Victory Liner vs. Race G.R. No.

164820 (2007)

Employee is Given a Period of 4 years from the Time of Dismissal to Institute the Case of which the
prescriptive period starts to run from the time of unjust termination of Employment. The Law
Mandates that Employers Observe the Requirement of Substantial and Procedural Due Process in
Dismissing an Employee

Facts:

Respondent Pablo Race was employed by Victory Liner as a bus driver for the Alaminos-Cubao
evening route. On August 1994, the bus which was being driven by Race met an accident. As a
result, he suffered a fractured leg and was confined in the hospital until October 10, 1994. Exactly a
moth after, he was again confined for one more month. All of the medical expenses were shouldered
by Victory Liner.

On January 1998, Race reported for work but was informed that he was considered resigned and he
was offered consideration, which he rejected. Before Christmas of 1998, Victory Liner reiterated that
he was considered as resigned. He was offered a bigger amount of money, which he rejected.

On June 30, 1999, Race sent a letter to Victory Liner demanding employment-related claims but he
received no response from the latter. He then filed a complaint on September 1, 1999 before the
Labor Arbiter for unfair labor practice, illegal dismissal, underpayment of wages, non-payment of
overtime and holiday premiums, service incentive leave pay, vacation and sick leave benefits, and
13th month pay, excessive deduction of withholding taxes and SSS premiums and payment of moral
and exemplary damages.

The Labor Arbiter dismissed the case. It ruled that the prescriptive period for filing the case for illegal
dismissal was four years from the dismissal of the employee and that since Race only filed the
complaint on September 1, 1999, despite having been dismissed since August 24, 1994, his cause of
action had already prescribed. Race was also adjudged to be a mere field personnel. He was then
not entitled to receive the money claims.

The NLRC reversed the decision of the Labor Arbiter. It held that Races cause of action accrued in
January 1998, when the respondent reported for work but was rejected by the petitioner. Thus, the
respondent's filing of complaint was well-within the prescriptive period. This decision was affirmed by
the Court of Appeals.

Issue:
WoN the cause of action for illegal dismissal had prescribed

Held:

No. Employee is Given a Period of 4 years from the Time of Dismissal to Institute the Case

In illegal dismissal cases, the employee concerned is given a period of four years from the time of his
dismissal within which to institute a complaint. This is based on Article 1146 of the New Civil Code
which states that actions based upon an injury to the rights of the plaintiff must be brought within four
years. When one is arbitrarily and unjustly deprived of his job or means of livelihood, the action
instituted to contest the legality of one's dismissal from employment constitutes, in essence, an action
predicated "upon an injury to the rights of the plaintiff," as contemplated under Art. 1146 of the New
Civil Code, which must be brought within four years. (Callanta vs. Carnation Philippines)

The Prescriptive Period Starts to Run from the Time of Unjust Termination of Employment

The four-year prescriptive period shall commence to run only upon the accrual of a cause of action of
the worker. It is settled that in illegal dismissal cases, the cause of action accrues from the time the
employment of the worker was unjustly terminated. Thus, the four-year prescriptive period shall be
counted and computed from the date of the employee's dismissal up to the date of the filing of
complaint for unlawful termination of employment.

The respondent must be considered as unjustly terminated from work in January 1998 since this was
the first time he was informed by the petitioner that he was deemed resigned from his work. It was
only at that time that the respondent's cause of action accrued. Consequently, the respondent's filing
of complaint for illegal dismissal was well within the four-year prescriptive period.

The employer-employee relationship between petitioner and respondent continued even after the
latter's discharge from the hospital. Respondent had reported for work to the petitioner after his
release from the hospital in December 1994. Subsequently, respondent was also granted a 120-day
sick leave and disability leave. Respondent also availed himself of the services of the petitioner's
physician on two occasions after his release from the hospital. These circumstances clearly manifest
that petitioner exercised control over the respondent and that the latter was still under the
employment of the petitioner even after December 1994.

The Law Mandates that Employers Observe the Requirement of Substantial and Procedural Due
Process in Dismissing an Employee. The petitioner, as an employer, is burdened to prove just cause
for terminating the employment of respondent with clear and convincing evidence, and that petitioner
failed to discharge this burden. The Court then held that respondent was dismissed without just
cause.

In the termination of employment, the employer must (a) give the employee a written notice specifying
the ground or grounds of termination, giving to said employee reasonable opportunity within which to
explain his side; (b) conduct a hearing or conference during which the employee concerned, with the
assistance of counsel if the employee so desires, is given the opportunity to respond to the charge,
present his evidence or rebut the evidence presented against him; and (c) give the employee a
written notice of termination indicating that upon due consideration of all circumstances, grounds
have been established to justify his termination. Petitioner miserably failed to comply with the
foregoing requirements. There was nothing in the records which evinces that petitioner had sent a
written notice to the respondent informing him of the ground or grounds of his termination or the
reason why he was deemed resigned.