Law Summary
Issue of Spurious or Fake Surety Bonds
- There have been instances where bonding companies refuse payment, claiming that the surety bond posted is spurious or fake.
- This refusal poses challenges to the enforcement of monetary awards in labor disputes.
Legal Position on Refusal Based on Spurious Bond Claims
- The refusal to pay by a bonding company on the ground that the surety bond is fake does not:
- Extinguish the company’s joint and solidary liability.
- Suspend the execution proceedings against the bond.
- The welfare of the workers is prioritized over technical defenses raised by bonding companies.
Procedural Directive Regarding Execution of Judgment
- Execution of the final judgment against the surety bond shall proceed despite the bonding company’s refusal to pay on grounds of the bond’s alleged spuriousness.
- Such execution may only be stayed if a higher court issues an injunction.
Signatories and Formal Adoption
- The resolution was unanimously adopted by the National Labor Relations Commission (NLRC) En Banc on October 9, 2013.
- It signifies the collective stance of commissioners and presiding officers on protecting workers’ rights concerning appeal bonds.
Implications for Labor Practice
- This ruling reinforces the enforcement of labor awards despite disputes over the authenticity of surety bonds.
- It emphasizes speedy and effective relief for workers, minimizing delays caused by bonding companies’ defenses.
Summary of Key Legal Concepts
- Appeal bond: A security posted to guarantee payment of judgment awards in labor appeals.
- Surety bond: The bond posted, typically by bonding companies, as financial security.
- Solidary liability: Joint responsibility that ensures all liable parties are accountable.
- Execution proceedings: Legal steps to enforce a court judgment.
- Injunction: A court order to temporarily or permanently prevent a specific action, in this case, the execution of judgment.