Authority of the Voluntary Arbitrator

Tinig ng Marino – September – October 2014

Head, Litigation and Seafarers Department
Sapalo Velez Bundang and Bulilan Law Offices


Who has jurisdiction over a case involving the interpretation or implementation of the collective bargaining agreement: the labor arbiter or the voluntary arbitrator?

The recent case of “Estate of Nelson R. Dulay represented by his wife Merridy Jane P. Dulay vs. Aboitiz Jebsen Maritime, Inc. & General Charterers, Inc.” (G.R. No. 172642) decided by the Supreme Court on June 13, 2012 answered the above question by holding that the voluntary arbitrator should take cognizance of such an issue.

In the said Dulay case, a veteran seafarer, after completion of his employment contract, and while still a bona fide member of a union which was the collective bargaining agent of his employer, died of acute renal failure secondary to septicemia. The widow claimed for death benefits through the grievance procedure of the Collective Bargaining Agreement (CBA) between the seafarer’s union and his employer but the procedure was declared deadlocked. Pursuant to a provision in the CBA, the widow then filed a claim against the employer for death and medical benefits and damages amounting to US 90,000 dollars before the National Labor Relations Commission (NLRC) – Arbitration Board.

A few days later, the deceased seafarer’s brother received 20,000 Pesos from the employer pursuant to a different and separate provision of the same CBA and released the union from further liability. The employer insisted that the NLRC has no jurisdiction over the wido’s claim due to the absence of an employer-employee relationship at the time of the seafarer’s death and the fact that the seafarer’s contract was already completed prior to his demise. The labor arbiter and the NLRC both recognized the claim and ruled in favor of the widow, ordering the claims arising out of an employer-employee relationship or by virtue of any employer to pay.

On appeal, the Court of Appeals (CA) reversed the decision of the NLRC and referred the claim to the National Conciliation and Mediation Board (NCMB) for the designation of the voluntary arbitrator or constitution of a panel of voluntary arbitrators for appropriate resolution on the applicable CBA provision to be applied insofar as death benefits due to the heirs of the seafarer are concerned.

The Supreme Court affirmed the CA ruling, finding that Republic Act (RA) No. 8042, the special law governing overseas Filipino workers, does not provide for any provision regarding jurisdiction over disputes or unresolved grievances on the interpretation or implementation of a CBA. Section 10 of R.A. 8042 simply speaks in general of law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. On the other hand, Articles 217 (c) and 261 of the Labor Code, a general statute, are clear and particular in expressing that voluntary arbitrators have jurisdiction over case arising from the interpretation or implementation of CBA’s.. As such, the specific or special provisions of the Labor Code govern and not those of R.A. 8042.

The High Court, upon review of the CBA which the seafarer’s widow considers to be the law between the parties, likewise concluded that the parties really intended to bring to conciliation or voluntary arbitration any dispute or conflict in the interpretation or application of the provisions of their CBA.

It noted that Section 7 of the Omnibus Rules and Regulations, as amended by R.S. 10022, promulgated by the Department of Labor and Employment and the Department of Foreign Affairs, which implement R.A. 8042, so provides that for Overseas Filipino Workers with CBA’s the case shall be submitted for voluntary arbitration following Articles 261 and 262 of the Labor Code. Such is the same idea invoked in Section 29 of the POEA Standard Employment contract.

The Court made it clear that with respect to disputes involving claims of Filipino seafarers where the parties are covered by a CBA, the dispute or claim should be submitted to the jurisdiction of a voluntary arbitrator or panel of arbitrators. In the absence of a CBA, the parties may opt to submit the dispute to either to the NLRC or to voluntary arbitration.

This position is consistent with the policy of the state and Section 3, Article 13 of the Constitution to promote voluntary arbitration as a mode of settling labor disputes.

Translate »