MANEJA vs. NLRC and MANILA MIDTOWN HOTEL

Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 124013 June 5, 1998
ROSARIO MANEJA, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MANILA MIDTOWN HOTEL, respondents.


MARTINEZ, J.:

Assailed in this petition for certiorari under Rule 65 of the Revised Rules of Court are the Resolution

¹ dated June 3, 1994 of the respondent National Labor Relations Commission in NLRC NCR-00-10-05297-90, entitled "Rosario Maneja, Complainant, vs. Manila Midtown Hotel, Respondent," which dismissed the illegal dismissal case filed by petitioner against private respondent company for lack of jurisdiction of the Labor Arbiter over the case; and its Resolution ² dated October 20, 1995 denying petitioner's motion for reconsideration.

Petitioner Rosario Maneja worked with private respondent Manila Midtown Hotel beginning January, 1985 as a telephone operator. She was a member of the National Union of Workers in Hotels, Restaurants and Allied Industries (NUWHRAIN) with an existing Collective Bargaining Agreement (CBA) with private respondent.

In the afternoon of February 13, 1990, a fellow telephone operator, Rowena Loleng received a Request for Long Distance Call (RLDC) form and a deposit of P500.00 from a page boy of the hotel for a call by a Japanese guest named Hirota Ieda. The call was unanswered. The P500.00 deposit was forwarded to the cashier. In the evening, Ieda again made an RLDC and the page boy collected another P500.00 which was also given to the operator Loleng. The second call was also unanswered. Loleng passed on the RLDC to petitioner for follow-up. Petitioner monitored the call.

On February 15, 1990, a hotel cashier inquired about the P1,000.00 deposit made by Ieda. After a search, Loleng found the first deposit of P500.00 inserted in the guest folio while the second deposit was eventually discovered inside the folder for cancelled calls with deposit and official receipts.

When petitioner saw that the second RLDC form was not time-stamped, she immediately placed it inside the machine which stamped the date "February 15, 1990." Realizing that the RLDC was filed 2 days earlier, she wrote and changed the date to February 13, 1990. Loleng then delivered the RLDC and the money to the cashier. The second deposit of P500.00 by Ieda was later returned to him.

On March 7, 1990, the chief telephone operator issued a memorandum

³ to petitioner and Loleng directing the two to explain the February 15 incident. Petitioner and Loleng thereafter submitted their written explanation. ⁴

On March 20, 1990, a written report

⁵ was submitted by the chief telephone operator, with the recommendation that the offenses committed by the operators concerned covered violations of the Offenses Subject to Disciplinary Actions (OSDA): (1) OSDA 2.01: forging, falsifying official document(s), and (2) OSDA 1.11: culpable carelessness — negligence or failure to follow specific instruction(s) or established procedure(s).

On March 23, 1990, petitioner was served a notice of dismissal

⁶ effective April 1, 1990. Petitioner refused to sign the notice and wrote therein "under protest."

Meanwhile, a criminal case

⁷ for Falsification of Private Documents and Qualified Theft was filed before the Office of the City Prosecutor of Manila by private respondent againts Loleng and petitioner. However, the resolution recommending the filing of a case for estafa was reversed by 2nd Asst. City Prosecutor Virgilio M. Patag.

On October 2, 1990, petitioner filed a complaint for illegal dismissal against private respondent before the Labor Arbiter. The complaint was later amended to include a claim for unpaid wages, unpaid vacation leave conversion and moral damages.

Position papers were filed by the parties. Thereafter, the motion to set the case for hearing filed by private respondent was granted by the Labor Arbiter and trial on the merits ensued.

In his decision

⁸ dated May 29, 1992, Labor Arbiter Oswald Lorenzo found that the petitioner was illegally dismiised. However, in the decision, the Labor Arbiter stated that:

Preliminary, we hereby state that on the face of the instant complaint, it is one that revolves on the matter of the implementation and interpretation of existing company policies, which per the last par. of Art. 217 of the Labor Code, as amended, is one within the jurisdictional ambit of the grievance procedure under the CBA and thereafter, if unresolved, one proper for voluntary arbitration. This observation is re-entrenched by the fact, that complainant claims she is a member of NUWRAIN with an existing CBA with respondent hotel.

On this score alone, this case should have dismissed outright.

⁹

Despite the aforequoted preliminary statement, the Labor Arbiter still assumed jurisdiction "since Labor Arbiters under Article 217 of the same Labor Code, are conferred original and exclusive jurisdiction of all termination case(sic.)." The dispositive portion of the decision states that:

WHEREFORE, premises considered, judgment is hereby renrdered as follows:

(1) Declaring complainant's dismissal by respondent hotel as illegally effected;

(2) Ordering respondent to immediately reinstate complainant to her previous position without loss of seniority rights;

(3) Ordering further respondent to pay complainant the full backwages due her, which is computed as follows:

3/23/90 - 10/31/90 = 7.26/mos.

P2.540 x 7.26/mos. P18,440.40

11/1/90 - 1/7/91 = 2.23/mos.

P3,224.16 x 2.23/mos. 7,189.87

1/8/91 - 4/29/92 = 15.7/mos.
P3,589.16 x 15.7/mos. 56,349.89
P81,980.08

(4) Moreover, respondent is ordered to pay the 13th month pay due the complainant in the amount of P6,831.67 including moral and exemplary damages of P15,000.00 and P10,000.00 respectively, as well as attorney's fees equivalent to ten (10) percent of the total award herein in the amount of P11,381.17;

(5) Finally, all other claims are hereby dismissed for lack of merit.

