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Execution bond in the proposed escrow provision is anti-labor

Execution bond in the proposed escrow provision is anti-labor
Atty. Dennis Gorecho July 31, 2023

The requirement of posting an execution bond under the proposed escrow provision of the pending Magna Carta of Filipino Seafarers is another manifestation of its anti-labor character.

There are two scenarios under Section 51 of House Bill 7325, which was passed by the Lower House on March 6.

First, the award shall be placed in escrow, if the employer or manning agency has raised or intends to raise the decision for judicial review until the issuance of an entry of judgment by the appropriate reviewing court. This shall not include claims for salaries, statutory monetary benefits, or those originally determined by the employer or manning agency to be legally due to the seafarer.

Second, the seafarer may move for the execution of the monetary award pending appeal upon posting of a bond, the amount of which shall be determined by the appropriate court.

Proponents stressed that this is necessary to ensure the restitution of monetary awards in case the appropriate appellate court annuls or partially or totally reverses the monetary judgment award.

Under both the Labor Code and the NLRC Rules of Procedure, if the employer appeals a Labor Arbiter’s decision that requires payment of monetary claims, a cash or surety bond shall be required to be paid on/before the filing of the appeal.

The posting of bond is imposed only on the side of employer. Labor is required to pay only a minimal appeal fee.

It is mandatory and jurisdictional as failure to comply renders the decision of the Labor Arbiter final and executory.

In Turks Shawarma Company v. Pajaron (GR 207156 , January 16, 2017), the Supreme Court said that the indispensable requisite for the perfection of an appeal “is to assure the workers that if they finally prevail in the case, the monetary award will be given to them upon the dismissal of the employer’s appeal.”

The Court also said that the bond “is further meant to discourage employers from using the appeal to delay or evade payment of their obligations to the employees.”

The purpose of requiring an appeal bond is to guarantee the payment of valid and legal claims against the employer. It is a measure of financial security granted to an employee since the resolution of the employer’s appeal may take an indeterminable amount of time. (Malcaba, v. Prohealth Pharma Philippines Inc., GR 209085. June 06, 2018)

Claims for disability and death compensation became a legal battleground, which is partly attributable to the fact that employers do not hesitate to harness their immense resources to limit their liability.

The proponents of the execution bond erroneously presumed that the seafarer is in the same economic footing with the employer.

A seafarer seeks payment of monetary benefits because of the fact that he is in financial distress due to his medical condition.

Many are jobless, sick, disabled and infirm who incur huge debts to sustain their medication while others die before the decision by the Supreme Court is released.

Instead of saving his earnings for his medication, he will be forced to redirect them to the execution bond, jeopardizing further his economic well-being.

To paraphrase the Turks Shawarma decision, putting the award in escrow or requiring an execution bond “is meant to discourage employees from fighting for their case as employers use the appeal to delay or evade payment of their obligations to the employees.”

Employers are throwing off-balance the already imbalanced legal battle on seafarers’ claims as every labor dispute is a David and Goliath situation.

Without any leverage in prosecuting his monetary claims, chances are, the seafarer bows to the demand of his employer to either drop his claim or accept a small settlement.

If passed into law with said provision, the Magna Carta will partake of the nature of class legislation because it singles out seafarer claims from other labor claims, both local and overseas.

There lies no substantial distinction between the claims of a seafarer and any other laborer.

“Seafarers’ claims for disability benefits should not be considered unreasonable and impelled by nothing but greed, but rather, justified by their health considerations and a natural desire of every person to preserve his life for as long as possible. For being human, seafarers should not be penalized.” (UPL v. Beseril, GR 165934, April 12, 2006).

Seafarers will be “penalized” by the escrow provision that will downplay their rights guaranteed by the constitution instead of protecting their rights and promoting their welfare.

In the end, the “balance of scale” will tilt more to capital as this will protect the business interest of the manning agencies and their principal rather than the seafarers themselves.