 2009 DECISION WAS TAINTED WITH
VERY SERIOUS IRREGULARITIES.

VIII.
G.R. NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED IN THIS
CASE.
IX.
THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER VERY
MERITORIOUS ARGUMENTS OF THE RESPONDENTS WHICH ARE AS FOLLOWS:
(A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS
BEFORE THE [LA] (WHEN 2 MISSED HEARINGS MEAN DISMISSAL)[.]
(B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF LEISURE
EXPERTS, INC., BUT NOT OF ANY OF THE RESPONDENTS[.]
(C) PETITIONER'S POSITIVE LETTER TO RESPONDENT MR. EULALIO
GANZON CLEARLY SHOWS THAT HE WAS NOT ILLEGALLY DISMISSED
NOR EVEN DISMISSED BY ANY OF THE RESPONDENTS AND PETITIONER
EVEN PROMISED TO PAY HIS DEBTS FOR ADVANCES MADE BY
RESPONDENT[S].
(D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE
RESPONDENTS. PETITIONER PRESENTED WORK FOR CORONADO BEACH
RESORT WHICH IS [NEITHER] OWNED NOR CONNECTED WITH ANY OF
THE RESPONDENTS.

(E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED EVEN

IF THERE WAS ABSOLUTELY NO EVIDENCE AT ALL PRESENTED THAT
PETITIONER WAS DISMISSED BY THE RESPONDENTS[.]
(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST 2
MONTHS AFTER THE START OF THE ALLEGED EMPLOYMENT
AGREEMENT, AND HAS STILL NOT RETURNED TO THE PHILIPPINES AS
CONFIRMED BY THE BUREAU OF IMMIGRATION.

(G) PETITIONER COULD NOT HAVE SIGNED AND PERSONALLY

APPEARED BEFORE THE NLRC ADMINISTERING OFFICER AS INDICATED
IN THE COMPLAINT SHEET SINCE HE LEFT THE COUNTRY 3 YEARS
BEFORE THE COMPLAINT WAS FILED AND HE NEVER CAME BACK. 5 4

On September 4, 2012, the Court en banc 5 5 issued a Resolution 5 6 accepting the case
from the Third Division. It also issued a temporary restraining order (TRO) enjoining the
implementation of the LA's Decision dated September 30, 2004. This prompted
McBurnie's ling of a Motion for Reconsideration, 5 7 where he invoked the fact that the
Court's Decision dated September 18, 2009 had become nal and executory, with an entry
of judgment already made by the Court. HASDcC

Our Ruling
In light of pertinent law and jurisprudence, and upon taking a second hard look of the
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 parties' arguments and the records of the case, the Court has ascertained that a
reconsideration of this Court's Decision dated September 18, 2009 and Resolutions dated
December 14, 2009 and January 25, 2012, along with the lifting of the entry of judgment in
G.R. Nos. 186984-85, is in order.
The Court's acceptance of the
third motion for reconsideration
At the outset, the Court emphasizes that second and subsequent motions for
reconsideration are, as a general rule, prohibited. Section 2, Rule 52 of the Rules of Court
provides that "[n]o second motion for reconsideration of a judgment or nal resolution by
the same party shall be entertained." The rule rests on the basic tenet of immutability of
judgments. "At some point, a decision becomes nal and executory and, consequently, all
litigations must come to an end." 5 8
The general rule, however, against second and subsequent motions for reconsideration
admits of settled exceptions. For one, the present Internal Rules of the Supreme Court,
particularly Section 3, Rule 15 thereof, provides:
Sec. 3. Second motion for reconsideration. — The Court shall not
entertain a second motion for reconsideration, and any exception to this rule
can only be granted in the higher interest of justice by the Court en banc
upon a vote of at least two-thirds of its actual membership. There is
reconsideration "in the higher interest of justice" when the assailed decision is
not only legally erroneous, but is likewise patently unjust and
potentially capable of causing unwarranted and irremediable injury or
damage to the parties. A second motion for reconsideration can only be
entertained before the ruling sought to be reconsidered becomes nal by
operation of law or by the Court's declaration.
xxx xxx xxx (Emphasis ours)

In a line of cases, the Court has then entertained and granted second motions for
reconsideration "in the higher interest of substantial justice," as allowed under the Internal
Rules when the assailed decision is "legally erroneous," "patently unjust" and "potentially
capable of causing unwarranted and irremediable injury or damage to the parties." In
Tirazona v. Philippine EDS Techno-Service, Inc. (PET, Inc.), 5 9 we also explained that a
second motion for reconsideration may be allowed in instances of "extraordinarily
persuasive reasons and only after an express leave shall have been obtained." 6 0 In Apo
Fruits Corporation v. Land Bank of the Philippines, 6 1 we allowed a second motion for
reconsideration as the issue involved therein was a matter of public interest, as it
pertained to the proper application of a basic constitutionally-guaranteed right in the
government's implementation of its agrarian reform program. In San Miguel Corporation v.
NLRC, 6 2 the Court set aside the decisions of the LA and the NLRC that favored claimants-
security guards upon the Court's review of San Miguel Corporation's second motion for
reconsideration. In Vir-Jen Shipping and Marine Services, Inc. v. NLRC, et al., 6 3 the Court en
banc reversed on a third motion for reconsideration the ruling of the Court's Division on
therein private respondents' claim for wages and monetary benefits. STaCcA

It is also recognized that in some instances, the prudent action towards a just resolution of
a case is for the Court to suspend rules of procedure, for "the power of this Court to
suspend its own rules or to except a particular case from its operations whenever the
purposes of justice require it, cannot be questioned." 6 4 In De Guzman v. Sandiganbayan, 6 5
the Court, thus, explained:
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 [T]he rules of procedure should be viewed as mere tools designed to facilitate
the attainment of justice. Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote substantial justice, must
always be avoided. Even the Rules of Court envision this liberality. This power to
suspend or even disregard the rules can be so pervasive and encompassing so
as to alter even that which this Court itself has already declared to be nal, as
we are now compelled to do in this case. . . . .

xxx xxx xxx

The Rules of Court was conceived and promulgated to set forth guidelines in the
dispensation of justice but not to bind and chain the hand that dispenses it, for
otherwise, courts will be mere slaves to or robots of technical rules, shorn of
judicial discretion. That is precisely why courts in rendering real justice have
always been, as they in fact ought to be, conscientiously guided by the norm that
when on the balance, technicalities take a backseat against substantive rights,
and not the other way around. Truly then, technicalities, in the appropriate
language of Justice Makalintal, "should give way to the realities of the situation." .
. . . 6 6 (Citations omitted)

