CURRENT PRACTICE OF VOLUNTARY ARTIBRATION IN THE SETTLEMENT OF LABOR

DISPUTES
(WITH RELATED SUPREME COURT DECISIONS)

BY: NICANOR B. JIMENO

DEFINITIONS
Labor Dispute
- Includes any controversy or matter concerning terms and conditions of employment or
the association or representation of persons in negotiating, fixing, maintaining, changing
or arranging the terms and conditions of employment, regardless of whether the
disputants stand in the proximate relations of the employer and employee.

Proximate relations of employer and employee
- A labor dispute can xxx exist regardless of whether the disputants stand in the
proximate relationship of employer and employee xxx provided the controversy
concerns, among others, the term and conditions of employment or a change or
arrangement thereof.
- Put differently, and as defined by law, the existence of a labor dispute is not negative by
the fact that the Plaintiffs and Defendants do not stand in the proximate relation of
employer and employee.

Voluntary Arbitration
- A mode of settling labor-management disputes by which the parties select a competent,
trained and impartial third person who shall decide on the merits of the case and whose
decision is final and executor. (Rule II, Section 1 (d), Revised Procedural Guidelines in the
Conduct of Voluntary Arbitration Proceedings, 2005)

Compulsory Arbitration
- The process of settlement of labor disputes by a government agency which has the
authority to investigate and to make an award which is binding on all the parties. (PAL
vs. NLRC, G.R. No. 55159, December 22, 1989)

Voluntary Arbitrator
- Means any person accredited by the Board as such, or any person named or designated
in the Collective Bargaining Agreement by the parties to act as their Voluntary
Arbitrator.
- One chosen with or without the assistance of the National Conciliation and Mediation
Board, pursuant to a selection procedure agreed upon in the Collective Bargaining
Agreement.
- Any official that may be authorized by the Secretary of Labor and Employment to act as
Voluntary Arbitrator upon the written request and agreement of the parties to a labor
dispute (Art. 212 (n) Labor Code)

PRIMARY FUNCTION OF VOLUNTARY LABOR ARBITRATION
The primary function of voluntary labor arbitration is to provide:
(1) A process for the orderly disposition of disputes; and
(2) A foundation for stable labor management relations.

Commercial arbitration grew up as an alternative to court action, while labor-management
arbitration has evolved primarily as substitute for strikes. (Franklin Elkouri and Edna Asprer
Elkouri, How Arbitration Works, Bureau of National Affairs, Inc. [Washington DC, 1979] pp 3-7)

NATURE OF VOLUNTARY ARBITRATION

VOLUNTARY ARBITRATION: A PRIVATE JUDICIAL SYSTEM
A voluntary arbitrator is not a public tribunal imposed upon the parties by a superior
authority which the parties are obliged to accept.
He has no general character to administer justice for a community which transcends the
parties.
He is rather a part of a system of self-government created by and confined to the
parties. (Maurice S. Trotta, Arbitration of Labor Management Disputes, American
Management Association, New York, 1974, p. 73 cited in Azucena C.A. Labor Code with
Comments and Cases, Vol. II, 7
th
Edition, 2010, p.503)

DISTINGUISED FROM A COURT OF LAW
Difference Between Voluntary Arbitration and Court of Law
The procedures followed those in a court of law are formal, whereas arbitration
proceedings are informal.
A judge under the doctrine of stare decisis is obliged to follow precedents set by other
judges while Arbitrators are not obliged to follow precedents set by other arbitrations
in similar cases.
The rules of evidence established in courts of law are not followed in arbitration
proceedings. What might be admissible in arbitration case would not necessarily be
admissible in a court of law. The arbitrator determines what is admissible evidence.
In the courts of law, decisions may be appealed to a higher court, but in arbitration
there is no comparable appeal recourse.
With the exception of certain specialized courts, judges hear a great variety of cases and
are not usually experts in the particular subject matter brought before them while
most labor arbitrators have extensive background and knowledge of the manifold
problem in industrial relations, and they hear only industrial disputes.

CONSTITUTIONAL BASIS
1987 CONSTITUTION OF THE PHILIPPINES
Art. III Bill of Rights
Section 16. All persons shall have the right to a speedy disposition of their cases before all
judicial, quasi-judicial or administrative bodies.

Art. XIII Social Justice and Human Rights
Section 3 (3
rd
paragraph). The State shall promote the principles of shared responsibility
between workers and employers and the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their mutual compliance therewith to foster
industrial peace.


