a) Grievance Machinery/Voluntary Arbitration, Arts.

224 (c), 273;

Book V, Rule XIX, Sec. 1, 2nd par., 2

 Atlas Farm, Inc. v. NLRC, G.R. No. 142244, 18

November2002HAMPAC

FACTS:

Private respondents Jaime O. dela Pea and Marcial I. Abion, both employed under
petitioner Atlas Farms Inc. were terminated on separate causes. On March 13, 1993,
Pea was allegedly caught urinating and defecating on company premises not
intended for the purpose while Abion caused the clogging of the fishpond drainage
resulting in damages worth several hundred thousand pesos when he improperly
disposed of the cut grass and other waste materials into the ponds drainage system.
A formal notice was issued directing them to explain within 24 hours why disciplinary
action should not be taken against the for violating company rules and regulations
but they refused to receive the formal notice. Both were terminated on March 20,
1993 and October 27, 1992 respectively. They also acknowledged receipt of their
separation pays.

Both private respondents worked seven days a week, including holidays, without
holiday pay, rest day pay, service incentive leave pay and night shift differential pay.
When terminated ,Abion was receiving a monthly salary of P4,500 while Pea was
receiving P180 pesos daily wage, or an average monthly salary of P5,402.

Pea and Abion filed separate complaints for illegal dismissal that were later
consolidated. Both claimed that their termination from service was due to petitioners
suspicion that they were the leaders in a plan to form a union to compete and replace
the existing management-dominated union.

On November 9, 1993, the labor arbiter dismissed their compla3ints on the ground
that the grievance machinery in the collective bargaining agreement (CBA) had not
yet been exhausted. Private respondents availed of the grievance process, but later
on refiled the case before the NLRC in Region IV. They alleged lack of sympathy on
petitioners’ part to engage in conciliation proceedings.

Their cases were consolidated in the NLRC. At the initial mandatory conference,
petitioner filed a motion to dismiss, on the ground of lack of jurisdiction, alleging
private respondents themselves admitted that they were members of the employees
union with which petitioner had an existing CBA. This being the case, according to
petitioner, jurisdiction over the case belonged to the grievance machinery and
thereafter the voluntary arbitrator, as provided in the CBA.

In a decision dated January 30, 1996, the labor arbiter dismissed the complaint for
lack of merit, finding that the case was one of illegal dismissal and did not involve the
interpretation or implementation of any 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
petitioners financial assistance.
Thus, private respondents brought the case to the NLRC, which reversed the labor
arbiters 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 arbiters decision.
ISSUE: Whether or not the labor arbiter and the NLRC had jurisdiction to decide
complaints for illegal dismissal.*

HELD: YES. 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 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 Arbitration provided in the Collective Bargaining Agreement.

But as held in Vivero vs. CA,[14] petitioner 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 of the Labor
Code [Jurisdiction over other labor disputes] to apply in the case at bar.

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 employees rights, it is already cognizable by the labor
arbiter.

*There were three issues discussed in the case namely: 1. The validity of the
dismissal. 2. The Jurisdictio of the Labor Arbiter and the NLRC, and finally, 3.) The
Party liable for the cost of the suit. Pursuant to the discussion on Art. 217 as set in the
syllabus, the issue herein discussed pertains only to the second one.

 University of San Agustin Employees’ Union-FFW v.