Consistent with the foregoing precepts, the Court has then reconsidered even decisions
that have attained nality, nding it more appropriate to lift entries of judgments already
made in these cases. In Navarro v. Executive Secretary, 6 7 we reiterated the
pronouncement in De Guzman that the power to suspend or even disregard rules of
procedure can be so pervasive and compelling as to alter even that which this Court itself
has already declared nal. The Court then recalled in Navarro an entry of judgment after it
had determined the validity and constitutionality of Republic Act No. 9355, explaining that:
Verily, the Court had, on several occasions, sanctioned the recall of entries of
judgment in light of attendant extraordinary circumstances. The power to
suspend or even disregard rules of procedure can be so pervasive and compelling
as to alter even that which this Court itself had already declared nal. In this case,
the compelling concern is not only to afford the movants-intervenors the right to
be heard since they would be adversely affected by the judgment in this case
despite not being original parties thereto, but also to arrive at the correct
interpretation of the provisions of the [Local Government Code (LGC)] with respect
to the creation of local government units. . . . . 6 8 (Citations omitted)

I n Muñoz v. CA, 6 9 the Court resolved to recall an entry of judgment to prevent a

miscarriage of justice. This justi cation was likewise applied in Tan Tiac Chiong v. Hon.
Cosico, 7 0 wherein the Court held that:
The recall of entries of judgments, albeit rare, is not a novelty. In Muñoz v. CA,
where the case was elevated to this Court and a rst and second motion for
reconsideration had been denied with nality, the Court, in the interest of
substantial justice, recalled the Entry of Judgment as well as the letter of
transmittal of the records to the Court of Appeals. 7 1 (Citation omitted)

In Barnes v. Judge Padilla, 7 2 we ruled:

[A] nal and executory judgment can no longer be attacked by any of the parties
or be modified, directly or indirectly, even by the highest court of the land.
However, this Court has relaxed this rule in order to serve substantial justice
considering (a) matters of life, liberty, honor or property, (b) the existence of
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 special or compelling circumstances, (c) the merits of the case, (d) a cause not
entirely attributable to the fault or negligence of the party favored by the
suspension of the rules, (e) a lack of any showing that the review sought is merely
frivolous and dilatory, and (f) the other party will not be unjustly prejudiced
thereby. 7 3 (Citations omitted)STCDaI

As we shall explain, the instant case also quali es as an exception to, first, the proscription
against second and subsequent motions for reconsideration, and second, the rule on
immutability of judgments; a reconsideration of the Decision dated September 18, 2009,
along with the Resolutions dated December 14, 2009 and January 25, 2012, is justi ed by
the higher interest of substantial justice.
To begin with, the Court agrees with the respondents that the Court's prior resolve to
grant, and not just merely note, in a Resolution dated March 15, 2010 the respondents'
motion for leave to submit their second motion for reconsideration already warranted a
resolution and discussion of the motion for reconsideration on its merits. Instead of doing
this, however, the Court issued on January 25, 2012 a Resolution 7 4 denying the motion to
reconsider for lack of merit, merely citing that it was a "prohibited pleading under Section
2, Rule 52 in relation to Section 4, Rule 56 of the 1997 Rules of Civil Procedure, as
amended." 7 5 In League of Cities of the Philippines (LCP) v. Commission on Elections, 7 6
we reiterated a ruling that when a motion for leave to le and admit a second motion for
reconsideration is granted by the Court, the Court therefore allows the ling of the second
motion for reconsideration. In such a case, the second motion for reconsideration is no
longer a prohibited pleading. Similarly in this case, there was then no reason for the Court
to still consider the respondents' second motion for reconsideration as a prohibited
pleading, and deny it plainly on such ground. The Court intends to remedy such error
through this resolution.
More importantly, the Court nds it appropriate to accept the pending motion for
reconsideration and resolve it on the merits in order to rectify its prior disposition of the
main issues in the petition. Upon review, the Court is constrained to rule differently on the
petitions. We have determined the grave error in af rming the NLRC's rulings, promoting
results that are patently unjust for the respondents, as we consider the facts of the case,
pertinent law, jurisprudence, and the degree of the injury and damage to the respondents
that will inevitably result from the implementation of the Court's Decision dated September
18, 2009.
The rule on appeal bonds
We emphasize that the crucial issue in this case concerns the suf ciency of the appeal
bond that was posted by the respondents. The present rule on the matter is Section 6, Rule
VI of the 2011 NLRC Rules of Procedure, which was substantially the same provision in
effect at the time of the respondents' appeal to the NLRC, and which reads:
RULE VI
APPEALS

Sec. 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 cash or surety bond. The appeal bond shall either be in
cash or surety in an amount equivalent to the monetary award, exclusive of
damages and attorney's fees.

xxx xxx xxx

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 No motion to reduce bond shall be entertained except on meritorious
grounds and upon the posting of a bond in a reasonable amount in
relation to the monetary award.
The ling of the motion to reduce bond without compliance with the requisites in
the preceding paragraph shall not stop the running of the period to perfect an
appeal. (Emphasis supplied) IaEScC

While the CA, in this case, allowed an appeal bond in the reduced amount of
P10,000,000.00 and then ordered the case's remand to the NLRC, this Court's Decision
dated September 18, 2009 provides otherwise, as it reads in part:
The posting of a bond is indispensable to the perfection of an appeal in cases
involving monetary awards from the decision of the Labor Arbiter. The lawmakers
clearly intended to make the bond a mandatory requisite for the perfection of an
appeal by the employer as inferred from the provision that an appeal by the
employer may be perfected "only upon the posting of a cash or surety bond." The
word "only" makes it clear that the posting of a cash or surety bond by the
employer is the essential and exclusive means by which an employer's appeal
may be perfected. . . . .
Moreover, the ling of the bond is not only mandatory but a jurisdictional
requirement as well, that must be complied with in order to confer jurisdiction
upon the NLRC. Non-compliance therewith renders the decision of the Labor
Arbiter nal and executory. This requirement is intended to assure the workers
that if they prevail in the case, they will receive the money judgment in their favor
upon the dismissal of the employer's appeal. It is intended to discourage
employers from using an appeal to delay or evade their obligation to satisfy their
employees' just and lawful claims.
xxx xxx xxx

