Prescription in Illegal Dismissal Cases: The Impact of Complaint Withdrawal

The Supreme Court has long protected workers from illegal dismissal, but that protection has limits. One of those limits is prescription — the deadline for filing a case. In Montero v. Times Transportation Co., Inc. (G.R. No. 190828, March 16, 2015), the Court clarified a critical point: if a worker files a complaint and then voluntarily withdraws it, the prescriptive period continues to run as if no case had ever been filed. This decision serves as a warning to workers and lawyers alike about the consequences of abandoning a timely filed case.

The Facts of the Case

The case involved 21 employees of Times Transportation Co., Inc. (TTCI), a bus company operating routes between the Ilocos Region and Metro Manila. In 1997, after a series of labor disputes and a strike, TTCI terminated the employees effective October 26 and November 24, 1997.

On May 14, 1998, ten of the employees filed complaints for illegal dismissal before the National Labor Relations Commission (NLRC). These cases were consolidated under Malana v. TTCI. However, on March 4, 1999, the union's counsel moved to withdraw the case, and the withdrawal was granted on March 22, 1999.

Four years later, from June to July 2002, the employees filed new complaints for illegal dismissal, unfair labor practice, and money claims. The respondents argued that the claims had already prescribed.

The Issue

The central question was whether the employees' complaints for illegal dismissal were barred by prescription, specifically whether the period during which their earlier case was pending should be deducted from the four-year prescriptive period.

The Ruling

The Supreme Court ruled against the employees. The Court held that an action for illegal dismissal is essentially an action for injury to rights under Article 1146 of the Civil Code, which must be brought within four years.

The employees argued that the period from May 1998 to March 1999 — when their first case was pending — should be excluded from the computation. The Court rejected this argument, citing Article 1155 of the Civil Code, which states that prescription is interrupted when an action is filed in court.

However, the Court applied the doctrine from Intercontinental Broadcasting Corporation v. Panganiban: while filing a case interrupts the running 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.

In this case, the employees voluntarily withdrew their 1998 complaint. That withdrawal effectively erased the tolling of the prescriptive period. The Court noted that the employees filed their new complaints in 2002 — more than four years after their dismissal in October and November 1997. Their claims were therefore barred by prescription.

The Court was sympathetic but firm: "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."

Practical Takeaways

• The four-year rule: An illegal dismissal claim must be filed within four years from the date of dismissal. This period is based on Article 1146 of the Civil Code, which covers actions for injury to rights.
• Filing interrupts prescription — but only if the case continues: Filing a complaint stops the running of the prescriptive period. But if the case is withdrawn or dismissed, the interruption is erased, and the clock resumes as if no case was filed.
• Withdrawal is a serious decision: Workers who withdraw a timely filed case risk losing their right to refile if the prescriptive period has already lapsed. Always consult a lawyer before withdrawing a labor complaint.
• Check the dates carefully: Compute the prescriptive period from the actual date of dismissal, not from when the worker "feels" ready to file. Delays can be fatal to a claim.
• The NLRC and courts will not save a late claim: Even in labor cases, where the law favors workers, the rules on prescription are strictly applied. A meritorious claim filed too late is a claim lost.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.