SO ORDERED.

Private respondent appealed the decision to the respondent commission on the ground inter alia that the Laber Arbiter erred in "assuming jurisdiction over the illegal dismissal case after finding that the case falls within the jurisdictional ambit of the grievance procedure under the CBA, and if unresolved, proper for voluntary arbitration."

¹⁰ An Opposition ¹¹ was filed by petitioner.

In the assailed Resolution

¹² dated June 3, 1994, respondent NLRC dismissed the illegal dismissal case for lack of Jurisdiction of the Labor Arbiter because the same should have instead been subjected to voluntary arbitration.

Petitioner's motion for reconsideration

¹³ was denied by respondent NLRC for lack of merit.

In this petition for certiorari, petitioner ascribes to respondent NLRC grave abuse of discretion in —

1. Ruling that the Labor Arbiter was without jurisdiction over the illegal dismissal case;

2. Not ruling that private respondent is estopped by laches from questioning the jurisdiction of the illegal dismissal case;

3. Reversing the decision of the Labor Arbiter based on a technicality notwithstanding the merits of the case.

Petitioner contents that Article 217(a)(2) and (c) relied upon by respondent NLRC in divesting the labor arbiter of jurisdiction over the illegal dismissal case, should be read in conjunction with Article 261

¹⁴ of the Labor Code. It is the view of petitioner that termination cases arising from the interpretation or enforcement policies pertaining to violations of Offenses Subject to Disciplinary Actions (OSDA), are under the jurisdiction of the voluntary arbitrator only if these are unresolved in the plant-level grievance machinery. Petitioner insists that her termination is not an unresolved grievance as there has been no grievance meeting between the NUWHRAIN union and the management. The reason for this, petitioner adds, is that it has been a company practice that termination cases are not anymore referred to the grievance machinery but directly to the labor arbiter.

In its comment, private respondent argues that the Labor Arbiter should have dismissed the illegal dismissal case outright after finding that it is within the jurisdictional ambit of the grievance procedure. Moreover, private respondent states that the issue of jurisdiction may be raised at any time and at any stage of the proceedings even on appeal, and is not in estoppel by laches as contended by the petitioner.

For its part, public respondent, through the Office of the Solicitor General, cited the ruling of this Court in Sanyo Philippines Workers Union- PSSLU vs. Cañizares

¹⁵ in dismissing the case for lack of jurisdiction of the Labor Arbiter.

The legal issue in this case is whether or not the Labor Arbiter has jurisdiction over the illegal dismissal case.

The respondent Commission, in holding that the Labor Arbiter lacks jurisdiction to hear the illegal dismissal case, cited as basis therefor Article 217 of the Labor Code, as amended by Republic Act No. 6715. It said:

White it is conceded that under Article 217(a), Labor Arbiters shall have original and exclusive jurisdiction over cases involving "termination disputes," the Supreme Court, in a fairy recent case ruled:

The procedure introduced in RA 6715 of referring certain grievances originally and exclusively to the grievance machinery, and when not settled at this level, to a panel of voluntary arbitrators outlined in CBAs does not only include grievances arising from the interpretation or implementation of the CBA but applies as well to those arising from the implementation of company personnel policies. No other body shall take cognizance of these cases. . . . (Sanyo vs. Cañizares, 211 SCRA 361,
372)

¹⁶

We Find that the respondent Commission has erroneously interpreted the aforequoted portion of our ruling in the case of Sanyo, as divesting the Labor Arbiter of jurisdiction in a termination dispute.

Art. 217 of the Labor Code gives us the clue as to the jurisdiction of the Labor Arbiter, to wit:

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 decided 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;

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 (P5,000.00) 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 personel 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.

As can be seen from the aforequoted Article, termination cases fall under the original and exclusive jurisdiction of the Labor Arbiter. It should be noted, however, that in the opening there appears the phrase: "Except as otherwise provided under this Code . . . ." It is paragraph (c) of the same Article which respondent Commission has erroneously interpreted as giving the voluntary arbitrator jurisdiction over the illegal dismissal case.

However, Article 217 (c) should be read in conjunction with Article 261 of the Labor Code which grants to voluntary arbitrators 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 personel policies. Note the phrase "unresolved grievances." In the case at bar, the termination of petitioner is not an unresolved grievance.

The stance of the Solicitor General in the Sanyo case is totally the reverse of its posture in the case at bar. In Sanyo, the Solicitor General was of the view that a distinction should be made between a case involving "interpretation or implementation of Collective Bargaining Agreement" or interpretation or "enforcement" of company personel policies, on the one hand and a case involving termination, on the other hand. It argued that the dismissal of the private respondents does not involve an "interpretation or implementation" of a Collective Bargaining Agreement or "interpretation or enforcement" of company personel policies but involves "termination." The Solicitor General further said that where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the grievance machinery set up the Collective Bargaining Agreement or by voluntary arbitration. Where there was already actual termination, i.e., violation of rights, it is already cognizable by the Labor Arbiter.

¹⁷ We fully agree with the theory of the Solicitor General in the Sanyo case, which is radically apposite to its position in this case.

Moreover, the dismissal of petitioner does not fall within the phrase "grievance arising from the interpretation or implementation of collective bargaining agreement and those arising from the interpretation or enforcement of company personel policies," the jurisdiction of which pertains to the grievance machinery or thereafter, to a voluntary arbitrator or panel of voluntary arbitrators. It is to be stressed that under Article 260 of the Labor Code, which explains the function of the grievance machinery and voluntary arbitrator. "(T)he parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personel policies." Article 260 further provides that the parties to a CBA shall name or designate their respective representative to the grievance machinery and if the grievance is unsettled in that level, it shall automatically be refered to the voluntary arbitrators designated in advance by the parties to a CBA of the union and the company. It can thus be deduced that only disputes involving the union and the company shall be referred to the grievance machinery or voluntary arbitrators.