Courtof Appeals, 485 SCRA 526 (2006)MKALINGKANG
Facts:
Respondent University of San Agustin (University) is a non-stock, non-profit
educational institution which offers both basic and higher education courses.
Petitioner Union is the duly recognized collective bargaining unit for teaching and non-
teaching rank-and-file personnel of the University while the other individual petitioners
are its officers.
On July 27, 2000, the parties entered into a 5-year CBA2 which, among other things,
provided that the economic provisions. Providing for salary increases, such increase
to take the form of either a lump sum or a percentage of the tuition incremental
proceeds (TIP).
The CBA contained a “no strike, no lockout” clause and a grievance machinery
procedure to resolve management-labor disputes, including a voluntary arbitration
mechanism should the grievance committee fail to satisfactorily settle such disputes.
During the negotiations, the parties could not agree on the manner of computing the
TIP, thus the need to undergo preventive mediation proceedings before the National
Conciliation and Mediation Board (NCMB), Iloilo City.
Tthe parties then made a joint request for the SOLE to assume jurisdiction over the
dispute the Secretary of Labor and Employment took jurisdiction. But still the
USAEEU-FW still made a strike.
Issue: whether or not the SOLE may take jurisdiction of the case
Whether or not the contents of the CBA be complied with
Ruling: Yes
The main purpose of management and labor in adopting a procedure in the
settlement of their disputes is to prevent a strike or lockout.—In Liberal Labor Union
vs. Philippine Can Company, 91 Phil. 72 (1952), the Court viewed that the main
purpose of management and labor in adopting a procedure in the settlement of their
disputes is to prevent a strike or lockout.
Thus, this procedure must be followed in its entirety if it is to achieve its objective.
Accordingly, the Court in said case held: The authorities are numerous which hold
that strikes held in violation of the terms contained in a collective bargaining
agreement are illegal, specially when they provide for conclusive arbitration clauses.
These agreements must be strictly adhered to and respected if their ends have to be
achieved.
The Secretary of Labor’s jurisdiction over labor disputes must include and extend to
all questions and controversies arising therefrom, including cases over which the
Labor Arbiter has exclusive jurisdiction.

Yes,
We are not unmindful of the Court’s ruling in International Pharmaceuticals, Inc. vs.
Secretary of Labor, et al., 205 SCRA 59 (1992), that the SOLE’s jurisdiction over
labor disputes must include and extend to all questions and controversies arising
therefrom, including cases over which the Labor Arbiter has exclusive jurisdiction.
However, we are inclined to treat the present case as an exception to that holding.
For, the NCMB’s inaction on the University’s motion to refer the dispute to voluntary
arbitration veritably forced the hand of the University to seek and accordingly submit
to the jurisdiction of the SOLE.
Considering that the CBA contained a no strike, no lockout and grievance machinery
and voluntary arbitration clauses, the NCMB, under its very own Manual of
Procedures in the Settlement and Disposition of Conciliation and Preventive
Mediation Cases, should have declared as not duly filed the Union’s Notice of Strike
and thereafter, should have referred the labor dispute to voluntary arbitration pursuant
to Article 261, of the Labor Code.

WEEK SEVEN (January 28-29)

F. Voluntary Arbitration

1. Basis and Rationale, 1987 Const. Art. XIII, Sec. 3; Arts. 218 A(a), 273

2. Arbitrable Issues, Arts. 274, 275, 224 (c)

3. Selection of Arbitrator, Arts. 219 (n); 273 3rdpar.

4. Plenary Jurisdiction of Voluntary Arbitrator vis-à-vis Labor Arbiter, Arts.

274, 275, 278 (h), 224 (a) (c); Policy Instruction No. 56, 6 April 1993
(Note: Ratio-speedy labor justice)

 Halagueña v. PAL, Inc., 602 SCRA 297 (1993)GOLING

FACTS: Petitioners were employed as female flight attendants of respondent

Philippine Airlines (PAL). On July 11, 2001, respondent and FASAP entered into a
Collective Bargaining Agreement incorporating the terms and conditions of their
agreement for the years 2000 to 2005. In a letter dated July 22, 2003, petitioners and
several female cabin crews manifested that the CBA provision on compulsory
retirement is discriminatory, and demanded for an equal treatment with their male
counterparts.
On July 29, 2004, petitioners filed a Special Civil Action for Declaratory Relief with
Prayer for the Issuance of Temporary Restraining Order and Writ of Preliminary
Injunction with the Regional Trial Court (RTC) of Makati City which ruled in favor of
the petitioners.
Aggrieved, respondent, on October 8, 2004, filed a Petition for Certiorari and
Prohibition with Prayer for a Temporary Restraining Order and Writ of Preliminary
Injunction with the Court of Appeals (CA). The CA rendered a Decision, granting the
respondent's petition and the RTC was declared to have NO JURISDICTION OVER
THE CASE and, consequently, all the proceedings, orders and processes it has so far
issued therein are ANNULED and SET ASIDE.

ISSUE: Whether the RTC has jurisdiction over the petitioners' action challenging the
legality or constitutionality of the provisions on the compulsory retirement age
contained in the CBA between respondent PAL and FASAP.

