Arbit-Part IV |1

LABOR MANAGEMENT DISPUTES/ COLLECTIVE BARGAINING "(k) "Unfair labor practice" means any unfair labor practice as expressly
defined by this Code.
Article 212. Definitions. - (a) "Commission" means the National Labor
Relations Commission or any of its divisions, as the case may be, as "(l) "Labor dispute" includes any controversy or matter concerning terms or
provided under this Code. conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing or arranging the terms and
"(b) "Bureau" means the Bureau of Labor Relations and/or the Labor conditions of employment, regardless of whether, the disputants stand in
Relations Divisions in the regional offices established under Presidential the proximate relation of employer and employee.
Decree No. 1, in the Department Labor.
"(m) "Managerial employee" is one who is vested with powers or
"(c) "Board" means the National Conciliation and Mediation Board prerogatives to lay down and execute management policies and/or to hire,
established under Executive Order No. 126. transfer, suspend, lay-off, recall, discharge, assign or discipline employees.
Supervisory employees are those who, in the interest of the employer,
"(d) "Council" means the Tripartite Voluntary Arbitration Advisory Council
effectively recommend such managerial actions if the exercise of such
established under Executive Order No. 126, as amended.
authority is not merely routinary or clerical in nature but requires the use
of independent judgment. All employees not falling within any of the above
"(e) "Employer" includes any person acting in the interest of an employer,
definitions are considered rank-and-file employees for purposes of this
directly or indirectly. The term shall not include any labor organization or
Book.
any of its officers or agents except when acting as employer.
"(n) "Voluntary Arbitrator" means any person accredited by the Board as
"(f) "Employee" includes any person in the employ of an employer. The
such, or any person named or designated in the collective bargaining
term shall not be limited to the employees of a particular employer, unless
agreement by the parties to act as their voluntary arbitrator, or one
this Code so explicitly states. It shall include any individual whose work has
chosen, with or without the assistance of the National Conciliation and
ceased as a result of or in connection with any current labor dispute or
Mediation Board, pursuant to a selection procedure agreed upon in the
because of any unfair labor practice if he has not obtained any other
collective bargaining agreement, or any official that may be authorized by
substantially equivalent and regular employment.
the Secretary of Labor and Employment to act as voluntary arbitrator upon
"(g) "Labor organization" means any union or association of employees the written request and agreement of the parties to a labor dispute.
which exists in whole or in part for the purpose of collective bargaining or
"(o) "Strike" means any temporary stoppage of work by the concerted
of dealing with employers concerning terms and conditions of employment.
action of employees as a result of an industrial or labor dispute.
"(h) "Legitimate labor organization" means any labor organization duly
"(p) "Lockout" means the temporary refusal of an employer to furnish work
registered with the Department of Labor and Employment, and includes
as a result of an industrial or labor dispute.
any branch or local thereof.
"(q) "Internal union dispute" includes all disputes or grievances arising
"(i) "Company union" means any labor organization whose information,
from any violation of or disagreement over any provision of the constitution
function or administration has been assisted by any act defined as unfair
and by-laws of a union, including, any violation of the rights and conditions
labor practice by this Code.
of union membership provided for in this Code.
"(j) "Bargaining representative" means a legitimate labor organization or
"(r) "Strike-breaker" means any person who obstructs, impedes, or
any officer or agent of such organization whether or not employed by the
interferes with by force, violence, coercion, threats or intimidation any
employer.
peaceful picketing by employees during any labor controversy affecting
 Arbit-Part IV |2

wages, hours or conditions of work or in the exercise of the right of self-
organization or collective bargaining.
"(s) "Strike area" means the establishment, warehouses, depots, plants or
offices, including the sites or premises used as runaway shops, of the
employer struck against, as well as the immediate vicinity actually used by
picketing strikers in moving to and fro before all points of entrance to and
exit from said establishment.
"(6) Except claims for employees compensation, social security, medicare
and maternity benefits, all other claims arising from employer-employee
relations, including those of persons in domestic or household service
involving an amount exceeding five thousand pesos (P5,000), whether or
not accompanied with a claim for reinstatement.
"(b) The Commission shall have exclusive appellate jurisdiction over all
cases decided by Labor Arbiters.

Article 216. Salaries, benefits and other emoluments. - The Chairman and "(c) Cases arising from the interpretation or implementation of collective
members of the Commission shall receive an annual salary at least bargaining agreements and those arising from the interpretation or
equivalent to, and be entitled to the same allowances and benefits as, enforcement of company personnel policies shall be disposed by the Labor
those of the Presiding Justice and Associate Justices of the Court of Arbiter by referring the same to the grievance machinery and voluntary
Appeals, respectively. The Executive Labor Arbiters shall receive an annual arbitration as may be provided in said agreements.
salary at least equivalent to that of an Assistant Regional Director of the
Department of Labor and Employment and shall be entitled to the same
allowances and benefits as that of a Regional Director of said department.
The Labor Arbiters shall receive an annual salary at least equivalent to, and
be entitled to the same allowances and benefits as, that of an Assistant
Regional Director of the Department of Labor and Employment. In no case,
however, shall the provision of this Article result in the diminution of
existing salaries, allowances and benefits of the aforementioned officials.

Article 217. Jurisdiction of Labor Arbiters and the Commission. - (a)

Except as otherwise provided under this Code, the Labor Arbiters shall
have the original and exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-
agricultural:

"(1) Unfair labor practice cases;

"(2) Termination disputes;

"(3) If accompanied with a claim for reinstatement, those cases that

workers may file involving wages, rates of pay, hours of work and other
terms and conditions of employment;

"(4) Claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations;

"(5) Cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts; and

1. G.R. No. 121227 August 17, 1998
VICENTE SAN JOSE, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and OCEAN TERMINAL
SERVICES, INC., respondent.
PURISIMA, J.:
Before the Court is a Petition for Certiorari seeking to annul a Decision of
the National Labor Relations Commission dated April 20, 1995 in NLRC-
NCR-CA-No. 00671-94 which reversed, on jurisdictional ground, a Decision
of the Labor Arbiter dated January 19, 1994 in NLRC-NCR Case No. 00-03-
02101-93 a case for a money claim — underpayment of retirement benefit.
Records do not show that petitioner presented a Motion for Reconsideration
of subject Decision of the National Labor Relations Commission, which
motion is, generally required before the filing of Petition for Certiorari.
While the rule prescribing the requisite motion for reconsideration is not
absolute and recognizes some exceptions, there is no showing that the
case at bar constitutes an exception. Nevertheless, we gave due course to
the petition to enable the Court to reiterate and clarify the jurisdictional
boundaries between Labor Arbiters and Voluntary Arbitrator or Panel of
Voluntary Arbitrators over money claims, and to render substantial and
speedy justice to subject aged stevedore retiree who first presented his
claim for retirement benefit in April 1991, or seven years ago.
Labor law practitioners and all lawyers, for that matter, should be fully
conversant with the requirements for the institution
of certiorari proceedings under Rule 65 of the Revised Rules of Court. For
instance, it is necessary that a Motion for Reconsideration of the Decision
of the National Labor Relations Commission must first be resorted to. The
ruling in Corazon Jamer v. National Labor Relations Commission, G.R. No.
112630, September 5, 1997, comes to the fore and should be well
understood and observed. An ordinary allegation — ". . . and there is no
appeal, nor any plain, speedy, and adequate remedy in the ordinary course
of law" (Rule 65, Sec. 1, Revised Rules of Court) is not a foolproof
substitute for a Motion for Reconsideration, absence of which can be fatal
to a Petition for Certiorari. Petitioner cannot and should not rely on the
liberality of the Court simply because he is a working man.
In the Jamer case, this court said:
Arbit-Part IV |3
. . . This premature action of petitioners constitutes a fatal infirmity as
ruled in a long line of decisions, most recently is the case of Building Care
Corporation v. National Labor Relations Commission —
The filing of such motion is intended to afford public respondent an
opportunity to correct any actual or fancied error attributed to it by way of
a re-examination of the legal and factual aspects of the case. Petitioner's
inaction or negligence under the circumstances is tantamount to a
deprivation of the right and opportunity of the respondent commission to
cleanse itself of an error unwittingly committed or to vindicate itself of an
act unfairly imputed. . . .
Likewise, a motion for reconsideration is an adequate remedy;
hence certiorari proceedings, as in this case, will not prosper.
As stated in the Decision of the Labor Arbiter in NLRC-NCR-Case No. 00-
03-0201-93, dated January 19, 1994, the facts of this case are undisputed.
The Labor Arbiter reported, thus:
Complainant, in his position paper (Record, pages 11 to 14) states that he
was hired sometime in July 1980 as a stevedore continuously until he was
advised in April 1991 to retire from service considering that he already
reached 65 years old (sic); that accordingly, he did apply for retirement
and was paid P3,156.39 for retirement pay . . . (Rollo, pp. 15, 26-27, 58-
59).
Decision of the Labor Arbiter in NLRC-NCR-
Case No. 00-03-02101-93, January 9, 1994
(Rollo, pp. 15017, at pp. 16-17).
The Labor Arbiter decided the case solely on the merits of the complaint.
Nowhere in the Decision is made mention of or reference to the issue of
jurisdiction of the Labor Arbiter (Rollo, pp. 15-17). But the issue of
jurisdiction is the bedrock of the Petition because, as earlier intimated, the
Decision of the National Labor Relations Commission, hereinbelow quoted,
reversed the Labor Arbiter's Decision on the issue of jurisdiction. Reads
subject Decision of the Labor Arbiter:
Respondents, in their Reply to complainant's position paper, allege
(Record, pages 18 to 21) that complainant's latest basic salary was
P120.34 per day; that he only worked on rotation basis and not seven days
a week due to numerous stevedores who can not all be given assignments
at the same time; that all stevedores only for paid every time they were
 Arbit-Part IV |4

assigned or actually performed stevedoring; that the computation used in = P28,600 - P3,156.30
arriving at the amount of P3,156.30 was the same computation applied to
the other stevedores; that the use of divisor 303 is not applicable because = P25,443.70
complainant performed stevedoring job only on call, so while he was
The Decision of the National Labor Relations
connected with the company for the past 11 years, he did not actually
Commission in NLRC-NCR-CA No. 06701-94
render 11 years of service; that the burden of proving that complainant's
April 20, 1995 (Rollo, pp. 18-21).
latest salary was P200.00 rests upon him; that he already voluntarily
signed a waiver of quitclaim; that if indeed respondent took advantage of
The National Labor Relations Commission reversed on jurisdictional ground
his illiteracy into signing his quitclaim, he would have immediately filed this
the aforesaid Decision of the Labor Arbiter; ruling, as follows:
complaint but nay, for it took him two (2) years to do so.
. . . His claim for separation pay differential is based on the Collective
The issue therefore is whether or not complainant is entitled to the claimed
Bargaining Agreement (CBA) between his union and the respondent
differential of separation pay.
company, the pertinent portion of which reads:
We find for the complainant. He is entitled to differential.
. . . ANY UNION member shall be compulsory retired (sic) by the company
upon reaching the age of sixty (60) years, unless otherwise extended by
We cannot sustain a computation of length of service based on the ECC
the company for justifiable reason. He shall be paid his retirement pay
contribution records. Likewise, the allegation that complainant rendered
equivalent to one-half (1/2) month salary for every year of service, a
service for only five days a month for the past 11 years is statistically
fraction of at least six months being considered as one (1) whole year.
improbable, aside from the fact that the best evidence thereof are
complainant's daily time records which respondent are (sic) duty bound to
. . . The company agrees that in case of casual employees and/or workers
keep and make available anytime in case of this.
who work on rotation basis the criterion for determining their retirement
pay shall be 303 rotation calls or work days as equivalent to one (1) year
The late filing has no bearing. The prescription period is three years. It is
and shall be paid their retirement pay equivalent to one half (1/2) month
suffice (sic) that the filing falls within the period.
for every year of service.
Whether or not complainant worked on rotation basis is a burden which lies
xxx xxx xxx
upon the employer. The presumption is that the normal working period is
eight (8) hours a day and six (6) days a week, or 26 days a month, unless
Since the instant case arises from interpretation or implementation of a
proven otherwise.
collective bargaining agreement, the Labor Arbiter should have dismissed it
for lack of jurisdiction in accordance with Article 217 (c) of the Labor Code,
Also, the burden of proving the amount of salaries paid to employees rests
which reads: (Emphasis supplied)
upon the employer not on the employee. It can be easily proven by
payrolls, vouchers, etc. which the employers are likewise duty bound to
Art. 217. Jurisdiction of Labor Arbiter and the Commission.
keep and present. There being non, we have to sustain complainant's
assertion that his latest salary rate was P200 a day or P5,200 a month. xxx xxx xxx
Therefore, his retrenchment pay differential is P25,443.70 broken down as
follows: (c) Cases arising from the interpretation or implementation of collective
bargaining agreement and those arising from the interpretation or
P200 x 26 days = P5,200 x 11 years enforcement of company procedure/policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and
2
voluntary arbitrator as may be provided in said agreements.
= (P2,600 x 11 years) - P3,156.30

Petitioner contends that:
I. THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION IN
GIVING DUE COURSE TO THE APPEAL DESPITE THE FACT 4 (SIC) THAT IT
WAS FILED OUT OF TIME AND THERE IS NO SHOWING THAT A SURETY
BOND WAS POSTED.
II. THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION IN
SETTING ASIDE THE DECISION OF . . . DATED 19 JANUARY 1994 AND
DISMISSING THE CASE ON THE GROUND OF LACK OF JURISDICTION
WHEN THE ISSUE DOES NOT INVOLVE ANY PROVISION OF THE
COLLECTIVE BARGAINING AGREEMENT. (Rollo, pp. 7-8)
The Manifestation and Motion (In Lieu of Comment) sent in on December 6,
1995 by the Office of the Solicitor General support the second issue, re:
jurisdiction raised by the Petitioner (Rollo, pp. 26-33, at pp. 38-32).
Labor Arbiter Decision
Labor Arbiters should exert all efforts to cite statutory provisions and/or
judicial decision to buttress their dispositions. An Arbiter cannot rely on
simplistic statements, generalizations, and assumptions. These are not
substitutes for reasoned judgment. Had the Labor Arbiter exerted more
research efforts, support for the Decision could have been found in
pertinent provisions of the Labor Code, its implementing Rules, and
germane decisions of the Supreme Court. As this Court said in Juan
Saballa, at al. v. NLRC, G.R. No. 102472-84, August 22, 1996:
. . . This Court has previously held that judges and arbiters should draw up
their decisions and resolutions with due care, and make certain that they
truly and accurately reflect their conclusions and their final dispositions. A
decision should faithfully comply with Section 14, Article VIII of the
Constitution which provides that no decision shall be rendered by any court
without expressing therein clearly and distinctly the facts of the case and
the law on which it is based. If such decision had to be completely
overturned or set aside, upon the modified decision, such resolution or
decision should likewise state the factual and legal foundation relied upon.
The reason for this is obvious: aside from being required by the
Constitution, the court should be able to justify such a sudden change of
course; it must be able to convincingly explain the taking back of its
solemn conclusions and pronouncements in the earlier decision. The same
thing goes for the findings of fact made by the NLRC, as it is a settled rule
that such findings are entitled to great respect and even finality when
Arbit-Part IV |5
supported by substantial evidence; otherwise, they shall be struck down for
being whimsical and capricious and arrived at with grave abuse of
discretion. It is a requirement of due process and fair play that the parties
to a litigation be informed of how it was decided, with an explanation of the
factual and legal reasons that led to the conclusions of the court. A decision
that does not clearly and distinctly state the facts and the law on which it is
based leaves the parties in the dark as to how it was reached and is
especially prejudicial to the losing party, who is unable to pinpoint the
possible errors of the court for review by a higher tribunal. . . .
This is not an admonition but rather, advice and a critique to stress that
both have obligations to the Courts and students of the law. Decisions of
the Labor Arbiters, the National Labor Relations Commission, and the
Supreme Court serve not only to adjudicate disputes, but also as an
educational tool to practitioners, executives, labor leaders and law
students. They all have a keen interest in methods of analysis and the
reasoning processes employed in labor dispute adjudication and resolution.
In fact, decisions rise or fall on the basis of the analysis and reasoning
processes of decision makers or adjudicators.
On the issues raised by the Petitioner, we rule:
1. Timeliness of Appeal
And Filing of Appeal Bond
The Court rules that the appeal of the respondent corporation was
interposed within the reglementary period, in accordance with the Rules of
the National Labor Relations Commission, and an appeal bond was duly
posted. We adopt the following Comment dated August 14, 1996,
submitted by the National Labor Relations Commission, to wit:
. . . While it is true that private respondent company received a copy of the
decision dated January 19, 1994 of the Labor Arbiter . . . and filed its
appeal on February 14, 1994, it is undisputed that the tenth day within
which to file an appeal fell on a Saturday, the last day to perfect an appeal
shall be the next working day.
Thus, the amendments to the New Rules of Procedure of the NLRC,
Resolution No. 11-01-91 which took effect on January 14, 1992, provides
in part:
xxx xxx xxx
1. Rule VI, Sections 1 and 6 are hereby amended to read as follows:
 Arbit-Part IV |6

Sec. 1. Period of Appeal — Decisions, awards or orders of the Labor Arbiter
. . . shall be final and executory unless appealed to the Commission by any
or both parties within ten (10) calendar days from receipt of such
decisions, awards or orders of the Labor Arbiter . . . . . . If the 10th day . .
. falls on a Saturday, Sunday or a Holiday, the last day to perfect the
decision shall be the next working day. (Emphasis supplied)
Hence, it is crystal clear that the appeal was filed within the prescriptive
period to perfect an appeal. Likewise, the petitioner's contention that
private respondent did not post the required surety bond, deserves scant
consideration, for the simple reason that a surety bond was issued by BF
General Insurance Company, Inc., in the amount of P25,443.70 (Rollo, pp.
63-64).
6. Except claims for Employees Compensation, Social Security, Medicare
and maternity benefits, all other claims, arising from employer-employee
relations, including those of persons in domestic or household service,
involving an amount exceeding five thousand pesos (P5,000) regardless of
whether accompanied with a claim for reinstatement.
xxx xxx xxx
(c) Cases arising from the interpretation or implementation of collective
bargaining agreement and those arising from the interpretation or
enforcement of company procedure/policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitrator so maybe provided in said agreement.