Thus, it behooves the Court to give utmost regard to the legislative and
administrative intent to strictly require the employer to post a cash or surety bond
securing the full amount of the monetary award within the 10[-]day reglementary
period. Nothing in the Labor Code or the NLRC Rules of Procedure
authorizes the posting of a bond that is less than the monetary award
in the judgment, or would deem such insuf cient posting as suf cient
to perfect the appeal.
While the bond may be reduced upon motion by the employer, this is subject to
the conditions that (1) the motion to reduce the bond shall be based on
meritorious grounds; and (2) a reasonable amount in relation to the
monetary award is posted by the appellant, otherwise the ling of the motion to
reduce bond shall not stop the running of the period to perfect an appeal. The
quali cation effectively requires that unless the NLRC grants the reduction of the
cash bond within the 10[-lday reglementary period, the employer is still
expected to post the cash or surety bond securing the full amount
within the said 10[-]day period . If the NLRC does eventually grant the motion
for reduction after the reglementary period has elapsed, the correct relief would be
to reduce the cash or surety bond already posted by the employer within the 10-
day period. 7 7 (Emphasis supplied; underscoring ours)

To begin with, the Court recti es its prior pronouncement — the unquali ed statement that
even an appellant who seeks a reduction of an appeal bond before the NLRC is expected to
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 post a cash or surety bond securing the full amount of the judgment award within the 10-
day reglementary period to perfect the appeal.
The suspension of the period to
perfect the appeal upon the filing
of a motion to reduce bond
To clarify, the prevailing jurisprudence on the matter provides that the ling of a motion to
reduce bond, coupled with compliance with the two conditions emphasized in Garcia v.
KJ Commercial 7 8 for the grant of such motion, namely, (1) a meritorious ground, and (2)
posting of a bond in a reasonable amount, shall suf ce to suspend the running of the
period to perfect an appeal from the labor arbiter's decision to the NLRC. 7 9 To
require the full amount of the bond within the 10-day reglementary period would only
render nugatory the legal provisions which allow an appellant to seek a reduction of the
bond. Thus, we explained in Garcia: CaSHAc

The filing of a motion to reduce bond and compliance with the two
conditions stop the running of the period to perfect an appeal. . . .
xxx xxx xxx
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 ling 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.

. . . 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 le 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.

xxx xxx xxx

In any case, the rule that the ling 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. In Intertranz Container Lines, Inc. v. Bautista, the
Court held:

"Jurisprudence tells us that in labor cases, an appeal from a decision

involving a monetary award may be perfected only upon the posting of
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 enrichment; and (3) special circumstances of the case
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 combined with its legal merits, and the amount and the issue involved." 80
(Citations omitted and emphasis ours)
A serious error of the NLRC was its outright denial of the motion to reduce the bond,
without even considering the respondents' arguments and totally unmindful of the rules
and jurisprudence that allow the bond's reduction. Instead of resolving the motion to
reduce the bond on its merits, the NLRC insisted on an amount that was equivalent to the
monetary award, merely explaining:
We are constrained to deny respondents['] motion for reduction. As held by the
Supreme Court in a recent case, in cases involving monetary award, an employer
seeking to appeal the Labor Arbiter's decision to the Commission is
unconditionally required by Art. 223, Labor Code to post bond in the
amount equivalent to the monetary award (Calabash Garments vs. NLRC,
G.R. No. 110827, August 8, 1996). . . . 8 1 (Emphasis ours)

When the respondents sought to reconsider, the NLRC still refused to fully decide on the
motion. It refused to at least make a preliminary determination of the merits of the appeal,
as it held: SDcITH

We are constrained to dismiss respondents' Motion for Reconsideration.

Respondents' contention that the appeal bond is excessive and based on a
decision which is a patent nullity involve[s] the merits of the case. . . . 8 2

Prevailing rules and jurisprudence

allow the reduction of appeal bonds.
By such haste of the NLRC in peremptorily denying the respondents' motion without
considering the respondents' arguments, it effectively denied the respondents of their
opportunity to seek a reduction of the bond even when the same is allowed under the rules
and settled jurisprudence. It was equivalent to the NLRC's refusal to exercise its discretion,
as it refused to determine and rule on a showing of meritorious grounds and the
reasonableness of the bond tendered under the circumstances. 8 3 Time and again, the
Court has cautioned the NLRC to give Article 223 of the Labor Code, particularly the
provisions requiring bonds in appeals involving monetary awards, a liberal interpretation in
line with the desired objective of resolving controversies on the merits. 8 4 The NLRC's
failure to take action on the motion to reduce the bond in the manner prescribed by law
and jurisprudence then cannot be countenanced. Although an appeal by parties from
decisions that are adverse to their interests is neither a natural right nor a part of due
process, it is an essential part of our judicial system. Courts should proceed with caution
so as not to deprive a party of the right to appeal, but rather, ensure that every party has
the amplest opportunity for the proper and just disposition of their cause, free from the
constraints of technicalities. 8 5 Considering the mandate of labor tribunals, the principle
equally applies to them.
Given the circumstances of the case, the Court's af rmance in the Decision dated
September 18, 2009 of the NLRC's strict application of the rule on appeal bonds then
demands a re-examination. Again, the emerging trend in our jurisprudence is to afford
every party-litigant the amplest opportunity for the proper and just determination of his
cause, free from the constraints of technicalities. 8 6 Section 2, Rule I of the NLRC Rules of
Procedure also provides the policy that "[the] 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." 8 7
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 In accordance with the foregoing, although the general rule provides that an appeal in labor
cases from a decision involving a monetary award may be perfected only upon the posting
of a cash or surety bond, the Court has relaxed this requirement under certain exceptional
circumstances in order to resolve controversies on their merits. These circumstances
include: (1) the fundamental consideration of substantial justice; (2) the prevention of
miscarriage of justice or of unjust enrichment; and (3) special circumstances of the case
combined with its legal merits, and the amount and the issue involved. 8 8 Guidelines that
are applicable in the reduction of appeal bonds were also explained in Nicol v. Footjoy
Industrial Corporation. 8 9 The bond requirement in appeals involving monetary awards has
been and may be relaxed in meritorious cases, including instances in which (1) there was
substantial compliance with the Rules, (2) surrounding facts and circumstances constitute
meritorious grounds to reduce the bond, (3) a liberal interpretation of the requirement of
an appeal bond would serve the desired objective of resolving controversies on the merits,
or (4) the appellants, at the very least, exhibited their willingness and/or good faith by
posting a partial bond during the reglementary period. 9 0
In Blanca or v. NLRC, 9 1 the Court also emphasized that while Article 223 9 2 of the Labor
Code, as amended by Republic Act No. 6715, which requires a cash or surety bond in an
amount equivalent to the monetary award in the judgment appealed from may be
considered a jurisdictional requirement for the perfection of an appeal, nevertheless,
adhering to the principle that substantial justice is better served by allowing the appeal on
the merits to be threshed out by the NLRC, the foregoing requirement of the law should be
given a liberal interpretation. CAIHaE