RULING: The said issue cannot be resolved solely by applying the Labor Code. Here,
the employer-employee relationship between the parties is merely incidental and the
cause of action ultimately arose from different sources of obligation, i.e., the
Constitution and CEDAW.
Thus, where the principal relief sought is to be resolved not by reference to the Labor
Code or other labor relations statute or a collective bargaining agreement but by the
general civil law, the jurisdiction over the dispute belongs to the regular courts of
justice and not to the labor arbiter and the NLRC.
This Court holds that the grievance machinery and voluntary arbitrators do not have
the power to determine and settle the issues at hand. They have no jurisdiction and
competence to decide constitutional issues relative to the questioned compulsory
retirement age. Their exercise of jurisdiction is futile, as it is like vesting power to
someone who cannot wield it.
Although the CBA provides for a procedure for the adjustment of grievances, such
referral to the grievance machinery and thereafter to voluntary arbitration would be
inappropriate to the petitioners, because the union and the management have
unanimously agreed to the terms of the CBA and their interest is unified.
It cannot be said that the "dispute" is between the union and petitioner company
because both have previously agreed upon the provision on "compulsory retirement"
as embodied in the CBA. Also, it was only private respondent on his own who
questioned the compulsory retirement.
In the same vein, the dispute in the case at bar is not between FASAP and
respondent PAL, who have both previously agreed upon the provision on the
compulsory retirement of female flight attendants as embodied in the CBA. The
dispute is between respondent PAL and several female flight attendants who
questioned the provision on compulsory retirement of female flight attendants. Thus,
referral to the grievance machinery and voluntary arbitration would not serve the
interest of the petitioners.

 Negros Metal Corp. v. Armelo J. Lamayo, 629 SCRA 470

(2010)ABRIL
FACTS:
Lamayo is a machinist for petitioner. In May 2002, while he was using a grinder, the
manager approached him and asked why he was using the grinder. To which he
replied that the machine was bigger and that he would finish his work faster.
Respondent's explanation was found unsatisfactory, hence, he was, via
memorandum, charged of loitering and warned. Taking the warning as a three-day
suspension as penalized under company rules, respondent reported for work after
three days, only to be meted with another 10-day suspension from May 30 to June
10, 2002, for allegedly failing to sign the memorandum suspending him earlier.
After serving the second suspension, respondent reported for work on June 11, 2002
but was informed by the manager that his services had been terminated and that he
should draft his resignation letter, drawing respondent to file on June 17, 2002 a
complaint for illegal dismissal.
Petitioner contended that the complaint should be dismissed because the Labor
Arbiter had no jurisdiction over it since, under their Collective Bargaining Agreement
(CBA), such matters must first be brought before the company's grievance machinery.

ISSUE: Whether or not the Labor Arbiter has jurisdiction over the illegal dismissal
case

RULING:
YES.
Articles 217, 261, and 262 of the Labor Code outline the jurisdiction of labor arbiters
and voluntary arbitrators as follows:
Art. 217. Jurisdiction of the 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 or implementation 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 and underscoring supplied)
xxxx
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.
(emphasis and underscoring supplied)
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 and underscoring supplied)

Under Art. 217, it is clear that a labor arbiter has original and exclusive jurisdiction
over termination disputes. On the other hand, under Article 261, a voluntary arbitrator
has original and exclusive jurisdiction over grievances arising from the interpretation
or enforcement of company policies.
As a general rule then, termination disputes should be brought before a labor arbiter,
except when the parties, under Art. 262, unmistakably express that they agree to
submit the same to voluntary arbitration.13
In the present case, the CBA provision on grievance machinery being invoked by
petitioner does not expressly state that termination disputes are included in the ambit
of what may be brought before the company’s grievance machinery.
Even assuming, however, that the suspension of an employee may be considered as
a "disagreement" which bears on the "application and interpretation of any of the
provisions" of the CBA, respondent could not have bound himself to bring the matter
of his suspension to grievance procedure or voluntary arbitration in light of the
documented fact that he had resigned from the union more than a year before his
suspension, not to mention the fact that he denied having a hand in the preparation of
the union president Ronquillo’s letter invoking the grievance procedure.1avvphi1 In
fine, the labor tribunal had original and exclusive jurisdiction over respondent’s
complaint for illegal dismissal.

 Manila Pavilion Hotel v. Henry Delada, 664 SCRA 334

(2012)PURACAN

FACTS:

The present petition stems from a grievance filed by respondent Delada against
petitioner company for re-assigning him to another restaurant within the hotel as head
waiter.