2. Jurisdictional Issue B. Jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators

The jurisdiction of Labor Arbiters and Voluntary Arbitrator or Panel of Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary
Voluntary Arbitrators is clearly defined and specifically delineated in the Arbitrators. — The Voluntary Arbitrator or panel of Voluntary Arbitrators
Labor Code. The pertinent provisions of the Labor Code, read: shall have original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or implementation of
A. Jurisdiction of Labor Arbiters the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies referred to in
Art. 217. Jurisdiction of Labor Arbiter and the Commission. — (a) Except as the immediately preceding article. Accordingly, violations of a Collective
otherwise provided under this Code the Labor Arbiter shall have original Bargaining Agreement, except those which are gross in character, shall no
and exclusive jurisdiction to hear and decide, within thirty (30) calendar longer be treated as unfair labor practice and shall be resolved as
days after the submission of the case by the parties for decision without grievances under the collective bargaining agreement. For purposes of this
extension, even in the absence of stenographic notes, the following cases Article, gross violations of Collective Bargaining Agreement shall mean
involving all workers, whether agricultural or non-agricultural: flagrant and/or malicious refusal to comply with the economic provisions of
such agreement.
1. Unfair labor practice cases;
The Commission, its Regional Offices and the Regional Directors of the
2. Termination disputes;
Department of Labor and Employment shall not entertain disputes,
grievances or matters under the exclusive and original jurisdiction of the
3. If accompanied with a claim for reinstatement, those cases that workers
Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately
may file involving wages, rates of pay, hours of work and other terms and
dispose and refer the same to the Grievance Machinery or Voluntary
conditions of employment;
Arbitration provided in the Collective Bargaining Agreement.
4. claims for actual, moral, exemplary and other forms of damages arising
Art. 262. Jurisdiction over other labor disputes. — The Voluntary Arbitrator
from the employer-employee relations;
or panel of Voluntary Arbitrators, upon agreement of the parties, shall also
5. Cases arising from any violation of Article 264 of this Code, including hear and decide all other labor disputes including unfair labor practices and
questions involving the legality of strikes and lockouts; and, bargaining deadlocks.

The aforecited provisions of law cannot be read in isolation or separately.
They must be read as a whole and each Article of the Code reconciled one
with the other. An analysis of the provisions of Articles 217, 261, and 262
indicates, that:
1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of
Voluntary Arbitrators over the cases enumerated in Articles 217, 261 and
262, can possibly include money claims in one form or another.
2. The cases where the Labor Arbiters have original and
exclusive jurisdiction are enumerated in Article 217, and that of the
Voluntary Arbitrator or Panel of Voluntary Arbitrators in Article 261.
3. The original and exclusive jurisdiction of Labor Arbiters is qualified by an
exception as indicated in the introductory sentence of Article 217 (a), to
wit:
Art. 217. Jurisdiction of Labor Arbiters . . . (a) Except as otherwise
provided under this Code the Labor Arbiter shall have original and exclusive
jurisdiction to hear and decide . . . the following cases involving all
workers. . . .
The phrase "Except as otherwise provided under this Code" refers to the
following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters . . .
xxx xxx xxx
(c) Cases arising from the interpretation or implementation of collective
bargaining agreement and those arising from the interpretation or
enforcement of company procedure/policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitrator as may be provided in said agreement.
B. Art. 262. Jurisdiction over other labor disputes. — The Voluntary
Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties,
shall also hear and decide all other labor disputes including unfair labor
practices and bargaining deadlocks.
Parenthetically, the original and exclusive jurisdiction of the Labor Arbiter
under Article 217 (c), for money claims is limited only to those arising from
statutes or contracts other than a Collective Bargaining Agreement. The
Voluntary Arbitrator or Panel of Voluntary Arbitrators will have original and
Arbit-Part IV |7
exclusive jurisdiction over money claims "arising from the interpretation or
implementation of the Collective Bargaining Agreement and, those arising
from the interpretation or enforcement of company personnel policies",
under Article 261.
4. The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators
is provided for in Arts. 261 and 262 of the Labor Code as indicated above.
1. A close reading of Article 261 indicates that the original and exclusive
jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is
limited only to:
. . . unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those arising
from the interpretation or enforcement of company personnel policies . . .
Accordingly, violations of a collective bargaining agreement, except those
which are gross in character, shall no longer be treated as unfair labor
practice and shall be resolved as grievances under the Collective
Bargaining Agreement. . . . .
2. Voluntary Arbitrators or Panel of Voluntary Arbitrators, however, can
exercise jurisdiction over any and all disputes between an employer and a
union and/or individual worker as provided for in Article 262.
Art. 262. Jurisdiction over other labor disputes. — The voluntary arbitrator
or panel of voluntary arbitrators, upon agreement of the parties, shall also
hear and decide all other labor disputes including unfair labor practices and
bargaining deadlocks.
It must be emphasized that the jurisdiction of the Voluntary Arbitrator or
Panel of Voluntary Arbitrators under Article 262 must be voluntarily
conferred upon by both labor and management. The labor disputes referred
to in the same Article 262 can include all those disputes mentioned in
Article 217 over which the Labor Arbiter has original and exclusive
jurisdiction.
As shown in the above contextual and wholistic analysis of Articles 217,
261, and 262 of the Labor Code, the National Labor Relations Commission
correctly ruled that the Labor Arbiter had no jurisdiction to hear and decide
petitioner's money-claim-underpayment of retirement benefits, as the
controversy between the parties involved an issue "arising from the
interpretation or implementation" of a provision of the collective bargaining
agreement. The Voluntary Arbitrator or Panel of Voluntary Arbitrators has
 Arbit-Part IV |8

original and exclusive jurisdiction over the controversy under Article 261 of
the Labor Code, and not the Labor Arbiter.
3. Merits of the Case
The Court will not remand the case to the Voluntary Arbitrator or Panel of
Voluntary Arbitrators for hearing. This case has dragged on far too long —
eight (8) years. Any further delay would be a denial of speedy justice to an
aged retired stevedore. There is further the possibility that any Decision by
the Voluntary Arbitrator or Panel of Voluntary Arbitrators will be appealed
to the Court of Appeals, and finally to this Court. Hence, the Court will rule
on the merits of the case.
retirement provision of the Collective Bargaining Agreement, i.e., the
length of service as requirement for retirement, and salary as a basis for
benefit computation — the employer was forewarned of the need for
accurate record keeping. This is precisely the basis of retirement, and the
computation of benefits based on years of service and monthly wage.
To recapitulate; the Court hereby rules —
1. That the National Labor Relations Commission correctly ruled that the
Labor Arbiter had no jurisdiction over the case, because the case involved
an issue "arising from the interpretation or implementation" of a Collective
Bargaining Agreement;

We adopt as our own the retirement benefit computation formula of the 2. That the appeal to the National Labor Relations Commission was filed
Labor Arbiter, and the reasons therefor as stated in the decision within the reglementary period and that the appeal bond was filed; and
abovequoted.
3. That we adopt the computation formula for the retirement benefits by
The simple statement of the Labor Arbiter that "we cannot sustain a the Labor Arbiter, and the basis thereof, The respondent must therefore
computation of length of service based on ECC contribution records", was pay the petitioner the additional amount of Twenty-Five Thousand Four
not amply explained by the Labor Arbiter; however, there is legal and Hundred Forty-Three and Seventy Centavos P25,443.70) Pesos.
factual basis for the same. It is unrealistic to expect a lowly stevedore to
know what reports his employer submits to the Employee's Compensation In view of the long delay in the disposition of the case, this decision is
Commission under Book IV, Health, Safety and Welfare Benefits, Title II, immediately executory.
Employees Compensation and State Insurance Fund, of the Labor Code,
SO ORDERED.
simply because the insurance fund is solely funded by the employer and
the rate of employer's contribution varies according to time and actuarial
computations. (See Articles 183-184; Labor Code). The worker has no
ready access to this employer's record. In fact, it is farthest from his mind
to inquire into the amount of employer's contribution, much less whether
the employer remits the contributions. The worker is at all times entitled to
benefits upon the occurrence of the defined contingency even when the
employer fails to remit the contributions. (See Article 196 (b), Labor Code).

All employers are likewise required to keep an employment record of all

their employees, namely: payrolls; and time records. (See Book III, Rule
X, specifically Secs. 6, 7, 8, 1 and 12, Omnibus Rules — Implementing the
Labor Code).

The respondent-employer was afforded the opportunity to show proof of

the petitioner's length of service and pay records. In both instances, the
respondent-employer failed. By its own folly, it must therefore suffer the
consequences of such failure. (South Motorists Enterprises v. Tosoc, 181
SCRA 386, [1990]) From the very beginning — by the provision of the

2. G.R. No. 145800 January 22, 2003
CENTRAL PANGASINAN ELECTRIC COOPERATIVE, INC., petitioner,
vs.
GERONIMA MACARAEG and MARIBETH DE VERA, respondents.
PUNO, J.:
In this petition for review on certiorari, petitioner Central Pangasinan
Electric Cooperative, Inc. challenges the decision of the Court of Appeals in
CA-G.R. SP No. 55128 affirming the decision of the voluntary arbitrator in
NCMB-RBI-PM-VA-5-03-99 ordering the reinstatement of respondents to
petitioner’s employ and payment of their backwages.
Petitioner is an electric cooperative duly organized and existing under
Philippine laws. Respondent Geronima Macaraeg and Maribeth de Vera are
employees of petitioner at its office in Area V, Bayambang, Pangasinan.
Respondent de Vera was employed as teller whose primary duty was to
accept payments from petitioner’s consumers in Bayambang and remit her
collections to the cashier, herein co-respondent Geronima Macaraeg.
Respondent Macaraeg’s duty was to deposit the daily collections of the
office to petitioner’s account at the Rural Bank of Central Pangasinan in
Bayambang.
From January 1998 to January 1999, respondent de Vera accommodated
and encashed the crossed checks of her sister, Evelyn Joy Estrada. Evelyn
issued two hundred eleven (211) crossed checks amounting to
P6,945,128.95 payable to petitioner cooperative despite the absence of
any transaction or any outstanding obligation with petitioner. In turn,
respondent de Vera, with the knowledge and consent of respondent
Macaraeg, paid the full value of these checks from the cash collections of
petitioner. At the end of the day, respondents credited the checks as part
of their collection and deposited the same together with their cash
collection to the account of petitioner at the Rural Bank of Central
Pangasinan.
Sometime in January 1999, petitioner, through its Finance Department,
noticed that several checks payable to petitioner from the collections in the
Area V office were returned due to insufficiency of funds.
On January 19, 1999, Josefina Mandapat, Sandra Frias and Marites Radac,
petitioner’s Finance Manager, Chief Accountant and Legal Assistant,
respectively, confronted respondents with their discovery. Respondent de
Arbit-Part IV |9
Vera admitted that the checks were issued by her sister and that she
encashed them from the money collected from petitioner’s customers.
On January 21, 1999, Mrs. Josefina Mandapat submitted a memorandum to
petitioner’s General Manager, Salvador M. de Guzman, detailing their
findings about the bounced checks. On February 2, 1999, she submitted an
addendum to her memorandum.
On February 4, 1999, petitioner, through de Guzman, issued a
memorandum to respondents placing them under preventive suspension
and requiring them to explain in writing within forty-eight (48) hours why
they misappropriated cooperative funds. In the same communication, a
hearing was set on February 13, 1999 at 9:30 a.m. at the Board Room of
petitioner before Atty. Teodoro Fernandez.
In their respective Answers/Explanations, respondents denied having
misappropriated the funds of petitioner cooperative. They alleged that: (1)
the checks that bounced were redeposited with the Rural Bank of Central
Pangasinan; (2) the amount representing the face value of the checks had
been used by petitioner as of December 15, 1998; (3) there was never any
shortage in the cooperative money or funds in their possession; and (4)
they never violated any policy of the cooperative and on the contrary, they
have been very religious in remitting the funds and money of petitioner.1
At the scheduled hearing on February 13, 1999, respondents, with
assistance of counsel, appeared before Atty. Teodoro Fernandez.
Respondent de Vera testified and admitted that she encashed the checks of
Evelyn Joy Estrada because the latter is her older sister and that she has a
soft spot for her; that Mrs. Estrada owns a sash factory and that she
merely wanted to help her sister meet her business obligations; that
sometime in November 1998, Mrs. Marites Radoc, Chief Accountant of
petitioner, called her attention to one check which bounced thrice; that this
check was eventually replaced by her sister with cash; that despite the
bouncing of some other checks, all checks were eventually funded and paid
to petitioner, hence, petitioner incurred no losses in its collections; that she
has worked for petitioner for nineteen (19) years and this is the first time
she has been charged administratively by petitioner.
Respondent Macaraeg admitted that she knew of the accommodations
given by respondent de Vera to her sister; that she allowed her
subordinate to do it because respondent de Vera is her kumare, and that
she knew that Mrs. Estrada’s checks were sufficiently funded. She worked
 Arbit-Part IV |10

for petitioner for twenty-two (22) years and has never had an SO ORDERED."3
administrative charge.
Petitioner appealed to the Court of Appeals via a petition for review. On
Mrs. Josefina Mandapat, Finance Manager of petitioner, testified as August 17, 2000, the Court of Appeals rendered a decision dismissing the
petitioner’s witness. She stated that she prepared a report on the findings petition and affirming the decision of the voluntary arbitrator. Hence, the
of their accountant regarding the encashment of Evelyn Joy Estrada’s present course of action.
checks, and that the encashment of said checks is prohibited under an
office memorandum. Petitioner claims that:

On March 10, 1999, Atty. Fernandez submitted his findings to the General
Manager of petitioner. On March 19, 1999, on the basis of said findings and
recommendation, the General Manager issued to respondents separate
notices of termination, effective April 9, 1999, for "serious misconduct, and
breach of trust and confidence reposed on them by management."2
"(1) The Honorable Court of Appeals gravely abused its discretion in finding
that the procedure leading to the termination of respondents Maribeth de
Vera and Geronima Macaraeg was in violation of the provisions of the
Collective Bargaining Agreement (CBA) particularly Steps 1-4, Article XIII
of the said Agreement.

