PRESCRIPTION

Reyes v. NLRC

FACTS: Erwin Reyes filed a complaint against Coca-Cola Bottlers Philippines and Rotaida Taguibao, its
Human Resource Manager, for illegal dismissal. The LA ruled in favor of Reyes. CCBP immediately reinstated
Reyes, but appealed the monetary awards to the NLRC. The NLRC dismissed CCBP’s appeal and affirmed with
modification the LA’s decision by reducing the amount of backwages awarded to Reyes underscoring his
unexplained delay (more than three years) in filing his complaint for illegal dismissal, deleting the order
reinstating Reyes to his former position in view of the confidential nature of Reyes’ employment as a
salesman, and deleting the LA’s award for attorney’s fees. Reyes appealed to the CA, stating that the NLRC
abused its discretion in ignoring the established facts and legal principles when it modified the award for his
backwages and deleted the order for his reinstatement. The CA, however, dismissed Reyes’ petition for failure
to give any explanation why a copy of the said petition was not personally served upon the counsel of the
adverse parties. Since Reyes failed to file a timely MR, the CA Resolution dismissing his petition became final
and executory, and an entry of judgment was made. Eight months thereafter, Reyes’ new counsel filed an
Entry of Appearance with an Urgent MR. Reyes, through his new counsel, sought for the liberality of the CA,
faulting his former counsel for the procedural defects of his petition and for his failure to seasonably seek
reconsideration of the prior CA Resolution. Also, this time, petitioner provided the explanation required by
Section 11, Rule 13 of the Revised Rules of Court. The CA denied the Urgent MR for being filed out of time.
Reyes filed a petition for certiorari with the SC assailing the CA Resolutions.

ISSUE 1: W/N the CA gravely abused its discretion in not excusing Reyes’ procedural lapses.

YES. It is true that for Reyes’ failure to comply with Section 11, Rule 13 of the Revised Rules of Court, his
petition should be expunged from the records. Nevertheless, the Rules of Court itself calls for its liberal
construction, with the view of promoting their objective of securing a just, speedy and inexpensive
disposition of every action and proceeding. The circumstances of this case qualify it under the exception,
rather than the general rule. The negligence of Reyes’ former counsel may be considered gross since it
invariably resulted to the foreclosure of remedies otherwise readily available to Reyes. Not only was Reyes
deprived of the opportunity to bring his case before the CA with the outright dismissal of his petition on a
technicality, but he was also robbed of the chance to seek reconsideration of the dismissal of his petition.
What further impels this Court to heed the call for substantial justice are the pressing merits of this case
which, if left overshadowed by technicalities, could result in flagrant violations of the provisions of the Labor
Code and of the categorical mandate of the Constitution affording protection to labor.

Higher interest of justice and equity demand that Reyes should not have been denied his day in court and
made him to suffer for his counsel’s indiscretions. To cling to the general rule in this case would only
condone, rather than rectify, a serious injustice to a party—whose only fault was to repose his faith and trust
in his previous counsel—and close our eyes to the glaring grave abuse of discretion committed by the NLRC.

 The Court is fully aware that procedural rules are not to be belittled or simply disregarded for these
prescribed procedure insure an orderly and speedy administration of justice. However, it is equally
true that litigation is not a mere game of technicalities. Law and jurisprudence grant to courts the
prerogative to relax compliance with procedural rules of even the most mandatory character,
mindful of the duty to reconcile both the need to put an end to litigation speedily and the parties’
right to an opportunity to be heard.

1|S. Macapagal. BSU LAW 2012

  The rules of procedure are merely tools designed to facilitate the attainment of justice. They were
conceived and promulgated to effectively aid the court in the dispensation of justice. Courts are not
slaves to or robots of technical rules, shorn of judicial discretion. In rendering justice, courts have
always been, as they ought to be, conscientiously guided by the norm that on the balance,
technicalities take a backseat against substantive rights, and not the other way around. Thus, if the
application of the Rules would tend to frustrate rather than promote justice, it is always within our
power to suspend the rules, or except a particular case from its operation.
 The basic general rule is that the negligence of counsel binds the client. This general rule, however,
pertains only to simple negligence of the lawyer. Where the negligence of counsel is one that is so
gross, palpable, pervasive, reckless and inexcusable, then it does not bind the client since, in such a
case, the client is effectively deprived of his or her day in court.

ISSUE 2:W/N the NLRC was correct in decreasing the amount of backwages it awarded to Reyes in the light of
the latter’s more than three-year delay in the filing of his illegal dismissal complaint.

