G.R. No. 87698 September 24, 1991
PHILIPPINE AIRLINES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and OSCAR IRINEO, respondents.

FACTS

Oscar Irineo, an employee of Philippine Airlines, Inc. (PAL), was dismissed on August 23, 1967, following a fact-finding investigation that implicated him in irregular ticket refunds. Criminal charges for estafa through falsification were subsequently filed. After a protracted trial, the trial court convicted Irineo and others in 1976. On appeal, the Intermediate Appellate Court acquitted Irineo on grounds of reasonable doubt in a decision promulgated on September 23, 1983. Seventeen years after his dismissal, on May 10, 1984, Irineo filed a complaint for illegal dismissal, seeking reinstatement and back wages.
The Labor Arbiter ruled in Irineo’s favor, ordering his reinstatement with full back wages and moral damages. The Arbiter rejected PAL’s defense of prescription, construing the dismissal as a mere preventive suspension under an internal PAL circular and a then-existing Court of Industrial Relations injunction. The National Labor Relations Commission affirmed this decision, prompting PAL to file the present petition for certiorari.

ISSUE

Whether the complaint for illegal dismissal filed by Oscar Irineo seventeen years after his termination is barred by prescription.

RULING

Yes, the complaint is barred by prescription. The Supreme Court reversed the NLRC, holding that Irineo’s cause of action accrued from the date of his actual dismissal on August 23, 1967, not from the date of his acquittal in 1983. The legal logic is clear: an action for illegal dismissal must be filed within four years from the time the cause of action accrues, pursuant to Article 1146 of the Civil Code, which was the applicable prescriptive period at the time. The cause of action arises upon dismissal, as its legality or illegality can be determined independently of any parallel criminal proceedings. The Court found no merit in the NLRC’s theory that an internal PAL circular and a defunct CIR injunction converted the dismissal into a mere suspension. The CIR injunction had ceased to be operative after the parties entered into a collective bargaining agreement in 1965, long before Irineo’s dismissal. The circular could not unilaterally alter the legal character of the unequivocal act of termination. Irineo’s inaction for seventeen years constituted an impermissible delay, and his claim was thus time-barred. The NLRC’s decision was annulled for grave abuse of discretion.