Respondents, with the help of the President and representative of the (2) The Honorable Court of Appeals gravely abused its discretion in holding
Union, Central Pangasinan Electric Cooperative (CENPELCO) Employees’ that petitioner illegally terminated the services of herein private
Association-Tupas Local Chapter No. R01-0012, questioned their dismissal respondents."4
before the National Conciliation and Mediation Board (NCMB). They claimed
The petition is impressed with merit.
that their dismissal was without just cause and in violation of the Collective
Bargaining Agreement (CBA), which requires that the case should first be
At the outset, we hold that the first issue raised in the petition pertaining
brought before a grievance committee. Eventually, the parties agreed to
to the alleged violation of the CBA grievance procedure is moot and
submit the case to a voluntary arbitrator for arbitration.
academic. The parties’ active participation in the voluntary arbitration
proceedings, and their failure to insist that the case be remanded to the
On August 12, 1999, the voluntary arbitrator rendered a decision in favor
grievance machinery, shows a clear intention on their part to have the
of respondents, viz.:
issue of respondents’ illegal dismissal directly resolved by the voluntary
"WHEREFORE, in view of the foregoing, the undersigned arbitrator finds arbitrator. We therefore find it unnecessary to rule on the matter in light of
and so holds: their preference to bring the illegal dismissal dispute to voluntary
arbitration without passing through the grievance machinery.
(1) That the parties failed to comply with the provisions of the GRIEVANCE
PROCEDURE of the Collective Bargaining Agreement; This leads us to the next issue of whether respondents were validly
dismissed. To constitute a valid dismissal from employment, two requisites
(2) Reinstate immediately upon receipt of the Decision complainants must be met, namely: (1) it must be for a just or authorized cause, and
GERONIMA MACARAEG and MARIBETH DE VERA to their former positions (2) the employee must be afforded due process.5
without loss of seniority rights;
We hold that there exist a valid reason to dismiss both employees. Article
(3) Pay complainants their backwages to be reckoned from the time their 282(c) of the Labor Code allows an employer to dismiss employees for
employment has been [sic] illegally terminated up to their actual willful breach of trust or loss of confidence.6 Proof beyond reasonable doubt
reinstatement based on their last salary. of their misconduct is not required, it being sufficient that there is some
basis for the same or that the employer has reasonable ground to believe
Parties are hereby enjoined to be faithful with their commitment to abide that they are responsible for the misconduct and their participation therein
by this Decision which under their Collective Bargaining Agreement is final, rendered them unworthy of the trust and confidence demanded of their
executory and not subject to appeal. position.7
 Arbit-Part IV |11

To be sure, the acts of the respondents were clearly inimical to the
financial interest of the petitioner. During the investigation, they admitted
accommodating Evelyn Joy Estrada by encashing her checks from its funds.
They did so without petitioner’s knowledge, much less its permission.
These inimical acts lasted for more than a year, and probably would have
continued had it not been discovered in time. All along, they were aware
that these acts were prohibited by the Coop Checks Policy. 8 Clearly, there
was willful breach of trust on the respondents’ part, as they took
advantage of their highly sensitive positions to violate their duties.
Moreover, the acts of the respondents caused damage to the petitioner.
During those times the checks were illegally encashed, petitioner was not
able to fully utilize the collections, primarily in servicing its debts. In her
memorandum9dated January 21, 1999, Finance Manager Josefina
Mandapat reported how petitioner is prejudiced, thus:
"Though the checks were funded, it constitutes a violation of Coop Policy.
Checks that are covered even by local clearing only take three days to be
converted to cash and when returned another three (3) days to retry
clearing. The cooperative is deprived of the privilege to maximize use of its
collections primarily in servicing its debts considering the state of calamity
and even at the moment wherein we worry every time if we can payoff
(sic) our NAPOCOR power bill."10
counsel during the investigation. Finally, notices were sent to them on
March 19, 1999, informing them of the basis of their termination. In fine,
private respondents were given due process before they were dismissed.
Time and again, we have stressed that due process is simply an
opportunity to be heard.15
We are aware that the respondents Macaraeg and de Vera have been
employed with the petitioner for 22 and 19 years of continuous service,
respectively, and this is the first time that either of them has been
administratively charged. Nonetheless, it is our considered view that their
dismissal is justified considering the breach of trust they have committed.
Well to emphasize, the longer an employee stays in the service of the
company, the greater is his responsibility for knowledge and compliance
with the norms of conduct and the code of discipline in the
company. 16Considering that they have mishandled the funds of the
cooperative and the danger they have posed to its members, their
reinstatement is neither sound in reason nor just in principle. It is
irreconcilable with trust and confidence that has been irretrievably lost.17
IN VIEW WHEREOF, the petition is GRANTED. The Decision and Resolution
of the Court of Appeals in CA-G.R. SP No. 55128 (affirming the decision of
the voluntary arbitrator in NCMB-RBI-PM-VA-5-03-99) are reversed and set
aside.

It is not material that they did not "misappropriate any amount of money, SO ORDERED
nor incur any shortage relative to the funds in their possession." 11 The
basic premise for dismissal on the ground of loss of confidence is that the
employees concerned hold positions of trust. The betrayal of this trust is
the essence of the offence for which an employee is penalized. 12 In the
case at bar, the respondents held positions of utmost trust and confidence.
As teller13 and cashier,14 respectively, they are expected to possess a high
degree of fidelity. They are entrusted with a considerable amount of cash.
Respondent de Vera accepted payments from petitioner’s consumers while
respondent Macaraeg received remittances for deposit at petitioner’s bank.
They did not live up to their duties and obligations.

Nor is there any doubt that petitioner observed procedural due process in
dismissing the respondents. In separate memoranda dated February 4,
1999 and signed by the General Manager ( de Guzman), the respondents
were both appraised of the particular acts or omissions constituting the
charges against them. They gave their own "answer/explanation" to the
charges. They participated in the investigation conducted at petitioner’s
board room on February 13, 1999 at 11:30 a.m. They were represented by

3. G.R. No. 138094 May 29, 2003
MARILOU GUANZON APALISOK, petitioner,
vs.
RADIO PHILIPPINES NETWORK RADIO STATION DYKC and
STATION MANAGER GEORGE SUAZO,respondents.
CARPIO MORALES, J.:
Before this Court is a petition for review on certiorari under Rule 45
assailing the Court of Appeals Decision1 of October 30, 1998 and
Resolution 2 of February 26, 1999.
On May 15, 1995, Marilou Gaunzon Apalisok (petitioner), then Production
Chief of Radio Philippines Network (RPN) Station DYKC, received a
Memorandum3 from Branches Operations Manager Gilito Datoc asking her
to submit a written explanation why no disciplinary action should be taken
against her for performance of acts hostile to RPN, and arrogant,
disrespectful and defiant behavior towards her superior Station Manager
George Suazo.
Complying, petitioner submitted on May 16, 1995 her Answer 4 to the
memorandum.
On May 31, 1995, petitioner received another memorandum from the
Administrative Manager of RPN, informing her of the termination of her
services effective the close of regular office hours of June 15, 1995.
By letter of June 5, 1995, petitioner informed RPN, by letter of June 5,
1995, of her decision to waive her right to resolve her case through the
grievance machinery of RPN as provided for in the Collective Bargaining
Agreement (CBA) and to lodge her case before the proper government
forum. She thereafter filed a complaint against RPN DYKC and Suazo
(respondents) for illegal dismissal before the National Labor Relations
Commission, Regional Arbitration Branch of Region 7 which referred it to
the National Conciliation and Mediation Board.
By Submission Agreement5 dated June 20, 1995 signed by their respective
counsels, petitioner and respondents agreed to submit for voluntary
arbitration the issue of whether petitioner's dismissal was valid and to
abide by the decision of the voluntary arbitrator.
In her position paper6 submitted before the voluntary arbitrator, petitioner
prayed that her dismissal be declared invalid and that she be awarded
Arbit-Part IV |12
separation pay, backwages and other benefits granted to her by the Labor
Code since reinstatement is no longer feasible due to strained relations.
She also prayed that she be awarded P2,000,000.00 for moral damages
and P500,000.00 for exemplary damages.
Respondents on the other hand prayed for the dismissal of the complaint,
arguing that the voluntary arbitrator had no jurisdiction over the case and,
assuming that he had, the complaint is dismissible for lack of merit as
petitioner was not illegally dismissed.7
On October 18, 1995, the voluntary arbitrator rendered an Award 8 in favor
of petitioner, the dispositive portion of which reads:
WHEREFORE, above premises considered, this Voluntary Arbitrator rules
that the dismissal of complainant was invalid.
However, considering the impracticality of reinstatement because of proven
strained relation between the parties, respondents, instead shall pay
complainant the amount of FOUR HUNDRED ELEVEN THOUSAND ONE
HUNDRED TWENTY SIX PESOS & SEVENTY-SIX CENTAVOS (P411,126.76)
itemized as follows:
In summary, the total award is hereunder itemized:
1. SEPARATION PAY (P14,600.00 divide by 30
days multiplied by 15 days per year of service x
19 years) ......................................... P138,700.95
2. BACKWAGES (P14,600 X 6 months)
............................. P 88,817.00
3. MORAL AND EXEMPLARY DAMAGES
........................... P100,000.00
4. SERVICE INCENTIVE LEAVES (P14,600 divide
by 30 days = P486.67 x 5 days = P2,433.35 x
19 years ....... P 46,233.65
5. ATTORNEY'S FEES (10%) ........................... P 37,375.16
All other claims are hereby denied.
SO ORDERED. (Emphasis supplied)
 Arbit-Part IV |13

Respondents' motion for reconsideration9 of the Award having been denied
by the voluntary arbitrator by Order of November 21, 1995, they filed a
petition for certiorari before this Court, docketed as G.R. No. 122841.
By Resolution10 of December 13, 1995, the Third Division of this Court
referred G.R. No. 122841 to the Court of Appeals, following the case
of Luzon Development Bank v. Association of Luzon Development Bank
Employees, et al.11 holding that decisions or awards of a voluntary
arbitrator or panel of arbitrators in labor cases are reviewable by the Court
of Appeals.
Petitioner contends in any event that even assuming that the voluntary
arbitrator had no jurisdiction over the case, it would not be in keeping with
settled jurisprudence to allow a losing party to question the authority of
the voluntary arbitrator after it had freely submitted itself to its authority.16
The petition is impressed with merit.
The above quoted Article 262 of the Labor Code provides that upon
agreement of the parties, the voluntary arbitrator can hear and decide
all other labor disputes.

The Court of Appeals, finding that the option of petitioner not to subject Contrary to the finding of the Court of Appeals, voluntary arbitration as a
the dispute to the grievance machinery provided for in the CBA was mode of settling the dispute was not forced upon respondents. Both
tantamount to relinquishing her right to avail of the aid of a voluntary parties indeed agreed to submit the issue of validity of the dismissal of
arbitrator in settling the dispute which "likewise converted an unresolved petitioner to the jurisdiction of the voluntary arbitrator by the Submission
grievance into a resolved one," held that the voluntary arbitrator did not Agreement duly signed by their respective counsels.
have jurisdiction over petitioner's complaint and accordingly nullified and
As the voluntary arbitrator had jurisdiction over the parties' controversy,
set aside, by Decision of October 30, 1998, the voluntary arbitration
discussion of the second issue is no longer necessary.
award.
WHEREFORE, the Court of Appeals Decision of October 30, 1998 is hereby
Petitioner's Motion for Reconsideration12 of the Court of Appeals Decision
SET ASIDE and the voluntary arbitration Award of October 18, 1995 is
having been denied by Resolution13 of February 26, 1999, the present
hereby REINSTATED.
petition was filed which raises the following issues:
SO ORDERED.
1. Whether or not the Voluntary Arbitrator had jurisdiction over petitioner's
complaint, and

2. Whether or not respondents are guilty of estoppel.14

Petitioner, citing Article 262 of the Labor Code of the Philippines, as

amended which reads:

ARTICLE 262. JURISDICTION OVER OTHER LABOR DISPUTES. The

Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of
the parties, shall hear and decide all other labor disputesincluding
unfair labor practices and bargaining deadlocks. (Emphasis and italics
supplied),

contends that her option not to subject the dispute to the grievance
machinery of RPN did not amount to her relinquishing of her right to avail
of voluntary arbitration as a mode of settling it for she and respondents in
fact agreed to have the dispute settled by a voluntary arbitrator when they
freely executed the above-said Submission Agreement. She thus concludes
that the voluntary arbitrator has jurisdiction over the controversy.15
 Arbit-Part IV |14

4. G.R. No. 108001 March 15, 1996 On April 15, 1991, petitioners filed a motion to dismiss the complaint,
alleging that respondent Labor Arbiter had no jurisdiction over the subject
SAN MIGUEL CORPORATION, ANGEL G. ROA and MELINDA matter of the complaint, and that respondent Labor Arbiter must defer
MACARAIG, petitioners, consideration of the unfair labor practice complaint until after the parties
vs. have gone through the grievance procedure provided for in the existing
NATIONAL LABOR RELATIONS COMMISSION (Second Division), Collective Bargaining Agreement (CBA). Respondent Labor Arbiter denied
LABOR ARBITER EDUARDO J. CARPIO, ILAW AT BUKLOD NG this motion in a Resolution, dated September 23, 1991.
MANGGAGAWA (IBM), ET AL., respondents.
The petitioners appealed the denial to respondent Commission on
HERMOSISIMA, JR., J.:p November 8, 1991. Unimpressed by the grounds therefor, respondent
Commission dismissed the appeal in its assailed Resolution, dated August
In the herein petition for certiorari under Rule 65, petitioners question the
11, 1992. Petitioners promptly filed a Motion for Reconsideration which,
jurisdiction of the Labor Arbiter to hear a complaint for unfair labor
however, was denied through the likewise assailed Resolution, dated
practice, illegal dismissal, and damages, notwithstanding the provision for
October 29, 1992.
grievance and arbitration in the Collective Bargaining Agreement.
Hence, the instant petition for certiorari alleging the following grounds was
Let us unfurl the facts.
filed by the petitioners:
Private respondents, employed by petitioner San Miguel Corporation (SMC)
I
as mechanics, machinists, and carpenters, were and still are, bona
fide officers and members of private respondent Ilaw at Buklod ng RESPONDENT LABOR ARBITER CANNOT EXERCISE JURISDICTION OVER
Manggagawa. THE ALLEGED ILLEGAL TERMINATION AND ALLEGED ULP CASES WITHOUT
PRIOR RESORT TO GRIEVANCE AND ARBITRATION PROVIDED UNDER THE
On or about July 31, 1990, private respondents were served a
CBA.
Memorandum from petitioner Angel G. Roa, Vice-President and Manager of
SMC's Business Logistics Division (BLD), to the effect that they had to be II
separated from the service effective October 31, 1990 on the ground of
"redundancy or excess personnel." Respondent union, in behalf of private THE STRONG STATE POLICY ON 'THE PROMOTION OF VOLUNTARY MODES
respondents, opposed the intended dismissal and asked for a dialogue with OF SETTLEMENT OF LABOR DISPUTES CRAFTED IN THE CONSTITUTION
management. AND THE LABOR CODE DICTATES THE SUBMISSION OF THE CBA DISPUTE
TO GRIEVANCE AND ARBITRATION.2
Accordingly, a series of dialogues were held between petitioners and
private respondents. Even before the conclusion of said dialogues, the Petitioners posit the basic principle that a collective bargaining agreement
aforesaid petitioner Angel Roa issued another Memorandum on October 1, is a contract between management and labor that must bind and be
1990 informing private respondents that they would be dismissed from enforced in the first instance as between the parties thereto. In this case,
work effective as of the close of business hours on November 2, 1990. the CBA between the petitioners and respondent union provides, under
Private respondents were in fact purged on the date aforesaid. Section 1, Article V entitled ARBITRATION, that "wages, hours of work,
conditions of employment and/or employer-employee relations shall be
Thus, on February 25, 1991, private respondents filed a complaint against settled by arbitration." Petitioners' thesis is that the dispute as to the
petitioners for Illegal Dismissal and Unfair Labor Practices, with a prayer termination of the union members and the unfair labor practice should first
for damages and attorney's fees, with the Arbitration Branch of respondent be settled by arbitration, and not directly by the labor arbiter, following the
National Labor Relations Commission. The complaint 1 was assigned to above provision of the CBA, which ought to be treated as the law between
Labor Arbiter Eduardo F. Carpio for hearing and proper disposition. the parties thereto.
 Arbit-Part IV |15

