G.R. No. 132257 , October 12, 1998
Amado de Guzman and Manila Workers Union and General Workers Union (MALEGWU), Petitioners, vs. Court of Appeals and Nasipit Lumber Company, Respondents.

FACTS

On April 16, 1992, Nasipit Lumber Company, due to serious business reverses, placed fifteen rank-and-file employees, including petitioners Samuel Escalanda, Amado de Guzman, Jose Espiritu, Jr., Dominador Quilloy, and Porferio Higuit, on a six-month forced leave. The petitioner Union treated this as a grievance, alleging a violation of the Collective Bargaining Agreement (CBA) concerning optional retirement and separation pay. On June 2, 1992, and December 7, 1992, the petitioners filed complaints before the NLRC (National Labor Relations Commission) for illegal forced leave and illegal dismissal, alternatively praying for payment of CBA benefits. The Labor Arbiter, in a November 9, 1994 Decision, dismissed the illegal dismissal case but ordered payment of retrenchment benefits. This decision, affirmed by the NLRC on March 31, 1995, became final and executory. The NLRC, in its affirmation, noted that the interpretation of the CBA provision on retirement benefits (75 days lump sum plus 15 days per year of service) had already been submitted to voluntary arbitration in a related case, and that ruling had been sustained. The petitioners eventually referred their CBA-related money claim to a Voluntary Arbitrator, who rendered a Decision on July 16, 1996, granting Escalanda and de Guzman optional retirement benefits, and Espiritu, Jr., Quilloy, and Higuit separation assistance grants under the CBA. The Court of Appeals reversed the Voluntary Arbitrator’s Decision, ruling that the money claim had already prescribed under the three-year prescriptive period in Article 291 of the Labor Code, and that the earlier filing of the complaints before the labor arbiter/NLRC did not interrupt the prescriptive period as those agencies lacked jurisdiction over the CBA interpretation grievance.

ISSUE

Whether petitioners’ money claim for retirement and separation benefits under the Collective Bargaining Agreement (CBA) has prescribed.

RULING

Yes, the claim has prescribed. The Supreme Court denied the petition and affirmed the Decision of the Court of Appeals. The Court ruled that all money claims arising from an employer-employee relation, including those based on a CBA, are governed by the three-year prescriptive period mandated by Article 291 of the Labor Code, not the ten-year period for written contracts under Article 1144 of the Civil Code. The CBA, though a written contract, is rooted in the employer-employee relationship; thus, claims arising from it are consequences of that relationship and fall under the special law (Labor Code). The petitioners’ cause of action accrued on November 16, 1992, when they were dismissed. The three-year prescriptive period began to run from that date and expired on November 16, 1995. The filing of the complaints before the Labor Arbiter/NLRC in 1992 did not toll the running of the prescriptive period because, under Article 261 of the Labor Code, voluntary arbitrators have original and exclusive jurisdiction to hear and decide unresolved grievances arising from the interpretation or implementation of a CBA. Since the labor arbiter and NLRC had no jurisdiction over the CBA interpretation claim, their proceedings were a nullity and did not interrupt prescription. Consequently, when the petitioners filed their claim before the Voluntary Arbitrator, leading to the July 16, 1996 Decision, their claim had already been barred by prescription.