Prescription of Actions under the Civil Code and the Labor Code

I. GENERAL CONCEPT OF PRESCRIPTION

Prescription refers to the limitation of time within which a legal action may be brought or rights may be enforced. It serves as a bar to stale claims, encouraging diligence among parties and ensuring legal certainty.

In the context of labor law, the prescription of actions is vital in balancing the rights of employees to claim benefits and the employer's right to protect against protracted liability.

II. PRESCRIPTION UNDER THE CIVIL CODE

The Civil Code of the Philippines (Republic Act No. 386) contains general rules on prescription that may apply to labor disputes if not specifically governed by the Labor Code. Relevant provisions include:

Ordinary Actions:
- Article 1144: Actions upon a written contract, obligations created by law, or judgment must be filed within 10 years.
- Article 1145: Actions upon an oral contract must be filed within 6 years.
- Article 1146: Actions upon an injury to rights of another or a quasi-delict must be filed within 4 years.
Actions Involving Payment of Wages or Other Monetary Obligations:
- Article 1139 states that rights are not demandable after they have prescribed, except those exempt by law.

The Civil Code provisions are residual in nature; they apply only when no specific provision under the Labor Code governs the situation.

III. PRESCRIPTION UNDER THE LABOR CODE

The Labor Code of the Philippines (Presidential Decree No. 442, as amended) contains specific provisions on the prescription of actions, especially tailored to labor rights and remedies.

Money Claims Arising from Employer-Employee Relations:
- Article 306 (formerly Article 291): All money claims arising from employer-employee relations must be filed within 3 years from the time the cause of action accrued.
  - This includes claims for wages, overtime pay, holiday pay, night shift differentials, separation pay, and other monetary benefits.
  Important Points:
  - The prescriptive period is three years, reckoned from the date the employee’s cause of action accrues.
  - Failure to file within this period extinguishes the claim.
Illegal Dismissal Cases:
- Article 306 does not apply directly to illegal dismissal cases, as these are governed by the four-year period for filing under Article 1146 of the Civil Code.
- However, claims for back wages or separation pay resulting from illegal dismissal fall under the three-year prescription period.
Claims Under DOLE’s Visitorial and Enforcement Powers:
- Under Article 128, the Secretary of Labor or their representatives may enforce compliance with labor standards even without a complaint. These actions may be subject to a three-year prescriptive period, as specified under the Labor Code.
Union-Related Disputes:
- Article 258: Actions to question the validity of the certification election or union-related disputes must be filed within 30 days from the occurrence of the disputed act.
Prescriptive Period for Voluntary Arbitrators:
- When parties submit disputes to voluntary arbitration, the prescriptive period depends on the terms agreed upon in their collective bargaining agreement (CBA). Absent such terms, general Labor Code rules on prescription apply.

IV. CASE LAW INTERPRETATIONS

Philippine jurisprudence has clarified several key issues on prescription under both codes:

Reckoning Period:
- The prescription period starts when the cause of action accrues, or when the act or omission that gave rise to the claim happens.
- For continuing violations, prescription runs from the date of the last act of violation.
Applicability of Civil Code Rules:
- The Supreme Court has consistently held that Civil Code rules on prescription apply only when the Labor Code is silent. For example:
  - Illegal dismissal cases fall under the four-year prescriptive period under the Civil Code.
  - Money claims or labor standards violations fall under the specific three-year period under the Labor Code.
Waiver and Suspension of Prescription:
- Prescription may be interrupted by extrajudicial demands, the filing of a case, or written acknowledgment of the debt by the employer.
- Waivers of prescription are not favored unless explicitly provided by law or collective agreement.

V. POLICY CONSIDERATIONS

The difference in prescriptive periods reflects the nature of labor disputes:

Shorter periods (3 years) for monetary claims prevent accumulation of liabilities that could harm business stability.
Longer periods (4 or 10 years) for non-monetary claims, such as illegal dismissal, recognize the profound impact on employees' livelihood.

VI. SUMMARY OF PRESCRIPTIVE PERIODS

Type of Claim	Prescriptive Period	Legal Basis
Money claims (wages, benefits)	3 years	Labor Code, Article 306
Illegal dismissal	4 years	Civil Code, Article 1146
Quasi-delicts	4 years	Civil Code, Article 1146
Written contracts	10 years	Civil Code, Article 1144
Oral contracts	6 years	Civil Code, Article 1145
Union disputes (e.g., certification)	30 days	Labor Code, Article 258

VII. CONCLUSION

Understanding the prescription of actions under the Civil Code and Labor Code requires distinguishing between general civil law principles and the specific provisions of labor law. The application of these rules ensures the swift resolution of labor disputes while protecting the interests of both employees and employers.