The argument is unmeritorious. The law in point is Article 217 (a) of the in accordance with the procedure outlined in Article IV hereof [on
Labor Code. It is elementary that this law is deemed written into the CBA. Grievance Machinery] . . . 3 (Emphasis ours)
In fact, the law speaks in plain and unambiguous terms that termination
disputes, together with unfair labor practices, are matters falling under the Petitioners allege that respondent union requested management for a
original and exclusive jurisdiction of the Labor Arbiter, to wit: "reconsideration and review" of the company's decision to terminate the
employment of the union members. By this act, petitioners argue,
Art. 217 Jurisdiction of Labor Arbiters and the respondent union recognized that the questioned dismissal is a grievable
Commission — (a) Except as otherwise provided under this Code, the Labor dispute by virtue of Section 2, Article III of the CBA. This allegation was
Arbiters shall have original and exclusive jurisdiction to hear and decide . . strongly denied by the respondent union. In a Memorandum filed for the
. the following cases involving all workers, whether agricultural or non- public respondent NLRC, the Solicitor General supported the position of the
agricultural: respondent union that it did not seek reconsideration from the SMC
management in regard to the dismissal of the employees.
(1) Unfair labor practice cases;
Petitioners fail miserably to prove that, indeed, the respondent union
(2) Termination disputes; requested for a reconsideration or review of the management decision to
dismiss the private respondents. A punctilious examination of the records
xxx xxx xxx
indubitably reveals that at no time did the respondent union exercise its
right to seek reconsideration of the company's move to terminate the
The sole exception to the above rule can be found under Article 262 of the
employment of the union members, which request for reconsideration
same Code, which provides:
would have triggered the application of Section 2, Article III of the CBA,
Art. 262. Jurisdiction over other labor disputes — The voluntary arbitrator thus resulting in the treatment of the dispute as a grievance to be dealt
or panel of voluntary arbitrators, upon agreement of the parties, shall also with in accordance with the Grievance Machinery laid down in Article IV of
hear and decide all other labor disputes including unfair labor practices and the CBA. Stated differently, the filing of a request for reconsideration by
bargaining dead locks. (As added by RA 6715). the respondent union, which is the condition sine qua non to categorize the
termination dispute and the ULP complaint as a grievable dispute, was
We subjected the records of this case, particularly the CA to meticulous decidedly absent in the case at bench. Hence, the respondent union acted
scrutiny and we find no agreement between SMC and the respondent union well within their rights in filing their complaint for illegal dismissal and ULP
that would state in unequivocal language that petitioners and the directly with the Labor Arbiter under Article 217 (a) of the Labor Code.
respondent union conform to the submission of termination disputes and
unfair labor practices to voluntary arbitration. Section 1, Article V of the Second. Petitioners insist that involved in the controversy is the
CBA, cited by the herein petitioners, certainly does not provide so. Hence, interpretation and implementation of the CBA which is grievable and
consistent with the general rule under Article 217 (a) of the Labor Code, arbitrable by law under Article 217 (c) of the Labor Code, viz:
the Labor Arbiter properly has jurisdiction over the complaint filed by the
Art. 217 (c). Cases arising from the interpretation or implementation of
respondent union on February 25, 1991 for illegal dismissal and unfair
collective bargaining agreements and those arising from the interpretation
labor practice.
or enforcement of company personnel policies shall be disposed of by the
Petitioners point however to Section 2, Article III of the CBA, under the Labor Arbiter by referring the same to the grievance machinery and
heading Job Security, to show that the dispute is a proper subject of the voluntary arbitration as may be provided in said agreements. (As amended
grievance procedure, viz: by RA 6715).

. . . The UNION, however, shall have the right to seek reconsideration of Petitioners theorize that since respondents questioned the discharges, the
any discharge, lay-off or disciplinary action, and such requests for main question for resolution is whether SMC had the management right or
reconsideration shall be considered a dispute or grievance to be dealt with prerogative to effect the discharges on the ground of redundancy, and this

necessarily calls for the interpretation or implementation of Article III (Job
Security) in relation to Article IV (Grievance Machinery) of the CBA.4
Petitioner's theory does not hold water. There is no connection whatsoever
between SMC's management prerogative to effect the discharges and the
interpretation or implementation of Articles III and IV of the CBA. The only
relevant provision under Article III that may need interpretation or
implementation is Section 2 which was cited herein. However, as patiently
pointed out by this court, said provision does not come into play
considering that the union never exercised its right to seek reconsideration
of the discharges effected by the company. It would have been different
had the union sought reconsideration. Such recourse under Section 2
would have been treated as a grievance under Article IV (Grievance
Machinery) of the CBA, thus calling for the possible interpretation or
implementation of the entire provision on Grievance Machinery as agreed
upon by the parties. This was not the case however. The union brought the
termination dispute directly to the Labor Arbiter rendering Articles III and
IV of the CBA inapplicable for the resolution of this case.
The discharges, petitioners also contend, call for the interpretation or
enforcement of company personnel policies, particularly SMC's personnel
policies on lay-offs arising from redundancy, and so, they may be
considered grievable and arbitrable by virtue of Article 217 (c). Not
necessarily so. Company personnel policies are guiding principles stated in
broad, long-range terms that express the philosophy or beliefs of an
organization's top authority regarding personnel matters. They deal with
matters affecting efficiency and well being of employees and include,
among others, the procedure in the administration of wages, benefits,
promotions, transfer and other personnel movements which are usually not
spelled out in the collective agreement. The usual source of grievances,
however, is the rules and regulations governing disciplinary
actions.5 Judging therefrom, the questioned discharges due to alleged
redundancy can hardly be considered company personnel policies and
therefore need not directly be subject to the grievance machinery nor to
voluntary arbitration.
Third. Petitioners would like to persuade us that respondents' ULP claims
are merely conclusory and cannot serve to vest jurisdiction to the Labor
Arbiters. Petitioners argue with passion: "How was the employee
discharges' (sic) right to self-organization restrained by their termination?
Respondent did not show. There is no allegation of the existence of anti-
union animus or of the ultimate facts showing how the discharges affected
the rights to self-organization of individual respondents." 6 In short,
Arbit-Part IV |16
petitioners maintain that respondents complaint does not allege a genuine
case for ULP.
The Court is not convinced.
The complaint alleges that:
5. Individual complainants are bona fide officers and members of
complainant Ilaw at Buklod ng Manggagawa (IBM). They are active and
militant in the affairs and activities of the union.
xxx xxx xxx
23. The dismissal or lock-out from work of the individual complainants
clearly constitutes an act of unfair labor practices in the light of the fact
that the work being performed by the individual complainants are being
contracted out by the respondent company, and, therefore, deprives
individual complainants of their right to work and it constitutes a criminal
violation of existing laws.
xxx xxx xxx
25. The acts of the respondent company in economically coercing
employees to accept payment of separation and/or retirement benefits,
pending final resolution of the labor disputes between the parties constitute
acts of unfair labor practice in the light of the fact that there is undue
interference, restraint, and coercion of employees in the exercise of their
right to self-organization and collective bargaining. 7
Short of pre-empting the proceedings before the Labor Arbiter, the above
complaint, makes out a genuine case for ULP.
In Manila Pencil Co. v. CIR,8 this Court had occasion to observe that even
where business conditions justified a lay-off of employees, unfair labor
practices were committed in the form of discriminatory dismissal where
only unionists were permanently dismissed. This was despite the valid
excuse given by the Manila Pencil Company that the dismissal of the
employees was due to the reduction of the company's dollar allocations for
importation and that both union members and non-union members were
laid-off. The Court, thru Justice Makalintal, rebuffed the petitioner
Company and said:

. . . The explanation, however, does not by any means account for the
permanent dismissal of five of the unionists, where it does not appear that
non-unionists were similarly dismissed.
xxx xxx xxx
And the discrimination shown by the Company strongly is confirmed by the
fact that during the period from October 1958 to August 17, 1959 it hired
from fifteen to twenty new employees and ten apprentices. It says these
employees were for its new lead factory, but is (sic) not shown that the
five who had been permanently dismissed were not suitable for work in
that new factory.
A similar ruling was made by this Court in People's Bank and Trust
Co. v. People's Bank and Trust Co. Employees Union9 involving the lay-off
by a bank of sixty-five (65) employees who were active union members
allegedly by reason of retrenchment. The Court likewise found the
employer in that case to have committed ULP in effecting the discharges.
This Court was more emphatic however in Bataan Shipyard and
Engineering Co., Inc. v. NLRC, et al.: 10
Under the circumstances obtaining in this case, We are inclined to believe
that the company had indeed been discriminatory in selecting the
employees who were to be retrenched. All of the retrenched employees are
officers and members of the NAFLU. The record of the case is bereft of any
satisfactory explanation from the Company regarding this situation. As
such, the action taken by the firm becomes highly suspect. It leads Us to
conclude that the firm had been discriminating against membership in the
NAFLU, an act which amounts to interference in the employees' exercise of
their right of self-organization. Under Art. 249 (now Art. 248) of the Labor
Code of the Philippines, such interference is considered an act of unfair
labor practice on the part of the Company . . . (Emphasis ours).
It matters not that the cause of termination in the above cited cases was
retrenchment while that in the instant case was redundancy. The important
fact is that in all of these cases, including the one at bar, all of the
dismissed employees were officers and members of their respective unions,
and their employers failed to give a satisfactory explanation as to why this
group of employees was singled out.
It may be the case that employees other than union members may have
been terminated also by petitioner SMC on account of its redundancy
Arbit-Part IV |17
program. If that is true, the discharges may really be for a bona
fide authorized cause under Article 283 11 of the Labor Code. On the other
hand, it is also possible that such may only be a clever scheme of the
petitioner company to camouflage its real intention of discriminating
against union members particularly the private respondents. In any case,
these matters will be best ventilated in a hearing before the Labor Arbiter.
It is for the above reason that we cannot hold the petitioners guilty of the
ULP charge. This will be the task of the Labor Arbiter. We however find that
based on the circumstances surrounding this case and settled
jurisprudence on the subject, the complaint filed by the private
respondents on February 25, 1991 alleges facts sufficient to constitute
a bona fide case of ULP, and therefore properly cognizable by the Labor
Arbiter under Article 217 (a) of the Labor Code. This is consistent with the
rule that jurisdiction over the subject matter is determined by the
allegations of the complaint. 12
Finally, petitioners try to impress on this Court the strong State policy on
the promotion of voluntary modes of settlement of labor disputes crafted in
the Constitution and the Labor Code which dictate the submission of the
CBA dispute to grievance and arbitration. 13
In this regard, the response of the Solicitor General is apt:
Petitioners deserve commendation for divulging and bringing to public
respondents' attention the noble legislative intent behind the law
mandating the inclusion of grievance and voluntary arbitration provisions in
the CBA. However, in the absence of an express legal conferment thereof,
jurisdiction cannot be appropriated by an official or tribunal (sic) no matter
how well-intentioned it is, even in the pursuit of the dearest substantial
right (Concurring Opinion of Justice Barredo, Estanislao v. Honrado, 114
SCRA 748, 29 June 1982).14
In the same manner, petitioners cannot arrogate into the powers of
voluntary arbitrators the original and exclusive jurisdiction of Labor Arbiters
over unfair labor practices, termination disputes, and claims for damages,
in the absence of an express agreement between the parties in order for
Article 262 15 of the Labor Law to apply in the case at bar. 16
WHEREFORE, the instant petition is DISMISSED for lack of merit and the
resolutions of the National Labor Relations Commission dated August 11,
1992 and October 29, 1992 are hereby AFFIRMED.SO ORDERED.

5. G.R. No. 138938 October 24, 2000
CELESTINO VIVIERO, petitioner,
vs.
COURT OF APPEALS, HAMMONIA MARINE SERVICES, and
HANSEATIC SHIPPING CO., LTD. respondents.
DECISION
BELLOSILLO, J.:
CELESTINO VIVERO, in this petition for review, seeks the reversal of the
Decision of the Court of Appeals of 26 May 1999 setting aside the Decision
of the National Labor Relations Commission of 28 May 1998 as well as its
Resolution of 23 July 1998 denying his motion for its reconsideration, and
reinstating the decision of the Labor Arbiter of 21 January 1997.
Petitioner Vivero, a licensed seaman, is a member of the Associated Marine
Officers and Seamen's Union of the Philippines (AMOSUP). The Collective
Bargaining Agreement entered into by AMOSUP and private respondents
provides, among others -
ARTICLE XII
GRIEVANCE PROCEDURE
xxxx
Sec. 3. A dispute or grievance arising in connection with the terms and
provisions of this Agreement shall be adjusted in accordance with the
following procedure:
1. Any seaman who feels that he has been unjustly treated or even
subjected to an unfair consideration shall endeavor to have said grievance
adjusted by the designated representative of the unlicensed department
abroad the vessel in the following manner:
A. Presentation of the complaint to his immediate superior.
B. Appeal to the head of the department in which the seaman involved
shall be employed.
C. Appeal directly to the Master.
Arbit-Part IV |18
Sec. 4. If the grievance cannnot be resolved under the provision of Section
3, the decision of the Master shall govern at sea x x x x in foreign ports
and until the vessel arrives at a port where the Master shall refer such
dispute to either the COMPANY or the UNION in order to resolve such
dispute. It is understood, however, if the dispute could not be resolved
then both parties shall avail of the grievance procedure.
Sec. 5. In furtherance of the foregoing principle, there is hereby created a
GRIEVANCE COMMITTEE to be composed of two COMPANY
REPRESENTATIVES to be designated by the COMPANY and two LABOR
REPRESENTATIVES to be designated by the UNION.
Sec. 6. Any grievance, dispute or misunderstanding concerning any ruling,
practice, wages or working conditions in the COMPANY, or any breach of
the Employment Contract, or any dispute arising from the meaning or the
application of the provision of this Agreement or a claim of violation thereof
or any complaint that any such crewmembers may have against the
COMPANY, as well as complaint which the COMPANY may have against
such crewmembers shall be brought to the attention of the GRIEVANCE
COMMITTEE before either party takes any action, legal or otherwise.
Sec. 7. The COMMITTEE shall resolve any dispute within seven (7) days
from and after the same is submitted to it for resolution and if the same
cannot be settled by the COMMITTEE or if the COMMITTEE fails to act on
the dispute within the 7-day period herein provided, the same shall be
referred to a VOLUNTARY ARBITRATION COMMITTEE.
An "impartial arbitrator" will be appointed by mutual choice and consent of
the UNION and the COMPANY who shall hear and decide the dispute or
issue presented to him and his decision shall be final and unappealable x x
x x1
As found by the Labor Arbiter -
Complainant was hired by respondent as Chief Officer of the vessel
"M.V. Sunny Prince" on 10 June 1994 under the terms and conditions, to
wit:
Duration of Contract - - - - 10 months
Basic Monthly Salary - - - - US $1,100.00
Hours of Work - - - - 44 hrs./week
 Arbit-Part IV |19