STATUTORY BASIS
LABOR CODE OF THE PHILIPPINES (As amended by RA 6715 whichtook effect on March 21,
1989)
Republic Act No. 6715 AN ACT TO EXTEND PROTECTION TO LABOR, STRENGTHEN THE
CONSTITUTIONAL RIGHTS OF WORKERS TO SELF-ORGANIZATION, COLLECTIVE BARGAINING
AND PEACEFUL CONCERTED ACTIVITIES, FOSTER INDUSTRIAL PEACE AND HARMONY,
PROMOTE THE PRERENTIAL USE OF VOLUNTARY MODES OF SETTLING LABOR DISPUTES, AND
REORGANIZE THE NATINAL LABOR RELATIONS COMMISSION, AMENDING FOR THESE
PURPOSES CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO. 442, AS AMENDED,
OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, APPROPRIATING FUNDS
THEREFORE AND FOR OTHER PURPOSES.

Labor code as Amended by RA 6715
Art. 211 Declaration of Policy
A. It is the policy of the State: (a) to promote and emphasize the primacy of free collective
bargaining and negotiations, including voluntary arbitration, mediation and
conciliation, as mode of settling labor or industrial disputes.
BOOK V. LABOR RELATIONS
Art. 260. Grievance Machinery and Voluntary Arbitration
Art. 261. Jurisdiction of Voluntary Arbitration
Art. 262. Jurisdiction over other labor disputes.
Art. 262-A. Procedures
Art. 262-B. Cost of Voluntary Arbitration and Voluntary Arbitrators Fee.

IS VOLUNTARY ARBITRATION A MANDATORY ACTIVITY UNDER THE LABOR CODE?

Art. 241 (o) of the Labor Code
Other than for mandatory activities under this Code, no special assessment, attorneys fees,
negotiation fees or any other extraordinary fees may be checked off from any amount due to an
employee without an individual written authorization duly sighed by the employee xxx

In the case of Ambrocio Venco, et a. vs. Cresencio Trajano, et al., G.R. No. 74453, May 5,
1989:
It is very clear from [Article 241(o) ] that attorneys fees may not be deducted or checked off from
any amount due to an employee without his written consent except for mandatory activities under
the Code. A mandatory activity has been defined as judicial process of settling dispute laid
down by law. (Carlos P. Galvadores, et al. vs. Cresencio B. Trajano, xxx)

In the case of Carlos P. Galvadores, et al. vs. Cresenciano B. Trajano, G.R. No. 70067, Sept.
15, 1986,
xxx the benefits awarded to PLDT employees still form part of the collective bargaining
negotiations although placed under compulsory arbitration. This is not the mandatory activity
under the Code, which dispenses with individual written authorization for check-off
notwithstanding its compulsory nature. It is a judicial process of settling disputes laid
down by law.

Art. 241 (p) of the Labor Code
It shall be the duty of a labor organization and its officers to inform its members on the provisions
of its constitution and by laws, collective bargaining agreement, the prevailing labor relations
system and all their rights and obligations under existing labor laws.

For this purpose, registered labor organizations may assess reasonable dues to finance labor
relations seminars and other labor education activities.

MINIMUM CRITERIA FOR ACCREDITATION AS VOLUNTARY ARBITRATOR BY THE NCMB
A Filipino citizen residing in the Philippines;
A holder of a Bachelors Degree in any field of behavioural or applied sciences or
equivalent educational trainings short of a Bachelors Degree;
At least five (5) years experience in labor-management relations;
Completion of a training course on voluntary arbitration conducted by the Board; and
A person of good moral character, noted for impartiality, probity, and has not been
civilly, criminally and administratively adjudged guilty of any offense involving moral
turpitude as evidenced by duly sworn affidavit.

HOW ACCREDITED VOLUNTARY ARBITRATOR MAINTAINS ACTIVE STATUS
1. He must attend Arbitrators Continuing Retooling Program (ACRP) every 3 years, or
2. He must attend 2 regular retooling programs within 2-year period;
3. He should handle at least one case a year.

HOW VOLUNTARY ARBITRATOR IS CHOSEN
The preferred method of selection is by mutual agreement of the parties.
Alternative methods include the selection or appointment by an administrative agency
like the NCMB.
Parties may choose between the use of a temporary or permanent arbitrator. They
have also a choice as to the number of arbitrators, either sole arbitrator or a panel of
arbitrators or Arbitration Board.

