The Supreme Court ruled that a seafarer’s claim for disability benefits was filed beyond the three-year prescriptive period mandated by the Labor Code. This decision underscores the importance of adhering to strict deadlines when pursuing legal claims in maritime employment. It emphasizes that even if initial requests are met with promises, the accrual of a cause of action begins upon the explicit denial of the claim, triggering the countdown for legal action.

The Oiler’s Ordeal: When Does the Clock Start Ticking on Maritime Claims?

Lauro C. Degamo, an oiler working for Avantgarde Shipping Corporation, sustained an injury while on board the vessel Nippon Reefer. After repatriation and initial medical treatment, Degamo sought sickness benefits, but his claim was eventually denied by Avantgarde. The central legal question revolves around whether Degamo’s subsequent complaint was filed within the allowable timeframe, considering the provisions of the Labor Code and the principle of prescription of actions.

The timeline of events is crucial. Degamo was injured in 1995, and after medical treatment, he requested sickness benefits in December 1997. Avantgarde denied this claim on January 6, 1998. Degamo then filed a complaint with the Regional Arbitration Board on March 2, 2001. The Labor Arbiter dismissed the case, citing prescription, a decision upheld by the National Labor Relations Commission (NLRC). The core issue is whether the three-year prescriptive period under Article 291 of the Labor Code had lapsed before Degamo filed his complaint.

Article 291 of the Labor Code is the cornerstone of this case. This article stipulates that all money claims arising from employer-employee relations must be filed within three years from the accrual of the cause of action. The Supreme Court, in Cadalin v. POEA’s Administrator, clarified that Article 291 encompasses all money claims, including those of overseas contract workers. The determination of when the cause of action accrued is pivotal. According to jurisprudence, a cause of action accrues upon the categorical denial of a claim.

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.

In Degamo’s case, the Supreme Court pinpointed January 6, 1998, as the date when Avantgarde denied his claim, thus marking the accrual of his cause of action. Before this date, the company’s responses were characterized by indefinite promises, which did not constitute a denial. Consequently, the complaint filed on March 2, 2001, exceeded the three-year period mandated by the Labor Code. This highlights the importance of recognizing when a claim is definitively rejected, as this triggers the prescriptive period.

The Court also addressed the procedural lapse concerning the late filing of the petition for certiorari before the Court of Appeals. While acknowledging the principle of substantial justice, the Court emphasized the importance of adhering to the Rules of Court. Section 4, Rule 65, stipulates that a petition for certiorari must be filed within sixty days from notice of the judgment, with a maximum extension of fifteen days for compelling reasons. The Court of Appeals correctly noted that it had no authority to grant an extension beyond fifteen days.

Petitioner’s counsel cited heavy workload and extreme pressures as justification for the extension of time. However, the Supreme Court reiterated that while such reasons may be considered under the principle of substantial justice, the Court of Appeals was bound by the procedural rules. The petition was filed thirty days after the original deadline, exceeding even the maximum allowable extension. The failure to file the petition within the prescribed period rendered the NLRC resolutions final, highlighting the jurisdictional nature of timely filing.

The case underscores a critical lesson for legal practitioners. The Supreme Court emphasized that a client is bound by the mistakes of their counsel. This principle reinforces the duty of lawyers to exercise utmost care in handling cases and to remain faithful to the interests of their clients. The Court stated:

Basic is the rule that a client is bound by the mistake of his counsel. Hence, members of the bar must take utmost care of the cases they handle for they owe fidelity to the cause of their clients.

The decision serves as a reminder of the importance of strict compliance with procedural rules and the consequences of failing to meet deadlines. It also highlights the critical role of legal counsel in ensuring that clients’ rights are protected and that claims are pursued diligently and within the prescribed legal framework.

FAQs

What was the key issue in this case?	The key issue was whether the seafarer’s claim for disability benefits was filed within the three-year prescriptive period mandated by Article 291 of the Labor Code. The court had to determine when the cause of action accrued and whether the complaint was filed in a timely manner.
When does a cause of action accrue in labor cases?	A cause of action accrues upon the categorical denial of a claim by the employer. Indefinite promises or delayed responses do not constitute a denial and do not trigger the prescriptive period.
What is the prescriptive period for money claims under the Labor Code?	Article 291 of the Labor Code stipulates that all money claims arising from employer-employee relations must be filed within three years from the time the cause of action accrued. Failure to do so results in the claim being forever barred.
How does Article 291 apply to overseas contract workers?	The Supreme Court has clarified that Article 291 applies to all money claims, including those of overseas contract workers. This means that overseas workers must also adhere to the three-year prescriptive period for filing their claims.
What is the rule regarding extensions for filing a petition for certiorari?	Section 4, Rule 65 of the Rules of Court allows a maximum extension of fifteen days to file a petition for certiorari, and only for compelling reasons. The Court of Appeals cannot grant an extension beyond this limit.
What happens if a petition is filed late?	Filing a petition beyond the reglementary period, even with a granted extension exceeding the allowable limit, is a jurisdictional defect. The assailed resolutions become final and unappealable.
Who is responsible for the mistakes of legal counsel?	Generally, a client is bound by the mistakes of their counsel. This underscores the importance of choosing competent and diligent legal representation.
What is the effect of POEA Circular No. 55 on prescription of claims?	POEA Circular No. 55, Series of 1996, which took effect on January 1, 1997, provides for a one-year period to make claims from the date of the seafarer’s return. However, in this case, the employment contract predated the circular, making Article 291 of the Labor Code applicable.

The Supreme Court’s decision in this case reinforces the importance of adhering to procedural rules and statutory deadlines in pursuing legal claims. It also highlights the critical role of legal counsel in ensuring that clients are properly advised and represented. This case serves as a cautionary tale for both employees and employers in the maritime industry, emphasizing the need for vigilance and timely action in asserting their rights.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: LAURO C. DEGAMO VS. AVANTGARDE SHIPPING CORP., G.R. No. 154460, November 22, 2005