Since the parties failed to reach settlement, the respondent lodged a complaint before
the Panel of Voluntary Arbitrators (PVA) of NCMB. The PVA issued a decision and
ruled that the transfer of Delada was a valid exercise of management prerogative.
However, the PVA ruled the petitioner lost its authority to continue with the
administrative proceedings for insubordination and willful disobedience of the transfer
order and to impose the penalty of 90-day suspension on respondent. It said that it
acquired exclusive jurisdiction over the issue when the parties submitted such issues
before it.

ISSUE:

Whether petitioner retained the authority to continue with the administrative case
against respondent for insubordination and willful disobedience of the transfer order.

RULING:

YES.

Citing the decision in the case of Allied Banking Corp. vs. CA, the Court said that the
refusal to obey a valid transfer order constitutes willful disobedience of a lawful order
of an employer. Employees may object to, negotiate and seek redress against
employers for rules and orders that they regard as unjust and illegal. However, until
and unless these rules or orders are declared illegal or improper by the competent
authority, the employees ignore or disobey them at their peril.

Here, since the PVA eventually ruled that the transfer order was a valid exercise of
management prerogative, petitioner had the authority to continue with the
administrative proceedings for insubordination and willful disobedience against
respondent.

 Goya, Inc. v. Goya, Inc. Employees Union – FFW,

689 SCRA 1 (2013)BELEN

FACTS:
Goya, Inc., a domestic corporation engaged in the manufacture, importation, and
wholesale of top-quality food products, hired contractual employees from PESO
Resources Development Corporation (PESO) to perform temporary and occasional
services in its factory in Parang, Marikina City. This prompted respondent Goya, Inc.
Employees Union–FFW (Union) to request for a grievance conference on the ground
that the contractual workers do not belong to the categories of employees stipulated
in the existing CBA. When the matter remained unresolved, the grievance was
referred to the NCMB for voluntary arbitration. They agreed to submit for resolution
the solitary issue of “whether or not the Company is guilty of unfair labor acts in
engaging the services of PESO, a third-party service provider, under the existing
CBA, laws, and jurisprudence.”

Voluntary Arbitrator (VA) dismissed the Union’s charge of ULP for being purely
speculative and for lacking in factual basis, but the Company was directed to observe
and comply with its commitment under the CBA. The Company immediately filed a
petition for review before the Court of Appeals (CA) under Rule 43 of the Revised
Rules of Civil Procedure to set aside the directive to observe and comply with the
CBA commitment pertaining to the hiring of casual employees when necessitated by
business circumstances, professing that such order was not covered by the sole issue
submitted for voluntary arbitration.

Issue: WON the Voluntary Arbitrator can decide questions not covered by Submission
Agreement.

Held:
Yes.
Ratio: First, the said ruling of the VA is interrelated and intertwined with the sole issue
to be resolved that is, “Whether or not the Company is guilty of unfair labor practice in
engaging the services of PESO, a third-party service provider, under existing CBA,
laws, and jurisprudence.” Both issues concern the engagement of PESO by the
Company which is perceived as a violation of the CBA and which constitutes as unfair
labor practice on the part of the Company.
In general, the arbitrator is expected to decide those questions expressly stated and
limited in the submission agreement. However, since arbitration is the final resort for
the adjudication of disputes, the arbitrator can assume that he has the power to make
a final settlement. Thus, assuming that the submission empowers the arbitrator to
decide whether an employee was discharged for just cause, the arbitrator in this
instance can reasonably assume that his powers extended beyond giving a yes-or-no
answer and included the power to reinstate him with or without back pay. 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.

ISSUE:

Whether or not the Voluntary Arbitrator can decide questions not covered by
Submission Agreement.

RULING:

Yes. First, the said ruling of the VA is interrelated and intertwined with the sole issue
to be resolved that is, “Whether or not the Company is guilty of unfair labor practice in
engaging the services of PESO, a third party service provider, under existing CBA,
laws, and jurisprudence.” Both issues concern the engagement of PESO by the
Company which is perceived as a violation of the CBA and which constitutes as unfair
labor practice on the part of the Company.

In general, the arbitrator is expected to decide those questions expressly stated and
limited in the submission agreement. However, since arbitration is the final resort for
the adjudication of disputes, the arbitrator can assume that he has the power to make
a final settlement. Thus, assuming that the submission empowers the arbitrator to
decide whether an employee was discharged for just cause, the arbitrator in this
instance can reasonably assume that his powers extended beyond giving a yes-or-no
answer and included the power to reinstate him with or without back pay. 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.

