GR L 70615; (October, 1986) (Digest)
G.R. No. L-70615 October 28, 1986
VIRGILIO CALLANTA, petitioner, vs. CARNATION PHILIPPINES, INC., and NATIONAL LABOR RELATIONS COMMISSION, respondents.
FACTS
Petitioner Virgilio Callanta was employed by Carnation Philippines, Inc. as a salesman in January 1974. On June 1, 1979, Carnation terminated his employment on grounds of serious misconduct and misappropriation of company funds, following an approved application for clearance from the Ministry of Labor. Callanta filed a complaint for illegal dismissal with claims for reinstatement, backwages, and damages on July 5, 1982, over three years after his dismissal.
The Labor Arbiter ruled in favor of Callanta, finding the dismissal without valid cause and ordering reinstatement with one year of backwages. On appeal, the National Labor Relations Commission (NLRC) reversed the decision. The NLRC held that the complaint had prescribed, applying the three-year prescriptive period under either Article 291 (offenses penalized under the Labor Code) or Article 292 (money claims arising from employer-employee relations) of the Labor Code. Since the complaint was filed more than three years from the date of dismissal, the NLRC dismissed it.
ISSUE
Whether an action for illegal dismissal, with claims for reinstatement and backwages, prescribes in three years under Articles 291 or 292 of the Labor Code.
RULING
The Supreme Court ruled in favor of the petitioner, holding that an action for illegal dismissal is not subject to the three-year prescriptive periods cited by the NLRC. The Court clarified the legal logic by distinguishing the nature of an illegal dismissal complaint. First, it is not an “offense” under Article 291, as that term refers to violations of the Labor Code that are penal in nature and punishable by law, akin to a crime. Illegal dismissal, while a violation, is not penalized with criminal sanctions in that context.
Second, while the claim for backwages incidental to illegal dismissal is a money claim, the primary action for illegal dismissal itself—which seeks the relief of reinstatement—is not a purely monetary demand. It is an action predicated on an injury to the rights of the worker, specifically the right to security of tenure. Since the Labor Code is silent on the specific prescriptive period for such an action, the Court applied Article 1146 of the New Civil Code by supplementation, which provides a four-year prescriptive period for actions based upon an injury to the rights of the plaintiff.
Therefore, Callanta’s complaint filed on July 5, 1982, was filed within the four-year period from his dismissal on June 1, 1979, and was not barred by prescription. The Court modified the award, however, granting backwages for three years without qualification, considering that reinstatement was rendered impracticable due to Carnation’s business takeover by another corporation.