As the Court, nonetheless, remains rm on the importance of appeal bonds in appeals

from monetary awards of LAs, we stress that the NLRC, pursuant to Section 6, Rule VI of
the NLRC Rules of Procedure, shall only accept motions to reduce bond that are coupled
with the posting of a bond in a reasonable amount. Time and again, we have explained that
the bond requirement imposed upon appellants in labor cases is intended to ensure the
satisfaction of awards that are made in favor of appellees, in the event that their claims are
eventually sustained by the courts. 9 3 On the part of the appellants, its posting may also
signify their good faith and willingness to recognize the final outcome of their appeal.
At the time of a motion to reduce appeal bond's ling, the question of what constitutes "a
reasonable amount of bond" that must accompany the motion may be subject to differing
interpretations of litigants. The judgment of the NLRC which has the discretion under the
law to determine such amount cannot as yet be invoked by litigants until after their
motions to reduce appeal bond are accepted.
Given these limitations, it is not uncommon for a party to unduly forfeit his opportunity to
seek a reduction of the required bond and thus, to appeal, when the NLRC eventually
disagrees with the party's assessment. These have also resulted in the ling of numerous
petitions against the NLRC, citing an alleged grave abuse of discretion on the part of the
labor tribunal for its finding on the sufficiency or insufficiency of posted appeal bonds.
It is in this light that the Court nds it necessary to set a parameter for the litigants' and
the NLRC's guidance on the amount of bond that shall hereafter be led with a motion for a
bond's reduction. To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of
Procedure that give parties the chance to seek a reduction of the appeal bond are
effectively carried out, without however defeating the bene ts of the bond requirement in
favor of a winning litigant, all motions to reduce bond that are to be led with the NLRC
shall be accompanied by the posting of a cash or surety bond equivalent to 10% of the
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 monetary award that is subject of the appeal, which shall provisionally be deemed the
reasonable amount of the bond in the meantime that an appellant's motion is pending
resolution by the Commission. In conformity with the NLRC Rules, the monetary award, for
the purpose of computing the necessary appeal bond, shall exclude damages and
attorney's fees. 9 4 Only after the posting of a bond in the required percentage shall an
appellant's period to perfect an appeal under the NLRC Rules be deemed suspended.
The foregoing shall not be misconstrued to unduly hinder the NLRC's exercise of its
discretion, given that the percentage of bond that is set by this guideline shall be merely
provisional. The NLRC retains its authority and duty to resolve the motion and determine
the nal amount of bond that shall be posted by the appellant, still in accordance with the
standards of "meritorious grounds" and "reasonable amount". Should the NLRC, after
considering the motion's merit, determine that a greater amount or the full amount of the
bond needs to be posted by the appellant, then the party shall comply accordingly. The
appellant shall be given a period of 10 days from notice of the NLRC order within which to
perfect the appeal by posting the required appeal bond.
Meritorious ground as a condition
for the reduction of the appeal bond
In all cases, the reduction of the appeal bond shall be justi ed by meritorious grounds and
accompanied by the posting of the required appeal bond in a reasonable amount. HIAEcT

The requirement on the existence of a "meritorious ground" delves on the worth of the
parties' arguments, taking into account their respective rights and the circumstances that
attend the case. The condition was emphasized in University Plans Incorporated v. Solano,
9 5 wherein the Court held that while the NLRC's Revised Rules of Procedure "allows the
[NLRC] to reduce the amount of the bond, the exercise of the authority is not a matter of
right on the part of the movant, but lies within the sound discretion of the NLRC upon a
showing of meritorious grounds." 9 6 By jurisprudence, the merit referred to may pertain to
an appellant's lack of nancial capability to pay the full amount of the bond, 9 7 the merits
of the main appeal such as when there is a valid claim that there was no illegal dismissal to
justify the award, 9 8 the absence of an employer-employee relationship, 9 9 prescription of
claims, 1 0 0 and other similarly valid issues that are raised in the appeal. 1 0 1 For the
purpose of determining a "meritorious ground", the NLRC is not precluded from receiving
evidence, or from making a preliminary determination of the merits of the appellant's
contentions. 1 0 2
In this case, the NLRC then should have considered the respondents' arguments in the
memorandum on appeal that was led with the motion to reduce the requisite appeal
bond. Although a consideration of said arguments at that point would have been merely
preliminary and should not in any way bind the eventual outcome of the appeal, it was
apparent that the respondents' defenses came with an indication of merit that deserved a
full review of the decision of the LA. The CA, by its Resolution dated February 16, 2007,
even found justi ed the issuance of a preliminary injunction to enjoin the immediate
execution of the LA's decision, and this Court, a temporary restraining order on September
4, 2012.
Signi cantly, following the CA's remand of the case to the NLRC, the latter even rendered a
Decision that contained ndings that are inconsistent with McBurnie's claims. The NLRC
reversed and set aside the decision of the LA, and entered a new one dismissing
McBurnie's complaint. It explained that McBurnie was not an employee of the
respondents; thus, they could not have dismissed him from employment. The purported
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 employment contract of the respondents with the petitioner was quali ed by the
conditions set forth in a letter dated May 11, 1999, which reads:
May 11, 1999
MR. ANDREW MCBURNIE
Re: Employment Contract
Dear Andrew,

It is understood that this Contract is made subject to the understanding that it is

effective only when the project financing for our Baguio Hotel project pushed
through.
The agreement with EGI Managers, Inc. is made now to support your need to
facilitate your work permit with the Department of Labor in view of the
expiration of your contract with Pan Pacific.
Regards,

Sgd. Eulalio Ganzon (p. 203, Records) 1 0 3

For the NLRC, the employment agreement could not have given rise to an employer-
employee relationship by reason of legal impossibility. The two conditions that form part
of their agreement, namely, the successful completion of the project nancing for the hotel
project in Baguio City and McBurnie's acquisition of an Alien Employment Permit, remained
unsatis ed. 1 0 4 The NLRC concluded that McBurnie was instead a potential investor in a
project that included Ganzon, but the said project failed to pursue due to lack of funds. Any
work performed by McBurnie in relation to the project was merely preliminary to the
business venture and part of his "due diligence" study before pursuing the project, "done at
his own instance, not in furtherance of the employment contract but for his own
investment purposes." 1 0 5 Lastly, the alleged employment of the petitioner would have
been void for being contrary to law, since it is undisputed that McBurnie did not have any
work permit. The NLRC declared: aEHASI