 7K Corporation v. Eddie Albarico, 699 SCRA 700

(2013)NABATAR

FACTS:
When he was dismissed on 5 April 1993, Albarico was a regular employee of 7K Corporation,
a company selling water purifiers. He started working for the company in 1990 as a salesman.
Because of his good performance, his employment was regularized. He was also promoted
several times: from salesman, he was promoted to senior sales representative and then to
acting team field supervisor. In 1992, he was awarded the President’s Trophy for being one of
the company’s top water purifier specialist distributors. In April of 1993, the chief operating
officer of 7K Corporation terminated Albarico’s employment allegedly for his poor sales
performance. Albarico had to stop reporting for work, and he subsequently submitted his
money claims against 7K Corporation for arbitration before the National Conciliation and
Mediation Board (NCMB). The issue for voluntary arbitration before the NCMB, according to
the parties’ Submission Agreement was whether Albarico was entitled to the payment of
separation pay and the sales commission reserved for him by the corporation. As for its
defense, 7K Corporation claimed Albarico had voluntarily stopped reporting for work after
receiving a verbal reprimand for his sales performance; hence, it was he who was guilty of
abandonment of employment While the case was pending before the NCMB, Albarico filed a
complaint for illegal dismissal before the LA.

The latter ruled in favor of Albarico. However, the NLRC, on appeal, vacated the decision of
the LA on the ground of forum-shopping, without prejudice to the pending NCMB arbitration
case. The decision of the NLRC became final. NCMB ruling Albarico was ILLEGALLY
DISMISSED The arbitrator explained that the promotions, increases in salary, and awards
received by respondent belied the claim that the latter was performing poorly. It was also
found that Albarico could not have abandoned his job, as the abandonment should have been
clearly shown.

The VA also found that Albarico was dismissed from his work without due process. However,
it was found that reinstatement was no longer possible because of the strained relationship of
the parties. Thus, in lieu of reinstatement, the VA ordered 7K Corporation to pay separation
pay for two years at P4,456 for each year, or a total amount of P8,912. The VA also ordered
7K Corporation to pay backwages in the amount of P90,804.19, plus attorney’s fees since
Albarico had been compelled to file an action for illegal dismissal. 7K Corporation appealed to
the CA, imputing grave abuse of discretion on the part of VA for ruling on the issue of illegal
dismissal and for awarding payment of backwages and attorney’s fees. 7K Corporation
contended that the issue of the legality of dismissal was not explicitly included in the
Submission Agreement.

CA RULING: AFFIRMED VA; Deleted Attorney’s Fees for lack of factual basis.
ISSUE:
Did the VA properly assume jurisdiction to decide the issue of the legality of the dismissal of
Albarico as well as the latter’s entitlement to backwages?

RULING:
YES. The circumstances of the instant case lead to no other conclusion than that the claim of
Albarico for separation pay was premised on his allegation of illegal dismissal. Thus, the VA
properly assumed jurisdiction over the issue of the legality of his dismissal Moreover, it should
be noted that even the NLRC was of the understanding that the NCMB arbitration case
sought to resolve the issue of the legality of the dismissal of the Albarico. In fact, the identity
of the issue of the legality of his dismissal, which was previously submitted to the NCMB, and
later submitted to the NLRC, was the basis of the latter’s finding of forum shopping and the
consequent dismissal of the case before it. In fact, 7K Corporation also implicitly
acknowledged this when it filed before the NLRC its Motion to Dismiss Albarico’s Complaint
on the ground of forum shopping. Thus, it is now estopped from claiming that the issue before
the NCMB does not include the issue of the legality of the dismissal of respondent. Besides,
there has to be a reason for deciding the issue of respondent’s entitlement to separation pay.
To think otherwise would lead to absurdity, because the voluntary arbitrator would then be
deciding that issue in a vacuum. The arbitrator would have no basis whatsoever for saying
that Albarico was entitled to separation pay or not if the issue of the legality of Albarico’s
dismissal was not resolve first.

