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G.R. No. 70615 |  October 28, 1986.
Carlos Gavan

Virgilio Callanta was employed as a salesman by Carnation Philippines, Inc. (Carnation). Six (6) years
later, Carnation filed with the Regional Office of Labor and Employment for clearance to terminate
Callanta for serious misconduct and misappropriation of company funds worth P12,000. 

Callanta was dismissed from work on June 1, 1979. On July 5, 1982, he filed with the same office a
complaint for illegal dismissal with claims for reinstatement, backwages, and damages. Labor Arbiter
decided that Callanta’s dismissal was without valid cause, so Carnation was ordered to reinstate him and
to give all his benefits. 

Carnation appealed to the National Labor Relations Commission (NLRC). The NLRC overruled the
decision of the Labor Arbiter, saying that the complaint for illegal dismissal by Callanta has already

Callanta claims that his action falls as an “injury to the rights of the plaintiff” under Civil Code Art. 1146,
and not as a “penal offense” or a “money claim” under Arts. 291 and 292 of the Labor Code. 

WON the action for illegal dismissal with claims for reinstatement, backwages, and damages has
prescribed (NO)

The provisions of the Labor Code applicable:

Art. 291. Offenses. — Offenses penalized under this Code and the rules and regulations issued pursuant
thereto shall prescribe in three [3] years.

Art. 292. Money claims. — All money claims arising from employer-employee relations accruing during
the effectivity of this Code shall be filed within three [3] years from the time the cause of action accrued;
otherwise, they shall be forever barred.

Civil Code Art. 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict;

A dismissal without just cause is a violation, but it does not amount to “offense” under Art. 291 of the
Labor Code. Unlike cases of strikes, lockouts, and illegal recruitment under the Labor Code, termination
of an employment without just is not considered an unlawful practice. Further, the relief sought by
Callanta (reinstatement and other claims) due to the illegal dismissal cannot be contemplated under
offense as no penalty of fine nor imprisonment is imposed on the employer upon a finding of illegality in
the dismissal.

The Court said that while backwages may fall under “money claim,” it is not the principal cause of action.
In this case, the main cause of action is the unlawful deprivation of one’s employment by the employer.
The award thereof is not private compensation or damages but is in furtherance of the public objectives of
the Labor Code. 

Civil Code Article 1148. The limitations of action mentioned in articles 1140 to 1142, and 1144 to 1147
are without prejudice to those specified in other parts of this Code, in the Code of Commerce, and in
special laws. 


This means that the prescriptive period provided by the Civil Code may be availed of despite the
existence of those in special laws. 

Even assuming that the case falls under “offense” or “money claims” under the Labor Code, the Court
applied Art. 1146 because the case falls under “injury on the rights of the plaintiff.”  One's employment,
profession, trade or calling is a "property right.” When one is arbitrarily deprived of his job, the action
falls as "an injury to the rights of the plaintiff.”  

As a statutory provision on limitations of actions, Articles 291 and 292 go to matters of remedy and not to
the destruction of fundamental rights. As a general rule, a statute of limitation extinguishes the remedy
only. Although the remedy to enforce a right may be barred, that right may be enforced by some other
available remedy which is not barred.

Further, the delay in the filing of Callanta’s complaint was with a justifiable cause. He was threatened to
be charged with estafa should he file a complaint for illegal dismissal.  And there was no impartial
investigation granted to Callanta regarding the shortage in the company funds, so the Court found the
penalty of dismissal as severe. 

The applicable provision is Art. 1146 of the Civil Code. Callanta filed the suit 3 years and 1 month after
his dismissal which is well within the 4-year prescription period. 

NLRC decision reversed. Backwages granted to Callanta.