Prescription is not Stopped by the Filing of Complaint which was later Withdrawn

Prescription bars the party from pursuing any action against violation of rights.

If the complainant in a labor case filed the illegal dismissal case and later withdrew the same, will that period be included in the computation of the prescriptive period when they filed another case several years after?

The Supreme Court ruled as follows:

Onofre vs. Montero, et al. vs. Times Transporation Co., Inc., et al.
G.R. No. 190828, March 16, 2015

Facts:

Respondent Times Transportation Co., Inc., (TTCI) is a company engaged in the business of land transportation for passengers and goods serving the Ilocos Region to Metro Manila route. TTCI employed the petitioners as bus drivers, conductors, mechanics, welders, security guards and utility personnel.

Sometime in 1995, the rank-and-file employees of TTCI formed a union named as Times Employees Union (TEU) which was later certified as the sole and exclusive bargaining unit within TTCI.

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In March 1997, members of TEU went on strike; but when former Labor Secretary Leonardo A. Quisimbing assumed jurisdiction over the labor dispute and certified the same for compulsory arbitration, a return-to-work Order dated March 10, 1997 was issued which ended the strike and enjoined the parties from committing any other act that may intensify the situation.

On August 23, 1997, TTCI Board of Directors approved a resolution confirming the authority given to respondent Santiago Rondaris (Santiago), TTCI President and Chairman of the Board of Directors, to gradually dispose the assets of the TTCI as a result of its unabated increase of the cost of operations and losses for the last two years. TTCI also adopted a company-wide retrenchment program, which will take effect on October 1, 1997, where Santiago was given the authority to determine the number of excess employees who would be the subject of retrenchment.

The sale of 25 buses of TTCI, as well as the Certificates of Public Convenience for the operation of the buses, were likewise approved and subsequently transferred to respondent Mencorp Transport Systems, Inc., (MENCORP) by virtue of a Deed of Sale. Thereafter, several union members received notices that they were being retrenched.

TEU declared another a strike against TTCI, but the latter merely reiterated the earlier return-to-work order of the Labor Secretary. For disregarding the said return-to-work order, Santiago issued two notices of termination terminating some 106 workers and a revised list increasing the number of dismissed employees to 119, for participating in the illegal strike.

Likewise, Santiago served to the Department of Labor and Employment Regional Office I a notice that TTCI would be closing its operations due to heavy business losses.

Petitioners Estrañero, Pajarillo, Padre, Avila, Avila, Jr., Tupasi, Cuenta, Dulay, Yago, and Aganon filed several complaints against TTCI and MENCORP before the NLRC. The complaints were thereafter consolidated under the case entitled “Malana v. TTCI” docketed as NLRC RAB-I-01-1007. However, this case was withdrawn on March 4, 1999 upon motion by the TEU’s counsel which was given due course on March 22, 1999.

Four years later, several complaints for unfair labor practice, illegal dismissal with money claims, damages and attorney’s fees were filed against TTCI, Santiago, MENCORP and its General Manager Virginia Mendoza, including the latter’s husband Reynaldo Mendoza (collectively called the respondents), before the LA. Accordingly, these complaints were consolidated.

In response, TTCI asserted that the petitioners’ cause of action had already been barred by prescription because the complaints were filed only in June 2002 or after almost five years from the date of their dismissal. MENCORP, on the other hand, raised the defense of lack of employer-employee relationship since it never engaged the services of the petitioners when TTCI sold to them its buses and the Certificates of Public Convenience.

LA Ruling:

The LA rendered a Decision dismissing the petitioners’ claim for unfair labor practice and money claims on the ground of prescription. However, with regard to the issue of illegal dismissal, only the complaints of Montero, Ravina, Cabello, Genaro, Madera, Gaano, Arsenio Donato and Estilong were dismissed for having been barred by prescription.

The LA found that petitioners Estrañero, Pajarillo, Aganon, Padre, Dulay, Cuenta, Canaria, Yago, Avila and Avila, Jr. were illegally dismissed and were awarded their separation pay and backwages. According to the LA, the complaints of these 10 petitioners were timely filed in June 2002 because the eight-month period during which their cases were pending should be excluded from the four-year prescriptive period.

Disagreeing with the LA decision, all parties interposed an appeal before the NLRC.

NLRC Ruling:

However, said appeals have both been denied for non-perfection, particularly for failure of the petitioners to verify their appeal, and for failure of the respondent to post the required cash or surety bond.   The NLRC vacated and set aside the findings of the LA, upon finding that the petitioners’ complaints had already been barred by prescription.

The NLRC observed that the LA had ignored the rule on prescription, and chose to be selective in awarding relief to the 10 complainants by stating in his decision that the period during which the labor cases were pending should be deducted from the period of prescription.

The NLRC added that the application of the principle of prescription should not be done on a selective basis, especially when the dates of accrual of the causes of action and the filing of the complaints readily show that prescription has set in.

The petitioners filed a motion for reconsideration, but it was denied. Hence, they filed a petition for certiorari before the CA.

CA Ruling:

The CA Decision dismissed the petition. In sustaining the NLRC decision, the appellate court ratiocinated that the illegal dismissal case was filed only in June 2002 or for more than four (4) years and seven (7) months from the time petitioners received the notices of their dismissal in November and October 1997. Clearly, the four-year prescriptive period has already elapsed.

Issue/s:

Whether or not in computing the prescriptive period for filing an illegal dismissal case the period during which the cases were pending should be excluded from the period of prescription.

Whether or not the period during which an action was filed and later on withdrawn should be excluded from the period of prescription.

SC Ruling:

The SC found the petition meritorious.

Settled is the rule that when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to contest the legality of one’s dismissal from employment constitutes, in essence, an action predicated upon an injury to the rights of the plaintiff, as contemplated under Article 1146 of the New Civil Code, which must be brought within four years.

The petitioners contend that the period when they filed a labor case on May 14, 1998 but withdrawn on March 22, 1999 should be excluded from the computation of the four-year prescriptive period for illegal dismissal cases. However, the Court had already ruled that the prescriptive period continues even after the withdrawal of the case as though no action has been filed at all. The applicability of Article 1155 of the Civil Code in labor cases was upheld in the case of Intercontinental Broadcasting Corporation v. Panganiban where the Court held that “although the commencement of a civil action stops the running of the statute of prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves the parties in exactly the same position as though no action had been commenced at all.

In like manner, while the filing of the complaint for illegal dismissal before the LA interrupted the running of the prescriptive period, its voluntary withdrawal left the petitioners in exactly the same position as though no complaint had been filed at all. The withdrawal of their complaint effectively erased the tolling of the reglementary period.

A prudent review of the antecedents of the claim reveals that it has in fact prescribed due to the petitioners’ withdrawal of their labor case docketed as NLRC RAB-I-01-1007.40 Hence, while the filing of the said case could have interrupted the running of the four-year prescriptive period, the voluntary withdrawal of the petitioners effectively cancelled the tolling of the prescriptive period within which to file their illegal dismissal case, leaving them in exactly the same position as though no labor case had been filed at all.

The running of the four-year prescriptive period not having been interrupted by the filing of NLRC RAB-I-01-1007, the petitioners’ cause of action had already prescribed in four years after their cessation of employment on October 26, 1997 and November 24, 1997. Consequently, when the petitioners filed their complaint for illegal dismissal, separation pay, retirement benefits, and damages in 2002, their claim, clearly, had already been barred by prescription.