DOCTRINES: A voluntary arbitrator may, by agreement of the parties, assume jurisdiction

over any of the labor disputes enumerated under Article 223 of the Labor Code or those
which could fall under the jurisdiction of the Labor Arbiter. He has plenary jurisdiction and
authority to interpret an agreement to arbitrate and to determine the scope of his own
authority when the said agreement is vague — subject only, in a proper case, to the certiorari
jurisdiction of this Court. In deciding a case, the voluntary arbitrator may award backwages
upon a finding of illegal dismissal, even though the issue of entitlement thereto is not explicitly
claimed in the Submission Agreement. Backwages, in general, are awarded on the ground of
equity as a form of relief that restores the income lost by the terminated employee by reason
of his illegal dismissal. Aside from illegal dismissal cases, separation pay may also be
awarded in the following instances: a. when employees have been terminated for authorized
causes, such as redundancy, retrenchment or installation of labor-saving devices; b. when
employees have been terminated for a just cause other than serious misconduct or an act
reflecting on moral character and social justice calls for the awarding of separation pay; c.
when it has become an established practice of the company to pay the said benefit to
voluntarily resigning employees; or d. when an employee has been validly dismissed for non-
membership in a union as required in a closedshop agreement

5. Procedures, Art. 276

6. Interpretation of Agreement

 Lepanto Consolidated Mining Corp. v. Lepanto Local Staff

 union, 562 SCRA 495 (2008)VIDAL

FACTS: Petitioner Lepanto is a domestic mining corporation. Respondent Lepanto

Local Staff Union is the duly certified bargaining agent of petitioner's employees
occupying staff positions. In 1998, petitioner and respondent entered into their 4th
Collective Bargaining Agreement wherein Sec.3 thereof provides that the company
shall continue to pay nightshift differential for work during the first and third shifts to all
covered employees within the bargaining unit:

• 1st shift (11:00 p.m. to 7:00 a.m.) = differential pay is 20% of the basic rate
• 3rd shift (3:00 p.m. to 11:00 p.m.) = differential pay is 15% of the basic rate

(par. 3) However, for overtime work, which extends beyond the regular day shift (7:00
a.m. to 3:00 p.m.), there will be no night differential pay added before the overtime
pay is calculated.

As to the longevity pay, it was stated in the CBA that the company shall grant
longevity pay of P30.00 per month effective July 1, 1998 and every year thereafter.

In 2000, respondent filed a complaint with the NCMB alleging that petitioner failed to
pay the night shift differential and longevity pay of respondent's members as provided
in the 4th CBA.

The Voluntary Arbitrator ruled in favor of the respondent and ordered petitioner to pay
respondent the night shift differential and longevity pay. Interpreting par.3, it only
meant that an employee who extends work beyond the second shift shall receive
overtime pay which shall be computed before the night shift differential pay. In other
words, the 2nd shift is still entitled to receive night shift differential.

ISSUE: Whether VA’s interpretation of the 4th CBA was correct when it ruled in favor
of the respondent

HELD: Yes. The first paragraph of Section 3 provides that petitioner shall continue to
pay night shift differential to workers of the first and third shifts. It does not provide
that workers who performed work beyond the second shift shall not be entitled to
night shift differential. The inclusion of the third paragraph is not intended to exclude
the regular day shift workers from receiving night shift differential for work performed
beyond 3:00 p.m. It only provides that the night shift differential pay shall be excluded
in the computation of the overtime pay.

RATIO: The terms and conditions of a collective bargaining contract constitute the law
between the parties. If the terms of the CBA are clear and have no doubt upon the
intention of the contracting parties, the literal meaning of its stipulation shall prevail.
To ascertain the intention of the contracting parties, the (1) contemporaneous and
subsequent acts of the parties as well as their (2) negotiating and contractual history
and evidence of past practices are used by the courts in interpreting ambiguities in
the CBA.

7. Awards and Orders, Art. 276

 Equitable PCI Banking Corp. v. RCBC Capital Corp, 574 SCRA

858 (2004)MABBORANG
FACTS:

Petitioners Equitable PCI Bank, Inc. (EPCIB) and the individual shareholders of Bankard, Inc., as sellers,
and respondent RCBC Capital Corporation (RCBC), as buyer, executed a Share Purchase Agreement
(SPA) for the purchase of petitioners’ interests in Bankard, representing 226,460,000 shares, for the
price of PhP 1,786,769,400. To expedite the purchase, RCBC agreed to dispense with the conduct of a
due diligence audit on the financial status of Bankard. RCBC deposited the stipulated downpayment
amount in an escrow account after which it was given full management and operational control of
Bankard.