Absent an employment permit, any employment relationship that [McBurnie]

contemplated with the [respondents] was void for being contrary to law. A void
or inexistent contract, in turn, has no force and effect from the beginning as if it
had never [been] entered into. Thus, without an Alien Employment Permit, the
"Employment Agreement" is void and could not be the source of a right or
obligation. In support thereof, the DOLE issued a certi cation that [McBurnie]
has neither applied nor [been] issued [an] Alien Employment Permit (p. 204,
Records). 1 0 6

McBurnie moved to reconsider, citing the Court's Decision of September 18, 2009 that
reversed and set aside the CA's Decision authorizing the remand. Although the NLRC
granted the motion on the said ground via a Decision 1 0 7 that set aside the NLRC's
Decision dated November 17, 2009, the ndings of the NLRC in the November 17, 2009
decision merit consideration, especially since the ndings made therein are supported by
the case records.
In addition to the apparent merit of the respondents' appeal, the Court nds the reduction
of the appeal bond justi ed by the substantial amount of the LA's monetary award. Given
its considerable amount, we nd reason in the respondents' claim that to require an appeal
bond in such amount could only deprive them of the right to appeal, even force them out of
business and affect the livelihood of their employees. 1 0 8 In Rosewood Processing, Inc. v.
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 NLRC, 1 0 9 we emphasized: "Where a decision may be made to rest on informed judgment
rather than rigid rules, the equities of the case must be accorded their due weight because
labor determinations should not be 'secundum rationem but also secundum
caritatem .'" 1 1 0
What constitutes a reasonable
amount in the determination of
the final amount of appeal bond
As regards the requirement on the posting of a bond in a "reasonable amount," the Court
holds that the nal determination thereof by the NLRC shall be based primarily on the
merits of the motion and the main appeal.
Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI thereof, provides
that the bond to be posted shall be "in a reasonable amount in relation to the monetary
award," the merit of the motion shall always take precedence in the determination. Settled
is the rule that procedural rules were conceived, and should thus be applied in a manner
that would only aid the attainment of justice. If a stringent application of the rules would
hinder rather than serve the demands of substantial justice, the former must yield to the
latter. 1 1 1
Thus, in Nicol where the appellant posted a bond of P10,000,000.00 upon an appeal from
the LA's award of P51,956,314.00, the Court, instead of ruling right away on the
reasonableness of the bond's amount solely on the basis of the judgment award, found it
appropriate to remand the case to the NLRC, which should first determine the merits of the
motion. In University Plans, 1 1 2 the Court also reversed the outright dismissal of an appeal
where the bond posted in a judgment award of more than P30,000,000.00 was
P30,000.00. The Court then directed the NLRC to rst determine the merit, or lack of merit,
of the motion to reduce the bond, after the appellant therein claimed that it was under
receivership and thus, could not dispose of its assets within a short notice. Clearly, the rule
on the posting of an appeal bond should not be allowed to defeat the substantive rights of
the parties. 1 1 3
Notably, in the present case, following the CA's rendition of its Decision which allowed a
reduced appeal bond, the respondents have posted a bond in the amount of
P10,000,000.00. In Rosewood, the Court deemed the posting of a surety bond of
P50,000.00, coupled with a motion to reduce the appeal bond, as substantial compliance
with the legal requirements for an appeal from a P789,154.39 monetary award
"considering the clear merits which appear, res ipsa loquitor, in the appeal from the [LA's]
Decision, and the petitioner's substantial compliance with rules governing appeals." 1 1 4
The foregoing jurisprudence strongly indicate that in determining the reasonable amount
of appeal bonds, the Court primarily considers the merits of the motions and appeals.
Given the circumstances in this case and the merits of the respondents' arguments before
the NLRC, the Court holds that the respondents had posted a bond in a "reasonable
amount", and had thus complied with the requirements for the perfection of an appeal
from the LA's decision. The CA was correct in ruling that:
In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees
Association, President Rodolfo Jimenez[,] and members[,] Reynaldo Fajardo, et al.
vs. NLRC, Nueva Ecija I Electric Cooperative, Inc. (NEECO I) and Patricio de la
Peña (G.R. No. 116066, January 24, 2000), the Supreme Court recognized that:
"the NLRC, in its Resolution No. 11-01-91 dated November 7, 1991 deleted the
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 phrase "exclusive of moral and exemplary damages as well as attorney's fees in
the determination of the amount of bond, and provided a safeguard against the
imposition of excessive bonds by providing that "(T)he Commission may in
meritorious cases and upon motion of the appellant, reduce the amount of the
bond."
In the case of Cosico[,] Jr. vs. NLRC[,] 272 SCRA 583, it was held:

"The unreasonable and excessive amount of bond would be oppressive

and unjust and would have the effect of depriving a party of his right to
appeal."
xxx xxx xxx

In dismissing outright the motion to reduce bond filed by petitioners, NLRC

abused its discretion. It should have fixed an appeal bond in a reasonable
amount. Said dismissal deprived petitioners of their right to appeal the Labor
Arbiter's decision.

xxx xxx xxx

NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec. 6, Rule
VI, NLRC Rules of Procedure). This Court finds the appeal bond in the amount of
[P]54,083,910.00 prohibitive and excessive, which constitutes a meritorious
ground to allow a motion for reduction thereof. 1 1 5

The foregoing declaration of the Court requiring a bond in a reasonable amount, taking into
account the merits of the motion and the appeal, is consistent with the oft-repeated
principle that letter-perfect rules must yield to the broader interest of substantial justice.
116 caIDSH

The effect of a denial of the appeal

to the NLRC
In nding merit in the respondents' motion for reconsideration, we also take into account
the unwarranted results that will arise from an implementation of the Court's Decision
dated September 18, 2009. We emphasize, moreover, that although a remand and an order
upon the NLRC to give due course to the appeal would have been the usual course after a
nding that the conditions for the reduction of an appeal bond were duly satis ed by the
respondents, given such results, the Court nds it necessary to modify the CA's order of
remand, and instead rule on the dismissal of the complaint against the respondents.
Without the reversal of the Court's Decision and the dismissal of the complaint against the
respondents, McBurnie would be allowed to claim bene ts under our labor laws despite
his failure to comply with a settled requirement for foreign nationals.
Considering that McBurnie, an Australian, alleged illegal dismissal and sought to claim
under our labor laws, it was necessary for him to establish, rst and foremost, that he was
quali ed and duly authorized to obtain employment within our jurisdiction. A requirement
for foreigners who intend to work within the country is an employment permit, as provided
under Article 40, Title II of the Labor Code which reads:
Art. 40. Employment permit for non-resident aliens. — Any alien seeking
admission to the Philippines for employment purposes and any domestic or
foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of Labor.
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 I n WPP Marketing Communications, Inc. v. Galera, 1 1 7 we held that a foreign national's
failure to seek an employment permit prior to employment poses a serious problem in
seeking relief from the Court. 1 1 8 Thus, although the respondent therein appeared to have
been illegally dismissed from employment, we explained:
This is Galera's dilemma: Galera worked in the Philippines without proper work
permit but now wants to claim employee's benefits under Philippine labor laws.
xxx xxx xxx

