Andrew James McBurnie vs. Eulalio Ganzon, EGI-Managers, Inc., and E. Ganzon, Inc.

,
G.R. Nos. 178034 & 178117, G.R. Nos. 186984-85, October 17, 2013, 707 SCRA 646.

Simplified Facts:
Petitioner, Andrew James McBurnie, signed a five-year employment contract as Executive Vice-
President of respondent EGI Manager's, Inc. (EGI). McBurnie's responsibilities were to oversee
the general management of the company's hotels and resorts within the Philippines. Respondent
Ganzon informed McBurnie that his services were no longer needed because their intended project
would no longer push through due to lack of funds. McBurnie filed a complaint for illegal dismissal
with prayer for the payment of his salary and benefits for the unexpired term of the contract,
damages, and attorney's fees. In defense the respondents argued that 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." However, the Labor Arbiter
declared petitioner's dismissal illegal and ordered respondents to pay the monetary awards.
Respondents filed an appeal with the NLRC but failed to post the required appeal bond within the
prescribed period.

Principle No. 1:

The McBurnie Ruling has defined what is meant by “reasonable amount” in Section 6,1 Rule VI,
2011 NLRC Rules of Procedure. The Court declared that “the posting of a provisional cash or
surety bond equivalent to ten percent (10%) of the monetary award subject of the appeal is
sufficient provided that there is meritorious ground therefor.” In connection therewith, the
McBurnie Ruling established the five (5) Guidelines for Motion to Reduce Appeal Bond, to wit:

(a) The filing 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 suffice 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 final 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.

In addition, the Court pronounced the reminder that:

“The filing 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 final and executory.”

1
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.
xxxx
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 filing 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.
Principle No. 2:

McBurnie Ruling further declared that:

“The absence of an employment permit voids the employment relationship between

a foreign national and their employer for being contrary to law.”

Warning: That is just the general rule, the latest Rouche2 Ruling has carved out an explicit
exception that:

“An alien employee who was illegally dismissed and whose visa and permit were
not processed solely due to the negligence of their employer's counsel, should not
be barred from seeking relief under the Labor Code.”

2
Steven Rouche vs. French Chamber of Commerce in the Philippines-Le Club, et. al., G.R. No.
238581, December 7, 2022.