Overtime - - - - 495 lump O.T. settlement he had to ventilate his case before the proper forum, i.e., the
Philippine Overseas Employment Administration.6 The NLRC further held
Vacation leave with pay - - - - US $220.00/mo. that the contested portion in the CBA providing for the intercession of a
Voluntary Arbitrator was not binding upon petitioner since both petitioner
On grounds of very poor performance and conduct, refusal to perform his
and private respondents had to agree voluntarily to submit the case before
job, refusal to report to the Captain or the vessel’s Engineers or cooperate
a Voluntary Arbitrator or Panel of Voluntary Arbitrators. This would entail
with other ship officers about the problem in cleaning the cargo holds or of
expenses as the Voluntary Arbitrator chosen by the parties had to be paid.
the shipping pump and his dismal relations with the Captain of the vessel,
Inasmuch however as petitioner chose to file his Complaint originally with
complainant was repatriated on 15 July 1994.
POEA, then the Labor Arbiter to whom the case was transferred would have
to take cognizance of the case.7
On 01 August 1994, complainant filed a complaint for illegal dismissal at
Associated Marine Officers’ and Seaman’s Union of the Philippines
The NLRC then remanded the case to the Labor Arbiter for further
(AMOSUP) of which complainant was a member. Pursuant to Article XII of
proceedings. On 3 July 1998 respondents filed a Motion for
the Collective Bargaining Agreement, grievance proceedings were
Reconsideration which was denied by the NLRC on 23 July 1998.
conducted; however, parties failed to reach and settle the dispute
amicably, thus, on 28 November 1994, complainant filed [a] complaint with Thus, private respondents raised the case to the Court of Appeals
the Philippine Overseas Employment Administration (POEA).2 contending that the provision in the CBA requiring a dispute which
remained unresolved by the Grievance Committee to be referred to a
The law in force at the time petitioner filed his Complaint with the POEA
Voluntary Arbitration Committee, was mandatory in character in view of
was EO No. 247.3
the CBA between the parties. They stressed that "since it is a policy of the
state to promote voluntary arbitration as a mode of settling labor disputes,
While the case was pending before the POEA, private respondents filed
it is clear that the public respondent gravely abused its discretion in taking
a Motion to Dismiss on the ground that the POEA had no jurisdiction over
cognizance of a case which was still within the mantle of the Voluntary
the case considering petitioner Vivero's failure to refer it to a Voluntary
Arbitration Commitee’s jurisdiction."8
Arbitration Committee in accordance with the CBA between the parties.
Upon the enactment of RA 8042, the Migrant Workers and Overseas
On the other hand, petitioner argued -
Filipinos Act of 1995, the case was transferred to the Adjudication Branch
of the National Labor Relations Commission. (A)s strongly suggested by its very title, referral of cases of this nature to
the Voluntary Arbitration Committee is voluntary in nature. Otherwise, the
On 21 January 1997 Labor Arbiter Jovencio Ll. Mayor Jr., on the basis of
committee would not have been called Voluntary Arbitration Committee but
the pleadings and documents available on record, rendered a decision
rather, a Compulsory Arbitration Committee. Moreover, if the referral of
dismissing the Complaint for want of jurisdiction.4 According to the Labor
cases of similar nature to the Voluntary Arbitration Committee would be
Arbiter, since the CBA of the parties provided for the referral to a Voluntary
deemed mandatory by virtue of the provisions in the CBA, the [NLRC]
Arbitration Committee should the Grievance Committee fail to settle the
would then be effectively deprived of its jurisdiction to try, hear and decide
dispute, and considering the mandate of Art. 261 of the Labor Code on the
termination disputes, as provided for under Article 217 of the Labor Code.
original and exclusive jurisdiction of Voluntary Arbitrators, the Labor
Lastly, [respondents] ought to be deemed to have waived their right to
Arbiter clearly had no jurisdiction over the case.5
question the procedure followed by [petitioner], considering that they have
already filed their Position Paper before belatedly filing a Motion to Dismiss
Petitioner (complainant before the Labor Arbiter) appealed the dismissal of
xxxx9
his petition to the NLRC. On 28 May 1998 the NLRC set aside the decision
of the Labor Arbiter on the ground that the record was clear that petitioner
But the Court of Appeals ruled in favor of private respondents. It held that
had exhausted his remedy by submitting his case to the Grievance
the CBA "is the law between the parties and compliance therewith is
Committee of AMOSUP. Considering however that he could not obtain any
mandated by the express policy of the law."10 Hence, petitioner should

have followed the provision in the CBA requiring the submission of the
dispute to the Voluntary Arbitration Committee once the Grievance
Committee failed to settle the controversy.11 According to the Court of
Appeals, the parties did not have the choice to "volunteer" to refer the
dispute to the Voluntary Arbitrator or a Panel of Arbitrators when there was
already an agreement requiring them to do so. "Voluntary Arbitration"
means that it is binding because of a prior agreement or contract, while
"Compulsory Arbitration" is when the law declares the dispute subject to
arbitration, regardless of the consent or desire of the parties.12
The Court of Appeals further held that the Labor Code itself enumerates
the original and exclusive jurisdiction of the Voluntary Arbitrator or Panel of
Voluntary Arbitrators, and prohibits the NLRC and the Regional Directors of
the Department of Labor and Employment (DOLE) from entertaining cases
falling under the same.13 Thus, the fact that private respondents filed their
Position Paper first before filing their Motion to Dismiss was immaterial and
did not operate to confer jurisdiction upon the Labor Arbiter, following the
well-settled rule that jurisdiction is determined by law and not by consent
or agreement of the parties or by estoppel.14
Finally, the appellate court ruled that a case falling under the jurisdiction of
the Labor Arbiter as provided under Art. 217 of the Labor Code may be
lodged instead with a Voluntary Arbitrator because the law prefers, or gives
primacy, to voluntary arbitration instead of compulsory
arbitration.15 Consequently, the contention that the NLRC would be
deprived of its jurisdiction to try, hear and decide termination disputes
under Art. 217 of the Labor Code, should the instant dispute be referred to
the Voluntary Arbitration Committee, is clearly bereft of merit. 16 Besides,
the Voluntary Arbitrator, whether acting solely or in a panel, enjoys in law
the status of a quasi-judicial agency independent of, and apart from, the
NLRC since his decisions are not appealable to the latter.17
Celestino Vivero, in his petition for review assailing the Decision of the
Court of Appeals, alleges that the appellate court committed grave abuse
of discretion in holding that a Voluntary Arbitrator or Panel of Voluntary
Arbitrators, and not the Adjudication Branch of the NLRC, has jurisdiction
over his complaint for illegal dismissal. He claims that his complaint for
illegal dismissal was undeniably a termination dispute and did not, in any
way, involve an "interpretation or implementation of collective bargaining
agreement" or "interpretation" or "enforcement" of company personnel
policies. Thus, it should fall within the original and exclusive jurisdiction of
the NLRC and its Labor Arbiter, and not with a Voluntary Arbitrator, in
accordance with Art. 217 of the Labor Code.
Arbit-Part IV |20
Private respondents, on the other hand, allege that the case is clearly one
"involving the proper interpretation and implementation of the Grievance
Procedure found in the Collective Bargaining Agreement (CBA) between the
parties"18 because of petitioner’s allegation in his claim/assistance request
form submitted to the Union, to wit:
NATURE OF COMPLAINT
3. Illegal Dismissal - Reason: (1) That in this case it was the master of
M.V. SUNNY PRINCE Capt. Andersen who created the trouble with physical
injury and stating false allegation; (2) That there was no proper procedure
of grievance; (3) No proper notice of dismissal.
Is there a Notice of dismissal? _x_ Yes or ____ No
What date? 11 July 1994
Is there a Grievance Procedure observed? ____ Yes or _x_ No19
Private respondents further allege that the fact that petitioner sought the
assistance of his Union evidently shows that he himself was convinced that
his Complaint was within the ambit of the jurisdiction of the grievance
machinery and subsequently by a Panel of Voluntary Arbitrators as
provided for in their CBA, and as explicitly mandated by Art. 261 of the
Labor Code.20
Thus, the issue is whether the NLRC is deprived of jurisdiction over illegal
dismissal cases whenever a CBA provides for grievance machinery and
voluntary arbitration proceedings. Or, phrased in another way, does the
dismissal of an employee constitute a "grievance between the parties," as
defined under the provisions of the CBA, and consequently, within the
exclusive original jurisdiction of the Voluntary Arbitrators, thereby
rendering the NLRC without jurisdiction to decide the case?
On the original and exclusive jurisdiction of Labor Arbiters, Art. 217 of the
Labor Code provides -
Art. 217. Jurisdiction of Labor Arbiters and the Commission. - (a) Except as
otherwise provided under this Code, the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decide within thirty (30) calendar
days after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural: (1) Unfair
labor practice cases; (2) Termination disputes; (3) If accompanied with a

claim for reinstatement, those cases that workers may file involving wages,
rates of pay, hours of work and other terms and conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations; (5) Cases arising from any
violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts; and, (6) Except claims for Employees
Compensation, Social Security, Medicare and maternity benefits, all other
claims arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding
five thousand pesos (₱5,000.00) regardless of whether accompanied with a
claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all
cases decided by Labor Arbiters.
(c) Cases arising from the interpretation of collective bargaining
agreements and those arising from the interpretation or enforcement of
company personnel policies shall be disposed of by the Labor Arbiter by
referring the same to the grievance machinery and voluntary arbitration as
may be provided in said agreements (emphasis supplied).
However, any or all of these cases may, by agreement of the parties, be
submitted to a Voluntary Arbitrator or Panel of Voluntary Arbitrators for
adjudication. Articles 261 and 262 of the Labor Code provide -
Art. 261. Jurisdiction of Voluntary Arbitrators or Panel of Voluntary
Arbitrators. - The Voluntary Arbitrator or panel of Voluntary Arbitrators
shall have original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or implementation of
the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies referred to in
the immediately preceding article. Accordingly, violations of a Collective
Bargaining Agreement, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of this
article, gross violations of Collective Bargaining Agreement shall mean
flagrant and/or malicious refusal to comply with the economic provisions of
such agreement.
The Commission, its Regional Offices and the Regional Directors of the
Department of Labor and Employment shall not entertain disputes,
grievances or matters under the exclusive and original jurisdiction of the
Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately
Arbit-Part IV |21
dispose and refer the same to the Grievance Machinery or Voluntary
Arbitration provided in the Collective Bargaining Agreement.
Art. 262. Jurisdiction Over Other Labor Disputes. - The Voluntary Arbitrator
or panel of Voluntary Arbitrators, upon agreement of the parties, shall also
hear and decide all other labor disputes including unfair labor practices and
bargaining deadlocks (emphasis supplied).
Private respondents attempt to justify the conferment of jurisdiction over
the case on the Voluntary Arbitrator on the ground that the issue involves
the proper interpretation and implementation of the Grievance Procedure
found in the CBA. They point out that when petitioner sought the
assistance of his Union to avail of the grievance machinery, he in effect
submitted himself to the procedure set forth in the CBA regarding
submission of unresolved grievances to a Voluntary Arbitrator.
The argument is untenable. The case is primarily a termination dispute. It
is clear from the claim/assistance request form submitted by petitioner to
AMOSUP that he was challenging the legality of his dismissal for lack of
cause and lack of due process. The issue of whether there was proper
interpretation and implementation of the CBA provisions comes into play
only because the grievance procedure provided for in the CBA was not
observed after he sought his Union’s assistance in contesting his
termination. Thus, the question to be resolved necessarily springs from the
primary issue of whether there was a valid termination; without this, then
there would be no reason to invoke the need to interpret and implement
the CBA provisions properly.
In San Miguel Corp. v. National Labor Relations Commission21 this Court
held that the phrase "all other labor disputes" may include termination
disputes provided that the agreement between the Union and the Company
states "in unequivocal language that [the parties] conform to the
submission of termination disputes and unfair labor practices to voluntary
arbitration."22 Ergo, it is not sufficient to merely say that parties to the CBA
agree on the principle that "all disputes" should first be submitted to a
Voluntary Arbitrator. There is a need for an express stipulation in the CBA
that illegal termination disputes should be resolved by a Voluntary
Arbitrator or Panel of Voluntary Arbitrators, since the same fall within a
special class of disputes that are generally within the exclusive original
jurisdiction of Labor Arbiters by express provision of law. Absent such
express stipulation, the phrase "all disputes" should be construed as
limited to the areas of conflict traditionally within the jurisdiction of
Voluntary Arbitrators, i.e., disputes relating to contract-interpretation,
 Arbit-Part IV |22

contract-implementation, or interpretation or enforcement of company a Voluntary Arbitrator for resolution; in fact, petitioner precisely requested
personnel policies. Illegal termination disputes - not falling within any of the Court to recognize the jurisdiction of the Labor Arbiter over the case.
these categories - should then be considered as a special area of interest The Court had held in San Miguel Corp. v. NLRC28 that neither officials nor
governed by a specific provision of law. tribunals can assume jurisdiction in the absence of an express legal
conferment. In the same manner, petitioner cannot arrogate into the
In this case, however, while the parties did agree to make termination powers of Voluntary Arbitrators the original and exclusive jurisdiction of
disputes the proper subject of voluntary arbitration, such submission Labor Arbiters over unfair labor practices, termination disputes, and claims
remains discretionary upon the parties. A perusal of the CBA provisions for damages, in the absence of an express agreement between the parties
shows that Sec. 6, Art. XII (Grievance Procedure) of the CBA is the general in order for Art. 262 of the Labor Code to apply in the case at bar. In other
agreement of the parties to refer grievances, disputes or words, the Court of Appeals is correct in holding that Voluntary Arbitration
misunderstandings to a grievance committee, and henceforth, to a is mandatory in character if there is a specific agreement between the
voluntary arbitration committee. The requirement of specificity is fulfilled parties to that effect. It must be stressed however that, in the case at bar,
by Art. XVII (Job Security) where the parties agreed - the use of the word "may" shows the intention of the parties to reserve the
right of recourse to Labor Arbiters.
Sec. 1. Promotion, demotion, suspension, dismissal or disciplinary action of
the seaman shall be left to the discretion of the Master, upon consultation The CBA clarifies the proper procedure to be followed in situations where
with the Company and notification to the Union. This notwithstanding, any the parties expressly stipulate to submit termination disputes to the
and all disciplinary action taken on board the vessel shall be provided for in jurisdiction of a Voluntary Arbitrator or Panel of Voluntary Arbitrators. For
Appendix "B" of this Agreement x x x x 23 when the parties have validly agreed on a procedure for resolving
grievances and to submit a dispute to voluntary arbitration then that
Sec. 4. x x x x Transfer, lay-off or discipline of seamen for incompetence,
procedure should be strictly observed.1âwphi1 Non-compliance therewith
inefficiency, neglect of work, bad behavior, perpetration of crime,
cannot be excused, as petitioner suggests, by the fact that he is not well-
drunkenness, insubordination, desertion, violation of x x x regulations of
versed with the "fine prints" of the CBA. It was his responsibility to find
any port touched by the Company’s vessel/s and other just and proper
out, through his Union, what the provisions of the CBA were and how they
causes shall be at Master’s discretion x x x in the high seas or foreign
could affect his rights. As provided in Art. 241, par. (p), of the Labor Code
ports. The Master shall refer the case/dispute upon reaching port and if not
-
satisfactorily settled, the case/dispute may be referred to the grievance
machinery or procedure hereinafter provided (emphasis supplied).24 (p) It shall be the duty of any labor organization and its officers to inform
its members on the provisions of its constitution and by-laws, collective
The use of the word "may" shows the intention of the parties to reserve the
bargaining agreement, the prevailing labor relations system and all their
right to submit the illegal termination dispute to the jurisdiction of the
rights and obligations under existing labor laws.
Labor Arbiter, rather than to a Voluntary Arbitrator. Petitioner validly
exercised his option to submit his case to a Labor Arbiter when he filed In fact, any violation of the rights and conditions of union membership is a
his Complaint before the proper government agency. "ground for cancellation of union registration or expulsion of officer from
office, whichever is appropriate. At least thirty percent (30%) of all the
Private respondents invoke Navarro III v. Damasco25 wherein the Court
members of a union or any member or members especially concerned may
held that "it is the policy of the state to promote voluntary arbitration as a
report such violation to the Bureau [of Labor Relations] x x x x"29
mode of settling disputes."26 It should be noted, however, that in Navarro
III all the parties voluntarily submitted to the jurisdiction of the Voluntary It may be observed that under Policy Instruction No. 56 of the Secretary of
Arbitrator when they filed their respective position papers and submitted Labor, dated 6 April 1993, "Clarifying the Jurisdiction Between Voluntary
documentary evidence before him. Furthermore, they manifested during Arbitrators and Labor Arbiters Over Termination Cases and Providing
the initial conference that they were not questioning the authority of the Guidelines for the Referral of Said Cases Originally Filed with the NLRC to
Voluntary Arbitrator.27 In the case at bar, the dispute was never brought to the NCMB," termination cases arising in or resulting from the interpretation
 Arbit-Part IV |23

and implementation of collective bargaining agreements and interpretation should not be deprived of his legitimate recourse because of the refusal of
and enforcement of company personnel policies which were initially both Union and respondent companies to follow the grievance procedure.
processed at the various steps of the plant-level Grievance Procedures
under the parties' collective bargaining agreements fall within the original WHEREFORE, the Decision of the Court of Appeals is SET ASIDE and the
and exclusive jurisdiction of the voluntary arbitrator pursuant to Art. 217 case is remanded to the Labor Arbiter to dispose of the case with dispatch
(c) and Art. 261 of the Labor Code; and, if filed before the Labor Arbiter, until terminated considering the undue delay already incurred.
these cases shall be dismissed by the Labor Arbiter for lack of jurisdiction
SO ORDERED.
and referred to the concerned NCMB Regional Branch for appropriate action
towards an expeditious selection by the parties of a Voluntary Arbitrator or
Panel of Arbitrators based on the procedures agreed upon in the CBA.