¹⁸

In the case at bar, the union does not come into the picture, not having objected or voiced any dissent to the dismissal of the herein petitioner. The reason for this, according to petitioner is that "the practice in said Hotel in cases of termination is that the latter cases are not referred anymore to the grievance committee;" and that "the terminated employee who wishes to question the legality of his termination usually goes to the Labor Arbiter for arbitration, whether the termination arose from the interpretation or enforcement of the company personnel policies or otherwise."

¹⁹

As we ruled in Sanyo, "Since there has been an actual termination, the matter falls within the jurisdiction of the labor Arbiter." The aforequoted doctrine is applicable foursquare in petitioner's case. The dismissal of the petitioner does not call for the interpretation or enforcement of company personnel policies but is a termination dispute which comes under the jurisdiction of the Labor Arbiter.

It should be explained that "company personel policies" are guiding priciples 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, are the rules and regulations governing disciplinary actions.

²⁰

The case of Pantranco North Express, Inc. vs. NLRC

²¹ sheds further light on the issue of jurisdiction where the Court cited the Sanyo case and quoted the decision of therein Labor Arbiter Olairez in this manner:

In our honest opinion we have jurisdiction over the complaint on the following grounds:

First, this is a complaint of illegal dismissal of which original and exclusive jurisdiction under Article 217 has been conferred to the labor Arbiters. The interpretation of the CBA or enforcement of the company policy is only corollary to the complaint of illegal dismissal. Otherwise, an employee who was on AWOL, or who committed offenses contrary to the personnel policies(sic) can no longer file a case of illegal discharge is premised on the interpretation or enforcement of the company policies(sic).

Second. Respondent voluntarily submitted tha case to the jurisdiction of this labor tribunal. It adduced arguments to the legality of its act, whether such act may be retirement and/or dismissal, and prayed for reliefs on the merits of the case. A litigant cannot pray for reliefs on the merits and at the same time attacks(sic) the jurisdiction of the tribunal. A person cannot have one's cake and eat it too. . . . .

As to the second ground, petitioner correctly points out that respondent NLRC should have ruled that private respondent is estopped by laches in questioning the jurisdiction of the Labor Arbiter.

Clearly, estoppel lies. The issue of jurisdiction was mooted by herein private respondent's active participation in the proceedings below. In Marquez vs. Secretary of Labor,

²² the Court said:

. . . . The active participation of the against whom the action was brought, coupled with his failure to object to the jurisdiction of the court or quasi-judicial body where the action is pending, is tantamount to an invocation of that jurisdiction and a willingness to abide the resolution of the case and will bar said party from later on impugning the court or body's jurisdiction.

In the assailed Resolution,

²³ respondent NLRC cited La Naval Drug Corporation vs. Court of Appeals ²⁴ in holding that private respondent is not in estopel. Thus,

The operation of the principle of estoppel on the question of jurisdiction seemingly depends upon whether the lower court actually had jurisdiction or not. If it had no jurisdiction, but the case was tried and decided upon the theory that it had jurisdiction, the parties are not barred, on appeal, from assailing such jurisdiction, for the same "must exist as a matter of law, and may not be conferred by consent of the parties or by estoppel" (5 C.J.S., 861-863). However, if the lower court had jurisdiction, and the case was heard and decided upon a given theory, such, for instance, as that the court had no jurisdiction, the party who induced it to adopt such theory will not be permitted, on appeal, to assume an inconsistent position — that the lower court had jurisdiction. Here, the principle of estoppel applies. The rule that jurisdiction is conferred by law, and does not depend upon the will of the parties, has no bearing thereon. (Emphasis ours)

Again, the respondent NLRC has erroneously interpreted our ruling in the La Naval case. Under the said ruling, estoppel lies in this case. Private respondent is stopped from questioning the jurisdiction of the Labor Arbiter before the respondent NLRC having actively participated in the proceedings before the former. At no time before or during the trial on the merits did private respondent assail the jurisdiction of the Labor Arbiter. Private respondent took the cue only from the preliminary statement in the decision of the Labor Arbiter, which was a mere obiter, and raised the issue of jurisdiction before the Commission. It was then too late. Estoppel had set in.

Turning now to the merits of the case, We uphold the ruling of the Labor Arbiter that petitioner was illegally dismissed.

The requisites of a valid dismissal are (1) the dismissal must be for any of the causes expressed in the Article 282 of the Labor Code,

²⁵ and (2) the employee must be given an opportunity to be heard and to defend himself. ²⁶ The substantive and procedural laws must be strictly complied with before a worker can be dismissed from his employment because what is at stake is not only the employee's position but his livelihood. ²⁷

Petitioner's dismissal was grounded on culpade carelessness, negligence and failure to follow specific instruction(s) or established procedure(s) under OSDA 1.11; and, having forged or falsified official document(s) under OSDA 2.01.

Private respondent blames petitioner for failure to follow established procedure in the hotel on a guest's request for long distance calls. Petitioner, however, explained that the usual or established procedures are not followed by the operators and hotel employees when circumstances warrant. For instance, the RLDC forms and the deposits are brought by the page boy directly to the operators instead of the cashiers if the latter are busy and cannot attend to the same. Furthermore, she avers that the telephone operators are not concious of the serial numbers in the RLDCs and at times, the used RLDCs are recycled. Even the page boys do not actually check the serial numbers of all RLDCs in one batch, except for the first and the last.

