Montero vs. Times Transportation Co., Inc.

The voluntary withdrawal of a labor complaint does not toll the running of the prescriptive period for illegal dismissal claims; the withdrawal effectively erases the tolling effect of the filing, leaving the parties in exactly the same position as though no action had been commenced at all.

Respondent Times Transportation Co., Inc. (TTCI) is a company engaged in land transportation of passengers and goods, serving the Ilocos Region to Metro Manila route. The 21 petitioners were employed by TTCI as bus drivers, conductors, mechanics, welders, security guards, and utility personnel. In 1995, the rank-and-file employees formed the Times Employees Union (TEU), which was later certified as the sole and exclusive bargaining unit within TTCI. Labor relations between TEU and TTCI were marked by strikes, return-to-work orders from the Labor Secretary, and a company-wide retrenchment program adopted by TTCI's Board of Directors in August 1997 due to heavy business losses, leading to the sale of 25 buses and Certificates of Public Convenience to respondent Mencorp Transport Systems, Inc. (MENCORP).

In March 1997, members of the Times Employees Union (TEU) went on strike against TTCI. Then Labor Secretary Leonardo A. Quisimbing assumed jurisdiction over the labor dispute and issued a return-to-work order dated March 10, 1997, which ended the strike and enjoined the parties from committing acts that would intensify the situation. On August 23, 1997, TTCI's Board of Directors approved a resolution confirming the authority of respondent Santiago Rondaris, TTCI President and Chairman of the Board, to gradually dispose of TTCI's assets due to unabated increases in the cost of operations and losses over the preceding two years. TTCI adopted a company-wide retrenchment program effective October 1, 1997, with Santiago authorized to determine the number of excess employees to be retrenched. The sale of 25 buses and the corresponding Certificates of Public Convenience to respondent MENCORP was formalized through a Deed of Sale dated December 12, 1997. Several union members received notices that they were being retrenched effective 30 days from September 16, 1997.

On October 17, 1997, TEU declared a second strike against TTCI. TTCI reiterated the earlier return-to-work order, and when the striking employees disregarded it, Santiago issued two notices of termination dated October 26, 1997 terminating some 106 workers, followed by a revised list dated November 24, 1997 increasing the number to 119, all for participating in the illegal strike. On December 4, 1997, Santiago notified the DOLE Regional Office I that TTCI would be closing its operations due to heavy business losses.

On May 14, 1998, several petitioners filed complaints against TTCI and MENCORP before the NLRC, which were consolidated under the case entitled "Malana vs. TTCI" docketed as NLRC RAB-I-01-1007. This case was withdrawn on March 4, 1999 upon motion by TEU's counsel, which was given due course on March 22, 1999. Four years later, from June to July 2002, the petitioners filed new complaints for unfair labor practice, illegal dismissal with money claims, damages, and attorney's fees against TTCI, Santiago, MENCORP, and its General Manager Virginia Mendoza and her husband Reynaldo Mendoza. These complaints were consolidated. The petitioners received their notices of termination on October 26 and November 24, 1997, meaning that by the time they refiled in June to July 2002, more than four years and seven months had elapsed from the date of their dismissal.

• Tolling of Prescriptive Period: Petitioners contended that their complaints for illegal dismissal were filed within the four-year prescriptive period because the period during which their earlier case (NLRC RAB-I-01-1007) was pending should be excluded from the computation of the prescriptive period.
• Equitable Consideration: Petitioners impliedly argued that the pendency of their first complaint should work in their favor, as they had diligently pursued their claims before withdrawing and refiling.

• Prescription: TTCI asserted that the petitioners' cause of action had already been barred by prescription because the complaints were filed only in June 2002, or almost five years after the date of their dismissal in October and November 1997.
• Lack of Employer-Employee Relationship: MENCORP raised the defense that it never engaged the services of the petitioners, having merely purchased buses and Certificates of Public Convenience from TTCI, and therefore no employer-employee relationship existed between MENCORP and the petitioners.

• Prescription of Illegal Dismissal Claims: Whether the petitioners' complaints for illegal dismissal filed in June to July 2002 had already prescribed, given that they were terminated in October and November 1997.
• Effect of Withdrawn Complaint on Prescription: Whether the period during which the petitioners' first labor case (NLRC RAB-I-01-1007) was pending, which was voluntarily withdrawn in March 1999, should be excluded from the computation of the four-year prescriptive period.

• Prescription of Illegal Dismissal Claims: Yes. The complaints had already prescribed, as more than four years had elapsed from the dates of termination in October and November 1997 to the filing of the new complaints in June to July 2002.
• Effect of Withdrawn Complaint on Prescription: No. The voluntary withdrawal of the first complaint did not toll the prescriptive period; the withdrawal left the parties in exactly the same position as though no action had been commenced at all, pursuant to Article 1155 of the Civil Code as interpreted in Intercontinental Broadcasting Corporation vs. Panganiban.