As earlier stated, the instant case is a termination dispute falling under the
original and exclusive jurisdiction of the Labor Arbiter, and does not
specifically involve the application, implementation or enforcement of
company personnel policies contemplated in Policy Instruction No. 56.
Consequently, Policy Instruction No. 56 does not apply in the case at bar.
In any case, private respondents never invoked the application of Policy
Instruction No. 56 in their Position Papers, neither did they raise the
question in their Motion to Dismiss which they filed nine (9) months after
the filing of their Position Papers. At this late stage of the proceedings, it
would not serve the ends of justice if this case is referred back to a
Voluntary Arbitrator considering that both the AMOSUP and private
respondents have submitted to the jurisdiction of the Labor Arbiter by filing
their respective Position Papers and ignoring the grievance procedure set
forth in their CBA.

After the grievance proceedings have failed to bring about a resolution,

AMOSUP, as agent of petitioner, should have informed him of his option to
settle the case through voluntary arbitration. Private respondents, on their
part, should have timely invoked the provision of their CBA requiring the
referral of their unresolved disputes to a Voluntary Arbitrator once it
became apparent that the grievance machinery failed to resolve it prior to
the filing of the case before the proper tribunal. The private respondents
should not have waited for nine (9) months from the filing of their Position
Paper with the POEA before it moved to dismiss the case purportedly for
lack of jurisdiction. As it is, private respondents are deemed to have
waived their right to question the procedure followed by petitioner,
assuming that they have the right to do so. Under their CBA, both Union
and respondent companies are responsible for selecting an impartial
arbitrator or for convening an arbitration committee;30 yet, it is apparent
that neither made a move towards this end. Consequently, petitioner

6. G.R. No. 140960 January 20, 2003
LUDO & LUYM CORPORATION, petitioner,
vs.
FERDINAND SAORNIDO as voluntary arbitrator and LUDO
EMPLOYEES UNION (LEU) representing 214 of its officers and
members, respondents.
QUISUMBING, J.:
This petition for review on certiorari seeks to annul and set aside the
decision1 of the Court of Appeals promulgated on July 6, 1999 and its
Order denying petitioner’s motion for reconsideration in CA-G.R. SP No.
44341.
The relevant facts as substantially recited by the Court of Appeals in its
decision are as follows:
Petitioner LUDO & LUYM CORPORATION (LUDO for brevity) is a domestic
corporation engaged in the manufacture of coconut oil, corn starch, glucose
and related products. It operates a manufacturing plant located at Tupas
Street, Cebu City and a wharf where raw materials and finished products
are shipped out.
In the course of its business operations, LUDO engaged the arrastre
services of Cresencio Lu Arrastre Services (CLAS) for the loading and
unloading of its finished products at the wharf. Accordingly, several
arrastre workers were deployed by CLAS to perform the services needed by
LUDO.
These arrastre workers were subsequently hired, on different dates, as
regular rank-and-file employees of LUDO every time the latter needed
additional manpower services. Said employees thereafter joined
respondent union, the LUDO Employees Union (LEU), which acted as the
exclusive bargaining agent of the rank-and-file employees.
On April 13, 1992, respondent union entered into a collective bargaining
agreement with LUDO which provides certain benefits to the employees,
the amount of which vary according to the length of service rendered by
the availing employee.
Thereafter, the union requested LUDO to include in its members’ period of
service the time during which they rendered arrastre services to LUDO
Arbit-Part IV |24
through the CLAS so that they could get higher benefits. LUDO failed to act
on the request. Thus, the matter was submitted for voluntary arbitration.
The parties accordingly executed a submission agreement raising the sole
issue of the date of regularization of the workers for resolution by the
Voluntary Arbitrator.
In its decision dated April 18, 1997, the Voluntary Arbitrator ruled that: (1)
the respondent employees were engaged in activities necessary and
desirable to the business of petitioner, and (2) CLAS is a labor-only
contractor of petitioner.2 It disposed of the case thus:
WHEREFORE, in view of the foregoing, this Voluntary Arbitrator finds the
claims of the complainants meritorious and so hold that:
a. the 214 complainants, as listed in the Annex A, shall be considered
regular employees of the respondents six (6) months from the first day of
service at CLAS;
b. the said complainants, being entitled to the CBA benefits during the
regular employment, are awarded a) sick leave, b) vacation leave & c)
annual wage and salary increases during such period in the amount of FIVE
MILLION SEVEN HUNDRED SEVEN THOUSAND TWO HUNDRED SIXTY ONE
PESOS AND SIXTY ONE CENTAVOS (P5,707,261.61) as computed in
"Annex A";
c. the respondents shall pay attorney’s fees of ten (10) percent of the total
award;
d. an interest of twelve (12) percent per annum or one (1) percent per
month shall be imposed to the award from the date of promulgation until
fully paid if only to speed up the payment of these long over due CBA
benefits deprived of the complaining workers.
Accordingly, all separation and/or retirement benefits shall be construed
from the date of regularization aforementioned subject only to the
appropriate government laws and other social legislation.
SO ORDERED.3
In due time, LUDO filed a motion for reconsideration, which was denied. On
appeal, the Court of Appeals affirmed in toto the decision of the Voluntary
Arbitrator, thus:

WHEREFORE, finding no reversible error committed by respondent
voluntary arbitrator, the instant petition is hereby DISMISSED.
SO ORDERED.4
Hence this petition. Before us, petitioner raises the following issues:
I
WHETHER OR NOT BENEFITS CONSISTING OF SALARY INCREASES,
VACATION LEAVE AND SICK LEAVE BENEFITS FOR THE YEARS 1977 TO
1987 ARE ALREADY BARRED BY PRESCRIPTION WHEN PRIVATE
RESPONDENTS FILED THEIR CASE IN JANUARY 1995;
II
WHETHER OR NOT A VOLUNTARY ARBITRATOR CAN AWARD BENEFITS
NOT CLAIMED IN THE SUBMISSION AGREEMENT.5
Petitioner contends that the appellate court gravely erred when it upheld
the award of benefits which were beyond the terms of submission
agreement. Petitioner asserts that the arbitrator must confine its
adjudication to those issues submitted by the parties for arbitration, which
in this case is the sole issue of the date of regularization of the workers.
Hence, the award of benefits by the arbitrator was done in excess of
jurisdiction.6
Respondents, for their part, aver that the three-year prescriptive period is
reckoned only from the time the obligor declares his refusal to comply with
his obligation in clear and unequivocal terms. In this case, respondents
maintain that LUDO merely promised to review the company records in
response to respondents’ demand for adjustment in the date of their
regularization without making a categorical statement of refusal. 7 On the
matter of the benefits, respondents argue that the arbitrator is empowered
to award the assailed benefits because notwithstanding the sole issue of
the date of regularization, standard companion issues on reliefs and
remedies are deemed incorporated. Otherwise, the whole arbitration
process would be rendered purely academic and the law creating it inutile.8
The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators
and Labor Arbiters is clearly defined and specifically delineated in the Labor
Code. The pertinent provisions of the Labor Code, read:
Arbit-Part IV |25
Art. 217. Jurisdiction of Labor Arbiters and the Commission. --- (a) Except
as otherwise provided under this Code the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for decision
without extension, even in the absence of stenographic notes, the following
cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases:
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers
may file involving wage, rates of pay, hours of work and other terms and
conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relations;
xxx
Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary
Arbitrators. — The Voluntary Arbitrator or panel of Voluntary Arbitrators
shall have original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or implementation of
the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies referred to in
the immediately preceding article. Accordingly, violations of a Collective
Bargaining Agreement, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of this
article, gross violations of Collective Bargaining Agreement shall mean
flagrant and/or malicious refusal to comply with the economic provisions of
such agreement.
The Commission, its Regional Offices and the Regional Directors of the
Department of Labor and Employment shall not entertain disputes,
grievances or matters under the exclusive and original jurisdiction of the
Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately
dispose and refer the same to the Grievance Machinery or Voluntary
Arbitration provided in the Collective Bargaining Agreement.
Art. 262. Jurisdiction over other labor disputes. — The Voluntary Arbitrator
or panel of Voluntary Arbitrators, upon agreement of the parties, shall also
 Arbit-Part IV |26

hear and decide all other labor disputes including unfair labor practices and By the same token, the issue of regularization should be viewed as two-
bargaining deadlocks." tiered issue. While the submission agreement mentioned only the
determination of the date or regularization, law and jurisprudence give the
In construing the above provisions, we held in San Jose vs. NLRC, 9 that voluntary arbitrator enough leeway of authority as well as adequate
the jurisdiction of the Labor Arbiter and the Voluntary Arbitrator or Panel of prerogative to accomplish the reason for which the law on voluntary
Voluntary Arbitrators over the cases enumerated in the Labor Code, arbitration was created – speedy labor justice. It bears stressing that the
Articles 217, 261 and 262, can possibly include money claims in one form underlying reason why this case arose is to settle, once and for all, the
or another.10 Comparatively, in Reformist Union of R.B. Liner, Inc. vs. ultimate question of whether respondent employees are entitled to higher
NLRC,11 compulsory arbitration has been defined both as "the process of benefits. To require them to file another action for payment of such
settlement of labor disputes by a government agency which has the benefits would certainly undermine labor proceedings and contravene the
authority to investigate and to make an award which is binding on all the constitutional mandate providing full protection to labor.14
parties, and as a mode of arbitration where the parties are compelled to
accept the resolution of their dispute through arbitration by a third party As regards petitioner’s contention that the money claim in this case is
(emphasis supplied)."12 While a voluntary arbitrator is not part of the barred by prescription, we hold that this contention is without merit. So is
governmental unit or labor department’s personnel, said arbitrator renders petitioner’s stance that the benefits claimed by the respondents, i.e., sick
arbitration services provided for under labor laws. leave, vacation leave and 13th-month pay, had already prescribed,
considering the three-year period for the institution of monetary
Generally, the arbitrator is expected to decide only those questions claims.15 Such determination is a question of fact which must be
expressly delineated by the submission agreement. Nevertheless, the ascertained based on the evidence, both oral and documentary, presented
arbitrator can assume that he has the necessary power to make a final by the parties before the Voluntary Arbitrator. In this case, the Voluntary
settlement since arbitration is the final resort for the adjudication of Arbitrator found that prescription has not as yet set in to bar the
disputes.13 The succinct reasoning enunciated by the CA in support of its respondents’ claims for the monetary benefits awarded to them. Basic is
holding, that the Voluntary Arbitrator in a labor controversy has jurisdiction the rule that findings of fact of administrative and quasi-judicial bodies,
to render the questioned arbitral awards, deserves our concurrence, thus: which have acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only great respect but even
In general, the arbitrator is expected to decide those questions expressly
finality.16 Here, the Voluntary Arbitrator received the evidence of the
stated and limited in the submission agreement. However, since arbitration
parties first-hand. No compelling reason has been shown for us to diverge
is the final resort for the adjudication of disputes, the arbitrator can
from the findings of the Voluntary Arbitrator, especially since the appellate
assume that he has the power to make a final settlement. Thus, assuming
court affirmed his findings, that it took some time for respondent
that the submission empowers the arbitrator to decide whether an
employees to ventilate their claims because of the repeated assurances
employee was discharged for just cause, the arbitrator in this instance can
made by the petitioner that it would review the company records and
reasonable assume that his powers extended beyond giving a yes-or-no
determine therefrom the validity of the claims, without expressing a
answer and included the power to reinstate him with or without back pay.
categorical denial of their claims. As elucidated by the Voluntary Arbitrator:
In one case, the Supreme Court stressed that "xxx the Voluntary Arbitrator
The respondents had raised prescription as defense. The controlling law, as
had plenary jurisdiction and authority to interpret the agreement to
ruled by the High Court, is:
arbitrate and to determine the scope of his own authority subject only, in a
proper case, to the certiorari jurisdiction of this Court. The Arbitrator, as "The cause of action accrues until the party obligated refuses xxx to
already indicated, viewed his authority as embracing not merely the comply with his duty. Being warded off by promises, the workers not
determination of the abstract question of whether or not a performance having decided to assert [their] right[s], [their] causes of action had not
bonus was to be granted but also, in the affirmative case, the amount accrued…" (Citation omitted.)
thereof.
 Arbit-Part IV |27

Since the parties had continued their negotiations even after the matter
was raised before the Grievance Procedure and the voluntary arbitration,
the respondents had not refused to comply with their duty. They just
wanted the complainants to present some proofs. The complainant’s cause
of action had not therefore accrued yet. Besides, in the earlier voluntary
arbitration case aforementioned involving exactly the same issue and
employees similarly situated as the complainants’, the same defense was
raised and dismissed by Honorable Thelma Jordan, Voluntary Arbitrator.

In fact, the respondents’ promised to correct their length of service and

grant them the back CBA benefits if the complainants can prove they are
entitled rendered the former in estoppel, barring them from raising the
defense of laches or prescription. To hold otherwise amounts to rewarding
the respondents for their duplicitous representation and abet them in a
dishonest scheme against their workers.17

Indeed, as the Court of Appeals concluded, under the equitable principle of

estoppel, it will be the height of injustice if we will brush aside the
employees’ claims on a mere technicality, especially when it is petitioner’s
own action that prevented them from interposing the claims within the
prescribed period.

WHEREFORE, the petition is denied. The appealed decision of the Court of

Appeals in CA-G.R. SP No. 44341 and the resolution denying petitioner’s
motion for reconsideration, are AFFIRMED. Costs against petitioner.