On the charge of taking of the money by petitioner, it is to be noted that the second P500.00 deposit made by the Japanese guest Ieda was later discovered to be inserted in the folder for cancelled calls with deposit and official receipts. Thus, there exists no basis for personal appropriation by the petitioner of the money involved. Another reason is the alleged tampering of RLDC No. 862406.

²⁸ While petitioner and her co-operator Loleng admitted that they indeed altered the date appearing therein from February 15, 1990 to February 13, the same was purposely made to reflect the true date of the transaction without any malice whatsoever on their part.

As pointed out by Labor Arbiter Oswald b. Lorenzo, thus:

The specifics of the grounds relied by respondent hotel's dismissal of complainant are those stated in Annex "F" of the latter's POSITION PAPER, which is the Notice of Dismissal, notably:

1. OSDA 2.01 — Forging, falsifying official documents(s)

2. OSDA 1.11 — Culpable negligence or failure to follow specific instruction(s) or established procedure(s)

On this score, we are persuated by the complainant's arguments that under OSDA 1.11, infractions of this sort is not without qualifications, which is, that the alleged culpable carelessness, negligence or failure to follow instruction(s) or established procedure(s), RESULTING IN LOSS OR DAMAGE TO COMPANY PROPERTY. From the facts obtaining in this case, there is no quantum of proof whatsoever, except the general allegations in respondent's POSITION PAPER and other pleadings that loss or damage to company property resulted from the charged infraction. To our mind, this is where labor tribunals should come in and help correct interpretation of company policies which in the enforcement thereof wreaks havoc to the constitutional guarantee of security of tenure. Apparently, the exercise of little flexibility by complainant and co-employees which is predicated on good faith should not be taken against them and more particularly against the complainant herein. In this case, to sustain the generalized charge of respondent hotel under OSDA 1.11 would unduly be sanctioning the imposition of too harsh a penalty — which is dismissal.

In the same tenor, the respondent's charge under OSDA 1.11 on the alleged falsification of private document is also with a qualification, in that the alleged act of falsification must have been done "IN SUCH A WAY AS TO MISLEAD THE USER(S) THEREOF." Again, based on the facts of the complained act, there appeared no one to have been misled on the change of date from RLDC #862406 FROM 15 TO 13 February 1990.

As a matter of fact, we are in agreement with the jurisprudence cited by VIRGILIO M. PATAG, the 2

nd Asst. City Prosecutor of the City of Manila, who exculpated complainant MANEJA from the charges of falsification of private documents and qualified theft under IS No. 90-11083 and marked Annex. "H" of complainant's POSITION PAPER, when he ruled that an altercation which makes the document speak the truth cannot be the foundation of a criminal action. As to the charge of qualified theft, we too are of the finding, like the city prosecutor above-mentioned that there was no evidence on the part of MANEJA to have unlawfully taken the P500.00 either from the hotel or from guest IEDA on 13 February 1990 and moreover, we too, find no evidence that complainant MANEJA had intention to profit thereby nor had misappropriated the P500.00 in question. ²⁹

Given the factual circumstances of the case, we cannot deduce dishonesty from the act and omission of petitioner. Our norms of social justice demand that we credit employees with the presumption of good faith in the performance of their duties,

³⁰ especially petitioner who has served private respondent since 1985 up to 1990 without any tinge of dishonesty and was even named "Model Employee" for the month of April, 1989. ³¹

Petitioner has been charged with a very serious offense — dishonesty. This can irreparably wreck her life as an employee for no employer will take to its bosom a dishonest employee. Dismissal is the supreme penalty that can be meted to an employee and its imposition cannot be justified where the evidence is ambivalent.

³² It must, therefore, be based on a clear and not on an ambiguous or ambivalent ground. Any ambiguity or ambivalence on the ground relied upon by an employer in terminating the services of an employee denies the latter his full right to contest its legality. Fairness cannot countenance such ambiguity or ambivalence. ³³

An employer can terminate the services of an employee only for valid and just causes which must be supported by clear and convincing evidence. The employer has the burden of proving that the dismissal was indeed for a valid and just cause.

³⁴ Failure to do so result in a finding that the dismissal was
unjustified. ³⁵

Finding that there was no just cause for dismissal of petitioner, we now determine if the rudiments of due process have duly accorded to her.

Well-settled is the dictum that the twin requirements of notice and hearing constitute the essential elements of due process in the dismissal of employees. It is a cardinal rule in our jurisdiction that the employer must furnish the employee with two written notice before the termination of employment can be effected: (a) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and, (b) the second informs the employee of the employer's decision to dismiss him. The requirement of a hearing, on the other hand, is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted.

³⁶

In the case at bar, petitioner and her co-operator Loleng were issued a memorandum on March 7, 1990. On March 11, 1990, they submitted their written explanation thereto. On March 20, 1990, a written report was made with a recommendation that the offences committed by them were covered by OSDA 1.11 and 2.01. Thereafter, on March 23, 1990, petitioner was served with a notice of dismissal for said violations effective April 1, 1990.

An examination of the record reveals that no hearing was ever conducted by private respondent before petitioner was dismissed. While it may be true that petitioner submitted a written explanation, no hearing was actually conducted before her employment was terminated. She was not accorded the opportunity to fully defend herself.

Consultations or conferences may not be a substitute for the actual holding of a hearing. Every opportunity and assistance must be accorded to the employee by the management to enable hom to prepare adequately for his defense, including legal representation.