NO. That Reyes did not immediately file his complaint should not affect or diminish his right to backwages, for
it is a right clearly granted to him by law—should he be found to have been illegally dismissed—and for as
long as his cause of action has not been barred by prescription. The law fixes the period of time within which
Reyes could seek remedy for his illegal dismissal at four years, and for as long as he filed his Complaint within
the prescriptive period, he shall be entitled to the full protection of his right to backwages. The filing of Reyes’
Complaint was well within the said prescriptive period since his dismissal from service was on 15 September
2001 and his complaint was filed on 14 June 2004. The LA had followed the long-settled rule that full
backwages should be awarded, to be reckoned from the time of illegal dismissal up to actual reinstatement.
On the other hand, the NLRC, in modifying the LA’s award for backwages by computing the same only from
the time Reyes filed his complaint for illegal dismissal before the LA, up to the day when the LA promulgated
his judgment, providing no other explanation for its modification except that it was just and equitable to
reduce the amount since Reyes took more than three years to file his complaint, acted with grave abuse of
discretion.

The Court finds no justice or rationality in the distinction created by the NLRC; and when there is neither
justice nor rationality, the distinction transgresses the elementary principle of equal protection and must be
stricken out. Equal protection requires that all persons or things similarly situated should be treated alike, as
to both rights conferred and responsibilities imposed. There is no sufficient basis why Reyes should not be
placed in the same plane with other illegally dismissed employees who were awarded backwages without
qualification.

 One of the natural consequences of a finding that an employee has been illegally dismissed is the
payment of backwages corresponding to the period from his dismissal up to actual reinstatement.
The statutory intent of this matter is clearly discernible. The payment of backwages allows the
employee to recover from the employer that which he has lost by way of wages as a result of his
dismissal. Logically, it must be computed from the date of the illegal dismissal up to the time of actual
reinstatement. There can be no gap or interruption, lest we defeat the very reason of the law in
granting the same.
 In illegal dismissal cases, the employee concerned is given a period of four years from the time of his
illegal dismissal within which to institute the complaint. The four-year prescriptive period shall
commence to run only upon the accrual of a cause of action of the worker.

2|S. Macapagal. BSU LAW 2012

Petition granted. Reyes entitled to reinstatement without loss of seniority rights and other privileges and to
full backwages, inclusive of allowances, and to other benefits or their monetary equivalents computed from
the time compensation was withheld up to the time of actual reinstatement.

 The doctrine of strained relations should not be strictly applied so as not to deprive an illegally
dismissed employee his right to reinstatement. Every labor dispute almost always results in strained
relations, and the phrase cannot be given an overarching interpretation; otherwise, an unjustly
dismissed employee can never be reinstated.
 A confidential employee is one who (1) assists or acts in a confidential capacity, in regard to (2)
persons who formulate, determine, and effectuate management policies specifically in the field of
labor relations.

Rivera v. UNILAB

FACTS: Januaria Rivera started working for UNILAB in 1958 as a senior manufacturing pharmacist. Under
UNILAB’s comprehensive retirement plan at that time, a member is compulsorily retired upon reaching the
normal retirement date which is the date when the member has reached age 60 or has completed 30 years of
service, whichever comes first. Upon Rivera’s completion of 30 years of service to UNILAB in 1988, she
retired pursuant to the terms of the comprehensive retirement plan, and received retirement benefits under
that plan. However, at Rivera’s request, she was allowed by UNILAB to continue working, and was even
promoted to the position of AVP. She rendered service to the company in this capacity until the end of 1992,
at which time, Rivera retired from employment with the company (as distinguished from retirement from the
comprehensive retirement plan). In that same year, UNILAB amended its retirement plan, providing, among
others, for an increase in retirement benefits. From 1993 to 1994, Rivera served as a personal consultant
under contract with the Active Research and Management Corporation and with Fil-Asia Business
Consultants, both sister companies of UNILAB, which assigned Rivera to render service involving UNILAB. N
1993, UNILAB gave Rivera a check for payment in full of her retirement plan based on the 1988 plan, which
she received. In 1995, Rivera asked UNILAB that her retirement benefits be increased in accordance with the
amended retirement program based on her 1992 terminal basic salary, multiplied by her 34 years of service
with the company. Rivera made two follow-up letters, receiving no reply from UNILAB. In 1996, UNILAB
replied to her letter, denying her request for increase in retirement benefits, explaining that since the upgrade
of the retirement benefit formula occurred in 1992, it did not apply to her—what applied to her case is the
formula that governed in 1988. Rivera filed a complaint with the NLRC for recovery of unpaid retirement pay
differential. UNILAB prayed for the dismissal of the complaint on the ground of prescription, invoking Article
291 of the Labor Code, maintaining that Rivera’s cause of action accrued when the company’s retirement plan
was amended considering that the action was triggered by the additional benefit provided by the amendment
to the retirement plan. Rivera disagreed, arguing that the three-year period within which to file her complaint
should be counted from when the company categorically denied her letter demanding payment of the unpaid
balance of her retirement benefits.

ISSUE: Has Rivera’s cause of action already prescribed because she had already received full payment of her
retirement benefits based on the 1988 plan?