SO ORDERED.
 Arbit-Part IV |28

7. G.R. No. 119293 June 10, 2003
SAN MIGUEL CORPORATION, Petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, Second Division,
ILAW AT BUKLOD NG MANGGAGAWA (IBM), Respondents.
DECISION
AZCUNA, J.:
Before us is a petition for certiorari and prohibition seeking to set aside the
decision of the Second Division of the National Labor Relations Commission
(NLRC) in Injunction Case No. 00468-94 dated November 29, 1994,1 and
its resolution dated February 1, 19952 denying petitioner’s motion for
reconsideration.
Petitioner San Miguel Corporation (SMC) and respondent Ilaw at Buklod ng
Manggagawa (IBM), exclusive bargaining agent of petitioner’s daily-paid
rank and file employees, executed a Collective Bargaining Agreement
(CBA) under which they agreed to submit all disputes to grievance and
arbitration proceedings. The CBA also included a mutually enforceable no- Section 2. The COMPANY agrees that there shall be no lockout during the
strike no-lockout agreement. The pertinent provisions of the said CBA are term of this Agreement so long as the procedure outlined in Article IV
quoted hereunder:
Section 1. Any and all disputes, disagreements and controversies of any
kind between the COMPANY and the UNION and/or the workers involving
or relating to wages, hours of work, conditions of employment and/or
employer-employee relations arising during the effectivity of this
Agreement or any renewal thereof, shall be settled by arbitration through a
Committee in accordance with the procedure established in this Article. No
dispute, disagreement or controversy which may be submitted to the
grievance procedure in Article IV shall be presented for arbitration until all
the steps of the grievance procedure are exhausted.
xxx xxx xxx
ARTICLE VI
STRIKES AND WORK STOPPAGES
Section 1. The UNION agrees that there shall be no strikes, walkouts,
stoppage or slowdown of work, boycotts, secondary boycotts, refusal to
handle any merchandise, picketing, sit-down strikes of any kind,
sympathetic or general strikes, or any other interference with any of the
operations of the COMPANY during the term of this Agreement.
hereof is followed by the UNION.3

ARTICLE IV On April 11, 1994, IBM, through its vice-president Alfredo Colomeda, filed
with the National Conciliation and Mediation Board (NCMB) a notice of
GRIEVANCE MACHINERY
strike, docketed as NCMB-NCR-NS-04-180-94, against petitioner for
allegedly committing: (1) illegal dismissal of union members, (2) illegal
Section 1. - The parties hereto agree on the principle that all disputes
transfer, (3) violation of CBA, (4) contracting out of jobs being performed
between labor and management may be solved through friendly
by union members, (5) labor-only contracting, (6) harassment of union
negotiation;. . . that an open conflict in any form involves losses to the
officers and members, (7) non-recognition of duly-elected union officers,
parties, and that, therefore, every effort shall be exerted to avoid such an
and (8) other acts of unfair labor practice.4
open conflict. In furtherance of the foregoing principle, the parties hereto
have agreed to establish a procedure for the adjustment of grievances so
The next day, IBM filed another notice of strike, this time through its
as to (1) provide an opportunity for discussion of any request or complaint
president Edilberto Galvez, raising similar grounds: (1) illegal transfer, (2)
and (2) establish procedure for the processing and settlement of
labor-only contracting, (3) violation of CBA, (4) dismissal of union officers
grievances.
and members, and (5) other acts of unfair labor practice. This was
docketed as NCMB-NCR-NS-04-182-94.5
xxx xxx xxx
The Galvez group subsequently requested the NCMB to consolidate its
ARTICLE V
notice of strike with that of the Colomeda group, 6 to which the latter
ARBITRATION
opposed, alleging Galvez’s lack of authority in filing the same.7
 Arbit-Part IV |29

Petitioner thereafter filed a Motion for Severance of Notices of Strike with are ancillary issues to the main question, that is, the union
Motion to Dismiss, on the grounds that the notices raised non-strikeable leadership...12 (Emphasis supplied)
issues and that they affected four corporations which are separate and
distinct from each other.8 Meanwhile, on May 23, 1994, the Galvez group filed its second notice of
strike against petitioner, docketed as NCMB-NCR-NS-05-263-94. Additional
After several conciliation meetings, NCMB Director Reynaldo Ubaldo found grounds were set forth therein, including discrimination, coercion of
that the real issues involved are non-strikeable. Hence on May 2, 1994, he employees, illegal lockout and illegal closure.13 The NCMB however found
issued separate letter-orders to both union groups, converting their notices these grounds to be mere amplifications of those alleged in the first notice
of strike into preventive mediation. The said letter-orders, in part, read: that the group filed. It therefore ordered the consolidation of the second
notice with the preceding one that was earlier reduced to preventive
During the conciliation meetings, it was clearly established that the real mediation.14 On the same date, the group likewise notified the NCMB of its
issues involved are illegal dismissal, labor only contracting and internal intention to hold a strike vote on May 27, 1994.
union disputes, which affect not only the interest of the San Miguel
Corporation but also the interests of the MAGNOLIA-NESTLE On May 27, 1994, the Colomeda group notified the NCMB of the results of
CORPORATION, the SAN MIGUEL FOODS, INC., and the SAN MIGUEL their strike vote, which favored the holding of a strike. 15 In reply, NCMB
JUICES, INC. issued a letter again advising them that by virtue of the PAL v. Drilon
ruling, their notice of strike is deemed not to have been filed, consequently
Considering that San Miguel Corporation is the only impleaded employer- invalidating any subsequent strike for lack of compliance with the notice
respondent, and considering further that the aforesaid companies are requirement.16 Despite this and the pendency of the preventive mediation
separate and distinct corporate entities, we deemed it wise to reduce and proceedings, on June 4, 1994, IBM went on strike. The strike paralyzed the
treat your Notice of Strike as Preventive Mediation case for the four (4) operations of petitioner, causing it losses allegedly worth P29.98 million in
different companies in order to evolve voluntary settlement of the disputes. daily lost production.17
. . .9 (Emphasis supplied)
Two days after the declaration of strike, or on June 6, 1994, petitioner filed
On May 16, 1994, while separate preventive mediation conferences were with public respondent NLRC an amended Petition for Injunction with
ongoing, the Colomeda group filed with the NCMB a notice of holding a Prayer for the Issuance of Temporary Restraining Order, Free Ingress and
strike vote. Petitioner opposed by filing a Manifestation and Motion to Egress Order and Deputization Order.18 After due hearing and ocular
Declare Notice of Strike Vote Illegal,10 invoking the case of PAL v. inspection, the NLRC on June 13, 1994 resolved to issue a temporary
Drilon,11 which held that no strike could be legally declared during the restraining order (TRO) directing free ingress to and egress from
pendency of preventive mediation. NCMB Director Ubaldo in response petitioner’s plants, without prejudice to the union’s right to peaceful
issued another letter to the Colomeda Group reiterating the conversion of picketing and continuous hearings on the injunction case.19
the notice of strike into a case of preventive mediation and emphasizing
the findings that the grounds raised center only on an intra-union conflict, To minimize further damage to itself, petitioner on June 16, 1994, entered
which is not strikeable, thus: into a Memorandum of Agreement (MOA) with the respondent-union,
calling for a lifting of the picket lines and resumption of work in exchange
xxx xxx xxx of "good faith talks" between the management and the labor management
committees. The MOA, signed in the presence of Department of Labor and
A perusal of the records of the case clearly shows that the basic point to be
Employment (DOLE) officials, expressly stated that cases filed in relation to
resolved entails the question of as to who between the two (2) groups shall
their dispute will continue and will not be affected in any manner
represent the workers for collective bargaining purposes, which has been
whatsoever by the agreement.20 The picket lines ended and work was then
the subject of a Petition for Interpleader case pending resolution before the
resumed.
Office of the Secretary of Labor and Employment. Similarly, the other
issues raised which have been discussed by the parties at the plant level,

Respondent thereafter moved to reconsider the issuance of the TRO, and
sought to dismiss the injunction case in view of the cessation of its
picketing activities as a result of the signed MOA. It argued that the case
had become moot and academic there being no more prohibited activities
to restrain, be they actual or threatened.21 Petitioner, however, opposed
and submitted copies of flyers being circulated by IBM, as proof of the
union’s alleged threat to revive the strike.22 The NLRC did not rule on the
opposition to the TRO and allowed it to lapse.
On November 29, 1994, the NLRC issued the challenged decision, denying
the petition for injunction for lack of factual basis. It found that the
circumstances at the time did not constitute or no longer constituted an
actual or threatened commission of unlawful acts.23 It likewise denied
petitioner’s motion for reconsideration in its resolution dated February 1,
1995.24
Hence, this petition.
Aggrieved by public respondent’s denial of a permanent injunction,
petitioner contends that:
A.
THE NLRC GRAVELY ABUSED ITS DISCRETION WHEN IT FAILED TO
ENFORCE, BY INJUNCTION, THE PARTIES’ RECIPROCAL OBLIGATIONS TO
SUBMIT TO ARBITRATION AND NOT TO STRIKE.
B.
THE NLRC GRAVELY ABUSED ITS DISCRETION IN WITHHOLDING
INJUNCTION WHICH IS THE ONLY IMMEDIATE AND EFFECTIVE
SUBSTITUTE FOR THE DISASTROUS ECONOMIC WARFARE THAT
ARBITRATION IS DESIGNED TO AVOID.
C.
THE NLRC GRAVELY ABUSED ITS DISCRETION IN ALLOWING THE TRO TO
LAPSE WITHOUT RESOLVING THE PRAYER FOR INJUNCTION, DENYING
INJUNCTION WITHOUT EXPRESSING THE FACTS AND THE LAW ON WHICH
IT IS BASED AND ISSUING ITS DENIAL FIVE MONTHS AFTER THE LAPSE
OF THE TRO.25
We find for the petitioner.
Arbit-Part IV |30
Article 254 of the Labor Code provides that no temporary or permanent
injunction or restraining order in any case involving or growing out of labor
disputes shall be issued by any court or other entity except as otherwise
provided in Articles 218 and 264 of the Labor Code. Under the first
exception, Article 218 (e) of the Labor Code expressly confers upon the
NLRC the power to "enjoin or restrain actual and threatened commission of
any or all prohibited or unlawful acts, or to require the performance of a
particular act in any labor dispute which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party x x x." The second exception,
on the other hand, is when the labor organization or the employer engages
in any of the "prohibited activities" enumerated in Article 264.
Pursuant to Article 218 (e), the coercive measure of injunction may also be
used to restrain an actual or threatened unlawful strike. In the case of San
Miguel Corporation v. NLRC,26 where the same issue of NLRC’s duty to
enjoin an unlawful strike was raised, we ruled that the NLRC committed
grave abuse of discretion when it denied the petition for injunction to
restrain the union from declaring a strike based on non-strikeable grounds.
Further, in IBM v. NLRC,27 we held that it is the "legal duty and obligation"
of the NLRC to enjoin a partial strike staged in violation of the law. Failure
promptly to issue an injunction by the public respondent was likewise held
therein to be an abuse of discretion.
In the case at bar, petitioner sought a permanent injunction to enjoin the
respondent’s strike. A strike is considered as the most effective weapon in
protecting the rights of the employees to improve the terms and conditions
of their employment. However, to be valid, a strike must be pursued within
legal bounds.28 One of the procedural requisites that Article 263 of the
Labor Code and its Implementing Rules prescribe is the filing of a valid
notice of strike with the NCMB. Imposed for the purpose of encouraging the
voluntary settlement of disputes,29 this requirement has been held to be
mandatory, the lack of which shall render a strike illegal.30
In the present case, NCMB converted IBM’s notices into preventive
mediation as it found that the real issues raised are non-strikeable. Such
order is in pursuance of the NCMB’s duty to exert "all efforts at mediation
and conciliation to enable the parties to settle the dispute amicably,"31 and
in line with the state policy of favoring voluntary modes of settling labor
disputes.32 In accordance with the Implementing Rules of the Labor Code,
the said conversion has the effect of dismissing the notices of strike filed
by respondent.33 A case in point is PAL v. Drilon,34 where we declared a
strike illegal for lack of a valid notice of strike, in view of the NCMB’s
 Arbit-Part IV |31

conversion of the notice therein into a preventive mediation case. We cited jurisprudence do not squarely cover and apply in this case, as they
ruled, thus: are not similarly situated and the remedy sought for were different.37

The NCMB had declared the notice of strike as "appropriate for preventive Unfortunately, the NLRC decision stated no reason to substantiate the
mediation." The effect of that declaration (which PALEA did not ask to be above conclusion.1âwphi1
reconsidered or set aside) was to drop the case from the docket of notice
of strikes, as provided in Rule 41 of the NCMB Rules, as if there was no Public respondent, in its decision, moreover ruled that there was a lack of
notice of strike. During the pendency of preventive mediation proceedings factual basis in issuing the injunction. Contrary to the NLRC’s finding, we
no strike could be legally declared... The strike which the union mounted, find that at the time the injunction was being sought, there existed a threat
while preventive mediation proceedings were ongoing, was aptly described to revive the unlawful strike as evidenced by the flyers then being
by the petitioner as "an ambush." (Emphasis supplied) circulated by the IBM-NCR Council which led the union. These flyers
categorically declared: "Ipaalala n’yo sa management na hindi iniaatras
Clearly, therefore, applying the aforecited ruling to the case at bar, when ang ating Notice of Strike (NOS) at anumang oras ay pwede nating muling
the NCMB ordered the preventive mediation on May 2, 1994, respondent itirik ang picket line."38 These flyers were not denied by respondent, and
had thereupon lost the notices of strike it had filed. Subsequently, were dated June 19, 1994, just a day after the union’s manifestation with
however, it still defiantly proceeded with the strike while mediation was the NLRC that there existed no threat of commission of prohibited
ongoing, and notwithstanding the letter-advisories of NCMB warning it of activities.
its lack of notice of strike. In the case of NUWHRAIN v. NLRC,35 where the
petitioner-union therein similarly defied a prohibition by the NCMB, we Moreover, it bears stressing that Article 264(a) of the Labor
said: Code39 explicitly states that a declaration of strike without first having filed
the required notice is a prohibited activity, which may be prevented
Petitioners should have complied with the prohibition to strike ordered by through an injunction in accordance with Article 254. Clearly, public
the NCMB when the latter dismissed the notices of strike after finding that respondent should have granted the injunctive relief to prevent the grave
the alleged acts of discrimination of the hotel were not ULP, hence not damage brought about by the unlawful strike.
"strikeable." The refusal of the petitioners to heed said proscription of the
NCMB is reflective of bad faith. Also noteworthy is public respondent’s disregard of petitioner’s argument
pointing out the union’s failure to observe the CBA provisions on grievance
Such disregard of the mediation proceedings was a blatant violation of the and arbitration. In the case of San Miguel Corp. v. NLRC,40 we ruled that
Implementing Rules, which explicitly oblige the parties to bargain the union therein violated the mandatory provisions of the CBA when it
collectively in good faith and prohibit them from impeding or disrupting the filed a notice of strike without availing of the remedies prescribed therein.
proceedings.36 Thus we held:

The NCMB having no coercive powers of injunction, petitioner sought x x x For failing to exhaust all steps in the grievance machinery and
recourse from the public respondent. The NLRC issued a TRO only for free arbitration proceedings provided in the Collective Bargaining Agreement,
ingress to and egress from petitioner’s plants, but did not enjoin the the notice of strike should have been dismissed by the NLRC and private
unlawful strike itself. It ignored the fatal lack of notice of strike, and five respondent union ordered to proceed with the grievance and arbitration
months after came out with a decision summarily rejecting petitioner’s proceedings. In the case of Liberal Labor Union vs. Phil. Can Co., the court
cited jurisprudence in this wise: declared as illegal the strike staged by the union for not complying with the
grievance procedure provided in the collective bargaining agreement. . .
Complainant’s scholarly and impressive arguments, formidably supported (Citations omitted)
by a long line of jurisprudence cannot however be appropriately considered
in the favorable resolution of the instant case for the complainant. The As in the abovecited case, petitioner herein evinced its willingness to
negotiate with the union by seeking for an order from the NLRC to compel
 Arbit-Part IV |32

observance of the grievance and arbitration proceedings. Respondent

however resorted to force without exhausting all available means within its
reach. Such infringement of the aforecited CBA provisions constitutes
further justification for the issuance of an injunction against the strike. As
we said long ago: "Strikes held in violation of the terms contained in a
collective bargaining agreement are illegal especially when they provide for
conclusive arbitration clauses. These agreements must be strictly adhered
to and respected if their ends have to be achieved."41

As to petitioner’s allegation of violation of the no-strike provision in the

CBA, jurisprudence has enunciated that such clauses only bar strikes which
are economic in nature, but not strikes grounded on unfair labor
practices.42 The notices filed in the case at bar alleged unfair labor
practices, the initial determination of which would entail fact-finding that is
best left for the labor arbiters. Nevertheless, our finding herein of the
invalidity of the notices of strike dispenses with the need to discuss this
issue.

We cannot sanction the respondent-union’s brazen disregard of legal

requirements imposed purposely to carry out the state policy of promoting
voluntary modes of settling disputes. The state’s commitment to enforce
mutual compliance therewith to foster industrial peace is affirmed by no
less than our Constitution.43 Trade unionism and strikes are legitimate
weapons of labor granted by our statutes. But misuse of these instruments
can be the subject of judicial intervention to forestall grave injury to a
business enterprise.44

WHEREFORE, the instant petition is hereby GRANTED. The decision and

resolution of the NLRC in Injunction Case No. 00468-94 are REVERSED and
SET ASIDE. Petitioner and private respondent are hereby directed to
submit the issues raised in the dismissed notices of strike to grievance
procedure and proceed with arbitration proceedings as prescribed in their
CBA, if necessary. No pronouncement as to costs.