³⁷ Considering that petitioner denied having allegedly taken the second P500.00 deposit of the Japanese guest which was eventually found; and, having made the alteration of the date on the second RLDC merely to reflect the true date of the transaction, these circumstances should have at least warranted a separate hearing to enable petitioner to fully ventilate her side. Absent such hearing, petitioner's right to due process was clearly violated. ³⁸

It bears stressing that a worker's employment is properly in the constitutional sense. He cannot be deprived of his work without due process of law. Substantive due process mandates that an employee can only be dismissed based on just or authorized causes. Procedural due process requires further that he can only be dismissed after he has been given an opportunity to be heard. The import of due process necessitates the compliance of these two aspects.

Accordingly, we hold that the labor arbiter did not err in awarding full backwages in view of this finding that petitioner was dismissed without just cause and without due process.

We ruled in the case of Bustamante vs. NLRC

³⁹ that the amount of backwages to be awarded to an illegally dismissed employee must be computed from the time he was dismissed to the time he is actually reinstated, without deducting the earnings he derived elsewhere pending the resolution of the case.

Petitioner is likewise entitled to the thirteenth-month pay. Presidential Decree No.851, as amended by Memorandum Order No. 28, provides that employees are entitled to the thirteenth-month pay benefit regardless of their designation and irrespective of the method by which their wages are paid. ⁴⁰

The award of moral and exemplary damages to petitioner is also warranted where there is lack of due process in effecting the dismissal.

Where the termination of the services of an employee is attended by fraud or bad faith on the part of the employer, as when the latter knowingly made false allegations of a supposed valid cause when none existed, moral and exemplary damages may be awarded in favor of the former.

⁴¹

The anti-social and oppressive abuse of its right to investigate and dismiss its employees constitute a violation of Article 1701 of the New Civil Code which prohibits acts of oppression by either capital or labor against the other, and Article 21 on human relations. The grant of moral damages to the employees by reason of such conduct on the part of the company is sanctioned by Article 2219, No. 10 of the Civil Code, which allows recovery of such damages in actions reffered to in Article 21.

⁴²

The award of attorney's fees amounting to ten percent (10%) of the total award by the labor arbiter is justified under Article 111 of the Labor Code.

WHEREFORE, premises considered, the petition is GRANTED and the assailed resolutions of the respondent National Labor Relations Commission dated June 3, 1994 and October 20, 1995 are hereby REVERSED AND SET ASIDE. The decision dated May 29, 1992 of the Labor Arbiter is therefore REINSTATED.

SO ORDERED.

Regalado, Puno and Martinez, JJ., concur.
Melo, J., is on leave. Footnotes
1 Penned by Presiding Commissioner Bartolome S. Carale and concurred in by Commissioner Vicente S.E. Veloso and Commissioner Alberto R.Quimpo (on leave). First Division.
2 Ibid
3 Annex "D" of Respondent's Memorandum; Rollo, p. 105.
4 Annex "E" of Complainant's Position Paper; Rollo, p. 59; Annex "E" of Respondent's Memorandum; Rollo, p. 106.
5 Annex "F" of Respondent's Memorandum: Rollo, pp. 107-108.
6 Annex "F" of Complainant's Position Paper; Rollo, p. 60.
7 Entitled "Manila Midtown Hotel, Complainant, vs. Rowena Loleng y Sanares, et al., Respondents."
8 Annex "I" of Petition; Rollo, pp.133-144.
9 Rollo, p. 136.
10 Annex "J" of Petition; Rollo, pp. 145-155.
11 Annex "K" of Petition; Rollo, pp. 157-164.
12 See note 1; Annex "A" of Petition; Rollo, pp. 28-32.
13 Annex "B" of Petition; Rollo, pp. 33-39.
14 Article. 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 of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the preceding article.
15 211 SCRA 361 [1992].
16 Resolution of respondent commission dated June 3, 1994; Rollo, pp. 28-32.
17 Sanyo, supra.
18 Ibid.
19 Petition, Rollo, p. 15.
20 San Miguel Corp. vs. National Labor Relations, G.R. No. 108001, March 15, 1996, 255 SCRA 133, 140; citing C.A. Azucena, The Labor Code With Comments And Cases, Vol. II, 1993 ed., p. 272.
21 G.R. No. 95940, July 24, 1996, 259 SCRA 161, 167-168.
22 171 SCRA 337, 346; cited in Stolt-Nielsen Marine Services (phils.), Inc. vs. NLRC, G.R. No. 105396, November 19, 1996, 264 SCRA 307, 319.
23 Annex "C" of Petition; Rollo, pp. 41-42.
24 236 SCRA 78.
25 Article 282 of the Labor Code provides:
Art. 282. Termination by employer. — An employer may terminate an employment for any of the following cause:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offence by the employee against the person of his employer or any immediate member of his family or duly authorized representative, and
(e) Other causes analogous to the foregoing. 26 Midas Touch Food Corp. vs. NLRC, G.R. No. 111639, July 29, 1996, 259 SCRA 652, 657; citing Mapalo vs. NLRC, 233 SCRA 266; Pizza Hut/Progressive Development Corp. vs. NLRC, G.R. No. 117059, January 29, 1996, 252 SCRA 531, 535 citing Mapalo vs. NLRC, supra.
27 Midas Touch Food Corp. vs. NLRC, supra., 657.
28 Annex "C" of Private Respondent's Position Paper, Rollo, p. 90.
29 Decision of Labor Arbiter; Rollo, pp. 140-141.
30 Pizza Hut/Progressive Development Corp. vs. NLRC, supra., 539.
31 Rollo, pp. 91-92.
32 Pizza Hut/Progressive Development Corp. vs. NLRC, supra., 540.
33 Pantranco North Express, Inc. vs. NLRC, G.R. No. 114333, January 24, 1996, 252 SCRA 237, 243-244.
34 Philippine Long Distance Telephone Company vs. NLRC, et al., G.R. No. 99030, July 31, 1997.
35 Uy vs. National Labor Relations Commission, G.R. No. 117983, September 6, 1996, 261 SCRA 505, 512; citing Labor Code, Article 277(b); Golden Donuts, Inc. vs. National Labor Ralations Commission, 230 SCRA 153 [1994]; Reyes & Lim Co., Inc. vs. National Labor Relations Commission, 201 SCRA 772, 775 [1991].
36 Pono vs. NLRC, et al., G.R. No. 118860, July 17, 1997.
37 Ibid.
38 Ibid.
39 G.R. No. 111651, November 28, 1996, cited in the case of Philippines Long Distance Telephone Company vs. NLRC, et. al., G.R. No. 99030, July 13, 1997; Mabeza vs. NLRC, Hotel Supreme, et. al., G.R. No. 118506, April 18, 1997.
40 Jackson Building Condominium Corporation vs. National Labor Relations Commission, G.R. No. 111515, July 14, 1995, 246 SCRA 329, 333.
41 Lirag Textile Mills, Inc. vs. Court of Appeals, et. al., 63 SCRA 374, 385, April 14, 1975.
42 Philippine Refining Co., Inc. vs. Garcia, 18 SCRA 107, September 27, 1966.

