Montero vs. Times Transportation Co., Inc.

The prescriptive period for filing an illegal dismissal complaint is four years under Article 1146 of the Civil Code. The voluntary withdrawal of a previously filed complaint does not interrupt prescription; it leaves the parties in the same position as if no action had been filed, and the prescriptive period continues to run uninterrupted.

TTCI, a bus company, experienced financial losses and labor strife in 1997. After a strike, it implemented a retrenchment program and sold assets to Mencorp Transport Systems, Inc. (MENCORP). In October and November 1997, TTCI terminated numerous employees, including the petitioners, for participating in an illegal strike and as part of the retrenchment/closure.

• Filed in the NLRC (Regional Arbitration Branch) in 1998 (docketed as NLRC RAB-I-01-1007). This case was voluntarily withdrawn by the union's counsel in March 1999.
• New complaints for illegal dismissal, etc., filed before the Labor Arbiter (LA) from June to July 2002.
• LA Decision (June 29, 2005): Dismissed claims for unfair labor practice and money claims due to prescription. Found 10 of the petitioners were illegally dismissed, reasoning the 8-month pendency of the withdrawn case should be deducted from the prescriptive period.
• NLRC Decision (March 31, 2008): Vacated the LA decision. Dismissed all complaints on the ground of prescription, rejecting the LA's deduction of time.
• CA Decision (August 28, 2009): Dismissed the petition for certiorari and affirmed the NLRC.
• SC (March 16, 2015): Denied the petition and affirmed the CA.

• TTCI employed the 21 petitioners as bus drivers, conductors, etc.
• In 1997, following a strike and a return-to-work order, TTCI's board authorized asset disposal and a retrenchment program.
• Notices of termination were served to employees effective October/November 1997.
• On May 14, 1998, some petitioners filed a labor complaint (NLRC RAB-I-01-1007).
• This complaint was voluntarily withdrawn on March 22, 1999.
• From June to July 2002, the petitioners filed new consolidated complaints for illegal dismissal, unfair labor practice, and money claims.
• TTCI and MENCORP (which purchased TTCI's assets) defended primarily on the ground of prescription.

• The period during which their first labor case (filed May 1998, withdrawn March 1999) was pending should be excluded from the computation of the four-year prescriptive period.
• Their 2002 complaints were therefore filed within the prescriptive period.

• The petitioners' causes of action accrued in October/November 1997.
• The complaints filed in 2002 were made more than four years later, so prescription had set in.
• MENCORP separately argued it had no employer-employee relationship with the petitioners.

• Procedural Issues: N/A
• Substantive Issues:
  • Whether the petitioners' complaints for illegal dismissal had already prescribed.

• Procedural: N/A
• Substantive: The SC ruled that the complaints had prescribed.
• The cause of action for illegal dismissal accrued upon receipt of the termination notices in October/November 1997.
• The prescriptive period is four years under Article 1146 of the Civil Code.
• The filing of the first complaint in May 1998 interrupted the prescriptive period.
• However, the voluntary withdrawal of that complaint in March 1999 nullified the interruption. Citing Intercontinental Broadcasting Corporation v. Panganiban, the SC held that such withdrawal leaves the parties "in exactly the same position as though no action had been commenced at all."
• Therefore, the four-year period continued to run from October/November 1997 and expired in 2001, before the new complaints were filed in 2002.

• Prescription of Actions for Illegal Dismissal – An action to contest the legality of a dismissal is one predicated on an injury to the rights of the plaintiff, which must be brought within four (4) years from the time the cause of action accrues (date of termination), as per Article 1146 of the Civil Code.
• Interruption of Prescription and Effect of Withdrawal – Under Article 1155 of the Civil Code, prescription is interrupted by filing a case in court. However, the voluntary withdrawal of that case has the effect of erasing the interruption. The prescriptive period resumes as if no action was ever filed. This principle was applied from Intercontinental Broadcasting Corporation v. Panganiban.

• "Although the commencement of a civil action stops the running of the statute of prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves the parties in exactly the same position as though no action had been commenced at all." (Citing Intercontinental Broadcasting Corporation v. Panganiban)
• "Although the Constitution is committed to the policy of social justice and the protection of the working class, it does not necessarily follow that every labor dispute will be automatically decided in favor of labor. The management also has its own rights."

• Intercontinental Broadcasting Corporation v. Panganiban — Controlling precedent applied. The SC followed this case's ruling that the voluntary withdrawal of a complaint nullifies its effect of interrupting the prescriptive period.
• Callanta v. Carnation Philippines, Inc. — Cited to establish that an illegal dismissal action is based on injury to rights and prescribes in four years under Article 1146.
• Victory Liner, Inc. v. Race — Cited for the principle that the SC may review factual findings when the NLRC and LA decisions are contradictory.
• PLDT v. Pingol — Cited for the statement that social justice does not automatically mean deciding every case in favor of labor.

• Article 1146, New Civil Code — Establishes the four-year prescriptive period for actions upon an injury to the rights of the plaintiff.
• Article 1155, New Civil Code — Provides that prescription is interrupted when an action is filed in court. The SC interpreted the effect of a subsequent voluntary withdrawal.