NO. The first opportunity for Rivera to claim her retirement pay differential corresponding to her claimed
continuous work up to the end of 1992 came only in 15 January 1993 when she received her final pay that did
not include her service after the end of 1988. However, the running of the prescriptive period was effectively
interrupted by her first letter to UNILAB on 7 January 1995 when she demanded additional retirement
benefits under the 1992 amended retirement plan. UNILAB only answered Rivera’s letter on 26 February
1996, with a categorical denial of Rivera’s demand; the running of the prescriptive period restarted on the

3|S. Macapagal. BSU LAW 2012

date of this denial, but stopped again on 9 August 1996, when the complaint before the NLRC was filed.
Adding all the running periods yields a total of less than 3 years; hence, Rivera seasonably filed her monetary
claim when she filed her complaint before the NLRC.

 It should be noted that Articles 1139 to 1155 of the Civil Code provide the general law on
prescription of actions. Under Article 1139, actions prescribe by the mere lapse of time prescribed by
law. That law may either be the Civil Code or special laws as specifically mandated by Article 1148. In
labor cases, the special law on prescription is Article 291 of the Labor Code which provides that all
money claims arising from employer-employee relations shall be filed within 3 years from the time
the cause of action accrued; otherwise they shall be barred forever.
 How prescription operates is another matter that the general law, rather than the Labor Code,
governs since the Labor Code is silent on the matter.
 The prescriptive period for labor-related money claims can be interrupted by an extra-judicial
demand on the employer.

BUT SC denies Rivera’s petition on the ground that her claim for retirement pay differential lacks merit.

PLDT v. Pingol

FACTS: Roberto Pingol was a maintenance technician of PLDT from 1979 to 2000. In 1999, Pingol was
admitted at The Medical City for “paranoid personality disorder” due to financial and marital problems. He
was discharged from the hospital a month thereafter, and he reported for work, but frequently absented
himself due to his poor mental condition. From September to December 1999, Pingol was absent from work
without official leave. PLDT allegedly sent him notices warning him that he would be dismissed from
employment if he continued to be absent without official leave, but despite these warnings, Pingol still failed
to show up for work. On 1 January 2000, PLDT terminated Pingol’s services on the grounds of unauthorized
absences and abandonment of office.

On 29 March 2004, Pingol filed a Complaint for Constructive Dismissal and Monetary Claims against
PLDT, alleging that he was hastily dismissed from his employment. PLDT filed a motion to dismiss, claiming
that Pingol’s cause of action had already prescribed as the complaint was filed 4 years and 3 months after his
dismissal. Pingol, however, countered that in computing the prescriptive period, the years 2001 to 2003 must
not be taken into account, because at that time he had been inquiring from PLDT about the financial benefits
due him as an employee who was no longer allowed to do his work, but he merely got empty promises. It
could not, therefore, result in abandonment of his claim. The LA granted PLDT’s motion to dismiss on the
ground of prescription. Pingol appealed to the NLRC, which reversed the LA decision and ruled in favor of
Pingol. PLDT appealed to the CA, but was denied.

ISSUE: W/N Pingol’s claim has already prescribed.

YES. The Labor Code has no specific provision on when a claim for illegal dismissal or a monetary claim
accrues. Thus, the general law on prescription applies. Article 1150 of the Civil Code states that the time for
prescription for all kinds of actions, when there is no special provision which ordains otherwise, shall be
counted from the day they may be brought. The day the action may be brought is the day a claim starts as a
legal possibility. In the present case, 1 January 2000 was the date the Pingol was not allowed to perform his
usual and regular job as maintenance technician. Pingol cited the same date of dismissal in his complaint
before the LA. As such, the LA correctly ruled that the complaint filed had already prescribed.

Although in Pingol’s mind, his follow-ups with PLDT from 2001 to 2003 should toll the prescriptive period,
that clearly is not the case, because the rule in this regard is covered by Article 1155 of the Civil Code, which

4|S. Macapagal. BSU LAW 2012

states that the prescription of actions is interrupted when they are filed before the Court, when there is a
written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by
the debtor. Since Pingol never made any written extrajudicial demand, nor did PLDT make any written
acknowledgment of its alleged obligation, then the claimed “follow-ups” could not have validly tolled the
running of the prescriptive period.

Petition granted. CA decision reversed and set aside; Pingol’s complaint dismissed.

 Three elements of a cause of action:

(1) A right in favor of the plaintiff by whatever means and under whatever law it arises or is
created;
(2) An obligation on the part of the named defendant to respect or not to violate such right; and
(3) An act or omission on the part of such defendant violative of the right of the plaintiff or
constituting a breach of the obligation of the defendant to the plaintiff.
 Although the Constitution is committed to the policy of social justice and the protection of the
working class, it does not necessarily follow that every labor dispute will be automatically decided in
favor of labor.

5|S. Macapagal. BSU LAW 2012