The Lawphil Project - Arellano Law Foundation

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Antonio L. Buensuceso Jr.

CELESTINO VIVIERO

SECOND DIVISION

[G.R. No. 138938. October 24, 2000]

CELESTINO VIVIERO, petitioner, vs. COURT OF APPEALS, HAMMONIA MARINE SERVICES, and HANSEATIC SHIPPING CO., LTD. respondents.

D E C I S I O N

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

x x x x

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.

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 x[1]

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

Overtime - - - - 495 lump O.T.

Vacation leave with pay - - - - US $220.00/mo.

On grounds of very poor performance and conduct, refusal to perform his job, refusal to report to the Captain or the vessel's Engineers or cooperate with other ship officers about the problem in cleaning the cargo holds or of the shipping pump and his dismal relations with the Captain of the vessel, complainant was repatriated on 15 July 1994.

On 01 August 1994, complainant filed a complaint for illegal dismissal at Associated Marine Officers' and Seaman's Union of the Philippines (AMOSUP) of which complainant was a member. Pursuant to Article XII of the Collective Bargaining Agreement, grievance proceedings were conducted; however, parties failed to reach and settle the dispute amicably, thus, on 28 November 1994, complainant filed [a] complaint with the Philippine Overseas Employment Administration (POEA).[2]

The law in force at the time petitioner filed his Complaint with the POEA was EO No. 247.[3]

While the case was pending before the POEA, private respondents filed a Motion to Dismiss on the ground that the POEA had no jurisdiction over the case considering petitioner Vivero's failure to refer it to a Voluntary Arbitration Committee in accordance with the CBA between the parties. Upon the enactment of RA 8042, the Migrant Workers and Overseas Filipinos Act of 1995, the case was transferred to the Adjudication Branch of the National Labor Relations Commission.

On 21 January 1997 Labor Arbiter Jovencio Ll. Mayor Jr., on the basis of the pleadings and documents available on record, rendered a decision dismissing the Complaint for want of jurisdiction.[4] According to the Labor Arbiter, since the CBA of the parties provided for the referral to a Voluntary Arbitration Committee should the Grievance Committee fail to settle the dispute, and considering the mandate of Art. 261 of the Labor Code on the original and exclusive jurisdiction of Voluntary Arbitrators, the Labor Arbiter clearly had no jurisdiction over the case.[5]

Petitioner (complainant before the Labor Arbiter) appealed the dismissal of 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 had exhausted his remedy by submitting his case to the Grievance Committee of AMOSUP. Considering however that he could not obtain any settlement he had to ventilate his case before the proper forum, i.e., the Philippine Overseas Employment Administration.[6] The NLRC further held that the contested portion in the CBA providing for the intercession of a Voluntary Arbitrator was not binding upon petitioner since both petitioner and private respondents had to agree voluntarily to submit the case before a Voluntary Arbitrator or Panel of Voluntary Arbitrators. This would entail expenses as the Voluntary Arbitrator chosen by the parties had to be paid. Inasmuch however as petitioner chose to file his Complaint originally with POEA, then the Labor Arbiter to whom the case was transferred would have to take cognizance of the case.[7]

The NLRC then remanded the case to the Labor Arbiter for further proceedings. On 3 July 1998 respondents filed a Motion for Reconsideration which was denied by the NLRC on 23 July 1998.

Thus, private respondents raised the case to the Court of Appeals contending that the provision in the CBA requiring a dispute which remained unresolved by the Grievance Committee to be referred to a Voluntary Arbitration Committee, was mandatory in character in view of 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, it is clear that the public respondent gravely abused its discretion in taking cognizance of a case which was still within the mantle of the Voluntary Arbitration Commitee's jurisdiction."[8]

On the other hand, petitioner argued -

(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 committee would not have been called Voluntary Arbitration Committee but rather, a Compulsory Arbitration Committee. Moreover, if the referral of cases of similar nature to the Voluntary Arbitration Committee would be deemed mandatory by virtue of the provisions in the CBA, the [NLRC] would then be effectively deprived of its jurisdiction to try, hear and decide termination disputes, as provided for under Article 217 of the Labor Code. Lastly, [respondents] ought to be deemed to have waived their right to question the procedure followed by [petitioner], considering that they have already filed their Position Paper before belatedly filing a Motion to Dismiss x x x x [9]

But the Court of Appeals ruled in favor of private respondents. It held that the CBA "is the law between the parties and compliance therewith is 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.