HOW TEMPORARY OR PERMANENT ARBITRATOR HAS BEEN SELECTED
Temporary or ad hoc arbitrator
o Selected when a dispute is already at hand. He is named to arbitrate a specific
dispute or a specific group of disputes, and there is no commitment to select
him again.
Permanent arbitrator
o One who is selected before a dispute arises, usually during the negotiation of the
CBA. He is to serve a period of time, usually during the life of the CBA, rather
than for just one case or specific group of cases.

JURISDICTION OF VOLUNTARY ARBITRATOR
Original and exclusive jurisdiction to hear and decide:
All unresolved grievances arising from the interpretation or implementation of the CBA.
Two Kinds of Disputes in the field of labor relations:
1. Contract-negotiation disputes (Arbitration of interest)
2. Contract-interpretation disputes (Arbitration of grievance or rights)
Disputes arising from the interpretation or enforcement of company personnel policies.
Violations of Collective Bargaining Agreements except those which are gross in
character
o Gross violation of CBA flagrant and/or malicious refusal to comply with the
economic provision of the CBA (Art. 261, Labor Code)
Wage distortion issues arising from the application of any wage orders in organized
establishments.
Interpretation and implementation of the productivity incentive programs under R.A.
6971 (The Productivity Incentives Act of 1990)
Termination Cases arising from the CBAs and company personnel policies which were
initially processed at the Grievance Machinery are under the original and exclusive
jurisdiction of the voluntary arbitrator. (Policy Instruction No. 56)

JURISDICTION OVER TERMINATION CASES
The parties must have agreement in unequivocal language that the termination
dispute should be submitted to voluntary arbitration. Otherwise, Labor Arbiter shall
have jurisdiction.
Absent such stipulation only termination of employment disputes arising from CBA or
company personnel policies interpretation and implementation shall be within the
original and exclusive jurisdiction of the voluntary labor arbiter. (Celestino Vivera vs. CA,
G.R. No. 138938, October 24, 2000)

CONCURRENT JURISDICTION
Upon agreement of the parties, all other labor disputes including unfair labor practices
and bargaining deadlocks.
Labor disputes under Article 263 on strikes, picketing and lock-outs, parties may opt to
submit their dispute to voluntary arbitration before or at any stage of the compulsory
arbitration process.

The parties are free to opt for voluntary arbitration directly and by-pass the Grievance
Machinery. By-passing is not equivalent to relinquishing right to voluntary arbitration. (Apalisok
vs. Radio Philippine Network, G.R. No. 138094, May 29, 2003)

DEFINITION OF GRIEVANCE
- Any question by either the employer or the union regarding the interpretation or
application of the Collective Bargaining Agreement or company personnel policies or
any claim by either party that the other party is violating any provision of the CBA or
company personnel policies. (Primer on Grievance Settlement and Voluntary Arbitration
NCMB, 1990)

DEFINITION OF COMPANY PERSONNEL POLICIES
- Guiding principles stated in broad, long-range terms that express the philosophy or
beliefs of an organizations top authority regarding personnel matters.
- They deal with matters affecting efficiency and well-being of employees and include,
amon 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 expansion of the original and exclusive jurisdiction of voluntary arbitrators to include
questions arising from the interpretation and enforcement of company personnel policies has
the effect of widening the meaning and interpretation of a grievance to include a situation where
there is no Collective Bargaining Agent and no CBA. (Primer NCMB)

CONSTITUTIONAL BASIS FOR EMPLOYEES PARTICIPATION IN THE POLICY AND DECISION-
MAKING PROCESSES OF THE EMPLOYER INVOLVING TERMS AND CONDITIONS OF
EMPLOYMENT

Second paragraph, Section 3, of Article XIII Social Justice and human Rights of 1987
Constitution, to wit:
It (State) shall guarantee the rights of all workers to self-organization, of collective bargaining
and negotiations, and peaceful concerted activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure, humane conditions of work and a living
wage. They shall also participate in policy and decision-making processes affecting their
rights and benefits as may be provided by law.

HOW VOLUNTARY ARBITRATION IS INITIATED
1. By a Submission
Also known as Stipulation or an Agreement to Arbitrate
Used when there is no previous agreement to arbitrate.
Usually entered into after the dispute has materialized and the issues are
already defined.
2. By Demand or Notice to Arbitrator
Used when there is previous agreement to arbitrate.
Applicable when dispute arise from the application or interpretation of the CBA
since Labor Code as amended required CBAs to provide for a grievance
procedure and voluntary arbitration clause.