The law and the rules are consistent in stating that the employment permit must
be acquired prior to employment. The Labor Code states: "Any alien seeking
admission to the Philippines for employment purposes and any domestic or
foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of Labor."
Section 4, Rule XIV, Book I of the Implementing Rules and Regulations provides:

"Employment permit required for entry. — No alien seeking employment,

whether as a resident or non-resident, may enter the Philippines without
rst securing an employment permit from the Ministry. If an alien enters
the country under a non-working visa and wishes to be employed
thereafter, he may be allowed to be employed upon presentation of a duly
approved employment permit."
Galera cannot come to this Court with unclean hands. To grant Galera's
prayer is to sanction the violation of the Philippine labor laws requiring
aliens to secure work permits before their employment. We hold that the
status quo must prevail in the present case and we leave the parties where
they are. This ruling, however, does not bar Galera from seeking relief from
other jurisdictions. 1 1 9 (Citations omitted and underscoring ours)

Clearly, this circumstance on the failure of McBurnie to obtain an employment permit, by

itself, necessitates the dismissal of his labor complaint.
Furthermore, as has been previously discussed, the NLRC has ruled in its Decision dated
November 17, 2009 on the issue of illegal dismissal. It declared that McBurnie was never
an employee of any of the respondents. 1 2 0 It explained:
All these facts and circumstances prove that [McBurnie] was never an
employee of Eulalio Ganzon or the [respondent] companies, but a
potential investor in a project with a group including Eulalio Ganzon
and Martinez but said project did not take off because of lack of funds.
[McBurnie] further claims that in conformity with the provision of the employment
contract pertaining to the obligation of the [respondents] to provide housing,
[respondents] assigned him Condo Unit # 812 of the Makati Cinema Square
Condominium owned by the [respondents]. He was also allowed to use a Hyundai
car. If it were true that the contract of employment was for working visa purposes
only, why did the [respondents] perform their obligations to him?
There is no question that [respondents] assigned him Condo Unit # 812 of the
MCS, but this was not free of charge. If it were true that it is part of the
compensation package as employee, then [McBurnie] would not be obligated to
pay anything, but clearly, he admitted in his letter that he had to pay all the
expenses incurred in the apartment.

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 Assuming for the sake of argument that the employment contract is valid
between them, record shows that [McBurnie] worked from September 1, 1999 until
he met an accident on the last week of October. During the period of employment,
[the respondents] must have paid his salaries in the sum of US$26,000.00, more
or less.

However, [McBurnie] failed to present a single evidence that [the respondents]

paid his salaries like payslip, check or cash vouchers duly signed by him or any
document showing proof of receipt of his compensation from [the respondents]
or activity in furtherance of the employment contract.
Granting again that there was a valid contract of employment, it is undisputed
that on November 1, 1999, [McBurnie] left for Australia and never came back. . . . .
121 (Emphasis supplied)
Although the NLRC's Decision dated November 17, 2009 was set aside in a Decision dated
January 14, 2010, the Court's resolve to now reconsider its Decision dated September 18,
2009 and to af rm the CA's Decision and Resolution in the respondents' favor effectively
restores the NLRC's basis for rendering the Decision dated November 17, 2009.
More importantly, the NLRC's ndings on the contractual relations between McBurnie and
the respondents are supported by the records.
First, before a case for illegal dismissal can prosper, an employer-employee relationship
must rst be established. 1 2 2 Although an employment agreement forms part of the case
records, respondent Ganzon signed it with the notation "per my note." 1 2 3 The respondents
have suf ciently explained that the note refers to the letter 1 2 4 dated May 11, 1999 which
embodied certain conditions for the employment's effectivity. As we have previously
explained, however, the said conditions, particularly on the successful completion of the
project nancing for the hotel project in Baguio City and McBurnie's acquisition of an Alien
Employment Permit, failed to materialize. Such defense of the respondents, which was
duly considered by the NLRC in its Decision dated November 17, 2009, was not suf ciently
rebutted by McBurnie. SCHcaT

Second, McBurnie failed to present any employment permit which would have authorized
him to obtain employment in the Philippines. This circumstance negates McBurnie's claim
that he had been performing work for the respondents by virtue of an employer-employee
relationship. The absence of the employment permit instead bolsters the claim that the
supposed employment of McBurnie was merely simulated, or did not ensue due to the
non-fulfillment of the conditions that were set forth in the letter of May 11, 1999.
Third, besides the employment agreement, McBurnie failed to present other competent
evidence to prove his claim of an employer-employee relationship. Given the parties'
con icting claims on their true intention in executing the agreement, it was necessary to
resort to the established criteria for the determination of an employer-employee
relationship, namely: (1) the selection and engagement of the employee; (2) the payment
of wages; (3) the power of dismissal; and (4) the power to control the employee's
conduct. 1 2 5 The rule of thumb remains: the onus probandi falls on the claimant to
establish or substantiate the claim by the requisite quantum of evidence. Whoever claims
entitlement to the bene ts provided by law should establish his or her right thereto. 1 2 6
McBurnie failed in this regard. As previously observed by the NLRC, McBurnie even failed
to show through any document such as payslips or vouchers that his salaries during the
time that he allegedly worked for the respondents were paid by the company. In the
absence of an employer-employee relationship between McBurnie and the respondents,
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 McBurnie could not successfully claim that he was dismissed, much less illegally
dismissed, by the latter. Even granting that there was such an employer-employee
relationship, the records are barren of any document showing that its termination was by
the respondents' dismissal of McBurnie.
Given these circumstances, it would be a circuitous exercise for the Court to remand the
case to the NLRC, more so in the absence of any showing that the NLRC should now rule
differently on the case's merits. In Medline Management, Inc. v. Roslinda, 1 2 7 the Court
ruled that when there is enough basis on which the Court may render a proper evaluation of
the merits of the case, the Court may dispense with the time-consuming procedure of
remanding a case to a labor tribunal in order "to prevent delays in the disposition of the
case," "to serve the ends of justice" and when a remand "would serve no purpose save to
further delay its disposition contrary to the spirit of fair play." 1 2 8 In Real v. Sangu
Philippines, Inc., 1 2 9 we again ruled:
With the foregoing, it is clear that the CA erred in af rming the decision of the
NLRC which dismissed petitioner's complaint for lack of jurisdiction. In cases
such as this, the Court normally remands the case to the NLRC and directs it to
properly dispose of the case on the merits. "However, when there is enough basis
on which a proper evaluation of the merits of petitioner's case may be had, the
Court may dispense with the time-consuming procedure of remand in order to
prevent further delays in the disposition of the case." "It is already an accepted
rule of procedure for us to strive to settle the entire controversy in a single
proceeding, leaving no root or branch to bear the seeds of litigation. If, based on
the records, the pleadings, and other evidence, the dispute can be resolved by us,
we will do so to serve the ends of justice instead of remanding the case to the
lower court for further proceedings." . . . . 1 3 0 (Citations omitted)