SO ORDERED.
 Arbit-Part IV |33

ADDITIONAL Co-respondent Marcial I. Abion5 was a carpenter/mason and a maintenance

man whose employment by petitioner commenced on October 8, 1990.
1. G.R. No. 142244 November 18, 2002 Allegedly, he caused the clogging of the fishpond drainage resulting in
damages worth several hundred thousand pesos when he improperly
ATLAS FARMS, INC., petitioner,
disposed of the cut grass and other waste materials into the pond’s
vs.
drainage system. Petitioner sent a written notice to Abion, requiring him to
NATIONAL LABOR RELATIONS COMMISSION,
explain what happened, otherwise, disciplinary action would be taken
JAIME O. DELA PEÑA and MARCIAL I. ABION, respondents.
against him. He refused to receive the notice and give an explanation,
according to petitioner. Consequently, the company terminated his services
DECISION
on October 27, 1992. He acknowledged receipt of a written notice of
QUISUMBING, J.: dismissal, with his separation pay.

Petitioner seeks the reversal of the decision1 dated January 10, 2000 of the Like Peña, Abion worked seven days a week, including holidays, without
Court of Appeals in CA-G.R. SP No. 52780, dismissing its petition for holiday pay, rest day pay, service incentive leave pay and night shift
certiorari against the NLRC, as well as the resolution2 dated February 24, differential pay. When terminated on October 27, 1992, Abion was
2000, denying its motion for reconsideration. receiving a monthly salary of P4,500.

The antecedent facts of the case, as found by the Court of Appeals, 3 are as Peña and Abion filed separate complaints for illegal dismissal that were
follows: later consolidated. Both claimed that their termination from service was
due to petitioner’s suspicion that they were the leaders in a plan to form a
Private respondent Jaime O. dela Peña was employed as a veterinary aide union to compete and replace the existing management-dominated union.
by petitioner in December 1975. He was among several employees
terminated in July 1989. On July 8, 1989, he was re-hired by petitioner and On November 9, 1993, the labor arbiter dismissed their complaints on the
given the additional job of feedmill operator. He was instructed to train ground that the grievance machinery in the collective bargaining
selected workers to operate the feedmill. agreement (CBA) had not yet been exhausted. Private respondents availed
of the grievance process, but later on refiled the case before the NLRC in
On March 13, 1993, Peña was allegedly caught urinating and defecating Region IV. They alleged "lack of sympathy" on petitioner’s part to engage
4

on company premises not intended for the purpose. The farm manager of in conciliation proceedings.
petitioner issued a formal notice directing him to explain within 24 hours
why disciplinary action should not be taken against him for violating Their cases were consolidated in the NLRC. At the initial mandatory
company rules and regulations. Peña refused, however, to receive the conference, petitioner filed a motion to dismiss, on the ground of lack of
formal notice. He never bothered to explain, either verbally or in writing, jurisdiction, alleging private respondents themselves admitted that they
according to petitioner. Thus, on March 20, 1993, a notice of termination were members of the employees’ union with which petitioner had an
with payment of his monetary benefits was sent to him. He duly existing CBA. This being the case, according to petitioner, jurisdiction over
acknowledged receipt of his separation pay of P13,918.67. the case belonged to the grievance machinery and thereafter the voluntary
arbitrator, as provided in the CBA.
From the start of his employment on July 8, 1989, until his termination on
March 20, 1993, Peña had worked for seven days a week, including In a decision dated January 30, 1996, the labor arbiter dismissed the
holidays, without overtime, holiday, rest day pay and service incentive complaint for lack of merit, finding that the case was one of illegal
leave. At the time of his dismissal from employment, he was dismissal and did not involve the interpretation or implementation of any
receiving P180 pesos daily wage, or an average monthly salary of P5,402. CBA provision. He stated that Article 217 (c) of the Labor Code 6 was
inapplicable to the case. Further, the labor arbiter found that although both
complainants did not substantiate their claims of illegal dismissal, there

was proof that private respondents voluntarily accepted their separation
pay and petitioner’s financial assistance.
Thus, private respondents brought the case to the NLRC, which reversed
the labor arbiter’s decision. Dissatisfied with the NLRC ruling, petitioner
went to the Court of Appeals by way of a petition for review on certiorari
under Rule 65, seeking reinstatement of the labor arbiter’s decision. The
appellate court denied the petition and affirmed the NLRC resolution with
some modifications, thus:
WHEREFORE, the petition is DENIED. The resolution in NLRC CA No.
010520-96 is AFFIRMED with the following modifications:
1) The private respondents can not be reinstated, due to their acceptance
of the separation pay offered by the petitioner;
2) The private respondents are entitled to their full back wages; and,
3) The amount of the separation pay received by private respondents from
petitioner shall not be deducted from their full back wages.
Costs against petitioner. SO ORDERED.7
Petitioner forthwith filed its motion for reconsideration, which was denied in
a resolution dated February 24, 2000, which reads:
Acting on the Motion for Reconsideration filed by petitioner[s] which drew
an opposition from private respondents, the Court resolved to DENY the
aforesaid motion for reconsideration, as the issues raised therein have
been passed upon by the Court in its questioned decision and no
substantial arguments were presented to warrant its reversal, let alone
modification. SO ORDERED.8
In this petition now before us, petitioner alleges that the appellate court
erred in:
I. … DENYING THE PETITION FOR CERTIORARI AND IN EFFECT AFFIRMING
THE RULINGS OF THE PUBLIC RESPONDENT NLRC THAT THE PRIVATE
RESPONDENTS WERE ILLEGALLY DISMISSED;
II. … RULING THAT THE PRIVATE RESPONDENTS ARE ENTITLED TO
SEPARATION PAY AND FULL BACKWAGES;
III. … RULING THAT PETITIONER IS LIABLE FOR COSTS OF SUIT.9
Arbit-Part IV |34
Petitioner contends that the dismissal of private respondents was for a just
and valid cause, pursuant to the provisions of the company’s rules and
regulations. It also alleges lack of jurisdiction on the part of the labor
arbiter, claiming that the cases should have been resolved through the
grievance machinery, and eventually referred to voluntary arbitration, as
prescribed in the CBA.
For their part, private respondents contend that they were illegally
dismissed from employment because management discovered that they
intended to form another union, and because they were vocal in asserting
their rights. In any case, according to private respondents, the petition
involves factual issues that cannot be properly raised in a petition for
review on certiorari under Rule 45 of the Revised Rules of Court.10
In fine, there are three issues to be resolved: 1) whether private
respondents were legally and validly dismissed; 2) whether the labor
arbiter and the NLRC had jurisdiction to decide complaints for illegal
dismissal; and 3) whether petitioner is liable for costs of the suit.
The first issue primarily involves questions of fact, which can serve as basis
for the conclusion that private respondents were legally and validly
dismissed. The burden of proving that the dismissal of private respondents
was legal and valid falls upon petitioner. The NLRC found that petitioner
failed to substantiate its claim that both private respondents committed
certain acts that violated company rules and regulations,11 hence we find
no factual basis to say that private respondents’ dismissal was in order. We
see no compelling reason to deviate from the NLRC ruling that their
dismissal was illegal, absent a showing that it reached its conclusion
arbitrarily.12 Moreover, factual findings of agencies exercising quasi-judicial
functions are accorded not only respect but even finality, aside from the
consideration here that this Court is not a trier of facts. 13
Anent the second issue, Article 217 of the Labor Code provides that labor
arbiters have original and exclusive jurisdiction over termination disputes.
A possible exception is provided in Article 261 of the Labor Code, which
provides that-
The Voluntary Arbitrator or panel of voluntary arbitrators shall have
original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the
Collective Bargaining Agreement and those arising from the interpretation
or enforcement of company personnel policies referred to in the
immediately preceding article. Accordingly, violations of a Collective
 Arbit-Part IV |35

Bargaining Agreement, except those which are gross in character, shall no Consequently, Policy Instruction No. 56 does not apply in the case at
longer be treated as unfair labor practice and shall be resolved as bar.15 x x x
grievances under the Collective Bargaining Agreement. For purposes of this
article, gross violations of Collective Bargaining Agreement shall mean Records show, however, that private respondents sought without success
flagrant and or malicious refusal to comply with the economic provisions of to avail of the grievance procedure in their CBA.16 On this point, petitioner
such agreement. maintains that by so doing, private respondents recognized that their cases
still fell under the grievance machinery. According to petitioner, without
The Commission, its Regional Offices and the Regional Directors of the having exhausted said machinery, the private respondents filed their action
Department of Labor and Employment shall not entertain disputes, before the NLRC, in a clear act of forum-shopping.17 However, it is worth
grievances or matters under the exclusive and original jurisdiction of the pointing out that private respondents went to the NLRC only after the labor
Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately arbiter dismissed their original complaint for illegal dismissal. Under these
dispose and refer the same to the grievance Machinery or Arbitration circumstances private respondents had to find another avenue for redress.
provided in the Collective Bargaining Agreement. We agree with the NLRC that it was petitioner who failed to show proof that
it took steps to convene the grievance machinery after the labor arbiter
But as held in Vivero vs. CA,14 "petitioner cannot arrogate into the powers first dismissed the complaints for illegal dismissal and directed the parties
of Voluntary Arbitrators the original and exclusive jurisdiction of Labor to avail of the grievance procedure under Article VII of the existing CBA.
Arbiters over unfair labor practices, termination disputes, and claims for They could not now be faulted for attempting to find an impartial forum,
damages, in the absence of an express agreement between the parties in after petitioner failed to listen to them and after the intercession of the
order for Article 262 of the Labor Code [Jurisdiction over other labor labor arbiter proved futile. The NLRC had aptly concluded in part that
disputes] to apply in the case at bar." private respondents had already exhausted the remedies under the
grievance procedure.18 It erred only in finding that their cause of action
Moreover, per Justice Bellosillo:
was ripe for arbitration.
It may be observed that under Policy Instruction No. 56 of the Secretary of
In the case of Maneja vs. NLRC,19 we held that the dismissal case does not
Labor, dated 6 April 1993, "Clarifying the Jurisdiction Between Voluntary
fall within the phrase "grievances arising from the interpretation or
Arbitrators and Labor Arbiters Over Termination Cases and Providing
implementation of the collective bargaining agreement and those
Guidelines for the Referral of Said Cases Originally Filed with the NLRC to
arising from the interpretation or enforcement of company personnel
the NCMB," termination cases arising in or resulting from the interpretation
policies." In Maneja, the hotel employee was dismissed without hearing.
and implementation of collective bargaining agreements and interpretation
We ruled that her dismissal was unjustified, and her right to due process
and enforcement of company personnel policies which were initially
was violated, absent the twin requirements of notice and hearing. We also
processed at the various steps of the plant-level Grievance Procedures
held that the labor arbiter had original and exclusive jurisdiction over the
under the parties’ collective bargaining agreements fall within the original
termination case, and that it was error to give the voluntary arbitrator
and exclusive jurisdiction of the voluntary arbitrator pursuant to Art. 217
jurisdiction over the illegal dismissal case.
(c) and Art. 261 of the Labor Code; and, if filed before the Labor Arbiter,
these cases shall be dismissed by the Labor Arbiter for lack of jurisdiction In Vivero vs. CA,20 private respondents attempted to justify the jurisdiction
and referred to the concerned NCMB Regional Branch for appropriate action of the voluntary arbitrator over a termination dispute alleging that the
towards and expeditious selection by the parties of a Voluntary Arbitrator issue involved the interpretation and implementation of the grievance
or Panel of Arbitrators based on the procedures agreed upon in the CBA. procedure in the CBA. There, we held that since what was challenged was
the legality of the employee’s dismissal for lack of cause and lack of due
As earlier stated, the instant case is a termination dispute falling under the
process, the case was primarily a termination dispute. The issue of whether
original and exclusive jurisdiction of the Labor Arbiter, and does not
there was proper interpretation and implementation of the CBA provisions
specifically involve the application, implementation or enforcement of
came into play only because the grievance procedure in the CBA was not
company personnel policies contemplated in Policy Instruction No. 56.
observed, after he sought his union’s assistance. Since the real issue then

was whether there was a valid termination, there was no reason to invoke
the need to interpret nor question an implementation of any CBA provision.
One significant fact in the present petition also needs stressing. Pursuant
to Article 26021 of the Labor Code, the parties to a CBA shall name or
designate their respective representatives to the grievance machinery and
if the grievance is unsettled in that level, it shall automatically be referred
to the voluntary arbitrators designated in advance by the parties to a CBA.
Consequently only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators. In these
termination cases of private respondents, the union had no participation, it
having failed to object to the dismissal of the employees concerned by the
petitioner. It is obvious that arbitration without the union’s active
participation on behalf of the dismissed employees would be pointless, or
even prejudicial to their cause.
Coming to the merits of the petition, the NLRC found that petitioner did not
comply with the requirements of a valid dismissal. For a dismissal to be
valid, the employer must show that: (1) the employee was accorded due
process, and (2) the dismissal must be for any of the valid causes provided
for by law.22 No evidence was shown that private respondents refused, as
alleged, to receive the notices requiring them to show cause why no
disciplinary action should be taken against them. Without proof of notice,
private respondents who were subsequently dismissed without hearing
were also deprived of a chance to air their side at the level of the grievance
machinery. Given the fact of dismissal, it can be said that the cases were
effectively removed from the jurisdiction of the voluntary arbitrator, thus
placing them within the jurisdiction of the labor arbiter. Where the dispute
is just in the interpretation, implementation or enforcement stage, it may
be referred to the grievance machinery set up in the CBA, or brought to
voluntary arbitration. But, where there was already actual termination,
with alleged violation of the employee’s rights, it is already cognizable by
the labor arbiter.23
In sum, we conclude that the labor arbiter and then the NLRC had
jurisdiction over the cases involving private respondents’ dismissal, and no
error was committed by the appellate court in upholding their assumption
of jurisdiction.
However, we find that a modification of the monetary awards is in order.
As a consequence of their illegal dismissal, private respondents are entitled
to reinstatement to their former positions. But since reinstatement is no
longer feasible because petitioner had already closed its shop, separation
Arbit-Part IV |36
pay in lieu of reinstatement shall be awarded.24A terminated employee’s
receipt of his separation pay and other monetary benefits does not
preclude reinstatement or full benefits under the law, should reinstatement
be no longer possible.25 As held in Cariño vs. ACCFA:26
Acceptance of those benefits would not amount to estoppel. The reason is
plain. Employer and employee, obviously, do not stand on the same
footing. The employer drove the employee to the wall. The latter must
have to get hold of the money. Because out of job, he had to face the
harsh necessities of life. He thus found himself in no position to resist
money proffered. His, then, is a case of adherence, not of choice. One
thing sure, however, is that petitioners did not relent their claim. They
pressed it. They are deemed not to have waived their rights. Renuntiato
non praesumitur.
Conformably, private respondents are entitled to separation pay equivalent
to one month’s salary for every year of service, in lieu of
reinstatement.27 As regards the award of damages, in order not to further
delay the disposition of this case, we find it necessary to expressly set forth
the extent of the backwages as awarded by the appellate court. Pursuant
to R.A. 6715, as amended, private respondents shall be entitled to full
backwages computed from the time of their illegal dismissal up to the date
of promulgation of this decision without qualification, considering that
reinstatement is no longer practicable under the circumstances.28
Having found private respondents’ dismissal to be illegal, and the labor
arbiter and the NLRC duly vested with jurisdiction to hear and decide their
cases, we agree with the appellate court that petitioner should pay the
costs of suit.
WHEREFORE, the petition is DENIED for lack of merit. The decision of the
Court of Appeals in CA-G.R. SP No. 52780 is AFFIRMED with the
MODIFICATION that petitioner is ordered to pay private respondents (a)
separation pay, in lieu of their reinstatement, equivalent to one month’s
salary for every year of service, (b) full backwages from the date of their
dismissal up to the date of the promulgation of this decision, together with
(c) the costs of suit.
SO ORDERED.