AUTHORITY OF ARBITRATOR UNDER SUBMISSION AGREEMENT
The arbitrator is expected to decide only those questions expressly delineated by the
Submission Agreement. (Ludo and Luym Corp. vs. Saornido. G.R. No. 140960, January 20,
2003)
Nevertheless, the arbitrator can assume that he has the necessary power to make a final
settlement since arbitration is the final resort for adjudication of disputes.
Law and jurisprudence give the voluntary arbitrator enough leeway of authority as well
as adequate prerogative to accomplish the reason for which the law on voluntary
arbitration was created speedy labor justice.

AUHTORITY OF THE VOLUNTARY ARBITRATOR ON CASES INVOLVING INTERPRETATION
AND IMPLEMENTATION OF THE CBA

1. A voluntary arbitrator is confined to the interpretation and application to the CBA
(Veloso, Vicente, J. Labor Reviewer, 2012 Edition, pp 458-459)
He does not sit to dispense his own brand of industrial justice: his ward is
legitimate only in so far as it draws its essence from the CBA. (Lepanto Ceramics
vs. Lepanto Ceramics Employees Association, G.R. No. 180866, March 2, 2010)
2. Neither does he have jurisdiction over matters affecting third persons in a given
submission.
His ruling cannot bind their persons. (Temic Automotive vs. Temic Automotive
Philippines, G.R. No. 186965, December 23, 2009)
3. While the voluntary arbitrator is confined to the interpretation and application of
the CBA in resolving the issue/s submitted for its resolution, he is not expected to
merely rely on the cold and cryptic words on the face of the CBA.
He is mandated to discover the intentions of the parties.
Gaps may likewise be filled in by reference to the practices of the industry, such
that the parties contemporaneous and subsequent acts should be considered.
4. What the voluntary arbitrator is prohibited from doing is dispense his own brand
of industrial justice.
His award is legitimate only in so far as its draws its essence from the CBA.
Otherwise, his award is an unauthorized amendment or alteration thereof,
because it is:
Unfounded in reason and fact;
Unconnected with the working and purpose of the agreement;
Without factual support in view of its language, its context, and any
other indicia of the parties intention;
Ignores or abandons the plain language of the contract;
Mistakenly based on crucial assumption which concededly is a non-fact;
Unlawful, arbitrary or capricious; and
Contrary to public policy. (United Kimberly-Clark vs. Kimberly-Clark, 414
SCRA 459)

WHEN JURISDICTION IS ACQUIRED
1. Upon receipt of the Submission Agreement signed by both parties;
2. Upon receipt of the Notice to Arbitrate by the Arbitrator named in the CBA;
3. Upon receipt of an Appointment/Designation by Voluntary Arbitrator by the NCMB
a. In the event the parties fail to select an arbitrator
b. In the event the other party does not reply within 7 days from receipt of Notice
to Arbitrate and does not name in advance an arbitrator.

POWERS AND DUTIES OF VOLUNTARY ARBITRATORS
Under Article 262-A, Labor Relations:
The Voluntary Arbitrator shall have the power to hold hearings, receive evidence and
take whatever action is necessary to resolve the issue or issues subject of the dispute,
including efforts to effect a voluntary settlement between the parties.
All parties to the dispute shall be entitled to attend the arbitration proceedings. The
attendance of any third party or the exclusion of any witness from the proceedings shall
be determined by the Voluntary Arbitrator. Hearings may be adjourned for a cause or
upon agreement by the parties.

POWER OF VOLUNTARY ARBITRATOR
a. To summon any person to attend hearings;
b. To subpoena witnesses and documents;
c. To issue writ of execution to enforce financial judgment;
d. To formulate and adopt ground rules;
e. To encourage the parties to enter into stipulation of facts and simplification of issues;
f. To direct parties to submit position papers and other pleadings;
g. To determine necessity of clarificatory conferences and the conduct of ocular inspection.

NCMB GUIDELINES
Nature of Proceedings
1. Proceedings are non-litigious in volume;
2. Not governed by technical rules of procedure of the regular courts;
3. But, must at all times, comply with the requirements of due process.

