Cielos v. Bacolod Murcia Milling Co.
REITERATIONFacts
The Antecedents: Plaintiffs, seven former employees of defendant Bacolod Murcia Milling Co., Inc. (company), were dismissed from employment without a definite period. Their dismissal stemmed from their affiliation with the National Employees-Workers Security Union (NEWSUN) while still members of the Allied Workers Association (AWA), which had a closed shop agreement with the company. Upon demand by AWA, the company dismissed the plaintiffs. Some dismissed laborers filed an unfair labor practice case, while others accepted termination pay. The plaintiffs did not join the unfair labor practice case nor accept the offered separation pay, fearing prejudice to their reinstatement rights. The Supreme Court later ruled in G.R. No. L-9003 that the dismissal was justified and legal. Procedural History: On January 5, 1961, the plaintiffs filed a complaint to recover separation pay under Republic Act 1052. The City Court of Bacolod dismissed the complaint. On appeal, the Court of First Instance of Negros Occidental also dismissed the complaint, holding that the action had prescribed, as it was filed more than six years after their dismissal on June 16, 1954. The trial court applied Article 1146(1) of the Civil Code, considering the failure to pay separation pay as an injury to the plaintiffs' rights, prescribing in four years. The Petition: The plaintiffs appealed directly to the Supreme Court, contending that their action had not prescribed because Republic Act 1052 created an obligation arising from law, thus falling under Article 1144(2) of the Civil Code, which provides a ten-year prescriptive period.
Issue(s)
Whether the action to recover separation pay under Republic Act 1052 has prescribed. Whether the obligation to pay separation pay under Republic Act 1052 is an obligation created by law or an injury to the rights of the plaintiff.
Ruling
The Supreme Court reversed the decision of the Court of First Instance, ordering the defendant-appellee to pay the plaintiffs-appellants their separation pay, with interest and attorney's fees.
Ratio Decidendi
On the prescription of the action to recover separation pay under Republic Act 1052: The Court held that the plaintiffs' action had not prescribed. The trial court erred in applying Article 1146(1) of the Civil Code, which prescribes a four-year period for actions upon an injury to the rights of the plaintiff. Instead, the Court found that Republic Act 1052 imposes an obligation on the employer to either provide one month's advance notice of termination or pay one month's compensation from the date of termination. This obligation is specifically created by law and does not require stipulation in the employment contract. Therefore, the applicable prescriptive period is ten years, as provided under Article 1144(2) of the Civil Code for actions upon an obligation created by law. The plaintiffs' filing of the complaint on January 5, 1961, which was within ten years from their dismissal on June 16, 1954, was thus timely. On the nature of the obligation to pay separation pay under Republic Act 1052: The Court clarified that the obligation to pay one month's compensation under Republic Act 1052 is an obligation created by law. This is evident from the text of the law itself, which mandates this payment in cases of termination without the required advance notice. The law imposes this duty on the employer, irrespective of any contractual stipulation. Even if the payment partakes of a penalty for non-compliance with the notice requirement, it undeniably creates a legal obligation in favor of the employee. The Court drew an analogy to compensation under the Workmen's Compensation Act, which is also considered an obligation created by law with a ten-year prescriptive period. Thus, the action to enforce this statutory obligation is governed by the ten-year prescriptive period under Article 1144(2) of the Civil Code, not the four-year period for injuries to rights under Article 1146(1).
Main Doctrine
An action to enforce the employer's obligation to pay separation pay under Republic Act 1052 is an obligation created by law, and thus may be filed within ten years from the time the right of action accrues, as provided under Article 1144(2) of the Civil Code.