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_ No[19]

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 (P5,000.00) 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 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 Commission[21] 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, contract-implementation, or interpretation or enforcement of company personnel policies. Illegal termination disputes - not falling within any of these categories - should then be considered as a special area of interest governed by a specific provision of law.

In this case, however, while the parties did agree to make termination disputes the proper subject of voluntary arbitration, such submission remains discretionary upon the parties. A perusal of the CBA provisions shows that Sec. 6, Art. XII (Grievance Procedure) of the CBA is the general agreement of the parties to refer grievances, disputes or misunderstandings to a grievance committee, and henceforth, to a voluntary arbitration committee. The requirement of specificity is fulfilled by Art. XVII (Job Security) where the parties agreed -

Sec. 1. Promotion, demotion, suspension, dismissal or disciplinary action of the seaman shall be left to the discretion of the Master, upon consultation with the Company and notification to the Union. This notwithstanding, any and all disciplinary action taken on board the vessel shall be provided for in Appendix "B" of this Agreement x x x x [23]

Sec. 4. x x x x Transfer, lay-off or discipline of seamen for incompetence, inefficiency, neglect of work, bad behavior, perpetration of crime, drunkenness, insubordination, desertion, violation of x x x regulations of any port touched by the Company's vessel/s and other just and proper causes shall be at Master's discretion x x x in the high seas or foreign 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]

The use of the word "may" shows the intention of the parties to reserve the right to submit the illegal termination dispute to the jurisdiction of the Labor Arbiter, rather than to a Voluntary Arbitrator. Petitioner validly exercised his option to submit his case to a Labor Arbiter when he filed his Complaint before the proper government agency.

Private respondents invoke Navarro III v. Damasco[25] wherein the Court held that "it is the policy of the state to promote voluntary arbitration as a 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 Arbitrator when they filed their respective position papers and submitted documentary evidence before him. Furthermore, they manifested during the initial conference that they were not questioning the authority of the Voluntary Arbitrator.[27] In the case at bar, the dispute was never brought to a Voluntary Arbitrator for resolution; in fact, petitioner precisely requested the Court to recognize the jurisdiction of the Labor Arbiter over the case. The Court had held in San Miguel Corp. v. NLRC[28] that neither officials nor tribunals can assume jurisdiction in the absence of an express legal conferment. In the same manner, 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 Art. 262 of the Labor Code to apply in the case at bar. In other words, the Court of Appeals is correct in holding that Voluntary Arbitration is mandatory in character if there is a specific agreement between the parties to that effect. It must be stressed however that, in the case at bar, the use of the word "may" shows the intention of the parties to reserve the right of recourse to Labor Arbiters.

The CBA clarifies the proper procedure to be followed in situations where the parties expressly stipulate to submit termination disputes to the jurisdiction of a Voluntary Arbitrator or Panel of Voluntary Arbitrators. For when the parties have validly agreed on a procedure for resolving grievances and to submit a dispute to voluntary arbitration then that procedure should be strictly observed. Non-compliance therewith cannot be excused, as petitioner suggests, by the fact that he is not well-versed with the "fine prints" of the CBA. It was his responsibility to find out, through his Union, what the provisions of the CBA were and how they could affect his rights. As provided in Art. 241, par. (p), of the Labor Code -

(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 bargaining agreement, the prevailing labor relations system and all their rights and obligations under existing labor laws.

In fact, any violation of the rights and conditions of union membership is a "ground for cancellation of union registration or expulsion of officer from office, whichever is appropriate. At least thirty percent (30%) of all the members of a union or any member or members especially concerned may report such violation to the Bureau [of Labor Relations] x x x x"[29]

It may be observed that under Policy Instruction No. 56 of the Secretary of Labor, dated 6 April 1993, "Clarifying the Jurisdiction Between Voluntary Arbitrators and Labor Arbiters Over Termination Cases and Providing Guidelines for the Referral of Said Cases Originally Filed with the NLRC to the NCMB," termination cases arising in or resulting from the interpretation and implementation of collective bargaining agreements and interpretation and enforcement of company personnel policies which were initially processed at the various steps of the plant-level Grievance Procedures under the parties' collective bargaining agreements fall within the original and exclusive jurisdiction of the voluntary arbitrator pursuant to Art. 217 (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 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 should not be deprived of his legitimate recourse because of the refusal of both Union and respondent companies to follow the grievance procedure.

WHEREFORE, the Decision of the Court of Appeals is SET ASIDE and the case is remanded to the Labor Arbiter to dispose of the case with dispatch until terminated considering the undue delay already incurred.

SO ORDERED.

Mendoza, Quisumbing, Buena, and De Leon, Jr., JJ., concur.

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[1] Rollo, pp. 34-35.

[2] Id., pp. 49-50.