The Cardinal Rules for Procedural Due Process in Administrative or Quasi-judicial
Tribunal (Ang Tibay vs. CIR, 169 Phil 635, 1940)
1. The right to a hearing, which includes the right to present ones case and submit
evidence in support thereof;
2. The tribunal must consider the evidence presented;
3. The decision must have something to support itself;
4. The evidence must be substantial. Substantial evidence is such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion;
5. The decision must be based on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected;
6. The tribunal or body or any of its judges must act on its or his own independent
consideration of the law and facts of the controversy, and not simply accept the views of
a subordinate; and
7. The tribunal or body should render its decision in such manner that the parties to the
proceeding can know the various issues involved in the reason for the decision
rendered.

DUTY TO CONCILIATE AND MEDIATE
During the initial conference, the parties shall be encouraged to explore all possible
means of affecting a settlement of the dispute. The voluntary arbitrator shall exert best
efforts to conciliate or mediate to aid the parties to reach a settlement of the dispute.
Terms of settlement shall be adopted as the decision.
Lawyers and representatives of the parties cannot enter into a compromise agreement
without the clients or the principals expressed consent or through as special power of
attorney.

RENDITION OF DECISION
Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator or
panel of Voluntary Arbitrators to render an award or decision within 20 calendar
days from the date of submission of the dispute to voluntary arbitration.
The award or decision shall contain the facts and the law on which it is based. It shall be
final and executor after 10 calendar days from the receipt of the copy of the award
or decision by the parties.

DEPARTMENT ORDER NO. 40-03 SERIES OF 2003, IMPLEMENTING RULES OF BOOK V OF
THE LABOR CODE

Section 6, Rule XIX, Last Paragraph
Failure on the part of the voluntary arbitrator to render a decision, resolution, order or award
within the prescribed period, shall upon complaint of a party, be sufficient ground for the Board
to discipline said voluntary arbitrator, pursuant to the guidelines issued by the Secretaryin
cases that the recommended sanction is delisting, it shall be unlawful for the voluntary arbitrator
to refuse or fail to turnover to the board, for its further disposition, the records of the case within
ten (10) calendar days from demand thereof.

EXECUTION OF AWARD
Upon motion of any interested party, in case of the absence or incapacity of the
Voluntary Arbitrator, may issue a writ of execution requiring either the sheriff of the
NLRC or regular courts to execute the final decision, order or award.

VOLUNTARY ARBITRATION AWARD CAN BE SUBJECT OF MOTION FOR RECONSIDERATION
Before R.A. No. 6715, Art. 263 of the Labor Code provided that voluntary arbitration
awards or decisions shall be final, unappealable and executory.
Section 7, Rule XIX of D.O. No. 40, Series of 2003 implementing Book V of the Labor Code
in Labor Relations specifically provides that decision or award of the Voluntary
Arbitrator shall be final and executory after 10 calendar days from receipt of the copy
of the award or decision by the parties and it shall not be subject of a motion for
reconsideration.
R.A. No. 6715 (which took effect on March 21, 1989) inserted Art. 262-A which provide
that the award or decision shall be final and executory after ten (10) calendar days from
receipt of the copy of the award or decision by the parties.
In the case of Imperial Textile Mills, Inc. vs. Sampang, G.R. No. 94960, March 8, 1993, the
Supreme Court ruled that since R.A. No. 6715 makes the award final and executory after
ten (10) days from receipt, presumably the decision may still be considered by the
Voluntary Arbitrator on the basis of a motion for reconsideration duly filed within
that period.
In the case of Coca-Cola Bottlers Philippines, Inc. Sales Force Union PTGWO Balais vs.
Coca-cola Bottlers, Inc., G.R. No. 155651, July 28, 2005, SC stated in its Decision that
under Sec. 6, Rule Vii of the same guidelines implementing Article 262-A of the Labor
Code, a Decision (of a Voluntary Arbitrator), as a matter of course, would be become
final and executory after ten (10) calendar days from receipt of the decision xxx unless
in the meantime, a motion for reconsideration or a petition for review to the Court
of Appeals under Rule 43 of the Ruels of Court is filed within the same 10-day
period.
In the case of Albert Teng et al. vs. Pahagac et al., G.R. No. 169704, November 17, 2010.
o A motion for reconsideration is the more appropriate remedy in line with the
doctrine of exhaustion of administrative remedies. By allowing a 10-day period,
the obvious intent of Congress in amending Article 263 to Article to Article 262-
A is to provide an opportunity for the party adversely affected by the VAs
decision to seek recourse via a motion for reconsideration or a petition for
review under Rule 43 of the Rules of Court filed with the CA. Indeed, a motion
for reconsideration is the more appropriate remedy in line with the doctrine of
exhaustion of administrative remedies. For this reason, an appeal from the
administrative agencies of the CA via Rule 43 of the Rules of Court requires
exhaustion of available remedies as a condition precedent to a petition under
that Rule.

