G.R. No. 155639 ; April 22, 2009
JANUARIA A. RIVERA, Petitioner, vs. UNITED LABORATORIES, INC., Respondent.

FACTS

Januaria A. Rivera commenced employment with United Laboratories, Inc. (UNILAB) on April 7, 1958. Under UNILAB’s retirement plan, compulsory retirement occurred upon reaching age 60 or completing 30 years of service, whichever came first. In 1988, having completed 30 years of service, Rivera was retired effective December 31, 1988, and received her full retirement benefits totaling ₱1,047,331.33, which were transferred to a special account (Trust Fund C). At her request, UNILAB allowed her to continue working and she was promoted to Assistant Vice-President on January 1, 1989, serving until the end of 1992. From 1993 to 1994, she served as a personal consultant under contract with UNILAB’s sister companies, assigned to render services involving UNILAB. On December 16, 1992, UNILAB amended its retirement plan, increasing benefits from one month to one-and-a-half months of terminal basic salary for every year of service. On January 7, 1995, Rivera demanded that her retirement benefits be increased under the amended plan based on her December 31, 1992 salary and her 34 years of service. UNILAB denied her request on February 26, 1996, stating the upgrade did not apply to her as she was compulsorily retired in 1988. Rivera filed a complaint with the NLRC on August 9, 1996, for recovery of unpaid retirement pay differential. The Labor Arbiter dismissed the complaint, finding it filed out of time and that she was not entitled to the upgraded benefits. The NLRC affirmed. The Court of Appeals set aside the NLRC decision, ruling the claim had not prescribed due to an extrajudicial demand interrupting the period, but remanded the case to the Labor Arbiter for a hearing on the merits.

ISSUE

The primary issue is whether Rivera’s claim for additional retirement benefits under UNILAB’s amended retirement plan had prescribed.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The Court held that Rivera’s cause of action for the retirement pay differential accrued on January 15, 1993, when she received her retirement pay check after her retirement on December 31, 1992. The three-year prescriptive period under Article 291 of the Labor Code began to run from that date. However, this prescriptive period was interrupted by Rivera’s extrajudicial demand through her letter dated January 7, 1995, pursuant to Article 1155 of the Civil Code. Consequently, when she filed her complaint on August 9, 1996, it was within the prescriptive period. The Court also found that the CA correctly remanded the case for a hearing on the merits to determine the crucial factual issue of when Rivera retired for the purpose of applying the amended retirement plan, as the records were insufficient for a complete resolution. The Court did not rule on the substantive entitlement to the differential, leaving that for the Labor Arbiter’s determination upon remand.