It bears mentioning that although the Court resolves to grant the respondents' motion for
reconsideration, the other grounds raised in the motion, especially as they pertain to
insinuations on irregularities in the Court, deserve no merit for being founded on baseless
conclusions. Furthermore, the Court nds it unnecessary to discuss the other grounds that
are raised in the motion, considering the grounds that already justify the dismissal of
McBurnie's complaint.
All these considered, the Court also af rms its Resolution dated September 4, 2012;
accordingly, McBurnie's motion for reconsideration thereof is denied.
WHEREFORE, in light of the foregoing, the Court rules as follows:
(a) The motion for reconsideration led on September 26, 2012 by
petitioner Andrew James McBurnie is DENIED;
(b) The motion for reconsideration led on March 27, 2012 by
respondents Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc. is
GRANTED.
(c) The Entry of Judgment issued in G.R. Nos. 186984-85 is LIFTED.
This Court's Decision dated September 18, 2009 and Resolutions
dated December 14, 2009 and January 25, 2012 are SET ASIDE. The
Court of Appeals Decision dated October 27, 2008 and Resolution
dated March 3, 2009 in CA-G.R. SP No. 90845 and CA-G.R. SP No.
95916 are AFFIRMED WITH MODIFICATION. In lieu of a remand of
the case to the National Labor Relations Commission, the complaint
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 for illegal dismissal led by petitioner Andrew James McBurnie
against respondents Eulalio Ganzon, EGI-Managers, Inc. and E.
Ganzon, Inc. is DISMISSED.
Furthermore, on the matter of the ling and acceptance of motions to reduce appeal bond,
as provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby
RESOLVES that henceforth, the following guidelines shall be observed:
(a) The ling of a motion to reduce appeal bond shall be entertained by
the NLRC subject to the following conditions: (1) there is meritorious
ground; and (2) a bond in a reasonable amount is posted;
(b) For purposes of compliance with condition no. (2), a motion shall be
accompanied by the posting of a provisional cash or surety bond
equivalent to ten percent (10%) of the monetary award subject
of the appeal, exclusive of damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suf ce to suspend
the running of the 10-day reglementary period to perfect an appeal
from the labor arbiter's decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to
reduce bond and determine the nal amount of bond that shall be
posted by the appellant, still in accordance with the standards of
"meritorious grounds" and "reasonable amount"; and
(e) In the event that the NLRC denies the motion to reduce bond, or
requires a bond that exceeds the amount of the provisional bond, the
appellant shall be given a fresh period of ten (10) days from notice of
the NLRC order within which to perfect the appeal by posting the
required appeal bond.
SO ORDERED. cHCSDa

Sereno, C.J., Carpio, Leonardo-de Castro, Brion, Peralta, Bersamin, Villarama, Jr., Perez and
Mendoza, JJ., concur.
Velasco, Jr. and Perlas-Bernabe, JJ., took no part.
Del Castillo, Abad and Leonen, JJ., are on official leave.

Footnotes

1.Rollo (G.R. Nos. 186984-85), pp. 874-909; subject of the Motion for Leave to File Attached
Third Motion for Reconsideration dated March 27, 2012, id. at 867-871.

2.Penned by Associate Justice Consuelo Ynares-Santiago (retired), with Associate Justices

Minita V. Chico-Nazario (retired), Presbitero J. Velasco, Jr., Antonio Eduardo B. Nachura
(retired) and Diosdado M. Peralta, concurring; id. at 481-493.

3.Id. at 994-1010.
4.Id. at 979.

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 5.Id. at 165-169.
6.Id. at 424-435.

7.Docketed as NLRC NCR CA No. 042913-05.

8.Rollo (G.R. Nos. 178034 and 178117), pp. 65-106.
9.Rollo (G.R. Nos. 186984-85), pp. 216-226.

10.Id. at 216.
11.Id. at 267-271.
12.Id. at 269.

13.Id. at 324-326.
14.Rollo (G.R. Nos. 178034 and 178117), pp. 130-181.
15.Rollo (G.R. Nos. 186984-85), pp. 328-330.
16.Id. at 347-350.

17.Id. at 88-141.
18.Rollo (G.R. Nos. 178034 and 178117), pp. 251-252.
19.Id. at 263-265.

20.Id. at 28-51.
21.Id. at 297.
22.Id. at 320.

23.Id. at 322-324.
24.Id. at 350-351.
25.Id. at 240.
26.Penned by Associate Justice Arcangelita M. Romilla-Lontok (retired), with Associate
Justices Mariano C. del Castillo (now a member of this Court) and Portia Aliño-
Hormachuelos (retired), concurring; rollo (G.R. Nos. 186984-85), pp. 47-70.

27.Id. at 70.
28.Subject of CA-G.R. SP No. 90845.
29.Rollo (G.R. Nos. 186984-85), p. 67.

30.Id.
31.Subject of CA-G.R. SP No. 95916.
32.Rollo (G.R. Nos. 186984-85), p. 69.
33.Id. at 44-45.

34.Id. at 3-36.
35.Id. at 640-655.
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 36.Id. at 655.

37.Id. at 481-493.
38.Id. at 492.
39.Id. at 490.

40.Id. at 489.
41.Id. at 494-546.
42.Id. at 595-596.
43.Id. at 657.

44.Id. at 657-659.
45.Id. at 659. The dispositive portion of the NLRC Decision reads:
WHEREFORE, the foregoing considered, complainant's Motion for Reconsideration is hereby
GRANTED. The Decision of the Commission, dated November 17, 2009, is SET ASIDE.
However, let the Decision of the Commission remain on file with the case records.
SO ORDERED.