• Prescription of Illegal Dismissal Claims: An action for illegal dismissal is predicated upon an injury to the rights of the plaintiff, as contemplated under Article 1146 of the New Civil Code, which must be brought within four years. The petitioners received their notices of termination on October 26 and November 24, 1997. Counting from those dates, the four-year prescriptive period expired in October and November 2001, respectively. The complaints filed in June to July 2002 were thus filed well beyond the reglementary period. The antecedent facts giving rise to the dismissal were not disputed, and there was no question that the claims for unfair labor practice and money claims had prescribed. The only contested point was whether the earlier withdrawn case tolled the period.

• Effect of Withdrawn Complaint on Prescription: Article 1155 of the Civil Code provides that prescription of actions is interrupted when they are filed before the court. However, as settled in Intercontinental Broadcasting Corporation vs. Panganiban, although the commencement of an action stops the running of the statute of prescription, its dismissal or voluntary abandonment by the plaintiff leaves the parties in exactly the same position as though no action had been commenced at all. The petitioners filed their first complaint on May 14, 1998, which could have interrupted the running of the four-year prescriptive period. But they voluntarily withdrew it on March 4, 1999, given due course on March 22, 1999. This voluntary withdrawal effectively erased the tolling of the reglementary period, leaving the petitioners in exactly the same position as though no labor case had been filed. The prescriptive period therefore continued to run uninterrupted from the dates of dismissal, and the cause of action had prescribed four years after their cessation of employment. The Court noted that while the Constitution is committed to social justice and the protection of labor, justice must be dispensed in light of established facts and applicable law, and management also has its own rights.

• Prescription of Illegal Dismissal Claims — An action for illegal dismissal, being predicated upon an injury to the rights of the plaintiff, prescribes in four years pursuant to Article 1146 of the New Civil Code. The prescriptive period is counted from the date of dismissal or termination of employment.

• Effect of Voluntary Withdrawal on Prescription (Article 1155, Civil Code) — While the filing of a complaint interrupts the running of the prescriptive period under Article 1155, the voluntary withdrawal or dismissal of that complaint leaves the parties in exactly the same position as though no action had been commenced at all. The tolling effect of the filing is effectively erased, and the prescriptive period continues to run as though no case was ever filed. This principle applies to labor cases.

• Social Justice Does Not Override Prescription — Although the Constitution is committed to the policy of social justice and the protection of the working class, it does not follow that every labor dispute will automatically be decided in favor of labor. Justice is dispensed in light of established facts and applicable law and doctrine, and management also has its own rights.

• "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." — This is the controlling formulation from Intercontinental Broadcasting Corporation vs. Panganiban as applied to labor cases, establishing that voluntary withdrawal of a complaint does not toll the prescriptive period.

• "while the filing of the said case could have interrupted the running of the four-year prescriptive period, the voluntary withdrawal of the petitioners effectively cancelled the tolling of the prescriptive period within which to file their illegal dismissal case, leaving them in exactly the same position as though no labor case had been filed at all." — This passage states the ratio decidendi: the withdrawal erased the tolling effect, causing the 2002 complaints to prescribe.

• "Although the Constitution is committed to the policy of social justice and the protection of the working class, it does not necessary follow that every labor dispute will be automatically decided in favor of labor. The management also has its own rights." — This passage articulates the Court's stance that social justice does not override substantive legal rules such as prescription.

• Intercontinental Broadcasting Corporation vs. Panganiban, 543 Phil. 371 (2007) — Controlling precedent. The Court applied its holding that voluntary withdrawal or dismissal of an action leaves the parties in the same position as though no action had been commenced, thereby not tolling the prescriptive period. This was the decisive authority for ruling that the petitioners' withdrawal of NLRC RAB-I-01-1007 did not interrupt prescription.

• Callanta vs. Carnation Philippines, Inc., 229 Phil. 279 (1986) — Cited for the rule that an action for illegal dismissal constitutes an action predicated upon an injury to the rights of the plaintiff under Article 1146 of the Civil Code, prescribing in four years.

• Victory Liner, Inc. vs. Race, 548 Phil. 282 (2007) — Cited for the principle that while the Court is not a trier of facts, it may delve into the records where the findings of the NLRC and the Labor Arbiter are contradictory.

• Philippine Long Distance Telephone Company (PLDT) vs. Pingol, G.R. No. 182622, September 8, 2010, 630 SCRA 413 — Cited for the proposition that social justice does not mean every labor dispute is automatically decided in favor of labor, and that management also has rights.

• Article 1146, New Civil Code — Provides that actions upon an injury to the rights of the plaintiff must be instituted within four years. Applied to hold that illegal dismissal claims, being actions predicated on injury to the rights of the plaintiff, prescribe in four years from the date of dismissal.

• Article 1155, New Civil Code — Provides that prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by creditors, and when there is any written acknowledgment of the debt. Applied to hold that while filing interrupts prescription, voluntary withdrawal of the filing erases that tolling effect.

Associate Justice Presbitero J. Velasco, Jr. (Chairperson), Associate Justice Mariano C. del Castillo, Associate Justice Martin S. Villarama, Jr., and Associate Justice Francis H. Jardeleza. No separate concurring opinions were written.