Mendoza v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Petitioner Ernesto L. Mendoza was employed as a passenger bus driver by respondent Baliwag Transit, Inc., paid by commission. On May 20, 1983, the bus he was driving was involved in a vehicular accident resulting in injuries to several passengers and drivers of other vehicles. Petitioner was "grounded" and advised to wait for the results of the police investigation and potential actions from other vehicle owners. Realizing he had waited too long, petitioner requested reinstatement on December 11, 1986, but was formally informed by respondent Baliwag that his services were terminated due to the May 20, 1983 accident. Procedural History: On November 15, 1990, petitioner filed a complaint for illegal dismissal, damages, and attorney's fees before the NLRC. Respondent Baliwag contended that petitioner was not dismissed but had abandoned his job, and that the cause of action had prescribed and was barred by laches. The Labor Arbiter dismissed the complaint, ruling that the action prescribed four years from May 20, 1983, or was barred by laches due to the delay in filing the complaint even from December 1986. The NLRC affirmed the Labor Arbiter's decision. The Petition: Petitioner sought to annul the NLRC's resolution and order, arguing that the NLRC erred in affirming the dismissal of his complaint on the grounds of prescription and laches, contending that the four-year prescriptive period should be counted from the time he was informed of his dismissal, not from the date of the accident.
Issue(s)
Whether the petitioner's cause of action for illegal dismissal had prescribed. Whether the petitioner was guilty of laches in filing his complaint. Whether the petitioner was illegally dismissed or had abandoned his job. Whether respondent Baliwag Transit, Inc. complied with the procedural due process requirements for dismissal; and the propriety of the award of damages, backwages, separation pay and attorney's fees.
Ruling
The petition is GRANTED. The Resolution of the NLRC dated June 21, 1995, and its Order dated August 28, 1995, are REVERSED and SET ASIDE. A new judgment is entered finding petitioner's dismissal illegal. Respondent Baliwag Transit, Inc. is ordered to pay petitioner backwages equivalent to three years, separation pay equivalent to one month's salary for every year of service, moral damages of P15,000.00, exemplary damages of P15,000.00, and attorney's fees of P10,000.00.
Ratio Decidendi
On the issue of prescription: The Supreme Court held that the cause of action for illegal dismissal accrues from the date the employee is formally informed of the dismissal, not from the date of the incident that led to the dismissal. Applying the ruling in Baliwag Transit, Inc. vs. Ople and Hughes, the Court found that petitioner's cause of action accrued in December 1986 when he was formally dismissed, not on May 20, 1983, the date of the accident. On May 20, 1983, petitioner was merely "grounded" and advised to wait, implying he was not yet considered terminated. Therefore, the complaint filed on November 15, 1990, was well within the four-year prescriptive period from December 1986. On the issue of laches: The Court ruled that laches cannot be invoked to bar a cause of action that was filed within the prescriptive period allowed by law. Citing Imperial Victory Shipping Agency vs. NLRC and Chavez vs. Bonto-Perez, the Court emphasized that laches is a doctrine in equity, while prescription is based on law, and equity follows the law. Since the claim was filed within the statutory period, recovery cannot be barred by laches. The Court stated that courts should not apply the doctrine of laches earlier than the expiration of the time limited for the commencement of actions at law. On the issue of abandonment versus illegal dismissal: The Court found that respondent Baliwag Transit, Inc. failed to prove abandonment. For abandonment to be a valid ground for dismissal, there must be an intention to abandon coupled with an overt act. The employer bears the burden of proof to show a clear and deliberate intent to discontinue employment. The filing of the complaint for illegal dismissal by the petitioner negates the charge of abandonment. The Court concluded that the dismissal was not for abandonment. On the issue of procedural due process and the award of damages and backwages: The Court held that Baliwag Transit, Inc. failed to comply with the twin requirements of notice and hearing for dismissal. The employer must furnish two written notices: one apprising the employee of the charges and another informing of the decision to dismiss, which must come after the employee is given an opportunity to answer and be heard. Respondent Baliwag's failure to apprise petitioner of its intention to dismiss him and the specific acts or omissions for which dismissal was sought cast grave doubt on whether the dismissal was for a just cause. The Court found the dismissal illegal and ordered reinstatement, but since reinstatement was no longer feasible due to petitioner reaching retirement age, separation pay was granted. Backwages were limited to three years, as the illegal dismissal occurred before the effectivity of Republic Act No. 6715. Moral and exemplary damages were awarded due to the dismissal without just cause, and attorney's fees were granted for being compelled to litigate.
Main Doctrine
The cause of action for illegal dismissal accrues from the date the employee is formally informed of the dismissal, not from the date of the incident that led to the dismissal. Laches cannot be invoked to bar a cause of action filed within the prescriptive period.