THE INSURANCE COMMISSION (IC) seeks to repeal the National Labor Relations Commission (NLRC) resolution requiring surety companies to immediately pay the appeal bonds to the winning parties of a case, despite the suspicion that they are fake.
In a statement emailed to journalists over the weekend, IC Commissioner Dennis B. Funa said that it would be unfair for bonding companies to be liable, and such rule will not address the “proliferation” of fake bonds.
“Fake bonds should not become a source of any obligation and surety companies should not be held liable for payment as solidary obligor,” Mr. Funa was quoted in the statement as saying.
An appeal bond in labor cases is intended to assure workers that the monetary award will be given to them when they prevail in a case.
However, bonding companies are refusing to pay the judgment award as they are claimed to be fake.
NLRC En Banc Resolution 5-2013, however, said that “notwithstanding refusal of a bonding/surety company to pay on the ground that the bond is spurious/fake, execution of final judgment against the surety bond shall proceed unless enjoined by a higher court.”
Mr. Funa proposed create a verification system with bonding companies “that is not violative of the rules of fair play.” — Elijah Joseph C. Tubayan