June 2, 2000 is also considered by the parties as the Closing Date referred to in the SPA. Sometime in
September 2000, RCBC had Bankard’s accounts audited, creating for the purpose an audit team and
the conclusion was that the warranty, as contained in Section 5(h) of the SPA (simply Sec. 5[h]
hereinafter), was correct. RCBC paid the balance of the contract price. The corresponding deeds of
sale for the shares in question were executed in January 2001. Thereafter RCBC informed petitioners
of its having overpaid the purchase price of the subject shares, claiming that there was an
overstatement of valuation of accounts amounting to PhP 478 million, resulting in the overpayment
of over PhP 616 million.

Thus, RCBC claimed that petitioners violated their warranty, as sellers, embodied in Sec. 5(g) of the
SPA (Sec. 5[g] hereinafter). RCBC, in accordance with Sec. 10 of the SPA, filed a Request for
Arbitration dated May 12, 2004 with the ICC-ICA. In the request, RCBC charged Bankard with
deviating from, contravening and not following generally accepted accounting principles and practices
in maintaining their books. Arbitration in the ICC-ICA proceeded after the formation of the arbitration
tribunal consisting of retired Justice Santiago M. Kapunan, nominated by petitioners; Neil Kaplan,
RCBC’s nominee; and Sir Ian Barker, appointed by the ICC-ICA. After drawn out proceedings with each
party alleging deviation and non-compliance by the other with arbitration rules, the tribunal, with
Justice Kapunan dissenting, rendered a Partial Award. On the matter of prescription, the tribunal held
that RCBC’s claim is not time -barred, the claim properly falling under the contemplation of Sec. 5(g)
and not Sec. 5(h). As such, the tribunal concluded, RCBC’s claim was filed within the three (3)
-year period under Sec. 5(g) and that the six (6)-month period under Sec. 5(h) did not apply.

The tribunal also exonerated RCBC from laches, the latter having sought relief within the three (3)-
year period prescribed in the SPA. Notably, the tribunal considered the rescission of the SPA and ASPA
as impracticable and "totally out of the question." RCBC filed with the RTC a Motion to Confirm Partial
Award. The RTC issued the first assailed order confirming the Partial Award and denying the adverted
separate motions to vacate and to suspend and inhibit. From this order, petitioners sought
reconsideration, but their motion was denied by the RTC.

ISSUE:

Whether or not there is manifest disregard of the law by ICC-ICA?

HELD:

The petition must be denied. In order to justify the vacation of an arbitral award on account of
“manifest disregard of the law,” the arbiter’s findings must clearly and unequivocally violate an
established legal precedent. Anything less would not suffice.

Parameters by which an arbitral award may be set aside.—In Asset Privatization Trust v. Court of
Appeals, 300 SCRA 579 (1998), the Court passed on similar issues as the ones tendered in the instant
petition. In that case, the arbitration committee issued an arbitral award which the trial court, upon
due proceedings, confirmed despite the opposition of the losing party. Motions for reconsideration by
the losing party were denied. An appeal interposed by the losing party to the CA was denied due
course.

On appeal to this Court, we established the parameters by which an arbitral award may be set aside,
to wit: As a rule, the award of an arbitrator cannot be set aside for mere errors of judgment either as
to the law or as to the facts. Courts are without power to amend or overrule merely because of
disagreement with matters of law or facts determined by the arbitrators. They will not review the
findings of law and fact contained in an award, and will not undertake to substitute their judgment for
that of the arbitrators, since any other rule would make an award the commencement, not the end,
of litigation.

Errors of law and fact, or an erroneous decision of matters submitted to the judgment of the
arbitrators, are insufficient to invalidate an award fairly and honestly made. Judicial review of an
arbitration is, thus, more limited than judicial review of a trial. Nonetheless, the arbitrators’ awards is
not absolute and without exceptions. The arbitrators cannot resolve issues beyond the scope of the
submission agreement.

The parties to such an agreement are bound by the arbitrators’ award only to the extent and in the
manner prescribed by the contract and only if the award is rendered in conformity thereto.