[3] Sec. 3, par. (d), of EO No. 247, the "Reorganization Act of the Philippine Overseas Employment Administration" (24 July 1987) provides -

Sec. 3. Powers and Functions. - x x x x (d) Exercise original and exclusive jurisdiction to hear and decide all claims arising out of an employee-employer relationship or by virtue of any law or contract involving Filipino workers for overseas employment including the disciplinary cases; and all pre-employment cases which are administrative in character involving or arising out of violation of requirement laws, rules and regulations including money claims arising therefrom, or violation of the conditions for issuance of license or authority to recruit workers x x x x

[4] Id., p. 53.

[5] Rollo, p. 66

[6] Id., p. 60.

[7] Id., p. 61.

[8] Rollo, p. 66.

[9] Rollo, p. 67.

[10] E. Razon, Inc. v. Secretary of Labor and Employment, G.R. No. 85867, 13 May 1993. 222 SCRA 1, 8.

[11] Rollo, p. 69.

[12] Id., p. 70, citing II Azucena, THE LABOR CODE WITH COMMENTS AND CASES 277 (1993).

[13] Id., p. 70.

[14] Tolentino v. Court of Appeals, G.R. No. 123445, 6 October 1997, 280 SCRA 226, 234.

[15] Labor Code, Art. 211, par. (a) provides that: "It is the policy of the State to promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes."

[16] Rollo, p. 70.

[17] Id., p. 70; see Luzon Development Bank v. Association of Luzon Development Bank Employees, G.R. No. 120319, 6 October 1995, 249 SCRA 162, 168-69, citing Labor Code, Art. 262-A, in relation to Labor Code, Art. 217 (b) and (c), as amended by RA 6715, Sec. 9.

[18] Id., p. 74.

[19] Id., p. 23.

[20] Id., p. 74.

[21] G.R. No. 108001, 15 March 1996, 255 SCRA 133.

[22] Id., p. 137.

[23] The aforesaid Appendix B provides for a Table of Offenses and Maximum Penalties, where the offense of insubordination, which includes "any acts of disobedience to lawful orders of a superior officer" is punished with the maximum penalty of dismissal; Rollo, p. 46.

[24] Rollo, pp. 36-37.

[25] G.R. No. 101875, 14 July 1995, 246 SCRA 260.

[26] Id., p. 264, citing Manguiat, MECHANISMS OF VOLUNTARY ARBITRATION IN LABOR DISPUTES, pp. 2-6 (1978)

[27] See Note 25, p. 264.

[28] See Note 20, pp. 143-44.

[29] Labor Code, Art. 241 (p).

[30] Rollo, p. 35.

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Antonio L. Buensuceso Jr.

FROM ATTY. C. CARPIO ALDEGUER 'S BLOG

FRIDAY, MARCH 11, 2011

What is a quitclaim in relation to labor law?

A quitclaim, in relation to labor law, is defined as a waiver of a claim by an employee against his employer. An employer who may want to prevent an employee from filing future cases for the recovery of his monetary claims would be encouraged to prepare a quitclaim agreement in favor of the employee to prevent the latter from filing future monetary claims. In other words, a quitclaim is executed in order to settle once and for all the disputes arising from such employment relation and to close the lid on an impending litigation.

Are quitclaim agreements valid? Yes, quitclaims are valid contracts under Philippine laws. The validity of quitclaims coincides with Article 1306 of the Civil Code of the Philippines which states: "The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy."

The requisites for a valid quitclaim are: 1) that there was no fraud or deceit on the part of any of the parties; 2) that the consideration for the quitclaim is credible and reasonable; and 3) that the contract is not contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. (See Francisco Soriano, Jr. vs. NLRC et al., G.R. No. 165594 April 23, 2007). In other words, employees, must not have been deceived in signing, or taken advantage of their vulnerability and ignorance of the law.

A quitclaim is a valid and binding, provided that it constitutes a credible and reasonable settlement, and that the one accomplishing it has done so voluntarily and with a full and complete understanding of its import and consequences. (See Plastimer Industrial Corporation et al. vs. Natalia C. Gopo et al. G.R. No. 183390 February 16, 2011).

Usually, a quitclaim is prepared by the employer and is being utilized in instances where an employee files a labor dispute and subsequently agrees to a settlement, or when a resigning employee has been terminated from employment but given a substantial severance pay so that no future litigation can be filed by the employee for recovery of additional monetary claims.

Are there instances when a quitclaim has been declared void and ineffective? The answer is in the affirmative. According to jurisprudence, even if an employee has signed a satisfaction receipt for his claims, it does not necessarily result in a valid quitclaim. A quitclaim may not be considered as a valid agreement where a worker agrees to receive less compensation than what he is entitled to recover. It is well-settled that a deed of release or quitclaim cannot prevent an employee from demanding benefits to which he is legally entitled. The reason why quitclaims are commonly frowned upon as contrary to public policy, is that the employer and the employee do not obviously stand on the same footing, the tendency for the employer to drive the employee to the wall. (See Lourdes Marcos et al. vs. NLRC et al., G.R. No. 111744 September 8, 1995)

While rights may be waived under Article 6 of the Civil Code of the Philippines, the waiver must not be contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. A quitclaim agreement is considered void where it obligates the workers concerned to forego their benefits while at the same time exempting the employer from any liability that it may choose to reject. This also runs counter to Article 22 of the Civil Code of the Philippines which provides that no one shall be unjustly enriched at the expense of another.

So how can quitclaims be validly enforced? It boils down to being transparent during negotiations. Parties must be well-informed of all the necessary data to enable each one to make a sound decision before signing a quitclaim agreement. All cards must be laid down the table with nothing to hide. This way, parties can effectively negotiate on a substantial settlement, even if it does not coincide with each other's ideal expectations.

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Antonio L. Buensuceso Jr.