46.Id. at 598-601.
47.Id. at 602-637.
48.Id. at 732-733.

49.Id. at 853.
50.Id.
51.Id. at 914.

52.Id.
53.Id. at 874-909.
54.Id. at 876-878.

55.By a vote of 12.

56.Rollo (G.R. Nos. 186984-85), p. 979.
57.Id. at 994-1010.
58.Verginesa-Suarez v. Dilag, A.M. No. RTJ-06-2014, August 16, 2011, 655 SCRA 454, 459-460.

59.G.R. No. 169712, January 20, 2009, 576 SCRA 625.

60.Id. at 628, citing Ortigas and Company Limited Partnership v. Velasco, 324 Phil. 483, 489
(1996).
61.G.R. No. 164195, April 5, 2011, 647 SCRA 207.

62.256 Phil. 271 (1989).

63.210 Phil. 482 (1983).
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 64.De Guzman v. Sandiganbayan, 326 Phil. 182, 188 (1996), citing Vda. de Ronquillo, et al. v.
Marasigan, 115 Phil. 292 (1962); Piczon v. Court of Appeals, 268 Phil. 23 (1990).
65.326 Phil. 182 (1996).
66.Id. at 190-191.
67.G.R. No. 180050, April 12, 2011, 648 SCRA 400.

68.Id. at 436.
69.379 Phil. 809 (2000).
70.434 Phil. 753 (2002).

71.Id. at 762.
72.482 Phil. 903 (2004).
73.Id. at 915.
74.Rollo (G.R. Nos. 186984-85), p. 853.

75.Id.
76.G.R. No. 176951, February 15, 2011, 643 SCRA 149.
77.Rollo (G.R. Nos. 186984-85), pp. 487-489.

78.G.R. No. 196830, February 29, 2012, 667 SCRA 396.

79.Id. at 409.
80.Id. at 409-411.

81.Rollo (G.R. Nos. 186984-85), p. 244.

82.Id. at 325.
83.See Nicol v. Footjoy Industrial Corp., 555 Phil. 275, 287 (2007).
84.Cosico, Jr. v. NLRC, 338 Phil. 1080 (1997), citing Star Angel Handicraft v. National Labor
Relations Commission, G.R. No. 108914, September 20, 1994, 236 SCRA 580; Dr. Postigo
v. Phil. Tuberculosis Society, Inc., 515 Phil. 601 (2006); Rada v. NLRC, G.R. No. 96078,
January 9, 1992, 205 SCRA 69, and YBL (Your Bus Line) v. National Labor Relations
Commission, 268 Phil. 169 (1990).
85.Bolos v. Bolos, G.R. No. 186400, October 20, 2010, 634 SCRA 429, 439.
86.Aujero v. Philippine Communications Satellite Corporation, G.R. No. 193484, January 18,
2012, 663 SCRA 467, 481-482, citing Heirs of the Deceased Spouses Arcilla v. Teodoro,
G.R. No. 162886, August 11, 2008, 561 SCRA 545, 557.
87.Garcia v. KJ Commercial, supra note 78, at 410.
88.Intertranz Container Lines, Inc. v. Bautista, G.R. No. 187693, July 13, 2010, 625 SCRA 75, 84,
citing Rosewood Processing, Inc. v. NLRC, 352 Phil. 1013 (1998).

89.555 Phil. 275 (2007).

90.Id. at 292.
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 91.G.R. No. 101013, February 2, 1993, 218 SCRA 366.
92.Art. 223. Appeal. — Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days
from receipt of such decisions, awards, or orders. . . .
In case of a judgment involving a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Commission in the amount equivalent to the monetary
award in the judgment appealed from.
xxx xxx xxx

93.See Mindanao Times Corporation v. Confesor, G.R. No. 183417, February 5, 2010, 611 SCRA
748; Computer Innovations Center v. NLRC, 500 Phil. 573 (2005); St. Gothard Disco Pub
& Restaurant v. NLRC, G.R. No. 102570, February 1, 1993, 218 SCRA 327.
94.2011 NLRC Rules of Procedure, Rule VI, Section 6 reads:
SEC. 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.
95.G.R. No. 170416, June 22, 2011, 652 SCRA 492.
96.Id. at 503-504, citing Ramirez v. CA, G.R. No. 182626, December 4, 2004, 607 SCRA 752, 765.

97.See Nicol v. Footjoy Industrial Corp., supra note 89.

98.See Semblante v. Court of Appeals, G.R. No. 196426, August 15, 2011, 655 SCRA 444.
99.Id.

100.See Star Angel Handicraft v. National Labor Relations Commission, supra note 84.
101.See YBL (Your Bus Line) v. NLRC, supra note 84.
102.See University Plans Incorporated v. Solano, supra note 95; Nicol v. Footjoy Industrial Corp.,
supra note 89.
103.Rollo (G.R. Nos. 186984-85), p. 649.

104.Id. at 650.
105.Id. at 650-651.
106.Id. at 654.

107.Id. at 640-655.
108.Id. at 64-65.
109.352 Phil. 1013 (1998).

110.Id. at 1031.
111.City of Dumaguete v. Philippine Ports Authority, G.R. No. 168973, August 24, 2011, 656
SCRA 102, 117, citing Basco v. CA, 392 Phil. 251, 266 (2000).
112.Supra note 95.
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 113.Supra note 98.
114.Supra note 109, at 1031.
115.Rollo (G.R. Nos. 186984-85), pp. 67, 69.

116.Nicol v. Footjoy Industrial Corp., supra note 89, at 290, citing Rosewood Processing, Inc. v.
NLRC, supra note 109.
117.G.R. No. 169207, March 25, 2010, 616 SCRA 422.
118.Id. at 442-443.

119.Id.
120.Rollo (G.R. Nos. 186984-85), p. 652.
121.Id. at 652-653.

122.Lopez v. Bodega City (Video-Disco Kitchen of the Phils.) and/or Torres-Yap, 558 Phil. 666,
674 (2007).

123.Rollo (G.R. Nos. 186984-85), p. 169.

124.Supra note 103.
125.Javier v. Fly Ace Corporation, G.R. No. 192558, February 15, 2012, 666 SCRA 382.

126.Id. at 397-398.
127.G.R. No. 168715, September 15, 2010, 630 SCRA 471.
128.Id. at 486.

129.G.R. No. 168757, January 19, 2011, 640 SCRA 67.

130.Id. at 89-90.

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