Thus, Sections 24 and 25 of the Arbitration Law provide grounds for vacating, rescinding or modifying
an arbitration award. Where the conditions described in Articles 2038, 2039 and 2040 of the Civil
Code applicable to compromises and arbitration are attendant, the arbitration award may also be
annulled. x x x x Finally, it should be stressed that while a court is precluded from overturning an
award for errors in determination of factual issues, nevertheless, if an examination of the record
reveals no support whatever for the arbitrators’ determinations, their award must be vacated. In the
same manner, an award must be vacated if it was made in “manifest disregard of the law."
Errors in law and fact would not generally justify the reversal of an arbitral award.—Following Asset
Privatization Trust, errors in law and fact would not generally justify the reversal of an arbitral award.
A party asking for the vacation of an arbitral award must show that any of the grounds for vacating,
rescinding, or modifying an award are present or that the arbitral award was made in manifest
disregard of the law. Otherwise, the Court is duty-bound to uphold an arbitral award.

8. Finality and Execution of Awards, Art. 276

 Coca-Cola Bottlers Philippines, Inc. Sales Force Union-

PTGWO-BALAIS v. Coca-Cola Bottlers, Philippine, Inc.,
464 SCRA 507 (2005)SALCEDO
FACTS:
The Coca-Cola Bottlers Philippines, Inc. Sales Force Union-PTGWO is a legitimate
labor organization duly registered with the Department of Labor and Employment, and
is the sole and exclusive bargaining representative of all regular route salesmen,
regular relief route salesmen, regular lead helpers, regular relief lead helpers, regular
route helpers, regular relief route helpers and order-taker collectors who are assigned
in various sales offices specified in the parties' collective bargaining agreement. On
the other hand, the respondent company is a domestic corporation duly organized
and existing under the laws of the Philippines and is engaged in the manufacture and
distribution of its soft drink products.

In January 1989, the UNION filed a Notice of Strike with the National Conciliation and
Mediation Board raising certain issues for conciliation. As a result of said dispute, the
UNION staged a strike.

Subsequently, the Board succeeded in making the parties agree to a voluntary

settlement of the case via a Memorandum of Agreement signed by them on February
9, 1989.

In denying the claim of the Union for the payment of the additional 50% of the
average commission for the last six months, the respondent argues that the said MOA
is not applicable since the company did not grant Christmas bonus in 1999.

After hearing and the submission of evidence and position papers, the Arbitration
Panel composed of Apron Mangabat and Noel Sanchez, as chairman and member,
respectively, denied petitioner's claim and declared that the P4,000.00 given as ex
gratia is not a bonus, while Arnel Dolendo, another member dissented.
ISSUE:
Whether or not the Honorable Court of Appeals committed a reversible error when it
dismissed the petition on mere technicality
HELD:
NO. On the matter of procedure, Article 262-A of the Labor Code governs. It provides
that the award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators
shall be final and executory after ten (10) calendar days from receipt of the copy of
the award or decision by the parties. Moreover, Section 6, Rule VII of the NCMB
Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings, dated July
28, 1989, states categorically, to wit:
"Section 6. Finality of Award or Decisions. 'Awards or decisions of voluntary arbitrator
become final and executory after ten (10) calendar days from receipt of copies of the
award or decision by the parties."\

The above-mentioned rule makes the voluntary arbitrator's award final and executory
after ten calendar days from receipt of a copy of the decision or award by the parties.
Presumably, the decision may still be reconsidered by the Voluntary Arbitrator on the
basis of a motion for reconsideration seasonably filed during that period. Thus, the
seasonable filing of a motion for reconsideration following the receipt by the petitioner
of a copy of the decision or award of the panel of Voluntary Arbitrators, is a
mandatory requirement to forestall the finality of such decision or award. In the case
at bar however, the petitioner filed on March 12, 2001 a motion for reconsideration of
the arbitrators decision, which it received on February 20, 2001. Without doubt at the
time the said motion was filed, which was beyond the reglementary period of ten (10)
days, the decision had already become final and executory. It is a hornbook rule that
once a judgment has become final and executory, it may no longer be modified in any
respect, even if the modification is meant to be an erroneous conclusion of fact or law,
and regardless of whether the modification is attempted to be made by the court
rendering it or by the highest court of the land, as what remains to be done is the
purely ministerial enforcement or execution of the judgment.

Nothing is more settled in law than that when a judgment becomes final and
executory it becomes immutable and unalterable. The same may no longer be
modified in any respect, even if the modification is meant to correct what is perceived
to be an erroneous conclusion of fact or law, and whether made by the highest court
of the land. The reason is grounded on the fundamental considerations of public
policy and sound practice that, at the risk of occasional error, the judgments or orders
of courts must be final at some definite date fixed by law.

9. Appeal, Rules of Court, Rule 43