G.R. No. L-20991; August 30, 1967
RUFINO CIELOS, ET AL., plaintiffs-appellants, vs. BACOLOD MURCIA MILLING CO., INC., defendant-appellee.

FACTS

The plaintiffs, seven former employees of Bacolod Murcia Milling Co., Inc., were dismissed on June 16, 1954. Their employment was without a definite period. They were members of the Allied Workers Association (AWA), which had a closed shop agreement with the company. In 1953, while this agreement was subsisting, they affiliated with another union, the National Employees-Workers Security Union (NEWSUN). Consequently, they were expelled from the AWA, and the company dismissed them upon the AWA’s demand pursuant to the closed shop agreement. The plaintiffs did not join an unfair labor practice case filed by some co-employees, nor did they accept the separation pay offered by the company, hoping for reinstatement if that case succeeded. However, in a 1956 Supreme Court decision (Bacolod-Murcia Milling Co., Inc., et al. v. National Employees Worker’s Union), the dismissal was declared justified and legal. Having lost hope of reinstatement, the plaintiffs filed a complaint on January 5, 1961, before the Bacolod City court, to recover separation pay under Republic Act 1052, as they were dismissed without the required one-month advance notice. The city court and the Court of First Instance of Negros Occidental dismissed the complaint, holding the action had prescribed under Article 1146(1) of the Civil Code, which sets a four-year prescriptive period for actions “upon an injury to the rights of the plaintiffs.” The plaintiffs appealed directly to the Supreme Court.

ISSUE

Whether the plaintiffs’ action to recover separation pay under Republic Act 1052 has prescribed.

RULING

No. The Supreme Court reversed the lower court’s decision. It held that the employer’s obligation to pay one month’s compensation under Republic Act 1052, when an employee without a definite period is dismissed without one month’s advance notice, is an obligation created by law. Therefore, the applicable prescriptive period is ten years under Article 1144(2) of the Civil Code, not four years under Article 1146(1). The right of action accrued upon the plaintiffs’ dismissal on June 16, 1954. Since they filed their complaint on January 5, 1961, which was within ten years, the action had not prescribed. The Court distinguished the cited case of Valencia v. Cebu Portland Cement Co., as that involved a claim for damages due to alleged malicious acts, not a claim for separation pay under Republic Act 1052. The Court ordered the defendant-appellee to pay the plaintiffs-appellants their separation pay with interest and attorney’s fees.