Prescription of Actions Under Philippine Labor Law and Social Legislation

The prescription of actions in labor law pertains to the period within which a claim or action must be filed to avoid being barred by the lapse of time. Prescription is governed by specific provisions of the Labor Code of the Philippines, special laws, and jurisprudence. Below is a detailed discussion on this topic, including legal bases, nuances, and notable cases.

1. Governing Provisions in the Labor Code

The Labor Code of the Philippines sets the prescriptive periods for filing certain actions:

Money Claims (Art. 306, formerly Art. 291):
- All money claims arising from employer-employee relationships must be filed within three (3) years from the time the cause of action accrued. These include claims for unpaid wages, overtime pay, separation pay, and other benefits.
- If the claim is not filed within this period, the right to file the action is extinguished.
Illegal Dismissal Cases:
- No specific prescriptive period is provided in the Labor Code, but jurisprudence has consistently held that actions for illegal dismissal must be filed within four (4) years under the general rule in Article 1146 of the Civil Code.
Violation of Labor Standards and Social Legislation:
- Actions involving violations of labor standards laws (e.g., nonpayment of minimum wage, noncompliance with safety standards) generally follow the three (3)-year prescription period under Article 306.
- Claims arising from social legislation like the Social Security Act, Pag-IBIG Fund Law, and PhilHealth Law may have specific prescriptive periods under their respective statutes.

2. Exceptions to Prescription Rules

Certain circumstances may suspend or interrupt the running of the prescriptive period:

Fraud or Concealment:
- When the employer conceals the cause of action through fraud or deceit, prescription is deemed to run only from the time the employee discovers the cause of action.
Continuous Violations:
- For continuing violations, such as the failure to pay minimum wage or overtime pay, the prescriptive period is reckoned from the date of the last violation.
Union Activities and Unfair Labor Practices (ULPs):
- Actions for ULPs, as defined under Article 294, must be filed within one (1) year from the occurrence of the act constituting the ULP.
- In cases involving dismissal due to union activities, the broader four-year period for illegal dismissal may apply.

3. Special Rules in Social Legislation

SSS, PhilHealth, and Pag-IBIG Contributions:
- The prescriptive period for employer obligations to remit contributions is ten (10) years based on jurisprudence, as these obligations are deemed impressed with public interest.
- For employees’ claims for benefits under these laws, the prescriptive periods are set by their respective statutes. For example, claims for benefits under the Social Security Act generally prescribe in ten (10) years.
Claims for Damages or Penalties:
- For claims arising from violations that result in damages or penalties (e.g., death benefits under social legislation), the prescription period may vary, depending on the type of action or remedy sought.

4. Procedural and Jurisdictional Matters

Filing in the Correct Forum:
- The prescription period is jurisdictional; filing the complaint in an improper forum (e.g., a civil court instead of the NLRC) does not interrupt the prescriptive period.
- For labor claims, the proper forum is usually the National Labor Relations Commission (NLRC) or the DOLE, depending on the nature of the case.
Interruption by Extrajudicial Demand:
- An extrajudicial demand (e.g., a demand letter) can interrupt the running of the prescription period. However, jurisprudence requires that the demand be unequivocal and timely.

5. Notable Jurisprudence

Several Supreme Court decisions have clarified the application of prescription rules in labor cases:

"Republic vs. Asiapro Cooperative" (G.R. No. 172101, 2019):
- Clarified that obligations with public interest, such as those involving remittance of government-mandated contributions, prescribe in ten years.
"Santos vs. Servier Philippines" (G.R. No. 202573, 2016):
- Ruled that the three-year prescriptive period for money claims begins from the time the employee knew or should have known of the violation.
"Ilaw at Buklod ng Manggagawa vs. NLRC" (G.R. No. 91980, 1991):
- Held that the filing of an illegal dismissal complaint interrupts the prescriptive period for other monetary claims related to the dismissal.

6. Practical Implications for Employers and Employees

For Employers:
- Maintain clear and accurate records of all employment-related transactions to defend against stale claims.
- Address employee complaints promptly to avoid potential liability for continuing violations.
For Employees:
- File claims as soon as possible to avoid prescription.
- Seek legal advice promptly to ensure compliance with procedural rules.

Conclusion

Understanding the rules on prescription in labor law and social legislation is critical to protecting the rights of both employers and employees. The interplay of statutory provisions, case law, and procedural rules highlights the need for vigilance in asserting and defending labor claims.