G.R. No. L-55312 December 29, 1987
MANUEL L. FERNANDEZ, petitioner, vs. GROLIER INTERNATIONAL, INC., THE MINISTER OF LABOR, and THE NATIONAL LABOR RELATIONS COMMISSION, respondents.

FACTS

Petitioner Manuel L. Fernandez was an employee of Grolier International, Inc. in the Philippines. In 1974, he was directed by his superior, Ronald Besaw, to attend conferences at the company’s Sydney, Australia office. He traveled to Sydney on a visitor’s visa stamped “Employment Prohibited.” After the conferences, he continued working there for Grolier Society of Australia, receiving salary from the Australian entity, while his immigration papers were being processed. He returned to Manila in February 1975 when his visa expired, awaiting approval of his immigration status. The processing continued until May 1976, when Australian authorities finally denied his immigrant application, after which Grolier terminated his employment.
Fernandez filed a complaint for illegal dismissal. The Labor Arbiter and the NLRC dismissed the complaint on grounds of prescription and lack of jurisdiction, ruling that his cause of action prescribed one year from his return to Manila in February 1975 and that his employer was the separate Australian entity, not the Philippine-based respondent. This Court initially affirmed that dismissal.

ISSUE

Whether the NLRC correctly dismissed Fernandez’s complaint on the grounds of prescription and lack of jurisdiction.

RULING

The Court granted the motion for reconsideration, reversed the NLRC, and ruled for Fernandez. On prescription, the defense was deemed waived as the private respondent failed to specifically plead it in its position paper before the Labor Arbiter. Jurisprudence holds that failure to plead prescription constitutes a waiver. Moreover, the finding of prescription was erroneous. The reckoning point for the prescriptive period was not his return to Manila in February 1975, as he was not dismissed at that time. He remained an employee, with the company still processing his papers. His dismissal effectively occurred only in May 1976 upon the final immigration denial, and his complaint filed in August 1976 was well within the one-year period.
On jurisdiction, the Court ruled that the Philippine labor authorities have jurisdiction. While Grolier International, Inc. (Philippines) and Grolier Society of Australia are separately incorporated, they are marketing arms of the same multinational corporation under unified management. Critically, Fernandez never entered into a new employment contract with the Australian entity; his original employment contract with the Philippine branch governed his work in Sydney. His assignment abroad was a company-directed transfer, not a resignation or a shift to a distinct employer. Therefore, his dismissal was actionable against the respondent Philippine corporation before the NLRC. The Court ordered his reinstatement with three years of backwages and reimbursement for his return airfare.