G.R. No. 187122 ; February 22, 2012
NEGROS SLASHERS, INC., RODOLFO C. ALVAREZ AND VICENTE TAN, Petitioners, vs. ALVIN L. TENG, Respondent.

FACTS

Respondent Alvin Teng, a professional basketball player, was traded from the Laguna Lakers to petitioner Negros Slashers, Inc., which assumed his existing employment contract. During the 2000 MBA Championship Round, Teng exhibited poor performance in Game 4, after which he was benched. He then called in sick and did not play in the crucial Game 5. The Slashers’ management required Teng to explain his absence and scheduled an investigation. After hearings and a team meeting where players and staff opposed his return, the Slashers terminated Teng’s employment on March 16, 2001, citing his actions.
Teng initially filed a complaint with the MBA Commissioner per his contract’s arbitration clause. Subsequently, on November 6, 2001, he filed an illegal dismissal case with the NLRC. The Labor Arbiter ruled the dismissal illegal, awarding back wages and separation pay. The NLRC reversed, dismissing the complaint as premature due to the pending MBA arbitration. The Court of Appeals then reinstated the Labor Arbiter’s finding of illegal dismissal.

ISSUE

The primary issue is whether the Labor Arbiter had jurisdiction over Teng’s illegal dismissal complaint despite the pendency of arbitration proceedings before the MBA Commissioner.

RULING

The Supreme Court affirmed the Court of Appeals and held that the Labor Arbiter properly exercised jurisdiction. The legal logic is grounded in the distinction between voluntary arbitration and the compulsory jurisdiction of labor tribunals. While the parties’ contract contained an arbitration clause, this did not divest the Labor Arbiter of jurisdiction over termination disputes. Labor standards, including security of tenure, are mandated by law and involve public interest. The jurisdiction of the Labor Arbiter over illegal dismissal cases is original and exclusive, as provided under Article 217 of the Labor Code.
The Court clarified that the choice to submit to voluntary arbitration is permissive, not mandatory, for the employee. Teng’s act of filing with the NLRC after initiating MBA proceedings did not constitute forum shopping, as the causes of action and reliefs sought were identical. The NLRC’s dismissal on grounds of prematurity was erroneous. On the merits, the Court sustained the finding of illegal dismissal, as Teng’s single instance of absence and prior benching did not constitute willful disobedience or serious misconduct warranting termination. The penalty was grossly disproportionate to the alleged infraction.