That, the NLRC committed grave error when it refused to grant the appeal
filed by petitioner and/or reversing the dismissal of the complaint of petitioner by
the Labor Arbiter on ground of prescription of actions.[5]
Simply, we are asked now to resolve (1) whether petitioners cause of action had
already prescribed, and (2) whether the Court of Appeals properly denied
petitioners motion for extension.
Petitioner, citing Article 1155[6] of the New Civil Code, contends that his cause of
action had not prescribed as the running of the prescriptive period was tolled by his
extrajudicial demand for unpaid sickness benefits on December 24, 1997.
Respondents counter that the Civil Code provision on extinctive prescription
applies only to obligations that are intrinsically civil in nature and is inapplicable to
labor cases. Respondents assert that petitioners demand was made more than one
year from his date of arrival in the Philippines, contrary to what is prescribed in
Section 28[7] of the Philippine Overseas Employment Administration (POEA)
Memorandum Circular No. 55, Series of 1996.[8] They add that the institution of
the action was beyond the three-year period prescribed in Article 291 of the Labor
Code as his employment with the respondents ended on March 4, 1995 but the
complaint was filed only on March 2, 2001.
We note that POEA Circular No. 55, Series of 1996 became effective only on
January 1, 1997 while the employment contract between the parties was entered
earlier on November 8, 1994. The earlier standard employment contract issued by
the POEA did not have a provision on prescription of claims. Hence, the applicable
provision in this case is Article 291 of the Labor Code which we shall now discuss.
In Cadalin v. POEAs Administrator,[9] we held that Article 291 covers all money
claims from employer-employee relationship and is broader in scope than claims
arising from a specific law. It is not limited to money claims recoverable under the
Labor Code, but applies also to claims of overseas contract workers.
Article 291 provides that all money claims arising from employer-employee
relations shall be filed within three years from the time the cause of action accrued,
otherwise, these shall be forever barred. A cause of action accrues upon the
categorical denial of claim.[10] Petitioners cause of action accrued only on January
6, 1998, when Avantgarde denied his claim and so breached its obligation to
petitioner. Petitioner could not have a cause of action prior to this because his