APPEAL OF THE DECISION OR AWARDE OF VOLUNTARY ARBITRATOR IS TO THE COURT
OF APPEALS UNDER RULE 43, NOT RULE 65
A Voluntary Arbitrator by the nature of his functions acts in a quasi-judicial capacity.
(Oceanic Bic Division (FFW) et al. vs. Romero et al., G.R. No. L-43890, July 16, 1984)
xxx a Voluntary Arbitrator partakes of the nature of a quasi-judicial instrumentality
and is within the ambit of Section 9(3) of the Judiciary reorganization Act, which
provides in part:
(3) (The Court of Appeals shall have ) exclusive appellate jurisdiction over final
judgments, decisions, resolutions, orders or awards of the Regional Trial Courts
and quasi-judicial agencies, instrumentalities, xxx (Luzon Development Bank vs.
Association of Luzon Development Bank Employees, G.R. No. 120319, October 6,
1995)
In a petition for certiorari from an award or decision of Voluntary Arbitration, the Court
of Appeals must be deemed to have concurrent jurisdiction with the Supreme Court. As
a matter of policy, this Court shall henceforth remand to the Court of Appeals
petitions of this nature for proper disposition. (Luzon Development Bank, ibid)
As such, the decisions of a voluntary arbitrator fall within the exclusive appellate
jurisdiction of the Court of Appeals. Indeed, this Court took note of this decision
(referring to Luzon Development case) in approving the 1997 Rules of Civil Procedure,
the pertinent provision of which states as follows:
Section 1 (Rule 43, Appeal from the Court of Tax Appeals and Quasi-Judicial
agencies to the Court of Appeals) Scope This Rule shall apply to appeals on
final orders of the Court of Tax Appeals and from awards, judgments, final
orders or resolutions of an authorized by any quasi-judicial agency in the
exercise of its quasi-judicial functions. Among these agencies are the xxx, and
voluntary arbitrators authorized by law. (Nippon Paint Employees Union-
Olalia vs. CA, G.R. No. 159010, November 19, 2004)

Petition filed under Rule 65 may be allowed if:
1. Public welfare and the advancement of public policy dictates;
2. Broader interest of justice so requires;
3. Writs issued are null and void;
4. Questioned order amounts to an oppressive exercise of judicial authority.
(AMA Computer vs. Nacino, G.R. No. 162739, February 12, 2008)

COST OF VOLUNTARY ARBITRATION
Art. 262-B, Labor Code as amended
The parties to a CBA shall provide therein a proportionate sharing scheme on the cost of
voluntary arbitration including the Voluntary Arbitrators fee.
The fixing of the fee of the Voluntary Arbitrators, whether shouldered wholly by the
parties or subsidized by the Special Voluntary Arbitration Fund, shall take into account
the following factors:
o Nature of the case;
o Time consumed in hearing the case;
o Professional standing of the Voluntary Arbitrator;
o Capacity to pay of the parties; and
o Fees provided for in the Revised Rules of Court.

RULE XIX OF D.O. 40-03 RULES IMPLEMENTING BOOK V
Section 9.
xxx Unless the parties agree otherwise, the cost of voluntary arbitration proceedings and
voluntary arbitrators fee shall be shared equally by the parties.

Parties are encouraged to set aside funds to answer for the cost of voluntary arbitration
proceedings including voluntary arbitrators fee. In the event said funds are not sufficient to
cover such expenses, an amount by way of subsidy taken out of the Special Voluntary Arbitration
fund may be availed of by either or both parties subject to the guidelines on voluntary arbitration
to be issued by the Secretary.

SCHEDULE OF FEES UNDER SUBSIDY ENTITLEMENT PROGRAM
1. P15,000 for all types of VA cases;
2. P20,000 if:
a. Case is under expedited Voluntary Arbitration Procedure;
b. Case involves two or more issues independent of each other
c. Case involves bargaining deadlock
3. P5,000 if case is under FLAVAS (Free Legal Aid and Voluntary Arbitration Services)
Program.
Requirements
a. Either or both parties lack capacity to pay cost of arbitration
b. For workers without union or no CBA
c. Union still organizing
d. Distressed companies and small and medium enterprises.

Reference: Azucena, CA, Labor Code with Comments and Law, Vols. I and II, 7
th
Edition, 2010.